Baseball Gods, Demigods and the Untold Story

Non-healthcare related post:

For those who did not hear the story of how the Royals won game 7 of the World Series 4-3 in the bottom of the 10th inning, I provide the following narrative.

When people stopped believing in the gods of ancient Greece, the gods retired to Olympus and paid little heed to the affairs of mortals. Religion seized power over the masses and ruled almost two millennia. Then rose the machine, and science and technology fought religion for dominion over men. Against the brute force of science and religion, the ancient gods saw little opportunity to exercise their unique, chaotic power over men. They stirred to life only occasionally on the field of battle and during athletic contests. Those battles and games provided fertile ground for the gods to implant bits and pieces of mythological narratives, but battles and games proved too ephemeral for the gods to stage a comeback in the hearts and minds of man.

Wide bosomed Gaia (aka Mother Nature), a woman who knew a thing or two about staying power, told her son, Chronos, “We need a game or a battle that never ends.” Chronos shook his head, sadly: “Battles cannot be waged in perpetuity. They are destructive, spending resources but never renewing them. Games end sooner rather than later, else they have no victor.” Persephone raised her hand indicating she had something to add but, as usual, she was sucking on a mouthful of pomegranate seeds. To clear her mouth to speak, she started spitting seeds at Hades with remarkable accuracy. He was clearly used to it and obviously annoyed but he waited for her to stop with the air of a man willing to accept his punishment.

Persephone said, “My life is a game I both win and lose every year. Neanderthal Hades lurking over there, sniffing around me like always, kidnapped me and took me to hell. I went on a hunger strike and, while I was in the underworld, the world above lay frozen and dead. Father Zeus ordered Hades to return me and Hades complied but he played me. He said, ‘You win,’ and he gave me pomegranate seeds as my prize. He knew I couldn’t resist those things. Because I ate those seeds while underground, I have to return to hell each year and winter returns to the world above. I am both goddess of vegetation and goddess of the dead. A game that follows my life story could play on and eternally renew itself—beginning again each spring, being fought each endless summer and culminating in a climactic if metaphorical battle to the death when the leaves fall.”

To make a long story short (though it is a great story, it is not the story of the moment), the other gods joined in and created the game of baseball. They arose from their long stupor and discovered new purpose. This is why only those who can see the unseen hands of the baseball gods can truly appreciate and understand the game of baseball. [Please note: not everyone who claims to see what others do not see is blessed with true sight. Some people see causation when there is only sequence. Do not be deceived by them. Those people are just crazy.] The game of baseball is populated with mere mortals, heroes, demigods, archetypes, legends, fates, sirens, muses, miracles, deus ex machina and the harmony of the cowhide sphere. The baseball shelf in my home library has on it: Hero with a Thousand Faces by Joseph Campbell; Mythology by Edith Hamilton; Man and his Symbols by Carl Jung; The Golden Bough by James Frazer; Mythologies by Roland Barthes; Bulfinch’s Mythologies by Thomas Bulfinch; Metamorphoses by Ovid; The Universal Baseball Association by Robert Coover; Baseball: An Illustrated History by Ken Burns; and The Baseball Encyclopedia, MacMillan edition.

Baseball demigods are mortal players with a single divine power bequeathed to them by a “parent” god. Of course, other gods have other narratives in mind, and they will find ways to tell their story. The god parent of the demigod will see to it that the divine power of the demigod is not simply overwhelmed or taken away by gods with competing stories. Of such contests amid such conflict, tragedies, comedies, epics, legends and chivalric romances are born.

The contest had been billed as dynasty versus destiny. Dynastic reigns are often built on the life story of a single demigod. Madison Bumgarner is a demigod with a single divine power: he can pitch in the World Series as many innings as he wants without allowing an RBI. Teams of destiny are not led by demigods but by heroes. Sometimes it takes the long view of history to determine whether a player is a demigod or a hero. [There has not been sufficient history to tell for certain but Salvador Perez may be either a hero or a demigod. He hit a homerun in game 1 off the demigod. It was a meaningless RBI at the end of a long outing; so, it may have been a red herring—an intentional feint allowed by the parent god of a demigod to confuse the other gods. On the other hand, it may have been a portent, a harbinger. Time will tell.]

This World Series may have been an accidental collision between teams of destiny and dynasty. It happens sometimes. It was an even year and the dynastic team was arriving as scheduled after winning in 2010 and 2012. The Royals may have been a year early. Their World Series was probably destined for 2015, 30 years after their one and only. I suspect the Royals even caught the gods by surprise, but by the end of the wild card game they were paying attention, and by game 7, the conflicting narratives were fully ripened and prepared for the harvest. 

A dynastic team simply wins the World Series—game 4 or game 7, it does not matter. A team of destiny wins by coming from behind with two outs in the ninth inning of game 7. Those who understand baseball mythology knew that the Royals would have to win by scoring 4 runs—their magic number. So, it was as important that Bumgarner take the mound leading 3-2 as it was that the Royals could not score until two outs in the 9th inning. The gods who were writing the team of destiny story understood that the demigod Bumgarner could not yield a run batted in while he pitched during game 7; so, they had to devise a way to score a run with two outs in the 9th without an RBI. 

Gordon hit a blooper to center field and the gods guided the ball past Blanco. Perez ran to the wall to pick it up and the gods kicked the ball out of his hand. By the time he ran it down, Gordon was approaching third. As Perez threw to Crawford for the relay, Gordon was rounding third and headed for home. The third base coach threw up both hands giving the stop sign. It was the right call according to conventional baseball wisdom, but the gods of destiny turned off Gordon’s mind and turned on his feet. Gordon flew around the stop sign and suddenly it became clear why Infante had done so earlier in the series. Miracles acquire gravitas through the accretion of parallel detail. A miracle without proper foreshadowing can seem a mere flash in the pan. 

The throw beat Gordon to the plate by ten feet but Posey had trouble capturing the ball in his glove—as well he might with six unseen hands slapping at it. Posey moves to make the tag and we see a replay of Escobar’s foot kicking the ball out of the catcher’s mitt in the final game of the ALCS. The game is tied.

Perez fouls out to end the ninth. Holland pitches a perfect top of the 10th and Bumgarner does not take the mound for the bottom of the 10th. The Royals score a run to win 4-3. It does not matter how the run scored. I suspect Moose hit his 6th homer of the postseason.

I don’t know what you saw. I know what I saw.

MINUTE RANT: On how Missouri wants to be 'like Mike'

The "trickle down" guys won't let a little thing like reality mitigate their religious zeal. The Missouri legislature overcame Nixon's veto of the tax cut they had to pass to keep up with the Kansas "pro business" and pro "job creators" tax cut that was guaranteed to make the Kansas economy sizzle. The reality of the Kansas swoon was well known to Missouri legislatures before they voted to override. 

When the Missouri economy stalls like the Kansas economy, it will no doubt be blamed on Obamacare.

I have a simple plan to reward actual job creators: start all business entities at a 90% tax rate but give them a tax credit for every FTE they employ making at least $10 an hour until they get down to a 10% tax rate. Wall Street billionaires might actually think about starting at least a lemon aid stand to employ people instead of just making a profit.

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KANSAS CITY STAR: Kansas economy still a concern as a spotlight remains on Brownback - May 7, 2014

National reviews of Kansas Gov. Sam Brownback’s performance continue to roll in. The New York Times writes about the FBI investigation into lobbying in the state in today’s editions.

