Hospital Charges – Why Do They Vary Among Hospitals?

Posted on May 9, 2013 by Linda Ringquist

Summary: Hospital charges for the same services can vary greatly from hospital to hospital. The Department of Health and Human Services(HHS) and the Centers for Medicaid and Medicare (CMS) have created a database making some of these charges available to the public.

Hospital charges are currently like a dart board. Throw the dart and see what you will pay. The variation goes beyond differences in location such as a rural hospital in Minnesota as compared to a healthcare system in New York City. You would expect to see a difference just based on the cost of living between these two areas.

Below are some examples of just how much variation there is:

Joint replacement in Ada Oklahoma $5,300
Joint replacement in Monterey Park California $223,000
Joint replacement Sky Ridge Medical Center in Lone Tree $84,000
Joint replacement Denver Health $46,000
Lung blood clot treatment Beth Israel New York City $51,580
Lung blood clot treatment NYU Hospital Center $29,869
Lung blood clot treatment Mayo Clinic Minnesota $16,861
Simple Pneumonia Surburban Hospital Bethesda Maryland $5,284
Simple Pneumonia Hahnemann University Hospital Philadelphia $79,365

Part of President Obama’s Healthcare Reform is to provide more transparent. As such HHS and CMS have created a database to make some of this information available to the public. This information is good to have but will not really be an apples to apples comparison. Factors which may not be obtained from the data include variations in demographics and the risk levels of the particular population. This can serve as more of a ballpark figure. In the examples listed above, all things being equal, where would you choose to have these procedures done?

The other important thing to note is these are “charges”. This is basically the initial offer. These rates are negotiated down through discounts with insurance companies and Medicare. So, these may not be what the patient would truly pay. There is also room for negotiation with those that are uninsured.

It will be interesting to see how hospitals respond and how they will rationalize the charges they have set as compared to their competitors. There will be quite a lot of scrambling going on.

What are your thoughts on these wide variations in charges for the same procedure? Why do they vary even within the same city which would have similar populations? Will making some of these charges available to the public help or will they cause more confusion?

About BHM Healthcare Solutions

BHM is a healthcare management consulting firm whose specialty is optimizing profitability while improving care in a variety of health care settings. BHM has worked both nationally and internationally with managed care organizations, providers, hospitals, and insurers. In addition to this BHM offers a wide breadth of services ranging including managed care consulting, strategic planning and organizational analysis, accreditation consulting, healthcare financial analysis, physician advisor/peer review, and organizational development.

Why There Will Be A Shortage of Doctors With Obamacare Infographic

Posted on May 8, 2013 by Linda Ringquist

It is evident that there will be a shortage of physicians. We have a shortage now. So, we are going to expand Medicaid and potentially have an extremely large number of additional lives that could be covered. This new group, while not all of course, but a good number are going to visit a doctor for the first time or the first time in a long time. Additionally, the exchanges will be implemented in full force adding another group of eligible consumers. How are we going to be able to treat this huge influx? These are just the new issues. We still have an aging population who require additional care.

2014 is going to a very tenuous year for healthcare in terms of supply and demand.

Why There Will Be a Shortage of Doctors with ObamaCare

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Preliminary Results As to the Effects of Medicaid Expansion Under the ACA

Posted on May 8, 2013 by Linda Ringquist

Summary: Preliminary studies show mixed results in terms of costs/usage and diagnosis/treatment as a result of Medicaid expansion.

The Patient Protection and Affordable Care Act (PPACA) is a comprehensive healthcare reform act which provides regulation for items such as Medicaid expansion, the creation of health insurance exchanges (marketplaces), clarifying and simplifying health insurance claim denials processes, creating Accountable Care Organizations (ACO)s, removing health insurance barriers such as lifetime limits and pre-existing conditions, and restructuring the methods in which physicians are paid for their services. This is not an all-inclusive list but rather just a few examples as to the topics included in the PPACA.

