Medicare's financial stability was "substantially improved" by the passage this spring of the Patient Protection and Affordable Care Act, which will extend the solvency of the program for another 12 years to 2029, according to the 2010 Medicare Trustees Report released Thursday.
Despite the extended solvency, the trustees warned that Medicare is still not adequately financed over the next 10 years. "HI (Hospital Insurance Trust Fund) expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law through 2013. However, the savings from the healthcare reform law is expected to generate surpluses from 2014 through 2022," the report states.
"Beginning in 2014, trust fund surpluses are estimated to occur throughout the short-range projection period and for several years thereafter. The shortfalls projected for the next four years can be met by redeeming trust fund assets, which at the beginning of 2010 were $304 billion, but the asset balance would fall below the Trustees' recommended minimum level starting in 2012 under the intermediate assumptions," the report states.
In 2009, 46.3 million people were covered by Medicare: 38.7 million aged 65 and older, and 7.6 million disabled. About 24% of beneficiaries enrolled in Part C private health plans that contract with Medicare to provide Part A and Part B health services. Total benefits paid in 2009 were $502 billion. Income was $508 billion, expenditures were $509 billion, and assets held in special issue U.S. Treasury securities were $381 billion, the report stated.
Projected costs are slightly lower overall than in last year's report, reflecting lower-than-expected costs in 2008-2009, which were partially offset by higher benefits from phasing out the coverage gap.
The report says the largest projected savings under the healthcare reform law comes from lower annual increases in the prices Medicare pays for services by hospitals, skilled nursing facilities, home health agencies, and most other providers. Payment increases will be reduced by the increase in "multifactor" productivity for the economy overall, which is about 1.1% per year.
Other provisions reduce Medicare costs through lower payments to private Medicare Advantage health plans. The tax hike of .9% of earnings above $200,000 for single taxpayers or $250,000 for married couples also directly benefits the Medicare Trust Fund.
Projected costs for Part B are also lower because of the health reform law, the report states. Part B spending now approximates 1.5% of Gross Domestic Product. Last year's Trustees report projected that would increase to 4.5% by the end of the 75-year projection period. However, now, under current law, it is projected to reach only 2.5% of GDP by the end of the trustees' 75-year projection period.
Part B is in financial balance because beneficiary premiums and general revenue financing are reset each year to match the expected costs for the next year.
However, the trustees said that actual Part B costs are likely to exceed current projections because Congress will continue to override Medicare payments cuts to physicians. Under the "sustainable growth rate" formula, physician payment rates would have to be reduced by about 23% on Dec. 1, 2010, a further 6.5% on Jan. 1, 2011, and 2.9% on Jan. 1, 2012.
The Medicare Part D prescription drug program is also balanced because of annual updating of enrollee premiums and federal payment rates.
The Medicare trust fund has not met the Trustees' formal test of short-range financial adequacy since 2003. In addition, the HI long-range actuarial deficit has been reduced to .66% of taxable payroll, which is one-sixth of its projected amount prior to the new health reform law, the report stated.
The Medicare Trustees are: Treasury Secretary and Managing Trustee Timothy F. Geithner; Health and Human Services Secretary Kathleen Sebelius; Labor Secretary Hilda L. Solis; and Social Security Commissioner Michael J. Astrue. Two public representatives to the board who are appointed by the president are vacant and the president's nominees await Senate confirmation. CMS Administrator Donald M. Berwick, MD, is the secretary of the board.
Press Ganey Associates, Inc. announced today that it has acquired the Quality Indicator Project division from the Maryland Hospital Association. Financial terms of the purchase were not disclosed.
Launched in 1984, QI Project was one of the first clinical performance measurement programs to use advanced data collection to help hospitals identify and improve quality measures.
Press Ganey CEO Richard B. Siegrist Jr., says the QI acquisition will bring to more than 500 the total number of U.S. hospitals that use Press Ganey to meet clinical reporting requirements.
"The experienced staff and robust tools of the Quality Indicator Project enhance our proficiency in this increasingly important area for hospitals," Siegrist says. "This new solution coupled with our current products will give our clients a timely and accurate picture of their clinical performance and will allow them to identify changes and improvements right away."
QI Project is housed in a Web-based data center which provides real-time data at different levels. Clients have a single vantage point for managing the performance measurement and assessment process, from data collection and management, to transmission and analysis.
