The Cost of Safety

At a time where the nation is struggling with a debt crisis driven in large part by the cost of our health care entitlement programs Medicare and Medicaid, the press reports of larger hospitals with fewer beds continue:

A southwestern Indiana hospital expects to start work in the coming months on a $100 million construction project to replace much of its existing facility that has parts dating back more than a century.

The master plan for the project approved by Good Samaritan Hospital's board includes a new 120-bed, five-story inpatient tower.

The completed project will see the hospital's capacity drop by 67 beds to 165, but Good Samaritan President Rob McLin said it will allow for growth in areas such as oncology, orthopedics and cardiology care.

You can never be too safe. Infection control requires single rooms with big screen TVs that have internet and personalized meals. Really it does.

No matter what the cost, it's safety, safety, safety. Entire institutes full of safety experts have sprung up the help hospitals make sure they keep the message coming and to fufill the lofty goal of never having a readmission. Hopsitals pay these institutions hefty sums to make sure they comply with mandated safety classes for all of their employees. In fact, these lessons is so important that they even give their directors millions of dollars of safety-inspired compensation packages to make sure their family members have a lifetime of safe health care after they retire.

And then there's that not-so-little issue of medical equipment expiration dates. Imagine if one of those foam headrests in the operating room were to expire! "You can't use those any more, doctor, they're expired!"

So we throw them away and order more.

In every hospital across our land this happens. Tons and tons and tons of medical waste because of expiration dates for things that, practically, shouldn't have expiration dates. But because we have regulations regarding how long things can sit on shelves in hospitals, we label them with expiration dates. "Order more, please." After all, if the Joint Commission finds expired headrests, hospitals might lose their accreditation. Our medical supply industry, full of middlemen like group purchase organizations that exist to get a better deal on bulk orders (really), is only too happy to comply.

My point here is not to speak badly of the need for safety in hospitals, rather a need to gain some equipoise on the subject. It is true that we've done a pretty good job improving surgical infection rates in America with things like pre-procedure antibiotics, antibacterial drapes, and good technique. But I wonder what's more expensive for our system in the long run, hand washing with soap and water or foam alcohol dispensers that have cannisters that have to be refilled and repurchased time and time again. what about all those plastic gowns we wear because a nasal swab shows traces of the genetic makeup of a single methicillin-resistant bacillus in a patient's nose? Or might all that plastic we purchase ultimately become more expensive to our health care system and environment in the long run?

These are not convenient questions to ask. But, given our concerns about the costs of health care and its affect on our economy, it seems to me that doctors AND patients had better start looking for (and demanding) ways to save money with the little things we do every day that might not be viewed as perfectly safe but rather, perfectly acceptable.

-Wes

They Can Build It, But Will They Come?

There's an interesting bet being played out across America right now, one that I'm really not sure how it will play out. It is that of continued consolidation and construction in the hospital industry.

Just at a time when the economy is in the doldrums, unemployment is at a steady nine percent or more, and people are paying more for their health care than ever before, we see large hospital systems growing and building at an unprecedented pace. Like squirrels hoarding their nuts for the winter in a panic before the icy winds of winter descend, big hospital systems are building, building, building.

Winter, of course, comes in 2014 for the hospital industry. That's when, according to our recently passed health care bill, the Patient Protection and Affordable Care Act, kicks in with its employer mandate. As it stands now, in 2014 all large employers with over 50 employees will have to purchase health insurance for their employees, or pay a $2000-per-employee fine.

It doesn't take many Betz cells to know what will happen when employers who presently pay $8000-$9000 per employee for health care benefits suddenly get the opportunity to pay a $2000-per-employee "fine." Do the math: for an employer with 3000 employees, they pay about $65.5 million for the health care benefits they're currently providing compared to a $6 million dollar "fine." Seems like a nearly 10-fold savings to me! Now THAT, ladies in gentleman, is one heck of a beneficial fine!

But just before 1 January 2014, Americans would have had to pick their OWN untested insurance plan from one of those offered by an insurer or the US government. These plans will carry certain prerequisites for coverage mandated by someone really smart on such matters in Washington DC, so be sure to read the fine print. If history is any guide, the govenment will want to make sure people have some "skin in the game" with their health care costs, so a larger portion of people's personal income will go toward paying for that insurance, whether it's constitutional or not to do so. That, you see, is the Grand Plan.

But will people come at the same pace to our great health care empires of the future?

No one knows.

But there sure are lots of things being done to make sure they do. Like "free" preventative health care screenings or free "Welcome to Medicare" physicals touted by policy makers as the new way to save money in health care.

Seems logical to me. (Not really.)

