Six health plans in New York State funded incentives worth $1.5 million to establish patient-centered medical homes that will serve nearly 500,000 people in the Hudson River Valley region, program coordinator Taconic Health Information Network and Community announced Wednesday.
The health plans--Aetna, CDPHP, Hudson Health Plan, MVP Health Care, UnitedHealthcare, and Empire BlueCross Blue Shield--represent 65% of the commercial insurance market in the Hudson Valley and 43% of Medicaid managed care. THINC said the plans set aside competition in favor of cooperation, and paid the incentives to 236 primary care physicians in 11 practices that achieved patient-centered medical home recognition from the National Committee for Quality Assurance.
The PCMH transformation project was managed over one year by not-for-profit THINC.
"This success of this project means we've reached critical mass for the medical home in the Hudson Valley," said Susan Stuard, THINC's executive director. "A majority of the commercial and public program insurance plans serving the Hudson Valley worked together to support the foundation of primary care -- bring better preventive care, improved chronic condition care, and better access to coordinated care. Ultimately, this project shows that those caring for the people of the Hudson Valley can move beyond competition to enhance quality."
Along with the promise of incentive payment once NCQA recognition was achieved, the health plans provided data which will be used to evaluate the project's outcomes, part of a five-year commitment from the plans to help practices delivery enhanced care.
"The project evaluation will go beyond what the national demonstration project was able to measure, giving us information about physician satisfaction, patient satisfaction, and improvements in quality of care, which we can report in 2011," Stuard said. "For the first time, the data set will allow us to benchmark this quality data and then look at those issues over time."
Moving forward, Stuard said THINC wants care management within NCQA Level 3 patient-centered medical homes to improve efficiency and quality. Borrowing technical support from Geisinger Health System’s ProvenHealth Navigator program, THINC will create a small pilot at several sites before rolling out to medical home recognized primary care providers across the region. Stuard said the program will serve as a national model operating outside of an integrated health system.
Patients have a 46% lower risk of experiencing a safety incident at a top-rated hospital compared to a poorly rated hospital, HealthGrades reports this week.
The findings are from the annual HealthGrades Patient Safety in American Hospitals study, released Wednesday, which analyzed 40 million Medicare patient records, from 2007 to 2009. HealthGrades used 13 patient safety indicators published by the Agency for Healthcare Research and Quality to identify preventable medical mistakes that occurred during patients' hospitalizations.
"HealthGrades commends the efforts of those hospitals that are focused on providing consistent, safe and effective medical care," said Rick May, MD, vice president of clinical quality services at Denver-based HealthGrades, and co-author of the study. "But the fact remains that there are huge, life-and-death consequences associated with where a patient chooses to seek hospital care. Until we bridge that gap, HealthGrades urges patients to research the patient safety ratings of hospitals in their community and know what steps they can take to protect themselves from error before being admitted."
The HealthGrades study also found that:
Four patient safety indicators (death among surgical inpatients with serious treatable complications, pressure ulcer, post-operative respiratory failure, and post-operative sepsis) accounted for 68.51% of all patient safety events during the three years analyzed.
The 13 patient safety events studied were associated with $7.3 billion of excess cost, which equates to an additional $181.17 per Medicare patient hospitalization.
Preventable medical errors are so pervasive and costly that the federal government has proposed linking incentive-based hospital compensation to four of the AHRQ Patient Safety Indicators, starting in 2014. In addition, the Centers for Medicare and Medicaid Services are currently developing a 10-year, $70 billion plan aimed at reducing hospital-acquired infections.
Even with encouraging research from the Centers for Disease Control and Prevention showing reductions in hospital-acquired bloodstreaminfections, that progress is inconsistent. Some hospitals have made rapid progress in reducing infection rates, but hospitals continue to show wide variations.
HealthGrades found that patients treated at the top 5% of hospitals for patient safety were 52% less likely to contract a hospital-acquired bloodstream infection or to suffer from post-surgical sepsis than those treated at poor-performing hospitals. Nearly one in six patients who acquired a bloodstream infection while in the hospital died, the study found.
HealthGrades used the AHRQ's 13 patient safety indicators – which include foreign objects left in a body following a procedure, excessive bruising or bleeding as a result of surgery, bloodstream infections from catheters, and bedsores – to identify those hospitals performing in the top 5%, naming them Patient Safety Excellence Award recipients. The list of these hospitals, along with clinical quality ratings for all of the nation's nearly 5,000 hospitals, can be found at HealthGrades.com.
