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The Plight of Rural Hospitals (Part 2)

As shared in last week’s post, hospitals, specifically critical access hospitals (CAHs), are having a difficult time surviving under the strain of various financial challenges. This week discusses how highly-stressed hospitals can possibly be identified to warrent additional attention.

Similar to our vehicle’s check engine light, we hope to be alerted with any major problem BEFORE something catastrophic happens. Sometimes, however, depending on the make, model and year of the vehicle, once the red or yellow light is flashing, the damage may have been done, leaving us shocked, frustrated and perhaps stranded in the middle of nowhere.

Similarly, we don’t want this to happen to our CAHs. If a financial stress light is not activated early enough, indicating that a particular rural hospital is in deep financial trouble, local officials and state policymakers are forced to react to something that could’ve been addressed earlier had the problem been closely monitored. It’s about being proactive and having the right tools to assess and manage over a period of time.

National Academy for State Health Policy

In early August, I received an email from the National Academy for State Health Policy (NASHP) that caught my attention. NASHP is a “nonpartisan forum of policymakers throughout state governments” whose mission is to convene state leaders on health policy issues to help “lead and implement innovative solutions to health policy challenges.”

The email’s headline was simple and direct: “Transparency Model Law Requires Hospitals to Report their Financial Health.” In order to address rising healthcare costs and/or assure financial stability for hospitals so they continue to provide access to care, NASHP’s approach is for state policymakers and the public to have “detailed hospital financial information to understand a hospital’s assets as well as its expenses and liabilities.” Hospitals encompass one-third of each dollar spent on healthcare.

After reviewing many policies and practices from other states, NASHP developed hospital transparency model legislation that would give states the authority to collect data needed from hospitals – including what data to be collected and which hospital documents to be used to obtain this information. It is also important to determine which state agency or office would be responsible for analyzing this data on an ongoing basis.

The model legislation also includes a reporting template for hospitals. (Click on the ‘Hospital Financial Transparency Report Template’ link to download an Excel spreadsheet template.) By having this template, the state agency would receive standardized financial information from all hospital and medical organizations that would be required to annually submit this information. Additionally, NASHP provides a Q&A on how states can use this Model Law and Template to increase hospital and health care system financial transparency. Finally, NASHP shares A Community Leader’s Guide to Hospital Finance, which provides an overview of key questions policymakers can ask to better understand hospital finances.

Current Iowa Hospital Financial Reporting vs. NASHP Model

The NASHP Model legislation and reporting template naturally created more questions about ‘if’ and ‘how’ Iowa hospitals currently report audited financial statements to the Iowa Department of Public Health (IDPH). As mentioned in my Part 1 post, Iowa Code Section 135.75 generally outlines basic annual reports that hospitals and health care facilities must file to the IDPH. From this requirement, other Codes also apply, including:

Are the data elements found in the Iowa reporting requirements adequate to address rising healthcare costs and/or hospital solvency metrics? NASHP provided me with a very brief side-by-side comparison of the Iowa Hospital Financial Reporting versus the NASHP Model. It is worthwhile to mention that the NASHP model is intended to give broad authority to a designated state agency that would implement a uniform reporting system via regulations. The specific data elements of the NASHP Model are outlined in the template rather than in the legislation. Iowa’s current law appears to prescribe a few specific reporting elements that the IDPH must incorporate in a uniform reporting system. However, there is no Iowa ‘template’ and IDPH has indicated that not every hospital participates, nor is the information collated when received by IDPH. Finally, IDPH is not adequately staffed to do much with the information collected from hospitals.

According to NASHP, a few key takeaways from the brief comparison include:

  • The NASHP Model is more comprehensive and breaks down each data element – such as all types of assets, liabilities, gross and net patient revenue by payer while Iowa’s law broadly indicates that hospitals must report assets, liabilities, income, and expenses.
  • NASHP recommends reporting on a system-level basis while Iowa invites hospitals and facilities to report per facility. NASHP’s systems approach is based on the fact that, because of increased consolidation, most hospitals and health systems are now part of larger systems, and data must be collected from each parent system.
  • NASHPs Model template automatically analyzes hospital-reported data and requires the state agency to produce annual reports while Iowa no longer has an annual reporting requirement.

