The Daily Briefing

News for Health Care Executives

Time and attention: The value patients are willing to pay for

December 06, 2013

When the New York Times and NPR profiled the One Medical primary care practice last week as part of their investigative series on health care value, I can’t say I was surprised. Many of my colleagues go to One Medical, a boutique practice in five cities, and they typically come back raving about their experiences.

It’s not necessarily because the physicians are so exceptional. In fact, because of the One Medical model, patients might not see the same doctor each time they go. But One Medical offers patients an experience that’s more like what we’ve grown to expect from practically every other industry.

And my co-workers, who are paying $200 a year for the privilege of being One Medical patients, see the benefits of the practice as well worth the cost.

Doctors plead guilty to role in $100M insurance fraud scheme

To date, 22 people have admitted to their participation

January 08, 2014

Eleven physicians have admitted to accepting bribes in a $100 million insurance fraud scheme involving a New Jersey laboratory that paid providers to refer patients for tests, the Department of Justice (DOJ) announced on Monday. 

Lab chief: Hundreds of doctors took bribes in Medicare fraud scheme

June 2013: Lab chief admits to role in scheme

In June 2013, Scott Nicoll—the former president of Biodiagnostic Laboratory Services (BLS)—and six others pleaded guilty in federal court to money laundering and conspiracy to violate the Anti-Kickback Statute in the fraud scheme.

The defendants admitted to paying hundreds of doctors to send blood samples to their company and perform unnecessary tests. They said the scheme involved millions of dollars in bribes and netted more than $100 million in reimbursements from Medicare and private insurers through overbilling on blood samples and those tests, prosecutors say.

This week: Doctors admit to accepting bribes

On Monday, Joel Fischgrund pleaded guilty to one count of accepting bribes as part of the scheme. Specifically, the Livingston-based doctor said he accepted $1,500 each month under a "sham consulting agreement" to refer blood specimens to BLS and perform unnecessary tests. As part of the agreement, Fischgrund would fill out a short "Consulting Advisory Board Data Sheet" designed to disguise the bribes.

To date, Fischgrund is one of 22 individuals—including 11 doctors—who have pleaded guilty to charges in connection with the scheme, according to a DOJ release.

According to U.S. Attorney Paul Fishman, Fischgrund faces up to five years in federal prison and a $250,000 fine; he will be sentenced in April (Queally, New Jersey Star-Ledger , 1/6; DOJ release, 1/6).


Which hospital workers are most susceptible to superbugs?

Nature of assistants' work increases the likelihood of contamination

January 08, 2014

Nursing assistants' hands are more likely to be contaminated with Clostridium difficile (C. diff) than those of any other health care staffer, according to a new study in Infection Control and Hospital Epidemiology.

For the study, French researchers examined health care workers' hands after they came into contact with patients being treated for C. diff while at a teaching hospital in Paris. The workers followed protocols that included wearing disposable gowns with full-length sleeves and gloves.

Researchers found that about 25% of the workers had C. diff spores on their hands after treating the patients. However, some workers were more likely to have spores on their hands than others:

  • 42% of nursing assistants had spores on their hands;
  • 23% of physicians had spores; and
  • 19% of nurses had spores.

According to researchers, nursing assistants were more likely to become contaminated because they were significantly more likely to engage in in high-risk contact, such as performing digital rectal exams or changing bed linens.

"Because C. difficile spores are so resistant and persistent to disinfection, glove use is not an absolute barrier against the contamination of healthcare workers' hands," says lead author Caroline Landelle, adding that health care workers must follow hand hygiene protocols thoroughly after treating such patients (Mullaney, McKnight's Long-Term Care News , 1/3).


Hospital margins rebound, new AHA data show

Despite financial pressures, hospital finances improve

January 08, 2014

New data from the American Hospital Association (AHA) suggests that hospitals have bounced back from the economic downturn, although they face continued pressures: inpatient procedures continue to transition to outpatient settings, and charity care and bad debt have hit record levels, Modern Healthcare's Beth Kutscher reports.

How not-for-profit hospitals survived the recession

New survey confirms outpatient shift

The numbers from AHA's latest annual Hospital Statistics guide—which contains data from fiscal year 2012—show that the nation's acute-care providers are increasingly delivering services to patients in an outpatient setting and in the ED:
  • Outpatient visits rose nearly 2.9% from 2011 to 2012, reaching almost 675 million visits in 2012. By comparison, year-over-year growth from 2010 to 2011 was just 0.7%.
  • ED visits increased by 2.9% from 2011 to 2012, compared with a 1.7% increase between 2010 and 2011.

