Posts Tagged ‘Medicare’

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Super Committee’s Failure Raises Questions About Healthcare Funding

Wednesday, December 7th, 2011

Now that the Super Committee has failed to identify $1.2 trillion in cuts from the federal budget, automatic cuts totaling billions for everything from Medicare to biomedical research, start in 2013.  Some healthcare sectors will fare better than others.  The primary health entitlement programs, Medicare and Medicaid, are protected under the law that created the Super Committee.  Automatic cuts will not impact Medicaid, the joint federal-state health program for the poor.  Medicare would be cut by two percent – all from payments to hospitals and other providers.

The bad news is that unless Congress reworks the legislation mandating the automatic cuts, a series of across-the-board reductions will begin in 2013.  The House and Senate appropriations committees must decide how to spread the cuts among various programs.  And some of the larger, better-financed lobbies may be able to influence what is cut and what is kept.

Even though the Medicare cuts are limited to hospitals and other medical providers and would not exceed two percent, they argue that is too much and that they sacrificed plenty in the Patient Protection and Affordable Care Act (ACA).  Rich Umbdenstock, president and CEO of the American Hospital Association, said sweeping cuts would hurt Medicare beneficiaries and their families and “also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire healthcare system.”

Officially known as the Joint Select Committee on Deficit Reduction, the Super Committee was unable to meet its deadline to come up with $1.2 trillion of deficit reduction required by the law that created it, much less the $4 trillion that deficit hawks said was necessary to stabilize the finances of the U.S. government, whose debt has topped $15 trillion.  The failure ensures that the fiscal debate between Democrats who want to protect social programs and increase revenue by raising taxes on the wealthy; and Republicans who want smaller government and have pledged to reject tax increases will be a fundamental choice confronting voters in 2012.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Representative Jeb Hensarling,(R-TX), and Senator Patty Murray, (D-WA) said.  The co-chairs thanked committee members, staffers and “the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.”

Writing for Politico, David Nather speculates on whether the Super Committee’s failure has harmed efforts to reform Medicare and Medicaid.  It would be easy to conclude that the Super Committee’s failure means the big, expensive health care entitlement programs — Medicare and Medicaid — are untouchable.  It also would be wrong.  The timing was off, coming too close to a presidential election.  The co-chairs weren’t powerful enough.  The work came too soon after a summer debt deal that Democrats hated.  Republicans couldn’t give the kind of concessions on taxes that Democrats needed.  And the alternative to a Super Committee deal on healthcare entitlements — the two percent automatic cuts in healthcare payments and defense funding that will now take place in 2013 — wasn’t harsh enough to force a deal on Medicare and Medicaid. In fact, it might even have been the easier way out.  All of which means Medicare and Medicaid are not off the table forever.”

The Hill’s Sam Baker offers a different perspective. “The Super Committee’s demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare’s payment formula, known as the sustainable growth rate (SGR).  The AMA — with bipartisan support in Congress — pushed hard for the supercommittee to include in its deficit-cutting package a long-term fix to the SGR.  The formula calls for automatic annual cuts in doctors’ payments, which add up as Congress consistently delays each cut from taking effect.  Aspirations of a long-term SGR patch should be put to rest, healthcare lobbyists said. But they questioned whether the supercommittee push was ever realistic, because an SGR fix would add to the deficit.”

“I never once believed that the Joint Select Committee would be the one to do that,” said Julius Hobson, a senior adviser at the Washington, D.C.-based law firm Polsinelli Shughart and a former AMA official.

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Will Cuts in Healthcare Save the Federal Budget?

Tuesday, December 6th, 2011

Healthcare budget and policy experts are waiting for Washington to eventually face the difficult task of finding even more savings to cut the deficit.  They anticipate that health spending — which makes up more than 20 percent of the federal budget — will be targeted.  Some healthcare leaders are already planning to redirect a debate they’re expecting in 2013.  They hope to prevent spending from being shifted from one part of the system to another.  Jack Lewin, chief executive of the American College of Cardiology, said that proposals to address the basic causes of high healthcare costs have mostly been ignored in Washington.