What policy pundits in the health care space don't get is that people don't want to think about being sick. They don't think much about their health care needs at all. They prefer Nascar. This is just human nature. We pay plastic surgeons to stay young. We pay health food stores huge sums of money to eat healthy foods. We exercise until we're blue in the face to keep our weight off. And for goodness sakes, we wear lots of facial products. (For the record, it is good to exercise and eat correctly to improve longevity, but let's be real: this simply delays the inevitable). My point is that people, given their own druthers, would prefer to spend their money on just about anything else besides health care.

And there will sit our Great Empirical Palaces to health care taking care of those who really have no choice but to succumb to the forces of nature: the Expensive Ones. The hospital systems that are located in affluent areas will get cold hard cash above and beyond the mandated insurance coverages to do so and likely survive. Those that cater to the indigent and less fortunate will either have to fold, or become like Cook County hospital in Chicago: a bureaucratically run institution with two separate boards trying to out-manuever the other in a political cat-and-mouse game of who gets to tell the taxpayers of Illinois what they're on the hook for and a shining example of fiscally-strapped public health care if there ever was one.

Which, of course, is what our large non-profit hospital systems are banking on: when the rubber meets the road, you'll want your health care like you want your facial products: nothing but first class for you.

But will people be able to afford such care?

They might not have a choice since the alternative health care option to this conundrum, the independent physician, is rapidly shrinking away in favor of the Grand Plan.

But the big question behind it all, of course, is this:

In the end, when we have no choice, will we really be able to afford all this product?

-Wes

How to Optimize Your Care While Hospitalized

It was interesting lunchtime conversation. A lone doctor listening to some highly experienced and capable nurses, reflecting on their work:

"If the patient's nice, it's a lot easier to want to go back in that room with them. Their reputation travels at the nurses station. But if they're mean, well, it's not as easy to go back in there, so I might not stop by as often."

"I agree, it's easier to catch flies with honey than vinegar."

Words to live by.

-Wes

How Hospitals View Cardiology Groups

It is no surprise that hospitals are acquiring cardiology and primary care groups groups in droves lately. It seems there is a signficant financial incentive to do so for now, but doctors (and especially cardiologists) should read the tea leaves ahead:

While hospitals are limited to paying fair market value for practices, they can gain an edge over competing hospitals by offering longer employment contract terms or better electronic medical record systems and management services. If hospitals move forward with a transaction, Ms. Kaplan suggests they limit employment contracts to no more than two years if possible and rebase compensation annually based on productivity.

"In healthcare you shouldn't assume anything is permanent," says Ms. Kaplan. She cautions that the revenue increases that are currently available to hospitals through expanding outpatient cardiology services may not last forever, which is why she urges hospitals to limit employment contracts and other agreements to only a few years. Doing so will afford an "out" for the hospital if the service line goes from a money-maker to a money pit.

-Wes

Insurers Excluding Pricey Hospitals

From Crain's Chicago Business:

Every one of the 60 workers at Amitron Corp. snapped up the suburban manufacturer's new health insurance plan this spring, even though they won't be able to use marquee hospitals like Northwestern Memorial, Children's Memorial or University of Chicago Medical Center.

Those pricey, brand-name places were among a handful left out of a new PPO plan from UnitedHealthcare of Illinois aimed at mid-sized businesses weary of spiraling health care costs. Cutting out more-expensive hospitals and doctors can save companies as much as 15% on premiums.

Amitron, a circuit-board maker, still offers UnitedHealthcare's standard PPO, which allows workers to go to any hospital in metro Chicago. “But nobody takes it because it's so expensive,” says Amber McKibben, office manager at the Elk Grove Village-based company.

Now, imagine what would happen if patients could chose from a range of insurers across state lines, too...

-Wes

When Hospitals Divorce Their Doctors

As doctors increasingly become physician-employees, there's no longer a need to share resources with University specialists:

Three University of Virginia cardiologists have been told by the Augusta Health board they will lose their hospital privileges next week, impacting the 2,500 patients the doctors serve.

Augusta Health officials told the doctors in a letter that they won’t be able to treat their patients in emergencies or otherwise at the hospital in Fishersville.

. . .

Crow’s statement said the board is limiting cardiology department participation to doctors “under contract to Augusta Health.”

Augusta Health has four cardiologists on staff, and will soon have a fifth, he said.

Limiting cardiology participation to the hospital’s own doctors will allow Augusta Health “to build a strong and financially viable community-based cardiology program,” Crow said.

Universities have a long history of exporting their clinical expertise in the hopes of capturing more complicated surgical cases from their imbedded specialists. With more and more health systems consolidating (note the three-for-one swap above), the days of collaboration and shared resources between health systems are ending and patients are finding access to doctors more challenging.

