Author: Ann Marie Marciarille

I am guest blogging at PrawfsBlawg this month, so you will find this X-posted there as well.   http://prawfsblawg.blogs.com/prawfsblawg/

Happy New Year, friends!

 

Prompted by Prime Healthcare Services’s end of the year and under the wire closure of its acquisition of  Landmark Medical Center in Woonsocket, Rhode Island,  I thought I might begin with a few observations on the changing nature of hospital ownership in the United States. There could not be a more telling example of what is happening in hospital conversions (the transformation from not-for-profit to for-profit or investor-owned facilites) than in considering the acquisition activities of Prime, an investor-owned Ontario, California-based chain of 25 hospitals. 

Prime’s nationwide expansion strategy is interesting because its distinctive business model may soon arrive at a distressed community hospital near you.

Prime buys genuinely  distressed hospitals. No, I don’t mean merely struggling hospitals but distressed hospitals. A distressed hospital is a facility so financially troubled its board of directors or governing authority has determined it must either be closed or sold.

I have written elsewhere about the  economic and social implications of hospital closure but what you need to understand today is that hospitals rarely fold quietly. Whether it is wise in all circumstances to prolong the life of an acute care hospital is seldom considered at the community level.  The overwhelming presumption is that all hospitals are health-promoting, job-creating, community welfare-enhancing institutions. And Prime acknowledges this with its corporate tag-line: “Saving Hospitals, Saving Jobs, and Saving Lives.”

Prime’s multi-state acquisition strategy has finally brought it to southern New England where Rhode Island, Massachusetts, and Connecticut have some of the lowest rates of investor-owned hospitals in the nation.  Prime’s 2001 origins in California and eventual expansion to Nevada, Texas, Kansas (which I have discussed here: http://delong.typepad.com/annmariemarciarille/2013/04/prime-healthcare-comes-to-kansas-city-kansas.html), and Pennsylvania  have always been interesting but the arrival of the Prime business model in Rhode Island can tell us somethings both about the evolution of Prime’s business model as well as the perilous state of community hospitals in many places.

Woonsocket Rhode Island is an old mill city in the Providence metropolitan area, still heavily French-Canadian and quite low income.  The Washington Post has noted that Woonsocket’s economy is so dependent on the food stamps (or SNAP) income of approximately forty percent of its population, that it  might be said to have the modern version of a  boom or bust economy.  And it has been mostly bust for Landmark Medical Center for some years — more than $10 million in debt and overseen by a court-appointed special master since 2008.  An earlier attempted sale to a Boston-based for-profit chain fell through in the face of failed negotiations with Blue Cross and Blue Shield of Rhode Island.

Rhode Island has an acute care hospital bed market you can actually  get your mind around. As I understand it, there are thirteen not-for-profit acute care facilities in Rhode Island, six of them stand alone community hospitals. And stand alone community hospitals, once the bulwarks of acute care in low income communities like Woonsocket, are the dinosaurs of the hospital world. Large (with 214 beds in its Woonsocket unit alone) unionized  facilities tied to a non-diverse  lower rate payor mix like Medicaid are the most vulnerable in a contracting market for acute care hospital services.

And there’s the rub: is it better  to let the facility close or better to embrace Rhode Island’s first for-profit hospital operated by a chain dodged dogged by  billing practices investigations? (Which you may read about here: http://californiawatch.org/dailyreport/prime-hospital-chain-acknowledges-it-faces-2-federal-investigations-18801). 

So hesitant  or so eager were both Rhode Island’s Attorney General and its Department of Health Director to decide the issue under Rhode Island’s hospital conversion statute (which you may read about here: http://www.health.ri.gov/publications/laws/HospitalConversionActSummary.pdf or consult here: http://webserver.rilin.state.ri.us/Statutes/title23/23-17.14/index.htm) that the deal was finally approved with a remarkable set of conditions attached  including capital investment requirements, service expansion requirements, a committment to three years guaranteed continued operation and more.

