Physician: The reimbursement increase should make total ankle replacement “rewarding” for hospitals that invest in those capabilities for their orthopedics service lines.
A little-noticed update in early September to CMS’s Inpatient Prospective Payment System promises to increase the reimbursement bundle for primary and revision total ankle replacement procedures, which a specialist says will yield far better reimbursement and margins for facilities where such procedures are performed.
The changes, which begin at the start of the 2018 fiscal year, move total ankle replacement from a broad, lower-paying joint category that includes total hip and total knee replacement that yielded thin margins and lower utilization into a higher-paying Medicare code, says Greg Berlet, MD, an orthopedic surgeon and certified specialist in total ankle replacement.
“This announcement and change is most significant on the facility level, not the provider level,” says Berlet, who is also managing partner of the Columbus, Ohio-based Orthopedic Foot & Ankle Center, whose nine physicians draw 20-% to 30% of their patients from out of state. “This also doesn’t apply to outpatient centers. The change reflects that people who are changing the regs are hearing us,” he says.
Patients undergoing ankle replacements typically require an overnight stay in the hospital, he says.
The alternative surgical option to replacement, ankle fusion, is a good option for pain relief for such patients, but replacement ideally restores functionality of the joint, while fusion generally reduces joint function. Berlet says the update was needed because knee replacements by comparison are more predictable, and usually are needed because of normal wear and tear and age. Ankle replacement, by contrast, is more complex, requires longer operative times, and may need other work such as ligament repair that is uncommon in knee replacements.
Ankle replacements are usually the result of past injury, thus patients are usually younger, averaging age 55, while knee joint replacement patients’ average age is 70. Given the younger population, Berlet is hopeful commercial insurers will also adjust their reimbursement consistent with the CMS change.
He says the business impact of the decision is that hospitals will be much more willing to embrace total ankle replacement in their musculoskeletal service line, and be more willing to partner with physicians.
Though many hospitals have said they expect to lose moneyon Medicare’s Comprehensive Care for Joint Replacement reimbursement model, Berlet doesn’t expect them to experience the same financial difficulty with total ankle replacements.
“I think they’re losing money in hip and knee because they have allocated costs from other service lines,” he says. “I would be more interested if those statements came from orthopedic hospitals, so I don’t buy that statement, but regardless, I believe this can be profitable for everyone and will enhance a hospital’s reputation.”
He says while knee replacements nationwide number between 500,000 and 600,000 procedures a year, ankle replacements represent a much lower number of procedures. Of the 50,000 or so surgeries that feature either ankle fusion or replacement, replacement represents only about a third. This decision will replace fusion in a large number of patients over the next few years, he says.
Berlet says in treatment terms, he expects the decision to remove the financial barriers to access to ankle replacement, and it’s up to hospitals to help remove the accessibility barrier.
“Executives should make sure they surround themselves with physicians who embrace this innovation and can bring this skill to their facility,” he says. “They will find a rewarding service line to invest in.”
The New Jersey-based physician practice management company signs deals with groups in Oregon and Arizona to roll out management services and care models.
New Jersey-based Summit Health Management, which grew out of an 800-provider physician practice with 65 practice locations, will expand its care model in a nationwide push. It’s first members outside of New Jersey will include Bend (Oregon) Memorial Clinic and Phoenix-based Arizona Primary Care Physicians.
The Phoenix group will be renamed Summit Medical Group Arizona as of the new year, and while Bend Memorial Clinic will retain its name, Summit Health Management will provide the 120-provider practice with administrative, clinical and financial management services.
Both clinics will gain access to SHM’s proprietary patient care and practice management model which its CEO says has demonstrably improved outcomes and reduced costs at Summit Medical Group in New Jersey, an independent multispecialty physician group.
“We have risk contracts on the commercial side,” says Jeffrey Le Benger, chairman and CEO of Summit Health Management.
“Those contracts are very advanced, where we match cohorts and risk stratify…and we have proven that we have met every quality metric and lowered the total cost of care in the state by 6% to 8% over the past few years.”
Bend Memorial Clinic includes more than 120 providers in 30 specialties and services including urgent care, primary care, specialty care, imaging and clinical services in five locations.
“This is an important milestone in the long and distinguished history of BMC that will ensure the strength and vitality of our physician-owned and governed medical group,” said David Holloway, MD, Bend Memorial Clinic’s CEO, in a press release.
APC has seven locations in the Phoenix area with a total of 51 providers practicing internal medicine, family medicine, pediatrics, geriatrics, colorectal, neurology, podiatry and audiology.
