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Whither hospitals in the Trump era?

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Michael P. Strazzella, practice group leader for federal government relations for  the law firm of Buchanan, Ingersoll & Rooney’s District of Columbia office and a healthcare expert, speculated in an interview what  might happen to hospitals in Trump administration that seeks to take apart the Affordable Care Act.

Among his observations:

“Repeal is good campaign language but it’s a 2,000-plus page bill and not everything can be repealed.”

Fierce said that he said that Republicans and  Mr. Trump don’t want to see millions of people suddenly losing their insurance.”The question the administration must grapple with is how to transition them so they can stay insured but also access more affordable health plans.”

But, he said, Mr. Trump can, in his first days of office, and without congressional approval,  withdraw the appeals of certain pieces of the law that are caught up in lawsuits. He can take action immediately on the appeal to cost-sharing subsidies, insist that the Department of Health and Human Services direct reinsurance payments back to the Treasury Department, and refuse to pay out risk corridor payments.

But,  Fierce asked, “where does this leave hospitals and healthcare systems that have agreed to cost-sharing proposals under the Medicare program if the ACA is rolled back?

He said there will be concerns about the additional costs involved in policies and programs put in place to replace the ACA.

“I believe people need to take a hard look at their business models, where they fit in to Republican proposals driven by Trump,” Mr. Strazzella says.

As for some of the ACA pilot programs, such as the Accountable Care Organizations under the Medicare Shared Savings Programs that were endorsed by the Obama administration? Mr. Strazzella expects the Trump administration to take a close look.

“President Trump will not be shy to hold back on those if he is not seeing the dollar savings and see if he can do it better in a different form.”

He also noted that Mr. Trump has talked about moving people off Medicaid and to private  insurance.

To read the whole interview, please hit this link.


4 ways Trump could affect hospital revenue cycle

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Becker’s Hospital Review presents four ways  in which President-elect Donald Trump’s proposed healthcare reforms could affect hospitals’ revenue cycle:

“1. Tax-free, inheritable health savings accounts. Mr. Trump said he would sign legislation to promote tax-advantaged HSAs to encourage consumers with high-deductible health plans to set aside money for out-of-pocket healthcare costs.

“Mr. Trump would also tie HSAs to a person’s estate, meaning an account could pass on to next of kin without facing federal taxes.”

“2. Federal mandate for provider price transparency. Mr. Trump said he would require ‘all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals,’ to disclose service prices to consumers prior to treatment. This could speed the rate of price transparency adoption at hospitals across the nation.”

“3. New Medicaid funding method. Mr. Trump proposed dismantling financing for Medicaid expansion under the ACA and converting the program to a block grant to contain healthcare costs. Block grants would give states more authority over their Medicaid programs in exchange for accepting a fixed amount of funding from the federal government. This means states would not be required to cover certain groups of people, such as children, pregnant women and the elderly, to receive federal money. ”

“4. Repeal of the ACA. Mr. Trump vowed to repeal the ACA as one of his first presidential acts. Bill HR 3762, introduced into Congress October 2015, would: repeal ACA tax credits, end Medicaid expansion, repeal major taxes used to fund insurance expansion and create a two year transition period to dismantle ACA infrastructure. The Congressional Budget Office estimated 22 million people would lose insurance if HR 3762 is signed into law without a Republican replacement plan. The rise in uninsured Americans could negatively affect healthcare providers by increasing their uncompensated care and bad debt rates to pre-ACA levels.”

To read the full article, please hit this link.


CMS gives some relief on off-campus reimbursement

CMS, in a final rule that changes how providers with off-campus facilities are reimbursed, has grandfathered in some hospitals that have had to relocate their facilities because of natural disasters.

The final rule  stops paying  for care at hospital off-campus facilities at the same rate as at hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015.

Modern Healthcare notes:  “The change will make it difficult for health systems to recoup capital or operational costs for off-site facilities, even though they are responsible for continuing to equip and maintain the off-campus offices.”

There has been concern that the draft rule did not protect reimbursements  for work done at recently relocated off-site facilities that had to be moved because of  environmental issues, such as being on an earthquake fault line or a flood plain; having a lease expire, or becoming too small because of population shifts and increased patient loads.

So  CMS is allowing exceptions for extraordinary circumstances while warning that exceptions will be rare.

To learn more, please hit this link.

Penn. to review definition of hospital charity care

 

Responding to a series of articles called “Counting Charity Care,” by the Pittsburgh Post-Gazette, Pennsylvania Gov. Tom Wolf has agreed to review the state’s definition of charity care, the newspaper reports.

The newspaper raised the question of how hospitals make decisions for patients who don’t fill out  charity-care forms. Many hospitals use algorithms to determine if the patient qualified for charity care based on publicly available data.

However, the paper reported, many hospitals don’t tell these patients that they qualified for charity care and that they can  come back for more free care as they would with patients who complete the form.

This practice means that charity care is not necessarily applied evenly among patients, the paper reported.