Why would Prime accede? Landmark’s turnaround story would be quite a feather in Prime’s cap. Community hospital conversion to for-profit turnaround is Prime’s business model after all, whatever you make of the not inconsiderable controversy surrounding its operations. The value of establishing a for-profit hospital beachhead in Rhode Island may be difficult to overestimate.

All of this coming soon to a community near you.

 

 

 

If you have spent any time at all in the ED, you have caught an earful about "drug seeking behavior." DSB is widely discussed though rarely quantifed (though you may see some interesting estimates on DSB in the ED concerning opioids here: http://www.medicine.wisc.edu/~williams/drugseeking.pdf) in part because we lack universal electronic medical records and in part  because we do not systematically track those who leave our EDs in search of help somewhere else. As for the latter, I have to wonder if if it is  because we do not want to know. There is some safety in not knowing.  Maybe we don't have to do anything about things we don't quantify.  And, if we don't qualify the DSB concept, we don't have to struggle with the fine line between health seeking behavior and drug seeking behavior.

Several months back,health law listserves were circulating a new kind of ED sign designed to warn those engaging in DSB away from certain EDs.  You can see a version of this sign as found in a hospital ED in Milwaukee, Wisconsin here:  http://www.jsonline.com/watchdog/watchdogreports/ers-in-milwaukee-county-restricting-opioid-prescriptions-if6m4m4-168328376.html.

What is interesting about the sign is that attempts to split the hair between reasonable and rational use of opioids in the ED with the requirements of EMTALA (the Emergency Medical Treatment and Labor Act). Severe pain, after all, deserves medical treatment as does its underlying condition, the latter of which can be masked by treating only the former.  So does drug addiction or drug withdrawal, though it is unclear whether the ED is the best place to provide treatment for any of these concerns.

Tapping into this dual nature of the ED — emergency care for some, sole source care for others– may have been what prompted HHS to indicate the linked sign might be problematic under EMTALA. CMS's Atlanta Regional Office indicated the sign might be problematic under EMTALA as far back as April, 2013.

And that's the rub. The ED is the only place for treatment for some individuals in our society.  This makes reasonable and rational signs, such as the one linked above,  designed to keep emergency medicine distinct from other kinds of specialty care problematic. We don't have a universal primary care system to plug people into, thereby rationalizing the limited role of ED physicians in chronic pain management.

We want it all from our EDs and those who staff them: genuinely emergent care and chronic care for those with nowhere else to go, all in one of the most expensive venues in which to receive health care in the world.

 

This is big.

I had absolutely no idea how California was going to continue expanding Medi-Cal under the ACA without finding a way to provide services for a huge increase in Medi-Cal-funded births. Medi-Cal now pays for roughly half of all births in California, a percentage sure to grow with the expansion of Medi-Cal.  The tag line was always that the plan was to expand scope of practice for licensed mid-wives, now required to practice under the supervision of a physician in California.

And now it has happened.  You can see Assembly Bill 1308, which takes effect in January of 2014, here: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201320140AB1308. Independently licensed CNMs are restricted to lower risk births (singletons only, no major complications, etc.) but most births are lower risk births.

Most states consider midwives to be independent practitioners, so no triumphalism here. California, in fact, is bringing up the rear on this essential component of health care reform.

Missouri has two legislative committees working on developing proposals for re-inventing Medicaid in the 2014 legislative session. The Senate committee has, apparently,  been discussing its draft in public. From what I can see in the press, there are lots of ideas about Medicaid Managed Care, Accountable Care Organizations/Patient Centered Medical Homes, and emergency department use by Medicaid beneficiaries. Nothing surprising here. These are important  and worthwhile topics for all Medicaid programs.

What is surprising is the reported failure of the draft to discuss Medicaid expansion.  That appears to be the elephant in the living room on  Missouri Medicaid reform. The Senate committee draft report, as I understand it, proposes to neither endorse nor reject Medicaid expansion (you may read the Kansas City Star's report on this here http://www.kansascity.com/2013/11/14/4620782/missouri-senate-panel-rejects.html) though silence, of course, is an implicit endorsement of the status quo. It also signals, however, a fearful ambivalence about a subject when it is too controversial to talk about. Pay no attention to that elephant in the living room.