“We talk about them all the time, but there’s nothing that we’re doing in any of these proposals to get that done,” Lewin said.  “What we would like to get on the table that’s not there is a paradigm shift in thinking about how you control costs.”  According to Thomas Scully, a former Medicare administrator under President George W. Bush and now a senior counsel at Alston & Bird, an Atlanta-based law firm, “There’s going to be a Round Two (of cuts), but after the election, because of the economic pressures exerted by the national debt.”

Proposals include reducing payments to providers; asking beneficiaries to pay more for coverage; and raising the Medicare eligibility age.  The healthcare interests that might take another hit in 2013 want to start planning now.  Several key healthcare leaders – the majority of whom have been through other cost-cutting campaigns — say efforts to reduce spending too often transfer costs from the federal budget and individuals, insurers, doctors and hospitals.

These worries have caused “people from dramatically different quarters to start thinking about what to do to get their hands around this” and redirect the conversation, said Karen Ignagni, president of America’s Health Insurance Plans.  “I’ve been talking to a range of stakeholders about how to work together…to urge policymakers to look at what’s already out there now and build on it.”

The Patient Protection and Affordable Care Act (ACA) is one element of this debate.  Administration officials and other supporters of the law say it will help drive down costs through initiatives designed to promote primary care, emphasize on preventive medicine, study treatments to evaluate their effectiveness and rate hospitals and other providers on quality.  Other healthcare authorities counter that the law will not strongly impact costs because its reforms are small and will mature incrementally.

Additionally, the law saves money by cutting Medicare payments to hospitals and other providers; it also places some unwelcome standards on health plans.  For example, insurers cannot reject people with pre-existing conditions, must justify rate increases of 10 percent or more, and send rebates to consumers if they don’t spend a minimum of 80 percent of premiums on healthcare.

Writing in the Washington Post, Drew Altman and Larry Levitt – both with the Kaiser Family Foundation — note that “Healthcare costs are driving people into poverty.  Indeed, if the burden of healthcare expenses were not taken into account, then 10 million fewer people would have been classified as poor.  One of the biggest jumps in poverty under the new method is among people with private health insurance.  We tend to think of such people, most of whom get coverage through their jobs, as being better equipped to handle the cost of getting sick.  But even those who are insured are increasingly vulnerable to high healthcare costs, in no small part because, as costs keep rising, employers have shifted more of the burden onto workers.  The share of employees with an insurance deductible of $1,000 or more for single coverage has tripled in the past five years.  The trend is especially strong among small businesses, where half of workers faced a deductible of at least $1,000 in 2011.  For those on the edge of poverty, a big medical bill could send you over it — even if you have insurance.  The effect of healthcare costs is particularly acute for the elderly, with the proportion of seniors living in poverty increasing from nine percent under the official census measure to 16 percent under the alternative measure.  An astounding 49 percent of seniors are living at or below twice the poverty level, a threshold at which people are still considered low-income (up from 35 percent under the official method).

“It’s up to us to get really serious with the agenda so that, when the time comes after the election, we are prepared to offer serious proposals that deal with costs and that do not impair the quality of care,” said Ron Pollack, executive director of the consumer group Families USA.

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Can Marilyn Tavenner Save Medicare?

Monday, December 5th, 2011

President Barack Obama’s choice of Marilyn Tavenner as administrator of the Centers for Medicare and Medicaid Services – to replace Dr. Donald Berwick, whose recess appointment was set to expire at the end of the year – is more likely to survive the Senate confirmation process relatively unscathed.

A Harvard-educated pediatrician, Berwick won praise and the backing of major healthcare groups for his academic work, which focused on cutting the cost of care while improving quality and patient experience.  Republicans took exception to his praise of Britain’s National Health Service as an “example” for the United States to emulate.  Others accused him of supporting “rationing” healthcare services, a claim Berwick rejects.  “Every bone in my body, as a physician, even as a person, is to get everything (patients) want and need and to help them at every step,” he said.  “I have gone to the mat to get a last-ditch bone marrow transplant for a child with leukemia…and they are telling me I’m rationing?  They haven’t met me.”

White House officials said, “Before entering government services, Tavenner spent nearly 35 years working with health care providers in significantly increasing levels of responsibility, including almost 20 years in nursing, three years as a hospital CEO, and 10 years in various senior executive-level positions for Hospital Corporation of America.”

