Archive for category Healthcare Reform

Life’s a struggle then you die!!!

Posted by Mark Brenzel in For Consumers, Healthcare Reform on December 9th, 2009

The above saying usually contains a more colorful word than struggle, but the meaning is the same. In the context of health, this statement describes the human condition well. From birth to death, even the healthiest among us deal with the health consequences of aging and the demands of living that eventually results in death. The Senate Healthcare Reform Bill appears to be written based on the premise that this reality can be substantially changed (except for the ending of course) by government action.

The major goal of this bill continues to be to extend health insurance to all people living in the US. It is accepted without debate that not having health insurance is a severe health risk. The truth is actually much more complicated, but that is another discussion for another day. This bill goes far beyond simply increasing access to health insurance, however. The bill contains an almost endless list of studies, experiments, demonstration projects, and health improvement initiatives geared to making people healthier.

The following list describes some of these initiatives:
• Establishes the Center for Quality Improvement and Patient Safety to identify best practices and healthcare delivery process improvements
• Medical Homes will be funded to provide medication management services for specific patients that includes in-home services
• Funds a program to develop patient decision aids sensitive to cultural issues to help patients make the right healthcare choices for themselves
• Establishes an Office of Women’s Health to focus on how to improve healthcare for women
• Creates a National Prevention, Health Promotion, and Public Health Council to reduce incidence of preventable illness and disability (includes reduction of tobacco use, sedentary behavior, and poor nutrition)
• Funds more School-based clinics
• Provides for funds to study ways to improve oral health care
• Allows Medicare to pay for a physician visit to put together a personalized prevention plan
• Directs Secretary of HHS to determine which preventive services should be covered by Medicare without co-pays or deductibles
• Funds a tobacco cessation program for pregnant women covered by Medicaid
• Directs the Secretary to research incentives that could be implemented to change risky behaviors in the Medicaid population
• Requires manufacturers to make sure that new healthcare technology is accessible by the handicapped
• Provides funding to increase immunizations
• Requires chain restaurants to label their food with nutritional values
• Funds community centers to develop individualized wellness plans
• Requires employers to provide reasonable break times for nursing mothers
• Creates an initiative to combat childhood obesity
And many more…

Sadly, they left out my favorite health improvement idea. Studies have shown that people with pets tend to be happier and live longer. The authors of this bill should have funded a program of buying everyone a government approved pet. The good news is that this idea and any others that are left out can be added later. The bill calls for the establishment of many new Offices, Centers, and Commissions that can add new programs and initiatives as studies indicate their value.

Clearly, there was a heavy dose of academic input into this bill. Academics love to create studies and recommend courses of action that address the problems and implement the solutions identified by their studies. Obviously, the political sponsors of this healthcare bill have bought into the above academic ideas in a big way. The question is why they have done so now? The answer is embedded in the language that accompanies almost all of the health improvement initiatives. The ultimate goal is healthcare cost reduction. These collective initiatives are one of the cost reduction strategies the sponsors hope will not only pay for the cost of this entitlement, which will be much greater than projected, but also cover the ever growing government deficits caused by the Medicare and Medicaid programs. They are gambling big that healthcare costs can be driven down by preventive and wellness care. They are gambling with their political futures and perhaps the solvency of the US government.
Unfortunately, their gamble is going to fail because of the inherent immutable truth of the lead into this piece. Whatever other benefits these initiatives will generate, cost reduction will not be one of them. A simple thought experiment and real life example demonstrate this fact. Think about what would happen to the national cost of healthcare if an inexpensive cure for cancer was found tomorrow. The academic answer would be that healthcare costs would decline significantly. All the costs associated with diagnostic tests, surgery, chemotherapy, radiation therapy, and other related treatments would disappear overnight. The real answer, however, is that healthcare costs would decline in the short term and then begin to increase again until the increase swamped any savings generated by no longer providing cancer services. The reason is that anything that extends life almost certainly causes an increase in healthcare costs over time (as well as increasing the costs of non-healthcare programs like Social Security). Only the mix of healthcare services that are utilized would change assuming overall access to healthcare remains unchanged. Because cancer would no longer end people’s life prematurely, more will have to be spent on the increased incidence of other chronic diseases associated with aging such as congestive heart failure and dementia. Perhaps the best real world example of this conundrum involves cigarette smoking. It is very clear that the significant reduction in the number of people in the US who smoke cigarettes (from 37% in 1970 to 22% in 2003; a 40% reduction in the number of smokers over that time) has had no impact on the rate of inflation in the nation’s healthcare costs. Despite this reality, the federal government still publishes reports on how much cigarette smoking is costing the nation in terms of healthcare expenditures.

Hopefully, there are better strategies being considered than the ones discussed here to “bend the healthcare cost curve”. If not, the light at the end of the tunnel is a train.

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Missed Opportunities to Control Future Healthcare Costs in the House Healthcare Reform Bill

Posted by Mark Brenzel in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 23rd, 2009

Missed Opportunities to Control Future Healthcare Costs in the House Healthcare Reform Bill

It is generally agreed that the recently passed House Reform Bill will cause healthcare costs to explode. Providing more people with insurance coverage and making certain services free to the patient (e.g. there will be no cost sharing for preventive services) will cause an explosion in demand. As the Massachusetts experiment has shown, the only restraint on the increase in demand will be the shortage of physicians, especially primary care physicians.

This is not to say that none of the provisions in the Bill address healthcare costs. It is worth reviewing some of these provisions.

