News

SPOTLIGHT: Sutter accelerates $400 million EMR installation

Neil Versel — Fri, 19 Mar 2010 14:47:09 -0400

Sutter Health is accelerating its $400 million project to install an inpatient Epic Systems EMR in all 26 of its hospitals in Northern California, nearly two-and-a-half years after slowing down the rollout as the economy began to tank. The Sacramento, Calif.-based health system will attempt to complete the project within five years. When Sutter delayed the implementation in late 2007, the organization said it would install the EMR in phases through 2015, starting with Sutter's six highest-volume hospitals. FierceEMR

Health reform could cut deficit by $138B, CBO says

Wendy Johnson — Fri, 19 Mar 2010 14:21:08 -0400

The reconciliation proposal under fiery debate in Congress would shave $138 billion off the federal deficit over the next 10 years, according to a preliminary estimate by the Congressional Budget Office.

But the nonpartisan forecast is "more art than science," the Washington Post reports. Two scenarios could push those forecasts way off kilter: If the CBO under- or over-estimated the savings that could result from a heavier reliance on evidence-based medicine, or if future lawmakers make substantial changes to some of the provision's Medicare-related cost-saving measures, according to the newspaper.

Democrats are still rounding up enough votes to pass the $940 billion health bill in time for an expected vote Sunday. In a final push for its success, President Obama addressed students in Northern Virginia today, calling the legislation "enormously important for America's future," and likening the vote to the historic votes that launched Social Security and the Civil Rights Act of 1964, ABC News reported.

"This is going to be a very close vote, and it's crunch time," House Republican Leader John Boehner (Ohio) told Fox News Channel, the Wall Street Journal reported. "They're doing everything they can to get the votes. I'm doing everything I can to make sure members understand that they can vote with their constituents or they can vote with [House] Speaker [Nancy] Pelosi. But they can't do both."

For more information:
- read the Washington Post report
- check out ABC's coverage
- here's the Congressional Budget Office report

Insurance company knowingly engaged in rescission efforts against HIV patients, court finds

Dan Bowman — Fri, 19 Mar 2010 12:25:52 -0400

In upholding a South Carolina county court's ruling from 2004 that insurance company Fortis (now known as Assurant Health) wrongly terminated an HIV patient's health insurance, the state's Supreme Court uncovered an "unprecedented" number of HIV-targeted rescissions. While the state's ruling occurred last September, records from that case that recently were made public showed that Fortis used a computer program and algorithm to pinpoint insurance customers who recently had contracted HIV, with intentions to launch insurance fraud investigations those customers in order to ultimately get their policies canceled, according to a report from Reuters.

The plaintiff in the case, Jerome Mitchell, contracted HIV as a college freshman in 2002. In 2004, a Florence County (S.C.) jury ruled that Assurant needed to pay $15 million to Mitchell for canceling his policy after one note, written in error by a nurse, said that Mitchell may have been diagnosed with HIV before he purchased his coverage. Based on that note, in which the date was printed incorrectly, Fortis ignored all other medical records, including doctor's notes proving Mitchell's diagnosis came after he was insured.

"Fortis was motivated to avoid the losses it would undoubtedly incur in supporting Mitchell's costly medical condition," the Supreme Court wrote, although it did lower the amount awarded to Mitchell to $10 million.

Judge Michael G. Nettles, who presided over Mitchell's initial case in 2004, wrote that this instance wasn't the first time Fortis targeted patients with "life-threatening diseases."

"Fortis pre-programed its computer to recognize the billing codes for expensive health conditions, which triggers an automatic fraud investigation by its 'Cost Containment' division whenever such a code is recognized," Nettles wrote.

A federal investigator who looked into the case confirmed Nettles' statement, pointing out that policyholders found to have HIV were "scrutinized" more than other policyholders. "This was about money," said the investigator, who remained anonymous.

Peter Duckler, a spokesman for Assurant, said in a statement that the company "disagreed with the court's characterization" of the actions taken by the insurance company against Mitchell.

To learn more:
- read this Reuters article

State high court removes hospital's property tax exemption

Dan Bowman — Fri, 19 Mar 2010 11:45:43 -0400

Nonprofit hospitals, take notice: your tax exemption is only as good as the charity care you actually provide. The Illinois Supreme Court ruled on Thursday to remove the tax exemption status of Provena Covenant Medical Center in Urbana, Ill., citing that the Catholic facility's records show it to be a hospital devoted to caring for patients "in exchange for compensation through private insurance" more often than not, Reuters reports.

The ruling means that Provena Covenant's Urbana facility will have to pay property taxes. That tax-exempt status first was elimintated in 2003, when the Champaign (Ill.) County Board of Review determined the facility did not meet the requirements to receive such a status. Three years later, the state's Department of Revenue agreed, saying that the amount Provena Covenant spent on charity care was less than the property tax exemption. After the Sangamon (Ill.) County Circuit Court ruled that the Department of Revenue was in the wrong in 2007, a state appeals court overturned that ruling, ultimately paving the way for yesterday's decision.

"[U]ndermining Provena Hospitals' claims of charity is that even where it did offer discounted charges, the charity was often illusory," the ruling stated. "[U]ninsured patients were charged PCMC's 'established' rates, which were more than double the actual costs of care. When patients were granted discounts at the 25 percent and 50 percent levels, the hospital was therefore still able to generate a surplus. In at least one instance, the discount was not applied until after the patient had died, producing no benefit to that patient at all."

