fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Category Archives: uncategorized

Hospital Realignment Produces Positive Results for Patients, Communities

April 09, 2014 | FAH Hospital Policy Blog

Category: Health Care Delivery, Realignment, Uncategorized

An editorial written by Connecticut attorney John Horak in the Hartford Courant (and recently blogged about here on the benefits of investor-owned hospitals) raises the reality of key drivers of change in the hospital industry and the need for local markets to be adaptable to hospital realignment to ensure benefits for patients and communities and avoid hospital closures.

Earlier this year, the FTI’s Center for Healthcare Economics and Policy, conducted a review, and the results echo the need to maintain community hospitals through realignment. The FTI reviewed 75 studies on hospital consolidation, spanning the years 1996-2013, and also included 36 primary sources for their study. The assessment is the most comprehensive of its kind to date. The FTI’s study found that hospital realignment brought significant benefits to the patients and communities they serve.

Not only do hospital realignments help to keep hospitals open and thriving in the communities that need them, they often bring improvements in health care delivered in those hospitals. The assessment showed expanded access to medical care, improved service offerings and increased investments in health IT as just some of the benefits to patients.

Most importantly, the study served to dispel two huge misconceptions about hospital realignment: that realignments do not impede market competition, nor do they result in anticompetitive prices. The review found that there is no consistent statistical data that demonstrates a relationship between hospital realignment and price increases. The study showed this misconception is based on data that is over 20 years old, and rooted in a U.S. economic system that looks nothing like the one we have today.

The bottom line is that hospital realignment allows hospitals to maintain their presence in the community and preserve patient access to care while improving delivery of care and increasing important health care investments. Mergers and other realignment efforts are driven by a community’s healthcare needs and hospitals’ commitment to providing the care their patients need, when and where they need it. Further driving realignment is that the nation’s health care landscape is shifting toward more integrated systems and coordinated care, as well as the need to create more sustainable market systems. This shift is in part due to substantial public sector reductions in hospital funding, which necessitate hospitals’ ability to adapt to changing economic and financial factors. The priority of any realignment is to keep hospitals open, preserve or expand our patients’ access to care, and continue to provide consistent, quality care 24/7/365.

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FAH Submits Comments on Medicare/Medicaid Emergency Preparedness Requirements

April 03, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

On Monday, the FAH submitted comments to CMS Administrator Marilynn Tavenner on the proposed rule on Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers. Hospitals serve a key role in emergency preparedness, and the FAH supports CMS’s emergency preparedness efforts. We believe hospitals and all stakeholders in a community should be prepared and positioned to respond effectively in case of an emergency.

The overall goals of the Proposed Rule are commendable, however there is room for improvement in certain core elements of the proposal. The FAH is concerned primarily with the lack of flexibility for hospitals and other providers in developing emergency preparedness plans to comply with multiple agency requirements at the federal, state, local and county levels.

Emergency preparedness protocols are addressed by local, state and federal authorities who must interact and successfully collaborate in order to provide the most effective plans that work across different communities and localities across the United States. Allowing hospitals a role in developing emergency preparedness plans that are tailored to fit their unique needs can result in higher compliance with these local, state and federal authorities—each of whom have their own preparedness standards based on differing climates, populations, and other risk factors in their respective jurisdictions.

A rigid, one-size-fits-all policy approach may run counter to these entities and could overlook specific characteristics of each community in favor of a more uniform approach. A generalized approach does not consider the very fact-specific needs of risk-factor assessments in individual communities. Allowing flexibility will help hospitals and other providers achieve greater alignment among all community stakeholders, and bring their unique resources to the table so that they can collectively execute a comprehensive, cohesive community plan based on each community’s individual needs and risk factors.

To help achieve this flexibility, the FAH recommends that CMS adopt emergency preparedness conditions of participation (“CoPs”) under a broad regulatory construct, coupled with interpretive guidelines (“IGs”). IGs, by their nature, contain more specificity and can be easily updated, allowing more efficient responses to unique dynamics and conditions in individual localities.

For example, CMS’s proposed training requirements conflict with the current National Incident Management System (“NIMS”) training program used by most hospitals. This matter could be better addressed and resolved through the IG process, which should reflect that NIMS training and testing, or meeting a hospital’s accrediting organizations guidance, is sufficient to meet any federal requirement.

