Here are five key points from his conversation.
1. Medical institutions must shift focus to patient outcomes.
2. Changing how individuals approach their health will change the healthcare system.
3. Embrace email.
4. Interoperability must a priority.
5. The spiraling cost of drugs poses a major hurdle for healthcare reform.
Modern Healthcare reported:
“The size of the credits would be tied to the cost of the lowest-priced available coverage in a market.
“The Conference Board report also calls for collapsing and broadening the insurance exchanges established under the Affordable Care Act so that more customers will use them. That would include eliminating separate exchanges for individuals and small businesses established under the Affordable Care Act.”
For various reasons of history and ideology, leaders first turn for social-and-economic engineering to the tax code, instead of doing things directly, say through higher or lower taxes and direct spending. It may not be efficient, but Americans put up with it, even though it has created the most complex tax “system” in the world.
Will Section 1332 of the Affordable Care Act — State Innovation Waivers — open up broad sunlit uplands of highly creative reform or will its main effects be a race to the bottom by low-tax-obsessed states? This Commonwealth Fund report looks at the possibilities, including how eight states might make changes.
Justice Louis Brandeis called the states the “laboratories” of American democracy. We’ll see if in the case of Section 1332 they’re run by mad scientists and cynical politicians or kindly statesmen.
Section 1332 takes effect in 2017. It will widen the ability of states to innovate by letting their officials reappraise the ACA’s coverage designs and then make changes regarding covered benefits, subsidies, insurance marketplaces, qualified health plans and (politically very important) individual and employer mandates
But these ACA elements may not be waived, says a Commonwealth Fund analysis of the law:
* States must not deny coverage or increasing premiums based on medical history.
We wonder if the political risks for governors and state legislators in crafting more of their own health systems will send them rushing back to the Feds for the latter to take more of the responsibility again.
Becker’s Hospital Review reported that Dr. Cosgrove said ”he sees some positive changes, noting healthcare inflation has fallen while quality metrics have gone up, in addition to 13 million new people becoming enrolled in health insurance.”
Dr. Cosgrove explained that two and a half years ago, Cleveland Clinic knew it must cut the budget. He said the clinic planned to reduce the budget by 20 percent, or $1.5 billion out of $6.5 billion, and in the last 18 months has taken out about $500 million in costs.
He touted Care Pass, Cleveland Clinic’s system of streamlining procedures, which has let it reduce spending significantly.
“‘With Care Pass, you take the very best of how you do a procedure, take care of somebody and standardize it. That takes out the variation. As you take the variation out, you improve the quality and reduce the cost,” Dr. Cosgrove told Becker’s.
The news service also said that the clinic’s “renowned same-day appointment philosophy has enabled more than 1 million same-day appointments a year at Cleveland Clinic facilities. Additionally, the clinic has developed a mobile stroke unit, one of two in the country.”
Cleveland Clinic will further expand its virtual patient-physician visits based on mobile apps.
Early Persian psychiatric treatment.
Experts link much of the increase to the greater number of patients showing up because of the expansion of California’s Medicaid program (Medi-Cal) under the Affordable Care Act.
So that jurisdiction, as are many in America, are looking at placing more emphasis on community-based outpatient treatment and less on hospital beds. This suggests more of a focus at improving other factors besides direct psychiatric care — such as housing and transportati0n — that also affect health and whose shortages drive up medical costs by driving the mentally ill to hospital emergency departments.
“The plan, expected within three months, will include services that help the mentally ill before they reach a full-blown crisis, alternatives for those in a crisis and better assessments to avoid unnecessary hospitalizations,” The Bee reported.
“Preliminary estimates peg the cost of those services at around $9 million a year, much of which would be offset by federal and state funds and reduced hospitalization costs.”
This is common-sensical. However, at the same time, there’s growing opinion that there should be a revival of hospitals to care for the most severely mentally for the long-term — in the case of some patients, for the rest of their lives. The deinstitutionalization movement has gone too far for some patients and their exhausted families.
The Bee noted that “Efforts to relieve pressure on emergency rooms have led to more psychiatric hospital stays, according to a county staff report.” Not exactly a fiscal triumph for the payers.
