Search This Blog

Tuesday, October 13, 2020

How the US Healthcare System Starves Rural Hospitals

Healthcare is the central concern in the 2020 elections in all fifty states and US territories. This article reveals more information on states with hospitals which are in danger of closing and one key finding is that most of these states (all voted Republican in 2016) chose not to expand Medicaid with the 2010 Affordable Care Act are worse off.  Of these states only Kentucky, Pennsylvania, and Arizona  have recently implemented the Medicaid expansion under the provisions of the Affordable Care Act. This provision allows low-income persons to obtain healthcare. The rest of these states are limiting federal funding for their rural hospitals even though they are required by federal law to provide care regardless of an individuals ability to pay. Here is a table which shows those states with the greatest number of hospitals likely to close: (The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability, 2020)

40% likely to close

31-39% likely to close

26-30% likely to close

21-25% likely to close

Texas

Oklahoma

Wyoming

Nebraska

Mississippi

South Carolina

Kansas

Arizona

Missouri

Alabama

Kentucky

Pennsylvania

Florida

 

North Carolina

 

 

 

Georgia

 

Of these states, only Kentucky has expanded Medicaid under the Affordable Care Act. The rest of the Methodology
The Charter Center for Rural Health used regression analysis, which is a type of statistical analysis using multiple variables to assess hospital viability and those criteria included: average age of patient, length of stay, case mix index, Medicare and Medicaid discharges, size of the facility, geographic area, and the age of the facility. In terms of financial measures, operating margins, revenue, occupancy, capital efficiency, and the state level of Medicaid expansion were also evaluated. 

Though a one percent increase in funding can reduce a hospitals chance of closure by three times that investment, this is not occurring. (The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability, 2020) One of the Charter Center’s regression models showed that states which adopted the Medicaid Expansion under the Affordable Care Act reduced the likelihood of hospital closure by 62% on average. Four hundred and fifty-three hospitals were identified as vulnerable to closure in the US.

When I researched other sources on vulnerability of US hospitals the results were similar and here are the findings from the 2020 Rural Hospital Sustainability Index by Guidehouse. (The Rural Hospital Sustainability Index, 2020)

State

Vulnerable Facilities

Proportion at risk of closure

Tennessee

19 of 28 hospitals

68% of rural hospitals are at risk

Alabama

18 of 30 hospitals

60% of rural hospitals are at risk

Oklahoma

28 of 47 hospitals

50% of rural hospitals are at risk

Arkansas

18 of 34 hospitals

53% of rural hospitals are at risk

Mississippi

25 of 50 hospitals

50% of rural hospitals are at risk

West Virginia

9 of 18 hospitals

50% of rural hospitals are at risk

South Carolina

4 of 9 hospitals

44% of rural hospitals are at risk

Georgia

14 of 34 hospitals

41% of rural hospitals are at risk

Kentucky

18 of 45 hospitals

40% of rural hospitals are at risk

Louisiana

11 of 30 hospitals

37% of rural hospitals are at risk


Larger hospital corporations are driving smaller stand-alone facilities into oblivion. Further, the US healthcare system treats the health of the nation like another product and the healthcare system like a capital enterprise, which as it turns out, doesn’t deliver the most efficacious healthcare. This means we are paying more for treatments that don’t deliver a commensurate improvement in patient health. As a society we should care about this as we would not accept a lesser quality product or outcome from any other consumer good and healthcare certainly is that.

Further, the Medicaid enrollment in rural areas is higher, so states which refuse to help their residents obtain healthcare by expansion of Medicaid under the Affordable Care Act are denying people access to care. Yet, rural people elected the current president who has vowed to gut the Affordable Care Act, an existing program for individuals to obtain medical care and to keep their hospitals afloat through improved cash flows. (Estes, 2020)

The pandemic grants from the federal government are now coming due and I think we can make a good case that rural hospitals should not have to repay the grants, as they are teetering on insolvency. Perhaps this is one issue in which Republicans and Democrats can agree, however, Senate Majority leader, McConnell has scoffed at providing further to assistance municipalities, hospitals, and individuals. The people of this diverse and hardworking nation deserve better.

