Friday, July 10, 2009
BATON ROUGE — LSU's main campus will furlough employees, stall pay raises and cut funding for its art museum and award-winning press as a way to trim costs and balance its budget this year, according to plans released Thursday.
Martin's plan for the main campus includes an average 3 percent cut to academic programs and varying types of reductions to nonacademic areas, including ancillary programs that rely on LSU to stay afloat, like LSU Press and its literary publication, the Southern Review.
Merit pay raises won't be allowed, and nonfaculty employees will be furloughed for 52 hours, an average 3 percent pay cut to each employee.
The plan lacked specifics, and Martin said more details would come as each department decides how to allocate its budget cuts.
The entire LSU System was cut by $52 million in state funds this year. Nearly all of LSU's campuses released their budget-cutting plans online Thursday.
The LSU System announced budget plans Thursday to lay off or eliminate close to 400 employee positions — far fewer than the more than 1,000 job losses feared.
reductions include about 100 jobs axed on LSU’s flagship
The LSU systemwide cuts include LSU medical schools, but not the state’s LSU-run public hospital system, which is coping with its own reduction in state funds.
“I think they’re substantial,” LSU System President John Lombardi said of $52 million in budget cuts because of reduced state revenue. “But I don’t think they’re as bad as we anticipated.
“We’ll function, but we won’t function well,” he added. “And it won’t be at a sustainable level.”
The LSU System includes five academic campuses, a law school, agricultural center, biomedical research center and two medical schools.
plans released Thursday did include drafts, but not finalized budgets, for
the main LSU campus and the
“General comments do not a budget make,” Lombardi said of the drafts of the system’s two largest schools.
Martin said the details will be completed shortly for the flagship campus.
“We’re so much bigger and more complex,” Martin said, noting that he is awaiting details on what and who are being cut from 14 academic colleges. “We’re going to do this right and not just fast.”
main LSU campus employs nearly 3,300 people. The
Martin emphasized that ancillary units such as the LSU museums, LSU Press and Center for Advanced
Microstructures and Devices are being cut more to avoid closing academic programs and laying off tenure-track faculty. Preserving the academic core is key, he said.
The award-winning LSU Press, for instance, was getting $500,000 per year but exceeding its budget and ending up with close to $1.5 million a year in state funds, he said. Now the press will have to make do with $400,000 and self-generated revenue.
Martin said he will help raise funds and even sell books on the street if needed. But he said he will not close academic degree programs for the press.
Academic colleges will be cut 3 percent and non-academic departments 5 percent, he said. Martin also wants mandatory furloughs — mandatory time off without pay. For all employees who are not tenure-track faculty that will average 3 percent salary reductions.
Gov. Bobby Jindal and the Legislature worked out a last-minute compromise that was finalized June 25 to limit the cuts so colleges could downsize more slowly, preparing for more budget reductions at least through 2012.
The total state higher education budget cuts are nearly 45 percent less than the original $219 million that Jindal proposed cutting.
The latest budget slices do not factor in $55 million already cut from higher education in January.
UNO Chancellor Tim Ryan announced a reorganization plan to decrease the number of upper-level administrators.
The changes would cut UNO from 27 top administrators to 18, eliminating two vice chancellors, five associate vice chancellors and two deans.
The goal is to protect the classroom, Ryan said. But 20 vacant faculty positions are being axed too, he said. Ryan said the fear of major cuts caused some faculty to leave UNO.
Once these cuts are implemented, Ryan, Lombardi and Martin all said the focus switches to planning for more anticipated cuts through 2012.
LSU’s campuses are implementing 5 percent tuition increases to help offset some cuts. The tuition increase would generate more than $10 million for the LSU System, including $7.1 million for the main campus.
BATON ROUGE -- The campuses of the Louisiana State University System plan a combination of staff layoffs and furloughs, cuts to nonacademic programs, wage freezes and elimination of vacant positions as they adjust to a $52 million reduction in state support for the 2009-10 academic year, according to figures released Thursday.
The preliminary details emerged two weeks after the Legislature approved a budget plan that cuts total state financing for its four public college and university systems by about $100 million -- or less than half the amount Gov. Bobby Jindal originally proposed in his budget plan.
When increases in tuition is factored in, the total cut to the LSU System is about $33 million, according to figures provided by a university spokesman.
After the Legislature approved the $29 billion budget package, the heads of each of the LSU campuses -- which include five four-year universities, two medical schools, the Paul M. Hebert Law Center, the LSU Agricultural Center and the Pennington Biomedical Research Center -- were asked to provide a preliminary blueprint of what changes are in store.
LSU's flagship campus in
Nonacademic units would be cut by an average of 5 percent, while academic departments would take an average 3 percent cut. "Merit increases" for faculty and staff will also be halted for the upcoming academic year.
But LSU Chancellor Michael Martin said the exact extent of the cuts has not yet been determined. "It is a work in progress and will change as more detailed information is received from individual units across campus over the next few days," Martin wrote.
Few in state government appear to be headed for the unemployment line despite tight budget constraints and earlier talk of big employee job layoffs.
Only a handful of state agencies have submitted employee layoff plans for required state Civil Service approval.
