When patients undergo surgical or other medical procedures, they hope to receive optimal care provided by experienced physicians. They are rarely concerned about proper sterilization of surgical instruments and other medical equipment as it is likely assumed that the health care facility has applied this standard precaution. Unfortunately, however, not every medical center is adequately sterilizing its equipment, yet this is a crucial element of successful medical care.
According to a report by The Center for Public Integrity, a patient who underwent a routine rotator cuff repair surgery at a Texas hospital in 2009 was readmitted weeks later due to an infection from the deadly bacteria known as P. aeruginosa. An investigation conducted by the Centers for Disease Control and Prevention (CDC) and the hospital revealed that the arthroscopic shaver utilized for the surgery contained the deadly bacteria even after the sterilization process.  A more recent incident occurred in March of this year where a routine inspection at an oral surgeon’s office in Tulsa, Oklahoma exposed sterilization issues, including cross-contamination problems. The Department of Health stated, “more than 60 former patients [of the oral surgeon] tested positive for hepatitis and HIV.”
Medical device manufacturers originally sold “single-use” devices because of the demand for disposable equipment. In the late 1970s, hospitals began reusing medical devices intended for or labeled as “single-use” as a cost control measure. The FDA explains that “single-use” devices are to be used once or on one patient during a single procedure whereas reusable medical devices are those that can be reused to treat several patients.
Contaminated reusable medical devises can lead to infections but a method known as “reprocessing” involves meticulous sterilization intended to prevent infections. Reprocessing generally includes the following steps: 1) preliminary decontamination and cleaning in the area of use such as the operating room to inhibit drying of blood and other contaminants on the devises; 2) transfer of the devise to the reprocessing area where careful cleaning occurs and 3) final disinfection or sterilization to allow the devise to be reused. The FDA further explains that problems arise for reprocessing when sterilization instructions by the manufacturer are “unclear, incomplete, difficult to obtain from the manufacturer, or impractical for the clinical environment.”  Manufacturer designs that render proper cleaning difficult in addition to scantily paid sterilization technicians are other sources of concern.
There are some diseases that preclude the reuse of medical devices, specifically Creutzfeldt-Jakob Disease (CJD). CJD is a neurodegenerative disorder that causes rapidly advancing dementia, deteriorating memory, drastic changes in behavior, and coordination and visual issues. It is 100% fatal; patients with CJD usually die within one year of disease symptom onset. CJD results when normal brain proteins are transformed into abnormal and infectious forms known as prions. Infected pituitary hormones, dura mater transplants, cornea grafts, and neurosurgical instruments are some examples of materials that can transmit the disease to patients. Most disinfectant and sterilization procedures do not eliminate the infected prions. Importantly, although fatality normally occurs within one year of symptom onset, the disease has an incubation period of up to 50 years, it is not readily detectable until symptoms occur, and is seemingly capable of transmission to others during the incubation period.
The World Health Organization (WHO) released infection control guidelines for health facilities handling patients with CJD. Essentially, any reusable surgical instruments that come into contact with “high infectivity areas” including the brain, spinal cord, and eye should be disposed of and incinerated. But the difficulty, of course, is knowing who is infected with this infectious fatal disease with the disturbingly long incubation period. Ensuring that hospitals follow proper sterilization is integral, but technician certification is also an important aspect of the overall sterilization scheme. As the director of sterilization at a healthcare facility in New York so accurately stated, “The people who do your nails, they have to take an infection control course before they can apply for a license …Yet the people who deal with lifesaving equipment, they are required to have zero education.” Currently, New Jersey is the only state that makes certification mandatory for sterilization technicians.
As the provision of health care becomes more transparent, patients not only have the ability to choose where to obtain services based on price and reputation of a facility, but they are also, presumably, able to learn about various quality measures. By filtering a search based on location or hospital name, the Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Website enables patients to view quality measures such as readmission, complication, and mortality rates. There, patients are able to examine the facility’s rates in comparison to the national average. Therefore, improper sterilization leading to increased infection rates will likely be exposed to the public, however attenuated, which could cause patients to seek care elsewhere—at least in time, among consumers able to bring choice to the equation (non-emergency, non-insurance dictated) and who have the ability to comprehend the data. But seemingly, more direct measures can be taken to ensure patient safety.
 http://www.publicintegrity.org/2012/02/22/8207/filthy-surgical-instruments-hidden-threat-americas-operating-rooms, http://www.today.com/health/today-investigates-dirty-surgical-instruments-problem-or-1C9382187
Last week, the Jersey Journal reported that a jury recently awarded a former employee of Bayonne Medical Center over $2.1 million in his whistleblower suit against the hospital. The employee, Ceferino Doculan, alleged that the hospital violated New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (CEPA), by terminating his employment as a technician in the hospital’s blood bank because he had complained to hospital personnel that his new supervisor was not qualified to hold that position under New Jersey law.
Although the hospital argued it had terminated Doculan for other reasons, the jury apparently accepted Doculan’s view of the predominant reason for his firing. According to the article, the jury awarded him about $120,000 in compensatory damages (lost wages and pain and suffering) and $2 million in punitive damages. The hospital intends to appeal.
The case offers several lessons regarding whistleblower liability risks for hospitals and other healthcare providers. One broad takeaway is that management of whistleblower risks cannot be disentangled from other compliance matters. So, in addition to the concerns about how to respond to a whistleblower appropriately, Bayonne Hospital had an actual legal problem – the supervisor was not qualified under New Jersey law. CEPA and most other whistleblower laws do not limit protection to complaining employees who are correct about the law; typically, the employee’s report must merely be made in good faith. Yet, intuitively, if the employer has in fact broken the law, the employee may have an easier time establishing her wrongful termination claim, in part because the existence of the legal violation will potentially make the whistleblower more credible in her lawsuit. Thus, vigilance about compliance with the law in the employer’s operations in general – in this case, on a human resources-related matter – is a key component in reducing whistleblower liability risks.
Second, keep in mind that, with rare exception, whistleblower laws protect only reports of illegal conduct or conduct that poses some kind of direct and serious risk to the public. Whistleblower laws do not protect employee reports of violations of employer policies, nonlegal disputes with the employer, or other purely internal matters. But, in highly regulated industries like healthcare, actions that might not otherwise implicate the law often do. For example, in most industries, the law does not require a license, special training, or other credentials to serve as a supervisor; in healthcare, things are different. Compliance personnel in the healthcare context therefore should know that whistleblower liability risks linger in the background of many human resources and other kinds of decisions. Employee complaints and reports regarding such decisions – even those that might seem standard or run-of-the-mill – therefore should be taken seriously and treated like those that obviously involve legal mandates.
Finally, hospitals and other healthcare providers potentially confront multiple whistleblower regimes. High-profile whistleblower litigation in this area often involves federal law, most notably, the False Claims Act (including “qui tam” actions for alleged overbilling of the government). See examples here and here. And the new whistleblower provisions found in the Affordable Care Act are garnering much attention. But, as the CEPA claim in this case suggests, many states provide statutory and common-law whistleblower protections that sweep more broadly, potentially protecting employees who report a wide variety of alleged legal violations. Each of these federal and state regimes has its own set of legal requirements, limitations, and remedies. A working familiarity with these various regimes can enhance compliance and risk management.
For those interested in learning more about federal and state whistleblower regimes, Seton Hall Law School now offers an eight week online course on managing whistleblower risks. The course is designed to introduce human resources and compliance personnel to the laws protecting employees who report alleged misconduct of their employers. If you would like more information, please visit the course website or call 973-642-8482.