To facilitate Arizona Primary Care’s transition into the Summit Medical Group Arizona partnership, APC has entered into a comprehensive managed services contract with SHM that will permit the integration to move forward while also honoring APC’s established contracts with payers and other parties for the remainder of their term.
“We’re a physician-owned and led management company,” Le Benger says.
“I feel we understand the psyche of what physicians are going through. We want to [provide healthcare] at a lower cost structure, we understand how to negotiate a risk-based contract with payers, and we know how to assimilate physicians into a culture with minimal turnover.”
More than 50 senior leaders and board members who are not in direct patient care roles have been certified in patient safety by a national body because 'patient safety is everyone's duty.'
Rusty Holman is a physician and chief medical officer at LifePoint Health, so it makes sense that he should be certified in patient safety. He holds a Certified Professional in Patient Safety credential from the National Patient Safety Foundation, which merged with the Institute for Healthcare Improvement in May, 2017.
For the past few years, Holman has headed up an internal executive patient safety conference in the Nashville area for leaders at LifePoint.
The 72-hospital chain considers it mandatory for patient safety officers and quality directors at its hospitals to achieve the certification, and supports other clinical positions in achieving the designation as well.
But as it became increasingly clear that quality and patient safety could be measured and quantified, and as more of its clinicians became certified, a few LifePoint executives began to see the value in getting certified themselves.
The logic: Their effectiveness and empathy for clinicians could be greatly improved by learning more about quality and patient safety themselves. They went to Holman with a request: Could they also get certified?
"Much in same way we've always exercised financial and operational discipline and strong community partnership, we've pivoted our culture toward patient safety in such a way that recognizes the improvements we need to make and that there's a science to patient safety," he says.
"It's not just a series of common-knowledge principles you follow through on."
About 105 individuals throughout chain have been certified, roughly half of whom are part of individual hospital C-suite teams, including CEOs and even a CFO.
Culture change can be tricky to implement and slow to build, Holman concedes, and the organization's journey toward making quality and patient safety a priority represented a culture change of sorts as people outside of traditional patient care roles were encouraged informally to get certified, if they desired.
There was no organizational mandate toward leaders on achieving the designation, but a few early adopters recognized that imperatives to improve patient safety metrics might be easier to achieve if the offer of patient safety certification was extended to more than just patient safety officers or quality directors.
The organization needed broader involvement, a guiding coalition, and strength in numbers, as Holman puts it.
"The cultural piece is something we all recognize is slow to build," he says.
"Fundamentally, we did not necessarily want to change our culture, but we wanted to evolve what was already strong about it and deliver outstanding results in quality and safety."
Many of the newest certified C-suite members have done so because they were challenged by their colleagues, says Holman.
Senior leaders went through a training process and an exam "that's not by any stretch easy" to achieve certification, says Holman. That sent a signal to everyone that patient safety is worthwhile, important, and not just good for patients, but for their careers.
"It makes them better leaders, informed executives, and it helps achieve our mission of making communities healthier," Holman says.
Thanks to the testimony of those few early adopters, momentum followed.
"Early it was just a handful. But the number has grown significantly over the past three years," he says.
And it's unusual.
"I'm simply not aware of other large health systems are encouraging anyone outside patient safety or quality to undertake this certification," says Holman.
Vicki Parks, chief financial officer at Jackson Purchase Medical Center, a 227-bed community hospital in Mayfield, KY, received her certification in early 2016.
She accepted a challenge from her group president to become the first CFO in the company to be certified in patient safety. In her training and background as a CPA, things are very clear-cut.
That's not so in patient care. "Accounting rules standards to tell us how to do everything. There's not a lot of gray involved in the CFO world," she says.
"But what I learned is that most of what they do every day is based on judgment. I learned to listen to [clinicians] more, instead of judging so much. There are so many extenuating circumstances to why they act in a certain way and I don't think I had any idea what they went through on a daily basis."
Mark Holyoak, CEO of 49-bed Castleview Hospital in Price, Utah, and a 17-year LifePoint employee, achieved his certification in late 2016.
Though Holyoak is a nurse by training, he sees benefits to having non-clinicians achieve patient safety certification because it helps them better understand why decisions are made in patient care, and helps them make better decisions involving budgets.
"We're looking at process improvements, but as CEO it's helped me make the decisions through the lens of being as safe as we can be," he says.
Boston's Partners Health is set to acquire three of Care New England's four hospitals, but has said the deal is predicated on a viable turnaround plan. CNE lost $40 million in the first half of its fiscal year.
Care New England’s Dennis Keefe announced he will retire from the financially troubled organization as of Dec. 31, 2017, after serving as president of the Providence, Rhode Island-based four-hospital system since 2011.