Full article & image: http://www.kansascity.com/2014/05/07/5008403/kansas-economy-still-a-concern.html#storylink=cpy

Taking the hospital "stress test": Will OCH survive in 2014?

At the Becker's Hospital Review Annual Meeting in Chicago on May 17, Scott Becker, JD, CPA, partner with McGuireWoods in Chicago, talked about signs of hospital sustainability. He mentioned the following factors as critical signs of whether a hospital will end up going bankrupt or being sold.

I attended that conference and will be speaking at the next one in May. I decided to take Becker’s hospital “stress test” for OCH. You might do the same and see if your answers are different than mine. [In keeping with my rant about OCH in 2014, please note that, unlike the MHA version, in the Becker hospital “stress test” there are no questions specifically about cash reserves even though this is a “test” designed to figure out which health systems are likely to survive in 2014.]

Test Question 1: Does the hospital have a clear strategy for physician alignment?

Scott Becker’s comments: "It used to be if you were a hospital, you viewed yourself as in fabulous shape if a large portion of business came with physicians you didn't have a financial relationship with," said Mr. Becker. That has since changed, where throughout the country today about 80 percent of physicians have some type of financial relationship with their hospital –– up from about 60 percent a decade ago, according to Mr. Becker. Does a hospital default on a strategy where it relies on independent but affiliated physicians? If so, it should strive to be more than that in order to remain sustainable.

Answer: I would say that we do have a clear strategy. We employ almost all of our doctors for the work they do at OCH in both Missouri and Arkansas. We do not depend on any independent practitioners to bring their patient volume to us. We have very little physician turnover. We need and want to recruit more physicians to the organization, and we do face challenges in that regard.

Test Question 2. Does the hospital have high quality care?

Scott Becker’s comments: "One of the things I find most interesting is when I'm in a meeting and you have to work hard to find a board member in that meeting who would actually use that hospital," says Mr. Becker. Mr. Becker calls this a fascinating litmus test: When not one board member would want their family members treated at the hospital, that's a good sign the hospital should be sold quickly.”

Answer: We provide quality care. One of our strategies in providing quality care is that we will simply not provide a service if we can not do it well—which is one of the few benefits of being surrounded by large health systems in both Arkansas and Missouri. Our system-wide focus is primary care provided in a clinic setting. We provide quality primary care as well or better than any of our competitors. We provide quality care through our inpatient services in Arkansas and Missouri. We are something of a quality “niche” provider in Gravette through our swing bed service and in Springfield through our novel approach to care and management of geriatric patients with medical and behavioral co-morbidities. We are a leading provider of chronic pain management in all of our markets. We do that difficult job the right way for everyone regardless of payor status. There are no other health systems our size providing the scope and quality of outpatient behavioral health care that we do.

Test Question 3. Does the hospital have a great leadership team?
Scott Becker’s comments: "When people hire people, you have a choice between talented leadership and experienced leadership, and we've found really hardwired, talented engaged leadership is more critical than experience. It's not one experience that's going to help; it's being able to respond to various situations over time.”

Answer: We certainly focus more on talent than experience when developing administrative leadership. From the CEO down, except for our nursing leadership which of necessity comes from a healthcare background, our leadership primarily comes from outside the healthcare arena. My analogy is the football draft—it is smarter to draft players based on athletic ability, not the name or size of the player’s college program. You can decide for yourself how that is working out for OCH. I can tell you this for certain: an experienced healthcare leadership group would have given up on this project 12 years ago. There is a line experienced hospital administrators are not supposed to cross when making a decision about whether to close or stay open. That line is defined by days of operating cash on hand. If the health system drops below that line—close. The fact is we have never been above that line.

Test Question 4: Does a hospital have a clear plan, or is it operating vaguely?
Scott Becker’s comments: A hospital can adopt various "mantras" to serve as guiding rules going forward. These strategies should be clearly understood across all levels of the organization, and sustainable hospitals' employees will be able to recite this strategy within 30 seconds. That goes to show the need for concision and definition in the plan. "It could be, 'We're going to be a leader in shared savings programs. We're going to be an innovator. We're going to be the leader in cardiovascular services," says Mr. Becker. The goal should be well-known and easy to remember.

Answer: 

• We are and we are going to continue to be a leader in primary care for governmental patients and the uninsured. Our recent adoption of the Kitchen Clinic is a recent illustration and it is paying dividends to the organization. 
• The reimbursement playing field is leveling out and it is coming down to where we are and have been. Our advantage over other health systems is that we are accustomed to it and will thrive while they are collapsing. 
• We are being innovative in the way we are incorporating behavioral health as primary care—both on an inpatient and outpatient basis. The nation is slowly beginning to recognize that care for behavioral health is as important as national security to our long-term survival as a nation. It doesn’t hurt that we will now have the NRA on our side lobbying for funds. 
• We are clearly an innovator when it comes to governmental revenue management. For example, our understanding of governmental reimbursement led us to develop a game changing strategy in the Gravette hospital. We recruited expansive-to-manage skilled nursing patients to our inpatient swing bed service knowing that we would be reimbursed for those higher costs while other providers would not. As a result, we are getting patients from providers who have their own skilled nursing units. 
• We have been a leader in maintaining provider-based clinics. The only clinic in our organization that is not provider based is OCH Jasper County—and we receive provider-based reimbursement even there for our Missouri Medicaid patients. 
• We have been an innovator in providing care for the Medicaid population. We opened and continue to operate the only hospital-based primary care clinic exclusively for Medicaid patients in the State. We employed specialists and paid Medicare rates for services provided to Medicaid patients. 
• Our employment of long-term care providers through provider-based rural health clinics tied to a small urban hospital is a one-of-a-kind innovation. 
• We have been an innovator in physician contracting. We are one of the only health systems in our markets that is “payor blind” when determining physician compensation. We do not require physician production to deduct for operating expenses. We do not impose covenants against competition. This innovative approach to physician compensation will give us an advantage in expanding our base of primary care providers—which is our fundamental strategy. 
• We are going to stick with the plan we have followed for over ten years and trust that the healthcare industry will catch up to it and find us leading the way. 

Test Question 5: Does the system have a clear reason for being?
Scott Becker’s comments: "If you're a community hospital, the answer is probably yes. If you closed, people would have to travel much further for care. In Chicago, there might be less need for being," said Mr. Becker. Hospitals in urban or competitive markets with hundreds of hospitals, especially need a defined reason for their existence.

Answer: We are a community hospital in Gravette and we provide a niche, skilled nursing care service for expensive-to-manage patients through our swing bed program. In general, the Springfield community does not need our hospital beds since there are two billion dollar hospital systems in town, but it does need our clinics; and I believe we still provide a needed inpatient service primarily to the nursing home community.

Test Question 6. Is the hospital known for something?
Scott Becker’s comments: Closely related to that former question, hospitals need a reason patients would travel to or strongly prefer their facilities. This often comes in the form of an outstanding specialty program. There are plenty examples of these reputations in Chicago. "Years ago, the University of Chicago was the lead academic institution here. If you had a serious GI problem, you went there. On the North Side, there were also certain hospitals that patients preferred for OB/GYN care," says Mr. Becker.