“I think some agencies are waiting until they get their official budget letter” detailing how they fared financially and personnel-wise, Civil Service Director Shannon Templet said.
So far, agencies have been asking for and receiving the OK to go forward with layoff-avoidance measures such as withholding merit pay raises, implementing job furloughs and offering employees eligible to retire an incentive to do so.
State revenue is expected to decline by $1.3 billion in the fiscal year that started July 1.
Agencies have to get by with less money in the state’s $29 billion budget.
U.S. Census Bureau said that, in 2007,
The Division of Administration reports that this fiscal year’s budget contains 1,335 fewer jobs.
The division was unable to detail how many of those are filled positions.
The Legislature approved a resolution sponsored by state Rep. Mert Smiley, R-St. Amant, to study the number of state government jobs that can be eliminated.
Smiley said he is not pushing for massive layoffs. Instead, he said he wants to eliminate positions as they are vacated.
“We’re going to do this to take care of some financial problems we’re going to have in the future,” Smiley said.
State agencies are trying to avoid major layoffs as they look at their employee situations.
State Department of Health and Hospitals Secretary Alan Levine said he expects to lay off no more than 100 employees in his sprawling agency, which has 12,130 employees.
employee layoffs — around 70 — will be connected with the closure of the New
Orleans Adolescent Home, he said. There also will be some employee layoffs at
“We have been slowing our hiring down in anticipation of having a lower authorized position total,” Levine said.
State Agriculture Commissioner Mike Strain is grappling with a $12 million budget cut.
He said he plans to reduce the shortfall by $5.5 million by refinancing debt that he inherited when he took office.
Despite the budget constraints, Strain hopes to avoid putting anyone in the unemployment line.
The agency, which has 710 employees, earlier downsized by 75 positions.
“We are going to try to avoid further layoffs if possible and do everything we can to bring the department into budget,” he said.
Strain said more than 100 people are eligible for retirement.
He said he hopes to encourage at least some of them to retire by offering them a package that allows them to collect up to 50 percent of their remaining pay for the year.
The retirement incentive is a new layoff avoidance option.
It allows agencies to offer retirement-eligible employees a one-time, lump-sum payment that cannot exceed 50 percent of the savings realized by the agency in the fiscal year the employee retires.
The payment would come after the employee’s departure.
The state Departments of Insurance and Agriculture and Forestry offered the retirement incentive.
The withholding of “merit” pay is being used primarily by colleges and universities and throughout the LSU hospital system to reduce the number of layoffs.
At LSU neither classified rank-and-file state workers nor unclassified employees will get the pay increase.
Most state employees receive a 4 percent pay raise on their anniversary date.
At the Department of Corrections, 105 employees will mark their last day on the state payroll July 26.
affected employees work at the
“Because it is now a locally operated facility, there will be a loss of state employee positions although it’s likely that a number of current state employees will transfer over to the sheriff’s payroll and continue to work at the facility,” she said.
Laborde was uncertain how many workers will make the transfer.
Another layoff plan approved for the Department of Social Services, involving consolidation of some administrative functions, ended up with one employee layoff.
The department’s spokesman, Trey Williams, said the agency is trying to eliminate 122 jobs by not replacing workers who leave.
“We don’t expect any major layoffs at all,” he said.
The agency has 4,900 employees.
Colonoscopies save lives by allowing doctors to find and treat cancer, but that life-saving test turned into a potential health threat because of equipment sterilization mistakes made at Veterans Affairs medical centers.
this spring, the VA sent out letters warning patients who received the
diagnostic procedure at three centers that they might have been exposed to
diseases, including HIV and hepatitis B and C. The risk stemmed from failure
to properly sterilize equipment between uses on different patients at medical
But even after that problem came to light and the VA launched a national safety campaign, problems persisted. The VA performed surprise inspections in May, but fewer than half of the 42 centers that were visited had proper operating procedures and training guidelines for endoscopic procedures like colonoscopies.
"We think there are systemic issues," said John Daigh, the agency's assistant inspector general.
That seems clear, and the VA must take steps to ensure that all of its 153 medical centers have the right training and procedures in place to protect patients.
The VA had to notify 10,000 veterans that they had been exposed to potential infection and should be tested. Of that number, six tested positive for HIV, 34 for hepatitis C and 13 for hepatitis C.
There's no way to know for sure whether those patients were infected during colonoscopies. The VA maintains that the chance is remote.
But it should have been beyond remote. Veterans' lives and health needlessly were put at risk because equipment was not properly sterilized. That's unacceptable. So is the worry that thousands of patients now must endure.
For Jefferson Parish's hospitals, it makes sense to join forces
Times-Picayune | 07.10.09
Parish's population and geography may justify having two publicly-owned
hospitals, one on each side of the
especially true as the hospitals continue to face post-Katrina losses from
higher labor costs and additional indigent patients in the absence of
Now parish officials have formed a 10-member board to look for combined ways to stop the financial bleeding, and that's a welcome move.
