United States: The Pass-Through Industry

17 days ago, I had total knee replacement surgery. After years of wear and tear, two meniscus repairs and persistent pain, I took the plunge.

This week, I started getting the bills: the whopper $51,829.35 from the hospital for my 55-hour stay. And that doesn't include professional fees for my surgeon, internist and anesthetist, the 3 medications I now take, the crutches and walker I bought, and the over-the-counter aids I've purchased. In all likelihood, the final tally will be close to $60,000. Wow.

I don't know how to place a value on walking with confidence and without pain. I took the plunge hoping for the best and oblivious to costs. I studied report cards about my surgeon's performance and infection rates for the hospital we used. I tried, to no avail, to estimate costs, and investigated out-of-market options for a bundled package. In the end, my local option was best, but there were more unknowns than knowns as I went under the knife.

As an industry, we're accustomed to business models where everything is a pass-through to someone else who'll pay—an insurance company or taxpayers. We mark up and pass through everything we do. The buck stops somewhere, and on occasion, doctors and hospitals have to eat some of what's not paid.

At the bottom of my bill, the hospital noted "We have filed a claim with your insurance carrier. Please take a moment to review the insurance information listed above in order to ensure your claim is billed accurately." It's nice of them to forward the bill to the insurance company, but I'd like to sign off on what was charged before it's sent, and I don't have a clue what some of the 11 items even mean. What's the "central service" and "PASR", and why was there a separate billing for the "laser surgery center," that's different, I guess, than the "operating room" charge of $38,092.80. But I intend to find out, and notify both my insurer and providers what I learn.

Last week, the Federal Reserve released its annual Report on the Economic Well Being of U.S. Households finding 1 in 4 face dire economic circumstances. 43% said they could not cover a major out of pocket medical expense, though 84% said they have health insurance. 25% had not visited a dentist in the past year because they could not afford it, 18% had not seen a physician and 15% did not get a prescription filled for the same reason.

A Wall Street Journal-NBC poll released last week found three-quarters of the population feeling "economic anxiety" and a major credit score reporting agency announced it was reducing the negative impact of medical debt collection agency actions against consumers since the practice had become so pervasive (as of July, 2014, 64.3 million Americans have a medical collection incident on their credit report representing more than half of all collection agency activity overall).

So what's this mean?

It means transparency is not enough. Unless customizable data about prices and costs, outcomes and options is available in easy-to-use sources widely accessible at no cost to consumers when they make decisions, pass-throughs will persist and costs will soar. Transparency is not an end in itself; it is a key element of a solution that equips consumers to make decisions that impact their health and their pocketbooks.

It means more and more attention will be given to the value of a dollar spent in healthcare and the return on that investment: if a similar outcome can be achieved at a lower cost, how fast will consumers acclimate their purchases to value. And if households have to choose between paying for energy, housing, food and healthcare, healthcare is likely to be the odd-man out. After all, the utility company will shut off electricity, but the emergency room will still be open, and ultimately someone else will pay.

And it means the relationship between having health insurance, managing costs and optimizing care needs fresh-thinking: If insurers are part of healthcare's pass-through economy without adding value, what's their role?

There's nothing like being a consumer in the health system to remind one of its strengths while being exposed to its flaws. I am seeing both.

Sources: "Report on the Economic Well Being of US Households, Board of Governors of the Federal Reserve System, July 2014; Patrick O Conner, "Poll Finds Widespread Economic Anxiety," Wall Street Journal, August 5, 2014; Anna Maria Andriotis, "New Credit Scores to Ease Access to Loans," Wall Street Journal, August 8, 2014