The HealthGrades study also found regional variation in the prevalence of medical errors and preventable deaths and complications. The 10 cities with the fewest patient safety incidents are: Minneapolis-St. Paul; Wichita, KS; Cleveland; Wilkes-Barre, PA; Toledo, OH; Boston; Greenville, SC; Honolulu; Charlotte, NC; and Oklahoma City.
HealthGrades independently and objectively analyzed approximately 40 million Medicare patient records from fiscal years 2007 through 2009. To be included in the analysis, hospitals must have met minimum thresholds in terms of patient volumes, quality ratings, and the range of services provided.
In the HealthLeaders Media Industry Survey 2011, ninety-one percent of healthcare leaders specializing in quality improvement said compliance with government regulations in the next three years will be challenging or very challenging.
Texas Children's Hospital has opened its first suburban hospital in the Barker Cypress area of West Houston. The $220 million, 48-bed, Texas Children's Hospital West Campus will serve one of the nation's fastest growing pediatric populations—the area from Sugar Land to Bryan-College Station, TX, THC said.
The five-story, 515,000 square-foot West Campus hospital has about 370 physicians, nurses, and staff. It sits on 55 acres and features the only 24/7 pediatric emergency room in the Greater West Houston area, two operating rooms, 48 intermediate and acute-care patient beds, advanced imaging, a sleep lab, a pathology lab and a pharmacy.
The hospital can expand to accommodate an additional 48 beds. An attached outpatient clinic, which opened in December, has 15 pediatric subspecialty practices including physical/occupational and speech therapy, cardiology, and oncology, and houses a Texas Children's Pediatric Associates primary care practice.
West Campus is a part of the hospital's $1.5 billion expansion, Vision 2010, which also includes the Jan and Dan Duncan Neurological Research Institute, the nation's first multi-disciplinary research institute for childhood neurological disorders, and the Texas Children's Pavilion for Women, an obstetrics hospital focusing on high-risk births.
“The opening of this new community hospital exemplifies Texas Children's 50-year commitment to the health and wellbeing of children and families by providing them with expanded access to the highest quality family-centered pediatric care,” said Mark A. Wallace, president/CEO of TCH. “Our new community hospital complements the services we provide at our Main Campus in the Texas Medical Center and is a key component of our vision for the future.”
For-profit hospitals will continue to see revenues stressed by soft volumes and pricing pressures over the next 12 to 18 months but profitability should remain healthy thanks to cost containment efforts, Moody's Investor Services said.
The credit outlook for the sector remains stable through mid-2012, but growing uncertainty surrounding pricing and demand prompted a negative bias on the outlook, Moody's said in its report: For Profit Hospitals: Profitability to Remain Healthy Despite Pressures.
"Moody's negative bias on the stable outlook for the for-profit hospital sector stems from our belief that these headwinds and additional investment in growth initiatives may make it difficult for hospitals to maintain their current margins," said Dean Diaz, a Moody's senior credit officer.
The expectation that weak hospital admissions trends will not worsen over the next 18 months provides some stability to for-profit hospitals, Diaz said.
Also tempering Moody's stable sector outlooks is its belief that consumers' overall use of medical services will be lower than otherwise would have been expected due to changes in health benefit plans and greater cost shifting to employees.
Longer term, however, demographics, healthcare reform legislation and the introduction of new technologies will help drive growth in demand for both hospital services and medical devices.
Moody's rated the median profit margin of for-profit hospitals at about 15%.
The report said that:
Investments that hospitals are making to foster future growth could also compress margins in the near term. These include upgrading information technology and aligning with physicians in a bid to boost patient referrals.
Growth in adjusted admissions will likely remain weak as the uninsured or people whose premiums and co-pays have risen continue to defer non-urgent care. Birth rates, and related hospital admissions, have also declined amid high unemployment and economic sluggishness. This trend will likely continue constraining volume growth.
Pressure on pricing should continue as commercial insurers resist payment increases and Medicare reimbursements fall.
Longer-term factors should support demand for hospital services, including the aging baby boomers and consumers' increased access to healthcare through the 2010 industry reform package.
