The state Legislature took initial action on several bills that the MHA is watching during the week of May 23. In the House, testimony was taken on bills to make changes to lead testing requirements for children and a bill that would create a new state-based exchange for healthcare insurance. In the Senate ..
The MHA Legislative Policy Panel convened May 25 to develop recommendations for the MHA Board of Trustees on legislative initiatives impacting Michigan hospitals. The meeting was highlighted by a presentation from former State House Speaker Jase Bolger on the Michigan …
The MHA, the Michigan Community College Association, Michigan Independent Colleges and Universities and the Michigan Association of State Universities released June 1 a collaborative proposal to invest state funds in expanding access to bachelor of science in nursing (BSN) degree programs to the state’s …
Applications are due June 30 for the 2022-2023 class of the MHA Excellence in Governance Fellowship, which will be held from October 2022 through June 2023. Board members and executives who want to hear more about the fellowship experience can watch a video of graduates’ testimonials explaining …
The MHA released another episode of the MiCare Champion Cast, which features interviews with healthcare policy experts in Michigan on key issues that impact healthcare and the health of communities. On this episode, Karen Cheeseman, CEO of Mackinac Straits Health System …
Suicide safety continues to be a priority for accrediting organizations such as the Centers for Medicare & Medicaid Services and The Joint Commission, requiring many providers to evaluate various policies and processes. They include how to keep suicidal patients safe when care is needed outside of …
The MHA hosted a CEO Rural Round Table event May 25 where healthcare leaders safely gathered at the Grand Traverse Resort & Spa to collaborate on ways to foster growth and make immediate and long-term improvements in rural communities. …
MHA Senior Vice President of Advocacy Adam Carlson is listed in the 50 Names to Know in Lobbying guide for 2022 published by Crain’s Detroit Business. The Crain’s list is a selection of professionals representing trade groups, major corporations, law firms and multiclient firms. …
Medicare Advantage (MA) enrollment in Michigan totaled approximately 1.18 million in April, an increase of 23,000 beneficiaries since January. The April MA enrollment is spread across 46 MA plans that are currently operating in the state, with approximately 56 percent of Michigan’s 2.1 million …
The Keckley Report
It’s Past Time for a Mental Health Moonshot
“Mental illness involves mood, stress, substance abuse and anxiety disorders and impacts children and adults. Mental illnesses are more common than cancer, diabetes, or heart disease in the U.S. but its been treated as a second-class citizen in the U.S. health system for decades.”
The MHA will host a webinar from 11 a.m. to noon ET June 8 with ParaRev to provide an update on the Protecting Access to Medicare Act (PAMA) Lab Test Private Payor Rate Reporting – CMS Update on PAMA Reporting Requirements.
MHA Endorsed Business Partner SUNRx will host a 340B Regulatory Brief from 2 to 3 p.m. ET June 14 to provide valuable insights for consideration in the management of participants’ 340B pharmacy strategies. The webinar will cover the current regulatory environment and implications moving forward.
“We will make electricity so cheap that only the rich will burn candles.”― Thomas A. Edison
Recently the RAND Corp. released its latest hospital pricing study that uses Medicare as a benchmark for hospital pricing. For many years, pricing and affordability has been top of mind for our patients, and our hospitals and health systems go to great lengths to ensure anyone who walks through our doors at any date or time will receive high-quality care regardless of their level of coverage. Efforts have been made to increase healthcare transparency, including the development of the MHA’s verifymicare.org website, recent federal legislation to establish a dispute resolution process for balanced billing that removes patients from payer and provider disputes, and federal requirements that hospitals post price information online.
Unfortunately, the recent study from RAND does not provide an accurate picture on the relationship between fixed government reimbursement rates, negotiated private insurer rates and financial sustainability for hospitals. We know Medicare does not cover the true cost of care. Hospitals do everything they can to break even, and most operate on razor-thin margins. Just consider that 52 hospitals in the US closed between 2018 and 2020. Nearly all hospitals still lose money on Medicare. In addition, unlike public goods that respond quickly to inflationary pressures, the ability of a hospital to pass cost on to consumers is extremely limited. The drivers of increased cost in the economy are felt by all hospitals, such as through the increased cost of labor and supply chain increases.
