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Miracles and Dollars James R. Teeter As a society, we're in for some exciting times-medically speaking-in the next five years. Big breakthroughs in biotech drugs give hope of treating illnesses now incurable. They'll change the way healthcare is delivered. Take cancer for instance. Some 270 cancer drugs are now in advanced clinical trials. Like the Pentagon's smart bombs unleashed on Serbia and Kosovo, some of them will target specific cancers like ovarian, prostate, brain, liver, breast, colon, lung, and skin cancers. More potent doses of these concoctions over longer periods of time will yield better results than today's less specific chemotherapy. And they'll have far fewer side effects. There's also a cancer vaccine being tested that boosts the immune system. It won't prevent cancer, but may very well halt its spread. New vaccines are coming, too, for malaria, Lyme disease, and eventually even AIDS. For obesity, gene therapy will speed metabolism and curb appetites for the more than 50,000,000 Americans now considered overweight. Inhalable flu vaccines will curb virus reproduction. A biotech inhaler for cold symptoms will be out in a few years. Inhalable insulin for diabetics can be expected in the next three years, eventually replacing injections. Later, an insulin pill will help those with Type 2 diabetes. With none of us getting younger, it's comforting to know that aging won't be as debilitating. Approval is near for drugs to block inflammation brought on by arthritis. Osteoporosis and the bone loss that accompanies it will be combated by drugs that carry no cancer risk. Bypassing clogged arteries by generating new ones with a vascular gene injection will become common, replacing some of today's bypass surgery. Amazing developments! But, will we be able to afford them all? Will everybody have access to these wonder drugs and benefit from them? Today, one-third of the 39 million people on Medicare have no help whatsoever with the cost of outpatient drugs. They pay their total pharmacy bill out of their own pockets. Some cut grocery purchases and take half-doses of medicine because their drugs cost $500-$600 a month. Another 44 million Americans have no help with the cost of medicine because they have no health insurance. Sadly, their numbers are growing by a million each year as employers cut back on coverage to control costs. So much suffering by so many has caught the eye of politicians. President Clinton wants to expand Medicare by providing at least some drug coverage. Congressional Democrats do, too, and have introduced their own plan. Such plans, though, would create a huge new entitlement program estimated to cost $10 billion to $30 billion a year. Medicare coverage of pharmaceuticals and how to pay for it will entail contentious debate. Meanwhile, Arkansas' own Rep. Marion Berry is holding meetings of the House Prescription Drug Task Force he co-chairs. The goal of the task force is to make prescription drugs available at lower prices. Berry is focusing upon generic drug manufacturers' claims that brand-name drug makers are allowed by laws, rules, and regulations to hog the market when more reasonably priced generic drugs could save consumers $10 billion a year. While the congressman from Arkansas is mindful that it's the brand name manufacturers who foot the huge research and development costs of new wonder drugs, he believes highly priced prescription medicines have become "a moral issue" because so many people can't afford them. There comes a time, says he, when the government has to step in to bring fairness to the process. And therein lies the challenge: Balancing the scale to bring fairness and better health to all. Let's wish Rep. Berry well. Arkansas
Community Hospital Financial Indicators Ed Nilles, president and CEO of Bradley County Medical Center in Warren, has announced the appointment of Harold E. Mitchell, Jr. as chief financial officer of the facility, effective February 8. Mitchell previously served as CFO at Good Faith Medical Center in Pine Bluff and Drew Memorial Hospital in Monticello. Greg Stock, president and CEO of Northwest Health System in Springdale, has announced the appointment of Donald (Donnie) J. Frederic as chief operating officer at Bates Medical Center in Bentonville. Frederic is a former CEO of Crossroads Community Hospital in Mt. Vernon, Illinois. Crossroads was chosen as one of the "Top 100 in the