Archive for the ‘Hospitals’ Category

« Older Entries

Is It Time to Reform the Fee-for-Service Model?

Tuesday, September 25th, 2012

Despite the healthcare industry’s attempts to alter the way in which physician reimbursements are determined,  fee-for-service is still the accepted basis for payment.  Typically, physicians are reimbursed according to the number of patients they see and how many procedures and tests they order.  Policymakers have concluded that the “do more, earn more” business model is deeply flawed and one reason why Americans pay so much for healthcare.  In 2012, Americans will pay more than $8,000 per individual on healthcare.  That’s more than double the $3,400 average spent for each person in other industrialized nations.  What’s more, all that spending has not made Americans healthier.

The time may have come to find a new reimbursement model that places less of a financial burden on patients while still rewarding physicians.  An August article in the Journal of the American Medical Association notes that the fee-for-service payment is the foundation of even some emerging accountable-care organizations, including Medicare’s popular shared-savings program, say Drs. Allan Goroll of Harvard University Medical School and Stephen Schoenbaum of the Josiah Macy, Jr., Foundation.  The shared-savings program “Promotes accountability for a patient population and coordinates items and services under (Medicare) Part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”

Goroll and Schoenbaum isolate a number of reasons for why fee-for-service endures:  many physicians are risk-averse and so resist change; additionally, skepticism is a “major barrier” to reforming the payment model.  “Transitioning to a new payment system will require new modes of practice, and many physicians feel ill equipped to assume financial or performance risks individually or even collectively,” Goroll and Schoenbaum write.  “The concern is that continued reliance on fee-for-service payment for primary care as well as for specialists, with its emphasis on volume of services, threatens meaningful practice transformation and the very goals of delivery system reform.” The bottom line is that the healthcare industry must develop “robust, scientifically validated risk-adjustment models,” according to Goroll and Schoenbaum.  Payment reform could blend capitation and fee-for-service with a plan to revise the payments over time.

Change must be forced on the medical community, whether or not they are ready for it.  One provision of the Patient Protection and Affordable Care Act (ACA) requires alterations to payment and delivery systems to control costs and enhance the quality of care.  Rather than basing payment solely on the number of patients a physician sees and tests ordered, these methods promote preventive care and maintain open lines of communication between a patient’s multiple physicians.

The potential alternative reimbursement models presently being considered include:

•       Bundled payments or fixed amounts paid to healthcare providers for related services a patient needs within a given timeframe.

•       Patient-centered medical homes.  This model would restructure primary-care practices so that their focus is on preventive medicine, patient education and healthcare coordination.

•       Accountable care organizations, in which physicians and other providers share responsibility for providing cost-effective, quality care for patient groups.

Tags: , , , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | 1 Comment »

GOP VP Candidate Paul Ryan Advocates “Medicare Premium Support”

Wednesday, September 5th, 2012

Now that Representative Paul Ryan (R-WI) has been selected by former Governor Mitt Romney (R-MA) as his vice presidential running mate, the debate is focusing on the Wisconsin representative’s plan to reform Medicare.  Known as Medicare Premium Support, it “refers to a system under which Medicare enrollees would pick from a menu of competing plans with a fixed government payment to help defray premium costs.  Enrollees would be on the hook for any charges above the government contribution.  But they could save money by selecting a plan with a premium below the federal subsidy.”

Ryan says that under his plan, the government’s contribution toward premiums will equal the cost of the second least expensive plan in any market — or traditional Medicare — whichever costs less.  Ryan believes that his plan is politically feasible because it doesn’t begin until 2022 with the result that it retains traditional Medicare for Americans who were 55 and older in 2011 — meaning that baby boomers are exempt from the changes.  Democrats who oppose the plan contend that Ryan’s Medicare overhaul would subject seniors to the vagaries of the private market, leaving them with little protection against rising premiums and negligible benefits.

So what is the difference between the Democratic and Republican cuts to Medicare?  The ACA stresses government control and central planning. The law creates a panel of 15 unelected government officials, called the Independent Payment Advisory Board (IPAB) to direct changes that will shrink spending by cutting physician and hospital reimbursement.  The Wyden-Ryan plan preserves the ACA’s targets for future Medicare spending, but uses competitive bidding.  Seniors would have the same benefits that they do now, and would have the option of choosing from several government-approved private insurance plans.

The Republican budget targets Medicare growth of GDP plus 0.5 percent, just as the 2013 Obama budget does. The difference lies in the fact that the GOP budget repeals the ACA, while maintaining that law’s Medicare cuts.  The Democratic budget leaves the ACA in place.

