Healthcare provider and consumer groups joined ranks on Wednesday to blast a proposal in the U.S. Senate to impose a cap on federal spending, saying the "real-world" impact of the plan would cut more than $2.7 trillion from critical safety net programs.
The Commitment to American Prosperity (CAP) Act, sponsored by Sen. Bob Corker (R-TN) and Sen. Claire McCaskill (D-MO), would limit federal spending to about 21% of Gross Domestic Product and automatically cut across all federal programs in any year where spending is projected to exceed the cap.
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The Lewin Group was commissioned by a group of provider and consumer organizations to analyze the impact of the proposal and found that the CAP Act would cut $4.2 trillion from federal spending between 2013 and 2021, including: $1.3 trillion in Social Security; $859 billion in Medicare; and $575 billion in federal Medicaid payments to states.
"Arbitrary caps that don't take into account the growing healthcare needs of our aging population are bad news for the patients and communities hospitals serve," said Rich Umbdenstock, president/ CEO of the American Hospital Association. "Hospitals are already absorbing more than $155 billion in federal reductions as well as billions more in reductions in state Medicaid programs. Additional cuts of this magnitude would force most hospitals to operate in the red, just at a time when more people are turning to them for care."
Newly inaugurated American Medical Association President Peter Carmel, MD, said physicians understand the need to reduce the nation's deficit, but he suggested that budget cuts should be done with a scalpel and not a chainsaw.
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"We know from experience that across-the-board cuts to federal health programs are counterproductive to health system improvements and will ultimately limit access to care for patients," Carmel said. "With baby boomers entering Medicare and more patients joining Medicaid, the AMA encourages policymakers to focus on policy changes that will protect vulnerable patients while improving the fiscal health of the nation."
Under the CAP Act, The Lewin Group analysis found thatby 2021:
Social Security benefits would be cut by nearly 20%.
Cuts to Social Security and other income support programs would force 3.8 million people into poverty--2.1 million of them seniors, a 44% increase among this age group.
5.1 million people could lose their health insurance.
Dramatic reductions in fees for physician services would lead to fewer physicians participating in Medicare.
Cuts to hospitals could force most to operate in the red, jeopardizing access to care.
Up to 1.3 million healthcare workers could lose their jobs.
Cost shifting of federal payment shortfalls to private employers could lead to a nearly 5% increase in health insurance premiums for those in employer-sponsored plans.
"AARP understands the nation's long-term fiscal challenges must be confronted, but this discussion cannot simply be reduced to a budget exercise—this is about real people," said David Certner, AARP's Legislative Policy Director. "We oppose proposals that rely on arbitrary spending limits because they could result in harmful cuts to the critical Medicare, Social Security and long-term care benefits that allow millions of older Americans to live independently and age with dignity. Such proposals threaten the financial and health security of today's seniors and future generations."
It is not clear how much support the CAP Act has in Congress.Nevertheless, the groups that banded to oppose the proposal said similar consequences could result from any across-the-board measure that sets specific limits on spending. They want Congress to reject proposals that call for arbitrary spending caps.
The groups that commissioned The Lewin Group study include American Hospital Association, American Medical Association, AARP, American College of Cardiology and LeadingAge.
For more information, view a summary of the findings or the full report.
Peter W. Carmel, MD, a pediatric neurosurgeon practicing in Newark, NJ, was inaugurated Tuesday as the 166th president of the American Medical Association – the first neurosurgeon to be elected president of the nation’s oldest largest physicians’ organization.
"My heroes have always been doctors," Carmel said in his inaugural addressbefore colleagues at the AMA’s annual meeting in Chicago. "I can’t recall a day in my life when I did not admire doctors, did not want to be a doctor, nor doubted I would one day become a doctor."
Carmel said the AMA would continue to support physicians and fight for improvements in health reform as it continues to evolve.
"The AMA is the trusted advisor that America’s physicians need to help them navigate health reform and the overwhelming changes occurring in medicine," Carmel said. "Physicians can count on the AMA to use the powerful voice of our profession to help Congress get health reform right."
