вход по аккаунту



код для вставкиСкачать
Healthcare industry now watches to see if lawmakers
shore up or undermine shaky individual markets Page 6
Slow growth
in earnings
M&A /
Page 12
Alexa, what
pills should
I be taking
today? /
Page 20
2017 BRG Healthcare
Leadership Conference
Where top executives from healthcare, finance
and policy converge to discuss the most
pressing issues facing the industry
David Axelrod v. Karl Rove
Andy Slavitt on Health Care Reform
in the Age of Trump
A DC Insider’s Look from
Top Congressional Staffers
Medicaid in the Crosshairs
Healthcare Data Analytics
Provider Compliance Programs
Capital Markets Analysis
High-Profile Healthcare
Deal Trends and Strategies
and more!
Some parts of this issue, including the editorial
and guest expert pages, were printed before the
Senate’s July 28 vote attempting to repeal the
Affordable Care Act.
2 Late News
CMS sets wheels in
motion for cuts to
Medicaid DSH payments.
4 The Week Ahead
HHS seeks applications
for new health IT
5 Regional News
6 Cover story
So what’s next?
By Mara Lee
With the latest GOP effort to repeal Obamacare dying in the
Senate, many hope Congress will work on shoring up the
individual insurance market.
Indiana scales back
work requirement in its
Medicaid waiver proposal.
Repealing the ACA would
have led to unnecessary
deaths and higher overall
costs by forcing people
to postpone care.
25 Guest Expert
Radical reduction of
administrative red tape
should be the first step on
the path to comprehensive
healthcare reform.
28 Innovations
By Rachel Z. Arndt
San Francisco IT company Carbon Health wants to
put control of patient data right where it belongs:
in the hands of the patient.
Shareholders sue Aetna
over retreat from ACA
exchanges in 2016.
“We not only need
to do a better job
of being able to
articulate our
value proposition,
we need to figure
out ways to
improve it.”
12 Finance
30 Q&A
Cover photo Getty Images
16 Automating the arcane world of medical
10 Legal
20 The health adviser
will hear you now
By Rachel Z. Arndt
Voice-activated virtual
assistants, such as Amazon’s
Alexa, are being delegated a
growing number of everyday
tasks. That now includes
accessing healthcare advice
and information. But hurdles
still stand in the way of
more advanced applications.
24 Editorial
8 Regulation
Insurers, states forced
to play guessing game
with 2018 rates.
device warranties
By Alex Kacik
As healthcare organizations work to achieve efficiencies
through reduced overhead and supply-chain savings, they’re
also using technology to help manage the intricacies of
medical device warranties.
Slow organic growth
puts M&A pressure on
hospital chains.
14 Population
Barbershop chats lead
to improved cancer
screening rates.
Hospital for Special Surgery
CEO Lou Shapiro discusses the
New York organization’s unique
care-delivery approach and
how it strives to provide value.
32 Data Points
While the rate of new diabetes cases has remained
relatively flat, more than 30 million live with the disease.
Learn about their cost and how many are at risk of
joining their ranks.
Awards and Recognition
Final week to nominate Up & Comers
Know some young healthcare leaders already making a
difference in the industry? Aug. 4 is the deadline to send us
nominations for this year’s Up & Comers. /UpandComers
Education and Events
Workplace of the Future conference
Join top-tier executives from the nation’s leading healthcare
organizations to discuss best practices and strategies for
creating an exceptional work environment. /Workplace
36 Outliers
34 Newsmakers
Digital health veteran
Harold “Hal” Wolf III
named incoming CEO
Whether it’s a
1960s-era scooter
or old signs from a
grocery store chain,
these items take
dementia patients
down memory lane in
former East Germany.
MODERN HEALTHCARE (ISSN 0160-7480). Vol. 47 No. 31 is published weekly by Crain Communications Inc., (except for combined issues the last week of June and the first week of July; the last two weeks of December),
150 N. Michigan Ave., Chicago, Ill. 60601-7620. Periodicals postage is paid at Chicago, Ill., and additional mailing offices. U.S. subscription price: $169 per year, $258 for two years; foreign subscriptions: $218 per year.
Canadian subscriptions: $226 for one year (includes GST). Sales Agreement No. 0293547. GST #136760444. Printed in U.S.A. Title® at U.S. Patent Office. © Entire contents copyright 2017, by Crain Communications Inc.
Use of editorial content without permission is strictly prohibited. All rights reserved. POSTMASTER: Send address changes to MODERN HEALTHCARE, Circulation Department, 1155 Gratiot Ave., Detroit, Mich. 48207-2912.
July 31, 2017 | Modern Healthcare
CMS sets wheels in motion
for DSH payment cuts
Hospital trade groups will have to circle the wagons again if they hope to stave
off billions of dollars in cuts to Medicaid
disproportionate-share payments.
The CMS late last week proposed a
rule that would fulfill an Affordable
Care Act mandate to cut DSH payments
by $43 billion between fiscal 2018 and
2025. During negotiations over the ACA,
hospital lobby groups accepted the cuts
under the assumption that expanded
coverage from the healthcare reform law
would reduce the need for the funding.
As it became clear that the actual
number of newly insured wasn’t going to match initial estimates, hospital
groups successfully lobbied Congress
to delay the cuts from 2014 until fiscal
2018, which begins Oct. 1. The ACA
repeal bill that died in the Senate last
week would have eliminated the cuts.
Hospital groups were swift in denouncing the proposed rule.
“(We’re) very disappointed that CMS
is moving forward with these cuts at a
time when rural hospitals struggle to
keep their doors open,” said Maggie
Elehwany, vice president of government affairs and policy for the National
Rural Health Association.
The cuts build year over year, starting
at $2 billion in fiscal 2018, before making their way to $8 billion by 2025.
Annual proposed
Medicaid DSH cuts
($ in billions)
2018 2019 2020 2021 2022 2023 2024 2025
Source: CMS
Aiming to lessen some of the blow,
the CMS said the formula used for the
cuts is geared toward ensuring that
DSH funds reach those providers with
the greatest need for financial support.
Among other things, the rule would
impose a smaller cut in low-DSH states.
Larger cuts would be felt in states that
have the lowest percentage of uninsured, states that do not target DSH
payments for hospitals with high Medicaid volumes, and states that do not
target DSH payments on hospitals with
high levels of uncompensated care.
“Our hospitals simply can’t sustain
cuts of this magnitude without reducing services or scaling back their workforce,” Erin O’Malley, director of policy
at safety net provider advocate America’s Essential Hospitals, said in an email.
Between 2013 and 2014, total hospital uncompensated care for Medicaid-enrolled and uninsured patients
fell by about $4.6 billion, or 9.3%, with
the largest declines in states that expanded Medicaid, according to the
Medicaid and CHIP Payment and
Access Commission, an independent
government panel. Medicaid disproportionate-share hospital payments
totaled $18 billion in fiscal 2014, the
last year for which a figure is available.
—Virgil Dickson
2 Modern Healthcare | July 31, 2017
$8 $8
n RWJBarnabas Health and Rutgers
University are partnering to create New
Jersey’s largest academic healthcare
system. “In this business, scale means
everything,” Rutgers President
Dr. Robert Barchi said in a conference
call last week with reporters. “If
you want to deliver first-rate care,
perform population health-based
research, capitalize what you do
across the entire system and bring in
talent including community-based
physicians, hospital physician groups
and academic and research groups,
you need scale.” RWJBarnabas
Health is New Jersey’s largest health
system with 13 hospitals and annual
revenue of $5.1 billion; Rutgers and its
health group include 1,000 employed
physicians as well as dentists,
psychologists, nurses, pharmacists
and other healthcare professionals.
The organizations will remain
separate corporations.
The Food and Drug Administration last
n week announced a pilot program to look
into new precertification procedures
for companies that make software. The
agency hopes the initiative will help cut
down on the time and money needed
to enter the digital health market. Up
to nine companies will participate
in the program and give the agency
advice and feedback on what kinds of
protocols could supplant the current
requirements for some products.
The agency hopes to come up with
processes that allow software to change
“in a timely fashion.”
n The CMS approved a waiver that will
allow Maryland hospitals and doctors
to enter care-coordination partnerships
and share savings stemming from more
efficient treatment, according to Nicole
Dempsey Stallings, vice president
of policy at the Maryland Hospital
Association. Such partnerships could
trigger federal anti-kickback laws, but
the approved plan waives participants’
liability starting July 1. Sixteen
hospitals will participate in the Care
Redesign Program, and more will be
able to join next year.
Changing times calls for evolved supply chain leadership
Responding to today’s shifts in the healthcare environment
David Hargraves
Senior Vice President of
Supply Chain Services
Premier, Inc.
In today’s environment, supply chain
leaders are being pushed to assume more
responsibility for the goals of value-based care by shifting
purchasing toward the highest-quality, highest-value
products. But to succeed in this environment, providers
have to be willing to abandon business as usual and look to
new innovations, solutions and resources to discover buried
inefficiencies, improve workflow and maximize savings.
What do you see as the major challenges facing
healthcare supply chain executives?
DH: Today’s environment requires leaders to take a total
cost management approach; it’s no longer about a lower
price per item, but about managing spend to ensure value.
But getting to total cost management can be difficult, as
most health systems still deal with misaligned incentives
that pit different providers and different settings against
one another in the cost containment journey, dysfunctional
markets that lack competition and conspire to keep prices
artificially high, lack of total cost and quality data to make
comparisons and identify opportunities, and a limited
ability to test, spread and scale purchasing innovations and
best practices.
What are key solutions supply chain leaders need
to thrive in era of value-based care?
DH: To succeed in a world where increasingly value is
the new economy and measures are its currency, health
systems need to focus on next-generation opportunities for
total cost management, including:
• Pursuing opportunities for greater alignment, such as
bundled payments or shared savings arrangements, which
incent providers to move away from volume in favor of
value-based incentives that move providers to holistically
manage cost.
• Better data and analytics to reach across the continuum
to measure cost and quality – at the setting, service line or
individual provider levels. For instance, Premier uses its
rich data sets on quality, safety, operations and outcomes
for ~40% of U.S. health system discharges to create cloudbased tools providers can use to pinpoint inefficiencies and
opportunities, all in real-time.
• Opportunities to uncover and test innovations through
data-driven collaboratives that give leaders a forum to
learn from others what works to manage total costs, the
specific steps to implement change and the processes that
hardwire success into business processes.
• Automation solutions that help leaders standardize
purchasing functions across the care continuum. ERP
solutions, in particular, are vital to help organizations
manage their supply chain, financial and workforce
management practices all in one, consolidated place to
ensure compliance and maximum efficiency.
It’s one thing to identify cost opportunities, and
another to make them reality. How can leaders
secure buy in and manage change across a hospital,
health system or a clinically integrated network?
DH: For total cost management opportunities, buy-in
from clinical leaders and executive champions is crucial.
Facilitating that discussion requires a substantive business
case using real-world cost and quality data to prove the
scope and breadth of the problem, as well as the financial
opportunity associated with change.
Can you provide an example of how that cultural
shift can be achieved?
DH: Premier’s Partnership for Advancement of
Comparative Effectiveness Review (PACER) is a forum for
this work, leveraging data to determine value and helping
providers standardize to vendors or products that provide
greatest returns. Participants have driven behavior change
among frontline clinicians on physician preference items
(PPIs) by engaging them through the whole decision-making
process, giving them insight into how supply chain decisions
are made, allowing them to test and provide feedback
on the different products in a clinical setting and see for
themselves how interventions affect outcomes.