Writing in the Washington Post, Ezra Klein puts the difference in a nutshell:  “The difference between the two campaigns is not in how much they cut Medicare, but in how they cut Medicare.”

In an exclusive interview with Modern Healthcare magazine, Ryan says that “This is an idea whose time has come.  And it’s a bipartisan idea.  What Representative Ron Wyden (D-OR) and I tried to do was to plant the seeds of a bipartisan consensus.  We knew we weren’t going to pass it because of the politics.  We did this together to get the consensus-building started.”  Ryan believes that the plan’s chances for approval will greatly improve in 2013 — especially if the Romney/Ryan team wins the November 6 presidential election.  “I’m actually pretty optimistic,” he said, noting that the United States should reform healthcare on its own terms and “fix this on our terms” instead of borrowing European ideas.  “We believe there are far superior ways to get back to a patient-centered healthcare system, the nucleus of which is the patient and doctor — and not the government,” Ryan said.  “We believe consumer-driven, market-based reforms do more to alter the cost curve of healthcare inflation.”

If Ryan’s plan is enacted into law, people 55 and younger would see a change from one in which everyone gets the same set of government-paid benefits to one in which the government gives all senior citizens a fixed amount of money.  They could use this to purchase private insurance or pay a portion of the cost of enrolling in traditional Medicare.  Ryan has not said how much the premium support payment would be.  But he would limit the annual growth rate to no more than one-half percent more than the economy’s overall growth rate, even though healthcare costs are rising at a significantly faster pace.  Ryan’s plan would also raise the Medicare eligibility age to 67 from 65 by 2034.

“Not so fast,” Democrats warn as partisans from both parties accuse the other side of throwing senior citizens under the bus.  “Make no mistake about it — these Republicans don’t believe in Medicare,” Obama campaign senior adviser David Axelrod said.  “They want to turn it into a voucher program.  And slowly, all the burden is going to shift to seniors themselves.  And that is not an answer to entitlement reform.”

Republicans counter that $716 billion in cuts to Medicare are already a part of the Patient Protection and Affordable Care Act (ACA).  An online video created by the Republican National Committee features Ryan saying that Democrats “have refused to make difficult decision because they are more worried about their next election than they are about the next generation.”  According to Ryan, “We won’t duck the tough issues; we will lead.”

Uwe Reinhardt, a healthcare economist at Princeton University disagrees, saying that rather than motivating insurers to control their costs, the Ryan plan will not benefit seniors.  “You’re essentially shoving these guys out on a boat, saying, ‘We’ll give you a push, but if the waves are rough, you’re on your own,” he said.  “It would really worry me if I were a middle-class American.”

Tags: , , , , , , , , , , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | 1 Comment »

Burnout Affects 30 Percent of Nurses

Wednesday, August 29th, 2012

With hospitals slashing costs to cope with growing financial pressures, nurses believe that the resulting insufficient staffing is detrimental to patients.  A team from the University of Pennsylvania has identified a key reason for this: Hospitals where relative fewer caregivers work typically provide inferior care.  If hospitals reduced their proportion of burned-out nurses to 10 percent from the prevailing 30 percent, they would prevent 4,160 cases a year of the two most-common hospital-acquired infections and save $41 million in Pennsylvania alone.  “It is costing hospitals more money not to spend money on nursing,” said Linda H. Aiken, one of the study’s authors and director of the Penn Nursing School’s Center for Health Outcomes and Policy Research.

The researchers determined that the nurses studied averaged 5.7 patients on a typical shift, said Rutgers University professor Jeannie Cimiotti.  “Maybe they are staffed a little bit above what they should, but if they (hospitals) can provide an organizational climate that’s conducive to nursing, I think they’d be fine,” Cimiotti said. “That doesn’t mean you can overburden them because workload is one of those factors that does contribute to burnout.”

“Most burnout is related to high workload,” said Patricia Eakin, an ER nurse who is president of the Pennsylvania Association of Staff Nurses and Allied Professionals.  Patients nowadays need a whole lot of care. There’s a lot of equipment, a whole lot of fancy things. A lot of things that take a lot of time and a lot of attention.”

Historically, the number of nurses per patient was low following World War I.  At what would ultimately become Baylor University Medical Center, the hospital in 1919 accommodated 225 patients who were cared for by a nursing staff of 12 graduates and 100 students.  As recently as the 1980s, nurses often cared for eight or nine patients (Insert Nurse Together link here.)  The night shift could see a single nurse caring for as many as a dozen patients, often without a Certified Nursing Assistant (CNA) to assist.

