Category Archives: Hospitals

North Adams hospital to close: Here’s how it fits into the bigger picture

I’m quoted in the Springfield Republican today about the closure of North Adams Hospital and the implications for healthcare in Massachusetts more broadly. The article draws heavily on a report we contributed to about the challenges facing lower and middle income communities as a result of how healthcare is financed in this state.


By healthcare consultant David E. Williams of the Health Business Group

Health Business Group in HealthLeaders

HealthLeaders (‘Vicious Cycle’ Flagged in MA Hospital Financing Disparities) reports today on a white paper we contributed to about the impact of hospital price differences in Massachusetts.  We built on previously publicized price data to highlight the implications for middle class and lower income communities: they effectively subsidize their richer brethren who pay the same premiums but get their routine care from pricier providers.

One of the things that surprised us is that Medicaid managed care plans, which are hired by the state, pay teaching hospitals much more than they pay community hospitals.

The report includes four recommendations to address the disparities:

  1. Require high-cost providers to hold cost growth below the general benchmark under Chapter 224 of health reform
  2. Consider each provider’s payer mix when setting Medicaid (and possibly commercial) rates
  3. Implement a Medicaid Accountable Care Organization (ACO) to contain costs and encourage quality, rather than relying on cutting unit prices
  4. Encourage commercial health plans to design products that reward members who use low cost providers

I’m quoted in the article.

By healthcare consultant David E. Williams of the Health Business Group

15 minutes could save you… nothing in medical bills

Two medical bills arrived in the mail over the weekend. One requested $525 for a specialist office visit, another $250 for a routine colonoscopy at a hospital. Since I don’t think we owe for either of these and the numbers are pretty big I decided to tackle them.

The specialist bill was odd because it didn’t appear that the insurance company had been billed. We go to this specialist frequently and have had the same Blue Cross Blue Shield of MA plan for a long time so I wondered what happened. After going through the phone tree, being kept on hold and listening to a recording about “higher than normal call volume” I was connected with a customer service rep. She said, “actually looks like insurance just paid. Your balance is $5.” On the one hand I was happy but on the other hand if I had just waited for the next bill it sounds like I would not have had to call at all. I’m still not sure why they sent the bill to me without any indication of billing the insurance company.

For the colonoscopy I decided to call my health plan first to check whether I had full coverage. They had “higher than normal call volume,” too, which I think must be normal. They were surprised to hear about the request for $250 but then looked at the bill and said it had been submitted as an outpatient surgical procedure (for which I would owe $250) rather than as a routine preventive screening.

I then called the hospital and had a long wait on hold, although they didn’t say anything about it not being “normal” call volume. I explained the situation, the rep then went to do a bit of research and came back to tell me it was billed properly –but not as a routine colonoscopy– and could I please pay the $250. I said no, hung up the phone, and spoke to the patient who assured me it was in fact a routine, every 5 year screening.

Not exactly what to do next, I decided to send an email to the hospital (conveniently, there is a billing email on the bill) presenting the information I have. I was happy to receive a reply within one business day letting me know they were checking with the physician to look into it.

So bottom line: I spent about 45 minutes on these bills and don’t have a lot to show for my effort so far. On the other hand I have helped drive up administrative costs by prompting action from my specialist’s billing office, health plan customer service, hospital billing office and now a doctor.

By healthcare business consultant David E. Williams, President of the Health Business Group

Health Business Group assesses economic impact of Steward Health Care System

Steward Health Care System is having a major impact on the economy of Eastern Massachusetts. An analysis by Health Business Group, where I am president, demonstrates that Steward directly and indirectly supports approximately 33,000 jobs and was responsible for $8.4 billion in economic impact in 2011 and 2012.

The full report is available for download.

Improving the Hospital Compare website

HealthLeaders’ Cheryl Clark has done a commendable job in identifying 12 changes she’d like to see on Hospital Compare, the quality reporting website run by the Centers for Medicare and Medicaid Services. You should read the article for the details.

I don’t disagree with any of the recommendations, but there are four in particular that I’d like to highlight. The recommendation #’s and bolded titles are from the article.

