2012 January

Archive for January 2012

Hospital executives wonder how they can afford HIEs

By Ken Terry

Nearly 70 percent of hospitals are building or planning to build the infrastructure for a health information exchange, according to a survey of 200 hospital executives by Beacon Partners, a health IT consulting firm. However, many respondents were concerned about the high startup costs of HIEs and the lack of capital to invest in them.

Annual budgets for HIEs are low: 38 percent of respondents said their facilities had budgeted less than $1 million, and 21 percent had no budget. But it was unclear from the survey whether this was due to insufficient funds or whether HIEs were a low priority for hospitals.

The business case for HIEs remains uncertain, despite the Meaningful Use requirement that hospitals show they are capable of exchanging clinical information with other providers. Nevertheless, two-thirds of respondents saw an HIE as a “positive move” for their organization, and 42 percent said it would improve patient outcomes.

Among the top expectations for HIEs are improved primary care connectivity, improved transitions of care, and better clinical quality reporting. The most important reason for having an HIE, respondents said, is patient safety and fewer medical errors. Other key goals included increased availability of patient data across care settings, increased communication among practices, and a reduction in the number of redundant tests.

The survey showed some ambivalence about what form an HIE should take. For example, while 31 percent of the respondents said that they were interested in a “community hospital/health network,” which sounds like a private HIE, nearly as many said that state or local government initiatives had caught their attention, meaning they wanted to be part of a public exchange.

Similarly, “clinical summary exchange for care coordination” was the second most cited operational reason for forming an HIE, just behind “connectivity to EHR/clinical documentation.” While an HIE could enable the exchange of clinical summaries between inpatient and outpatient EHRs within an enterprise, it could also allow hospitals to trade data with non-affiliated practices and other entities.

Among the survey’s other findings: - 64 percent of respondents said CIOs should be in charge of HIEs. - About half of respondents have not created a department, oversight group or executive role to handle their HIE initiative. - The majority of respondents favored a single-vendor solution over a best-of-breed approach for inpatient systems (73 percent), ambulatory departments (68 percent), and physician practices (53 percent).

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Beacon Partners Study Finds Most Healthcare Organizations Recognize Benefits of HIEs But Have Limited Resources Toward Development

The following two articles on recent studies highlights the difficult road that hospitals have in meeting the requirements laid out in the PPACA. Meaningful use, accountable care, and the like all sound like great ideas, but without the necessary budgetary guidelines hospitals are put in a difficult, almost untenable, situation lacking a clear path to follow. They are currently having difficulty maintaining current services and staff due to cuts in Medicare and Medicaid, and yet the government is increasing the cost of doing business through the PPACA requirements. It is clear a more defined solution is necessary with more efficient ease-of-use technologies and assisting a patient service orientation.

Beacon Partners Study Finds Most Healthcare Organizations Recognize Benefits of HIEs But Have Limited Resources Toward Development

January 19, 2012

By Steve Campbell

EMR Daily News

According to the Health Information Exchange Study: Assessing the Interest and Value in HIE Participation, conducted by healthcare management consulting firm Beacon Partners, many healthcare executive respondents recognize the benefits of participating in an HIE, but lack an HIE budget. Nearly 70% of respondents are currently planning for an HIE, despite their perceptions of high start-up costs and other governance issues.

More than 200 healthcare C-suite executives responded to this study, with more than half of the respondents being CIOs. Also, most respondents (58%) were from community hospitals, the largest segment of the hospital industry, according to the American Hospital Association.

“HIEs are top of mind for many healthcare organizations, and this study demonstrates their concerns and overall opinions,” says Kevin Burchill, director at Beacon Partners. “We’ve seen and heard first hand that healthcare executives know the importance and benefits of an HIE, but this study confirms their concerns over the lack of a budget — mostly due to high start-up costs and insufficient capital.”

In fact, 41% of respondents consider high start-up costs and insufficient capital to support HIEs as their top concerns.