Nation" for facilities under 99 beds in both 1997 and 1998. Patrick Flynn, president and CEO, Washington Regional Medical Center, Fayetteville, has been elected as an American Hospital Association alternate delegate and Regional Policy Board member, representing the Section for Metropolitan Hospitals. His term expires December 31, 1999. David Laffoon, CEO of Central Arkansas Hospital in Searcy, has been reappointed by Governor Mike Huckabee to the State Board of Health for a term expiring December 31, 2002. Barbara Wood has been named administrator of McGehee Desha County Hospital succeeding Ed Lacy who accepted the administrator position at Baptist Medical Center Heber Springs. Wood, who has served the hospital as acting administrator since Lacy’s departure, has been associated with the McGehee hospital 15 years. Governor Mike Huckabee has appointed Joe Smith, CEO of DeWitt City Hospital, to the Arkansas Health Services Commission for a term that began April 12, 1999, and expires April 9, 2002. Smith succeeds Baptist Health president Russell D. Harrington, Jr., who served on the commission for 11 years. Kaye (Korky) Mallory has been named administrator of Stone County Medical Center (SCMC) in Mountain View. Mallory, who was appointed to the position in January prior to the sale of SCMC to White River Medical Center in Batesville, will continue as the hospital’s administrator now that the sale is final. She succeeds Stanley Townsend, former owner and administrator of SCMC. Scott Street, has been named chief operating officer at St. Bernards Regional Medical Center in Jonesboro, succeeding John Heer who has accepted a position in Florida. Street is former vice president of patient services at Baptist Medical Center in Little Rock.
Arkansas Hospitals Participate
in Quality Improvement Projects Under this program, the AFMC and hospitals across the state that voluntarily participate in quality studies make detailed examinations of individual services provided by the hospitals with a goal of improving local processes that impact the effectiveness and safety of the services. Three studies in recent years were aimed at Cesarean-section deliveries, antibiotic-resistant bacteria and the use of potentially life-saving drugs called beta-blockers to prevent heart attack. In the first study, which was conducted for the Arkansas Medicaid program, hospitals throughout the state collaborated with the AFMC to successfully reduce the rate of repeat C-section deliveries performed on Medicaid recipients by 11%. The overall goal of the project was to increase the use of vaginal birth after C-section (VBAC). Hospitals participating in the study showed a 51% increase in VBACs for women who tried to deliver vaginally after one or more Cesarean deliveries, compared to a 2% decline among hospitals that did not participate. A residual benefit is a cost savings for the Arkansas Medicaid program that could top $250,000 per year as the use of more costly C-section deliveries falls. Another study was conducted in response to concerns voiced by the national Centers for Disease Control and Prevention about a proliferation of new strains of bacteria in the U.S. that are not being effectively treated with antibiotics. More than 66% of Arkansas hospitals enthusiastically embraced an opportunity to work with the AFMC on that project, begun in 1996, to improve their abilities to proactively target antibiotic resistant bacteria. As a result, those hospitals have adopted policies that position them to detect, report and prevent the spread of so-called "super germs," especially those that have developed a resistance to the powerful vancomycin antibiotic—a drug known until recently as a reliable last resort. In the third project, 62 hospitals in Arkansas joined with the AFMC as part of the federal Health Care Financing Administration’s National Cooperative Cardiovascular Project. The purpose was to improve the outcomes of patients diagnosed with acute myocardial infarction (AMI) through use of beta-blockers and aspirin. At the start of the project in 1995 only 27% of Arkansas physicians prescribed beta-blockers to eligible heart attack patients. Less than two years later, based on results of the study, 43% of the physicians were using the proven drug therapy to prevent cardiac death. There was also a notable improvement in the appropriate use of aspirin upon admission of heart attack patients to a hospital, during the hospital stay and at discharge.