He will serve as a consultant for the organization for up to a year after he retires, helping shepherd the acquisition of three of its four hospitals by Partners Healthcare.
That deal is now in question because Boston-based healthcare giant has said the deal is contingent on whether the three hospitals can return to profitability relatively quickly.
“Despite our challenges and recent difficulties, I remain confident in a future of sustained financial stability for Care New England,” said Keefe, in a press release.
“That is a testament to the work we have done together, and that you will continue to do going forward. It represents the best and necessary path to ensure a strong Care New England regardless of the outcome of our important and current business opportunities.”
Care New England lost $40 million in the first half of its fiscal year, and Partners said in August that it is holding off on finalizing the acquisition until a viable turnaround plan is in place.
The two groups will meet later this month or in early October to decide whether to complete the deal, but five-hospital Lifespan, the largest health system in Rhode Island, is interested in case the Partners deal ultimately falls through.
The fourth hospital in Care New England’s portfolio, Memorial Hospital of Rhode Island, a 294-bed teaching hospital, is operating under a letter of intent to be acquired by California-based Prime Healthcare, which already owns Landmark Medical Center and Rehabilitation Hospital of Rhode Island among its 45 hospitals in 14 states.
Prime has problems of its own, as it faces a Medicare fraud lawsuit brought by a whistleblower and joined by the Department of Justice. The Prime acquisition of Memorial is expected to be completed by the fourth quarter this year, according to the Providence Journal.
James Fanale, MD, who is currently executive vice president, chief clinical officer and chief operating officer of Care New England, will take over as interim president and CEO on Jan. 1.
Many of the system’s financial problems stem from low patient volumes and its unfavorable payer mix, which relies heavily on Medicaid reimbursement.
Data can help establish strategic priorities at healthcare organizations, but only with effective analysis of that data can critical, lasting impacts on quality improvement and cost reduction be achieved.
Data without organizational tools is like trying to find your way around a dark room that you’ve never been inside. You can feel your way around using intuition and logic, but progress is slow, and mistakes can hurt you.
In healthcare, data is ubiquitous, but it's also largely unstructured and unanalyzed, as anyone who has tried to interpret it knows. This problem has left the industry in a dark room in terms of using that information strategically—until recently.
Developing operational and strategic imperatives from all that data is dependent upon analytics—the discovery and interpretation of meaningful patterns. Analytics, to extend the analogy, is a necessary source of light. To deal strategically with everything from eliminating variation in clinical interactions to reducing overutilization to improving patient outcomes, healthcare leaders need technological solutions to assist clinician decision-making at the care site, where the majority of decisions involving cost and outcomes are made.
For these and other reasons, leaders are making critical decisions on the tools that will help them make sense of their data to not only drive smart clinical decision-making, but to allocate scarce resources toward gaining efficiency and competing on cost.
Analytics, in short, is critical to demonstrating value, says Richard Vaughn, MD, chief medical information officer at St. Louis–based, 20-hospital SSM Health.
“The differentiator in the marketplace will be folks who have the data in the right format and know how to use it,” he says. “Analytics helps us use our data as a strategic resource.”
To enable that strategic resource, he adds that the data has to be clean, organized, and it has to connect to the health system’s care delivery platform.
“We have to get the data oriented properly and then make sure it’s sitting in the care delivery stack,” he says.
Analytics helps make the connection between higher quality and lower cost, says Timothy Sielaff, MD, the chief medical officer at Allina Health in Minneapolis. He says the 12-hospital health system is probably ahead of the curve in using data to find meaningful insights that can translate to higher-quality care, and the virtuous circle that results from higher-quality care is that it’s also less expensive.
“The highest-cost care is almost never the highest quality,” he says. “In fact, the incremental cost-effectiveness ratio rarely favors more expensive and better.”
Also critical to effective insights from data analytics is the ability to attribute data to individual practitioners, says Kathleen Sanford, RN, senior vice president and chief nursing officer with Catholic Health Initiatives, largely because individuals don’t generally accept conclusions from aggregated data as readily as they do from their own data.
“It’s difficult even now to get people to accept evidence-based practices unless it’s their own evidence,” she says.
CHI’s goals with analytics is to measure individual providers’ quality outcomes, lengths of stay, and readmission rates, among other statistics, to help convince practitioners to share tactics that work to improve quality of care on both an organizational and individual level. Such data spurs competition and cooperation, because clinicians, without fail, want to provide the best possible care to their patients—they’re just not always sure how to achieve that goal. Without data, they rely on intuition and training, which isn’t always backed up by the evidence.