At the same time, inpatient revenues have declined. Although inpatient beds per capita have remained unchanged—about 2.6 per 1,000 people—since 2009 and the average length of stay has held steady at 5.4 days, inpatient admissions declined by 1.2% from 2011 to 2012, following a 0.9% decrease from 2010 to 2011 and a 1.1% decrease from 2009 to 2010.

Meanwhile, the survey found that the level of uncompensated care continued to grow. In 2012, hospitals spent 6.1% of total expenses—a record $45.9 billion—on charity care and bad debt.

Hospitals adapt in volatile economic times

Despite pressure on the inpatient side of the business, the nation's hospitals reported $821.3 billion in net revenue in 2012, compared with $755.3 billion the year prior and $730.9 billion in 2010. Caroline Steinberg, AHA's vice president of health trends analysis, believes operating margins improved with the economy.

Meanwhile, hospitals mostly weathered fears that the challenging operating environment would lead many facilities to close their doors. Instead, the total number of hospitals remained fairly consistent year-over-year, and even rose slightly from 4,973 in 2011 to 4,999 in 2012. (In 2008. there were 5,010 hospitals across the United States.)

However, the report notes that financial pressures did encourage hospital consolidation. There were 3,100 facilities that were part of a larger system in 2012, up from 3,007 in 2011 and 2,868 in 2008.

The AHA survey also suggests that hospitals are contributing more to the nation's economy:

  • Acute-care providers employed 5.6 million people in 2012, 1.5% more than in 2011 and 800,000 more workers than 10 years earlier.
  • In mountain states, hospital employees comprise 3.3% of the workforce, while 5.1% of workers in New England work at medical facilities.

"The health care sector continues to grow and hospitals are a big part of that," Steinberg told Modern Healthcare. Hospitals are also trying to reinforce their nursing and technical staff in preparation for changes stemming from meaningful use and the implementation of ICD-10 coding sets.

Industry outlook

As the health care industry undergoes more change related to the Affordable Care Act, Steinberg predicts that the number of hospitals participating in the health insurance exchanges will rise. "We're still not seeing formation of insurance products," she says.

Hospitals worry about cost-sharing in ACA health plans

Steinberg notes that the survey uncovered evidence of steady growth in high-deductible health plans, which threatens to increase hospitals' bad debt if patients cannot afford their share of medical costs. "That will be a significant impact on hospitals," she warns (Kutscher, Modern Healthcare, 1/3 [subscription required]).


Report: The 10 issues that hospital execs are watching in 2014

ECRI: Hospital leaders must weigh impact on outcomes, costs

January 08, 2014

The ECRI Institute has named the 10 clinical developments, tools, and technologies to watch in 2014, examining the "hype versus the evidence" and the impact on outcomes and costs for hospital and health system leaders weighing whether to adopt the new interventions.

For this year's "Hospital C-Suite Watch List," researchers examined new and upcoming developments over the next 12 to 18 months in major clinical service lines, including oncology, cardiovascular, neurosciences, and orthopedics. ECRI Institute also considered cross-cutting developments that could affect patients in multiple disciplines. Additionally, the research firm discussed two health system topics: geriatric emergency services and big data implications of electronic health records (EHRs).

According to the report, the list is not intended to be a compilation of "must-haves," but rather a list of "must-think-carefully-about" technologies and health systems issues. "Our mission is to help decision makers understand the hype versus the evidence and the important issues to consider when deciding whether to be early adopters, middle adopters, or no-adopters," the report states.

ECRI's 2014 C-suite watch list

According to ECRI Institute, hospital and health system leaders should question whether these emerging technology- and health system-related developments improve outcomes and control costs:

1. Computer-assisted sedation systems: The new technology could essentially replace anesthesiologists by automating the sedation of patients undergoing gastrointestinal procedures. However, there are concerns about the system's ability to regulate propofol sedation and deliver supplemental oxygen. Nonetheless, one study found that the system has the potential to save the U.S. health care system about $160 million by 2015 if used for 80% of colonoscopies.

Man vs. machine: Could a new robot replace anesthesiologists?

2. Catheter-based renal denervation: The technology, which is expected to reach the U.S. market by mid-2015, is being used to treat the growing number of patients with treatment-resistant hypertension. While trials have shown the treatment is safe, it is difficult to predict which patients may benefit; one study suggest about 84% of patients see desired results.

3. Emergency departments for elderly patients: In preparation for a growing number of elderly patients, health systems are creating senior-specific EDs in the hopes of reducing readmissions and improving patient satisfaction. However, creating such a department can cost as much as $3.2 million, and questions remain about whether they improve outcomes.