Seton Hall Law & NYLPI Release Report Documenting Hundreds of Cases of Coerced Medical Repatriation by U.S. Hospitals
Filed under: Cost Control, Health Law, Hospital Finances
Medical repatriations of undocumented immigrants likely to rise as result of federal funding reductions to safety net hospitals under Affordable Care Act
New York, NY, and Newark, New Jersey, December 17, 2012 –Today, the Center for Social Justice (CSJ) at Seton Hall University School of Law and New York Lawyers for the Public Interest (NYLPI) released a report documenting an alarming number of cases in which U.S. hospitals have forcibly repatriated vulnerable undocumented patients, who are ineligible for public insurance as a result of their immigration status, in an effort to cut costs. This practice is inherently risky and often results in significant deterioration of a patient’s health, or even death. The report asserts that such actions are in violation of basic human rights, in particular the right to due process and the right to life.
According to the report, the U.S. is responsible for this situation by failing to appropriately reform immigration and health care laws and protect those within its borders from human rights abuses. The report argues that medical deportations will likely increase as safety net hospitals, which provide the majority of care to undocumented and un- or underinsured patients, encounter tremendous financial pressure resulting from dramatic funding cutbacks under the Affordable Care Act.
The report cites more than 800 cases of attempted or actual medical deportations across the country in recent years, including: a nineteen-year-old girl who died shortly after being wheeled out of a hospital back entrance typically used for garbage disposal and transferred to Mexico; a car accident victim who died shortly after being left on the tarmac at an airport in Guatemala; and a young man with catastrophic brain injury who remains bed-ridden and suffering from constant seizures after being forcibly deported to his elderly mother’s hilltop home in Guatemala.
According to Lori A. Nessel, a Professor at Seton Hall University School of Law and Director of the School’s Center for Social Justice, “When immigrants are in need of ongoing medical care, they find themselves at the crossroads of two systems that are in dire need of reform—health care and immigration law. Aside from emergency care, hospitals are not reimbursed by the government for providing ongoing treatment for uninsured immigrant patients. Therefore, many hospitals are engaging in de facto deportations of immigrant patients without any governmental oversight or accountability. This type of situation is ripe for abuse.”
“Any efforts at comprehensive immigration reform must take into account the reality that there are millions of immigrants with long-standing ties to this country who are not eligible for health insurance. Because health reform has excluded these immigrants from its reach, they remain uninsured and at a heightened risk of medical deportation,” added Shena Elrington, Director of the Health Justice Program at NYLPI. “Absent legislative or regulatory change, the number of forced or coerced medical repatriations is likely to grow as hospitals face mounting financial pressures and reduced Charity Care and federal contributions.”
Rachel Lopez, an Assistant Clinical Professor with CSJ stated, “The U.S. is bound to protect immigrants’ rights to due process under both international law and the U.S. Constitution. Hospitals are becoming immigration agents and taking matters into their own hands. It is incumbent on the government to stop the disturbing practice of medical deportation and to ensure that all persons within the country are treated with basic dignity.”
More information about this issue can be found at medicalrepatriation.wordpress.com, a NYLPI- and CSJ-run website that monitors news and advocacy developments on the topic of medical deportation.
About New York Lawyers for the Public Interest
New York Lawyers for the Public Interest (NYLPI) advances equality and civil rights, with a focus on health justice, disability rights and environmental justice, through the power of community lawyering and partnerships with the private bar. Through community lawyering, NYLPI puts its legal, policy and community organizing expertise at the service of New York City communities and individuals.
About the Center for Social Justice at Seton Hall University School of Law
The Center for Social Justice (CSJ) is one of the nation’s strongest pro bono and clinical programs, empowering students to gain critical, hands-on experience by providing pro bono legal services for economically disadvantaged residents in the region. The cases on which students work span the range from the local to global. Providing educational equity for urban students, litigating on behalf of the victims of real estate fraud, protecting the human rights of immigrants, and obtaining asylum for those fleeing persecution are just some of the issues that CSJ faculty and students team up to address.
First, late last month the Obama administration announced a joint effort between the federal government and major health insurance companies to fight fraud. According to the New York Times, under the partnership – called the National Fraud Prevention Partnership – the federal government and health insurance companies will share data, trends, and tools to find “upcoders” and other fraudulent billers. As the article indicates, it is a partnership that makes much sense from the federal government’s perspective as the financial strain on the federal healthcare programs grows ever-tighter, and the return-on-invest for the governments’ fraud investigations is somewhere between $7-to-$1 and $15-to-$1 – no matter the actual number, a good investment for Uncle Sam.
Second, just last week, the New York Times reported that Hospital Corporation of America (“HCA”) Healthcare, the major for-profit hospital chain that owns 163 hospitals across the country and a party that has been no stranger to fraud settlements in the past, is under investigation for unnecessary cardiac procedures at its hospitals that sometimes resulted in clear patient harm.
With anti-fraud tools built in to the Affordable Care Act, an increase in funding to fight healthcare fraud throughout the country, and intensified focus, expect the anti-fraud efforts of the federal agencies to not only continue, but intensify. Those providers who offer clearly unnecessary procedures will have very little defense. Indeed, in addition to overbilling the federal-government and private insurance payors, causing the costs of healthcare for us all to increase, these providers are harming patients by subjecting them to more (and often dangerous) care – which sometimes results in life-threatening harm for no reason.
However, with these increased resources, the challenge of differentiating which cases reflect clear, intentional, and fraudulent overtreatment from the investigations that reflect poor or inefficient decision-making by the provider will be formidable. And with the blunt, unforgiving False Claims Act in the back pocket of the federal government’s investigators, providers should take extra caution when trying to decide whether or not to order that extra test or procedure.
John Roberts’ jurisprudential wizardry in NFIB has been compared with the artistic genius of pro wrestlers and rappers. Poor Americans in states newly empowered to resist the ACA’s Medicaid expansion may need even more ingenuity to get themselves insured. Both Kevin Outterson and my colleague John Jacobi have observed the perplexing predicament imposed on the poor in states that keep Medicaid 1.0, and resist Medicaid 2.0. From Jacobi’s post:
The reform provides insurance subsidies through tax credits. The credits are calculated on a sliding scale, according to household level, for people with income up to 400% of FPL [the federal poverty line] — subsidizing more generously someone earning 200% of FPL, for example, than someone earning 350% of FPL. But, under 26 USC 36B(c)(1), credits will not be distributed to those with incomes below 100% of the FPL. Why? Because Congress assumed states would take up the Medicaid expansion, obviating the need for exchange-based subsidies for the very poor. . . .Bottom line: states rejecting Medicaid 2.0 will not only forego about 93% federal funding for the program between 2014 and 2022, but they could also be depriving the poorest of the uninsured from any shot at coverage — potentially affecting millions nation-wide.
Georgia hospitals are already worried about the “unexpected prospect of lower reimbursements without the expanded pool of patients” to be covered by the Medicaid expansion:
Last year, Georgia hospitals lost an estimated $1.5 billion caring for people without insurance. The promise of fewer uninsured is what led the national hospital industry to agree to the health law’s $155 billion in Medicare and Medicaid cuts over a 10 year period. The Medicaid curveball comes at a time when Georgia hospitals are already in the throes of a massive industry transformation to improve quality and efficiency driven by market forces as well as the new law. Hospitals face lower payments from insurers and pressures to consolidate. One in three Georgia hospitals lose money. All are busy preparing for new standards under the law that, if not met, could mean millions of dollars in penalties.
It’s hard to imagine how hospitals like Grady can continue to act as a safety net in that environment. The article notes that “Georgians already pay for the cost of care provided to people without insurance through higher hospital bills and inflated insurance premiums.” If that trend continues, all the states refusing Medicaid 2.0 may end up doing is shifting the cost of the Medicaid expansion population from national taxpayers to Georgians with insurance. The superwealthy Americans of Marin County and Manhattan ought to send Georgia Governor Nathan Deal a thank you note for keeping Georgians’ problems for Georgians themselves to solve.