The new board will explore cost-saving measures like merging some administrative functions and combining the hospital's negotiating power to seek higher reimbursement rates from insurers and better deals from suppliers. A preliminary review concluded that combining administrative functions could eventually save $4 million to $7 million a year.
losses have not been exclusive to Jefferson Parish's institutions. The
Government Accountability Office last year concluded that the Jefferson
hospitals, Touro Infirmary,
This newspaper has supported efforts to tap federal aid to help hospitals cover those losses. But funding secured so far has been insufficient to make up the gap -- and future losses will keep piling up if hospitals don't do something to lower their costs.
The Jefferson Parish-owned hospitals have tapped reserve funds to make up deficits, but administrators say they can't keep that up for much longer without having to cut services. That ought to bring some urgency to the new joint effort.
ROUGE. (AP) —
Gov. Bobby Jindal signed the bill creating the program on Thursday, but the plan is tied to federal stimulus money the state has yet to receive.
The bill allows the state health department to apply for the stimulus money to dole out loans to health care providers for the purchase and implementation of electronic health record systems.
state budget includes $5 million in matching money required for
The law also allows the loan program to draw on other sources of funding if available.
So, if you want to see a doctor for a runny nose, you could be in for a long wait. But, some have no other choice. "Twenty-five percent of all patients that come in the facility are uninsured," Guarisco said.
According to a study released by the Louisiana Health Insurance Society in 2007, 22 percent of the people who live in Ascension Parish are not insured. That number struck a chord with the hospital and the parish. "We knew we couldn't sit back and do nothing," Guarisco said.
Parish Health Director Kenny Matassa says visits will cost between 5 and 25 dollars, depending on income. "Hopefully, the government realizes that this is the way to go for primary care," Matassa said. He believes this is just the first step in public and private entities working together to improve healthcare across the board.
Start-up costs for the clinic were funded by a $500,000 grant through the Fransiscan Sisters Ministries.
Bobby Jindal signed a law Tuesday expanding
With the backing of social conservatives and religious activists, the administration said the measure is necessary to uphold the individual rights of doctors, nurses, pharmacists and other workers whose personal beliefs might clash with their professional responsibilities.
Opponents, led by Planned Parenthood and the American Civil Liberties Union, said that the law, sponsored by Rep. Bernard LeBas, D-Ville Platte, will restrict patient access to accurate information and timely services.
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LeBas' House Bill 517 allows "any person . . . not to" provide abortions, distribute "abortifacient drugs," work on human embryonic stem-cell research or cloning, or participate in euthanasia or physician-assisted suicide. The drug provision is intended to include the so-called "morning-after pill," but would not extend to routine birth control.
Providers still must provide emergency care, as federal law mandates.
The measure also includes an unrelated change in state law to allow intergovernmental transfers of cash from local governments to the state for the purpose of securing greater Medicaid match payments from the federal government.
Sen. David Heitmeier, D-New Orleans, attached the proposal to LeBas' bill as it moved through the Senate. The transfers will not be an option until federal economic stimulus money runs out after fiscal 2011. But Heitmeier said the transfers could yield more than $250 million annually for the state's health-care system.
Jindal also signed Senate Bill 279 by Sen. Mike Walsworth, R-West Monroe, that is designed to increase the state's stock of emergency evacuation shelters, especially those that have been retrofitted to become more storm resistant and better accommodate evacuees.
The bill allows facilities owned or leased by the state or local governments, such as schools and colleges, to be placed in service in emergencies, but excludes hospitals and nursing homes. The bill says that the state Office of Emergency Preparedness will select the best sites from a list compiled by parish officials.
The governor has included $7.5 million in the state's construction budget to renovate facilities owned or leased by the state or local government so they can house more evacuees in state. The number of additional evacuees that could be accommodated by the bill was not specified.
The researchers recruited study participants, people with diagnoses of schizophrenia or schizoaffective disorder, plus controls from the general population. They analyzed data collected and also conducted a meta-analysis of data from the Molecular Genetics of Schizophrenia, International Schizophrenia Consortium and SGENE data sets – thousands of DNA samples.
While a single gene does not appear to be the source of the development of schizophrenia, the researchers found variations on chromosome 6 that appear to be associated with higher risk. These variations were found most often in people with schizophrenia, leading the scientists to believe that these common variations contribute to the development of schizophrenia. This area of chromosome 6, in the same area where genes important to the immune system function, provokes questions about whether or not treatments for autoimmune disorders might also be helpful in treating schizophrenia.
"Schizophrenia can be a devastating disease, and while treatments are improving, there are still people who do not respond or only partially respond," notes Buccola, principal investigator on the LSUHSC study. "Understanding the underpinnings of this illness will open doors to new and potentially better treatments."
to the National Institute of Mental Health, schizophrenia is a chronic,
severe, and disabling brain disorder that affects about 1.1 percent of the
LSUHSC research team, which included LSUHSC Assistant Professor of Clinical
Psychiatry, Margaret Baier, MD, and Erich Conrad,
MD, LSUHSC Assistant Professor of Psychiatry, as well as Sherri Chalona, completed the work while evacuated from
The research was supported by funding from the National Institute of Mental Health and the National Alliance for Research on Schizophrenia and Depression.
"Scientists have been looking for schizophrenia susceptibility genes since the early 1900s," says Buccola. "This study shows that these genes can be found and sets the stage for future research."
By PAULINE W. CHEN, M.D.
