As the Trump administration backs a repeal of the individual mandate, a new study offers a 'conservative estimate' on threats to coverage in the individual market.
More than 52 million Americans under age 65 have a pre-existing medical condition that would likely leave them uninsured in the individual market under state regulations that existed before the Affordable Care Act was enacted.
That's according to a new Kaiser Family Foundation issues brief, which notes that many in this potentially vulnerable group of adults, representing 27% of the total population, now get their coverage through their employers or government programs, and do not have to face medical underwriting on the individual market.
However, KFF says the findings provide a perspective on how many people would be at risk under pre-ACA standards if they were to lose their coverage.
"This is a conservative estimate as these surveys do not include sufficient detail on several conditions that would have been declinable before the ACA (such as HIV/AIDS, or hepatitis C)," the brief said.
"Additionally, millions more have other conditions that could be either declinable by some insurers based on their pre-ACA underwriting guidelines or grounds for higher premiums, exclusions, or limitations under pre-ACA underwriting practices," the brief said.
The study comes amid ongoing efforts by the Trump administration and Congressional Republicans to repeal or hobble the ACA, and give states the opportunity to re-impose coverage denials for pre-existing conditions.
Most recently, the Trump administration's efforts to kneecap the ACA includes efforts to have the individual mandate declared unconstitutional by the U.S. Supreme Court. Critics contend that removing the mandate would destabilize the individual insurance markets and lead to their collapse.
Among the findings:
Nearly 30 million non-elderly women and 22.8 million non-elderly men have declinable preexisting conditions. Pregnancy accounts for some of the difference.
The rates of declinable pre-existing conditions vary from state to state, from 41% in Kingsport, Tennessee to 20% in Logan, Utah and Rochester, Minnesota.
Rates are higher in other states, particularly in the South, where in Tennessee (32%), Arkansas (32%), Alabama (33%), Kentucky (33%), Mississippi (34%), and West Virginia (36%), at least one-third of the non-elderly population would have declinable conditions.
The prevalence of pre-existing conditions can vary by 10% or more between cities in the same state. For example, in Kansas 32% of Topeka’s population has a pre-existing condition, as compared to 21% of Manhattan’s population.
Prosecutors allege that an East Texas health system and its affiliated ambulance company tapped a slush fund to pay kickbacks that secured ambulance contracts.
Seven ambulance industry defendants will pay the government more than $21 million to settle whistleblower allegations of kickbacks and bribes paid to local government authorities in three states to secure ambulance contracts, the Department of Justice said.
Federal prosecutors said that Tyler-based East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc., and affiliated ambulance company, Paramedics Plus, LLC allegedly created a "slush fund" controlled by ETMC and Paramedics Plus that funneled the kickbacks to municipal emergency services providers in California, Florida and Oklahoma.
The government authorities identified by prosecutors include: Emergency Medical Services Authority, Alameda County, California; Pinellas County Emergency Medical Services Authority in Florida; and Oklahoma's Emergency Medical Services Authority.
Federal prosecutors said the kickbacks and bribes included cash payments, political contributions, marketing expenses, direct payments to the Oklahoma EMSA's contractors, and a direct payment of $50,000 to former EMSA President Herbert Stephen Williamson, which prosecutors said was for his "personal benefit."
The bulk of the settlement, $20.6 million, will be paid by ETMC and Paramedics Plus. Alameda County's Emergency Medical Services Authority will pay $300,000.
Williamson will pay the federal government and Oklahoma $80,000, which prosecutors said was based on what he could afford.
"Paramedics Plus paid millions of dollars in illegal inducements over the course of a number of years," said U.S. Attorney Joseph D. Brown for the Eastern District of Texas.
"Williamson allegedly received gifts and also directed Paramedics Plus to make political contributions to Oklahoma politicians, which EMSA could not do on its own," Brown said.
