News & Updates

1. Disruption got real. After years of speculation about who or what would become the “Uber of healthcare,” the tectonic plates of the industry shifted substantially in the past year — and there’s reason to believe this will only continue in 2018. A number of mergers illustrate the blurring line between healthcare and other industries, such as retail and insurance. Consider the combinations of CVS and Aetna or Optum and DaVita and Surgical Care Affiliates. As for what’s to come, Apple and Amazon have both shown interest in expanding their healthcare footprint. In fact, just last month, we reported Amazon was in talks to move into the EHR space.

Executive’s takeaway: Executives grew skeptical of the term ‘disruptor’ when it was used as generously as it was circa 2011-2016. But now disruption is actually unfolding at a rapid clip, and executives are paying close attention to who/what poses the greatest threat to their business models.

2. Hospital-insurer negotiations heated up. Previously, a health system and a commercial insurer occasionally hit a snag in the contract negotiation process, resulting in a dispute palpable enough to consumers that it warranted headlines. These impasses generally lasted a matter of weeks before outside pressure drove the parties to compromise. The nature of these conflicts has since changed. This past year brought regular coverage of strained provider-payer talks. In fact, we now do a weekly compilation of payer-provider disputes and resolutions to stay abreast of these conflicts as they occur and subside. In 2017, we saw lawmakers intervene in payer-provider disputes, a health system executive’s meant-to-be-private email about an insurance company go public, and a children’s hospital go out of network with a commercial insurer — affecting 10,000 kids.

Executive’s takeaway: Health system executives are growing increasingly vocal with their thoughts about commercial insurers. In the past, executives took great lengths to observe discretion in these relationships. Now the gloves are off — or at least one is. We’re sure we haven’t seen the worst of a payer-provider dispute yet, but the number we see on a weekly basis, and their tone, indicates that disputes are both more frequent and more serious than in years past.

3. Investments in value-based care, once a somewhat safe bet, became debatable. In a final rule issued in November, CMS officially canceled the hip fracture and cardiac bundled payment programs and rolled back some mandatory requirements in the Comprehensive Care for Joint Replacement Model. This will continue to have a ripple effect on payers, providers and health system strategy. For hospitals and health systems that made significant investments to support excellence under the program, this news is difficult to take — especially since no investment is made lightly amid thin margins. Although CMS says it is still committed to value-based care as a concept, the mandatory nature of the bundles program acted as a pedal-to-the-metal force that made hospitals act. Since commercial payers follow Medicare, the fate of the program will likely influence the adoption of bundles among private insurers, too.

Executive’s takeaway: Most all executives tell us they want to be on the leading edge, not bleeding edge, of value-based care. Without a “do it or lose it” approach to bundles, the industry lost a major impetus toward value-based care, in which many health systems and physicians would take the plunge together. Providers have never had a clearly paved path for their “journey toward value-based care.” At best, it was a dirt trail. Now it could be compared to a dirt trail covered in snow. This leaves executives questioning the value of their current and future investments in value-based care.

4. Big systems want bigger. Just when you thought you had a handle on what a “big” health system looked like in the United States, a few major players rewrote (or are attempting to rewrite) the playbook. After more than a year of talks, Catholic Health Initiatives and Dignity Health signed a definitive agreement in December to create a 139-hospital, $28.4 billion health system. Soon after came reports of St. Louis-based Ascension and Renton, Wash.-based Providence St. Joseph discussing a merger, which would result in a 191-hospital, $44.8 billion operation. Although both of these deals trail Oakland, Calif.-based Kaiser Permanente and it’s nearly $65 billion in revenue, they illustrate how the composition of nonprofit American health systems is continuing to change from local and regional entities to corporate national networks. For example, if Ascension and Providence combine, they will outsize the largest for-profit health system today — Nashville, Tenn.-based HCA Healthcare — which includes 177 hospitals in 20 states and Britain.

Executive’s takeaway: Executives may want to reevaluate the oft-spoken phrase “all healthcare is local” in light of 2017’s M&A activity. Hospitals will continue to serve as economic engines in their respective communities, but the organization of health systems is moving in a direction where they are viewed as ubiquitous brands as opposed to regional hubs for health. For example, San Francisco-based Dignity and Englewood, Colo.-based CHI are basing the corporate headquarters for their new enterprise in Chicago. Ascension and Providence would have footprints in 27 states if they merge.

5. Many health systems that were new players in the health plan business got out of it. Provider-sponsored health plans always carried a great amount of risk. Of the 37 health plans launched by hospitals and health systems since 2010, only four were found profitable in 2015, according to research published this past year by the Robert Wood Johnson Foundation. As major health insurers reduced their individual coverage options and rolled back from the public exchanges this year, we also saw several health systems decide to scale back or shut down their health plans. New Hyde Park, N.Y.-based Northwell Health shared plans in August to wind down its health insurance business, CareConnect, over the next year. Dayton, Ohio-based Premier Health is selling its health plan to Evolent Health, a Washington, D.C.-based value-based care platform. Louisville, Ky.-based Baptist Health plans to shut down its health plan operation in 2018. Late last year, Dallas-based Tenet Healthcare revealed plans to scale back its insurance business in 2017 after officials attributed lukewarm earnings to its health plan business.

Executive’s takeaway: When even the big five health insurers — so well-equipped with analytic tools, data, infrastructure, utilization management experience and risk analysis talent — have a difficult time accounting for risk, it is not surprising many green health systems made their move for the door this past year. This is not an opportune time for health systems with little experience managing risk to build or buy a health plan.

