fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Category Archives: uncategorized

Statement Issued by the FAH On House Ways & Means Hospital Improvements for Payment Act Of 2014

November 20, 2014 | Chip Kahn

Category: Uncategorized

The Federation applauds the Ways and Means Committee for its efforts to reform a number of complex hospital Medicare payment policies, and for the Committee’s continuing commitment to engage stakeholders in the policymaking process. The Hospital Improvements for Payment Act of 2014 discussion draft is a serious and thoughtful effort and deserves a carefully considered, in-depth policy assessment, which we will do with our hospital membership.

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The FAH Issues An Official Statement in Response to U.S. Supreme Court Decision to Hear the King v.

November 07, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

Charles N. Kahn III, President and CEO of the Federation of American Hospitals, issued the following statement regarding the U.S. Supreme Court Decision to Hear the King v. Burwell case: “The Supreme Court’s decision to hear the King v. Burwell case should be taken at face value and not construed as indicating that the High Court desires to strike federal subsidies for people in states which have federally facilitated Marketplaces.

Clearly, Congress intended the Affordable Care Act to expand coverage as broadly as possible, and for subsidies for purchasing Marketplace-based coverage to be available to every eligible citizen in the United States.

We are confident that the Supreme Court will recognize and uphold Congressional intent and prevent subsidies from being denied to eligible people based upon where they live. Its decision to hear the appeal during its current term simply means that this confirmation will come sooner rather than later.”

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Pivotal Study Shows For-Profit Conversion Preserves Patient Access to Quality Care

October 22, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

A new empirical study released in the Journal of the American Medical Association (JAMA) sets the record straight on the issue of for-profit hospital conversion, dispelling myths about the impact of these critical efforts to maintain access to care in communities with struggling hospitals. In the study “Association Between Hospital Conversions to For-Profit Status and Clinical and Economic Outcomes,” analysis of data from for-profit hospital conversions shows that these hospitals maintain access to care, improve quality metrics, increase nurse staffing ratios, and, the study concludes, improve financial performance.

The study measured hospital performance by 3 factors: financial performance, quality of care and outcomes and measures of patient population. The scope of the analysis and the impactful conclusions should put to rest assertions of critics of for-profit conversions.

Among the key findings:

“We found no evidence that conversion was associated with worsening care, as measured by process of care, nurse staffing, or outcomes.”

“We also found no evidence that the improvements in financial health came through avoiding care for poor patients.”

“Prior to conversion, we found that hospitals that would eventually become for-profit institutions were struggling financially, with negative total margins; …after conversion, there was a significant improvement in total and operating margins…. For a hospital with persistently negative margins, for-profit status may also bring access to capital and other financial resources that can lead to changes in the hospital’s economic viability.”

“We also found no evidence that for-profit conversion was associated with any increase in Medicare payments or annual Medicare case volume or decrease in the provision of care to poor patients or to racial or ethnic minorities.”

These conclusions, which come from a comprehensive analysis of conversions in the 2000s, make clear the critical importance of the decision for a hospital to pursue for-profit status. Without conversion, struggling hospitals face diminished patient access to care, and in the worse cases, closure as many were operating with negative financial margins. Instead, by pursuing opportunities to convert, hospitals can stay open to serve their communities, patients experience no change in their access to 24/7 quality care, and hospital caregiver positions are maintained.

Critics of for-profit conversion have claimed for years that hospital conversion would harm patient care, cause job losses and lead to discrimination against low-income patients. This study dispels these claims one by one, bringing to light the reality for hospitals nationwide that have pursued this option.

In an official statement released by the FAH, President and CEO Charles N. Kahn III said, “Job one is for patients and communities to be assured that they have access to high-quality hospitals. Frequently, the alternative to the conversion of a hospital is downsizing, reduction in services or closure. This new study demonstrates conclusively that struggling hospitals that undergo conversions emerge stronger and better able to serve their patients and communities. The results dissolve myths that such changes have any negative effect on quality, service to low-income individuals on Medicaid, or to nurse or staffing levels necessary to assure the highest quality care.”

Every single hospital across the country is committed to protecting patient access to care and serving their communities 24 hours a day. Hospitals that choose to meet this mission via the path of a for-profit conversion embrace the benefits of improved access to capital, experienced management, and a tradition of high quality care. This pivotal study is proof positive that conversion strengthens communities and the caregivers and hospitals that serve them.

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New Survey Reinforces the Consumer Paradox Trend in Health Care Spending

August 14, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

A new survey out this week by the National Business on Group Health (NBGH) examines health care benefit cost growth for employer-based health insurance in 2015, polling nearly 400 large employers across the U.S. The survey finds that employers expect to limit their benefit cost growth to 5 percent, below their 2014 growth rate. One of the key reasons cited by employers in lowering their cost growth rate is shifting greater burden and cost-sharing responsibility onto the consumer.
The CEO of NBGH adds:

“Our survey shows that many employers are, in fact, taking necessary steps to rein in costs. This includes partnering with workers to engage in health care decisions and educating them to be better health care consumers, as well as sharing more costs with workers and narrowing their benefit options.”

The survey by NGBH reinforces the findings of a July study by Dobson | DaVanzo that examines how & why consumers continue to perceive that the growth in their health costs is escalating at the same time that the growth in national health care spending and prices is decelerating. Dobson | Davanzo notes, for example, that hospital prices are increasing at a historically low annual rate of only 0.9 percent from December 2013 to June 2014. This consumer paradox is a result of a new paradigm in health plan benefit design.

As the health care marketplace experiences many key structural changes, so too do health insurance plans. These new plans place a greater emphasis on out-of-pocket spending (premiums, deductibles, cost-sharing). The NBGH survey explains that shifting more cost sharing onto the consumer enables benefit cost growth for employers to stay at these low levels.

According to Dobson | DaVanzo, worker premium contributions have grown 114% from 2010-2013. This paradigm shift is occurring during a time of modest wage growth – just 31% over the same time span. Dobson also notes some other trends in out-of-pocket (OOP) costs and changing health benefit plans that are a result of this new plan paradigm:

* From 2006-2013, the average deductible for family coverage increased more than 75%, an increase of nearly $1,000.

* In that same span, the number of workers with high-deductible health insurance plans increased more than 5 times, from 4% to 26%, with the typical plan deductible totaling more than a family’s available savings.

* Out-of-pocket maximum limits are growing – half of families enrolled in plans have out-of-pocket limits exceeding $6,000, a 32% increase from 2010 to 2013.

* Employees’ share of medical costs (premium + OOP) grew by 42% — from $6,824 in 2009 to $9,695 in 2014.

Greater cost-sharing, and higher out-of-pocket costs combined with narrowing benefits and provider choice are the new normal in this era. This is why the consumer paradox continues in tandem with an enduring national spending slowdown. As new evidence and additional studies analyze the consumer paradox, the FAH reminds policymakers that a critical priority in health care is to protect and preserve the national health care spending slowdown, so that everyone can share in the associated savings.

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