The second quarter of 2010 was not kind to hospitals.
April posted a record 18 mass layoffs of 50 employees or more in the hospital sector. And as I reported earlier this month, hospitals reported 2,200 payroll reductions in June, which followed 2,400 reductions in May. The last time that the nation's hospitals reported back-to-back months of payroll reductions was in 2000, when 2,200 jobs were lost between January and April, according to the Bureau of Labor Statistics.
Despite the reductions, David Cherner, managing partner of Health Workforce Solutions, LLC, says he remains “bullish” on hospital hiring, and believes hospitals in several markets across the country are poised to add staff—possibly by the end of this year or the first quarter of 2011.
“Overall, the demand for healthcare labor continues to strengthen, notwithstanding the fact that there were all of these massive layoffs,” Cherner says. “There are still a lot of challenges in terms of hospitals and healthcare employers getting ready for decreased reimbursements—and having to do with a lot less. But at the same time, you can only cut patient care services so much. In order to deliver quality care, you need people.”
HWS’s Labor Market Pulse Index (LMPI) quarterly barometer of the nation’s 30 largest healthcare markets shows that key indicators were up in 20 of the nation’s 30-largest healthcare labor markets in Q2. LMPI’s basket of indicators includes temporary health workforce shortages and surpluses, facility and bed closures, announced layoffs and expansions, and local economic trends. In Q1 of 2010, only 11 markets were showing improvement.
LMPI found that near-term demand for healthcare workers is growing fastest in Orlando, San Francisco Bay and Detroit in the second quarter, while the Las Vegas, New York City, and Houston markets ranked at the bottom of the 30 markets tracked. “There are select parts of the country that are still weak,” Cherner says. “But on the whole, the healthcare labor market as measured by our composite index, continues to strengthen.”
Cherner says much of the growth is fueled by expansion plans and large-scale hiring announcements, most notably at the University of Michigan Health System, Ann Arbor; the Henry Ford Health System, Detroit; the University of California San Francisco Mission Bay Hospital; and the University of California-San Diego Medical Center.
“We are seeing folks cut as much as they could over the last couple of years. They can’t cut anymore. At the same time you have all these expansion projects that we have been chronicling over the past year or two that continue, and some of them are coming on line later this year and early next year. You are going to need folks to staff those facilities,” he says.
“Our bet is that in the next two to three quarters you are going to start seeing an increase in hiring. My sense is that there is a lot coming on at the end of this year, and the first quarter of next year. There will be a lot of staffing ahead,” he says.
“We expect that this collaborative affiliation with Miami Children’s Hospital will take the already great level of pediatric emergency room care at Palms West Hospital to an even higher level,” said Bland Eng, CEO of Palms West Hospital. “Palms West is looking forward to working with one of the most respected names in pediatric healthcare to provide enhanced pediatric emergency care.”
The 289-bed, not-for-profit Miami Children's Hospital is South Florida’s only licensed specialty hospital exclusively for children, with more than 650 attending physicians and more than 130 pediatric subspecialists.
“Miami Children’s Hospital has grown to become a regional healthcare system for the children of South Florida. Through this new collaboration with our esteemed associates at Palms West Hospital, we look forward to offering enhanced convenience for the families of Palm Beach County,” said Narendra Kini, MD, president/CEO of Miami Children’s Hospital. “This affiliation is part of our commitment to being ‘where the children are.’”
A report detailing record-long waits at the nation's emergency departments comes as no surprise to emergency physicians, who say waits will lengthen as health coverage expands, emergency departments close, and hospitals fail to improve admitting processes.
Angela Gardner, MD, president of the American College of Emergency Physicians, says the four-hours-and-seven-minutes average wait at the nation's EDs—detailed in Press Ganey's 2010 Emergency Department Pulse Report: Patient Perspectives on American Health Care— threatens patient safety.
"Nobody can possibly call a national average of more than four hours in the emergency department something to cheer about," Gardner says. "Last year the GAO reported that even patients who need to be seen in 1 to 14 minutes are waiting an average of 37 minutes for care. Emergency physicians have become masters of improvisation and troubleshooting under extreme conditions, but the fundamental problems in our emergency departments remain unsolved."
The Press Ganey report is based on evaluations of more than 1.5 million patients treated at 1,893 hospitals in 2009. The 2009 average wait was a four minute increase over 2008 wait times, and a 31-minute increase since reports were made available in 2002.
Gardner said hospitals aren't doing a good job of admitting patients through the ED, which creates a backlog. "Hospitals need to stop boarding admitted patients in the emergency department and get them to the appropriate inpatient floor quickly," Gardner says. "That is what's best for the admitted patients but it's also what's best for the patients suffering in the waiting room."
