HHS Secretary Alex Azar has outlined four of his biggest priorities for the department.
Perhaps surprising some providers, Azar told the Federation of American Hospitals on Monday that there would be “no going back to a system that pays for procedures rather than value,” and asserted that the Trump administration doesn’t fear disrupting current arrangements, regardless of the powerful economic interests backing them. Sounds like someone from the Obama administration….
He also suggested a willingness to have “perhaps even an uncomfortable degree” of federal intervention to make the system work better for the stakeholders he sees as least well-served currently: patients and taxpayers, FierceHealthcare reported.
His priorities for accelerating the move toward a value-based healthcare sector, as summarized by Fierce:
“1. Moving ownership and control of electronic health records from providers to patients.”
“2. Providing payers and providers with incentives to be more transparent about healthcare costs.”
“3. Using Medicare and Medicaid to drive industry change.”
He called previous efforts to drive innovation such as through Affordable Care Organizations “lackluster,” promising “bold measures” to “create a true competitive playing field where value is rewarded handsomely.”
“4. Reducing regulatory burdens.”
“He particularly singled out reporting rules and FDA policies around communications that he said might inhibit collaboration among stakeholders.”
Becker’s Hospital Review asked five figures in the healthcare industry for their reactions to President-elect Trump’s selection of Georgia Congressman Tom Price, M.D., to be secretary of the Department of Health & Human Services and Seema Verma, founder and CEO of health-policy consultancy SVC, to be administrator of the Centers for Medicare & Medicaid Services (CMS).
Ted Shaw, president and CEO of the Texas Hospital Association:
“Trump’s nominees to lead the national conversation on healthcare both have long careers in health policy. Their depth of understanding of complex health policy issues will be essential as Congress debates the future of healthcare reform and states continue their work to more effectively manage their Medicaid programs.”
Chip Kahn, president and CEO of the Federation of American Hospitals:
“The Federation of American Hospitals congratulates Chairman Tom Price on his nomination to be HHS Secretary.
“His decades of experience in the medical field make him uniquely qualified to confront the challenges facing patients, families, and caregivers. As chairman of the Budget Committee, he has proven to be a thoughtful, detail-oriented legislator who cares deeply about public policy. In light of expected legislative action on the ACA, it is noteworthy that his repeal and replace proposal recognizes the need to protect access to hospital care for millions of Americans by restoring deep Medicare and Medicaid cuts. ”
“President-elect Trump’s selection to lead CMS, Seema Verma, has a solid reputation as an effective innovator in assisting states in reforming and modernizing Medicaid programs for low-income Americans.”
To read the whole piece, please hit this link.
Donald W. Fisher, president and CEO of AMGA:
“AMGA offers its congratulations to Rep. Tom Price (R-Ga.) on his nomination to become the next secretary of the United States Department of Health and Human Services. From his experience as a practicing physician for nearly 20 years and his leadership on the House Ways and Means Committee, House Budget Committee, and the House GOP Doctors Caucus, he brings a wealth of clinical and policy expertise.”
Bruce Siegel, M.D., President and CEO of America’s Essential Hospitals:
Ms. Verma “offers a deep understanding of healthcare delivery and policymaking and can contribute an important state-level perspective on Medicaid, insurance and public health.”
Jodi Magee, president of Physicians for Reproductive Health:
“President-elect Trump’s plan to nominate Rep. Tom Price (R-Ga.) to be the Secretary of Health & Human Services (HHS) signals an alarming direction for reproductive health. Price has been a staunch opponent of women’s health and the Affordable Care Act during his time in Congress.
“Although Price has insisted that ‘patients, families and doctors should be making health decisions, not Washington, D.C.,’ he has directly contradicted that by supporting legislative efforts that interfere in the patient-doctor relationship. For example, Price has voted for anti-choice legislation that would harm our doctor’s patients, including bans on abortion, defunding Planned Parenthood and repealing the Affordable Care Act. We are deeply troubled that Price, though he is a physician, seems to disregard the strong medical evidence that access to safe and legal abortion and contraception protects not just a woman’s health, but that of her family and community.”