Reducing Fraud and Abuse:

The Bill increases funding for fraud and abuse investigations. Congress learned in the 1990s after passage of the Kennedy-Kassenbaum Bill that there is potentially a lot of money to be recovered from misbehaving providers committing Medicare fraud. There have definitely been some egregious cases of fraud where providers have engaged in scams to get Medicare reimbursement for fictitious services. For the most part, however, this fraud is small dollar fraud relative to the size of the Medicare budget. The big recoveries have come from cases where the fraud was dubious at best and at worst were attacks on specific industries or companies. The actions against lab companies, home health agencies, dialysis companies, and Columbia/HCA in the 1990s and early 2000s come to mind. The accusations mostly involved different interpretations of various regulations between Medicare and the providers. In most of the cases, the government decided to go after providers for long established practices that were well known. This is not true fraud and speaks more to the complexity of Medicare’s regulations and the government’s incompetence than anything else. If the government goes after major recoveries based on “new” interpretations of what is acceptable practice, no cost reductions are being accomplished. Medicare will recover the funds, but the providers will have to seek other revenues to replace what is lost and cover the fines. As they have for 50 years, they will look to private insurers (if they are still around). This is cost shifting, not cost reduction.

Establishing Clinical Standards:

Perhaps the more interesting cost-control provision of the Bill establishes a Center for Comparative Research inside the Agency for Healthcare Research and Quality. The purpose of this new Center is “to identify the manner in which diseases, disorders, and other health conditions can most effectively and appropriately be prevented, diagnosed, treated and managed clinically” i.e. this Center will be establishing new clinical standards. For opponents of the Bill, this Center is the dreaded “Death Panel”. They fear that the Center and its related Commission inevitably would establish standards that limit care for cost reasons. However, to avoid this criticism, the following language was added to the Bill:

“Nothing in this section shall be construed to permit the Center or Commission to mandate coverage, reimbursement or other policies for public or private payers.”

“Nothing in this section shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine.”

The Bill’s opponents can decide whether these latter two provisions provide enough security from the federal government meddling in people’s healthcare decisions. From my perspective, it is simply a missed opportunity for the government to initiate some meaningful reform. The lack of consistently applied and dynamic clinical standards is perhaps the greatest weaknesses of the healthcare system today. No other industry operates in such a manner. This lack of standards makes it impossible for insurers to adequately describe what they cover (or do not cover) and for patients to understand what they should expect from their providers. This vacuum leaves the door wide open for attorneys to sue providers and insurers for their decisions when their client did not get the desired outcome. Without standards, there is always an “expert” available to say that the care could have been better. The lack of standards also allows many medical device and pharmaceutical companies to market inferior, more expensive, and sometimes even ineffective therapies in partnership with bought off medical researchers.

While undertaking comprehensive healthcare reform, the government has a real opportunity to bring some discipline to the provision of medical services. The physician’s decision to order tests or treatments is always an exercise in probability. The current system that exposes doctors to severe malpractice risks and financially protects patients from the cost of their care leads physicians to order tests and treatments that have a low probability of providing useful information or getting effective results. Clinical standards that are developed after consideration of clinical probabilities and costs of various treatment alternatives could be very helpful to physicians. While physicians have been generally resistant to these efforts, I believe their concerns can be addressed. If the standards are tied into protection from baseless malpractice suits, physicians will be more open to the idea. The process for setting standards would have to be dynamic so that they change as new technology and information become available. They would also have to clearly indicate where physician judgment is necessary. Most importantly, insurance companies should be allowed to make coverage decisions based on these standards. Their decisions could be reviewed by an outside panel where there is disagreement. Because the standards would be based on an evaluation of probabilities, patients should always be allowed to pay for tests and treatments that are not within the standards. Research companies could also pay for “non-covered” services for their purposes.

It is absurd to think that when the government gets to the point that it is paying 60 to 70% (whether this is appropriate is another discussion) of the nation’s healthcare bill that it should not make decisions about the value of what is being purchased. It is the same discretion that any intelligent person exercises when a significant purchase is being considered. Unfortunately, the House Bill is setting up the scenario where the government will eventually pay a large percentage of the nation’s healthcare bill and have to forego a valuable tool to manage its expenditures. It is a missed opportunity.

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The Patient Protection and Affordable Care Act

Posted by Editor in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 19th, 2009

pdf        The Patient Protection and Affordable Care Act

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Intended consequence of the recently passed House Bill

Posted by Mark Brenzel in For Consumers, Healthcare Policy, Healthcare Reform on November 16th, 2009

Over the past month, the leadership in the House had to accept one significant change to their concept of healthcare reform; the public option will now have to act more like a private insurer at least in regards to how it will negotiate rates with providers. Instead of accessing the Medicare rates, the revised Bill calls for the government plan to pay the average of prevailing provider rates with private insurers (obviously the formerly confidential agreements between payers and providers will no longer be confidential at least as far as the government is concerned) .

At first glance, this would appear to be a significant and positive change for the future financial stability of hospitals. Under the old bill, the government plan would have had such an enormous advantage over private insurers in terms of what it paid providers in general and hospitals in particular that it was hard to see how the private insurers could survive. Their decline and eventual demise would have eventually reset provider rates across the country to Medicare rates, which do not cover the cost of operating hospitals by today’s standards.  Furthermore, the Health Choices Commissioner (HCC) was given power to restructure the payment methodology for providers that potentially could have caused even more havoc in the industry (the Bill still allows for experimentation with the Medicare payment methodology).

However, after reading the new House Bill that just got passed by the House, it appears there really is not much of a reprieve for providers if this Bill or something like it becomes law. The (HCC) was given even more powers to regulate the private insurance industry than the previous bill. These new powers in essence make all the private insurers de facto government run plans. The single most important new power is to approve annual premium increases. This gives the HCC the same power that the States have over their public utilities. There are several big differences however.  In my state, the Corporation Commission that has control over the public utilities rates is governed by an elected Board. They are not accountable to the State’s governor. The decisions of the Corporation Commission also do not significantly affect the State budget. As expensive as utilities can be, they do not make or break the State budget. By this bill, the HCC will be accountable only to the President and will have a powerful voice in how much the federal government pays for healthcare. The federal budget for this program will be significant and it will be very politically sensitive. 