ACEP has called for hospitals to implement the full-capacity protocol, which Gardner says hospitals have been reluctant to embrace.
Gardner says the problems of long ED waits will worsen with the implementation of federal healthcare reform laws, which will expand health insurance coverage to more than 30 million people.
"Policymakers and the public should also have no illusions that the recently passed healthcare legislation is going to decrease ER use," she says. "Massachusetts, which enacted healthcare reform in 2006, has seen an increase in emergency department visits, with no decrease in patient acuity. It proves that healthcare coverage is no guarantee of healthcare access."
Exacerbating the problem even more, Gardner says, is the number of EDs that have closed in recent years. "More patients plus fewer ERs equals longer wait times," she says. Early one-quarter of hospitals report periods of ambulance diversion because they are over capacity. A longer ride to the hospital is not good medicine."
Utah had the longest wait, with an average emergency department time of 8:17—early an hour and a half longer than the state's average time spent last year. Iowa had the shortest average time spent at just under three hours (2:55), followed by South Dakota (2:59), North Dakota (3:07), Nebraska (3:08) and Minnesota (3:11). More than half the states were able to improve wait times or keep increases to a minimum. Nevada made the biggest improvement in 2009, reducing average wait time by 66 minutes since 2008.
"This report is yet another wake-up call that healthcare reform has yet to address the acute care needs of 123 million emergency patients a year," Gardner said. "They may report being satisfied with the care they are receiving in the ER, but emergency physicians are dissatisfied with an average time in the emergency department that is nearly equal to a coast to coast airplane ride."
An updated Massachusetts Hospital Association in-house study released this week shows that member hospitals in the Bay State trimmed $3.1 billion in operating expenses in the past two fiscal years.
This week's report, an update of MHA's April Hospital Costs in Context: A Transparent View of the Cost of Care report, details expenses of Massachusetts hospitals for fiscal year 2009 through the second quarter of FY 2010, and shows hospital cost trends have moderated substantially and in some cases reversed in response to the financial crisis and recession.
"The most current data shows that the trend in hospital expense growth reported earlier this year has abated," said Lynn Nicholas, president/CEO of MHA. "As a result of hospital cost management efforts, expense increases fell 65% from 2008 to 2009—from 8.6% to just 3%."
"All told, we're estimating hospital expense reductions worth some $3.1 billion in Fiscal Years 2009 and 2010. Expense growth has dropped back to very moderate levels, and this welcome change should be acknowledged by state policy makers and insurers," Nicholas said.
At the same time, payments to hospitals for the last two fiscal years were reduced more than $2.4 billion than they would have been had the FY 2004 – FY 2008 operational expenses trend continued, the study said.
Savings were found in the elimination of clinical and administrative positions, programs and services; cuts in compensation and benefits; changes in purchasing strategies, implementation of quality and process engineering techniques, and reduced non-essential spending, the report said.
"As the FY 2009 figures show, Massachusetts hospitals have responded to the call for cost reduction by health plans, government, and employers," Nicholas said. "Some of these changes were sparked by the economic downturn, but all the changes were driven by hospital initiative, and hospitals will strive to sustain this progress as part of our contribution to lasting reform and bending the cost curve. With real healthcare reform, the future will not replicate the past."
Nicholas said Massachusetts hospitals are committed to identifying greater cost efficiencies while maintaining quality of care, but that it needs to be implemented alongside "fundamental system reform, including fair and adequate payment to cover the cost of providing care, and adequate access to capital for health information technology and to modernize outdated facilities."
"Without these critical elements, hospitals will have to accelerate the closing of services and some hospitals may not survive. That means more than lost jobs and a drag on the economy; it means more limited access to healthcare, and that is not good for anyone," she said.
Emergency physicians are more likely to honor the requests of women and racial minorities to see a doctor of their same gender, race, or religious background, a University of Michigan Health System-led study shows.
One-third of the 176 physicians surveyed at the American College of Emergency Physicians Scientific Assembly said patients perceive they get better care from racial, gender, or ethnic matching, even though there is no evidence to support that perception.
The U-M study—conducted with the University of Rochester, and University of Pennsylvania—showed Muslim patients were the most likely to have their request accommodated.
Women and minorities appear more likely to make a doctor request, and female physicians are more supportive of that request than are male physicians, according to the study published in the Journal of Emergency Medicine.
“Some patients prefer, and are more satisfied with, providers of the same gender, race, or faith,” says lead author and Robert Wood Johnson Clinical Scholar Aasim I. Padela, MD, an emergency physician at U-M. “This study is the first to look at the culture of accommodation in the emergency department.”
