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As competition intensifies, hospitals worry more and more about ratings


For Kaiser Health News


For two years, Saint Anthony Hospital here has celebrated its top-rated “A” grade from the national Leapfrog Group that evaluates hospital safety records. But this fall, when executives opened a preview of their score, they got an unwelcome surprise: a “C.”

Hospitals take their ratings seriously, despite hospital industry experts’ skepticism about their scientific methodology and studies showing that scores may not have a huge influence on patient behavior. In a highly competitive market, no one wants to be a “C”-rated safety hospital any more than a “C”-rated restaurant for cleanliness.

So, the hospital didn’t take its new grade sitting down. It sued the ratings group for defamation, alleging that the grade was based on data that Leapfrog knew to be inaccurate.

“If Leapfrog publishes a ‘C’ grade for Saint Anthony as part of its Fall 2017 Hospital Survey Grades, it will erase years of improvements at the hospital and irreparably degrade the public perception of the hospital,” according to the complaint, which was filed in the Circuit Court of Cook County, Ill. “Saint Anthony competes with other hospitals in the immediate area, including one down the street, and one of the most important ways Saint Anthony recently has been able to distinguish itself is the high safety grades it receives from Leapfrog.”

In a response filed to the court on Tuesday, Leapfrog called Saint Anthony’s lawsuit an “eleventh hour gambit to turn back the clock on a disappointing safety grade based in part on the data that [the hospital] itself provided and certified, and which Leapfrog simply used in accordance with its long-established processes.”

Leapfrog is one of a number of organizations, including U.S. News and World Report, Healthgrades and Consumer Reports, that score hospitals based on whether they meet certain quality measures. Based in Washington, D.C., Leapfrog’s scores are a combination of 27 measures of quality from government data and an independent survey to evaluate things like infections, deaths among surgical patients and how well doctors communicate.

About 50 percent of hospitals participate in Leapfrog’s survey; the others are evaluated based only on publicly available data. Leapfrog’s mission is to help hospitals improve in weak areas and to give patients useful information.

Hospitals are quick to tout good grades on advertising and banners.

Saint Anthony’s complaint appears to be the first time a hospital has sued a rating agency over a contested grade. But in an era when hospitals are brands and patients are customers hoping to make rational purchases for care, such grades and rating systems are likely to face more scrutiny and new pushback.

“In highly competitive markets, hospitals are likely to see poor grades as a challenge, and I think many will be tempted to sue the rating agencies,” said Ashish Jha, a professor at the Harvard T.H. Chan School of Public Health.

Jha, who was on a committee that helped set standards when Leapfrog was established, said he was heartened that hospitals are reacting to data, whatever the impetus. “If they’re going to use that as motivation to get better, that’s perfect,” he said. “As a patient, you don’t care why a hospital is investing in safety, you just care that they are.”

It is unclear to what extent grades influence patient decisions. A Pew Research Center survey from 2012, for example, found that only 14 percent of internet users consulted online rankings or reviews of hospitals or medical facilities.

But Saint Anthony hospital executives insist Leapfrog’s score has an enormous effect on their bottom line. “We have seen, for better or worse, that people are paying a great deal of attention — not only our patients but also our stakeholders, vendors and politicians,” said Dr. Eden Takhsh, the hospital’s chief quality officer. Such scores have also influenced them to focus on improving certain quality metrics, such as rates of sepsis and central line infections.

Leapfrog’s scores are plastered across every newspaper in town, he said. Based on their past “A” grades, Takhsh said, Saint Anthony has been approached by both the University of Chicago and Northwestern, two much larger teaching hospitals in Chicago, to form partnerships in pediatrics and neurology. Both hospitals offered to send their physicians to Saint Anthony to provide subspecialty care, which would provide the small community hospital with more patients and prestige.

A “C” grade could threaten those partnerships. “These organizations don’t want to partner with someone with low quality because it hurts them,” said Takhsh.

Dr. Karl Bilimoria, a professor at Northwestern University in Chicago, said it’s unclear whether ratings ought to have so much influence. “These ratings systems are overall not very good,” he said. “Most of them use data that are generated for billing, so they’re not particularly accurate.”

Major ratings systems “frequently conflict,” because they use different criteria, he said: “A hospital can be rated best on one of them and be rated poorly on another.” Saint Anthony, for example, was rated three out of five stars on Medicare’s Hospital Compare website during the same period that it received an “A” from Leapfrog. The hospital was not included in U.S. News and World Report’s top 22 hospitals in Chicago.

Hospitals can choose to advertise the rating that makes them look best. Patients may be impressed by a hospital’s “Top Hospital” banner but never see the lower scores.