Hillary Clinton, under pressure from the left wing of the Democratic Party, is now pushing for “public option” coverage in the state and federal health insurance exchanges.
This would be a compromise between Sen. Bernie Sanders, who backs a “Medicare-for-all” approach, and the current very complex system of private insurance partially paid for by employers, private insurance bought in insurance exchanges, and expanded Medicaid under the Affordable Care Act.
Polls have suggested that a majority of the public favors extending Medicare t0 all or at least a public option, in which people could chose government-financed insurance instead of coverage from a private insurer.
It appears that hospital executives oppose a public option because they fear that it would cut the payments that hospitals receive to provide care. So the American Hospital Association and the Federation of American Hospitals has sent this message to the Democratic Platform Drafting Committee.
“Our members have serious concerns that creating a public option with Medicare-like payments would subvert those goals by depressing insurer payments to healthcare providers and disrupting the fragile finance system that sustains hospitals today.”
The letter asserted that two-thirds of the two groups’ member hospitals received Medicare reimbursements that are below cost of providing care, while the average operating margin on Medicare reimbursements for hospitals was negative 5.8 percent in 2014.
“Adding millions more enrollees whose healthcare would be reimbursed at Medicare rates would likely threaten access to needed healthcare services, particularly for those in vulnerable communities,” the letter said.
In the late 1990s you could have taken what hospitals charged to administer inpatient chemotherapy and bought a Ford Escort econobox. Today average chemo charges (not even counting the price of the anti-cancer drugs) are enough to pay for a Lexus GX sport-utility vehicle, government data show.
Hospital prices have risen nearly three times as much as overall inflation since Ronald Reagan was president. Health payers have tried HMOs, Accountable Care Organizations and other innovations to control them, with little effect.
A small benefits consulting firm called ELAP Services is causing commotion by suggesting an alternative: Refuse to pay. When hospitals send invoices with charges that seem to bear no relationship to their costs, the Pennsylvania firm tells its clients (generally medium-sized employers) to just say no.
Instead, employers pay hospitals a much lower amount for their services — based on ELAP’s analysis of what is reasonable after analyzing the hospitals’ own financial filings.
For facilities on the receiving end of ELAP’s unusual strategy, this is a disruption of business as usual, to say the least. Hospitals are unhappy but have failed to make headway against it in court.
“It was a leap of faith,” when Huffines Auto Dealerships, which provides coverage to 300 employees and their families, signed on to the ELAP plan a few years ago, said Eric Hartter, chief financial officer for the Texas firm.
What he says now: “This is the best form of true healthcare reform that I’ve come across.”
Huffines first worked with ELAP on charges for an employee’s back surgery. The worker had spent three days in a Dallas hospital. The bill was $600,000, Hartter said.
Like many businesses, the dealership pays worker health costs directly. At the time it was working with a claims administrator that set up a traditional, “preferred provider” network with agreed hospital discounts.
The administrator looked at the bill and said, “‘Don’t worry. By the time we apply the discounts and everything else it’ll be down to about $300,000,’” Hartter recalled. “I said, ‘What’s the difference? That doesn’t make me feel any better.’”
Instead he had ELAP analyze the bill. The firm estimated costs for the treatment based on the hospital’s financial reports filed with Medicare. Then it added a cushion so the hospital could make a modest profit.
“We wrote a check to the hospital for $28,900 and we never heard from them again,” Hartter said.
Now Huffines and ELAP, which launched this service in 2007 and has been growing since, treat every big hospital bill the same way. The result has saved so much money that what the dealership and workers contribute for health costs stayed unchanged for six years while benefits remained the same, Hartter said.
More than 200 employers providing health coverage to about 115,000 workers and dependents have hired ELAP. Company CEO Steve Kelly said he is aware of only one other, smaller, benefits consultant with the same approach.