The future HCC is going to face the inevitable squeeze of being between a rock and a hard place. As premiums continue to increase faster than inflation (as there are no cost reducing measures in this bill), the cost of the government provided affordability credits (subsidies to low income individuals and families to buy insurance) will rise as well. This will increase the pressure of the program on the government budget at a time when deficits are already projected to be high. One way to mitigate this budgetary pressure will be to fix the value of the affordability credits. If this is done however, the share of the premiums that lower income people will have to pay out of their own pocket will become unaffordable. This will be politically unacceptable. The other alternative will be to just tell the insurers that they cannot raise their rates as much as requested. This will be much more politically acceptable and reduce the pressure of the program on the government deficit.

By the time the above occurs, the insurers will also be restricted by the government’s target of maintaining at least an 85% medical loss ratio. As a result, they will not have the resources (or power) to implement tough new utilization standards that could help them reduce costs. They will not have any choice but to deny providers’ rate increase requests, the only cost they will be able to control (the government also dictates the benefit structure of each plan). Providers will not really have any alternative to accepting what the insurers offer because all the insurers will be forced to operate almost exactly alike. Providers could receive a double punch at this time. In recent years, providers have negotiated new rates with insurers to not only cover their increasing costs, but to also make up for the inadequate increases of Medicare and Medicaid. If the federal and state governments are limiting increases to providers through these programs at the same time, providers will feel enormous financial stress.

Eventually insurers and providers may again choose to experiment with capitation contracts (it is likely such a change would require government approval). Powerless insurers will want providers to take more risk for utilization and prices. Providers may prefer to take risk rather than accept pricing limits hoping that they can implement effective utilization and cost controls on their own. It seems that no matter what eventually occurs with healthcare reform, hospitals will have to become very innovative in lowering their costs.

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What it all Means: Practice versus Theory

Posted by John Morrow in Healthcare Reform on November 16th, 2009

Data Guy: 

No one disputes that there is variation in care and outcomes in the US and that variation manifests in many, many different ways. Most of us have been staring that variance in the eye for well over two decades. Some of us have even been doing something about it on a national scale.

One way to look at variation is to study Medicare spending per capita and to declare that if spending is high, and not justified by outcomes (controlling for age, gender, and other socio-economic factors) that it is a bad thing, and most might agree. It sounds logical and consistently plays out for the dozen or so years that the Dartmouth Atlas Project has been pushing for reform. Same model, same results no surprise there.

Others, especially those who build systems, collect data for analysis, test hypothesis, build models, teach physicians about variance and get their hands dirty every day with the “change” thing, know that the “stick approach” is nothing other than bad policy. What they also object to is the abject approach that if the spending says so then it is true!

I don’t have to cite examples of government data and research that points to illogical spending, reimbursement or taxation for that matter to make my point any more clear.

The simple point gentlemen is that there is no one single thing that makes McAllen,  East Long Island, Grand Junction or Rochester exceptionally good or bad, except that they are at similar points on some researchers pole that doesn’t adjust for all variables.

The reason that there is a Blog on The Hospital Value Index site is to also bring awareness to the multi-variant points of light that make health care unique from one place setting to another.  The more we refine the analyses, and the better the data and methodology become, the closer we get to root cause. But until then, let’s stay focused on some key factors; utilization, safety, satisfaction, process measures, risk adjustment for case severity, efficiency, outcomes  and price (and maybe a few other things) all matter! AND when building models and drawing conclusions it is more helpful to have complete, current and accurate data! GIGO is what we once called it, “garbage in, garbage out”.

Where the rubber hits the road is not with the researcher’s ego and political affiliation or even source of funding and grants, but with what we all can learn and deploy when we working stiffs go into hospitals and try to re-train the physicians and staff; most of whom weren’t taught anything about economics while they were studying for their Board certification. It may be just that easy…or not!

If you have a better point to make, go build something like RWJ funded at Dartmouth, or invest a couple million dollars and try to create your own engine like we did. I personally appreciate your contributions and look forward to your results.

John R. Morrow

Founder: The Hospital Value Index™, 100 Top Hospitals:Benchmarks for Success®, The Patient Satisfaction Index™

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Hospital Value Index™ Quality Award Recipients Released

Posted by Editor in Findings, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform, Value-Based Purchasing on November 2nd, 2009

Superior Quality Merit Award recognizes 75 hospitals nationwide

NASHVILLE, Tenn. ‐ Data Advantage, LLC announced today 75 hospitals receiving a Best in Value™: Superior Quality Merit Award from the 2009‐2010 Hospital Value Index™ the first and only national study on U.S. hospitals and the value of care they provide.

The 2009‐2010 Hospital Value Index™is an independent analysis of each hospital’s performance in the categories of: quality, affordability & efficiency and patient satisfaction. Out of the more than 4,500 hospitals that were analyzed, 75 received the Superior Quality Merit Award for achieving high marks in the quality category.

“This group of hospitals has a proven ability to deliver high quality care, a key element in providing overall value to their communities,” “Our study suggests that hospitals that achieve outstanding scores in the area of quality will be rewarded in the new world of Value‐Based Purchasing, so each of these hospitals is off to a good start.”

The quality category is analyzed using data from the Centers for Medicare and Medicaid Services (CMS) Core Measures, AHRQ Patient Safety Indicators, CMS 30‐day mortality scores and CMS reported hospital readmission rates. In order to receive the award, hospitals were first considered as Best in Value™ or in the top 25 percent of all hospitals in the study. The top 10 percent of this group were then ranked in the quality category in order to receive the Superior Quality Merit Award.

“The Hospital Value Index™ study found that all hospitals recognized as Best in Value™ improved their quality scores by an average of 8.14% since March 2009, while those that were not recognized as Best in Value™ saw a drop in quality by 1.1% during the same term,” said John Morrow, a founder of the Hospital Value Index™ study.