Some ratings groups charge for the display. Leapfrog charges $5,500-$17,600 for a hospital to use its emblem in advertising, depending on the hospital’s size. Others, such as U.S. News and World Report’s “Best Hospitals” program, also levies a fee, but Consumer Reports does not.

The ratings systems differ widely on how they compile their scores, and some are more focused on the quality of care than others. “Leapfrog is the best and the only publicly reported rating focused exclusively on safety. It was developed by top experts and uses the very best publicly available data,” said Leapfrog CEO and President Leah Binder. “Our reviews are scrupulous.”

Saint Anthony’s lawsuit hinges on the question of how its physicians order medications, which Saint Anthony believes was the principal reason for their lower grade. The grade was wrong, the hospital claims, because it is based on an inaccurate assessment that physicians prescribed medications electronically only 50 to 74 percent of the time. Saint Anthony maintains that its physicians in fact prescribe electronically 95 percent of the time. The hospital contacted Leapfrog several times to fix the error but Leapfrog declined, according to the lawsuit.

Leapfrog contends that Saint Anthony did not contact it within the appropriate two week time period, according to Leapfrog’s defense document.

Leapfrog has removed Saint Anthony’s grade for now, but will likely repost it pending further investigation, noting that the electronic ordering issue was unlikely to fully explain the “C” grade.  “There’s clearly some very poor and sloppy reporting from this hospital,” said Binder.

Dr. Karen Joynt Maddox, an assistant professor at the Washington University School of Medicine, in St. Louis, said that the dispute underlines the weaknesses of the ratings information available to patients. “This whole field is way behind where it needs to be,” especially given the proliferation of “consumer-driven” high-deductible plans, she said, adding: “there’s a vacuum in terms of consumer-friendly information.”


Update executive-succession approach


An article in Trustee magazine looks at the need to update executive-succession planning for hospitals and health systems. It notes that traditionally such planning has included:

“Inventory of talent resources: A list of leaders with a summary of their personal and professional attributes, work experience, time in their career and current job, age, and skill sets.”

“Readiness assessment: An evaluation of each leader’s stage of development in current and future roles, which can be used for determining future potential…..”

“Succession charts: These organizational charts depict replacements rather than chains of responsibility….”

“{But} more and more organizations, however, are finding these approaches inadequate in the face of health care’s transformation. Next-up replacement approaches rely on the assumption that the future is a continuation of the past. But the executive skills of the past may not successfully address ongoing transformation.

The historical approaches have four shortcomings that hinder the acquisition of new skill sets for the C-suite:

  1. “Perception and subjective assessments of individual qualifications are not based upon the measurable outcomes of the leaders in the organization. Rather, they are based upon competencies and leadership skills evaluated during an annual performance review. In general, annual reviews focus on how the executive performs and not the executive’s accomplishments.
  2. “Next-up replacement approaches lack context or a situational awareness of the organization’s current needs, skills or future challenges. This deficiency arises as an organization focuses on replacement of the incumbent rather than where the organization is headed in the future and what it needs.
  3. “Next-up approaches tend to be vertical in scope and view talent within the silos of functional areas. When one views only the function or the operations, one cannot view the entire pool of talented individuals, regardless of where they report. It is rare to see someone who is not within a function on the replacement chart of the C-suite leader of that function.”To read the whole article, please hit this link.


UnitedHealth diving deeper into direct care

UnitedHealth Group, America’s largest private-sector health insurer, plans to  buy a large physician group to add to its existing total of 30,000 doctors. Thus it is diving deeper into direct health delivery.

UnitedHealth’s Optum unit will buy the physician group from DaVita, a large for-profit chain of dialysis centers, for about $4.9 billion in cash, subject to regulatory approval. Most important in this story is that DaVita runs nearly 300 clinics in a half-dozen states, including California and Florida.

“Combining DaVita Medical Group and Optum advances our shared goal of supporting physicians in delivering exceptional patient care in innovative and efficient ways,” said Larry C. Renfro, Optum’s chief executive. Of course, the central purpose of the move is to get more revenue and profit!

Analysts  said the move was part of UnitedHealth efforts to get more into ambulatory care as hospital populations shrink even in the face of such countervailing forces as the aging of the U.S. population.

“The asset is strongly synergistic” with UnitedHealth’s overall ‘mission and strategy,’ Ana Gupte, an analyst for Leerink, told investors. Indeed.




To read The New York Times report on this, please hit this link.

Some rural hospitals are losing maternity wards because of cost

Governing magazine looks at how maternity wards are disappearing from some rural hospitals.