The Post-Gazette reported:

“Hospitals have given various reasons why they don’t tell the patients — from claiming that the law simply does not require them to, to saying that it would just be too expensive and a ‘burden’ to track down the patients and tell them they qualified.

“Patient advocates say not telling the patient does not appear to follow the law or spirit of the Affordable Care Act, which seeks to get people into a system of regular health care, rather than just receiving care in an emergency room when they are sicker.”

To read the Post-Gazette’s story, please hit this link.


CBO report: Hospitals need to raise productivity to stave off big losses

 

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Tourism statue in the Netherlands, of a nameless boy plugging a dike to stop a great flood.

A new analysis from the Congressional Budget Office (CBO) has recognized that changes in laws and regulations, prompted primarily by the ACA–notably reduced Medicare payment updates and expanded insurance coverage–can be expected to significantly impact hospitals’ future finances.

Things look tough!

The researchers noted “substantial uncertainty” around the predictions.

The CBO’s  predictions included:

If hospitals improved their productivity  only in line with the overall economy — by an average of about 0.8 percent a year through 2025, the share of hospitals with operating losses would rise to 41 percent and hospitals’ average profit margin fall to 3.3 percent.

If hospitals boosted their productivity by 0.4 percent a year, the share with operating losses would rise to  51 percent and their average profit margin fall to 1.6 percent.

If hospitals can’t increase their productivity or otherwise reduce cost growth, the share with operating losses would rise to 60 percent.

“Consequently, if those hospitals were not able to increase their productivity by enough to fully offset those reductions in payment updates or did not use those productivity gains to reduce the growth of their costs then Medicare’s payments would not keep pace with their costs of treating those patients, and profit margins for those hospitals would decline,” the  CBO researchers concluded.

To read the CBO report, please hit this link.

To read a HeathcareDIVE review 0f it, please hit this link.


The bottom line of reducing clinical variation

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Donna Hopkins, R.N., vice president for  the healthcare-consulting firm Novia Strategies, led a Becker’s Hospital Review seminar on reducing clinical variation to improve hospitals’ bottom line. As Becker’s noted: “Clinical variation involves the overuse, underuse, different use and waste of healthcare practices and services with varying outcomes.”

“Reducing clinical variations means creating uniform clinical guidelines and order sets, reducing tests and procedures, eliminating care gaps and delivering true interdisciplinary care,” said Ms. Hopkins.

The panel’s participants discussed successes in clinical variation.

Here are  some highlights:

Steven Goldstein, CEO of Strong Memorial Hospital, in Rochester, N.Y., said reducing clinical variation within clinical redesign efforts is, in Becker’s paraphrase, “imperative for staying viable under risk-based payment models, and CMS’S goal to link 50 percent of Medicare payments to value-based reimbursement models by 2018 has fueled the sense of urgency around such efforts.”

Patrice M. Weiss, M.D., CMO, of Roanoke, Va.-based Carilion Clinic,  said that after the American College of Obstetricians and Gynecologists recommended in 2013  refraining from inducing elective deliveries before 39 weeks of gestation, Dr. Weiss pushed to eliminate them at Carilion altogether.

“We quickly became one of the lowest early induction rate hospitals,” she said, noting that her hospital’s rate was less than 1 percent. “Then we received a letter from the state of Virginia that said a different Carilion hospital had a 17 percent early induction rate.”

Becker’s reported: “Dr. Weiss said she realized then that reducing clinical variation means hospital executives must know the differences in practices between hospitals, even within one system.”

Shelly Hunter, CFO of Mercy Hospital Joplin (Mo.),  noted:

“If you have wide variation, you have less predictability in your finances, which leads to lower operating performance.”

She  continued, in Becker’s paraphrase: “With standardized care, there are better outcomes for patients, fewer complications, lower rates of readmission and higher performance on other quality-based metrics that are tied to reimbursement. Importantly, as hospitals zero in on eliminating waste and duplicative services, standardized clinical pathways help reduce over-utilization of tests and labs. On the other hand, with high clinical variation and erratic utilization, it’s much more difficult to accurately predict costs.”

“In addition to quality-based metrics, patient satisfaction scores measured by HCAHPS affect federal reimbursement to hospitals. Clinical variation has the potential to derail patient satisfaction because lack of standardized care can lead to medical errors, complications, increased length of stay and readmissions, among other issues.”

“It is absolutely key that physicians are on board and engaged” with clinical variation reduction efforts, said Dr. Weiss.  She added (Becker’s paraphrase): “Achieving systemwide physician engagement requires identifying and naming physician champions to serve as leaders. A strong physician champion is clinically active, highly respected by their peers, enthusiastic about effecting positive change and a strong communicator. While hospital administrators might be inclined to turn to department chairs or the most productive physicians to serve as physician champions, these factors alone don’t mean a provider will be a successful leader.”

 

Nancy Lakier, R.N., CEO of Novia, said that physicians are, in varying degrees, scientists. and so will want to see data before they change.  “When physicians look at solid risk-adjusted data, and they don’t feel that they are being told what to do but rather being supported with data, we find they very quickly use this information to improve the care they provide for their patients,” she said.