6. Activist shareholders shook up legacy hospital operators. Board room issues within the major for-profit hospital operators are typically opaque, but 2017 brought a rash of investor-prompted activity that resulted in ousted CEOs, overhauled boards of directors, poison pills and new governance rules. Tenet Healthcare underwent significant change in 2017 under intense pressure from its largest shareholder, Glenview Capital Management. When two Tenet board members, both employed by Glenview, resigned over what they described as “irreconcilable differences,” they made it known that Glenview would possibly “evaluate other avenues” to be a constructive owner of Tenet on or after Sept. 1. By Aug. 31, Tenet announced it would replace CEO Trevor Fetter, “refresh” the composition of its board of directors and implement a short-term shareholder rights plan. Mr. Fetter resigned in October, before a successor was named, after 14 years with the system. In August, an investor in Franklin, Tenn.-based Community Health Systems called for the resignation of CEO Wayne Smith, who has led the 127-hospital system since 1997, over what the investor described as missteps in strategy resulting in financial trouble for the system. At this time, Mr. Smith still holds his job, but CHS may be bracing for more investor activity. Chinese billionaire Tianqiao Chen has gradually been ramping up his stock in the hospital operator since 2016. At time of publication, he holds nearly 23 percent of CHS stock. Finally, directors of HCA Healthcare made a change in late 2017 to allow established investors to participate in the board seat nomination process, a move made in response to an activist investor.

Executive’s takeaway: The fact that two of the largest U.S. for-profit hospital operators faced calls for CEO resignations in 2017 is part of a sweeping trend across industries in which activist investors start campaigns for change by targeting top management. Between January and May 2017, activist shareholders were responsible for ousting CEOs at three high-profile S&P 500 companies — American International Group, CSX and Arconic, according to The Wall Street Journal. Investors were attempting to oust six other CEOs in the same time frame. It’s worth noting that CEOs feel the heat at the launch of campaigns versus as a last resort. The WSJ characterized this trend as “a new level of aggressiveness for a group already known for its bold actions.”

7. As the average health system C-suite grew, a few systems reduced administrative roles. While the number of practicing physicians in the U.S. grew 150 percent between 1975 and 2010, the number of healthcare administrators increased 3,200 percent in the same period. Yet in 2017, we saw a few major health systems go against the grain and not only lay off administrators, but eliminate their roles completely. In June, Houston-based MD Anderson Cancer Center eliminated executive vice president roles and gave senior vice presidents more focused areas of responsibility. Valley Medical Center, part of Seattle-based UW Medicine, got rid of the COO position in May, and Charleston, S.C.-based Roper St. Francis did the same in August. In December, San Diego-based Scripps Health shared plans to eliminate the CEO position in its four hospitals in favor of a regional CEO model.

Executive’s takeaway: This past year contained several isolated incidents in which executive or administrative jobs were not immune from the financial pressures mounting on hospitals and health systems. There is reason to believe “right-sizing” (or at least reducing) administrative staffing at health systems will continue throughout 2018. Chris Van Gorder, president and CEO of Scripps Health, recently shared that layoffs at the system will likely include administrative and leadership roles while the system continues to hire caregivers. His reasoning, an excerpt of which follows, is applicable to many health systems today: “Healthcare is changing rapidly with huge growth in ambulatory care and reduced utilization of inpatient hospitals — and given the elimination of the individual mandate under the Affordable Care Act, the uninsured will once again be growing nationally. … We’ve got to shift our organizational structures around to be able to deal with the new world of healthcare delivery, find ways of lowering our costs significantly. If we don’t, we will not be able to compete.”

8. Healthcare and the government failed to effectively communicate. In 2017, the opportunities for the Trump administration, Congress and healthcare leaders to convene about healthcare legislation and policy came and went. CEOs from the five largest nonprofit health systems in the country took pen to paper, urging President Donald Trump and Congress to meet with them and exchange ideas. In the end, the closest thing we saw to healthcare reform in 2017 were bills — the American Health Care Act, Better Care Reconciliation Act of 2017 (or Skinny Repeal package), the Graham-Cassidy healthcare bill — that received significant opposition from major healthcare stakeholders, which are not historically liberal. Yet even an avalanche of nays from the American Medical Association, American Hospital Association, Federation of American Hospitals, American Psychiatric Association, Association of American Medical Colleges and several other groups did not sway Congress. All but three Republican Senators voted to pass the Skinny Repeal package, illustrating how the partisan nature of our political process is overriding expertise and informed lawmaking.

Executive’s takeaway: A bipartisan approach is the most effective way when attempting to redesign a $3 trillion industry that influences life-or-death decisions. These efforts also require input from a variety of seasoned healthcare experts who can challenge ideas, anticipate repercussions and identify blind spots. This holds true no matter which party holds control of the White House, Congress or both. Although healthcare stakeholders and government officials did not productively connect in 2017, health system leaders must persist in their attempts to influence public policy and exercise greater creativity in their advocacy efforts. Strategies that worked in the past can no longer be counted on in 2018 and beyond.

9. Fed up, nurses walked off the job. While nurses’ strikes are not a novel event, there is a reason many demanded wider attention and transcended local business news to become national headlines. The most noteworthy strike of the year took place July 12, when approximately 1,200 nurses at Boston-based Tufts Medical Center began a 24-hour strike — the first nursing strike Boston saw in 31 years. Roughly 120 miles from Boston, approximately 800 nurses at Berkshire Medical Center in Pittsfield, Mass., participated in a one-day strike in October. Across the country in California, nurses organized rallies and protests at more than 20 Kaiser Permanente sites to protest what they called inadequate staffing levels. In September, nurses and other hospital personnel unionized with SEIU walked off their jobs at Riverside University Health System – Medical Center in Moreno Valley, Calif., for three days. The county footed the $1.5 million bill for temporary replacement nurses for those 72 hours. Speaking of a bill, Minneapolis-based Allina Health tallied the costs of two 2016 strikes — one lasting six weeks — called by the Minnesota Nurses Association. The system put the figure in the ballpark of $149 million, which anchored Allina’s operating loss of $30 million for fiscal year 2016.