  • #1 Lake Wobegon Syndrome. Something is wrong when 95% or more of the hospitals are listed as average with very, very few in the below or above average category. But this does present an opportunity to really call out the outliers for special treatment or shunning. My hope is that we’ll get to finer gradations as the quality of the data increases.
  • #2 Report by Bricks and Mortar. Too many facilities are allowed to be grouped under one identifier, which tends to hide both good and bad performers. It’s related to issue #1 above.
  • #3 Military Hospitals and the VA. Very little information is presented for many federal hospitals. Actually, we should expect them to report more than the private sector since they are accountable to the taxpayer. And they should set the example for the rest of the system.
  • #7 Stop Avoiding Children. Hospital Compare is Medicare-centric. That’s an issue for the non-Medicare population as a whole, but especially for pediatrics. This is a more difficult hole to fill.


By David E. Williams of the Health Business Group.

Wall Street Journal shames itself with health policy coverage

The Wall Street Journal’s Op/Ed page has always been very conservative, but traditionally the news sections have been balanced and objective. When Rupert Murdoch took over the Journal a few years back, an Australian friend warned me that objectivity in the new section would soon be out the window. Overall I have been fairly happy with the Journal under Murdoch’s ownership. Obviously it would have been unrealistic to expect everything to stay the same; Murdoch’s team has done a good job of adding new features even if some of them are a little fluffy.

But in recent months I’ve noticed that the Journal is going out of its way to undermine the Affordable Care Act on the news pages. Sometimes it’s by slanting real news stories negatively. Other times –like today’s front page article Patients Cram In Tests Before Health-Law Start, it’s by making up news out of nowhere.

Here’s the lead:

Thousands of people are cramming in tests, elective procedures and specialist visits before year’s end, seeking out top research hospitals and physician groups that will be left out of some 2014 insurance plans under the new health law, health-care providers say.

Many insurers offering plans under the law are slimming down their networks of doctors and hospitals in a bid to lower the cost of policies, which begin coverage Wednesday.

The article continues with a discussion of how more of the plans being sold on exchanges feature narrow networks and often exclude high-priced academic medical centers. The story includes a few anecdotes supplied by high-priced hospitals about patients deciding to get surgery or a colonoscopy this year instead of next, but there’s no data presented to back up the assertions.

The implication is that patients are rushing to use their “good” health insurance before Obama takes it away. But this really doesn’t make a lot of sense. Reading between the lines –or more literally the first word “thousands”– I don’t think the editor actually believes this is a real story either.

Think about it. There are more than 300 million people in this country. It’s front-page news that “thousands” are supposedly getting care a little sooner than planned? In addition, the logical chain is pretty weak. Every year people rush to use up their benefits or just push to get things done around the end of the year when they have time off of work. Many of the people getting coverage on the exchanges are newly insured –so their access is increasing, not narrowing. Even those who are getting narrower networks are likely saving significant dollars on their premiums. And isn’t it actually a good thing that the Affordable Care Act is increasing competitive pressures on high-priced providers, who now must do more to show that they are actually better or be forced to bring their pricing into line?

It’s sad to see the Journal fall to this level.

By David E. Williams of the Health Business Group.

Medical child abuse: Making sense of the Boston Globe stories on Children’s Hospital

The Boston Globe caused quite a stir with its two-part story on Justina Pelletier, a 14 year-old girl taken from her parents and kept at Children’s Hospital in Boston for months after doctors there suspected her parents of “medical child abuse” and got the state child protection office to take emergency custody. The stories ( part I and part II) are well documented and disturbing, but I’ve been around the media and health care long enough to know that you can never be 100 percent sure of the real situation just by reading about it.

There are a couple points that stand out for me, however:

  • It is concerning that Dr. Mark Korson, the referring physician from Tufts –who is a knowledgeable and level headed guy– was not allowed to take part in the process after Justina was confined and that the patient did not get to see the gastroenterologist Korson referred her to. Children’s really needs to explain that part of the story
  • There are definitely cases where child abuse is wrongly asserted by physicians and the consequences for kids and parents can be absolutely devastating. When a child is seriously ill, some parents may lose it and act somewhat crazy, adding to the suspicion that they are causing the problem in the first place. I can empathize with the families while at the same time understanding where the doctors are coming from

Child abuse is real, but there are also physical illnesses that look like child abuse. And there’s no guarantee that physicians will sort out the true diagnosis. There is a helpful article (The Differential Diagnosis of Child Abuse) by Michael Segal, an MD PhD pediatric neurologist. It should be required reading for anyone in a position to make allegations of abuse. The article covers findings including lethargy/coma, bleeding and bruising, failure to thrive, immunodeficiency, high muscle enzymes, broken bones and recurring odd complaints. For each finding there is an explanation of potential underlying reasons other than child abuse.