Other significant findings include: - 64% of respondents named the CIO as the person responsible for HIE development, while governance considerations for HIEs and potential connecting “partners” are the responsibility of others in the C-suite leadership group. - Approximately half of respondents have not yet created a department, oversight group or executive role to handle the HIE initiative. - 38% of respondents have annual budgets for HIE development of less than $1 million, while 21% have NO budget. - 66% of respondents see HIEs as a positive move for their organization and 42% also believe HIEs will improve patient outcomes (and not one respondent felt it would have a negative effect on patient outcomes). - Other HIE components that respondents felt would have a positive impact on their organization: Primary care connectivity (88%), Continuum-of-care (84%), Clinical quality reporting (74%), Patient accessibility (67%), Interoperable IT systems (66%) and Medical staff alignment efforts (59%).

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State Medicaid cuts cause more problems than savings

Athough the cuts we are seeing nationwide in Medicaid, whether that is a state like Illinois six to nine months late on payments or Arizona administering across-the-board reductions in funding, this article demonstrates the potential unintended consequences of decreasing Medicaid funds. It also shows that hospitals will have to do everything in their power to ensure their patients have adequate support in applying for Medicaid, Disability, and other programs. Without expert assistance, the likelihood that the patients application will not be approved is significant.

State Medicaid cuts cause more problems than savings By Alicia Caramenico

Fierce Health Payer

Although Idaho slashed Medicaid funding by $35 million, the cutbacks haven’t saved the state money, the Idaho Press-Tribune reported.

Instead of savings, the Medicaid cuts eliminated 4,000 jobs, strained law enforcement and jeopardized residents, according to a panel that included Idaho’s former chief economic analyst, the Boise police Sargent and advocates for the disabled and Medicaid beneficiaries.

The panel cited Medicaid recipients without mental healthcare services commonly landing up with law enforcement officials, as well as an uptick in suicide calls, noted the Press-Tribune.

Even though the state’s predicted revenue growth could restore much of the lost Medicaid funding, legislators don’t intend to do so, the panel noted.

Despite the panel’s claim of absent savings, state Medicaid officials said they haven’t seen increased hospitalizations of mentally ill residents following the program cuts, according to a Tuesday budget hearing, reported The Associated Press.

Needing more time to fully identify the effects of the cuts, state Medicaid Administrator Paul Leary said the Medicaid reform bill, which authorized the $35 million reduction, remains on course to yield its expected savings, noted the AP.

To learn more: - read the Press-Tribune article - read the AP article: http://washingtonexaminer.com/news/2012/01/after-medicaid-cut-idaho-doesnt-see-crisis-spike/2104801

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Insurers profit from health reform

By Dina Overland

Fierce Health Payer

After dropping almost $90 million to oppose the health reform law, repeatedly claiming its provisions would raise costs and disrupt coverage, health insurers actually have benefited the most from the law, according to a Bloomberg Government report released Thursday.

The average operating profit margins for the five largest insurers–Wellpoint, UnitedHealth, Aetna, Humana and Cigna–expanded to 8.24 percent in the six quarters since reform, compared to 6.88 percent for the 18 months before the reform law passed, reports Bloomberg.

“The industry that was the loudest, most persistent critic of this law, the industry whose analysts and executives predicted it would suffer immensely because of the law, has thrived,” said Peter Gosselin, study author and senior healthcare analyst for Bloomberg Government.

These prosperous times are largely a result of insurers expanding into government programs, whose share of big insurers’ revenues jumped from 36 to 42 percent in the past three years, The Washington Post reports.

The insurers stand to reap even more benefits as they position themselves to gain from Medicaid’s expansion in 2014, when it covers at least 16 million additional individuals and the federal government subsidizes private insurance policies for an additional 19 million individuals. In fact, insurers can bid on roughly $40 billion in state Medicaid contracts in the next two years, Bloomberg notes.