Answer: OCH is known as the “Medicaid hospital” in Springfield. We are known for being a community resource in Gravette. We are known in a small but important way for the approach we take in the treatment of disenfranchised and at-risk people in Missouri and Arkansas. For example, there was a situation recently in which a DFS caseworker needed help for a child, and the situation involved police, EMT, Children's Division hotline worker and the caseworker. Before OCH could raise its hand and say “We will help,” all involved came to an independent conclusion that OCH was the place to go for help. They know we will cut through bureaucratic nonsense and payment concerns and simply help. We are known in a surprising number of places across the nation as a unique safety-net provider that somehow manages not only to stay open but to grow despite the odds stacked against us.

Test Question 7. What is the payor mix?
Scott Becker’s comments: This factor is the wild card, as a payor mix is largely dependent on demographic traits that fall out of hospital management's control. Still, hospital leaders should not be naive about the determinant nature of a payor mix.

Answer: We take patients from the payors our competitors do not value, and we have transformed that necessity into a virtue.

Test Question 8. Is the hospital large enough to afford some chance investments?
Scott Becker’s comments: If not, hospitals have to make every single bet right, and that's risky. "You have to have enough size and capital to take some chances," said Mr. Becker. Hospitals with $100 million in revenue may be sustainable, but they may face the challenge of finding enough money to invest in their physician alignment strategy, for instance.
Answer: Our strategy is to strengthen and widen our base of primary care providers. We cannot manufacture capital (cash reserves) which would make us a larger system as systems are ranked based on their balance sheets; so, we have to get “large enough to afford some chance investments” simply by growing real capital—OCH patients and employees.

OCH in 2014: What this year will bring for our health system

I may be an incurable optimist. Then again, I may not be. I am not a glass-is-half-full guy. As I recall saying at one of our Christmas dinners, I am a glass-is-always-completely-full guy. That makes me a realist… a MacGyver-wannabe, perhaps, but a realist. The glass really is always full, even if it is full of a complete vacuum. After all, a vacuum is a really useful force. I don’t focus on the emotional connotation of the half empty/full glass—the realm of the pessimist/optimist—I focus instead on what can be done with a glass that is half full of water and half full of air. Air, like a vacuum, is not nothing.

So, there we are. OCH in 2014 is a glass half full of water and half full of air. What will become of it… and us? I use the glass full of water and air to illustrate the principle of defamiliarization—a novel perspective on a familiar object that forces the viewer to look at the familiar as though seeing it for the first time. In the OCH world, capital is that familiar object. What is capital? Most would answer “money” or assets that can be converted into money. Capital is a resource. Businesses are rated as weak or strong largely on the strength of available resources—and capital is king among business resources.

The conventional assessment of OCH is that we are a weak business organization because we have so little capital. If capital is money, it is true that OCH has never had any. By the time we opened our doors for business in 2000 we had already spent all of the money we had. We have been living off cash flow from current operations ever since. When OCH is compared to other health systems, the most glaring difference between us and everyone else is the lack of capital—of cash reserves. True, there are some systems that manage to make a great deal of profit, but most health systems these days are barely above break even, generating an operating margin of no more than one percent.

The Missouri Hospital Association recently employed consultants to perform a “stress test” of all the hospitals in Missouri. OCH-S was judged to be one of the most financially stressed hospitals in the state, and the other stressed hospitals could depend on non-operating sources of revenue—such as government hospitals receiving direct taxpayer support and nonprofits with foundations, donations, grants and large cash reserves. We do it without ancillary support revenue.

The Arkansas Office of Rural Health retained a firm to provide economic performance benchmarks for all critical access hospitals in Arkansas. OCH-G has the lowest cash reserves of any CAH in the State and we do not compare favorably with other hospitals according to most economic indicators. However, we were also deemed in the top five of all critical access hospitals in the State in terms of our average inpatient costs and charges weighted by DRG—we are treating patients with the same illness by doing less but getting similar outcomes. In other words, we are efficient.

There is one category in which OCH compares favorably with the economically healthiest health systems: the ratio of non-physician employee compensation to total operating expenses. OCH has one of the best such ratios in the nation: the range is from 40% to 60% and we are near 40%. Generally speaking, if a health system’s cost of labor is low compared to overall operating expenses, the health system is an efficient business operation. We are also a system composed of safety-net facilities. We have a predominantly governmental payor mix. Safety-net providers typically have a labor ratio nearer 60% than 40% because governmental payors pay less for the same service. If our cost of labor was calculated against the volume of patient services provided, we would truly be in a class by ourselves.

I realize I am the glass-is-always-completely-full guy, but I admit I am perversely proud of the fact that OCH is still here, still providing quality care to thousands of patients (many of whom would not have access to quality primary care otherwise), in spite of the fact that we constantly appear to be on the edge of economic ruin. As we like to say around here: “If it was easy, it wouldn’t be any fun.”

So, where does that leave OCH… where does that leave us?

We have an efficient organization, as efficient as any of the “profitable” systems. If only we had capital. Like glasses half full of water and half full of air, there is another way to look at capital. People are capital. OCH employees and OCH patients are capital. Healthcare experts are increasingly discounting the value of cash as capital and are instead focusing on the number of primary care patients who access care through a given health system. One such expert approached me at a recent healthcare symposium and said, “Everybody has cash.” [I thought to myself this guy needs to get out more.] “Cash can be gone with the wind. The real capital in healthcare right now is primary care encounters.” 

On that basis, OCH has plenty of capital. OCH does over 200,000 primary care encounters a year system-wide. As a point of comparison, There are billion-dollar health systems (based on monetary capital) which do not do as many.

OCH employees are another source of capital. We are battle tested in ways that employees who work at well-funded health systems can not imagine. Everyone acknowledges that the healthcare industry faces an increasingly challenging future. Hospitals which have had an easy time of it over the last few decades are ill-equipped to deal with decreasing reimbursement and increased governmental regulation. We at OCH have lived in that world virtually since we were born.

We are efficient. We have sufficient capital. We need to keep growing. It may seem crazy to push the pedal on expansion while we struggle to pay our bills, but crazy has worked for us for more than a decade. Get ready to have some fun. 2014 is going to be an OCH year.

MINUTE RANT: On the effect of states refusing to expand Medicaid

I have ranted about the fact that the states like Missouri that refused to create a state exchange and expand Medicaid are making the cost of insurance higher for their residents than those states that both created exchanges and expanded Medicaid. I had no real data to support that rant but I knew it would be forthcoming.

From the Huffington Post:

While Republicans at the national level have thus far been completely unsuccessful in attempts to repeal or defund the Affordable Care Act, Republicans at the state level have succeeded in preventing people from obtaining health coverage under the new law. Data compiled by Theda Skocpol of Harvard University for the Scholars Strategy Network, a progressive group of academics, illustrates how states' decisions to not create their own health care exchanges or expand Medicaid under the ACA have suppressed enrollment. According to Skocpol's research, the 14 states that are expanding Medicaid and running their own exchanges have seen enrollment in Medicaid and exchanges at around 40 percent of projections. In contrast, in the 23 states that refused to expand Medicaid or cooperate when it comes to an exchange, enrollment percentages are in the single-digits.

