The health system served more than 2 million patients in 2018, the highest annual total in its history, but CEO Tom Mihaljevic says it has a 'moral obligation' to serve even more.
Cleveland Clinic CEO and President Tom Mihaljevic, MD, this week unveiled a strategic plan to double the number of patients served by the renowned health system over the next five years.
"We will stay true to who we are—working as a team with the patient at the center of everything we do," Mihaljevic said in a State of the Clinic address that wraps up his first year as CEO and president.
"We will care for patients and families across their lifetimes, with proactive care, supported with the very best of digital technology," he said. "And we will grow and double the number of patients we serve over the next five years."
Mihaljevic said Cleveland Clinic has a "moral obligation" to expand it services to as many patients as possible.
"Last year, we cared for over 2 million patients—more than ever before," he said. "Despite adding more facilities and more caregivers, we barely made a dent in demand for our services."
"We can't take this demand for granted. It's our moral obligation to open our doors as wide as possible for those in need," he said.
Among the successes in Mihaljevic's first year as CEO:
Cleveland Clinic cared for more than 2 million patients in 2018, the highest annual total in its history.
The 16-hospital health system saw operating revenue increased 6.2% to $8.9 billion.
Contributions to state and local economies—in the form of jobs, wages and taxes—totaled $17.8 billion, according to Cleveland Clinic estimates.
The heart and urology programs were ranked No. 1 in the nation by US News & World Report.
The Cleveland Clinic footprint expanded—in Northeast Ohio, with the addition of Union Hospital in Dover and the opening of Cleveland Clinic Children's new home; and in Florida, with the addition of four hospitals in 2019.
In 2019, Mihaljevic said Cleveland Clinic will continue to focus on care priorities it introduced last year for patients, caregivers, communities, and the health system itself.
Prosecutors allege that Vanguard SNFs and top executives submitted false claims to Medicare and Medicaid for "worthless" services.
Vanguard Healthcare LLC and two top executives will pay more than $18 million to resolve allegations that five of the company's skilled nursing facilities billed Medicare and Medicaid "for grossly substandard nursing home services," the Department of Justice said.
The settlement also resolves claims brought by DOJ against Vanguard's majority owner and CEO, William Orand, and Vanguard's former director of operations, Mark Miller, who agree to pay $250,000 as part of this settlement.
"Simply stated, our elderly and vulnerable citizens who can't care for themselves deserve far better treatment than what they were subjected to by Vanguard," U.S. Attorney Don Cochran for the Middle District of Tennessee said in a media release.
"The substandard care that many of these facilities' residents endured while the companies were raiding the public coffers is deplorable," he said. "This settlement holds them accountable and the ensuing Corporate Integrity Agreement should ensure that this conduct is not repeated going forward."
DOJ and Tennessee filed suit against several Vanguard companies, Miller, and Orand, alleging that they were responsible for five Vanguard-owned skilled nursing facilities submitting false claims to Medicare and Medicaid for nursing home services that were "grossly substandard or worthless."
In particular, the state and federal prosecutors allege that the five Vanguard nursing facilities:
Failed to administer medications as prescribed;
Failed to provide standard infection control, resulting in urinary tract infections and wound infections;
Failed to provide wound care as ordered;
Failed to take prophylactic measures to prevent pressure ulcers, such as turning and repositioning;
Used unnecessary physical restraints on residents;
Failed to meet basic nutrition and hygiene requirements of residents.
The lawsuit further alleged that the defendants were responsible for the submission of hundreds of preadmission forms by these facilities to TennCare, Tennessee’s Medicaid Program, which contained forged nurse or physician signatures.
Vanguard and several of its companies that have reorganized in bankruptcy will pay more than $5.1 million, and two bankrupt Vanguard companies will pay $13.5 million.
Vanguard's SNFs include Boulevard Terrace Rehabilitation and Nursing Center in Murfreesboro, Tennessee; Glen Oaks Health and Rehabilitation in Shelbyville, Tennessee; and Manchester Health Care Center in Manchester, Tennessee.