I met Ed (not his real name) during internship, the year after we both graduated from medical school. Built like a competitive wrestler, Ed was an Ivy League college graduate and one of his medical school’s top students, a 27-year-old who wanted nothing more than to become a general surgeon. Like me, he was enamored with the fearlessness that seemed to characterize the specialty. At a dinner during our first month on the job, Ed told the rest of us, “I love that nothing scares a general surgeon.” A dreamy look passed over his well-chiseled face as he continued, “They can take care of it all.”
Ed was determined to be that kind of surgeon and applied his intelligence and good nature to the huge workload we always had at hand. One night when I was on call I found Ed, who was supposed to have gone home for the night, in a patient’s room. A small mound of discarded alcohol swabs, blood-stained gauze pads and used test tubes stood by his side as the patient, an older woman, laughed and encouraged him on. When Ed saw me, he smiled sheepishly. “I never learned to draw blood in medical school,” he said. “It takes me a few tries.” The patient patted Ed’s hand and nodded as he continued, “If I can’t draw blood, how am I ever going to be able to operate?”
But several months later, I learned that Ed had gotten in trouble one night for not responding to a nurse’s page about a critically ill patient. “He must have been overwhelmed,” I thought, remembering that only a few nights earlier I had likewise forgotten a nurse’s request after several trauma patients rolled into the emergency room and I never returned to the wards as promised. I silently vowed to do better the next time and now hoped that Ed would do the same.
But a couple of weeks later, I heard that Ed overslept and missed morning rounds. A month later he was publicly reprimanded for examining and placing undue pressure on a patient’s freshly sewn incision. And a month after that, he was placed on probation because he had pulled a surgical tube out of a patient when it should have stayed put.
Suddenly it seemed as if Ed, the promising young surgeon, had disappeared into a vicious cycle of errors and mishaps and couldn’t pull himself out.
But Ed, the friend, had gone missing, too. He stopped smiling when we passed one another in the halls and refused to meet up with the rest of us for meals. “I’ve got to read,” he would say, his face stony. “I’ve got to study.” He still roamed the wards at all hours, but now he was like a man possessed. With his list of patients crumpled in one hand and a pen in the other, Ed studied patient charts and reports for hours, furiously jotting notes down on his list.
Despite his efforts, Ed continued to stumble. He soon developed a reputation for being testy, not only with other doctors and nurses but with patients. He argued, lost his temper and was too rough during procedures. One afternoon I heard Ed’s voice bellowing from a patient’s room: “But I never said that to you! Why did you have to tell the senior doctor that? You got me into trouble!”
Ed finally gave up on becoming a surgeon. In trying to understand what had happened to our once aspiring colleague, the other young doctors and I talked about how stress is inevitable and surmised that those who collapsed under the pressure were probably better suited to other lines of work. We speculated that Ed lacked a certain sense of humility.
But all of our ruminations finally boiled down to this: each of us was only one misstep away from that lonely and vicious cycle of errors that could unexpectedly and irrevocably spiral out of control.
In the years since, I have worked with other doctors who have had similar experiences. And while the discussions at disciplinary meetings and at morbidity and mortality conferences tend to focus (and rightly so) on the effects of these physicians’ errors on patients, there is rarely any time devoted to how such errors affect doctors and their subsequent interactions with patients.
called Dr. Colin P. West recently, a practicing general internist and the
associate director of the internal medicine residency training program at the
Mayo Clinic in
“What we are learning is that there’s clearly a cost for doctors and patients,” Dr. West said. “There’s probably a certain amount of stress that’s constructive, but when you deal with it for too long and take it too far, that’s when work suffers.”
While doctors should strive for as few errors as possible, “you can’t go through training without making an error unless you are not taking care of patients,” Dr. West said. “And if you are really invested in the care of patients, there’s a personal cost when things don’t go well.”
That cost can extend to patients. Doctors who are depressed are as much as two times more likely to make subsequent errors than doctors who are not. “From the point of view of the patient,” Dr. West observed, “it’s important whether the doctor treating you is experiencing symptoms of depression or burnout.”
And while Dr. West’s research focuses on doctors-in-training, he added, “I don’t think that as a practicing physician you ever stop thinking about how you could have done better, even sometimes with those events you probably couldn’t have prevented.”
Greater support for doctors from both the training process and patients could help to improve patient outcomes and strengthen the patient-doctor relationship. “In 21st century medicine, there’s no reason for a patient to accept suboptimal care,” Dr. West said. “At the same time, patients need to balance their expectations against the reality of the physician experience. And the medical establishment needs to do a better job of helping patients understand what physician lives are really like.”
“This doesn’t mean that physicians need to be coddled,” Dr. West continued, “but they need to be supported from within and by patients. They need to be supported in developing those relationships that help them to flourish. The reward is a stronger physician-patient bond. And that leads to more effective health care for everybody.”
By DONALD G. McNEIL Jr.
BETHESDA, Md. — The Obama administration warned Americans on Thursday to be ready for an aggressive return of the swine flu virus in the fall, announcing plans to begin vaccinations in October and offering states and hospitals money to help them prepare.
potential for a significant outbreak in the fall is looming,” President Obama
said by telephone link from
With good planning, “we may end up averting a crisis,” Mr. Obama said. “That’s our fervent hope.”