INDUSTRY PULSE

Acute Care 

• Volume up in hospitals: Tenet reported volume up 4% in 2Q while red admissions were down 22%; HCA reported 9.2% 2Q revenue increase; Aurora Health Care (15-hospital, not-for-profit system) saw admissions increase 8% in the first quarter. Moody's Investors Service has downgraded 34 hospitals YTD and upgraded 12; "A rush of newly insured patients using health services has boosted hospital operators' fortunes but have racked up costs that insurers didn't anticipate...People are getting more back surgeries, seeking maternity care and showing up at emergency rooms more frequently..." Christopher Weaver, "Hospitals Cash In on Newly Insured," Wall Street Journal, August 4, 2014
• Bay area ACO collaboration: Executives at UCSF Medical Center, San Francisco, and John Muir Health, Walnut Creek, Calif., signed a letter of intent to create a jointly owned and operated company that will create a regional accountable care organization in the Bay Area as the first of several joint-efforts. Bob Herman, "Bay Area powerhouses to create joint company, ACO," Modern Healthcare, August 1, 2014
• Wisconsin multi-hospital ACO launched: 6 Wisconsin healthcare systems: Aspirus in Wausau; Aurora Health Care in Milwaukee; Bellin Health in Green Bay; Gundersen Health System in La Crosse; ThedaCare in Appleton; and UW Health in Madison, announced a new partnership to operate a statewide accountable care organization and also share data (all currently use the EPIC platform). Together, they comprise 44 hospitals and more than 5,600 physicians providing care to 90% of the State's population. Bob Herman, "Six Wisconsin systems create pact, aim for ACO," Modern Healthcare, August 6, 2014
• Investor-owned hospitals challenge reference pricing by plans as a violation of ACA: In a comment letter sent August 1 to Health and Human Services (HHS), the Federation of American Hospitals (FAH) urged the federal government to reverse its previous position on reference-based pricing and declare that, until it develops further guidance, health plans that use reference-pricing strategies may not be in compliance with the Affordable Care Act's enrollee out-of-pocket maximum cap. The FAH letter calls reference pricing "an extreme form of narrow healthcare network that isn't transparent and therefore should be differentiated from narrow or tiered networks". In May, the Departments of Treasury and HHS said that "reference pricing aims to encourage plans to negotiate cost-effective treatments with high-quality providers at reduced costs." "FAH Reference Pricing Comment Letter," August 1, 2014, www.fah.org; Joseph Burns, "High Interest in Reference Pricing," Association of Health Care Journalists, May 27, 2014

Health Insurers

• Insurers announce exchange market entries in 2Q earnings calls: Cigna (CI) disclosed it would enter Maryland, Missouri and Georgia next year in addition to the 5 states where it already operates. Aetna (AET) said it is expanding into Georgia on top of the 16 states and the District of Columbia; United HealthGroup (UNH) plans to expand "to as many two dozen state exchanges." Bruce Japsen, "With Insurer ACA Expansions In 2015, More Obamacare Choices, Competition," Forbes, August 3, 2014
• Wellpoint-Blue Shield of CA announces health information exchange: The insurers announced they will invest $80M to build the California Integrated Data Exchange over the next 3 years allowing digital connectivity to the 9 million enrollees currently served by the 2 plans. Dignity Health, a 32-hospital system headquartered in San Francisco, announced it would participate. UCLA Medical officials said they are interested. Melinda Beck, "Two Insurers to Pool Medical Records in California," Wall Street Journal, August 5, 2014
  
  Note: Health information exchanges (HIEs) are different than health insurance exchanges called for in the Affordable Care Act. HIEs facilitate information-sharing across multiple, unrelated sites of care, i.e. labs, hospitals, clinics, pharmacies to improve care coordination and reduce fraudulent activity association with identity theft, et al.

Retail Health

• Walmart expands primary care initiatives: The company is "In the throes of its most aggressive push yet to become a one-stop shopping destination for medical care...unlike CVS or Walgreens, which also offer some similar services, or Costco, which offers eye care, Walmart is offering itself as a primary medical provider." Its primary care clinic provides a wider mix of services than traditional retail clinics, charging $40/visit. Rachel Abrams, "In Ambitious Bid, Walmart seeks foothold in Primary Care Services," New York Times, August 7, 2014
• Credit scores discount medical debt: Thursday, Fair Isaac Corporation, a company that provides consumer credit scores to merchants and lenders, announced it was relaxing its methodology in the cases where individuals with medical debt had been turned over to a collection agency. As of July, 2014, 64.3 million U.S. consumers had a medical collection on their credit report. More than half of all debt collection activity on consumer reports comes from medical bills. 75 million people in the U.S. (41% of adults) had trouble paying medical bills, up from 58 million in 2005. (The result of discounting medical debt scoring could be an improvement of 25 points in a person's FICO score. Anna Maria Andriotis, "New Credit Scores to Ease Access to Loans," Wall Street Journal, August 8, 2014; Sara R. Collins, Ruth Robertson et al, "Insuring the Future: Current Trends in Health Coverage and the Effects of Implementing the Affordable Care Act," Commonwealth Fund, April 2013