Through this work, participants were able to standardize
on products that yield the best value, and extract better
volume-based discounts for the effort. A handful of
Premier member health systems participating saved more
than $8 million in two years on cardiac stents and surgical
mesh, proving the value of the work in just a small subset of
clinical categories.
This Executive Insight was
produced and brought to you by:
To learn more about Premier Inc., please visit
July 31, 2017
| Modern Healthcare 3
Aurora Aguilar
Matthew Weinstock Managing Editor
Paul Barr
Features Editor
Erica Teichert
News Editor
David May
Assistant Managing Editor
Patricia Fanelli
Art Director
Keith Horist
Production Manager
Merrill Goozner
Editor Emeritus
Blair Chavis
Web Producer
Fan Fei
Digital Graphics Producer
Harris Meyer
Rachel Z. Arndt
Dave Barkholz
Southern Bureau Chief
Maria Castellucci
Virgil Dickson
Washington Bureau Chief
Steven Ross Johnson Chicago
Alex Kacik
Mara Lee
Washington, D.C.
Shelby Livingston
Yonatan Gebre
Research Associate
Julie A. Johnson
Copy Desk Chief
Valerie Lapointe
News Intern
Modern Healthcare editorial offices at: 150 N. Michigan Ave.,
Chicago, Ill. 60601-7620; 685 Third Ave., New York, N.Y. 100174036; 104 East Park Drive, Building 300, Brentwood, Tenn. 37027;
1200 G St. NW, Suite 859, Washington, D.C. 20005; 1975 W. El
Camino Real, Ste. 304, Mountain View, Calif. 94040Member of
Business Publications Audit of Circulation.
4 Modern Healthcare | July 31, 2017
HHS seeks applications for
new health IT committee
Would-be members of the Health
Information Technology Advisory
Committee have just a few days to
get their applications in to the Office
of the National Coordinator for Health
Information Technology, as the Aug. 4
deadline approaches.
HHS is asking for applications
for two of the three members it
will appoint to the committee,
established by the 21st Century Cures Act to recommend
policies, standards and other digital health guidance to
the ONC.
The 21st Century Cures Act stipulates that of the three
HHS appointees, one represents HHS and one is a public
health official.
Other members of the committee are named by the
Government Accountability Office and by members of
Congress, who have already appointed Sutter Health
clinical informaticist Dr. Steven Lane, Norton Healthcare
Chief Information Officer Steve Ready and NantHealth
founder Dr. Patrick Soon-Shiong.
The new committee replaces the Health IT Policy Committee and the
Health IT Standards Committee.
Per the 21st Century Cures Act, the new panel will look into, among other
topics, health IT infrastructure, “existing gaps in policies and resources”
for interoperability, and how to make digital health information travel more
effectively among users. —Rachel Z. Arndt
A bi-weekly poll taking the pulse
of the Modern Healthcare audience
This week's poll: Should the CMS mandate
participation in bundled-payment initiatives,
or should it be voluntary?
To participate in this poll and see other poll results,
go to
Indiana scales back proposal
on Medicaid work requirement
Indiana has relaxed its proposal
to impose a work requirement on
Medicaid beneficiaries following
public backlash for the new
Under the revised amendment
submitted to the CMS last
week, Indiana would not require
students, pregnant women,
homeless individuals and some
other Medicaid beneficiaries to
seek work or be employed as a
condition of eligibility.
The move is part of Indiana’s
renewal application for its Healthy
Indiana Plan 2.0 waiver, and state
health officials believe its healthcare
costs could go down if the request is
approved. The state seeks to require
all able-bodied HIP participants to
either work on average 20 hours per
week; be enrolled in full-time or parttime education; or participate in a job
N.H. governor slams waiver
aimed at stabilizing market
Facing the potential for large premium increases, New Hampshire will
seek a waiver allowing it to create a
high-risk fund for individuals on the
marketplace. The state’s Republican
governor immediately pushed back
on the proposal, and could prevent the
plan from reaching federal officials.
State officials last week proposed a
Section 1332 waiver they say will save
the federal government $9 million in
advance premium tax credits for next
year, promote marketplace stability
and reduce the risk of dramatic rate increases in the individual marketplace.
The proposed state-operated reinsurance program would be funded
both by a new tax on insurance compa-
government for permission to change
elements of the ACA that apply to private health insurance coverage. The option only became available Jan. 1 of this
year. —Virgil Dickson
Medical Mutual brings all
University Hospitals facilities
into its network
search and training program.
After receiving nearly 60
comments, most of them critical of
the request, the state decided to
tweak the provisions.
Indiana estimates that 30%, or
more than 130,000 of the 438,600
Medicaid enrollees, will have to
comply with the new requirement
after factoring in all the exemptions.
Currently, 244,000 Indiana Medicaid
beneficiaries are unemployed and
an additional 58,000 members work
fewer than 20 hours per week.
—Virgil Dickson
nies and limited federal funding, which
could provide a collective $45 million
to cover the cost of high-cost claims.
The goal is to prompt companies offering plans on the individual market
to lower their rates.
But New Hampshire Gov. Chris
Sununu said he fears any additional
costs will be passed along to consumers.
If state health officials keep the
insurer tax in the finalized waiver
request, Sununu could prevent the proposal from ever reaching the CMS for
review, according to Danielle Barrick, a
spokeswoman for the New Hampshire
Insurance Department.
The CMS approved the first-ever 1332
waiver out of Alaska this month. The
state received permission to use what
would have been federal premium tax
credits and cost-sharing reductions to
fund a reinsurance program. Under a
1332 waiver, states can ask the federal
Medical Mutual of Ohio and University Hospitals have come to an agreement to include all UH facilities in the
insurer’s SuperMed network, reversing
a contractual decision made more than
20 years ago that excluded UH main
campus and UH Bedford.
Leaders believe that the agreement,
announced July 27, will bring UH more
patients and give Medical Mutual a
competitive advantage it’s been missing for two decades.
Bringing all UH services and facilities into the network has been a goal for
Medical Mutual CEO Rick Chiricosta
since he took the job in 2009. “If there’s
one thing that is probably equally important and maybe more important is
cost and so the challenge has always
been how do you get this done, how
do you improve access and make sure
that the cost of healthcare is kept at
the same or lower level,” he said. “And
we’ve finally found a way to get that
done, and that’s the part that I’m just so
happy and proud about.”
Bedford and all of the main campus facilities were the entirety of the
UH system at the time of the contractual decision in the 1990s. Other
medical centers that have been added
since then, such as Ahuja, Parma and
Geauga, were worked into the network as they came online.
But Medical Mutual members who
wanted to receive care on the main
campus, which contains much of UH’s
specialty programs and technology,
would have to pay out-of-network costs.
Of Medical Mutual’s 1.5 million
members, about 650,000 of them live in
northeast Ohio. —Lydia Coutre, Crain’s
Cleveland Business
July 31, 2017 | Modern Healthcare
With ACA repeal dead, shoring up
individual market takes center stage
By Mara Lee
The dramatic collapse of the GOP’s
efforts to repeal and replace the Affordable Care Act has, for now, minimized
the threat of significant Medicaid funding cuts. All eyes now turn to what the
Trump administration and Congress
will do about a shaky individual insurance market.
The administration could put its
thumb on the scale for an Obamacare
failure that it has been rooting for by
cutting off cost-sharing reduction payments to insurers. Thus far, President
Donald Trump has threatened to let the
system go into freefall, but hasn’t fully
followed through since the administration has continued to make those critical payments.
“As I said from the
“As I said from the beginning,
beginning, let Obamacare
let Obamacare implode, then deal.
implode, then deal.
Watch!” the president tweeted at 2:25
Watch!” the president
a.m. Friday, barely an hour after the
tweeted at 2:25 a.m. Friday,
Senate failed in a 49-51 vote to pass a
barely an hour after the
so-called skinny repeal of the ACA.
Senate failed in a 49-51
Republican Sens. John McCain, Susan
vote to pass a so-called
Collins and Lisa Murkowski crossed
the aisle to vote with all 48 Democrats
skinny repeal of the ACA.
and kill the repeal-and-replace effort.
Despite the early morning tweet,
the administration’s stance toward ue to threaten to stop them.
“Trash talking has its own effect,” Jost
cost-sharing reduction payments,
which are used to help insurers offset said. “We could see Anthem withdraw
the cost of providing more affordable from all the markets in all the states if
they think he’s about to do something
plans to low-income people, is hazy.
“We are still considering our options,” really stupid.”
The need to address the
White House spokesman
market, howevNinio Fetalvo said.
er, isn’t lost on some SenTimothy Jost, a healthate leaders. Even before
care reform expert and
As the individual
market continues
last week’s floor debate,
emeritus law professor
to teeter, industry
Sen. Lamar Alexander
from Washington and Lee
observers are
(R-Tenn.), chairman of the
University, Lexington, Va.,
hopeful that
Health, Education, Labor
thinks the most likely path
Congress and the
and Pensions Commitis for the administration to
administration will
tee, said he would hold
keep making the payments,
take action.
hearings on health polibut that Trump will contin-
6 Modern Healthcare | July 31, 2017
cy. At about 3 a.m. Friday, he put out
a statement saying that the failed vote
“leaves an urgent problem that I am
committed to address—Tennessee’s
state insurance commissioner says our
individual insurance market is very
near collapse.”
Sen. Amy Klobuchar (D-Minn.) said
she has faith in Alexander’s ability
to get complex legislation done. She
noted that Minnesota and Tennessee
have added reinsurance to their ACA
markets, and that should be a priority
Representatives of insurers are
also pressing for a solution, including
permanent CSR appropriations and
“We will continue to work on solutions to ensure a smooth open-enrollment period and to stabilize the
individual insurance market for the
long term,” said Justine Handelman,
senior vice president of policy and representation at the Blue Cross and Blue
Shield Association.
But it’s not clear whether there are a
dozen Senate Republicans who want to
spend billions on restoring reinsurance
Long and winding road
leads to a dead end
6 House unveils the American Health Care Act
13 Congressional Budget Office estimates
24 million people would lose coverage under AHCA
20 House leaders modify AHCA, moving it further
to the right
23 With support dwindling, House leaders
reschedule floor vote
23 CBO scores revised AHCA
24 Speaker Paul Ryan pulls AHCA from consideration
27 House again delays planned vote on AHCA rewrite
4 House passes AHCA by a vote of 217-213
22 Senate leaders unveiled “discussion” draft of the
Better Care Reconciliation Act
26 CBO estimates that 22 million would lose coverage
under BCRA
13 Revised version of BCRA retains cuts to Medicaid,
aims to stabilize individual market
17 Sens. Mike Lee and Jerry Moran pull support;
vote on BCRA delayed
19 CBO estimates 32 million would lose
coverage under repeal-and-delay approach
24 President Donald Trump uses bully pulpit
to promote ACA repeal the day before the Senate
is expected to take a procedural vote on proceeding
25 Vice President Mike Pence casts tie-breaking vote to
allow debate on BCRA
25 BCRA voted down, 43-57
26 Partial repeal of ACA voted down, 45-55
28 So-called “skinny” bill rejected, 49-51
in the individual market.
“Bailing out insurance companies with no thought
of any reform is not something I want to be a part of,”
Senate Majority Leader Mitch McConnell said shortly
after Friday’s vote. There’s also no guarantee that House
Speaker Paul Ryan would allow a bipartisan bill of that
kind on his side of the Capitol, especially given the hard
line some in the Freedom Caucus have been taking on
federal spending.
