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Heavy losses from hospital-employed physicians

A new report from  Kentucky says that 58 percent of hospitals reported annual per-physician losses of more than $100,000 — and growing.

Still, Medical Economics reports,  hospitals who hired ”primary-care physicians incurred lower losses on average ($100,000 or less) compared with hospitalists or specialist physicians (more than $100,000). Specialists also accounted for the greatest losses across the board, representing the only physician provider type to incur more than $200,000 in losses per physician annually.”

”Larger hospital systems faced greater losses, as did larger hospitals…Sixty-six percent of hospitals with more than 200 beds report losses between $100,000 and $200,000 per provider annually while 33% reported losses greater than $200,000. In smaller hospital systems and in hospitals with fewer than 200 beds, 88% reported losses less than $200,000, with 66% falling below the $100,000 mark for losses. ”


How to negotiate with payers

He notes that many physicians sign payer contracts without negotiating. 

”Often the payer will say, ‘This is what we are paying in your market. Take it or leave it.’  We must understand that the terms in the contract are not immutable.  We have to create and demonstrate value in terms of data, quality of care and cost-effective, long-term goals that benefit the team as a whole.”

He recommends creating a ”utilization report to capture and review data. Using a spreadsheet, determine the frequency of a current procedural terminology code and the number of times it was billed to that payer. Multiply that by the current payment amount.  Determine the break even point. This is done by adding overhead and physician compensation by total frequency of all codes for that payer. The results are weighted average cost.  Compare the weighted average cost to weighted average reimbursement.”

He also warns of the urgent need to monitor contract start and end dates.

“It may be advisable to start discussions with the payer representative 150 days before the contract term ends. It helps tremendously when the communication is channeled through one individual from the health plan with whom a business relationship has been built.”

 


Inpatient-to-outpatient transformation, continued

 

Cleveland Clinic plans to close  its Lakewood (Ohio) Hospital, and then  turn it into an ambulatory facility, reflecting the nationwide trend toward outpatient care.

Consider, most recently, Steward Healthcare System’s controversial plans to replace Quincy (Mass.) Medical Center with an outpatient urgent-care center and a 24-hour emergency department, in two separate places.  HCA closed Edward White Hospital, in St. Petersburg, Fla., in November with the same plan.


How the ACA might be unraveled

Jonathan H. Burroughs, M.D.,  president and CEO of The Burroughs Healthcare Consulting Network,  deconstructs what  a Republican-led unraveling of the Affordable Care Act might look like legally.

 

 


Chris Powell: The great Conn. hospital crisis, continued

Who will take the blame for the reduction in services, staff and payroll at Connecticut’s financially stressed nonprofit hospitals?

That’s the question behind the renewed dance of the  administration of Gov. Dannel Malloy and Tenet Healthcare Corp., the hospital chain that proposed to acquire Waterbury’s two hospitals and hospitals in Bristol, Manchester and Vernon but withdrew in the face of onerous conditions imposed by the state Office of Healthcare Access. Those conditions would have prevented Tenet from changing anything substantial at the hospitals for five years, making it impossible for the new owner to earn a profit.

In a letter sent this week to Tenet’s CEO, Governor Malloy sought to revive the company’s bid for the Waterbury hospitals as a step toward reviving the bid for the others too. “We can find a settlement that will be beneficial to your company as well as the state, Waterbury residents, and the Waterbury hospitals,“ the governor wrote.

So if the governor really wants the hospital acquisitions to happen, why did the Office of Healthcare Access obstruct them so? After all, that office is part of governor’s own administration.

The governor is playing charades and a double game here.

On one hand, both the federal government and state government are trying to squeeze money out of medical care, of which government is the biggest purchaser. Government long has underpaid hospitals for services they are required to provide to the poor, and lately the Malloy administration has greatly reduced subsidies to hospitals on the pretext that they would recover the money through the new national medical insurance program. That hasn’t happened.

On the other hand, organized labor and social service groups, constituencies of the governor’s party, the Democratic Party, oppose the sale of the hospitals, realizing that a profit-seeking corporation would be tougher than the current management of the hospitals.

While some hospitals in Connecticut are not managed well, what happens to hospital services and staff will be largely government’s decision, a matter of how much money government puts into them and how much it economizes with them.

Since the decision is to economize, the government generally and the governor particularly must want Tenet to do their dirty work and take the blame for it along with any profits.

* * *

With the Tenet deal suspended, Eastern Connecticut Health Network’s board of trustees and community corporators are back in business. Manchester Memorial and Rockville General hospitals remain their responsibilities for the time being, and although the hospitals are so insolvent that the trustees and corporators have given up on them and want to sell them, a former trustee who is now a corporator insists that they all have been doing a great job.

