Payers & Providers Midwest Edition – Issue of January 24, 2012

8/3/2019 Payers & Providers Midwest Edition Issue of January 24, 2012

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Edward Hospital in suburban Naperville, Ill.,delivers about 3,500 babies a year. In 2010,about 950 of those were scheduled deliveries,through induction or C-section done between

the ages of 37 and 39 weeksgestation time in otherwords, before the baby wasready to come out.

In 2011 that numberdropped to ve.

The hospital pushed itspercentage of non-medicallynecessary early births from28% to near zero by requiringphysicians to get permissionfrom the OB medical directorto schedule an early delivery.

Edwards is one success

story among many in thenational effort to reduce thenumber of elective deliveriesbefore 39 weeks that occurwithout a good medicalreason. On Jan. 25 theLeapfrog Group, an allianceof purchasers devoted toimproving quality and value,will release results of a survey detailinghospitals progress in reducing these harmfulearly deliveries and will announce a series ofinitiatives to deter and prevent the practice.

The issue of early deliveries is a highpriority for a great number of organizationsnow. There has never been this level ofinterest, said Leah Binder, CEO of Leapfrog.

Some 55 organizations,including the AmericanMedical Association and theAmerican HospitalAssociation are involved.Other partners includeAetna, Cigna, WellPoint,UnitedHealthcare , theCatalyst for PaymentReform, and the Institute forHealthcare Improvement,among others. The Leapfrogdata are expected to show adecline in early deliveries

among the 750 hospitals thathave reported.

There are manyreasons women want tohave their babies before39 weeks, said DennisCrouse, M.D., professorof pediatrics andassociate clinical chief

of the division of neonatology at theUniversity of Illinois-Chicago Medical Center

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In Brief

Uncompensated CareRises Strongly at

Minnesota Hospitals

Minnesota hospitals contributed $3.4billion to the life of the state in 2010,according to a report issued by theMinnesota Hospital Association, up6% over the previous year.

The increase was because of adramatic increase in charity care, theassociation said, which rose 27%.

The hospitals spent $1.17 billion oncommunity and health services,education, and healthcare work forcedevelopment.

A substantial and growingproportion of hospitals communitycontributions is from providing carewithout getting paid, the associationsaid. This uncompensated care

includes charity care for patients fromwhom there is no expectation ofpayment, and bad debt, the result ofpatients who cannot or did not paytheir share of the hospital bill.

The total for uncompensated carewas $496.5 million in 2010, anincrease of about 4%.

The losses from caring for Medicareand Medicaid patients also pushed upthe community contribution gure. Thefederal and state governmentcompensated hospitals $1.3 billionless than the actual cost of care,accounting for 7% of Minnesotahospitals operating expenses.

Ohio County CanAgain Operate Worker

Health Programs

A new law signed by Gov. John Kasichof Ohio allows Franklin County, whichincludes Columbus, to maintain a

Continued on Page 3

NEWS

Early Deliveries (Continued from Page One)

Caregivers may want to deliver a womantheyve been caring for when they are on call.Or women may want to be delivered before

their caregiver goes away on vacation, orwhen relatives are due to arrive to help hercare for the newborn. And military wives oftenwant to deliver before their husband goesoverseas on a long deployment. Andsometimes women get to the point wherethey dont want to be pregnant any more,especially in the summertime. They thinkthey can deliver at 37 weeks or later, Crousesaid.

Unfortunately, the notion that a baby hasreached full term at 37 weeks has gainedwidespread acceptance. In fact 39 to 41weeks is better for the infant, Crouse said.

Each week closer to 39 weeks there is asignicant reduction in morbidity. Part of thatis due to our improved medical care fornewborns on the pediatric side. Those infantsdo quite well and we dont see much in theway of mortality.

Caregivers who deliver the infants early, hesaid, tend not to remember the few who dontdo extremely well. Theyre not seen infollow-up; theyre seen by another physician.

But those few are often extremely expensivefor payers: health plans, state Medicaidagencies, and ultimately employers, said LarryBoress, president of the Midwest BusinessGroup on Health, which put on a summit inNovember in Illinois to inform stakeholders onthe issue. He is trying to gure out how todissuade hospitals and physicians fromallowing these early deliveries to proceed.

Medicare has a list of adverse events theywont pay for, Boress said. Private payers areadopting similar approaches. Can we set upsystems to pay docs less if they deliver forunder 39 weeks gestation? Harold Miller, executive director of theCenter for Healthcare Quality and PaymentReform, has a few ideas on this. Payers nowreimburse for labor and delivery in piecemealfashion. A Cesarean section is paid differentlyfrom a vaginal delivery, and infant care is paidout of another pot. Knowing that the fee ishigher for a C-section than a conventionaldelivery creates perverse incentives for doctorsand hospitals, Miller said.