Why geriatric EDs may be the wave of the future

4. Copper surfaces in a hospital room: Many providers are considering investing in copper, which has antimicrobial properties, given the high stakes for reducing health care-associated infections. Although promising, the report cautions that antimicrobial copper is intended to supplement, not replace, standard infection control practices.

5. Wearable powdered exoskeleton rehabilitation for people who are paralyzed: Limited data is available on the effectiveness of the technology, which is intended to reduce morbidity and improve overall survival in certain patients with spinal cord injuries. Insurers are unlikely to offer coverage for the systems until more evidence has accumulated.

More centers using robots to help paralyzed patients walk

6. Magnetic resonance-guidance focused ultrasound for bone-crushing cancer pain: While current treatments for bone-related cancer pain are lacking, the MRgFUS technology is a major capital investment—and clinical evidence and a favorable reimbursement climate are likely years away.

7. NanoKnife system: The new technology is being promoted by oncology clinics for patients with delicate, inoperable tumors. However, it is a major capital investment, has not been approved specifically for treating cancer, and may pose a serious risk to patients.

8. Real-time MRI adaptive radiation therapy: The "real-time" imaging system's estimated initial capital costs are expected to exceed $8 million, with annual service costs expected to top $500,000.

9. Intelligent pills: To increase patient adherence to medication regimens, hospitals are using "smart" pills that track ingestion and feed data to the patient, caregivers, and prescribers.

A pill that texts the doctor when it hits your stomach

10. Big data: Big data analytics offer a powerful tool that health care systems can use to improve effectiveness and efficiency, and even patient outcomes in certain areas. However, few providers have capitalized on the technology (Lee, Modern Healthcare, 1/4 [subscription required]; ECRI report, January 2014 [registration required]).


RAND: Not all wellness programs are built the same

Chronic disease management programs see the most success

January 08, 2014

Employer wellness programs aimed at helping workers manage chronic diseases produce more cost savings than those for lifestyle management, according to a RAND study published Monday in the journal Health Affairs.

For the study, which was previewed in Reuters last year and was compiled on behalf of the Labor Department, researchers at RAND used data on more than 67,000 people who were eligible to participate in PepsiCo's "Healthy Living" wellness program. The program offers employees and their families both disease management and lifestyle management programs.  

The researchers found that the company saved an average of $30 per person, per month for individuals who participated in any part of the program for seven years. However, when examined separately, they found that disease management programs lowered health costs by $136 per person each month, while lifestyle programs, which focus on weight loss or stress management, produced no net savings.

Specifically, the study estimated that the disease management program saved an average of $3.78 for every dollar spent, compared with 48 cents for the lifestyle program. Combined, the programs saved $1.46 for each dollar spent. The greatest savings were generated by those who participated in both programs. Those individuals saved $160 monthly, with a 66% decrease in hospital admissions.

Soeren Mattke, senior author of the study, said the findings were not surprising because disease management programs are aimed at individuals who likely have higher medical costs because of their medical conditions. He noted, "Cutting one hospital admission saves a lot of money."

Mattke said the findings should not cause companies to devalue lifestyle programs, noting that participants in those programs showed a slight decrease in absenteeism (Mattke et al., Health Affairs, 1/2014; Carrns, New York Times, 1/6).


Hospitals report flood of calls from newly insured Americans

Demand is ticking up at many hospitals, outpatient clinics

January 08, 2014

Health care providers say they are receiving increased phone call volumes as more U.S. residents who gained coverage under the Affordable Care Act (ACA) begin seeking care, Modern Healthcare's Beth Kutscher reports.

HHS reports that about 2.1 million people have signed up for coverage through the federal health insurance exchange, while another 3.9 million have qualified for coverage through the law's Medicaid expansion.

Obama administration: ACA enrollment surpasses 2.1M as of Dec. 28

Barry Arbuckle, president and CEO of MemorialCare Health System in Long Beach, Calif., says his system's physician practices are receiving a "barrage of phone calls" from new patients, as well as current patients, verifying that their new plan is accepted. In response, the health system has expanded the number of outpatient centers, increased staffing at retail clinics and urgent-care centers, and trained staff to field questions about coverage under the ACA.

Similarly, Neighborhood Health Association in Ohio has fielded about 30 calls about coverage under the ACA, while meeting with between 75 and 90 consumers daily. Brad Clark, navigator project director at Neighborhood, says that the company has been conducting follow-up calls with individuals enrolled in exchange plans, adding, "We have not had any feedback [about problems with plans]."

Texas Health Resources is also expecting an increased patient volume under the law, although a spokesperson for the health system said it is too early to assess the ACA's impact.