Filed under: Catholic Healthcare, Health Policy Community
On March 26-27, Seton Hall Law will be home to a two day Symposium entitled “Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?” Funded through the generosity of a number of contributors, the Symposium is being hosted by Seton Hall Law’s Center for Religiously Affiliated Nonprofit Corporations and its Center for Health & Pharmaceutical Law & Policy, in collaboration with the University of St. Thomas, John A. Ryan Institute for Catholic Social Thought, the Terrence J. Murphy Institute for Catholic Thought, Law and Public Policy and the Veritas Institute.
In an April 2010 article, a reporter for The Boston Globe pondered whether “… for-profit Catholic health care is an oxymoron, or whether profitability and religious mission can be integrated.” This Symposium will examine whether a for-profit structure is a viable alternative for Catholic health care ministry.
The Program will provide a unique forum for dialogue among practitioners, academics and scholars in law, finance, theology and Catholic social teaching to “drill down” to specific legal, financial and operational issues relevant to an objective examination of the relationship of the for-profit legal and financial structure to the Catholic tradition of health care ministry. The Symposium will consist of a sequence of presentations intended to provide an objective overview of the relevant issues with opportunity for audience interaction. The first day, presenters will provide foundational descriptions of changes in law and finance that may occur when converting from a nonprofit legal structure to a for-profit structure. The second day, theologians, canonists and scholars in applied Catholic Social Thought will respond to the legal and financial descriptive presentations. The panelists will frame the conversation, in part, by referencing examples of for-profit models in Catholic health care.
In asking the Symposium’s question, “Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?” the proceedings are designed to engage scholars and practitioners from multiple disciplines to develop an objective framework for analyzing the following questions:
- Is the delivery of health care as a ministry compatible with providing that care through an investor-owned company publicly identified as Catholic?
- If not, why not?
- If yes, are there any management, governance or other structures or processes that may need to be developed to accommodate Catholic health care as a ministry?
The Symposium will not take a position on whether such conversions, in any of its forms, should or should not occur. The Symposium will provide the audience participants with the range of issues that may impact their specific decision.
An Examination of the Key Issues
The legal and financial differences between a non-profit and for-profit corporation will be analyzed from the perspective of Roman Catholic canon law, ethics and Catholic social teaching. The Symposium, focusing on these disciplines, will address questions such as the following:
- What is the relationship between the theological understanding of health care as a ministry and the legal definition of health care as a public good or a private commodity?
- Is Catholic identity in the legal purpose clause of a corporation subject to treatment as a trade or a service mark?
- Is Catholic identity an intangible asset subject to valuation?
- If the charter of the corporation is a contract between the investor and the corporation, what is the shareholder purchasing in terms of Catholic identity?
- If a corporate culture is rooted in values, is it necessary to use religious language to describe values rooted in the Catholic tradition to create a culture consistent with Catholic ministry? Or is it sufficient to describe Catholic identity in terms of objectively discernable proscriptions and prescriptions?
- If professional managers tend to be beyond effective shareholder control and shareholders cannot instruct the board of directors, each of whom cannot be removed without cause, by whom and how is Catholic identity determined or monitored?
- What is the relationship between corporate law and Catholic Social Thought on private property, labor and capital, subsidiary, the distribution of goods and services, and human rights to social goods such as health care?
- In states adopting corporate constituency statutes instructing directors that they either may, or must, take into account the interests of constituencies other than shareholders in exercising their powers, does Catholic identity create new, discreet constituents other than shareholders or those identified in statutes?
- Are new benchmarks necessary to determine Catholic corporate success? If so, do these new benchmarks differ or align with benchmarks for success for any corporation having no religious affiliation?
Filed under: CMS, Physician Compensation, Research
On February 14, 2012, Marilyn Tavenner, the acting Administrator of CMS, told reporters that CMS will “re-examine the timeframe” of the planned conversion to the ICD-10 code standard. Presently, covered entities under HIPAA must fully convert from the ICD-9 coding system to ICD-10 by October 1, 2013.
ICD-10, which stands for the International Classification of Diseases, 10th Revision, is a coding system that providers use for billing purposes and medical researchers also use for statistical analysis. ICD-10 consists of 68,000 codes that will expand upon the 13,000 codes currently being used with ICD-9. The codes, each representing a separate medical service or diagnosis, are used by providers and hospitals when they submit their bills to the insurer. The providers receive payment for their services based upon the codes and the terms of their reimbursement agreement. From these codes, medical researchers are able to evaluate kind and frequency of care; with more than five times as many descriptive codes in the new system, many researchers and evidence based medicine proponents are said to look forward to the far greater depth of analysis the new coding system will offer. The United States already lags behind many countries in ICD-10 implementation and it is said that this compliance extension will widen the gap even further.
Two days after Ms. Tavenner’s announcement, HHS issued a news release stating that “HHS will initiate a process to postpone the date by which certain health care entities have to comply with ICD-10.” Kathleen G. Sebelius, the Secretary of HHS, states in the news release that “we have heard from many in the provider community who have concerns about the administrative burdens they face in the years ahead. We are committing to work with the provider community to reexamine the pace at which HHS and the nation implement these important improvements to our health care system.”
HHS’s news release leaves a lot of questions unanswered. There is no hint at which “certain health care entities” will be granted an extension for compliance and how far off the new deadline will be. HHS claims they will “initiate a process,” which leads many to believe a formal rule making process with public comments will occur. This process could possibly take years to complete, which undoubtedly has caused a giant sigh of relief for providers and institutions across the country that feel ill-prepared for the 2013 deadline. Analysts at Health Care IT News estimate that the deadline could be pushed off a year or two if there is a formal rule-making process.
As the news of Ms. Tavenner’s announcement spread, members of the industry sent out messages cautioning that a complete overhaul of the current plan is unlikely. Ms. Tavenner’s announcement, which happened at the American Medical Association (AMA) Advocacy Conference in Washington, D.C., was fittingly met with applause by AMA members. The AMA has publicly and vehemently opposed the current October 1, 2013 deadline. In a January 17, 2012 letter addressed to Speaker of the House John A. Boehner, the Executive Vice President and CEO of the AMA James L. Madara M.D. pleaded with Speaker Boehner to stop the implementation of ICD-10. In the letter, Dr. Madara argues that the conversion “will create significant burdens on the practice of medicine with no direct benefit to individual patient care, and will compete with other costly transitions associated with quality and health IT reporting programs.” Of course, Dr. Madara is referring to the task of implementing an electronic health records (EHR) system in accordance with CMS’s meaningful use criteria, which entitles a covered entity to receive incentive payments from CMS. Dr. Madara also cites to what he deems to be the competing tasks of dealing with financial penalties for non-participation in Medicare programs, including e-prescribing and the Physician Quality Reporting System.
ICD-10 opponents also cite to the industry’s recent failure to comply with the January 1, 2012 deadline to comply with the transition to Version 5010, a HIPAA electronic transactions upgrade that is necessary to support ICD-10, as evidence that the industry is not ready for the ICD-10 change. In November 2011, CMS gave in to industry pressures to extend the 5010 compliance deadline an additional ninety days. It is undeniable that providers are already subject to tremendous demands under HIPAA and the HITECH Act, on top of Medicare cuts, which are placing significant financial stress and compliance burdens on the industry. It is not surprising that ICD-10 has met a lot of resistance from providers. However, it is no secret that providers and institutions are consistently successful lobbyists for their concerns and beliefs and it remains to be seen how CMS will proceed with the scheduled ICD-10 implementation and what compromises will be made.