According to Ezra Klein, “Tavenner’s healthcare experience lies much more in management than policy.  Former colleagues describe her as a patient-centered manager, a hands-on medical professional equally comfortable in the board room and the emergency room.  And in contrast to Berwick, Tavenner isn’t associated with a grand vision for health reform, or a particular policy agenda for Medicare and Medicaid.  ‘With Marilyn, you present the information, then she makes a decision, and you move on,’ said Patrick Finnerty, who served as Virginia’s Medicaid director under Tavenner.  ‘She doesn’t make promises she can’t keep.  There are differences of opinions, and she would try to work through those.  She’s straight with folks but always respectful.’”

Tavenner started her career as a nurse at Virginia hospitals owned by the Hospital Corporation of America (HCA).  Tavenner met with success, rising from chief nursing officer to CEO.  In 2004, she was again promoted to HCA’s president of outpatient services, her first national position with the firm.  She resigned two years later, when then-Virginia Governor Tim Kaine tapped her to head the state’s Health and Human Resources department.

Tavenner has already won the American Medical Association’s (AMA) backing. “We have worked extensively with her in her role as deputy administrator, and she has been fair, knowledgeable and open to dialogue,” AMA President Peter Carmel said.  “With all the changes and challenges facing the Medicare and Medicaid programs, CMS needs stable leadership, and Marilyn Tavenner has the skills and experience to provide it.”

Senator Orrin Hatch (R-UT), the ranking Republican on the Senate Finance Committee, said that the panel would thoroughly scrutinize Tavenner, but did not say he opposes her nomination.  Despite Hatch’s mild comment, Tavenner is expected to face some difficult questioning because Senate Republicans have not overtly endorsed her.  According to a Republican healthcare lobbyist, “I can’t imagine a lot of support for her,” noting that the high-profile CMS role “always gets sucked into the controversy of the day.”  Ultimately, Tavenner is likely to be confirmed for the CMS post.

Tavenner is widely seen as a pragmatic administrator who will not rock the CMS boat. “The only way to stabilize costs without cutting benefits or provider fees is to improve care to those with the highest health care costs,” she said.  Tavenner also said she opposed Republican efforts to turn Medicaid into a block grant that would limit the amount of federal funding states can receive for the program.  “That approach would simply dump the problem on states and force them to dump patients, benefits or make provider cuts or all the above,” she said.  Tavenner “brings continuity in terms of implementing the mission,” said Len Nichols, director of George Mason University’s Center for Health Policy Research and Ethics.

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Showdown As Opposing Medicare Ads Debut

Wednesday, November 30th, 2011

A coalition of advocacy groups such as the Americans United for Change, Service Employees International Union, American Federation of State, County, the Municipal Employees and Service Employees International Union and Moveon.org recently started running a series of ads telling lawmakers not to cut Medicare benefits.  In particular, the ads target Representative Denny Rehberg (R-MT), Senator Dean Heller (R-NV) and Senator Scott Brown (R-MA).

“If you vote to cut Medicare, Representative Rehberg, I will remember it every time I visit my doctor.  I’ll remember you cut Medicare and Medicaid every time I fill my prescription,” says an elderly woman narrator in one of the ads.  “I’ll remember you cut Medicare every time I fall or get hurt. I’ll remember you protected millionaires over protecting my health. My friends will remember it, too — all of them.  Call Senator Heller.  Tell him to protect Medicare and Medicaid.”

Brian Walsh, the National Republican Senatorial Committee communications director, made light of the Democratic message, arguing that the half-trillion dollars they shifted out of Medicare to pay for healthcare reform makes their argument hollow.  “The irony of this pathetic attack ad is that in each of these three races, it’s actually the Democrat candidates who are all firmly on record supporting the $500 billion in Medicare cuts that were included in their massive healthcare overhaul,” said Walsh.  “The big labor unions funding this ad know that, but yet they are doing everything they can to mislead voters in Montana, Nevada and Massachusetts.”

In the meantime, the United States Chamber of Commerce is running commercials attacking Senators Sherrod Brown (D-OH) and Jon Tester (D-MT).  Friends of the U.S. Chamber criticize Tester for supporting “government-run healthcare” and challenges Brown on energy taxes.  The business community has been under unprecedented threat,” Rob Engstrom, part of a two-man team running the chamber’s political operation, said.  The trade group plans to break its previous political spending record — $50 million — to try to elect a more business-friendly Congress.  The Montana ad reminds viewers about Tester’s votes for “government-run healthcare” then urges voters to “call Senator Tester and tell him to stop supporting big government and start fighting for Montana’s families.”

