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Changing pediatric care through clinical integration

 

Robert Meyer, chief executive of Phoenix Children’s Hospital, discusses how clinical integration is changing pediatric care.

He says: “Twenty-four months ago, Phoenix Children’s Hospital launched a bold initiative to create a first-of-its-kind pediatric clinically integrated organization, or PCIO — a value-based approach to improving care and controlling costs.”

“The clinically integrated organization is different from the ACO  {Accountable Care Organization} in that an ACO is limited to a product offering from a contractual perspective, i.e., Medicare. Clinically integrated organizations can operate in multiple platforms, including Medicare, Medicaid and commercial products. This model’s flexibility allowed us to provide the best possible care specifically focused on children.”

“As we built the infrastructure of our clinically integrated organization, we recognized that 92 percent of all care interactions occur outside the hospital, requiring a proactive approach to patient care. Our PCIO, the Phoenix Children’s Care Network, is a collaborative and integrated system of care encompassing general pediatricians, pediatric specialists and sites of service, including Phoenix Children’s Hospital and the hospital-owned urgent care and surgery centers. The PCCN is governed by physicians, the majority of whom are independent.”

 


Rural hospitals create alliance to survive

 

By MICHAEL OLLOVE, for Stateline News Service

WILLCOX, Ariz.

Ask Sam Lindsey about the importance of Northern Cochise Community Hospital and he’ll give you a wry grin. You might as well be asking the 77-year-old city councilman to choose between playing pickup basketball—as he still does most Fridays—and being planted six feet under the Arizona dust.

Lindsey believes he’s above ground, and still playing point guard down at the Mormon church, because of Northern Cochise. Last Christmas, he suffered a severe stroke in his home. He survived, he said, because his wife, Zenita, got him to the hospital within minutes. If it hadn’t been there, she would have had to drive him 85 miles to Tucson Medical Center.

There are about 2,300 rural hospitals in the U.S., most of them concentrated in the Midwest and the South. For a variety of reasons, many of them are struggling to survive. In the last five years, Congress has sharply  slowed spending on Medicare, the federal health-insurance program for the elderly, and the patients at rural hospitals tend to be older than those at urban or suburban ones. Rural hospitals in sparsely populated areas see fewer patients but still have to maintain emergency rooms and beds for acute care. They serve many people who are uninsured and can’t afford to pay for the services they receive.

Several months ago, Northern Cochise sought to strengthen its chances for survival by joining an alliance with Tucson Medical Center and three other rural hospitals in southwestern Arizona. Together, the Southern Arizona Hospital Alliance is negotiating better prices on supplies and services. And the Tucson hospital has promised to help its rural partners with medical training, information technology and doctor recruitment.

“We are committed to remaining autonomous for as long as we can,” said Jared Wilhelm, director of community relations at Northern Cochise. “We think this gives us the best leverage to do so.”

Northern Cochise and the other rural hospitals in the alliance, which is similar to ones in Kansas, Mississippi, Washington state and Wisconsin, hope that by joining they will avoid the fate of 56 rural hospitals that have closed since 2010. Another 283 rural hospitals are in danger of closing, according to the National Rural Health Association (NRHA).

Right now, some Arizonans in the region are learning what it’s like to lose a hospital. Cochise Regional Hospital, in Douglas, near the Mexican border, closed earlier this month, following Medicare’s decision to terminate payments because of repeated violations of federal health and safety rules. The hospital was part of a Chicago-based chain and its closing leaves Arizona residents in the far southeastern portion of the state up to 75 miles away from the closest hospital emergency room.

Sam Lindsey shudders to think what a long drive to Tucson would have meant for him last Christmas.

“If I’d have had to go 85 miles,” he said, “I don’t think I’d be here today.”

Multiple Advantages

The alliance offers the rural members multiple advantages. One of the most important is in purchasing. Their combined size will enable them to get discounts that are beyond them now. For example, instead of being a lone, 49-bed hospital with limited bargaining leverage, alliance member Mount Graham Regional Medical Center, in Safford, is suddenly part of a purchasing entity with more than 700 beds.

“If I’m just Mount Graham and I’m going to buy one MRI every seven years, the sales people will say, ‘Oh, that’s very nice,’ ” said Keith Bryce, Mount Graham’s chief financial officer. “But as part of this alliance that they want to do regular business with, they are going to give us a much better price.”

