17 January 2012

Midwest Edition
Calendar
January 20
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Wisconsin Targets Quality Upgrade

Hospital Association Pushes Partnership for Patients
After 10 years of working on improving incentivize hospitals to get on the quality healthcare quality, U.S. hospitals still have a bandwagon. The project is supported with way to go, says the Department of Health and $218 million in grants to organizations around Human Services: the country, including the American Hospital * About one in 20 patients has an infection Association and numerous state and local relating to their hospital care. afliates, known as Hospital Engagement * One in seven Medicare patients is Networks. These networks are tasked with harmed during their treatment. developing learning collaboratives for * One in ve Medicare hospitals that will develop training patients is readmitted within programs and technical 30 days, at a cost of $26 assistance to bring all hospitals billion a year. up to the minimum standard. Like those throughout the The Department of Health Midwest, Wisconsin hospitals and Human Services estimates are digging into the quality that if fully implemented, the requirements of the program could save as much as Affordable Care Act to make $35 billion across the entire sure they are improving as healthcare system, including $10 fast as they must to hit the billion in savings to Medicare, deadlines and meet the goals. over three years. This winter, under the Wisconsin already enjoys leadership of the Wisconsin higher-than-average Hospital Association, as quality of care. Kelly Court many as 80 hospitals will According to health Wisconsin Hospital Association rankings monitored by band together to ght hospital-acquired the Agency for conditions (HAC) and reduce unnecessary Healthcare Research and Quality, the Badger readmissions. State placed seventh among the fty. The effort is part of the Partnership for The Partnership for Patients aims to reduce Patients, an initiative of former CMS inpatient harm by 40% and readmissions by administrator Donald M. Berwick, M.D., to
Continued on Next Page

March 6-7
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June 11-13
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NEWS
Wisconsin Quality (Continued from Page One)

Page 2

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In Brief
Self-Insurance Group Sues to Overturn New Michigan Claims Tax
A new Michigan law that assesses a 1% tax on healthcare claims paid has come under attack from the SelfInsurance Institute of America Inc., which led a lawsuit seeking to overturn it. The tax was passed last year to help fund Michigans Medicaid program (Payers & Providers, July 19, 2011). It effectively transfers the burden of raising the states Medicaid match from Medicaid HMOs to the broader insured population. The bill was strongly opposed by the Michigan Manufacturers Association, which argued that it would fall disproportionately on manufacturers and self-insured companies. It went into effect Jan. 1, and assessments must be paid every quarter starting in April. The tax is paid by third-party claims administrators, insurers of fully-insured plans, and stop-loss insurers for selffunded plans. It is intended to generate $400 million in revenues each year. Formerly, Medicaid HMO plans paid a 6% use tax. The federal government signaled that it would no longer approve such a funding source. The Self-Insurance Institute said the tax violates ERISA, the federal law governing how pension and benet plans must be administered nationwide. The institute represents companies that sponsor and administer selffunded ERISA plans.

Hospital Fountain Was Source of Legionella that Sickened Eight

A decorative fountain in the lobby of a Milwaukee-area hospital turned out to be the source of Legionella bacteria that sickened eight patients in 2010.

Continued on Page 3

20% by the end of 2013. Achieving this improvement would save more than 60,000 lives and cause 1.8 million fewer patient injuries. It will concentrate on 10 key improvement goals. We will have change packages for those 10 conditions, said Kelly Court, chief quality ofcer for the WHA, who is spearheading the project. Well scour the literature, talk to experts, to nd key things to leverage improvement. The methods will involve webinars, oneon-one coaching, and a few in-person meetings, she added. Hospitals will collect two measures for each condition: one process measure and one outcome measure. All this data will be rolled up to help meet the national goal, she said. At ThedaCare in northeast Wisconsin, We are tracking results all the time, said Scott Decker, vice president of quality. This is what we learned from manufacturing. ThedaCare got the quality improvement religion a long time ago. It now has 30 fulltime personnel to support improvement for its ve hospitals, 22 clinic sites, and 6,200 employees. It uses the Toyota techniques from lean manufacturing to drive out waste and improve processes. It has already reduced readmissions by 3% or 4% using lean techniques. The changes in Medicare reimbursement that penalize hospitals for unnecessary readmissions or medical errors are driving hospital transformation, Decker said. And now