Proponents of the ICD-10 system argue that the new coding system will create significant positive changes in the industry because it will help collect important data that will improve the quality of patient care, decrease costs, and collect statistics for medical research. CMS and the Center for Disease Control and Prevention believe that the new codes will create more accurate and exact descriptions of diagnoses and inpatient procedures, which will improve efforts to track care, detect emerging health issues and improve quality. A report from Deloitte, a consulting firm, reported that the increased size and scope of the ICD-10 codes is expected to provide potential benefits in cost and quality measurement, public health, research, and organizational monitoring and performance measurement. Whether a provider supports the change or not, Deloitte echoes the sentiment of many that advance planning is essential. Providers and institutions that have already invested time and money into the ICD-10 implementation are frustrated and upset by CMS’s decision to “reexamine” the current compliance deadline. After all, no provider wants to see its large investment in the ICD-10 system put to waste.
The fact is that no one, perhaps even CMS and HHS, is certain about the date of the future ICD-10 implementation plan so perhaps the smartest choice for providers is to proceed with steps to continue the ICD-10 implementation. Considering the prospect of the financial disincentives attached with non-compliance, it seems like a risky choice for any provider to sit around and wait and see what may happen, especially when the ICD-10 implementation cannot happen overnight. There are providers that started the ICD-10 conversion process back in 2009 when it was first introduced and they still have not completed the task. Unfortunately for providers, the ICD-10 conversion requires time, manpower, training, testing with payers, and significant technological changes that will carry high administrative and financial costs. The Medical Group Management Association (MGMA), which opposes the ICD-10 implementation, estimates that it will cost a ten doctor practice more than $285,000 to convert to ICD-10, with software upgrades accounting for only $15,000 of that amount. According to the MGMA, the bulk amount would be for increases in claims queries, reductions in cash flow, and increased documentation time. What it comes down to is that if a provider wants to be paid for its services, noncompliance with ICD-10 is not an option. The risk for successful claims processing and receiving payments in a timely fashion is present, but adequate preparation and testing well before the compliance deadline is the best way to combat this significant risk.
One thing is certain – until HHS releases a new rule and schedule for ICD-10 implementation, opponents will continue to argue that the costs to adopt the new system are too high, the task too onerous, and the rewards too speculative to justify such an undertaking. Unless the industry comes together to find a solution for an easy transition, this could be a bumpy road until the ICD-10 transition is complete.
[Ed. Note: We are pleased to welcome Andy Braver, Esq. back to Health Reform Watch. Andy is a health care attorney who recently completed an LL.M in Health Law at Seton Hall Law. Prior to entering the LL.M. program, Andy spent five years as a healthcare provider, running a state of the art medical diagnostic imaging center. During that time, he dealt with many important health law issues faces by providers today, including Fraud and Abuse, Medicare and Medicaid licensing and reimbursement, state and private accreditation organizations, private payers, electronic health records, and HIPAA and other privacy issues, to name just a few.]
Medicare’s fee for service payment system has many problems that need fixing. While recent studies have predicted that Accountable Care Organizations (ACOs) may very well achieve better care and lower costs, any savings generated as a result of these new groups of providers will be just a drop in the bucket solution to a vast problem.
Medicare was projected to spend over $500 billion on patient care in 2010. Notwithstanding the fact that the White House Office of Management and Budget believes $36 billion of the Medicare and Medicare Advantage payments made in 2009 were improper.
The problem is, there is no distinction made for the provision of quality medical care. Conversely, there is no check in the system to make sure that the care provided is inadequate. If you provide the service, you get paid.
I realize that in many areas of medicine, it is difficult or even impossible to create a system to accurately and impartially judge the adequacy of care provided. How in fact do you measure the ‘quality’ of healthcare? Do you look at the structure of an entity, its organization and ability to provide what is generally regarded as good care? Or do you look at the actual process or provision care, measuring relative malpractice claims among other objective factors? Many believe that better outcomes suggest better care. While I do not believe that outcome or evidence based medicine is the answer to every problem, it certainly can be a solution to some of these challenges.
There are differences in the Medicare program based on geography, and local coverage determinations and reimbursement rates, whether using the PPS or RVU systems (Part A & B), vary greatly across the country. That part of the system makes sense by taking into account cost of living, cost of employment, property costs, and local tax rates.
In my mind, however, these processes fail because they do not further take into account advances in technology, or reward investment in the future. For example, Medicare pays the same amount of money for an MRI exam regardless of the type of machine that was used to take the picture, and without a thought given to the type of storage system employed by the medical provider. Imagine a facility with a two decade old system, state licensed and able to take pictures, with a machine equivalent to the first generation digital camera I owned 15 years ago, and printed pictures that are stored in a file room. Then imagine a state of the art facility with an HD camera taking high resolution digital pictures, stored in an electronic file system, in a format that is able to be sent electronically to specialists all around the country (or world), and accessed by the patient quickly and securely on the internet. Are those two pictures worth the same to Medicare? There certainly is increased value to the patient in the ‘new’ system. Better picture quality undoubtedly leads to better diagnostic capability (better medicine), and fewer picture redos over time; long-term storage and record portability is certainly going to lower future treatment costs if the issue is a chronic one. HITECH and the new EHR incentive programs recognize the importance of electronic medical records, but it remains to be seen how those requirements will affect licensing and reimbursement rates. Will there be a license ranking and a tiered payment system based on perceived quality or outcome?
I certainly hope that payments are tiered when advanced technology is used, but not according to self-assessment rankings and quality benchmarks. I would argue that medicine is the one area where any kind of ranking and result (or outcome) based assessment is virtually impossible. People are not cars, and JD Power cannot provide meaningful answers when it comes to medicine; there is no way to objectively determine a specific course of treatment for a particular patient is better at one hospital versus another. No two patients are the same, though it is entirely possible they might both drive the same car. Determining quality in healthcare is exceedingly difficult. Patient bases are different, whether because of socio-economic reasons, or geography. So do you then look to the education of the physician to determine quality? We don’t do the same for lawyers? Or do we? Do you look at healthcare structure (how an entity is organized, its equipment, etc…) to determine quality? Or process (the # of lawsuits against it, for example)? Better outcomes alone do not mean better healthcare, and none of these items taken alone should affect licensing of healthcare providers. In the end, this highlights the fact that designing a system that is fair and without major flaws may never be possible with so much money in the system and with so many parties having opposed interests. But that doesn’t mean we shouldn’t try to fix the expensive and broken (the status quo is unsustainable), it just means that attainable reform could very well mean significantly less unfairness and less major flaws. Because ultimately, in this context, the perfect may be the enemy of the good.
What distinguishes the time bank concept from established volunteer service organizations? Not much, really, since time banks — over 300 total in existence within 23 countries– allow individuals to join and indicate what service they would like to provide: ranging from home repairs, child care, visiting the incapacitated, and accompanying patients to the doctor. Anti-poverty activist Edgar Cahn, is often viewed as somewhat of a time bank pioneer; he wrote about the concept early, and has attributed the rise in time banks to the cuts in social programs during the Reagan years. The currency of time banks is, not surprisingly, measured in hours rather than dollars, and members may accumulate credits and use them on those services offered by other time bank members. The barter/exchange system is seemingly win-win, since individuals are able to provide services they feel comfortable providing, and may receive like-time in services they want. With time banks, all work is equally valued– as such, it is said to be deemed non-taxable barter.
While the social benefits and altruistic aspects of time banks can be clearly inferred, the health payoffs may not be as explicitly recognizable but are seemingly also present– perhaps evidenced by just how many time banks are sponsored by healthcare providers. According to the New York Times, “The largest one in New York City is the Visiting Nurse Service of New York Community Connections TimeBank.” Also according to the Times:
Elderplan, a New York health insurance company, also runs a time bank for members. Hospitals such as the Lehigh Valley Health Network, based in Allentown, Pa., run time banks. In Britain, even private medical practices have established time banks. At Rushey Green Group Practice in London, Dr. Richard Byng was convinced that what many of his patients needed wasn’t medication, but friends, social connections and a way to feel useful and valued. Now doctors there routinely prescribe that patients join the Rushey Green Time Bank.
