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Knowing When the Wrong Guy Is At the Table

There's a lot of work involved when a hospital enters into negotiations with a payor and knowing if you're sitting down to negotiate with the right person should be near the top of your checklist.

At the beginning of a negotiation, before a meeting is even scheduled, prep work will have already identified how the payor fits into the overall financial picture, how they are or are not complying with their obligations under their current contract, how they're perceived by the employers in the market, whether or not you want to continue doing business with them, and what your goals are under a new agreement.  A CFO and various members of his or her staff will spend a large amount of time pulling together this information, cross-checking it, and testing it, attempting to not only answer all of their own questions and assumptions but also to anticipate any and all roadblocks and arguments that the payor will raise in opposition to your goals.

Once the CFO has the necessary information, the meeting is scheduled.  You meet the payor's negotiator, who will provide you with the latest press release about why that payor is the best/nicest/most philanthropic payor in the state/region/country or some similar corporate communication meant to dissuade the CFO from their belief that managed care is a failed payment mechanism, that that payor is especially disagreeable to work with, and, because of this new good press, thousands of your patients will be flocking to join that payor as members in the very near future.  The CFO states their goals for the new agreement, financially as well as utilization and quality, and, if they're bold, presents a draft of the new agreement.  The meeting concludes with niceties about family, the weather, golf, and/or the current season's sport with a follow-up meeting tentatively scheduled.

You are now in the middle of negotiations where, depending on how significant the financial changes are, the payor's negotiator will either drag their feet -- vacation, division meetings out of town, other departments have to do the number crunching are old stand-bys -- or try to get LOAs quickly signed.  Contract language will depend on the size of the hospital and/or the experience of the CFO.  A CFO presenting a draft contract will automatically lengthen the duration of the negotiation by at least a factor of three, or, depending on the size of the payor, bring negotiations to a complete halt.  It will be the payor's policy to only negotiate from their own document -- no, the payor won't provide you with hard-copy of their policies and procedures, but you'll be welcome to look them up on the payor's web page.  A review copy of the payor's "boilerplate" agreement will already be in the mail to the CFO's attention.

The CFO will send the boilerplate agreement to their attorney for review.  The hospital's attorney will identify all of the ways the document is one-sided to the benefit of the payor, down to definitions of covered services, medically necessary, participant, and benefit plan.  There will be follow-up phone calls, faxes and e-mails between the payor and the CFO.  The first follow-up meeting to review language will easily take an hour and should take two.  The negotiator will tell the CFO that the financial goals aren't possible, or the physician's just received a 2 percent increase, or that to even consider making the requested financial changes, the hospital will have to go to some kind of fixed OP pricing.

There will be multiple meetings, language and reimbursement will finally be (and most times grudgingly) agreed to.  Both CFO and payor negotiator will still be alive and can expect to repeat this process in 2 years.  The negotiation will have taken somewhere between 3-9 months from first meeting to signature.  The whole process will have taken 12-15 months.  What will impact the length of time the greatest is who you have at the table for the actual negotiation.

Having the wrong guy at the table will stretch the process to its limit, making it important to look for and identify the wrong guy early in the negotiation process.  You know you're dealing with the wrong guy when he doesn't come prepared to answer your questions (or doesn't respond within 24-hours with answers), when he tells you language cannot be changed because it's the national template, and most tellingly when he can't agree to make a change during the meeting.  Once the wrong guy has been identified, stop the meeting.  Before you can proceed, you need to know who the right guy is, whether he's this negotiator's boss or his boss's boss.  That's who the next meeting needs to be scheduled with and don't be surprised if it takes a notice of termination to make it happen.

Knowing when the wrong guy is at the table and how to get to the right guy will significantly cut the amount of time it takes to reach agreement.■

Michael Moore Being Given Too Much Credit?

When Michael Moore's latest documentary, Sicko, begins general release tomorrow I intend to be in the audience.  I want to see what new ground Moore covers on the broken U.S. health care system that hospital administrators, healthcare workers, managed care executives, politicians, numerous policy wonks and patients haven't been able to already discern.

I've not read any of the many reviews that are available -- I don't want to spoil the ending.  I'm looking forward to being shown something shockingly new, amazing, and disturbing like managed care executives receiving multi-million dollar salaries while premiums increase by 10-15 percent each year, or hospitals trying to provide new, potentially life-saving procedures only to be told they're not medically necessary, or physician practices struggling to see patients because reimbursement has stayed below the cost-of-living for the last 5 years, or patients declaring bankrupticy because they can't afford to pay for care received after some catastrophic event -- oh, wait, we've seen that.