"Press Ganey can make the investment QI Project and IQIP need to maintain and expand not just market share, but scope of work. The new owner will also be able to tap into the power of its wide and refined distribution network to achieve that goal," says Carmela Coyle, MHA President & CEO.
"Their vision of using performance measurement to improve quality aligns perfectly with that of QI Project and IQIP," she adds. "Press Ganey sees both as a perfect fit of people and culture, with a solid underlying strength and a similar approach to helping customers that, given adequate capitalization and full resources, can truly realize its potential in a growing market."
In addition to the immediate actionable data, QI clients have access to training and support staff to interpret data and design improvement plans.
"This fits well with Press Ganey's strategy of streamlining and integrating performance data with analysis and improvement tools to help clients drive alignment across their organizations," Siegrist says.
UnitedHealth Group's IT subsidiary Ingenix says it is acquiring compliance and medical management consultants Executive Health Resources, with undisclosed financial terms to be finalized by the year's end.
Ingenix, based in Eden Prairie, MN, says the acquisition will improve its ability to help hospitals manage medical necessity compliance with the CMS at a time when patient volumes for government-sponsored plans are expected to grow.
"The expertise and evidence-based clinical insights that Executive Health Resources and its outstanding team provide, combined with Ingenix's unmatched health information and analytics capabilities, will help our clients thrive in the evolving regulatory environment for health care," says Ingenix CEO Andy Slavitt.
Federal and state laws require hospitals to perform compliance reviews for medical services provided to patients covered by Medicare/Medicaid to ensure that the care is medically necessary and delivered in the proper setting. Congress expanded federal auditing oversight in 2006 to all 50 U.S. states to reduce federal payment discrepancies with hospitals.
"The regulatory landscape is complex and ever-changing, and compliance has become a crucial aspect of a hospital's operational integrity," says Robert Corrato, MD, president/CEO of Newtown Square, PA-based Executive Health Resources. "As we continue to support our clients in this rapidly growing market with solutions that simplify the compliance process, Ingenix's impressive data assets and sophisticated technologies will help us to more quickly deliver critical, technology-enabled intelligence for our clients."
Executive Health Resources advises more than 1,100 hospital and health systems nationwide, including for-profit and non-profit systems, academic medical centers, community hospitals, and specialty centers.
The survey, conducted this spring, received responses from 1,703 physicians and Certified Registered Nurse Anesthetist (CRNAs).
It found that internists' salaries in 2010 averaged $191,864, a 6.6% increase over the $179,958 average salary in 2009. However, internists' annual salaries remain well below that of subspecialists like radiologists, who reported an average salary of $398,571 in 2010, up 5.1% from the 379,140 average reported in 2009.
The survey also found that anesthesiologists reported an average salary of $362,450 in 2010, up 2% from the $355,264 reported in 2009; psychiatrists' salaries averaged $202,975, up from $201,683 in 2009; surgeons' average salaries fell from $287,520 in 2009, to $284,642 in 2010. Since 2007, surgeons' average salaries have fallen $7,462, or 2.5%, from $292,104 to $284,642, according to the LocumTenens survey.
Certified registered nurse anesthetists also saw their average salaries fall from $178,068 in 2007, to $169,043 in 2009, to $166,833 in 2010, an overall drop in the last four years of $11,235, or 6.3%.
The Alpharetta, GA-based physician recruiting firm also provides salary breakdowns by region, years in practice, and gender. Survey respondents are physicians who practice on a locum tenens basis as well as those with permanent salaries. Respondent demographics included in the reports include region of practice, board certification, and time frame for making next job change.
In a separate survey released last week, the American Medical Group Association found that 76% of all specialties saw an increasein compensation, with the overall weighted average increase of approximately 3.4%. The primary care specialties' (excluding hospitalists) average compensation increase was about 3.8%. Other medical specialties had on average a 2.4% increase, and surgical specialties had a 3.8% average increase.
The Locum Tenens findings are also in line with those issued in mid-July by Dallas-based physician recruiters Merritt Hawkins, which noted that recruiting was down in 2009-10 for the first time in the 17-year history of the survey, even though there is nothing to suggest that demand has abated.
The average return on investments for 85 nonprofit healthcare organizations reviewed by the Commonfund Institute improved to 18.8% in Fiscal Year 2009. It was the best year for investments in nearly a decade.
The Commonfund Benchmarks Study of Healthcare Organizations results for FY2009 represent a dramatic improvement over average losses of -21.2% reported for FY2008.