Executive’s takeaway: Although it is tempting to reduce labor strikes to events fueled by local market forces and politics, hospital and health system executives should pause and consider that striking nurses’ arguments — that they are expected to work demanding jobs with too few staff, resulting in unsafe conditions, high stress and burnout — is a description that applies to many, if not most, U.S. hospitals. Gender dynamics may also wield greater influence on administrator-nurse affairs in the coming year. As the nation comes to terms with troubling events that went unaddressed after women’s claims and voices were not met with the attention they deserved, health system executive teams are wise to change the approach taken in years past and pay closer attention to the female-dominated field of nursing. As one representative with the MNA told The Nation: “[Management is] a male institution thinking they can snub 1,200 women and pretend their opinions about healthcare don’t count.”

10. The year healthcare became very, extremely, incredibly difficult. Was any component of healthcare ever easy? Those who have spent years in the industry would say no. Yet 2017 was the year in which officials and lawmakers reminded the American public that healthcare is complicated. While true, this narrative functioned as a sound bite to normalize Congressional dysfunction.

Executive’s takeaway: What’s concerning here is whether this throwaway statement will make its way from Capitol Hill to hospital board rooms, executive offices, clinician lounges and medical school lecture halls and, over time, nurture a climate that fosters and condones inaction. It is unproductive to constantly point out the complicated nature of healthcare and/or bask in this acknowledgement. To do so is not the behavior of an effective leader. It goes without saying that healthcare is complicated. Healthcare is also necessary, expensive, life-saving, honorable, slow, inaccessible, urgent, flawed, and never going away. What are you doing to make it better?

San Diego will try something new in its uphill battle to shrink emergency response times in the sprawling and increasingly congested city: roving “peak-hour” fire engines not connected to any station and deployed at busy times in busy areas.

City officials say they plan to add six peak-hour engines – three in July 2019 and another three in July 2020 – to help meet a goal of having emergency crews arrive at the scene within seven and a half minutes 90% of the time.

Fire Chief Brian Fennessy said this month that the city is meeting that goal about 79% to 80% of the time, predicting the peak-hour engines could significantly boost that.

The engines will operate with four-man crews from 9 a.m. to 9 p.m. each day in areas where response times have been weak, or where regular crews are not available because of training.

City officials say it’s crucial to have peak-hour engines during late afternoon and evening commute hours, when emergency calls are typically at their highest volume.

To fully staff all six engines, the city plans to hire 48 additional firefighters at a cost of $6.3 million per year. No capital costs are anticipated because the city has several reserve engines it can use.

Fennessy stressed that peak-hour engines are not a substitute for new fire stations in key geographic locations, which he called the ultimate solution to the city’s response time struggles.

“I’ve never considered serving any of the fire station gaps with peak-hour engines instead of, rather than in addition to, fire stations,” Fennessy told the City Council this month.

Peak-hour engines, however, can shrink response times in areas where new fire stations are badly needed, but where construction has been delayed by lack of money or other problems.

Fennessy said an example is a planned station on the edge of City Heights that outside consultants Citygate called San Diego’s No. 1 response time priority in reports published in 2011 and 2017.

City officials considered seven potential locations in the area before buying a Fairmount Avenue site in May that has significant environmental hurdles.

Those issues have prompted city officials to estimate construction of the three-story station won’t begin until fall 2020, frustrating nearby residents and community leaders.

Councilwoman Georgette Gomez, who represents many of the neighborhoods the station would serve, said it’s baffling that a consultant’s report called for a new station there in 2011 and the city is still three years away from construction.

Fennessy said land in the area is scarce and some other potential sites wouldn’t have had as great an impact on response times in the area.

He said, however, that a peak-hour engine would be ideal for the area until the new station opens.

Other parts of the city likely to be considered for peak-hour engines, based on the 2017 consultant’s report, include Pacific Beach, south University City, Torrey Pines, Rancho Bernardo, Sabre Springs and southeastern San Diego.

Three areas with weak response times slated to get new fire stations are north University City in 2020, Black Mountain Ranch in 2021 and the UC San Diego campus in 2022.

Additional new stations include one already under construction in Little Italy and one planned in the Otay Mesa area.

Peak-hour engines will save the city money compared with quickly filling all of the 12 emergency-response gaps identified by the consultant, Fennessy said.

The savings go beyond just the cost of building 12 new stations at roughly $15 million per station. Staffing a new station typically adds about $2 million per year to the city’s budget on an ongoing basis.

https://www.beckershospitalreview.com/patient-flow/allegheny-health-network-to-shutter-hospice-unit.html

Pittsburgh-based Allegheny Health Network will close its nine-bed inpatient hospice unit at its West Penn Hospital, which is also in Pittsburgh, Jan. 25, according to the Pittsburgh Post-Gazette.

Hospital officials attributed the closure to a declining demand for inpatient hospice services and an increasing demand for home hospice care.

“Patients are getting on hospice sicker than ever and living less long,” Robert Hebert, MD, CMO of Allegheny Health@HomeHospice, told the Pittsburgh Post-Gazette.

“A large minority of our patients die within a week — almost half of them — and when they go home [after a hospital discharge], people want to stay home. They don’t want to make one more move.”

After the closure, the hospital will focus on expanding its at-home hospice services. AHN intends to hire a nurse practitioner and establish a care coordination position to ensure patients are properly cared for during at-home visits.

