Healthcare Layoffs During the COVID-19 Pandemic

Despite overcrowding of the ICUs with patients infected with coronavirus (COVID-19, SARS-CoV-2), hospitals have halted or downsized other operations. Phoenix-based Banner Health, which is Arizona's largest private employer, will impose "short-term" furloughs and pay cuts for some employees (1). Other major hospitals and hospital systems including the Mayo Clinic Arizona, Dignity Health, Tucson Medical Center and Carondelet have announced similar cost-cutting reductions. Banner Health, which has approximately 43,000 employees in Arizona, is starting the furloughs this week. The nonprofit company anticipates that the measures will affect 5% to 7% of its workforce, or up to 3,000 Arizona employees. The company says the furloughs are temporary and employees will be eligible for unemployment benefits, including an extra $600 per week provided by Arizona via the federal CARES Act. All senior leaders, including senior vice presidents, presidents, vice presidents and CEOs, will take up to a 20% reduction in pay beginning in May, Banner said. The company will pause hiring for most non-clinical, non-revenue-generating positions across the organization. This includes newly created jobs as well as vacant roles in the corporate office and facilities. The company will continue to post and recruit for positions that are essential to meet the needs of COVID-19.

An analysis by the Arizona Hospital and Healthcare Association shows Arizona hospitals are reporting revenue losses of 30% to 40% because of the cancellation of elective procedures and a reduction in emergency department visits. Hospitals had an operating margin, the difference between revenues and expenses, that averaged 2.7% in 2016 (2). The hospital association has asked Arizona’s governor, Doug Ducey, to relax his executive orders on halting elective surgeries and on expanding hospital bed capacity, citing recent modeling projections that indicate Arizona will not be as hard-hit by the disease as previously was predicted.

It is unclear how other healthcare organizations other than hospitals are managing during the COVID-19 pandemic. Our small pulmonary practice has been shut down since mid-March although we are doing some telemedicine. Yet compared to the large healthcare systems, we have managed to retain all our employees at a full-time basis as of today. Our group did apply for a small business loan to the Federal government which was denied.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Innes S. Banner Health, Arizona's largest health system, to implement pay cuts and furloughs. Arizona Republic. April 20, 2020. Available at: https://www.azcentral.com/story/money/business/health/2020/04/20/banner-health-implement-pay-cuts-and-furloughs-arizona-coronavirus-covid-19/5165992002/ (accessed 4/21/20).
2. Moody's Investors Service. Moody's: preliminary FY 2016 US NFP hospital medians edge lower on revenue, expense pressure. Moody's. 16 May 2017. https://www.moodys.com/research/Moodys-Preliminary-FY-2016-US-NFP-hospital-medians-edge-lower--PR_366813 Accessed 4/21/20.

Cite as: Robbins RA. Healthcare layoffs during the COVID-19 pandemic. Southwest J Pulm Crit Care. 2020;20(4):135-6. doi: https://doi.org/10.13175/swjpcc029-20 PDF 

Healthcare Payments Under the Budget Deal: Mostly Good News for Physicians

In the early morning hours last Friday (2/9/18) Congress passed and President Trump signed a massive budget agreement (1). The spending package will cost about $320 billion over 10 years, according to the Congressional Budget Office. Payments for healthcare substantially increase under the deal. Most praised the agreement. "Congress made the right choice this morning for patients and communities by voting to halt damaging cuts to hospitals that care for low-income working families and others who face financial challenges," said Dr. Bruce Siegel, CEO of America's Essential Hospitals, which represents the nation's safety-net facilities. Marc Goldwein of the Center for a Responsible Federal Budget called the healthcare provisions the one "beacon of light" in what otherwise is an exorbitantly costly budget bill. Goldwein praised its mix of structural reforms with "reasonable policy” and liked that the bill pays for the increased healthcare spending.

The bill extends Medicare physician fee cuts that provide about $38 billion in offsets to the increased spending (2). The bill preserves the planned physician fee cuts at 0.5% in 2018 but would reduce the cut to 0.25% in 2019. Not all were pleased by the continuation of the cuts. Calling it "contrary to Congress' intent” ACP President Jack Ende called on Congress to enact permanent relief from the physician fee cuts.