An early term elective delivery is costlessand maybe even cost saving from thephysician perspective, Miller said. Labor,delivery, and infant care should instead bebundled into one payment that puts the

provider team at risk if the outcome is notgood, he thinks. In a bundled payment,things you do that harm the baby become

cost that you want to avoid, rather thansomething that gets paid for by the healthplan, or Medicaid. Now there is a built-indisincentive to do an unnecessary C-sectio

The problem is guring out how to weahospitals from the revenue streams that cofrom neo-natal intensive care and otherfollow-up care for C-sections. Miller isdeveloping new nancial models that sharthe risk and reward from cutting back on thprocedures.

The March of Dimes has been working this problem for several years. It devised aprogram in ve states that combined accou

for 35% of U.S. births to reduce the rate ofelective early births. It solicited ve hospitto volunteer in each state, to develop aprogram to tackle the problem. EdwardHospital was one of the ve in Illinois.

Somehow we had drifted toward doindeliveries between 37 and 39 weeks that wnot medically indicated, said PatriciaBradley, a nurse and the director of obstetat Edward. The hospital adopted a toolkitprepared by the March of Dimes that includlot of data on NICU use by infants deliveredbefore they are fully ready.

Now, with any request for early delivery

physicians have to submit a form listing thepatients gestational age. If there is to be adelivery before 39 weeks, the OB medicaldirector must approve the reason.

Minnesota has even passed a law codifywhat hospitals and physicians must do. Itincludes four pieces:

1. A hard-stop policy, requiring a medidirectors oversight to do an early delivery.

2. An estimate of gestational age before tbaby reaches 20 weeks.

3. An education program for mothersexplaining why its important to carry the into full term.

4. A requirement that hospitals have a

quality improvement process in place forinductions of labor before 39 weeks.In Minnesota, 38% of births are paid by

Medicaid or Minnesota Care.We said, well continue to pay for all ba

being born, but we want to know if the hosphas the four steps in this process in place, sJeff Schiff, M.D., medical director for Minnehealth care programs at the Department ofHuman Services.

If they have it in place, every year they to report to us their rate of elective inductionto 39 weeks, Schiff said.


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NEWS

In Brief

wellness program for countyemployees.

County ofcials want to ghtobesity, high blood pressure, diabetes,and heart disease in the county workforce, but in 2009 a local prosecutordeclared that state law prohibited thelocal government from paying for such

programs out of the general fund.Franklin County had started theprograms in 2007. Some counties inthe state have operated wellnessprograms, while others declined to,citing recommendations from locallegal authorities.

In 2011 the county spent $30.6million on health benets for 2,450employees, up from $28.6 million in2010. The county spent about$200,000 a year in 2008 and 2009 onprograms for blood-pressurescreenings, nutrition advising, andWeight Watchers.

Blue Cross, Shield ofMinnesota Names

New President, CEO

Kenneth Burdick has been appointedpresident and CEO ofBlue Cross andBlue Shield of Minnesota, succeedingPatrick Geraghty, who moved to BlueCross and Blue Shield of Florida. Burdick came from CoventryHealth Care, and before that was atSecure Horizons, a UnitedHealthGroup company.

In a statement Burdick said he islooking forward to working in thiscommunity and leading Blue Cross ata time of signicant change inhealthcare.

He is a graduate ofAmherstCollege and has a law degree from theUniversity of Connecticut.

The Minnesota Blues are based inEagan, near St. Paul.

Eleven hospitals in eastern Michigan operatedby McLaren Health Care are getting newnames in a rebranding that removes the wordsmedical center or hospital from the facilitysmoniker.

A mouthful such as McLaren Health CareVillage at Clarkston, for example, is nowMcLaren-Clarkston. The others follow a similarformula, linking McLaren to the marketerspreferred name for the locality.

Using one name will enable us to have asingle identity that reects the scope andimpact of our organization across the state,

said Philip Incarnati, president and chiefexecutive ofcer of McLaren Health Care,which is based in Flint.

McLaren is one of the largest healthsystems in the Midwest, with 17,000employees, 11,000 afliated physicians, andnet revenues of $2.1 billion.

Letting area residents know that their lohospital is part of McLaren, part of a largerhealth system, is one of the goals of therebranding, Incarnati said. A new logo hasbeen unveiled, and a marketing campaign wlaunch in late January.

McLaren Renames 11 HospitalsEastern Michigan System Launches Campaign

Former name: New name:

Bay Regional Medical Center McLarenBay Region

Bay Special Care Hospital McLarenBay Special Care

Central Michigan Community Hospital McLarenCentral Michigan

Great Lakes Cancer Institute McLaren Cancer Institute

Ingham Regional Medical Center McLarenGreater Lansing

Ingham Regional Orthopedic Hospital McLaren Orthopedic Hospital

Lapeer Regional Medical Center McLarenLapeer Region

McLaren Health Care Village at Clarkston McLarenClarkston

McLaren Regional Medical Center McLarenFlint

Mount Clemens Regional Medical Center McLarenMacomb

POH Regional Medical Center McLarenOakland

Two hospital systems that were turned downby the Illinois CON panel in their quest tobuild a new hospital in Chicagos farnorthwestern suburbs are using a new strategyto get the decisions overturned.