We also encourage CMS to engage in an open collaborative process when crafting the IGs, and to consult with providers and other relevant stakeholder, including state and local governmental entities, as part of that process. This will allow CMS to protect the health of Medicare beneficiaries. Further, it will ensure that CMS’s approach keys on standards, programs and plans that are already in place across each community so that they may collectively prepare for and respond to potential emergencies

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The Benefits of Investor-Owned Hospitals

April 02, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

Last week, the Hartford Courant ran an Opinion Editorial by John Horak on the advantages of investor-owned (“for-profit”) hospitals. Horak is a Hartford attorney, who founded his firm’s Nonprofit Organizations Practice Area. Investor-owned hospitals generally face the same market and regulatory conditions that non-profit hospitals do, but have met resistance as well as a few political and legislative roadblocks in Connecticut, halting efforts by investor-owned hospitals to partner with non-profit hospitals or otherwise assume ownership of and invest resources in a community hospital to keep it in top-notch condition. The reality is that investor-owned and non-profit hospitals are not all that different in their mission and structure, and both offer benefits to their communities.

The editorial explains that “for-profit and nonprofit hospitals must both operate profitably” and highlights the contributions that investor-owned hospitals add to their communities, the most important of which is to maintain access to high-quality health care and answer the call when public emergencies demand it.

“Our leaders should promote nonprofit/for-profit hospital conversions and affiliations because they are a prudent strategic lifeline for many of our hospitals and hospital systems… Communities with nonprofit hospitals gain value when a for-profits enters the market. State and federal laws say a for–profit must pay the fair market value of any nonprofit hospital it acquires — and that money must stay in the community in a locally managed “successor” charitable foundation for area health care needs.”

Facing similar operating conditions generally make non-profit and investor-owned hospitals nearly indistinguishable in the communities they serve. One distinction is that investor-owned hospitals typically have access to more varied sources of capital, for example equity financing, which enhances their ability to meet the health care needs of the communities they serve. In addition, investor-owned hospitals must also pay income and property taxes, providing desperately needed funding for a wide variety of local community functions such as education and transportation. Horak explains that “in many ways ‘tax-exempt’ and ‘taxable’ are the better terms to use to distinguish nonprofit from for-profit hospitals because both must earn a profit to survive.”

Finally, Horak outlines the core of every hospital’s mission, investor-owned or non-profit – their commitment to their patients who have grown to expect the highest standard of care from their providers:

“Hospitals operate between a rock and a hard place. The public expects excellent health care services regardless of the ability of people to pay. The cost of acquiring and maintaining facilities and the latest technology is enormous. Malpractice risk is a constant. State and federal regulations multiply exponentially, Medicare and Medicaid payments do not cover actual costs, and the economic dust of the Affordable Care Act is far from settled.”

Hospitals are open 24/7/365; during holidays, inclement weather and natural disasters. The obstacles faced by hospitals are already so great and the stakes so high that additional barriers to investor-owned arrangements or management are not just short-sighted - they are harmful to the communities served by those hospitals. The bottom line is, when a patient needs care, a hospital should be there to provide it, regardless of ownership.

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Senate Passes the Protecting Access to Medicare Act

March 31, 2014 | FAH Hospital Policy Blog

Category: Uncategorized

Today the Senate voted on, and passed, the Protecting Access to Medicare Act (H.R. 4302). In addition to increasing Medicare payments to physicians and avoiding a payment cliff, the legislation extends crucial rural hospital payments, without which many rural hospitals would be forced to reduce access to care, cut staff or even close altogether. The bill also extends both the moratorium against enforcement of the “two midnights” rule by recovery audit contractors and the implementation date for ICD-10.

On Friday, the FAH sent a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell urging them to pass H.R. 4302.

Highlighted in the letter, FAH argues that to not pass HR 4302 will adversely affect seniors, hospitals and practitioners who depend on consistent Medicare policy. Absent the immediate option of a comprehensive overhaul to permanently repeal and replace the Sustainable Growth Rate (SGR), the FAH believes action now through the passage of this patch is necessary for hospitals and patients, especially seniors and vulnerable Americans as well as residents of rural areas, to avoid reduced access to care.

The FAH applauds the House of Representatives and the Senate for taking action now to pass this important legislation and protect patients and hospitals nationwide.

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