Private insurers increasingly reliant on government business

By N.C. Aizenman, Published: January 4

Washington Post

Despite the sluggish economy, the nation’s major health insurers have prospered in large part by expanding their role in government programs such as Medicare and Medicaid, according to a study released Thursday.

The share of large insurers’ revenues contributed by their Medicare and Medicaid business has jumped from 36 to 42 percent over the past three years. And the report by Bloomberg Government, a research division of Bloomberg LP, suggests that insurers will further increase their reliance on federal dollars with full implementation of the health-care law in 2014 — when Medicaid will expand to cover an eventual 16 million additional low-income Americans and the federal government will begin subsidizing private-insurance policies for an estimated 19 million more.

The study found that since 2009, carriers have enjoyed substantial growth to their operating margin, the share of a company’s revenue left over after accounting for operating expenses.

During last year’s first three quarters, the combined operating margin of the five largest publicly traded insurance companies averaged 8.65 percent — the best three-quarter performance of the past three years.

This occurred even as revenues from traditional private-insurance business have remained virtually flat since the end of 2008.

The five insurers combined — UnitedHealth Group, Wellpoint, Aetna, Humana and Cigna — cover 42.3 million people, or about 17 percent of Americans with health insurance. The report is mostly based on an analysis of their filings with the U.S. Securities and Exchange Commission. The study also found evidence that nonprofit Blue Cross Blue Shield plans, which cover a comparable share of the insured, likely performed similarly well.

The insurers’ government business involves taking over components of the Medicare and Medicaid programs that government policymakers are increasingly outsourcing in hopes of cutting expenditures.

Essentially, the private companies are hired to run managed-care plans as an alternative to the traditional fee-for-service plans provided by the two programs. Under the arrangement, the insurer receives a fixed amount from the state or federal authority ultimately responsible for a given Medicaid or Medicare population. In many cases, the insurer can then keep part of any savings it generates by managing the care of the covered population more cost-effectively.

The practice is attractive to states seeking to curb spending on Medicaid, which is funded with a combination of state and federal dollars. Privately run Medicare managed-care plans — called Medicare Advantage Plans — have also long been common.

The health-care law will actually reduce federal payments to Medicare Advantage Plans by $136 billion. Nonetheless, the study’s author, Peter Gosselin, posits that insurers still expect the plans to prove profitable, because the current national focus on debt reduction will give them political cover to manage beneficiaries’ care more tightly than was considered palatable in years past.

That same logic might explain why insurance companies and their investors appear unruffled by the possibility that the health-care law could be overturned by the Supreme Court or drastically altered by the next Congress.

In the absence of the law, Medicaid might not be expanded. But the political imperative will still be to reduce spending on both Medicaid and Medicare — and this would probably be done through further outsourcing to private companies.

“It seems as if insurers have figured out a way to win whether the law is fully implemented or not,” Gosselin said.

Insurers buy private exchange to challenge states

By doverland

Created 09/22/2011 – 21:00

Fierce Health Payer

WellPoint, Blue Cross Blue Shield of Michigan, and Health Care Service Corporation will be competing directly against state- and federally-run insurance exchanges after buying a majority stake in a private marketplace.

The three insurers purchased a 78 percent stake in Bloom Health, a two-year-old online marketplace that offers health plan options to almost 50 companies, for an undisclosed sum, Bloomberg reports. Bloom Health allows employers to contribute a defined amount per employee toward the cost of health benefits while workers choose their coverage based on various benefit plans, according to the Wall Street Journal.

“We invested in [Bloom Health] because we do feel it will grow quite a bit,” Ken Goulet, president and chief executive of WellPoint’s commercial business unit, told the WSJ.

The insurance companies plan to offer limited exchanged-based services next year and then become fully operational by 2013, one year before health reform-mandated marketplaces open.

“Our objective is to be in all 50 states in the next year,” Goulet told Bloomberg.