Post-Acute Care

• Study - Hospice care scrutinized: One in three patients leave hospice care before dying as a result of inadequate care or enrolling patients who were not eligible. Highlights of the study:
  - 15% are discharged because a patient's health unexpectedly improves but at some hospices – newer, for-profit companies – the rate of patients leaving hospice care alive is double
  - The number of "hospice survivors" was especially high in two states: Mississippi, where 41% of hospice patients were discharged alive, and Alabama, where 35% were discharged alive
  - 1 of 4 patients who leave hospice alive are hospitalized within 30 days
  - More than 12,000 patients in 2010 were released alive from hospice, entered a hospital and within two days of leaving the hospital were re-enrolled in hospice
  Peter Whoriskey, Dan Keating, "Rising rates of hospice discharge in U.S. raise questions about quality of care," Washington Post, August 6, 2014

Transactions

• Healthcare REIT deal: North Star Realty Finance Corp. will acquire Griffin American Healthcare REIT in a $4B cash and stock transaction. The companies own medical office buildings, long-term care facilities, and hospitals. Note: The cap rate on healthcare real estate is 1.5% higher than apartment buildings and office towers. Falling cap rates indicate value is rising. Per Green Street Advisors data, the cap rate (average of capitalization on healthcare properties) fell to 6.82% - down from 7.38% a year earlier and 9.69% five years ago. Robbie Wheelan, "Property Deal Banks on Health-Care Spending," Wall Street Journal, August 5, 2014
• Inversion update: Walgreens announced it was not pursuing its inversion transaction with European drugstore chain Alliance Boots instead paying $15B to purchase the remaining 55% it does not already own. Tuesday, treasury officials announced they were investigating a range of "authorities and administrative actions" that could be taken against inversion deals largely derived from IRS Code 7874 (2004) that addressed inversions but left some room for interpretation. The 2004 rule requires that if 80% of a company's shareholders are in the U.S., it would be treated as a U.S. corporation. According to Thomson Reuters, tax inversions have been a major element in 66% of cross-border deals for U.S. companies—up from 1% in 2011. There have been 47 American companies that have put together inversions in the past decade, according to the Congressional Research Service. Damian Paletta, Dana Mattioli, "Double Punch for Inversion Deals," Wall Street Journal, August 5, 2014; Shayndi Rajne,"How Tax Inverions Became the Hottest Trend in M&A,", Wall Street Journal, August 5, 2014; "Walgreens drops idea of moving overseas," Washington Post, August 7, 2014; "The Market May Gave Overreached To Walgreen's Decision Against Tax Inversion," Forbes, August 8, 2014 

CLINICAL PULSE

Cost benefit analysis for tobacco products: Since the Clinton Administration, federal regulations with a potential of more than $100M impact on the economy required a cost-benefit analysis to preclude a high-cost, low-benefit outcome. Current issue: The FDA calculates that the health benefits of smoking cessation is discounted by smokers' loss of happiness (referred to as the happiness quotient). Last week, University of Chicago researchers challenged the happiness quotient used in the FDA's analysis, stating that most smokers were addicted to smoking early in life and therefore loss of happiness was an inappropriate consideration. To date, the FDA has received 69,000 comments about proposed restrictions on tobacco product sales. Sabrina Tavernise, "In new calculus on smoking, it's health gained vs. happiness lost," New York Times, August 6, 2014

Cost benefit analysis for Hepatitis C drug: There are 1.3 million inmates in state prisons, and 200,000 in federal prisons. The incidence of Hep C is higher than the general population, and the efficacy of Solvaldi as a cure is solidly supported by science. But there are 2 issues for states dealing with their prison populations: 1) Costs: states pay retail prices for drugs, or $84,000 for a course of treatment using Solvaldi; and 2) Cost Benefit: because hepatitis C can take up to 30 years to turn from active infection to liver disease, the benefit of administering the drug to inmates soon to be released is negligible. Most states are creating policies that limit access to Solvaldi due to the cost-benefit gap. Margot Sanger-Katz, "Boon for Hepatitis C patients, disaster for prison budgets," New York Times, August 7, 2014

