The Daily Briefing

News for Health Care Executives

How does your bad debt stack up?

March 30, 2012

Josh GrayAR improvements, wide variance in bad debt across hospitals
The Financial Leadership Council’s most recent survey revealed that since 2008 hospitals have shown strong improvement in AR days across all performance categories. Average and bottom quartile programs, however, still have ample room to improve.

Bad debt levels, meanwhile, continue to vary widely. While hospitals in the high-performing quartile write off only 1.3% of net patient revenue as bad debt, low performers averaged 11.2%.

 

We also found that, overall, hospitals collect 94% of their total net patient revenue in cash. Unsurprisingly, self-pay suffers from the largest shortfalls. Recovery rates for Medicare and Medicaid were 92% and 94%, respectively, largely mirroring past results from our 2008 survey. The relatively low collections from government payers and self-pay patients were balanced by significantly higher rates from private payers.

Learn more
Financial Leadership Council members can download or order 2011 Revenue Cycle Benchmarking Results for more industry benchmarks and performance standards.

Report outlines which cancer types are on the rise

Overall cancer rate falls, but obesity-related cancer rates increase

March 30, 2012

Although the number of new cancer diagnoses in the U.S. declined between 1999 and 2008, the rate of several cancers linked to obesity and sedentary lifestyle increased each year during that period, according to a report in Cancer.

The report found that the rate of cancer declined by 0.6% annually between 2004 and 2008, while the rate of cancer among women declined by 0.5% between 1998 and 2006. Most of the declines in cancer rates were seen among lung, breast, colon, and prostate cancers.

However, the rate of esophageal, kidney, pancreatic, liver, endometrial, and thyroid cancers all increased during that time, which researchers largely attributed to the increase in obesity rates and inactivity. The report found excess weight and sedentary lifestyle can be a risk factor for between 25% and 33% of common cancers in the United States.

Researchers reviewed more than 7,000 studies and found an association between excess weight and several cancers. Although it is unclear what the precise link is, researchers say fat cells may promote production of more insulin or hormones that can stimulate tumor growth. The study also found that obesity can lower the quality of life for cancer survivors and worsen the prognosis for many cancers.

Not all obesity-related cancers increased during the study period, however. Rates of colorectal cancer declined by 2.6% annually, largely because of widespread screening (McKay, Wall Street Journal, 3/28; Lloyd, USA Today, 3/28; Reinberg, HealthDay, 3/28).


Tips for technology etiquette: Medical schools ramp up training

Programs help students balance technology with patient interactions

March 30, 2012

U.S. medical schools and health care organizations are training medical students and physicians to maintain personal connections with patients while using health IT in the exam room.

According to a recent report in Health Affairs, the number of U.S. physicians who reported using electronic health record (EHR) systems has doubled since 2008. The report noted that many more physicians are expected to adopt EHR systems by 2015 to avoid Medicare payment cuts.

Training programs
Medical schools such as Georgetown University are offering training programs to help students learn how to balance technology use with patient interactions. For the Georgetown program, students complete 15-minute office visits with actors playing the role of patients seeking diabetes care. Students must use computerized systems to provide each patient with test results, create a treatment plan, and send an electronic prescription.

Meanwhile, staff members at Stanford University have created guidelines to help students use their school-issued iPads during appointments without diverting their attention away from patients.

Tips for technology etiquette
Experts recommend various strategies to help health care providers use health IT without compromising patient interactions, such as:

  • Facing patients at all times; 
  • Excusing themselves when they check a device screen; 
  • Putting devices away when they are not needed; 
  • Refraining from personal use of devices in front of patients; and 
  • Allowing patients see device screens so they can better understand a health condition (AP/Washington Post, 3/29).


Five quick reactions to the Supreme Court hearings

Our observations on this week's events

March 29, 2012

Chas Roades Chas Roades, Chief Research Officer

Looks like March is going out like a lion. The past three days have seen an extraordinary set of hearings on the constitutionality of the Affordable Care Act in the Supreme Court. The tough questions put by the justices to both sides in the case have created new, and perhaps unexpected uncertainty for the future of the Obama health care reforms. (Whatever your politics, I highly recommend downloading and listening to the proceedings—at a minimum, we got a front-row seat for a terrific civics lesson!)