“Quality continues to improve in high value hospitals, and these Merit Award recipients are being recognized for their exceptional quality performance,” Morrow added.

In alphabetical order, the Superior Quality Merit Award recipients from the 2009‐2010 Hospital Value Index™study are:

  • Advocate Good Samaritan Hospital (Downers Grove, IL)
  • Alegent Health Immanuel Medical Center (Omaha, NE)
  • Alegent Health Lakeside Hospital (Omaha, NE)
  • Alegent Health Mercy Hospital (Council Bluffs, IA)
  • Alegent Health Midlands Hospital (Papillion, NE)
  • Arnot Ogden Medical Center (Elmira, NY)
  • Aurora Baycare Medical Center (Green Bay, WI)
  • Ball Memorial Hospital (Muncie, IN)
  • Baylor Medical Center at Irving (Irving, TX)
  • Berger Hospital (Circleville, OH)
  • Berkshire Medical Center (Pittsfield, MA)
  • Bon Secours-Memorial Regional Medical (Mechanicsville, VA)
  • Carolinas Medical Center‐University (Charlotte, NC)
  • Centra Health (Lynchburg, VA)
  • Clara Maass Medical Center (Belleville, NJ)
  • Cleveland Clinic Florida (Fort Lauderdale, FL)
  • Community Medical Center (Toms River, NJ)
  • Cullman Regional Medical Center (Cullman, AL)
  • Delray Medical Center (Delray Beach, FL)
  • Evanston Hospital (Evanston, IL)
  • Flowers Hospital (Dothan, AL)
  • Forsyth Memorial Hospital (Winston
  • Fort Madison Community Hospital (Fort Madison, IA)
  • Fremont Area Medical Center (Fremont, NE)
  • Gaston Memorial Hospital (Gastonia, NC)
  • Good Samaritan Hospital Medical Center (West Islip, NY)
  • Goshen General Hospital (Goshen, IN)
  • Hackensack University Medical Center (Hackensack, NJ)
  • Hackettstown Regional Medical Center (Hackettstown, NJ)
  • Harlingen Medical Center (Harlingen, TX)
  • Heartland Regional Medical Center (Saint Joseph, MO)
  • Holland Community Hospital (Holland, MI)
  • Holy Name Hospital (Teaneck, NJ)
  • Huntington Beach Hospital (Huntington Beach, CA)
  • Integris Mayes County Medical Center (Pryor, OK)
  • Jackson Purchase Medical Center (Mayfield, KY)
  • Kettering Medical Center (Dayton, OH)
  • Kettering Medical Center‐Sycamore (Miamisburg, OH)
  • Kingwood Medical Center (Kingwood, TX)
  • La Palma Intercommunity Hospital (La Palma, CA)
  • Main Line Hospital Bryn Mawr Campus (Bryn Mawr, PA)
  • Mariners Hospital (Tavernier, FL)
  • Meadowview Regional Medical Center (Maysville, KY)
  • Memorial Hospital Pembroke (Hollywood, FL)
  • Memorial Regional Hospital (Hollywood, FL)
  • Mercy Medical Center‐Dubuque (Dubuque, IA)
  • Mercy San Juan Medical Center (Carmichael, CA)
  • Minden Medical Center (Minden, LA)
  • Moberly Regional Medical Center (Moberly, MO)
  • Munson Medical Center (Traverse City, MI)
  • Newport Hospital (Newport, RI)
  • North Ottawa Community Hospital (Grand Haven, MI)
  • Oklahoma Heart Hospital (Oklahoma City, OK)
  • Owatonna Hospital (Owatonna, MN)
  • Parkway Medical Center (Decatur, AL)
  • Peninsula Medical Center (Burlingame, CA)
  • Presbyterian Hospital (Charlotte, NC)
  • Presbyterian Hospital Huntersville (Huntersville, NC)
  • Reid Hospital and Health Care Services (Richmond, IN)
  • Saint Joseph Hospital London (London, KY)
  • Saint Joseph Mercy Saline Hospital (Saline, MI)
  • St. Charles Hospital (Port Jefferson, NY)
  • St. Luke’s Regional Medical Center (Sioux City, IA)
  • St. Mary’s Health Center (Jefferson City, MO)
  • Summa Health System Barberton Hospital (Barberton, OH)
  • Sutter Roseville Medical Center (Roseville, CA)
  • Tawas St. Joseph Hospital (Tawas City, MI)
  • Texas Health Harris Methodist Hospital Cleburne (Cleburne, TX)
  • United Hospital Center (Clarksburg , WV)
  • Vassar Brothers Medical Center (Poughkeepsie, NY)
  • Venice Regional Medical Center (Venice, FL)
  • Walker Baptist Medical Center (Jasper, AL)
  • Walla Walla General Hospital (Walla Walla, WA)
  • West Anaheim Medical Center (Anaheim, CA)
  • Williamsport Hospital and Medical Center (Williamsport, PA)

For more information on the Voices of Value™and the Best in Value™hospitals, please visit www.HospitalValueIndex.com.

About Data Advantage, LLC

Data Advantage, LLC is a privately held healthcare information company that specializes in providing hospitals and other healthcare ‐related businesses with independent and objective business intelligence. The company has aggregated and compiled a warehouse of the most insightful information about healthcare utilization and maintains comprehensive benchmarks about the financial, operational and clinical performance of the U.S. hospital industry. For more information, visit www.data‐advantage.com or call 866‐996‐3282.

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Unintended Consequences Part IV

Posted by Editor in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on November 1st, 2009

Unintended Consequences Part IV

 

The powers of the new Healthcare Commissioner are enormous. So far, significant changes to the Medicare reimbursement system for providers have required Congressional action. If the House Bill is passed, the President will have enormous power to change how providers are reimbursed without asking Congress. The Commissioner can implement patient-centered medical homes and other care organizations, value based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers. This power is subject to enormous abuse, which would seem almost inevitable.