House Democrats want a formal review of Medicare Part D after a federal audit found the program's "sponsors" may have overcharged policyholders by underestimating by billions of dollars the value of drug manufacturers' rebates in nearly 70% of their bids for plan year 2008.
"According to the Inspector General, the private health insurers providing the drug benefit are commonly underreporting drug manufacturer rebates, resulting in billions of dollars of profits at the expense of taxpayers and Medicare beneficiaries," Democrats on the House Energy & Commerce Committee said in a letter to Joseph R. Pitts, R-PA, the chairman of the Subcommittee on Health, and Cliff Stearns, R-FL, the chairman of the Subcommittee on Oversight and Investigations. "The Inspector General's report reveals severe problems with the structure of the Part D program and the behavior of the private insurers that administer the drug benefit. These failures present a severe risk to program integrity, reduce beneficiaries access to important drugs, increase drug costs for seniors, and cause billions of dollars in wasted taxpayer funds," the Democrats said in their letter.
The Office of Inspector General for the Department of Health and Human Services conducted the audit and examined six Medicare Part D sponsors, and found that some "may deliberately underestimate their rebates to increase profits."
In addition, the audit determined that the sponsors had "commonly had complex relationships with their pharmacy benefit managers, and in some cases, these relationships lacked transparency. This lack of transparency raises concerns that sponsors may not always have enough information to oversee the services and information provided by pharmacy benefit managers." The audit found that some sponsors passed the fees that their pharmacy benefit managers received from manufacturers on to the program, while others did not.
OIG did not identify the six sponsors it audited.
The Plan D sponsors reported receiving $6.5 billion in drug manufacturer rebates in 2008, which represents approximately 10% of total gross Part D drug costs. "Rebates can substantially reduce the cost of the Part D program; however, sponsors must accurately report these rebates to the government in order for the government and beneficiaries to receive any cost savings," OIG said.
In a list of recommendations, OIG urged the Centers for Medicare and Medicaid Services to: (1) take steps to ensure that sponsors more accurately include their expected rebates in their bids, (2) require sponsors to use methods CMS deems reasonable to allocate rebates across plans, (3) ensure that sponsors have sufficient audit rights and access to rebate information, and (4) ensure that sponsors appropriately report the fees that pharmacy benefit managers collect from manufacturers.
The industry group America’s Health Insurance Plans sees it this way: The Part D program is highly competitive so plans have an incentive to offer the lowest bids and, therefore, the most affordable premiums to attract beneficiaries. As a result, AHIP spokesperson Robert Zirkelbach explains, overall cost of the Part D program is far below original projections – saving money for seniors and taxpayers. According to CMS, the average Part D premium in 2011 is about $30, only a $1 increase from 2010 and well below estimates when the Part D program was enacted.
It is also important to keep in mind, Zirkelbach says, that Part D bids are based on projections of future costs, which are inherently uncertain. As the report notes, he continues, Part D plans reconcile rebates estimated in their bids with the amounts actually collected from pharmaceutical manufacturers to ensure the taxpayer continues to share in any additional savings the plan may be able to generate.
The American Medical Association Monday applauded a federal appeals court's ruling that physicians who bill patients after providing services are not subject to Federal Trade Commission so-called red flag rules that apply to creditors.
AMA President Cecil B. Wilson, MD, said the ruling Friday by the U.S. Court of Appeals in Washington, DC, validates the AMA's long-standing argument with the Federal Trade Commission about the red flag rules' application to physicians.
The appeals court, ruling on a lawsuit filed by the American Bar Association that challenged the application of the red flags rule to attorneys, said the FTC's regulations were made invalid because Congress passed the Red Flag Program Clarification Act of 2010 in December to better define who is considered a creditor under the rule.
"The court's decision reinforces the intent of a new law clarifying the scope of the red flag rule and helps eliminate any further confusion about the rule's application to physicians," Wilson said in a statement. "The AMA will remain vigilant that the FTC respects the meaning and intent of the Clarification Act."
The AMA and other physicians' groups objected to the FTC's requirement for physicians to verify the identity of their patients before agreeing to treat them if the patients are not paying in full at the time of the visit.
The intention of the requirement is to prevent potential cases of identity theft. If a patient says he or she is someone else, the wrong person or entity would be billed for that individual's care. But doctors complained that requiring such proof of identity is time-consuming, awkward, and may delay care if the patient didn't bring proper documents.