Using a private exchange like Bloom Health could limit an employer’s costs and provide consistency compared with separate state-run exchanges, each with their own regulations, Goulet said, Bloomberg notes. He added that Bloom Health likely will appeal to companies looking for more price certainty and could even become a conduit for increasing market share.

Private exchanges may also become popular in states that are currently against government involvement in healthcare, according to CivSource. “We believe private exchanges will be an important solution as the rising costs of healthcare leave employers searching for more predictability in their health care spend,” Goulet said.

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Public hospitals carry burden of charity care despite big tax breaks for nonprofits

By Sandy Kleffman Contra Costa Times

Posted: 10/23/2011 12:01:00 AM PDT

Updated: 10/23/2011 02:33:30 AM PDT

The East Bay’s nonprofit hospitals receive millions of dollars in tax breaks each year to care for the poor and uninsured, yet they provide only a fraction of local charity care, a Bay Area News Group analysis reveals.

The responsibility of caring for the indigent falls largely on the region’s public hospitals, which struggle under the weight.

County-owned Contra Costa Regional Medical Center in Martinez, propped up by a nearly $40 million annual public subsidy, spent 23 percent of its operating expenses on charity care in 2010. The nonprofit John Muir Medical Center in Walnut Creek, in comparison, spent 1.7 percent.

Similarly, in Alameda County, the county-owned Highland Hospital in Oakland spent more than 15 percent of its operating expenses on charity care, while the nonprofit Alta Bates Summit Medical Center spent 2.4 percent.

Debate has intensified nationally about whether nonprofit hospitals do enough to justify their lucrative, tax-exempt status.

“We are giving literally millions of dollars of tax breaks to major hospital chains, and what are we getting in return?” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

In August, Alameda County Supervisor Wilma Chan and Senate Majority Leader Ellen Corbett, D-San Leandro, won legislative approval for a state audit that will examine the issue at a sampling of California institutions.

“We’re doing this because there are some nonprofit hospitals in our area that we feel have probably not adequately fulfilled their charity care obligations,” said Chan, who declined to name the institutions.

Whether the hospitals are flouting the terms of their nonprofit status is hard to say, because federal and state laws contain only hazy guidelines about what the hospitals must do to qualify for tax breaks.

To shed light on the debate, the Bay Area News Group analyzed charity care at East Bay hospitals in two ways. It looked at what percentage of operating expenses each hospital devotes to charity care. It also computed countywide charity care totals and looked at how the total is divided among the hospitals.

Charity care refers to free or discounted hospital services delivered to low-income, uninsured patients.

In Contra Costa, the county hospital alone accounted for more than 75 percent of the countywide charity care total in 2010.

The county’s six nonprofit hospitals together provided slightly less than 23 percent.

Doctors Medical Center in San Pablo, a district hospital, delivered 1.3 percent of the total, and the East Bay’s only for-profit hospital, San Ramon Regional Medical Center, provided 0.2 percent.

In Alameda County, Highland accounted for more than 53 percent of the countywide charity care total in 2010.

All told, Alameda County’s nine nonprofit hospitals provided slightly less than 43 percent.

The two district hospitals delivered 3.9 percent.

The nonprofit hospitals note that they spend millions of dollars each year on other services such as mobile health vans, free screenings, no-cost surgeries for low-income people, support for clinics and community programs, educational classes and medical research.

“Charity care is extremely important to us, but it’s just one component of our overall community benefit,” said Dr. Steve O’Brien, vice president of medical affairs at Alta Bates Summit Medical Center in Oakland and Berkeley.

Hospitals in wealthier areas also argue that fewer uninsured patients seek to use their services.

Because John Muir’s facilities are in Walnut Creek and Concord, it tends not to get as many people who lack coverage as hospitals in lower-income areas, said Lynn Baskett, executive director of the John Muir Community Health Alliance.

In the neighborhoods around Pleasanton’s ValleyCare Health System, the median family income is more than $120,000, notes Ken Jensen, chief financial officer.

“We can’t force people to come here for charity care,” Jensen said.