-Wes

Addendum 26 Jun 2010 @ 05:45am: It seems procedures, not patients, are what's at stake:

"“Twenty-five hundred [patients] is significant, but is not going to generate that many procedures on a yearly basis,” he said.

How Many Administrators Does It Take to Run A Hospital?

From KevinMD:

... for every one doctor there are 5 more are employed to do administrative tasks.

And, frankly, it’s ridiculous. As Dr. Cutler says, “There is a lot of money spent doing things that in no other industry do we tolerate.”

If you want to find out how many administrators it takes to run a hospital, ask yourself how many work on the weekend.

That number should be just about right.

-Wes

The Loss of Physician-Owned Hospitals Solves Nothing

With the new health care reform bill signed in to law, the fate of physician-owned hospitals was sealed:

The bill Congress passed in March includes a ban on new physician-owned hospitals and freezes those already in business at their present size. Doctors hold a one-third interest in Avera Heart, which opened in 2001, so the bill President Obama signed would prevent that facility from ever growing.

The law change, in effect, leaves expansion of treatment of cardiovascular disease open for Sanford to dominate locally in coming years - if in fact that field of medicine grows. Avera Heart says such growth is not a given, because people are living healthier and have less need for emergency care.

While it is easy to point to the potential conflict of interest inherent to physician-owned medical facilities, it is not so easy to demonstrate that non-physician-owned hospitals don't have similar conflicts with generating profits. After all, continuing to build large $78 million-dollar expansions requires hospitals of any kind to achieve a return on their investment in order to continue operations.

So with the downturn in heart attacks that we are now seeing thanks to public health initiatives like anti-smoking campaigns, how is Sanford going to fund their shiny new facility?

Why prevention, of course!

O'Brien acknowledges the down trend in heart attacks but said other needs are increasing. Sanford performed 20,000 heart screenings the past two years, and about 1,000 led to follow-up such as a stent procedure to clear a passageway for blood flow. In the past, many such problems would show up later as a heart attack.

"We see fewer heart attacks than we did in previous years, but more can be done without resorting to surgery," he said. "Across the country surgery numbers are down, and angioplasty and stent numbers are up." (Editor's note: So much for having the COURAGE to say "no," eh? Let's not forget the conflicts inherent to physicians being employees of hospitals who increasingly tie physician compensation to their productivity)

On the surface, prevention sounds sexy as a cure-all for our current health care cost conundrum. What's not to like with preventing disease before it happens? But to think the hospital administrators have patients best interests at heart by using prevention as their excuse to "screen" for more heart disease, we should ask ourselves if the non-physician hospitals are any more altruistic than partially physician-owned facilities:

"You don't build cath labs and surgical suites if you're going to do preventive medicine."

Amen.

But then, our Congressmen understood all this, right?

-Wes

Using "Treatment Standardization" To Bar Cardiologists From Hospitals

Is the need for cookbook medicine is being used as a ploy to bar cardiologists from practicing at competing hospital systems in Colorado?

Banner Health, the owner of McKee Medical Center in Loveland and the operator of North Colorado Medical Center in Greeley, soon will bar cardiologists who are not on the Banner payroll from practicing at the Greeley hospital. The denial of hospital privileges to cardiologists outside the Phoenix-based Banner system is the latest step in carving up the heart of the Northern Colorado health care market, where two dominant hospital groups — Banner and Poudre Valley Health System — vie for shares.

PVHS chief executive Rulon Stacey said the decision to block non-Banner cardiologists was an unprecedented step in Colorado’s health care industry.

“I personally have never seen, and don’t believe there is anywhere in Colorado, a policy of exclusivity that applies to cardiologists,” Stacey said Tuesday. “We have no plans to restrict access to any of our hospitals, and have never even discussed the topic.”

But Rick Sutton, former chief executive at McKee and now in his second year in the same position at NCMC, said the move was not about competition but about patient interests.

Sutton said the new policy, spelled out in a March 17 memo to his medical staff and taking effect April 19, was designed to standardize treatment procedures and reduce variation. He said Stacey’s criticism has no bearing on the goals of the new policy.

“That may be his experience and his opinion, but that doesn’t mean this is something we can’t do,” Sutton said.

I wonder who will stand up for patients if hospital-directed "standardized treatment procedures" are antiquated or just not right?

-Wes

When Hospitals Mandate Where Patients Are Treated

... it can lead to conspiracy and racketeering charges.