“A study published in September in the journal Health Affairs found that 1 in 10 rural counties had lost their ob-gyn wards in the past 10 years,” the magazine noted. But then, ob-gyn are very expensive.

The magazine reports: “Maternal health in rural America is made more complicated by the fact that rural areas routinely rank higher than urban areas in rates of noncommunicable diseases and preventable deaths. Birth outcomes are poorer, too. And with fewer and fewer ob-gyns available, there will likely be more high-risk pregnancies, unhealthy births and resulting long-term health issues. ”


“There’s no funding solution in sight. While states might try to pick up some of the slack, there’s a consensus among most health-care experts that a federal partner is needed”

To read the whole article, please hit this link.



‘Transportation and the Role of Hospitals’

This just in from Hospitals & Health Networks:

“’Transportation and the Role of Hospitals,’ recently released by the American Hospital Association’s Health Research & Educational Trust and the Association for Community Health Improvement, discusses how transportation issues affect health and health care access and outlines strategies for hospitals and health systems. Strategies include screening and evaluating patients’ transportation needs, providing transportation services through community partnerships or programs and supporting policy and infrastructure programs that create safer and more accessible transportation options. Transportation also can be a vehicle for wellness through implementation of varied, targeted strategies.”

To read the whole report, please hit this link.


Mass. panel opposes Partners purchase of Mass. Eye and Ear

Mass. Eye and Ear, on the banks of the Charles River.

Partners HealthCare and Massachusetts Eye and Ear Hospital are challenging the Massachusetts Health Policy Commission’s finding  that Partners’ acquisition of the specialty hospital would significantly raise costs for consumers.

The panel concluded that said the purchase would boost prices for Mass. Eye and Ear’s services, increasing spending by $20.8 million to $61.2 million a year. And it said that the costs would be felt in higher health-insurance premiums.

But Partners, the Greater Boston health system behemoth, and Mass. Eye and Ear, in a formal response to those assertions, said the commission overstated potential cost increases and underestimated  Mass. Eye and Ear’s financial problems.

To read a Boston Globe article on this, please hit this link.


Video: U.S. hospitals using foreign nurses to full staffing gaps.


This Reuters video looks at how U.S. hospitals are using foreign nurses to fill staffing gaps. To watch it, please hit this link.


How GOP tax legislation would affect health policy


Kaiser Health News

Having failed to repeal and replace the Affordable Care Act, Congress is now working on a tax overhaul. But it turns out the tax bills in the House and Senate also aim to reshape health care.

Here are five big ways the tax bill could affect health policy:

1. Repeal the requirement for most people to have health insurance or pay a tax penalty.

Republicans tried and failed to end the so-called individual mandate this year when they attempted to advance their health overhaul legislation. Now the idea is back, at least in the Senate’s version of the tax bill. The measure would not technically remove the requirement for people to have insurance, but it would eliminate the fine people would face if they choose to remain uninsured.

The Congressional Budget Office has estimated that dropping the requirement would result in 13 million fewer people having insurance over 10 years.

It also estimates that premiums would rise 10 percent more per year than they would without this change. That is because healthier people would be most likely to drop insurance in the absence of a fine, so insurers would have to raise premiums to compensate for a sicker group of customers. Those consumers, in turn, would be left with fewer affordable choices, according to the CBO.

State insurance officials are concerned that insurers will drop out of the individual market entirely if there is no requirement for healthy people to sign up, but they still have to sell to people who know they will need medical care.

Ironically, the states most likely to see this kind of insurance-market disruption are those that are reliably Republican. An analysis by the Los Angeles Times suggested that the states with the fewest insurers and the highest premiums — including Alaska, Iowa, Missouri, Nebraska, Nevada, and Wyoming — would be the ones left with either no coverage options or options too expensive for most consumers in the individual market.

2. Repeal the medical-expense deduction.

The House-passed tax bill, although not the Senate’s, would eliminate taxpayers’ ability to deduct medical expenses that exceed 10 percent of their adjusted gross income.

The medical expense deduction is not widely used — just under 9 million tax filers took it on their 2015 tax returns, according to the Internal Revenue Service. But those who do use it generally have very high medical expenses, often for a disabled child, a serious chronic illness or expensive long-term care not covered by health insurance.

Among those most vehemently against getting rid of the deduction is the senior advocacy group AARP. Eliminating the deduction, the group said in a statement, “amounts to a health tax on millions of Americans with high medical costs — especially middle income seniors.”

3. Trigger major cuts to the Medicare program.

The tax bills include no specific Medicare changes, but budget analysts point out that passing it in its current form would trigger another law to kick in. That measure requires cuts to federal programs if the federal budget deficit is increased.