Chris Jacobs of the Juniper Research Group, a former
policy staffer for the Senate Republican Policy Committee and for Vice President Mike Pence when he served in
the House of Representatives, said he’s more optimistic
than most that Republicans in the Senate will take another stab at repealing some part of Obamacare, though
he didn’t express confidence something would pass.
“McConnell may think he’s done with healthcare, but I
don’t know that healthcare’s done with him,” he said.
Community Health Options CEO Kevin Lewis, whose
company serves about 33,000 on Maine’s ACA exchange,
would also like to see Congress fix the ACA’s affordability problems for those who don’t get subsidies or get relatively small ones. A 60-year-old nonsmoker in Maine
who doesn’t get a subsidy will pay $764 a month for a
bronze plan in Portland next year, assuming Community Health Options’ request is approved. That’s a 20%
increase from this year.
Lewis said getting federal reinsurance back for customers who make $90,000 to $250,000 a year in claims
could moderate those increases by 5 percentage points.
While the future is still hazy for insurers in the individual market, the situation looks a little more secure for
hospitals and other providers who have relied on Medicaid expansion to bolster the ranks of the insured.
Julius Hobson Jr., a healthcare lobbyist with Polsinelli,
said this vote showed a majority of Republicans do not
support scaling back spending on Medicaid, either generally or for the Medicaid expansion population.
The House budget resolution, which is needed to set
the stage for a vote on tax reform in the Senate, contains
$200 million in entitlement cuts with changes to Medicaid and Medicare. Although approved by the Budget
Committee, it has not had a vote on the floor because
moderate Republicans do not support those cuts.
“I think they have the same problem on the budget
resolution as they had in healthcare. The Republicans
have divisions among themselves that are almost insurmountable,” Hobson said. “I would say Medicaid is safe
until the next election.”
Jacobs said that could be true, but that it will take a few
months to be sure.
Ultimately, though, Jacobs thinks entitlement reform
has to be on the table.
“If some Republicans don’t want to touch Medicaid,
the president doesn’t want to touch Medicare, that’s just
not a fiscally sustainable dynamic,” he said. 
Alex Kacik contributed to this article.
July 31, 2017 | Modern Healthcare
Insurers, states forced to play
guessing game with 2018 rates
By Virgil Dickson
How plans are filing rates
It’s crunch time for insurance companies and state regulators as they set rates
for 2018. Right now, though, they are
flying blind. That’s because the federal
government has yet to commit to making payments that help insurers offset
the cost of providing low-income people
with more affordable plan options on
Affordable Care Act exchanges.
“I can’t underscore that time is of the
essence, and some of our critical decisions may have to occur in a relatively
short period of time,” Anthem CEO Joseph Swedish said on an investors call
last week.
Anthem sold plans on the marketplace in 14 states this year, but Swedish
questioned if that would be sustainable next year without the so-called
cost-sharing reduction payments. The
insurer has already told regulators it
plans to leave or scale back its presence on the marketplaces in Indiana,
Ohio and Wisconsin. Depending on
what happens with CSRs, more exits
could follow.
Swedish isn’t alone in hoping for
clear direction from the Trump administration. Across the nation, insurers
and state regulators are playing a bit of
a guessing game, especially since the
administration has thus far been making the CSR payments on a month-bymonth basis.
Modern Healthcare contacted regulators in all 50 states and the District of
Columbia to see how they are handling
the uncertainty. In the absence of any
assurances by the federal government,
state commissioners are making one of
three choices:
• Have plans draft two rates with
one that assumes CSRs and one that
does not
• Issue no guidance at all or have
plans file assuming CSRs will continue
• Have them file rates assuming
With uncertainly swirling about whether or not cost-sharing reductions will continue
for marketplace plans, insurers are being told to take one of three approaches:
develop two rates, one that assumes CSRs will continue and one that does not;
file one rate that assumes their continuation; or file one that does not.
8 Modern Healthcare | July 31, 2017
Assume CSRs
Assume no CSRs
File both
Miss. Ala.
Source: Modern Healthcare
CSRs will not continue
decided to assume CSRs there is a
Based on responses to Modern downside to that approach,” said Ceci
Healthcare’s inquiry, 38 states and Connolly, CEO of the Alliance of ComWashington, D.C., have either told munity Health Plans. She said plans
plans to assume CSRs or gave no guid- could face significant financial losses if
ance at all, letting plans choose how to the CSRs go away.
proceed. Seven states have
If a plan files assuming
had insurance companies
no CSRs and that ends up
THE TAKEAWAY being the case, premiums
draft two rates and six have
companies that are filing ascould rise at least 20% from
The federal
suming no CSRs.
last year, according to the
“We’re trying to give carKaiser Family Foundation.
riers some sort of certainty,”
Such a scenario would
approach to costsaid Idaho Department of
in more consumsharing reduction
Insurance Product Bureau
ers either choosing to
payments creates
Chief Wes Trexler, which
have no coverage at all or
a risky situation for
asked carriers to assume
choosing a bronze plan,
payers, providers
CSRs will not continue.
according to Sean Muland consumers.
“For those states that have
lin, a senior director at
the healthcare consulting firm Leavitt
Having more people going into
high-deductible bronze plans would
be the worst-case scenario for medical
providers. “There will be more people
getting procedures without providers
getting paid leading to an increase in
bad debt,” Mullin said.
If insurance companies assumed
no CSRs and they are paid, they would
have to issue rebates to consumers
since they would have taken in too
much money under the medical loss
ratio guidelines outlined in the ACA.
This policy dictates the amount of margin that can be retained after medical
costs are paid.
“Filing two sets of rates
in one state is not at all
typical,” Owen said. “It is
not as simple as including
or excluding an amount
for CSR in the rates.”
submit one rate by the Aug. 16 deadline.
Plans on the federal exchange will have
until Sept. 27 to sign a contract with the
CMS. A truncated open-enrollment
season runs from Nov. 1 to Dec. 15.
Currently, the federal government
is spending $7 billion a year to lower deductibles and co-pays for about
8.4 million customers with silver
plans, which are the only plans eligible
for the funds. The Kaiser Family Foundation estimated that would grow to
$10 billion in 2018.
“There is not a lot of runway from an
operations standpoint to be sure rates
are actually rolled out in time,” said
Hans Leida, an actuary at consultancy
Milliman. l
Rebecca Owen
Health research actuary
The Society of Actuaries
For the states that have had plans
develop two rates, actuaries are faced
with the unprecedented challenge of
making sure rates are neither too high
or too low, according to Rebecca Owen,
health research actuary for the Society
of Actuaries.
“Filing two sets of rates in one state is
not at all typical,” Owen said. “It is not
as simple as including or excluding an
amount for CSR in the rates.”
Factors that come into play when
developing two rates is predicting how
consumers will respond to both prices and how other plans in the market
will respond to the continuation or
end of CSRs. Not all plans receive the
same amount of money, so they may
choose a limited premium increase if
the funds vanish.
For the 38 states now relying on for their residents to
buy insurance, there appears to be limited opportunity for plans to update
their rates once they are submitted to
the CMS, which is only allowing them to
Pathstone’s Balanced Partnership ® approach is
designed to maximize and accelerate the financial
benefit delivered via your healthcare operations.
Learn how you can leverage our team’s extensive
healthcare experience by visiting us at
July 31, 2017 | Modern Healthcare
Shareholders sue Aetna over retreat
from ACA exchanges in 2016
By Shelby Livingston
Aetna’s 2016 decision to
drastically scale back its
participation on the Affordable Care Act’s insurance exchanges continues
to haunt the insurer almost a year later.
Hartford, Conn.-based
Aetna was hit with a shareholder lawsuit last week
that accuses its board of
directors of breaching
its fiduciary duties to the
company and its shareholders by making false
statements about the insurer’s reasons for pulling out of exchanges in
11 states.
The Allegheny County
Employees’ Retirement
Fund—an Aetna stockholder—alleges that Aetna’s retreat
In July, Aetna CEO Mark Bertolini wrote a letter to the
from the exchanges was not a “busiJustice Department stating he would immediately
ness decision,” as the insurer claimed,
reduce Aetna’s exchange footprint in 2017 and
but a move to better its chances of
withdraw from at least five states or possibly the
closing a $37 billion merger with Hupublic exchange business altogether.
mana that ultimately failed.
The complaint, filed in Pennsylvania
state court, says that Aetna’s alleged
conduct, which came to light during in multiple states from which Aetna on repeated threats to the U.S. Justice
its legal battle to acquire Humana, has withdrew were actually profitable for Department and then-HHS Secretary
Sylvia Mathews Burwell to curtail its
caused the company financial harm the company,” the complaint states.
An Aetna spokeswoman declined to participation in the exchanges if the
and damaged its reputation. Moreover,
merger were blocked. The shareholdthe lawsuit claims that Aetna chose to comment on the lawsuit.
U.S. District Judge John Bates, who er lawsuit filed this week cited Bates’
forgo profits “simply to make good on
blocked Aetna’s merger opinion as proof that Aetna misrepretheir wrongful threats to
with Humana in January, sented its reasons for exiting the ACA
the government.”
first made the accusation marketplaces.
“The real reason that
Shareholders allege
that Aetna used its particIn August 2016, Aetna said it would
Aetna withdrew from the
that Aetna's decision
ipation on the exchanges pull out of exchanges in 11 states and
exchanges was to retalto exit exchanges
as a form of leverage to remain in just four states, forcing huniate against the governunder false pretenses
close its merger.
dreds of thousands of plan members
ment for its attempt to
hurt their investment
He claimed in his writ- to find a new insurer. The company
block the Aetna-Humana
and the company's
ten opinion that Aetna announced the decision just a month
merger and, moreover,
bottom line.
leadership made good after the Justice Department sued to
the public exchanges
10 Modern Healthcare | July 31, 2017
block its merger with insurer Humana.
Aetna leadership said the move was
purely a “business decision” made because the company was losing money
on the plans.
At the time, Aetna’s retreat came as
a surprise. The company just months
before told investors it was on track to
break even on the exchanges in 2016.
But during the second quarter of 2016,
Aetna announced it had lost $200 million from the plans and said it expected
to incur a pre-tax loss of $350 million
for the year.
In August 2016, Aetna
said it would pull out
of exchanges in
11 states and remain
in just four states,
forcing hundreds of
thousands of plan
members to find a
new insurer.
Bates’ opinion laid out transcripts
of emails, phone calls and depositions
that he said showed Aetna’s decision
was not based on financial losses.
For example, Aetna CEO Mark Bertolini told Burwell over the phone in
June 2016 that were she to be contacted by the Justice Department regarding the merger, he would “appreciate
a good word for all that we’ve done
with you,” according to the opinion.
In July, Bertolini wrote a letter to the
Justice Department stating he would
immediately reduce Aetna’s exchange
footprint in 2017 and withdraw from at
least five states, or possibly the public
exchange business altogether, if the
department sought to block the deal,
court documents showed.
“The inescapable conclusion from
these contemporaneous emails and
documents is that the Aetna team
making recommendations to Bertolini did not view withdrawing from the
17 complaint counties as a business decision,” Bates’ opinion stated. l
Put our singular health care focus to work for you.
July 31, 2017 | Modern Healthcare
Slow organic growth puts
M&A pressure on hospital chains
By Dave Barkholz and Shelby Livingston
Increased merger-and-acquisition activity among
for-profit hospitals is being
driven in part by the kind
of slower organic growth
seen in the first round of second-quarter earnings announcements.