I thought it might be useful to share our quick observations on the situation as it stands, and how we are thinking about health system strategy given this most recent turn of events. Five key take-aways, in our view:

1. Don’t over-react to the hearings themselves.
We’ll leave the punditry and analysis of the hearings to the professional court-watchers, but surely it would be a mistake to over-interpret the tone and content of the justices’ questions at this point.

One lesson of the past two years is that the political process has a logic all its own—and the Court is no exception. Best to wait until the final ruling to trigger major changes to your strategy.

2. The Supreme Court will not overturn the aging process, or the rise in chronic disease.
As we have modeled out in our Medicare Breakeven Project work, the forces that will most pervasively impact hospital economics over the next ten years are shifts in payer mix and case mix as the Boomers move into Medicare and patients continue to get sicker. In our modeling, the impact of the ACA cuts both ways—some upside from coverage expansion, offset by downside from mandated price cuts.

But the underlying demographics will still dictate our future. In the coming days, we’ll update our modeling to provide scenario-planning capabilities around various potential court rulings (no mandate, no Medicaid expansion, no ACA)—be sure to check our Medicare Breakeven Project website for more information as it becomes available.

One thing is certain: cost-cutting alone will not allow us to sustain our economics over the coming decade—we still face an imperative to transform the care model whether or not Medicare ACOs are a reality.

3. Purchasers of health care will continue to seek to budget their spending.
Medicare, Medicaid, commercial insurers, employers and individuals have all begun to approach health care purchasing with a budget-orientation, looking to limit unnecessary and costly utilization where possible. We are in the early days of a wholesale shift toward “defined-contribution” approaches to health care purchasing, and our care delivery strategies must enable us to provide care for our patients in an affordable way.

If anything, the reversal of the ACA would only hasten the political discussion around even more radical approaches to constraining growth in Medicare and Medicaid spending—a reality we must be prepared for.

4. There is no political constituency or market demand for high-cost, low-quality care.
Regardless of the outcome of the case, the shift toward value-based approaches to health care purchasing will continue. There is broad political agreement that traditional fee-for-service is broken, and both public and private payers (and employers) will continue to seek to link our payment to performance.

Even if the ACA’s value-based purchasing policies go away, the cat is out of the bag—we must continue to invest in strategies that allow us to deliver better, more reliable care in an efficient way. Quality improvement and evidence-driven care delivery will remain essential for success in the future.

5. Right strategy, regardless of the future of reform, must be driven by what’s right for the patient.
The strategies many health systems have been pursuing will continue to serve no matter what happens to the ACA: closer alignment with our physicians, tighter integration across the care continuum, greater use of clinical data and analytics in our work, relentless attention to quality and the use of the best clinical evidence, and a strong focus on delivering value to those who use our services.

These touchstones weren’t created by the ACA, and they will remain key to our success in any future world—truly "no-regrets" strategies.

It’s hard to believe that health care reform is already in its Terrible Two’s! As events continue to unfold, we will remain focused on assisting you in understanding the impact of new policy developments and changes in the marketplace. As ever, our focus will be less on momentary political shifts in direction, than on identifying right answers for you and those you serve over the longer-term. In these fascinating times, we remain truly humbled by the opportunity to stand beside you in that work.

Please don’t hesitate to reach out to me directly if I can be of assistance—you can reach me at roadesc@advisory.com.


CDC: One in 88 U.S. children has autism

Study finds a 23% increase in cases between 2006 and 2008

March 30, 2012

About one in 88 U.S. children has been diagnosed with autism or a related disorder by age eight, according to a CDC study released Thursday.

According to the study, boys are five times more likely to be diagnosed with autism spectrum disorders—one in 54 boys compared with one in 252 girls.

For the study, researchers analyzed school and medical records of 337,093 children who were age eight in 2008. The study found 11.3 cases of autism spectrum disorder per 1,000 children in 2008, a 23% increase over 2006 and 78% increase over 2002. On average, autistic children were diagnosed at age four.

Public health officials said the increase in cases could be related in part to more diagnoses among minority and younger children, according to the Wall Street Journal. The outstanding question is whether there actually was an increase in incidence, not just in diagnoses.