Source: http://www.huffingtonpost.com/2014/01/07/health-care-obstruction_n_4556307.html

Medicare bundled payments

This Wednesday Rep. Diane Black (R-Tenn.) and Rep. Richard Neal (D-Mass.) proposed legislation that would expand bundled payments within the Medicare program. The Comprehensive Care Payment Innovation Act would establish a voluntary bundled payment model, building off the Bundled Payments for Care Improvement initiative, which is currently in effect. CMS has piloted BPCI and other bundled payment programs during the past 25 years. The new program would go into effect Jan. 1, 2015. Under the proposed legislation, hospitals and other providers would receive a lump payment from Medicare for all services furnished from three days prior to an inpatient admission to 90 days after discharge. Covered services include acute inpatient care, physician services, outpatient hospital services and post-acute care such as home health and skilled nursing. Providers could choose the bundled payment program from six conditions: hip/knee joint replacements, lumbar spine fusion, coronary artery bypass graft, heart valve replacement, angioplasty with a stent and colon resection. The bundled payments would also be tied to quality measures, such as mortality, patient outcomes and avoidable readmissions.

Sooner rather than later, something like this bill is going to become law. This proposal and all the pilot projects currently underway focus on specific diagnoses—most of which have little relevance to OCH; however, I believe that the bundled payment surrounding an inpatient admission will some day be the rule for all inpatient admissions. There are things both good and bad about it for OCH. Since the bundled payment will be based on a blend of costs historically incurred at all health systems for a given diagnosis and since OCH is a low cost health system, we will actually benefit from that aspect of a bundled payment. On the negative side, the bundled payment will include a number of days post discharge and a disproportionately heavy percentage of our inpatient admissions come from nursing homes and return to skilled nursing beds in those homes. We have little control over how much money Medicare spends in those thirty days post discharge. Based on current data from the Medicare hospital compare web site, OCH directly spends significantly less of each Medicare dollar than other health systems but the total cost of care for patients admitted to OCH is actually slightly higher than the nationwide average due to the amount of money being spent post discharge from our hospital. We will have to find ways to address that anomaly in the future if we are to thrive under a bundled payment system.

MINUTE RANT: On the temporary fix addressed by the senate budget deal

Last week, the U.S. Senate passed a two-year budget agreement addressing spending cuts and reducing the likelihood of a government shutdown.

What does this mean for healthcare? MHA Today shared the following overview:

By a margin of 64-36, the U.S. Senate has passed a negotiated budget agreement that was approved by the U.S. House of Representatives last week. The three-month “doc fix” in the agreement includes a 0.5 percent increase in Medicare physician payment rates through March 31, 2014.This extension was to allow the House and Senate more time to complete a comprehensive overhaul of the sustainable growth rate formula. Other provisions include extensions of the Medicare low volume and dependent hospital payment programs through March 31, 2014, and extending Medicare sequestration payment adjustments for an additional two years. The agreement also includes eliminating federal fiscal year 2014 Medicaid DSH cuts and shifting the 2015 cuts into fiscal year 2016. Medicaid DSH cuts will now be extended another year to 2023.

The devil is always in the details... except when he is openly attacking with pitchfork in hand.

Ozarks Public Television (OPT) discusses the Affordable Care Act

On Thursday, November 21, CEO Paul Taylor was featured on Ozarks Public Television (OPT) as a part of the educational series "Sense of Community." He along with panelists Eddie Marmouget of BKD and Jeremy Malarsky of Primaris offered insight about the Affordable Care Act, new marketplace exchanges, and discuss the future impact on consumers and businesses.

Ozarks Public Television is broadcast on KOZK out of Springfield, MO and KOZJ out of Joplin, MO.

Quick roundup of news concerning the exchanges

There’s been a lot of information circulating in the news about the federal health exchange this week. Here are six articles I consider worth reading up on: 

• The consumer experience at state run health exchanges appear to be much better than those at exchanges run by the federal government, according to a New York Times report last week: 

LINK: http://www.nytimes.com/2013/10/09/us/politics/uninsured-find-more-success-via-health-exchanges-run-by-states.html?_r=0

• Experts agree that the success of the health exchanges depends, in part, on younger, less sick (lower cost) consumers signing up. According to an initial analysis of the sign up, that seems to be happening:

LINK: http://www.modernhealthcare.com/article/20131015/NEWS/310159967/large-percentages-of-young-people-signing-up-at-insurance-exchanges

• The federal government will spend about $10,000 subsidizing health insurance costs for a poor, middle-aged man who lives in Georgia - and just $3,000 buying the same guy in nearby Tennessee a near-identical plan. The cost variation in the federal exchanges is wide: 

LINK: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/13/the-cost-of-obamacare-varies-wildly-by-state/

• For the past 12 days, a federal health exchange system costing more than $400 million and billed as a one-stop click-and-go hub for citizens seeking health insurance has thwarted the efforts of millions to simply log in. The growing national outcry has deeply embarrassed the White House, which has refused to say how many people have enrolled through the federal exchange:

LINK: http://www.twincities.com/national/ci_24310073/federal-health-exchange-rollout-plagued-by-delays-missteps

• House Republicans last week called on the Obama Administration to suspend penalties for consumers because of all the trouble they continue to have signing up.

LINK: http://www.nytimes.com/news/affordable-care-act/2013/10/09/house-republicans-argue-for-delay-in-health-law-penalties/

• If you want to put it all in perspective, the last time there was a huge rollout of a new Medicare benefit - the Part D drug program - there were huge glitches. 

LINK: http://ccf.georgetown.edu/all/how-does-acas-first-week-compare-to-medicare-part-ds/

Jon Stewart on Medi-can’t states

The Daily Show's Jon Stewart had harsh words this week for states that have not expanded their Medicaid programs under the Affordable Care Act. His 3-and-a-half minutes on this topic last week are very funny - regardless of your political persuasion:

Video Shortlink: http://on.cc.com/15szK4Q

DID YOU KNOW? One governor intends to bypass the legislature. After failing to gain enough support from Republican legislators, Ohio Governor John Kasich will ask a spending oversight panel to expand the state’s Medicaid program, according to reports last week. The Republican governor is expected to make the request to the Controlling Board on Oct. 21. Kasich will ask the seven-member board, made up of lawmakers, for permission to spend about $2.5 billion in federal funds to cover about 275,000 residents under Medicaid. If the Controlling Board approves the request, expanded coverage can start January 1.

MINUTE RANT: On the misconception surrounding the future of small health systems

There is an OCH Regional Medical Center. It is located in Starkville, Mississippi (the same town that is home to Mississippi State University. The “OCH” derives from Oktibbeha County Hospital which is what it was originally. They consider themselves a small, rural health system. They are about the same size as Ozarks Community Hospital, but with more specialty services since there is no competition from larger health systems in their market. They made $2.8 million profit in 2012 and they are doing slightly better than break even in 2013 but they are looking for a big brother to acquire them because “the future looks bleak for small health systems.”

So, my question is “What should be the OCH response to statements like that from similar health systems?” (I could have picked any of a thousand systems. I thought one with a similar name may peak your interest.) My answer is “Bring it on. If it was easy, it wouldn't be any fun.”

“Oktibbeha County” has a distinctly Faulknerian sound to it, does it not?

Outline of new growth rules for healthcare

I have to admit that I cannot improve much upon the following outline and that I agree with most of it. This kind of work is why I am going to participate in and later speak at the Becker’s Review CEO forum. Pay particular attention to #6 through #8. The other insights are interesting mostly because they are applicable to the mega systems and have been one of the ways I evaluate whether a given mega system is going to get it or get hit.

Here are eight contemporary insights for hospital and health system leaders from the Advisory Board, which collected these ideas during its CEO Special Sessions.