In the meantime, some localaties are advancing the Medicaid expansion substantive debate themselves. You may read about the Mayor and City Council of Columbia, Missouri voting a non-binding resolution of Missouri Medicaid expansion on business and job expansion grounds here: http://www.bizjournals.com/stlouis/morning_call/2013/12/columbias-city-council-calls-for.html. Apparently, the Missouri Chamber of Commerce is talking up a storm as well. You may read their position statement here: http://www.mochamber.com/mx/hm.asp?id=healthcare.

Sometimes,  strategies to shunt debate to the side only serve to promote debate elsewhere.

In late October, New York's new statute extending state antitrust immunity to Nassau Health Care Corporation, a "substate" entity, was signed into law. Perceived as essential to Nassau Health's continued existence in a changing health care system, the rationalization was that substate entity hospitals have to integrate with competitors (clinical and otherwise) with whom they are not linked by the corporate form in order to survive. Specifically, this legislation unambiguously clears the way for the pending private-public partnership between Nassau Health (one medical center and five community health care centers) and North Shore-Long Island Jewish Health System (16 acute care hospitals and 400 ambulatory and physician practices on Long Island and Staten Island).

Yes, it is more difficult for free-standing acute care hospitals to benefit from scale and to capture efficiencies in the modern health care market place. But Nassau University Medical Center is a safety net facility.  In all candor, what could they bring to the table other than blanket state antitrust immunity with which to grace their potential partnerships? And why would that be so valuable to would be wooers?

Phoebe Putney may end up being the Constitutional gift that keeps on giving. Here, in response to that Supreme Court ruling, we have a New York state statute that clearly and explicitly displaces competition. It is reported to have passed both houses of the New York legislature unanimously.

Now let's see what Nassau University Medical Center really does with its immunity blanket.

A group of non-profits has filed a lawsuit against the State of Missouri's Director of Insurance, claiming that Missouri's Health Insurance Marketplace Innovation Act of 2013 violates the Affordable Care Act, specifically in how it how it prohibits ACA-recognized consumer assistance programs such as St. Louis Effort For AIDS and Planned Parenthood from engaging in the full range of health insurance counseling functions contemplated by the ACA. In particular, these entities would like to be able to counsel patients about the full range of health insurance programs available to them (complying with the ACA) without running afoul of (and simultaneously violating) Missouri's Health Insurance Marketplace Innovation Act. You may see the complaint here: http://web.mhanet.com/uploads/media/St_Louis_Effort_for_AIDS_v_Huff_Complaint.pdf.

I confess to some puzlement as to what "innovation" is referenced in the title of the Missouri statute. Protecting the income streams of health insurance brokers at the expense of promoting one stop health insurance shopping through ACA-acknowledged navigators is more like retrogression.

 

Abigail Zuger's November 11, 2013 NYT post on "When Healers Get Too Friendly"  (found here: http://well.blogs.nytimes.com/2013/11/11/doctors-boundaries-with-patients/) caught my eye — such a beautiful meditation on how, over many years of a physician-patient relationship, genuine friendship might actually take root between a doctor and a patient. How might this friendship be expressed? Through the gift of a relatively small sum of money (bus fare, a prescription co-pay, money for food).

Intrigued by the reporting of the chastisement of an experienced physician who, at 5:00PM on a Friday afternoon, punctuated a failed two hour insurance battle by giving a patient $30 of his own money to refill a prescription, I read on.  Dr. Gordon Schiff was later reprimanded for the act as violating the "professional-patient boundaries" of the Boston academic medical center he had recently joined.  You see, such acts of kindness were not common place but also not unheard of among the medical staff during his immediately prior 30 years of service at a Midwestern public hospital. You may read Gordon Schiff's "Crossing Boundaries — Violation or Obligation?" here: http://jama.jamanetwork.com/article.aspx?articleID=1741827. I know, I know, those of you who want to say "And that's one of the differences between the Midwest and the East Coast" have already crossed my mind.