“When I first came to CHI 10 years ago, the reports of our results were blinded by organization,” she says. “We not only made [the results] unblinded, we’re able to compare each organization not only with each other but also with the rest of the country. So just in 18 months, we’ve had a 22% decrease in pneumonia mortality, a 42% decrease in CAUTIs, a 9% decrease in CLABSIs, 31% decrease in colon surgery infections, a 19% decrease in hysterectomy infections, and 14% decrease in pressure ulcers.”
To view the complete HealthLeaders Media Roundtable report “Impactful Analytics: Driving Clinical, Financial, and Cultural Change,” click on this link.
Tomislav "Tom" Mihaljevic, MD, will take over as CEO in January. Toby Cosgrove, MD, will stay on in an advisory role.
Four months after Cleveland Clinic President and CEO Delos "Toby" Cosgrove, MD, announced his decision to retire, the board of the Cleveland Clinic has named his successor.
Tomislav "Tom" Mihaljevic, MD, will take over as president and CEO on Jan. 1, 2018. The 53-year old cardiothoracic surgeon has been CEO of the Cleveland Clinic Abu Dhabi since 2015.
Robert E. Rich, chair of the Clinic's board of directors, said the board unanimously chose Mihaljevic based on his experience as an "innovative, world-class surgeon," but also because of his recent experience as a hospital executive with a track record of achievement in healthcare quality and safety, patient experience and business strategy.
Mihaljevic directly managed the Abu Dhabi unit's Patient Experience and Strategy & Business Development programs.
"Cleveland Clinic is very well positioned for the future," Mihaljevic said in a news release. "Our ongoing success will hinge on our ability to maintain high-quality outcomes, while reducing healthcare costs, encouraging innovation, and improving access and affordability for patients."
"By nearly every measure – quality, accessibility, finances, innovation, reputation – Cleveland Clinic has made unprecedented strides since Dr. Cosgrove became CEO and president in 2004," said Rich.
Cosgrove Shepherded Growth
Cosgrove, who has led the organization since 2004, and who will continue on in an advisory role, has overseen strong growth during his tenure.
Revenues grew from $3.7 billion in 2004 to $8.5 billion in 2016 and he began an expansion beyond the clinic's Cleveland headquarters. Locations were added in Florida, Nevada, Abu Dhabi, and Canada. in addition to the international locations.
While operating income dipped in 2016, the hospital routinely scores high in rankings of clinical outcomes, patient experience, innovation and wellness. It earned a No. 2 spot from U.S. News & World Report this year and was ranked No. 1 in cardiology and heart surgery for 23 consecutive years.
Cosgrove was the only health system representative named to President Donald Trump's strategic and policy forum before it disbanded abruptly following Trump's controversial response to the violent protests in Charlottesville.
Mihaljevic earned his medical degree from the University of Zagreb (Croatia) before moving to the United States in 1995 to join Brigham and Women's Hospital in Boston.
He moved to Cleveland Clinic in 2004 as a cardiothoracic surgeon specializing in minimally invasive and robotically assisted cardiac surgeries, particularly robotic mitral valve repair, complex valve operations, heart failure surgery, and heart transplantation.
In 2005, he received a patent for a novel cardioscopy system for minimally invasive cardiac surgery. He earned the Cleveland Clinic Innovation Award in both 2006 and 2007.
The top three non-emergent ER diagnoses were identified by researchers as joint disorders, atopic dermatitis, and other soft tissue diseases.
What does “avoidable” mean?
Answer: It depends on who’s doing the study.
A study published Thursday in the peer-reviewed International Journal for Quality in Health Carefound that only 3.3% of emergency room visits could be classified as “avoidable.” That stands in stark contrast, for example, with another study from Truven Health Analytics that found nearly 71% of emergency room visits are avoidable. What gives?
For its part, the more recent study, Avoidable Emergency Department Visits: A Starting Point, contends that it’s difficult to determine whether an ED visit was necessary until after the visit, which makes some sense, but severely limits the ability of triage to make a difference.
“Using chief complaints derived from diagnoses, which are determined post hoc, can be dangerous because visits that are eventually determined to be non-emergent after physician examination and diagnostic testing are virtually indistinguishable from emergent visits,” the study says.
So there’s that.
The 3.3% of visits the study’s authors do contend are actually avoidable include visits that did not require any diagnostic or screening services, procedures or medications, and were discharged home, which is fairly restrictive. Further, a significant number of those avoidable visits, by their definition, included mental health and dental conditions, which emergency departments are ill-equipped to treat.
“This suggests a lack of access to healthcare rather than intentional inappropriate use is driving many of these ‘avoidable’ visits,” said study author Renee Hsia, MD, of the Department of Emergency Medicine at the University of California, San Francisco, in a press release. “These patients come to the ER because they need help and literally have no place else to go.”