As of January 1, 2014, Medicaid expansion will become effective. It is interesting to note that individual states have the option to elect to expand Medicaid or not, as each state operates its own Medicaid program. Those that elect to expand will have the federal government pick up the tab for the first 3 years at 100% of the costs incurred. After 3 years, the amount of the federal portion will drop to 90% and foreseeably continue to drop thereafter. As of today, 18 states and the District of Columbia have elected for expansion, with a possibility of more in the coming months. The expansion involves increasing access to Medicaid for Americans who earn less than 133% of the poverty level which translates to about $15,000 for 2014. There are higher limits for families.

What is the outlook for Medicaid? Certainly more Americans will qualify for Medicaid, but will more Americans take advantage of their new coverage options? Will there be an influx of newly eligible consumers rushing to setup doctor visits? Will there be a significant increase in healthcare spending? Will better data be available in terms of diagnosis and treatment of certain health issues?

A couple of studies have been conducted in Oregon which delve into some of these issues to arrive at results which may serve as predictors as to what we can expect. The study included a comparison of a select group of about 10,000 consumers who had access to Medicaid through a lottery system as compared to a select group who did not and was conducted over a 2 year period. The results indicated an increase in doctor’s visits, more money spent on healthcare, and more hospital visits. The health effects were mixed. No strides were made in terms of levels such as blood pressure and blood sugar, however this group did show reductions in the prevalence of depression and brought about feelings of increased financial security. Additionally, no significant changes to the diagnosis of hypertension or cholesterol were made. On the positive side, the probability that diabetes and depression would be detected were significant and noteworthy.

Is Medicaid expansion a good thing? Absolutely. Will there be higher healthcare costs incurred? Absolutely. Will the expansion begin with addressing healthcare issues and then lead to preventative in this group? More than likely. There will be significant costs occurred in the initial years following the expansion but should begin to decrease thereafter.

What are your thoughts on Medicaid expansion? Do you think these decisions should be decided upon by individual states? Do you think there will be an influx of Americans taking advantage of their newly eligible status? Do you think the paperwork required will preclude many in this group from participating?

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So, How Is President Obama Doing on His Campaign Promises?

Posted on May 6, 2013 by Linda Ringquist

Summary: What promises were made during the Presidential campaigns? Which promises are falling by the waste side?

The thing about campaign promises are many of them are empty promises – promises either have no intention of being filled or are not able to be filled due to unforeseen circumstances. Sorting these situations out can be a daunting task. But in the end, does it really matter? The bottom line is the promises go unfulfilled. To fulfill one promise may mean breaking yet another.

Let’s start with healthcare affordability, one of the pillars of The Affordable Care Act “ACA”. The goal was to provide more affordable health insurance to more Americans. Everything that has come out recently regarding the health insurance exchanges points to a significant increase in premiums. Increases in premiums will cause more Americans to be uninsured not less. Additionally, you will be spending more to receive less. A higher premium price tag also equates to higher deductibles and higher out of pocket limits.

How about the national deficit which is now in the trillions? Promises were made to cut back spending and without affecting programs such as Social Security. It seems now that cost of living will be affected negatively.

Let’s talk about the sequestration for just a moment. It was supposed to be a cross the board spending cut. Medicaid was supposed to be exempt from the cuts but certain Medicaid indices are tied to Medicare rates which were part of the sequestration. So, perhaps Medicaid wasn’t directly affected but it was certainly indirectly impacted. Some of these broken promises are masked or hidden to the extent that it isn’t apparent to the average American. Keep in mind that programs such as Medicare, Medicaid and Social Security were not supposed to be affected

Tax increases were originally promised for primarily the wealthier Americans – singles earning in excess of $200,000 and families earning in excess of $250,000. The income levels which were affected were singles earning in excess of $400,000 and families in excess of $450,000. It now appears that other levels of income will be affected with tax hikes as inflation measures are being examined. Undoubtedly, tax increases are coming which will affect most if not all Americans either directly or indirectly.