Black patients tend to rate black providers higher in quality and Hispanics are more satisfied with care received from Hispanic providers. Similarly a large percentage of Asians seek care from providers of a similar background.
Padela says the reasons patients make the request are more complex than doctors may think, and can include prior discrimination, feelings of a lack of cultural sensitivity, and language difficulties.
Physicians appear unaware of these patient experiences, which could affect physicians’ attitude toward honoring patient requests and strategies to improve workforce diversity, Padela says. Roughly 80% of the nation’s emergency physicians are white.
The study showed that greater physician diversity is one solution for addressing racial health disparities because physicians and patients who share common values and language are more likely to develop stable healthcare relationships.
“Within healthcare, and particularly within the emergency department, provider and patient matching is not entirely possible, nor in line with our value system,” Padela says. “A better approach is to enhance cultural sensitivity and compassionate care.”
After three years of decline, the nation’s stand-alone, not-for-profit hospitals stabilized balance sheets in 2009 and saw improvements in other key operating metrics. This results in pre-recession levels similar to 2006. This improving trend is expected to continue through 2010, despite the uncertainty surrounding the economy and healthcare reform, according to Standard & Poor’s.
“Since the 2008 median report and in response to the broader global economic challenges that began in late 2007, we have seen management teams at many hospitals sharpen their focus on tightening expenses and strengthening revenue cycle performance, which has yielded better operating margins in many cases,” S&P states. “At the same time, the investment and financial markets have shown signs of recovery this past year after much instability. We believe that along with more prudent management of capital investments and spending levels, this helped stabilize balance sheets for many rated stand-alone hospitals.”
S&P says the improvement is reflected in fewer credit rating downgrades in the first half of 2010, and nearly as many upgrades as downgrades.
“In our opinion, management teams spurred operational improvements by returning to the basics with a focus on strengthening market positions, improving processes, and reducing costs,” S&P says. With severe constraints on non-operating revenue, S&P said many hospitals exerted tighter control of expenses and held off on major capital projects to focus on operations and to retain cash balances.
“More specifically, these stricter expense policies included tighter staffing levels and focus on patient-throughput processes as well as salary and benefit freezes or cutbacks,” S&P says.
For the past decade, S&P said, stand-alone, not-for-profit hospitals have been a good credit risk thanks to strong non-operating income, growing liquidity, and solid operations. However, the recession has created a challenging environment.
“We are optimistic about the initial improvement reflected in the 2009 medians and fiscal 2010 year-to-date results. However, we are also mindful of ongoing economic and industry pressures such as weaker volumes, potential state Medicaid funding reductions, capital upkeep needs, and the still unknown impact from the passage of the Patient Protection and Affordable Care Act,” S&P says.
Providers are showing improved performance using expense-control measures, but there is still the question of: can these gains be sustained?
The financial performance of individual hospitals often was influenced by their respective fiscal years. For example, hospitals that ended their fiscal year on June 30, 2009, were more likely to report depressed non-operating earnings, while hospitals that ended the fiscal year on Dec. 31, 2009, were more likely to enjoy stronger earnings because of improving investment markets, and because the hospitals had recorded their biggest investment losses in the previous fiscal year.
Patients last year averaged a record of four hours and seven minutes spent in the nation’s emergency departments—a four minute increase over 2008 wait times, and a 31-minute increase since reports were made available in 2002, according to a new review from Press Ganey Associates, Inc.
Press Ganey’s 2010 Emergency Department Pulse Report: Patient Perspectives on American Health Care, is based on evaluations of more than 1.5 million patients treated at 1,893 hospitals in 2009.
Utah had the longest wait, with an average emergency department time of 8:17—nearly an hour and a half longer than the state’s average time spent last year.
Iowa had the shortest average time spent at just under three hours (2:55), followed by South Dakota (2:59), North Dakota (3:07), Nebraska (3:08) and Minnesota (3:11). More than half the states were able to improve wait times or keep increases to a minimum. Nevada made the biggest improvement in 2009, reducing average wait time by 66 minutes since 2008.
“Although the overall national average wait time increased slightly, what we found encouraging is that 32 states had either reduced wait times or held increases in wait times to five minutes or less over the previous year,” says Deirdre Mylod, vice president, hospital services, Press Ganey. “Some states have done really well in keeping emergency department times in check, despite growing challenges of higher patient volumes and understaffing. But there’s still a long way to go to make visits to the emergency department much more efficient for patients.”
