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The great healthcare economic contradiction


For Kaiser Health News

In many ways, the healthcare industry has been a great friend to the U.S. economy. Its plentiful jobs helped lift the country out of the Great Recession and, partly due to the Affordable Care Act (ACA), it now employs 1 in 9 Americans—up from 1 in 12 in 2000.

As President  Trump seeks to fulfill his campaign pledge to create millions more jobs, the industry would seem a promising place to turn. But the business mogul also campaigned to repeal the ACA and lower healthcare costs—a potentially serious job killer. It’s a dilemma: One promise could run headlong into the other.

“The goal of increasing jobs in healthcare is incompatible with the goal of keeping healthcare affordable,” said Harvard University economist Katherine Baicker, who sees advantages in trimming the industry’s growth. “There’s a lot of evidence we can get more bang for our buck in healthcare. We should be aiming for a healthcare system that operates more efficiently and effectively. That might mean better outcomes for patients and fewer jobs.”

But the country has grown increasingly dependent on the health sector to power the economy—and it will be a tough habit to break. Thirty-five percent of the nation’s job growth has come from healthcare since the recession hit in late 2007, the single-biggest sector for job creation.

Hiring rose even more as coverage expanded in 2014 under the health law and new federal dollars flowed in. It gave hospitals, universities and companies even more reason to invest in new facilities and staff.  Training programs sprang up to fill the growing job pool. Cities welcomed the development—and the revenue. Simply put, rising health spending has been good for some economically distressed parts of the country, many of which voted for Trump last year.

In Morgantown, W.Va., the West Virginia University health system just opened a 10-story medical tower and hired 2,000 employees last year. In Danville, Pa., the Geisinger Health System has added more than 2,200 workers since July and is trying to fill 2,000 more jobs across its 12 hospital campuses and a health plan. Out West, the UCHealth system in Colorado expanded its Fort Collins hospital and is building three hospitals in the state.

In cities such as Pittsburgh, Cleveland and St. Louis, healthcare has replaced such  industries as coal and heavy manufacturing as a primary source of new jobs. “The industry accounts for a lot of good middle-class jobs and, in many communities, it’s the single-largest employer,” said Sam Glick, a partner at the Oliver Wyman consulting firm in San Francisco. “One of the hardest decisions for the new Trump administration is how far do they push on healthcare costs at the expense of jobs in healthcare.”

House Republicans, with backing from Trump, took the first swipe. Their American Health Care Act sought to roll back the current health law’s Medicaid expansion and cut federal subsidies for private health insurance. The GOP plan faltered in the House, but Republican lawmakers and the Trump administration are still trying to craft a replacement for the ACA.

Neither the ACA nor the latest Republican attempt at an overhaul tackle what some industry experts and economists see as a serious underlying reason for high healthcare costs: a system bloated by redundancy, inefficiency and a growing number of jobs far removed from patient care.

Labor accounts for more than half of the $3.4 trillion spent on U.S. healthcare, and medical professionals from health aides to nurse practitioners are in high demand. But the sheer complexity of the system also has spawned jobs for legions of data-entry clerks, revenue-cycle analysts and medical billing coders who must decipher arcane rules to mine money from human ills.

For every physician, there are 16 other workers in U.S. healthcare. And half of those 16 are in administrative and other nonclinical roles, said Bob Kocher, a former Obama administration official who worked on the ACA. He’s now a partner at the venture capital firm Venrock, in Palo Alto, Calif.

“I find super-expensive drugs annoying and hospital market power is a big problem,” Kocher said. “But what’s driving our health-insurance premiums is that we are paying the wages of a whole bunch of people who aren’t involved in the delivery of care. Hospitals keep raising their rates to pay for all of this labor.”

Take medical coders. Membership in the American Academy of Professional Coders has swelled to more than 165,000, up 10,000 in the past year alone. The average salary has risen to nearly $50,000, offering a path to the American Dream.

“The coding profession is a great opportunity for individuals seeking their first joband it’s attractive to a lot of medical professionals burned out on patient care,” said Raemarie Jimenez, a vice president at the medical coding group. “There is a lot of opportunity once you’ve got a foot in the door.”

Some of these back-office workers wage battle every day in clinics and hospitals against an army of claims administrators filling up cubicles inside insurance companies. Overseeing it all are hundreds of corporate vice presidents drawing six-figure salaries.

Administrative costs in U.S. healthcare are the highest in the developed world, according to a January report from the Organization for Economic Cooperation and Development. More than 8 percent of U.S. health spending is tied up in administration while the average globally is 3 percent. America spent $631 for every man, woman and child on health-insurance administration for 2012, compared with $54 in Japan.

America’s huge investment in healthcare and related jobs hasn’t always led to better results for patients, data show. But it has provided good-paying jobs, which is why the talk of deep cuts in federal health spending has many people concerned.

Linda Gonzalez, a 31-year-old mother of two, was among the thousands of enrollment counselors hired to help sign up Americans for health insurance as the ACA rolled out in 2014. The college graduate makes more than $40,000 a year working at an AltaMed enrollment center, tucked between a Verizon Wireless store and a nail salon on a busy street in Los Angeles.