And this is the healthpolicymaven signing off encouraging you not to sign blanket medical releases when you have medical procedures, do consent for which you agree and that which you decline. This article was written by Roberta E. Winter an independent healthcare analyst and journalist.

References

Estes, C. (2020, October 13). 1 of 4 Rural Hospitals Are At Risk of Closure And The Problem Is Getting Worse. Retrieved from Forbes.com: https://www.forbes.com/sites/claryestes/2020/02/24/1-4-rural-hospitals-are-at-risk-of-closure-and-the-problem-is-getting-worse/#72aa1c861bc0

The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability. (2020, February 1). Retrieved from Chartis Center for Rural Health: https://www.ivantageindex.com/wp-content/uploads/2020/02/CCRH_Vulnerability-Research_FiNAL-02.14.20.pdf

The Rural Hospital Sustainability Index. (2020, October 13). Retrieved from Guidehouse.com: https://guidehouse.com/-/media/www/site/insights/healthcare/2020/ruralhospitalsustainabilityindex0420_rev01.pdf



Unintended Consequences of Pandemic Hospital Bailouts May Hasten Their Demise

This article was originally posted June 9, 2020 but was accidentally deleted and this is a repost as the article has been cited and comments are posted in various media.

We can thank the Covid pandemic for revealing the fissures in America’s healthcare system, especially how large hospital corporations continue to be focused on earnings over community healthcare. This article examines how the federal pandemic money (CARES Act) for hospitals exacerbated the problem, through distribution to the wealthiest hospital systems and not the struggling rural ones. A similar phenomenon was observed for the farm bailouts when giant agricultural corporations ended up with the money and not the small farmers. The continual winnowing of our nation’s food suppliers and healthcare resources weakens national health. Doling out money without restrictions and lacking a needs-profile for the hospitals resulted in the federal government giving billions based on how much money the hospitals already billed for services. This is like providing a sewage treatment plant to a city that already has one and leaving the neighboring community to treat its own effluent. Further, no other country spends wildly in healthcare, with fewer community health benefits. All funding for healthcare, which is largely paid for by the government through tax subsidies and government financed programs, as well as steep individual contributions in the private sector should be needs-based. We can’t expect the Trump Administration to understand these criteria since it has given billions to the wealthiest while stripping school lunch money from children. This article analyzes the fraying network of urban trauma centers and rural hospitals, with suggestions to abate the hemorrhaging.

Hospitals at Risk

Becker’s Hospital Report found that 20% of US hospitals are at risk of closure as of April 20, 2020. (Ellison, State By State Breakdown of 354 Hospitals At Risk of Closing, 2020) In real terms that means 354 hospitals are potentially unsustainable and 81% of those are considered critical to the community. In my home state, Washington, 18% of rural hospitals are in danger of failure and this isn’t as dire as many states where 50% of theirs could fail. Hospitals provide jobs, help economic development, and offer critical healthcare. Here is a list of the states where the greatest percentage of their hospitals are threatened with closure due to inadequate cash on hand:

1.       Tennessee-68%

2.       Alabama-60%

3.       Oklahoma-60%

4.       Arkansas-53%

5.       Mississippi-50%

6.       West Virginia-50%

7.       South Carolina-44%

8.       Georgia-41%

9.       Kentucky-40%

10.   Louisianna-37%

Hospitals at risk of failure in Washington State (Ellison, 2020)

Columbia County Health System in Dayton is a farming community which serves a county-wide population of 4,058. The nearest hospital is in Walla Walla which is a half-hour drive by car.

Mid-Valley Hospital in Omak (4,806) is a mountainous community in the Okanogan and serves a countywide population of 41,000

Three Rivers Hospital in Brewster is also in the Okanogan region and is in a town of 2,364 people. Seems like Mid-Valley and this one should combine forces.

Grays Harbor Community Hospital in Aberdeen is a fishing and logging community which serves a countywide population of 75,000. The next nearest hospitals would be Olympia or Shelton, both about and hours drive.

Whidbey Health Medical Center in Coupeville, the Whidbey Island County Seat has a population of 1,959 people. Since there is another hospital on the island in Oak Harbor, this wouldn’t be as critical if it succumbs.