"Sophisticated healthcare companies do not simply give away millions of dollars to referral sources without expecting something in exchange. Quid pro quo arrangements for the referral of health care business are illegal," he said.
The whistleblower suit was originally filed in 2014 by Stephen Dean, who was the chief operating officer at Paramedics Plus and oversaw the EMSA contract. Dean will collect $4.9 million as his share of the settlement.
East Texas Medical Center Regional Healthcare System was purchasedin May by Ardent Health Services and The University of Texas Health Science Center at Tyler and is now part of the 10-hospital UT Health East Texas system.
Depending upon the region, Blue Cross NC said, ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
For the first time since entering the Affordable Care Act marketplace in 2014, Blue Cross and Blue Shield of North Carolina will reduce premiums statewide in 2019 for most of its 475,000 Obamacare customers.
Depending upon the region, Blue Cross NC said ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
The North Carolina Department of Insurance approved the plans this month.
The health insurer's ACA plans in the Triangle around Raleigh, Durham and Chapel Hill will see an average premium decrease of 21% in 2019, which translates into a pre-subsidy average of $140 a month under a new provider agreement with UNC Health Alliance.
"Our agreement with UNC Health Alliance allows us to offer similar plans, but at a significantly lower cost," Blue Cross and Blue Shield of North Carolina CEO Patrick Conway said in amedia release. "What makes this possible is that UNC agreed to partner with us on an arrangement where we're both responsible for the quality and total cost of care."
The health insurer is ending its ACA Blue Local partnership with Duke Health and WakeMed, which now has about 50,000 customers in 12 counties. Blue Cross NC said the new plan will offer "similar benefits."
"We will work with our current Blue Local customers to find in-network providers, and make sure they are getting the care they need throughout this transition," Conway said.
Blue Cross NC said it has lost more than $450 million during the first three years of the ACA, but remains committed to offering coverage in all 100 of North Carolina's counties.
On average, premiums will fall by $1,680 a year for ACA customers in the Triangle. Premiums are expected to drop by about 16% for ACA members in the Charlotte and Gastonia areas, which with the Triangle comprise 40% of ACA members in North Carolina.
Statewide, Blue Cross NC said the rate decrease translates into a $120 million cut in healthcare costs in 2019.
'Wait and See'
Blue Cross NC representatives did not specify how they plan to cover the $120 million savings. Under state regulations they don't have to disclose cost sharing or benefits packages before the enrollment period opens this fall, says Brendan Riley, a health policy analyst with the North Carolina Justice Center.
"It's wait and see at this point, but overall it's promising to see that premiums can actually come down in some areas," Riley says. "We know they are ACA compliant plans so they are full comprehensive coverage. They meet the essentially health benefits requirements, so it's not like the Trump-endorsed alternatives such asshort-term plans."
Riley says the savings likely will come from a narrower provider network, particularly in the Triangle and Charlotte areas. "There is a risk that by narrowing the network some consumers may have a harder time finding the doctors they need, especially specialists, but we don’t know that for certain yet," he said.
Blue Cross NC said the decision to partner its ACA plans with UNC Health Alliance in the Triangle "was the result of a competitive process between the area's hospital systems. The decision was based on which system could provide customers with the lowest rates, while continuing to offer them access to the highest quality care."
Matt Ewend, MD, a neurosurgeon and president of the UNC Physicians, says the new arrangement with BlueCross NC "will be a stretch, but we're pushing ourselves to do this."
"There is a realization from our organization and Blue Cross that we can't just keep spending more and more," Ewend says. "We decided as an organization that, instead of sitting back and letting this happen around us, we wanted to get out in front of this. We think in five years from now everyone will be doing this."
"A tight partnership with Blue Cross is step one. The second thing is we have to reduce the overall cost of care by getting patients to the right site and reducing unnecessary variations in care. It's preventative care over fixing the problem."