AHN will still offer inpatient hospice services at its other hospitals across Pittsburgh, according to the report.

To say that it has been a tumultuous year for the healthcare industry is an understatement. Federal policy changes and recent transactions involving large insurers, health systems and retailers will affect providers, payers and patients alike.

While there are many new and emerging trends we need to pay close attention to in 2018, here are what I think are the four most significant issues that will command our attention in the year ahead.

1. Inconsistent healthcare policy will continue to dominate the headlines
The federal debacle with so-called healthcare reform this year has been a case study in confusion, inefficiency and lack of focus. Every week seemed to bring a new twist in the direction of healthcare policy, especially in regards to the ACA, with almost no consistency to the legislative thought process. In many ways, the whole focus of ACA repeal and replace efforts was misguided — you can’t take something apart without some ideas for a replacement. The federal government’s lack of direction on healthcare policy has created chaos among all industry players.

Given the healthcare provisions in the proposed tax bill and potential future action with the ACA, there are serious implications for states across the country. The confusion surrounding Medicaid and other joint federal-state partnerships has discombobulated state budgets, and it is patients who will ultimately face the harshest consequences if states are forced to slash funding for healthcare.

For the foreseeable future, we’re going to continue to see inconsistency in government policies and funding. This is especially dangerous for hospitals in underserved communities that rely almost exclusively on Medicaid and Medicare funding. Unless they are supported in some way, many of these providers will sink deeper into debt.

2. In order to keep pace with newly formed organizations and partnerships, hospitals and health systems need to innovate
The CVS-Aetna deal did not come as a surprise to industry leaders who have been keeping their ears to the ground and have paid attention to recent trends. But nevertheless, this merger is a major shake-up that cannot be ignored. Google, Amazon and IBM Watson are all looking to stake out a piece of the healthcare field, and deals such as Optum’s purchase of DaVita Medical Group underscore the ever-evolving nature of the ways people access and pay for care and services. Providers should not view this movement as a threat that must be stopped. Instead, we should spur innovation on our end. We can’t sit still. That’s why, in Northwell Health’s case, we have been forging new partnerships and pursuing ventures that will enable the organization to compete more effectively in this rapidly changing environment.

It will be especially intriguing to see what market segments CVS and Aetna pursue after the merger is finalized. Undoubtedly, they will offer prescriptions, preventive care and other primary services to supplement CVS’ “Minute Clinics,” but it remains to be seen what other health services will be provided as part of this new collaboration.

Regardless of what new competitors enter the healthcare market, the seriously ill, elderly patients with chronic conditions and those who have suffered traumatic injuries will still be relying on hospitals to take care of them. It’s highly unlikely that any of the new players will be providing inpatient care. As we all know, the bulk of healthcare funding is spent on long-term care for people at the end of life. The Amazons and Googles of the world are not targeting that population.

Recognizing that traditional healthcare providers do need to adapt to this era of consumerism, among my strategies are to continue expanding our ambulatory network, facilitating innovative partnerships, enhancing efforts in prevention, maximizing our use of artificial or augmented intelligence, and improving our already robust telemedicine program.

In the end, I believe competition is good. Market disruptions give all of us headaches, but they are ultimately beneficial because they force us to do better and be more efficient, productive and creative

3. Unless we continue to improve the customer experience, customers will go elsewhere for care
The more competitive the market becomes, the more work we as providers must do to continually improve the patient experience and develop customer loyalty. This can partly be done through improving communication and curating a more retail-focused experience.

This is unbelievably important, as patients now have more access and choice for their healthcare than ever before. This is not limited to the in-person experience, but also how hospitals and health systems communicate with patients to help them get information and make appointments. Online and mobile platforms are already important for engaging customers, and they will only grow more essential in 2018.

Online engagement is not only for younger patients. It’s a medium that has become increasingly more effective than print or broadcast advertising for reaching older patients. Equally important is creating an experience that connects families with providers. We deliver more than 40,000 babies every year in our health system. Those are 40,000 families with whom we could be creating life-long bonds. Pursuing initiatives to maintain a connection with mothers and families is essential.

Over the past five or six years, we’ve seen major changes in the way innovative organizations in all industries treat their customers. For far too long in our industry, there was a pervasive attitude of, “We’re hospitals, or we’re physicians, people will always come because we’re here in the community,” but those days are over. Consumers don’t want to be told when to come or what to do – they want to access care and services on their terms, not ours. We are in the consumer service business, and our patients are educated and knowledgeable. They value easy access, a pleasant experience and quality care, so it’s our job to adapt quickly to meet their needs and expectations.

4. Strategies about “healthcare” must now encompass behavioral and mental health
As social stigmas surrounding mental health begin to break down and more people feel comfortable confronting behavioral health issues, it is the responsibility of providers to design their systems in a way that addresses the needs of these individuals. This is especially important at a time when opioid abuse has become one of this nation’s most-challenging public health crises.

The problem goes beyond drug and alcohol abuse. For instance, studies have shown that younger generations’ increased use of technology, particularly mobile devices, can lead to increased rates of anxiety, depression or loneliness. We as providers must consider these trends and tailor services accordingly, as more and more patients turn to us seeking care for issues that are destroying lives and breaking up families. All of us need to do a better job developing and training staff to meet this demand, especially when it comes to screening those who are trying to hide their addictions to opioids. It entails not only psychiatrists but nurses, social workers, case managers and other clinicians.

Regardless of the issues we face in this ever-evolving industry, we as providers must not resist change. We must continually adapt — those that don’t will get left behind.

TORONTO — For Dr. Peter Cram, an American internist who spent most of his career practicing in Iowa City, Iowa, moving here about four years ago was almost a no-brainer.

