The Daily Briefing

News for Health Care Executives

Are you considering CMS’ bundled payments program?

August 30, 2011

Since CMS’ Innovation Center announced a major new bundled payment initiative last week, the Health Care Advisory Board, Financial Leadership Council, and Marketing and Planning Leadership Council research teams have been reviewing the details of the four bundled payment models and analyzing the impact for providers across the care continuum. The bundling models contained in this new initiative do not fundamentally break fee-for-service incentives, but rather elevate providers’ performance risk for specific elements of care delivery.

Regardless of the precise model in question, episodic bundled payments will require hospitals to collaborate with physicians, post-acute care providers, and even patients to successful ensure efficient yet high-quality episodes of care. However, by voluntarily accepting this elevated performance risk, hospitals gain license to engage in CMS-sanctioned gainsharing, potentially driving performance improvement in key strategic areas—including quality improvement, cost control, and volume growth.

Building on the initial impressions Chief Research Officer Chas Roades published earlier, the Health Care Advisory Board will be hosting a special webconference to offer more detailed guidance on the bundled payment initiative. During this webconference, Advisory Board experts will review critical details of the four bundled payment models included in the program and explore the strategic implications of the initiative.

Specifically, presenters will address the following questions:

  • How does bundling fit into the broader movement toward accountable care?
  • What are the major differences among CMS’ four new bundling models?
  • Which providers may find these bundling models attractive?
  • What are the financial risks of the four bundling models?
  • What are the strategic benefits of participating in the initiative?
  • What are operational risks of joining the program?
  • What metrics help identify ideal services for bundling?

Presenters will leave time at the end of the webconference to answer any technical or strategic questions about the bundling initiative. Attendees are encouraged to email our research team questions in advance of the webconference, so presenters can address questions during the session in a timely manner. The Q&A portion of the session will include a panel of Advisory Board experts, bringing together deep expertise on the strategic and operational aspects of bundled payment programs. For any providers considering the bundling initiative, this webconference will help highlight both the challenges and benefits of bundling with Medicare. 

Register now
Health Care Advisory Board members may register now open for the “Medicare’s Bundled Payments for Care Improvement Program: Details and Strategic Implications” webconference, scheduled for Wednesday, Aug. 31 at 1 p.m. ET. Daily Briefing readers with questions about the Health Care Advisory Board may email

When patients attack

Should hospitals be liable?

August 30, 2011

The Tennessee Court of Appeals has ruled that a medical center can be held liable for one patient attacking another, raising questions about hospitals' responsibility to protect patients from third parties, American Medical News reports.

A 2010 Joint Commission report found that assaults, rapes, and killings of patients, visitors, and staff at health care facilities have increased in recent years. For example, there have been 256 violent crime reports filed to the group's Sentinel Event Database since 1995. 

The lawsuit was filed against two Tennessee medical facilities in 2010 by a woman claiming that a male patient assaulted her while staying at one of the hospitals. The patient alleged that hospital staff did not adequately monitor her or properly supervise the patient who assaulted her. She also alleged that the hospital accepted patients even though the facility lacked the resources to care for them.

The provider denied any wrongdoing and said the case should be dismissed because the claims do not constitute medical negligence. The hospital also argued that the patient failed to comply with the Tennessee Medical Malpractice Act, which requires plaintiffs to file a pre-suit notice and certificate of merit in medical liability cases.

A trial court initially ruled in favor of the hospital, saying that the case included medical liability claims, such as "monitoring of patients, the admission of patients, and the placement of patients with regard to room assignments and staffing levels." 

However, the appeals court earlier this summer reversed the decision, saying the patient still can sue the hospital for the alleged attack. The lawsuit must move forward on the grounds of "ordinary negligence" or "premise liability," rather than medical negligence, according to the decision.