To derive their results, study authors examined a total of 115,081 records, representing 424 million ED visits made by patients aged 18–64 years who were seen in the ED and discharged home.
By contrast, a separate study, which used data from emergency department visits of patients with employer-sponsored health plans, and examined insurance claims data for more than 6.5 million emergency room visits made by commercially insured individuals, under age 65, in calendar year 2010, found that just 29% of those patients required immediate attention in the emergency room.
The Truven study found that the top three non-emergent diagnoses were joint disorders, atopic dermatitis, and other soft tissue diseases.
Part of the controversy surrounding ED visits is, unsurprisingly, about money. ED care is expensive compared to non-emergency settings, and not only do insurance companies have an incentive to reduce unnecessary visits in favor of lower-cost settings of care, but with the rise of high deductible health plans, so do many patients. That is especially true for patients with employer-sponsored high-deductible plans, where the patient is responsible for all medical care costs up to a certain deductible, usually several thousand dollars, in a calendar year.
Medicaid patients, to use one example, do not generally have the same cost-sharing responsibilities, although that is changing.
A unique partnership, the first with a physician-owned group practice promises to change cancer care and reduce its cost.
The University of Texas MD Anderson Cancer Center in Houston has been adding partners to its cancer network for at least six years in a bid to extend its reach nationwide.
A partnership with an independent physician group in New Jersey is the first of its kind and could potentially cut the cost of cancer care while keeping patients close to home, its oncology chief says.
In April 2016, New Jersey's Summit Medical Group announced a partnership with Houston's University of Texas MD Anderson Cancer Center. At first glance, Summit's addition to the MD Anderson Cancer Network seemed identical to four other such partnerships signed since 2011 in Arizona, Florida, California, and at Cooper Health System in southern New Jersey.
But the Summit partnership, which covers the northern portion of the state, is unique in that it's the first with a physician-owned and governed group practice instead of a health system.
The 130,000-square-foot Summit Medical Group MD Anderson Cancer Center is its physical manifestation, and will open in April 2018 next to the medical group's new facility in Florham Park, NJ.
HealthLeaders recently spoke with William DeRosa, DO, its chief of oncology, about the partnership's implications on changing cancer care and reducing its cost. Following is a lightly edited transcript of that conversation.
HealthLeaders: How did the relationship between Summit and MD Anderson come about?
DeRosa: It's unique. Every major cancer center has its own approach. Some want to be regional. Cancer centers like Dana Farber (Boston) and Memorial Sloan Kettering (New York) have a regional presence with a national profile.
Anderson wants to have their intellectual architecture available to one-third of the nation through network and partnership arrangements, and we were their fifth partnership.
The partnership model uses Anderson's expertise to deliver care where the patient lives. We wanted to represent them in the North New Jersey metro marketplace and through Cooper (University Health Care), which had the arrangement with them for Southern New Jersey, we signed an agreement to provide oncologic services for the state's nine northern counties.
HealthLeaders: You say a partnership with a physician group has the potential to reduce the cost of cancer care. How?
DeRosa: We're the largest physician-owned and governed outpatient care delivery system in the country that is agnostic to hospitals. Soon we will have 800 providers with 74 sites, and 1.4 million square feet of clinical space and 10,000 patient visits a day.
We're also the only physician-owned care delivery system partnered with a major cancer center. Every other one is with a hospital or health system. We feel we're able to bring highest level of care in the most value-based way.
As you know, hospital systems bill at the OPPS rate, they get a substantial reimbursement increase because of facility fees and they get 2% more on Medicare (reimbursement). We feel this is the model for the future of cancer care delivery throughout the country.
If we can do this at commercial rates, with none of the rate enhancements of hospitals, and if we can show outcomes that are consistent on a population platform, you then have the power to go into any marketplace and start to go at risk.
That allows you to price the product at a level that will expand care to a greater portion of the population, people who don't have the wherewithal to travel to comprehensive cancer centers. We should have the ability to push out to every patient in the country that level of sophistication.
HealthLeaders: Why do patients often feel the need to travel out of their local area for cancer care and why is this model superior clinically?
DeRosa: Patients go where they feel comfortable and where they perceive they'll get the best care.
Memorial Sloan Kettering is an outstanding facility, but for us, the idea is that not only do you get to stay home, but all the other docs who cared for you here remain involved in your care, as opposed to being disassociated.
With our platform of primary care and other specialties, we take the lead from screening to diagnosis to treatment to curative or palliative care, and everything in that continuum.
