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MedPAC backs higher rates for certain hospitals, physicians


The Medicare Payment Advisory Commission has recommended that acute-care hospitals and physicians get higher payments in 2018 but not ambulatory surgery centers, skilled-nursing facilities and inpatient rehabilitation facilities.

MedPAC commissioners recommended that the government boost Medicare payments for hospital inpatient and outpatient services by 1.85 percent and 0.5 percent for physicians.  Acute-care hospitals and physicians both had slight increases in their Medicare volumes in 2015.

In recommending against raises for nonhospital-linked ambulatory surgery centers, the commissioners noted that those outpatient facilities seem to be very financially healthy at current reimbursement rates.

MedPAC also argued that   skilled-nursing facilities, hospices and long-term-care hospitals don’t need higher rates and suggested modest cuts for home-health agencies and inpatient rehabilitation facilities because both groups  have profit margins ranging from 18 percent to 41.5 percent. The average profit margin for companies in the S&P 500 is about 8 percent.

For inpatient rehabilitation facilities specifically, MedPAC says that Medicare payments substantially exceed the costs of care.

Now expect an avalanche of lobbying of politicians and regulators in Washington so that these groups can maintain their very high profit margins.

To read more, please hit this link.


Rural hospitals outpace urban ones in Medicare value-based program


In what might surprise many people, rural hospitals, despite all their problems and  the fact that few are affiliated with medical schools, did better on average  than their urban counterparts in Medicare’s value-based purchasing program, says a new report by the U.S. Department of Health & Human Services.

The program rewards or penalizes acute-care hospitals based on the quality of care. The report said rural hospitals did better than urban ones on patient experience as well as on efficiency and costs.

HHS said “while rural hospitals face unique barriers, they have a number of strengths that might enable successful participation in and good performance under delivery reform efforts.”

The report linked rural hospitals’ strong showing in part to the care coordination  needed among a  relatively small (compared to urban and suburban hospitals) group of providers and noted that a broad range of services often share the same physical site or owner, which tends to increase efficiency.

It also said the increasingly effective use of telemedicine, particularly useful for treating  widely dispersed  populations in the countryside, might be improving care in rural hospitals.

To read the HHS report, please hit this link.

Number of Catholic-linked hospitals rises 22%


MergerWatch reports that the number of Catholic-owned or -affiliated hospitals in the United States has grown 22 percent since 2001, and now 1 in 6 acute-care beds is in a hospital connected to the church.

So 14.5 percent of all  U.S. acute-care hospitals  are now either owned by or affiliated with the Catholic church.  The number of Catholic hospitals is more than 30 percent of the total in some states, MergerWatch says.

FierceHealthcare noted that some observers worry about the increase in Catholic-connected hospitals because they tend to follow directives from the U.S. Conference of Catholic Bishops, which, for example, bans contraception and of course abortion.

Other observers, of course, applaud what they see as the application of traditional morality and conscience to hospital rules.

“In general, Catholic hospitals provide excellent care,” Lois Uttley, director of MergerWatch and one of the report’s authors told Reuters. “Our concern is with these restrictions with reproductive healthcare.”


Which hospitals are in ACOs and why


Researchers at the The Dartmouth Institute for Health Policy and Clinical Practice have found that hospitals participating in Accountable Care Organizations tend to be large and urban.

Using data from the National Survey of Accountable Care Organizations and the Leavitt Partners ACO Database, the study, says a Dartmouth press release, “analyzed the types of hospitals participating in ACOs to determine whether they differed from those not participating. The study used interviews with key ACO personnel (predominantly chief medical officers) to examine the {characteristics} of hospital participation in ACOs.”

Among the findings:

  • “20 percent of U.S. hospitals were part of ACO in 2014.”
  • “Large hospitals rather than smaller ones were more likely to have an ACO contract. Hospitals participating in ACOs were most likely to be in the most heavily populated urban areas and least likely to be in more rural areas, with more than two-thirds  in the Eastern or Pacific  time zones.”
  • “For hospitals that participated in ACOs, 13 percent of the population in the hospital’s catchment area had incomes under the federal poverty level, compared to 16 percent for hospitals not participating in an ACO.”
  • “The large majority (85 percent of hospitals that participated in ACOs were short-term acute-care hospitals, rather than specialty or critical- access hospitals.”
  • “Teaching hospitals and those that offered a greater number of services (such as obstetrics and intensive care) were more likely to participate in ACOs, compared to non-teaching hospitals and those that offered fewer services.”

The study found these advantages of being in an ACO:

  • “Most representatives of ACOs with a hospital reported that the hospital was an advantageous source of capital to the ACO, while leaders of ACOs without hospitals thought a hospital would be a useful source of capital.”
  • “Other strategic advantages of hospital participation in an ACO included patient data sharing between inpatient and outpatient settings, such as discharge summaries or alerts to an emergency admission, as well as the ability to align financial incentives across care settings to regulate costs and ensure quality.”

The study’s authors conclude, the press release said, that “policymakers have the ability to negate some of the perceived disadvantages of forming an ACO without a hospital by providing access to capital and support for implementing health information exchange systems. They also note that for ACOs to meet quality and cost goals it will be ‘important to ensure broader and more consistent participation of different types of providers in the model.”

Hospital-care prices fell

Are pressures from payers and more cost transparency finally starting to bring the world’s highest hospital charges under control?

New federal data show that  aggregate prices that prices paid by insurers to acute-care hospitals fell in January from the year-earlier month. That’s a first since  federal officials began to collect such data.  And experts said that public- and private-sector payer pressure to cut costs could explain the drop.

The overall price of acute-care hospital care —including for the uninsured— fell 0.1 percent from the year earlier. The data, which may be revised, included a 2.3 percent drop in Medicare hospital-care rates  and the weakest 12-month price growth, 1.6 percent among private health plans since July 1998. Medicaid prices fell  0.1 percent.
“This appears to be a combination of the public sector pressure, but an even more fierce change on behalf of the private payers,” said Paul Hughes-Cromwick, a senior health economist at the Altarum Institute Center for Sustainable Health Spending, told M0dern Healthcare.
“Insurers are trying to figure out how they can save healthcare cost by lowering the hospital bill, so they are more aggressively bargaining with hospitals and more aggressively investing in programs that lower hospital utilization rates,” Neraj Sood, director of research and associate professor in health policy and economics at the University of Southern California, told the publication.The hospital sector comprises about a  third of America’s $2.9 trillion medical bill.”Soft hospital price growth has continued to drag on overall healthcare inflation even as prices for home care, prescription drugs and nursing homes have risen, according to an analysis by the Altarum Institute that includes data from two federal measures of healthcare inflation. Healthcare inflation remained historically low through the end of last year, the analysis shows, though it did increase slightly as 2014 ended.”

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