The summit meeting was jointly led by the secretary of health and human services, Kathleen Sebelius; the secretary of homeland security, Janet Napolitano; and the secretary of education, Arne Duncan. It gathered health and school officials from across the country and took questions by video link from the governors of several states, most of whom wanted to know who would pay for preparations like the vaccination drive.
Vaccinations will begin in October only if tests scheduled to begin in August prove that the vaccine is safe and effective. Even then, officials expect only tens of millions of doses to be ready, so they will have to decide who is vaccinated first. The most likely candidates, Ms. Sebelius said, are school children, health care workers, pregnant women and people with asthma or other conditions that make the flu riskier.
health officials were careful to warn that there was no evidence that the flu
had mutated into a more dangerous form, they noted that it seriously
disrupted some cities, including
“This flu is not over,” said Dr. Thomas R. Frieden, the new head of the Centers for Disease Control and Prevention, describing its continuing spread in more than 50 summer camps, the large numbers of cases seen in Chile, Argentina and Australia, which are now at the beginning of their flu season, and the initial detections of three cases resistant to the drug Tamiflu.
the flu’s peak in May, Mr. Duncan noted, 726 schools were closed across the
Officials from New York and Texas described the difficulties they had in deciding which schools to shut down and how hard it was to explain why they picked those they did.
Both schools and businesses need to prepare for the possibility of several weeks of high absenteeism, Ms. Napolitano said. She also reminded governors that not only the obvious services, like hospitals and schools, would be affected.
“As a former governor, I can say: make sure your payroll continues,” she said. “Whoever processes your checks, make sure they have a backup.”
Ms. Sebelius outlined actions the federal government was taking. It will offer $260 million in “preparedness grants” to states and cities for the vaccination drive and $90 million to hospitals preparing for surges of cases. (Congress has already appropriated $1 billion for vaccine ingredients and up to $7.5 billion more for testing, buying and distributing vaccine if health officials decide it is safe and effective.)
The Health and Human Services Department is also remaking its Web site, www.flu.gov, to be the central repository of information for everyone, including parents, school officials and doctors. And it will hold a contest, asking Americans to film their own public-service announcements about flu.
“This is a YouTube challenge to everyone,” Ms. Sebelius said. “The best will be aired nationwide.”
officials said that they were aware of fears that a Tamiflu-resistant
strain of the virus was already spreading silently in the
worry stems from a single case found in a teenage girl who flew to Hong Kong from
girl was never dangerously ill, was not treated with Tamiflu
and recovered. But the sequence of her virus, released last week by the
fact that the girl had a resistant strain without being treated suggests that
she caught an already resistant virus from someone else, presumably in
Centers for Disease Control and Prevention has intensified its monitoring in
Therefore, Dr. Frieden said, “it does not appear to be widespread.”
Different strains of virus “compete” with one other each year, and the drug-resistant strains do not always win. But a Tamiflu-resistant strain of seasonal H1N1 flu utterly crushed its rivals during the last American flu season, rising to 99 percent of sequenced samples.
Also, Tamiflu-resistant strains can sometimes be successfully treated with Relenza, another neuraminidase inhibitor, with older drugs like rimantadine, or even with larger Tamiflu doses.
Cadets Tested for Swine Flu
Democrats Open to Idea Of Forming Health Co-op
By PATRICK YOEST and COREY BOLES
Senate Majority Leader Harry Reid and Sen. Charles Schumer said they were amenable to considering a cooperative -- perhaps in lieu of a government-run insurance plan -- to compete with private insurers as part of the effort to reduce the country's health-care costs and expand coverage to uninsured Americans.
The public competitor should "keep the companies honest … be available right at the beginning to everybody, and have the strength to borrow," Mr. Schumer said. "If it can do those things in a co-op form, I think we're open to it."
Looking Back at Federal Plans for Health-Care Coverage
Journal articles on changes to health-care coverage from the 1940s through 1960s
* Multibillion Dollar Medical Plan Drafted By Federal Officials (March 17, 1945)
* President Suggests
* Social Security Measure Would Add 15 Million Persons, Boost Payroll Tax, Spend Large Sum on Hospitals (May 25, 1945)
* Insurance Companies, Nonprofit Plans Score Gains Among Elderly (July 16, 1962)
President Barack Obama has pushed for the establishment of a government-run health plan in the overhaul, but many Republicans have opposed a public plan, saying it would pose unfair competition to private insurers.
It was unclear whether Republicans would support a health cooperative, which could require a heavy infusion of start-up funding from -- and initial management by -- the federal government. A co-op with close ties to the government might be viewed by Republicans as a predecessor to a government-run plan.
heard more positives than negatives on co-ops from Republicans," said
Sen. Olympia Snowe, a moderate Republican from
The White House and Democratic leaders hope to pass health-care legislation by autumn. The challenge is how to pay for the overhaul, which is estimated to cost upward of $1 trillion over 10 years.
By JANET ADAMY
Reaching both of those numbers at the same time is turning into one of hardest tasks for Congress and the White House. The nonpartisan Congressional Budget Office has found that several initial efforts either sailed beyond the targeted price tag or left many people without insurance.