He’s part of a small cohort of American doctors who, for personal or professional reasons, have moved north to practice in Canada’s single-payer system. Now when he sees patients, he doesn’t worry about whether they can afford treatment. He knows “everyone gets a basic level of care,” so he focuses less on their finances and more on actual medical needs.

Cram treats his move as a sort of life-size experiment. As a U.S.-trained physician and a health system researcher, he is now studying what he says is still a little-understood question: How do the United States and Canada — neighbors with vastly different health systems — compare in terms of actual results? Does one do a better job of keeping people healthy?

For all of the political talk, in many ways it is still an open question.

“The Canadian system is not perfect. Neither is the United States’,” Cram said over coffee in Toronto’s Kensington Market. “Anyone who gives you a sound bite and says this system should be adopted by this country … I think they’re being almost disingenuous.”

Still, American support for government-run, single-payer health care, once a fringe opinion, is picking up momentum.

Sen. Bernie Sanders, the Vermont independent who emphasized single-payer health care in his 2016 presidential bid, helped move Canada into the U.S. spotlight.

Lawmakers in California and New York have taken steps toward such programs on a statewide level, and the concept is a hot topic in gubernatorial campaigns in both Illinois and Maryland.

In addition, polling finds doctors and patients increasingly supportive, though the percentages in favor typically drop when questions are focused on the taxpayer costs of such a system.

In Canada, medical insurance comes through a publicly funded plan. And, while covering everyone, Canada still spends far less on health care than the United States does: just over 10 percent of its GDP, compared with the United States’ 18 percent.

To many American advocates, Canada’s health system sounds like the answer to the United States’ challenges. But in Toronto, experts and doctors say the United States first must address a more fundamental difference. In Canada, health care is a right. Do American lawmakers agree?

“The U.S. needs to get on with the rest of the world and get an answer on that issue before it answers others,” said Dr.
Robert Reid, a health quality researcher at the University of Toronto, who has practiced medicine in Seattle.

It’s an obvious disconnect, said Dr. Emily Queenan, a family doctor now practicing in rural Ontario. Queenan, 41, grew up in the United States and did her residency in Rochester, N.Y. By 2014, after about five years of frustrating battles with insurance companies over her patients’ coverage, she had enough. She found herself asking, why not Canada?

She moved north. Gone, she said, are the reams of insurance paperwork she faced in America. Her patients don’t worry about affording treatment.

“We have here a shared value that we all deserve access to health care,” said Queenan. “That’s something I never saw in the States.”

Sanders has pushed the discussion, with a “Medicare-for-All” bill in Congress and in a visit to Toronto this fall. It was part fact-finding mission and part publicity tour. On that trip, doctors, hospital leaders and patients painted a rosy picture where everyone gets top-notch care, with no worries about its cost to them.

“They have managed to provide health care to every man, woman and child without any out-of-pocket cost,” Sanders told reporters while speaking on the ground floor of Toronto General Hospital. “People come to a facility like this, which is one of the outstanding hospitals in Canada. They undergo a complicated heart surgery, and they leave without paying a nickel.”

It sounds idyllic. But the reality is more complicated.

While progressives tout the Canadian system for efficiently providing universal health care, the Commonwealth Fund, a nonprofit research group, puts it just two spots above the United States — which ranks last — in its health system assessment. It suggests that in timeliness, health outcomes and equitable access to care, Canada still has much to improve.

“If you deny there are trade-offs, I think you’re living in wonderland,” Cram said.

The Canadian Vibe
In Canada, everyone gets the same government-provided coverage. Provinces use federal guidelines to decide what’s covered, and there’s no cost sharing by patients.

“Come to our waiting room,” said Dr. Tara Kiran, a family doctor at St. Michael’s Hospital, in Toronto. “You will see people who are doctors or lawyers alongside people who are homeless or new immigrants. People with mental health issues or addiction issues together with people who don’t.”

But that insurance — which accounts for 70 percent of health spending in Canada —addresses only hospitals and doctors. Prescription medications, dentists, eye doctors and even some specialists aren’t covered. Most Canadians get additional private insurance to cover those.

In countries such as Britain or Germany people can opt out to buy private insurance. Canada prohibits private insurers from offering plans that compete with the government, a restriction some doctors are suing to lift. It’s not a popular view in Canada, experts said, but the implications are significant.

Here, the debate focuses more on bringing down health spending — a concern in the United States, too, but one often overtaken by politics.

Canada’s provinces put, on average, 38 percent of their budgets into health care, according to a 2016 report from the Canadian Institute for Health Information, a nonprofit organization. Canada’s single-payer system is supported by a combination of federal and provincial dollars, mostly raised through personal and corporate income taxes. (A few provinces charge premiums, which are income-based and collected with taxes.)

“We make improvements or change things only to have additional debates about other things. Those debates are constant, and they should be,” Reid said. “[But] most of what you hear in the U.S. is back to the tenor of the insurance framework, whether [they] should have Obamacare or not.”

Taxes in Canada are generally higher than in the United States. Canada, for instance, collects a levy on goods and services and also taxes wealthier citizens at a higher income tax rate.

But many here call that a concession worth making, and also note that they don’t have to pay separate premiums for health care as people in the United States do.

“We can’t have what we have if we don’t pay the taxes,” said Brigida Fortuna, a 50-year-old Toronto resident and professional dog groomer, while on her way to a medical appointment. “But you have to take care of your people. … If you don’t have good health care, you’re not going to have a good society.”

The Trade-Offs
That said, it’s not a perfect system. Canadian health care doesn’t cover prescriptions, physical therapy and psychotherapy. And there’s the concern that Canadians wait longer for health care than would Americans with robust health coverage.