The Mental Health Improvement Coalition, which includes area hospitals and nonprofits, said: “The system of behavioral healthcare is fundamentally broken. People in crisis have little option other than to access services through hospital emergency room departments, which are the least conducive environments for behavioral health patients to become well and receive appropriate services.”
The Times reports that the Center for Healthcare Strategies has documented such efforts in 26 states. “Some are run by private insurers and healthcare providers, while others are part of broader state overhaul efforts. The federal government is supporting some, too, through its $10 billion Innovation Center….”
“They raise a new question for the healthcare system: What is its role in tackling problems of poverty? And will addressing those problems save money?”
“We had this forehead-smacking realization that poverty has all of these expensive consequences in healthcare,” Ross Owen, a Hennepin County, Minn., health official, told The Times. “We’d pay to amputate a diabetic’s foot, but not for a warm pair of winter boots.”
”Now health systems around the nation are trying to buy the boots, metaphorically speaking. In Portland, Ore., health outreach workers help patients get driver’s licenses and give them essentials, such as bus tickets, blankets, calendars and adult diapers. In New York, medical teams are trained to handle eviction notices like medical emergencies. In Philadelphia, community health workers shop for groceries with diabetic patients.”
“The idea — to eliminate avoidable hospital use — went against years of economic habit. Hospitals make money by charging per visit and procedure, and fewer of both would dent revenues.”
So some jurisdictions, encouraged by Affordable Care Act incentives, have offered carrots. Consider Hennepin County {Minn.} Medical Center, which is paid a fixed amount per patient and gets to keep the money even if patients don’t show up, or use less medical care than was paid for.” Such pilot programs seek to care for patients in places cheaper than hospitals — which is most places.
By GUY GUGLIOTTA, for Kaiser Health News
MOUNT VERNON, Texas
Despite residents’ concerns and a continuing need for services, the 25-bed hospital that served this small East Texas town for more than 25 years closed its doors at the end of 2014, joining the ranks of dozens of other small rural hospitals that have been unable to weather the punishment of a changing national healthcare environment.
For the high percentages of elderly and uninsured patients who live in rural areas, closures mean longer trips for treatment and uncertainty during times of crisis. “I came to the emergency room when I had panic attacks,” said George Taylor, 60, a retired federal government employee. “It was very soothing and the staff was great. I can’t imagine Mount Vernon without a hospital.”
The Kansas-based National Rural Health Association, which represents around 2,000 small hospitals throughout the country and other rural care providers, says that 48 rural hospitals have closed since 2010, the majority in Southern states, and 283 others are in trouble. In Texas along, 10 have changed.
“If there was one particular policy causing the trouble, it would be easy to understand,” said health economist Mark Holmes, from the University of North Carolina, whose rural health research program studies national trends in rural healthcare. “But there are a lot of things going on.”
Experts and practitioners cite declining federal reimbursements for hospitals under the Affordable Care Act as the principal reason for the recent closures. Besides cutting back on Medicare, the law reduced payments to hospitals for the uninsured, a decision based on the assumption that states would expand their Medicaid programs. However, almost two dozen states have refused to do so. In addition, other Medicare cuts caused by a budget disagreement in Congress have also hurt hospitals’ bottom lines.
But rural hospitals also suffer from multiple endemic disadvantages that drive down profit margins and make it virtually impossible to achieve economies of scale.
These include declining populations; disproportionate numbers of elderly and uninsured patients; the frequent need to pay doctors better than top dollar to get them to work in the hinterlands; the cost of expensive equipment that is necessary but frequently underused; the inability to provide lucrative specialty services and treatments; and an emphasis on emergency and urgent care, chronic money-losers.
‘Another Disaster’
Rural healthcare experts caution that national and state officials need to address the problems for rural hospitals or they could face a repeat of the catastrophic closings that followed changes in the Medicare payment system 30 years ago. That 1983 change, called the “prospective payment system,” established fixed reimbursements for care instead of payments based on a hospital’s reported costs. That change rewarded large, efficient providers, but 440 small hospitals closed before the system was adjusted in 1997 to help them. Those adjustments created the designation of critical-access hospitals for some small, isolated facilities, which are exempted from the fixed payment system.