Other major healthcare provisions include (1,2):

• Continued funding for community health centers for two years.
• A two-year delay to the already-in-effect payment cuts to Medicaid disproportionate-share hospitals (DSH) which predominately represent safety net hospitals.
• A two-year delay in the low-volume adjustment program which predominately affects rural hospitals.
• An additional 4-year extension of the Children's Health Insurance Program (CHIP), which had received a 6-year extension in the continuing resolution that was approved in January.
• Forcing pharmaceutical companies to pay 75 percent of the cost of drugs for seniors in Medicare’s coverage gap a year earlier than planned.
• Repeal of the "therapy cap”, a move long pushed by therapy provider groups and the American Association of Retired Persons. This would permanently repeal Medicare's coverage limit on physical therapy, speech-language pathology, and outpatient treatment.
• $6 billion for the opioid epidemic, which will go toward state grants, public prevention programs, and law enforcement.
• Funding for the Maternal, Infant, and Early Childhood Home Visiting Program, which helps at-risk pregnant women and families navigate the social safety net.
• A reduction in Medicare payments to Home health agencies. They're expected to lose $3.5 billion in Medicare payments starting in 2020 due to a change in the way Medicare calculates annual payment updates.
• Funding the Chronic Care Act, which opens up new flexibilities for Medicare Advantage and care for chronically ill Medicare beneficiaries.
• A 2-year delay in implementing The Affordable Care Act's high-cost plan tax, popularly known as the “Cadillac tax”. This was a 40 percent excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The tax is now scheduled to take effect in 2020.
• Repeal of Independent Payment Advisory Board (IPAB). Provider groups from the American Medical Association to the American Hospital Association applauded the move, even though Congress has never triggered the panel, which was charged to find and implement Medicare savings.

However, not all were pleased by the repeal of cost containments. IPAB repeal doesn't cost much in the grand scheme of things, said Mark Goldwein from the Center for a Responsible Federal Budget but “the long-term policy implications are huge, and a big mistake” (2). Kaiser Family Foundation Senior Vice President Larry Levitt chided that the bill demonstrates “…healthcare cost containment generally seems better in theory than in practice” (2).

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Luthi S. Beacon of light: Healthcare additions in budget law pleasantly surprise providers. Modern Healthcare. February 9, 2018. Available at: http://www.modernhealthcare.com/article/20180209/NEWS/180209895 (accessed 2/12/18).
2. Ault A. Trump signs budget deal, cuts Medicare fee in 2019. Medscape. February 9, 2018. Available at: https://www.medscape.com/viewarticle/892491 (accessed 2/12/18).

Cite as: Robbins RA. Healthcare payments under the budget deal: mostly good news for physicians. Southwest J Pulm Crit Care. 2018;16(2):88-9. doi: https://doi.org/10.13175/swjpcc032-18 PDF 

Limited Choice of Obamacare Insurers in Some Parts of the Southwest

The New York Times is reporting that all of Arizona, much of Nevada, and portions of Utah and Colorado will have only one insurer available under the Affordable Care Act (ACA, Obamacare) marketplace (Figure 1) (1).

Figure 1. New York Times compilation of insurance company announcements for providing coverage under the ACA or Obamacare.

About 35,000 people buying insurance in Affordable Care Act marketplaces in 45 counties could have no choice in carriers in Ohio and Missouri (Figure 1), This would be the first time that has happened since the marketplaces were opened in 2014.

Some insurance companies are still deciding what they will do in 2018, and others may reverse course, so these numbers could go up or down.

Most Americans get health insurance from a job or government program, but about 22 million people buy individual policies under Obamacare. More than half of them use Obamacare marketplaces, where most of them get a federal tax credit to help pay for coverage. The rest buy directly from an insurer or broker, outside the Obamacare marketplaces. A recent New York Times analysis showed that many insurers are now choosing to sell exclusively outside the marketplaces, where their customers are not eligible for federal subsidies. Because customers cannot use subsidies for these plans, many may not be able to afford coverage.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Park H, Carlsen A. For the first time, 45 counties could have no insurer in the Obamacare marketplaces. New York Times. June 9, 2017. Available at: https://www.nytimes.com/interactive/2017/06/09/us/counties-with-one-or-no-obamacare-insurer.html (accessed 6/12/17).

Cite as: Robbins RA. Limited choice of healthcare insurers in some parts of the southwest. Southwest J Pulm Crit Care. 2017;14(6):295. doi: https://doi.org/10.13175/swjpcc074-17 PDF 

Trump Proposes Initial Healthcare Agenda

On Friday, November 11, President-elect Trump proposed a healthcare agenda on his website greatagain.gov (1). Yesterday, November 12, he gave an interview on 60 Minutes clarifying his positions (2). Trump said that he wanted to focus on healthcare and has proposed to:

• Repeal all of the Affordable Care Act;
• Allow the sale of health insurance across state lines;
• Make the purchase of health insurance fully tax deductible;
• Expand access to the health savings accounts;
• Increase price transparency;
• Block grant Medicaid;
• Lower entrance barriers to new producers of drugs.

In his 60 Minutes interview Trump reiterated that two provisions of the ACA – prohibition of pre-existing conditions exclusion and ability for adult children to stay on parents insurance plans until age 26 – have his support (2). Other aspects of the ACA that might receive his support were not discussed.

On the Department of Veterans’ Affairs Trump proposed to make the VA great again by removing corrupt and incompetent individuals who let our veterans down (1).  The website goes on to say that only honest and dedicated public servants in the VA have their jobs protected, and will be put in line for promotions.