Carmel has served on the AMA Board of Trustees since 2002 and on the Council on Long Range Planning and Development. He chaired the advisory committee from 2006 to 2007. Carmel is a former president of the AMA Foundation and is on the Foundation Board, an AMA media release said.
He has served in both the American Association of Neurological Surgeons and the Congress of Neurological Surgeons. For 17 years, Carmel was a CNS representative in the House of Delegates, the AMA’s primary policy-making body.
The former chairman of the National Coalition for Research in Neurological Disease and Stroke, Carmel was subsequently chair of the National Foundation for Brain Research. He helped launch the Decade of the Brain initiative that raised millions of dollars in research money for neurological diseases and stroke.
Born in Brooklyn, NY, Carmel completed his medical training at the New York University School of Medicine and was research associate at the National Institutes of Health. He completed his residency in neurosurgery at the Neurological Institute of New York and obtained his doctorate in neuroanatomy from Columbia University College of Physicians and Surgeons. Carmel was on the faculty at P&S for 27 years and was the founding chief of the Division of Pediatric Neurosurgery and a professor of neurological surgery.
In 1994 Carmel moved to the New Jersey Medical School, where he is now chairman of the Department of Neurological Surgery and co-medical director of the Neurological Institute of New Jersey. He operates at the University Hospital in Newark, NJ and is the second physician from New Jersey to hold the office of AMA president.
Carmel’s wife, Jacqueline Bello, MD, is a neuroradiologist. The couple lives in Manhattan, NY, the AMA said.
The number of septicemia and sepsis hospitalizations more than doubled between 2000 and 2008, resulting in much longer, costlier hospitals stays, and more problematic and often fatal outcomes for patients with the bloodstream infections, according to a report from the Centers for Disease Control and Prevention.
"Reasons for these increases may include an aging population with more chronic illnesses; greater use of invasive procedures, immunosuppressive drugs, chemotherapy, and transplantation; and increasing microbial resistance to antibiotics. Increased coding of these conditions due to greater clinical awareness of septicemia or sepsis may also have occurred during the period studied," said the study, Inpatient Care for Septicemia or Sepsis: A Challenge for Patients and Hospitals, a data brief compiled by CDC's National Center for Health Statistics.
Hospitalizations for septicemia or sepsis as a principal diagnosis grew from 326,000 in 2000 to 727,000 in 2008. In the same time span, the rate of the hospitalizations also more than doubled from 11.6 per 10,000 population to 24 per 10,000, and cost an estimated $14.6 billion to treat in 2008, the report said.
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The report, like studies conducted by the Dartmouth Atlas and others, shows that there is little correlation between how much a hospital spends and the quality of patient outcomes.
"Even with this expenditure, the death rate was high. Patients who do survive severe cases are more likely to have negative long-term effects on health and on cognitive and physical functioning," the report said.
Last year, University of Michigan researchers found that older hospitalized patients who survive sepsis develop lasting, moderate to severe cognitive impairment and functional disability at 3.3 times the rate of patients hospitalized for other reasons. Those consequences were labeled a "public health disaster" in a JAMA commentary.
While accounting for only 2% of hospitalizations in 2008, sepsis and septicemia made up 17% of in-hospital deaths. And patients who survived hospitalization with sepsis or septicemia were twice as likely to be transferred to another short-term care facility, and three-times as likely to be transferred to a long-term care facility, the CDC study found.
The bloodstream infections overwhelmingly affected the elderly, most of whom are Medicare recipients. About two-thirds of patients hospitalized with sepsis or septicemia were age 65 or over, and the hospitalization rate for sepsis and septicemia patients aged 85 or older (271.2 per 10,000 population) was 30 higher than the rate for those under age 65, (9.5 per 10,000 population), and more than four times higher than the rate of hospitalization (65.7 per 10,000) for those ages 65-74, the report said.
The hospitalization rates include: patients hospitalized for septicemia or sepsis; patients hospitalized for another diagnosis but who had septicemia or sepsis at the time they were admitted; and patients who acquired septicemia or sepsis during their hospital stay.
Baptist Health System and Emerus announced Monday that they will partner to open four emergency hospitals in the San Antonio area.
