21 January 2010
California Edition
Calendar
January 24-27
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
Anthem Pledges $6M For Safety
Will Fund Hospital Focus on Sepsis, ICU Infections
In a turnaround from an often contentious
relationship with acute care providers,
Anthem Blue Cross of California has
pledged $6 million over three years to help
improve hospital patient safety and
outcomes statewide.
The money will be used by the state’s
three regional hospital associations to
work with providers to prevent medical
complications and patient deaths.
“The impact of medical errors on loved
ones…can’t even begin to be calculated,
and they are by and large avoidable,” says
Anthem Blue Cross of California President
Leslie Margolin.
The funding will be channeled through
the Hospital Association of Southern
California (HASC), the Hospital Council of
Northern and Central California (HCNCC)
and the Hospital Association of San Diego
& Imperial Counties, along with the
National Health Foundation, a HASC
affiliate. It will come directly from Anthem
Blue Cross’ business operations, according
to Margolin.
The entities had been working on
patient quality initiatives using grants from
the UniHealth Foundation and the Blue
Shield of California Foundation, but
monies from those sources had begun to
dry up, officials say.
The hospitals will focus on three areas
officials say are leading causes of hospital-
based medical complications and patient
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deaths: induction of birth prior to 40
weeks of gestation; hospital-acquired
sepsis; ventilator-acquired pneumonia;
and blood and urinary tract infections
contracted in intensive care units. The
conditions cost hundreds of millions of
dollars to treat and claim thousands of
lives in California hospitals each year.
According to HCNCC President Art
Sponseller, the goal of the initiative is to
see if hospitals can create a “zero zone”
for such ailments. Officials say this may
be achieved by data-sharing among
hospitals regarding their number of
patient complications and deaths from
these conditions, as well as following
protocols that have been developed by
researchers to avoid hospital-acquired
infections or at least identify them before
they become too serious. Expectant
parents will also be educated about the
dangers of inducing birth too early,
officials say.
Utilizing such protocols to avoid ICU
infections is fairly straightforward. But
it’s trickier in cases of sepsis, a massive
infection that shuts down vital organs
and kills about 17,000 hospital patients
in California each year – about 25% of
all patient deaths – most over the age of
62. One of the initial symptoms is
Continued on Next Page
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In Brief
Molina Purchases
Unisys Unit
Long Beach-based Medi-Cal
managed care firm Molina
Healthcare, Inc. has agreed to
purchase the health information
management arm of Blue Bell,
Penn.-based Unisys Corp. for $135
million.
The Unisys unit has contracts
with Medicaid programs in Idaho,
Louisiana, Maine, New Jersey, and
West Virginia, as well as a contract
to provide drug rebate
administration services for the
Florida Medicaid program.
Revenues are about $110 million a
year. About 900 workers are
employed by the Unisys division.
They will become Molina
employees after the deal closes in
mid-2010.
“I am excited about our
strategic acquisition of the Unisys
Health Information Management
business,” says J. Mario Molina,
M.D., president and chief executive
officer of Molina Healthcare. “This
business will complement our
Medicaid health plan business and
advance our strategic plan by
expanding our services and product
offerings beyond managed care.
Now, more than ever, state
governments need cost-effective
programs that help improve the
health of Medicaid beneficiaries.
For the first time, Molina
Healthcare will have, within a
single company, the tools our state
partners need to run their Medicaid
programs, ranging from full-risk
managed care health plans to fee-
based information technology
solutions.”
DMHC Announces
Timely Access
Regulations
Continued on Page 3
NEWS
Anthem Blue Cross (Continued from Page One)
confusion, which may be easily mistaken
for age-related dementia or a stroke.
“We have to work on identifying
cases of sepsis much more quickly,” says
Bruce Spurlock, M.D., executive director
of clinical acceleration for the Beacon
Collaborative, which works with several
hospitals in the Bay Area to reduce
patient complications and deaths. He
adds that the condition is so fast-moving
that even an hour delay in getting
antibiotics to a patient after a sepsis
diagnosis increases the chance of death
by 7%.
Cutting down on sepsis-related
deaths alone can be a big money saver:
San Francisco-based hospital chain
Catholic Healthcare West is aiming to
save $15 million a year by mid-2010 by
reducing incidents of hospital-acquired
sepsis, according to published reports.
Hospital officials give much of the
credit to creating the initiative to
Margolin. HASC President James Barber
notes that Margolin worked closely with
A Lifeline For OC’s Homeless Patients
Hospitals Pay For Lengthy Post-Discharge Care
The Hospital Association of Southern
California and its National Health
Foundation afliate have teamed with an
Orange County charity to address a thorny
issue: nding space for
homeless patients who
have been discharged
from the region’s
hospitals.