Is an attack medical negligence?
Experts say a plaintiff can only sue on grounds of medical negligence if it is apparent that the injury occurred as a result of medical treatment or a lack of adequate medical services. However, other court decisions—including a 2007 decision by the Tennessee appeals court—have considered a patient attack as medical negligence. The appeals court in that case—which examined a nursing home patient attack—ruled that the facility's decision to admit and retain a violent patient "was a medical decision."

Hospital executives outline ways to keep patients safe
An emergency physician at the University of Kentucky's Good Samaritan Hospital said facility administrators should be proactive in evaluating a facility's violence risk. He recommended that staff take extra precautions with patients who have a history of alcohol misuse, drug problems, or domestic violence, noting that health workers should be trained in self-defense.

Meanwhile, the network director for protective services at Philadelphia-based Albert Einstein Healthcare Network notes that using technology, such as cameras, panic alarms, and other staff communication tools, can help identify violent situations sooner and lead to faster solutions (Gallegos, American Medical News, 8/29).

Sprains, strains drive RN turnover

One in five injured nurses leave job within two years

August 30, 2011

Newly licensed RNs are more likely to leave a hospital position if they experience sprains or strains on the job, according to a study in the Journal of Advanced Nursing.

According to researchers, the U.S. health system faces a projected shortage of up to 260,000 full-time nurses by 2025. Overall, RN turnover in the United States cost hospitals $728 million in 2006, Advance for Nurses reports. For the study—which was funded by the Robert Wood Johnson Foundation (RWJF)—researchers examined the attitudes and opinions of 1,653 newly licensed RNs from 2006 to 2007 across 34 states and the District of Columbia.

Overall, the researchers found that while most nurses remained in hospital settings, many changed jobs in their first two years. Specifically, the findings showed that of the 40% of nurses who experienced at least one strain or sprain on the job, 19% changed jobs within their first two years. In addition, the study found that RNs who worked part-time or overtime, or had a second job were more likely to remain in their position.

Meanwhile, the study did not find a connection between marital or family status and turnover. The results also did not reveal a connection between workplace attributes, such as nursing residency programs, and turnover.

"Hospital systems need to look carefully at methods that decrease injuries," one of the study's authors said, adding, "Attention to the fundamental concerns of nurses that increase satisfaction and organizational commitment is likely to increase new nurses' intent to stay as well as reduce turnover" (RWJF release, 8/29; Advance for Nurses, 8/27).

No to Medicaid HMOs

Hospitals rebuff Illinois managed care program

August 30, 2011

Leading Illinois hospitals are refusing to join the state's new Medicaid managed care pilot program, arguing that it fosters bureaucracy and does not cut costs.

Under legislation passed in January, Illinois had pledged to move half of its 2.8 million Medicaid beneficiaries into managed care plans by 2015 in an effort save taxpayers nearly $200 million over the next five years and better coordinate care. So far, 40,000 adults in six Illinois counties are being pushed to enroll in two private, HMO-style plans—Aetna Better Health and IlliniCare Health Plan—which restrict hospital and physician networks.

Meanwhile, several prominent health care providers are refusing to join the new program, including Northwestern Memorial Hospital, Rush University Medical Center (RUMC), the University of Chicago Medical Center, Children's Memorial Hospital, and Loyola University Health System. In a statement, Loyola confirmed it would not join the program partly because "our expenses for Medicaid exceed our reimbursement." Meanwhile, the vice president of RUMC said managed care plans impose burdensome administrative requirements and restrict hospital payments.

The director of the Illinois Department of Healthcare and Family Services called providers' resistance "disappointing," noting that it may be in response to rising health care costs and growing skepticism about the state's commitment to mandatory Medicaid managed care. She said, "We have to change our Medicaid delivery system," adding that "care coordination is the future of health care in America." This is the first time Illinois has required managed care for Medicaid beneficiaries, the Chicago Tribune reports.

In an attempt to attract providers, IlliniCare has assured hospitals and physicians that they will be reimbursed within 30 days. The company also is offering temporary 90- or 120- day "letters of agreement" in lieu of long-term contracts for the most hesitant providers (Graham, Tribune, 8/26; AP/Chicago Sun-Times, 8/28). 