The government is experiencing serious annual deficits, has a large accumulated deficit, and is facing huge deficits in the years to come. If the House Bill passes with its robust public option, the federal government could control the reimbursement rates for up to 80% of all provider claims within 10 years. One projection shows that the total cost for hospital services in 2020 could reach 1.5 trillion dollars. The government could be responsible for paying 1.2 trillion of that amount. How tempting it will be to cut hospital reimbursement and the reimbursement of other providers to decrease the government’s deficit.

However, it is not just a matter of how much of a cut hospitals may have to bear but also by what methodology they will get paid. Some of the code words above such as value-based purchasing and bundling of services should be alarming to providers. It means the government can decide winners and losers. It would appear that the government could do this on a local basis, regional basis, or even national basis.

On the local or regional level, the government could request bids from providers to provide certain services. Obviously, the first objective would be to lower the prices for those services. Hopefully, the government would also consider quality in its selection. But that would beg the question of how to measure quality. Ultimately, you can bet that politics would come into play to determine the winners and losers. Unions would try to use their clout to ensure that unionized facilities get selected. Community groups would lobby for the hospitals located in or close to their communities. Big donors to the political party in power would expect their recommendations to be considered and so on. Will hospital and doctors groups have to take on significant lobbying costs just to stay in business?

The government could also determine winners and losers on a national scale. In the 80s, hospitals and freestanding companies opened up new SNFs, psychiatric facilities, rehab facilities, and LTACs. The terrific expansion of these sub-acute units and facilities was largely a response to Medicare’s implementation of the DRG system of reimbursement for acute care services. The DRG system incented hospital discharge planners to move patients out of acute status as soon as possible and into sub-acute status where more reimbursement could be received. Initially, there was no real clinical purpose served by moving patients to these units. Many companies and hospitals invested significant capital in providing sub-acute services as volumes grew. This investment added value to their services and they are now an accepted part of the care continuum. Many hospitals converted some of their excess acute care capacity caused by the shorter length of stays to other uses. If the government decides to bundle these services into one reimbursement per patient episode, the incentive that generated growth in the sub-acute services will be turned on its head. Hospital and doctor consortiums will be the likely recipients of the bundled payments. They will want to keep as much of the funds as possible and pay outside vendors as little as possible. As a result, the average length of stays in hospitals will begin to increase and the admissions to sub-acute facilities will decrease. New capital may be needed to expand hospitals bed capacity while many sub-acute facilities are underutilized. This will be an enormous waste of resources at a time when hospitals will not have the capital resources available to them.

The House Bill encourages the Health Care Commissioner to experiment with different reimbursement models. There are an infinite number of ways to reimburse providers. Hopefully, the government will realize there are enormous consequences to changing the payment model as witnessed by the growth in sub-acute care services after the major change in the 80s. All businesses need some stability in their pricing model and volume projections to do appropriate long term planning.  

 

                The Unintended Consequences of Healthcare Reform – #1
                The Unintended Consequences of Healthcare Reform – #2
                The Unintended Consequences of Healthcare Reform – #3 Part 1
                The Unintended Consequences of Healthcare Reform – #3 Part 2
                The Unintended Consequences of Healthcare Reform – #4

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The Unintended Consequences of Healthcare Reform

Posted by Mark Brenzel in For Consumers, Healthcare Financing, Healthcare Policy, Healthcare Reform on October 16th, 2009

The Unintended Consequences of Healthcare Reform

(that are never properly considered)

Two healthcare reform proposals have dominated the debate to date; the public option and how to finance the additional cost for universal coverage. However, there are some other significant changes in the House Bill that the general public would find hard to understand that would nevertheless dramatically change the healthcare system if passed.

The new Health Commissioner that will oversee the Health Choices Administration will have enormous powers over the new healthcare exchange and private QHBPs (qualified health benefit plans). The healthcare exchange will act much as the Massachusetts Connector and provide a marketplace for individuals and small employers to purchase insurance. In essence, it will allow individuals and small employers to increase their purchasing power by forcing insurers to put them into large risk pools.

Some of the requirements in the House Bill for QHBPs are as follows:

  • May not consider pre-existing conditions
  • Guaranteed issue and renewability
  • Premium rate variability:
    • Age – limited to 2-1 ratio from most expensive age group to least expensive
    • By area
    • By family make-up; ratio to individual premium must be consistent
  • Parity in mental health and substance abuse benefits to medical benefits
  • Must meet minimal medical loss ratio established by Commissioner; if does not meet it must make a refund to subscribers
  • No annual or lifetime limitations
  • No deductibles or co-pays for preventive services
  • Limit to annual out-of-pocket expenses; $5,000  per individual, $10,000 per family
  • Basic plan benefits must cover 70% of the expected cost of healthcare for the population; enhanced plan must cover 85% and premium plan must cover 95%

Some of the powers of the Health Commissioner are as follows:

  • Commissioner has right to determine adequacy of network and force an insurer to pay in-network rates where their contracted network is deemed inadequate
  • Commissioner can adjust premiums revenues among plans to adjust for adverse selection
  • Under the public option, the provider payment mechanisms and policies may be changed from the Medicare methodology to include patient-centered medical home and other care organizations, value based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers.

 

                The Unintended Consequences of Healthcare Reform – #1
                The Unintended Consequences of Healthcare Reform – #2
                The Unintended Consequences of Healthcare Reform – #3 Part 1
                The Unintended Consequences of Healthcare Reform – #3 Part 2
                The Unintended Consequences of Healthcare Reform – #4

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100 Top Best in Value(TM) Hospitals

Posted by Editor in Findings, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform, Index News, Value-Based Purchasing on October 12th, 2009

Hospital Value Index: Top 100 Best in Value ™ Hospitals Released

pdf 100 Top Best in Value(TM) Hospitals

Hospitals in New York, Michigan, Pennsylvania, Alabama and North Carolina cited the most

(NASHVILLE, Tenn.) ‐ Data Advantage, LLC announced today the Top 100 Hospital: Best in Value Hospitals™ list from the 2009‐2010 Hospital Value Index™, the first and only national study on U.S. hospitals and the value of care they provide.