Bryce said that he expects the added purchasing power alone will save Mount Graham “in the six figures” every year.

Similarly, the hospitals expect the combined size of the alliance to result in lower costs for employee benefits, workers’ compensation and medical malpractice insurance.

The alliance also helps the rural hospitals recruit doctors and other medical providers, many of whom are reluctant to work, let alone live, in isolated areas. Rural hospitals rarely have the contacts and relationships that help urban hospitals find doctors. “We’ve been trying to recruit another primary care doctor to this community for the last year with no success,” said Rich Polheber, CEO of Benson Hospital, another alliance member.

Tucson Medical Center has pledged to use its own recruiting muscle to help its rural partners find providers who are willing to live in rural areas, or at least regularly see patients there. As an incentive, Tucson will offer interested doctors help in managing the business aspects of their practices.

The rural alliance members also want Tucson’s help with medical training and IT. Some have dipped into telemedicine, which is particularly valuable for rural hospitals underserved by specialists, and are looking to expand those efforts. Copper Queen Community Hospital, in Bisbee, the fourth rural member of the alliance and probably the rural hospital in the best financial shape, is the most advanced user of telemedicine. Its networks in cardiology, neurology, pulmonology and radiology can connect doctors and their patients to specialists at major institutions such as the Mayo Clinic and St. Luke’s Medical Center, in Phoenix.

The alliance also will make it easier for patients who have surgery in Tucson to be transferred back to their home hospitals for recovery and rehabilitation, saving them and their families from traveling long distances.

A Defensive Strategy 

Despite the numerous advantages for the rural partners, the idea for the alliance began with the Tucson hospital, which approached the others with the proposal last spring. At the outset, some of the rural hospitals were skeptical.

“At first, we were like, ‘OK, so why are they doing this? What’s in it for them? Do they want to absorb us?’ ” said Bryce, the Mount Graham CFO.

But after a series of meetings, the suspicions disappeared and the rural hospitals eagerly signed on.

The Tucson hospital was frank about its motivation: to remain independent in an industry moving toward consolidation. As a result of acquisitions in the last few years, it is the last locally owned, independent hospital in Tucson.

“All of a sudden, we were in a situation where [Tucson Medical Center] found itself isolated and facing its own competitive market pressures because the environment had so dramatically changed,” said Susan Willis, executive director of market development at the hospital and president of the new alliance.

Nearly a quarter of Tucson’s patients come from outside the city, many from the areas served by the rural hospitals in the new alliance. Cementing the relationship with those hospitals, Willis said, will help Tucson maintain a flow of patients who need medical services that are beyond the capabilities of the rural hospitals. The rural members have laboratories, diagnostic equipment and therapeutic services, but some have little or no surgical or obstetrical services. Not one is equipped to perform complicated surgeries.

“Certainly you could describe it as a defensive strategy,” Willis said.


Conflict of interest on Medicare fee commitee?

 

 

Does Medicare rely too heavily on the American Medical Association to recommend fees for physicians who treat Medicare patients? That’s what a report from the Government Accountability Office suggests.

The report says that payment decisions may be biased because the 31 physicians on the Relative Value Scale Update Committee have potential conflicts of interest: They benefit when the government assigns higher values to their services.


Study challenges ideas about ER ‘super-utilizers’

 

 

Super-utilizers are the frequent fliers of the healthcare system, whose serious illnesses send them to the hospital multiple times every year and cost the system hundreds of thousands of dollars annually. Figuring out how best to address these patients’ needs and reduce their financial impact on the health care system is a subject of intense interest among policymakers.

Now a new study has found that, in contrast to the notion that “once a super-utilizer, always a super-utilizer,” many patients who use healthcare services intensely do so for a relatively brief period of time.

Research and news reports often point out that super-utilizers are often uninsured or on Medicare and Medicaid and account for a large percentage of health care spending. Federal officials have suggested that their “large numbers of emergency department [ED] visits and hospital admissions … might have been prevented by relatively inexpensive early interventions and primary care.” Many of the programs that have been developed to reduce super-utilizer health care use have focused on the needs of people with multiple chronic conditions, ensuring they have a medical home through which their care is coordinated, for example, or addressing their social services needs.