Despite longer waits, patient satisfaction with hospital emergency departments stayed about the same in 2009, continuing a five-year upward trend. Press Ganey says providing a patient with good emergency department experiences requires communication. Patients are willing to wait for care as long as they are kept informed about wait times. Patients who waited more than four hours, but received “good” or “very good” information about delays were just as satisfied as patients who spent less than one hour in the emergency department. Patient evaluation of communication about delays is identified as a key driver nationally of satisfaction.
“Patients would, of course, prefer a more efficient process,” says Mylod. “But good communication helps them understand the processes within the emergency department environment and shows them that staff has not forgotten them. Frequent, proactive communication improves both the quality of patient care and the manner in which patients perceive their care.”
Many hospitals are instituting procedures such as whiteboards in exam rooms to keep patients informed about treatments or delays. Also, welcome letters or pamphlets provided by the hospital help patients understand the process of triage, and prioritized treatment.
A long wait time might not be indicative of the emergency department’s performance. Instead, it could be a symptom of a larger patient flow issue in the hospital that keeps the patients in the emergency department when inpatient beds or testing equipment are not readily available.
Another factor impacting patient satisfaction with emergency departments is the time of day patients arrive. According to the report, patients who arrive between 7 am and 3 pm evaluate their care much more favorably than those who arrive after 3 pm. Patients who arrive in the emergency department on Monday and Tuesday rank lowest in terms of patient satisfaction, while Saturday and Sunday evaluations of care are the highest.
Among metro areas, patient satisfaction with ED care was highest last year in Madison, WI, which failed to make the top metro area list in 2008. Miami-Fort Lauderdale-Pompano Beach, FL, which was No. 1 in patient satisfaction in 2008, fell to sixth last year, but 2009 marked the third consecutive year it made the list.
All Children's Hospital & Health System in St. Petersburg, FL, has signed a letter of intent to join the Johns Hopkins Health System as a fully integrated member, the two systems said Tuesday.
The non-cash transaction between the two venerable not-for-profit health systems—the first of its kind for JHHS outside of the Baltimore region—is expected to be completed by the end of the year.
"The integration of All Children's into Johns Hopkins Medicine creates a synergy that allows both partners to continue our mission-centric work in children's healthcare," said Gary Carnes, president/CEO of All Children's. "We believe it increases All Children's value as a key community asset, extending benefits near and beyond to the families of children in need of top-notch clinical care by adding the benefits that the world-class teaching and research opportunities of Johns Hopkins Medicine will bring."
The proposed transaction hasn't been finalized, but the plan calls for ACH to retain its voluntary medical staff and physician organizations, including those University of South Florida physicians practicing at ACH. ACH will operate under the direction of the JHHS governance structure.
"All Children's is a very attractive organization because of its robust high quality clinical programs, its strong regional brand presence, and very high quality leadership team," said Edward D. Miller, MD, dean/CEO of Johns Hopkins Medicine. "The full integration of ACH into JHM offers a unique opportunity to both institutions. With this integration—and as part of its historic mission—JHM can leverage the intellectual and human capital within its pediatrics programs to expand the reach and impact of its current clinical, teaching and research programs."
All Children's Hospital, which opened a one-million-square-foot, 10-story tower and adjacent outpatient building in January, will retain its name and mission, and donations made to the Hospital's Foundation will remain for the benefit of All Children's. Leadership and day-to-day operation of the 259-bed freestanding pediatric hospital and outreach facilities in eight west Florida counties won't change. Local community leaders will continue to provide oversight of All Children's as majority members of the Hospital's Board of Trustees.
"Integration with Hopkins will position us to jointly shape the future of children's healthcare in partnership with an unparalleled leader in medical research and teaching," said Claudia Sokolowski, All Children's Health System board chair. "The potential economic impact for St. Petersburg, the Tampa Bay area and the state of Florida is significant and lasting. But the positive impact for children and their families will extend well beyond our geographic reach for generations to come."
JHHS' Maryland affiliates include The Johns Hopkins Hospital, Johns Hopkins Bayview Medical Center Inc., Suburban Hospital, and Howard County General Hospital Inc., and The Johns Hopkins University School of Medicine.
ACH is part of the $1 billion All Children's Health System, with more than 2,800 employees on its main campus and 10 outreach centers located throughout west central Florida. The system, founded in 1926 as a hospital primarily for young polio victims, has a patient mix that is 70% Medicaid.
The National Association of Public Hospitals and Health Systems has appointed Bruce Siegel, MD, to the newly created position of CEO. He succeeds Christine Capito Burch, who is retiring after serving 20 years as executive director, NAPH announced Monday.