"The third thing is we have to partner with the patients," Ewend says. "We need folks to understand that they're signing up for health insurance that is less-expensive than it was before, which is remarkable, but they have to be part of the solution to make that possible. So we have to engaged them in their own health."
Health system says the 'majority' of the layoffs affect corporate positions, and another 60 vacant positions will not be filled.
Toledo-based ProMedica says that it laid off 100 workers in leadership and corporate areas this month as part of an ongoing effort to cut costs and improve efficiency.
"The healthcare industry continues to face a series of challenges, including decreasing reimbursement rates for services and rising operational costs. To adapt, health systems around the country have had to make tough financial decisions," Karen Strauss, ProMedica's chief human resources officer, said in prepared remarks.
The "majority" of the approximately 100 affected employees serve in leadership and corporate roles, she said. In addition, 60 vacant "non-direct patient care positions" will not be filled.
The layoffs are unrelated to the $3.3 billion joint acquisition with private equity firm Welltower of bankrupt long-term care provider HCR ManorCare, Strauss said. The deal was finalizedlate last month.
Strauss said that while the joint venture is expected "to bring opportunities for growth and synergy, we still must address pre-merger ProMedica financial issues now."
It's been an eventful year for ProMedica.
The acquisition of ManorCare, the nation's second-largest long-term and post-acute care provider, essentially doubled the size of 13-hospital ProMedica overnight and gave it a footprint in 30 states. ProMedica CEO Randy Oostra said the acquisition was needed because ProMedica was situated "in a non-growth market" and had few other options to expand or diversify.
"I hate to say we are in uncharted waters here, but it seems to be a unique, first-of-its-kind partnership. A nonprofit health system, a large post-acute provider and a real estate investment trust as partners is unique," ProMedica CEO and President Randy Oostra said in an interview with HealthLeaders Media this spring.
Earlier this month, ProMedica formed a joint partnership with Sonic Healthcare USA called ProMedica Pathology Laboratories, which will provide lab tests for inpatients at health system and affiliated providers in Ohio, Michigan and parts of Indiana.
Shareholders from both companies back the deal, which remains the subject of a DOJ antitrust review.
Shareholders at Cigna Corp. and Express Scripts overwhelmingly approved the $52 billion merger agreement on Friday morning, the two companies announced.
Early results show that 90% of Cigna shareholders favored the deal, as did 78% of Express Scripts shareholders.
"By approving our proposed combination, Cigna and Express Scripts stockholders recognize and validate the highly attractive value this transaction delivers to all stakeholders," Express Scripts CEO Tim Wentworth said in a media release.
"Together, we will transform healthcare by combining two innovative healthcare services companies that will have the capabilities, financial flexibility, reach and expansion opportunities to create significant and immediate value for clients and stockholders," Wentworth said.
Cigna CEO David M. Cordani called the strong endorsement by shareholders a "recognition of the combination's significant value creation potential."
Cordani has been an unabashed cheerleader for the deal.
"Our combined company will enhance Cigna's differentiated service-based model, fueled by actionable insights and analytics, to drive innovation and meaningful growth in a highly dynamic market environment," Cordani said. "As a result, we will build more effective partnerships, further improve health outcomes and deliver a superior customer experience."
The final voting results will be filed with the Securities and Exchange Commission.
The merger is the subject of a Department of Justice antitrust review. If the deal clears those regulatory hurdles, it is expected to close by the end of this year.
Stakeholders want underserved communities to have the same cutting-edge technology, entrepreneurialism and problem-solving focus that is used by top health systems.
The 17 health systems collaborating in the newly created Medicaid Transformation Projectsay they want to close the gap between the needs of vulnerable populations and the healthcare they receive.
The collaborative, which includes 280 hospitals in 21 states, will focus on several problem areas for underserved communities, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
Rich Roth, chief strategic innovation officer at San Francisco-based Dignity Health, one of the "anchor" health systems in the collaborative, spoke with HealthLeaders about the project and what the health systems hope to accomplish. The following is a lightly edited transcript.