In other words, the NASHP Model requests data that is immediately actionable and helps policymakers understand key metrics of a hospital system’s financial status. This is very important, because state agencies – the IDPH included – may not have the necessary resources (personnel and financial) to analyze and summarize this data appropriately. What one does with the collected data is often just as important as the type of data being collected.

The Iowa Hospital Association and American Hospital Association Annual Survey 

After the Part 1 post was published last week, Perry Meyer, executive vice president of the Iowa Hospital Association (IHA), brought to my attention that the IHA, in conjunction with the American Hospital Association (AHA), “works with ALL Iowa hospitals each year to collect the AHA Annual Survey of Hospitals.” Perry further mentioned, “This is a comprehensive survey that includes Iowa hospitals reporting their audited financial information. Each year when completed, IHA provides this data on all Iowa hospitals to the IPDH in lieu of IDPH conducting a separate licensure survey. This agreement between IHA and IDPH has been in place for 30+ years. The comprehensive survey data is public and IDPH should have the information.”

This information from Perry is greatly appreciated. The IHA has a good pulse on what is happening to its hospital members, and with this knowledge, serves as a lobbyist for their members in Iowa legislative sessions. IDPH acknowledged receipt of the AHA/IHA survey results. And the data, according to my IDPH contact, is used to “check the number of licensed beds of each hospital.” The limited use of this data is a bit underwhelming, if not concerning, as the AHA annual survey also includes audited financial information that can be reviewed and analyzed. The IHA – presumably with the blessing of the state – appears to assume the check engine role for financially-stressed hospitals within our communities.

Going Forward…

The upcoming election will begin to determine the ‘new normal’ during the next two-to-four years. If former V.P. Joe Biden is elected president and the Democrats take hold of the Senate in addition to maintaining House majority, healthcare policy will be – along with Covid-19 and the economy – the top issue for years to come. Under this scenario, the Biden public health option will most likely be front and center, and the battles will become contentious by political party, payer and healthcare provider. As a result, one large battle will likely be centered around reimbursements for providers, specifically hospitals.  Bundled payments and alternative payment methods will presumably be analyzed to ensure that quality of care is being incentivized appropriately. But a key issue for hospitals and other providers will be just how much the public option will reimburse hospitals and how does it compare to current Medicare reimbursements that are largely considered to be at or below hospital cost.

In the final analysis, having a due diligence process in place, similar to the NASHP Model, will be necessary when assessing the survival of our critical access hospitals.

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New Trend or Passing Fad?
Smoking Rates will Drop with COVID Pandemic

This blog is the FOURTH in a series regarding the ‘unintentional consequences’ of the COVID-19 pandemic. As our lives have been abruptly altered due to social distancing requirements – both at home and in the workplace – unplanned ‘disruption’ of previous normal activities could permanently replace sacred elements once believed to be unyielding to any change. But COVID-19 just may have dictated new approaches to how we live and work.

In late April, over one month into the COVID-19 pandemic, a piece from Kaiser Health News (KHN) was published discussing how the virus may prompt some smokers to quit their habit, primarily to avoid respiratory risks. Past research has shown that smoking makes it more difficult to fight off respiratory infections. Because of this, one can reasonably assume that smoking will increase health complications, if infected by the virus. It was, therefore, a natural topic to cover how the pandemic may favorably shape smoking habits in the U.S.

Since publication of the KHN article, however, the science between smoking and COVID-19 is not as clear as one might think. Please read on…

Smoking and COVID-19

One early study about COVID-19 health factors suggests that smokers are 14 times more likely to need intensive treatment compared with nonsmokers. Such findings push doctors to use this connection between COVID and smoking, as yet another reason for people to quit this habit.

Yet, using the coronavirus as a valid reason to quit smoking, could possibly backfire. New research from UCLA’s psychology department shows that stigmatizing smokers may actually INCREASE their urge to smoke. Known as a ‘stereotype threat,’ people become anxious about being identified in a negative way and, consequently, end up confirming the behaviors they are trying so hard to disprove.