Centegra Health System and Mercy HealthSystem have each proposed to construct a newhospital for which the Illinois Health Facilitiesand Services Review board has found nopressing need.

In December the CON committeedismissed appeals, citing insufcient capacityutilization at other hospitals within drivingdistance of the McHenry County location.(Payers & Providers, Dec. 20, July 12, June28).

The two sponsoring organizations haverequested hearings in an attempt to overturn

the panels decision. They will be assigned ahearing ofcer to determine the merits of thecase, the review board administrator said lasweek. Ultimately the hospital companiescould take their case to a circuit court.

Mercy proposed a $115 million hospitain Crystal Lake, which was denied in a 6 to vote.

Centegra wants to build a 128-bed facilfor $233 million in Huntley. That plan was adenied.

Mercy has dedicated a web page towhipping up public support for its proposal.

Visitors to http://www.mercycrystallake.org/are invited to siga petition, send a letter, and watch a videodescribing the new hospital.

Illinois Systems Try to Overturn CONQuest for New Hospital will Get Judges Hearing


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Payers & Providers Page

Healthcare spending in 2009 and 2010 grew atthe slowest rates in 50 years. This startlingnews, published in an article by staff of theCenters for Medicare and Medicaid Services(CMS) in Health Affairs, was largely attributedto the shrinking economy. (Payers & Providers,Jan. 17). Loss of jobs andinsurance, slow growth inwages and family incomes, andgreater out-of-pockethealthcare costs haveundoubtedly caused uninsured,underinsured, and low-wageworkers and their families to

forgo care, contributing to theslowdown in health spending.An estimated 9 million peoplebecame uninsured when theylost a job with benets over200810, and they were muchmore likely than those who didnot lose coverage to reportdelaying needed care.

CMS is projecting lowerhealth spending over the rest ofthe decade. While the pooreconomy is having an effect oncurrent spending, the recession

alone doesnt explain whyprojected health spending in 2020 issubstantially below estimates made just twoyears ago. Either the original estimates were toohigh, or the tectonic plates underlying thehealth system are beginning to shift.

CMS's estimates of healthcare spendingthrough the end of the decade have beenfalling over the last year and a half. The mostrecent projection of national health spending in2020 is $4.6 trillion, or 19.8% of GDP,compared with its projection of $4.9 trillion, or21.1% of GDP, in 2009 in the absence ofreform. This represents a $275 billion (5.6%)

reduction for 2020, compared with pre-reformestimates. Moreover, that projection representsa cumulative reduction of $1.7 trillion over the10 years from 2011 to 2020.

This reduction in projected national healthspending is particularly important because thepre-reform projection of health care costs wasused by the Congressional Budget Ofce (CBO)and the CMS Ofce of the Actuary inestimating the cost and impact of healthreform. Already, spending is far below thetrajectory projected to result from

implementation of the Affordable Care Act. Infact, reduction in utilization and trims in paymrates under the ACA more than offset theprojected cost of covering the uninsured.

Projected Medicare spending is even furthbelow original estimates, and provisions in th

ACA play a major role in thenew, lower numbers. Medicspending in 2020 is nowestimated to be $922 billionwhich is $150 billion lower the $1.07 trillion projected bCMS pre-reform. As the authnote, Medicare savings com

from ACA changes in paymerates for Medicare Advantagplans, home health agenciesand other providers (effectivOct. 1, 2009), fraud and abuprovisions, as well asrequirements for prescriptiondrug rebates for Medicaremanaged care plans (effectivJan. 1, 2010). The ofcial CBhealth reform estimates incl$397 billion in projected

Medicare savings from ACAprovisions over the 201019

period. But it would now appthat the reduction in projected Medicare outlaover a 10-year period is almost twice that.

At a minimum, dire predictions that the ACwould fail to control costs and, in fact, accelespending have not been borne out by the earlexperience. It now appears that both the costscovering the uninsured and Medicare spendinare substantially below pre-reform estimates.

The efforts made over the last decade totransform health care delivery may also havecontributed to slower spending growth. Privatsector initiatives have been encouraging hospand physicians to adopt improved safety meth

reach performance benchmarks, and reorganicare to achieve greater value. Private insurers Medicaid have begun to pay for care differentcreating opportunities for new models of healcare delivery. There is much to celebrate in thhistoric slowdown. After a half-century of incing as a share of the economy, the health sectnow increasing at a more affordable rate.

OPINION

A Startling Slowdown in SpendingCMS Growth Projections Are Well Below Prior Estimat

Karen Davis is president of the Commonwea

Fund in New York. This is excerpted from a

recent blog post, at CommonwealthFund.o

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Payers & Providers Midwest Edition – Issue of January 24, 2012