Balanced Budget Act Has Impact
on Arkansas Hospitals Today, less than 24 months after the BBA was approved, Arkansas’ hospitals and health systems are feeling the sting of these reduced payments. As a result of the BBA, Arkansas hospitals will eventually lose a combined $550 million to $600 million in Medicare revenues, about 10%-12% of the Medicare payments they would have otherwise received over the 5-year period. They’re already experiencing the fallout from the BBA and are working to trim their costs to match the falling revenues by scaling back on employees and patient services. Arkansas hospitals saw their first vestiges of the BBA reductions in the fall of 1997, when Medicare allowed no growth for federal fiscal year 1998 in basic hospital payments for inpatient services. Last year, Medicare changed the way it pays for home health and skilled nursing services, further limiting Medicare payments available to hospitals that provide those services. Just over the horizon is a requirement that Medicare establish a new way of paying for outpatient hospital services. Before the BBA was passed, Medicare only paid 90% of hospital outpatient costs. After the new outpatient payment schedule is in place sometime next year, the program will cover only 82 cents of every dollar of care they provide; and the percent covered is expected to fall to 78 cents per dollar spent by 2002. Two of the act’s most damaging provisions include one that changes the definition of a hospital transfer and another that is already having a serious impact on home health care. The transfer provision applies to Medicare patients who are admitted to hospitals for certain conditions, and then discharged to a post-acute service like home care, a skilled nursing facility or a rehabilitation facility. The BBA says those patients are actually transferred rather than discharged. Under Medicare rules, hospitals generally are paid less for a patient who is transferred than for one discharged from the hospital, even though the patient received all needed inpatient services. The expanded transfer definition is expected to cost the nation’s hospitals about $3 billion over the five years covered by the law, including more than a half-million dollars in reduced Medicare payments for Arkansas hospitals. A worse effect is expected from the BBA’s impact on home care services. The act directs Medicare officials to develop a prospective payment system to cover home health services by next year, and to bridge the gap until that system is fully implemented with an interim payment method that has resulted in reductions of about 20% for many home health services. The federal Health Care Financing Administration (HCFA) originally estimated these provisions of the law would reduce total home health spending about $16 billion over the duration of the BBA. However, a new report from the Congressional Budget Office released in March this year shows that the five-year Medicare home health spending projection is tracking on a course that should drain about $47 billion from home health, almost triple the amount originally estimated by HCFA in support of the BBA. That’s bad news for Arkansas where 80% of hospitals offer home health care, but even worse news for patients who will lose access to the in-home services they need as more freestanding and hospital-based home health agencies shut their doors. While the BBA wasn’t designed specifically to close hospitals, it very well may in a state like Arkansas where there are many small, rural facilities. About 38% of the state’s hospitals were spending more to provide patient care than they were being paid for those services before the BBA began leaving its footprints. Almost a quarter of them, 22%, were posting overall operating losses—their costs exceeded revenues from all sources. And another nine hospitals had razor thin profits of less than 2% after all expenses were paid. Based on those numbers, it’s almost inevitable that some Arkansas towns and communities will lose their local hospital if the BBA runs its course. To guard against those closures, the Arkansas Hospital Association and its member hospitals are pushing for Congress to pass legislation that will address and revise some of the most damaging consequences of the BBA. The AHA will also continue to oppose any new action in Congress that could extend the duration of the BBA’s provisions beyond 2002 or lead to more Medicare spending reductions.
Arkansas Hospital Their volunteer hours of service not only help reduce hospitals’ operating costs, they also make services available to hospital patients, visitors, and staff members that otherwise may not be feasible. The cash contributions help to operate programs, buy equipment, furnish facilities, fund scholarships, and support community benefit initiatives. In some cases, auxilians’ contributions of time and money may be the difference in a community hospital’s survival. In addition, hospital auxilians make significant contributions to the Arkansas Hospital Association’s advocacy and representation efforts for the state’s hospitals. Their collective voice during the current legislative session, and those in the past, to support issues important to hospitals helps ensure that legislators and other public policy makers clearly hear the hospital message. The Arkansas Hospital Association and its member hospitals express their respect, admiration, and appreciation for the work of all the state’s hospital auxilians and teen volunteers Comparative
Financial Indicators, Community Hospitals, by State
Editor's Note: The statistical information in the link below was compiled by AHA senior vice president Paul Cunningham based on information from the American Hospital Association. Hospital Indicators Per 1,000 Population
Federal Poverty
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