As we learn more about the impact of this virus on humans, more studies will likely ensue on how smokers are impacted by newly-evolved viruses. Perhaps the development of a reliable and widely-available antibody test could reveal connections between smoking and the coronavirus.

Countervailing Study – Smokers are LESS likely to contract COVID-19

There is contradictory evidence that smoking may actually keep smokers from contracting COVID. French researchers believe that nicotine protects cells from coronavirus attacks. In fact, the Pasteur Institute found that four times fewer smokers contracted COVID than non-smokers.

In lieu of this finding, the French government banned online sales of nicotine replacements – nicotine gum and patches – and warned that pharmacies that dispense treatment for tobacco addiction must limit the amount issued per person. The concern is that “excessive consumption or misuse in the wake of media coverage” may push people to inappropriately consume nicotine replacements to combat COVID.

How true is the French finding? There is much skepticism. More information is needed to learn the truth about nicotine and COVID. For now, a helpful piece can be found in USA TODAY regarding the facts associated with nicotine and COVID.

Conclusion

Given the varied lifestyle behaviors of individuals, some smokers may decide to curtail the habit, while others will maintain the status-quo regardless of having conclusive evidence that their health is at greater risk by holding on to this habit.

As we have found in the past few months in our country, science can play an important role for those who embrace well-documented research, but it can also be discarded by others. In 2017, smoking rates in Iowa mimicked national rates – 17.1 percent of adults smoked. Smoking rates have decreased over the years, and whether the pandemic will accentuate this trend in the future is, at best, uncertain.

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Wellness Programs – New Study Confirms Cautioned Approach

During the past seven years, I have written a fair number of posts regarding wellness programs offered by employers. The core message of all blogs suggests that employers must have realistic expectations about what wellness initiatives will or will not do within the workplace.

A recent randomized clinical study published in JAMA is yet another reminder for employers to have tepid expectations when trying to keep their employees happy, healthy and less likely to incur more health costs. The study found that workplace wellness programs do not cut healthcare costs for employers, reduce absenteeism or improve the health of employees.

From the University of Chicago and Harvard, researchers used a large-scale approach that was peer-reviewed and included a more sophisticated design when analyzing BJ’s Wholesale Clubs. BJ’s has about 33,000 employees across 160 clubs. This analysis compared 20 randomly-assigned clubs that offered wellness programs with 140 BJ’s clubs that did not.

After 18 months of timeline analysis, this study revealed that wellness programs did not result in health measure differences, such as: improved blood sugar or glucose levels, reduced healthcare costs or absenteeism, or impacted job performance in a positive manner. In other words, employees with a wellness program did not experience reduced healthcare costs and other desired affects. I suppose one could argue that a year and one half was not enough comparison time to develop these conclusions.

One of the authors of this study, Katherine Baicker, dean of the Harris School of Public Policy at the University of Chicago, put it quite succinctly in a Kaiser Health News article: “[But] if employers are offering these programs in hopes that health spending and absenteeism will go down, this study should give them pause.”

What are your expectations about workplace wellness? Do you believe such programs, when appropriately and thoughtfully implemented, will greatly mitigate your healthcare costs, improve workforce productivity and reduce absenteeism? Maybe you feel these programs are a waste. From our 2012 Iowa Employer Benefits Study, employers shared their perceived ‘return on investment’ on the programs they currently had in place.

According to a 2013 “Workplace Wellness Programs Study” by researchers at the RAND Corporation, these programs only have a modest effect. This runs contrary to claims made by wellness firms that sell workplace wellness programs to employers. The report found that people who participate in wellness initiatives lose an average of only one pound a year for three years. Another finding is that employee participation in such plans “was not associated with significant reductions in total cholesterol level.” Smoking-cessation programs show some potential, but only “in the short term.”

Most likely, both skeptics and supporters of wellness initiatives will find ammunition to support their cause. Workplace wellness programs have grown to an $8 billion industry in the U.S., primarily as a direct result of rising employer health insurance costs.

This latest report may help stabilize any pre-conceived lofty expectations each of us may have about the benefits of workplace wellness programs. However, it must be noted that some employers have found value in these programs.

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