"This gives us the opportunity to provide a broader range of services, and when we partner with a group like Baptist who has a lot of infrastructure in place we aren't starting from ground zero," Toby Hamilton, MD, CEO of privately held Emerus told HealthLeaders Media. "There is certainly a prestige with the Baptist brand, and we view this as an opportunity to get into that market, and the timing is just right."
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The project calls for the construction of three new buildings, and a retrofitting of an existing building to house the emergency hospitals, at a cost of about $10 million for each hospital. Each will have about 10 inpatient beds, and will be open 24 hours a day, 365 days a year and staffed with board-certified emergency medicine physicians, registered nurses, radiation technologists, and other clinical specialists. The emergency rooms will be equipped like conventional, large hospital-based emergency departments, with on-site imaging services including X-ray, CT scan, and ultrasound, and in-house labs.
Emerus was started six years ago by six emergency physicians. It operates two emergency hospitals and three 24-hour emergency rooms in Texas. Hamilton says The Woodlands, TX-based company is now negotiating with other healthcare organizations to open additional emergency hospitals.
"Knowledge of the ER and its functionality is really hands-on," Hamilton says. "People can say they understand it but until you've lived in it for five or 10 years you don't understand how ERs work."
Hamilton says that once patients are triaged and registered at the Baptist emergency hospitals they will be seen by a physician within 15 minutes, and most patients will spend less than one hour in the facility. "The physicians and the staff are coordinated in a completely different level where we are cross training people and jobs aren't isolated in buckets," he says. "It's a SWAT team approach."
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Baptist will own the hospitals and provide the staff. Emerus will manage the hospitals. The project will create approximately 160 new jobs in the San Antonio area. Baptist expects to open its first hospital this fall, with the remaining three hospitals to open over the next year, the hospital system said.
"Our mission at Baptist Health System is to be an innovative leader in providing quality and accessible health care to the people of San Antonio in a way that best meets our patients' needs," Graham Reeve, president/CEO of Baptist Health System, said in a joint media release. "Minutes matter in an emergency situation and improving access to emergency medical care is crucial to the health and wellbeing of our growing communities. We believe that these free-standing emergency facilities will make a difference in people's lives."
For-profit Baptist Health System is owned by Vanguard Health System.
Hamilton says health systems are coming to recognize the flexibility and economy that smaller emergency hospitals provide.
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"In my opinion, the days of building that $300 million, 50-story hospital are over," he says. "Most hospitals are starting to look at community hospitals more as fire stations. For example, in our buildings they will be co-equipped with primary care physicians, rotating specialists etc., and the community comes to view that facility as its way station before it goes over to the big hospitals. It's the nimble, quicker version where that community doesn't have to drive nearly as far, but has access to those same resources."
Two national reports on physician recruiting and compensation confirm some of what we've suspected, but also show how complex and variable the process has become depending upon location and specialty. As in politics, it seems all healthcare is local.
Ken Hertz, a principal with the Medical Group Management Association's Healthcare Consulting Group, tells HealthLeaders Media it's hard to pinpoint many trends because healthcare is in a state of flux.
"There is a lot of change going on, but we are in a period where we are in the middle and it will probably be a year or so before the dust settles and [we see] what it all means," Hertz said. "You have the movement towards hospital and system employment. You have some aggregation of practices going on, but not as much as one would think. You've got private practices trying to get competitive with hospitals. You've got shifts in population, shifts in the age of physicians, general population-to-physician ratios, and then all of the healthcare reforms and accountable care organizations, and people are concerned that the sky is falling."
Merritt Hawkins' 2011 Review of Physician Recruiting Incentives, for example, confirms that the demand for primary care physicians continues to be strong, and that more physicians are becoming employees. The Irving, TX-based physician recruiter tracked more than 2,660 physician recruiting assignments nationwide from April 1, 2010 to March 31, 2011. In that time, 56% of the physician search assignments featured jobs with hospitals, up from 23% five years ago. Only 2% of Merritt Hawkins' search assignments featured openings for independent, solo practitioners, down from 17% five years ago.
"The era of the independent physician who owns and runs his or her practice is fading," Travis Singleton, senior vice president of Merritt Hawkins, said in the report. "Doctors today are more likely to be employees working for increasingly large health systems or medical groups."