Americans United for Change explains why it is running ads about protecting Medicare and Medicaid.  “For decades, seniors have relied on Medicare being a guaranteed benefit and those less fortunate have depended on Medicaid to provide long-term care and coverage for children.  These programs need to be strengthened to ensure they remain available for future generations, which means not gutting and decimating benefits, leaving low-income children, seniors, and people with disabilities out in the cold.  The key to making Medicare sustainable is reining in costs, not dumping more expenses onto seniors.  We are working to set the right priorities for an economically secure future while continuing to protect healthcare coverage for those who can least afford it.”

Writing for the Huffington Post, Sam Stein describes the Democratic ads as “Not exactly the most visually stimulating videos, the ads warn lawmakers that they will pay a political price for cutting Medicare or Medicaid.  That may prove to be popular politics — certainly, polls show that voters want the two healthcare programs protected — but the notion that cuts won’t ultimately be pursued is highly unlikely.  Aides on the Hill from both political parties have long agreed that there is room to trim down Medicare’s provider-side components.  Reforms to Medicaid, whether in the form of decreased help to the states or something more structural, have also been discussed.”

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Employer-Susidized Healthcare Insurance at a New Low

Wednesday, November 23rd, 2011

Fewer than half of  America employers - just 44.5 percent in the 3rd quarter, a decline of more than five percent in three years, — contribute to their employees’ healthcare coverage, according to a Gallup and Healthways Inc., poll.  The firms, which surveyed more than 90,000 adults, blamed the decline on high unemployment, under-employment and an increased number of employers who do not offer health insurance to their workers.

Employer-sponsored health insurance is one of the pillars of the $2.6 trillion U.S. healthcare industry.  Unfortunately, companies have scaled back benefits and raised employee charges to cope with fast-rising healthcare costs and anemic economic growth.  The latest figure was 5.3 percent below the 2008 high of 49.8 percent, when the companies began tracking trends in employer-sponsored health insurance.  “The health insurance system in the United States is experiencing numerous changes.  Governments and businesses have and will continue to cut back and/or reform their health coverage offerings,” according to the pollsters.

There was also an increase in the ranks of those covered by government plans from Medicaid, Medicare and military programs, which was up 2.2 percentage points since 2008 at 25.1 percent but off a 2010 high of 25.7 percent.

According to the Kaiser Family Foundation, there were 41 million uninsured American adults and 24 million adults under retirement age receiving the Medicaid program for low-income people and other public insurance plans last year.  Medicare covers an estimated 48 million beneficiaries.  The survey found higher levels of health insurance coverage among young people aged 18 to 26, which the pollsters attributed to a provision of the ACA that allows parents to cover grown children under their insurance plans.  Other portions of the law, including tax credits for small businesses, did not appear help those aged 25 to 64, whose uninsured ranks increased.

One large employer cutting back on healthcare coverage is Wal-Mart, the nation’s largest private employer.  Citing rising costs, the retailer told its employees that all future part-time employees who work less than 24 hours a week will no longer be eligible for any of the company’s health insurance plans.  Additionally, new employees who average 24 hours to 33 hours a week will no longer be able to include a husband or wife as part of their healthcare plan, although children can still be covered.  This is a massive shift from a few years ago when Wal-Mart expanded coverage after being criticized because so many of its 1.4 million workers could not afford or did not qualify for coverage — sending many of them to Medicaid.

“Over the last few years, we’ve all seen our healthcare rates increase and it’s probably not a surprise that this year will be no different,” said Greg Rossiter, a Wal-Mart spokesman.  “We made the difficult decision to raise rates that will affect our associates’ medical costs.  The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

There’s also some good news on the employer-subsidized healthcare front. Nearly 75 percent of medium-to-large employers plan will continue to offer their workers health insurance once the major provisions of the ACA take effect, according to a survey by consulting firm Towers Watson.  According to the survey of 368 mid-to- large-sized companies, 71 percent plan to continue to offer healthcare benefits to their employees through 2014, the year that everyone will be required to have health insurance and state-based health insurance exchanges will kick off.  Approximately one-third of the companies are not certain if they will continue offering insurance, or, if they stopped providing insurance, whether they would compensate employees by offering pay raises.