The 2009 return was the highest in the eight years the study has been conducted, and came in the year following the poorest return of the eight studies. The 85 participating organizations represented $76.8 billion in investable assets and $26.8 billion in defined benefit plan assets as of Dec. 31, 2009.
Investable assets include endowment and foundation funds, funded depreciation, working capital and other separately treated assets.
For the previous three years, nonprofits in the study reported average annual returns on their investable assets of -0.2%, while for the past five years participants reported average annual returns of 3.5%.
The average 2009 return for study participants' defined benefit pension plans was 21.5%, compared with last year's return of -26.3%. Returns on defined benefits plan assets averaged -.8% for the previous three years and 3.9% for the previous five years.
"FY2009's results represented welcome and much-needed relief after the dismal FY2008," said John S. Griswold, executive director of the Wilton, CT-based Commonfund Institute. "Still, the fact remains that the average return of 18.8% was not enough to move trailing three-year returns into positive territory and the average 3.5% return for the five-year period is well short of covering healthcare organizations' spending and investment and costs, plus the added impact of inflation."
Based on asset class, international equities provided the strongest return, an average of 37.3% for study participants. Returns for other asset classes were: domestic equities, 31.2%; fixed income, 11.7%; alternative strategies, 17%; and short-term securities/cash, 1%.
The negative returns came from subcategories of the alternative strategies allocation. Private equity real estate fell -25.8%; venture capital, fell -10.5%; and private equity fell -7.2%.
Other alternative strategies allocations were very strong, however, as commodities and managed futures produced a 32% return, energy and natural resources returned 28.2%, and distressed debt returned 20.8%.
"If we go back to the study for FY2007¬ before the losses of FY2008 ¬trailing returns for three- and five-year periods were 9% and 11.1%, respectively. Returns at levels such as these are essential for the long-term health of the nonprofit healthcare community," Griswold said.
For the fifth consecutive year, participating nonprofit healthcare organizations reported higher average debt levels in 2009. Overall, debt rose to an average of $903 million from $681 million in FY08. The largest increase in dollars came from organizations with assets of more than $1 billion, where debt increased to an average of $2.6 billion from $2.2 billion a year ago. Forty-five percent of responding organizations confirmed that they had increased debt in FY09.
At the same time, 41% reported decreasing debt in FY09. Only 14% said they made no change in debt levels this year. When compared to other areas of the nonprofit sector, nonprofit healthcare organizations realized lower returns.
In addition, 173 independent and community foundations in the Commonfund study posted an average return of 20.9% for FY2009, and 66 charities in the study saw an average return of 21.5%.
Aurora Health Care said it will open Wisconsin's first entirely green hospital in Grafton on Nov. 1.
The 106-bed, 520,000-square-foot Aurora Medical Center in Grafton cost $184 million, and will provide integrated care for thousands of residents in Ozaukee County, north of Milwaukee, Aurora said in a media release.
The hospital is nearly 80% complete, including most of the exterior. At the end of summer medical equipment to support surgeries, diagnostics and rehabilitation will arrive, with installation expected to take three months to complete. After that, the equipment will undergo testing and certification, Aurora said.
Aurora Medical Center in Grafton is being built to Leadership in Energy & Environmental Design (LEED) standards, which provides third-party verification that a building was constructed using environmentally friendly processes.
The original plans in 2007 called for Aurora Medical Center in Grafton to have 89 beds. Another 18 beds were added in the final design to account for anticipated increases in patient volume from physicians who have joined Aurora and Aurora Advanced Healthcare. The adjustment also reflects the projected rise in orthopedic surgeries based on demographic data.
The non-profit hospital will offer specialty services including cardiac, cancer, and neurological care, a 24-hour emergency department, an orthopedic center, a neonatal ICU, and advanced technology for diagnoses and treatments.
Milwaukee-based Aurora Health Care operates 13 nonprofit hospitals and 140 clinics in eastern Wisconsin. The medical center will bring more than 600 jobs to the area.
Allowing nurse anesthetists to provide anesthesia services without supervision from a doctor does not put patients at risk, according to a study in an issue of Health Affairs.
The study’s authors say the findings call into question a requirement that nurse anesthetists be supervised by an anesthesiologist or surgeon to receive Medicare reimbursement. States can “opt out” of the requirement, but only by petitioning the Centers for Medicare & Medicaid Services. The study confirms that certified registered nurse anesthetists, who receive high-level training, are able to provide the same level of services as anesthesiologists at potentially lower cost.