Ok, then I'll settle for being shocked and amazed by a documentary that brings continued attention and scrutiny to healthcare reform efforts that actually yields positive action and isn't just a self-promoting, unnecessarily provocative sideshow act regurgitating issues with which we are all too familiar and have already been actively engaged in correcting -- but I won't hold my breath.■

Hospital Administrator Pushed to Suicide by NHS Reforms

The Telegraph is reporting that a hospital manager jumped 100 feet to her death, driven to suicide by the stress of reforms in Britain's National Health Service (NHS).

This is a truly sad story about a troubled young woman who was unable to receive the help she needed in time.■

CDC Reports 2 Million More Uninsured Americans in 2006

The Centers for Disease Control (CDC) is reporting that there were 2 million more uninsured Americans in 2006 over the previous year, putting estimates for uninsured, all ages, at 43.6 million.  The number has been averaging between 41 and 44 million over the past 5 years.

Highlight of the CDC's National Center for Health Statistics report "Early Release of Health Insurance Estimates Based on Data from the 2006 National Health Interview Survey" include:

• In 2006, there were 43.6 million Americans of all ages who did not have health insurance (at the time of the interview), or 14.8 percent of the population
• Among working-age Americans (those ages 18-64), there were 19.8 percent who did not have health insurance in 2006, a slight increase from 18.9 percent in 2005.
• Approximately 9.3 percent of children under the age of 18 did not have health insurance in 2006, a decrease from 13.9 percent in 1997
• In 2006, the percentage uninsured at the time of interview among the 20 largest states ranged from 7.7 percent in Michigan to 23.8 percent in Texas.

The study examines data from interviews collected in over 100,000 households nationwide.■

Should America Follow Swiss Healthcare Reforms?

MASSACHUSETTS isn't the first place to mandate that everyone buy insurance as a way to achieve universal health coverage, and it isn't the first to get queasy about seeing through that solution.

Like Americans, the Swiss were not eager to accept the double principles of universal coverage and a mandate on individuals to purchase health insurance. It took almost a century and political debates as contentious as those in the Massachusetts Legislature before these two elements were added to the Swiss system in 1996.■

Number of Health Care Workers in Maine Shrinking

A recent study of Maine's health care industry by the state's Department of Labor expressed concerns about the imbalance between the demand for healthcare workers and the supply, confirming that Maine's healthcare workers are aging, are unevenly distributed around the state, and fewer people are entering the profession to replace those who retire.

Key numbers reported include:

• nearly one out of three surgeons in the state is older than 60
• two out of three Maine dentists are older than 50
• dentistry specialists are concentrated in southern Maine
• nursing vacancies in the state jumped by 34 percent between 2002 and 2006

Health care is a significant industry in Maine with more than 75,000 workers, more than 13 percent of all jobs in Maine, in 2004; wages totaled nearly $2.7 billion, or 14 percent of the state's total.  The national average for both jobs and wages is 9 percent.

Maine's nursing shortages are not necessarily from lack of interest in the profession.  State nursing schools have waiting lists but not enough instructors.  The Labor Department report suggests the state consider programs to lure existing nurses back into practice noting that 13.8 percent of all licensed registered nurses in Maine are either retired, not looking for work, or employed in another field.  The professions themselves are adapting to address some shortages, with an increasing use of physician assistants and dental hygienists.

Staffing shortages cause facilities to constantly adjust pay and benefit packages to better compete for workers.  Hospitals and physician practices are forced back to the negotiation table to argue for better reimbursement from managed care payors whose primary goal is to decrease reimbursement or, at least, keep payments flat.  Payors commonly cap hospital and physician increases at 2 to 3 percent per year, or keep reimbursement for high volume codes and procedures fixed, while the annual cost of living continues to increase an average 5.5 percent.

In the meantime, Maine's demand for health care is expected to increase in coming years, driven by a population whose average age is 41, making it the oldest in the country, and is getting older at a faster rate than the country as a whole.  Policy changes and directing more resources into education and training may help create a larger pool of workers in the industry, but the impact won't be immediate, making training only a part of a larger, much-needed, answer.■

Death Rate 47% Higher Post-Katrina

Following Hurricane Katrina, New Orleans lost seven of 22 hospitals, half of the city's hospital beds, and some 4,486 physicians were displaced from three New Orleans parishes, creating a shortage that continues to hamper recovery efforts and may have had a significant impact on mortality.

Kevin Stephens, Director, New Orleans Health Department and lead author of a study appearing in the journal Disaster Medicine and Public Health Preparedness, found, on average, 1,317 death notices a month from January to June 2006, for a mortality rate of about 91 per 100,000 people.  In 2002 and 2004, the average was 924 notices a month, for a death rate of 62 per 100,000, 47% fewer than after Katrina.

Because of Katrina's negative impact on the state office that tracks vital statistics, Stephens's team tracked death notices in the New Orleans Times-Picayune and compared the findings with the state's vital statistics.  The study wasn't designed to determine what caused the excess deaths.