A promise was made to create over 1 million manufacturing jobs by 2016. If the current pace continues, we will have created less than 500,000 manufacturing jobs. This one I think was more of an exaggeration than anything. When making a promise, it is more powerful to use a “1 million” number rather than a mere half a million. Nonetheless, it is another promise that will in all probability go unfulfilled.

How about education? Promises were made to increase graduation rates for both high school and college. However, one of the areas cut through the sequestration was education and funding to teaching hospitals and medical schools. How do you promote education and cut funding at the same time?

The campaign process is a game. Tell the people what they want to hear and not necessarily that which is possible to deliver. Times do change, the economy changes, and unforeseen issues do arise which require additional assistance from the government such as Hurricane Sandy and the bombing in Boston. This is when we need the government to roll up their shirt sleeves and assist anyway possible. The government has done a great job in states of emergency such as these. There are funds set aside for these emergencies and natural disasters. Wouldn’t it be nice in any political campaign to be honest and set forth measurable and attainable goals and then set courses of action to attain? It would provide a feeling of trust and loyalty and unity among Americans.

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Healthcare Financial Analysis – Want To Be More Profitable?

Posted on May 3, 2013 by Linda Ringquist

Summary: Many healthcare organizations are facing financial issues due to changes in the economy, changes to federal, state, and local legislation, and paradigm shifts caused by reform. What can providers and hospital organizations do to improve their profitability? How does an organization begin to recognize and implement changes to positively affect the bottom line?

Have you completed a healthcare financial analysis lately? We have previously written extensively about the importance of completing an extensive review on health insurance claim denials. This is one area in which the data is relatively easy to obtain and fairly easy to correct or at least chip away at making corrections to positively affect the bottom line. We have also written about the importance of looking at scheduling alternatives to maximize efficiency and reduce the number of missed appointments. Finally, we have written about the importance of reviewing payer mix and contracting. Are you receiving the maximum reimbursement based on your payer mix? Have you reviewed your contracts? Have you reached out to your providers to negotiate better rates? All of these issues need to be addressed when embarking on healthcare financial analysis.

To further our discussion on financial analysis, today we will focus on billing/coding maximization, staffing ratios, costs per unit, costs per service, and insourcing versus outsourcing options.

Billing/coding maximization

Billing/coding maximization involves billing for the services you provide at the level you provide them. It is imperative to know what is billable and how to code and document. This is going to be especially important when ICD-10 is implemented. Those billing for ICD-9 codes after a certain point will automatically have their claims denied. It is of utmost importance to make sure the organization is fully versed and current on all billing and coding protocols and standards in order to receive the maximum reimbursement allowed, and the appropriate reimbursement that most accurately reflects actual services provided. Coding is changing constantly and the organization needs to adapt to and adhere to these changes in order to receive the maximum reimbursement. Special considerations when coding include:

Ensuring that the most appropriate up to date codes are utilized
Ensuring that coding is reflective of the services provided from a time perspective
Ensuring that the coding is reflective of the intensity/complexity of the services provided
Ensuring that staff know appropriate code modifiers to use to align treatment with invoicing and avoid confusion and incorrect and/or inefficient codes

Staffing ratios

Staffing ratios for medium and small organizations is especially critical. What we usually find is a non-clinical staff that is bloated and non-functional. Staffing ratios should be established to ensure maximum efficiency in all aspects of the hospital. This includes non-clinical staff. What is the ideal number and mix of staff for each department to provide excellent patient care and safety while providing little to no downtime? Example: you can’t have staff working 40 hours of overtime on a consistent basis as this is very costly and errors are more likely to occur. Conversely, you can’t have staff with an abundance of downtime as this is a waste of resources.

Costs per service

We need to be able to drill down to what the cost is for each service on a per unit basis. What does a single unit of service cost the organization? How much can we charge for the service? What is the service reimbursement in our primary contracts established as? This is the ratio between volume and price. Do you know what the ROI needs to be to be profitable? Drilling down to the cost per service provides an opportunity for apples to apples comparisons to determine inefficiencies and target areas to improve.