Reaction: The application of cost-benefit analysis is widely used in business circles, but rarely used by clinicians in diagnosing or treating patients. Physicians are trained to approach each patient's need uniquely, and to make diagnoses and treatment recommendations based solely on the need of that particular patient. The notion of cost-benefit analysis is foreign to most clinicians, and for the majority, a breach of ethics. It is, therefore, difficult for physicians to embrace cost-benefit analysis in considering treatment options, and increasingly a source of tension in many medical communities. Health costs matter to physicians, but patient care matters more. Until and unless the tools are at the disposal of practicing physicians that permit them to know the relative and absolute costs for treatment interventions with similar results at the point of care will this issue be resolved. -  Chuck Peck, M.D., Managing Director and Chair, Physician Leadership Group

GOVERNMENT PULSE

Affordable Care Act (ACA) Implementation

• Exchange premiums up 7.5% in 2015: Per the PwC Research Institute's analysis of exchange filings in 27 states and the District of Columbia, the average rate increase 7.5%, while the average monthly premium (without subsidies) is around $384. Rates vary widely by state: from a low of -23% in Arizona to a high of 36% in Nevada. Blue Cross Blue Shield plan submissions average 9%. "A preliminary look at 2015 individual market rate filings," PwC Research Institute, August 8, 2014
• Massachusetts maintains state exchange oversight: State officials last week announced they will maintain the Health Connector, the state-based health exchange state in lieu of switching to the federal health exchange website, Healthcare.gov. Adrianne Appel, "Massachusetts Says It Will Keep Its State-Operated Health Exchange," Bloomberg BNA Health Care Daily Report, August 8, 2014
• IPAB challenge dismissed: An Arizona physician's challenge to Affordable Care Act provisions establishing the Independent Payment Advisory Board (IPAB) was dismissed in the U.S. Court of Appeals for the Ninth Circuit (Arizona) because the plaintiffs did not have standing to bring the case. Background: IPAB is a 15-member administrative board authorized in the ACA to monitor Medicare spending growth and develop and set spending targets. Mary Anne Pazanowski, "IPAB Challenge Not Ripe for Resolution; Allegations of Harm Too Speculative," Bloomberg BNA Health Care Daily Report, August 8, 2014
• 90% of uninsured will not face penalties: "90% of the 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016" per an analysis by the Congressional Budget Office and Joint Committee on Taxation. In addition to exclusions included in the ACA for illegal immigrants (Native Americans and religious objectors) 14 exceptions for hardships have been added. Stephanie Armour, "Fewer Uninsured Face Fines as Health Law Exemptions Swell," Wall Street Journal, August 6, 2014
• 3-day SNF rule waived for ACOs, bundled payments: Medicare rules require a 3-day hospital stay before the CMS will pay for skilled nursing care. But last week, CMS announced a waiver for hospitals participating in two alternative payment and delivery initiatives: the Medicare Pioneer accountable care organization program and bundled payments. Melanie Evans, "Reform Update: Medicare Offers 3-Day Rule for Some ACOs, bundled payments," Modern Healthcare, August 6, 2014

Centers for Disease Control (CDC)

• Appalachian health: "Appalachia, like some blighted urban areas and Native American reservations, mixes several ingredients of poor health: doctor shortages and access to care problems; unhealthy lifestyles; low education levels; and insidious poverty." Other chronic diseases are also prevalent as compared to the national average - heart disease is 84% higher, diabetes is 47% higher, and lung cancer kills at a rate 83% higher -- and some numbers continue to rise. Laura Ungar, "Appalachian Health Crisis is a Study of What Ails Us," USA Today, August 8, 2014
• Ebola update: Emory University Hospital officials reported improved health status for medical missionaries Keith Brantly and Nancy Writepol, who took an experimental dose of ZMapp to treat the Ebola virus both contracted in West Africa. The immediate focus of attention is the efficacy of ZMapp, previously not approved for use in humans, and if proven safe and effective, the mechanism whereby it might be manufactured by Mapp Biopharmaceutical Inc. and made available to effected populations in West Africa. The FDA also announced that second manufacturer, Tekmira Pharmaceuticals of British Columbia, had had positive results with its drug, TKM-ebola, in human trials. Friday, the World Health Organization declared the Ebola outbreak a global emergency after 1,000 fatalities in Guinea, Liberia, Nigeria, and Sierra Leone. Andrew Pollack, "Ebola Therapy From an Obscure Biotech Firm Is Hurried Along," New York Times, August 6, 2014; Alan Cowell, Nick Cumming-Bruce, "U.N. Agency call Ebola outbreak an International Health Emergency," New York Times, August 8, 2014; Andrew Pollack, "Second Drug Is Allowed for Treatment of Ebola," New York Times, August 7, 2014