The Stephens study contrasts with the study carried out by the Louisiana Department of Health and Hospitals that found only "slight excesses" in deaths in New Orleans Parish.  Jullette Saussy, Director, New Orleans EMS, quoted in USA Today says, "we can get hung up on the numbers, but the bottom line is that people are dying at a faster rate here post-Katrina."■

Bush Vetoes Stem Cell Research Enhancement Act

As expected, for the second time in the past year, President Bush has vetoed legislation to expand federal funding for embryonic stem cell research.

S.5 Stem Cell Research Enhancement Act would amend the Public Health Service Act to require the Secretary of Health and Human Services to conduct and support research that uses embryonic stem cells regardless of the date in which the stem cells had been harvested.  Under current legislation, federally funded scientists can conduct research on embryonic stem cells only if the cells were derived before 9 p.m. on Aug. 9, 2001.

Siding with many religious conservatives, Bush opposes research that would result in the destruction of embryonic stem cells despite strong support for the work among medical researchers and the public.  Bush has been quoted as saying, "If this legislation became law, it would compel American taxpayers -- for the first time in our history -- to support the deliberate destruction of human embryos...I will not allow our nation to cross this moral line."

Nations, like stars, are entitled to eclipse -- the struggle for progress continues.■

Toxic Payors

I watched a segment on The Early Show on CBS back in January about toxic friends that struck enough of a chord with me that I wrote a note to myself to follow up on the concept at a later date.

If you're not up on your pop psychology or have somehow missed the various self-help books on the subject of toxic friends, the very abridged version is: they exist, we've all met them and/or have them in our lives, they can be identified/categorized, they hurt us, and we should not keep as friends people who hurt us.

Why I wrote the note to myself was the immediate recognition I had that both the concept and a number of the categories of toxic friends could be easily applied to a healthcare setting, specifically to managed care payors.  (Yes, at 7 AM, on less than two cups of coffee, I am thinking about health care, payors, and the cross-application of personal relationship-therapy concepts to managed care provider relations.  No, subsequently, I have not yet been successful in getting a life; but thank you for asking.)

Depending on which book you read, general categories for toxic friends include: the promise breaker, the double-crosser, the self-absorbed, the user, the betrayer, the control-freak, the blamer, the complainer, and the drainer -- you can start to see why I recognized managed care payors in this.

From this, then, I came up with the concept of "toxic payors."  These are the payors who don't live up to their obligations, don't educate their members, don't pay their claims on time, change their policies and procedures without notice, second-guess medical decisions and retroactively deny authorization for procedures that they've subsequently deemed "not medically necessary," but have nonetheless already been performed.

They tend to be the ones who have centralized their staffing, "right-sized" their provider relations and member services representatives, and dumbed down their contracting and credentialing staffs by implementing one-sided boiler-plate responses to provider issues that benefit only the payor, and frustrate and anger everyone else.

They're also the ones who have CEOs who have made national news because their compensation package is in the millions and their premium increases are in double-digits for the sixth year in a row.  In the meantime, their fee schedules have increased at a rate less than CPI, if at all, they're redirecting your patients from your practice/facility to one of their national vendors, and your claims are suspending or denying because they're either upgrading their systems or consolidating claims platforms.

Promise breakers, double-crossers, and self-absorbed?  Managed care has become that, and even worse.  They hurt us, and we should not keep in business the toxic payors who hurt us.■

Universal Coverage - Don't Save the Date Just Yet

The Orlando Sentinel reported a conversation they had with Richard Irwin, Chief Executive Officer, Health Central, the longest-serving hospital CEO in central Florida, and I was struck by both the "when" and the "who" of his take on universal health care.

When asked if he thought it would ever happen, Irwin responded, "Whether it's going to be addressed in '08, I don't know...I think it's going to be '12 before we have leadership in health care. ...The process that's going to come out over the next two to six years is going to have to have some significant leaders. In the states that have championed coverage for all,...it hasn't been a health-care leader; it has got to be a political leader. It's the governor of the state. It's the president of the country."

Healthcare reform is shaping up to be the major domestic issue of the 2008 Presidential Election.  That, combined with the various state-level activities currently taking place and the experience of attempted reform during the 1994 Clinton Administration, I don't know how we justify taking another 14-, let alone 18-years, to make positive, effective changes to a healthcare system we all seem to agree is broken.

There does need to be strong leadership on the issue, but Hillary Clinton's attempt in 1994 clearly shows that a reform approach that is strictly government-led is doomed to failure.  For any reform attempt to have any chance of success, it will have to take the collegiate approach of bringing together representation from all the disparate stakeholders.

On the other hand, in 1994, when they were designing the mock-up health card that was to be displayed for the cameras when Clinton's committee made its presentation, the 15-member panel of national healthcare and hospital executives never did reach agreement on the final artwork.  If they couldn't decide on the ID card, then, how in the world are they ever going to agree on the actual reform, now? -- maybe 2012 isn't such an unrealistic date, after all.■