Vanguard previously operated three other SNFs in Tennessee, including Crestview Health and Rehabilitation in Nashville; Imperial Gardens Health and Rehabilitation in Madison; and Poplar Point Health and Rehabilitation in Memphis.
In addition, Vanguard Healthcare owned Elderscript Services, LLC, in Tupelo, Mississippi, which provided pharmacy services to the Vanguard SNFs.
Due to the bankruptcy of Vanguard, federal prosecutors anticipate the total government recovery will exceed $6 million.
The Iowa Republican has asked the IRS for data on how many of the nation's approximately 3,000 tax-exempt hospitals are in compliance with charity care requirements.
Senate Finance Committee Chairman Chuck Grassley has renewed efforts to ensure that nonprofit hospitals are earning their tax-exempt status by providing enough services for low-income people.
In a letter to Internal Revenue Service Commissioner Charles Rettig, the Iowa Republican asked for data on how many hospitals are in compliance with the requirements for tax-exempt status and the status of IRS examinations of those not in compliance.
"Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me," Grassley said in his letter.
"As chairman of the Senate Judiciary Committee, I oversaw an investigation into the billing practices of the Mosaic Life Care hospital. That investigation resulted in debt relief of almost $17 million for thousands of low-income patients. This issue is still just as important to me now that I am chairman of the Senate Finance Committee," Grassley wrote.
The Mosaic Life inquiry examined the billing and debt collection practices at the health system after news reports indicated it had sued low-income patients who should have qualified for charity care.
Grassley told Rettig that he was renewing his probe of tax-exempt hospitals after hearing "reports" that "at least some of these tax-exempt hospitals have cut charity care, despite increased revenue, calling into question their compliance with the standards set by Congress."
He asked Rettig for information about whether tax-exempt hospitals are meeting the statutory requirements laid out insection 501 of the Internal Revenue Code, and he cited in his letter an article in Politico that suggested nonprofit hospitals were profiting from the Affordable Care Act while simultaneously cutting their charity care.
In February 2018, Grassley sent a letter to the IRS to inquire about how the agency reviews nonprofit hospital compliance.
Acting Commissioner David J. Kautter responded in April 2018 that the IRS reviews the status of about 1,000 U.S. tax-exempt hospitals each year by reviewing Forms 990, hospital websites, and other information in order to identify the hospitals with the highest likelihood of noncompliance.
Kautter said the IRS assigns either a compliance check or examination to those hospitals that appear to be most at risk of noncompliance.
Melinda Hatton, general counsel for the American Hospital Association, said her organization was confident that nonprofit hospitals are meeting their mission.
“In 2015, an AHA analysis of Schedule H filings reported that 13.3% of tax-exempt hospitals and health systems total expenses were devoted to community benefits programs, and that half of that spending was attributable to expenditures for providing financial assistance to needy patients and absorbing losses from Medicaid and other means-tested government program underpayments," she said.
Hatton said an analysis by Ernst & Young for the AHA found that hospitals' and health systems' community benefit activities outweigh the value of their federal tax exemption by a factor of 11 to one. "According to the report, non-profit hospitals in 2013 were exempt from an estimated $6 billion in federal taxes and provided an estimated $67.4 billion in community benefits," Hatton said.
The fraudsters peddled weight-loss shots on Groupon, but subjected patients to unneeded tests, and billed for hospital services to get higher reimbursements.
A federal jury in Texas convicted an internist and hospital owner for their roles in a $3.2 million fraud scheme that billed commercial payers for bogus and inflated claims, the Department of Justice said.
Harcharan Narang, MD, 50, who owned and practiced at North Cypress Clinical Associates in Cypress, and Dayakar Moparty, 47, who managed and operated Red Oak Hospital in Houston, were each found guilty of one count of conspiracy to commit healthcare fraud, 17 counts of healthcare fraud and three counts of money laundering.
Sentencing is set for June 20.
Evidence during the two-week trial showed that Narang and Moparty submitted false claims for unneeded and bogus medical tests, and billed those services at Red Oak Hospital to get a higher reimbursement.