The shift in the United States from Florence Nightingale’s concept of multi-bed wards (which often contained 30 or more beds and were typically staffed by one or two nurses) to private and semi-private rooms started in the years following World War II and was mostly complete by the 1970s.  Private hospital rooms at this time were primarily reserved for patients whose families could afford to pay extra to keep their relative out of a ward and hire a private duty nurse to provide one-on-one care.  According to Jean C. Whelan, PhD, RN, “Private-duty nursing was the employment of nurses by individual patients for the delivery of care.  Patients hired their own nurse, who cared for them either in their homes or in the hospital.  Patients paid the nurse for her services with cash, based on a predetermined fee.  The nurse, generally employed for the duration of an illness, cared for only one patient at a time.  In essence, the private-duty nurse delivered highly individualized care to paying patients for as long as a patient needed and could pay for the nurse’s services.”

According to a U.S. National Library of Medicine of the National Institutes of Health Study, thousands of nurses – the vast majority of them women — migrate each year in search of better pay and working conditions, career mobility, professional development, a better quality of life, personal safety, or sometimes just novelty and adventure.  The percentage of foreign-educated physicians working in Australia, Canada, the United Kingdom, and the United States is currently reported to be between 21 and 33 percent, while foreign-educated nurses represent five to 10 percent of these countries’ nurse workforce.”

In 1994, nine percent of total registered nurses were foreign-born RNs; by 2008 that percentage had risen to 16.3 percent, or about 400,000 RNs.  Of those, approximately 10 percent had immigrated to the U.S. during the previous five years. About one-third of growth in RNs between 2001 and 2008 was fueled by foreign-born RNs.  The news is not all positive, though.  According to Newsweek, “While pay has risen in some regions to attract more nurses, in recent years it has flattened at the national level.  That’s why up to 500,000 registered nurses are choosing not to practice their profession — fully one-fifth of the current RN workforce of 2.5 million.”

Bringing those badly needed nurses from overseas is not always easy, said William R. Moore of El Centro Regional Medical Center in California, who has been waiting two years for 20 nurses from the Philippines he recruited to obtain visas.  In the meantime, Moore can’t find talent in the area.  “We’re in the poorest and least literate county in California, right in the middle of the desert,” says Moore. “We’re not a destination for (American) nurses.”

As the role of registered nurses has evolved over the years to encompass increased responsibility, so too, have the educational requirements.  A two-year associate degree (AND) or a four years bachelor’s degree — typically a Bachelor of Science in Nursing (BSN) — are the two primary degrees required in the 21st century.  Many nurses opt to pursue their Master of Science in Nursing (MSN) degree, which requires a minimal commitment of two years to complete the course work.  Others go even further in their educations, studying for a Doctor of Philosophy (PhD) or a Doctor of Nursing Practice (DNP).

Studying for a BSN degree – like all college educations – doesn’t come cheaply.  According to the Registered Nurse Education Requirements website, “Tuition and clinical fees together make up the total cost of nursing education while the tuition fee for a two-year nursing course in a community college is just $1,400, the clinical fees can are considerably higher at $4,000 plus per semester.  For a bachelors course the students end up paying almost $7,000 to $8,000 in clinical fees while the tuition is still lower at just $2,000 to $3,000 per semester.  Apart from this, students will also have to incur the cost of books, parking, basic living expenses and housing in case of out-of-town colleges. The cost of training at hospital affiliated nursing schools can be higher at $55,000 for resident student and over $100,000 for non-residents.”

Tags: , , , , , , , , , , , , ,
Posted in Hospital Systems, Hospitals | 1 Comment »

US News Names New Hospital as Best

Monday, July 23rd, 2012

Massachusetts General Hospital or Mass General is No. 1 for the first time, according to the US News & World Report Best Hospitals rankings. It marks the end of a 21-year run for Johns Hopkins that started in 1991, the year after U.S. News began publishing Best Hospitals.

When Mass General was founded, James Madison was President, Napoleon was Emperor of France and the Juliana, the first ever steam-powered ferryboat, began operation.   Only Pennsylvania Hospital (1751) and New York–Presbyterian Hospital (1771) are older. The fact that Mass General hasn’t taken the top spot before may come as a surprise to some, given its pedigree: It was the original teaching affiliate and flagship of Harvard Medical School; it remains the largest hospital-based research program in the United States, with an annual research budget of more than $400 million; and is renowned in such specialties as diabetes & Endocrinology, Ear, Nose & Throat, Neurology & Neurosurgery, Ophthalmology, Orthopedics, and Psychiatry.