To See How Your State Hospitals Fair

Here is the link to the statewide list: https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing

Covid-19 Hospital Bail-out Impact

In this latest government give-a-way most of the money went to the elite health care organizations, including local, Providence Healthcare, which is technically a nonprofit by statute, but makes so much money it has its own venture capital fund (12 billion in cash reserves), generating a billion dollars annually. (Jesse Drucker, 2020) And not to be outdone, lush Cleveland and Mayo Clinics also received millions. My former employer, Ascension Health, which is a Catholic hospital chain, makes so much money it has its own venture capital fund (15.5 billion in cash reserves) and it too received federal bail-out money. This table shows cash reserves and CARES fund distribution: (Liss, 2020)

Hospital Group

Cash in Reserves

Government Bailout

Ascension Health

15,500,000,000

211,000,000

Cleveland Clinic

7,000,000,000

199,000,000

Mayo Clinic

10,600,000,000

150,000,000

Providence Health

12,000,000,000

509,000,000

HCA (for profit)

51,300,000,000

1,000,000,000

Tenet (for profit)

731,000,000

517,000,000

This government largess was despite the fact all of these mega corporations have plenty of cash in reserves, so the government funding was to ensure their profits. Worse yet, the money they were given starves small rural hospitals which may be forced to close. I can’t think of a better example of the American “winner-take-all philosophy, but is this really how we should be running our critical healthcare system? It is impossible to research this and not feel the US government is cannibalizing its own health system.  This demonstrates another systemic failure in US healthcare, which puts profits ahead of patient health. I knew it was time to leave healthcare when the hospitals preferred hiring people without a healthcare background, the easier it is to put patients out of the equation if you think of them as widgets.

This article was written by Roberta Winter, an independent journalist and health policy analyst, who has published under the healthpolicymaven trademark since 2007. Please feel free to share this article virally.

References

Ellison, A. (2020, March 6). Five Hospitals Face Imminent Closure As Covid-19 Wreaks Havoc. Beckers Hospital Review. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/5-washington-hospitals-face-imminent-closure-as-covid-19-wreaks-havoc.html

Ellison, A. (2020, April 9). State By State Breakdown of 354 Hospitals At Risk of Closing. Becker Hospital Report. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html

Jesse Drucker, J. S.-G. (2020, May 25). Wealthiest Hospitals Get Billions in Bailbouts for Struggling Providers. The New York Times. Retrieved June 8, 2020, from https://www.nytimes.com/2020/05/25/business/coronavirus-hospitals-bailout.html

Liss, S. (2020, May 26). Here's How Much For Profit Hospitals Have Received In Bailout Money So Far. Healthcare Dive.com. Retrieved June 8, 2020, from https://www.healthcaredive.com/news/heres-how-much-for-profit-hospitals-have-received-in-covid-19-bailout-fund/578378/

 

Friday, September 18, 2020

Nationwide Data on Hospital Price and Comparability-Are You Getting Ripped Off By Your Hospital?

 

Hospital Price and Comparability-What Private Employers Pay VS Medicare

One of the crucial elements for making informed decisions on any product is understanding price and comparability for services and this is also true for healthcare. The recent Rand Report (Christopher M. Whaley, 2020) illuminated huge pricing disparities for hospitals across the country by evaluating what private employers pay versus government reimbursements. The State of Maryland has state-controlled hospital prices (and some of the lowest hospital costs in the nation) and is therefore not included in the survey. I previously published an article on how Maryland’s state hospital pricing works. (Winter R. , 2014) The Rand Report analyzed 3000 hospitals in 49 states to assess relative value for similar services paid by private employer plans versus Medicare, which is the largest government funded plan in the US. Quality rankings were based on findings from the Centers for Medicare and Medicaid Hospital-Compare data, Leapfrog Hospital Survey, and HRIS patient mix data then scaled on a 1-5, with 1 being the lowest ranking.

Using data from 2016 to 2018 for private employers, the Centers for Medicare and Medicaid (CMS), and state agency data on hospital claims, here are the key findings from the report: (Christopher M. Whaley, 2020)

ü     Rand found little relationship between hospital quality rankings and price disparity. In other words, hospitals that charge less can also deliver high quality results and these are referred to as high value hospitals. Conversely hospitals that charge more don’t necessarily have better quality.

