Payers & Providers Midwest Edition – Issue of August 7, 2012

7/31/2019 Payers & Providers Midwest Edition Issue of August 7, 2012

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In Brief

Freestanding HospiceOpens In Cook County

Although Cook County is the mostpopulous metropolitan area in theMidwest, it did not contain a

freestanding inpatient hospicecenter until now.The hospice, operated by

Midwest Palliative and HospiceCareCenter, will open the newcenter in Glenview, a suburb ofChicago, on Aug. 9.

Along with the16-bedinpatient center, named theMarshak Family Hospice Pavilion, i twill include a large adjacent gardenthat will be open to the public.

Amenities for patients andtheir families will include in-roomkitchenettes, laundry facilities anda childrens area. It is a homeaway from home where families can

stay with their loved one aroundthe clock, Midwest Palliative saidin a prepared statement.

According to the MedicarePayment Advisory Commission, theuse of Medicares hospice benefithas grown dramatically over thepast five years as patients becomemore educated about end-of-lifeissues.

Altogether, Midwest Palliativecares for 3,200 patients annually in150 communities throughout theChicago area.

Generic Drug UseSaves More Than $1

Trillion

A new report by the advocacyorganization Citizens AgainstGovernment Waste has concludedthat the use of generic drugs byhospitals and other providers has

Continued on Page 3

NEWS

Malpractice (Continued from Page One)

states without a cap averaged 120. Withadjustments, they found that states with capshad about 12% more physicians than those

without.According to the Missouri State Medical

Association, the number of lawsuits ledagainst physicians fell almost 58% after thedamage caps went into effect. The state alsosaw a $27 million decrease in lawsuitinsurance premiums.

The good news is that access and qualityof care may not be impacted.

A state-by-state assessment of emergencymedical care released in January 2006 by theAmerican College of Emergency Physiciansfound that states that ranked lower on themedical liability environment scale (those

without caps or with high ones) all rankedhigh for access to emergency care. Those that

graded the lowest on access to care all hadcaps.

Tim Aylward, a partner at the Kansas

City law rm Horn Aylward and Bandy LLCsaid it does impact the industry, but that theffect is likely not as dramatic as somepredict.

In the 24 hours after the recent courtopinion was handed down, the rmreceived a stream of letters from plaintiffslawyers demanding attorneys to accept thesettlements, or they would pull them. Hesaid they were using the courts decision asa lever, which was anticipated.

We expect most plaintiffs will startsaying every case is worth multi-milliondollars at least initially, he said. It will be

harder to get them settled before trial,which is what the courts want. TAMMY WORTH

Michigan Boosts Medical HomesBlues Plan Has Designated Some 4,000 to Date

Blue Cross Blue Shield of Michigan hasdramatically increased in the number ofpatient-centered medical homes statewide,claiming they have contributed to a signicant

drop in overall medical costs.The Michigan Blues has designated 994

medical practices throughout the WolverineState for 2012, up 28% from 2011.

According to data gathered and analyzedby the plan, those enrollees in medical homeshad a 23.8% lower rate of hospital admissionsfor certain unspecied medical conditions, a9.3% lower rate of emergency room hospitalvisits, an 8.3% decrease in the use of high-tech radiology, and a 3% higher rate ofgeneric drug utilization.

This program benets patients byimproving the doctor-patient relationship.

Patients have better access to their doctors'ofces, not only when they are sick, but whthey need advice and guidance to keep themhealthy, said Thomas L. Simmer, M.D., the

Michigan Blues chief medical ofcer.Physicians and their care teams areimproving patient outcomes, which leads tolower costs because there is less needfor testing and hospital care.

According to plan ofcials, about 4,000physicians have been designated medicalhomes statewide, and another 4,000 areworking toward a medical home designationThe medical home program began in 2009,when 1,200 physicians received thedesignation. Overall, 75% of those doctorswho received a medical home designation ftheir practices retain in on a year-to-year ba

according to the health plan.