Jon "Cody" Sokolski, Chair of the Board of Provena Covenant, took issue with the ruling, saying that it impairs the facility's ability to reach its charity care goals. Sokolski specifically pointed out that Provena "provided more than $38 million in free care and other community benefits" in 2008.

Provena Covenant CEO David Bertauski added that he hopes the "troubling ruling prompts a dialogue among hospitals and elected officials to dialogue about not only how we define charity care but also how we better ensure that the people who need financial assistance get it."

To learn more:
- read this Reuters report
- read the actual Illinois Supreme Court ruling
- here's Provena Covenant's response

Increased primary-care interest not enough to affect physician-shortage trend

Debra Beaulieu — Fri, 19 Mar 2010 10:41:28 -0400

You can't blame the National Resident Matching Program for trying to make lemons out of lemonade, but Thursday's Match Day results weren't as much of a win for primary-care physicians as the NRMP would like you to have believed. Sure, more U.S. medical students participating in this year's matching program picked internal medicine residencies than in 2009, but only 3.4 percent more, according to the American College of Physicians, not nearly enough to put a dent in the primary-care shortage dilemma facing the U.S.

More than 2,700 students chose to focus on internal medicine in 2010. However, that number was closer to 4,000 25 years ago. Furthermore, roughly 20 to 25 percent of those students who actually chose to go into internal medicine ultimately will end up in a subspecialty of internal medicine, like cardiology, the ACP said.

"Because it takes a minimum of three years of residency after four years of medical school to train an internist, it is critical to begin making careers in internal medicine attractive to young physicians," said Dr. Steven Weinberger, a deputy vice president with the ACP. "As America's aging population increases and more people gain access to affordable coverage, the demand for general internists and other primary-care doctors will drastically outpace the primary-care physician supply."

A recent Journal of the American Medical Association report showed a falling number of hours worked by primary-care physicians since fees began their gradual decline in 1995, a trend that JAMA authors concluded could lead to worsening of the primary-care shortage in the United States. The ACP pointed out that increased Medicare and Medicaid payments to doctors, as well as more pilot testing and support for primary-care training programs all could help to ease the shortage.

For more information:
- here's the ACP's press release
- read the NRMP's press release

Arizona becomes first state to drop children's health program

Debra Beaulieu — Fri, 19 Mar 2010 09:17:34 -0400

Faced with a $2.6 billion projected shortfall next year, Arizona's new budget will leave 47,000 low-income children without health insurance. Although three states, including Arizona, have in the last year capped enrollment in the Children's Health Insurance Program, Gov. Jan Brewer (R-Ariz.) signed yesterday the first state budget in the nation to drop the program entirely, reports the New York Times.

Financed jointly by states and the federal government, CHIP insures nearly 7.7 million children whose parents' income falls between Medicaid qualifications and being able to afford private insurance.

With state revenues down one-third since 2007, Arizona's $8.9 billion budget reduced spending by about $1.1 billion. As part of deep cuts to education and healthcare, Arizona also will remove Medicaid eligibility for childless adults, thereby dropping as many as 310,000 people. Brewer warned that more cuts will be needed if voters do not approve a referendum in May to raise the sales tax by a penny for three years, to 6.6 cents per dollar, according to the Times.

The current cuts have hospital officials and advocates for the poor expressing concern about long-term medical problems low-income children might suffer without adequate medical care. "They really are standing alone in cutting children off during the downturn," Jocelyn Guyer, co-executive director of the Center for Children and Families at Georgetown University, told the Times. "It's going to have long-term consequences that will be there for kids long after Arizona's budget situation gets better."

To learn more:
- read the full New York Times article

Nuns side with Catholic Health Association in favor of health reform

Dan Bowman — Thu, 18 Mar 2010 12:54:24 -0400

First it was the Catholic Health Association splitting with the church and the U.S. Conference of Catholic Bishops on health reform, now it's U.S. nuns. A letter was delivered to members of Congress yesterday on behalf of 59,000 Catholic Sisters throughout the U.S., that called the healthcare bill a "faith mandate" as far as ensuring coverage for everyone. "We have witnessed firsthand the impact of our national health care crisis, particularly its impact on women, children and people who are poor," the letter reads. "While it is an imperfect measure, it is a crucial next step in realizing health care for all." The letter also points out that "despite false claims to the contrary," the bill won't provide federal dollars for abortions. "It will uphold longstanding conscience protections and it will make historic new investments--$250 million--in support of pregnant women," the letter continues. "This is the REAL pro-life stance, and we as Catholics are all for it." Letter

To pass health reform, Democrats ready to enact 'Slaughter rule'

Debra Beaulieu — Thu, 18 Mar 2010 12:28:39 -0400

Despite Republican cries that using the "deem and pass" rule would be an unconstitutional way to pass legislation as immense as health reform, Democrats are prepared to proceed with this backup plan if they don't get the 216 votes necessary to pass the Senate Patient Protection and Affordable Care Act, Majority Leader Steny Hoyer (D-Md.), indicated during Wednesday's appearance on Good Morning America.

Under the "deem and pass," "self-executing" or Slaughter rule (named for committee chair Rep. Louise Slaughter, D-NY) a Senate-passed health bill would be "deemed" to have passed without a standard roll-call vote. Significant revisions sought by the House would be included in a separate budget reconciliation bill.

"This is a process that you can avoid a direct up or down vote on a bill. This is an attempt to hide the vote," House Minority Whip Eric Cantor (R-Va.) said alongside Hoyer on GMA. "Why do that? It's so big, we should have an up or down vote."

"This is not an unusual procedural. We're going to vote on a rule," Hoyer responded. "It's simply like a conference report."