On Friday, the three-judge appeals panel wrote that "the Clarification Act makes it plain that the granting of a right to 'purchase property or services and defer payment therefore' is no longer enough to make a person or firm subject to the FTC's red flags rule -- there must now be an explicit advancement of funds. In other words, the FTC's assertion that the term 'creditor,' as used in the red flags rule and the FACT Act, includes 'all entities that regularly permit deferred payments for goods or services,' including professionals 'such as lawyers or health care providers, who bill their clients after services are rendered,'…is no longer viable."
The appeals court ruling may be viewed here. The Red Flag Program Clarification Act of 2010 may be viewed here.
Hospital payroll additions grew by 2,100 jobs in February, a relatively flat rate when compared with historic trends, but a significant increase from the 700 hospital payroll additions reported in January, Bureau of Labor Statistics preliminary data shows.
Overall, the healthcare sector – everything from hospitals to podiatrists' offices to kidney dialysis centers – created 34,300 payroll additions in February, more than double the number of payroll additions reported for the sector in January. Over the last 12 months, healthcare has created 260,000 jobs, an average of more than 22,000 new healthcare jobs each month, BLS data show.
Ambulatory services continued to be the main catalyst for job growth in healthcare, recording 16,900 payroll additions in February. Ambulatory services accounted for 160,200 of the 265,800 payroll additions in the healthcare sector in 2010, while hospitals created 50,100 for the year. Nursing and residential care facilities accounted for another 15,000 new jobs in February, BLS data show.
BLS data from January and February is preliminary and may be considerably revised in the coming months.
Overall, the healthcare sector employed 13.9 million people in February, including 4.7 million jobs at hospitals, 6 million jobs in ambulatory services, and 2.3 million in physicians' offices, BLS preliminary data show.
The larger U.S. economy gained 192,000 jobs in February and the nation's jobless rate fell slightly from 9% to 8.9% for the month as the number of unemployed people decreased by 600,000 to 13.7 million. The number of long-term unemployed -- people jobless for 27 weeks or longer – fell from 6.2 million in January to 6 million in February and accounted for 43.9% of the unemployed, BLS preliminary data shows.
Even with the relatively slower healthcare job growth in February, the sector has been one of the few areas of steady job growth during the recession and slow recovery, creating 828,900 jobs since the recession began in December 2007, BLS data show.
The public fury over the news that Blue Cross Blue Shield of Massachusetts' former CEO received a compensation and severance package last year valued at between $9 million and $11 million is not a human resources debacle.
After all, Cleve Killingsworth didn’t negotiate this ridiculous overcompensation package with the folks at HR. It was voted on by the community leaders who sit on the nonprofit BCBSMA's board – the same people who collect high five-figure salaries for a part-time job and talk about containing healthcare costs – people who really should know better.
And, BCBSMA has pointed out, the package was part of an employment contract negotiated in 2005, long before the recession began.
No. It’s not HR’s fault. However, the front-line employees in HR departments in every business in the Bay State that contracts through BCBSMA will face the disbelief and vexation of their fellow employees. They’ll rightly see this egregious payout as a slap in the face after years of ballooning premiums, co-pays, and deductibles, and tighter benefits. (In the interest of full disclosure, as a policyholder at BCBSMA, I am one of those vexed and disbelieving employees, although I don’t blame our wonderful HR folks.)
What were they thinking when the BCBSMA board approved this package? The Boston Herald notes that several members of the board – including Greater Boston Chamber of Commerce President Paul Guzzi ($84,463), and Robert J. Haynes, president of the Massachusetts AFL-CIO ($72,700) -- “have been public advocates for trimming soaring healthcare costs — even as they sat on a panel that quietly approved the departing chief’s golden parachute.”
“Unions stand ready to be part of the solution to the healthcare cost crisis in which we all find ourselves,” the Herald quoted Haynes as saying in January. “The only way to ensure we are part of the solution is to guarantee that we have a voice and meaningful role in how cost savings are achieved.” Harrumph!
We don’t know whether or not Guzzi, or Haynes, or Bentley University President Gloria Larson ($76,400) or any of the other 18 BCBSMA board members – all of who collect between $56,000-$90,000 a year -- voted for the compensation package, because BCBSMA won’t say, and a spokesperson told the Herald that board members would not comment individually. So much for accountability!
Maybe the health plan will be more forthcoming with Massachusetts Attorney General Martha Coakley, who announced last week that her office will investigate the Killingsworth payout.