Importantly, time banks often provide simple practical aid that may not be directly medical-related and might not be covered by Medicaid or Medicare: an elderly woman, for instance, who was just released from the hospital but is still too frail to purchase her own groceries or get to a follow-up appointment receives these services. These not directly medical challenges, if not navigated, can easily land such patients right back in the hospital. Importantly, re-hospitalizations are monetarily disincentivized through Medicare and Medicaid. As such, hospitals are seemingly incentivized to facilitate such simple ancillary care which can decrease the recurrence of re-hospitalizations and the lack of reimbursement for repeat hospital stays. Time banks may be one way to offer those solutions for many.
Time banks have been shown to make people feel better and improve members’ health– in particular, they have shown benefit for those with low-incomes and living alone. They are also, at least anecdotally, economically beneficial; but in order for more health care organizations and providers to actually invest in time banking efforts, quantitative data showing proven cuts in the cost of health care resulting from time bank initiatives is seemingly needed. But there is some. A briefing published by the New Economics Foundation (NEF) provided the following:
- Volunteer Caregiving in Richmond, Virginia, where asthmatics are enrolled in a telephone time bank and befriend other asthmatics: the experiment cut the cost of treating those involved by 73 per cent — a total of $80,000 saved in the first year of the asthma program, rising to $137,500 in the second year.
The Times also reports that
A study published by the Transportation Research Board, an organization funded largely by state and federal transportation agencies, found that providing rides to non-emergency medical appointments was cost effective for every condition studied – especially for asthma, pre-natal care, heart disease and diabetes. Regular visits from neighbors can also catch early signs of serious problems. One time bank, for example, asked people who worked with diabetics to pay special attention to early signs of glaucoma.
UK studies provide more evidence. In Britain, the Nu Social Health Organization (NUSHO) found a cost savings of £250,000 within its first year. An economic model by the London School of Economics (LSE) concluded that the cost of each time bank member would average £450 per year, but the economic value of each member’s contributions would exceed £1,300.
The relative lack of published quantitative evidence on the projected savings that time banks will create may have something to do with them not being yet widespread. But with the urgency our nation faces to cut health care costs, there is, seemingly, great potential in time banks. But as the Times writer noted, the evaluations of time banking perhaps need to focus more on monetary value outcomes so that the case for the economic impact of time banks can be more convincingly made. With this kind of information, if available, perhaps a push can be made and the potential of time banks can be effectuated.
On April 29, the Department for Health & Human Services (HHS) announced the launch of the Hospital Inpatient Value-Based Purchasing (Hospital VBP) program under the Medicare Inpatient Prospective Payment System (IPPS). According to HHS, the Hospital HVP program “marks the beginning of an historic change in how Medicare pays health care providers and facilities-for the first time, 3,500 hospitals across the country will be paid for inpatient acute care services based on care quality, not just the quantity of the services they provide.”
As a part of the launch of the Hospital VBP program, authorized under § 3001(a) of the Patient Protection and Accountable Care Act of 2010 (ACA, codified at 42 U.S.C. § 1886(o)), the Centers for Medicare & Medicaid Services published the final rule outlining the measures, performance standards, scoring methodology, and methodology for translating hospitals’ Total Performance Scores into value-based incentive payments.
Why Should I Care?
Value-based purchasing has been called a “fast-approaching, mandatory competition with millions of dollars on the line.” The program is aimed to fix two previously identified problems: (1) preventable medical errors and (2) resulting health care costs. According to CMS:
One in seven Medicare patients will experience some “adverse” event such as a preventable illness or injury while in the hospital. One in three Medicare beneficiaries who leave the hospital today will be back in the hospital within a month. Every year, as many as 98,000 Americans die from errors in hospital care.
In addition to adding to the suffering of patients and their caregivers, these errors lead to significant unnecessary health care spending. Medicare spent an estimated $4.4 billion in 2009 to care for patients who had been harmed in the hospital, and readmissions cost Medicare another $26 billion.
The Hospital VBP program marks a shift in CMS reforms, from “pay-for-reporting” to “pay-for-performance.” In 2003, the Hospital Inpatient Quality Reporting (IQR) Program introduced the core-measures concept. Hospitals that did not successfully report data under the IQR program were penalized by a 2.0 percentage point reduction in their applicable percentage increase. The Hospital VBP program continues using payment incentives and takes the next logical step “in promoting higher quality care for Medicare beneficiaries and transforming Medicare into an active purchaser of quality health care for its beneficiaries.” The Hospital VBP program now directly ties payment amounts to a hospital’s performance score. CMS will begin measuring hospital performance for incentive payments this July.
To fund the Hospital VBP incentive program, CMS will reduce the base operating diagnosis-related group (DRG) payment by 1% in FY 2013 and increase withholding by 0.25% each year until it peaks at 2% in FY 2017. As a result, approximately $850 million will be allocated for the Hospital VBP program in FY 2013. Since overall Medicare spending for inpatient stays at acute care hospitals will remain constant, the new payment scheme will benefit some hospitals and hurt others. As the Hospitalist writes, “[i]t’s also a zero-sum game. That means there will be winners and losers, with the entire cost-neutral program funded by extracting money from the worst performers to financially reward the best.”
How It Works
As summarized by our very own Kate Greenwood:
[§ 3001(a)], which applies to patients discharged on or after October 1, 2012, establishes “value-based purchasing,” meaning that the government will make “value-based incentive payments” to hospitals that provide care to Medicare patients that meets or exceeds certain performance standards to be established by the Secretary of Health and Human Services. Initially the standards must relate to at least the following five conditions: heart attack, heart failure, pneumonia, surgery, and healthcare-associated infections. Eventually (by fiscal year 2014) the standards are to incorporate “efficiency measures,” that is Medicare spending per beneficiary must be a factor.
Beginning in FY 2013 (October 1, 2012), hospitals will receive incentive payments “based on how well they perform on each measure or how much they improve their performance on each measure compared to their performance on the measure during a baseline performance period.” The final rule adopts twelve clinical process of care measures and one patient experience measure, the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. These measures overlap or align with the Hospital Inpatient Quality Reporting (IQR) Program measures.
FY 2013 Objective Measures
Acute Myocardial Infarction
|AMI-7a||Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival|
|AMI-8a||Primary PCI Received Within 90 Minutes of Hospital Arrival|
|PN-3b||Blood Cultures Performed in the ED Prior to Initial Antibiotic Received in Hospital|
|PN-6||Initial Antibiotic Selection for CAP in Immunocompetent Patient|
|SCIP-Inf-1||Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision|
|SCIP-Inf-2||Prophylactic Antibiotic Selection for Surgical Patients|
|SCIP-Inf-3||Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time|
|SCIP-Inf-4||Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose|
Surgical Care Improvement
|SCIP-Card-2||Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker
During the Perioperative Period
|SCIP-VTE-1||Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered|
|SCIP-VTE-2||Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis
Within 24 Hours Prior to Surgery to 24 Hours After Surgery
In FY 2014, CMS will add thirteen more measures.