CMS: Medicare

• Hospital acquired conditions (HAC): "The federal government this month quietly stopped publicly reporting when hospitals leave foreign objects in patient's bodies or make a host of other life threatening errors. The change, which CMS denied last year that it was making, means people are out of luck if they want to search which hospitals cause high rates of problems such as air embolisms—air bubbles that can kill patients when they enter veins and hearts—or giving people the wrong blood type. CMS currently reports on 13 HACs including MRSA infection rates, but changed metrics; ACA requires that worst performing 25% of hospitals be penalized 1% on their Medicare rates. Jayne O Donnell, "Feds Stop Public Disclosure of Many Serious Hospital Errors," USA Today, August 6, 2014
• Medicare inpatient hospital increase 1.4% for FY15: Effective October 1, 2014, Medicare payments to hospitals will increase 1.4% resulting in an aggregate cut of $756M for FY15, per a final rule (CMS 1607, CMS 1599) issued last Monday by the CMS. The overall impact is a 1.4% increase in payments to 3,400 acute and 435 long-term care hospitals, according to the fact sheet, "reflects the projected hospital market basket update of 2.9% adjusted by -0.5% for multi-factor productivity and an additional adjustment of -0.2% in accordance with the Affordable Care Act." In addition, the rate is further decreased by 0.8% for a documentation and coding recoupment adjustment required by the American Taxpayer Relief Act of 2012, to arrive at 1.4%. Michael D. Williamson, "CMS Projects Inpatient Hospital Payments Will Decrease $756 Million in FY 2015," Bloomberg BNA Health Care Daily Report, August 5, 2014
• Medicare hospice increase 1.4% for FY15: Payments to hospices serving Medicare beneficiaries will increase 1.4 %, or $230M, in fiscal year 2015 under a final rule (CMS-1609-F; RIN 0938-AS10) released by the CMS last Monday. Per the CMS fact sheet, the hospice per diem rates of 2.1% (a hospital market basket increase of 2.9%, less 0.8% for reductions mandated by law), and a 0.7% decrease in payments to hospices due to updated wage data and the sixth year of the CMS' seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF).The phase-out will reduce the Budget Neutrality Adjustment Aactor (BNAF) by 15%, for a total reduction of 85% since FY 2010, CMS said. Nathaniel Weixel, "Medicare Hospice Payments Rise $230 Million in FY 2015 Under Final Rule," Bloomberg BNA Health Care Daily Report, August 5, 2014
• Medicare Part A: In 2013, Medicare spent $261.9B on hospital benefits and $4.3B on administrative expenses to run the program. It collected $251.1B in revenues drawing down $15.1B from its trust fund. Per capita Medicare spending, on an average annualized rate, has risen just 0.8% a year in the past four years, reflecting the relative good health of many aging baby boomers who recently qualified for benefits, compared with many older, less healthy Americans who pass away. Damian Paletta, " Medicare, Social Security Disability Fund Headed in Different Directions," Wall Street Journal, July 28, 2014

CMS: Medicaid

• Managed Medicaid in Florida: HHS has granted a three-year renewal of Florida's Medicaid managed-care program that serves 3 million Floridians — more than half are children—allowing the privatization effort to continue through 2017. State health officials predict privatization will save $2B over the three-year waiver period. "Feds grant Fla. 3-year Medicaid managed-care renewal," Associated Press, August 3, 2014
• Medicaid enrollment up to 66 million: Medicaid enrollment increased to 66 million beneficiaries including 7 million new enrollees in Medicaid and the Children's Health Insurance Program at the end of June. Enrollment in states that expanded Medicaid increased 18.5% since before open enrollment vs. the 4% increase in non-expansion states. As of June, 60.4% of individuals lacking insurance coverage live in the non-expansion states. The national uninsured rate has dropped from 17.9% in 3Q 2013 to 13.9% in 2Q 2014. "Medicaid & CHIP: June 2014 Monthly Applications, Eligibility Determinations and Enrollment Report," Centers for Medicare and Medicaid Services, August 8, 2014; Paul Demko, "Medicaid Expansion creates haves, have nots," Modern Healthcare, August 2, 2014