the Humanas and CIGNAs and Aetnas are getting into the act. In the old days, he explained, If you fell and broke your hip, and you needed a CT scan to see if you had a head bleed, what did we do? We billed the insurance companies. Now what they say is, You did it, youre responsible for it. I cant argue with that. The bar just keeps raising. Take, for example, central line associated bloodstream infections, or CLABSI. In early 2009 Wisconsin hospitals undertook a collaborative to eliminate these persistent and preventable infections, using the Comprehensive Unit-Based Safety Program, or CUSP. From September 2008 to September 2009, the CLABSI rate dropped from over 2 per 1,000 central line days, to less than 1, where it has remained since. Similar efforts in Michigan succeeded in reducing the median rate of catheter-related blood stream infections to zero. A national effort, dubbed Stop BSI, also reduced these infections, but at a slower rate. Given that the Institute of Medicine Report, To Err is Human, came out in 1998, and that the quality movement was already in gear before that, why has it taken hospitals so long to address these issues? Why havent readmissions already been reduced? Many hospitals have already taken up the challenge, Court said. But it is much easier for hospitals and systems with plentiful resources to train staff and hire quality personnel than it is for small or rural institutions to do so.

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Healthcare Cost Growth Levels Off

CMS Calculates Favorable 3.9% Increase for 2010
The rise in national spending on healthcare slowed in 2010 to 3.9%, after growing by 3.8% in 2009, the lowest rate of increase in the 51year history of the National Health Expenditure Accounts, economists at the Centers for Medicare and Medicaid Services Ofce of the Actuary found. The economic recession was the largest contributing factor to the slower growth, but new health plans that put more nancial responsibility on patients may also have played a role. Because GDP grew at 4.2% in 2010 (3.0% real growth), health spending grew at a lower rate than the overall economy. Thus, healthcare spending as a share of GDP remained constant from 2009 to 2010 at 17.9%. The slow growth in health spending in 2009 and 2010 was inuenced by slower growth in the use of healthcare goods and services as consumers remained cautious about their spending in part because of losses in private health insurance coverage, lower median household income, and future nancial uncertainty, the actuaries wrote in an article in Health Affairs. Per capita spending on healthcare reached $8,402, compared with $4,878 in 2000, $2,854 in 1990, and $1,110 in 1980. The increase in spending attributable to the provisions of the Affordable Care Act was 0.2%, the actuaries gured out, but they believe it may have been closer to 0.1%. Most of the 2010 provisions, other than a few specic provisions affecting Medicare payments, had a negliglbe impact on total spending or shifted the distribution of spending without affecting the overall rate of growth, the actuaries wrote. Spending on hospitals hit $814.0 billion in 2010, up almost 5% from $776.1 billion in 2009. Physician and clinical services took in $515.5 billion, increasing just 2.5% from $502.7 billion the year before. Price growth was stable, at 2.3%, but growth in use and intensity declined. Many people put off going to the doctor, and the u season was milder in 2010 than in 2009. Spending on prescription drugs stayed almost level, up to $259.1 billion from $256.1 billion in 2009. Analysts said the market entry of numerous generics in place of patented drugs helped push down the rate of spending growth. Among the blockbuster drugs that lost patent protection in 2010: Flomax, Effexor XR, Lovenox, and Aricept. Also, fewer new prescription drugs came online. The number of prescriptions dispensed increased just 1.2%, in part because of the decline in visits to physician ofces. The net cost of health insurance was calculated at $146.0 billion, increasing 8.4% from 134.7 billion in 2009. That gure had declined, though, by 2.2% in 2009 and 1.4% in 2008. The actuaries dene net cost of health insurance as the difference between premiums earned and benets paid for private health insurance, including administrative costs, plan prots, and premium taxes. Enrollment in private health insurance plans fell for the third year in a row, by 1.9% in 2010. The rate of spending increase by households, businesses, and state and local governments all rose at rates less than that of overal health expenditures. The federal government, whose spending rose 8.6%, picked up the slack. The causes for the slowdown in health spending may have their roots in basic changes in the healthcare economy, said Ana Gupte, an analyst at Sanford Bernstein.

