If you do the math, you can rather quickly determine that, as the Silver Tsunami continues with the Boomer generation, federal funding for health care will become more and more scarce. There have been some very serious cutbacks in funding to hospitals recently, and we have not seen even the tip of the iceberg. As a matter of fact, Windber's total increase in reimbursement from Medicare this year for all inpatient expenses will amount to about $8,000 for twelve months.
When all expenses are taken into consideration for even a hospital our size, $8,000 won't cover a tiny fraction of the cost increases that we will be dealing with from the implementation of new federal regulations alone this month.
We have written extensively about the amazingly low infection rates here at Windber Medical Center, but, you have also read those sobering national statistics regarding deaths from hospital missteps. CMS (the Center for Medicare and Medicaid Services), has recently introduced a form of pay for performance, or more appropriately, no pay for performance which will very likely cause a great deal of change in the American Healthcare System.
CMS has decided to literally stop paying for the treatment costs of preventable medical complications. At the present time, only seven hospital-acquired conditions are on the no-pay list, but it may include up to seventeen conditions by fiscal 2009, this October.
This approach is referred to as visibility for good care,and it will very well represent the beginning of a stampede from the third party insurance payers to follow "the CMS Big Dog," and discontinue payments based on the same criteria. In fact, Cigna Corp recently announced that it will not be reimbursing hospitals for certain errors as well.
So, what's on the list of "no pays?" Let's start with the obvious: Objects left in after surgery...clearly, that would seem to come under the duh category. Then there are the pressure ulcers or bed sores, falls and trauma, catheter associated urinary tract infections, and surgical-site infections after heart surgery.
As a small hospital in an area where the percentage of octogenarians statistically mirrors Dade County Florida, nursing home admissions often come in with these problems, but CMS contends that the hospital should make sure the infections or bruises were there upon admission. Otherwise, it's a free ride for the government.
Analysis of the source of infections can often times be almost impossible to determine. Having said that, however, only about 9% of U.S. hospitals use daily reminders to help physicians remember which patients have urinary catheters in place. According to the University of Michigan's Sanjay Saint, a professor of internal medicine, about 74% don't keep tabs on how long the catheters are in place.
Modern Healthcare had an article by Linda Wilson on this topic, and in that article quoted the number, $23,772, as the approximate loss that each hospital would endure from this first wave of no pays. Accepting that number as a guide would be like determining how much damage one termite might do to your home. The decision to impose these no-pay penalties should surely get the attention of those of us in this business whose job it is to keep the place open because the next nine conditions, and the next nine, and the next nine could possibly lead to very serious financial challenges for every hospital. It is bureaucracy at its finest.
In the carrot and the stick scenario, there will be lots of hits. Some will be fatal to smaller hospitals. Wouldn't it have been better to just reward hospitals like Windber? Everyone would have lined up to learn our secrets. Carrots work, too.
Nick, it has been far too long since my last comment on your site. In any event, "never lists" cuts in reimbursement rates from government and private payers as well as a host of articles regarding quality of care, provider ranking, hospital ranking, and lots of other similar issues have been playing out every day in the news. It's overwhelming and all seems to becoming a blur.
I keep coming up with the same question regarding all of this. Everyone in healthcare wants to mitigate costs while still providing high quality service. The insurance companies seem to be driving so much of healthcare’s financial issues without regard for the consequences. Why is the healthcare industry letting payers dictate cost control measures? It seems to me that reducing reimbursements from whatever payer source is the wrong approach. Paying less for something on the back end does not influence the cost of that particular item. It would be as if you and I went into a store and decided not to pay full price for something and we only paid what we thought we should. The store loses money. The cost of the item is still the same. By us paying less for the item we are not controlling the cost of the item. All we are doing is reducing our own out of pocket costs as a payer. The cost of manufacturing and providing that item is still the same.
If we as a nation of interested in controlling the costs associated with healthcare it would seem prudent to develop cost controls on the front end of products and services and not the back end which is what we are doing now. If payers are looking to force a change in the current with lowering reimbursement rates, and omitting payment for items of their own choosing - never lists - how does anyone expect hospitals and other healthcare facilities to survive?
I agree that as a nation we need to raise the bar with respect to quality in all of our hospitals, however even in the best of conditions it is unlikely that errors and mishaps will completely become extinct. In fact if hospitals are truly looking to completely moderate errors and mishaps they are going to have to spend a lot more on payroll and the integration of technology in providing services. I don’t see how that can be done in the face of our current and future reimbursement strategies.
Posted by: Mike Pringle | Sunday, June 08, 2008 at 11:17 AM