Admissions have been
dampened as the number of
newly insured has flattened
nationally, and the number
of new exchange patients and
those insured under Medicaid expansion has topped out.
Hospital admissions have
slowed to a “new normal”
of 1% to 2% year-over-year
growth, the earnings anAP PHOTO
nouncements indicate.
That has left hospital comAs announced in April, HCA is buying into a new
panies such as HCA, Universal Health
hospital market for the first time since 2003. The
Services and Community Health Sys$710 million deal to purchase 604-bed Memorial
tems struggling to sustain the revenue
University Medical Center in Savannah, Ga., is
growth and earnings performance
one of eight hospital acquisition deals that HCA
that their investors demand.
As announced in April, HCA is
has made this year, a mini-binge for the nation’s
buying into a new hospital marlargest hospital chain.
ket for the first time since 2003. The
$710 million deal to purchase 604-bed
Memorial University Medical Center ries & Co. healthcare analyst Brian tive consequences of that slowdown
in Savannah, Ga., is one of eight hos- Tanquilut. If the deal for Memorial are starting to show up in hospital and
University is completed health insurers’ earnings.
pital acquisition deals
by year-end, it will make
HCA posted flat net income in
that HCA has made this
Savannah the 15th ma- the second quarter on revenue of
year since April, a minijor market for 170-hospi- $10.7 billion and it lowered expectabinge for the nation’s
Less than stellar
tal HCA.
tions for the rest of 2017.
largest hospital chain.
hospital earnings
Admissions and emerUHS was in the same boat. The
Nashv ille-based
results make clear
gency room growth at acute-care and behavioral hospital
HCA’s reach into a new
that companies will
hospitals are at about giant lowered its guidance for all of
market for the first time
have to come up with
half the rates seen when 2017 when its second-quarter earnin 14 years speaks to the
new strategies to
Obamacare was crank- ings came in flat on slowing behavneed of HCA and other
address admissions
ing the newly insured ioral health volume.
hospital companies to
growth that has
into the healthcare sysCHS, the nation’s second-largest
supplement slowing orslowed to a “new
hospital chain, has
ganic growth with select
normal” of about 1%.
analysts note. The nega- been shedding lower-margin hosacquisitions, said Jeffe-
12 Modern Healthcare | July 31, 2017
pitals but not fast enough to return
to the black in the second quarter.
The Franklin, Tenn.-based company
posted a net loss of $131 million as
admissions at the 150 hospitals it has
owned at least a year fell 2.5% in the
quarter vs. the year-earlier period.
CHS is in the process of selling
30 hospitals and other assets to
reduce $15 billion in debt and focus
on its healthier markets.
Obamacare volumes also influenced the earnings of managed-care
companies in the quarter.
UnitedHealth Group benefited from
exiting nearly all of the 34 states where
it sold Affordable Care Act exchange
plans in 2016. The Minnetonka,
Minn.-based insurer’s revenue grew
7.7% year over year to $50.1 billion,
while profit surged 33.5% to $2.4 billion as the company pulled in more
revenue from its Medicare segment.
CHS, the nation’s
hospital chain, has
been shedding lowermargin hospitals but
not fast enough to
return to the black in
the second quarter.
Still, the insurer said it lost out on
$1.8 billion in revenue largely because
of its exchange pullback and a pause
in a health insurance tax.
But Centene Corp.’s results were
buoyed by its growing exchange footprint. The St. Louis-based insurer’s
experience managing low-income
Medicaid members has given it a leg
up over competitors in the ACA mar-
ketplace, where enrollment has been
dominated by sicker-than-average
Centene saw revenue increase 10%
to $12 billion thanks to enrollment
gains on the exchanges. It now covers
1.1 million marketplace members and
is poised to add more when it enters
three additional exchange markets in
2018 and expands in six existing markets. Centene’s net income totaled
$254 million, up from $170 million
during the same quarter in 2016.
Anthem, however, continues to lose
money from its ACA business and
plans to exit exchanges in three states
next year.
Even so, Medicaid and Medicare
membership growth helped boost the
company’s revenue in the quarter to
$22.4 billion, up 4.4% over the yearago period, while its profit rose 9.6% to
$855.3 million. l
Bgaf mk af []d]ZjYlaf_ `]Ydl`[Yj]k egkl km[[]kk^md eYjc]laf_
campaigns and discover the winning strategies.
Register Today:
This year’s Healthcare Marketing IMPACT Awards is co-located with Modern Healthcare’s Strategic Marketing Conference
July 31, 2017 | Modern Healthcare
Population health
Barbershop chats lead to improved
cancer screening rates
By Steven Ross Johnson
Hospitals looking to improve the
health of the communities they serve
might consider new avenues for outreach now that a team of researchers
have successfully increased certain
screening rates by regularly visiting
A new study published in the American Journal of Public Health examined the effectiveness of performing
patient navigation services in local
barbershops, and found there was an
increase in the cancer screening rate
studied. Community health workers
visited more than 100 barbershops in
engagement has
New York City between 2009 and 2013
become more prevalent
to provide patient navigation to more
at hospitals in recent
than 700 black men.
years as healthcare
The idea was to get to know members of the community well enough
has focused greater
that they believed the researchers who
attention on population
were urging them to get screened for
health management
colorectal cancer. Dr. Joseph Ravenell,
to improve health
associate professor of population
outcomes and lower
health and medicine at NYU Langone
healthcare costs
Health who led the research, said any
through prevention
type of community outreach relies on
establishing trust.
and wellness.
As such, Ravenell’s researchers
spent several years talking with barbershop workers and patrons in New tential barriers to getting screened,
York City, aiming to see if developing such as a lack of insurance. A consuch relationships outside clinical trol group was given advice on consettings could help to address some trolling blood pressure and a third
of the social factors that lead to health group received both a navigator and
the blood pressure condisparities. “We put a lot
trol counseling.
of time into developing a
The study found 17.5%
relationship with the barof men who worked with
bershops,” Ravenell said.
A new study
a navigator and 17.8% of
Participants were split
finds promise
men who got help navinto three groups, with
in hospitals
igating the system and
the first paired with a
addressing health
received counseling got
patient navigator who
disparity issues
screened for colorectal
educated them on the
within community
settings such as
cancer six months after
importance of colorecbarbershops.
they enrolled in the trial
tal cancer screening and
compared with 8% of men
helped them address po-
14 Modern Healthcare | July 31, 2017
Dr. Joseph
Ravenell talks
with a customer
at a Harlem
as part of the
who just received counseling.
Several factors played a role in contributing to the health disparities
many of the trial participants faced.
Only 60% had a personal physician,
while only 40% had received a checkup within the past year. Many were
uninsured and lacked knowledge
about their health and how to manage
it. The median salary of trial participants was $16,726, almost one-third
had less than a high school education,
and nearly half were unemployed.
But Ravenell said the results of the
trial showed the importance of having
healthcare providers meet the health
needs of patients who may not otherwise be seen within a clinical setting.
Community engagement has become more prevalent at hospitals in
recent years as healthcare has focused greater attention on population health management to improve
health outcomes and lower healthcare costs through prevention and
“What keeps people healthy often has
to do with what’s going on within their
communities,” said Dr. James Plumb, a
professor of family medicine and co-director for the Center for Urban Health
at Jefferson Health, a nine-hospital system based in Philadelphia. l
Health IT
that installs can disrupt billing and
patient throughput. The damage to operating performance usually dissipates
after the first year as staff and clinicians
become proficient in the technology.
Hospitals are trying to manage the
risk by establishing lines of credit to ensure cash availability as well as getting
cording to a new report from Moody’s the board of directors involved to hanInvestors Service.
dle project management.
During the first year of EHR installaMoody’s cited Wake Forest Baptist
tions, the median decline in operating Medical Center in Winston-Salem,
cash flow for hospital systems is 10% N.C., and Presence Health in Chicago
with a 6% falloff in days cash on hand, as examples of systems whose clunky
Moody’s said after examEHR conversions contribining system installations
uted to margin deterioraTHE TAKEAWAY
over the past several years.
tion and credit downgrades.
EHR installs can cost anyBoth have recovered.
The first year of an
EHR installation can
where from several milMoody’s upgraded Wake
have a sizable effect
lion dollars for a small,
Forest Baptist’s debt to posion the bottom line,
stand-alone hospital to
tive from stable last October.
but the pain usually
a half-billion dollars for
And Presence Health comdissipates as
larger systems.
pleted a $1 billion bond offerclinicians get used
Moody’s looked at 39 reing a year ago to restructure
to the system.
cent launches and found
its balance sheet. 
EHR rollouts taking a
financial toll on hospitals
By Dave Barkholz
UMass Memorial Health Care is going live with a new electronic health
record system later this year. While the
expectation is that there will be longterm efficiency gains, the rollout has
already had a significant effect on its
bottom line.
The four-hospital academic medical center saw EHR expenses mount to
$26.1 million in fiscal 2016, eroding operating income to $40.7 million for the year
with more being spent for the launch.
UMass has company. Hospitals
installing new EHR systems should
expect a sizable cash drain as the
process disrupts business and adds
technology and training expenses, ac-
Feeling trapped
More than 600 overdose deaths were
reported last year in Cuyahoga County, Ohio.
The death toll is projected to hit 850 this year.
In an effort to raise awareness of the dangers
of opioids, community groups in Cleveland
launched a yearlong "Know the Risks" campaign
last April. The initiative is tapping into all forms
of media to get its message out. The latest: a
9-foot tall prescription pill bottle in downtown
Cleveland with a person inside and a label on
the outside, telling the story of how the person
became trapped in addiction to painkillers.
July 31, 2017 | Modern Healthcare
Back office relief:
Automating the
arcane world of device
By Alex Kacik
he constant, complicated
stream of administrative
documents flooding hospital back offices involved in tracking
warranty credits, fulfilling purchase orders and replacing equipment can pose significant financial risks,
but new software aims to streamline traditionally outdated processes.
The tracking of warranty credits can get lost amid hospital and health system’s back office workflow, which
16 Modern Healthcare | July 31, 2017
some have described as
a “black hole”—archaic,
overly manual and tedious.
Disorganization and administrative
burden can compromise care quality and
cost health systems precious time and resources as well
as hefty penalties amounting to millions of dollars a year.
As many organizations work to coordinate care, reduce overhead and cut costs during the gradual shift to
value-based payment models, they are looking to auto-
“The issue of tracking warranties
of medical devices can be
complex, difficult to manage
and a liability for hospitals.”
Jesse Schafer
Explant control manager
Mayo Clinic
mate and integrate supply-chain processes across the
continuum, including the little-known world of device
warranty credits.
“The issue of tracking warranties of medical devices can be complex, difficult to manage and a liability
for hospitals,” said Jesse Schafer, explant control manager for Mayo Clinic, which is one of the few systems in
the country that has a full-time employee dedicated to
tracking replacement medical devices and passing the
credits on to Medicare, he added.
Errors in Medicare billing have left systems liable for
millions of dollars. HHS’ Office of Inspector General recently audited Mount Sinai Hospital in New York, New
York-Presbyterian Hospital and Abbott Northwestern
Hospital in Minneapolis, citing $41.9 million, $14.2 million and $8 million, respectively, for alleged overpayments stemming from Medicare billing errors.