[Health overhaul graphic]
CBO said this week that one Senate proposal, when combined with certain
expansions to the Medicaid program, would cost about $1.1 trillion over a
decade and still leave 15 million to 20 million Americans uninsured in 2019.
Currently, about 46 million
The Senate Health, Education, Labor and Pensions Committee at first developed a plan that offered generous subsidies to lower-income Americans to help them buy health insurance. The proposal would require most people to carry insurance or pay a penalty.
the price tag came in too high, lawmakers whittled the subsidies, which
helped the cost problem but made it difficult for people to buy insurance.
"The more you're going to make people pay, the harder it is to say to
them, 'You must buy it,'" said David Cutler, a professor of economics at
Keeping the federal cost to around $1 trillion or less is critical because the White House is emphasizing that the plan won't increase the deficit -- meaning savings must be found for every dollar spent.
Congress Weighs Bill For Health Care Reform
Lawmakers are making progress in reducing costs in a healthcare reform bill they'd like to pass in August. WSJ's Janet Adamy looks at recent developments that help smooth over some of the bumps they've had in their debates.
"Rising costs are crushing us," Vice President Joe Biden said Wednesday. "They're crushing families, crushing businesses, crushing state budgets -- and they are crushing the health-care industry itself." Mr. Biden trumpeted a deal with the hospital industry to cut government payments through Medicare and Medicaid by $155 billion over a decade, savings that could be used to fund an overhaul.
According to a CBO estimate last week, the Senate health committee's proposal would cost $611 billion over 10 years. That estimate didn't include the cost of expanding Medicaid, the federal-state insurance program for the poor, because that's outside the committee's jurisdiction. The CBO said Tuesday that expanding Medicaid to a new batch of Americans with incomes as high as $33,000 a year for a family of four would add $500 billion to the cost of the proposal.
The high cost estimates and prospect that millions would remain uninsured has left negotiators scrambling for ways to make the numbers work. The Senate Finance Committee, which is working on a parallel health bill, has discussed delaying the Medicaid expansion until 2013. That would reduce the 10-year cost of the bill. The committee is considering a narrower expansion of the program than the one calculated by the CBO, so the measure may result in a smaller reduction in the uninsured number by the end of the 10-year period.
say the expansion of public programs would undercut the current
employer-based health-insurance system. Sen. Mike Enzi of
Another way to bring down the number of uninsured while keeping down the cost is to enact stricter mandates on businesses to offer health insurance and individuals to have it. However, those mandates are politically sensitive and carry costs of their own -- albeit not directly paid by the government.
For providers, the import of the reform debate being advanced by the Obama administration now actually has increasingly less to do with expanding coverage. Rather, as policy makers have sought sources of savings and revenue to pay for potential coverage expansion, they have convinced themselves that the delivery system is imbalanced, inefficient, and rife with unproductive incentives. And, moreover, with major investments through the stimulus program—EHR adoption, specialty care effectiveness, bolstering primary care—Obama-era delivery system reform has begun.
So, whether to pay for universal coverage, ease the burden of escalating health care costs on the economy, or simply extend the solvency of the Medicare trust (or all of these), CMS, Congress, and the White House will seek to overhaul the delivery system in the coming months and years.
Admittedly, the specific details of delivery system reform proposals are yet to be finalized, but many common themes exist across diverse constituencies. In our analysis, the implications from this consensus are:
* The transition to outcomes-focused reimbursement will materially increase risks to revenue growth.
* Operating efficiency will challenge top-line growth as the driver of future inpatient profitability.
* Bundled payments and other reimbursement innovations will make specialty care more rare and less profitable.
* Rewards in primary care practice will evolve to focus on coordination, chronic disease management, and population health.
* Total cost management will begin to supplant fee-for-service incentives in the health system business model.
* All providers will maintain tighter and fewer affiliations across the delivery system.
* M&A strategy will expand in scope to focus increasingly on (functional) vertical integration.
* Information-driven care, not simply information technology adoption, will ascend as a competitive differentiator.
* Consumer-driven health care will be driven (further) to the margins.
* New regulatory frameworks and entities will emerge.
In this memo, I will address the first item in this list. Future writings will cover others.
1. Transition to outcomes-focused reimbursement will materially increase risks to revenue growth
Many new reimbursement schemes are being proposed to make the delivery system more efficient, bundling being the most common. All of these proposals do or will proceed under the label of “value-based purchasing,” deemphasizing the inherent payment risk shifted to providers. The risk arises from the fact that these new payment schemes will not be implemented in a budget-neutral way. Rather, they will be structured in a “negative sum” (as opposed to zero-sum) fashion to penalize the lower-tier performers and redirect the money that would have gone to them to other parts of the delivery system or to fund coverage expansion.
Expect this risk to manifest in three distinct areas:
Clinical outcomes—To many, the likeliest change in reimbursement appears to be the evolution of the ongoing CMS “core measures” program from paying for reporting to paying for outcomes. In the Senate Finance Committee’s treatment of this topic, they proposed eventually putting up to 5% of each hospital’s Medicare reimbursement at risk based on performance against outcomes metrics. Providers would be force-ranked and lower performers would not recover the full withhold. Lowest performers may receive none.