Because the tax bills in both the House and Senate would add an additional $1.5 trillion to the deficit over the next 10 years, both would result in automatic cuts under the Statutory Pay-As-You-Go Act of 2010, known as PAYGO. According to the CBO, if Congress passes the tax bill and does not waive the PAYGO law, federal officials “would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion.”

Cuts to Medicare are limited under the PAYGO law, so the Medicare reduction would be limited to 4 percent of program spending, which is roughly $25 billion of that total. Cuts of a similar size would be required in future years. Most of that would likely come from payments to providers.

4. Change tax treatment for graduate students and those paying back student loans.

The House bill, though not the Senate’s, would for the first time require graduate students to pay tax on the value of tuition that universities do not require them to pay.

Currently, graduate students in many fields, including science, often are paid a small stipend for teaching while they pursue advanced degrees. Many are technically charged tuition, but it is “waived” as long as they are working for the university.

The House tax bill would eliminate that waiver and require them to pay taxes on the full value of the tuition they don’t have to pay, which would result in many students with fairly low incomes seeing very large tax bills.

At the same time, the House tax bill would eliminate the deduction for interest paid on student loans. This would disproportionately affect young doctors.

According to the Association of American Medical Colleges, 75 percent of the medical school class of 2017 graduated with student loan debt, with nearly half owing $200,000 or more.

5. Change or eliminate the tax credit that encourages pharmaceutical companies to develop drugs for rare diseases.

Congress created the so-called Orphan Drug Credit in 1983, as part of a package of incentives intended to entice drugmakers to study and develop drugs to treat rare diseases, defined as those affecting fewer than 200,000 people. With such a small potential market, it does not otherwise make financial sense for the companies to spend the millions of dollars necessary to develop treatments for such ailments.
To date, about 500 drugs have come to market using the incentives, although in some cases drugmakers have manipulated the credit for extra financial gain.

The House tax bill would eliminate the tax credit; the Senate bill would scale it back. Sen. Orrin Hatch (R-Utah), chairman of the tax-writing Finance Committee, is one of the original sponsors of the orphan drug law.

The drug industry has been relatively quiet about the potential loss of the credit, but the National Organization for Rare Disorders called the change “wholly unacceptable” and said it “would directly result in 33 percent fewer orphan drugs coming to market.“

6 ‘best practices’ for making a partnership work


Authors of an article in Trustee propose six “best practices” raising the likelihood that a partnership of healthcare organizations will succeed.

The authors note: “While many partnerships have been successfully completed in recent years, participants all too often indicate that their exploration, negotiation and integration processes could have been smoother, yielding more optimal benefits in a timelier manner.”

So their six “essential practices are:

“1. Develop a shared vision with guiding principles, goals and objectives.”

“2. Quantify a business case based on achievable synergies.”

“3. Improve operating performance.”

“4. Engage physicians.’.

“5. Establish an enterprise-level board while retaining local governance.”

“6. Allow an organic definition of a new management structure.

The authors noted that  ”to gain the maximum benefit of executive strengths in the combining organizations, {a} system-level board endorsed a nonprescriptive structuring of the new management team. Two division presidents would direct acute and nonacute services in two geographic ‘pods’ with approximately the same population and revenue, crossing legacy organization service areas. Equal representation of senior management from each organization would not be required.”

For details of these suggestions, please hit this link.


How UCL develops leaders who think in population-health terms

Rebecca Graham, human resources and organizational-development director of UCLPartners, in London, writes about how UCL, one of the world’s largest academic health science partnerships, helps develop leaders.

Among her remarks, in a NEJM Catalyst essay:

“In a system that traditionally puts institutions in competition with one another, UCLPartners created a new model for cooperation. Established as a nonprofit social enterprise, UCLPartners’ vision was aligned with similar global initiatives to close the gaps in translational medicine and deliver evidence more rapidly into practice at a population level.

“Effective leaders for UCLPartners must have, in addition to the usual suite of leadership skills, an ability to foster cooperation among our member organizations. We must select clinicians to lead system-wide transformation and improvement, and to do so, we introduced a competency-based approach that evaluates candidates for a wide spectrum of personal characteristics and capabilities, rather than relying on the more traditional criteria of seniority, length of experience, and reputation.”

“At both the system level and the organization level, we need leaders who can make decisions based on what is best for the population, which is not always the same as what is best for their organization. ”

“(Our reconfiguration of stroke care in north central London is a good illustration of how the clinical evidence and patient benefit started to drive a new type of behavior in the system — looking at what can be achieved as a system rather than individual clinicians or organizations.)”

To read her entire essay, please hit this link.

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