Part of the issue relates to tracking warranty credits
for replaced medical devices. The hospital is financially
accountable for available warranty credits—even if it
did not pursue them. Investigators said that many hospitals regularly did not report manufacturer credits to
the CMS and often neglected to request those credits
from the manufacturers in first place. The legal repercussions can be significant, healthcare experts said.
Certain companies have written off tracking warranty
credits altogether. In medical-device developer Abbott
Laboratories’ 2016 annual report, the company said that
“product warranties are not significant.”
Reserves that medical-device manufacturers keep on
hand to pay warranty claims
As organizations
have been falling in recent
work to coordinate
years, making them more ficare, reduce
nancially vulnerable, Waroverhead and cut
ranty Week’s recent analysis
costs during the
of 152 medical and scientific
gradual shift to
equipment companies found.
value-based payment
Collectively, reserves fell
models, they look
to automate and
by $91 million in 2016 to
integrate supply$625 million, their lowest levchain processes
el over the past 14 years, the
such as the littlestudy concluded.
known practice
It’s a complicated, fluid proof tracking device
that requires multiple levwarranties for
coordination, experts said.
Medicare patients.
“It comes down to a visibility
issue and connecting the dots between departments,”
said Peter Casady, co-founder and CEO of Champion
Healthcare Technologies, which co-developed the automated software platform Warranty Tracker with Mayo
Clinic to help providers track warranty claims and credits. “Providers are siloed within their departments and
that is something that has to be overcome.”
Why warranty tracking matters
When devices such as pacemakers and defibrillators
malfunction or are recalled, manufacturers may refund
part or all of the cost of the replacement based on how
old it is. The CMS requires hospitals to pass the credits
on to Medicare, which pays for the surgeries of replaced
devices. Yet, providers can keep the credits if they are
less than 50% of what the hospital paid for the replacement device, which can complicate things.
In addition: only certain devices are eligible for credits; electronic health records are not equipped to track
warranties; vendor requirements for claims vary by
device; and vendor turnaround can take months, requiring coordination across a number of departments
within a hospital.
“This impacts all health systems,” Schafer said. “It’s a
very resource-intensive process and requires a proactive approach to tackle it head on.”
Cardiac rhythm implants such as pacemakers and
defibrillators account for more than half of all Medicare
overpayments, but warranty credits could also involve
cochlear implants, neurostimulators and orthopedic
implants, Schafer added.
The Warranty Tracker, which is in the pilot stage, is a
centralized platform that aggregates the logistics workflow—estimating the eligibility of the return, tracking
when the manufacturer receives the device and notifying on the credit outcome. The reason for the explant
is logged in the EHR, the EHR sends an on-screen notification to return the device to the vendor, it sends automated alerts when the 50% threshold is reached and
reconciles vendor credit reports with hospital records.
This minimizes risk, reduces liability and creates a more
efficient process, Casady said.
Providers are also using new tools to keep them informed of safety warnings and recalls when they are
purchasing equipment and devices. Tracking such
warnings can help health systems improve safety mea-
July 31, 2017 | Modern Healthcare
sures and save time and money by avoiding potentially
dangerous devices, especially as organizations look to
merge and scale up, said Michael DeLuca, executive
vice president of technology and client services for
safety technology company Prodigo Solutions.
Back office tech integration
Updating back-office tasks such as warranty tracking poses cultural hurdles, because transitioning from
long-standing processes that require new infrastructure, training and IT support can be difficult, said Eric
Wilson, a vice president at purchasing tech company
Basware. “Many just stick with manual processes because it’s what they know,” he said.
Coordinating back-office work can also prove challenging as systems consolidate. Jeff Friant, vice president of finance at Edward-Elmhurst Health in Illinois,
said that before Edward Hospital and Elmhurst Memorial Healthcare merged in 2013, their capital acquisition
processes varied—some were on paper and some were
digitized. It partnered with OpenMarkets, whose software helps hospitals and suppliers create a better equipment procurement process, to standardize equipment
across the organization and align its data, which allowed the organization to be more proactive, Friant said.
“Oftentimes with the old materials management
system, we wouldn’t know what was being purchased
“I would describe (back office
transformation) as a multiyear
journey to get where we are today.
You need everyone to buy in
to a collective culture.”
Jeff Friant
Vice president of finance
Edward-Elmhurst Health
until it got on our desks for approval, and at that point it
hampers the negotiation process,” he said. “It raises visibility not just with our materials management but within
our leadership as well—it’s not as much of a black hole.
Having similar equipment also allows us to reduce variation and perform better.”
But all this transformation is more than rolling out new
technology. It requires a cultural shift across the organization, Friant said. “I would describe it as a multiyear journey
to get where we are today,” he said. “You need everyone to
buy in to a collective culture.” l
A first look at healthcare’s top stories delivered directly to your inbox.
Modern Healthcare Enewsletters | Choose the information that’s critical to you.
Complimentary Registration
18 Modern Healthcare | July 31, 2017
Exceptional leadership is key to
Which rising stars will make the 2017 list?
Deadline: August 4, 2017
The new voice
of patient
is a
By Rachel Z. Arndt
lexa can order your groceries, hail
you a ride and tell you how many
teaspoons are in a tablespoon (it’s
three). Now, the Amazon virtual
assistant can also give you medical advice and
look up and recite clinical information.
Just as consumers are turning to voice-activated virtual assistants for tasks they previously
performed on smartphones, healthcare providers and patients alike are beginning to do the
same using devices from Amazon, Google and
others that respond to a human voice. Information from WebMD, for example, is available
via Alexa, as is medical advice from Healthtap’s
Doctor A.I. Another tool, called One Drop, lets
diabetes patients track their blood sugar information by telling it to Alexa.
Tap is one of many Amazon
devices featuring Alexa.
20 Modern Healthcare | July 31, 2017
Other pilot programs, run by hospitals, are in place so
patients can ask Alexa questions about their health and
providers can ask the digital assistant questions about
protocols and other clinical information.
Although technological and HIPAA-related hurdles
lie ahead, those types of changes stand to transform
the way we interact with health information, making it
more accessible and less onerous to use.
Now, with the tech industry singing the praises of
voice as the next best interface, healthcare is joining the chorus as providers seek to boost patient engagement and reduce their administrative burden
through the use of artificial intelligence-driven virtual assistants.
“Where we think it’s going to have its ultimate great
power is in the home,” said Dr. John Halamka, chief
information officer at Beth Israel Deaconess Medical
Center in Boston, who sees Alexa as a tool that can help
keep patients engaged and informed. “We want to keep
you healthy in your home because we’ll be paid for outcomes and quality.”
Because Alexa is already a consumer tool used in an
estimated 8 million households, the promise for virtual
assistants is huge.
“It’s pretty darn likely that our grandkids will laugh
at us for ever using a keyboard,” said Ben Greenberg,
WebMD’s vice president of mobile products and user
experience. “Speech is such a more natural, hands-free,
convenient and faster way to communicate.”
WebMD is banking on that being the case. The company has developed an Alexa “skill”—the name Amazon has given to what is essentially a voice app—to
deliver some of its web content via voice in response
to questions consumers ask their Alexa-enabled devices. Virtual assistants are expected to be adopted in
healthcare because of their ability to offer interactions
that feel natural, and they don’t demand adopting an
entirely new workflow because it’s the same one used
for talking to people.
Many consumer-facing applications, such as WebMD’s, focus on giving patients information. Boston
Children’s Hospital’s Alexa skill KidsMD, for instance,
provides parents with healthcare advice about basic
conditions that might affect their children.
“Voice has become this natural tool that people are
now starting to adopt in the household,” said John
Brownstein, chief innovation officer at Boston Children’s. “Our idea was, why not bring healthcare experience to Alexa and give Alexa
some healthcare education to
arm families with information about acute conditions?”
Health systems
Providing patients with
are experimenting
kind of information in
with virtual
the home is important given
assistants to keep
the simultaneous move topatients informed
ward value-based care and
and engaged.
the ever-rising complexity of
“Where we think
it’s going to have its
ultimate great power
is in the home. We
want to keep you
healthy in your home
because we’ll be paid
for outcomes and
Dr. John Halamka
Chief information officer
Beth Israel Deaconess
Medical Center
the healthcare system. “Over the last 30 years, people have become scared of the healthcare system because it’s complex, and it’s difficult to communicate
with providers effectively,” said Harry Wang, senior
director of research for Park Associates, a market research and consulting firm specializing in emerging
consumer technologies. “Voice technology is erasing
barriers and helping care providers manage patients
more efficiently.”
Part of that work involves keeping patients up-tospeed and onboard with their care. “One of the big challenges in any population is getting patients engaged in
their own care through digital experiences,” said Nathan Treloar, president and chief operating officer of
software company Orbita. Those experiences might be
a patient asking for a ride to a doctor appointment or receiving discharge instructions at home when they’re not
in a post-surgical haze.
“Voice is how everyone communicates most of the
time. We want to recognize that,” said Dr. John Loughlane, chief of innovation for Winter Street Ventures, the
healthcare accelerator affiliate of the Commonwealth
Care Alliance, a specialized care delivery provider
that’s using Orbita to develop a way for its members to
use Alexa to manage the use of personal care assistants.
“Especially for our patients with behavioral and physical barriers, we thought this could create a better care
model,” he said. “It will directly impact care, making it
more effective and more efficient.”
One of the ways it could drive efficiency is by reducing
some of the burden on providers, whether that’s scheduling or getting information about drug interactions.
“Voice can be a quick way to get information,” Boston
Children’s Brownstein said, especially in sterile environments, where tapping on a screen or clicking with a
mouse can be difficult.
Boston Children’s is piloting the use of Alexa for giving information to clinical staff. “There’s so much documentation,” Brownstein said. “For existing protocols or
July 31, 2017 | Modern Healthcare
Not everything can
be pulled up so
easily with a voice
because the devices
do not conform to
requirements under
the Health Insurance
Portability and
Accountability Act.
Google Home
guidelines, we digitize that information and put it in a
database. On the front end, you use voice to pull up that
HIPAA hurdles
But not everything can be pulled up so easily with a
voice because voice devices do not conform to requirements under the Health Insurance Portability and Accountability Act. “Right now, we’re not doing anything
around patient information because of some of the
limitations around HIPAA compliance,” Brownstein
said. “Right now, it’s very much focused on standard,
non-identifiable information.”
Until the HIPAA barriers are overcome, the ways
voice assistants are used likely will be less important
clinically than they could be. Brian Kalis, managing director of digital health and innovation for Accenture’s
health practice, said that HIPAA compliance is the biggest barrier to widespread adoption of voice-driven virtual assistants. But Kalis expects Alexa and other voice
services will eventually become HIPAA-compliant.
For that to happen, Amazon would have to make
Alexa one of its HIPAA-eligible services, said Valerie
Montague, a partner with the law firm Nixon Peabody.
“Amazon has the structure; it’s just a matter of imple-
22 Modern Healthcare | July 31, 2017
menting it for the Alexa product line,” she said.
But that can’t happen until the technical aspects of
HIPAA obligations are met. At this point, she said, “they
don’t have the appropriate processes and controls in
place to protect protected health information.”
What’s more, Montague said, providers would have
to implement new processes too, figuring out who’s
allowed in the room when Alexa is being used, for instance, and what kind of measures to put in place so
Alexa doesn’t mishear something and cause a clinical
error. “It’s a lot bigger deal to order the wrong drug than
it is to order the wrong pizza,” she said.
If Alexa or other virtual assistants were
HIPAA-compliant, they could become more powerful.