There are cases, Reid said, when cancer care in Canada is delayed enough to yield health problems. Ex-pat Cram pointed to research that suggests low-income people are likely to wait longer for medical care — which can result in worse health outcomes.

“We do have a two-tiered system,” he said. “Most know it. Few will admit it.”

Typically, experts said, people with serious medical needs will jump to the front of the line for medical care. Kathleen Wynne, Ontario’s Liberal Party premier, said the Canadian government is actively trying to improve wait times.

But so far, it’s unclear how effective that’s been. A 2017 report from the nonprofit Canadian Institute for Health Information found that wait times had dropped for hip fracture repairs. But waits for, say, MRIs and cataract surgery have actually gotten worse. Depending on their province, the average wait for cataract removal ranged from 37 days to 148 days.

Many patients, though, said the waits were a trade-off they were willing to make. Toronto-based Nate Kreisworth, a 37-year-old music composer and producer, called it an obvious choice.

“You are not going to die because you’re waiting,” he said on a recent sunny morning while walking with his dog near Kensington Market. “Better wait times for everything? Sure, why not. But as long as the major issues are being covered, then I don’t think it’s really much of an issue.”

As Fortuna put it: “If you go for a headache and someone else is going to lose their arm, of course they’re going to take care of that person. I’m OK with that, because someday that could be me, too.”

Waits aren’t the only concern, though. There’s financing — and what it would cost for the United States to implement a system like Canada’s.

Because Americans have higher expectations about what a health plan should cover, it would be more expensive to adapt a Canadian approach, said Dr. Irfan Dhalla, an internist and health quality researcher in Toronto. And the quality may differ from what they are used to.

And in Canada, “everyone gets Kmart care,” Cram said. “There’s no Neiman Marcus care.”

Of course, some amenities that drive up costs — fancier food, softer gowns or private rooms — don’t necessarily produce better results.

A 2017 study found that patients with cystic fibrosis fared better in Canada than in the United States. But on the other hand, 2015 research comparing surgical outcomes found better results in the United States than in Canada. The Commonwealth Fund’s most recent ranking places Canadian health outcomes above America’s, but only by two slots.

Even so, many Canadians said they couldn’t imagine living with an American system. It’s a question not just of efficiency, but of fairness. Kreisworth compared his experience to that of family members in the United States.

“I talk to my brother’s girlfriend who is a part-time worker who has no [health] benefits — who would just be sick and not go to the doctor because she couldn’t afford to pay,” he said. “I can’t imagine that here. It seems like — it’s so wrong. It just seems utterly wrong.”

A group of Madison Fire Department paramedics are seeing success with a pilot program that allows them to work on prevention methods with people who are frequently calling for emergency services.

The community paramedicine program has been in place in Madison for about two years. It’s run by paramedics Gail Campbell and Mindy Dessert. They received additional health care training to start the program.

They work with people like 73-year-old Sandra Espinoza. She started using an oxygen tank a few years ago and struggled to get used to it. She was having a hard time breathing and when she ran in to trouble, she would call 911. In 2015, she called for medical help 127 times.

“Sometimes I would call two or three times a day because I just did not know what I was doing,” Sandra said.

Gail and Mindy started making home visits to help teach Sandra how to use her oxygen tank. They worked together to find ways to prevent Sandra from having to get emergency care.

“it just took a little advocating, educating and just coming and spending some time with her and finding out what was that missing piece that 911 was filling,” Mindy said.

The program is a partnership with Meriter Hospital. David Hahn, a Nurse Case Manager in the Emergency Department, says the program is part of a growing trend in health care.

“Health care is changing more towards a patient-centered model. The health care needs of the patients is going beyond the walls of the hospitals and clinics and that change is what we’re seeing right now with community paramedicine,” Hahn said.

In November, Gov. Scott Walker signed a bill in to law that would create a formal certification program that paramedics can get to create and participate in their own programs, tailored to their community’s needs.

Gail and Mindy say they’ve found a lot of success in their program over the past two years. In Sandra’s case, in 2017, she’s called 911 less than 20 times. Most of those calls were for health problems unrelated to her oxygen tank.

“I didn’t like calling 911 but i didn’t know what else to do. It was a mess. I was a mess. I didn’t know what to do but now I know,” Sandra said.

“It’s not real hard stuff it’s just kind of figuring out what is that missing piece,” Mindy said.

The CMS is ending a funding stream that states relied on to transform their healthcare systems to provide more efficient patient care, saying it’s unclear that the program is a good investment.

Over the years, states have received billions of dollars through the Designated State Health Programs, or DSHP, which can be used to finance delivery system reform. Those funds have gone toward health issues including lead poisoning prevention or supported employment programs that benefit Medicaid beneficiaries, according to Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

But the CMS said Friday that it will not renew DSHP portions of Medicaid waivers when they expire, and new requests for DSHP money will be denied.

“Current demonstrations have not made a compelling case that federal DSHP funding is a prudent federal investment,” CMS Medicaid Director Brian Neale said in a letter to state officials Friday.

Health policy insiders said the news wasn’t much of a shock, as the Trump administration has previously stated it would reduce healthcare program spending.

“I am not surprised that the administration, despite its stated interest in improving healthcare quality, would cease investing in delivery system reform for the Medicaid population,” said Sara Rosenbaum, a professor health policy at the George Washington University.

DSHP funds were always supposed to be a temporary solution to help drive delivery system reform. However, states have viewed the federal dollars as a source of additional revenue, Neale said.

“This, in effect, results in increased federal expenditures without a comparable increase in the state’s investment in its demonstration,” Neale said in the letter.

The Medicaid and CHIP Payment and Access Commission has noted a similar sentiment when it evaluated delivery reform experiments around the country.