The hospitals in the Top 100 list represent nearly every state in the U.S. The states with the most hospitals achieving Top 100 Best in Value™ recognition were: New York, Michigan, Pennsylvania, Alabama and North Carolina.

“These are the hospitals that set the bar for the nation when it comes to value. If every hospital performed at the level of the Top 100, we found that more than $60 billion per year could be saved,”.

“The Hospital Value Index™ winners are a geographically diverse group of hospitals that have a proven ability to deliver high value care to their communities and represent a model of care that other U.S. hospitals should look to,” . “As legislators consider health reform, we believe that it will be increasingly important to recognize and reward those hospitals that deliver outstanding value.”

These results are part of the findings from the 2009‐2010 Hospital Value Index™ study, an analysis of the value of care provided at more than 4,500 U.S. hospitals. As part of the release, Data Advantage is inviting hospitals and healthcare leaders to participate in the Voices of Value™ Summit, which will take place in Chicago December 7‐9. Industry leaders will convene at the Westin Chicago River North and discuss topics such as value, affordability, efficiency and patient satisfaction.

In alphabetical order, the Top 100 list of hospitals from the 2009‐2010 Hospital Value Index™ study is:

• Alegent Health Immanuel Medical Center (Omaha, NE)
• Alegent Health Mercy Hospital (Council Bluffs, IA)
• Alegent Health Midlands Hospital (Papillion, NE)
• Alleghany Regional Hospital (Low Moor, VA)
• Arnot Ogden Medical Center (Elmira, NY)
• Berkshire Medical Center (Pittsfield, MA)
• Bertrand Chaffee Hospital (Springville, NY)
• Billings Clinic (Billings, MT)
• Bon Secours ‐Memorial Regional Medical (Mechanicsville, VA)
• Butler Memorial Hospital (Butler, PA)
• Carolinas Med Center‐Mercy (Charlotte, NC)
• Carolinas Med Center‐University (Charlotte, NC)
• Carolinas Medical Center‐Northeast (Concord, NC)
• Centra Health (Lynchburg, VA)
• Chelsea Community Hospital (Chelsea, MI)
• Citizens Medical Center (Victoria, TX)
• Clinch Valley Medical Center (Richlands, VA)
• Cobleskill Regional Hospital (Cobleskill, NY)
• Community Medical Center (Toms River, NJ)
• Connally Memorial Medical Center (Floresville, TX)
• Cullman Regional Medical Center (Cullman, AL)
• Dixie Regional Medical Center (Saint George, UT)
• Dubois Regional Medical Center (Du Bois, PA)
• Flowers Hospital (Dothan, AL)
• Forsyth Memorial Hospital (Winston Salem, NC)
• Fort Madison Community Hospital (Fort Madison, IA)
• Gaston Memorial Hospital (Gastonia, NC)
• Graham Regional Medical Center (Graham, TX)
• Greenbrier Valley Medical Center (Ronceverte, WV)
• Hamilton General Hospital (Hamilton, TX)
• Heart Hospital of Lafayette (Lafayette, LA)
• Heartland Regional Medical Center (Saint Joseph, MO)
• Henry Ford Macomb Hospital (Clinton Township, MI)
• Heritage Valley Sewickley (Sewickley, PA)
• Holland Community Hospital (Holland, MI)
• Integris Mayes County Medical Center (Pryor, OK)
• Jackson Purchase Medical Center (Mayfield, KY)
• Jefferson Regional Medical Center (Crystal City, MO)
• Kettering Medical Center (Dayton, OH)
• Kettering Medical Center –Sycamore (Miamisburg, OH)
• Lakeside Memorial Hospital (Brockport, NY)
• Lakeview Med Center (Rice Lake, WI)
• McCullough‐Hyde Memorial Hospital (Oxford, OH)
• Meadowview Regional Medical Center (Maysville, KY)
• Medical Center Enterprise (Enterprise, AL)
• Memorial Regional Hospital (Hollywood, FL)
• Mercy Health Partners Hackley Campus (Muskegon, MI)
• Mercy Health Partners‐ Mercy Campus (Muskegon, MI)
• Mercy Medical Center (Des Moines, IA)
• Mercy Medical Center‐Dubuque (Dubuque, IA)
• Methodist Medical Center of Illinois (Peoria, IL)
• Methodist Medical Center of Oak Ridge (Oak Ridge, TN)
• Minden Medical Center (Minden, LA)
• Monroe County Hospital (Monroeville, AL)
• Montgomery Regional Hospital (Blacksburg, VA)
• Mount St. Mary’s Hospital and Health Center (Lewiston, NY)
• Nebraska Heart Hospital (Lincoln, NE)
• Northwest Medical Center (Winfield, AL)
• Oklahoma Heart Hospital (Oklahoma City, OK)
• Owatonna Hospital (Owatonna, MN)
• Paradise Valley Hospital (National City, CA)
• Parkway Medical Center (Decatur, AL)
• Presbyterian Hospital Huntersville (Huntersville, NC)
• Redmond Regional Medical Center (Rome, GA)
• Reid Hospital & Health Care Services (Richmond, IN)
• Rochester General Hospital (Rochester, NY)
• Saint Joseph Hospital (London, KY)
• Saint Joseph Mercy Saline Hospital (Saline, MI)
• Saint Vincent Health Center (Erie, PA)
• Saint Vincent Hospital (Worcester, MA)
• Sarah Bush Lincoln Health Center (Mattoon, IL)
• Spectrum Health United Memorial ‐United Campus (Greenville, MI)
• St. Alexius Medical Center (Bismarck, ND)
• St. Anthony Hospital (Oklahoma City, OK)
• St. Anthony Regional Hospital (Carroll, IA)
• St. Charles Hospital (Port Jefferson, NY)
• St. Francis Health Center (Topeka, KS)
• St. Joseph Health Center (Warren, OH)
• St Josephs Hospital (Chippewa Falls, WI)
• St. Josephs Mercy Health Center (Hot Springs, AR)
• St. Luke’s Regional Medical Center (Sioux City, IA)
• St. Mary’s Health Center (Jefferson City, MO)
• St. Mary’s Hospital at Amsterdam (Amsterdam, NY)
• St. Vincent Healthcare (Billings, MT)
• Tawas St. Joseph Hospital (Tawas City, MI)
• Thomasville Medical Center (Thomasville, NC)
• Trinity Hospitals (Minot, ND)
• United Hospital Center (Clarksburg, WV)
• Unity Hospital of Rochester (Rochester, NY)
• UPMC McKeesport (McKeesport, PA)
• UPMC Northwest (Seneca, PA)
• UPMC Passavant (Pittsburgh, PA)
• Venice Regional Medical Center (Venice, FL)
• Walker Baptist Medical Center (Jasper, AL)
• Wesley Medical Center (Hattiesburg, MS)
• West Anaheim Medical Center (Anaheim, CA)
• Western Baptist Hospital (Paducah, KY)
• Wheeling Hospital (Wheeling, WV)
• White River Medical Center (Batesville, AR)
• Williamsport Hospital Medical Center (Williamsport, PA)