“You could imagine a dialogue,” Halamka said. “We
think this combination of ambient listening plus services connected from an EHR to the cloud will allow us
to give patients a much more positive experience than
they have today.”
In the meantime, one way to get around the need for
HIPAA compliance is to take advantage of Alexa’s ignorance and be conscious of what information Alexa
can glean from an interaction. Beth Israel Deaconess,
for example, has been experimenting with how to use
Alexa to give patients information about their care before the device itself is deemed HIPAA-compliant.
“Alexa has no idea who the person asking is,” Halamka
said, so the information transmitted can’t be linked to
a specific patient.
The hospital is now pilot-testing technology that
would let patients ask the virtual assistant questions
like “What’s my room number?” or “What’s my care
plan for today?” 
Michael J. Dowling
President and CEO,
Northwell Health
Opinions and Insights from Chief Human
Resource Leaders and Senior Healthcare
Executives, Including:
The Evolving Role of the CHRO: Challenges and
Enhancing the Experience of Candidates, Employees,
Clinicians and Executives
Technology Transforming Healthcare Human Resources
The Healthy Worker 2020—How Healthcare Employers
Promote Workforce Wellness and Well-Being
The Clash of the Titans--Millennials Meet Generation Z
Retaining and Managing Talent in the Network Age
Teri Fontenot
President and Chief
Woman’s Hospital
Co-located with Modern Healthcare’s Best Places to Work in Healthcare Awards Dinner
Supporting Sponsors:
Pull the plug on
this monstrosity
ccess to affordable health insurance for tens of millions of Americans remains in
jeopardy. Last week, Senate Majority Leader Mitch McConnell managed to keep
“repeal and replace” on life support by the thinnest of margins.
No version of the Senate bill has
managed to unite the ultra-conservatives opposed to any taxpayer-financed
healthcare for the poor with the few
remaining moderates in the GOP. That
shrinking faction recognizes that government must step in to offer health insurance when the private market fails
to provide this basic human right.
Passing a bill that would repeal the
individual and business mandates—
the skinny plan—is a cynical ploy to
keep the legislative process alive. If
enacted on its own, it would destroy
the individual market. There’s an easy
explanation for McConnell’s inability
to keep his coalition intact. Every iteration of the Senate bill has essentially
the same effect. They rip coverage and
affordable access to healthcare from
15 million to 33 million people. And
they will eventually force drastic cutbacks in Medicaid, the safety net for the
nation’s most vulnerable citizens.
If McConnell and President Donald
Trump get enough moderates to go
along with this monstrosity, it will not
be because the legislation was made
palatable. It will be because the moderates accepted Band-Aids for the grievous wounds inflicted on their neediest
No healthcare consumer does better
under these bills—except perhaps a
few healthy people who will get to buy
24 Modern Healthcare | July 31, 2017
skimpy plans and the insurance companies that want to sell them. These
people will only discover how meaningless their coverage is when an unforeseen catastrophic event happens
and they submit claims.
The only real beneficiaries are some
federal taxpayers. That’s the only thing
that explains why this vampire legislation refuses to die. The Republican
majority cannot give big tax cuts to
corporations and the well-to-do-the
next item on the GOP agenda-without
shrinking the government’s current
That not-so-secret agenda needs to
be put front and center. If the GOP majority gets away with cutting benefits
for the poor, why would they stop there?
House Speaker Paul Ryan has long
sought to limit the federal government’s commitment to Medicare by
giving seniors vouchers, also known
as premium support. To cut back the
government’s long-term commitment
to seniors, all they’d have to do is keep
the voucher’s growth rate below the
cost-of-care growth rate, just as they
propose to do with Medicaid.
The government now supports
healthcare for more than a third of the
population, who in aggregate account
for over half of all healthcare spending.
Tax dollars support the old, the blind,
the disabled, half the nation’s children,
and, since passage of the Affordable
Care Act in 2010, many lower-wage
workers-hardworking people whose
employers do not provide them with
health insurance.
Taxpayers also finance healthcare for
veterans, the men and women in the
armed services and their families, and
millions of federal workers. That includes
Sen. John McCain, who, only days after
an operation for brain cancer, dragged
himself across the country to cast the
deciding vote that opened the door to reconsideration of the various Senate bills.
Lobbyists from across the healthcare landscape have been doing a yeoman’s job in recent months in fighting
the GOP bills. Their arguments remain a powerful indictment of the
false claims made by the GOP over the
past seven years.
Repealing the Affordable Care Act
will lead to unnecessary deaths. It will
lead to higher overall healthcare costs
by forcing people to postpone care.
Its negative effects on the overall
economy will be just as pronounced. It
will make it harder for people to escape
poverty. It will lead to higher premiums
for employers and their workers. And it
will force people to cling to their jobs for
the health insurance. The GOP has yet
to refute any of those arguments. Their
bills deserve to die. l
Make administrative simplification the first
step on path to comprehensive health reform
By Dr. Matthew Hahn
epublican efforts to repeal and replace the Affordable Care Act are in disarray. And the reality is that
no comprehensive approach to healthcare reform has the support needed to pass in this deeply
divided Congress. So the search has turned to “skinny” or more-limited solutions.
Desperately needed administrative
simplification of the rule-bound U.S.
healthcare system would be the perfect solution. It could give an important
shot in the arm to American medicine
and provide an easy political win for
the beleaguered Congress.
Healthcare accounts for almost 18%
of the nation’s gross domestic product,
and, by some estimates, 30 cents of every healthcare dollar goes to administrative costs, double the amount spent
by most other nations. Eliminating
administrative waste represents the
most obvious and immediate opportunity to lower unnecessary healthcare spending, the Achilles’ heel of our
medical system.
Today doctors and other clinicians
in the U.S. fight less against disease
and more against a massive sea of
red tape. Getting care often depends
not on a clinician’s skills but on their
knowledge of (and the time for) the
workarounds made necessary by our
byzantine system.
Getting paid for a simple office
visit today is more complicated than
the visit itself. Federal regulations dictate that just to calculate the amount a
doctor can charge for an appointment,
he or she must use a bizarrely complicated formula, counting the number
of body parts discussed with a patient,
the number of body parts examined,
and estimating the complexity of their
medical decisionmaking. This “evaluation and management” (E/M) coding
system is overkill on the level of what we
did to the buffalo in the 1800s.
A claim for a typical Medicare patient’s office visit (which pays an av-
Dr. Matthew Hahn
practices family
medicine in Hancock,
Md., and is the
author of Distracted:
How Regulations
Are Destroying the
Practice of Medicine
and Preventing True
Health-Care Reform.
erage of $75) can go to a half-dozen
places—addressing deductibles, copays, primary insurers and secondary
insurers—before it is finally paid or,
just as easily, rejected. Each step is an
opportunity for an error, a discrepancy
or a denial, all of which are common.
The system creates waste on a massive
scale and invites fraud.
Getting prescriptions and simple
tests for patients can take hours of work
because of insurers’ prior authorization
requirements. One recent Friday evening I received an after-hours phone
message from a patient with Type 1
diabetes who was running out of insulin. The prescription was held up in
prior authorization. The patient had
been on the same insulin for years and
needs it to survive. In all, it took approximately a week to get the medication
approved. This needlessly complicates
treatment and endangers lives.
Here is the fix: All new CMS administrative programs should be put on hold
until true administrative simplification
takes place. They must wipe the slate
clean to cut unnecessary spending so
healthcare professionals can focus on
providing and improving patient care.
To begin, all aspects of getting paid
for medical care should be dramatically simplified. The E/M coding system
mentioned above must be overhauled.
Most medical billing for simple office
services and procedures should be
eliminated entirely in favor of pointof-care payment strategies, such as
healthcare payment cards (a debit card
perhaps) for all types of payers. Prior
authorization processes should be reserved only for extraordinary tests and
treatments. Even then, they need to be
streamlined and straightforward.
There are plenty of other potential
areas for administrative simplification,
including a universal website where
all patient and provider insurance information, and professional licenses,
certifications and credentials are maintained and can be securely accessed. A
unified set of rules and forms should be
established regarding all such things.
And the notoriously complex HIPAA
privacy and security rules would be far
more effective if they were far simpler.
Meanwhile, the Medicare Access
and CHIP Reauthorization Act, the
government’s new “value-based payment” system, makes no sense in the
current environment, because it actively prevents value on multiple fronts.
These types of improvements can
be incremental, but administrative
simplification represents an important reform that would dramatically
improve the American healthcare
system right now and could be the
bridge to more comprehensive reform
down the road. And it could just be
the win that Congress and the American people need right now. l
July 31, 2017 | Modern Healthcare
Blame the ACA for making
premiums unaffordable
for self-employed
Regarding the recent Vital Signs
blog post “Self-employed people weigh
returning to corporate jobs if Senate passes ACA repeal bill” (Modern, July 24), much of the
post reads as though the self-employed
must depend on subsidized healthcare
because they cannot pay for theirs on
their own.
That’s absurd, except to the degree
that the Affordable Care Act has made
health insurance prohibitively expensive for everyone who does not qualify
for a subsidy. Then, yes, that is precisely the middle class’ objection to it.
Ardath Blauvelt
Hollis, N.H.
Medicare for All? What about
all those workers who would
be disrupted?
Regarding the recent commentary
“Amid ongoing drama over healthcare
reform, there’s another solution hiding in plain sight” (July 24, p. 25), yes,
today’s healthcare delivery system is
far from perfect, making “Medicare for
All” sound sexy and sensible.
One simple question that isn’t being addressed should Medicare for All
be seriously considered: What do you
do for the hundreds of thousands of
middle-class people employed in our
current system, who could lose their
middle-class incomes, used to support
their middle-class children in their
middle-class neighborhoods?
The article speaks of highly paid insurance executives as if they are the
only insurance middlemen involved.
True, they make excessive incomes, but
far, far less than the combined incomes
of all the other healthcare insurance
and industry employees who would be
disrupted under such a plan.
Keith Taylor
Wallingford, Conn.
26 Modern Healthcare | July 31, 2017
Final week to send
nominations for
Up & Comers recognition
As healthcare executives face an
increasingly uncertain marketplace
and adapt to the accelerating shift
from volume to value, the next
generation of leaders must evolve
along with the industry. Those
challenges, along with the rise in
consumerism in healthcare, will
require new ideas and approaches
in all sectors. Today’s young
leaders are already proving they are
up to the task.
To help celebrate these
rising young stars in healthcare
leadership industrywide, Modern
Healthcare is now accepting
nominations for its annual Up &
Comers recognition.
Nominees must be no
older than 40 as of the Aug. 4
submission deadline. Nominations
will be judged based on several
criteria, including: the scope of
the person’s responsibilities and
accomplishments; the financial
and operating performance
of the organization(s) under
the nominee’s leadership; the
individual’s community service;
and leadership roles outside of the
nominee’s organization.
Judging will be conducted by
a panel of Modern Healthcare’s
senior editors.
To learn more about the
program, submit a nomination and
read about previous honorees,
please visit ModernHealthcare.
com/UpandComers. This year’s
class of Up & Comers will be
profiled in the Oct. 16 issue of
Modern Healthcare and online.
Corrections and clarifications
The July 17 story on hospital systems (“Health systems seeing returns on riskbased reimbursement,” p. 30) included an incorrect list of the top 10 largest
secular not-for-profit healthcare systems. Below is a corrected list based on
net patient revenue for 2016.