Normally customers who don’t pay bills get hassled or sued. This sometimes happens to ELAP clients and their workers. Hospitals send patients huge invoices for what the employer refused to pay. They hire collection agents and threaten credit scores.
ELAP fights back with lawyers and several arguments: How can hospitals justifiably charge employers and their workers so much more than they accept from Medicare, the government program for seniors? How can hospitals bill $30 for a gauze pad? How can employee-patients consent to prices they will never see until after they’ve been discharged?
The American Hospital Association and the Federation of American Hospitals did not respond to requests for comment about ELAP.
ELAP is not merely a medical-bill auditor, like many other companies, combing hospital statements for errors. It sets the reimbursement, telling hospitals what clients will pay.
Eventually, “overwhelmingly, the providers just accept the payment” and leave patients alone, Kelly said. A federal district judge in Georgia decided a 2012 case against a hospital and in favor of ELAP and its furniture chain client.
Most patients being dunned by hospitals are unlikely to meet with the same success on their own, lacking backup from ELAP and its legal firepower.
Under ELAP’s main model, neither employers nor their claims administrators sign contracts with hospitals. Employers detail the reimbursement process in documents establishing how the plan covers workers. That gives it legal weight, ELAP has argued in court. ELAP agrees to handle all hospital bills for an employer and defend workers from collections in return for a percentage fee tied to total hospital charges.
There is no hospital network. Employees may use almost any facility. Payments are made later based on ELAP’s analysis.
That may change, Kelly said. Often it makes sense even for medium-sized employers tocontract directly with hospitals to treat their workers, he said. That way prices are clear.
But for now ELAP clients such as Huffines and IBT Industrial Solutions are giving hospitals a different dose of medicine.
At IBT, a Kansas distributor of bearings and motors, “runaway health costs were starting to threaten the long-term viability of our company,” said chief financial officer Greg Drown. After reading “Bitter Pill,” a critical Time magazine piece about hospitals, IBT executives decided to try something else.
They hired ELAP, which was “not a simple or risk-free move,” cautions Drown.
About one IBT worker in five using a hospital gets “balance billed” for amounts the employer won’t pay, he said. That can take months to resolve even with ELAP’s legal support. But ELAP’s program cut health costs by about a fourth, he added.
Recently managers at a big medical system in metro Kansas City “finally figured out we were doing something a little bit different,” sent “a nasty letter” and followed up with a call, he said.
The hospital executive on the phone “was very condescending and thought I was stupid and had been duped by a predatory consultant and had been sold a — quote — crappy plan,” Drown said.
Drown listened. He told the man he would consult with his colleagues and reply.
“I called him back a week or two later and left him a rather detailed voicemail that said, ‘We’re not changing anything. We’re staying where we are.’ And the guy never called me back.”
Jane Maier was one of a select group of patients invited in early 2012 to help Partners HealthCare, Massachusetts’ largest health system, pick its new electronic health record system – a critical investment of close to $700 million.
The system, which is now being phased in, will help coordinate services and reshape how patients and doctors find and read medical information. The fact that Partners sought the perspective of patients highlights how hospitals increasingly care about what their customers think.
“It’s such a great experience,” Maier said. “They treat us as a member – a partner – in their review process.”
Patient advisory councils, like the one Maier belongs to, often serve as sounding boards for hospital leaders – offering advice on a range of issues. Members are usually patients and relatives who had bad hospital experiences and want to change how things work, or who liked their stay and want to remain involved.
For Maier, it all started in 2009 when she had surgery at Brigham and Women’s Faulkner Hospital, a Partners facility. Her husband wrote to the hospital’s CEO, praising her experience. The couple was then invited to speak at a hospital leadership retreat, sharing with top executives both the good and the not-so-good, and Maier was recruited to serve on a new patient advisory panel.
This hunt for patient perspective, which is becoming more and more common, is fueled in part by the health law’s quality-improvement provisions and other federal financial incentives, such as the link between Medicare payments and patient satisfaction scores.