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New Study of Best In Value™ Hospitals Highlights Potential Savings

Posted by Editor in Findings, For Consumers, Healthcare Financing, Healthcare News, Healthcare Policy, Healthcare Reform, Value-Based Purchasing on September 19th, 2009

NEW STUDY OF BEST IN VALUE™ HOSPITALS HIGHLIGHTS POTENTIAL SAVINGS OF $600B OVER 10 YEARS

pdf Hospital Value Index™ reveals 747 hospitals leading the way in delivering affordable, quality care  


Top Findings: America’s best hospital value often found in smaller towns, Midwest states

Washington, D.C. – The most comprehensive study of the Best in Value™ care provided by U.S. hospitals was delivered to lawmakers today as they resume the national debate over healthcare reform.

The 2009‐2010 Hospital Value Index™ ranked hospitals by an independent analysis of each hospital’s quality, affordability, efficiency and patient satisfaction performance. Out of the more than 4,500 hospitals that were analyzed, 747 were identified as providing the Best in Value™ care.

Key findings in the Hospital Value Index™ include:

• The highest value hospital care is often provided by community‐based hospitals, suggesting that consumers may find high value close to home and that policymakers should expand their search for models of reform beyond “name‐brand” teaching hospitals.

• If all hospitals in the U.S. performed at the average benchmark for the Best in Value™ hospitals, 9.3% of costs, or approximately $60B, could be eliminated from annual hospital spending on an all‐payer basis.

• The highest ranked hospitals in the study are geographically diverse, with the top 10 hospitals located in Dothan, AL; Minden, LA; Tawas City, MI; Clarksburg, WV; Gastonia, NC; Maysville, KY; Elmira, NY; Mechanicsville, VA; Holland, MI; and Winston‐Salem, NC.

• Of the 100 largest metropolitan areas in the U.S., the highest ranked markets are Charlotte, NC, Rochester, NY, Grand Rapids, MI, Pittsburgh, PA and Knoxville, TN. Markets with a population of less than 2,000,000 outperformed markets with a population of more than 2,000,000.

• There was no appreciable difference in performance between teaching hospitals and nonteaching hospitals.

• The study found that the top five states with hospitals delivering high value are North Dakota, Iowa, Montana, South Dakota, and Maine. The bottom five states for finding hospitals providing high value care are New Mexico, Arkansas, California, Hawaii and Nevada.

• The study found the gaps in hospital value can be dramatic. In one example, the study found the cost for the same medical procedure provided with the same quality of care at hospitals less than two miles apart can be more than $10,000.

The full findings of the study – and market by market rankings of hospital value performance – areavailable to the public for free at www.HospitalValueIndex.com.

Health reform

“As legislators consider health reform and as consumers shoulder an increasing burden of the cost of healthcare, it is important to recognize and reward those hospitals that deliver outstanding value,” said John Morrow, a senior advisor to Data Advantage.

“Healthcare consumers are increasingly making decisions based on value including quality, patient satisfaction and affordability. Hospitals providing the best value will ultimately be rewarded with more business.”

One of the prominent initiatives in health reform is Value‐Based Purchasing, which the Centers for Medicare and Medicaid Services (CMS) first recommended in November 2007. According to CMS, Value‐Based Purchasing will “drive improvements in clinical quality, patient‐centeredness and efficiency” in hospitals.

“The Hospital Value Index™ is the first‐ever and only benchmark to analyze these components to help hospitals understand their value proposition,” . “In Value‐Based Purchasing, hospitals will likely be reimbursed based on the overall value that they deliver, and it is essential for hospitals to understand the areas in which improvements are needed. Regardless of the ultimate scope of reform, it is clear that the future of the American economy depends upon value becoming the key determinant in purchasing healthcare.”

The Hospital Value Index™ defines a hospital’s “value” by its success in four critical areas:
Quality, including CMS’s Core Measures, patient safety, mortality and readmission rates;
• Efficiency, including the relative measure of the cost to the hospital for providing services;
• Affordability, a relative comparison of prices charged for inpatient and outpatient services, including what hospitals ultimately collect; and
• Patient satisfaction as measured by HCAHPS.
 