The Orange County
Recuperative Care
Program involves 18
hospitals. The hospitals
can work with the
Irvine-based
Illumination Foundation
to place discharged
This motel in Costa Mesa is being used to house
patients in beds at a
recently discharged homeless hospital patients.
Costa Mesa motel. The
patients are monitored
by a licensed vocational nurse during the
daytime, and a medical assistant around the
clock.
“It’s basically a clean, safe place for
patients to go while they continue their
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Page 2
his organization’s member relations
committee for more than a year to come to
terms on an agreement.
“The relations between Blue Cross and
the hospitals run hot and cold, but Leslie
worked very hard for a long time to get this
done,” he says.
The spirit of cooperation between
Anthem Blue Cross and the hospitals is
somewhat of a departure from years of
squabbling over levels of reimbursements in
contracts and other payment disputes.
Although Margolin calls the
announcement of the initiative one of the
“top two or three days of my career,” the
decision to move forward was not done
without considerations toward the bottom
line. She believes the savings in insurance
claims will more than compensate for
Anthem Blue Cross’ pledges.
Margolin says the financial upside
created by the initiative will be used to cut
premiums and expand coverage, but she
declined to immediately provide specifics.
recovery,” says Julie Puentes, a HASC regional
vice president.
Hospitals in Southern California have
been under pressure to take better care of
inpatients who have no
place to go after
discharge. Kaiser
Permanente, one of the
region’s biggest hospital
operators, was charged
by the Los Angeles City
Attorney in 2006 for
allegedly dumping a
patient on Los Angeles’
skid row. To settle the
matter, Kaiser paid
$500,000 to the
California Community
Foundation to help
establish protocols for
relocating discharged patients to shelters.
Homeless patients who are discharged
back onto the streets often require re-
hospitalization. According to Puentes, the
Continued on Next Page
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In Brief
The Department of Managed
Health Care has introduced new
regulations that require enrollees
of health plans to have access to
timely provider
appointments.
The regulations require that
health plan enrollees are able to
secure appointments for urgent
care that does not require prior
authorization within 48 hours and
96 hours for appointments that
require prior authorization.
Patients must be able to
secure mental health and non-
urgent primary care appointments
within 10 business days.
Appointments with specialists must
be secured within 15 business
days.
"California patients are
literally sick of having to wait
weeks to see a doctor,"
says DMHC Director Cindy Ehnes. !
"These new rules say that patients
can reasonably expect to have
timely access to needed health
care."
Each health plan must submit
a proposal to the DMHC for
complying with the
required time standards, receive
approval, and begin using the
standards
within one year of the effective
date of the regulation. The burden
of compliance with the time limits
rests on the health plan, not the
provider.
"Care delayed is often care
denied, leading to worse health
outcomes or unnecessary visits to
the emergency room," says
Anthony Wright, executive
director of Health Access, the
Sacramento-based advocacy
organization that sponsored the
original legislation that led to the
new regulations. "These new
first-in-the-nation rules will
provide consumers with clear
expectations about
how quickly they should get in to
see a doctor or specialist."
NEWS
Homeless (Continued from Page Two)
average homeless patient in the Los Angeles
area who does not have a place for
recuperative care is hospitalized nearly twice
as long as the statewide average. Studies
have shown that a recuperative care program
can reduce the length of stay by more than
one-third, according to Puentes.
In Orange County, keeping a patient in
a hospital bed costs about $2,200 per day.
Instead, the hospitals pay the Illumination
Foundation $200 a day to house each
discharged patient. Most are projected to stay
10 days to two weeks, according to Puentes.
“When you’re ill like that, even out of
the hospital you’re not going to be able to do
anything for at least a week,” says Paul Leon,
the Illumination Foundation’s executive
Poll Links Reform Efforts To Voter Ire
Hoover Says Issue Hurts Democratic Lawmakers
A new study by the Hoover Institution at
Stanford University indicates that voters’
dissatisfaction with healthcare reform is
directly linked to uphill election battles for
Democratic lawmakers during the upcoming
mid-term elections.
The study examined the attitudes of 500
voters in 11 states, selected by a non-partisan
third-party organization to represent the
overall makeup of registered voters in each
state. It indicated that popularity with the
healthcare reform plan ranged from 33% in
North Dakota to 48% in Nevada. According to
Hoover, which is a right-of-center think tank,
only two of the states showed that Democrats
have a solid lead in Congressional mid-term
elections.
