SEQUESTRATION: It’s here. What impact will it have?

Sequestration, which went into effect Mar. 1, 2013, is expected to cut the federal deficit by $1.2 trillion over the next 10 years.  These automatic cuts impact federal funding of both military and domestic spending.  According to The New York Times, the cuts are widespread, but might not be immediately apparent to the average Joe.  For instance, despite cautions that air travelers might want to factor in extra time at the airport, security lines have not immediately gotten longer due to furloughed TSA officials. 

What about the impact on hospitals?   Here’s an analysis from one state.  The North Carolina Hospital Association has calculated the expected impact of the cuts in Medicare reimbursement, which will decrease by 2 percent beginning April 1.  The decrease in Medicare reimbursement is expected to total $1.3 billion over 10 years.  However, there are other budget cuts that hospitals in North Carolina will face — nearly $8 billion over the next decade.

Sources:  CNN explains: sequestration.  CNN, Feb. 19, 2013.  Click here for full text: http://www.cnn.com/2013/02/06/politics/cnn-explains-sequestration 

Sequestration: when will you feel the pain?  Fox News, Mar. 1, 2013.  Click here for full text:  http://www.foxnews.com/politics/2013/03/01/sequestration-when-will-feel-pain/print 

Shear, M.D.  Across-the-board cuts take effect, but their impact is not immediately felt.  The New York Times, Mar. 2, 2003.  Click here for full text: http://www.nytimes.com/2013/03/03/us/politics/Spending-Cuts-Imposed-US-Starts-to-Trim-Its-Budget.html?_r=0&pagewanted=print

Thomas, J.  Sequestration cuts could cost NC hospitals $1.3B.  Charlotte Business Journal, Mar. 1, 2013.  Click here for full text: http://www.bizjournals.com/charlotte/news/2013/03/01/sequestration-cuts-expected-to-cost-nc.html?s=print  Posted by AHA Resource Center, (312) 422-2003, rc@aha.org

VALUE-BASED PURCHASING: Cost of quality

Under the new Medicare value-based purchasing program, reimbursement will be determined in part by a hospital’s total performance score (TPS).  The TPS is composed of process of care measures and patient experience measures.  In this study, a total performance score was calculated for over 3100 hospitals and compared to routine service costs.  Hospitals with higher total performance scores tended to have higher routine service costs.  Additionally, hospitals that are part of a health system were found to have higher TPS scores.

Source: Shoemaker, W.  The cost of quality: how VBP scores correlate with hospital costs.  HFM. Healthcare Financial Management;66(10):51-56, Oct. 2012.  Click here for publisher’s website: http://www.hfma.org/oct2012bev1/ Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Hospital-acquired infections: Can UTIs really be eliminated?

Urinary tract infections are the leading cause of hospital-acquired infection, occurring in 3.5 percent of post-op cases.  The Centers for Medicare and Medicaid Services have included catheter-associated UTIs on the nonpayment list of reasonably preventable events.  In this study based on the American College of Surgeons’ National Surgical Quality Improvement Program Participant User File, a large number of colorectal surgery patients and vascular surgery patients were compared to see whether there is a difference in UTI rate based on the nature of the surgical procedure and other patient-related factors.  The colorectal procedures were associated with a higher risk of UTI.  The authors, who are with the Cleveland Clinic, conclude that the goal of cutting the catheter-related UTI rate to zero may not be possible because “a certain rate of UTI is always present.”  They suggest a risk-adjustment approach for hospitals as a more realistic way to help move toward reducing the national UTI rate without unduly penalizing hospitals caring for certain types of patients.

Source: Attaluri, V., and others.  Risk factors for urinary tract infections in colorectal compared with vascular surgery: a need to review current present-on-admission policy?  Journal of the American College of Surgeons;212(3):356-361, Mar. 2011.

Growth in ambulatory surgery centers slows in ’09

MORE CURRENT DATA HERE:  http://www.medpac.gov/chapters/Mar13_Ch05.pdf

Number of ambulatory surgery centers:  In 2009, there were a total of 5,260 Medicare-certified ambulatory surgery centers in the U.S., up from 4,106 five years earlier, according to data from the Centers for Medicare and Medicaid Services (CMS).  However, the year-to-year net growth rate in the total number of ASCs has been steadily slowing, from nearly 8 percent in 2004 to about 2 percent in 2009.  Partial data for 2010 (through the first three quarters) show a count of 5,291 ASCs, and a growth rate slowed even further —  to 0.6 percent – which is attributed to the recession and to changes in ASC reimbursement that were introduced in 2008.  Number of operating rooms in ASCs: The source reports that there are an average of 2.6 ORs per ambulatory surgery center which, according to my calculations, would be nearly 13,700 ORs in ASCs in 2009.  Other characteristics of ASCs: Over 85 percent of Medicare-certified ASCs are in urban areas and virtually all (96 percent) are for-profit.  Some states have a higher concentration of ASCs than others — the top states include Arizona, Washington, Idaho, and Maryland.  Migration of procedures from hospitals:  This report contains an interesting analysis of the utilization of procedures in the (mostly freestanding) ASCs compared to hospital outpatient departments, noting a higher overall five-year growth rate for the ASCs in services provided and number of Medicare patients served.

Source:  Ambulatory surgical centers, in: Report to the Congress: Medicare Payment Policy.  Washington, DC: MedPAC, Mar. 2011, Chapt. 5, pp 101-116.  http://www.medpac.gov/documents/Mar11_EntireReport.pdf  UPDATED HERE: http://www.medpac.gov/chapters/Mar13_Ch05.pdf  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org