In Brief: Few Community Hospitals Touched By Mergers; Cancer Care Costs Driven Up By Payment Incentives

AHA: Few Community Hospitals Touched By Mergers

Despite an atmosphere of ongoing mergers among hospitals, a new study by the Chicago-based American Hospital Association concludes that most facilities have yet to be involved in such a transaction.

According to the study undertaken by AHA's Center for Healthcare Economics and Policy, 551 community hospitals have been involved in some form of merger. That's about 10% of the nationwide total of community facilities, according to the AHA. The average number of hospitals acquired as a result of one of these deals is one to two. Most of the mergers involve expansion into other service areas, or areas where at least five or more hospitals already operated.

“Hospitals are responding to the call for better coordinated, high-quality care by moving away from a structurally fragmented care system. They are meeting that expectation by building a continuum of care that involves physicians and other caregivers to improve patient care,” said AHA President and CEO Rich Umbdenstock. “Hospitals are collaborating with others ultimately to benefit the patients and communities that hospitals serve.”

Perverse Payment Incentives Driving Up Cost of Cancer Care, Study Claims

A new study by the Moran Group has concluded that there has been a significant shift in cancer chemotherapy treatments from outpatient centers to hospitals, significantly driving up costs.

The study by the Chicago-based Moran has concluded that the number of Medicare fee-for-service cancer treatments performed at hospitals rose from 13.5% of all billings in 2005 to 33% in 2011, a rise of more than 150%. Meanwhile, payments to outpatient centers declined more than 14%, even though the treatments they render are on average cost $6,500 less per patient per year.

The study suggested that the Medicare program has created a payment structure that provides perverse incentive to hospitals to provide the most expensive care.

“The Moran study quantifies what we have been seeing — cancer care is consolidating towards the higher cost setting," said Ted Okon, executive director of the Community Oncology Alliance, which sponsored the study. “Unfortunately, the Medicare sequester cut is accelerating this shift in cancer care by forcing some clinics to send seniors to the hospital for treatment and others to consider merging with hospitals. Congress and the White House have to act immediately before the bank is permanently broken for seniors and Medicare.”

CMS Releases Pricing For Hospital Outpatient Procedures

The Centers for Medicare and Medicaid Services released on Monday nationwide data on hospital outpatient charges. The release comes a couple of weeks after the agency released pricing by individual hospitals for common inpatient procedures.

“A more data-driven and transparent healthcare marketplace can help consumers and their families make important decisions about their care,” U.S. Health and Human Services Secretary Kathleen Sebelius. “The administration is committed to making the health system more transparent and harnessing data to empower consumers.”

Both sets of data were released in large spreadsheets available in downloadable files and online. The feds' push for price transparency was spurred in part by the publication last March of a 24,000-word article in Time magazine by media entrepreneur and journalist Steven Brill that discussed huge variations in hospital price chargemasters and how they drive up prices for patients who lack insurance.