Study summit
In the study, Data Advantage found many hospitals in every state that are providing exceptional value in an increasingly demanding environment. The Best in Value™ hospitals are urban and rural; teaching and non‐teaching; for‐profit and not‐for‐profit.

“Now, more than ever, it is important to identify those hospitals that have achieved excellent results,” said Morrow. “These hospitals are the models for success under health reform.”
In order to discover the keys to delivering high value, Data Advantage will host the Voices of Value™ Summit in December, where Hospital Value Index™ leaders will discuss and share best practices in achieving and providing value in this new era.

Data Advantage will reveal more details on the Voices of Value ™ Summit in the coming weeks, and additional comments from the Voices of Value™ participants can be found below.

About Data Advantage, LLC
Data Advantage, LLC is a privately held healthcare information company that specializes in providing hospitals and other healthcare‐related businesses with independent and objective business intelligence. The company has aggregated and compiled a warehouse of the most insightful information about healthcare utilization and maintains comprehensive benchmarks about the financial, operational and clinical performance of the U.S. hospital industry. For more information, visit www.data‐advantage.com
or call 866‐996‐3282.

Voices of Value™
(full quotes are available at www.HospitalValueIndex.com)
“The HCA TriStar Health System is honored to be named among the ‘best value’ health systems in America. Our ranking is a reflection of the hard work and dedication of our staff and physicians, and our continued focus on efficiency, effectiveness, and quality outcomes.”
Larry Kloess, President
HCA TriStar Health System (Nashville, Tennessee)

 

 
“Our leadership team and staff continue to look at the way we operate our hospital in order to provide improved value, quality and service to our community. We are excited about sharing our strategies, as well as learning new practices from hospitals at the Voices of Value™ summit.”
Lloyd Ford Jr., PhD, FACHE, President and CEO
Jefferson Regional Medical Center (Festus, Missouri)

“Billings Clinic appreciates the recognition as a leader in value from Data Advantage. We are strong believers in the importance of providing quality care at an optimal cost in our current health care environment and to prepare for future changes in health care.”
Nicholas Wolter, MD, CEO
Billings Clinic (Billings, Montana)

 

 
“Parkway is honored to be named a Top 100™ Hospital. We strive to be a leader in offering outstanding ‐ high value ‐ care for our community. At Parkway, patients can expect to be treated always with compassion and professionalism and to have access to the latest medical expertise and advanced technology. It is this combination that positions us well for the future.”
Tim McGill, CEO
Parkway Medical Center (Decatur, Alabama)

 

 
“Zeeland Community Hospital is honored to receive the Best in Value™ Award. The award is an affirmation of our most sincere efforts to meet the needs of our community and exceed their expectations in terms of quality, efficiency and compassionate care.”
Henry A. Veenstra, President
Zeeland Community Hospital (Zeeland, Michigan)

 

 
“I am pleased that Saint Vincent Hospital in Worcester, Massachusetts has been recognized as one of the Top 100™ hospitals in the country in terms of the ‘value’ it provides. If health reform is to be successful at the state and federal levels, hospitals like Saint Vincent that provide the highest level of quality care at reasonable costs will lead the way.”
Joseph J Mullany, President
Vanguard Health System, New England & Chicago Market

 

 
“This achievement is truly a team effort combining the efforts of our Board, medical staff, employees, and community creating a quality health care system. St. Anthony is proud to be recognized by this award and will continue to make a caring difference every day. ”
Gary Riedmann, President
St. Anthony Regional Hospital & Nursing Home (Carroll, Iowa)

 

 
“Holy Name Hospital is honored to be ranked among the top hospitals in the country for quality, efficiency, affordability and patient satisfaction. The Best in Value™ award is distinguished by its use of published data from objective, third‐party sources. The value index isn’t anecdotal or subjective; it’s culled from a wide variety of nationally‐recognized standards, measures and indicators, and I think that’s what makes this recognition especially meaningful. One of the key tenets of our mission is stewardship, and that’s being recognized here. I am continually impressed by the way our entire team of employees, nurses and physicians comes together in a process that creates value, engendering excellence on every
level.”
Michael Maron, President/CEO
Holy Name Hospital (Teaneck, New Jersey)

 

 
“The Best in Value™ Award recognition is a testament to the great care provided at Berger Hospital. We consistently hold ourselves accountable to deliver high‐quality, cost effective healthcare, and this third party review helps to validate our success.”
Tim Colburn, CEO
Berger Hospital (Circleville, Ohio)

 

 
“At a time when the nation is focused on providing both high quality and affordable healthcare, it’s great to earn national recognition for doing just that. Consumer education is increasingly more important when making healthcare decisions. This study from an independent source verifies the value we provide our patients.”
Rosemari Davis, CEO
Willamette Valley Medical Center (McMinnville, Oregon)

“I am very pleased that we, as a team, have been recognized with this award. Our people make the difference. They are passionate, caring and down‐to earth. Whether it’s a physician, nurse, therapist or the person who works in the lab or in dietary, people make an institution great. Certainly in healthcare that’s true. Over the last 20 years this organization has done a great job of creating the infrastructure of an integrated system, which is ideally suited to successfully face challenges in health care. Our focus is entirely patient centered and we benchmark against the best of the best to constantly improve the quality care and value we are able to offer our patients.”
Mark Laney, President and CEO
Heartland Health (Saint Joseph, Missouri)

 

 
“Earning this recognition demonstrates our commitment to excellence from every part of our organization – physicians, employees, volunteers, managers and our Board of Directors.”
Edward J. Roth III, President and CEO
Aultman Hospital (Canton, Ohio)

 
“There is no way to really reform health care without transparency, consistent metrics and full understanding of value for money. The Hospital Value Index™ is one of the fundamental building blocks for reform that results in an accountable system and a model for engaging physicians and patients in ways that can make a real difference.”
Jonathan T. Lord, CEO
Navigenics

 

 
 
 
 
 

 

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