Several aspects of healthcare were not addressed. Universal healthcare which Trump has supported in the past was not discussed (3). Trump did not make major policy proposals for Medicare during the campaign and Medicare was not addressed on his website or during his interview.

According to a survey conducted by the Kaiser Family Foundation the top three healthcare issues concerning voters were:

• Ensuring that high-cost drugs for chronic conditions such as hepatitis and cancer become affordable;
• Lowering prescription drug costs in general;
• Making sure health plans have enough physicians and hospitals in their networks (4).

None were addressed on Trump's website or during his interview.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. https://www.greatagain.gov/policy/healthcare.html (accessed 11/14/16).
2. CBS News. President-elect Trump speaks to a divided country on 60 Minutes. November 13, 2016. Available at: http://www.cbsnews.com/news/60-minutes-donald-trump-family-melania-ivanka-lesley-stahl/ (accessed 11/14/16).
3. CBS News. Trump gets down to business on 60 Minutes. September 27, 2015. Available at: http://www.cbsnews.com/news/donald-trump-60-minutes-scott-pelley/
4. Kirzinger A, Sugarman E, Brodie M. Kaiser Health Tracking Poll: October 2016. Available at: http://kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-october-2016/ (accessed 11/14/16). 

Cite as: Robbins RA. Trump proposes initial healthcare agenda. Southwest J Pulm Crit Care. 2016;13(5):240-1. doi: https://doi.org/10.13175/swjpcc117-16 PDF 

Hospital Employment of Physicians Does Not Improve Quality

The Annals of Internal Medicine posted a manuscript on-line today reporting that the growing trend of physician employment by hospitals does not improve quality (1). In 2003, approximately 29% of hospitals employed members of their physician workforce, a number that rose to 42% by 2012. The authors conducted a retrospective cohort study of U.S. acute care hospitals between 2003 and 2012 and examined mortality rates, 30-day readmission rates, length of stay, and patient satisfaction scores for common medical conditions for 803 hospitals that switched to the employment model compared with 2085 control hospitals that did not switch. Switching hospitals were more likely to be large (11.6% vs. 7.1%) or major teaching hospitals (7.5% vs. 4.5%) and less likely to be for-profit institutions (8.8% vs. 19.9%) (all p values <0.001).

The authors used Medicare Provider Analysis and Review File (MedPAR) from 2002 to 2013 to calculate hospital-level risk-adjusted performance on mortality, readmissions, and length of stay for acute myocardial infarction, congestive heart failure, and pneumonia. Hospital Compare data from 2007 to 2013 was used to assess overall patient satisfaction. After conversion to a physician employed model, no difference was found in any of 4 primary composite quality metrics with the single exception of readmission rates for pneumonia. That decline was modest (19.3% vs. 19.1% readmissions) and judged not likely to be clinically significant by the authors.

Recently, Baker and colleagues found that hospital employment of  physicians is associated with higher spending and prices (2). This data combined with the data from the present study suggest that the trend is for higher healthcare costs without an improvement in quality. Commenting in Medscape Richard Gunderman, a well-known healthcare delivery researcher from the University of Indiana, said that those who think quality comes from increasingly larger organizations with more advanced information technology and greater standardization across the system will see these results as surprising and disappointing (3). Pointing to high levels of burnout and widespread complaints of lack of time with patients, Gunderman said less physician control over individual patient care has taken a toll. "There's no doubt that a demoralized workforce will tend to drive quality down," he said. "Many hospitals and health systems around the country are grappling with poor and, in some cases, dismal engagement scores. I think that's an indication that a lot of physicians feel that the changes taking place across healthcare are problematic."

Funding for the study was provided by the Agency for Healthcare Research and Quality. Limitations of the study was that the patients were primarily Medicare beneficiaries aged 65 years and older. Therefore, the applicability of the findings to a younger population is unknown, however, the authors doubted that after switching to an employment model, hospitals would improve care for one group and not another.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Scott KW, Orav EJ, Cutler KM, Jha AK. Changes in hospital–physician affiliations in U.S. hospitals and their effect on quality of care. Ann Intern Med. 2016. Available at: http://annals.org/article.aspx?articleid=2552987 (accessed 9/20/16). [CrossRef]
2. Baker LC, Bundorf MK, Kessler DP. Vertical integration: hospital ownership of physician practices is associated with higher prices and spending. Health Aff (Millwood). 2014 May;33(5):756-63. [CrossRef] [PubMed]
3. Frellick M. Physician employment by hospitals does not improve quality Medscape. September 19, 2016. Available at: http://www.medscape.com/viewarticle/868978?nlid=109338_2863&src=wnl_dne_160920_mscpedit&uac=9273DT&impID=1200121&faf=1#vp_2 (accessed 9/20/16). 

Cite as: Robbins RA. Hospital employment of physicians does not improve quality. Southwest J Pulm Crit Care. 2016;13(3):133-4. doi: http://dx.doi.org/10.13175/swjpcc099-16 PDF