The 950-bed medical center each year admits about 48,000 inpatients and handles nearly 1.5 million visits in its outpatient programs at the main campus and satellite facilities. It also delivers more than 3,600 babies annually. It is now the largest non-government employer in the city of Boston, with more than 19,000 employees, including a nursing staff of 2,900. In addition, its 3,600-member medical staff includes physicians, dentists, psychologists, podiatrists, residents and fellows.

MGH is owned by Partners HealthCare, which was formed by MGH and Brigham and Women’s Hospital in 1994. MGH is also a member of the consortium which operates Boston MedFlight.

Tags: , , , , , , , , , , , , ,
Posted in General, Healthcare, Hospital Systems, Hospitals, Leadership | No Comments »

EHR Adoption Moving Forward

Wednesday, March 14th, 2012

The nation’s hospitals must demonstrate that they have collected the vital statistics of more than 80 percent of their patients in digital form if they want to continue receiving as much as $14.6 billion in federal grants for installing electronic health records (EHR) technology.  Awards as large as $11.5 million are available to hospitals that can prove “meaningful use” of the equipment, under preliminary rules issued by the Obama administration.  Physicians can apply for grants of $44,000 or $64,000, depending on whether they treat patients in Medicare or Medicaid.

The rules continue carrying out an initiative in the American Recovery and Reinvestment Act (ARRA) as a step toward overhauling the nation’s healthcare system, specifically in the Health Information Technology for Economic and Clinical Health (HITECH) Act.  Hospitals and doctors should achieve “substantial benefits” from adopting digital records, including lower record-keeping costs, fewer pointless tests, shorter hospital stays and reduced medical errors.

The percentage of U.S. hospitals that have adopted electronic records more than doubled between 2009 and 2011, to 35 percent, according to the American Hospital Association.  Approximately 85 percent of hospitals told the association that they plan to take advantage of government incentives by 2015.  The government expects that by 2019, 96 percent of hospitals will adopt electronic records and at least 36 percent of doctors’ practices.

In this second stage of adoption of EHR, the government is emphasizing making sure that electronic systems can talk to one another – or are “interoperable.”  According to Kaiser Health News, it’s “a real push ahead,” said Farzad Mostashari, the national coordinator for health information technology.  The rules require systems be able to transfer patient information across platforms.  A “summary of care” — including past diagnoses, procedures and test results – must be able to follow patients across referrals and changes in health care provider.  Additionally, the information should be available to some patients, who under Stage 2 requirements must be allowed to view their records online, as well as download and transfer information.  Finally, some patients must be able to communicate with their doctors through a secure, online system.

According to a survey of 302 hospital IT executives, more than one-quarter said they had already proven to the Centers for Medicare and Medicaid Services (CMS) that they have met the government’s standard for the first stage of meaningful use of health IT.  That means they have demonstrated that they have the baseline capabilities in their CMS-approved health IT system to collect and submit data.  Stage 2 also deals with security of exchanging patient information electronically, particularly the risk of a doctor mistakenly leaving his laptop or iPad accessible to the public.  “A huge, huge, huge portion of all breaches don’t occur because someone hacked into the system; they occur because people left their laptop on the train and they didn’t encrypt it,” Mostashari said.

Writing on the practicefusion.com website, Robert Rowley, M.D., says that “Stage 2 is about connectivity.  So let us take a step back and re-assess the larger picture.  Stage 1 Meaningful Use is about adoption of EHRs into the daily practice of clinicians and hospitals.  It is about moving the documentation of healthcare away from paper, and onto a digital platform.  The platform didn’t really have to connect with anything, though the capability to connect needs to be built for the technology to be Certified.  Stage 2 is about connectivity.  Now that EHRs are adopted, implemented and used meaningfully, the next stage is intended to be about connecting the silos together.  Stage 3, to come later, will be about inserting Decision Support between the connections, so that best practices (as well as authorizations) become part of the daily fabric of healthcare.”

A little-known fact is that EHR adoption is having a positive impact on healthcare IT job creation.  According to job resource Medzilla, an estimated 50,000 new jobs have been created in the health IT field since 2009, when the government passed the HITECH Act, which authorized funding for the EHR incentive program.  “The statistics over the past few months have been more than encouraging,” said Del Johnson, director of client relations at Medzilla.  “Here you have two, previously separate industries that are rapidly growing into one another.  Where the two meet you have an opportunity to explore a completely new labor pool.”