For more information:
- read this Los Angeles Times article
- check out this Associated Press article
- here's an entry from The Hill Blog
- read this letter to House Speaker Nancy Pelosi from Va. AG Ken Cuccinelli

Employed physicians' paychecks reflect a fraction of what they earn for hospitals

Debra Beaulieu — Thu, 18 Mar 2010 12:15:43 -0400

Employment models have been touted as a win-win for physicians and hospitals in recent years. But a new report by physician search firm Merritt Hawkins reveals that hospitals may be getting a better deal than originally thought, paying doctors just one-fifth to one-tenth of the dollars they earn for their hospitals.

Due to limitations posed by Stark law, anti-kickback laws and the IRS, the amount a hospital can legally compensate an employed physician is finite. And the study did not compare hospitals' profits on physicians to the amount of overhead those doctors would have to spend to run their own practices.

How much physician-generated revenue a hospital pockets depends on the specialty. For example, neurosurgeons draw an average revenue of $2,815,650 and are paid an average salary of $571,000 (20 to 22 percent of what they earn for the hospital). Primary-care physicians, including family physicians and internists, bring in about $1,650,586 and take home an average of $179,500 (10 to 12 percent of their revenue).

"The recession and declining reimbursement have prompted many physicians to seek closer relations with hospitals," Mark Smith, president of Merritt Hawkins, said in a statement. For hospitals, "the most powerful tool in healthcare remains the physician's pen," he added. "Hospitals depend on doctors to drive patient care, which in turns drives revenue."

To learn more:
- read the Becker's Hospital Review article
- check out this entry in the Wall Street Journal's Health Blog

Medical societies cheer over flaws found in physician rating programs

Debra Beaulieu — Thu, 18 Mar 2010 12:05:25 -0400

"Physician ratings conducted by insurers can be wrong up to two-thirds of the time for some groups of physicians," concluded a RAND Corporation study published in today's New England Journal of Medicine. RAND analyzed insurance claims submitted by 13,788 Massachusetts physicians to four health plans in 2004 and 2005 and determined that most physicians "did not have cost profiles that met common thresholds of reliability."

In particular, researchers found that 50 percent of internists, 66 percent of vascular surgeons, 40 percent of cardiologists, 50 percent of endocrinologists and 58 percent of pulmonary and critical-care specialists were inaccurately classified as providing lower-cost care.

These findings validate the American Medical Association's longstanding criticism of methods health plans use to rate physicians' quality based on the cost of care they provide. "Given the potential for irreparable damage to the patient-physician relationship [due to inaccurate quality information], the AMA calls on the health insurance industry to abandon flawed physician evaluation and ranking programs, and join with the AMA to create constructive programs that produce meaningful data for increasing the quality and efficiency of healthcare," said J. James Rohack, MD, AMA president.

Physician ratings, or tiers, have also been under close scrutiny by the Massachusetts Medical Society, which publishes NEJM, and in 2007 adopted its own set of principles for physician ranking programs. MMS is also currently in litigation with the Massachusetts Group Insurance Commission and two of its participating health plans, seeking to "correct the wrongs" in its tiering program.

As to the RAND study, Mario E. Motta, MD, president of the Massachusetts Medical Society, said, "It's critically important that patients and physicians get clear, accurate information about the cost and quality of health care. But this report, produced by an independent, renowned research firm, clearly demonstrates that these profiling programs fail to accomplish those goals."

To learn more about the AMA's reaction to the RAND study:
- read the abstract of the RAND study in the NEJM
- read the AMA's reaction to the study
- here's MMS' response to the study
- learn more about MMS' principles for physician ranking

Botched radiation treatments lead to fine for VA

Dan Bowman — Thu, 18 Mar 2010 11:33:35 -0400

Nearly two years after medical errors at the Philadelphia Veterans Affairs Medical Center came to light, which involved 97 of 116 prostate cancer treatments being performed incorrectly, the Nuclear Regulatory Commission announced its second biggest fine ever against a medical facility. The NRC on Wednesday proposed a $227,500 fine against the Department of Veterans Affairs, the parent of the Philadelphia hospital.

The incorrect procedures, performed between 2002 and 2008, involved iodine-125 seeds to treat prostate cancer not only being placed in "unintended organs and tissues," but also being used in "inconsistent" doses, according to an NRC inspection report from November 2009. As a result, some patients experienced "radiation proctitis, rectal bleeding...from high doses of radiation, and recurrences of cancer." Five of the 114 overall patients treated (two were treated twice) died, but not as a result of the treatments, according to the report.

Furthermore, many of the incorrect procedures initially went unreported.

"This lack of management oversight, the lack of safety culture to ensure patients are treated safely, the potential consequences to the veterans who came to this facility and the sheer number of medical events show the gravity of these violations," said Mark Satorius, regional administrator for the NRC's Region III office.

Despite the fine, the VA insists that it has taken all the right steps in dealing with this situation, according to the New York Times. Not only was the VA Philadelphia prostate cancer treatment program indefinitely suspended, but the physician responsible for a majority of the incorrect treatments, Dr. Gary Kao, is no longer employed at that facility.

"The fact remains that our VA staff self-discovered these potential dosing issues almost two years ago...cooperated fully with multiple investigations and have been transparent throughout the entire process," said Richard Citron, director of the Philadelphia VA facility.