In her cramped cubicle, families pull up chairs and sort through pay stubs and tax returns, often relying on her to sort out enrollment glitches with Medicaid. As the sole breadwinner for her two children, ages 9 and 10, she counts on this job but isn’t sure how long it will last.

“A lot of people depend on this,” she said one recent weekday. “It’s something I do worry about.”

Four organizations pushing price transparency


More hospitals and health systems are trying to create much more transparent pricing as a way of drawing more customers/patients.

PwC has surveyed price-transparency efforts in  four systems across America. Among its findings:

Adventist Health System (Altamonte Springs, Fla.) has has tried to reduce the charge-to-cost ratios in its chargemaster, focusing on  areas where it see increasing competition, including hospital-based rehabilitative services and outpatient laboratory work. It identified which services drive revenue for the hospital and which prices could be cut.

Integris Health (Oklahoma City). Integris developed a pricing tool through which patients  can obtain pricing information on various procedures and services. “Overall, the tool offers 240,000 price estimates for outpatient procedures each year,” PwC said.

The tool also links patients to financial planners before, during and after their visits. PwC said the tool has helped the system improve communications with its customers. And the system has been steering patients to lower-cost clinicians affiliated with Integris.

At St. Clair Hospital (Pittsburgh) leaders  work on how best to communicate out-of-pocket costs to patients via such efforts as listening sessions with former patients and their families. The hospital this year has introduced an online tool that lets individuals  get estimates for 105 different procedures,

Geisinger Health System (Danville, Pa.). “Geisinger offers consumers price quotes, a one-stop web portal for patient information and a single hospital bill as part of its Proven Experience program,” PwC said. And patients can now request refunds if they are unhappy with their hospital experience.

To read the PwC survey, please hit this link.


Patient complaints: Geisinger lets it hang out


Putting it in the complaint box.

CMS star ratings  for hospitals are related to patient satisfaction with care experiences based on data from the Hospital Consumer Assessment of Healthcare Providers and Systems Survey (HCAHPS) measures. The survey covers such things as   how well nurses and physicians communicated with patients, responsiveness of hospital staff to patient needs,  the cleanliness and noise level of hospital environments  and how well patients were prepared for life after they left  the hospital.

Opponents of  CMS star ratings  complain that they oversimplify complex data, conveying  misleading information that can hurt reputations and reflect unfairly on certain hospitals.

However, Healthcare Dive reports that the move toward value-based care and transparency has led some healthcare organizations – such as Intermountain Healthcare and Geisinger Health System – to publish what patients think of them, for better or worse.

“Patient stories have a greater impact on clinicians more than metrics like HCAHPS,” Dr. Greg Burke, chief patient experience officer at Geisinger, told the publication  after a  recent panel discussion.

Geisinger has gotten a lot of publicity because of its unorthodox implementation of its “ProvenExperience money-back guarantee.”   Dr. Burke said that Geisinger posts on its Web site about 97-98 percent of the comments it receives from patients on the system’s clinicians.

He explains why and how the system does this. Please hit this link to read the full article.


Geisinger to hire 1,500


Fast-growing Danville, Pa.-based Geisinger Health System, nationally known for helping to pioneer integrated care, will  hire more than 1,500 physicians, advanced practitioners, nurses and support staff as part of its new nationwide recruitment effort.

In the last 10 years, Geisinger has grown from two to 12 hospitals, widen its service area from 30 to 45 counties, including southern New Jersey, and nearly tripled its number of employees.

Geisinger also now offers a health-insurance product — Geisinger Health Plan — that covers more than 551,000 members.

For more information, please hit this link.

5 ways to improve community health


Point Pinos Lighthouse, Pacific Grove, Calif., on the beautiful Monterey Peninsula.

Healthcare consultant Sita Ananth dispenses some advice on living with the contradictions of community health based on the experience of a California hospital and health system.

“At Community Hospital of the Monterey Peninsula, making the cultural and philosophical shift from volume to value began almost five years ago, President and CEO Steven Packer, M.D., told me. With almost 75 percent of its payments coming from public sources, the hospital’s leaders realized they had to find ways to bridge some of the costs of uncompensated care.

“Given the relatively small population of the county, they decided their only option was to collaborate with other providers, including competitors. The first step was to create a separate entity that would lead the collaborative efforts and provide the needed distance from the parent organization. They named the entity Community Health Innovations.”

“Packer stated that the key success factors for Community Hospital and Community Health Innovations have been the five T’s. I paraphrase them here:

  1. “Talent: finding and hiring the right executives and staff to engage in a new way of thinking, focusing on population health management (PHM) and building community partnerships.”
  2. “Training: Identifying best practices and learning from them. To that end, Packer and his team worked with the experts at Geisinger Health System to provide intensive training for case managers and care managers in various clinical settings.”
  3. “Technology: Realizing that interconnectedness is crucial. To manage the complexities of integrated electronic health records and practice management solutions, Community Health Innovations hired people with health informatics and implementation skills.”
  4. “Trustees: Educating governing boards that the move from volume to value will not translate into immediate profits….”
  5. Time: Building PHM capabilities and implementing them. It’s a time-consuming and all-encompassing effort, said Packer, and cannot be done either part time or in a hurry.”