1. Accept the idea that price/high reimbursement is no longer a strategy for growth. Previously, hospitals consistently received price increases that outpaced inflation. Four market trends are signaling the end of this strategy, according to the Advisory Board:

• Direct and implicit reimbursement cuts from the Patient Protection and Affordable Care Act and sequestration.
• Limited offsets from coverage expansion.
• The dilution of employer-sponsored coverage and increase in high-deductible health plans.
• Patient preference for low-cost sites of care, such as retail clinics.

2. Transition from extractive to productive growth. Hospitals can no longer rely on growth strategies that focus on consolidating their market position, locking up referral streams or demanding price increases. Instead, hospitals are entering a new era of what the Advisory Board calls "productive growth" — earning market share by attracting empowered purchasers. This includes:

• Network suppliers, such as physicians, post-acute providers and capital partners.
• Wholesale buyers, such as commercial payers, employers and physician accountable care organizations.
• Clinical shoppers, or physicians and patients making decisions about individual episodes of care.

3. Re-position growth as an output instead of as an input. Traditionally, hospital leaders often justified growth as an input. Growth advanced a larger cause, such as funding innovation or extending the hospital's mission. But under productive growth, in which purchasers selectively buy care in a competitive market, the Advisory Board says leaders should re-position their understanding of growth as output rather than an input. Hospitals that grow are doing something right; hospitals that don't are failing.

4. Create three complementary care models. Savvy hospital leaders understand the subgroups within population health. The Advisory Board says there are three:

• High-risk patients with complex diseases and co-morbidities. This subgroup makes up about 5 percent of patients. Hospitals should take a comprehensive and proactive approach to care management to avoid high-cost acute-care services when possible.
• Rising-risk patients who may have medical conditions that are not under control. This subgroup makes up about 15 percent to 35 percent of patients. Providers should avoid unnecessary spending on these patients and keep them from becoming high-risk.
• Low-risk patients, who have minor conditions that are easily managed and account for 60 percent to 80 percent of patient populations. Hospitals should keep these patients healthy but loyal to the system when they need care.

5. Define population health goals. Develop a short list of actionable and measurable goals. They should be narrowly defined and unambiguous. Ensure each member of the organization understands how they contribute to the goals.

6. Ensure high-risk patients have care managers. The Advisory Board says high-risk patients' most important relationship is that with their care managers, not primary care physicians. Dedicated care managers can coordinate the diverse needs of high-risk patients, which span from clinical to nonclinical and may demand more help than PCPs can offer.

7. Manage "rising-risk" patients in the medical home. Nine risk factors, such as obesity and smoking, make a patient a fit in the rising-risk category. Hospitals should identify these patients and connect them to a medical home, which offers a balance of customized support and scale necessary to manage this population with limited resources.

8. Ensure access for healthy patients. Hospitals don't want too many encounters with their low-risk patients, but they must offer accessibility when the time for care comes. Hospitals also need to foster loyalty among these patients. "Mainly, you need to provide timely access to evidence-based preventative care," wrote the Advisory Board. "We've also seen organizations turning to patient portals to offer convenient options such as online scheduling and the ability to email a physician."

Hospital cuts are hitting fast and furious

I am not trying to scare everyone, but we all need to stay informed about what is going on in our industry. It is not pretty out there. If you have been listening to me rant, you know the healthcare industry is no longer the inflationary spending beast hell bent on wrecking the economy that it was according to the talking heads urging reform. For more than a generation, healthcare spending was increasing faster than the rest of the U.S. economy by a factor of two or three times. Beginning in 2009 and continuing through the first half of 2013, nation-wide healthcare spending was keeping pace with growth in the gross domestic product—but no more than that. In fact, spending per person is actually down. The 2.7% annual increase in overall spending is due to population increase.

Despite that fact, the pace of reform has not abated—if anything, it has increased. Modern Healthcare recently ran a cover story entitled, “Death by a Thousand Cuts.” The title says it all. Change is coming fast and furious. The healthcare industry needs a chance to catch its collective breath. I am afraid that we are all going to wake up in a year or two and discover that we have effectively disabled one of the few significant sectors of the U.S. economy that had been thriving. As weak as the “recovery” has been, it is a good way to trigger a second recession.

So, I will continue to pass along information as I receive it about facilities closing, cutting costs and laying off employees. According to the most recent seasonally adjusted data from the Bureau of Labor Statistics, hospitals cut 4,400 jobs during July. Becker’s Review reported the following on August 1, August 15 and September 4:

August 1:

1. Sound Shore Health System to Lay Off Nearly 2,000
Sound Shore Health System in New Rochelle, N.Y., which filed for bankruptcy in May, plans to lay off 1,993 employees. The system notified the New York State Labor Department of its layoff plans. The cuts will affect employees at Sound Shore Medical Center in New Rochelle, Mount Vernon (N.Y.) Hospital, the Helen and Michael Schaffer Extended Care Center in New Rochelle, Mount Vernon Housing Corp. in Mount Vernon and New Rochelle Sound Shore Housing.

2. Interfaith Medical Center in Brooklyn Sends Layoff Notices to All 1,544 Employees
Financially beleaguered Interfaith Medical Center in Brooklyn, N.Y., sent layoff notices to all 1,544 of its employees and asked a bankruptcy court to approve its closing. A hearing on the closing of the hospital will be held Aug. 15.

3. Denver Health to Slash 300 Jobs
Denver Health will cut roughly 300 jobs in the next year through layoffs, attrition and reduction in new hires. In all, the workforce reduction will shrink Denver Health's workforce by 5 percent.

4. Vanderbilt University Medical Center Braces for More Staff, Budget Cuts
Nashville, Tenn.-based Vanderbilt University Medical Center recently cut more than 300 members from its staff, and further budget and staff cuts are on their way at VUMC. VUMC officials have set a goal of saving $100 million in its new fiscal year, and an additional $150 million in the following fiscal year. These cost savings will be achieved through cutting costs in areas like supplies, facilities and contract improvements, and also through labor cuts like offering early retirement, leaving vacant positions empty, implementing a hiring freeze and instituting layoffs.

5. Baptist Health in Arkansas to Lay Off 170
Little Rock, Ark.-based Baptist Health laid off 170 employees. The system cited lower reimbursement, increasing charity care and bad debt as the reasons for the cuts.

6. Danbury, New Milford Hospitals Cut 116 Jobs
Danbury (Conn.) Hospital and New Milford (Conn.) Hospital's parent network, Western Connecticut Health Network, cut 116 jobs, resulting in 65 layoffs.

7. Excela Health to Lay Off 78
Greensburg, Pa.-based Excela Health is laying off 78 and leaving an additional 58 positions empty. Excela attributed the workforce reduction to lower patient volumes and revenue.

8. St. Joseph Health to Lay Off 37
Orange, Calif.-based St. Joseph Health plans to lay off 37 employees across two hospitals. The layoffs will affect 26 employees at Santa Rosa (Calif.) Memorial Hospital and 11 employees at Petaluma (Calif.) Valley Hospital.

9. Blue Mountain Health System Lays Off 16
Blue Mountain Health System, a two-hospital system with campuses in Palmerton, Pa., and Lehighton, Pa., laid off 16 employees and eliminated 13 empty positions. Additionally, the system cut the hours of seven employees, and senior management and department directors took a pay cut.

10. Providence St. Peter Hospital Cuts Number of Licensed Practical Nurses
Olympia, Wash.-based Providence St. Peter Hospital is laying off nine licensed practical nurses. The layoffs are part of an internal restructuring at the hospital. Officials decided a registered nurse with a certified nursing assistant could handle patient care in certain units.