10 largest secular not-for-profit healthcare systems
Ranked by net patient revenue, 2016
Sutter Health
University of California
Health System
Mayo Clinic Health System
Baylor Scott & White Health
Banner Health
Texas Health Resources
Intermountain Healthcare
Allina Health
Yale New Haven Health System
Note: Includes only survey respondents; hospital count represents the total number of facilities with a unique
Medicare provider number.
Source: Modern Healthcare’s 2017 Hospital Systems Survey; Modern Healthcare’s Healthcare Systems
Financials Database
Join us in honoring the Best Places to Work in Healthcare. This
year marks our 10th anniversary for recognizing organizations that
create stand-out work cultures, and showcases every segment of
the industry, including providers, suppliers and payers.
Congratulate your peers, discover their strategies and celebrate the
impact these organizations have had on the healthcare community.
Carbon Health’s epic plan for patient data
By Rachel Z. Arndt
Carbon Health wants to put control in the patient’s hands.
The company’s app, nestled in a patient’s
smartphone, is an electronic health record, a
telehealth portal, a secure message platform,
and a payment and scheduling service. That is,
it’s most of the moving parts necessary for care
to become more patient-centric and transparent, a tactic that would spell success for Carbon
Health in the age of healthcare transformation
and the Triple Aim.
Inspired by the case studies doctors present to
one another, CEO Eren Bali set out to change the
way patients’ medical information is presented.
“Medical records should change in two ways,”
he said. “They should be designed in a way that
makes sense to patients and doctors, and they
should be organized around patients rather
than the providers.”
Bali first had that idea a couple of years ago,
when he was still running a company he founded,
online education platform Udemy, and his mother
fell ill with neurosarcoidosis. She’s fine now, but
she consulted with a lot of different doctors, resulting in hundreds of pages of medical records.
Bali’s sister, who’s a doctor in Turkey, helped organize everything. But Bali thought there had to
be a better way, and he sketched an idea of what
a comprehensive medical record might look like.
Eventually, that idea became Carbon Health,
which is centered on a mobile app. Within the
app, a patient’s medical information is organized
by condition, each with a timeline. Patients can
communicate with providers in the app, including through telemedicine visits; fill out medical
histories before their appointments; and access
their medical information, from imaging (the
actual images themselves) to doctors’ notes.
“Carbon Health allows the patient to be the
hub,” said Dr. Linda Dubins, a provider at Carbon Health’s San Francisco primary-care clinic.
“Providers can access, through the patient, his or
her medical information.”
Bali and his team opened the San Francisco
clinic to the public in October 2016 to test and
perfect the Carbon Health platform, which it’s
using instead of a traditional EHR like those
from the two dominant vendors in the industry,
Epic Systems Corp. and Cerner Corp.
28 Modern Healthcare | July 31, 2017
“It’s like a very
large hospital
that does
not own any
Carbon Health
Eren Bali
San Francisco
Carbon Health’s
smartphone app is
an electronic health
record, a telehealth
portal, a secure
message platform,
and a payment and
scheduling service
that could make care
more patient-centric
and transparent.
The platform is
being used at
Carbon Health’s
San Francisco
clinic. The company
expects to expand
to other providers
later this year.
Later this year, the company will expand to
other providers, who will replace their existing
EHRs with the platform, paying for it not upfront
but by handing over a percentage of billing.
The idea is to build a Carbon Health network.
Rather than a group of providers united by a hospital, this group will be united by the platform
itself. Interoperability will be built in. “It’s like a
very large hospital that does not own any buildings,” Bali said. “It works and feels very different
from an EHR, but it does what an EHR does.”
Dr. Greg Burrell, Carbon Health co-founder
and director of medicine, expanded on the idea:
“Both doctors and patients are in this network
together, and the technology connects them.”
That may not be enough to challenge established vendors, though, said Dr. David Kibbe,
CEO of DirectTrust, a not-for-profit organization
that governs the Direct framework. “Carbon
Health is not a model that will pose a threat for
the market leaders.”
Now Carbon Health includes only the medical
history that comes from its providers. The app
can’t pull or push external data. But it will be able
to eventually. “This is not as easy as it sounds,”
Bali said, and there will always be some practices
that don’t even use EHRs in the first place.
Even when practices use EHRs, there are still
problems, Bali said. Because he designed the
app from scratch, he could fix some of those issues. The first problem, he said, is the way medical records are stored. “Many existing ones are
like glorified note-taking systems built around
a billing solution,” he said. Carbon Health, on
the other hand, is built on the idea of structured data. When lab results come in, for instance, they’re not in a PDF but in discrete data
elements. Symptoms and procedures are organized by conditions, and those conditions are
connected to each other by the patient.
When patients can view their information that
way, they’re better able to stay healthy, Burrell
said. “One of our goals is to make it so the patient and provider can really try to optimize their
health,” he said. Giving patients access to all their
information is a step toward achieving that, along
with more efficient care.
“When you have a record over time that each
caregiver can see and interpret, you can avoid duplication of procedures and treatments,” Dubins
said, and “provide more continuity of care.” l
“Price is what you pay; value is what you get. And as the healthcare industry
evolves, distinguishing the difference is really, really hard for everyone.”
‘Leaders in the industry
have an opportunity to
rise to the occasion and
make a difference’
For more than 150 years, the mission of the Hospital for Special Surgery in New York City
has been to provide high-quality, efficient care for orthopedic and rheumatology patients.
The hospital performs roughly 29,000 surgical procedures a year, including 365 joint
replacement operations and 294 non-cervical spine fusions. At the helm of the organization
since 2006 is Lou Shapiro, a veteran healthcare executive who previously served as chief
operating officer of Geisinger Health System in Pennsylvania. Shapiro stopped by Modern
Healthcare’s Chicago offices to speak with safety and quality reporter Maria Castellucci
about HSS’ unique care-delivery approach, its efforts to expand and how to achieve value
in healthcare. The following is an edited transcript.
MH: What makes HSS’ approach
unique in the orthopedic and
rheumatology landscape?
Lou Shapiro: There’s a
concept called Focused
Factories where
organizations, whether
they’re in manufacturing
or healthcare, whatever
they do, they have a great
deal of volume in one area.
All of their support systems
are organized around it
and they produce a better
result than the same kind
of organization that’s not
HSS has a long history
of having that focus
and a commitment to
excellence that’s in the
DNA of the organization.
Employees, regardless of
what role they play, view it
as a privilege to be part of
HSS and understand the
commitment that’s required
to make HSS able to fulfill
its purpose; if you’re not
fulfilling that purpose,
then you have no purpose.
It’s also about talent.
Regardless of the evolution
of technology—ranging
from robotics to artificial
intelligence—in healthcare,
for the foreseeable future,
technology is an enabler, but
it’s still people taking care
of people. And the ability
to recruit and retain people
who are the best at what they
do in all fields is a driver of
success of any organization.
A derivative of the
Focused Factory and the
culture is that everything
you do is organized around a
patient type. You put all that
together, not by accident but
by design, and that’s when
the real definition of value
comes to life. Value is a great
30 Modern Healthcare | July 31, 2017
word, but understanding
what it means is even
more important. It’s used
excessively today, but there’s
a clear formula for it: quality
plus service over cost is sort
of the baseline equation.
Price is what you pay; value
is what you get. And as
the healthcare industry
evolves, distinguishing the
difference is really, really
hard for everyone.
MH: What do you think is needed
to make that easier?
Shapiro: In general, it’s
having a common language
and a common system of
measurement. The way
some systems are measured
today, you could have two
patients who had spine
surgery and you could be
measuring what it cost and
what were the outcomes,
and one may be better than
the other. But, what if the
patient didn’t need surgery,
that they should have been
treated with a nonoperative
The systems aren’t
mature enough to
measure that. Only some
institutions attract patients
for second opinions. So
those organizations have
a unique view into the
industry, because they
can see what’s happening
elsewhere. We had two tools
to measure outcomes for
hip and knee replacements.
But because they’re long
and complicated, patients
weren’t filling them out. Our
outcomes scientists studied
that and developed a way
of tracking and measuring
outcomes. That was
promulgated because it was
studied, it was published,
and now that’s what
everyone uses.
I think that’s what
has to happen, sort of
from the bottom up. The
government’s not going
to solve our problems for
us. The large groups that
represent everyone are
probably not going to solve
our problems for us, not in
the way that we need to.
But leaders in the industry
have an opportunity to rise
to the occasion and make a
MH: What are your thoughts
on bundled payments for joint
replacements? Is that moving
the needle toward value?
Shapiro: Healthcare, to a
certain extent, is still a
cottage industry, and one
of the consequences of
that, as things become
more complicated, is care
has become fragmented.
If you take anything that’s
fragmented, it’s probably
going to be more expensive
and it’s probably not going
to be as good. So the concept
of bundles is very basic.
Instead of paying 10 people
to take care of one patient,
I’m going to pay one person
and I’m going to pay them
less, and that’s going to force
them to not be fragmented.
The problem with it is it’s just
not that easy.
At HSS, we participate in
bundles programs. But we
do that because it’s a trend in
the industry, and that’s what
the buyer wants. We were
never fragmented, so we’ve
been delivering the value of
a bundle regardless of how
we’ve been paid. This
notion of volume to value,
there’s some truth to it, but
it’s also a little insulting to
those that have always been
delivering value.
I remember sitting
around the table with
Dr. Don Berwick (former
CMS administrator and
head of the Institute for
Healthcare Improvement)
20 years ago, talking about
exactly the same thing with
the same passion that we’re
talking about now. How do
we make things better?
So bundles are not
revolutionary. You can argue
about how it’s being done
and whether it’s successful
or not, but you can’t really
argue with the principles of
it, right? Access, cost, quality.
It’s impossible to argue with
that. How you do that is a
totally different story.
MH: Can you talk about this role
of the chief value medical officer
that you created and why you
thought it was important?
Shapiro: Before the word
“value” was prominently
used in the literature, we said
to ourselves, “We need to do
a better job of articulating
our value proposition to
our key stakeholders,” who
are our patients, anyone
who’s involved in receiving
care or paying for care. And
we specifically said, “Our
patients,” or consumers
and patients, depending
on where they are, and
“employers, insurance
companies.” It’s harder
to communicate with the
government, so we didn’t
really include that, but
“Consumers, employers,
We not only need to do
a better job of being able
to articulate our value
proposition, we need to
figure out ways to improve
it, even though we led the
industry. We worked at it
and worked at it and we got
better at communicating it.
We continued to make
improvements just like we
always have, and then we
decided that we needed to
bring in a physician leader
who understands quality
and value-just like we have
people who are sort of the
best and brightest at taking
care of people whose back
hurts or patients who have
osteoarthritis, or patients
who have lupus, or whatever.
We identified a person
who was a quality leader at
a major health insurance
company, on the faculty
of a major university and
research company, and
happened to have her base
specialty in an HSS-related
field, rheumatology. She
knew a lot about back pain.
She knew a lot about
osteoarthritis, and she
knew a lot about quality
and value. So we said that
we were going to create a
leadership role for her to
drive the journey toward
improving our value
proposition. And she is our
chief value medical officer
and she leads our Value
Management Office, which
is a group of data scientists
and biostatisticians and
quality professionals who
study these things and
help us figure out what we
need to do to communicate
and what we need to do to
That’s all under the
banner of the Center for
the Advancement of Value
of Musculoskeletal Health,
which is our commitment to
playing a leadership role to
promulgate this in academic
and innovative ways inside
HSS and across the industry.
MH: How do your global efforts
advance that commitment?