“With so much still unknown regarding both the short- and long-term impact of healthcare reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012,” said Ron Fontanetta, senior healthcare consulting leader at Towers Watson.

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Obama to Sign Executive Order Releasing $1 Billion to Cut Medical Fraud

Wednesday, November 23rd, 2011

President Barack Obama will once again sidestep a fractious Congress and sign an executive order designed to cut fraud from Medicare and Medicaid.  The Department of Health and Human Services (HHS) will administer the changes, such as testing changes to obsolete hospital billing systems to prevent overbilling, administration officials said.

The billion-dollar initiative will reward the “most compelling new ideas” for cutting costs and improving care of Medicare and Medicaid patients with rewarding federal grants.  Called the Health Care Innovation Challenge, the initiative will provide between $1 million and $30 million over three years to individual organizations or coalitions that develop sustainable, new approaches to improving healthcare quality and efficiency.  “We’ve taken incredible steps to reduce healthcare costs and improve care, but we can’t wait to do more,” said HHS Secretary Kathleen Sebelius.  “Both public and private community organizations around the country are finding innovative solutions to improve our healthcare system, and the Health Care Innovation Challenge will help jump-start these efforts.”

Centers for Medicare and Medicaid Services (CMS) administrator Dr. Donald M. Berwick, M.D. said, “When I visit communities across the country, I continually see innovative solutions at the very ground.  By putting more programs like this in place and more ‘boots on the ground,’ these types of programs can truly transform our healthcare system.”

This program is part of the Obama Administration’s “We Can’t Wait” initiative, which is a series of legal Executive Branch steps designed to move America forward while Congressional Republicans block critical and necessary legislation.

To demonstrate that its campaign to cut government waste is working, the White House said the administration cut improper payments by nearly $18 billion in 2011, largely in such programs as Medicare, Medicaid, Pell Grants and food stamps.  Budget chief Jack Lew ordered federal agencies to tighten their oversight of contractors and grant recipients to reduce the potential for taxpayer waste.

Not surprisingly, there was some immediate opposition to the initiative, with Republican critics calling it a “$1 billion experiment.”  “On the day the Supreme Court decided to review the constitutionality of ‘Obamacare,’ the president is asking for another $1 billion in taxpayer dollars to pay for another healthcare experiment that will continue taking us in the wrong direction,” said RNC spokeswoman Kirsten Kukowski.  “We already spent $2.6 trillion on his job-killing health care bill.  Another $1 billion Executive Order is just more words for a president more interested in campaign talking points than creating jobs.”

With the Supreme Court preparing to hear arguments for and against the Patient Protection and Affordable Care Act (ACA) next March, it is important to note that even the 26 states suing to have the law overturned are hedging their bets.  Only four states have refused all federal money to plan for the changes that are scheduled to take place.

Several healthcare industry leaders expressed their support for the ACA. “The system is transforming itself,” said Charles N. Kahn III, president of the Federation of American Hospitals.  “But the success of these changes depends a lot on whether there is sufficient funding.”  Nationally, hospital systems are anticipating an influx of federal funds and patients as the law goes into full effect.  “If the law is struck down, healthcare reform will have to continue one way or another,” said Patricia Brown, president of Johns Hopkins HealthCare.

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Who Has the Most Trouble Paying Medical Bills? The Sick.

Wednesday, November 16th, 2011

Americans with chronic illnesses or serious health problems are more likely to have difficulties paying their medical bills or problems getting needed care than adults with similar problems in other high-income countries.  The poll found that Americans were most likely to have problems getting needed care because of the high cost, or as a direct result of medical debt, according to the Commonwealth Fund.  “Despite spending far more on healthcare than any other country, the United States practically stands alone when it comes to people with illness or chronic conditions having difficulty affording healthcare and paying medical bills,” Commonwealth Fund president Karen Davis said.  “This is a clear indication of the urgent need for Affordable Care Act (ACA) reforms geared toward improving coverage and controlling healthcare costs.”