Productivity—In the Medicare market-basket update calculation, CMS does not factor in potential productivity gains that lower the input costs of providing care. President Obama and the Senate Finance Committee have both endorsed considering changing the reimbursement formula to include presumed efficiency gains. With the influence of the Congressional Budget Office over scoring the costs of various coverage expansion proposals, it is likely a good bet that when it comes to scoring the cost savings that will fund expansion, such hard-edged changes in payments could appear very valuable.
Total cost—Reimbursement schema in this arena expand cost accountability across the typically siloed providers in the care continuum and beyond the time of direct interaction of provider and patient. The Senate Finance Committee has suggested that bundling physician and hospital inpatient payments, bundling inpatient and post-acute payments, and incenting providers to reduce population-based costs are all worth considering. In suggesting consideration, the committee also assumed providers would become more efficient at providing care due to the natural incentives to collaborate, so combined payments should be smaller than the sum of the current separate reimbursements.
For more information
In subsequent memos, I’ll share my thoughts on the implications of these changing incentives on margin performance, investment strategy, and physician integration. In the meantime, if you’d like to discuss these issues in greater depth, please consider registering for the Health Care Advisory Board’s ongoing Special CEO Sessions or its upcoming National Meeting for Member Executives, which will launch in September and focus on preparing your hospital or health system for success in the new health care economy. Finally, we would be happy to host one-on-one discussions about the implications of reform for your organization. Please feel free to reach out to me directly at email@example.com or 202-266-5326 or Matt Eirich, managing director of the Health Care Advisory Board, at firstname.lastname@example.org or 202-266-5371.
Ongoing analysis—Top 10 implications of health care reform
2. Operating efficiency will challenge top-line growth as the driver of future inpatient profitability
The hospital lobby and Obama administration have announced an agreement that will see Medicare hospital reimbursements cut by over $150 billion across the next decade in order to help fund insurance coverage expansion (see related stories in the July 7 Daily Briefing and today’s issue). The very existence of such negotiations, let alone the two sides reaching a compromise, highlights what we’ve been calling the “negative- sum” (as opposed to zero-sum) nature of achieving near universal coverage—if one constituency is getting more through reform, budget realities dictate that others receive less. Still unclear at this point is the scope of this agreement. For instance, does it account for new reimbursement proposals that would put hospital payment at risk for outcomes or readmissions, which could also be implemented in a way to create budget savings? More clear than the particulars of implementation, however, is the direction of future funding: payment schemes will place downward pressure on revenue growth. As a result, hospital and health system executives will attempt to maintain excess margin by rebalancing their focus between clinical and operational efficiency on the one hand and top-line growth on the other.
This shift represents no small change in strategy. Across this decade, hospital profitability has been driven by rapidly expanding revenues through building new capacity, purchasing new technology, and introducing new services. The success of these efforts diminished the relative importance of cost control and also added to the expense base of many organizations. As a consequence, hospitals were able to expand margin despite a cost per discharge that outstripped economy-wide inflation. And the depth of the financing change will likely be matched by the intensity of the challenge. If the historical precedent of the Balanced Budget Act serves as any guide, a reduction in the annual Medicare market-basket update will challenge many organizations in maintaining margins.
As hospitals and health systems seek margin enhancement opportunities, they may focus on emerging opportunities in a “reformed” delivery system:
* IT and productivity—Given the historic incentives to implement and utilize information technology introduced through the Obama administration’s economic stimulus package, many provider organizations may be in the strongest position ever to lower cost and bolster productivity through technology. This applies not only to automating currently manual tasks but also leveraging the growing asset of digitized data to analyze their operations for improvement opportunities.
* Physician preference items and comparative effectiveness research—With the Institute of Medicine’s recent publication of comparative effectiveness research priorities, hospitals may find eventual support to revise device and drug utilization and care protocols based on objective research. Capitalizing on new findings to rationalize the technology-component cost of patient care may ultimately lower the cost of care associated with physician orders while maintaining quality.
* Revised business case for alternate care management strategies—With potential reductions in inpatient payments but additional payments to sub-acute care providers and physicians operating “medical homes,” strategies to ensure patients, especially low-reimbursed medical patients, are treated in the most clinically appropriate and cost-effective setting may receive fresh energy. New reimbursement incentives could offer compelling opportunities to consider substantial changes in care delivery for many patient populations.
Learn more—Register today for the Health Care Advisory Board National Meeting
This is the second memo in an ongoing series of analyses intended to help members prepare for delivery system reform (access our first memo here). It represents a portion of our ongoing research, publishing, and consultative supportive for members during this time of uncertainty and potentially disruptive change. We encourage members who would like to discuss these issues in greater depth to consider registering for the Health Care Advisory Board’s ongoing Special CEO Sessions or its upcoming National Meeting for Member Executives, which will launch in September and focus on preparing your hospital or health system for success amid delivery system reform and the new health care economy. Finally, we would be happy to host one-on-one discussions about the implications of reform for your organization. Please feel free to reach out to me directly at email@example.com or 202-266-5326 or Matt Eirich, managing director of the Health Care Advisory Board, at firstname.lastname@example.org or 202-266-5371.
