DCMedical News: Monday, May 16, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Monday, May 16, 2022
Atrium-Advocate Aurora Merger Will Test Biden Antitrust Rhetoric
Announcement of the merger of Atrium Health and Advocate Aurora Health (here) will test the "anti-monopoly" rhetoric of the Administration, along with the representation that health care inflation is due in significant part to monopoly pricing.
The merger sponsors note that "The new organization will have a combined footprint across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama. It will serve 5.5 million patients, operate more than 1,000 sites of care and 67 hospitals, employ more than 7,600 physicians and nearly 150,000 teammates and have combined revenues of more than $27 billion." The combined organization will be known as Advocate Health, and will be led by Atrium's Eugene Woods after the first eighteen months of co-CEO status, will be headquartered in Charlotte, current base of Atrium, and will have Wake Forest as its primary teaching center.
Sweeteners aimed at public officials "Include a $2 billion pledge to disrupt the root causes of health inequities across both rural and urban underserved communities, their commitment to achieve carbon neutrality by 2030 and a pledge to create more than 20,000 new jobs across the communities they serve."
One public official not waiting long, however, is the State Treasurer of North Carolina, Atrium's home state. The Georgia Virtue (here) publishes a report that "North Carolina’s state treasurer is at least one state official denouncing the move, asking the Federal Trade Commission, U.S. Department of Justice and the North Carolina attorney general to block it in the regulatory approval process. Republican Dale Folwell says, ultimately, taxpayers will lose on the deal to 'tax-exempt, multibillion-dollar investment companies disguised as nonprofit hospitals.'"
“'The proposed merger of Atrium Health and Advocate Aurora Health into a six-state medical behemoth pocketing $27 billion in annual revenue raises many red flags. Chief among those is the monopolistic nature of the alliance, which would be the sixth largest health system in the country,' Folwell wrote in a Wednesday statement. 'North Carolina, already home to one of the country's top five metropolitan markets with the highest level of health care concentration, is no stranger to the ill effects of consolidation.'"
“'Research consistently shows mergers and acquisitions do not deliver on hospital executives’ promises, but instead trigger higher costs, reduced access and the same or lower level of care.' Folwell is encouraging the FTC, the DOJ and state Attorney General Josh Stein, a Democrat, to closely scrutinize the deal."
Fresh off the 51-50 confirmation of a third Democrat to the five member Federal Trade Commission (report in The New York Times here), the hospital merger will be among the first major monopoly challenges for the FTC's executive Lina Khan, now with a majority vote behind her. Some observers believe (here) that the FTC, rather than sticking to its traditional antitrust jurisdiction, will soon become involved in a multi-year squabble with tech companies over privacy.
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Turn Off the Federal Money Spigot for Hospitals
Prominent economists from Johns Hopkins write in JAMA (here) that hospitals received too much money from the federal pandemic spigot, accounting for, among other phenomena, bloated costs structures and hospital investment in areas in which hospital executives have no experience.
Ge Bai and Gerard Anderson, joined by Yang Wang, report that "A sizeable reduction in the operating margins of US hospitals was found in 2020. However, their overall profit margins remained similar to those in prior years, and government, rural, and smaller hospitals generated higher overall profit margins during 2020 than in prior years . . . The study results suggest that the COVID-19 relief fund effectively offset the operational financial losses of hospitals during the COVID-19 era, particularly for government, rural, and smaller hospitals, which are typically more financially vulnerable and have been supported by some targeted fund allocation."
The study was based, however, on RAND data, a "compiled and processed" version of Medicare Cost Reports, and its conclusions at direct variance with hospital industry representatives to Congress.
Ge Bai and Brian Blase comment candidly on Bai's study in STAT (here). "During the pre-pandemic period, U.S. hospitals with July-June fiscal years generated about 5% average annual profit margins. From July 2020 to June 2021, their average annual profit margins more than doubled, increasing to 11%." They add, "Continuing unnecessary government subsidies would also reduce their incentives to improve efficiency, an important effort since many hospitals have developed inefficient, bloated cost structures."
RaDonda Vaught Conviction and Sentencing Puts Spotlight on Automated Dispensing, ISMP
The Institute for Safe Medical Practices has been collecting voluntarily-reported information on dispensing errors from hospital medication cabinets, sharing that information with the two prominent manufacturers of such cabinets, and receiving reports from time to time on hospital adoption of new safety features for such cabinets (five letters for drug names, reminders to staff of drug name spelling), during the three years since RaDonda Vaught was arrested for erroneous and fatal administration of the wrong drug. ISMP shares some of this information with the Kaiser Family Foundation, here.
OIG Finds Patients at Risk in Hospitals, Unchanged in Ten Years
The Office of the Inspector General of HHS has published its second report on accidental harm to patients in hospitals (here). The first such study, in 2010 was "the first national incidence rate of patient harm events in hospitals" and found "27 percent of hospitalized Medicare patients experienced harm in October 2008. During that month, hospital care associated with these events cost Medicare and patients an estimated $324 million in reimbursement, coinsurance, and deductible payments. Nearly half of these events were preventable."
This update studies patient harm events among hospitalized Medicare patients in October 2018, and found that "One in four hospitalized Medicare patients experienced harm during October 2018. For nearly a quarter of these patients, harm events resulted in additional costs to Medicare. Physician-reviewers determined that 43 percent of the harm events could have been prevented if patients had been provided better care."
Of the harm incidents, 43% were related to medication, 23% were related to patient care, 22% stemmed from procedures and surgeries and 11% were due to infections. Modern Healthcare notes (here) that "Of the 25% of Medicare patients who experienced harm, around half experienced adverse events, which led to longer hospital stays, permanent harm, life-saving intervention or death. The majority of adverse events, 74%, contributed to or resulted in a prolonged facility stay, care elevation, transfer to another facility or subsequent admission. Another 10% of adverse harm events contributed to patients' death—an estimated 1.4% of the roughly one million hospitalized Medicare patients died during the month-long study period in 2018."
"Among the preventable events, 33% involved patients receiving substandard treatment or therapeutic care and 31% involved patients receiving inadequate preventative care. In the OIG's sample group, seven of the 11 adverse events that contributed to or resulted in death were preventable, reviewers determined.
"OIG said it is recommending that the Centers for Medicare and Medicaid Services broaden the number of hospital-acquired conditions listed under its harm-prevention incentive policies to include common, preventable, and high-cost harm events. Also, CMS should develop guidance for surveyors to assess hospital compliance with patient harm tracking and monitoring requirements, the OIG said. The watchdog recommended the Agency for Healthcare Research and Quality update its agency-specific Quality Strategic Plans and continue its efforts to develop new strategies to prevent common patient harm events in hospitals."
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here. The JAMA Patient Page explains the current status of oral anti-viral medications for COVID-19, here.
2022 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
May 17, 18, 19
June 7, 8, 9, 10, 13, 14, 15, 16, 21, 22, 23, 24
July 12, 13, 14, 15, 18, 19, 20, 21, 26, 27, 28, 29
August, Congress adjourned, no issues
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org