DCMedical News: Wednesday, January 8, 2020
DCMedical News-DCMN
Washington, D.C.
Wednesday, January 8, 2020
DCMedical News is published every day both the House and the Senate are in session.
THE BIG STORY IN HEALTH CARE
Hospital Mergers Degrade Quality, or Not
Leemore Dafny and colleagues (here) in the New England Journal of Medicine report that “Hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates. Effects on process measures of quality were inconclusive.” Coverage of the story in the Wall Street Journal, here. Recent previous research was summarized by Austin Frakt, here, in the New York Times. Other opinions (on hospital mergers and quality) over time include Ho in 2000 (here), Gaynor in 2012 (here), Jha in 2012 (here), Makary in 2015 (here), AHA’s consultant Noether in 2017 (here), and Gaynor again (here, in 2018 testimony covered in DCMN).
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
Hospital Outpatient Visits Down, Primarily in the ED, But OP Revenue Was Up, Nearly Equal to Inpatient Revenue
Modern Healthcare reports (here) that “For the first time in 35 years, U.S. hospitals delivered fewer outpatient visits in 2018 than in the prior year as the competition to provide such care continues to intensify . . . hospitals in the U.S. delivered a cumulative 879.6 million outpatient visits in 2018, 0.9% less than in 2017, when they delivered 880.5 million outpatient visits. The data, which covers health system-owned ambulatory surgery centers, outpatient clinics and urgent care clinics, is the first year-over-year decline since 1983” [when, coincidentally, DRGs were introduced to attempt to cap inpatient hospital cost]. Due to new competitive outpatient service from disruptors, “The amount of outpatient care being delivered nationwide is likely on the rise, it's just happening in more places than it used to.” But also, “Despite the lower number of visits, hospitals' net outpatient revenue increased 4.5% year-over-year in 2018 on a cumulative basis, even as net inpatient revenue rose 2.1%. As in prior years, the newest AHA data show the gap between outpatient and inpatient revenue continues to narrow. Hospitals' net outpatient revenue—$494 billion—was 97% of net inpatient revenue—$508 billion—in 2018, compared with 95% in 2017 and 92% in 2016.” Hospital bad debt was 4.1% of expenses in the AHA survey.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Himmelstein, Woolhandler, Again
The researchers have found (again, here) that the cost of administration of American medical care is much greater than, for example, Canada’s costs, in fact five times greater. Their report in the Annals of Internal Medicine is that “U.S. insurers and providers spent $812 billion on administration, amounting to $2497 per capita (34.2% of national health expenditures) versus $551 per capita (17.0%) in Canada: $844 versus $146 on insurers' overhead; $933 versus $196 for hospital administration; $255 versus $123 for nursing home, home care, and hospice administration; and $465 versus $87 for physicians' insurance-related costs. Of the 3.2–percentage point increase in administration's share of U.S. health expenditures since 1999, 2.4 percentage points was due to growth in private insurers' overhead, mostly because of high overhead in their Medicare and Medicaid managed-care plans.” The story also appears in Time, here.
Medicare Advantage, Advance Notice of Methodology (Reimbursement) Changes
“Today, the Centers for Medicare & Medicaid Services (CMS) released Part I of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data.” Part I draft here, “fact sheet” from CMS here.
Basically, Congress believes CMS will pay MA plans less, or at least more accurately, by using actual versus calculated encounter data, and is phasing in complete actual data by 2022. The “Better Medicare Alliance” MA lobby notes (here) that “Primarily, the change listed in Part I of the Advance Notice would increase the use of encounter data in calculating risk scores. For Calendar Year (CY) 2021, CMS proposes calculating risk scores using a blend of 75% encounter data, and 25% Risk Adjustment Processing System (RAPS). Over the last several years, CMS has been transitioning to greater use of encounter data by incrementally decreasing the weight of RAPS. In CY 2019, CMS calculated risk scores using 25% encounter data and 75% RAPS and as of CY 2020, each data account for 50% of the risk score. The goal is to move to 100% use of encounter data and phase out the use of RAPS entirely.”
MEPS Survey Shows State Variation in Private Insurance Market, Narrowing Gap of Public-Private Hospital Pay Rates
AHRQ has announced (here) that “Average annual healthcare premiums for single coverage in employer-sponsored plans in 2018 were significantly higher than the national average in nine states: Alaska, Connecticut, District of Columbia, Illinois, Massachusetts, New Hampshire, New Jersey, New York and Rhode Island.” The complete set of charts will be found at: https://meps.ahrq.gov/data_files/publications/cb23/cb23.shtml?utm_source=ahrq&utm_medium=en-1&utm_term=Highest_Premiums&utm_content=1&utm_campaign=ahrq_en01_07_2020.
The same survey found that “While payments for hospital stays, outpatient hospital care and emergency department (ED) visits grew much faster for privately insured patients than for Medicare and Medicaid patients from 2000 to 2012, that trend of a widening private-public payment gap slowed or even reversed itself from 2012 to 2016, according to a new study published in the journal Health Affairs. The analysis, based on data from AHRQ’s Medical Expenditure Panel Survey (MEPS), found that private insurers’ payment rates for hospital stays were 66 percent greater than Medicare’s payment rates in 2013, yet had narrowed to only 50 percent greater in 2016. The study also showed that since 2000, hospital charges grew at a faster rate than private insurance payments. Hospital charges, when measured as a percent of Medicare payment rates, grew most rapidly for ED care.”
READINGS AND REFERENCES
U.S. House of Representatives:
Members at https://www.house.gov/representatives
Committees and Members at https://www.house.gov/committees
U. S. Senate:
Members at https://www.senate.gov/general/contact_information/senators_cfm.
Committees and Members at https://www.senate.gov/committees
House 2020 Calendar of Regularly Scheduled Sessions, here; Senate schedule subject to impeachment debate
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
January 9, 10, 13, 14, 15, 16, 27, 28
February 4, 5, 6, 7, 10, 11, 12, 13, 25, 26, 27, 28
March 2, 3, 4, 5, 9, 10, 11, 12, 23, 24, 25, 26, 27, 30, 31
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com.