“The results indicated that the higher the
level of opposition to health reform, the
greater the likelihood that the state’s voters
supported Republicans,” according to a
statement issued by Hoover, which notes that
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Page 3
director. However, Illumination only accepts
patients who do not require a skilled nursing
facility or other types of step-down care.
Leon adds that many of the homeless can
be placed into permanent housing during their
stay. Of the 13 discharged patients who have
been sent to the Illumination Foundation,
permanent housing has been found for ve of
them, Leon says.
“If they could get parts of their lives in
check,” many qualify for services,” says Leon,
who adds that many qualify for Veterans
Administration of Social Security benets. “But
many of them don’t have a phone, or a family
member to help them out. They can’t last long
enough to sign up for services and receive
them.”
two-thirds of the voters polled were aware of
how their Senator voted for healthcare reform
during its historic Christmas Eve vote.
David W. Brady, the Stanford professor
who conducted the study, believes that most
voters believe a reform package will lead to
higher healthcare premiums in the future.
“They did very little to put cost controls
into the reform proposals,” he says.
Although the Senate took pains to keep
the estimated cost of its bill to less than $1
trillion over the rst decade of its
implementation, Brady notes that it included
steep cuts in Medicare payments that
lawmakers have repeatedly avoided in the
past because of their political unpopularity.
However, Brady believes that the
Democrats must pass a reform package or
they will get hurt even more in the midterm
elections.
“The disaster is even greater for them if
they don’t pass anything,” he says.
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Payers & Providers
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OPINION
Healthcare Trends Of 2010 – Part II
Capital Access, Quality, Labor Issues Play a Big Part
In the first part of this article that ran in
last week’s issue, I discussed many of the
issues that may affect the bottom line for
hospitals and physician organizations
during 2010. Most of the trends discussed
in the first part of this article – the
economy, hospital closures and the
pressures on physician-hospital alignment,
will remain in place.
Healthcare reform was at the
top of the list. I discussed how it
would impact changes in
reimbursement, and that it could
take years for its full force to be
felt.
The GOP victory in the
Massachusetts Senate race on
Tuesday has cast some doubts on
whether a reform package will be
signed into law. This was in some
ways an unexpected
development, one that only came
into full view in the past week.
By
The portent of reform does not quite Steven T. for-performance; and value-based
play the same role in my second round Valentine purchasing) and negatively (e.g.,
of predications, which I present here:
6. Organized Labor and Workforce
Supply
Expect unions to aggressively continue
to organize healthcare workers in order to
build membership. Top priority thereafter
is to push for mandated staffing ratios
among nurses and allied professionals.!
The demand for allied health professionals
will mean greater need to support
advanced nursing training, programs and
recruitment.
7. Capital Access and Expenditures
Access to capital will be difficult in
2010.! Strategic planning will have to
focus on resource allocation, net income
generation, and preparation for the new
era in healthcare delivery.! Capital
expenditures should be focused on
essential projects that reinforce core
competencies, critical Information
Technology infrastructure, revenue
generating equipment and services, and
streamlining care processes.
8. Information Technology
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Page 4
Clinical information systems,
Computerized Physician Order Entry,
Electronic Medical Record (physician office
and hospital) – all are key components of
ensuring high quality, efficient standard-of-
care service. Financial rewards as well as
penalties are tied to IT adoption under reform
guidelines.! New delivery models and
payment reform require EMR.
9. Clinical Quality/Patient
Outcomes
Typical P4P programs will evolve
to include both quality metrics
and cost.! Reporting on quality
will continue to be of increasing
importance and will have
significant impact on whether or
not you receive full payment for
services rendered.! Payments will
be impacted positively
(gainsharing under bundled
payment and ACO programs; pay-
reduced payment for readmissions,
hospital-acquired infections, and
others.)! Public posting (transparency) of
quality and patient safety data and indicators
will mean internal vigilance on assuring
performance levels are achieved.
10. Value
Patients will have more choice in 2010
and beyond.! Over time, healthcare reform, if
passed, will level the “paying” field.! Choice
will be made based on value, benefit design,
provider network, accessibility, and
perceptions of quality.! Physicians, hospitals,
and other providers will need to focus on
brand identity and demonstrating quantifiable
indicators of value.!
Steven T Valentine is President of The Camden
Group, a national healthcare consulting firm in El
Segundo. He is a member of the Payers &
Providers Editorial Board.
Op-ed submissions of up to 575 words are
welcomed. Please e-mail proposals to
editor@payersandproviders.com, or call
(877) 248-2360, ext. 3.
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