But patients can travel, countered Contra Costa Supervisor John Gioia.

“All of these hospitals are in counties that have large numbers of patients who need hospital services and can’t pay for them,” Gioia said. “So the argument that you’re located in a high-income area doesn’t hold water.”

Gioia leads the board overseeing Doctors Medical Center, which is striving to avert its second bankruptcy in five years.

“We could lose an important institution in West County if there isn’t a more equitable sharing of charity care services,” Gioia said.

The Bay Area News Group computed statewide charity care averages and examined institutions in Alameda and Contra Costa counties using hospital financial reports filed with the state.

An analysis of charity care as a percentage of each hospital’s operating expenses reveals:

Five of the East Bay’s nonprofit hospitals have charity care levels well below the statewide nonprofit average of 2.99 percent of operating expenses.

Charity care rose dramatically at the two county hospitals from 2005 to 2010. At Contra Costa Regional, it jumped from $57 million to $81 million. At Highland, it rose from $27 million to $59 million.

St. Rose Hospital in Hayward, despite recent financial struggles, had the highest level of charity care among nonprofits at 5.9 percent of its operating expenses, or nearly double the state average.

Charity care has declined sharply at the nonprofit Sutter Delta Medical Center in Antioch, dropping from $5.5 million in 2005 to $4.2 million in 2009 to $2.1 million in 2010. The 2010 amount is 1.3 percent of the institution’s operating expenses.

Sutter Delta spokeswoman Angela Juarez-Lombardi said the hospital has lowered its charity care costs by signing up more than 700 uninsured patients for Medi-Cal coverage during a 13-month period. The hospital also operates an urgent care clinic for the uninsured next to its emergency department that sees more than 5,000 patients annually.

The stakes in the debate are high. Nationwide, nonprofit hospitals enjoy tax exemptions estimated at $12 billion to $20 billion annually.

Sen. Charles Grassley, R-Iowa, is among those who have called for more scrutiny of nonprofits, urging the IRS to investigate whether the institutions do enough to justify their tax breaks.

Grassley once suggested requiring nonprofit hospitals to devote at least 5 percent of expenditures to care for the poor, but he backed off that idea this year, saying that setting minimums could discourage some institutions from doing more.

The East Bay hospitals with charity care levels well below the statewide nonprofit average of 2.99 percent of operating expenses were:

John Muir in Walnut Creek at 1.7 percent.

John Muir in Concord at 1.5 percent.

Sutter Delta at 1.3 percent.

Alta Bates Summit in Berkeley at 0.9 percent.

ValleyCare in Pleasanton at 0.6 percent.

Children’s Hospital Oakland had a charity care level of 1.2 percent, but its numbers are not necessarily comparable because more children than adults are insured and so do not need charity care.

Nonprofit hospitals were required on their 2009 IRS forms for the first time to estimate the value of their broader community benefits, in addition to charity care. But what can go into such tallies has been vigorously debated.

Consumer advocates question the validity of including costs such as medical research, educational programs and services the hospitals may offer to attract patients.

“Some of these things are very nice and good and helpful, but a lot of things also end up being marketing for the hospital, whether it be showing up at fairs or handing out a car seat to a pregnant woman” to encourage her to deliver at the hospital, Wright said.

The hospitals respond that it is unfair to judge them on charity care alone. John Muir estimated its community benefits at more than $37 million in 2009, including free breast and cervical cancer screenings for nearly 500 low-income women, a mobile health clinic and a $1.6 million annual donation to a community health fund.

Gioia praises John Muir and Kaiser Permanente for helping keep Doctors Medical Center open. After Doctors declared bankruptcy in 2006, Kaiser donated $12 million to the hospital over three years and John Muir contributed $3 million.

This year, as Doctors again teetered on the verge of bankruptcy, Kaiser gave $4.2 million more.

The Bay Area News Group could not compile comparable charity care numbers for Kaiser hospitals because the nonprofit health system does not file annual financial reports like other hospitals.