Additionally, prosecutors said Narang and his co-conspirators falsified home health patient assessments to make the beneficiaries appear sicker than they were, to get higher reimbursements from Blue Cross Blue Shield, Cigna, Aetna and other payers.
Moparty also told his employees to falsely bill the medical services at Red Oak, even though the patients never received services there.
During the trial, patients testified that they bought a Groupon for weight loss shots with Narang, but that he gave them all a battery of medical tests that were not needed or provided.
As a result of the scheme, Red Oak received at least $3.2 million from payers, and Moparty covertly paid $3 million to shell companies owned by Narang.
A co-conspirator, Gurnaib Sidhu, MD, 67, of Houston, previously pleaded to conspiracy to commit healthcare fraud and is awaiting sentencing.
Attempts by HealthLeaders to contact Red Oak Hospital and North Cypress Clinical Associates were not successful.
Family physicians provide an excellent ROI, earning an average $241,000 as a starting salary but generating nine times that amount in hospital revenues.
Physicians each generate an average of nearly $2.4 million in revenues annually for their hospitals, a new survey finds.
Cardiovascular surgeons, on average, generated $3.7 million for their hospitals, topping the list of money makers among the 18 specialties examined in the survey of hospital chief financial officers, which was conducted by Dallas-based physician recruiters Merritt Hawkins.
The money includes net inpatient and outpatient revenue derived from patient hospital admissions, tests, treatments, prescriptions, and procedures performed or ordered by physicians.
"The value of physician care is not only related to the quality of patient outcomes," said Travis Singleton, Merritt Hawkins' executive vice president.
"Physicians continue to drive the financial health and viability of hospitals, even in a healthcare system that is evolving towards value-based payments," Singleton said.
Invasive cardiologists were No. 2 on the list of money makers for hospitals, generating an average of $3.5 million, followed by neurosurgeons at $3.4 million, and orthopedic surgeons at $3.3 million.
Primary care physicians pulled their weight too, according to the survey. Family physicians generate an average of $2.1 million in net revenue, while general internists generate an average of almost $2.7 million.
The average net revenue generated by all physicians in the survey, $2,378,727, is up 52% from 2016, the last year Merritt Hawkins conducted the survey.
Average revenue generated by each of the 18 medical specialties included in the survey increased compared to 2016, in most cases significantly.
Even though inpatient stays declined or flat-lined in recent years, Singleton attributed the increase in net revenues to more outpatient visits, which have more than tripled since 1975, higher costs per hospital stay, and sicker patients as the population ages.
"Demographics are our destiny," Singleton said. "New delivery models that promote prevention, population health and fee-for-value are laudable innovations but they don't change the basic facts. People get older and require more medical care, with much of it ordered by or directly provided by physicians."
While primary care physicians are not the top revenue generators for their hospitals, Singleton says they represent an excellent return on investment.
Family physicians average $241,000 as a starting salary, according to Merritt Hawkins' data, but they generate nine times that amount in hospital revenues. Orthopedic surgeons, with an average starting salary of $533,000, generate six times that amount for their hospitals.
An aging demographic, a strong economy driving a tight job market, and increases in the costs of medical goods and services are key reasons for spending growth.
National health expenditure growth is expected to average 5.5% annually through 2027, reaching nearly $6 trillion and consuming nearly 20% of the economy by then, according to federal actuaries.
The projections, issued Wednesday by the independent Office of the Actuary at the Centers for Medicare & Medicaid Services and published in Health Affairs, anticipate that growth in national health spending will outpace projected growth in Gross Domestic Product by 0.8 percentage points over the coming decade.
Because of that, the actuaries project that healthcare's share of the GDP to rise from 17.9% in 2017 to 19.4% by 2027.
"Long observed, key economic and demographic factors fundamental to the health sector are anticipated to be the major drivers of healthcare spending and coverage trends over the projection period," study lead author Andrea Sisko, an economist for the National Health Statistics Group, said Wednesday at a media teleconference.
Those key drivers include: an aging baby boomer demographic transitioning to Medicare; continued income and employment growth; and a 2.5% increase in prices for medical goods and services through 2027, which is more than twice the 1.1% rate of growth between 2014-2017.