August 15:

1. Maine Medical Center to Slash 225 Positions
Portland-based Maine Medical Center announced it will lay off 50 employees and eliminate 175 other positions. In addition to the eliminated positions and layoffs, 120 employees took an early retirement package.

2. Mountain States Health Alliance to Chop 200 Jobs
Mountain States Health Alliance in Johnson City, Tenn., is cutting 200 jobs through attrition. System officials pointed to shrinking revenues, tied to the federal sequester and lack of state officials' agreement over Medicaid expansion, as the reason for the workforce reduction.

3. WakeMed to Lay Off Hundreds, Close Nursing Home
WakeMed Health & Hospitals in Raleigh, N.C., is laying off more than 100 employees, mostly through the closure of a nursing home in Fuquay-Varina, N.C. WakeMed will also cut the jobs of 14 staff interpreters as it outsources its interpretation services. All together, WakeMed will lay off 111 employees.

4. Northside Medical Center in Ohio to Lay Off 77
Northside Medical Center in Youngstown, Ohio, an affiliate of ValleyCare Health System of Ohio in Youngstown, is laying off 77 employees.

5. Alameda Health System to Lay Off Dozens
Oakland, Calif.-based Alameda Health System prepared to lay off about 57 workers. The layoffs will affect employees at all seven of the system's locations, including a psychiatric hospital and wellness clinics.

6. Lowell General Lays Off 34
Lowell (Mass.) General Hospital laid off 34 workers. Twenty-nine of the affected employees held administrative positions, while the remaining five were nurses and caregivers.

7. Samaritan Medical Center Lays Off 23
Samaritan Medical Center in Watertown, N.Y., announced a workforce restructuring plan that will lead to 23 layoffs. Of the 23 employees who will be laid off, six are in management and 17 are in non-management positions. In addition to the layoffs, about 42 staff members will be reassigned to other jobs that are currently vacant.

8. Ukiah Valley Medical Center Cuts Jobs, Employee Hours
Ukiah (Calif.) Valley Medical Center eliminated six positions and is leaving five positions vacant. Additionally, five positions will have a reduction in hours.

9. Anna Jaques Hospital Lays Off 9 Workers
Newburyport, Mass.-based Anna Jaques Hospital laid off nine employees. The layoffs represent the loss of roughly six full-time equivalent positions.

10. Hancock Medical Center in Mississippi Lays Off 8
Bay St. Louis, Miss.-based Hancock Medical Center laid off eight employees and cut the hours of an unspecified number of other employees.

11. Orlando Health Layoffs Continue
Orlando Health confirmed more employees will be laid off as part of a restructuring the system announced in November. No specifics on how many employees would be laid off in this phase have been released.

September 4:

1. PeaceHealth to Slash 500 Jobs: Vancouver, Wash.-based PeaceHealth plans to eliminate 500 jobs throughout its system through layoffs, attrition and reduced hours. Most of the jobs being cut will be from two hospitals in southwest Washington State: Southwest Medical Center in Vancouver and St. John Medical Center in Longview. Of the 340 positions being eliminated from the two hospitals, 177 will be lost through layoffs.

2. King's Daughters Medical Center Lays Off 148: Ashland, Ky.-based King's Daughters Medical Center laid off 148 workers in support, administrative and supervisory positions. The workforce cuts were made due to declining patient volumes and reimbursement cuts.

3. Centra Notifies 124 Employees Affected by Layoffs: Lynchburg, Va.-based Centra notified 124 employees they will be laid off. By Sept. 5, 112 employees will have been laid off, and 12 more will be gone by the end of the year.

4. NorthShore to Lay Off About 100 Workers: Evanston, Ill.-based NorthShore University HealthSystem announced plans to lay off 1 percent of its workforce, roughly 100 people. The layoffs are part of an effort to "address redundancies and realign staff," according to a NorthShore memo.

5. Baptist Memorial Health Care Lays Off 23, With More Layoffs Coming: Memphis, Tenn.-based Baptist Memorial Health Care laid off 23 managers, and announced a second round of layoffs affecting 61 additional employees. Baptist pointed to increased charity care and lower reimbursements from the government as the reason for the first round of layoffs.

6. Arnot Health to Eliminate 83 Positions at St. Joseph's Hospital: Elmira, N.Y.-based Arnot Health announced it will eliminate 83 full-time equivalent positions at St. Joseph's Hospital in Elmira in September. Arnot Health is transitioning St. Joseph's to focus more on outpatient care, psychiatric and alcohol/drug addiction treatment, long-term care and chronic care. Some units will be closed or consolidated as part of the transition, leading to the elimination of positions.

7. HMA's Tennova to Cut 75 Jobs: Tennova Healthcare, based in Knoxville, Tenn., plans to lay off 75 employees in October. Affected employees work in one of the system's regional service centers in the Physicians Regional Hospital in Knoxville. Naples, Fla.-based Health Management Associates owns Tennova, and is consolidating the Knoxville regional service center into a center in Arkansas.

8. Mission Health to Lay Off Dozens, Cut Budget: Asheville, N.C.-based Mission Health plans to lay off about 70 employees and make other employee-related budget cuts. In addition to the layoffs, the system eliminated three vice president positions, did away with merit increases for 2014 and froze paid time off accruals, among other cuts.

9. Covenant Health to Lay Off 49: Covenant Health in Lubbock, Texas, plans to lay off 49 employees as part of a workforce reduction strategy. The layoffs stem from reduced reimbursements due to healthcare reform and the sequester's cuts to Medicare.

10. Columbus Regional Healthcare System Axes 4% of Workforce: Columbus Regional Healthcare System in Whiteville, N.C., eliminated 28 jobs, or 4 percent of its workforce. Ten of the 28 positions were vacant.

11. Windber Medical Center Restructures Workforce, Lays Off 19: Windber (Pa.) Medical Center laid off 19 employees and is leaving 11 positions vacant in an effort to reorganize its workforce in order to prepare for the future of healthcare. The layoffs are not linked to lower patient volumes. The workforce reorganization will create four new positions at WMC.

12. CHS' Crestwood Medical Center Lays Off 13: Huntsville, Ala.-based Crestwood Medical Center laid off 13 employees, about 1 percent of its total workforce. Affected employees were in administrative and support positions. Crestwood is owned by Franklin, Tenn.-based Community Health Systems.

Why a "Medicare for all" plan is necessary

Here is a great explanation for why a "Medicare for all" plan is necessary:

Video: Why Are American Health Care Costs So High?
YouTube URL: http://youtu.be/qSjGouBmo0M

Minute Rant: On Healthcare Executive Compensation

Did you know the total compensation paid to the top 25 executives of not-for-profit healthcare organizations in 2011 was about $100 million? Some of the guys at the bottom were only getting $3 million but the ones at the top made $8 million. Of course, the nonprofits aren’t paying the big bucks that the for-profits are paying.

Minute Rant: On Healthcare Insurance Company Profits

Healthcare insurance companies are making enormous profits this year and they are all forecasting good times in 2014—at the same moment in time when providers are laying off employees or closing. Why are none of the talking heads yelling about that on television and radio? Here are the second quarter PROFIT numbers for the big five insurance companies: Aetna $536 million; Cigna $505 million; Humana $420 million; United $1.436 billion; and Wellpoint $1.231 billion. I say we all have a drink and celebrate their good fortune and then get back to work trying not to lay off a few more employees.