Beyond that, local variables kick in. A report from MGMA -- Physician Compensation and Production Survey: 2011 Report Based on 2010 Data -- finds that compensation growth for primary care and specialty care physicians was all over the board in 2010, and appeared to be determined as much by location as by area of medical expertise.
For example, median compensation for both primary care physicians and specialists was highest in southern states, with primary care physicians earning a median of $216,170, and specialists earning a median $404,000. By comparison, primary care physicians in eastern states earned a median $194,409, and specialists earned a median $305,575.
Hertz says that factors beyond cost of living and demand may explain regional compensation variations. "The Northeast is heavy into … I would hesitate to call it managed care, but certainly more structured PPO/negotiated plans. California has the foundation models, the huge groups, again the heavy negotiations. The South has an aging population, a lot of specialists, and gerontologists," Hertz explained.
Both Merritt Hawkins and MGMA found that some physicians can't necessarily bank on an increase in compensation every year. Five of the Top 20 recruited specialties in the Merritt Hawkins survey saw their average base salary decline between 2009/10 and 2010/11. Family practice base salary fell from $200,000 to $197,000. Neurology fell from a base of $281,000 to $256,000. Hematology/Oncology fell from $385,000 to $369,000. Radiology fell from $417,000 to $402,000, and endocrinology fell from $219,000 to $218,000, the survey showed.
MGMA found that orthopedic surgeons reported median compensation of $514,659 -- the highest median of and specialty in the survey -- up 3.7% from 2009, and 15.2% from 2006. However, urologists reported median compensation of $372,455, a drop of 4.66% from 2009, and up 4.15% from 2006, while radiology/diagnostic reported median compensation of $471,253, a drop of 1.6% compared to 2009, and up 5.5% from 2006.
"The cuts in imaging continue to impact cardiology, radiology, and urology, but the big trend toward hospital employment for cardiology probably kept them from seeing any big losses," Hertz says.
While it might be difficult to spot firm and fast trends in physician recruiting, Hertz says, healthcare organizations that are successful at physician recruiting do share some common characteristics.
"All too often the healthcare organization, to be an effective recruiter, thinks it's all tied up with money. For the new docs money is important. But work/life balance, quality of life, integrity, transparency, those are all important issues," Hertz pointed out. "The successful groups from a recruiting standpoint are those that embrace the latest social networking and embrace some of the Internet technology to surface candidates."
The Centers for Medicare & Medicaid Services said Friday that starting July 1, it will use new predictive modeling technology in a "real-time" fight against Medicare fraud.
The new predictive modeling technology, similar to that used by credit card companies, helps identify potentially fraudulent Medicare claims on a nationwide basis, and helps stop fraudulent claims before they are paid. The initiative builds on the new anti-fraud tools and resources provided by the Affordable Care Act that are helping move CMS beyond its former "pay & chase" recovery operations to an approach that focuses on preventing fraud and abuse before payment is made, CMS said.
"Today's announcement is bad news for criminals looking to take advantage of our seniors and defraud Medicare," CMS Administrator Donald Berwick, MD, said in a media release. "This new technology will help us better identify and prevent fraud and abuse before it happens and helps to ensure the solvency of the Medicare Trust Fund."
Original Medicare claims will be analyzed using innovative risk scoring technology that applies effective predictive models, an approach similar to that used by the private sector to successfully identify fraud. For the first time, CMS will have the ability to use real-time data to spot suspect claims and providers and take action to stop fraudulent payments before they are paid, CMS said.
Northrop Grumman was selected through a competitive procurement to develop CMS' national predictive model technology format using best practices of both public and private stakeholders. The contract is being implemented nationally and ahead of schedule.
Northrop Grumman will deploy algorithms and an analytical process that looks at CMS claims – by beneficiary, provider, service origin or other patterns — to identify potential problems and assign an "alert" and assign "risk scores" for those claims. These problem alerts will be further reviewed to allow CMS to both prioritize claims for additional review and assess the need for investigative or other enforcement actions, CMS said.
Pardee Hospital in Hendersonville, NC has entered into an affiliation agreement with the UNC Health Care System, becoming the second hospital in the Tar Heel State to affiliate with a major health system this month.