Local, state, and federal governments are projected to pay for 47% of national healthcare spending, compared with 45% in 2017.
"This increases entirely accounted for by an increase in the federal government's share, which largely reflects faster growth in Medicare spending as the baby boom generation continues to transition into the program," Sisko said.
Owing to higher projected enrollment growth, Medicare's 7.4% average annual spending growth is expected to exceed that of Medicaid (5.5%) and private health insurance (4.8%).
"The differences in enrollment growth across the three coverage type primarily explain the differences in projected average annual growth," Sisko said.
"The contrast between the Medicare and private health insurance growth rate both for spending an enrollment is largely explained by the continued shift of the baby boom generation into Medicare. The average annual per enrollee growth rates across the payers are otherwise largely similar," she said.
Also among the projections:
Hospital spending growth will average 5.6% through 2027. This includes a projected acceleration in 2019, to 5.1% from 4.4% in 2018, owing to faster expected growth in both Medicare and Medicaid, but slower projected growth in private health insurance as enrollment declines slightly due to the repeal of the individual mandate.
For the remainder of the decade, hospital spending growth is projected to average 5.7%, with faster growth anticipated for all payers but led by Medicare and with the expectation of higher growth in wages reflecting tighter labor markets for hospital employees.
Physician and clinical services spending will grow an average of 5.4% per year over through 2027. This includes faster growth in prices over 2020-2027 for physician and clinical services due to anticipated rising wage growth related to increased demand from the aging population.
Net health insurance enrollment gains across all sources are generally expected to keep pace with population growth with the insured share of the population going from 91% in 2017 to 89.7% in 2027.
With Medicaid's recent expansion in Idaho, Maine, Nebraska, Utah, and Virginia, spending growth is then projected to average 5.5% for 2020 through 2027, owing to an older, sicker enrollment mix.
Private health insurance spending growth is projected to average 4.8%, the slowest among the major payers, due to slow enrollment growth as baby-boomers transition to Medicare.
Out-of-pocket expenditures are projected to grow at an average rate of 4.8% through 2027 and to represent 9.8% of total spending by 2027, a decrease from 10.5% in 2017.
Accelerated drug spending growth of 4.6% is expected in 2019 because of higher use of new and existing drugs. Through 2027, spending growth is expected to average 6.1%.
The ongoing financial crisis threatening rural hopsitals may be worsening. And stakeholders warn that it could get even worse if the economy cools off.
More than 20% of rural hospitals are at a "high risk of closing" due to wobbly finances, a Navigant analysis of publicly available data shows.
The study, released Wednesday, also shows that 64% of these at-risk rural hospitals are considered essential to the health and economic well-being of their communities.
The analysis examines the financial viability and community essentiality of more than 2,000 rural hospitals nationwide. It found that 21% of the rural hospitals are at high risk of closing based on their total operating margin, days cash on hand, and debt-to-capitalization ratio. This equates to 430 hospitals across 43 states that employ 150,000 people.
"Our analysis shines a new light on a rural hospital crisis that must be addressed and could significantly worsen with any downturn in the economy," study co-author David Mosley, managing director at Navigant, said in a media release.
"Local, state, and federal politicians, as well as health system administrators, need to act," he said.
The study also reviewed of the "community essentiality" of these cash-strapped rural hospitals, measuring factors such as trauma status, service to vulnerable populations, geographic isolation, and economic impact.
They determined that 64% or 277 of these hospitals are considered essential to their community's health and economic well-being. In 31 states, at least half of these financially distressed rural hospitals are considered essential.
Southern and Midwestern states, including Mississippi, Alabama, Kansas, Georgia, and Minnesota, are projected to be impacted the most, the data shows.
The study blamed "multiple factors" for the ongoing crisis with rural hospitals, including low rural population growth, payer mix degradation, excess hospital capacity due to declining inpatient care, and an inability for hospitals to leverage technology due to a lack of capital.
One possible solution involves collaborations between rural hospitals and academic and regional health systems, that leverages the larger systems' resources for telehealth, revenue cycle management, human capital, electronic health records, physician training, and clinical optimization.