Insourcing versus outsourcing

Once you are able to obtain the cost per service, you can begin to look for opportunities to insource/outsource. Some services may be less expensive to insource while other services may be less expensive to outsource. A cost benefit analysis should be performed to identify areas in which cost savings can be obtained.

Conclusion

There are many ways to improve the financial profitability in any healthcare organization. It takes due diligence and comprehensive analysis to determine the areas of improvement as well as to prioritize which improvements can have the biggest impact.

About BHM Healthcare Solutions

BHM is a healthcare management consulting firm whose specialty is optimizing profitability while improving care in a variety of health care settings. BHM has worked both nationally and internationally with managed care organizations, providers, hospitals, and insurers. In addition to this BHM offers a wide breadth of services ranging including managed care consulting, strategic planning and organizational analysis, accreditation consulting, financial management of health care, physician advisor/peer review, and organizational development.

5 Ways That Our Healthcare System Is Broken Infographic

Posted on May 1, 2013 by Linda Ringquist

How is our healthcare system doing? What changes need to be made? Is the Affordable Care Act the answer? What suggestions do you have to help fix our healthcare system? What are you doing to help reduce healthcare costs? How are you offsetting Medicare cutbacks?

Five Ways That Our Healthcare System is Broken infographic by NowSourcing.

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Top 5 Healthcare Consulting Issues as a Result of the ACA

Posted on April 29, 2013 by Linda Ringquist

Summary: The Affordable Care Act and all of its complexities have given rise to several areas in which healthcare providers may need additional assistance.

Healthcare is changing faster than the blink of an eye. Healthcare providers are finding it more and more cumbersome and in some instances impossible to keep up with all the new legislation. The Patient Protection Affordable Care Act (PPACA) alone is enough to drive a provider mad. The PPACA is a 900+ page document filled with provisions becoming effective from 2010 to 2015. It is difficult to understand all of the provisions let alone know how to properly comply with them. The PPACA touches many different subjects in the healthcare realm.

In order to properly adhere to the PPACA, healthcare providers must have expertise in:

Financial Aspects

Reducing health insurance claim denials to offset some of the reductions in Medicare reimbursement
Reducing hospital readmissions to a level to avoid penalties and further reduction in Medicare reimbursement
Value based payment programs for physicians as opposed to the traditional volume based payment
Bundled payments for groups of services as opposed to the traditional pay for each individual service
Tax credits for small businesses
Additional fraud and abuse penalties

Have you had your healthcare financial analysis lately?

Health Insurance

As mentioned above, cutbacks in Medicare reimbursement
Covering children longer
Not being able to use pre-existing conditions as a basis for non-coverage
Expanding Medicaid to cover more consumers
Health Insurance Exchanges/Marketplaces
Preventative care and what that entails
Limits on administrative costs as a percentage of total cost

Health insurance appeals for denied claims

Do you find it difficult to manage the appeals process? Wouldn’t it be great to have a healthcare management consulting firm relieve this burden for you. Wouldn’t it be nice to utilize physician advisor services that is fully automated with medical necessity criteria built in and deadlines automated to comply with accreditation requirements? Visit our physician advisor services pages for more details.

Do you know all of the ins and outs of insurance from private to commercial and from medicare to medicaid?

Care Models

Patient Centered Medical Homes (PCMH) or Patient Centered Health Care Home (PCHCH)
Accountable Care Organizations (ACOs)/integrated health

Do you know all of the advantages of becoming a PCMH? Will you be left behind by not being armed with information as to how to implement? Are you interested in becoming a part of an ACO? Do you know how to start the process?