FY 2014 Objective Measures
Acute Myocardial Infarction
|Mortality-30-AMI||Acute Myocardial Infarction (AMI) 30-day Mortality Rate|
|Mortality-30-HF||Heart Failure (HF) 30-day Mortality Rate|
|Mortality-30-PN||Pneumonia (PN) 30-Day Mortality Rate|
Hospital Acquired Condition Measures
|Foreign Object Retained After Surgery|
|Pressure Ulcer Stages III & IV|
|Falls and Trauma: (Includes: Fracture, Dislocation, Intracranial Injury,
Crushing Injury, Burn, Electric Shock)
|Vascular Catheter-Associated Infections|
|Catheter-Associated Urinary Tract Infection (UTI)|
|Manifestations of Poor Glycemic Control|
AHRQ Patient Safety Indicators (PSIs),
|Complication/patient safety for selected indicators (composite)|
|Mortality for selected medical conditions (composite)|
Hospitals will be scored according to achievement (compared to all other hospitals) and improvement (over each hospital’s baseline) for each applicable measure. Achievement points will be awarded if the hospitals performance during the measurement period (quarterly) exceeds the 50th percentile of hospitals measured during the baseline period (the “threshold”). Improvement points will be awarded to the extent that a hospital’s current performance exceeds baseline period performance.
Baseline scores for improvement measurement have already been set, during the period from July 1, 2009 to June 30, 2010. The FY 2013 performance period for clinical process of care measures will be July 1, 2011 through March 31, 2012. July 1, 2011 will also mark the beginning of a 12-month performance period for the FY 2014 30-day mortality measures.
The Total Performance Score (TPS) is calculated “for each hospital by combining the greater of its achievement or improvement points on each measure to determine a score for each domain, multiplying each domain score by the proposed domain weight and adding the weighted scores together.” In 2013, clinical measures will account for 70% of a hospital’s performance score and the HCAHPS survey for 30%. Over time, scoring methodologies will be “weighted more heavily towards outcome, patient experience, and functional status measures.”
Moving forward, CMS will implement other ACA provisions designed to improve care and reduce costs. For instance, hospitals will begin receiving reduced payments in FY 2015 if they are unable to prevent certain hospital acquired infections or if the hospital fails to “meaningfully use information technology to communicate within the hospital to deliver better, safer, more coordinated care.” Check prior posts to learn more about HITECH’s “Meaningful Use” Rule.
Filed under: Accountable Care Organization, Hospital Finances, Physician Compensation
One of the many $64,000 questions in the accountable care organization (ACO) debate has been who should lead these organizations. In a policy adopted in November 2010, the American Medical Association (AMA) made clear its view that ACOs must be physician-led. The American Hospital Association (AHA) refrained (at least in its public letter to CMS) from asserting its entitlement to the ACO helm, based, for example, on its management experience and pools of capital. Instead, it simply urged CMS to “defer details of the organization, such as leadership and management structure, to each ACO.”
CMS seems to have heeded the AHA’s advice because its recently released proposed rule does not directly take on this normative debate. (See Summary of CMS Proposed Rule on Accountable Care Organizations recently posted by Jordan T. Cohen for an overview of the proposed rule.) While “ACO participants must have at least 75 percent control of the ACO’s governing body” to be eligible for participation in the Shared Savings Program (proposed Section 425.5(d)(8)), the definition of “ACO participant” in the proposed rule includes physicians and hospitals, among others (proposed Section 425.4).
Similarly, the proposed rule simply requires that the “ACO’s operations must be managed by an executive, officer, manager, or general partner whose appointment and removal are under the control of the organization’s governing body and whose leadership team has demonstrated the ability to influence or direct clinical practice to improve efficiency processes and outcomes” (proposed Section 425.5(9)(ii)). The proposed rule does not address who or what would make the best such leader.
The proposed rule, however, clearly preserves a role for physicians to form and lead ACOs. For example, it recognizes that ACOs may be comprised of professionals in group practice arrangements and networks of individual practices, independent of hospitals (proposed Section 425.5(b)).
In addition, “[c]linical management and oversight [of the ACO] must be managed by a full-time senior-level medical director . . . who is a board-certified physician . . .,” and “[a] physician-directed quality assurance and process improvement committee must oversee an ongoing action-oriented quality assurance and improvement program” (proposed Sections 425.5(9)(iii) and (iv)).
The proposed rule also builds in a preference for ACOs comprised of all physicians or physician groups with fewer than 10,000 assigned beneficiaries by proposing to exempt them from the 2 percent net savings threshold adjustment under the one-sided model (proposed Section 425.9(c)(4)(i)). It also proposes to vary confidence intervals, which affect the minimum savings rate, by the size of the ACO in the one-sided model “to improve the opportunity for groups of solo and small practices to participate in the Shared Savings Program” (Preamble to proposed rule at Section II.F.10).
But on a practical level, the specifics of CMS’ proposal may — unintentionally, perhaps — give hospitals the greater chance to take the reins, at least initially. An apparently leaked CMS internal discussion document reflects some level of concern that physicians may have a hard time taking the lead with ACOs.
The proposed rule’s regulatory impact analysis estimates that the average start-up investment and first year operating expenditures for an ACO in the Shared Savings Program will be $1,755,251. In addition, the proposed rule uses a 6-months claims run-out (proposed Section 425.7(a)). Presumably, that means ACOs — assuming they satisfy all program requirements — will not see a dime of shared savings for more than eighteen months. CMS also proposes to withhold 25 percent of any earned shared savings accrued in a given year to ensure repayment of any losses to the Medicare program in subsequent years of the three-year ACO agreement (proposed Section 425.5(d)(6)(iii)).
Even if private physicians can amass the capital to make these upfront investments, there of course is no guarantee they will regain their outlays. A recent study published online by the New England Journal of Medicine, as reported by the American Medical Association, found that participants in CMS’ Physician Group Practice Demonstration did not recoup, at least in the initial years of the demonstration, all of the money they invested to establish ACOs. As the AMA summarized:
Early adopters, for the most part, did not recoup their set-up costs in the first three years of operation. The 10 integrated health systems that were studied spent an average of $1.7 million to take part in the demonstration project. Eight received no shared savings payments in the first year of the project. Six got a payment in the second year, and five received a bonus in the third year.
The Everett Clinic in Washington, for example, reportedly spent approximately $1 million on infrastructure for its ACO but recouped only $129,268 in shared savings during the first four years of the demonstration project.
According to a 2007 report from the National Center for Health Statistics (NCHS), in 2003-04, 80.6 percent of office-based medical practices in the United States consisted of one or two practitioners and 94.8 percent had five or fewer practitioners. The risks associated with forming an ACO are considerable for these smaller practices to absorb, especially when, at best, the ACO will see 75 percent of its portion of any shared savings upwards of eighteen months down the road and could instead be responsible for its share of losses. It is not clear how many small practices are willing and able to assume these risks without some substantial financial or management support. Not surprisingly, the AMA’s statement on the proposed ACO rule specifically identifies “the large capital requirements to fund an ACO” as a significant barrier that must be addressed if physicians in all practice sizes and settings will be able to successfully lead and participate in ACOs.
Another aspect of the proposed rule that may present a particular challenge to independent physicians is proposed Section 425.11(b)’s requirement that “[a]t least 50 percent of an ACO’s primary care physicians must be meaningful [Electronic Health Records (EHR)] users, using certified EHR technology as defined in §495.4, in the [Health Information Technology for Economic and Clinical Health (HITECH)] Act and subsequent Medicare regulations by the start of the second performance year in order to continue participating in the Shared Savings Program.”
Physician practices indisputably have increased their use of EHR systems in recent years. According to the National Ambulatory Medical Care Survey conducted by NCHS (reported here), only 17 percent of physicians in 2008 reported that they had a “basic” EHR system (which is defined as having electronic patient demographic information, patient problem lists, patient medication lists, clinical notes, orders for prescriptions, and laboratory and imaging results). Recent NCHS data (reported here) show that that number has climbed nearly 50 percent to 24.9 percent of office-based physicians.