From a letter from the Chairman of the Board of Citizens Medical Center to one of the cardiologists filing suit:

"While it is certainly your right to exercise your medical judgement as you see fit, likewise, it is the responsibility of the Board of Directors at Citizens Medical Center to exercise their judgement as to what is in the interest of the business of Citizens Medical Center and its patients and Medical Staff. It is the Board's firm belief that it is in the best interest of Citizens Medical Center for patients who are capable of being treated at Citizens Medical Center to be treated at Citizens Medical Center and not be transferred elsewhere."

Business interests before doctor-patient interests?

Ouch.

-Wes

Hospital Monopolies Get Pushback

From the AMA Medical News:

A Peoria, Ill., ambulatory surgery center will get its chance to try to prove allegations that the dominant area hospital improperly manipulated an exclusive contract with an employer health plan to edge the surgicenter out of the market. Without addressing the case's merits, the U.S. District Court for the Central District of Illinois on Dec. 30, 2009, allowed Peoria Day Surgery Center's antitrust lawsuit to proceed to trial. The court said it heard enough evidence that OSF Saint Francis Medical Center's actions could harm local competition and, ultimately, health care access. The trial is expected to begin March 8.

It is no secret that monopolies can lead to higher health care costs, but how that occurs is interesting. From a report by the Attorney General of one of the highest health care cost states in the US, Massachusetts:

... our preliminary review has revealed serious system-wide failings in the commercial health care marketplace which, if unaddressed, imperil access to affordable, quality health care. In brief, our investigation has shown:

1. Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.



2. Price variations are not correlated to (1) quality of care, (2) the sickness or complexity of the population being served, (3) the extent to which a provider is responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.



3. Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.



4. Variation in total medical expenses on a per member per month basis is not correlated to the methodology used to pay for health care, with total medical expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis.



5. Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts.



6. The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.

Not to say that adding a single doctor-owned surgery center is going to change downstate health care pricing much since patients remain sheltered from what is actually being paid by insurers for their surgical procedures. But as patients bear a increasingly larger portion of their health care costs, demands for transparency of pricing for elective procedures will mount. Further, as long as competition between centers exists, the wanton nature of health care service price increases by hospitals who monopolize markets has at least a snowball's chance in hell of slowing.

But then again, I'm sure that the Massachusetts AG's finding doesn't pertain to other areas in the United States...

-Wes

h/t: WSJ Health Blog

Clash of the Titans

After Northwestern Memorial Healthcare closed its acquisition of Lake Forest Hospital in the posh northern suburbs of Chicago this past Friday, they have officially leapfrogged the geographic stronghold formerly held exclusively by NorthShore University HealthSystem (disclaimer: my employer, so I tread lightly). What this means for the health care market in the north Chicago suburbs remains to be seen, but there is no denying that competition for patients between the large hospital systems will be keen.

After all, someone has to pay the bills.

So what will the competition look like?

First, patients like all things bright and shiny. So look for plenty of new construction. Nothing like a tasteful, brass-laden lobby with plenty of open air space and windows to bring in their distinguished "consumers."

Second, plenty of advertising. Get the word out: there's a new kid in town. And their competition won't like this so they'll shout, too. As a result, money will flow freely to marketing and ad agencies. Look for these folks to profit handsomely from this deal.

Third, court the doctors. This is likely to be their most challenging endeavor. No doctor wants to travel 45 minutes (one way, in good traffic) from the Chicago Loop (site of the Mother Ship) to the posh suburbs and back again. What a waste of time. Still, specialists will be "encouraged" to make the road trip to provide "unprecedented" service to the suburbs. At first doctors who reside in the area will be tasked with supporting the expansion, but as the need for a backup cavalry of physicians to assist with call schedules takes hold, specialists will feel the strain. As a result, more high-priced doctors will need to be recruited. While this will be a snap due to the hospital's location, those specialists will pine for the conferences and academic niceties of the Mother Ship. Geographic realities will once again come in to play.

Local private doctors eager to sell their practices like new buildings with prestigious names, too. But some might not be as eager to work for a large corporate structure after having the independence of their own practice. Look for plenty of practices to demand a hefty price tag to assure a golden parachute to their more resistant senior practitioners as they consolidate with the Mother Ship. Look for the Mother Ship to be choosey as they try to cut costs.

Fourth, insurers ever-so-happy when hospitals compete for their patients, will find two stubborn health care systems with huge overheads (Lake Forest Hospital's $400 million price tag did not come cheap). They may not see as dramatic price improvements as they had hoped initially. Still, pressure for patients will ultimately prevail so the hospitals will have to "improve efficiencies" (i.e., not rehire staff and run lean and mean) to remain solvent.