HLM: Why is the Medicaid Transformation Project Needed?
Roth: There needs to be an injection of the next level of innovation and entrepreneurialism for all communities, including those people who are most vulnerable. There has been a lot of innovation, but sometimes it's innovation for a certain segment of the population but not for everyone. It is incumbent upon us to drive that innovation for all communities, all individuals, regardless of their payer status.
HLM: Can you provide an example of how this transformation would work?
Roth: At Dignity Health, for example, we have strong expertise in digital transformation; using novel care models and digital methods to care for all populations. Other systems have expertise in different things. This is a chance for us to get around the table and help drive transformation based upon our shared accomplishments in unique areas and help to create things that may only work in one state or service area now, and that need fuel to help them scale nationally to accomplish the goals of benefitting all individuals.
That could be through solutions individual systems have created. It could be through an entrepreneurial company, or it could be finding needs at the table for these forward-leaning systems that say "we need a solution in this area" and co-creating something to address problems that are not effectively being addressed.
HLM: One of the project's focus areas is avoidable ER visits. How might that be addressed?
Roth: In an ideal world you want to treat patients in a manner that is close to their home, convenient to their needs and which embraces them in preventative health holistically. There are great examples of this happening throughout the healthcare delivery system, but it's not necessarily done at scale.
At Dignity Health we have been working with a connected inhaler that our teams have helped develop. That work resulted in 100% reduction in hospitalizations, and a 60% reduction in ER visits for children with challenging asthma conditions, with an average savings of $600 per patient per year.
We can scale that throughout Dignity. But if we are to truly address this problem as a nation, that means broader scale beyond what we can do. We are forward-leaning those types of methods and capabilities to scale to other areas of the country and other health systems.
We will also learn from other systems that address similar problems. It will be about understanding the challenges in the ER, and working together to cross the chasm with innovation that makes a difference, and to scale it nationally.
HLM: What metrics will you use to measure success?
Roth: We ultimately are going to measure success in the areas we focus on in their ability to reduce the cost of care, improve quality, and improve access for people who face barriers today.
For example, when you talk about ER overcrowding, interjecting more services that keep people out of the ER in a preventative way. That is a win for us, the systems, and individuals who get a more personalized experienced.
HLM: Where is CMS's role in this project?
Roth: While CMS is not an official member, per se, because that is not their role, we will absolutely work with their programs and advocate and support changes to policies and programs that allow for better support for these communities.
HLM: Andy Slavitt has been an outspoken critic of CMS and President Trump. Could his lead role in this project be seen as a shot across the bow?
Roth: Andy has sat in the CMS chair. He understands how to make change. He has created a strong bipartisan group out of the United States of Care, which includes people from both sides of the aisle. He's been a successful entrepreneur as well. He is going to be an important voice. But if you look at our assemblage of systems, they're from all over the country and they recognize this not as a political problem, but as a community health problem and a public health problem and that is the lens we all see this in.
We see this as an effort to serve patients in communities, regardless of what state you are in. The diversity of the systems in the project and where they're from speaks to that.
HLM: Your media release announcing the project struck a tone of urgency. Why?
Roth: The feeling is that healthcare is changing and we are seeing various issues that exist in our community. With the rise in certain conditions, such as opioids abuse and other public health and social issues, the only way to get in front of it is to take a leadership position and do so in partnership not only with peers but with the entrepreneurial community to create systems, models and processes that are sustainable and can impact change for populations.
Now is the time for forward leaning systems, entrepreneurs and others to partner together to create change. There is a tremendous platform out there. New technologies have been developed. We need to get them in practice, and we need to make sure they are addressing real problems in real communities in ways that helps the healthcare system become more sustainable.
Former CMS Acting Administrator Andy Slavitt will co-lead collaborative that focuses on behavioral health, women and infant care, substance abuse and avoidable ER visits.