FDA

• States encourage tougher regulation of e-cigarrettes: Friday, Attorney Generals from 29 states sent a letter to the FDA to encourage tougher restrictions for e-cigarettes including prohibitions of sales to minors under 18, TV ads and the use of flavoring to enhance their appeal. The e-cigarette industry had $2.5B in revenue last year. Elizabeth Harris, "29 states seek tighter e-cigarette regulations," New York Times, August 8, 2014; Mike Esterl, "States take aim at e-cigarette ads, flavors," Wall Street Journal, August 9, 2014
• Study - Black box warning for new medicines prevalent: New medicines approved through the FDA's fast track process have a 1 in 3 chance of acquiring a black box warning or being withdrawn for safety reasons within 25 years of their approval, per a study released last Monday by Public Citizen. "Safety Concerns About New Drugs Revealed," Public Citizen, August 4, 2014
  
  Background: Since the Prescription Drug User Fee Act (PDUFA) was enacted, drug approval times for new molecular entities marketed in the U.S. have decreased from 33.6 months to 16.1 months, the study said. The Public Citizen study said the FDA approved 748 new molecular entities (NMEs) between 1975 and 2009. Of these NMEs, 114 (15.2%) received one or more black box warnings and 32 were withdrawn from the market for safety reasons, the study said. Black box warnings are the most serious medication warnings required by the FDA in drug labels. Very few of the 32 drugs withdrawn for safety reasons had clearly unique benefits at the time of approval, but all had unique risks that eventually led to their withdrawal, the study said. Frank et al., "Era Of Faster FDA Drug Approval Has Also Seen Increased Black-Box Warnings And Market Withdrawals," Health Affairs, August 2014

ONC Meaningful Use

• Stage 2: As of July, 2014, the number of hospitals and healthcare providers that attested to meeting Stage 2 requirements for the meaningful use program: 78 hospitals and 1,898 clinicians had attested to meeting the Stage 2 criteria vs. 10 hospitals and 972 providers in June. The totals eligible to participate are 4,741 hospitals and 479,940 providers. Alex Ruoff, "CMS Reports Big Jump in Stage 2 Meaningful Use Attestations in July," BNA's Health Care Daily Report, August 7, 2014
• Study: Meaningful use to improve care coordination disappointing: Last week, Robert Wood Johnson Foundation researchers reported that the majority of hospitals and doctors are using electronic health records (EHRs) more than ever, but few are using them to share patient information or improve quality of care. Highlights of the RWJF report:
• • Since 2011, the rate of EHR adoption has grown by at least 10% each year for hospitals and providers
  • In 2013, 78% of office-based physicians had adopted some kind of EHR system, and almost 60% of hospitals had adopted an EHR with "advanced capabilities", but less than 15% shared patient information electronically with another provider
  • Less than 6% of hospitals were ready to meet the requirements of Stage 2 of the meaningful use program in 2013 because they couldn't connect enough patients to web-based tools for accessing their own health data or exchange health information with another provider 
  • 77% of the EHR-enabled hospitals had created a dashboard with measures for organizational performance and less than 66% had dashboards for performance by individual providers; 52% were using EHRs to identify gaps in the care they provide patients and 54% were using their EHRs to identify patients at high-risk of getting sick

  The CMS is expected to release draft requirements for Stage 3 in the fall and a final rule in early 2015. Alex Ruoff, Providers, Hospitals Adopting EHRs, But Not Using Health IT to Improve Care," Bloomberg BNA Health Care Daily Report, August 7, 2014

• ONC falls short in oversight of certifiers, security at issue: The Office of the National Coordinator for Health Information Technology (ONCHIT) didn't fully ensure that electronic health record systems certified for use in the meaningful use program had proper security controls in place, according to a report (A-06-11-00063) released August 4 by the HHS' Office of the Inspector General. The focus of the OIG's analysis was the certification processes overseen by the six ATCB (authorized testing and certification bodies) that authorize an EHR meets federal standards for privacy and security of patient information. It found security measures around password protection, fraud detection, and access protocols for personnel inadequate for 4 of the 6 active in the program. As of June, 479,000 healthcare providers and 4,741 hospitals have collected a total of $24.66B in Medicare and Medicaid incentive payments through the meaningful use program, according to the latest CMS data. Alex Ruoff, "National Coordinator for Health IT Failed To Oversee EHR-Certifying Bodies, OIG Says," Bloomberg BNA Health Care Daily Report, August 4, 2014