But not all providers are seeing an influx of activity. Paul Berkeley, administrator and CEO of the New York-based Healthcare Associates in Medicine, says his practice has not yet seen any impact from the ACA. He also voiced concern about the number of patients who will come in with a high-deductible health plan, potentially leaving hospitals on the line to pay fees they themselves cannot afford.

"Every physician in New York has the same problem," he said. "There's nothing you can do. Pray" (Kutscher, Modern Healthcare, 1/6 [subscription required]).


'Sticky balls' can take out cancer

New treatment targets metastatic diseases

January 08, 2014

Researchers at Cornell University have added a powerful new weapon to the arsenal against cancer: "sticky balls" that target migrating tumor cells and may prevent the spread of the disease.

The innovative technique, explained in the Proceedings of the National Academy of Sciences, prevents the spread of tumors by remaining in the bloodstream and killing migrating cancer cells on contact.

What makes a cancer discovery a 'breakthrough'?

The researchers developed a "sticky ball" that combined the cancer-killing protein Trail and other "sticky" proteins to tiny spheres or nanoparticles. When injected into the bloodstream, the sticky spheres latch onto white blood cells. Tests show that the white blood cells collide with tumor cells that were attempting to spread and trigger the death of the cancerous cells.

"The data shows a dramatic effect: it's not a slight change in the number of cancer cells," says lead author Michael King, adding that the "results are quite remarkable actually, in human blood and in mice. After two hours of blood flow, they [the tumor cells] have literally disintegrated."

King believes the treatment could be beneficial prior to surgery or radiotherapy, which often results in tumor cells breaking off and spreading. Or, it could be used in patients with aggressive cancers to prevent them from spreading.

CDC IDs regions with the highest cancer rates

However, he cautions that more safety testing should occur before human trials to ensure that the treatment does not damage the immune system or other body cells. "There's a lot of work to be done," says King, adding, "Various breakthroughs are needed before this could be a benefit to patients" (Gallagher, BBC News, 1/6).


The latest executive transitions

This week's industry transitions

January 08, 2014

Each week, the Daily Briefing highlights executive transitions among the nation's hospitals and health systems. Are you moving to a new institution? Please email transitions@advisory.com to let us know.

  • Justin Carothers named COO at Ochsner St. Anne General Hospital (Raceland, La.)
  • Kim Hodgkinson named CFO at St Vincent's Health System (Jacksonville, Fla.)
  • Tim Allen named CEO at Ochsner St. Anne General Hospital (Raceland, La.)
  • Damond Boatwright named President and CEO at SSM Health Care-Wisconsin (Madison, Wis.)
  • David Butler named CEO Tillamook County General Hospital (Tillamook, Ore.)
  • Bryan Chalmers named CFO at Ivinson Memorial Hospital (Laramie, Wyo.)
  • Linda Deering named President at Sherman Health (Elgin, Ill.)
  • Joe DeSchryver named CEO at Sierra Vista Regional Medical Center (San Luis Obispo, Calif.)
  • Kelly Driscoll named COO at Faith Regional Health Services (Norfolk, Neb.)
  • Cindy Duncan named CEO at Memorial Hospital (Frederick, Okla.)
  • Angela Ellis named CNO at Terre Haute Regional Hospital (Terre Haute, Ind.)
  • Theresa Freyou named CNO at Dauterive Hospital (New Iberia, La.)
  • Michelle Gaskill named President at Advocate Trinity Hospital (Chicago, Ill.)
  • Stephanie Grinage named Chief Development Officer at University of Illinois Hospital & Health Sciences System (Chicago, Ill.)
  • Kent Hansen named President at Northwest Radiology Network (Indianapolis, Ind.)
  • Mike Harbor named CFO at Lincoln Regional Hospital (Fayetteville, Tenn.)
  • Steve Huey named CFO at Central Peninsula General Hospital (Soldotna, Alaska)
  • Leanne Hunstock named COO at Kaiser Moanalua (Honolulu, Hawaii)
  • Suzanne Inglis named CNO at Fisher-Titus Medical Center (Norwalk, Ohio)
  • Lou Inzana named CFO at Maine Medical Center (Portland, Maine)
  • Carolyn Izzo named CEO at Ellwood City Hospital (Ellwood City, Pa.)
  • Terrence Kessler named CEO at Sisters of Charity Health System (Cleveland, Ohio)
  • Jason Little named President and CEO at Baptist Memorial Hospital-Memphis (Memphis, Tenn.)
  • Greg Loomis named President and COO at Mercy Health Partners-Muskegon General Campus (Muskegon, Mich.)
  • Kathy Major named Vice President at University of Colorado Health (Aurora, Colo.)
  • Cynthia McGuire named CEO at Monadnock Community Hospital (Peterborough, N.H.)
  • Jean Meyer named President and CEO at St. John Providence Health System (Warren, Mich.)
  • Jonathan Nalli named CEO at St. Vincent Hospitals and Health Services (Indianapolis, Ind.)
  • Kelli Powers named CFO at Huntsville Hospital (Huntsville, Ala.)
  • Lee Ann Reddy named CNO at Arkansas Children's Hospital (Little Rock, Ark.)
  • Scott Reiner named President and CEO at Adventist Health (Roseville, Calif.)
  • Kenneth Rhee named CMO at Bristol Hospital (Bristol, Conn.)
  • Israel Rocha named CEO at Doctors Hospital at Renaissance (Edinburg, Texas)
  • Assaad Sayah named CMO at Cambridge Health Alliance (Cambridge, Mass.)
  • Michael Tretina named CFO at Bayhealth Medical Center (Dover, Del.)
  • Susan Turley named President at Doctors Hospital at Renaissance (Edinburg, Texas)
  • Glen Washington named CEO at Pleasant Valley Hospital (Point Pleasant, W.V.)
  • Stewart Watson named President and CEO Dean Medical Center/Dean Clinic (Madison, Wis.)
  • Robert Wright named CEO at Newman Regional Health (Emporia, Kan.)