However the Pelletier story comes out, I’m glad that we still have an independent, local newspaper that puts real resources into these investigations.


By David E. Williams of the Health Business Group.

Avoidable emergency department visits: Lessons from the Robert Wood Johnson Foundation (transcript)

This is the transcript of my recent podcast interview with Susan Mende of the Robert Wood Johnson Foundation.

David E. Williams: This is David Williams from the Health Business Group. I’m speaking today with Susan Mende, senior program officer at the Robert Wood Johnson Foundation. Susan, thanks for joining me today.


Susan Mende: My pleasure.


Williams: Susan, let’s talk about avoidable emergency department visits. I know that the Foundation has been funding work on that topic. So, first question: how big of a problem is avoidable emergency department visits?


Mende: It’s a pretty big problem. It’s a problem for patients, for overcrowded emergency departments and for costs. We’re finding that there are increasing numbers of emergency department visits and that patients’ demand for the emergency department is increasing at the same time that the number of hospitals with emergency departments is decreasing.


We found a 20% rise in emergency department visits between 2000 and 2010, but at the same time we see an 8% decrease in the number of hospitals with operating emergency departments between 1991 and 2010. So, what happens is that we are seeing large numbers of patients in overcrowded emergency departments waiting longer and longer.


Williams: Why isn’t the solution just to build more emergency departments? You talk about avoidable visits, but is the goal to just avoid these visits? What does that mean?


Mende: We all want emergency departments to be there in real emergencies. Certainly, for you or me, for our families, we want to know that if we are facing something life-threatening or something that seems really, really scary or really, really acute, that we want to know that the emergency department is there.


The problem is we’re finding that 70% of emergency department visits are not true medical emergencies. If these patients had been able to get to effective primary care in the time that they need it, they could have avoided going to the emergency department.


If you go to the emergency department there is often a very long wait time and still all of your problems and complex medical issues or social issues that you’re facing might not get addressed. Because emergency departments are really, really busy places where the idea is to diagnose, treat and move on to the next patient.


So first of all, people are not getting comprehensive care there. It’s not getting coordinated. If they show up at the emergency department over and over again, they’re probably going to be seeing different providers. A lot of the information about what happens with patients in the emergency department doesn’t get transmitted to their primary care doctor, so the doctor might not know that a medication was changed, that a test was done. And vice versa, the emergency department doesn’t necessarily know what kind of medications the patients are on, their whole medical history or what kinds of tests or procedures were already done. So, we can have a lot of duplication.


So there’s a question of quality and a question of cost as well. When a patient receives care in the emergency department that’s not really emergency — that is unnecessary — we all pay the price. We found that in 2007, the average cost of a visit to the ED or Emergency Department was $767.  At the same time, if you went to an office-based visit, the cost is $187. That means a cost difference of $580. So the healthcare system could save about $38 billion if we can eliminate all the unnecessary emergency department visits.


Williams: Susan, I understand the foundation has been funding some efforts to do just that; to look for opportunities to reduce these avoidable visits. Can you describe the sort of projects that have been funded and what sort of results you’re seeing?


Mende: The Robert Wood Johnson Foundation has a program that called Aligning Forces For Quality or AF4Q. It’s our signature program. This 10-year initiative works to improve the quality of care in 16 communities – some of them small, some of them big – all across the country. The idea is that we work to improve the care and the quality of care in these communities and also develop models and resources for other communities to learn from and to follow. A number of these Aligning Forces For Quality communities have been involved for many years in targeted efforts to reduce inappropriate emergency department use.


Williams: Have you found that the same kind of best practices work in different places? I understand that the AF4Q communities are in diverse settings, some urban, some more rural and in different parts of the country with different characteristics. Is it the same sorts of things that work in different places or are there all different kinds of answers and responses?


Mende: What we’re finding is that some of the issues are the same across the country, such as people showing up in emergency departments for conditions that would be much better treated in the primary care setting. But what we’re finding is that each community comes up with a solution that works for its own local circumstances.