"Pardee is a well respected and exceptionally strong community provider that shares a similar mission with UNC Health Care," Gary L. Park, president of UNC Hospitals, said in a media release. "We look forward to joining Pardee in developing an even better healthcare system for the citizens of Henderson County and the region."
Also, the Pardee Hospital board of directors named James "Jay" Kirby II as president/CEO. Kirby most recently was senior vice-president/CAO of Self Regional Healthcare in Greenwood, SC.
Pardee Hospital is a not-for-profit community hospital that is licensed for 222 acute care beds and is the second largest employer in Henderson County. The hospital has several locations separate from the main campus, including an adult day services center, a health education center, home care services, rehab and wellness center, a midwifery program, various family and internal medicine practices, and an urgent care facility.
On June 6, Person Memorial Hospital in Roxboro, NC, announced that it plans to become the second hospital to affiliate with Duke LifePoint Healthcare, a joint venture of Duke University Health System, Inc. and LifePoint Hospitals. PMH's board of trustees approved a non-binding memorandum of understanding that allows the 110-bed, community owned hospital and Duke LifePoint to negotiate the acquisition, PMC said.
Duke LifePoint is a joint venture formed last year between Duke University Health System and LifePoint Hospitals to create a network of affiliated community hospitals throughout North Carolina. The venture combines Brentwood, TN-based LifePoint's operational resources and management of community-based hospitals with Duke's clinical and quality services expertise. If the deal is finalized, PMH will become the second hospital in the Duke LifePoint network. The first hospital, Maria Parham Medical Center in Henderson, NC, entered the affiliation in January.
The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.39% over the 12 months ending in April 2011, continuing an 11-month deceleration of cost growth, Standard & Poor's Healthcare Economic Indices show.
April's results represent the lowest cost growth in the six-year history of the S&P measure, and reflect a continuing deceleration in Composite healthcare cost growth from the +5.77% annual growth in March, +6.17% in February, and +6.31% in January 2011 for the composite index, S&P said.
"Historically, there has been a general pattern of healthcare trends declining on a lagged basis following economic downturns. Much of our spending on healthcare is related to supply-side factors – in particular, the supply of new technology and procedures," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in the report. "It takes considerable time for investments in healthcare to translate into increased supply and, conversely, reduced investments often result in a reduction in trend a few years later. The decline in index growth rates that began in mid-2010 may be a result of trends slowing due to reduced capital spending during the recession that began in 2007."
Even with the deceleration, healthcare costs grew at nearly double the 3.2% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in April, Bureau of Labor Statistics data show.
A further breakdown of S&P's indices show that, over the 12 months ending April, healthcare costs covered by commercial insurance rose +7.13%, down from +7.57% for the 12-month period ending in March, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of +2.48%, for the 12-month period ending in April, down from of +2.78% for March, as measured by the S&P Healthcare Economic Medicare Index. This is also the lowest annual rate of growth posted for the Medicare Index in its six-year history, S&P said.
The highest annual growth rate for the S&P Composite index in the past six years was during the 12 months ending May 2010, when it posted +8.74%. With April's report of +5.39%, Composite claims costs growth rates have decelerated 3.35 percentage points in 11 months. In that same 11-month span, the Commercial index fell from a record +9.87% to +7.13%, a deceleration of 2.74 percentage points. The Medicare index posted a record high annual growth of +8.01% in November 2009. Since then, it has decelerated by 5.53 percentage points.
"The trend of deceleration in US healthcare costs, which started in May 2010, continues," Blitzer said. "Both the Composite and Medicare Indices posted record low annual growth rates with this month's report. But while we continue to see healthcare costs decelerate, all three rates are still above core inflation, significantly so for commercial healthcare costs."
The biggest slowdown in cost growth has been in the Hospital and Hospital Medicare indices, where annual growth rates hit new six-year lows of +4.86%, and +0.93%, respectively, which Blitzer said is "arguably the only healthcare costs that are in line with or below core inflation rates."
The Professional Services index grew +5.73% for the year ending in April, is only 0.05 percentage points away from its historical low of +5.68% recorded in February 2009
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year, S&P said.