Arizona, California, New York, New Hampshire, Rhode Island and Washington now have waivers that include DSHP funds.

Spokespeople from those state Medicaid agencies noted they still had DSHP funds for several years to come. They acknowledged they may have to come up with a replacement if delivery system reform efforts continue beyond the funding’s expiration.

“We have always understood that this DSHP was only available for the five-year life of our Medicaid transformation demonstration,” Amy Blondin, a spokeswoman for Washington’s Medicaid agency, said. “We are pleased to be able to continue the transformative work we have already underway with our waiver.”

As long as states are allowed to complete their waiver terms without change, the elimination of DSHP shouldn’t be a problem in the short term, Solomon said.

“However, for states that rely on this as a way of financing their initiatives it could make it harder for them to continue their reform efforts in the future, and of course no new states would be able to utilize this method to finance future efforts to reform their delivery systems,” Solomon said.

The Obama administration shared the Trump administration’s view that DSHP funds should be a temporary aid for health system transformation, according to Eliot Fishman, who oversaw 1115 waiver under the Obama administration and is now senior director of health policy at Families USA.

However, he was disappointed that states that haven’t yet used this funding tool will never get the chance to do so, as delivery system reform is needed around the country.

“We are still in the second or third inning out of nine when it comes to Medicaid system transformation,” Fishman said. “This is something that still needs federal support.”

————————————–
Note – from an explanation provided to the National Governor’s Association in a report authored by the Center for Health Care Strategies:
https://www.chcs.org/media/Medicaid-Compendium-Overview.pdf

1115 WAIVERS/DELIVERY SYSTEM REFORM INCENTIVE PROGRAM/DESIGNATED STATE HEALTH PROGRAMS
Some states have received approval from HHS for Medicaid Section 1115 demonstrations that have provided states with the authority to make sweeping changes to their Medicaid programs while receiving additional funding from the federal government. For example, states have Section 1115 demonstrations that allow them to implement large-scale delivery system and payment reform efforts and to receive additional federal funds through the DSRIP, which states have used to make additional payments to providers and other entities, and Designated State Health Programs (DSHP), which are state-funded programs that would not otherwise be eligible for federal Medicaid matching funds.

Since the first DSRIP program was approved in California in 2010, seven additional states (Kansas, Massachusetts, New Jersey, New Mexico, New York, Oregon, and Texas) have received approval from HHS for DSRIP programs and several of these states have extended their programs.

Early DSRIP programs provided federal funding for payments to hospitals, and particularly safety net hospitals, with metrics tied to the success of individual projects. More recent DSRIP programs provide federal funding for payments to integrated delivery networks linking hospitals to other providers and social service agencies, with metrics tied to system transformation.

Significantly, in more recent waivers, both the integrated delivery networks receiving DSRIP funds and the state are at risk based on quality and cost measures – meaning that a failure to achieve these metrics results in reductions of DSRIP funds.

New York is using its DSRIP to invest in 25 Performing Provider Systems, each of which must include a network of acute, long-term care, and behavioral health providers with linkages to community- based social services organizations. Providers must form partnerships to implement innovative projects focusing on system transformation, clinical improvement, and population health improvement. DSRIP funds are used to reward performance linked to achievement of specific project milestones associated with specific projects. One keystone of New York’s demonstration is the link between DSRIP funds and demonstrable metrics with an overarching goal of reducing avoidable hospitalizations by 25 percent over five years.

Oregon is using its Section 1115 demonstration waiver to implement its CCO program. Under this demonstration, Oregon obtained a significant level of federal matching funds to support CCO implementation. The state used DSHP funds to invest in a Transformation Center, innovator agents, learning collaboratives, and other technical supports, which are part of the quality strategy that Oregon developed to meet its program goals. DSHP is tied closely to specific terms and conditions pertaining to the annual expenditure reduction in spending targets and quality and access standards. For example, CMS is authorized to reduce DSHP funding if Oregon does not meet those terms.

Kindred Healthcare (NYSE: KND), the nation’s largest home health care provider, is in advanced talks to be acquired by insurance giant Humana Inc. (NYSE: HUM) and two private equity firms, the Wall Street Journal reported Sunday. The newspaper cited “people familiar with the matter.”

Kindred and Humana did not immediately respond to requests for comment from Home Health Care News on Sunday afternoon.

Louisville, Kentucky-based Kindred would be divided up as part of the complex deal, WSJ reported.

Under terms of the rumored deal, private equity firms Welsh, Carson, Anderson & Stowe and TPG would acquire Kindred’s 77 long-term care hospital and 19 rehabilitation facilities. The private equity firms and Humana would acquire Kindred’s home and hospice business.

The deal values Kindred’s stock at $9 per share, giving the company a $750 million market value with a total enterprise value of $4 billion, according to the Journal. KND shares were trading at $8.60 at market close on Friday. Kindred’s share price was buoyed last month, when the Centers for Medicare & Medicaid Services (CMS) announced it would hold off for now on a controversial new framework for reimbursing home health agencies.

The latest takeover rumor comes as Kindred has been in a period of transformation, and follows other reports that potential takeover bids had not been successful.

After its $1.8 billion merger with Gentiva Health Services, completed in 2015, Kindred became the largest home health and hospice provider in the United States but also increased its debt load. Since then, it has made a big move to divest its large skilled nursing business.

This potential Humana deal could be announced “soon,” WSJ reported, but noted that it still could fall through.

Insurers making big moves
Humana, which is also based in Louisville, is a major health insurance provider, with more than 13 million customers. The company also has some home health care operations and executives recently expressed their desires to expand the home care business line, in discussing third quarter earnings.