“This study shows that patient safety was not compromised by the opt-out policy,” says Jerry Cromwell, a senior fellow in health economics at the Research Triangle Institute and coauthor of the study. “We recommend that CMS change the policy so that governors no longer have to petition for their states to opt out of this Medicare requirement.”
The study analyzed rates of death and complications from surgery in the 14 states that “opted-out” and found no increase in the odds of a patient dying or experiencing complications. They also found no significant differences when they compared patient outcomes across three scenarios: certified registered nurse anesthetists working without anesthesiologist supervision, anesthesiologists working alone, or the two types of provider working together on a case.
Cromwell and coauthor Brian Dulisse, a health economist at RTI, analyzed 481,440 hospitalizations covered by Medicare. They found that the frequency of nurse anesthetists’ providing anesthesia without anesthesiologist supervision grew from 1999 to 2005. As of 2005, 21% of surgeries in opt-out states and 10% in non-opt-out states used nurse anesthetists without anesthesiologists, as opposed to 17.6% and 7% in 1999. The authors speculate that the increase could be due to anesthesiologists’ taking on more privately insured cases and leaving more Medicare cases to certified registered nurse anesthetists.
The researchers also found that although nurse anesthetists are trained to handle very complex cases, anesthesiologists, on average, work on more of these cases, which involve greater risk of death. The authors hypothesize that anesthesiologists, who can choose their cases more often than can certified registered nurse anesthetists, prefer more complex, better-paying, cases. Anesthesiologists also are more prevalent in teaching hospitals that perform more complex surgery.
“Nurse anesthetists get essentially the same training in anesthesia as anesthesiologists. So in this case, a nurse is just about a perfect substitute for the doctor,” says Cromwell. “Eliminating physician supervision will not only allow nurses to do what they are trained and highly qualified to do, but it will encourage hospitals and surgeons to use a more cost-effective mix of anesthetists.”
Using nurse anesthetists more broadly could help save on health care costs because they typically earn less than anesthesiologists, the authors say.
A report from the American Medical Association finds an average of 95 medical liability claims filed for every 100 physicians.
The report, released Tuesday, prompted renewed calls from the AMA for comprehensive national and state-level tort reforms.
“Even though the vast majority of claims are dropped or decided in favor of physicians, the understandable fear of meritless lawsuits can influence what specialty of medicine physicians practice, where they practice and when they retire,” says AMA Immediate Past-President J. James Rohack, MD. “This litigious climate hurts patients’ access to physician care at a time when the nation is working to reduce unnecessary healthcare costs.”
The report—which includes data from the AMA’s 2007-2008 Physician Practice Information survey of patient-care physicians and other sources—has data on medical liability claims’ impact by age, gender, and practice arrangement for physicians.
The report shows:
Nearly 61% of physicians age 55 and over have been sued.
There is wide variation in the impact of liability claims between specialties. The number of claims per 100 physicians was more than five times greater for general surgeons and OB/GYNS than it was for pediatricians and psychiatrists.
Before they reach age 40, more than 50% of OB/GYN have been sued.
90% of general surgeons age 55 and over have been sued.
The number of medical liability claims is not an indication of the frequency of medical error, AMA says, because the physician prevails 90% of the time in cases that go to trial. While 65% of claims are dropped or dismissed, they are not cost-free. Average defense costs per claim range from a low of over $22,000 among claims that are dropped or dismissed to a high of over $100,000 for cases that go to trial. This leads to increased costs for physicians and patients.
“The AMA supports proven medical liability reforms to lower health care costs and keep physicians caring for patients,” Rohack says. “The findings in this report validate the need for national and state medical liability reform to rein in our out-of-control system where lawsuits are a matter of when, not if, for physicians.”
Help wanted ads for healthcare professionals dropped by 18,400 listing in July, even as the overall economy saw a modest increase of 139,200 in online job listings, a report released Monday shows.
The Conference Board's Help Wanted Online Data Series, which tracks more than 1,000 online job boards across the United States, said the drop in healthcare job ads was largely due to decreases in advertised vacancies for physical and occupational therapists, speech pathologists, pharmacists, physicians, and surgeons.
The Conference Board said labor demand varies greatly from the higher-paying practitioner and technical jobs, to the lower-paying support jobs. In June, the latest month for which unemployment data is available, advertised vacancies for healthcare practitioners or technicians outnumbered those looking for work in the fields by more than two to one.