Too much paperwork

Hospital groups push back on IRS reporting rule

August 29, 2011

Health care groups last week sent a letter to Internal Revenue Service (IRS) officials urging changes to reporting rules for not-for-profit hospitals, Modern Healthcare reports.

Earlier this year, IRS released proposed criteria for not-for-profit hospitals' community needs assessments under the federal health reform law, which requires tax-exempt hospitals to conduct an assessment every three years beginning in 2012. IRS also extended the reporting deadline and decided that hospitals did not need to complete the new assessments for fiscal year (FY) 2010.

In response to a request for comment on the new rules, the American Hospital Association, the Healthcare Financial Management Association and VHA are asking IRS to make the new reporting rules optional for FY 2011.

In a 23-page letter, the groups outlined concerns that the rules fail to consider hospital size and asked to push back the new 501(r) section of the Schedule H tax form until it can be revised to better reflect hospital diversity. They also said that the agency was increasing the reporting burden with "no clear relationship to any requiring in the law or that was clearly useful to the public" (Selvam, Modern Healthcare, 8/25 [subscription required]; AHA News, 8/24). 

Pursuing PCPs

Providers eye family medicine, internists in lieu of specialists

August 30, 2011

A recent report found that family practice and general internal medicine physicians are the two most-requested physician search assignments, as health care organizations seek to prepare for a new health care delivery system.

For the survey—which was conducted by physician staffing firm Merritt Hawkins—researchers analyzed data for 2,667 permanent physician and advanced professional search assignments conducted by a handful of staffing firms between April 2010 and March 2011. They found that demand for radiologists, cardiologists, and anesthesiologists—which previously topped the most-requested list—have dropped to the 17th, 18th, and 19th most-requested search assignments, respectively.   

According to Merritt Hawkins' senior vice president, efforts to coordinate care through patient-centered medical homes and accountable care organizations have "bolstered the attention to primary care because primary care serves as the foundation for these emerging delivery systems."

Organizations sweeten contracts for new hires
Health care organizations are using a number of creative methods to boost physician recruitment, Healthcare Finance News reports.

For example, some organizations now offer signing bonuses, relocation allowances, and continuing education programs. The report found that 74% of search assignments offered potential recruits production bonuses in addition to their salaries (Bouchard, Healthcare Finance News, 8/24).

NLRB requires hospitals to post employees’ unionization rights

August 30, 2011

The National Labor Relations Board (NLRB) on Thursday issued a final rule that requires all employers, including most hospitals, to post information about employees' right to unionize under the National Labor Relations Act.

Specifically, the rule—which will take effect on Nov. 14—requires employers to post and maintain notices in conspicuous places that explain that employees have the right to collectively bargain, distribute union literature, and cooperate to improve wages and conditions without fear of retaliation.

However, employers are not required to distribute such notices via email, voicemail, or other electronic communications. According to AHA News, failure to comply with the new regulations may be considered an unfair labor practice and could be used as evidence in an unfair labor practice case.

The rule was released after NLRB received more than 6,500 public comments, which they used to modify the draft rule, the New York Times reports.

Labor experts respond to rule
's president, Richard Trumka, lauded the new rule, calling it a "much-needed step." He said, "Just as employers are required to notify their employees of their rights around health and safety, wages, and discrimination on the job, this rule gives clear information to employees about their rights under this fundamental labor law so that workers are better equipped to exercise and enforce them."

According to a George Washington University labor law professor, the new rule may help unions "between a little and a modest amount." He noted that "[w]orkers who are dissatisfied with things at work—and right now there are a lot of them—may look at this notice and say, 'Maybe we should call a union'" (Greenhouse, Times, 8/25; AHA News, 8/26).

Shedding pounds

Researchers devise alternative model for predicting weight loss

August 30, 2011

Researchers at the National Institute of Diabetes and Digestive and Kidney Diseases have created a new model for predicting weight loss that accounts for metabolic deceleration as a person slims down.