The RAND study makes a very broad claim from a cherry-picked data set that looks at claims for just 2.2% of overall hospital spending and inappropriately uses Medicare reimbursement rates as a benchmark. It fails to acknowledge that hospitals are the only healthcare entities in our communities and modern society that are open 24/7/365 to everyone, regardless of their ability to pay. This remains a commitment of ours well into the future.
Hospitals not only have to consider the actual and projected cost of care but plan capital improvements that will be necessary in terms of new technologies or facility renovations. For example, the cost of the workforce is built into negotiations with insurers. The reason we see price increases is that underlying costs for hospitals are on the rise. When contrasting the price of hospital care with the price of many goods and services in this inflationary economy, we do not look out of line. Looking at 2020, the unbudgeted expenses for hospitals exploded due to personal protective equipment and staffing expenses that totally changed the cost of hospital operations. Remember, hospitals are extraordinarily labor dependent, and hospitals must meet workforce sustainability challenges to maintain appropriate staff throughout their facilities and ensure the quality of care is never impacted.
Recent analysis from Kaufman Hall clearly indicates profiteering is not occurring by hospitals. Hospitals have been losing money during the pandemic and, while federal relief funds have made a significant impact, many have still lost money because of the exorbitant staffing and supply expenses they have been forced to absorb. Median operating margins for hospitals fell from 5.6% to -1.4% between December 2021 and March 2022, which includes funding from the Coronavirus Aid, Relief, and Economic Security Act. Hospital labor expenses have increased by more than one-third from pre-pandemic levels while contract labor as a percentage of total labor expenses increased more than five times the rate from pre-pandemic levels. In addition, drug costs have seen the largest increase in expenses for hospitals, up 24% compared to before the pandemic.
We empathize with our patients: no one wants to pay more money for healthcare than is necessary. This is true whether it’s healthcare or gas or milk. Hospitals’ shared goal is providing access to high-quality care in this challenging environment in a cost-effective way. It is a costly enterprise to ensure everyone in the community has high-quality healthcare every minute of every day, but hospitals do their best to keep costs as low as possible for every patient, every time.
The MHA responded to several media requests the week of May 16 on topics including the RAND 4.0 Hospital Price Transparency Study, hospital workforce challenges and the shortage of contrast media from GE Healthcare.
MiBiz and Crain’s Detroit Business published stories on the latest RAND report that includes multiple quotes from MHA CEO Brian Peters discussing the flaws associated with the study, including the use of Medicare as a reimbursement benchmark and the limited data set. The MiBiz story also cites recent findings from the American Hospital Association and Kaufman Hall on significantly increasing hospital expenses.
“So it’s not a comprehensive set. It’s looking very specifically at Medicare reimbursement rates, which we know in Michigan and other states as well does not cover the true cost of care,” said Peters to MiBiz. “Hospitals do everything they possibly can just to break even, at best, and still lose money on Medicare.”
Michigan Radio aired a feature on May 16 following an interview with Peters on workforce challenges impacting hospitals.
“We are losing employees to McDonald’s for a job that pays better and is less stressful,” said Peters. “And we are incredibly limited in our ability to compete with rising wages in other industries.”
Crain’s Detroit Business published an additional article May 18 on the topic that cited the Michigan Radio story and quotes Peters. Laura Appel, executive vice president of government relations and public policy, MHA, also spoke with WZZM-TV Channel 13 for a story on workforce challenges that aired May 19.
The Detroit Free Press and Fox 2 Detroit also reached out earlier in the week on the reported shortage of contrast media from GE Healthcare. A general statement was provided to reflect the varying impacts from the shortage on hospitals throughout the state.
The MHA responded to several media requests the week of Oct. 25 that focused on hospital price transparency and the on-going staffing crisis.
The Detroit News published Oct. 24 a story on the staffing shortage impacting EMS workers and touched on the staffing crisis impacting hospitals. MHA CEO Brian Peters is quoted in the story discussing the lack of availability of transport for patients to lower levels of care, resulting in increased cost and strain to the healthcare system.
“They are in crisis mode,” said Peters. “These are not only front-line clinical staff who are in short supply, but also non-clinical staff. … We are struggling on both counts.”
“In addition, there is ambiguity within the final rule that has left hospitals to interpret the level and detail of pricing information that should be provided to consumers,” said the statement published by Crain’s. “Hospitals and health systems are working diligently to comply with federal policies in their release of information.”
Members with questions on COVID-19 efforts and resources should contact Ruthanne Sudderth, and any questions regarding media requests should be directed to John Karasinski at the MHA.