The average wage in these jobs is $33.51 an hour. In marked contrast, the average wage for healthcare support occupations is $12.84 an hour and there were more than two jobless people looking for work in the field for every advertised vacancy.
The U.S. Bureau of Labor Statistics, which will release its employment statistics for July on Friday, has shown that the healthcare sector is one of the few areas in the economy that has seen monthly job growth throughout the recession, although that growth has slowed considerably since 2009. Despite the overall growth in the healthcare sector, hospitals for May and June have seen more than 4,600 job reductions—the first back-to-back cuts since January through April, 2000.
"After rising sharply in December and January, online job demand for the nation as a whole has settled into a more modest pattern over the last six months, with increases that have averaged about 43,000 per month," said June Shelp, vice president at The Conference Board. "The gains in job demand vary across the country with some East Coast states—New York, New Jersey, Pennsylvania, Virginia, Delaware and Maryland?posting steady and strong upward trends throughout this year. Steady but more modest improvement better characterizes online job demand in other states like Washington, Ohio, Oregon and Texas."
Among the Top 10 occupations advertised online, there were more vacancies than unemployed people seeking positions for computer and mathematical science, healthcare practitioners, and architecture and engineering.
In transportation and material moving, there were more than eight people seeking or every online advertised vacancy, and there were more than four unemployed looking for work in installation, maintenance, and repair positions for every advertised opening.
Massachusetts Gov. Deval Patrick this summer signed into law a bill that stiffens criminal penalties for those who assault on-duty nurses and other healthcare providers.
The new law treats assaults on healthcare professionals doing their jobs as a separate crime with its own set of penalties—extending to healthcare providers the protections and enhancements that were already in the law for assaulted emergency medical technicians.
"This law gives us the tools to further protect the many healthcare professionals who work tirelessly to ensure the care of all Commonwealth residents," Patrick-flanked by nurses-said at a signing ceremony in his office.
Donna Kelly-Williams, president of the Massachusetts Nurses Associationwhich lobbied heavily for the law said it validates nurses' concerns and will raise public awareness of about violence in the healthcare workplace. "Nurses are assaulted on the job to the same degree as police officers and prison guards," she said.
While Bay State nurses are cheering the new protection, they also say it's not enough. Kelly-Williams said two other MNA-sponsored bills that would address healthcare violence are opposed by the Massachusetts Hospital Association. One of the bills requires healthcare providers to have in place proactive policies and procedures to prevent workplace violence from occurring in the first place. The second bill calls for what MNA describes as "safe patient limits for nurses, as the lack of staff to adequately respond to patients and families concerns [that] is a major factor leading to these types of incidents." Translation: staffing ratios.
"We have been trying for over 10 years to get safe patient limits assigned to an RN at one time and that has been met with much opposition," Kelly-Williams said, adding that MHA has "fought us every step of the way."
Kelly-Williams said it's almost impossible to talk about other safety strategies—such as de-escalation—if nurses are already overworked and unable to recognize and address the behavior of patients in pain, or with substance abuse or mental health issues, and their anxious relatives and friends.
MHA issued a statement saying it is aware of the concerns of hospital safety and has long supported increased criminal penalties for those who assault healthcare workers. MHA said its member hospitals have "gone to great lengths to provide a variety of security and social services to maintain a level of safety in both the clinical setting and administrative offices. Such safeguards are designed to address the unique needs of every community. A 'one size fits all' approach simply doesn't work in dynamic hospital settings."
Even with the best planning, MHA said it is impossible to account for every potentially violent situation in the hospital setting, owing to the hospital's unique healing mission, and the fact that it is open 24 hours a day to the general public. "While important safeguards are continually updated and improved, healthcare facilities are stressful environments and violence can be perpetrated by patients, families, friends, visitors, and even co-workers," MHA said.
The MHA raises valid points. For hospitals, staffing ratios could prove to be extremely expensive, and the benefits could be questionable if the management and scheduling aren't done properly. This is a legitimate bottom line issue.
However, MNA can make the emotional connection with the public on this issue. Overworked nurses and long waits in the ER provide visceral images for the public many of whom have endured that experience. The argument that violence occurs in part because understaffed nurses can't adequately control upset patients is simple, commonsensical, and easily understood for most of the public. This message will resonate even more in the coming months and years as millions of newly insured Americans?unable to find care elsewhere—head to the ER for medical treatment.