For more information:
- read this NRC press release
- here's the NRC's report (search ML093210599 to access report)
- read this New York Times article

Bill opposing health insurance mandate signed by Idaho governor

Dan Bowman — Thu, 18 Mar 2010 09:52:02 -0400

Virginia may have beaten Missouri to the punch nearly two weeks ago when it became the first state to approve legislation allowing its citizens to avoid a federal mandate to buy health insurance, but Idaho topped that by becoming the first state to actually have its governor sign such a bill into law on Wednesday.

Gov. C.L. "Butch" Otter stressed that the measure, deemed the Idaho Health Freedom Act, will keep citizens of that state from having to "turn over another part of their life to government control," reports the Associated Press. He also believes it will have significant nationwide clout, especially if the 37 other states working on such legislation ultimately follow Idaho's lead.

"[Y]ou get 36 states, that's a critical mass," Otter said. "That's a constitutional mass."

A spokesman for Virginia Attorney General Ken Cuccinelli also announced yesterday that his state will file a lawsuit against the federal government, should the health reform bill be approved by Congress, according to the Washington Post's blog, Virginia Politics.

However David Freeman Engstrom, a constitutional law expert at Stanford University Law School, isn't sure that any of these laws or threats to file suit will make a difference in the grand scheme of things, citing that federal law always trumps state law. "[I]t really doesn't matter what a state legislature says on this," he said.

To learn more:
- read this Associated Press article
- here's the Virginia Politics blog post, via the Washington Post

Mobile simulation labs deliver on-site surgical training

Dan Bowman — Wed, 17 Mar 2010 13:27:11 -0400

Future surgeons throughout the Midwest are able to get the training they need without major interruptions in their work schedules, thanks to mobile operating rooms that travel to different hospitals. Converted from trailers, the units allow physicians to practice at fixed simulation labs located at their own hospitals, the Chicago Tribune reports.

One such facility, a 36-foot-long state-of-the art training lab, has all the amenities of a regular operating room, including television monitors and a drainage system for biohazardous waste. Not bad for a converted trailer. But they're still fairly new -- only about 18 such units are in use throughout the U.S., the newspaper reports.

"It's really quite a leap in progress in terms of surgeon education, particularly for the areas that aren't within, you know, 20 miles of these fixed labs," said Dr. Vishal Mehta, an orthopedic surgeon in Geneva, Ill.

To learn more about the mobile operating room:
- check out this Chicago Tribune article

AMA launches first managed care tool designed for physicians

Debra Beaulieu — Wed, 17 Mar 2010 12:03:44 -0400

The American Medical Association yesterday launched its new National Managed Care Contract, a first of its kind online resource and database to help physicians analyze and improve managed care contracts, as well as thwart unfair business practices.

The NMCC will provide model contract language that complies with insurance laws and regulations in each of the 50 states plus the District of Columbia, and allow physicians to keep up with changes in statutes through its searchable online database.

The AMA expects physicians to use these new tools to request reasonable changes to managed care contracts, enhance communication with managed care organizations, monitor legislative and regulatory trends and more.

"The concentrated market power of large health insurers gives them an unprecedented advantage in dictating key aspects of healthcare to physicians," said AMA President J. James Rohack, MD. "The AMA's new resources will be a welcome guide for negotiating fair contracts with health plans angling for an even greater advantage over physicians."

For more information:
- read the AMA's press release
- check out this article in Hospital Review Magazine
- here's the actual database

'Three-share' insurance gives some employers, patients first shot at health coverage

Debra Beaulieu — Wed, 17 Mar 2010 11:57:32 -0400

Though a silver bullet has yet to be found, five states--Oregon, Virginia, Minnesota, New York and Colorado--so far have taken advantage of federal grants to explore a new approach to making health insurance more affordable for some residents. "Three-share" programs, as they're called, simply divide premiums among three entities: patients, employers and the community.

The Gold Dust Saloon in Pueblo, Colo., is one restaurant forking over its third, in a move that offers health insurance to its cooks and wait staff for the first time in the 25 years it's been in business. Two local hospitals pay the community portion of the $180 premium for Gold Dust and 29 other small businesses in the county. Health Access Pueblo, launched in August 2008, doesn't offer insurance, avoiding the state's minimum benefit rules. Rather, 200 local doctors and two hospitals accept reduced rates.

Other three-share programs exist in Muskegon County, Mich., and Duval County, Fla.; but due to due to a lack of interest among employers and insurers, as well as strict eligibility rules, enrollment numbers remain small overall. Nonetheless, employers who participate in the programs claim the extra expense is worth it. "My employees will be healthier and will be less likely to call in sick," Gold Dust owner Ruth McDonald stated in an article coproduced by NPR and Kaiser Health News. "They'll realize this is a benefit and will stay longer. And a more experienced employee provides better food service," she added.

To learn more about "three share programs":
- read this NPR/Kaiser Health News article

Insurance rates jump for poor in Pennsylvania

Debra Beaulieu — Wed, 17 Mar 2010 11:50:47 -0400

About 2,400 poor adults on the waiting list to join AdultBasic, Pennsylvania's state insurance program for those who don't qualify for Medicaid, were hit March 1 with a near doubling of their monthly premium, from $313 to $600.

Faced with cost hikes, the state opted to preserve the $36 per month fee for the 39,000 residents already enrolled in the main program and shift the burden to those on the waiting list, who have been allowed to purchase the same coverage at a higher cost since the program's inception in 2002.

Because the waiting list members buy insurance on a month-to-month basis, many do so only when they are sick, thus adversely affecting the risk pool and increasing costs. But hiking costs for this group, which includes individuals who make less than half of the federal poverty level--or about $21,672--will likely only make matters worse, the state insurance commissioner, Joel Ario, admitted to the New York Times. As more people drop the program and cause costs to rise further, it "is likely to send us into a death spiral," he said.