Patients don't have to leave the providers who already contribute to their care. By bringing MD Anderson's architecture to an integrated practice, we feel this can be the future of cancer care, from medical to radiation to surgical oncology.
We have subspecialists who concentrate on onco-internal medicine, for example. We have cardiologists, gastroenterologists, endocrinologists, pulmonologists and others who are interested in being able to apply their specialty to the cancer patient.
This is a concept pioneered by MD Anderson, where their specialists are there to take care of cancer patients.
HealthLeaders: Operationally, how does the partnership increase the capabilities of Summit?
DeRosa: If we can do this in conjunction with comparable outcomes, this is the model for the future of cancer care delivery throughout the country.
I just joined a year ago but this comes from the foresight and vision of Dr. (Jeffrey) LeBenger (chairman and CEO, Summit Health Management) and the board. This is a hypercompetitive marketplace and oncology was always the last frontier.
We're at the beginning of precision medicine, the beginning of understanding at molecular level what's really happening in cancer. In medical oncology, our ability to give sophisticated care has continued to evolve and will continue to do so.
In radiation oncology, Anderson feels their treatment plans are unique. Every patient who receives radiation has a treatment plan developed with our chief of radiation oncology who works in conjunction with oncologists at the campus in Houston to make sure it's exactly the same as what they would receive there.
On the medical side, we have the ability to interact with all the major thought leaders in Houston. So any clinic question that requires additional expertise, we can bring a multidisciplinary approach here similar to what's in Houston.
As the extent of the devastation became evident, TeamHealth mobilized its clinician recovery team.
Established following Hurricanes Katrina and tweaked following Ike and Sandy, the team is trained to spring into action in an emergency.
In this case, the TeamHealth unit is helping to relieve nearly 550 colleagues in the Houston area, many of whom are victims themselves and some of whom have been working at Memorial Hermann hospitals since Harvey made landfall last Friday night.
TeamHealth contracts with many hospitals in the 16-hospital Memorial Hermann health system to provide emergency room physicians, hospitalists, and other specialties.
The company's recovery team, consisting of credentialing, recruiting operations professionals, and clinician leaders, began organizing volunteers from among its more than 19,000 clinicians nationwide when Texas Gov. Greg Abbott temporarily suspended clinical practice statutes and rules to allow physicians from other states to assist with the disaster response.
The first group of 10 ER physicians arrived in Houston Tuesday. Mary Haven Merkle, MD, Team Health's senior vice president of integrated operations, says that within 14 hours of the governor's decision, those physicians had volunteered, received a temporary credential, and arranged transport.
Many drove from relatively close cities such as Dallas and Austin, and in some cases were transported to areas of greatest need by boat and Memorial Hermann helicopters because flooded streets made surface travel impossible.
"Many physicians and nurse practitioners [are] trapped in their homes and unable to get to work and the ones who made it in have been working long hours with no relief," says Merkle.
Almost all Memorial Hermann hospitals remain open, although several freestanding ERs have closed, and Sugar Land hospital was evacuatedand shut down due to flooding.
Ben Taub Hospital, the county's safety net facility, experienced flooding, ran low on food, and had to transfer many patients to other hosptials, including Memorial Hermann hospitals.
In fact, says Robert Frantz, MD President of Team Health's West Group, which includes the Houston area, Memorial Hermann's hospitals are now primarily receivers of patients from other hospitals in the area that have had to be evacuated due to storm-related issues.
"We seem to learn well from our previous experiences," says Frantz, of the recovery team. "We've responded before, but we've gotten increasingly more sophisticated. We don't want to get good because of the misfortune that it brings, but… we mobilized resources in a very short time to ID qualified people to relieve fatigued and overwhelmed providers."
Some of those providers have lost everything, he says, but are continuing to work in what he calls a dynamic situation.
One doctor Frantz spoke with related that the mood was sad, because "everyone he is working with has lost most or everything and they're still at work," says Frantz. "More of our providers than not have had some level of property damage or loss."
Relief Efforts Continue
To help them, TeamHealth has established internal phone and email hotlines that reach Merkle and the HR department directly. Some families are in homes that are flooded and they need to get out and find a place to stay. TeamHealth immediately attaches an HR person to each of these cases as they come in, Frantz says.
Meanwhile, Merkle expects the work relief effort to continue, if not intensify, over the coming days and weeks. She says hospitalists, ER physicians, pediatricians, OB physicians and advance practice nurses numbering more than a hundred have volunteered and are being mobilized to rotate in and out.
Six hospitalists and an advance practice nurse will go in tomorrow, and over the weekend, about 26 physicians and 10-11 mid-levels will go in.