Kaiser estimated it invested more than $1 billion in programs and services that benefited communities statewide in 2009, including more than $18 million in contributions to such Northern California institutions as Asian Health Center, La Clinica de la Raza, Lifelong Medical Care and school-based health centers in Oakland.

Alta Bates Summit estimated its community benefits at more than $87 million in 2009, including contributing to the Berkeley Primary Care Access Clinic, providing free discharge prescriptions, supporting asthma management, AIDS, diabetes and cancer centers and contributing to health ministries.

ValleyCare put the value of its community benefits at $10 million, including supporting a mobile health unit, health centers at Chabot and Las Positas colleges, disease support groups, a lactation program, educational seminars and a nursing school.

Such programs are beneficial, consumer advocate Wright agreed, but he noted that only charity care eliminates some or all of the medical bills for low-income people who need emergency hospitalization.

Charity care reporting rules are also clearer, enabling more valid comparisons.

The nonprofit hospital with the highest level of charity care in the East Bay, St. Rose in Hayward, is going through severe financial challenges. In July, St. Rose asked Alameda County supervisors to help it obtain an emergency grant to ensure it could meet its payroll.

Last month, it announced plans to lay off nearly 10 percent of its workforce.

Despite such difficulties, St. Rose delivered $7.7 million worth of charity care in 2010, or 5.9 percent of its operating expenses. “If you’re not paying taxes, then you need to provide a measurable benefit to the community to justify that status,” CEO Michael Mahoney said.

Charity care at Doctors Medical Center, a financially struggling public hospital, plunged from $9.4 million in 2009 to $1.4 million in 2010. Although nearly one-fourth of Doctors’ emergency room patients are uninsured, the hospital has been successful at signing up large numbers of people for Medi-Cal coverage so they do not need charity care, said Chief Financial Officer Jim Boatman.

Other patients are in and out of Doctors’ emergency room so quickly the hospital has been unable to get them to fill out the applications to qualify for charity care, “so those are just written off as bad debt, but we’ll never collect on them,” Boatman said. Doctors had $11.6 million in bad debt in 2010.

In recent months, the county general fund subsidy of nearly $40 million for Contra Costa Regional Medical Center has been hotly debated.

Several law enforcement leaders have sharply criticized the spending, arguing that it forces deep cuts in other county programs.

But the same economy that compels county budget cuts is pushing more patients to the hospital, its chief said.

“We have seen an unprecedented increase in demand,” CEO Anna Roth said. “The economy has played a significant role in upping the pressure on the public hospitals.”

Chan said lawmakers should consider revising the definition of community benefits and should scrutinize whether hospitals do enough to earn their tax exemptions.

“We’re in a new situation with health care reform coming,” she said. “We have hospitals in distress. We have more uninsured because people have lost jobs. So this may be a good time to re-examine the whole system.”

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Medicare Prepares Rule To Penalize Hospitals With High Readmission Rates

By Jordan Rau

KHN Staff Writer

Jul 30, 2011

This story was produced in collaboration with The Washington Post

When hospitals discharge patients, they typically see their job as done. But soon, they could be on the hook for what happens after Medicare patients leave the premises, and particularly if they are readmitted within a month.

In an effort to save money and improve care, Medicare, the federal program for the elderly and disabled, is about to release a final rule aimed at getting hospitals to pay more attention to patients after discharge.

A key component of the new approach is to cut back payments to hospitals where high numbers of patients are readmitted, prodding hospitals to make sure patients see their doctors and fill their prescriptions.

Medicare also wants to pay less to hospitals with higher-than-average costs for patient care. It has proposed calculating the costs by combining a patient’s hospital expenses with fees incurred up to 90 days after discharge.

The efforts, called for in last year’s health care law, are part of a push to make hospitals the hub for coordinating care. Hospital care is the largest chunk of Medicare spending; Medicare says readmissions alone cost $26 billion in a decade. Plus, many experts argue hospitals are the most organized actors in a splintered and often dysfunctional health system, and thus best able to take the lead in overseeing patient care.