Should it materialize, the Humana transaction would come on the heels of another major health care deal; at the beginning of the month, CVS Health (NYSE: CVS) announced it will be acquiring Aetna (NYSE: AET), the nation’s third-largest health insurance provider, for $69 billion.

Early in 2017, Humana and Aetna called off their proposed $34 billion merger, facing federal opposition due to antitrust concerns.

Humana’s home care division, Humana at Home, took a hit at the beginning of 2017 as the health system experienced a $400 million loss. In February, the company announced 500 home care workers were laid off in its Ohio and Florida locations.

But both Humana and Kindred have touted their ability to enhance coordination between acute and post-acute settings in general, and home health in particular, as a way to improve outcomes while keeping costs down in value-based payment models.

The CMS announced on Thursday that patient experience scores and star ratings have been added to the Physician Compare website for patients and caregivers to view.

The site will now display physicians’ 2016 performance under the Physician Quality Reporting System as star ratings.

Patient survey scores from the Consumer Assessment of Healthcare Providers and Systems surveys will be listed on “group pages” that show the overall performance of a physician practice instead of individual doctors.

The measures used to get a composite 5-star rating score for doctors involve preventive care, patient safety, care planning, diabetes, behavioral health and heart disease.

Physician Compare was also updated to show 2016 data from the Shared Savings Program.

Earlier this week, the CMS also announced it added four new quality measures for healthcare consumers to view on the Inpatient Rehabilitation Facility and Long-Term Care Hospital Compare websites.

The CMS’ suite of Compare sites were mandated under the Affordable Care Act and designed to encourage Medicare beneficiaries to seek out high-quality healthcare. However, a few of them have been flagged for having incorrect information. As recently as last week, the CMS said an update to its Hospice Compare website would be delayed while some information was corrected.

CMS Administrator Seema Verma has publicly touted her commitment to improving patients’ access to information that allows them to shop for their care.

In what is believed to be the first study to measure the impact of Uber and other ride-booking services on the U.S. ambulance business, two researchers have concluded that ambulance usage is dropping across the country.

A research paper released Wednesday examined ambulance usage rates in 766 U.S. cities in 43 states as Uber entered their markets from 2013 to 2015.

Co-authors David Slusky, an assistant professor of economics at the University of Kansas, and Dr. Leon Moskatel, an internist at Scripps Mercy Hospital in San Diego, said they believe their study is the first to explain a trend that until now has only been discussed anecdotally.

Comparing ambulance volumes before and after Uber became available in each city, the two men found that the ambulance usage rate dipped significantly.

Slusky said after using different methodologies to obtain the “most conservative” decline in ambulance usage, the researchers calculated the drop to be “at least” 7 percent.

“My guess is it will go up a little bit and stabilize at 10 to 15 percent as Uber continues to expand as an alternative for people,’’ Moskatel said.

Slusky said he and Moskatel are submitting the paper to journals for peer review.

San Francisco-based Uber quickly distanced itself from the notion that hailing an Uber driver is an acceptable substitute for calling an ambulance.

“We’re grateful our service has helped people get to where they’re going when they need it the most,” said company spokesman Andrew Hasbun. “However, it’s important to note that Uber is not a substitute for law enforcement or medical professionals. In the event of any medical emergency, we always encourage people to call 911.”

Moskatel, however, said many patients “tend to be pretty good at assessing their state and how quickly they need to come in and how sick they are.”

But at least one prominent Bay Area emergency room physician disagreed.

Paul Kivela, president of the 37,000-member American College of Emergency Physicians, said he believes that for those low-risk patients who can’t drive themselves to the emergency room, Uber is a good service.

But many people, he said, may not be able to differentiate between a life-threatening emergency and an innocuous medical issue. So, he said, calling 911 is always the safest bet.

“A paramedic has the training and the ability to deliver life-saving care en route,” Kivela said. “Where I really have a hard time is believing an Uber driver is going to attend to you.”

Kivela noted that in addition to his work as an ER doctor at Queen of the Valley Medical Center in Napa, he is also the medical director of an ambulance company in Solano County.

The researchers, however, insisted that ride-booking services such as Uber and San Francisco-based Lyft can sometimes be the best way to get to the hospital in a hurry.

Previous research, Moskatel said, “suggests that a fair number of people are using ambulances to get to the hospital because they simply don’t have another way to get there’’ — particularly those who live in areas with limited taxi service.

And, Slusky added, with health care taking a big chunk out of most people’s budgets, many consumers these days have to weigh a few factors before calling an ambulance.

“They have to think about their health — and what it’s going to cost me,” he said. “And for many of us with high-deductible plans, an ambulance ride would cost thousands of dollars.’’

Slusky added: “If we want to reduce (health care) spending, we have to find ways to do things cheaper — and that’s in all kinds of situations where you don’t need the most expensive resource. We don’t all need to fly first-class all the time.”

Moskatel and Slusky said they focused only on Uber because they needed a broad set of data and the company had been operating for a longer period of time than competing services, allowing the researchers to assess a greater number of locations.

Because Uber was not involved in the study, Moskatel had to painstakingly map all the dates the company entered a certain market, based only on the company’s public announcements.

Ambulance rates were obtained from the National Emergency Medical Services Information System, or NEMSIS, a national repository for emergency medical services data.

Slusky said Salt Lake City-based NEMSIS agreed to run the numbers for each city, but an agreement between NEMSIS and its members prevents any release of information that could be used to identify rates for specific regions at the state, city or ZIP Code level.

In Santa Clara County, Emergency Medical Services director Jackie Lowther said there had been “no significant decrease in volumes in Santa Clara County, other than the usual seasonal variation for this time of year.’’

Travis Kusman, Lowther’s counterpart in Alameda County, did not respond to a request for comment. Nor did officials from Lyft.