CDC Director Thomas Frieden attributed the higher rates to improved awareness of the disorder and methods of diagnosis. "I think we can say it is possible that the increase is the result of better detection," Frieden said (Carey, New York Times, 3/29; Begley, Reuters, 3/29; Brown, Washington Post, 3/29; Wang, Wall Street Journal, 3/29).


Meet the man behind the individual mandate

Jonathan Gruber advised states, White House on health reform

March 30, 2012

The New York Times this week profiled Massachusetts Institute of Technology economics professor Jonathan Gruber, the man who developed the scientific model used to create the federal health reform law's individual mandate.

Becoming 'Mr. Mandate'
Gruber began building his expertise in health care economics in 1991, when he chose to write his Harvard University dissertation on how mandated employer benefits negatively affected workers' wages. From 1997 to 1998, Gruber conducted similar analyses on a broad range of public policies for former president Clinton's Department of the Treasury.

Gruber in 2001 was contracted by then-Massachusetts Gov. Jane Swift's (R) administration to develop potential health insurance expansion models for the state. Gruber later advised Mitt Romney on how to use an individual mandate to create a universal health care system for Massachusetts.

According to the Times, Gruber also has advised officials in California, Connecticut, Delaware, Kansas, Minnesota, Oregon, Wisconsin, and Wyoming.

The federal health reform law
In addition to his state-level experience, Gruber also served as an adviser to the Congressional Budget Office, which positioned him to advise the White House on health reform. 

According to the Times, President Obama—who made health care a cornerstone of his campaign—wanted to release a reform proposal soon after taking seat, but the preceding executive branch had not conducted health policy technical modeling. Gruber worked from his home in Lexington, Mass., to help the Obama administration mount the basic principles of the proposal using the software model he developed.

Some economists have criticized Gruber's assessments. For example, Paul Starr, a Princeton University sociologist, said Gruber's model did not take into account how hard it would be to implement an individual mandate. "There is this groupthink about how important the mandate is," Starr said. "Most people don't understand or won't acknowledge how weak the enforcement mechanism is." 

However, the Times notes that many experts have difficulty refuting Gruber's work because "he has nearly cornered the market on technical science behind [health care policy] predictions." Current alternative models use Gruber's work as a benchmark, according to Jean Abraham, a health economist at the University of Minnesota.

"He's brought a level of science to an issue that would otherwise be just opinion," said Harvard economist David Cutler. "He's really the only person who has been doing all this careful modeling for so long. He's the only person you can go to for that kind of thing, which is why the White House reached out to him in the first place" (Rampell, Times, 3/28). 


Editor's picks

Our reads for the weekend

March 30, 2012

The Daily Briefing editorial team highlights several studies and articles that got us talking this week.

This week was huge for health care fanatics as the federal health reform law went before the Supreme Court. Now that the oral arguments are over, experts and media pundits across the country are weighing in on what's ahead for the law.

  • The Advisory Board's Chas Roades outlines the five key takeaways from this week's arguments. More.
  • Ezra Klein, of the Washington Post's "Wonkblog," lists the three ways the Supreme Court could rule against the individual mandate. More.
  • Sarah Kliff, also of "Wonkblog," takes a behind-the-scenes look at what will happen at the Supreme Court between now and June, when the decision is expected to be announced. More.
  • The New Yorker's Ryan Lizza examines the potential future of the health law without the mandate. More.
  • The New York Times' Kevin Sack outlines the options for Congress and the White House if the high court strikes down the individual mandate. More.

In other health news this week:

One in three U.S. cancer deaths can be attributed to diet and physical activity habits, according to a report in Cancer. More.

Europeans consume 12.5 liters of pure alcohol per year, more than in any other part of the world, according to report from the World Health Organization and the European Commission. More.

This week in the New York Times, 23-year-old Suleika Jaouad launched “Life, Interrupted,” a weekly column chronicling her experiences dealing with cancer in her 20s. More

Defining death: NPR explains how a new method for obtaining transplant organs is raising ethical questions. More.

A 37-year-old man hugs his doctor after receiving the most extensive face transplant to date. Reuters has the amazing photos of the transformative procedure. More.

