Tag: The Industry

Health Systems’ Ferocious Challenges


Lately, I’ve had interesting discussions with a thoughtful exec. at a
major Western health system about the ferocious challenges facing
hospitals and health systems. Her organization’s internal conversations
at the moment are centered, in part, on what they should do to become
"reform ready," not only for policy changes that could be in the wings,
but more importantly, for emerging market dynamics that will change the
ways hospitals work. She asked me to catalog some of the trends I think
health system managers will have to deal with, along with five
recommendations for action. Here’s some of what I told her.

Hospitals face dramatic financial stresses on a range of fronts.
Over the last 25 years, health systems’ average total margins have
remained reasonably stable at around 5 percent. As you’d expect, some
organizations have performed better, and others worse. About
one-quarter of all US hospitals, many of them safety nets, have
reported negative margins, and continually teeter toward failure.

Now the pressures are ramping up considerably. Perhaps most
profoundly, the balance has eroded between more profitable
privately-covered patients, and patients with public coverage –-
Medicare, Medicaid and other governmental sources –- that may not cover

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Birthing turf wars

This spring, the American Medical Association decided to support a legislation "that
helps ensure safe deliveries and healthy babies by acknowledging that the safest setting for labor, delivery, and the immediate post-partum period is in the hospital" or accredited birth center.

So the AMA is against ANY women choosing to give birth at home. This appears to be based more on turf management than evidence.

(The issue erupted following the release of the documentary, "The Business of Being Born," by former talk show host Ricki Lake in which she haves her baby at home. The American College of Obstetricians and Gynecologists and AMA publicly criticized Lake, who wrote about the ordeal last month for the Huffington Post.)

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Is Meaningful Health Care (Or Any Other Kind Of) Reform Possible?

Those who wait, ever hopefully, for real health reform might want to take a deep breath and take stock of a few realities.First, think about the fact that when the Democrats retook Congress, they tweaked but did not fundamentally change the lobbying rules that trade money for influence over policy. In fact, most contributors have now adjusted their contributions to favor the current, rather than the past, majority party. As it turns out, Democrats, like Republicans, are only too eager to allow special interests to trump the common interest, so long as the transactions fetch a good price.

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Hospital rankings for positive press or for real?

Hospital & Health Networks magazine announced America’s "100 Most Wired" hospitals for 2008 this week.

You can compare this list to the list of "top hospitals," as recently ranked by U.S. News and World Report.

Hospital & Health Networks created the "most wired" ranking a decade ago. This issue’s cover story says that wired hospitals have happier patients and higher quality measures than their less technologically advanced peers.

"Taken together, the patient satisfaction and quality indicator analyses
provide the strongest evidence in the 10-year history of the Most Wired
Survey and
Benchmarking Study that information technology makes a
difference in both the patient experience and the quality of care."

Mr. HISTalk has a more cynical take on the ranking.

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The Managed Care Roller Coaster

At a health care forum held last year in Las Vegas, then-presidential candidate Hillary Clinton declared that she was intent on “taking money away from people who make out really well right now” in order to fund health care reform. When asked exactly which fat cats she was referring to, Clinton responded, “Well, let’s start with the insurance companies.”

Clinton’s sentiment — that private insurers are making out like bandits while our health care system crumbles — is part of the received wisdom these days, especially among progressives who believe that for-profit health insurance doesn’t add much value to our health care system. But the reality is that in recent years, private insurers haven’t been doing so well financially.

Consider United Health Care (UHC), the nation’s biggest private insurer. Joe Paduda of Managed Care Matters reports that UHC will be cutting 4,000 jobs as part of a restructuring plan that includes eliminating Uniprise, one of its major brands. Since last fall, UHC stock has plummeted from $53 to $22 a share. WellPoint, another huge private insurer, has watched its stock drop from $82 a share in 2007 to $49 a share in June.

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It’s all about the billing

Sean Neill is a South African-born, British-trained anesthesiologist, who recently relocated to Midwestern USA. He blogs regularly at OnMedica about his cross-cultural experience, frequently pointing out oddities of American health care.

Having arrived to see the last of the winter snow, we were amazed at how quickly spring and summer evolved.  Frozen pavements evolved to lush green grass in a matter of weeks.  Work is a 10 minute cycle away and most Americans find it humorous to see you arrive at the hospital in cycling gear.  When asking for directions, the reply is always in terms of driving, even if it is just around the corner.  One quickly learns to cycle on the wrong (right) side of the road as the vehicles are so large you would not want to make a mistake.

Another noticeable difference between health care in the UK and the USA is in terms of billing. A UK patient can go into an NHS hospital for a big procedure and may not be asked for another penny. It is completely different in America, where charges start from the minute you walk in the door. Each hospital specialty has its own large team of dedicated professionals diligently chasing every possible expense. A short visit to a primary health care facility will be followed by a bill within days.

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My Health Direct

The problems of emergency department overcrowding and increased bad debt affect nearly every urban acute care hospital in the country. Patients who seek care at an ED are four times more likely to be covered under Medicaid or twice as likely to be uninsured than their privately insured counterparts. 

In 2006, several hospitals sought a new approach to address some of their most entrenched challenges – overcrowded emergency departments, increasing levels of uncompensated care, and an ongoing imperative to maximize use of its clinical resources. They soon gravitated to a web-based solution called My Health Direct, which was created by start-up Global Health Direct for use in settings with a highly disproportionate share of the Medicaid and uninsured population.

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Overcoming the challenges facing rural health care

Kensington, Minn. is barely a dot on the map. This small grid of concrete, where fewer than 300 people live, is a brief interruption amid the sprawling acres of green corn, soybean and wheat fields that cover Minnesota’s western plains.

Similar tiny villages exist every seven or so miles along the Soo Railroad route. These once busy agricultural hubs are now skeletons of commerce with rapidly aging populations.

About one-fifth of Americans live in rural areas, and providing health care to them is a challenge financially and logistically. Only 10 percent of the nation’s doctors practice in rural areas, and rural residents tend to be poorer and less likely to have employer-based insurance than urban dwellers. The list of challenges is long.

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If California can’t protect consumers, who can?

Crazy as it sounds an Associated Press story from Thursday reported that the California Department of Managed Care "didn’t even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they feared they would be outgunned in court."

Last year, the department announced that it would fine the insurer for improperly rescinding individual heath insurance policies in the midst of the California rescission controversy. Since then, most insurers have announced policy changes in the way they rescind coverage.

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How do we disrupt the cycle of rising health costs?

Last week two new excellent new reports on health spending asked, do
we get what we pay for?Risingcosts_2

The answer is, well, sometimes — particularly when you follow the perverse incentives that lead you on the money trail of waste, ineffectiveness and, worst of all, poor health outcomes.PricewaterhouseCoopers’ Health Research Institute and the Center for Studying Health System Change offer their views on this topic with slightly different lenses.

In You Get What You Pay For, PwC examines 20 health systems and finds that managing costs is the top ranked factor for re-engineering payment systems throughout. Costs are put ahead of quality, efficiency, or meeting demand. While prospective payment (a la DRGs) has been adopted in 20 countries belonging to the OECD, and two-thirds of those countries believe their payment methods will change as they’re not stemming cost increases.

"Better informed patients" are seen as an optimal way to manage demand — not increasing out-of-pocket payments, at least not as a strategy on its own.

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