Reintroduced in 2017 by Sens. Chuck Grassley, R-Iowa, Amy Klobuchar, D-Minn., and Cory Gardner, R-Colo., the REACH Act would create a new Medicare classification under which rural hospitals would offer emergency and outpatient services but no longer have inpatient beds.
A study involving 401 patients in seven ICUs across the nation found higher oxygen saturation using the bag-mask ventilation, and lower risk of vomiting stomach contents into the lungs.
Using bag-mask ventilation to force air into the lungs during tracheal intubation improves outcomes and has the potential to save lives, new research shows.
"When you place a breathing tube, you have to give patients medications to make them relaxed and sleepy. And those medications take about a minute to kick in," said Jonathan D. Casey, MD, a pulmonary and critical care fellow at Vanderbilt University Medical Center.
"After you give those medications, there is a big divide among doctors about whether to just wait and watch while their breathing slows and stops, or to provide ventilation (breath for the patient) with a bag-mask device," Casey said in comments accompanying the study.
"We found that providing ventilation with a bag-mask device is safe and very effective. Most importantly, it cut the rate of severely low oxygen levels in half," he said.
More than 1.5 million patients undergo tracheal intubation each year in the United States, during which 40% of patients with illness suffer low oxygen levels, which may damage the brain and heart. Two percent of people undergoing a tracheal suffer cardiac arrest, which is frequently fatal.
Vanderbilt's PreVent trial (Preventing Hypoxemia with Manual Ventilation during Endotracheal Intubation) study, published this week in the New England Journal of Medicine has the potential to fundamentally change the practice.
For the study, the multicenter trial was used in seven ICUs across the nation, with adult patients undergoing the procedure receiving either ventilation with a bag-mask device or no ventilation between induction and laryngoscopy.
Among the findings:
401 patients enrolled, the lowest median oxygen saturation was 96% in the bag-mask ventilation group as compared to 93% in the no-ventilation group.
A total of 21 patients in the bag-mask ventilation group had severely low oxygen levels, as compared with 45 patients in the no-ventilation group.
Vomiting stomach contents into the lungs occurred during 2.5% of intubations in the bag-mask ventilation group and during 4% of the group without bag-mask ventilation.
"Some doctors believe that when you squeeze the bag and force air into the lungs that will also put air into the stomach and put the patient at risk for vomiting of stomach contents into the lungs," Casey said.
"That is not what we found. Our study found that bag-mask ventilation didn't cause the vomiting that people were worried about, and it was very effective at preventing low oxygen levels," he said.
Based on the study findings, VUMC's ICU now uses bag-mask ventilation during placement of a breathing tube.
"It is important to act on what we learn," said study senior author Matthew W. Semler, MD, VUMC's ICU medical director.
"Not only did we immediately apply these important results to our practice, but we have started follow-up trials of other ways to improve the safety of tracheal intubation – and those new trials require that bag-mask ventilation be provided for every patient receiving a breathing tube," he said.
Study co-author David R. Janz, MD, added that "the best thing about this intervention is that it is free."
"This is a device that is already always available when you are placing a breathing tube," said Janz, assistant professor of Medicine at Louisiana State University.
"In the past, we only used the bag-mask device to assist patients' breathing if we had difficulty placing a breathing tube. Now we know that it should be used in every procedure even before we make our first attempt to place a breathing tube," he said.
A greater primary care physician supply was associated with lower mortality, but the per capita supply did not keep pace with U.S. population growth between 2005 and 2015.
Every 10 additional primary care physicians per 100,000 population was associated with a 51.5 day increase in life expectancy, according to a study published Monday in JAMA Internal Medicine.
Using that same metric, an increase in 10 specialist physicians per 100,000 population corresponded to a 19.2-day increase in life expectancy, the study found.
By linking mortality rates with the numbers of primary care physicians, the Stanford University research supports the validity of population health initiatives that emphasize and rely upon access to primary care.
Over the course or a decade, the primary care physician supply in the U.S. increased from 196,014 in 2005, to 204,419 in 2015. That number did not, however, keep pace with the overall population growth, which means the number of primary care physicians per capita in that span decreased from 46.6 per 100,000 population to 41.6 per 100,000.