"The plan is we're going in waves every three to four days," she says. "And we're assessing needs about every eight hours to readjust."
Ground transport is a huge barrier, so most volunteer practitioners are prepared to stay at the hospitals during their time in the area. In some cases, TeamHealth has been able to reserve a few hotel rooms near the hospital for showers and brief rest. To make the most of the time of those rotating in, the company is providing a "cheat sheet" for onboarding to smooth out the process, and is using scribes to enter medical data for those who may not be familiar with the facility's EMR."
"Our team on the ground are delighted to see their colleagues," says Merkle. "Everyone's pitching in."
A new site-neutral CMS outpatient rule will cut reimbursements sharply for new outpatient centers, forcing hospitals and health systems to rethink construction decisions.
This article first appeared in the September 2017 issue of HealthLeaders magazine.
Last fall, with one regulatory swipe, CMS may have changed the plans of countless hospitals and health systems that counted on higher billing rates for "hospital-based" services provided to Medicare beneficiaries by off-campus hospital-owned facilities.
The move wasn't a surprise—the regulatory changes come directly from the Bipartisan Budget Act of 2015, Section 603—but it essentially means that payments to provider-based departments that were not billing as a hospital department prior to November 2, 2015, will be cut in half. Those established after that date will be considered "site neutral" and, thus, will receive the lower reimbursement rate.
Hospitals and health systems, for a variety of reasons, had been investing heavily in outpatient facilities, either by acquiring physician practices that owned them or by building off-campus facilities on their own.
One example is the proliferation of medical malls that combine a variety of outpatient services under one roof. Under the old rules, they could bill at the hospital rate. But those investments are now in question thanks, in large part, to this new rule.
"They took a significant sledgehammer to innovation and community focus, and all because they didn't like hospitals buying clinics and converting them."
While it's not affecting plans for a consolidated outpatient center for his organization, Mark Herzog, FACHE, president and CEO of Holy Family Memorial in Manitowoc, Wisconsin, says the rule will likely have a chilling effect on other organizations that want to either consolidate outpatient services or move more care out of the inpatient setting.
Several forces drive this trend: For one, all but the most specialized and complex care is generally more dangerous in an inpatient setting; it's also generally more inconvenient for patients and more expensive.
"It is a very poorly-thought-out regulation," Herzog says.
Inspired by the trend toward hospitals buying large physician group practices and converting them to provider-based sites, which, of course, also provided for better Medicare reimbursement, the rule was intended to put a stop to such behavior.
But like many government regulations added to stop a particular undesirable behavior, it's not retroactive—that is, if you already have established these facilities, you can continue to bill the old way.
Only future construction projects and strategic decisions associated with them are affected. In this way, the new OPPS rules are the equivalent of closing the barn door after a horse has already escaped. To extend the metaphor further, it may prevent the proper care and feeding of the horses that remain.
The root cause of the new regulation is to prevent gaming the reimbursement system through physician acquisition, says Herzog, "but in so doing, while they may have stopped a temporary problem … they put a huge barrier in place for existing providers trying to do the right thing for their communities."
Besides, he says, because the physician acquisition boom is years old now, hospitals and health systems are running out of new providers to acquire.
Holy Family Memorial, in fact, is attempting to decrease operating expenses by consolidating services under fewer "roofs," and the new regulation will effectively put a damper on that activity for health systems that are seeking to right-size their physical building infrastructure.
When he became CEO of the 67-staffed-bed medical and surgical hospital, which has more than 1,200 employees in its network, it had 27 network service facilities. By consolidating outpatient locations, such as physician offices, the system is down to six "roofs," he says, as part of an efficiency drive.
He says as a result of the consolidation, the health system has not experienced an increase in operating expenses since 2010, partially by reducing such fixed costs.
One example—HFM Lakefront, an outpatient medical campus that opened in summer 2017—consolidates three existing locations into one and reduces operating costs by about $500,000 a year, he says, adding that it provides better patient experience and integrates behavioral health. But it won't be able to bill under the old rate.
"We were well along with this project, and thanks to an enlightened board that was committed to doing what's right, we're continuing on that plan," says Herzog. "But if I had a corporate board, which is the norm, after this regulation came down, the system CFO probably would have said, 'No deal; we're not going to do it.' "
"There might be a tendency to reinvest on the hospital campus as opposed to other outpatient locations, which is unfortunate because the idea is to increase access."
He says the rule will prevent existing organizations with existing clinics from doing the right thing by relocating clinics because, if they do, their Medicare reimbursement rate will drop.