Seventeen health systems in 21 states are collaborating to identify, develop, and scale financially sustainable digital solutions to improve healthcare for the 75 million Americans on Medicaid.
The Medicaid Transformation Project will focus on critical challenges facing vulnerable populations across the country, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
"Geisinger has joined the Medicaid Transformation Project because of AVIA’s emphasis on action. ... The gap between the needs of vulnerable populations and the healthcare they receive is too great," said David Feinberg, CEO of Geisinger, in Danville, Pennsylvania, one of five "anchor" health systems in the collaborative.
"We are no longer interested in discussing the problems our patients are facing or just piloting solutions – we’re interested in solving them as quickly as possible," Feinberg said.
The collaborative will be led by AVIA, the health system digital transformation network, and Andy Slavitt, former acting administrator at the Centers for Medicare & Medicaid Services, and founder of the venture capital firm Town Hall Ventures.
"The current healthcare system fails the people who need it most," Slavitt said. "The Medicaid Transformation Project will be part of a decade-long journey leading some of the best health systems in the country. Our work will be to deepen and refine the best innovations and then implement them at an accelerated pace at providers across the country."
Slavitt is an outspoken critic of the Trump administration and its ongoing efforts to hobble the Affordable Care Act and reform Medicare and Medicaid. It is not clear if the collaborative intends to work with Medicaid, or in spite of it, to achieve its transformational goals. No mention of collaboration with the current leadership at CMS made in a media release issued by the collaborative.
AVIA will work with a team at each health system to implement solutions that share best practices across the network, and create a roadmap for partner organizations to act quickly to create change. The work will feature a Leadership Council, chaired by Slavitt and composed of health system CEOs.
The collaborative said that Medicaid in its existing form is not sustainable, and the fallout from a destabilized program could be catastrophic. Medicaid insures one-in-five Americans, pays for 50% of births in the United States, is the biggest payer for behavioral health services, and with Medicare accounts for 33 cents of every dollar for physician services.
Combined, the 17 hospitals in the collaborative span 21 states, 280 hospitals with more than 53,000 hospitals beds, and more than $100 billion in combined annual revenues.
The collaborative said the allied health systems will be able to better meet their communities' needs by adopting shared digital solutions and innovative care models.
In addition to the five anchor health systems, the 12 other health systems in the Medicaid Transformation Project are:
A white paper from Press Ganey shows how to build the metrics for value-based care, and how to find the right incentives to help the transition.
Thomas H. Lee, MD, CMO at Press Ganey Associates, is a big fan of balanced score cards and incentive programs as critical tools that can help health systems transition from volume to value.
When balanced score cards first emerged in the 1990s, Lee says, the business sector then was much like the healthcare sector is now.
"There was lots of turmoil and mergers and new kinds of strange bedfellows were being thrown together and they needed tools to show what they were trying to accomplish as an organization," Lee says in an interview with HealthLeaders.
"That's where we are in healthcare today. We've got healthcare systems from organizations that were bitter rivals, and we've got newly named organizations that don't mean anything because they're brand new and they picked the words out of some marketing exercise."
Problems arise, however, when health systems attempt to transfer those "lofty" transitional aspirations to clinical care, Lee says. To help with the transition, Press Ganey has issued a white paper that offers suggestions on how to build a balanced scorecard that will measure the metrics that are important for organizational success, and how to find the incentives to help achieve those metrics.
Lee spoke with HealthLeaders. The following is a lightly edited transcript.
HLM: What do you hope to accomplish with this white paper?
Lee: A lot of organizations in healthcare are recognizing the need for fundamental change. It's easy to say "transformation." It's harder to actually execute on it. This is about going from that lofty goal to tactics. If you're going to change, how do you measure, and then what do you do that makes what you're measuring improve. That is what we set out to do, to go from talking about transformation to being tactical.
HLM: What is the most common mistake that hospitals might do in this transition?