But basic use of EHRs is not sufficient under the proposed rule, which requires “meaningful use.” Survey data from the Office of the National Coordinator for Health Information Technology, as reported here, show that only 41.1 percent of office-based physicians plan to apply for billions of federal dollars in EHR incentive payments that are available to Medicare and Medicaid providers under the HITECH Act, compared with 80.8 percent of acute care non-federal hospitals. Additionally, as reported here, a recent survey from the Medical Group Management Association (MGMA) found that only 13.6 percent of medical practices that have adopted EHRs and plan to apply for the EHR Meaningful Use incentives currently are able to satisfy the fifteen core criteria necessary to establish that they are meaningful users. Medical practices have a long row to hoe.
But the news is not all bad for physicians. The MGMA survey also found something that suggests this issue is far from resolved on a theoretical or practical level. As reported here, “almost 20 percent of responding independent medical practices that owned EHRs said that they had optimized their uses of EHRs” whereas “[o]nly 8.8 percent of responding hospitals — or [integrated delivery system (IDS)] — owned practices with EHRs said they had optimized their EHR use.”
Almost certainly, it is not just a coincidence that physicians are devoting their energy to becoming meaningful EHR users just as the first EHR Meaningful Use incentive payments are available. If CMS or private foundations develop additional incentive programs to help smaller practices cover the start-up costs associated with forming an ACO, the individual physician could still be in this game. Notably, the AMA’s brief statement on the proposed ACO rule reiterates its recommendation to CMS to increase access to loans and grants for small practices as part of this puzzle. It remains to be seen if any such programs are viable in this fiscal climate.
As promised, future posts will address the normative question of who should lead ACOs.
A recent New York Times article by Gina Kolata highlighted the debate surrounding dialysis as an end-of-life treatment. In reading the article and surfing the internet for counter-arguments, I found two points of interest.
According to the Medicare ESRD Network Organizations Manual, Section 299I of the Social Security Amendments of 1972, Pub. Law 92-603, which “created the National End Stage Renal Disease (ESRD) Program … [and] extended Medicare coverage to individuals with ESRD who require either dialysis or transplantation to maintain life.” In addition, depending on your perspective, Sec. 299I requires/limits the entitlements for/to individuals under the age of 65 who have insurance coverage (remember this age and insurance coverage part — it will be important later in the discussion).
By the time the legislation was adopted in 1972, only 10,000 individuals were being dialyzed in the country and only 20,000 to 25,000 were considered candidates for the procedure. Section 299I was estimated to cost $250 million over the first four years. Now, according to the N.Y. Times, about 400,000 people will undergo dialysis at an estimated cost of $40 billion to $50 billion in this year alone.
Has the entitlement had the unintended consequence of benefiting those over 65?
Kolata argues that this law was intended “to keep young and middle-aged people alive and productive” and has had the unintended consequence of financing dialysis treatment for (primarily elderly) individuals who are too sick to benefit from the treatment. She explains:
When Congress established the entitlement to pay for kidney patients in October 1972… [Congress expected] that most of those patients would be healthy — except for their failed kidneys — and under age 54.
Now… More than a third of the patients are 65 or older, and they account for about 42 percent of the costs. People over 75 make up the fastest-growing group of dialysis patients. And most elderly dialysis patients have other serious diseases like diabetes, heart failure, stroke and even advanced dementia. One-third of them have four or more chronic conditions.
Others, however, would argue that Sec. 299I has not benefited the elderly because they were already entitled to Medicare coverage prior to its enactment. In the “Dialysis from the sharp end of the needle” blog, Bill Peckham writes in response to Kolata’s argument:
No no no. Dialyzors who are “old and have other medical problems” have access to Medicare due to age or disability, “patients who take advantage of the law” are few: only about 25,000 people [out of about 417,000] have access to Medicare as a consequence of Section 299I of the Social Security Amendments of 1972.
Well… According to Kaiser, the source of Peckham’s figures, only 5.8% of Medicare enrollees with ESRD directly benefit from Section 299I. But what about indirect benefits? A comprehensive history of Section 299I can be found in Origins of the Medicare Kidney Disease Entitlement: The Social Security Amendments of 1972, a chapter in Biomedical Politics. Richard A. Rettig writes:
It was presumed that the benefit existed for the elderly, however, because a Medicare benefit could not be established for those under 65 and not be available for the elderly. In fact, very few elderly persons were being dialized at the time and none were receiving transplants. Although the Bureau of Health Insurance had answered several inquiries in the previous year, the nature and extent of coverage for the elderly had not been clarified.
The entitlement for those under the age of 65 extends from the third month after “a course of renal dialysis is initiated” until a year after the person has a renal transplant or ends the course of dialysis. This section could have been read to provide an entitlement to dialysis and renal transplant solely to those under the age of 65, or it could be interpreted to create a near universal entitlement to such treatments.
It seems that President Nixon’s administration read Section 299I according the latter interpretation, because in his statement on the Signing of the Social Security Amendment of 1972 Nixon said, “it extends Medicare coverage for kidney transplants and renal dialysis.”
Aggressive Treatment and End of Life Care
“Clearly, when the program was initiated in the 1970s, the hope and expectation was that this program would return otherwise healthy people back into society so they could work and be productive,” said Dr. Manjula Kurella Tamura, a kidney specialist at Stanford. But, she added, “dialysis at the end of life is a different sort of treatment.”
A second important aspect of the article is its focus on end-of-life care. Even Peckham concedes that, “caring for the elderly is expensive and aggressive treatment may not always be in the interest of the ill. That is a serious discussion our electorate should have but has not been able to have.”
The article highlights new clinical practice guidelines produced by the Renal Physicians Association designed to promote, through shared decision-making and informed consent, “medical management without dialysis.” Particularly concerning is that the provision of dialysis gives patients false hope of survival. According to the NY Times:
Recent studies have found that dialysis does not prolong life for many elderly people with other serious chronic illnesses. One study found that the procedure’s main effect is to increase the chances that such patients will die in the hospital rather than at home.
Yet, a 78-year-old woman is quoted as saying, “I go to dialysis because I want to live. I want dialysis.” Although he doctors explained that dialysis would not necessarily prolong her life, she chose aggressive treatment because, “Some life is better than no life.” This anecdotal story raises a HUGE informed consent problem because it appears that the patient may not have understood the risks and benefits of undergoing dialysis.
Key to the decision to forego, commence, or withdraw dialysis is a properly informed consent. The above guidelines state that certain patients, including those age 75 years and older, those with high comorbidity scores, those with marked functional impairment, or those with severe chronic malnutrition, “should be informed that dialysis may not confer a survival advantage or improve functional status over medical management without dialysis and that dialysis entails significant burdens that may detract from their quality of life.”
The ESRD program has provided life-saving dialysis to many people. However, as with many other tests and treatments performed in the last year of life, it is important to ensure that patients (or their legal decision-makers) are properly informed about the risks and benefits of all options, including palliative care, at the end of life.
Filed under: Economic Analysis of Health, Hospital Finances, Primary Physician Shortage, Productivity, Public Health
Bad weather recently caused massive failures at Heathrow Airport, and brought chaos to air travel in the New York area. Both scenarios suggest an intriguing set of dilemmas in health law and policy. We should be doing much more to prepare for sudden, disruptive events in both the transportation and health sectors. But economic short-termism rules the roost, undercutting the infrastructural investments that a more enlightened America would make.
By 2025 the need for general hospitals to cross-subsidize [i.e., use payments from the well-insured to pay for others' care] will greatly increase, but their ability to do so will be diminished. U.S. hospitals could begin to resemble U.S. airlines: severely cutting costs, eliminating services, and suffering financial instability. . . .