Fifth, the "Northwestern Lake Forest Hospital" will have to have a unified electronic medical record system with downtown. This is no minor issue, especially when the Mother Ship has yet to consolidate under "one EMR roof" compared to their more local competitor. But the whole EMR story is increasingly becoming a commodity rather than a market differentiator and the difference between health systems will likely be short-lived.

The real challenge will be for patients, as its quite likely that the two EMR systems used by the health systems competitors will not communicate with each other. What a mess. But this issue alone might become the fault in the EMR-exclusivity tectonic plates that our computer specialists will have to resolve to avoid liablity for health care malfeasance.

All in all, its tough to see where costs will fall to patients in the short term. Maybe, just maybe, we'll see the affects of real competition on health care prices eventually, but just don't expect to see the affects anytime soon.

-Wes

How Hospitals Can Help Invalidate Non-compete Clauses

Non-compete clauses are familiar to the business community as a means to prevent a former employee from using corporate trade secrets to compete against the former employer. But when a doctor is forced to leave a practice and three other doctors in that practice join him, that non-compete clause may also impact a hospital in the same geographic area as the non-compete. Hospitals, not wanting to lose admissions, are more than happy come to the aide of the exonerated:

A noncompetition clause in the four doctors' employment contracts prohibited them from practicing medicine within 25 miles of the clinic if they left it.

All four doctors have continued seeing patients at the clinic because their contracts allow them to work for 90 days after termination or resignation. The clause would have gone into effect in mid-February.

Meanwhile, the four cardiologists filed a preliminary injunction in Marion County Circuit Court against Salem CardioVascular Associates (ed note: their former employers), asking that they be allowed to continue practicing locally.

The possibility of having four well-regarded cardiologists suddenly leave the area prompted grave concerns at Salem Hospital, where the four doctors have admitting privileges. All four said they wished to remain in good standing at Salem Hospital.

Judge Graves granted the plaintiffs' preliminary injunction and prevented Salem CardioVascular Associates from enforcing the noncompetition clause.

Graves said enforcing such a clause could reduce the public's access to care and Salem Hospital's quality of service.

"I do find the public interest in this case is greater than the private interest of the three board of directors of this (cardiovascular) organization," Graves said.

So the moral of the story is, hospitals can be handy at invalidating non-compete clauses if you're a busy specialist who admits often to a local hospital who is also affected by your practice's non-complete clause.

Somehow I think that if these cardiologists had been employees of the hospital these same arguments for invalidating their non-compete ("quality"/patient access) would have never have seen the light of day before the judge.

-Wes

When the Hospitalist Service is Capped

It's the fastest growing "specialty" service in medicine: hospitalist medicine. These are the doctors who limit their practice to the care and management of patients admitted to the hospital. It has been wildly popular because it adds a shift-like work schedule to medical care for physicians while supposedly preserving their personal life. It also moves patients through the hospital faster, shortening length of stays. As one of our more esteemed hospitalist bloggers likes to boast: it's a "WIN-WIN!"

At least until the hospitalist service gets too busy.

It seems now that hospitalists services are limiting the number of patients they admit per day in response to their overwhelming "popularity." It's something akin to capping resident medical student ward services - they stop accepting patients when their census gets too full. I learned this today when a patient I was trying to manage with heart failure was just not turning the corner and needed to be admitted for more agressive inotropic therapy.

Finding an admitting physician becomes an interesting exercise when the patient's primary care doctor no longer admits to the hospital (or is on vacation as was the case today) and the hospitalist service is no longer accepting patients because they're "capped" and you're trapped in a busy clinic.

What becomes the pop-off valve? You guessed it: the Emergency Room. Even though the patient absolutely, positively does not need the Emergency Room.

So much for cost savings.

It appears hospitalist services are increasingly finding themselves overwhelmed with admissions and the promise of a reasonable lifestyle can be assured by either limiting the number of patients admitted to each hospitalist or hiring more of them. But new hires are becoming tougher to justify in this "do more with less" economic time in medicine. As a result, it appears existing hospitalists are quickly finding they've hit the peak speed of their clinical-care gerbil wheels.

In a 1999 National Association of Inpatient Physicians (NAIP) survey, 25% of hospitalists were at risk for burnout, and 13% were in fact burned out. While these burnout rates were significantly lower than those documented in similar surveys of intensivists and emergency medicine physicians at the time, others suggested that his rate could increase as the field matured.

News flash: At least at some hospitals, it looks like we're there.

-Wes

References:
Robert M. Wachter, MD; Lee Goldman, MD, MPH
The Hospitalist Movement 5 Years Later. JAMA. 2002;287:487-494.

Hoff TH, Whitcomb WF, Williams K, Nelson JR, Cheesman RA. Characteristics and work experiences of hospitalists in the United States. Arch Intern Med. 2001 Mar 26;161(6):851-8.

