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Teaching Hospital Update - March 9-13, 2009

 
 

Email Alert

By Clinton Mikel*

March 13, 2009

Obama Signs Omnibus Spending Bill

President Barack Obama on Wednesday signed into law a $410 billion omnibus appropriations bill. The House approved the measure last month, and the Senate approved the bill on Tuesday. Obama called the omnibus measure, which includes more than 8,500 earmarks costing nearly $7.7 billion, "imperfect."

Democratic members of the House Budget Committee and Senate Budget Committee on Wednesday held separate meetings with Obama and Vice President Joe Biden at the White House to discuss the president's fiscal year 2010 budget proposal. Senator Ron Wyden (D-OR) said that Obama is focused on cutting healthcare cost with the spending bill because he understands that "medical costs are gobbling up everything in sight." Senator Bernard Sanders (I-VT) called for "bold changes in the extraordinarily wasteful health care system."

Kaiser Daily Health Policy Report, Obama Signs Omnibus Spending Bill, Vows To Push Earmark Reform, Henry J. Kaiser Fam. Fdn. (Mar. 12, 2009).

Growth of Medical Tourism Industry Spurs Questions on Addressing Risk/Legal Factors

Medical tourism continues to be a tremendous growth industry as U.S. patients seek cheaper medical care abroad. In 2007, nearly 750,000 Americans engaged in medical tourism; that number is expected to swell to six million by 2010, representing $16 billion to $19 billion in expenditures.

This growth has been fueled not only by the uninsured and underinsured seeking less expensive options for surgical care, but also by employers seeking to drive down costs by seeking healthcare in places such as India, Turkey, Dubai, and approximately thirty other countries. With annual growth rates of 20%, medical tourism has become a $60 billion global business. One of the biggest beneficiaries of that trend has been India—where a half million international patients traveled for medical care in 2007. That trend is expected to infuse $2.2 billion annually into India's economy by 2012.

Foreign medical centers, which promise world-class care at third-world prices, are more cost-effective for several reasons, including lower facility construction costs and time; lower labor costs; an absence of legacy systems; very low medical malpractice and liability costs; and a corporate culture that is "better, faster, cheaper, and hungrier'' than in the United States. Thus far, most medical tourism has focused on elective procedures such as orthopedics, cardiovascular surgery, cancer diagnosis and management, cosmetic surgery, and bariatric surgeries. Dentistry also has risen in prominence in recent years.

Medical tourism, however, poses several possible risk and legal factors that must be addressed not only by patients, but also providers in both countries. Some of medical tourisms' key challenges and concerns are quality of care, defining covered and non-covered services, expenses (Medicare and Medicaid will not pay for medical services sought outside the United States), legal liability exposure, and tax and ERISA issues. Prospective patients must exercise some diligence in choosing where they seek treatment because not all foreign medical centers meet U.S. standards.

Growth of Medical Tourism Industry Spurs Questions on Addressing Risk/Legal Factors, BNA'S HEALTH L. REP. (Mar. 12, 2009) (note: registration is required to view this content).

Medical School Growth, Development Increasing Amid Economic Recession

Expansion plans of medical schools at several U.S. universities are rushing ahead despite the severe economic downturn. Existing medical schools are responding to warnings of a looming doctor shortage by raising their enrollment rates while new schools are opening or are already under development. The number of medical schools approved to train physicians by the Liaison Committee on Medical Education is expected to increase by four to 130 this year; five other schools that have plans to enroll students in the next two years have submitted accreditation applications. James Rohack, a cardiologist and president-elect of the American Medical Association, said the reason for the growth is that "Americans are living longer, and there are more of them," adding, "It's clear that the demographics of American society point to the need of having and expanding a well-educated medical work force."

Medical care experts once blamed rising health costs on what they said was a surplus of doctors who would perform unnecessary procedures and drive up medical costs. As a result, medical schools restricted or reduced enrollments. A recent study of the issue, however, found the potential for a large shortfall in the number of doctors in coming decades. Also, a 2006 report by the Association of American Medical Colleges (AAMC) urged medical schools to increase their enrollments by 30% to ease the projected shortfall of physicians nationwide. Last year, AAMC released a new study that found that current demand and physician supply rates could lead to a shortage of 159,000 physicians by 2025.

Kaiser Daily Health Policy Report, Medical School Growth, Development Increasing Amid Economic Recession, Henry J. Kaiser Fam. Fdn. (Mar. 12, 2009).

Wal-Mart Plans to Offer Lower-Cost Electronic Health Records System for Physician Offices

This spring, Wal-Mart will partner its Sam's Club division with Dell and eClinicalWorks to begin offering low-cost electronic health records (EHR) systems to physicians. Under the initiative, Dell will provide the healthcare providers with the option for a desktop or tablet personal computer, while eClinicalWorks will contribute the EHR and practice management software that would be used for Internet-based patient billing and registration. Wal-Mart will use its buying power to acquire discounts for both the software and hardware.

The initial cost to set up the EHR system will be less than $25,000 for the first physician and about $10,000 for each additional physician in a practice. The management and support will cost about $4,000 to $6,500 per year after installation and training, according to Sam's Club estimates. Wal-Mart officials said that the EHR initiative would make it more accessible and cost-efficient for physicians to adopt healthcare information technology. In addition, the $19 billion healthcare IT incentive package under which physicians would be eligible for more than $40,000 over several years could accelerate EHR adoption among physicians.