VA Veterans Health

• President signs $16.3B VA reform bill: Last Thursday, President Obama signed into law the Veterans Access to Care through Choice, Accountability, and Transparency Act (H.R. 3230) which authorizes the Department of Veterans Affairs to hire additional doctors, nurses and other health professionals to work at VA facilities and permits veterans who have waited more than 30 days for an appointment or who live more than 40 miles from a VA facility to get care from civilian providers ($10B Veterans Choice Fund). Reimbursement rates, anticipated at current Medicare rates, will be set in regulations for implementation that are due to be released 90 days after enactment. Nathaniel Weixel, "President Obama Signs Bill Allowing Veterans to Access Non-VA Providers," Bloomberg BNA Health Care Daily Report, August 8, 2014

Related:

• Post-Vietnam combat stress in vets: The Department of Veterans Affairs analysis released last week found little improvement in treating post-traumatic stress disorder (PTSD) prevalent among vets from conflicts dating back to Vietnam. It estimates 11% of Vietnam vets, 283,000, live with PTSD, most untreated. Benedict Carey, "Combat Stress among Vietnam Veterans is Found to Persist Since Vietnam," New York Times, August 7, 2014; Gregg Zoroya, " Vietnam veterans still dogged by PTSD," USA Today, August 8, 2014

QUOTABLE

"Each year an estimated 5% are misdiagnosed based on currently available evidence. This may sound like a decent track record—95% accuracy—given that doctors are grappling with more than 10,000 diseases in patients with a staggering array of symptoms. But, a 5% error rate means that more than 12 million adults are misdiagnosed every year." Hardeep Singh, "The Battle against Misdiagnosis," Wall Street Journal, August 7, 2014

FACT FILE

Public mood about economy: 76% of U.S. adults lack confidence that their kids' generation will have a better life than they do—an all-time high; 71% think the country is on the wrong track—8% higher than June, 2014 survey; 71% think dysfunctionality in Congress contributes to the country's economic problems; 60% think the U.S. is in a state of decline; 49% think the U.S. is still in a recession. Patrick O Conner, "Poll Finds Widespread Economic Anxiety," Wall Street Journal, August 5, 2014

Prison Health: In 2011, $7.7B was spent on correctional healthcare vs. $8.2B in 2009; Median cost per inmate: $7,142 for 1.57 million inmates. "State Prison Healthcare Spending," Pew Charitable Trust, July 8, 2014, pewtrusts.org

Workforce: 40% of practicing physicians and 33% of nurses are over the age of 55; by 2015, there will be a shortage of 21,000 primary care physicians increasing to 65,800 by 2025. Rick M. Sherwood, Towers Watson speaking at Missouri Hospital Association Healthcare Workforce Summit, July 23, 2014, St. Louis, Mo.

Fed report on household finances: The Federal Reserve's 2013 household survey found:

• 60% of households said they were doing well/living comfortably vs. 13% "struggling" and 25% "just getting by"
• 34% said they were "worse off" vs. 5 years prior compared to 34% "about the same"
• 24% had education debt of some kind
• 43% said they could not cover a major out of pocket medical expense though 84% said they have health insurance
• 25% had not visited a dentist in the past year because they could not afford it; 18% had not seen a physician and 15% did not get a prescription filled for the same reason
• 57% of those who had savings before the 2008 recession reported using part or all of these funds
• 48% said they could cover an unexpected expense of $400 without selling something or borrowing
• 31% of those under the age of 65 reported no retirement savings

Report on the Economic Well Being of US Households," Board of Governors of the Federal Reserve System, July 2014

Wall Street Journal CEO council representation: Of its 100 corporate leaders, 23 are healthcare industry leaders; prominently represented: health plans (4), biopharma (7), providers (8) retail health (2) and supply chain/distribution (4). Wall Street Journal, August 8, 2014, advertisement for Dec 1-2, 2014 annual meeting p.A9

Healthcare workforce hiring: July 2014 hiring: ambulatory care +21,300 (+.3%, 6.7M jobs); hospitals -+7100 (-.1%, 4.8M); nursing homes -5200 (-.4%, 1.6M). Melanie Evans, "Ambulatory Care Adds Jobs Offsetting Hospital Hiring Loses," Modern Healthcare, August 1, 2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.