How Hospitals Survive: Making Dust

If they don't make dust, they fade (subscription):

UIC has spent four years drafting plans for a $450-million patient tower as the centerpiece of a $650-million, five-year-long overhaul of its Near West Side campus. But an inability to finance the project has forced longtime CEO John DeNardo to ice those plans for now.

He's settling for a $40-million repair job on the 500-bed hospital, which lost heat two days last month when the campus steam plant gave out.

The capital crunch poses a threat to UIC, where the hospital serves as a training ground for the nation's largest medical school — more than 15% of the state's physicians cut their teeth at the place. Rival university hospitals are pouring money into new buildings, including Rush University Medical Center's $1-billion makeover next door. The wider that gap grows, the harder UIC will have to work to attract talented physicians and researchers — or the well-insured patients it needs to improve its bottom line.

Part of the problem is the patient mix UIC sees, but the other larger part of the problem is the abysmal state of Medicaid funding:

The medical center has never been a financial powerhouse, partly because it treats a high percentage of low-income patients. Roughly one-third of its revenue in recent years has come from the state's Medicaid program for the poor. Still, its 500-physician medical staff has built some nationally prominent programs, including in eye care, organ transplants and robotic surgery.

Mr. DeNardo acknowledges the challenges but says the modest building overhaul will be enough to stay competitive and continue to provide a training center for medical students and residents.

Joseph Flaherty, dean of U of I's medical school, says the hospital's deteriorating condition — especially in light of its competitors' gleaming new facilities — already has hurt its ability to recruit and keep top faculty. "If we don't start making some dust soon, people will feel that this is a sinking ship," Dr. Flaherty says.

It's survival of the financially fittest right now - even for hospitals.

One wonders how UIC's next door neighbors (Rush and Stroger) will fare should they close and their Medicaid patients are shunted their way. Given the mandate that Medicaid is being expanded and the burden falls squarely on the budgets of states after 2017, unless the government addresses these underfunded entitlement programs directly, it all seems like a colossal house of cards - even with "reform."

-Wes

Compensating Doctors for After-Hours Call Coverage

Should there be a premium added to physician compensation for on-call coverage after hours, or are Medicare rates enough?

This appears to be the central question between two competing hospitals in Longview, Texas where a $300,000 stipend was paid to a cardiology group by one hospital and not the other for cardiology on-call coverage.

Guess which one the doctors are promoting now?

Banos said the Diagnostic Clinic cardiologists recently approached Good Shepherd "demanding hundreds of thousands of dollars in compensation from Good Shepherd for providing call coverage to the patients of Good Shepherd."

"This is in addition to whatever money they are able to bill and collect from patients and their insurance companies for the services they actually provide when they are called in to perform a procedure," Banos said in his e-mail to Good Shepherd employees.

Banos said he believes the demands for compensation were "veiled threats to move their elective procedures to Longview Regional if we did not pay." He added Good Shepherd's stand is that meeting the compensation demands would "not be fair to the many other physicians on our medical staff who selflessly and without any expectation of pay [from the hospital] provide call coverage to our patients each day as part of their commitment to the community."

"We cannot meet the needs of our community and pay doctors for doing something that they are already obligated to do as a part of their community obligation" Banos said.

Banos said he believes Longview Regional agreed to pay the cardiologists more than $300,000 a year for on-call coverage.

"We do not believe that it was by chance that it was only after this agreement was reached that these physicians touted Regional's 'commitment to quality care' and announced their 'choice' of Longview Regional for their patients." Banos said. "We knew that taking a stand could result in these physicians moving their elective cases to Longview Regional, and it did."

Before condoning the cardiology groups' actions strictly on the basis of greed, we should note that there is a precedent for higher pay for employees working after hours in industry. Hospitals, too, have resorted to paying "nocturnists" (night-shift hospitalists) higher salaries than their daytime hospitalist counterparts as they struggle to find staff willing to work the night shift managing inpatients. These salaries are not covered strictly by funds received from the paltry Evaluation and Management payments paid by Medicare, rather, they are subsidized by the hospital system.

Threatened with unprecedented pay cuts from Medicare, look for this trend to continue as doctors use their only remaining asset, patient referral clout, to negotiate their compensation going forward.

-Wes

Could Health Care Help Fund the 2016 Olympics?

With the recent report in Crain's Chicago Business that disclosed that health care costs in Chicago are 25% above those in nearby cities, the use of health care to help fund the 2016 Olympics might not be as far fetched as it sounds.