Reform Rant

Want to fix the ACA? Harry Reid admitted recently that the long term goal should be a Medicare for all, single payor system. If we had done so back in 2008, I believe the backlash would have been no worse and we would have a system worth fighting to preserve.

I've included a study (click here to view PDF) analyzing the economic impact of a universal Medicare program. It is based on HR 676—the Expanded and Improved Medicare for All Act—a bill introduced by Rep. John Conyers Jr. (D-Mich.). The bill has been proposed for 11 straight years. The bill is a mess. It gets involved on the provider side too much and, for that reason, would never pass—not should we want it. Reform can be accomplished solely on the payor side. Payment reform will drive provider reform without draconian and “socialistic” re-engineering providers (e.g., the bill would convert all providers to nonprofits—as if that status makes the provider less susceptible to greed?).

According to the study, the expansion of Medicare would save the U.S. healthcare system $592 billion in 2014 alone. The main savings would come from slashing "administrative waste" (profit) in the private health insurance industry and by using the government’s bargaining power to obtain cheaper pharmaceuticals. Over the next decade, the study said savings could reach $1.8 trillion.

Under HR 676, a single-payer system would be financed through several factors: increasing the personal income tax on the top 5 percent of income earners, instituting a progressive tax on payroll and self-employment, taxing capital gains and other unearned income, instituting a 0.5 percent tax on stock trades and other "progressive tax" financing efforts, according to the study.

Single-payer healthcare bills have generally been opposed by Congress. According to a recent polling data, a majority of physicians now support a single-payer system.

RAC from HDI

This summer, Ozarks Community Hospital was forced to restructure its inpatient behavioral health services (originally known as OCH Resolutions) due to RAC audits. While the hospital is still actively combating these claims, OCH no longer has the resources to continue providing the service through Resolutions. OCH now provides care to geriatric patients through OCH Inpatient Services.

In light of what happened to Resolutions, our inpatient geriatric psych service, you may be asking yourself:

What is a RAC and who the hell is HDI? 

A RAC is a Recovery Audit Contractor, a private, for-profit company empowered by the federal government to “recover” funds paid by Medicare to healthcare providers in the event the RAC computer or RAC “auditor” (whose last job may have been phone solicitor or bank teller) decides there was something wrong with the claim. The RAC gets to keep a percentage of all the money it recovers. The thing you need to know is that hospitals are winning over 75% of the appeals when reviewed by a neutral administrative law judge—a percentage which might lead one to conclude that the RACs are recovering more money than they should.

HealthDataInsights (When did businesses first start running their names together into one name with interior capital letters? I assume it is an outgrowth of web site naming conventions that eliminate spaces between words. It just looks silly to me and I wish they would stop.) HDI is a wholly owned subsidiary of HMS Holdings Corp. HDI began life as an entrepreneurial venture-backed company. HDI investors included Redhills Ventures, GRP Partners and Ticonderoga Capital. In other words, a bunch of venture capitalists with political connections but ZERO healthcare expertise helped create a company for the sole purpose of getting a government contract to make millions of dollars by “recovering” it from healthcare providers. The “word on the street” back then was getting one of the RAC contracts would be a license to print money—there was literally no way to lose.

Once the venture capitalists got the bid to be a RAC, they got HDI up and running until it was printing money as expected and then they sold it to HMS.

Who the hell is HMS?

HMS Holdings Corp. (NASDAQ: HMSY) operates through its subsidiaries including Health Management Systems, Inc. (HMS), AMG-SIU, IntegriGuard LLC, Reimbursement Services Group, Inc. (RSG) and HealthDataInsights, Inc. (HDI). It is the nation's leader in cost containment, program integrity, and coordination of benefits solutions for government-funded, commercial, and private entities. HMS is focused exclusively on the healthcare industry.

For the first half of 2013, HMS reported revenue of $242.4 million, an increase of 6.6% compared to revenue of $227.4 million for the same period a year ago. Net income for the first half was $17.4 million. You can pretty much double those numbers to see what they make in a year.

As President and Chief Executive Officer at HMS HOLDINGS CORP, William C. Lucia made $1,860,000 in total compensation according to proxy statements filed for the 2012 fiscal year.

It is nice to know we are helping with someone’s bottom line.

Why Missouri should expand the Medicaid program

Paul is hosting a series of community forums this July & August on Medicaid Expansion throughout Southwest Missouri. These forums will provide community members with an overview of what’s currently going on with Medicaid expansion and give real answers as to how the actions of the state legislature will directly impact Missouri employers, the local economy and individuals. For additional tour dates and details, visit: www.OCHonline.com. 

I strongly favor expansion of the Medicaid program in Missouri under the Affordable Care Act. I do not have the luxury of taking a principled position on purely political or philosophical grounds, but, if I did, I would still favor expansion. Expansion of the Medicaid program in Missouri will help people. It will help OCH care for more people. It will provide an economic benefit for OCH so that we can continue paying taxes and employing Missourians. Without it, due to reductions in payments from Medicare and Medicaid, OCH will struggle to survive, and if OCH fails, thousands of Missourians will struggle to find similar access to primary care.

The healthcare payment system in this country should not work this way. It should not be impossible to run a healthcare business on what the government pays for healthcare services, but it is. The few healthcare systems that manage to do it with a predominantly governmental patient mix depend on grants, donations or taxpayer support (in the case of government owned hospitals). Most healthcare systems manage to limit the percentage of governmental patients they treat so that they can shift cost to better paying commercial insurance patients. OCH cannot do so, because we have so few commercial insurance patients. In a way, OCH will serve as a test case for reform (or perhaps as the canary in the mine): we have no sources of income or revenue other than payments for services; and we almost exclusively care for governmental patients. If “reform” leaves government healthcare programs in a cockeyed mess, OCH will suffer disproportionately.

As I indicated, OCH favors expansion of Medicaid in Missouri because it is obviously in our interest. Why should anyone else? Before getting “redirected” by political posturing and economic rationalizations, I believe it is important to begin with certain fundamental principles on which we should all agree.

First, good health for everyone is a good thing for Missouri. We can only be a strong nation if we are a nation of healthy people—both physically and mentally. A healthy economy requires healthy workers. The consequence of poor physical health is too obvious to warrant discussion. The consequence of poor mental health to individuals and society at large should be just as obvious, but, in case it has escaped anyone’s attention, recent events have reinforced the point.

Second, regular access to healthcare promotes good health. I doubt anyone will object to that statement, but it gets a little tricky when the focus is regular access to healthcare for Medicaid and uninsured people. Let me put it this way: if regular access to healthcare will not improve the health of people on Medicaid, then there is little reason to believe that regular access to healthcare will improve the health of any other segment of the population—and we should start closing all our hospitals, clinics and doctors’ offices.

Third, healthcare insurance (including government programs like Medicare and Medicaid) improves access to healthcare. There should be little debate about this point. Without spreading the risk through insurance, the cost of healthcare would strain the pockets of all but the wealthy few. Since all people share the risk that they will experience an expensive health event some time in their lives, insurance works best if all people are included in the risk pool. Given the self-evident truth of the first two principles, one might expect the strongest nation on earth would want to protect and preserve that strength by ensuring regular access to healthcare for its people by requiring everyone to get into the “pool.” In point of fact, we did pass a law doing just that… sort of.