The former trustee and current corporator, Robert D. Rodner of South Windsor, wrote the other day that the trustees and corporators “always have been and continue to be well-respected, knowledgable, and dedicated members of our multi-town community … insightful, cautious, challenging, questioning, and supportive.”

In fact ECHN’s Board of Trustees has been rife with financial conflicts of interest, with several trustees owning companies that have done millions of dollars of business with ECHN. Of course those “questioning” trustees have never seen anything wrong in the grotesquely excessive salaries paid to ECHN’s executives, who have arranged that lucrative business for the trustees’ own companies.

That is, ECHN’s board has never been independent, has never been in a position to distinguish the interest of the hospitals from the interests of board members themselves. A few weeks ago, even as ECHN was laying off employees and freezing salaries, the company was paying big raises to its already overpaid executives.

The corporators should install a new board without conflicts of interest. Managed for public benefit rather than the benefit of its executives, ECHN still might survive with local nonprofit ownership.

Chris Powell is managing editor of the Journal Inquirer, in Manchester, Conn.


CEO says: Better a penalty than signing up under the ACA

 

Andy Puzder,  the chief executive officer of CKE Restaurants, explains why most of his employees would rather pay a penalty rather than sign up for benefits under the Affordable Care Act.


How to address physician self-reference

self

The Ouroboros, a dragon that continually consumes itself, is  a symbol for self-reference.

 

This piece in JAMA looks at  the persistent increase in physician self-referrals, which costs payers vast sums every year,  because of ”inadequate statutory and regulatory oversight in the face of ongoing incentives afforded by the fee-for-service reimbursement model.”

The authors say that problem requires ”regulatory or legislative relief. Support for legislative is substantial. Consensus recommendations of a broad swath of health policy experts called for the closure of ‘loopholes for in-office imaging, pathology laboratories, and radiation therapy.”’

 

 


Physician says it’s past time to jettison MOC

Paul S. Teirstein, M.D.,  taking aim at the American Board of Internal Medicine (ABIM), argues in the New England Journal of Medicine that ”Maintenance of Certification”  (MOC) requirements are bad for both physicians and patients because, he asserts, they waste time and money on ABIM mandates that primarily benefit the ABIM as a business.

He writes: “Although the ABIM argues that there is evidence supporting the value of MOC, high-quality data supporting the efficacy of the program will be very hard, if not impossible, to obtain.”
And he complains that the ABIM has become a big business from fees used, for among other things, to compensate highly paid board members and its chief executive.
“We all support lifelong learning, but an excellent alternative to MOC already exists: continuing medical education (CME).”
“My main recommendation would be to allow 25 annual hours of CME to be substituted for the current MOC requirements that need to be met every 2 years.””Doing so would eliminate, or make optional, the {ABIM} busywork modules that have little practical value, including all medical knowledge, practice-improvement, and patient-safety modules.”

 


A Web site to simplify healthcare administration?!

maze

Fierce Healthcare reports that the Mass Collaborative,  with more than 35 health plans, healthcare providers and trade associations, has developed a new Web site to standardize and simplify healthcare administration processes and costs.

Massachusetts is a rich and high-tech state. The question is whether such sites can be created in less sophisticated places. And economic, political and social constituencies will continue to militate against simplification, as they do in Congress and state legislatures.

Much of American healthcare’s sky-high cost can be attributed to the fact  that hospitals and other providers (who are the highest paid in the world) must negotiate multiple contracts with insurers. The cliche is the Western Europeans are the most bureaucratic and rep-tape-bound nations, when, in fact, from America’s healthcare ”system” to our multi-jurisdictional regulatory ”system” to our incomprehensible tax ”system,” America is much worse.

Fierce Healthcare reports that the aforementioned Web site ”features standardized industry forms and strategies to address insurance eligibility verification and claim appeals. Its goal is to take the cost and complexity out of the system and improve the overall end-to-end experience for healthcare providers, payers and patients in the state, according to Lynn Nicholas, president and CEO of the Massachusetts Hospital Association.”

It’s hard to believe that this will “take the cost and complexity” out of the system, but let’s grant Ms. Nichols poetic license.

 


Conn. justices back forced chemotherapy on teen

 

Video and text: In a very strange story,  the Connecticut  Supreme Court rules that a 17-year-old girl must continue to submit to chemotherapy for Hodgkins lymphoma at Connecticut Children’s Medical Center although she is trying to refuse treatment.

The case raises questions on how much a hospital should be a tool for involuntary treatment.

 


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