When asked to guess device prices, surgeons get it wrong 80% of the time

Report highlights lack of price transparency

January 08, 2014

Most orthopedic surgeons cannot correctly guess the price of the medical devices that they implant in patients, according to a Health Affairs report highlighting the lack of price transparency in the health industry.

For the report, Kaiser Permanente researchers surveyed 503 physicians at seven academic medical centers, and asked them to estimate the prices for 13 commonly used devices. (A guess was deemed "correct" if it was within 20% of the device's actual price.)

However, orthopedic surgeons correctly guessed the device's price only 21% of the time. Meanwhile, medical residents were even less accurate: They guessed the "correct" price only 17% of the time.

Particpants' price guesses wildly ranged, too—from 1.8% of the actual price to 24.6 times the price.

Lead study author and orthopedic surgeon Kanu Okike notes that doctors are "never told how much things cost. We never see the cost displayed anywhere, and even if you were interested, there's no great way to find it."

Daugherty: What price transparency means for hospitals—and what to do next

The researchers could not release the actual costs, because they signed non-disclosure agreements with the hospitals, but a 2012 report suggests that the device implanted during a knee replacement costs anywhere from $1,797 to $12,093, Okike says. She adds that there is little evidence that one particular device is any better than another.

"Medical device manufacturers strive to keep their prices confidential so that they can sell the same implant at a different price to different health care institutions," which means there is little information available to physicians or patients, the study authors write.

Last year CMS released billing information for the 100 most common inpatient procedures at U.S. hospitals, highlighting major variations in what different facilities charge Medicare for the same procedure.

The move was meant to provide greater transparency about health care prices, but Okike argues that it has not been enough pressure to encourage device manufacturers to change the way they negotiate prices with hospitals (Okike et al., Health Affairs, January 2014; Gold, "Capsules," Kaiser Health News, 1/6).


Daily roundup: Jan. 8, 2013

Bite-sized hospital and health industry news

January 08, 2014

  • Massachusetts: Brigham and Women's Hospital delayed elective procedures and put its ED into "Code Black" after a pipe burst and flooded its sixth floor on Tuesday morning. At about 6 a.m., the pipe burst due to cold weather-related complications. About 30 patients were moved and ambulances were diverted to nearby hospitals. No one was injured, and the hospital continued to accept walk-in patients, officials say (Abel/Gaitan, Boston Globe, 1/7).

'Polar vortex' sends frost-bitten Americans to area hospitals

  • Minnesota: Ridgeview Medical Center on Jan. 1 began managing operations at Sibley Medical Center's (SMC) hospital in Arlington and its four nearby clinics. Ridgeview officials say they will make capital improvements and that SMC's 130 employees will join their staff (Grayson, Minneapolis/St. Paul Business Journal, 1/6).

  • New York: Gov. Andrew Cuomo (D) this week is expected to announce approval of a plan that would allow patients suffering from serious illnesses such as cancer to be treated with hospital-prescribed medical marijuana. The plan would give 20 hospitals across the state permission to prescribe the drug to patients with diseases that meet standards set by the state's health department. New York would be the 21st state to pass similar legislation (Craig/McKinley, New York Times, 1/4).