Accreditation

In order to be recognized as a PCMH, an organization must go through the accreditation process. The following organizations currently offer PCMH/PCHCH accreditation:

URAC accreditation
NCQA accreditation
CARF accreditation
TJC accreditation
AAAHC accreditation

Generally what differentiates these organizations is the type of organizations they accredit as well as the accreditations offered. Additionally, ACOs must be accredited. Currently only NCQA offers ACO accreditation. Look for details in the future to see if any of the other national accreditation organizations begin to offer this type of accreditation as well.

Do you need assistance with your accreditation needs?

Healthcare has become extremely complex and it is difficult for healthcare organizations to be experts on every aspect. Healthcare management consulting has expanded with the enactment of the PPACA especially. You don’t have to do everything on your own. You don’t have to reinvent the wheel. Turn to the experts who have already been through and established protocols for the healthcare issues you are experiencing.

About BHM Healthcare Solutions

BHM is a healthcare management consulting firm whose specialty is optimizing profitability while improving care in a variety of health care settings. BHM has worked both nationally and internationally with managed care organizations, providers, hospitals, and insurers. In addition to this BHM offers a wide breadth of services ranging including managed care consulting, strategic planning and organizational analysis, accreditation consulting, financial consulting for healthcare, physician advisor/peer review, and organizational development.

The ABCs of the Physician Payments Sunshine Act

Posted on April 26, 2013 by Linda Ringquist

Summary: The Physician Payments Sunshine Act final rule was announced by CMS in February 2013 and requires public disclosure of transfers in value by manufacturers of medical devices and drugs.

The Physician Payments Sunshine Act (The Act) is a provision of the Patient Protection and Affordable Care Act (PPACA) – aka Obamacare or Healthcare Reform. The PPACA was enacted in 2010 with provisions becoming effective through 2014. The basic premise of the act is to discourage fraud and anti-kickcback issues affiliated with relationships between drug and medical device manufacturers and physicians and to encourage and promote transparency. Transfer of value cannot negatively affect the healthcare of patients and the decisions surrounding their care. The Act charges CMS with creating a searchable database to report transfer of value information, relationships between companies/physicians, ownership interest of physicians and these companies, and penalties issued as a result of noncompliance.

Who has to report?

Group purchasing organizations (GPOs)
Manufacturers of drugs
Manufacturers of devices
Manufacturers of biological
Manufacturers of medical supplies
All of which payment is available under Medicare, Medicaid or the Children’s Health Program (CHIP)

Physician – include medical doctors, doctors of osteopathy, dentists, optometrists, chiropractors, and podiatrists.

Types of transactions deemed “transfer of value”

Consulting fees
Compensation for services other than consulting
Honoraria
Gifts
Food and beverage
Entertainment
Travel and lodging
Education
Research
Charitable contributions
Royalty or license payments
Compensation for serving as faculty or as speaker for an unaccredited and non-certified continuing education program as well as an accredited and certified continuing education program
Grants
Space rental or facility fees
Ownership or investment interests

What is excluded from The Act?

OTC drugs and class I and II medical devices
Gifts/payments/incidentals valued at less than $10
Educational materials and items specifically created for patients and their families
Discounts, rebates, and contractual warranties issued by a manufacturer
Samples for patient use
Certain indirect payments transferred by a third party
Payments or other transfers of value to residents
Existing personal relationships
In kind items for the provision of charity care
Short term loans of covered devices

Critical dates

Initial final rule due date was December 31, 2012 but was delayed due to negative responses by such agencies as the AAFP. The issue was the potential cumbersome and complicated reporting aspects.
Initial collection period will be August 1 through December 31, 2013
Reporting is due to CMS by March 31, 2014
CMS will publish the initial period data by September 30, 2014
CMS will publish subsequent year’s data by June 30.
Physicians and teaching hospitals will have 45 days to review and dispute (if applicable) the reported information
Manufacturers will have 15 days following the physician and teaching hospital review period correct and re-submit the data.

Penalties for non-compliance

Between $1,000 and $10,000 for each transfer of value not reported for a maximum of $150,000 if deemed unintentional
Up to $100,000 for each transfer of value not reported that the company intentionally failed to report with a maximum of $1,000,000.