Some officials suspect the new rates are part of a tactic to decrease enrollment in the AdultBasic program before the insurers' agreement to help fund it expires at the end of 2010. "Our fear is that the state is being pressured by insurers to raise rates as a way to limit the number of people enrolled in the program," Kristen Dama, a staff lawyer with Community Legal Services of Philadelphia, told the Times. "Then if insurers decide not to continue underwriting the program after Dec. 31 of this year, there will be fewer people enrolled in it that suddenly will lose coverage."

According to Aria, the solution to his state's predicament would be to require nearly all residents to carry insurance, so that costs would be spread more evenly.

To learn more:
- read the full New York Times article

Hospital accused of threatening, interrogating nurses

Dan Bowman — Wed, 17 Mar 2010 11:39:10 -0400

Interrogative tactics and videotaping nurses engaged in union activities are just two of the charges brought against Borgess Medical Center in Kalamazoo, Mich., by the Michigan Nurses Association (MNA), which filed an Unfair Labor Practice charge with the National Labor Relations board on Tuesday. MNA claims Borgess was "premeditated" in its actions related to contract negotiations.

According to John Karebian, MNA's executive director, Borgess leaders not only "threatened and coerced" nurses by removing employee protections, but also tried to avoid working with the labor union as a bargaining representative, something he called insulting.

"The decision by the management of Borgess Medical Center to attempt to take away the existing assurance of the voice of the nurses at the bedside without just cause shows a disregard and disrespect for the profession of nursing and the nurses that practice in their facility," Karebian said.

The actual complaint accuses Borgess of trying to "deal directly with employees" during contract negotiations, offering only "take-it-or-leave-it" deals to such employees. The complaint also says that Borgess interrupted nurses at various points throughout the day with an emphasis on promoting its bargaining proposals, and that the hospital threatened "economic penalties" for rejection of Borgess' proposal.

To learn more:
- read the MNA's press release
- here's the actual complaint filed with the NLRB

Mass., Blue Cross CEO resigns after company loses $150M in 2009

Dan Bowman — Wed, 17 Mar 2010 09:14:45 -0400

On the heels of Blue Cross Blue Shield of Massachusetts posting a $149 million loss for 2009, CEO Cleve Killingsworth resigned from the insurer on Monday. While Blue Cross went on record as saying that Killingsworth was not forced out, an anonymous source told the Boston Herald that's exactly what happened. In the meantime, former Blue Cross CEO William Van Faasen, who left the company in 2005 with a $16.4 million retirement package, will once again take the reins, but this time on a temporary and pro bono basis. Article

Skyrocketing: Hospital costs 55 percent higher in Mass., than national average

Dan Bowman — Tue, 16 Mar 2010 14:00:33 -0400

Hospital costs throughout the U.S. are constantly on the rise, but nowhere more so than in Massachusetts, where they rose to more than 55 percent above the national average in 2007. The culprit? A combination of expensive clinical service usage, fewer manufacturing companies and "heavy reliance on teaching hospitals," according to a recent report co-authored by Alan Sager, a professor of healthcare finance at Boston University's School of Public Health.

The hospital cost per patient in Massachusetts in 2007--the most recent year from which data was used for the report--totaled $3,015. The national average that same year was $1,941 per patient, according to the Associated Press.

Catherine Bromberg, a spokeswoman for the Massachusetts Hospital Association, called the report's analysis of data "inaccurate," and added that the state's rates are actually much lower according to other studies.

However, a Boston Globe article details how one regional insurer, Harvard Pilgrim Health Care, paid some hospitals up to three times more money for the same care as other hospitals. Rick Weisblatt, senior vice president for health services at Harvard Pilgrim, said some of the bigger teaching hospitals in Boston use their stature and geographic dominance as "leverage."

"The employers in that community generally want that hospital in the network," Weisblatt said. "And the hospitals are not shy about threatening termination."

Hospitals in the Partners HealthCare stable are paid anywhere from 15 to 60 percent more than other hospitals for the same work, which in turn, has driven up costs in the Eastern portion of the state, the article points out.

Partners called its fees appropriate, citing that is hospitals are ahead of the curve for most other facilities in terms of disease treatment and research. But Dr. JudyAnn Bigby, secretary of the Executive Office of Health and Human Services for the state, thinks that a lot of the high hospital costs have to do with a desired for more money.

"So much of what drives costs now is the revenue that hospitals want to generate," Bigby said.

For more information:
- read this Associated Press article, via the Boston Herald
- here's the Boston Globe's article

Urban Institute: Reform failure could push middle class over the financial edge

Caralyn Davis — Tue, 16 Mar 2010 12:54:54 -0400

Failure to pass a significant national reform package could have unpleasant consequences for the nation's healthcare system and its middle class. Ten million additional Americans could become uninsured in just five years, and government healthcare spending for the poor could more than double by 2020, according to a new report prepared by the Urban Institute for the Robert Wood Johnson Foundation (RWJF) in Princeton, N.J.

"Families and individuals across this country are already stretched beyond their means. They simply cannot afford to see their insurance costs rise by more than a third in just five short years," says Risa Lavizzo-Mourey, RWJF president and CEO. "This report paints a grim picture for the future of our nation if we fail to make health insurance more affordable for all Americans, while also reducing healthcare costs."

Urban Institute analysts used a simulation model to assess the best-case, intermediate-case and worst-case scenarios for the national changes in coverage patterns and healthcare costs that will occur from 2010 to 2020 without major reforms. The middle class will be hit the hardest under all three economic scenarios.