“And now, beginning in 2010, we’ve had another series of cuts that are all combining to create another expansion of closures just like we saw in the ‘90s,” said Brock Slabach, senior vice president of the Rural Health Association. “We don’t want to wake up with another disaster.”
The current surge in closures means federal officials need to come up with new legislation to halt the recent cuts to small hospitals in order to “buy time” to figure out how rural hospitals should effectively operate in the future, said the association’s chief lobbyist, Maggie Elehwany. “It is important to stop the bleeding right now.”
In Mount Vernon, a town of 2,678 people nestled in grassland and dairy country about two hours east of Dallas, family practitioner Jean Latortue has taken out a lease on the now-vacant hospital building to convert it into an outpatient and urgent care clinic at his own expense. Reopening may be a risky move, he acknowledged, but the need is there.
“The community went into panic mode,” he said. “I figured I had to step up.”
The non-profit ETMC Regional Healthcare System, based in Tyler, Texas, closed the Mount Vernon hospital and two others of its then-12 rural hospital affiliates because it could no longer sustain operating losses that had persisted for five years.
“There was no ill will,” Franklin County Judge Scott Lee said in an interview from his Mount Vernon office. “They were losing money. We had a good working relationship for years, and they had a business decision to make.”
Mount Vernon’s Issues
Perry Henderson, senior vice president of affiliate hospitals for ETMC, a major healthcare provider in East Texas, noted that rural hospitals have many uninsured patients, and Medicare accounts for “60 to 70 percent of the business,” while in “Dallas or Houston it’s a fraction of that.”
Mount Vernon, with lakefront properties that are attractive to retirees, has its share of elderly patients. Henderson also noted that many rural hospitals also have to deal with large numbers of agricultural accidents. Farming, another Mount Vernon staple, is one of the country’s most dangerous occupations. Finally, he added, country roads bring many traffic accidents. When there’s no hospital, emergencies mean longer trips to get help.
Henderson and other experts cite three reasons for the rash of closures nationally. Sequestration, the across-the-board federal budget cut that arose out of the legislative impasse between the Obama administration and congressional Republicans, has resulted in a 2 percent reduction in Medicare reimbursements since 2013.
“If Medicare is 50 percent of your revenue and you lose two points,” North Carolina’s Holmes said, “it can be a killer.”
Rural hospitals took a second hit from the federal health law’s reductions in “disproportionate share hospital” payments to hospitals with large numbers of indigent and uninsured patients. Federal officials made the cuts assuming that the law would assure that more patients had insurance.
It hasn’t worked well in rural areas, the Rural Health Association’s Elehwany said, because annual deductibles for the new insurance plans, which come out of consumers’ pockets, “are running between $2,500 and $5,000,” and people can’t pay them.
And in communities such as Mount Vernon, this problem is exacerbated because Texas, along with 22 other states, has refused to expand Medicaid, a key provision of the Affordable Care Act.
“That’s a big deal,” ETMC’s Henderson said. “That’s when we had the hurt.”
Latortue, who came to Mount Vernon as an ETMC hospital doctor in 2008, appears undaunted by the challenges of reinventing the hospital, which was treating an average of eight inpatients a week when it closed. Still, he said, “I’m very busy, and patients need to be seen—we’ll be all right.”
He intends to provide both outpatient services, including lab work, at the new clinic, and emergency care, stabilizing patients until they can be transferred to the Titus Regional Medical Center, in Mt. Pleasant, 16 miles away, or to a smaller facility in Winfield, eight miles away. He also plans a wellness clinic to treat obesity and will offer Botox and laser cosmetic services. A cardiologist and a gastroenterologist will make weekly visits, and he is also looking for an ob-gyn.
Latortue got a favorable lease from the town of Mount Vernon and inherited an X-ray machine and other equipment from ETMC, but he still took out $150,000 in loans for remodeling and needs another $60,000 to $70,000 for equipment.
Still, none of this will replace the hospital, and his patients know it. “I live right behind the building,” said Mary Hunter, a very fit grandmother of 73. “I’ve had very good health until my blood pressure spiked last week,” she said. “We retired in 2006 and moved here, partly because of the hospital. And now it’s gone.”