Reporting requirements

Who is the recipient
What was the transfer of value item?
What was the amount of the transfer of value?
Were there any third party transactions? Who was the third party?
What ownership relationships exist between the physician and his/her family and the manufacturer?
Any additional information regarding the transfer of value

August 1, 2013 is right around the corner. How do you start to prepare for the reporting requirements?

Determine which entities qualify as GPO or manufacturer under the definition for The Act
Determine which transactions qualify as transfer of value
Review the reporting requirements and templates as referenced below on the CMS website
Update applicable company policies and procedures to comply with The Act
Review existing arrangements with teaching hospitals and physicians.

Issues and concerns regarding The Act:

Information may be misinterpreted or taken out of context
Physicians may scale back on new research and education due to the reporting requriements
Hospitals and other providers may review this data when evaluating pursuing relationships with physicians
Competition issues could arise as a result of having to report these transfer of value issues. This is potentially an issue with research.
The government has designed this public data for the purpose of transparency, but information may be requested by the Department of Justice and the Food and Drug Administration. What will these organizations use this information for?
Plaintiff attorneys may use this information in a new way of ambulance chasing.

Additional information

For the official information on the Physician Payment Sunshine Act, please visit http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/index.html. The information found at this site includes:

General information
Fact sheets
Tools and instructions
Resources
Dates of webinars, calls and meetings
Frequently asked questions

Additionally, CMS has created a website for the templates required for reporting. Templates may be downloaded at: http://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10419.html

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What Are the Current Trends in Accountable Care Organizations (ACOs)?

Posted on April 25, 2013 by Linda Ringquist

Summary: What can we expect in 2013 in terms of Accountable Care Organizations (ACOs)? Where are we headed? What considerations need to be taken into account?

ACOs are continuations to the Patient Centered Medical Home (PCMH) model. PCMH places the patient at the center of all decisions regarding his health care and assigns responsibility to the primary care physician to coordinate care with all other care givers involved with the patient. These might include specialists, laboratories, imaging centers, etc. If a PCMH is like a home, an ACO is more like a neighborhood. It is a group of PCMHs working together in an accountable manner which is nationally recognized through organizations such as the Centers for Medicare and Medicaid Services (CMS).

ACOs began formally being recognized in 2012. As of January 2013, there are approximately 300 ACOs. They are really taking off – leaps and bounds.

So what are some of the trends we are seeing?

We would expect the Medicare Shared Savings Plan (MSSP) to nearly double in 2013 and continue the trend of expansion.
We would expect Medicaid ACOs to slow in growth a bit due to the impending healthcare exchanges and Medicaid expansion which are results of the Patient Protection Affordable Care Act (PPACA). We are in a holding pattern waiting to see what is going to happen with these. 2014 will probably provide more growth for Medicaid ACOs. Medicaid also has additional challenges of instability of the population and a large emphasis on long-term care which adds to the slower growth in Medicaid ACOs as compared to Medicare ACOs.
For states that decide to expand Medicaid, ACOs can provide additional monetary incentives which may encourage ACO expansion as well. States that have currently opted to expand Medicaid are: Arkansas, California, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Nevada, Rhode Island, Vermont, and Washington.
We would expect a growth in the number of patient centered medical homes (PCMH). 2012 was a big year for PCMH and really was the turning point for health care and the focus on the patient.
States will begin to move dual eligible populations toward managed care and toward ACOs.
Beginning in perhaps 2015 or 2016, we may see ACOs as part of the exchanges.
We will begin to see the expansion of commercial ACOs.
Mergers and acquisitions should rise in 2013 with the cutbacks from Medicare and the move to accountable care.
NCQA accreditation in particular will take off in 2013. They will be accrediting ACOs and exchanges. The number of accredited organizations will grow in leaps and bounds this year.
One can hope with all of the emphasis on primary care that more physicians will begin to choose primary care as their profession. This still remains to be seen.