For the latest health reform news
To access the Daily Briefing’s Washington Health Wire—providing special coverage of the policies, people, and political forces shaping health reform—please visit www.advisory.com/policy.
Senate Weighs New Taxes To Fund Reform
"Senate Finance Committee Chairman Max Baucus (D-Mont.) presented his members Thursday with more than a dozen ways to pay for health care legislation, ranging from new fees on industry to an income-tax hike on couples making more than $1 million a year," Politico reports.
"Faced with a $320 billion hole in his reform plan, Baucus revisited options that were considered in the past, but never emerged as top-tier options because he believed taxing employer-provided health benefits was the best way to provide that revenue. The Senate Democratic leadership nixed the idea this week, saying the caucus could not support it because it would hurt the middle class. ... Instead of relying on one major source of funding, the committee will have to piece together revenue from a variety of places."
Possible funding sources include "broadening the 1.45-percent Medicare tax on earned income to 'passive income,'" levying a "five-percent surtax on individuals who earn more than $500,000 and couples that make $1 million," taxing employer-provided health benefits "at a higher level than had been considered," "capping the tax break on itemized deductions at 28 percent," issuing "tax credit bonds to pay for the proposed Medicaid expansion," charging fees to drug companies and hospitals and raising taxes on sodas and sugary drinks. The Finance Committee will also "renew their efforts to find more savings in the health system," but "the challenge is convincing the Congressional Budget Office to recognize these initiatives as true cost-savers" (Brown and Rogers, 7/9).
Roll Call adds that Sen. Olympia Snowe, R-Maine, said that a value-added tax was off the table (Drucker, 7/9).
Meanwhile, Majority Leader Harry Reid, D-Nev., did "an about-face" when he said he supports the Finance Committee's "efforts to strike a deal," Roll Call reports in a separate article. His statement of support was "a stark contrast" from Tuesday, when he urged Baucus "to rein in his pursuit of GOP support for a package for fear it would cost too many Democratic votes." On Thursday, however, Reid was "effusive in his praise for the Finance Committee's work." He also "reaffirmed that he is committed to the August deadline" (Drucker, 7/9).
The Wall Street Journal reports that Reid and Sen. Charles Schumer, D-N.Y., "said they were amenable to considering a [non-government] cooperative – perhaps in lieu of a government-run insurance plan – to compete with private insurers." Schumer said that a public competitor should "keep the companies honest … be available right at the beginning to everybody, and have the strength to borrow…If it can do those things in a co-op form, I think we're open to it." Whether Republicans would support such a cooperative remains unclear, because "a co-op with close ties to the government might be viewed by Republicans as a predecessor to a government-run plan" (Yoest and Boles, 7/10).
addition, "Senators working on health-care legislation are considering
provisions to pare back the billions of dollars in tax breaks enjoyed by U.S.
hospitals," The Wall Street Journal reports in a separate article.
"More than half of the 5,482 hospitals in the
Baucus and Sen. Charles Grassley, R-Iowa, are floating a proposal that would require hospitals "to offer a minimum amount of charity care, limit charges to the uninsured and tame their collection practices -- or face an excise tax." Nonprofit hospitals would "have a lot to lose. In a report issued in December 2006, the Congressional Budget Office estimated nonprofit hospitals were spared $12.6 billion in taxes annually, on top of the $32 billion in federal, state and local subsidies the hospital industry as a whole received each year" (Martinez, 7/10).
"As Congress wrangles with overhauling the health care system, there is one population not being discussed. No proposal for a national health plan would cover the nation's estimated 11 million illegal immigrants," NPR reports. But "analysts say the notion that illegal immigrants drain the health system is overblown. Simply figuring out how many undocumented immigrants lack insurance is not easy," although the Lewin Group has estimated that the number is about 6.1 million, which is "only about half the total population of undocumented immigrants." John Sheils of the Lewin Group "says many illegal immigrants use false documents to work on the books, with regular tax deductions and benefits."
Paul Fronstin of the Employee Benefit Research Group "says illegal immigrants are younger, and so generally healthier, than the overall population, and studies show they go to the doctor far less than the native born. He estimates their total share of the health care system at about 1 or 2 percent, with only a small slice of that paid for in public money. About $1 billion a year is paid by Emergency Medicaid, a federal program that covers emergency care for patients who would otherwise be eligible for Medicaid but can't prove their legal status. Sheils estimates that an additional $5 billion is uncompensated in any way. He says that's a blip on the national health care system — some two-tenths of 1 percent — but it can hurt when it falls disproportionately on hospitals, say, along the southern U.S. border."
Carla Luggiero of the American Hospital Association "has seen more and more hospitals face the burden of caring for illegal immigrants in the past decade. Some have had to raise fees. Others qualify for extra federal subsidies if they have an especially large number of Medicare or Medicaid patients. Luggiero says this can be a way to indirectly cover part of the cost of caring for the undocumented. … Luggiero says if Congress does not include illegal immigrants in any health plan, hospitals will look for those federal payments to continue. They would also like lawmakers to revive a separate subsidy that reimbursed hospitals several hundred million dollars for care of the undocumented in recent years but has expired" (Ludden, 7/8).
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