Lee: It's getting overwhelmed and then searching for a single magic solution. We have to be ready to think holistically about how the various performance metrics track back to having an engaged workforce. That is an integrated way of looking at things but it is challenging and complex. Don't be overwhelmed and don't look for simple solutions. With complex problems, you break them down and make progress on them.
HLM: How do you determine the correct incentive program for your hospital?
Lee: In the long run we think that financial incentives work best for financial issues, and nonfinancial incentives are most effective for nonfinancial issues such as quality of care and safety. Some of the most respected healthcare systems in the country—Cleveland Clinic, Mayo Clinic, Kaiser Permanente, Geisinger—all four of them do not use financial incentives for quality. They use nonfinancial peer pressure for quality.
But, not everyone has a culture where nonfinancial incentives can be effective. Recognize where you are in the process of owning the culture. Many organizations need financial incentives just to get people to show up for a meeting. If that is where you are, that is where you are. But, you should recognize where you're trying to go is to create a culture where nonfinancial incentives can be more effective.
HLM: What's the problem with financial incentives?
Lee: We see many organizations around the country regretting what they've done with financial incentives. It's often goal setting that is aspirational, but not realistic, such as every physician has to be at the 90th percentile or they lose 2%, 3%, 4% of their income. Then, doing it at the individual doctor level. Those are mistakes that we see that have been made, that are still being made.
Incentives financial and nonfinancial, tend to make people upset because they're supposed to put pressure on people.
HLM: How do you build an effective balanced score card?
Lee: They should be tailored to the organization. These are supposed to be strategic management tools. They're supposed to allow an organization to track something more than their quarterly financial performance. They should also be tracking how are they doing in making progress on the things that should be their competitive differentiators in the long run.
Strategy is based upon what are doing for whom and how are you going to be different? If you are going to be different because your teamwork is superb or you're reliably empathic for patients, then you ought to be tracking those things. You have to ask what is most important for your strategy execution, and those should be the things in your balanced scorecard. They shouldn’t just be the things that are easy to measure.
HLM: What should you keep in mind when you're building this balanced scorecard?
Lee: Organizations and individuals need a goal hierarchy. They need to have clarity on what they are trying to accomplish at the very top. If you don't have an idea of what the goal is, then it's really hard to talk about you're making progress toward your goal.
The successful healthcare organizations that we see put patients first. They are un-ambivalent about it. Meeting the patients' needs is the No. 1 goal. What will help organizations be better and differentiate themselves competitively in their ability to meet patients' needs? That is what the organizations that we see doing the best in healthcare right now do.
The caregiver falsely claimed to provide services for a Medicaid patient who'd been dead for at least six months, his body hidden in a storage unit.
A Missouri nurses faces 10 years in prison after admitting that she falsely claimed to provide Medicaid services to a developmentally disabled man who was found dead and encased in concrete.
Melissa Denise DeLap, 49, a community registered nurse in Columbia, waived her right to a grand jury and pleaded guilty in federal court this week to one count of healthcare fraud, prosecutors said.
DeLap was paid $38 a visit to provide face-to-face evaluations and medical services to Carl DeBrodie, a Medicaid beneficiary in a supported living program operated by Second Chance Homes in Fulton.
Prosecutors said DeBrodie is believed to have died in early September 2016 while under the care of Second Chance Homes, but his disappearance was not reported until April 17, 2017, and his body was found encased in concrete in a storage unit on April 24, 2017.
In that six-months span, DeLap falsified DeBrodie's monthly health summaries for every month in that period, falsely claiming that she had performed a face-to-face assessment of DeBrodie and provided the other services she was required to do as a CRN.
Along with the potential prison time, DeLap must pay $106,795 to Medicaid, surrender her nursing license within six months, and never become licensed again to practice as a nurse in the United States and its territories.
The author of a study examining executive compensation in non-profit healthcare says it's time to ask if a 'self-perpetuating bureaucracy' is worth the money.