What are some particular organizations doing?

Crystal Run is glad that reimbursement has finally become a focal point when using patient centered care models. They have been practicing patient centered strategies since the 1990s and have had an EMR since 1999. They were just waiting for the rest of the country to catch up. Crystal Run just thought it was the right thing to do and didn’t do it for any other reason.
Colorado ACO program saved $20 million in unnecessary care, of which after expenses, they were able to give $3 million back. Colorado ACO program also saw a reduction in emergency room visits and hospital readmissions. A true success story.
North Carolina has had great success with their medical home model within Medicaid which of course is the prelude to any successful ACO.
Aetna is on the move expanding their ACO kingdom both through partnerships with providers as well as a data analytics subsidiary.
Kelsey-Seybold was named the first accredited ACO through NCQA

2013 and going forward are going to be very interesting and an opportunity for tremendous growth. Keeping up with all of the changes is a daunting task. What are your thoughts on ACO? Do you think they are a good concept? Do you think there are flaws? Do you think there are areas of improvement?

About BHM Healthcare Solutions

Checkout our PCHCH accreditation (patient centered health care home accreditation) services: http://www.bhmpc.com/accreditation/

Cancer Patients are Seeing the Ripple Effects from the Sequestration

Posted on April 24, 2013 by Linda Ringquist

Summary: The Patient Protection Affordable Care Act (PPACA) seeks to provide accessible affordable care to more Americans. However, the ripple effects of the sequestration (to Medicare patients undergoing cancer treatments) are in direct contrast to these goals and principles.

Let’s start with the basics and talk about what sequestration means.

Sequestration is across the board spending cuts issued by the federal government to assist in reducing the national deficit which is currently in the trillions. The sequestration was enacted in the first part of 2013. Some of the major areas which were cut were:

Medicare
The Food and Drug Administration (FDA)
Medical funding grants
Funding for medical schools and teaching hospitals
Funding for medical research
Centers for Disease Control (CDC)
The Department of Health and Human Resources (HHS) and the Internal Revenue Service (IRS) specifically pertaining to implementing the PPACA
Military
Federal employee paychecks in the form of furloughs
World Trade Center Fund
Health insurance exchange grants
Prevention and public health fund

We are starting to see the impact of these spending cuts in a ripple effect. One of the areas of concern is the treatment of cancer patients who are Sequestration covered by Medicare who are treated in clinics. Medicare cuts were issued as 2% across the board and primarily affect Part B and Part D. Chemotherapy treatments are very costly. The Medicare cuts have created the ripple effect of cancer treatments in clinics too costly for the clinics to remain profitable.

At this point, clinics are faced with the following choices:

No longer accept Medicare patients – currently approximately 60% of Medicare cancer patients are seen in a clinic setting. With this potential loss of patients, will the clinics be able to survive?
No longer administer treatments which aren’t profitable
Wait and see if the government will exempt cancer treatments from the sequestration

What does this mean to the patient?

Patients will have less accessibility to treatment
The treatments will be more costly
Some of the costs will be passed along to the patient to the tune of about an additional $650 annually
May have to wait for treatments based upon the availability of the hospital

What does this mean for hospitals?

Hospitals will see a rise in Medicare cancer patients
Healthcare costs will rise as hospitals charge approximately $6000 more for treatments than clinics do
Additional staff may be required to treat these patients
Will hospitals be able to absorb the influx of patients? Currently about 60% of Medicare cancer patients are currently being seen in a clinic setting.

Does the sequestration make sense as it specifically relates to Medicare cuts? The PPACA was designed to provide more affordable and accessible care to more Americans. If cancer patients are being turned away from clinics, isn’t this in direct contrast to what the PPACA is trying to accomplish? Is it worth jeopardizing the care of Medicare cancer patients? Shouldn’t patient care be first and foremost? Will we see a rise in cancer patients and deaths attributed to cancer? We would love to hear your comments.

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