In Brief
A study in Infection Control and Hospital Epidemiology outlined the detective work by public health authorities who sought to uncover the cause of the local outbreak of Legionnaires disease. The bacterium causes fever, chills, headaches, coughing, and severe respiratory distress. It can be fatal. The eight sickened persons were not inpatients but visitors to the hospital, or delivery persons who passed through the lobby, or had an outpatient visit, or were picking up drugs at the hospital pharmacy. Each of them had an underlying health condition, such as diabetes, rheumatoid arthritis, or alcoholism, which left their immune systems vulnerable to the pneumonia-like illness. The fountain in the hospital lobby, once identied as a possible source of the bacterium, was tested and found to contain high concentrations of the Legionella bacterium, which thrives in warm water. None of the patients died from their illness.

Trustmark is Accused of Violating ACA

The Obama administration has accused Trustmark Life Insurance Co., based in Lake Forest, Ill., of raising health insurance rates above and beyond whats necessary. It told the insurer to rescind the rate hikes or explain why it believes they are justied. A Trustmark spokeswoman said the company disagrees with the federal ndings, and blamed the increases on rising medical costs. Under the health reform law, the secretary of Health and Human Services may conduct an annual review of unreasonable increases in premiums. The department has set increases of more than 10% as subject to review. The department said Trustmark was aiming for increases of 13% in ve states: Alabama, Arizona, Pennsylvania, Virginia and Wyoming. Trustmark said it is in compliance with the law.

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OPINION

Page 4

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Great Risk Shift Comes to Medicare

Ryan Plan Would No Longer Be Worthy of the Name
The Republican House Budget Chairman Paul meant that employers would have much more Ryans plan for reforming Medicare has been money available to reward shareholders because the subject of much rancor and argument, and they would be paying less in revenues over time no wonder: The proposal would change the to retired employees. The winners consequently program so fundamentally as to no longer be have been the wealthy individuals and institutions rightfully called Medicare. who own todays corporations, while the losers Ryans plan would be a continuation of have been the ones who work for them. what one academic called The Great Risk Shift: Instead of being dened benets plans like Big corporations have pensions, 401(k)s are referred to methodically shifted much of as dened contribution plans. the risk of providing benets That means that workers enrolled from the employer to in such plans no longer get a employees. Ryans plan would certain amount of money every accelerate the trend and take it month when they retire as my further by gradually shifting father did, but instead will get much of the nancial obligation whatever is in their 401(k) of paying for benets from the balances, most of which they government to Medicare contributed themselves. beneciaries. Under Ryans Highly compensated blueprint, the government employees, including CEOs, are would be doing just what big pleased with the shift because corporations have been doing they have the means to sock for several years now: offaway more money in their loading risk. 401(k)s than the rank and le. This is similar to the And the money they sock away phasing out of traditional is tax-deferred, so 401(k)s have By Wendell Potter pension plans and the become a favorite tax shelter substitution of 401(k) plans. for the well-to-do. In the early part of my fathers career, Ryans Medicare scheme would replicate what 401(k)s had not yet been invented. Soon after 401(k)s have done to the rank and le. The he was hired as a shift worker at a Tennessee vouchers the government would provide glass factory, he was enrolled in his employers beneciaries are the equivalent of a dened pension plan. When he retired more than 25 contribution. And the vouchers invariably would years later, he began receiving a predetermined become less valuable over time as the cost of pension benet every month. insurance increased. The wealthy among us By contrast, when I went to work for wouldnt be nearly as disadvantaged as low- and CIGNA in 1993, pensions were an endangered middle-income earners who would have to dig species. CIGNA still offered one, but the deeper into their own pockets to buy health care company changed the structure soon after I coverage from private insurers. And undoubtedly, was hired, which meant that I would get less they would nd that the only plans they could each month upon retirement than colleagues afford would be those with high deductibles. who had joined the company a few years If backers of Ryans plan would drop the word earlier. Medicare and name it something with a bunch Aetna also had a nancial services division of numbers and a letter or two in parenthesis, that back then. So two of the biggest health would be far more honest than calling it insurance rms in the country, Aetna and Medicare. At least the proponents of the great risk CIGNA, played key roles in the early years of shift didnt have the audacity to call 401(k)s the great risk shift by ushering in the era of pensions. Theyre entirely different creations. 401(k)s and bringing the pension era to an end. Employers began phasing out pensions in the 1990s as rapidly as they began jettisoning Wendell Potter, a former public relations indemnity health insurance plans in favor of executive with CIGNA, is author of Deadly HMOs and other managed care plans. Spin and a blogger at WendellPotter.com. Transitioning from pensions to 401(k)s

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