For instance, one of the communities we worked with is Detroit. The group there is called The Greater Detroit Area Health Council. In Detroit they worked with their primary care practices to reduce the number of unnecessary ED uses. They work through the Greater Detroit Area Health Council with the Blue Cross network of Michigan and through Oakland Southfield Physicians, which is an independent primary practice association.


They implemented straightforward, low-tech interventions to reduce visits. For example they provided practices with scripts to use. The scripts would give them advice on how to do after-hours telephone recording and to telephone triage to direct patients to the appropriate providers. As a result every practice didn’t have to develop these on their own.


We wanted to reduce the barriers of patients getting through to primary care and having to go to the emergency department. So they gave advice about scheduling policies that allowed for patients to come in to see the doctor the same day as well as scheduling to allow patients to come in evenings and weekends, which is when a lot of patients go to the ED because they can’t get in to their primary care provider at that time.


Also, they felt that it is really important to follow up with patients who recently visited the ED. They wanted to remind patients that they should schedule a follow-up appointment with their primary care doctors after the ED visit. And they also wanted to tell them, “Listen, we’re here beyond 9:00 to 5:00.” We want to tell them that there are after-hours and weekend availability.


And for every new patient who came in, they developed what they call a welcome letter. And that would lay out what the practice was offering, their office hours, their scheduling policies, their after-hours contact numbers and how patients could get a hold of them after hours.


They found that before they started these different interventions, they were seeing the rates of emergency department use increase for conditions that should really be better treated at the primary care office. They had a high of 49 visits per 1,000 patients affiliated with their Blue Care network members.


After they did these interventions –starting in 2010– they found quite a dramatic decrease. They recorded a decrease to 7.43 visits per 1,000. So that was from 49 to 7.3. They were very pleased with that success and those results.


Williams: Some of the demand for ED visits is based on patient preference. But some demand seems to be driven, at least in my own experience, from the provider side. In other words, patients may call the provider especially off-hours and the provider may suggest going to the emergency department. Do you find that to be a key factor or is my experience unusual?


Mende: I think that factor is present in a number of communities. And I think that some of the work that we just talked about in Detroit really addresses that. There is a responsibility on the part of the primary care providers to not only educate patients about what is an emergency, what’s really appropriate to go through the emergency department about, but also they have to do things to increase access to their practices – things like same day scheduling. Sometimes people go to the emergency department because they just could not get off from work. And by the time they get off of work, their primary care practices are closed. And so a number of primary care practices are extending their hours or staggering their hours, changing their hours, offering weekend hours. And so I think there’s really responsibility from the primary care practice point of view to educate and to make themselves accessible.


Williams: In addition to the best practices that you are putting forward, are there changes that are needed to reimbursement or other kinds of rules and incentives in order to enable this? Some of the things you’re describing, for example, that a primary care practice might do sound like the right thing to do, but may not contribute to the bottom line.


Mende: Yes. I think that these kinds of changes, for primary care practices, certainly do have some financial implications. There are a number of initiatives around that are trying to address this. There’s something called Patient Centered Medical Homes, where practices get paid a certain amount of money per member per month to increase their accessibility, to provide better care coordination, and to provide better patient education.


And that’s just one example of the kinds of payment reforms or different ways of paying practices to increase their access and improve the quality of their care.


Williams: Are there ways for people who are not in communities that have Aligning Forces for Quality alliances to get access to some of the resources that you’re making available, whether they’re patients or whether they’re providers?


Mende: Yes, absolutely. We’ve learned a great deal from our work with Aligning Forces for Quality communities over the past seven years, about what works and what doesn’t work to reduce ED overuse. And so we packaged these lessons into a series of materials that are straightforward, that people can use as a guide and that they can adapt in their own communities.


We have issue an brief that talks about the role of better coordination with primary care settings in reducing inappropriate ED use. We have a wide compendium of resources that provide links and additional information for providers and organizations. We have a series of three case studies, one of them which is from Detroit that I mentioned. We have case studies from New Mexico about some public service announcements and public education that they did around this issue. We have resources from Wisconsin. Really detailed information about how communities tackled this issue. We have a guide for primary care practices on working with their patients to reduce avoidable ED use and a webinar. We have interviews about simple steps that you can take. And all of these materials are available free for charge if you come to our website.


