WEEKLY E-BULLETIN


May 9, 2016

Analysis Says NFP Hospitals Are Most Profitable; Study Deeply Flawed Say Hospital Execs

Not-for-profits dominate the top 10 most profitable hospitals in the nation, occupying seven slots, according to research published in Health Affairs last week.  But in ranking La Crosse, Wisconsin’s 239-bed Gundersen Lutheran Medical Center as the most profitable U.S. hospital, researchers relied on incomplete Medicare cost report data rather than accounting for Gundersen Health System’s full costs as an integrated system, according to Gundersen CEO Scott Rathgaber, M.D., and CFO Dara Bartels. Their analysis found system-wide operating margins over the past few years range between 4 and 5 percent, and earnings, rather than being hoarded, were invested in service expansions and care improvement initiatives.  Click here for the Gunderson rebuttal. Click here for a news summary that includes the top 10 list.  Click here for the Health Affairs abstract.  Click here for Moody’s upbeat analysis on NFP hospital financials.

Medicare ACO, Bundled Payment and Other Payment Model Overlap Already Causing Problems: Analysis

Medicare’s release of multiple Alternative Payment Models are starting to bump into each other, with models like ACOs and bundled payments beginning to overlap and set up potential conflicts for participants.  So says Brandeis health care fellow Robert Mechanic in the latest New England Journal of Medicine.  “…Reforms are reaching a scale at which distortions generated by overlapping models could create real problems.,” he writes.  “Such model overlaps make evaluation of outcomes difficult and create financial distortions that may undermine the models’ goals. An immediate example is the interaction between ACO and bundled-payment approaches.”  Click here for the excellent analysis.

Medical Errors Third Leading Cause of Death in US: Study

Medical errors in health-care facilities are incredibly common and may now be the third-leading cause of death in the United States — claiming 251,000 lives every year, more than respiratory disease, accidents, stroke and Alzheimer’s.  This is according to new research released last week in the BMJ.  Martin Makary, a professor of surgery at the Johns Hopkins University School of Medicine who led the research, said that the category includes everything from bad doctors to more systemic issues such as communication breakdowns when patients are handed off from one department to another.  Click here for the BMJ study.  Click here for the Washington Post story.

  • Seven emergency surgeries account for 80 percent of deaths and costs, according to a new study.  These procedures are mostly related to the organs of the digestive system: removing part of the colon, small-bowel resection, removing the gallbladder, operations related to peptic ulcer disease, removing abdominal adhesions, appendectomy and other operations to open the abdomen.  Click here for the JAMA abstract. Click here for the report.

 CMS Throws Lifeline to CO-OPs; Urges States To Help Small Health Plans

CMS is encouraging states to come up with their own solutions for helping small health plans that have been hit with significant risk adjustment assessments.  The are focused mostly on the CO-OPs in the latest rule. CMS is considering changes to the risk adjustment program, including taking into account drug costs, but they wouldn’t be implemented until 2018. Some state insurance commissioners, including in Maryland and New Mexico, have lobbied the Obama administration to allow states to come up with their own changes in the interim.  Click here for the new rule.  Click here for details from CMS.

  • Humana may join UnitedHealth in pulling out of state exchanges.  Click here.

 Insurance Mega-Mergers Face New DOJ Hurdles

The pending Aetna-Humana and Anthem-Cigna mergers are facing an uphill battle to gain federal regulators’ approval, according to news reports last week.  Standing in their way are Bill Baer, who has just been promoted to the DOJ’s No. 3 position, and Renata Hesse, a follower of Baer’s tough-on-mergers stance who replaces him as head of the antitrust division. Both have recent records of scuttling major deals–Baer deemed the just-scrapped Halliburton-Baker Hughes merger “unfixable,” and Hesse led the DOJ’s opposition to the now-abandoned Comcast-Time Warner merger. Baer has characterized the deals as a “game-changer” in the insurance industry.  Click here for the report.

Congress Wants CMS To Withdraw Part B Drug Demo; AARP Wants Demo

A bipartisan group from the House of Representatives sent a letter to CMS last week calling for the withdrawal of Medicare’s Part B proposal to test new ways of paying for outpatient drugs administered by doctors. This follows a letter sent by Senate Finance Committee Republicans also asking CMS to pull the demo. The project, which CMS aims to commence this summer, will begin by testing a lower reimbursement rate for high cost drugs administered under Part B. Click here for the House letter, and here for the Senate letter. However, the AARP, and several other groups including some of the largest health insurers, sent a letter in support of the demo. Click here for the letter.

290 Health Centers Awarded $260 Million from HHS

HHS last week awarded over $260 million in funding to 290 health centers in 45 states, the District of Columbia, and Puerto Rico for facility renovation, expansion, or construction. Health centers will use this funding to increase their patient capacity and to provide additional comprehensive primary and preventive health services to medically underserved populations. This investment builds on the nearly $150 million awarded to 160 health centers for construction and/or renovation in September 2015. Click here for the list of awarded health centers.