This year, approximately 49.4 million people have no health coverage. In the worst-case scenario, the number of uninsured would jump to 59.7 million by 2015 and to 67.6 million by 2020. The uninsured rate for middle-class families earning roughly $40,000 to $75,000 a year would rise to 28 percent in 2020, up from 19 percent in 2010. Overall, the percentage of uninsured people from families with incomes above $40,000 would increase from 44 percent to 53 percent in 2020.

In the worst-case scenario, premiums for both single and family policies would more than double by 2020, rising from $4,800 to $10,300 for single policies and from $12,100 to $25,600 for family policies. Employer spending on premiums would increase by 98 percent, jumping from $430 billion in 2010 to $851 billion in 2020. As a result, small and medium-sized employers would stop offering coverage benefits to employees, say the analysts.

These skyrocketing costs would impose heavy strains on government healthcare programs. Medicaid and Children's Health Insurance Program (CHIP) enrollment would increase from 45.4 million in 2010 to 58.2 million in 2020, an increase of 12.8 million nonelderly Americans. Medicaid and CHIP spending for the nonelderly would grow 108 percent from $278 billion in 2010 to $576 billion in 2020. In addition, uncompensated care costs would more than double, growing from $64 billion in 2010 to $140 billion in 2020.

To learn more:
- read the RWJF report
- check out the fact sheet

Nursing graduates face tough job market

Caralyn Davis — Tue, 16 Mar 2010 12:44:26 -0400

Healthcare may be one of the few industries that is consistently adding jobs during the recession, but nursing school graduates in at least one state have to work harder to find employment. Several years ago, most nursing students in North Carolina received multiple job offers before graduation. But that "outrageously wonderful" employment picture has faded, says Tina Gordon, chief executive at the North Carolina Nursing Association.

Job placements at Charlotte-based nursing schools tell the statewide story. Once upon a time, seniors at the Carolinas College of Health Sciences typically had 100 percent job placement by graduation, says Ellen Sheppard, president of the school, which is part of Carolinas HealthCare System. Last year, roughly 20 percent of graduates had jobs by May and about 80 percent had jobs by November. Presbyterian Healthcare operates a nursing school with Queens University of Charlotte. In 2008, Presbyterian offered jobs to 120 graduating students. In 2009, that number dropped to 67. Nursing students at Central Piedmont Community College "all find jobs eventually," says Ruth Hedgpeth, associate dean for health programs. "It just may not be the job they wanted."

Why the slowdown? Older nurses aren't retiring or changing jobs as quickly as they did before the recession. In addition, hospitals and other healthcare providers are hiring more judiciously. Before the recession, Carolinas HealthCare often over-hired new nurses so there would be extras to slot in as needed, but that practice has ended, says Sheppard.

The current "holding pattern" isn't permanent, says Hedgpeth. However, the slowdown could continue at least in part for two to three years, says Sheppard.

To learn more about the nursing employment picture:
- read the Charlotte Business Journal article

Hospitals claim state witholding federal reimbursement dollars

Caralyn Davis — Tue, 16 Mar 2010 12:31:36 -0400

The state of Tennessee isn't playing fair when it comes to reimbursing public hospitals for uncompensated care, charge some critics. A large chunk of the money provided by the federal government to reimburse Tennessee for uncompensated care doesn't trickle down to hospitals such as Nashville General Hospital at Meharry.

Uncompensated care is a major worry for hospitals nationwide. So even though Tennessee's actions are legal, they are "not right"--especially when Nashville General could have a $10.5 million budget shortfall in the next fiscal year due to state cuts, says the Rev. Jay Voorhees, pastor of Antioch United Methodist Church and a member of Nashvillians for Metro General. In the 2008-09 fiscal year, the state withheld almost $20 million in uncompensated care costs from General Hospital, he says.

Next month, Nashville's Metropolitan County Council will consider a nonbinding resolution to ask each gubernatorial candidate to sign a pledge to work to ensure that Nashville General obtains "all federal funding for uncompensated care...earned by the Hospital's certified public expenditures." Such resolutions could become a trend in the state. Last month, the Shelby County Commission approved a similar measure to aid another public hospital, the Regional Medical Center at Memphis.

Critics don't understand how the system works, according to TennCare Bureau, the state agency that manages the federal funds. Federal funding for uncompensated care supports hospital payments from TennCare managed care organizations, so sending more federal money directly to the hospitals likely would result in cuts to the TennCare payments, says TennCare CEO Darin Gordon.

Nashville General has received an average of $7.4 million in annual special state payments for past three fiscal years. (The payment for the 2008-09 year was about $9.9 million.) However, the state has retained federal funding of $16.7 million to $19.9 million over the same period, say hospital advocates.

TennCare is using all of the federal funding for ongoing operations, says Gordon. "There isn't some extra pot of cash yet to be spent."

To learn more about uncompensated care funding:
- read The Tennessean article

Punishment for caregiver mistakes often inappropriate, study concludes

Dan Bowman — Tue, 16 Mar 2010 12:21:16 -0400

What if hospitals, instead of disciplining employees who make inadvertent and sometimes deadly mistakes, opted to console and retrain such employees? Two programs, "Care of the Caregiver" and "Just Culture," aim to do just that, while a new study in April's Joint Commission Journal on Quality and Patient Safety looks into how simply assigning blame on an individual or the hospital system is often a faulty approach.