There are numerous similarities between the airline and hospital industries. Both comprise companies that built a complex infrastructure and provided cross-subsidized services. Both were protected by a lack of price transparency and limited competition. In the recently deregulated airline industry, price competition and specialized airlines have emerged that do not have to serve all cities and can focus on the most profitable routes. They need not charge higher prices for these routes to make up for losses incurred elsewhere. Similarly, in the hospital industry, specialty hospitals have emerged that can focus on the most profitable patients and do not have to treat the uninsured or provide money-losing services.
The new specialty hospitals, like the new low-cost carriers, are not saddled with fixed costs from old plant and equipment and do not have to contend with excess capacity that resulted from historical changes in demand.* Both use their inherent cost advantages to compete for more price-sensitive consumers. Legacy airlines cannot raise fares to cover costs because price-sensitive customers can now obtain transparent price information on the Internet and shop for the lowest fares. California is now requiring, and many advocacy organizations are encouraging, hospitals to post their prices on the Internet. Hospital patients, facing increased copayments, deductibles, and other out-of-pocket costs, could begin to behave more like airline passengers. . . .
Because of increased price transparency and specialized competition, legacy airlines could not raise prices sufficiently to cover their costs. Between 1 October 2001 and 31 December 2003, they cut costs by $12.1 billion. They stopped serving some locales and reduced seat capacity. They cut labor costs, services, and amenities. Nevertheless, from 2001 through 2003, the legacy airlines lost $24.3 billion, while the low-cost carriers reported profits of $1.3 billion.
The past few years have witnessed a recovery for many airlines pushed to the brink after 9/11. They filled more seats in each plane (leading to higher “load factors”) and otherwise “cut the fat” (sometimes endangering passengers in the process). Nate Silver observes that filling up planes has some positive effects on prices and the environment, but also sets in motion dynamics that few fully consider until the unexpected strikes:
[L]oad factors have been rising steadily. A decade ago, they were closer to 70 percent, which permitted quite a bit more slack in the event of cancellations. At a 70 percent load factor, there are 2.3 passengers for every available seat, which means, roughly speaking, that one day’s worth of cancellations might take two days to clear through the system. At an 82 percent load factor, on the other hand, there are 4.6 passengers for every seat — roughly twice as many — so one day’s worth of cancellations might require four or five days to get everyone home.
The societal trade-offs here are tough, and airlines need flexibility in determining how far they should go to crowd planes and maximize profits. But in the realm of healthcare, I am much more concerned that a long series of hospital closures will leave the system disastrously overwhelmed in case of an infectious disease outbreak, terrorist attack, or extreme weather event. Like airlines, hospitals have been cutting their surge capacity in order to improve the bottom line. As I noted over four years ago, the asymmetry between projected demand and supply for something as fundamental as ventilators is shocking. A 2006 estimate suggested that only 5,000 spare ventilators would be available to as many as 742,500 people in need in the case of a serious pandemic.
In a 2005 article in the Journal of Contemporary Health Law and Policy, Lance Gable et al. discuss surge capacity as “the number of critical casualties arriving per unit of time that can be managed without compromising the level of care,” and propose ways of increasing “the availability of skilled health professionals to supplement the existing health workforce.” I applaud their approach and attention to the problem (astonishingly, it is the only article in the Westlaw JLR database with “surge capacity” in the title). But I also worry that scarce physical space is going to cause as large a problem at hospitals as personnel shortages. Like its airports, New York’s community hospitals are fraying:
In New York’s many community hospitals, which provide an essential first line of defense in the effort to safeguard public health, the danger of failure is particularly acute. Combine growing costs, decreasing revenues, and high debt loads, and you can’t dig out. Then what happens? “If you’ve accumulated any reserve over time,” an executive at a major local hospital says, “the first thing you do is eat it up. Then you cut costs on staffing and support services, sometimes below levels you know are safe. Then you stop spending money to keep your physical plant and equipment up to date. The condition of the physical plants of many New York City hospitals is staggering. Then, when there’s nothing else you can do, you declare bankruptcy. That’s the life cycle of a New York hospital.”
Given all these strains, hospitals may have to choose between community service and solvency in the wake of a major outbreak of illness. Vickie J. Williams’s article “Fluconomics” presciently examined the bad financial incentives that hospitals would face in case of a serious outbreak of infectious disease:
[W]e currently have no means of ensuring that hospitals acting as isolation, quarantine, and treatment centers in a pandemic will survive the loss of revenue that they will experience in protecting the public’s health. Our hospitals depend on a fragmented financing system that presumes the hospital’s ability to shift costs from low-paying public payors to higher-paying private payors, and from less lucrative cases to more lucrative, often elective, procedures.
Sometimes misery neither loves, nor is especially reassured by, company. Acclaimed author and president of Health Quality Advisors LLC, Michael Millenson, recently published an article over at Health Affairs and The Health Care blog well worth considering. It’s entitled “Why We Still Kill Patients.” And no, that’s not a question.
My recent articles examining the Medicare “errors contributing to death” (at a rate of 180,000 per year according to the Inspector General of the Department of Health and Human Services, Daniel R. Levinson), and my personal experience lately and prior (Thanksgiving & Medical Malpractice), have left me less than sanguine with regard to the doctor’s art as practiced in hospitals. Granted, I wasn’t particularly sanguine before– having long held the view that before we talk about malpractice reform, perhaps we could get hospital employees to at least wash their hands.
But there’s something even more disturbing about Millenson’s article. I’ll let this portion speak for itself– though the benefit analysis of “complications” which follows is, in its own right, equally disturbing. Millenson writes:
Letting Children Die Unnecessarily
There are many examples of the inertia these beliefs produce, but one I cannot get out of my mind concerns sick children. At the 2009 AcademyHealth meeting, Dr. Richard Brilli of Nationwide Children’s Hospital presented data showing how a collaborative backed by some of the most respected organizations in pediatric care had slashed the rate of catheter-associated bloodstream infections (CA-BSIs). CA-BSIs are relatively common, very expensive and can be quite deadly (up to one quarter of victims die). Brilli said his collaborative had tried to recruit 330 pediatric intensive care units to join the initial participants, but after three years, just sixty had accepted. The reasons Brilli said he’s been given indicated to me that few had taken the time to examine the collaborative’s methodology or results. Instead, respondents asserted that their patients were sicker, their hospital was busier than the others in the study, that joining would make them look bad to others, or that the mortality reduction didn’t apply because “I am in a world famous center.”
Now fast-forward to the February, 2010 issue  of Pediatrics, in which the collaborative concluded: “CA-BSIs are a preventable cause of patient harm to critically ill children.” What you can’t see in the peer-reviewed literature is this context: at literally scores of hospitals which declined to participate in the collaborative, hundreds of sick children likely were injured or killed who probably would not have been harmed had the hospital been a collaborative member. Those harmed were tended to by dedicated staff who thought they were doing everything they could to help the kids in their care. They were dead wrong, but even today they may not know it. Certainly, their patients and the public do not.
You can find the rest of the article here.
1. Medicaid Madness: Kaiser Health News details the debate over whether Medicaid recipients could purchase subsidized insurance on the ACA-mandated exchanges
2. On Republican Repeal: Ezra Klein discusses a piece by Peter Suderman of Reason Magazine that outlines the the dilemma that Republicans may face in their efforts to repeal the ACA.
3. Unemployment and Health Care: The Health Care Blog has a nice piece detailing the effect that rising unemployment could have on the the financial viability of hospitals.
4. Berwick Bashing: Donald Berwick will be testifying on Capital Hill this week. Politico spoke with members on the Hill about how they expect to grill Berwick.
5. Loko: Time Magazine has a piece on the FDA’s expected decision on whether to ban the highly alcoholic and caffeinated Four Loko drink that has been implicated in serious illness and death.
Update: Four Loko has decided to voluntarily remove caffeine from their alcoholic beverages.