Furthermore, the study found "disproportionate losses" of primary care physicians in some counties, particularly in rural areas.
"The authors suggest the decrease in primary care physician supply across counties could have important health implications, although conclusions about individual-level effects shouldn't be drawn from population-level associations," the study said.
In acommentary accompanying the study, Sondra Zabar, MD, Andrew Wallach, MD, and Adina Kalet, MD, said more must be done both to steer physicians in training toward primary care, particularly in underserved areas.
"To increase access to primary care, especially in underserved areas, we must align incentives to attract individuals into primary care practice, innovate primary care training, and greatly improve the primary care practice model," the physicians wrote. "Physician payment reform is a key to making all of this happen."
"Our reimbursement system needs to incentivize a realignment in the ratio between primary care and non-primary care that is associated with the best population health, such that primary care physicians no longer shoulder a disproportionate share of administrative work such as medication refills and prior authorizations," the physicians wrote.
The study looked at U.S. population data and individual-level claims data linked to mortality from 2005 to 2015 against changes in primary care and specialist physician supply from 2005 to 2015.
Data from 3,142 counties, 7,144 primary care service areas, and 306 hospital referral regions were used to investigate the association of primary care physician supply with changes in life expectancy and cause-specific mortality after adjustment for healthcare, demographic, socioeconomic, and behavioral covariates.
Prosecutors say two Pennsylvania hospitals owned by the California-based, for-profit health system billed Medicare for unneeded overnight hospital stays.
For the second time in less than one year, Prime Healthcare Services Inc. and founder and CEO Prem Reddy, MD, have reached an upcoding settlement with the U.S. Department of Justice.
Reddy and the for-profit health system, based in Ontario, California, this week agreed to pay $1.25 million to settle additional whistleblower allegations that two Prime hospitals in Pennsylvania—Roxborough Memorial Hospital in Philadelphia and Lower Bucks Hospital in Bristol—knowingly submitted false claims to Medicare, a violation of the False Claims Act.
Prosecutors said the hospitals allegedly admitted patients for overnight stays who needed only less costly, outpatient care. The hospitals also allegedly up-coded for more expensive patient diagnoses than needed.
"Charging the government for more-costly services than what the patient actually needs and billing the government for more serious diagnoses than what the patient actually has is a waste of taxpayer dollars," William M. McSwain, U.S. Attorney for the Eastern District of Pennsylvania said in a media release.
Prosecutors allege that from the time Prime acquired the two hospitals in 2012 through September 30, 2013, the hospitals admitted emergency room Medicare patients for costly and medically unnecessary one- and two-day overnight hospital stays, instead of treating the patients in less costly outpatient service or keeping them under observation.
In addition, from 2012 through Dec. 31, 2014, the hospitals up-coded inpatient diagnoses to increase Medicare payments.
In August 2018, Prime and Reddy paid $65 million to resolve whistleblower allegations that 14 Prime hospitals in California systematically overcharged Medicare. Prime admitted no wrongdoing in that settlement.
The Pennsylvania settlement resolves a whistleblower suit filed by an employee and a former employee at Roxborough Memorial.
"We expect health care companies to accurately bill federal healthcare programs for services they provide, not pad profits by charging for more expensive services than were actually provided," said Maureen Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.
Prime Healthcare Responds
Prime Healthcare on Friday afternoon acknowledged the settlement, and said it "dealt primarilty with the technical classification of the category under which patients were admitted and billed."
"Prime Healthcare agreed to resolve this matter as part of the larger resolution of the California qui tam lawsuit that Prime settled on August 3, 2018," the statement read. "This settlement contains no finding of improper conduct or wrongdoing, and Prime Healthcare's record of clinical quality care was never in question. The settlement also provides a full release to Prime Healthcare and does not affect its existing corporate integrity agreement."
Joel Richlin, Prime Healthcare's deputy general counsel, said "this settlement allows Prime Healthcare to continue to focus on its mission of providing quality, compassionate healthcare while saving hospitals, savings jobs, and saving lives."