The study by researchers at Denver Health, a medical center that serves many uninsured and underinsured patients, examined the characteristics and costs of patients who were hospitalized more than three times during a 12-month period in the 2 years from May 1, 2011, to April 30, 2013, or were hospitalized at least twice in 12 months and had a serious mental illness.

The results surprised researchers, says Tracy Johnson, director of healthcare reform initiatives at Denver Health and lead author of the study, published in Health Affairs. At the end of the first year, only 28 percent of 1,682 patients who were originally identified as super-utilizers still met the criteria. At the end of 2 years, the figure had shrunk to 14 percent Per-person spending decreased in line with their decreased use of health care services, from a baseline $113,522 per capita to $47,017 in year two.

Moreover, on an individual level, super-utilizers didn’t necessarily have characteristics of patients frequently assumed to fall into that group, Johnson says. “You’d think they’d all be people with multiple chronic conditions,” she says.

While a substantial 42 percent of high-cost patients with frequent hospital stays did have multiple chronic conditions, others did not. (Researchers grouped patients based on the category that best represented the reason for their hospitalizations. Some patients could have been placed in multiple categories.) Forty-one percent of super-utilizers’ hospitalizations were primarily related to serious mental-health diagnoses. Smaller numbers of high-use patients were hospitalized because of orthopedic surgery, trauma, terminal cancer, or for emergency inpatient dialysis.

“Other literature we saw said that there’s this homogenous group of people, and [suggest that] we can just do this one program and save millions of dollars,” Johnson says, “but what we saw is that it’s more nuanced.” Therefore, different types of super-utilizers may benefit from different program interventions to reduce their health care use and costs.


Problems with Medicare knee/hip-replacement payments

 

Here’s a discussion  in HealthAffairs of why Medicare’s hip- and knee-replacement payment system may not be the answer for other payers and buyers.

Among the problems:

  • “The Medicare proposal is hospital-centric.”
  • “While the proposed model provides financial incentives for hospitals to avoid-post-surgery complications, it does not vary payments to those hospitals with the severity of the patient’s condition.”
  • “The diagnosis related groups (DRGs) targeted by the program are too broad and include procedures unrelated to replacing a hip or knee. This could contribute to higher total costs of care and result in hospitals being penalized unjustly for those unrelated procedures.”
  • “The provider payments would not be reconciled until the end of the year, which means that providers are paid as usual and any rewards or penalties are not proximate to their performance.”


Many hospitals are cost-cutting in wrong places

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Navigant Healthcare Managing Director Bruce Hallowell says in a recent interview in  RevCycleIntelligence  that too many hospitals and healthcare systems overlook where there is management duplication. He says that they may be focusing on the wrong places.

He  asserts, that, among other things:

When hospitals do cost reductions, they look at cost, not outcomes. This takes their bottom line away. There is a bad habit in healthcare of treating everybody like a Medicare patient, so Medicare pays on DRG (diagnosis-related group) and we don’t get paid based on things like length of stay. There’s a huge effort to cut length of stay. When I’m cutting cost, I need to cut costs in the appropriate area.”

He says the best overall way for hospitals to consider costs is: “You have to look at it from the holistic approach. What are the costs that are actually costing me something in my different payer levels? Is it a utilization or a variation? How do I get rid of variation and not worry about the number of days?”

His view of  changes from  new payment methodologies:

If you have two underperforming units at two different hospitals that are five miles apart, if we moved them to one facility, they would be a high-performing function, but we don’t want to make those tough decisions. The new payment methodologies will force the healthcare industry to make tough decisions, such as do I really need four OB units within ten miles of each other or do I need one? ACOs (Accountable Care Organizations) – basically capitation with no control – are starting to look at risk components, making sure we get continuing of care from beginning to end provides an idea of how cost is structured.”

On ICD-10’s effects on  hospitals’ revenue and reimbursement situations:

ICD-10 is going to have a bigger impact on hospitals from a revenue and cash standpoint than anything else that’s coming right now. I have to get past that before I can deal with ACOs  and bundled payments. ICD-10 is the biggest threat to any income. ” (For laypersons: ICD-10 is the 10th revision of the International Statistical Classification of Diseases and Related Health Problems.)

“People who are not taking it seriously understand it from a technical standpoint and not a process standpoint. The threat is impending change that has a direct impact on reimbursement and that’s where my cash and investment comes from….”