The researches built the alternative model—detailed in the Lancet—after analyzing data from controlled feeding studies. The model predicts that if a typical overweight adult reduces their food intake by 10 calories per day, they will lose roughly one-half pound per year, instead of one pound per year. For example, adults who cut 250 calories per day for three years will lose about 25 pounds.

The model also determined that the weight-loss plateau that often occurs after dieting for six to eight months is caused by relaxed habits, not by metabolic adjustment.

According to the authors, the new model casts doubt on some long-held beliefs that small changes—like cutting one soda daily—can cause significant weight loss across time (Hobson, "Health Blog," Wall Street Journal, 8/26).


Cardiovascular and Oncology Service Line Summit

August 30, 2011

Join our clinical experts for a two-day summit exploring methods for meeting new performance mandates and improving care coordination. Register now.

Daily roundup: August 30, 2011

Bite-sized hospital and health industry news

August 30, 2011

  • District of Columbia: Walter Reed Army Medical Center officially closed on Saturday, following the transfer of the facility's 18 remaining patients, CNN reports. The closing—which completes the hospital's merger with Bethesda National Naval Medical Center—was commemorated with a flag-lowering ceremony. The new Walter Reed National Military Medical Center will be jointly run by the Army and Navy (Koran, CNN, 8/27).


  • North Carolina: The University of North Carolina (UNC) Health Care System has rejected WakeMed Health & Hospitals' nearly $875 million unsolicited bid for Raleigh-based Rex Healthcare. According to the chair of UNC's board, the deal as it stands would adversely affect patient care, increase costs, and threaten the financial stability of UNC Health Care and its affiliated medical school (Galloro, Modern Healthcare, 8/26 [subscription required]; deBruyn, Triangle Business Journal, 8/26).


  • South Carolina: The Columbia State this weekend examined the plight of South Carolina's 30 rural hospitals, noting that they are "struggling to find a niche" in a market saturated with larger health care providers. The state's rural hospitals' saw an 8% drop in their occupancy rate from 2007 to 2009, while 10 of the 13 smallest facilities operated at a financial loss across those years. According to the State, low patient volume prevents rural hospitals from purchasing new technology and attracting specialists. State health industry leaders have suggested multiple possible solutions to increase rural hospitals' viability. For example, some experts say several counties could pool resources, or rural facilities could affiliate with large urban hospitals or adopt a critical-care model that focuses on emergency and primary care (Holleman, State, 8/28).


  • Washington: The 9th Circuit Court of Appeals has ruled that Washington state does not have authority to bar a hospital from performing procedures like percutaneous coronary intervention (PCI) through its certificate of need (CON) laws. Washington since 2008 has required hospitals to prove that it will perform at least 300 PCI procedures annually and that a community's demand for the operation exceeds existing supply. According to the ruling, the hospital involved in the case has standing to sue the state over its CON laws under the interstate commerce clause. The hospital had argued that it would hire out-of-state physicians and obtain supplies from other states. The case now will return to district court where the hospital must prove that Washington's CON laws burden interstate commerce (Walker, MedPage Today, 8/26).

Minimally invasive appendix surgery beats traditional operation in new study

A minimally invasive laparoscopic surgery to remove the appendix appears to be more successful and less costly than the traditional operation, according to a study published in the Annals of Surgery.

For the study, Nebraska Medical Center researchers and colleagues analyzed data for about 40,000 appendix removals executed at dozens of U.S. academic medical centers. Approximately 750,000 appendix removals surgeries are performed annually in the United States, the study's lead author said.

The study found that people who had laparoscopy had lower death rates, fewer hospital readmissions, shorter hospital stays, and were in overall better health than patients who had the standard operation.

While the results showed that the two surgeries cost about the same for uncomplicated cases of appendicitis, laparoscopy cost an average of $12,125 and traditional open surgery cost $17,594 when the appendix burst (Joelving, Reuters, 8/22).