Blair Childs is senior vice president, public affairs, for the Charlotte-based Premier Inc., a healthcare alliance that serves the strategic needs of over 2,000 hospitals. Based in Premier’s Washington, D.C. office, Childs helps lead Premier’s advocacy efforts on Capitol Hill, while also gathering intelligence to share with member hospital executives. He has been following every element of the current healthcare reform legislative process very closely, including reimbursement reform proposals that could have very major implications for hospitals’ revenues and for the hospital and health system CIOs who will have to help facilitate a new era of outcomes reporting in healthcare. Childs spoke this week with Senior Contributing Editor Mark Hagland about where things stand.
HAGLAND: Where are things overall right now with healthcare reform?
CHILDS: The main thing that’s happened is that the process has been slowed down from when we had talked earlier in the summer, but the dynamics remain the same, with the question of how you achieve broader coverage without enlarging the deficit driving all the policy and political issues. There are two questions involved: first, how do you expand health insurance coverage in a way that will work for people who don’t have it now, but also in a way that doesn’t become unaffordable? There are all sorts of aspects to that. And the other element is, how do you do this without increasing the budget deficit?
HAGLAND: Some hospital associations are concerned that some of what they had discussed with the White House might be at risk?
CHILDS: Yes. The deal worked out between the Obama administration and the hospital community was that we would achieve 90 percent coverage under healthcare reform, and to get to that, hospitals were prepared to contribute $155 billion over ten years, and that was extraordinary. It’s a calculation made by hospitals, and I think the American Hospital Association did an impressive job in looking at this carefully and thoroughly; they said, if you expand coverage, you’ll have less uncompensated care, and because you’ll have less of that, that will cover a lot of the cost that hospitals are currently having to swallow in terms of uncompensated or poorly compensated care. The monies would come from reduced Medicare DSH (disproportionate share) and other payments, some related to productivity issues.
HAGLAND: How do you see the timeframe for the progress of healthcare reform legislation at this point?
CHILDS: I still believe it’s going to happen by the end of this year; it certainly won’t be delayed beyond the first quarter of next year.
HAGLAND: Let’s talk about some of the reimbursement reform proposals included in the major House and Senate plans.
CHILDS: Yes, there are several important areas. The Senate Finance Committee’s bill includes a value-based purchasing provision. What’s more, the so-called “Blue Dog” [conservative and moderate] Democrats in the House of Representatives, in their negotiations this summer with the House Democratic leadership, were able to exact some concessions from the leadership before allowing a bill to get out of the House Energy and Commerce Committee. And one of the concessions was value-based purchasing. In the end, I believe that value-based purchasing under Medicare will be in the final legislation coming out of Congress, because there’s broad support for the idea.
The House’s legislation is very aggressive — it penalizes the hospitals in the top quartile nationwide with regard to preventable readmissions; it starts at 1 percent and ratchets it up to 5 percent of their payments, for preventable readmissions, and that process starts in 2012. And the issue of what is preventable is extraordinarily difficult to identify. In fact, the biggest determinant of readmission is socioeconomic status. This is a community problem, and we think there is so much that hospitals can’t control.
HAGLAND: So Premier doesn’t support that element?
CHILDS: We think the best way to handle readmissions is to include that element in value-based purchasing, so that it isn’t isolating 25 percent of the hospital population. And we think the approach in terms of value-based purchasing would be a positive way to handle it and would help hospitals to continually improve. Because that’s the challenge, how do you continually improve? Because it takes a significant investment, and hospitals aren’t paid for that investment right now.
HAGLAND: And in the Senate version of this?
CHILDS: Yes, in the Senate bill, there’s again this penalty for the top 25 percent of hospitals with hospital-acquired conditions, including infections and other things. It would penalize them by 1 percent.
HAGLAND: How would this be levied? By episode of care?
CHILDS: No, it would be determined based on a regular (perhaps annual) review of their outcomes.
HAGLAND: Clearly, CIOs’ ability to help their organizations very regularly analyze their clinical outcomes data will be critical in this regard going forward, right?
HAGLAND: What other reimbursement reforms are being proposed?
CHILDS: There are a few other major types as well. Value-based purchasing overall is being proposed, as I had mentioned. And another proposal is for bundling payments for hospitals, physicians, and post-acute care providers. In caring for patients with particular conditions, a group involving a hospital or hospitals, and physicians, and post-acute care providers would receive bundled payments for the care of those patients. This is actually different from another proposal, for accountable care organizations (ACOs), which involves caring for a defined population across an entire community. The concepts are similar but different. In both cases, you’ll have pilot projects initiated under the legislation.