According to the researchers, the results underscore some of the biggest flaws in the American healthcare system.  The Commonwealth Fund surveyed 18,000 “sicker adults” in the United States and 10 other nations – including Australia, Canada, France, Germany, Switzerland and the United Kingdom – and asked about healthcare costs, access to care, coordination of care and medical errors.  Forty-two percent of Americans said the high costs of healthcare prevent them from seeing doctors, getting prescribed medications and avoiding treatments, an appreciably higher percentage than in the 10 other countries.

“Our system is the most disjointed in the developed world, which is the cause of many of our problems,” said Robert Field, professor of health management and policy at the Drexel University School of Public Health in Philadelphia.  “Doctors often don’t communicate with each other, so we are more likely to get duplicate tests, multiple drugs with dangerous interactions, and lost lab results.”

According to the survey, 51 percent of American adults with health problems who were 65 or younger went without care because of costs, compared with 19 percent of adults 65 and older, who were covered by Medicare.  The study found extensive gaps in access to healthcare.  More than 70 percent of  patients in Britain, Switzerland, France, New Zealand and the Netherlands were able to get same- or next-day appointments when needed.  Just half of patients in Sweden and Canada reported such rapid access.

More than 33 percent of American patients questioned paid more than $1,000 in medical costs in 2010, compared with less than 10 percent in France, Sweden and Great Britain – the nations reporting the lowest rates.

One reason why is that industrialized nations are more successful in giving patients easy access to primary care and to “medical homes” that are essentially centers for care and complex treatment.  A medical home is a single, familiar location where people receive care from accessible providers who know the patient’s medical history and the knowledge to optimally coordinate care.  The Commonwealth Fund study credits medical homes with fewer errors, poor information, coordination gaps, and emergency room visits.

“To varying degrees, care is often poorly coordinated,” said Cathy Schoen, the Commonwealth Fund’s senior vice president for policy, research and evaluation.  But the results also indicate that the use of medical homes reduced that lack of coordination and helped in other ways, said Commonwealth Fund researchers.  “Having a medical home makes a difference; it makes a difference in every country,” Schoen said.

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ACO Rules Revised to Attract Providers

Thursday, October 27th, 2011

The Obama administration has issued revised regulations to encourage doctors, clinics and hospitals to take greater responsibility for improving patients’ care.  The rules will reward healthcare providers who enter into partnerships to cut the cost of caring for Americans while also boosting quality — two goals of the Patient Protection and Affordable Care Act (ACA).  Known as Accountable Care Organizations, or ACOs, these partnerships have been promoted by many experts as the most promising remedy for the high costs that typify the American healthcare system.

Supporters believe that ACOs could save taxpayers billions of dollars by better coordinating patient care and replacing the current fragmented system in which patients bounce between doctors and hospitals with minimal communication between providers.  “ACOs can represent a very big step forward in helping to transform Medicare, Medicaid and the Children’s Health Insurance Programs so they can help assure high quality, seamless and less costly healthcare,” said Dr. Donald Berwick, who runs the Medicare and Medicaid programs and helped to write the new rules.

“We have made changes in response to what we heard,” Berwick said. “I think they make the program more attractive.”  During the early days, between 50 and 270 ACOs may enroll in the program and save the Medicare program as much as $950 million over four years, according to independent estimates.

Among the changes are increased flexibility in eligibility to participate in the Shared Savings Program; a choice of start dates in 2012; a longer agreement period for those starting in 2012; more flexibility in the governance and legal structure; more streamlined quality performance standards; changes to the financial model to enhance financial incentives to participate; increased sharing caps; no downside risk and first-dollar sharing in Track 1; removal of the 25 percent withholding of shared savings; increased flexibility in timing for the evaluation of sharing savings (claims run-out reduced to three months); more flexibility in antitrust review; enhanced flexibility in timing for repayment of losses; and more options for participation of Federally Qualified Health Centers and Rural Health Clinics.

ACOs are a key provision in the ACA to decelerate rising health costs while delivering high-quality care to Medicare patients.  They are designed to change the incentives that influence how doctors and hospitals operate.  Today, most hospitals and doctors get paid more by delivering more, not necessarily better, care.  ACOs will reward healthcare providers for keeping costs down and meeting certain quality measures, including cutting hospital readmissions or emergency room visits.  ACO’s goal is to replicate the highly respected models of care at the Mayo Clinic in Rochester, MN, and the Geisinger Health System in Pennsylvania where hospitals and doctors coordinate their efforts within the same organization.