While is it convenient for journalists and policy pundits to constantly point fingers at doctors who order too many tests as the sole cause of the explosion in health care costs, we must not forget other reasons our health care costs in Chicago might be uniquely situated to assist in that process.

• It is an inconvenient truth that the city of Chicago has the highest total sales tax of all major U.S. cities. It is also one of the most complex. 10.25% is levied on all non-perishable goods purchased, while 2% is levied on qualifying food, drugs, medicines and medical appliances.


• Chicago health care, although principally run by "non-profit" health systems sheltered in many ways from large tax obligations, is still "taxed" through secretly cloaked "hospital assessments" on gross revenues folded into insurance payments made to the hospitals. This asessment was approved recently by none other than the federal government whose commander in chief is serving as the Principle Spokesperson to promote the 2016 Olympic games.


• Chicago has, and continues to have, an almost limitless ability to add billion dollar health care facilities to its metropolis. Construction projects have historically been the thing of big unions, and no one knows big unions like health care. While many of these facilities have been substantally supported through philanthropic doles at their outset, the amount of money required to "keep the lights on" at such huge, expensive facilities mandates that beds be full and admissions processed. Need I say more?


• With the increasing consolidation of health care, especially in the lucrative, higher-income areas of Chicago, the ability of insurers to demand concessions on health care pricing has dwindled. Further, the adoption of the electronic medical record (EMR) has profited health care systems greatly by reducing insurance claim denials and shortening the times accounts are in collections. This leads to more revenue, which in turn, leads to more construction. More contruction leads to more... well, you know.


• And last, but not least, are hospital parking rates. I challenge just about any city in the nation to find rates as high as ours. Oh, and those rates are taxed by the City of Chicago.

So the next time you go to the hospital here in Chicago, remember how you might be doing your part to help secure our Olympic bid now and help our athletes later.

-Wes

Which Is It: Self-Referral or Gainsharing?

A series of fines have been levied in New Jersey for various fraudulent practices that might have a chilling impact on the way hospital systems do business:

The doctors -- Ravindra Patel of Scotch Plains, Jasjit Walia of Edison and Rakesh Sahni of Rumson -- agreed to pay a combined $960,000, representing twice the annual salaries they received from the University of Medicine and Dentistry of New Jersey, according to Ralph J. Marra, acting U.S. attorney for New Jersey.

Lawyers for the cardiologists were unavailable for comment last night.

Federal law prohibits doctors from accepting payments in exchange for referring patients. Beginning in 1996, authorities say University Hospital began trying to increase the number of cardiac procedures it performed by offering salaries to doctors in private practices in exchange for referrals.

A criminal inquiry into the program began after a federal monitor -- former U.S. Attorney Herbert J. Stern -- charged many of the doctors were given no-show faculty jobs. Most had few if any research credentials, and few actually taught, authorities said.

Many hospital systems pay non-employed specialist physicians from the surrounding community as "directors" of various specialty departments. In the case of cardiologists or gastroenterologists, one such role might be as "Director of the Catheterization Laboratory" or "Director of the GI Laboratory." Such directors reportedly play a role in assuring proper staffing, scheduling, or as training resources for nurses or technicians. But if no work actually occurs by the contracted physician in kind, then the government can move in. It appears this was the case in New Jersey.

But an even more perplexing problem is posed if there are competing groups vying for the services of one lucrative hospital laboratory, these same "directors" may be perceived as skewing the availability of lab time toward their groups, creating a source of friction for their competition. The defense of such a case can get very expensive for a hospital system.

But just when it appears doctors are starting to get the message about such arrangements, comes a new form of legal kickback: "gain-sharing." Gosh, I don't know why all of this is confusing, do you?

Could this be part of the government's upcoming strategy to save "$500 billion" in Medicare fraud costs? If so, it appears figuring out what is legal and what's not will continue to be next to impossible for physicians, and when there's a need for cash, well, it appears the side with the larger bankroll will win.

But if there's one takeaway from all of this: doctors and hospitals might want to carefully scruitinize their current consulting/employment arrangements.

After all, the government's a little short of cash right now.

-Wes

Saving Money: B.Y.O.P.

* bleeeeep bleeeeep bleeeeep *

It was 11:57PM on the alarm clock last night. I peeled my head from the pillow and felt my heart racing from the adrenaline surge that usurped by Stage IV REM sleep. I fumbled for the pacer and pressed the button. Glorious silence ensued as I caught my breath. Reading the pager, I noticed it was the nurse caring for my patient calling. I dialed the phone.

"This is Doctor Fisher. I'm returning Sally's call (not her real name)."

"Just a moment."

Some cheesy commercial played in the background with some canned music that I had heard a thousand times before. 'Damn, why don't they just play some soft classical music?' I thought to myself. Just then, a voice answered.