Williams: Susan, final question. As you mentioned, the level of emergency department visits had increased over the past decade. You’re certainly taking some steps here that are meaningful in order to reverse that trend, especially to reduce some of those avoidable visits. What is your overall level of optimism or pessimism about where this is headed? Are we going to look in another 10 years and see that the avoidable use of emergency department has continued to increase? Is it going to level off? Are we going to see potentially a dramatic reduction?


Mende: I’m very hopeful about tackling this problem. It’s certainly not going to happen overnight. It’s a very complex problem due to many of the factors that we’ve talked about. But I think that patients are feeling the pinch. Many of them have higher deductibles if they do have insurance cover. For some of them, the health plans are not paying or not paying the full cost of the visit if the health plan considers it a non-emergency. And patients are concerned because they don’t know how much it’s going to cost them if they walk in to the emergency room. They don’t know what the bill is going to be when they walk out and they certainly don’t know how long they’re going to have to wait. And they certainly don’t know whether or not they’re going to get the care that they need and care that’s coordinated with their primary care providers.


So I think that patients are feeling the pinch in many ways. I think there is a great deal of public service analysis, a lot of patient education around this issue and around getting alternatives that patients can take. I think a number of practices are taking very bold steps to educate their patients and to make themselves more accessible.


A number of hospitals and primary care providers are working together. For instance, a number of hospitals and healthcare systems have made agreements with primary care providers so that they share the data on which patients are coming to the emergency department and the practice can look through the data for their own patients, for their own panel of patients. They can see who came to the emergency department, they can follow up with them. They can identify patients who go to the emergency department over and over again and do a deep dive with these patients, find out why they’re going there, do they need to better coordinate their care; are there medical problems or social problems that are not being addressed?


So I think there were are many different ways that we are tackling this problem. And I think it’s gotten more and more attention as being both a quality problem and a cost problem. And so I am quite hopeful that we are going to make significant improvements.

By David E. Williams of the Health Business Group


Avoidable emergency department visits: Lessons from the Robert Wood Johnson Foundation (podcast)

Susan Mende, Sr. Program Officer

Susan Mende, Sr. Program Officer

Only about 30 percent of patients treated in hospital emergency departments need to be there. The other 70 percent might be better off in primary care, where care could be better coordinated and costs are about one-quarter, according to The Robert Wood Johnson Foundation (RWJF). In recognition of this issue, RWJF has been funding programs to tackle the problem of avoidable emergency department visits.

In this podcast interview, RWJF Senior Program Officer Susan Mende discusses the work of Aligning Force for Quality grantee communities in identifying the root cause of avoidable visits and developing interventions to help primary care practices achieve their missions. Resources are available for free on the RWJF website.

Susan is optimistic that there will be significant progress in addressing this issue over the next few years.


By David E. Williams of the Health Business Group.

The absolute case for relative value units


Fee-for-service methodologies, especially relative-value units (RVUs), keep creeping back into alternative payment models like capitation.  Maybe we should take the hint and adapt RVUs to the new environment rather than throwing them out the window. That’s the essential message of a persuasive Perspective by Erick Stecker and Steven Schroeder in the latest New England Journal of Medicine.

Capitation works well at the level of an overall health system, but it’s tricker to apply at the level of small physician groups due to challenges in risk adjustment in small populations and concerns about conflicts of interest. That means physicians usually get paid on some kind of RVU basis. Typical RVU methodologies only account for physician time, skill and intensity. But RVUs could be improved by using comparative effectiveness research to give more weight to activities that are likely to improve patient outcomes. The authors provide an example of stenting for chronic stable angina, which currently has a Medicare RVU weighting of 11.2. They propose boosting it by 25% for those with “AUC score of 7,8, or 9 and conducted in cath labs with an approved AUC auditing process” while lowering the RVU by 50 to 75 percent for those for whom stenting is less likely to be helpful.

RVU-based systems are well entrenched because they are already understood and used by financial managers, are included in software used by health systems, and are understood by physicians. When RVUs are distorted they lead to rapid and profound changes in physician behavior. The authors cite the growth of doctor-owned specialty surgical centers and imaging centers as examples. Why not use value-based RVUs to achieve rapid increases in behaviors that are desirable from a value perspective?

RVUs are tweaked frequently so there’s no need for a high risk, big bang approach. RVUs can be changed as better evidence becomes available and to adjust to changes in physician behavior.

It sounds like a good plan to me.

photo credit: Nicholas Eckhart via photopin cc

By David E. Williams of the Health Business Group.