Some Susan G. Komen for the Cure races report fundraising, attendance declines following the Planned Parenthood controversy, according to the Wall Street Journal. More.


Were you fooled?

Happy April Fools' Day

March 30, 2012

Some readers received an April Fools' edition of the Daily Briefing today.

Monday through Friday, about 250 days per year, the Daily Briefing does the serious job of covering the nation's health care news, operations, and strategy. This week alone, we carried coverage of the weighty hearings at the Supreme Court, pay-for-performance initiatives, and the latest workforce trends.

But today—well, the Briefing has a somewhat lighter issue for you. We're hoping you were amused, entertained, and (only for a brief moment) fooled by today's jokes.

Here's the list of non-fictional stories we slotted for March 30:

It's our privilege to serve you. If you have ever have feedback on the Briefing, I'd always welcome suggestions on our coverage (or virtual rotten tomatoes on our April Fools' issue) at diamondd@advisory.com.

Dan Diamond, Managing Editor


Quality in a multi-stakeholder health care community

March 30, 2012

Hear from Dr. Kristin Wilson and Marc Lassaux from Quality Health Network on how they have partnered with the Advisory Board to create "the registry-of-registries" to proactively monitor performance and achieve higher quality and lower cost.

Learn more.


Daily roundup: March 30, 2012

Bite-sized hospital and health industry news

March 30, 2012

  • California: The percentage of fully vaccinated kindergarteners in California has decreased from 92.9% in 2004 to 90.7% in 2010. In response to a growing number of state residents exempting their children from required immunizations, public health departments are launching campaigns promoting vaccinations and lawmakers are taking steps to make it more difficult to receive exemptions (Guzik, HealthyCal, 3/28).
  • Illinois: The Association of Safety-Net Hospitals (ASNH) is urging Illinois to seek more federal Medicaid funds before cutting hospital payments. Gov. Pat Quinn (D) has proposed $2.7 billion in Medicaid program cuts, some of which would come from reducing hospital reimbursement rates. ASNH leaders say the state instead could seek an additional $110 million in federal funding and more strictly enforce the program's eligibility requirements (AP/WJBC, 3/28).
  • Massachusetts: Two teams of Boston-area researchers have developed massive online catalogs to help predict whether certain types of cancer cells are vulnerable to specific drugs, according to two studies published in the journal Nature. In the past, efforts to identify medications that could target specific cancers typically used only a few tumor types, or "cell lines." The new catalogs, which are available online at no cost, allow researchers to more accurately represent the genetic diversity of different cancer types (Johnson, "White Coat Notes," Boston Globe, 3/29).
  • Rhode Island: The Rhode Island Quality Institute this week announced that it has received a $600,000 federal grant to help behavioral health care providers access Currentcare, the state's health data exchange. The Center for Integrated Health Solutions awarded the funds to facilitate data sharing between behavioral and general health care providers. The center is a joint program of HHS' Health Resources Services Administration and its Substance Abuse and Mental Health Services Administration (Barr, Modern Healthcare, 3/28 [subscription required]).


Government launches research initiative to harness 'big data'

The Obama administration on Thursday announced a new initiative designed to harness massive amounts of information—including health care data—for research purposes.

Using big data
The "Big Data Research and Development Initiative" aims to uncover innovative ways to use "Big Data" for scientific discovery, biomedical research, and other purposes.

Big Data refers to information that can be gleaned from diverse data sources, such as biological and industrial sensors, the Internet and social networking tools. By using advanced computing tools to analyze Big Data, researchers can identify trends and make scientific discoveries.

Agencies involved
The six government agencies and departments that are committing more than $200 million to the effort are the:

  • Defense Advanced Research Projects Agency
  • Department of Defense
  • Department of Energy
  • National Institutes of Health (NIH); 
  • National Science Foundation (NSF); and 
  • U.S. Geological Survey.

As part of the Big Data initiative, NIH and NSF plan to collaborate on a project to find new technologies and methods for data analysis, data management, and machine learning.

Descriptions of Big Data projects planned by the other government departments are available from a White House release (Lohr, New York Times, 3/29; Smith, National Journal, 3/29 [subscription required]).