As infuriating as the sizeable severance package is, this shouldn’t really surprise anybody. It is part of a continuing and troubling trend in healthcare in which many people of positions of power and influence – regardless of their politics -- collect hefty compensation packages while they preach cost containment for the rest of us. Their relatively high compensation buffers them from the anxieties of tens of millions of Americans in lower tax brackets who find paying for healthcare coverage increasingly more difficult every year.
In all likelihood, most people who sit on insurance company boards, or who are involved in other senior healthcare management and oversight positions probably don’t have to skip a medical screening because of their high deductible, or cut their pills in half to make it to the end of the month. When they talk about being “part of the solution to the healthcare cost crisis” they’re actually talking about passing costs on to the rest of us.
After six weeks of due diligence, Harvard Pilgrim Health Care and Tufts Health Plan jointly announced Friday that they will not merge.
The two nonprofit health plans signed a non-binding memorandum of understanding on Jan. 25 as the first step in a possible merger of the organizations. The MOU authorized a due diligence period for both organizations. During the due diligence period, however, the two plans said it became apparent that the savings and efficiencies they wanted would be more difficult to achieve than initially envisioned and the integration of the two organizations would be more costly and time-consuming than anticipated.
"As a result of this process, we have now determined that we are stronger as individual competitors than one company," said Eric Schultz, president/CEO of Harvard Pilgrim Health Care. "Both organizations will continue their work to keep high quality healthcare accessible and affordable, while at the same time investing in community programs and initiatives."
Harvard Pilgrim Health Care, and Tufts Health Plan are the second- and third-largest health insurers in Massachusetts, respectively, behind Blue Cross Blue Shield of Massachusetts. The combined plan would have had 1.9 million policyholders, with operations in Massachusetts, Maine, New Hampshire, and Rhode Island.
Tufts Health Plan CEO James Roosevelt said the due diligence process gave both plans an opportunity to see if they were compatible. "We made the thoughtful determination that while we are in the same business, our operations are very different and, in many important aspects, not fully compatible without significant changes to existing processes and applications," Roosevelt said.
"Based on the information we have received in the due diligence process, we now believe this decision is in the best interest of those we serve: our members and customers. We walk away from these discussions with great respect for the leadership at Harvard Pilgrim Health Care and remain respectful competitors in the Massachusetts market," he said.
Confusion over vendor qualifications and federal guidelines slowed somewhat the projected growth rate of electronic medical records systems to 13.6% in 2010, a value of $15.7 billion, according to a study by the healthcare market research firm Kalorama Information.
But despite the slower pace, considerable growth did occur in 2010. Kalorama Information publisher Bruce Carlson said more growth is expected in 2011 and beyond.
"We think that while progress was made in physician adoption and in vendor sales, there is still a lot more potential," he said. "There are still a considerable number of physicians who need to be fully functional and hospitals that have to improve their stage ranking."
Indeed, three quarters of healthcare executives surveyed for the HealthLeaders Media Industry Survey 2011 said they are looking at timely compliance with meaningful use.
Kalorama survey results show physician usage of EMR near 50%; reimbursement checks have been issued. As new systems are sold, companies will still earn revenues from existing clients in servicing and consulting, and Kalorama expects between 18%-20% market growth for the next two years.
Kalorama's report -- EMR 2011: The Market for Electronic Medical Record Systems – showed EMR growth rates of 10% in 2009 and 13.6% in 2010, lower than the 15% growth that Kalorama had predicted for each years. The research firm attributed the slower growth rate to hesitation by physicians confused about meaningful use guidelines.
Kalorama's forecast for 2011 assumes that EMR usage will continue to increase, as hospital EMR adoption will encourage physician adoption, current EMR Stage 3 hospitals will purchase more advanced systems, and current EMR owners will upgrade.
Carlson said the threat of penalties in 2015 in the form of reduced CMS payments for those that do not engage in meaningful use of electronic records will force doctors and hospitals to make upgrade decisions. "The stick is stronger than the carrot when it comes to the (American Recovery and Reinvestment Act) incentive-penalty equation," he said. "We continue to believe that and we think it's the industry's consensus as well. While the policy already picked up those oriented towards technology, the penalties will force conversion and upgrading in the future. And those decisions will happen in the next two years, before the penalties kick in."