Researchers from the Institute for Safe Medication Practices delved into the case of Julie Thao, a nurse at St. Mary's Hospital in Madison, Wis., who four years ago mistook a bag of epidural painkiller for penicillin and hooked it up to the IV line of a teen who was in labor. The epidural was to be administered via spinal injection at a later time, and caused the patient's heart to collapse, ultimately killing her (her baby was delivered successfully). Thao was not only fired by the hospital, but was also prosecuted by the state for criminal negligence.

The researchers concluded that Thao should not have been held solely liable and that the actions taken against her weren't an effective way to prevent similar mistakes from happening. Instead, a series of system flaws, such as inadequate training on a bar-coding system and a lack of rules to prevent fatigue, contributed to the tragedy.

Dr. Charles Denham, a patient-safety expert who wrote an accompanying editorial, said that while Thao should have been held accountable, she wasn't the only one. "It is clear that other nurses might have made the same error due to the social conditions and technical systems in the hospital," Dehnam said.

Programs like "Just Culture," which St. Mary's used after the incident, aim to ensure that not just one entity--either an individual or the system's culture--is held accountable in such situations. Instead, "Just Culture" strives to find a middle ground. Furthermore, the "Care of the Caregiver" standard founded by the National Quality Forum, where Denham co-chairs a committee on safe practices, treats employees who make such mistakes as traumatized patients who also need care. The standard even allows such employees to participate in their own investigations as long as their actions were found not to be reckless or malicious.

To learn more:
- read this Wall Street Journal article
- visit the Institute for Safe Medication Practices website

SPOTLIGHT: Cuts to new scheduling system to save VA $37M this year

Neil Versel — Tue, 16 Mar 2010 09:54:38 -0400

The decision to stop work on an online appointment-scheduling system will save the Department of Veterans Affairs $37 million this year, or about two-thirds of the projected $54 million in savings from halting 12 IT programs department-wide. The scheduling system, called the Replacement Scheduling Application Development program, which already has cost the VA $167 million to date, still could be restarted in the future, but likely with a different approach and a new name. FierceHealthIT

Critics bash organ transplant pilot program over ethical concerns

Dan Bowman — Mon, 15 Mar 2010 13:08:46 -0400

Emergency physicians at the University of Pittsburgh Medical Center-Presbyterian Hospital and Allegheny General Hospital, also in Pittsburgh, have a green light to preserve organs from just two minutes after the a patient's death is pronounced under a controversial pilot program funded by the HHS. The project, which hopes to determine whether such a practice is even possible, has opponents up in arms over ethical concerns.

Clifton Callaway, an associate professor of emergency medicine at the University of Pittsburgh and the project's leader, defended the practice by pointing out that medical professionals won't check on a patient's organ-donor status until after death is pronounced. He also said that medical personnel and transplant team members will work separately, and that "only patients...who it is clear cannot be revived" will be used.

"[Patient's will be] dead," Callaway said. "Clinically dead. There is an unambiguous death."

But Dr. Arthur Caplan, a University of Pennsylvania bioethicist, brought up a hypothetical situation involving a 20-year-old young man from the inner city being shot and brought into the ER for treatment. In Caplan's example, the youth dies, and his organs ultimately are preserved because he has an organ donor card. "You can imagine, [a family member] is going to think, 'Did you really do everything you could to save him?'" Caplan said.

Dr. Leslie Whetstine, a bioethicist with Walsh University in Ohio called the idea "ghoulish," adding that "there's a fine line between methods that are pioneering and methods that are predatory."

HHS supplied the two hospitals with a $321,000 grant for the pilot. If successful, the department aims to encourage other hospitals to participate in such a program.

In December 2008, California transplant surgeon Dr. Hootan Roozrokh was acquitted after being charged with hastening the death of a 25-year-old patient with irreversible brain damage in order to preserve the patient's organs for transplant. Roozrokh administered large doses of morphine, Ativan and Betadine to the patient, he claimed, to ensure the patient did not suffer after being removed from a respirator.

To learn more:
- read this Washington Post article

Catholic groups split on healthcare reform support

Dan Bowman — Mon, 15 Mar 2010 10:55:35 -0400

Despite the anti-abortion stance held by the more than 600 Catholic hospitals throughout the U.S., the Catholic Health Association announced this past weekend that it supported President Obama's healthcare bill. CEO Carol Keehan thinks the legislation to cover all Americans will provide "great improvements" for patients, and believes that the idea requiring insurers to collect separate premiums from policyholders for abortion coverage will work just fine. Keehan's viewpoint breaks from that of the U.S. Conference of Catholic Bishops, which would rather see a plan in place that keeps any plans receiving federal dollars from covering abortions. Article

Docs seek medical liability protections, state by state

Caralyn Davis — Mon, 15 Mar 2010 10:00:41 -0400

With national tort reform still on the back burner, physicians are mounting state-based efforts to achieve tort reforms, with a key focus on enacting, maintaining or lowering noneconomic damage caps, reports the American Medical News.

Physicians gained several legislative victories last year. Oklahoma passed a tort reform package that included a $400,000 cap on noneconomic damages, and doctors in Nevada and Colorado successfully battled bills to raise cap limits in their states. In the first three months of 2010, medical liability-related bills have been introduced in more than 30 states, according to the American Medical Association.

Key cap-related battles are ongoing in two states. In Utah, physicians are advocating a bill that would set the noneconomic damage cap at $450,000, removing annual inflation adjustments that raised the current cap to $480,000. In Maryland, physicians are contesting a bill that would raise the noneconomic damage cap from $680,000 to $740,000 and add inflation adjustments.