“It’s a change in culture,” said Jayne Hart Chambers, senior vice president for quality at the Federation of American Hospitals, which represents for-profit hospitals.
Data from 2013 suggested that 40 percent of hospitals had some kind of patient council, said Mary Minniti, a program and resource specialist at the Institute for Patient and Family Centered Care, a Maryland-based nonprofit organization. Though councils appear to have become more common in the past few years, experts say it’s too early to know whether they typically improve hospital practices.
“A lot of hospitals right now are very concerned because of the direction of [Medicare] payments,” said Carol Cronin, executive director of the nonprofit Informed Patient Institute, an advocacy group. “They’re very concerned about patient experience and patient satisfaction.”
But it’s not just federal incentives. Patients have greater expectations as they shoulder larger shares of healthcare costs, said Richard Evans, chief experience officer at Massachusetts General Hospital, another Partners facility. This, he added, leads hospitals to focus on customer service.
Cronin, who has had a relative stay for an extended time in the hospital, volunteers on the patient advisory council at Johns Hopkins Hospital, in Baltimore. She was struck, she said, by the “meaty” topics that the group addresses. Hopkins’ medical researchers have even pitched their projects to the council to find out what patients and families think are worthy of scientific investigation.
To have an impact, though, these groups can’t operate in isolation.
Patient and family advisory councils are useful if they have the ear of hospital leaders, Minniti said. But the groups also have to be integrated into decision making.
Andy DeVries joined the first patient advisory council at Michigan’s Spectrum Health about 10 years ago, after he was hospitalized with life-threatening injuries from a motorcycle accident.
“Initially, nobody knew who we were and we had to sell ourselves,” said DeVries, who now serves on one of Spectrum Health’s 13 patient groups. Now, by contrast, his group offers input “any time there’s something new that involves patient or family care,” adding that the panel of patient advisers has tackled issues ranging from beefing up the facility’s security to how the hospital should give patients billing information. He’s even worked with the human resources department on what to look for when hiring doctors and nurses.
Such feedback led to marked increases in patient satisfaction scores, said Deborah Sprague, Spectrum Health’s program manager for patient and family services.
For instance, she said, a member of the orthopedics and neuroscience patient council noticed slow responses when he pushed the call button in his hospital room, a problem staff hadn’t noticed. The council worked with hospital employees to speed up response times. After the fix, positive patient assessments of the hospital jumped.
Maier, from the Faulkner council, recalled a time when hospital executives asked for help with patient complaints regarding nighttime noise levels. Late-night talking by staff was keeping patients awake.
The group discussed potential nighttime “quiet times” and other strategies to minimize noise without keeping doctors from doing their jobs. Once changes were made, patient satisfaction scores went up, Maier said — and a council member noticed a definite improvement the next time he was a patient.
Meanwhile, MedStar Health, which serves the District of Columbia and Maryland, has targeted advisory panels’ efforts to improve both the quality and safety of its care. The system has emerged as a model for finding ways to incorporate patients’ opinions, which was noted in a report from the American Hospital Association.
In one recent case, said David Mayer, MedStar’s vice president for quality and safety, patient advisers helped brainstorm ways to soothe the confusion and stress that often sets in when people have been in the ICU for more than a day. When implemented, the ideas led to reduced instances of patient confusion – known as delirium – which is linked to more destructive behavior, like patients trying to leave the room or bed before they should.
But even as the role of patient advisory committees grows, recruiting members continues to be a challenge. Finding people from diverse backgrounds with both the inclination and time to serve can be tricky, Cronin said. As a result, council members are often “middle-aged and older, white and English-speaking, and a lot of women,” said Deb Wachenheim, health quality manager at the Massachusetts-based advocacy group Healthcare For All.
For some hospitals and health systems, though, these panels are just the beginning. Massachusetts General puts patients on various policy setting committees, and Faulkner has a non-voting patient board member.
“As we continue to evolve,” Maier said, “the hospital looks to us more and more.”