The eye-catching lead in a recent study found that CEOs at 22 major nonprofit health systems across the nation saw their compensation nearly double from 2005 to 2015.
The findings show that there exists a widening gap between compensation paid to nonclinical executives and that paid to physicians and nurses, with clinicians on the lagging end.
But lead author Randall E. Marcus, MD, of University Hospitals Cleveland Medical Center/Case Western Reserve University, says this wage gap "is more the symptom than the disease."
"The disease is the cost of all these nonclinical people," Marcus says. "There is no one looking at this closely."
Marcus spoke with HealthLeaders about the study. The following is a lightly edited transcript.
HLM: Why did you do this study?
Marcus: Having been in healthcare for more than 40 years I've seen this growing bureaucracy. There seem to be more administrators running around than people taking care of patients. We were trying to find the data to see if that was true, and we found that by 2015 we had this bloated, self-perpetuating, expensive healthcare bureaucracy.
For every physician on the front lines we are seeing 14 non-physician clinicians; nurses, physical therapists, etc. What was shocking was there was one manager for every physician and 10 nonclinical people. From 2005 to 2015 this bureaucracy has grown substantially. It is contributing way too much to the cost. That's the real takeaway.
HLM: Were you surprised by your findings?
Marcus: Our numbers are probably on the conservative end. When you get the 990s, they hide incentive compensation into one gigantic number for the whole medical center. There are situations where the base salary is less than half of what the overall comp is.
HLM: What is driving this administrative bloat?
Marcus: Certainly, you need administrators to run medical centers. But when you look at 2005-2015, there were a lot of mergers and acquisitions. You would think that would decrease the numbers of nonclinical people. Our data shows it went the other way.
It's like any other bureaucracy. It tends to be self-perpetuating. I make you the vice president of whatever. You quickly hire an administrative assistant and two deputy assistants and they each have an administrative assistant. That is what's going on.
HLM: Sounds like higher education. Do you see any parallels?
Marcus: When you have entities that don't have to make a profit, where the bureaucracy is not tied to stock prices and profitability, whether it's education or healthcare, it's hard to control.
HLM: Are you suggesting that clinicians are underpaid?
Marcus: No. We are not suggesting that. We just needed a comparison. So we looked at physicians paid at the higher end, orthopedic surgeons, and physicians paid at the lower end, pediatricians, and we looked at nursing staff.
HLM: Your study challenges the ROI for this administrative bloat. Please elaborate.
Marcus: We thought it was important to look at the overall utilization of healthcare in our country. That has been pretty stagnant over the 10 years of our study. So, when you see compensation and costs of nonclinical workers has in some cases doubled over 10 years when the utilization of healthcare in our country hasn’t changed, that is where we start to question the value.
HLM: Does this wage gap affect morale in hospitals?
Marcus: Where it really comes into play is when they say 'we've got to make budget' and then they look for cuts on the lower, assembly line end. People can look at the hospital's 990 and see the C-suite salaries have continued to increase at very high rates.
It's not just the morale of the employees. The increase in healthcare costs in this country has exceeded 17% of our gross domestic product. So, it should maybe hurt the morale of all of us who are patients and taxpayers.
HLM: How would you fix this?
Marcus: The cost of healthcare is so expensive, and at some point it's something we all need. It is important for us to look at every person, particularly the non-clinicians, that are a tax on the healthcare system and analyze how important they are. Does everyone need three deputy administrators?
You have to pressure nonprofit healthcare into looking at what's going on in every department and with every employee to see if the value is there.
HLM: What would be the best use for your findings?
Marcus: I would hope this study calls attention to a lot of the costs within healthcare. It's important for nonprofit boards, who are often volunteers, to get more involved in the finances of healthcare. These boards are fiduciarily responsible for huge expenditures and costs. So, if our study makes people who serve on these not-for-profit boards more aware of what is going on, then we will have done a service.