A coalition of medical imaging organizations and patients' advocacy groups asked the Medicare Payment Advisory Commission this week to reconsider its call for reduced reimbursements and required prior authorization for imaging services.
In a letter to MedPAC Chairman Glenn Hackbarth, the Access to Medical Imaging Coalition said the commission's recommendations "would further limit access to life-saving diagnostic imaging services while yielding questionable savings for the Medicare program."
The coalition, which includes dozens of medical imaging groups and professional medical associations, including the American College of Radiology, told Hackbarth it was particularly concerned about MedPAC's call for prior authorization for imaging services.
"Prior authorization has never been used in the Medicare program, impedes patient access to needed care, places huge administrative burdens on providers, and has not been shown to reduce costs over the long term," AMIC said in the letter.
"From the perspective of patient advocates prior authorization would mean placing a barrier between patients and services their physician believes are necessary, which could lead to delayed or denied care. From the provider perspective, prior authorization means having to devote additional uncompensated physician time as well as staff to a burdensome administrative process," AMIC said in the letter.
Nine patients' advocacy groups cosigned the letter with AMIC, including It's My Heart, Colon Cancer Alliance, and Kidney Cancer Association.
Tim Trysla, executive director of AMIC, said in a media release that patients affected by cancers, heart disease, and other illnesses need to be made aware of the potential impact of the MedPAC recommendations.
"Even though MedPAC has acknowledged that the most recent Medicare claims data show that advanced imaging spending and volume are flat, they are recommending further cuts to imaging reimbursement and an unprecedented prior authorization program that would, by definition, impede beneficiaries' access to care," Trysla said. Trysla said there is no scientific research validating the clinical quality of radiology benefit managers or whether they truly achieve cost savings or merely shift costs. He said there are numerous peer-reviewed articles supporting the use of advanced imaging studies. "RBMs are not accountable or transparent to the public, and their proprietary algorithms deny or delay care without any peer-reviewed clinical evidence showing they are safe," he said.
Compensation growth for primary care and specialty care physicians was all over the board in 2010, and appeared to be determined as much by location as by area of medical expertise, according to a survey from the Medical Group Management Association.
"A number of factors may attribute to regional differences in physician compensation," Jeffrey B. Milburn, with MGMA Health Care Consulting Group, said in a media release. "The supply and demand for primary care or specialty physicians may influence compensation. A high level of competition between groups or specific specialties may provide an opportunity for payers to reduce reimbursement. In states where payers have little competition, reimbursement and subsequent physician compensation may be lower."
The survey -- Physician Compensation and Production Survey: 2011 Report Based on 2010 Data -- found that median compensation for both primary care physicians and specialists was highest in southern states, with primary care physicians earning a median of $216,170, and specialists earning a median $404,000. By comparison, primary care physicians in eastern states earned a median $194,409, and specialists earned a median $305,575.
"Location desirability is another factor influencing competition and compensation," Milburn said. "Some areas have a much higher ratio of physicians to population, and one might think this would lead to increased competition and lower compensation. But, the usual laws of supply and demand aren't always at work in healthcare."
The survey results are consistent with those in a report last week from physician recruiters Merritt Hawkins, which showed that most job openings for physicians are in hospitals, while demand for private practice physicians is on the wane.
Among primary care physicians: internists reported median compensation of $205,379 in 2010, an increase of 4.2% since 2009; family practitioners reported a median of $189,402, an increase of 2.9%; and pediatricians reported their median compensation was $192,148, an increase of .39%. Since 2006, median compensation has risen 15.5% for family practitioners, 13.3% for internists; and 10.3% for pediatricians, the survey found,
There was even greater variance for specialists. Orthopedic surgeons reported median compensation of $514,659 -- the highest median of any specialty in the survey -- up 3.7% from 2009, and 15.2% from 2006. However, urologists reported median compensation of $372,455, a drop of 4.66% from 2009, and up 4.15% from 2006, while radiology/diagnostic reported median compensation of $471,253, a drop of 1.6% compared to 2009, and up 5.5% from 2006.
The survey provides data on nearly 60,000 providers, which MGMA said is the largest and most representative provider population of any physician compensation survey in the United States.