"This is an unprecedented time for our patients and the public hospitals that serve them each and every day. I am eager to work with these crucial safety net systems to ensure that they have the resources and the support to protect their communities," Siegel said in a statement. "Healthcare reform may have passed but our work is just beginning."
With the appointment, Siegel becomes the first African-American to lead a major hospital association in the United States. He is now director of the Center for Health Care Quality and a professor of health policy at the George Washington University School of Public Health and Health Services. Siegel was president/CEO of Tampa General Healthcare, and the New York City Health and Hospitals Corporation. He also served as commissioner of health for the state of New Jersey.
"Safety net hospitals and health systems must gear up for the implementation of health reform, while also responding to the increased need for safety net services during the current economic crisis," said NAPH President Larry S. Gage. "Bruce's experience leading two of the nation's most important safety net health systems, coupled with the major role he has played at George Washington University in studying the needs and concerns of vulnerable patient populations, provide an ideal background for this position."
Siegel has conducted studies on quality and equity for the Robert Wood Johnson Foundation, the Commonwealth Fund, the California Endowment, and the Agency for Healthcare Research and Quality. He is a member of the National Advisory Council for Healthcare Research and Quality and he has served as a director of the Accreditation Council for Graduate Medical Education.
""Bruce Siegel's deep understanding of health disparities will assist members in serving our diverse communities and in positioning public hospitals to be leaders in implementing health reform," said Lisa Harris, MD, who led the search process for NAPH. Founded in 1980, NAPH represents the nation's largest metropolitan safety net hospitals and health systems.
"Siegel earned an A.B. from Princeton University, a Doctor of Medicine from Cornell University Medical College, and a Master of Public Health from Johns Hopkins University School of Hygiene and Public Health.
Click here to read more about Siegel's appointment.
From all indications, the nation is emerging—however slowly—from the worst recession since the Great Depression. Although the brightening economic outlook will be welcomed, it also creates a new set of challenges as nonprofit hospitals and health system struggle to retain top-level executives.
Providing top talent with hefty pay hikes or bonuses at a time when 15 million people are out of work could prove to be a public relations disaster for a nonprofit hospital, especially if rank-and-file workers have received modest (if any) pay hikes.
On the other hand, the market for top healthcare talent is competitive. Nonprofits that don't provide executives with fair market compensation risk losing them, which is a far more expensive proposition.
Ron Seifert, executive compensation practice leader for Hay Group's healthcare practice, says that compensation increases in the last year were below historical trends, partly because many executives understood the market realities and "took one for the team." However, in the coming year, if the economic recovery continues, Seifert says, those same executives might not be so willing to wave the pom poms.
Seifert says most nonprofit hospital boards—well aware of the economic realities, political climate, and public perception—have done a good job exercising discretion with executive compensation packages over the last year.
The Hay Group's 2010 Healthcare Compensation Study, which looks at data from more than 120 integrated health systems, and 1,268 hospitals, found that pay hikes for healthcare employees decreased in 2010 to a rate of 2.5%, compared with a 4% increase in 2009.
For the C Suite, the newly released survey found that:
Turnover decreased at the executive level: CEO (5.2% in 2009-2010 from 14% in 2008-2009), the COO (4.1% from 11.6%), and the CFO (5% from 12.2%).
Executives faced a drop in salary increases: all executive groups experienced a decrease in both the most recent and next planned salary structure increases from the 2009 report. For instance, in 2010, the number of CEOs receiving at least a 6% increase in base salary has dropped to 22%—its lowest level in 10 years.
"People have been hunkered down," Seifert says. "They have been fully committed to seeing their organizations and healthcare through this very difficult time, but these are executives and they are not blind to opportunity. These hospitals need to be run by capable leaders and if you have high-performing individuals, the reality is you shouldn't mess around with their retention if they are that critical for you."
So, what will the next year bring? Seifert expects that more health systems will turn to long-term incentive plans as a retention tool for top executives. He notes that 24% of survey participants have a long-term incentive plan in place in 2010, up from 19% in 2009.
Of the organizations with LTI plans, performance units are the most commonly used vehicle, with 95% offering such a plan.
Beyond specific tools, Seifert says he anticipates "continued temperance in decision making" and a more focused approach to designing compensation packages.
"We will likely see an uptick, but it's more a demand for talent—not opening the floodgates," he says. "If you want to keep people retained, it's going to be selective, but you are going to need to do something. Boards are going to struggle more with pay decision-making going forward. and it is not going to be across-the-board type of budgeting. It's more likely to be focused on individuals. Going forward, the reality is they will have to think carefully if they want to retain key leaders."