ü      There is a huge variance in hospital prices by state, with Arkansas, Michigan, and Rhode Island boasting relative value prices within 200% of Medicare reimbursement levels. Meanwhile, Florida, West Virginia, and South Carolina had relative value prices nearly 350% of Medicare reimbursement levels. So private employer plans in the latter could be paying 150% more for the same services compared to those in AK, MI, or RI.

Using the recently published Rand Report of hospital pricing for private payments versus government funded CMS payments, I extracted the zip file and analyzed data for the combined cost for inpatient and outpatient services by state, health system, and individual hospital. Here are the results for the most expensive and least expensive hospitals both in Washington and nationwide.

Washington

These tables show the relationship between the combined price for inpatient and outpatient services charged to private insurers (and self-insured plans), versus what the Centers for Medicare and Medicaid paid. Yakima Valley Memorial Hospital is one of the best deals in the state with a combined price for inpatient and outpatient services of 170% for private insurance compared to what Medicare/Medicare (CMS) pays.

Least Expensive Hospitals

Facility Name

Location

Quality Ranking

5 is highest

Health System

Combined Price vs CMS

Yakima Valley Memorial Hospital

Yakima

4

Virginia Mason Health System

170% of CMS

Swedish Hospital Issaquah

Issaquah

4

Providence St. Joseph

176% of CMS

Evergreen Hospital

Kirkland

5

Peace Health

189% of CMS

UW Medicine-Northwest Hospital

Seattle

4

UW Medicine

207% of CMS

Overlake Hospital

Bellevue

4

Peace Health

215% of CMS

Most Expensive Hospitals

The most expensive hospital in the state is Tacoma General Hospital-Allenmore, part of the Multicare  System charging 330% of the CMS rate of reimbursement for privately insured plans. Though Harborview Medical Center scored a 312% combined price vs CMS, since it is a critical access hospital and trauma center for multiple states and therefor has more intensive patient needs, I have removed it from the list.

Facility Name

Location

Quality Ranking

5 is highest

Health System

Combined Price vs CMS Reimbursement

Tacoma General-Allenmore

Tacoma

2

Multicare

334% of CMS

Good Samaritan Puyallup

Puyallup

2

Multicare

330% of CMS

Swedish Providence

Seattle

5

Providence St. Joseph

307% of CMS

Harrison Medical Center

Bremerton

3

Catholic Health Initiatives

304% of CMS

St. Joseph Medical Center-Bellingham

Bellingham

4

Peace Health

303% of CMS

 Nationwide Data

10 Best Value Hospitals Rand Report 2020

Here are the 10 least expensive hospitals in the country, based on the relationship of what they charge private employers and what they are paid by CMS for similar services. Kudos to Maine for boasting multiple hospitals on this list of low price and high-quality rankings. This trend was also proven true when I ranked nationwide hospitals in 2011 and found only 1 hospital in the country had a perfect safety score, Penobscot Bay Medical Center in Maine. (Winter R. E., 2012) Of these highly affordable hospitals 90% are nonprofits and 40% are independent community based hospitals.