Tags: , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

Physician, Patient Must Share in Decision Making

Monday, March 12th, 2012

Heart devices save lives, but too often make the patient miserable.  That unpleasant possibility is why physicians are being urged to talk more honestly with people who have very weak hearts and are considering pumps, pacemakers, new valves or procedures to clear clogged arteries.  Patients with advanced heart failure often don’t realize what they are getting into when they agree to a treatment, and doctors assume they want everything possible done to keep them alive, according to the American Heart Association. The directive recommends shared decision making when patients face chronic conditions that frequently prove fatal; they need to decide what they really want for their remaining days.  If they also have dementia or kidney failure, the answer may not be a heart device.

“Patients may feel that the treatment was worse than the disease,” said Dr. Larry Allen of the University of Colorado Anschutz Medical Center, who helped draft the new advice. One of Dr. Allen’s former patients was a 74-year-old man too weak to shop or take walks.  He was so despondent that physicians thought he would feel better with a “mini artificial heart” — a $100,000 left ventricular assist device to improve his heart’s ability to pump blood.  “Even if it goes well, people are left with an electrical cord coming out of their belly” and a higher risk of stroke and bleeding from the nose or throat, Allen said.

More than five million Americans suffer heart failure, and the number is increasing as the population ages.  More and more high-tech treatments treat advanced disease, but they usually don’t slow its progression, they just keep people alive.  And that means living longer with symptoms that do nothing but worsen.  Patients typically don’t understand the repercussions when they agree to gadgets like a $30,000 to $50,000 implanted defibrillator, which shocks a quivering heart back into normal rhythm.  “Defibrillators don’t actually make people feel better — it doesn’t treat the underlying heart failure.  All it does is abort sudden death,” Allen said.

Allen and other physicians involved in the study stressed the importance of building a patient-doctor consensus with respect to questions of survival, symptom relief and quality of life issues.  Depending on their personal situation, not all patients want to “do everything” at all costs.  One way to facilitate such a discussion, according to the authors, is to reserve one day a year to review the patient’s situation, focusing on prognosis and possible treatments alongside an appreciation for the patient’s values and goals.  This annual review is not intended to replace appropriate discussions about the patient’s ongoing care, such as when a turn for the worse or hospitalization occurs.  “The process of checking in with patients on a regular basis is extremely important because heart failure and general health change over time,” Allen said.

Shared decision making goes beyond informed consent, requiring that healthcare providers and patients consider information together and work toward consensus.  This process should focus on the outcomes that are most important to the patients, including not only survival but also relief of symptoms, quality of life and living at home.  “For patients with advanced heart failure, the decision-making process should be proactive, anticipatory, and patient-centered. This involves talking about goals of care, expectations for the future, and the full range treatment options, including palliative care,” according to Dr. Allen.

Because the time required for shared decision making is tricky to fit into a regular clinic visit, the authors suggest a yearly review to discuss prognosis, consider realistic therapies, and spell out the patient’s values, goals and preferences.  This review is in addition to discussions triggered by events such as hospitalizations and other changes in the patient’s health.  “The process of checking in with patients on a regular basis is extremely important because heart failure and general health change over time,” Dr. Allen said.

Heart failure typically progresses with time.  During the early stages, it can often be managed with medicines and lifestyle changes in diet, stopping smoking and exercise.  Advanced heart failure requires additional treatments, including heart transplantation.  A focus of the decision making process is understanding that “doing everything” is not always the best thing.  For many patients with advanced disease, receiving symptom relief, comfort, and support and medical therapy are preferred.

Tags: , , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

2011 Was a Good Year in Medicare Fraud Battle

Tuesday, March 6th, 2012

The Department of Justice recovered nearly $4.1 billion stolen in healthcare fraud schemes during 2011, according to the Obama administration.  That is a 58 percent increase when compared with 2009.  “This is an unprecedented achievement — and it represents the highest amount ever recovered in a single year,” said Attorney General Eric Holder.  The Justice Department reported that more than 1,400 people were charged with fraud in 500 cases.  More than 700 have been convicted.  “We’re regaining the upper hand in our fight against healthcare fraud,” said Health and Human Services Secretary Kathleen Sebelius.  The numbers are part of the Health Care Fraud and Abuse Control Program Annual Report, which is submitted to Congress every year.

Holder and Sebelius gave credit to their Medicare Fraud Strike Force teams for tracking down crime in areas with “hot spots” of unexplained Medicare billing.  The strike forces include prosecutors and investigators from the FBI, the Justice Department and the Health and Human Services Office of Inspector General.