Physicians also are seeking out other ways to reduce unnecessary litigation. A separate bill in Maryland would enable doctors to apologize to patients without having their words thrown back at them in court. In Utah, a bill would require a panel to screen lawsuits, forcing plaintiff attorneys to file an expert affidavit certifying the merit of any cases they want to pursue that the panel has said have no merit. In Arizona, a bill that would require stronger expert witness opinions be validated as admissible in medical liability and other civil cases.

Physicians also are fighting to prevent potential expansions of liability in several states. In Washington, a bill would give parents the ability to bring more claims and recover additional noneconomic damages for an adult child's death. Also, court battles in Kansas and Illinois could result in the elimination of existing caps if state constitutional amendments aren't enacted.

To learn more about physician efforts:
- read the American Medical News article

Labor costs are key driver of hospital cost growth

Caralyn Davis — Mon, 15 Mar 2010 09:37:49 -0400

Not surprisingly, hospital care is the biggest driver of overall healthcare spending growth, accounting for 33 percent of every healthcare dollar spent. But what single factor is most responsible for spending growth in hospital patient care?

The answer is labor costs, according to the new American Hospital Association (AHA) report, "The Cost of Caring." Labor cost increases are responsible for 35 percent of the overall growth in hospital costs. Hospitals are dealing with ongoing shortages of registered nurses, pharmacists, medical technicians and other clinicians. "Continued workforce shortages during a period of rising service demand likely will put further cost pressure on hospitals," says the AHA.

Growth in labor costs also accounted for more than half of the growth in the cost of purchased goods and services. Other components included: prescription drugs, 5 percent; professional fees, 5 percent; professional liability insurance, 2 percent; and all others, 18 percent.

All told, the increased cost of these goods and services purchased to provide care represented 64 percent of overall growth in spending on hospital care from 2004 to 2008. By comparison, rising demand for care (i.e., change in the number of services provided) drove 34 percent of spending growth, while increased intensity of hospital care and other factors accounted for only 2 percent of the increase.

To learn more about hospital costs:
- read the AHA report

OIG still wants Medicare bad-debt policy modified

Caralyn Davis — Mon, 15 Mar 2010 09:28:38 -0400

For one reason or another, the Centers for Medicare and Medicaid Services (CMS) and other agencies within the U.S. Department of Health and Human Services don't always implement the recommendations that the Office of Inspector General (OIG) makes as a result of its audits and investigations. Seven "priority recommendations" for the traditional fee-for-service Medicare programs (Part A and Part B) remained unimplemented as of Sept. 30, 2009, according to the annual report, "Compendium of Unimplemented Office of Inspector General Recommendations." The OIG considers these recommendations, which include both monetary and nonmonetary issues, a priority because "in our view they represent the most significant opportunities to positively impact [the fee-for-service] programs." Here are the top outstanding recommendations that the OIG wants addressed:

Hospitals: Modify policy to reduce or eliminate Medicare payments for hospital bad debts. Estimated savings: $340 million. (This is one of seven unimplemented Medicare recommendations related to hospitals that the OIG still champions.)
Nursing homes: Ensure the appropriate processing of denial of Medicare payment remedies for noncompliant nursing homes. Nonmonetary.
Hospices: Ensure that hospice claims for beneficiaries in nursing facilities comply with Medicare coverage requirements. Nonmonetary.
Practitioners: Adjust eye global surgery fees to reflect the number of evaluation and management services actually being provided by physicians. Estimated savings: $97.6 million.
Medical equipment and supplies: Ensure medical equipment suppliers' compliance with Medicare enrollment standards. Estimated savings: to be determined.
Medical equipment and supplies: Reduce the rental period for Medicare home oxygen equipment. Estimated savings: $3.2 billion.
Medical equipment and supplies: Eliminate Medicare's vulnerability to fraudulent or excessive inhalation drug claims in south Florida. Estimated savings: to be determined.

To learn more about the unimplemented recommendations:
- read the OIG report

Ga. hospitals pay for taking a stand against governor's 'bed tax'

Caralyn Davis — Mon, 15 Mar 2010 09:21:32 -0400

Georgia hospitals got leveled by the equivalent of a gubernatorial body slam last week when Gov. Sonny Perdue revealed new plans to reduce the state's budget by $443 million to offset projected revenue declines for fiscal year 2011, which begins this July 1.

Perdue seeks to slash Medicaid payments to hospitals and other healthcare providers by 10.25 percent. In addition, the governor wants to eliminate the state sales tax exemption for nonprofit hospitals--a move that mirrors a growing national trend to revoke nonprofit tax breaks. The state's hospitals would lose about $144 million from the Medicaid cuts, as well as an additional $130 million from the elimination of the sales tax exemption.

Hospitals brought these steep cuts on themselves, according to Perdue, by their steep opposition to his earlier plan to institute a 1.6 percent hospital tax. Thanks to a higher federal draw-down, Medicaid reimbursements would have actually gone up by 14.5 percent under the "bed tax" proposal, he says, charging that hospitals haven't "been fair with the citizens of Georgia."

Hospitals rallied against the proposed bed tax because current law would have allowed the fee to be raised as high as 5.5 percent in the future, says Earl Rogers, a lobbyist for the Georgia Hospital Association. Perdue's new proposal to cut Medicaid payments by double digits could compromise patient care and even force hospital closures, he warns. "Grady (Memorial Hospital) closes under a scenario like that."

To learn more about the situation in Georgia:
- read the Atlanta Journal-Constitution article
- check out the Atlanta Business Chronicle article