To read the whole story on the Webinar, please hit this link.

 


5 ways to reduce hospital employees’ stress

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STAT looks at five ways  in which some hospitals are trying to relieve employees’ stress:
They are:

Pressing reset

“At Hennepin County Medical Center, in Minneapolis, administrators created a ‘reset room’ where employees can grab a quiet moment to themselves or take a quick nap.”

Tapping the spiritual

“At M.D. Anderson Cancer Center, in Houston, physicians and nurses visit a prayer labyrinth to recover from a sad or stressful episode in the facility….”

Arts, craft, and live music“Hospital arts programs are going beyond pinning a few colorful paintings on the walls.

“At MedStar Georgetown University Hospital, in Washington, D.C., nurses and doctors listen to live music, dance, and work on a wide range of projects, from bracelet making to creative writing. Julia Langley, director of the hospital’s Lombardi Arts & Humanities Program, said it is crucial for front-line caregivers to have a creative outlet.”

Taking a deep breath

“Hospitals are also placing a greater emphasis on physical activity for staff members. Instead of just opening a gym in the basement, many administrators are finding ways to incorporate exercise into the work day.”

Relieving information overload

“Cleveland Clinic administrators are targeting a primary source of stress for physicians: the electronic medical records system.

Record-keeping requirements force most physicians to spend more time working on computers than treating patients, which is not why they joined the profession, said Dr. Sumita Khatri, of the Cleveland Clinic Pathobiology Department.

“Dr. Khatri is working with a panel of physicians to redesign daily workflow to help relieve the burden of record-keeping requirements. The effort involves creating customized software and delegating some EMR work to physician’s assistants, among others. ”

To read the STAT story, please hit this link.


ESPN and legacy healthcare face similar disruption

 

Kenneth Kaufman writes in Hospitals & Health Networks that the disruption of ESPN by the Internet is  very similar to the disruption faced by legacy healthcare organizations, such as a acute-care hospitals. Among his observations:

“Like ESPN, many legacy health systems have strong brands, market presence and quality but high fixed costs and prices. Like ESPN, legacy healthcare organizations have been highly successful under a long-standing business model that institutionalized high price cost, and utilization — in the case of healthcare, through volume-based payment and first-dollar insurance coverage.

“As with cable TV, this business model is proving unsustainable in the long term. Government, commercial insurers and employers are pushing back on healthcare costs. As a higher portion of those costs are being passed along to consumers, they too are pushing back.”

“Where streaming video fueled customer revolt in cable TV, options like retail clinics, urgent-care chains, virtual visits and freestanding diagnostic centers have the potential to gain the loyalty of health care consumers with services that better fit their growing expectations for low prices and high convenience.”

“Like ESPN, health-care organizations face an immediate need to reduce costs. Historically, health care organizations’ expenses have increased and decreased roughly in line with the rise and fall of revenue. Now, however, revenue is likely headed for a more substantial decline, driven by the pressure of value-based payment and consumer demand. As a result, hospitals will need to significantly change their cost structures without harming core services.”

“Like ESPN, legacy healthcare organizations have no obvious strategic response. Partnering with innovative companies is one option, with hospitals potentially able to align their scale and broad high-intensity services with innovators’ more focused, usually low-intensity services.”

“Hospitals also could attempt to go head-to-head with healthcare’s nontraditional innovators, developing their own low-price, high-access services. However, the talent, technology and other infrastructure needs to do so are unfamiliar and expensive. And like ESPN, hospitals’ high fixed costs make it very difficult to compete on price with more-focused companies.”

To read the entire essay, please hit this link.


Study associates high ICU use with higher hospital costs

 

A new study in JAMA Internal Medicine says that hospitals with  a higher percentage than normal   of patients cared for in intensive-care units are more likely to have higher costs and perform more invasive procedures with no improvement in patient mortality rates compared with hospitals with less ICU usage.

Drumming up revenue?

To read the JAMA Internal Medicine article, please hit this link.


How hospitals have changed

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Abigail Zuger, M.D., writes in The New York Times:

“Once hospitals were where you found a doctor when you suddenly needed one; now doctors are all over the place, from big-box stores to storefront clinics. Hospitals were where you were headed if you were very sick; now you can heed your insurer’s pleas and choose a cheaper emergency center instead.

“Hospitals were where you stayed when you were too sick to survive at home; now you go home anyway, cobbling together your own nursing services from friends, relatives and drop-in professionals.

“Once hospitals were where you were kept if you were a danger to yourself or others. They still serve this function — although, perhaps, the standards for predicting these dire outcomes have tightened up quite a bit.

“These days, it may be easier to define hospitals by what they are not. They are not places for the sick to get well, not unless healing takes place in the brief interval of time that makes the stay a compensated expense.

“Hospitals are definitely not places for unusual medical conditions to be figured out, not if the patient is well enough to leave.”

To read her whole essay, please hit this link.


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