According to Sebelius, aggressively pursuing health care fraud is a great investment.  “Over the last three years, for every dollar we’ve spent, we’ve put more than seven dollars back in the hands of American taxpayers,” she said.  The money goes into the Medicare Trust Fund, the U.S. Treasury and state treasuries.

From 2009 to 2011, the federal government collected $7.20 for every dollar spent on fighting fraud, according to the HHS inspector general.  That’s an increase from the $5.10 for every dollar spent between 1997 and 2008.  “It demonstrates that our collaborative efforts to prevent, identify and prosecute the most egregious instances of health care fraud have never been stronger,” Holder said.  “Over the years, we’ve seen that as these crimes harm all of us — government agencies and programs, insurers and healthcare providers, and individual patients.”

The Health Care Fraud Prevention and Enforcement Action Teams (HEAT) sent 175 people to prison, with an average sentence of 47 months, according to the Justice Department.  The teams were created in 2009.  “I expect that we will be expanding those efforts to additional cities,” said Peter Budetti, director for the Centers for Medicare and Medicaid Services’ Center for Program Integrity.

The Patient Protection and Affordable Care Act (ACA) sets aside $350 million in healthcare fraud-fighting funds. One of the law’s provisions requires  providers and suppliers wishing to participate in the Medicare, Medicaid, and the Children’s Health Insurance Program that have been deemed to be at higher risk of fraud or abuse to undergo license checks and site visits to confirm legitimacy.

Writing in the Christian Science Monitor, Warren Richey puts this in historical perspective.  According to Richey, “During President Bush’s eight years in office, nearly $1.6 billion was recovered on average each year by federal agents and prosecutors.  In contrast, the Obama administration has recovered an average $3.6 billion per year during each of the past three years.  Fighting healthcare fraud is essential in an administration that is seeking to dramatically increase the level of federal control over the nation’s health insurance system.

But it is unclear from the report to what extent the increased recoveries are a function of more efficient law enforcement or simply the rampant nature of fraud against the government.  Estimates are that healthcare fraud diverts more than $60 billion a year from public health care to criminal enrichment.  Administration officials insist they are bringing fraud, waste, and abuse under control.”

In its fiscal year 2013 budget, HHS proposes to continue making progress against healthcare fraud by increasing support through mandatory and discretionary funding.  The mandatory funding level is $1.3 billion. HHS is requesting $610 million in discretionary funds.  In its FY 2013 budget request, the Justice Department requested $294.5 million in mandatory and discretionary funding to continue the fight against  healthcare fraud.

According to Holder, the department’s civil division filed 1,000 new civil cases in addition to 1,000 pending actions.  The work resulted in $2.4 billion in recoveries under the federal False Claims Act, he said.  “These are stunning numbers,” Holder said.

Tags: , , , , , , , , , , , , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

Medical Bills Major Cause of Bankruptcies

Wednesday, February 29th, 2012

Most Americans are just one illness away from bankruptcy – even those with healthcare insurance.  Unfortunately, there are millions of other Americans who don’t have the cash to cover their medical bills.  Hospitals expect quick payment and offer insured patients little flexibility if they have difficulty paying bills.  Those unpaid bills are sent to collection agencies, and damage the individual’s credit history for years.  The crisis in American healthcare is not restricted to emergency rooms where uninsured people wait – often for long periods of time — for care.

In fact, a study has estimated that as many as 62.1 percent of all bankruptcies are due – at least in part – to medical expenses that the person simply cannot afford to pay.  And, according to the study’s authors, that might well be a conservative estimate.

“Unless you’re a Warren Buffett or Bill Gates, you’re one illness away from financial ruin in this country,” said Steffie Woolhandler, M.D., of the Harvard Medical School.  “If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that’s the major finding in our study.”

Yet, 75 percent of the people with a medically-related bankruptcy had health insurance.  “That was actually the predominant problem in patients in our study — 78 percent of them had health insurance, but many of them were bankrupted anyway because there were gaps in their coverage like co-payments and deductibles and uncovered services,” Woolhandler said.  “Other people had private insurance but got so sick that they lost their job and lost their insurance.”

Even patients who have coverage “may not be protected from high out-of-pocket costs when they are diagnosed with cancer,” according to a report by the Kaiser Family Foundation and the American Cancer Society.  In addition to high insurance premiums, those costs may force patients to amass debt as they attempt to pay for the care they need — or postpone or skip lifesaving treatment.  “Having insurance increases people’s ability to access care,” said Mark Rukavina, an expert on medical debt and the executive director of The Access Project, a Boston-based healthcare advocacy group.  “The good news is that they get the care, but the bad news is it’s unaffordable.”