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NEWS

In Brief

saved the U.S. healthcare system$1.1 trillion over the past decade.

According to CAGW, genericdrugs comprised 80% of the 4billion prescriptions issued in theUnited States in 2011. Half of thesavings it reported using genericscame from drugs that were

introduced to the market since2002. It also noted that sincefederal legislation was passed inthe mid-1980s to promote the useof generics, savings estimates wereabout 1,000 times originalprojections.

Generic medicines continueto have a healing effect, not onlyon the patients who consume thembut also on taxpayers, said CAGWPresident Tom Schatz. Since thefederal government picks up 29%of the costs of all healthcarespending annually, mostly throughMedicare and Medicaid, and stateand local governments pick up an

additional 16% of such costs, theavailability of lower cost genericdrugs will increasingly be animportant tool in slowing themounting expense to taxpayers ofhealthcare in the future.

Allina To Open AnotherUrgent Care Facility

Minneapolis-based Allina Health isbuilding its third urgent carefacility in conjunction with theEmergency Physicians Professional

Association.The 14,000-square-foot center,which will be located in theMinneapolis suburb of VadnaisHeights, will begin constructionlater this month and open nextspring.

Branded Urgency Rooms,and marketed as a customer-friendly alternative to theemergency room, the first suchfacility was opened in Woodbury,Minn. In 2010. A second facility inEagan is slated to open in October.

Healthcare startups in the Midwest toppedhalf a billion dollars in total investments

during therst half of the year, according to aCleveland-based publication.

BioEnterprisesMidwest Health CareVenture Investment Reportsaid the totalinvestments reached $511 million during therst half of the 2012 in 97 differentcompanies.

It's been a great year to date for Midwesthealthcare startups, said Baiju R. Shah,BioEnterprises chief executive ofcer. Theregional company pipeline continues toadvance, requiring larger nancing roundsand attracting broader investor interest.

The 2012 total compares to $315.1

million worth of investments during therst

half of 2011 in 86 companies. The comparabperiods during 2010 and 2009 topped $400

million, but the pre-2008 totals were far morthan $500 million, according to thepublication.

Of the total invested in 2012, healthcaresoftware and service companies represented$118 million of those investments. Medicaldevice rms received $131 million, whilebiopharmaceutical rms received $259million.

Among the Midwest states, Ohio led ledwith $126.4 million in investments in fourdifferent companies 44 different companies.Cleveland was the leader among metropolitaareas, with $104.1 million, followed by

Minneapolis with $86.1 million.

Dublin, Ohio-based healthcare services giantCardinal Health reported at revenue growthfor the fourth quarter ofscal 2012, butposted a moderate boost in earningscompared to the year-ago period and for theentire calendar year.

Cardinals revenues for the fourth quarterof 2012 were $26.8 billion, identical to thefourth quarter ofscal 2011. However, netincome for the quarter was $236 million,compared to $207 million in the year-agoquarter, an increase of 14%.

For scal 2012, revenues were $107.6billion, compared to $102.6 billion, up 5%.

Net income was $1.07 billion, compared to$959 million for scal 2011, up 11% year-over-year.

Overall,scal 2012 was another strongyear, meeting virtually all of our nancial

goals, including revenues, margin growth,operating earnings, EPS and cash ow. It waalso a year in which we made great strides oour strategic priorities including expansion oour retail independent customer base (and)improved generic contribution, said GeorgeBarrett, Cardinals chief executive ofcer.

The company reported it had increased annual dividend by 10.5% to just under 24cents per share, and it had closed severaltransactions in China.

Cardinals stock dipped about 5% after

the Aug. 2 earnings announcement, droppinfrom about $41 per share to the $39 range intrading on the New York Stock Exchange.

MEET OUR READERS!

Need to promote a conference? Or your brand? PayerProvider!se-mail list for all editions is available for youmarketing needs. Reach out to more than 12,000healthcare professionals who read our publications. Cour advertising director Claire Thayer at (503) 226-98or e-mail her at [email protected].