George Roman, senior director of health policy at the American Medical Group Association, which represents approximately 400 large provider organizations, described the changes as “music to my ears.  We asked for almost all of these things.”

“We are very pleased at the number of significant changes in rules.  They have made the program look more attractive,” said Linda Fishman, senior vice president of the American Hospital Association.  “But it remains to be seen how many hospitals will find these changes to be motivation enough to enter the program.”

The 696-page document includes more generous shared savings incentives, leaves out 32 of the 65 original quality measures, and gives potential ACO participants extra time to formulate their plans.  One vital change is that the rule no longer mandates that 50 percent of participating physicians be approved under meaningful use requirements for electronic health record use. The revisions provide more opportunities for new ACOs to participate without absorbing risk in the earlier years, as well as major changes in at least 10 other critical areas.  Thanks to the revisions, many in the healthcare industry think more providers will be encouraged to sign up.

Writing in the Washington Post, Sarah Kliff notes that “It’s a big moment in health policy wonk land right now: the Obama administration has just published the final Accountable Care Organization rule.  Sound dull?  Let’s rephrase: The Obama administration has just released a regulation that could decide whether the American healthcare system moves past the broken, expensive fee-for-service model.  The idea is to encourage groups of providers to band together into ‘accountable care organizations’ and accept a flat fee for all care related to a particular patient or condition.  If they could deliver high-quality care in a cost-effective way, they could keep the money they saved.  The hope is to do nothing less than change the basic business model of American medicine from making money by getting patients to spend more money to making money by saving patients money.  There.  That’s better.  This is not the administration’s first crack at encouraging ACOs.  A proposed rule in April, which detailed the requirements to become an ACO, was greeted with howls of protest by the provider community.  In hundreds of comment letters, hospital and doctor groups blasted the program as unattractive, with too much risk and not enough reward.  The American Medical Group Association warned CMS that virtually none of its members would participate.  The group called the rule ‘overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.’

“There are two things that really irked healthcare systems here. First, if an ACO ended up spending more money than the target set by Center for Medicare and Medicaid Services (CMS), it would have to pay back some funds. Second, any ACO would have to show savings above two percent before they could reap any of the financial rewards.  The rule eliminates both of those barriers to entry.  It creates an ACO track with no ‘downside risk.’  The two percent gap gets cut, too: under the final rule, ACOs share in any savings from the very first penny.  CMS made a lot of other adjustments too that make the program easier to participate in, like lowering the quality reporting requirements and eliminating requirements that ACOs show significant use of electronic medical records.  As one CMS official put it this morning, the agency wanted to ‘smooth the on-ramp’ into the program.”

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ER Visits on the Rise, Thanks to Quick Treatment

Monday, October 24th, 2011

Visits to hospital emergency rooms soared to an all-time high of 136 million in 2009, according to new estimates provided by the Centers for Disease Control and Prevention (CDC).  This represents an approximately 10 percent increase from the 2008 statistic of 123.8 million.  The CDC study is one of three examinations of ER use being released at the American College of Emergency Physicians meeting.  

According to the CDC, patients under the age of 15 accounted for 21 percent of ER visits in 2009; patients between 15 and 24 made up 15 percent; patients between 25 and 44 accounted for 28 percent; patients between 45 and 64, 21 percent; and patients 65 and older, 15 percent.  Breaking visits down by gender, the CDC noted that women visited the ER at a rate of 48 visits per 100, while men had a rate of 42.   

The expected sources of payments for ER visits were private insurance, 39 percent; Medicaid or State Children’s Health Insurance Program, 29 percent; Medicare, 17 percent; other and unknown, five percent each.  Nineteen percent of ER visitors reported that they had no insurance.  The most typical reasons for visiting the ER were stomach and abdominal pain, 9.6 million; fever, 7.4 million; chest pain, 7.2 million; cough, 4.7 million; headache, four million; and shortness of breath and back symptoms, 3.7 million each.  

Physicians attributed the sharp increase to both greater demand for services and improvements that allow ERs to treat patients faster.   “With the economy, people have lost their coverage and, given the fact the emergency department is the safety net, they come to us,” said Dr. Jay Kaplan, an emergency physician at Marin General Hospital who serves on the board of the emergency physicians’ organization.  The physicians contend that it is counterproductive to discourage patients from going to the ER to save money in healthcare costs because they say it doesn’t.  “We’re efficient.  We take care of acute patients and that’s what we do well,” said Dr. Paul Kivela, managing partner of Napa Valley Emergency Medical Group, and a board member of the American College of Emergency Physicians.  