The days of Cadillac health plans are pretty much over,” said Peter Cunningham of the Center for Studying Health System Change in Washington, which found that 20 percent of American families have problems paying medical bills.  More than 44 million Americans currently are paying off medical debt, the Commonwealth Fund said, an increase over the 37 million in 2005.  Two years ago, Congress reported that 30 million Americans of working age had been contacted by a collection agency for unpaid medical bills.  One survey asks how people have been affected by their unpaid medical bills.  “Two-thirds of people say … they’ve had problems paying for some of the basic necessities — food, rent, mortgage, clothes, basic stuff,” Cunningham said. “They’ve put off major purchases.  They’ve taken money out of savings or borrowed money.  An increasing number consider filing for bankruptcy.”

Although it’s not yet known how the Patient Protection and Affordable Care Act (ACA) will impact medical bankruptcies, a study from Massachusetts since its healthcare reform became effective in 2006 offers scant good news. The study, which was published in the American Journal of Medicine, determined that between early 2007 and mid-2009, the share of all Massachusetts bankruptcies with medical grounds fell from 59.3 percent to 52.9 percent, a 6.4 percent decrease.  Because there was a sudden rise in total bankruptcies during that period, medical bankruptcy filings in the state rose from 7,504 in 2007 to 10,093 in 2009.

According to the study’s authors, “Even before the changes in healthcare laws, most medical bankruptcies in Massachusetts – as in other states – afflicted middle-class families with health insurance.  High premium costs and gaps in coverage – co-payments, deductibles and uncovered services – often left insured families liable for substantial out-of-pocket costs.”

“Despite a marked decline in the un-insurance rate in Massachusetts since the implementation of health reform, the proportion of bankruptcies that occurred in the wake of medical problems has not decreased significantly, and the absolute number of medical bankruptcies has actually increased by one third,” said David U. Himmelstein, M.D., from City University of New York School of Public Health, and the study’s lead author.

Tags: , , , , , , , , , , , , , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

Survey: Massachusetts Residents Like Their Healthcare Coverage

Tuesday, February 28th, 2012

Despite GOP presidential hopeful Mitt Romney’s wish to distance himself from the law he passed, an overwhelming majority of Massachusetts residents support their state’s landmark universal health insurance program. Even though backing for its central feature — the mandate that most residents have coverage – is not quite as popular, nearly 75 percent of respondents to the Harvard School of Public Health and the Boston Globe poll said they supported the law.  When asked if they wanted changes, more than 50 percent said they did.  Another 24 percent support continuing the law as it is.

Support for the law has risen from the last time Bay Staters were asked their opinion by the Harvard researchers in 2009.  At that time, overall support was 53 percent.  Since then, it has risen to 63 percent.  That will likely come as a surprise to those who have called the state’s law, which served as a model for the federal Patient Protection and Affordable Care Act (ACA), an abject failure.

“The picture of how the Massachusetts healthcare law is working out is different than many national commentators suggest,” said Harvard’s Robert Blendon.  “Most people in Massachusetts approve of this law, and it hasn’t negatively affected them.  A large share of the audience (outside of Massachusetts) believes that something is terribly wrong because they’ve heard stories about how expensive it is…and people who live in the state just have a very different view of what’s going on here,” he said.

“Even with all the attention the Massachusetts law has gotten nationally, it really hasn’t driven down support among voters here in Massachusetts,” said Steve Koczela, president of the MassINC Polling Group, which conducted the poll.  “Taking that in concert with the level of influence people thought the state law had on the national law, at least it suggests there’s some difficulty distancing yourself from what happened nationally to what happened here at home,” Koczela said.

The myth is that the Massachusetts law failed to significantly reduce the ranks of the uninsured in the state. The fact is that the Massachusetts law dramatically increased the state’s insurance rate over a period when the national health coverage rate declined.  At the end of 2010, 98.1 percent of the state’s residents were insured compared to 87.5 percent in 2006 when the law went into effect.  Almost all children in the state were insured in 2010 (99.8 percent).  By comparison, at the national level the health insurance rate dropped from 85.2 percent in 2006 to 84.6 percent in 2010.