To read her entire essay, please hit this link.

8 systems that have successfully moved into value-based care


Dan Beckham, writing in Hospitals &  Health Networks, looks at eight systems that have followed consistent strategies to create value-based systems.

The systems are:

  1. Advocate Health Care:  Mr. Beckham cites how it turned its physician-hospital organizations “into a super-PHO, becoming the national benchmark for clinically integrated networks.”
  2. Banner Health: “Banner centralized leadership and governance, and standardized care and management processes.”
  3. Baylor Scott & White Health: “Scott & White brought its highly integrated multi-specialty group practice model and its health plan to the merger, while Baylor brought a robust network of hospitals, surgery centers and entrepreneurial partnerships.”
  4. Cleveland Clinic: ”A pioneer in transparency related to demonstrated value and bundled contracts, Cleveland Clinic has combined one of America’s premier multi-specialty group practices with community hospitals and independent physicians to produce a powerful economic engine.”
  5. Geisinger Health System: “It is internationally recognized for innovating at the interface between health insurance, inpatient care, outpatient care and physician practice. Few organizations have positioned themselves as purposefully as Geisinger for the transition from volume- to value-based payment.”
  6. Intermountain Healthcare: “The late W. Edwards Deming, a quality icon, was a central inspiration for Intermountain’s relentless battle to drive out variation. While many health systems treated total quality management and its variants as a passing fad, Intermountain dug in and made it a way of life. The presence of Intermountain contributes greatly to Utah’s position as one of America’s healthiest places to live.”
  7. Mayo Clinic: “Its strength flows, to a great extent, from the team-based multispecialty group practice model that has been central to its operations since its founding, along with its unwavering focus on putting patient interests first. The ‘Mayo way’ is well-engineered and nonnegotiable. No organization has deeper, better-connected data.”
  8. Sentara Healthcare: “When other systems experimented with ownership of health plans, then exited in the face of losses, Sentara persevered. When physician employment became too big a financial burden for others, Sentara doubled down. Because it persisted when others folded, it was able to put more than two decades of experience into its intellectual bank vault. It learned to meld a managed care enterprise, a hospital enterprise,  and a physician enterprise into a formidable integrated delivery system.”
    To read all of Mr. Beckham’s piece, please hit this link.

Expansionary Geisinger explains its success


Sleepy downtown Danville, Pa.,  where Geisinger is based.

This interview with David Feinberg, M.D.,  the chief executive of Geisinger Health System, which serves a  largely rural clientele in Pennsylvania’s coal country, gives a pretty good idea of why, as The Wall Street Journal notes, it has “become a national poster child for the kind of carefully coordinated, data-driven healthcare that experts say one day could right the nation’s troubled medical system, providing better care at lower costs.”

Among other things, the system has long been  a pioneer in the use of electronic medical records and other data, which helps it to avoid unnecessary procedures. That the company also runs an insurance company  gives it an unusual incentives to reduce the number of many procedures.

And look for Geisinger to keep expanding:

“WSJ: Geisinger has been growing in size and scope, in part through merger-and-acquisition activity such as the deal with AtlantiCare health system in New Jersey. What are your plans for future mergers and acquisitions?

“DR. FEINBERG: Our M&A activity is wild. As far as our growth goes, I’m really looking for people that are culturally aligned with where we’re going. I want people or organizations—and AtlantiCare is a great example—that may be at a different place in the journey but believe in the journey around population health, innovation.”


Geisinger seeks to provide ‘concierge care for the masses’



We want to take patient-centeredness to the next level. We want to engage with our patients and families in a way that’s compassionate and kind, and deliver care that is of the highest quality in a safe and culturally sensitive manner. We want to make our transitions in care remarkably smooth. We want patients to understand their bill. ”

Geisinger changing uniforms for nurses




Danville, Pa.-based Geisinger Health System is changing its uniform policy to ensure that patients can  quickly and easily identify registered nurses and other healthcare workers.

The Daily Item reports that the changes will start with  registered nurses but Geisinger will eventually also develop uniform policies for physicians and other healthcare workers.

As of  Jan. 1, all registered nurses in Geisinger’s eight hospitals, clinics and nursing homes  will wear the same color scrubs — pewter — with a sewn Geisinger logo and a name tag with “Registered Nurse” spelled out.

Geisinger officials told The Daily Item the name badges currently identify the employee as an “R.N.” or some other initials signifying their position, but patients don’t always know what the initials mean.

Garden State giants


Barnabas Health and the Robert Wood Johnson Health System  plan to merge, with their combined  11 hospitals  forming New Jersey’s largest health system. Meanwhile, the  proposed merger of Hackensack University Health Network and Meridian Health would  create a nine-hospital system.

Other New Jersey mergers include Geisinger Health System’s agreement to to acquire AtlantiCare and Meridian Health’s deal  to acquire Raritan Bay Medical Center. Further,  the  Atlantic Health System in Morristown, has acquired Chilton Hospital in 2014 and has a deal pending for Hackettstown Regional Medical Center.
Big is now usually seen as better in the American hospital sector.

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