"This is Sally..."

"Sally, Dr. Fisher, returning your call..."

"Yes, Mr. Faachamatacheesedip is having trouble sleeping. Can he have a sleeping pill?"

My heart raced again, but I kept my composure and acquiesced. Sure." Then I prescribed a sleeping pill as requested and the nice nurse thanked me and I was back to lying an bed, staring at the ceiling, thinking about ways to cut health care costs. I do that sometimes. Especially when I've been awakened for a sleeping pill.

Every day, countless times across the country, thousands of doctors prescribe tylenol and sleeping pills and countless other "preventative" medications just so they don't get these calls at night. I wondered how many millions of dollars could be saved, but realized with the savings comes a price: the need to make another call to the doctor. Would this really save money? Hard to tell. Would doctors sleep worse? Probably.

Better still, what if we allowed patients to take their own chronic medications that they have been using for years when they have already paid for when they come in the hospital for routine procedures? These medications could be registered on the patient's electronic medical record and designated as "self-adminstered" to assure that the nurses and doctors caring for the patient knew which medications they were actively taking during their medication reconcilation process performed when they enter the hospital.

But alas, the hospital would lose money. "Patient safety might be compromised," they'll say!

But I say, maybe some simple ideas like this could save real money in the long run for our over-priced health care system. Call it "B.Y.O.P.:" Bring Your Own Pills.

And then maybe, just maybe, our system could save some real money, bit by bit. And patients could take their OWN sleeping pills so the doctor could get another wink of sleep each night.

-Wes

The Same Old “Same Old”

Years ago I practiced cardiac electrophysiology in an “EP-only” practice in Cincinnati, Ohio. There were three of us in our practice at the time, providing EP services to cardiologists who were not part of the larger 50-man cardiology group. I was credentialed at 11 hospitals and worked out of three different hospitals’ EP labs. Needless to say, I tried to make it work, but found myself running between hospitals so often and being called back to hospitals where I had already been, that the practice model did not work for me. After trying to make the practice model work for three years (I was not very bright then and was SURE my challenges were because I was a neophyte to private practice medicine), I left.

From that experience, I learned what it took to be a private practice cardiac electrophysiologist and just how hard it was to generate revenue with only professional and technical revenues from EKG’s, event recorders, and Holters, and the evaluation and management (E&M) codes as we rounded on our patients at each of the hospitals each day. It was virtually impossible to run a viable practice, since paying the receptionist, the billing and collection clerk, the nurse or medical assistant and office overhead came well before our salaries. Only our professional fees collected from invasive electrophysiology procedures generated a high enough amount of cash flow to survive. These, I came to find, were one tenth of the amount that hospitals collected for the use of their lab facilities. This was almost 10 years ago and that practice no longer exists. It was eye-opening to say the least.

But was even more eye-opening was watching how prices were negotiated between hospitals, insurers, and employers. Hospitals had the facilities, insurers had the money, and employers had the potential patients. First came the negotiation between the insurers and the employers, as “products” with varying deductibles were offered to employers to garner their business and “trust.” To win those contracts, insurers commonly presented low-cost options attractive to employers. The insurer would then come to the hospital with a promise of 10,000 or more potential patients, but would want the lowest possible price, otherwise they’d take their patients to another hospital in the city. Hospitals, eager to grow their patient referral base, would bitch and barter, and finally a deal was struck. Only then did they report to the physician the deal that they had hatched and the amount the physicians could expect to see for each procedure. Doctors then had to decide if they were “all in” and willing to accept an individual carrier’s patient volume. If so, they would agree to see patients from that insurance panel at the negotiated rate. Usually, they had to accept a lower price for larger groups of patients without any ability to negotiate the terms agreed upon. The problem with Cincinnati was there were too many hospitals and too few big employers, so the negotiations were particularly challenging for insurers there: they had to offer really low prices. Suffice it to say, the intermediaries got theirs while doctors and patients were left to make due with the fees paid and the services paid for, often creating a vicious cycle with more patients seen in less time, higher patient deductibles and all-too-often patients that were unhappy with their patient care experience while paying more for the pleasure. Needless to say, Cincinnati has had trouble retaining doctors for this reason.

But this cycle is not unique to Cincinnati. The annual courtship between insurers hospitals and employers recurs countless times across the country. Insurers, hospitals, employers offering prices, patients, negotiation terms that doctors and patients have no hope of deciphering.

And now, to maintain their stronghold on the bureaucracy, we see the same negotiations going on at a national scale happening behind closed doors with our Congressional leadership.

No real change where patients and doctors know what’s going on.

Just the same old “same old.”

-Wes