Approximately 77 percent of private companies are providing health insurance to their employees, compared to 70 percent before the law, according to Governor Deval Patrick’s office.  The law requires all employers with more than 11 full-time employees to make a “fair and reasonable” contribution toward their workers’ health plans or face penalties.  The mandate that requires all state residents to carry health insurance has also proved to be effective, with nearly 97 percent of taxpayers in compliance.

The problematic part of the law is its failure to curb rising costs.  Although implementation of the law itself didn’t damage the state’s budget – according to an analysis by the independent Massachusetts Taxpayer Foundation, the increase in net spending for the law was just one percent in 2010 – it hasn’t reduced overall costs for policyholders.  Private spending per member grew an average of 15.5 percent between 2006 and 2008.  Meanwhile, average premiums for full insurance increased 12.2 percent from 2006 to 2008, according to the Massachusetts Division of Health Care Finance and Policy.

Still, two-thirds of adults in the state support the law, while 88 percent of doctors say it improved, or did not affect, the quality of care.

Tags: , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

Small Businesses Can Rely on Pooled Exchanges to Cover Employees’ Healthcare Needs

Monday, February 27th, 2012

The Patient Protection and Affordable Care Act (ACA) lets some small businesses avoid buying employee health insurance.  Despite that, a new study from the RAND Corp., said few will qualify.  Starting in 2014, the ACA mandates that the majority of companies provide health insurance for employees or pay to participate in health insurance exchanges.  Companies with fewer than 100 employees can retain their previous policies under a grandfather clause or they have the option to self insure.  The goal, RAND notes, is to spread the financial risk of covering sick or high-cost enrollees across a wider pool of employers.

In 2014, insurance companies will be allowed to set premiums based on enrollees’ age, family size, where they live or tobacco use.  They won’t be allowed to consider enrollees’ gender, overall health or pre-existing conditions.  “Concerns have arisen that such cost sharing could be undermined if small employers with relatively healthy workers and dependents avoid the new regulations by self-insuring or by maintaining grandfathered health insurance plans,” according to RAND.  “Should such a trend develop…premiums offered to all businesses that remain in the exchanges could become unaffordable.”  RAND’s study came to the conclusion that most small employers will opt not to self-insure because of the potential liability and financial risk in case medical expenses rise unexpectedly.  “The self-insure option will reduce enrollment in the small-business insurance exchanges somewhat but it will not have a substantial impact on exchange premiums,” the RAND study said.

“We found that keeping the rules as they are written, particularly the limitations on maintaining a grandfathered plan, will be essential to keeping premiums affordable in small business insurance exchanges,” said Christine Eibner, RAND senior economist and the study’s lead author.  Under the terms of the ACA’s Small Business Health Options Program, or SHOP, the exchanges for individuals have targeted their opening date for January 1, 2014.

The need for SHOP exchanges is very real.  Small businesses tend to struggle to pay for health insurance for their employees, and they have much less bargaining power with insurers than big business.  According to Timothy Jost of the Washington and Lee University law school, to succeed, the SHOP exchanges will have to provide small employers with an attractive alternative to the options currently available; keep costs affordable; regulate the insurance burden; administer the program; manage enrollment periods; and protect against poor selection, which would lead to a top-heavy number of sicker individuals in the exchanges.

It is estimated that the ACA’s state health insurance exchanges for small businesses will cover nearly 10 million employees, in addition to the 15.3 million individuals who gain coverage through the individual exchanges when the law is fully implemented.  According to Fredric Blavin and colleagues at The Urban Institute and The Commonwealth Fund, SHOP has the potential to provide affordable insurance for small employers who face high premiums and administrative costs.

The reform law grants states considerable flexibility in designing their exchanges, such as allowing them to combine their small business and individual exchanges, limiting enrollment to companies with 50 or fewer employees or opening to firms of up to 100 employees through 2015, or reducing the ability of insurers in the exchange to charge premiums on the basis of age beyond what the law allows.  When they examined all options, the researchers found that merging the small business and individual market exchanges would bring two million additional people into the exchanges, for a total of nearly 27 million.  This would reduce premiums by an average of $600 per person every year, and would cut federal spending on premium subsidies by $4 billion.  Few of the other options significantly impacted coverage or costs.  The authors conclude that “these results suggest that states can make these design choices based on local support and preferences without fear of dramatic repercussions for overall coverage and cost outcomes.

“SHOP exchanges have the potential to transform the experience of small businesses and their employees when shopping for and administering health insurance,” said Sara Collins, vice president for Affordable Health Insurance at The Commonwealth Fund.

Tags: , , , , , , , , ,
Posted in Healthcare, Hospital Systems, Hospitals | No Comments »

« Older Entries