Midwest Health Investments On RiseNumbers For First Half Still Below Pre-Recession Year

Cardinal Reports FY 2012 EarningsModest Growth in Net Income, China Acquisitions


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Payers & Providers Page

Now that the U.S. Supreme Court has decidedthat ObamaCares mandate to buy healthinsurance is a tax, will the Internal RevenueService be able to collect it?Generally speaking, if you owe the IRS, it willget the money from youwith the possibleexception of the ObamaCare tax. ThoughObamaCares individual mandate imposes atax on people who do not purchasegovernment-approved health insurance, thelaw explicitly neuters the IRSs ability tocollect the tax.

Bizarre? Yes. And it matters. Ifpolicymakers expect uninsured

young people to buy healthinsurance when it is even moreexpensive than it is today, the threatof serious consequences for notdoing so must be real. Yes, the threatthat the IRS might come after you ifyou do not do what you are toldlooks real at rst glance. ButDemocratic politicians, fearing publicbacklash for making the mandate toointrusive, pulled its teeth.

First, the tax/penalty is too small to matterto the people who are its target. In 2014, thetax will be the larger of $95 or 1% of taxable

income for an individual. By 2016 it rises to$695 or 2.5% of income. Young people wouldnot want to pay a dollar if they could avoid it,but avoiding the tax means signing up forinsurance that many do not think they need.That insurance is not free. Even with subsidies,they will pay at least 3% of their incomes forpremiums and up to 6% of the cost of theinsurance in deductibles and co-payments.That adds up to a lot more than 95 bucks.

Second, the law counts on most of thescofaws turning themselves in. If you do nothave insurance and think you owe the tax,then you will be asked to check a box to that

effect on your tax return. If you choose toignore the mandate, you might also choosenot to check the box. But even those who doconfess that they do not have insurance maynot be liable for the new tax. Illegal aliens,Native Americans, prisoners, those who arewithout insurance for less than 3 months,those who do not have to le an income taxreturn, anyone who faces a hardship or cannotnd affordable coverage, and others are allexempt.

Third, the law requires the IRS to sift

through 140 million income tax returns totrack down the few who are actually liable.This requires collecting information from boththe insurance companies and the individuallers in an expensive feat of bureaucraticdetective work. What are the specics? Thedetails of any plan other than taking yourword for it have not been worked out yet, butthe likely scenario nds insurance companiessending documentation to the IRS and to thetaxpayer, which the taxpayer would theninclude with his return. That means even morbureaucracy and regulatory burden than the

healthcare industry and the IRS

currently have.Taking all parts of ObamaCare

together, the IRS is expected to spend$881 million from 2010 through 2013on thousands of new workers andupgrades to computer systems.Finally, even if the IRS has determinedthat you owe the new tax, it has very

limited ability to force you to pay it.Basically, the IRS has two options: To ask

you for the money and to reduce the size ofyour tax refund. But the IRS cannot reduceyour refund unless you overpay. Sincetaxpayers have great control over their

withholding, a savvy taxpayer who does notwant to buy insurance could easily work thesystem to ensure that the IRS could not holdback his refund to enforce the mandate tax.And half of American households do not oweany income tax to begin with, so good luckgetting the money from them. And half ofAmerican households do not owe any incometax to begin with, so good luck getting themoney from them.

This contrasts sharply with the way the IRcollects other taxes. To put it simply, the IRSgets the money it is owed because it has broapowers to enforce compliance. After all,

theres a reason were all scared of the IRS.

OPINION

The $64 Billion-Plus Taxpayer QuestioTheres a Penalty For ACA Scofflaws Is It Collectabl

Joseph Antos is the Wilson H. Taylor Scholar

Healthcare and Retirement Policy at the

American Enterprise Institute, where Michae

R. Strain is a research fellow. This post first

appeared at The American.

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ByJoseph

Antos and

Michael R.

Strain

Op-ed submissions of up to 600 words are

welcomed. Please e-mail proposals to

[email protected]


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Payers & Providers Midwest Edition – Issue of August 7, 2012

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