While many physicians—especially those in small practices—doubt the wisdom of switching to EHRs because of their cost and complexity, Wal-Mart has the potential to bring lower costs and an efficient distribution channel to cater to small physician groups. David Brailer, the former national coordinator for health IT under former President George W. Bush, said, "If Wal-Mart is successful, this could be a game changer."

Kaiser Daily Health Policy Report, Wal-Mart Plans To Offer Lower-Cost Electronic Health Records System for Physician Offices, Henry J. Kaiser Fam. Fdn. (Mar. 11, 2009).

Red Wine or White? No Difference for Breast Cancer Risk

A glass or two of Chianti each day may be no better for breast cancer risk than Chardonnay, researchers found. Unlike prevention of cardiovascular disease—which is linked more strongly to red wine—the color of the wine women drink makes no difference in breast cancer risk, according to a population-based, case-control study in the March issue of Cancer Epidemiology Biomarkers & Prevention. Some studies have attempted to sort out the effects of wine versus beer and other spirits, but few have examined whether red and white wine might differ in their impact on breast cancer.

Although total alcohol intake consumption equal to two or more drinks per day significantly increased breast cancer risk in the study, wine alone had neither a protective or harmful effect. Prior studies have found increased breast cancer risk for women with moderate alcohol consumption. In one large British study published last week, breast cancer was the greatest risk associated with alcohol intake among women.

Balancing the various health effects of moderate alcohol intake is a complicated matter, further muddled by the various definitions of "in moderation," commented Elizabeth A. Platz, ScD, MPH, of Johns Hopkins University, who was not involved in the study. "The bottom line is drinking too much is not good for women in general, and it's not safe from an accident perspective," she said. Guidelines from some organizations, including the American Heart Association and American Cancer Society, recommend no more than two drinks a day for men and no more than one a day for women. Notably, in the study, wine did not increase breast cancer risk significantly overall, or in the highest consumption group. Neither red nor white wine posed significant risks, neither incrementally nor at the highest consumption levels.

Crystal Phend, Red Wine or White? No Difference for Breast Cancer Risk, MedPage Today (Mar. 9, 2009).

"Observation" Classifications for Patients Rising as Medicare, Private Insurers Enforce Stricter Criteria for Hospital Admissions

The number of patients treated at hospitals that are classified as "observation" patients is increasing as Medicare and private insurers establish stricter criteria for hospital admissions in an effort to ensure that only the sickest people are treated in costly, resource-intensive medical centers. As a result, some Medicare patients are surprised by charges that are not covered because they were not classified as inpatients and therefore did not qualify for coverage. Hospitals are cautious about who is classified as an inpatient because they are at risk of being charged with fraud if they bill Medicare for an inpatient stay that does not meet the agency's standards. Medicare is beginning RAC audits of medical centers nationwide.

Observation care is a step up from the emergency room, but a step down from a formal hospital stay in which doctors can test, diagnose, stabilize, and rapidly treat patients who are neither evidently sick enough to be hospitalized nor well enough to go home. Gail Larsen, divisional vice president for provider relations at Blue Cross and Blue Shield of Illinois, said the purpose of observation care is to reveal whether a patient should be admitted to the hospital or sent home. Patients with chest pain, asthma attacks, kidney stones, dehydration, dizziness, mild trauma, and other conditions often are ideal candidates to be observation patients. The observation process normally takes place within twenty-four hours.

However, certain observation cases are causing concern in the medical community because patients sometimes stay longer than twenty-four hours. In some of those cases, treatments are not covered by Medicare because they are not classified as inpatient care. The problem is amplified for Medicare patients because hospitals are not required to inform them that they are in observational care. Medicare officials said patients can appeal the hospital's classification of their care to a regional medical contractor if they feel they are unjustly charged.

Kaiser Daily Health Policy Report, "Observation" Classifications for Patients Rising as Medicare, Private Insurers Enforce Stricter Criteria for Hospital Admissions, Henry J. Kaiser Fam. Fdn. (Mar. 9, 2009).

Few Hospitals Reach HIMSS Stage 7 EHR Ranking

Thirteen hospitals have been named by HIMSS Analytics as tops in the nation in hospital information technology systems adoption. HIMSS Analytics is the data analysis arm of the Chicago-based Healthcare Information and Management Systems Society. All thirteen hospitals named were the first ever to achieve the highest rating of Stage 7 on the 5 HIMSS Analytics EMR Adoption Model. All of the hospitals came from two hospital systems, Oakland, CA-based Kaiser Permanente and NorthShore University HealthSystem, Evanston, IL. All of the hospitals have products from Epic Systems Corporation at the core of their clinical healthcare IT systems.

Last month, HIMSS Analytics announced that forty-two hospitals had reached Stage 6 of its model. The model was developed in 2004 as a way for the industry to measure the penetration of electronic health record systems in hospitals. The scale runs from zero to seven. Practitioners at Stage 7 hospitals can deliver patient care without paper charts, share standardized summaries of patient records with other providers, and use their clinical databases to drive performance-improvement efforts.

Joseph Conn, Few Hospitals Reach HIMSS Stage 7 EHR Ranking, Modern Healthcare's Daily Dose (Mar. 10, 2009). (note: registration is required to view this content).

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

*We would like to thank Clinton Mikel, Esquire (Hall Render Killian Heath & Lyman PLLC, Troy, MI) for writing this email alert.

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