Facility Name

City

Quality Ranking

5 is highest

Health System

Combined Price vs CMS

Texas Women’s Hospital

Houston, TX

3

HCA Healthcare

48% of CMS

Redington Fairview Hospital

Skowhegan, ME

4

Independent

61% of CMS

Good Samaritan Hospital

Bakersfield, CA

2

Independent

62% of CMS

Women’s Hospital

Baton Rouge, LA

3

Independent

67% of CMS

Sebasticook Valley Hospital

Pittsfield, ME

4

Eastern Maine Healthcare Systems

71% of CMS

Deaconess Women’s Hospital

Newburgh, IN

5

Deaconess Health Systems

75% of CMS

Patients Hospital of Redding

Redding, CA

NA

Adventist Health

80% of CMS

Blue Hill Memorial Hospital

Blue Hill, ME

4

Eastern Maine Health Systems

82% of CMS

Physicians Medical Center

New Albany, IN

5

Independent

83% of CMS

Mount Desert Island Hospital

Bar Harbor, ME

4

Eastern Maine Healthcare Systems

89% of CMS

 10 Worst Value Hospitals Rand Report 2020

Of the most expensive hospitals with the greatest disparity in price charged to private employers versus the CMS reimbursement 70% were for profit companies, with 50% of those run by the behemoth HCA Health. HCA is the company that received the largest fine for healthcare fraud (at the time) for up-charging CMS and bilking government tax payers for billions. (Justice Department-US Government, 2003) Rick Scott, former Governor of Florida and now Senator of Florida was running HCA at that time. (Schultz, 2018) 

Most interesting is Face Book founder and guy-still-trying-to-make-friends, Mark Zuckerberg’s hospital in San Francisco, had the worst quality ranking in the Rand 2020 survey and still managed to charge private employers nearly six times the CMS reimbursement for the same services. These hospital price disparities place a great strain on employers in California, especially with the pressures of the Covid-19 pandemic. It is no wonder that California is exploring establishing its own state-run healthcare plan.

Facility Name

City

Quality Ranking

 5 is highest

Health System

Combined Price vs CMS

North Bay Regional Hospital

Fairfield, CA

2

North Bay Healthcare Group

815% of CMS

Fort Walton Beach Medical Center

Fort Walton Beach, FL

2

HCA Healthcare

575% of CMS

Memorial Hospital Modesto

Modesto, CA

2

Sutter Health

572% of CMS

Zuckerberg Memorial Hospital

San Francisco, CA

1

San Francisco Health Network

565% of CMS

Westside Regional Medical Center

Plantation, FL

1

HCA Healthcare

514% of CMS

Colorado Plains Medical Center

Fort Morgan, CO

2

LifePoint Health

508% of CMS

Parkridge Medical Center

Chattanooga, TN

2

HCA Healthcare

505% of CMS

Springs Memorial Hospital

Lancaster, SC

2

Community Health Systems

499% of CMS

Summit Medical Center

Hermitage, TN

2

HCA Healthcare

493% of CMS

Alaska Regional Hospital

Anchorage, AK

5

HCA Healthcare

493% of CMS

 Conclusion

It is obvious that small independent hospitals frequently offer better value with good hospital quality rankings, which reflects on hospital leadership and the fact they are focused exclusively on delivering healthcare to their communities as opposed to creating giant venture capital funds. I personally suggest we have someone from Maine lead US healthcare reform for they have surely figured that out in their home state.

And this is the healthpolicymaven signing off encouraging you not to sign blanket waivers when submitting to healthcare procedures, do indicate that for which you agree and also what you choose to decline.  Healthpolicymaven is a trademark of Roberta E. Winter, in continuous use since 2007. All opinions expressed in this column are independent journalism without industry sponsorship from the healthcare sector.

 References

Christopher M. Whaley, B. B. (2020). Nationwide Evaluation of Health Care Prices Paid by Private Health Plans-Findings From Round 3 of Employer-led Transparency Initiative. Rand Corporation, Santa Monica. doi: https://doi.org/10.7249/RR4394

Justice Department-US Government. (2003, June 26). Largest Healthcare Fraud Case In US History Settled-HCA Investigation Nets 1.7 Billion. US Government Department of Justice. Retrieved September 18, 2020, from ustice.gov/archive/opa/pr/2003/June/03_civ_386.htm#:~:text=(formerly%20known%20as%20Columbia%2FHCA,the%20Justice%20Department%20announced%20today.

Schultz, R. (2018, October 2). Gov. Rick Scott Took Responsibility-No He Took 300 Million. Retrieved September 18, 2020, from https://www.sun-sentinel.com/opinion/fl-op-col-rick-scott-medicare-fraud-20181002-story.html

Winter, R. (2014, May 20). State Laws Which Inform the Consumer of Price and Quality. Retrieved September 18, 2020, from https://healthpolicymaven.blogspot.com/2014/05/state-laws-which-inform-consumer-of.html

Winter, R. E. (2012). Unraveling US Healthcare-A Personal Guide. Rowman & Littlefield. Retrieved from https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972