Medicolegal Issues

A Pivotal Year for Policy


Change is in the air. With a new ad-ministration promising to be a change agent, an overhauled Congress, and a seemingly unanimous national interest in tackling healthcare reform, what changes can hospital medicine expect in 2009?

“I think there’s certainly the political will and interest now,” says Eric Siegal, MD, chair of SHM’s Public Policy Committee. “We haven’t had enough political will to ‘go big’ until recently. Now that we have it, the trillion-dollar question is where the money will come from.”

With that in mind, let’s explore three of the hottest healthcare issues:

Comprehensive Healthcare Reform

Providing healthcare coverage to all or most Americans was a centerpiece of President Obama’s campaign and a significant part of a proposal published by Senate Finance Committee Chairman Max Baucus (D-Mont.). Any actual reform will come through legislation, which will have to spell out who is covered and how, and where the money will come from. Any legislation will have to pass both the House and the Senate before Obama can sign it into law.

“The Democrats have certainly said [healthcare reform] is going to happen. Obama has talked about it … but how bipartisan will the effort be?” Dr. Siegal says. “This is too big and important for unilateral action; any durable healthcare reform must have bipartisan support. I do think that everyone can agree that the healthcare system is going to bankrupt itself if we don’t make changes.”

Dr. Siegal is skeptical that a major reform bill of any stripe will be passed anytime soon. “Given the depth of the recession and the projected cost of the stimulus package, my guess is that we will not see significant healthcare reform legislation passed in 2009,” he predicts. “However, I think that 2009 is still going to be an important year in that Congress will lay much of the foundation for new legislation. My guess is that 2010 is the year to look for major healthcare reform. And we want to make sure that the reform that happens is in the best interests of healthcare and of hospitalists.”

Less encompassing aspects of healthcare reform, the “easy stuff,” should have enough votes to pass in 2009, Dr. Siegal says. A good example is the State Children’s Health Insurance Program (SCHIP), which was passed the first week of February and increases the number of children eligible for free medical coverage from 7 million to 11 million. “SCHIP was as close to a slam dunk as possible.”

Major overhauls to the system, such as the healthcare exchange outlined in Sen. Baucus’ proposal or a major reworking of Medicare, may come about further down the road. “Those are going to take a lot of time, energy, and money,” Dr. Siegal says, “and I think that Congress has bigger fish to fry right now.”

Policy Points

HHS Targets Hospital-Acquired Infections

The U.S. Department of Health and Human Services (HHS) has released a new infection-control action plan that includes targeted goals for specific hospital-acquired infections (HAIs) within five years. The plan outlines how HHS will use measurement systems and data collected through its various agencies to track and reduce six HAIs: central-line-associated bloodstream; Clostridium difficile; catheter-associated urinary tract; methicillin-resistant Staphylococcus aureus (MRSA); surgical site; and ventilator-associated pneumonia. For more information on the plan, visit

Bundled Payment Demonstration

In January, CMS announced the five hospitals chosen to participate in its Acute Care Episode (ACE) demonstration. The new hospital-based trial will test the use of bundled payments for both hospital and physician services for a specific set of inpatient episodes of care. The dual goal is to use bundled payment to more closely align the incentives for hospitals and physicians—a concept seemingly tailor-made for hospitalists. The goal is to see if this model will lead to better quality and efficiency in the care delivered.

The demonstration sites are Baptist Health System in San Antonio; Oklahoma Heart Hospital in Oklahoma City; Exempla Saint Joseph Hospital in Denver; Hillcrest Medical Center in Tulsa, Okla.; and Lovelace Health System in Albuquerque, N.M.

For more information on the ACE demonstration, visit www.cms.hhs. gov/DemoProjects EvalRpts/MD/ itemdetail.asp?filterType=none &filterBy DID=99&sortByDID= 3&sort Order=descending&itemID=CMS1204388&intNumPerPage=10.

Physician Fee Schedule

Last summer, physician fees paid by Medicare were slashed by 10.6% and then restored—with a 1.1% increase—when Congress overrode a presidential veto. SHM members were among the many physicians who fought the fee cut with letters and e-mails to Congress. However, the current fee schedule is short-lived: A 20% fee cut is scheduled for 2010. Will hospitalists and others have to go through the same battle all over again to maintain their Medicare payments?

Bradley Flansbaum, DO, MPH, chief of the hospitalist section at Lenox Hill Hospital in New York City and a member of SHM’s Public Policy Committee, points out “there are some proposals to modify the SGR [sustainable growth rate] formula, so this may not be the hot issue it was in 2008.” The SGR is used to set reimbursement rates for specific services and have been targeted by numerous stakeholders as flawed.

Regardless of the reimbursement formula, the Centers for Medicare and Medicaid Services (CMS) physician fee schedule might become less crucial to hospitalists’ income. “In the context of healthcare reform, you have to wonder if fee-for-service is even going to be relevant,” Dr. Flansbaum explains. “I think that Congress and MedPAC will think things through and admit that we can’t keep Band-Aiding a broken system.”

A major system overhaul might be looming. “This may not happen this year,” he says, “but I think that if Congress needs to avert the pay cut, then they will say they’re doing this one more time, with the caveat that payment will be drastically different” in the near future.

Delivery System Reform

A third hot topic for 2009 is legislation and consideration of changes in the healthcare delivery system, including payment reform, healthcare information technology, and improving care coordination.

“We think that payment reform is central to reshaping the healthcare system,” Dr. Siegal says.

As for moving toward a fee-for-quality system: “Well, there’s politics and there’s policy,” Dr. Flansbaum says. “Politics says we need to reward quality. However, the policy is that the methods of measuring quality haven’t evolved to the point where we can go forward. Everything is in beta-testing right now; we’re not ready to make any sweeping decisions. The delivery system has to be well-thought-out. It’s complicated.”

For example, in 2008, the CMS published a proposed inpatient prospective payment system rule, which included additional categories of hospital-acquired conditions that would no longer carry higher Medicare payments. The list caused industry alarm because some of the conditions—including Clostridium difficile-associated disease (see “Clostridium Difficile Infection: Are We Doing Enough,” p. 12)—were seen as only partially preventable in hospitalized patients or not entirely hospital-acquired.

The lesson learned? Any reform to healthcare delivery must be carefully considered, along with input from the medical community. “Healthcare is 16% of the gross domestic product. You don’t take that and spin it around in one day,” Dr. Flansbaum says. “It’s best to approach reform slowly and really think it through.”

Even so, there is no guarantee that reform legislation will make it through Congress.

“Another aspect to consider is that there are ideological differences between Democrats and Republicans,” Dr. Flansbaum adds. “ … Many Republicans are miles away from [Democrats] ideologically. Further still, with Daschle’s exit, it is unclear how his replacement will approach any overhaul.”

Of course, nobody has a crystal ball. This year may bring forth less drastic changes than hospital medicine is predicting. Then again, considering the economic and political climate, reform could take place faster than seems possible.

Only time will tell. TH

Jane Jerrard is a medical writer based in Chicago.

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