But Gordon Schiff's anecdotal observation that physician practice and opinion is all over the place on the question of offering or giving small financial assistance to a patient is what really interests me. His account wonders (as do I) if practice environment (public hospitals often being the acute care provider of last resort in many communities) may play a role. I also wonder about the role of geography.  Would it be easier for a physician in a small community to refuse a request for money for food if the likelihood of encountering the requesting patient on the street later were exponentially higher?

And, finally, I wonder if physician opinion on what I will call out-of-provider-pocket assistance changes depending upon whether the request is for food (something we all need but not particularly the domain of the physician to provide, though good health is unobtainable without reasonably good food) or for coverage for the ailings of our byzantine health care system?  Was Dr. Schiff's gift to his patient an expression of faith in that patient's quest for good health or an expression of his despair in hoping to move our health care system toward one that does not penalize patients who have medical needs on Friday afternoons?

While all of this was on my mind, Katie Kraschel had a different take on the same Zuger NYT article.  In this posting ( http://blogs.law.harvard.edu/billofhealth/2013/11/14/limits-on-the-physician-as-a-good-samaritan/)on Harvard's Bill of Health Blog ("Limits on the Physician as a Good Samaritan") she discussed the restrictive role the Stark and Anti-Kickback laws can play in stifling creative thinking in health care delivery.

This also struck me as interesting. Neither the Zuger nor the Schiff articles referenced fraud and abuse laws as significant in the provider out-of-pocket to patient generosity calculus. Perhaps I am missing part of the story.

One popular theme in the health care finance literature is that fraud and abuse laws constrain provider innovation. And so they do.  This is because provider innovation too often runs in a troubling self-serving direction.

Here is a 2003 "Curbside Consultation" where all kinds of horribles are imagined as potentially flowing from provider out-of-pocket to patient generosity that is little focused on the legal implications of a small provider out-of-pocket to patient gift. (http://www.aafp.org/afp/2003/0401/p1629.html)  Though provider waiver of co-pays in government funded insurance have long been a subject of concern, Gordon Schiff wasn't waiving his practice's co-pay, he was paying forward the out-of-pocket cost of a patient prescription to be filled elsewhere, as I understand it. Is this all that different from a physician reserving and using a plentiful samples cabinet?

All of this merits more thought.  But you should know that there is far more anecdotal internet-available evidence of physicians and physician-office staff discussing how to extract co-pays from patients than in figuring out how to waive them within the constraints of the fraud and abuse laws. This is probably because waiver of co-pays for government funded insurance is rarely permitted, though documented indigency offers some relief. This, of course, does not preclude the courtesy "insurance only" services physicans are permitted to offer other physicians as a matter of professional courtesy, irregardless of fellow physician income.

And the courtesy owed a health-seeking adult in need of an immediate prescription at 5:00PM on a Friday afternoon? Better hope you have Gordon Schiff as your physician.

The American Medical Association panel that recommends values for physician services to CMS for DRG payment purposes or the AMA Specialty Society Relative Value Scale Update Committee is known as RUC.  

RUC is impenetrable.

Criticized consistently for its top secret (invitation only attendance) meetings that, essentially, determine the relative valuation of physician services (achieving an 85% or 95% ultimate  approval rating by CMS), RUC has decided to publish minutes of its meetings and group voting outcomes for individual current procedural terminology codes. (How do I know this undoubtably formerly top secret information? I read it in Modern Healthcare and you can too: http://www.modernhealthcare.com/article/20131104/NEWS/311049944/amas-ruc-panel-to-provide-minutes-in-limited-transparency-move&template=mobile.) Yes, I am among RUC's critics. You can read some of my more detailed thoughts on RUC here (co-authored with Brad DeLong) : http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1983721.

Although I am grateful that the very existence of the  new policies was released as publicly available information, I am underwhelmed. Why should the individual votes of RUC's 28 voting members not be identifiable?  What incredible source of pressure could we be protecting a board with almost no primary care representation from by releasing only non-identified voting results?  From the overwhelming power of the two primary care RUC seats added just last year? From the possible disclosure of voting blocs and coalitions between and among the medical specialties that dominate RUC?

Inquiring minds would like to know.