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Teaching Hospital Update May 30- June 3, 2011


Email Alert

June 3, 2011

By Webb Millsaps*

High-Risk Surgery Deaths Down Over Prior Decade

High-risk surgeries are getting safer, according to national data, but further improvments can be made. Operative deaths dropped significantly for all high-risk procedures considered in a national Medicare database study by researchers at the University of Michigan in Ann Arbor.

The relative decline from 1999-2008 ranged from 8% for carotid endarterectomy to 36% for abdominal aortic aneurysm repair, the group reported in the June 2, 2011, issue of the New England Journal of Medicine. "Although trends toward safer surgery are encouraging, tens of thousands of patients in the United States still die every year undergoing inpatient surgery," they wrote in the paper. "Wide variations in outcomes across hospitals suggest further opportunities for improvement."

Efforts in that regard to concentrate certain high-risk surgeries into the most experienced hands have had mixed results, which the researchers called not surprising.

Rising hospital volumes appeared to be driving the decrease in deaths for the high-risk operations with the strongest links between volume and outcome—cancer resections. Higher hospital volume accounted for 67% of the decline in mortality for pancreatectomy, 37% of the mortality decline for cystectomy, and 32% of the mortality decline for esophagectomy.

One reason for the success may be that these procedures are "relatively uncommon; thus the financial penalty is minimized for smaller hospitals that refer patients to higher volume centers," the researchers noted in the paper. But despite the push by payors and other organizations for minimum volume standards for a variety of other operations, high-risk cardiovascular operations were a different story.

For example, the number of hospitals performing coronary artery bypass grafting rose, while the number of procedures fell overall. "This proliferation of hospitals may be related to both the financial incentives for hospitals to be involved in cardiac surgery and their need to provide backup for interventional cardiologists," the researchers suggested in NEJM.

Crystal Phend, High-Risk Surgery Deaths Down Over Prior Decade, MedPage Today (June 2, 2011).

FDA Official: European Device Approval Model Not Workable in United States

The head of the medical device division of the U.S. Food and Drug Administration (FDA) told a House committee this week that the European model for approving medical devices would not work for the United States. At a hearing on the medical device approval process, Jeffrey Shuren, director of FDA's Center for Devices and Radiological Health, told the House Oversight and Government Reform Health Subcommittee that the European process for approving devices may be faster, but it is not superior to FDA's.

Shuren said that the agency could do a better job of communicating with industry but that he had "concerns" about importing a European system that does not require effectiveness as a condition for approval. He said he was "astonished that some in medical device space are calling for us to lower our standards to those of Europe. It's not in our best interest."

FDA requires that a device demonstrate both safety and effectiveness before it is cleared to market. Shuren acknowledged industry criticism about FDA becoming more risk averse, but said that was not the reason many companies are increasingly getting their devices approved overseas first. He also dismissed the idea that overly burdensome regulations are to blame. Instead, Shuren said that the recession has changed the business model to be more risk adverse. He also acknowledged that the high price of getting devices approved may be what makes Europe attractive to industry, but denied that the U.S. medical technology industry was in danger of being lost to Europe.

"FDA recognizes that it can do a better job at managing its premarket review programs," Shuren said in written testimony. "We know that medical device development is expensive. And we agree that, in many areas, insufficient clarity, consistency, and predictability on our part contributes to those expenses."

Nathaniel Weixel, FDA Official Says European Device Approval Model Will Not Work in U.S., BNA's Healthcare Daily Report (June 3, 2011) (note: registration is required to view this content).

California Medicaid Case Headed to U.S. Supreme Court

With valet parking for patients, video conferencing for parents of premature babies, and a healing garden abloom with azaleas, Santa Rosa Memorial Hospital tries to maintain the amenities of a thriving community hospital. But the hospital's chief financial officer is focused on the fiscal strains Memorial is facing. Nearly a quarter of the hospital's patients are on California's Medicaid program—and the state has been trying for years to cut its reimbursement rates for hospitals and other healthcare providers.