Shapiro: We’re trying to do
two things. One is through
an organizational model
that we’ve created called
HSS Global Ventures, which
is intended to replicate our
business model in other
geographies, domestically
and internationally. We’re
also advising others
that already exist. We
do it in Brazil, we do it in
South Korea. We call that
replication, right?
On the other side is how
do we help people without
it being bricks and mortar?
That’s innovation-in
science and technology,
which could be new devices
in care delivery. We’ve
had a number of startup
companies and licenses
that came out of HSS,
either independently or in
partnership with another
One example is a
relationship with a German
company that is using our
knowledge to hopefully
develop a new drug for
rheumatoid arthritis and
lupus. Another organization
that grew out of HSS is
an artificial intelligence
company that will be
able to diagnose images
accurately without human
HSS has some of the
highest patient-satisfaction
rates in the country. Our
net promoter score is
94%, which is unheard
of. We partnered with an
outside company to codify
the knowledge around
how we deliver a great
patient experience. A new
company was created to do
that, and it’s working with
A company in Italy applies
additive manufacturing
techniques, sort of like 3-D
printing, and uses trabecular
titanium to make joints
in a way that traditional
manufacturing can’t do.
We’re no different than
anyone else. We get paid for
what we do, so we want to
figure out how to get paid
for what we know, and use
that economic foundation
to continue to fuel the
academic and research
mission of the organization
in an environment where
resources are constrained.
That’s the approach
we’re taking. l
July 31, 2017 | Modern Healthcare
Millions at risk of
developing diabetes
The rate of new diabetes cases remained relatively flat from 2014 to 2015, according to the
Centers for Disease Control and Prevention. Still, more than 30 million people live with the
disease. Millions more have prediabetes, which could turn into Type 2 if left untreated.
Number of new diabetics
diagnosed annually
Number of Americans who are
Americans with diabetes in 2015
—Centers for Disease Control and Prevention
Total medical costs and lost work and
wages for people with diabetes annually
—American Diabetes Association
—Centers for Disease Control and
—American Diabetes Association
Percentage of
adults 65 years
or older with
—Centers for
Disease Control
and Prevention
90% TO 95% 15% TO 30%
of diabetes cases are Type 2
—Centers for Disease Control and Prevention
of people with prediabetes will develop Type 2 within five years
—American Diabetes Association
32 Modern Healthcare | July 31, 2017
Behavioral Health:
The Key to Successful Population Health Management
Healthcare leaders assess the behavioral health crisis and
discuss how better visibility of patient behavior equals better
clinical outcomes, loyalty and efficiency.
Networking Breakfast | Panel Discussion | Q&A
Friday, August 25, 2017
7:30 AM — 9:30 AM
Marriott Vanderbilt Nashville
Joey A. Jacobs
Chairman & CEO
Acadia Healthcare Inc.
Dr. Stephen Loyd
Assistant Commissioner, Tennessee
Department of Mental Health and
Substance Abuse Services, Division
of Substance Abuse Services
Jameson K. Norton
CEO, Vanderbilt
Psychiatric Hospital
(VPH) and Clinics
Dr. Lynn Simon
President, Clinical Services
& Chief Quality Officer
Community Health Systems
Merrill Goozner
Editor Emeritus
Modern Healthcare
Reserve Your Seat Today.
Single Tickets and Company Tables of 10 Available.
Supporting Sponsor:
Digital health leader
Wolf named next
From Director
Who: Harold “Hal” Wolf III
New role: President and CEO of
the Healthcare Information and
Management Systems Society,
starting in September.
Background: Wolf, who served
on the HIMSS board of directors,
comes to the role from the
Chartis Group, a Chicagobased consultancy where
he was director and practice
leader for information and digital
health strategy, focusing on
integrated-care models, product
development, marketing and
information technology.
Supply chain: As CEO, Wolf
hopes to modernize the supply
chain model, developing systems
that can collect information and
digitize it worldwide. “How do we
look at the supply chain model in
the way we’ve looked at the EMR
model?” Wolf asked.
Global reach: HIMSS has been
growing internationally, Wolf
said, and he hopes to continue
that trend. “I see us as a growing
globally entity that supports the
development of policies that
encourage innovation and get us
ready for change management.”
34 Modern Healthcare | July 31, 2017
to CFO
Inform the healthcare industry.
Submit now at
classified marketplace
To place your ad contact Kelly Rademacher l 312.649.5452 l
Located in Key West, Florida, this turnkey,
solo, private operation is the largest
& most successful ENT practice in the
area, operating in an office with ample
parking & only minutes away from the
hospital. As a Cigna, Tricare & as the
only Medicare and BC/BS provider, the
practice operates with an experienced PA
& well-trained staff, offering services that
include general ENT, allergy, sleep testing
(the only sleep lab in a 100-mile radius) &
treatment, & cosmetic medicine. Revenue
is over $340/sq foot/year, based on the
average for the last 3 years.
**Seller is willing to work with buyer
during transition to ensure a continued
success of the practice!
Inquire at:
Chicago- Turn-key medical facility
with in house pharmacy, six treatment
rooms, three private offices, medical lab,
reception area and break room. Located
at 4054 W North Ave, Chicago, IL 60639.
Please contact Dan Cartalucca at
847-436-1764 for additional information.
Fawn Lopez
Ilana Klein
Vice President/
National Advertising 312-649-5311
Sales Director
Jennifer McCullough Project Manager
David Baker
Cheryl DeSimone
Cheryl Gordon
Bill Klingler
Brian Lonergan
Kelly Rademacher
Tara Sullivan
Anthony Roach
Elizabeth Davis
Gianna Rizzi
Mariah Craddick Audience Engagement and
Development Manager
Lauren Melesio Reprint sales
Jodi Sniegocki Education and Events
Steve Eck
Event Content Strategist
Adam Rubenfire Custom Content Strategist
Samantha Dillon Senior Event Specialist
To place an advertisement: Call 312-649-5350 or send a fax to 312-397-5510
To place a classified advertisement: Call 312-649-5452 or send a fax to 312-397-5510
Michael Kanalas
Production Manager 312-280-3108
WHO WE ARE AND HOW TO REACH US - Modern Healthcare is the only weekly business news
magazine for hospital and healthcare executives. You can learn more about the publication and
view our daily news updates on our website at Modern Healthcare welcomes letters to the editor. They may be sent by mail to Modern Healthcare, 150 N. Michigan Ave.,
Chicago IL 60601-7620; e-mail, or fax, 312-280-3183.
All letters to the editor must be signed with job titles and telephone numbers.
Marketing Manager
Graphic Designer
Sales Marketing Coordinator 312-280-3163
SUBSCRIPTION 877-812-1581
Subscription fax 847-291-4816
Keith E. Crain
Mary Kay Crain
Vice Chairman
KC Crain
President and
Chief Operating Officer
Bob Recchia
Chief Financial Officer
Chris Crain
Senior Executive
Vice President
Anthony DiPonio
Chief Information Officer
G.D. Crain Jr.
Founder (1885-1973)
Mrs. G.D. Crain Jr.
Chairman (1911-1996)
July 31, 2017 | Modern Healthcare
advertising is
part of the decor
in the Dresden
retirement home’s
room that aims to
recreate a 1960s
East German
Communist-era kitsch
comforts dementia
patients in former
East Germany
very weekday morning, white-haired women patiently
line up before a door at a Dresden retirement home,
step in and quickly step back nearly six decades into their
past in Communist East Germany.
Most of the women—in their late 70s at the youngest—
are suffering from severe dementia, but the reminders
from bygone days trigger memories and skills once
thought lost, and produce surprising levels of happiness
and comfort.
They park their walkers next to a Kaufhalle sign from the
former East German grocery chain, put on their colorfully
patterned nylon aprons and start the day just like they did
some 50 years ago. They chop up bell peppers, tomatoes
and sausages for the popular Hungarian salad of their
youth, wash dishes in an original 1960s metal sink and
iron their laundry with old-fashioned pressing irons.
It’s hard to imagine that many were—not so long ago—
bedridden and unable to eat or use the bathroom on their
own, Gunter Wolfram, director of the Alexa seniors facility in
Dresden, told the Associated Press.
Wolfram said it was coincidence that he found out that
Communist kitsch and other memorabilia brought comfort
to some of his 130 residents. Two years ago he decided
to decorate the home’s movie theater with a vintage flashy
Troll scooter that was once very popular in East Germany.
“Instead of paying attention to the movie, these people
got so excited about the motorcycle. They could all of a
sudden remember how to start the ignition, and chatted
with bright eyes about outings to the Baltic Sea on their
own Trolls a long time ago—it was amazing,” Wolfram said.
So he set out to create an entire room in 1960s East
German style, scouring the region’s flea markets. Soon
the demand for the daily trip back into the past had
become so popular that Wolfram added a second room,
this one designed in East German 1970s style—including
psychedelic-patterned curtains and tasseled floor lamps. l
Google’s sister company
sets out to bug mosquitoes
T behemoth Google and its
associated businesses have moved
into a dizzying array of enterprises.
Now Verily, the life sciences division of
Google holding company Alphabet, is
taking a swat at mosquitoes.
In a bid to decrease the skeeter
population in Fresno County, Calif.,
Verily this month began releasing
36 Modern Healthcare | July 31, 2017
1 million male mosquitoes every week
for 20 weeks. But don’t bug out, it’s less
itchy than it sounds.
Debug Fresno is a field study that
aims to control the Aedes aegypti
mosquito population in the central
California county; that species is
known to carry yellow fever, Zika,
dengue fever and chikungunya,
although none of these diseases is
currently spreading in Fresno.
Verily is working with Fresno’s
Consolidated Mosquito
Abatement District by releasing
male mosquitos that have been
rendered sterile by a bacteria
called Wolbachia pipientis. So
the bugs haven’t been genetically
modified, but instead infected with a
naturally occurring bacteria as a form of
biological pest control.
If enough females mate with the
infected males, then the population
should drop. Wolbachia-infected
males don’t bite and can’t transmit
the bacteria to females so residents
shouldn’t be bothered by the extra
bugs, and it won’t wipe out the entire
Sterile insect techniques are nothing
new. They were first developed in the
1950s and are currently being used in
California to control the Mediterranean
fruit fly. A recent Australian study
using Wolbachia-infected mosquitoes
showed that releasing the bugs in
suitable and large enough locations
can significantly affect insect
populations in cities. The Florida
Keys Mosquito Control District also
recently began testing the technique
by releasing 20,000 Wolbachiainfected males. l
Good strategies can do
great things for health care
Today’s evolving health care environment is anything
but simple. Having a clear strategy to help your
organization grow and compete is essential for a
better future.
It’s all part of The Care Equation™ — our vision for a
better way forward. Solving for health care’s biggest
challenges and answering today’s most pressing
needs while preparing for the future.
Vizient™, together with our subsidiary Sg2®, delivers
clinical expertise and insights across the continuum
of care to help optimize your system of care strategy,
design new clinical and business models, and align
with physicians and strategic partners.
Together, let’s solve The Care Equation.
Find out more at
© 2017 Vizient, Inc. All rights reserved.
By Procedure
By Physician
At Point of Use
Real-Time Resource Utilization Analytics
Capture comprehensive, granular utilization data
Understand procedure cost variances with patient
severity context
Generate actionable insights to reduce spend, drive
For more information, please visit
Журналы и газеты
Размер файла
5 673 Кб
Modern Healthcare, journal
Пожаловаться на содержимое документа