 


Readmissions to penalize most hospitals

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Modern Healthcare analysis  has led it to report that “most  U.S. hospitals will get less money from Medicare in fiscal 2016 because too many patients return within 30 days of discharge.”

It reports that “Only 799 out of more than 3,400 hospitals subject to the Hospital Readmissions Reduction Program performed well enough on CMS’ {the Centers for Medicare & Medicaid Services] 30-day readmission program to face no penalty. Thirty-eight hospitals will be subject to the maximum 3 percent reduction.”

“The readmissions program initially evaluated how often patients treated for heart attack, heart failure and pneumonia had to return to the hospital within 30 days of discharge.”

Last Friday the CMS issued final rules for Medicare’s hospital inpatient prospective payment system, including changes for  inpatient-care quality reporting, excess readmissions, hospital-acquired conditions and value-based purchasing programs.

“Modern Healthcare said that “Among those provisions is a major change to the readmission measure for pneumonia in fiscal 2017. The change expands the population cohort included in the analysis to patients with a principal discharge diagnosis of either sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission.”

“The hospital readmission reduction program has faced increasing criticism by health policy researchers and industry groups representing U.S. hospitals. They argue that many factors affecting whether a patient needs to be readmitted are beyond a hospital’s control. In particular, facilities in poor communities may be unfairly penalized, some of the program’s critics say. ”


On Medicare reform: Time for benign neglect

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Idle Woman,”  by Daniel Hernández Morillo

Sherry A. Glied, writing in the Commonwealth Fund’s Web site, argues that no action on changing Medicare is the best action because there won’t be adequate data needed for revising the program for quite some time to come.

“Surprisingly, the most responsible thing to do right now about the forecasted insolvency of the Medicare Trust Fund is . . . nothing. Why? Because such projections are highly uncertain and we can make any necessary changes as we learn more over time.”

She notes: “Predicting the future of health care cost growth is notoriously difficult and small variations in assumptions about growth rates can lead to very large differences in long-term forecasts.

“There are really only three ways to control Medicare spending: cut expenditures, raise revenues, or shift a share of risks to beneficiaries by moving to a voucher or premium-support system. Our recent experience indicates it would be unwise to take any of these dramatic steps right now.”

 

 

 


Another hospital loses Medicare

 

Medicare will stop doing business with another hospital. This time it’s Winnebago (Neb.) Indian Health Service Hospital, But the facility’s officials say they plan to keep it open, at least for now.

Becker’s Hospital Review reports  “The funding cutoff was due to a CMS finding that the facility put its patients in ‘immediate jeopardy, which led to the death of one person earlier this year. A May CMS report cited the case of a patient who was sent home from {the hospital}  after complaining of exteme back pain on Dec. 30, 2014. A hospital staff member subsequently called the patient and left him a voicemail telling him his kidneys were failing, but the hospital made no other attempt to contact the patient about his condition. The patient died Jan. 1, 2015, according to a Lincoln Journal Star report. CMS also found the hospital provided inadequate treatment to at least nine other patients.”

In part because of the Affordable Care Act, the Centers for Medicare & Medicaid Services is cracking down/

 


Architects of insurance mega-merger plans

 

A look at Aetna chief executive Mark Bertolini, who has struck a $34 billion deal for Aetna to buy Humana, and Anthem CEO Joseph Swedish, who has a deal for Anthem to buy Cigna for $48 billion.

 

The merger plans won’t necessarily go smoothly: The Justice Department is leery of huge concurrent transactions in the managed-care industry. And hospital officials and physician groups, fearing cuts in their revenues because of the  new behemoth insurers’ bargaining power, oppose  the acquisitions. Further, two congressional committees have scheduled hearings for the fall on the mergers.

As The Wall Street Journal noted,  the “Aetna deal would create by far the biggest player in the private-insurer version of Medicare, so concern over market concentration will focus on the companies’ footprint in that business, known as Medicare Advantage. Mr. Bertolini said that the vast majority of Medicare Advantage consumers have at least five options currently, so ‘we don’t see a reduction in competition for consumers’ from the Humana deal.”

“He argues that the merged company will be better positioned to work closely with health-care providers and the federal government to bring down costs and improve quality.”

 

 

 

 

 


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