Most conversations about healthcare place people in one of three “coverage” groups: people covered by commercial insurance, people covered under a governmental program and people without insurance. We need to redraw that Venn diagram. People without insurance should be classified as people covered under a government benefit program. The federal government long-ago mandated universal access to care for anyone presenting at a hospital with an emergency medical condition (a mandate which, in most hospitals, has evolved into universal access to care for anyone with a medical condition who shows up in the ER); however, the mandate did not come with a corresponding mechanism for mandating payment. Some have referred to EMTALA as the equivalent of a universal healthcare program. If so, it is the worst kind of universal healthcare program one could imagine. In fact, it is one of the fundamental reasons the healthcare payment system in this country was so broken it needed something like the Affordable Care Act to try to fix it.

EMTALA has no reimbursement provision. Hospitals are required to guarantee the service but there is no guarantee of payment. This asymmetry has had a profound ripple effect on our national healthcare system. It created a culture of entitlement. It is my position that healthcare is an essential service; we can debate the issue in abstract terms, but the reality is the government has already established a universal “right” to healthcare. Furthermore, the government says we are entitled to it regardless of whether we pay for it. EMTALA conditioned people to see healthcare fundamentally in that light. Is it any wonder so many people feel conflicted about paying their medical bills and that so many are filing bankruptcy? As a private attorney many years ago, I counseled clients on personal bankruptcies. Though they seldom thought about why they felt that way, people with large medical bills were much more likely to feel justified in filing bankruptcy. They felt they had been saddled with a debt that was somehow really not fair. If healthcare coverage is a right and if that coverage is not “provided” through employment or otherwise, people do not feel pressure to buy insurance since there is “coverage” (through EMTALA) that does not cost anything.

Good health for everyone is a good thing for Missouri; regular access to healthcare promotes good health; and healthcare insurance promotes regular access to healthcare. Therefore, healthcare insurance for everyone would be a good thing for Missouri. The logic is inescapable; unfortunately, logic and politics are poor bedfellows, and political reality, to this point at least, dominates all other considerations. The expansion of Medicaid in Missouri will confer a number of significant economic benefits on the State of Missouri. Those benefits were disclosed, debated and not seriously denied during the last legislative session; so, I see little wisdom in repeating them yet again. The economic benefits are undeniably real; yet, they were not deemed sufficient to override political considerations—and the political landscape has not changed in Missouri.

However, the political landscape has changed outside Missouri, and that change presents a problem for Missouri. The Missouri legislation passed a dramatic tax cut while deferring debate on expansion of Medicaid. Supporters of the tax cut often cite competition from neighboring states as motivation for the tax cut: businesses will relocate to neighboring states with a more favorable business environment. Those who make that argument should recognize that the same rationale applies in favor of expanding Medicaid. Missouri is going to lose businesses and jobs to Arkansas which has adopted a program expanding healthcare insurance to those who qualify under the ACA.

OCH has a small hospital in northwest Arkansas, and I have spoken at a number of public events about Medicaid expansion in Arkansas. Businessmen who were adamantly opposed to the ACA in Arkansas have already begun making plans based on the fact that their employees will be getting insurance paid by the government. These employers are typically paying their employees $10-$12/hour. Their employees will qualify for coverage under 138% of the federal poverty level. Many employers who were worried about compliance with the ACA mandate are now realizing the expanded Medicaid provision will provide coverage at no cost to the employer. Arkansas will be attracting businesses and workers away from Missouri—at no expense to Arkansas. The economic boon Missouri missed by refusing to expand Medicaid will improve the economic vitality of Arkansas both within the healthcare industry and beyond it. It is already reality for OCH.

One of the rationales for delaying or declining the Medicaid expansion begins by stating that the Missouri Medicaid system is broken and that it makes no sense to expand a broken system. OCH is in a better position than most to know whether the Medicaid system is broken, and I can testify that it works. It does not work as well as I would like, but it is not broken. From my perspective, the commercial insurance “system” in our market is far more broken than Missouri Medicaid; yet, no one seems inclined to fix it. If there is a sincere desire to fix the Medicaid program in Missouri and not mere political gamesmanship to avoid adopting something that came from “Obamacare,” I believe the repair can be made quickly and efficiently. Contract with Medicare to process and pay claims for Medicaid beneficiaries as though Missouri Medicaid was Medicare. The ACA essentially requires that states provide the equivalent of Medicare coverage in order to qualify for 100% federal funding of the expanded Medicaid program. Why not simply adopt a Medicare look-alike? Anyone who suggests that Medicare is also a broken healthcare delivery and payment system is either being disingenuous or is simply uninformed. Medicare may not be perfect, but it is the backbone of American healthcare. Almost all commercial insurance companies now follow the Medicare reimbursement methodology by basing payments on a percentage of the Medicare fee schedule.

Wisconsin Provider Services (WPS) is the Medicare Administrative Contractor (MAC) which processes and pays all Medicare claims for a multi-state region that includes Missouri. Missouri could contract with WPS to pay Medicaid claims following Medicare methodology with funds provided by the federal government. The efficiency of such an arrangement should be immediately apparent. Hospitals and physicians have great familiarity with the Medicare system. In reforming Medicaid, the Missouri legislature should avoid at all cost any attempt to create a new, one-of-a-kind healthcare payment system from the ground up. Now is not the time to make healthcare in Missouri more complicated, and we should all fear the unintended consequences of legislative reforms of systems as complex as healthcare.

If the desire to reform the Missouri Medicaid program is sincere, there exists a quick, efficient “fix.” The real issue is whether Missouri should opt to expand Medicaid under the ACA. If the should is a moral, ethical, legal, logical or economic should, there is no question Missouri should expand the Medicaid program. If the should involves a political imperative, I urge politicians to consider the political consequences of losing momentum to neighboring states who acted when Missouri failed to act.

Broccoli and Healthcare Mandates

Nearly two years have passed since the Affordable Care Act was signed into law by President Obama. Since then, you may have noticed a lapse in my updates. This is simply because I had no reason to comment further. Now that the individual mandate is on the verge of being overturned, the time has come for me to comment again.

In a bold use of the persuasive reductio ad absurdum logical tactic, the US Supreme Court seems poised to declare that healthcare is the same as broccoli. Since the Supreme Court does not believe government should have the constitutional right to mandate that people eat broccoli, it follows that the government should not mandate that people buy healthcare insurance.

In Citizens United, the Supreme Court declared that corporations have the same constitutional rights as people. Ozarks Community Hospital is a corporation. Therefore, OCH has the same constitutional rights as a person.

Since OCH is a person, OCH is entitled to the same right as a person to be free from governmental mandates regarding broccoli and healthcare. Therefore, if the Supreme Court rules that the healthcare mandate is unconstitutional, OCH will post signs in its emergency rooms that the Supreme Court has declared that patients have no more right to healthcare than broccoli.

We believe that these signs will be in violation of the governmental law known has EMTALA that requires all hospitals to provide healthcare to all persons regardless of their ability to pay. This law has resulted in the enactment of a number of regulations--one of which would prohibit hospitals from displaying a sign such as the one just described. When OCH is fined by the government for displaying its "no right to broccoli; no right to healthcare" sign (below), OCH will appeal all the way to the Supreme Court where it will assert its constitutional right to be free from mandates regarding broccoli and healthcare. If the government does not have the power to create a system that requires people to be responsible for the cost of healthcare, then the government does not have the power to create a system that requires hospitals to provide healthcare to people who do not pay.

Hospitals are people too.

Quod erat demonstradum.

Paul Taylor, J.D.
CEO
Ozarks Community Hospital