Memorial, a 278-bed hospital in this city fifty-five miles north of San Francisco, CA, sued California to try to stop the payment reductions. Now it is part of a case before the United States Supreme Court that could redefine states' responsibilities on Medicaid services and ultimately determine whether Democratic Governor Jerry Brown can go forward with cuts he says are vital to closing the state's budget gap. The Court is likely to hear arguments in the fall and render a decision by next spring.

Many states are pressing for more flexibility on Medicaid, a joint federal-state healthcare program for the poor and disabled. But Memorial, as well as other hospitals and doctors, counter that the steep cuts violate federal law, which requires that payments be set high enough to ensure providers will see enrollees. They note that the state's reimbursement rates rank forty-sixth among the states.

In 2008, California targeted its Medicaid program, called Medi-Cal, which today has an annual budget of $42 billion. The legislature and former Republican Governor Arnold Schwarzenegger (R) approved a 10% cut in payments to Medi-Cal providers. The Obama Administration recently proposed a rule that would require states to consider the impact of payment cuts and to perform reviews to see if patients are getting necessary services.

Marilyn Chase, The Other Healthcare Lawsuit: California Medicaid Case Headed To Supreme Court, Kaiser Health News (June 2 2011).

Disclosing Medical Errors can Lower Liability Lawsuit Expenses

Disclosing medical errors to patients mitigates medical liability lawsuits, increases safety, and ensures long-term financial benefits for medical practices, according to a new report. The report, released online in May by the privately owned international insurance broker Lockton, reviewed previous studies on error disclosures between 1987 and 2010 and analyzed the financial impact of such disclosure on healthcare professionals.

The Lockton report cited an analysis of the University of Michigan Health System's 2001 medical disclosure approach. The study, in the August 17, 2010, issue of Annals of Internal Medicine, showed:

  • About twenty fewer lawsuits each year were filed after the program's implementation;

  • Lawsuit resolution time went from 1.36 years before the program started to 0.95 afterward; and

  • The average cost per lawsuit decreased from $405,921 to $228,308.

Research shows that disclosure programs make the best financial sense for healthcare organizations, along with being "the right thing to do," said the report's author, an attorney and Lockton clinical risk consultant. "I think healthcare practitioners, hospitals and clinicians, they're on the disclosure bus; it's left the station," she said. "But they're still wondering if it's going to save money or cost money. You can't argue with [the study data]. The data says these disclosures have saved us money."

Alicia Gallegos, Disclosing Medical Errors Can Lower Liability Lawsuit Expenses, Am. Med. News (June 1, 2011).

Panel Calls for Overhaul in Medicare Payment Methodology

Medicare pays more to doctors and hospitals in expensive parts of the country. But a prestigious panel says Medicare's methods of evaluating regional costs are disturbingly imprecise and need to be overhauled.

The Institute of Medicine (IOM) experts said Medicare needs to make a "significant change" to the ways it evaluates salaries of healthcare workers and real estate costs. Major changes to these calculations would affect the bottom lines of thousands of practitioners and institutions, but the report did not gauge the impact.

"The Medicare program needs more precise and objective tools and methods to assure the nation that the billions being spent are appropriately and fairly disbursed," said the committee chairman, a Duke University health policy and economics professor, in a statement accompanying the report. "As the criticism we heard from a range of healthcare providers indicates, there is significant skepticism about the fairness and accuracy of how adjustments are currently being determined. This report's recommendations will increase the likelihood that the geographic adjustments reflect reasonably accurate measures of regional differences in expenses," he added.

If all of the committee's recommendations were adopted, they would represent the biggest transformation in Medicare's geographic payment adjustments in two decades, said an independent consultant and member of the panel.

Jordan Rau, Report: Big Flaws in How Medicare Pays Hospitals, Doctors, Kaiser Health News (June 1 2011).

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 Webb Millsaps, Esquire (McDermott Will & Emery LLP, Miami, FL), for providing this week's update.

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