FDA Issues Rule to Regulate E-Cigarettes and Other Tobacco Products

The FDA published a long-awaited final rule asserting its authority to regulate e-cigarettes and other tobacco products on May 5th. The FDA said all tobacco products brought to the market after Feb. 15, 2007, including all e-cigarettes, must submit applications to FDA and show they don’t pose any new health risks beyond products that were on the market at that time. Click here for the rule, and here for the FDA information page on the rule.

New Medicaid Rules Pose Tough Challenges for States, Providers

The newly proposed Medicaid managed care rule puts states in the “driver’s seat” in the effort to overhaul the delivery system for Medicaid beneficiaries, according to a new report from the Commonwealth Fund.  The new rule seeks to modernize managed care plan regulations by establishing network adequacy standards, setting a medical loss ratio of 85 percent for Medicaid managed care plans and creating Medicaid’s first quality rating system, among other provisions. But all these new regulations will pose unique challenges for states.  Click here for the report.  Click here for more details from CMS’ Acting Administrator.

One-Third of Outpatient Antibiotics Prescriptions Inappropriate: CDC

About one-third of outpatient antibiotics prescriptions in 2010 and 2011 may be inappropriate, according to a new study by the Centers for Disease Control. Antibiotic-resistant infections affect 2 million people and are associated with 23,000 deaths annually in the U.S., the CDC said. Reducing inappropriate use is essential to address resistance and to prevent patients from unnecessarily suffering from drug side effects. Click here for the study.

Enrollment Up in Medical School

First-year U.S. medical school enrollment has swelled since 2002, according to a new report from the Association of American Medical Colleges. The organization says there were 16,488 first-year medical school students enrolled in 2002-2003, and now anticipates first-year enrollment of 21,434 students in 2017-2018. Click here for the report.

Major Physician Groups Call for Medical Education Funding Reforms

Two major physicians groups are calling for a realignment of funding for Graduate Medical Education that better responds to the nation’s urgent and growing need for primary care physicians. The American College of Physicians and the Alliance for Academic Internal Medicine issued a list of reforms in a joint policy paper published last week in Annals of Internal Medicine. One of the most glaring problems is the simple lack of residency slots, a number that was capped by Congress at 1996 levels under the Balanced Budget Act. Since then, more than 20 medical schools have opened or expanded class sizes, creating a bottleneck in the physician supply at the residency level.  Click here for the reform proposal.

44 Percent of Americans Know Someone Addicted to Painkillers

44 percent of Americans know someone who has been addicted to prescription painkillers, including one in five who say a family member has been hooked, according to a new poll. The poll found more than 80 percent of respondents said more pain management training for providers, expanded access to addiction treatment and monitoring doctors’ prescribing of painkillers would be effective strategies to address with the epidemic. Click here to read the poll results.

Not Enough Behavioral Therapy Provided To ADHD Kids: CDC

About three-quarters of kids under six years old diagnosed with ADHD were treated with medication but only about half received psychological services — despite the fact guidelines recommend behavioral therapy as the first-line treatment. The CDC looked at health care claims data from at least five million children aged two to five who were covered by Medicaid and about 1 million covered by employer-based insurance. Click here for more from the CDC.

More Mental Health Coverage but Cost Still an Issue

More people with serious psychological distress and behavioral health problems have gained health coverage over the past several years, but large numbers still go without treatment because of high costs, according to the CDC. The study shows that the percentage of uninsured Americans with serious psychological distress dropped from 28.1 percent in 2012 to 19.5 percent in the first months of 2015. While more people have coverage, there was about 24.4 percent of people with serious psychological distress in the first nine months of 2015 who said they needed medical treatment but didn’t get it because of the cost. Click here for the survey.

Nearly 1 in 5 Adults Have No Medical Home

17.3 percent of American adults between ages 18 and 64 didn’t have a usual place for medical care in 2014, according to a new CDC report. However, researchers noted wide variation between the states. Residents were least likely to have access in western and southwestern states – Nevada 26.7, Idaho 26.6 percent, and Texas 25.4 percent of adults didn’t have a usual place for care. Access was best in small northeastern states – Vermont 2.8 percent of adults didn’t have a usual place for care, Delaware 6.8 percent, Massachusetts 7.5 percent. Click here for the CDC report.

FDA Issues Tattoo Warning

The FDA has issued a warning to consumers regarding the risks of getting a tattoo. The agency says that beyond non-sterile needles or unhygienic practices by tattoo artists the inks used may also pose a risk of infection or allergic reaction. While the agency doesn’t regulate tattoo parlors, artists and products – that is done at the state and local level – FDA does often alert parlors of problems with their inks and helps coordinate effective recalls. Click here for more from the FDA.

Joint Commission Reverses Ban on Physician Texting

The Joint Commission, which accredits healthcare organizations, has reversed its long ban on physicians and certain other clinicians using text messaging to place orders related to patient care, citing technology advances that enable more secure communication. But users must comply with a list of requirements, including the use of encryption. Click here for details.

Fewer Mothers Are Uninsured

The number of uninsured mothers fell from 7.5 million in 2013 to 5.9 million in 2014, according to an Urban Institute report. The biggest declines in uninsured were seen in mothers in low- to moderate-income brackets who were targeted by the Affordable Care Act’s Medicaid expansion and subsidized Marketplace coverage.  Click here for details.