But hospital groups complain that Medicare’s plans could punish them for things they can’t control, such as unavoidable readmissions and patients who can’t afford the costs of prescriptions.

“A lot of this is very unfair,” says Blair Childs, a vice president at Premier, an alliance of more than 200 hospitals. He says hospitals that don’t have a lot of money to invest in improving their oversight of former patients could end up losing more money under Medicare’s proposals, putting them in an even bigger financial hole. In particular, he says, the changes may hurt inner city hospitals.

“These are often very stressed hospitals, and they’re the ones that are going to be penalized the most,” Childs says.

Some academics who have studied hospitals also think Medicare may be being too harsh. “The truth is the 30-day readmission is a relatively lousy quality measure for a hospital, because a lot is happening outside a hospital’s control,” says Dr. Ashish Jha, a professor at Harvard’s School of Public Health.

Medicare’s penalties could be significant-and widespread. Almost 7 percent of acute-care hospitals — 307 out of 4,498 — had higher-than-expected readmissions rates for heart failure, heart attack or pneumonia, according to Medicare data. Under Medicare’s draft proposal, which it put out in May, penalties would start in October 2012; hospitals with the worst readmissions rates eventually could lose up to 3 percent of their regular Medicare payments.

Hospitals with patients who cost Medicare lots of money during and after their hospital stays also could be hurt. Beginning in October 2013, these spending levels would count for a fifth of Medicare’s “value-based purchasing program,” which alters hospital payments based on long list of quality measures.

“The incentives we’re putting into place have created a whole new way to think about hospital care,” says Jonathan Blum, deputy administrator of the federal Centers for Medicare & Medicaid Services, or CMS.

These initiatives come on top of other Medicare experiments that will make not just hospitals but also surgeons responsible for costs run up from complications that occur beyond the operating room. One approach is “bundled payments,” where Medicare pays a set fee for the entire cost of a patient’s treatment, including expenses after discharge. And Medicare’s high-profile venture to create “accountable care organizations,” where teams of doctors and hospitals share the financial risks and rewards for caring for patients, would also hold hospitals partially to account for the costs of treatments that patients get elsewhere.

Hospitals “can no longer see our job as just being within the four walls we’ve built,” says Leah Binder, chief executive of the Leapfrog Group, a nonprofit that evaluates hospital quality.

CMS has limited leeway to tinker with the readmissions rule, because much of it was spelled out in the health care law. CMS has more freedom to change its plan to measure per-patient spending, as the law didn’t detail how it should work.

Regardless of what CMS ultimately decides, many hospitals are already scrambling to change how they supervise former patients, says Chas Roades, chief research officer at The Advisory Board Company, a health care consultancy. “One of the big themes I’m hearing now across the hospital industry is, ‘We can no longer think of ourselves as just hospital companies, we have to be full-service health care managers,’” he says.

Consider Trinity Health, which owns 50 hospitals around the country, including Holy Cross in Silver Spring, Md. Before patients leave the hospital, Trinity’s nurses now set up appointments for them with their regular doctors. They also make sure patients can get to the appointment, either by helping them figure out whether Medicare or Medicaid pays for transportation, or by paying for the trips directly.

“We’re trying to do a better job of sending them home better-prepared, rather than just saying good luck,” says Dr. Terry O’Rourke, Trinity’s chief clinical officer. But he says there are limits to what they can do: “The majority of physicians are not employed by the hospital, and we don’t have control over their practices.”

Dr. Kavita Patel, a Brookings Institution fellow and former Obama administration official, says changes occurring in both the private sector and Medicare will speed up the trend of hospitals’ overseeing the care of former patients.

For example, she says, many hospitals are buying the practices of primary care doctors, making it easier for them to arrange and oversee the care of patients after discharge. “The more hospitals realize they’re going to be held accountable, that’s where they are going to get creative,” Patel says.

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