"As of the date of this reg, it presupposed that every clinic is already in the ideal perfect location and that the needs of the community would never change and we'd never need to adjust," Herzog says. "They took a significant sledgehammer to innovation and community focus, and all because they didn't like hospitals buying clinics and converting them."
Lee Domanico, CEO of Marin General Hospital, a 176-bed, general medical and surgical hospital in Greenbrae, California, agrees the regulation will hamstring leadership at many hospitals and health systems by placing a barrier on flexibility with brick-and-mortar investments.
"It will have an effect on decision-making because the return on those investments will be lower," he says. "There might be a tendency to reinvest on the hospital campus as opposed to other outpatient locations, which is unfortunate because the idea is to increase access."
Conversely, hospitals and health systems on the margin will see better returns by investing on campus going forward, while the trend had been the opposite—toward better patient convenience and integration of outpatient services into single locations away from the main campus.
Marin General, in fact, is in the process of planning and building a replacement hospital, and while the regulation was not a factor in that decision in the years-old plan to replace the hospital (in part because of California's seismic safety regulations), the project will include not only a four-story, 260,000-square-foot hospital replacement building, but also a five-story, 100,000-square-foot ambulatory services building on the same campus.
District hospitals such as Marin General are exempt from some of that legislation because they are able to provide diagnostic services under the license of the district, but it will have some future effect.
"When the regulation first passed, we looked at everything through a new lens, he explains. "It's going to lower returns, but we decided to go forward in any case with a brand-new breast health center that was on the drawing board. Long term, it could have an effect on our outpatient plans, but in the short term we're still trying to meet needs on an ambulatory basis."
Both CEOs said they think the regulation could be tweaked to prevent gaming the system, but the current regulation is so blunt that it creates obvious unintended consequences, such as limiting flexibility for hospitals and health systems to move more care outside of their main inpatient campuses.
"The easiest way would be to say you couldn't bill newly acquired provider-based clinics as hospital-based in the future, but they added the prohibition against relocating provider-based practices with the new regulation, which makes no sense," says Herzog.
"They put a huge barrier in place for existing providers trying to do the right thing for their communities."
Based on his conversations with representatives of the American Hospital Association and other healthcare lobbies, Herzog says the industry was surprised by the prohibition against relocation.
"Inclusion of that is unwise regulatory overreach," he says.
He says he speculates that hospitals and their lobbying organizations were blindsided by the rule because government officials were concerned that allowing input from those being regulated would water it down.
But the result is that the broad regulation created unanticipated outcomes and is now damaging the broader trend of moving care into sites of lesser acuity for patients who don't need the extra clinical support that a full-service hospital offers.
But on the aggregate, is this regulation significant enough to dampen the effect of hospitals and doctors coming together?
"Possibly, but you're stamping out innovation and consolidation forever and maybe slowing down doctor acquisition for two years," Herzog says.
Because the board at Holy Family sees the new Lakefront center as right for the community, the regulation did not change the health system's planning process, Herzog says.
"We're doing it because it's right, and the fact that this 15,000-square-foot clinic is going to get a half million less in annual reimbursement because of this rule is not going to change our plans," he says. "It will possibly take other resources away from the community, however, and our ability to provide other services such as combating opioid abuse and other population health initiatives."
The bigger picture
The main problem with the legislation is the effect it will have on health systems' flexibility to locate and build facilities tailored to the needs of the patients they serve rather than the whims of government bureaucrats, says Herzog.
"Here we use a term called 'right care,' which means we're going to provide patients the right care at the highest-quality location and the lowest-cost setting for the right outcome," he says.
The inpatient hospital, from a financial point of view, is the absolute worst place, he argues, and it's the worst place for the many other patient needs, in terms of safety and convenience.
Right care, by Holy Family Memorial's definition, means moving patients to the clinic setting and, when possible, to the home.
Yet home healthcare is the worst-reimbursed setting, even though many studies, including a recent one by UCLA researchers in the peer-reviewed journal Medical Care, showed that hospitals that referred patients to inpatient facilities (e.g., postacute care) most often were more likely to readmit patients within 30 days compared to those who referred patients to inpatient facilities least often.
The study did not find a similar correlation between referrals to home healthcare and hospital readmissions.
"Now this regulation comes along, and it's one more reason to reinforce the hospital as center of the healthcare universe," says Herzog. "Health policy should support higher quality and lowering the cost of healthcare. This regulation does neither, and one could argue that, long term, it's deleterious to that effort."
Even so, while it may change the calculus on outpatient construction trends overall, Herzog says this regulation won't deter Holy Family Memorial from following its philosophy whether the government supports it or not.
"But you shouldn't increase the use of hospitals unnecessarily," he says, "because that is just volume-driven healthcare."