According to Dr. Michael Gerardi, an ACEP board member, he and his colleagues want comprehensive medical liability reform that includes indemnification based on recognized guidelines, caps on non-economic damages and medical courts where providers are judged by medical peers.  “In America, we sue far too often for bad outcomes and not deviations from standard of care,” Gerardi said.  “The overall anxiety of patients and the lack of acceptance that bad outcomes happen are driving costs.”  Because ERs are safety-net providers, they have become increasingly overcrowded.  One factor is the passage in 1986 of the Emergency Medical Treatment and Labor Act, which requires hospitals to provide people with emergency services, despite their inability to pay.  

It has been estimated that 13.7 percent of all emergency room visits could be treated in retail medical clinics, which are typically based in pharmacies or grocery stores.  These facilities are equipped to treat a limited number of minor conditions, such as throat infections or urinary tract infections.  An additional 13.4 percent of emergency room visits could be handled by urgent-care clinics — an independent medical facility that can handle a broader scope of problems, such as minor fractures and more serious injuries.  Urgent-care clinics typically are open on evenings and weekends, fulfilling the need for patients with occurring before or after typical physician office hours.

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National Health Service Corps Caring for More Medically Underserved Americans

Wednesday, October 19th, 2011

In the last three years, membership in the National Health Service Corps (NHSC) has tripled, according to Kathleen Sebelius, Secretary of Health and Human Services (HHS).  The NHSC is a national network of 10,000 primary-care providers and 17,000 sites in underserved communities with limited access to healthcare.

“When you don’t have access to primary care, small health problems grow into big ones,” Sebelius said.  “Way too many Americans have gone without check-ups, preventive screenings, vaccines, routine dental work and other care simply because there was no one to see,” Sebelius said.  The agency estimates that its providers care for approximately 10.5 million patients, compared with just 3,600 providers who cared for roughly 3.7 million patients three years ago.

The program, which is almost 40 years old — is administered by HHS’ Health Resources and Services Administration (HRSA) — and provides financial, educational and professional resources to medical, dental and behavioral healthcare providers.  According to HRSA the NHSC has awarded approximately $900 million in scholarships and loan repayment to healthcare professionals since 2008 to expand the agency’s primary-care workforce. That funding has come from the Patient Protection and Affordable Care Act (ACA), the American Recovery and Reinvestment Act (ARRA) and base appropriations.  “Eighty-two percent of NHSC clinicians continue to serve in high-need areas after they fulfill their service commitment,” HRSA Administrator Mary Wakefield said.  “These awards help ensure that underserved communities across the country have access to quality healthcare both today and in the future.”

“When you don’t have access to primary care, small health problems grow into big ones,” Sebelius said. “Most of these providers graduate with tens or even hundreds of thousands of dollars in loans, and it is very difficult to pay off while doing this important work.”

The Association of American Medical Colleges estimates that the nation will have a shortage of 91,500 physicians across all specialties just nine years from now. 

Despite the program’s recent significant growth, Wakefield said there are underserved areas of the country that qualify for National Health Service Corps members, but there is not enough money to fund providers there.  “It is a significant challenge,” Wakefield said.  “We have more sites that are designated or eligible than we have clinicians.  We also have, on the flip side, more students applying to National Health Service Corps than we have availability” to fund.

In Minnesota, for example, a state with vast wilderness areas, the federal government is providing $6.6 million in incentive dollars to doctors and nurses to increase the state’s number of primary-care providers.  According to Minnesota Public Radio, “Minnesota’s rural healthcare system is feeling new pressure.  National healthcare reform is forcing expensive record-keeping changes.  Greater reliance on Medicare and Medicaid reimbursement makes rural providers vulnerable.  Rural people tend to be older and poorer, are less likely to have insurance and suffer more chronic illness.  And the doctor shortage has gotten harder to deal with.  In response, care is changing.  Services like mental health counseling are delivered via teleconference.  Clinics and hospitals are consolidating.  ‘Mid-level’ practitioners like paramedics and dental therapists are starting to play new roles.”

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