The report, released this week, also found that serious disciplinary actions against doctors across the nation rose slightly in 2009, but are still about 18% lower than they were at their peak five years ago.
Sidney Wolfe, MD, director of Public Citizen's Health Research Group, said that had the national rate of doctor discipline remained at that peak, there would have been 653 additional serious disciplinary actions against physicians in 2009.
"There is considerable evidence that most boards are under-disciplining physicians," Wolfe said. "Most states are not living up to their obligations to protect patients from doctors who are practicing medicine in a substandard manner."
The weighted average rate of disciplinary action in the top five states—Alaska, North Dakota, Kentucky, Ohio, and Arizona—was 5.45 serious disciplinary actions per 1,000 physicians. The weighted average rate in the bottom five states—Minnesota, South Carolina, Wisconsin, New Hampshire, and Connecticut—was 1.5 actions.
In other words, problem physicians are more than 3.6 times as likely to be seriously disciplined by medical boards in the top five states as in the bottom five.
The rankings are calculated using three years of data from the Federation of State Medical Boards on serious disciplinary actions taken against doctors in 2007-2009.
Lisa Robin, senior vice president of advocacy and member services at Federation of State Medical Boards (FSMB), says she has "mixed thoughts" about the rankings. "Public Citizen provides a valuable public service by pointing out that medical boards need to have sufficient funding and staffing. We are on the same page on that because to be able to do their jobs they need to be adequately funded," Robin says.
"We don't believe the boards should be ranked because there is so much difference and variability between the states, not only to resources and staffing, but statutory authority and differences in the laws that can account for some variance," she adds. FSMB last week released its own report showing a 6% increase in the number of disciplinary actions taken by state medical boards. In that report, FSMB specifically urged the media not to rank states.
Robin says Public Citizen only uses serious disciplinary actions. "They count other actions as non-actions. What that misses is a lot of the good work that medical boards do," Robin says.
"They have a range of sanctions and actions they can take and that would be from some sort of retraining in a problematic area, or where the physician is not as competent as he should be. There are also interventions with a letter of public reprimand or a fine and that may be sufficient to get the physician back practicing at an acceptable level." Robin says many state medical boards also have confidential programs for physicians with substance abuse problems that wouldn't be reflected in the Public Citizen report.
However, Wolfe said dismissing state-by-state comparisons because some boards have better funding, tougher laws, and larger staffs doesn't make sense. He added that Arizona's state medical board, which for several years had been among the worst in the nation, improved dramatically when the state legislature increased the board's staff and budget, and hired new leadership.
"That is exactly why you need to compare them. That is something that needs to happen to get those states that aren't doing such a good job to do a better job," he says.
Wolfe says that FSMB is a trade association that wants to protect all its members.
"It's difficult because some boards are doing better than others," he says. "If you don't want to make some boards look better than others, the easy way, the cop out, is to say ‘you shouldn't rank them because it makes some boards look better than others.' That is ridiculous."
The Public Citizen report said boards are likely to do better jobs disciplining physicians if they have good leadership, are independent, proactive, adequately staffed, and adequately funded, with all money from license fees going to fund board activities instead of going into the state treasury for general purposes.
In addition, Public Citizen said effective medical boards need a "reasonable legal framework" for disciplining doctors, such as "preponderance of the evidence" rather than "beyond reasonable doubt" or "clear and convincing evidence."
Boston Scientific Corp. subsidiary Guidant LLC pleaded guilty on Monday to criminal misdemeanor charges for its failure to notify the government about short-circuiting problems in three of its implantable cardioverter defibrillators. The medical device maker will pay nearly $300 million in penalties, the Department of Justice announced.
Under the terms of the plea agreement, first announced on Nov. 6, Guidant pleaded guilty in U.S. District Court in St. Paul, MN, to withholding information from the Food and Drug Administration regarding catastrophic failures in some of its devices.
Specifically, Guidant admitted to: lying to the FDA about the status of the Ventak Prizm 2DR device; and failing to notify the FDA of a "correction" to the Contak Renewal devices, models H135 and H155, which the company made to reduce a health risk caused by the devices. The agreement calls for Guidant to pay a criminal penalty in excess of $296 million, according to DOJ.
The plea caps a four-year federal investigation and still must be approved by U.S. District Court Judge Donovan W. Frank. If approved, the plea would be the largest criminal penalty ever imposed on a device manufacturer for violating the Food Drug and Cosmetic Act.
"Guidant's guilty plea today is about accountability," said Assistant Attorney General Tony West, who heads the Justice Department's Civil Division. "This successful prosecution serves as an important wake-up call to all those who seek to withhold vital information about public health and safety. We will continue our efforts to prosecute those who jeopardize public health by evading their reporting obligations to the FDA."
Guidant was charged in federal court on Feb. 25. The guilty plea agreement was then filed with the court on March 11.
Boston Scientific first announced the settlement "in principle" on Nov. 6. The Natick, MA-based company said Guidant's failure to disclose the problems with the defibrillators occurred before Boston Scientific acquired it in 2006. Boston Scientific added it had already posted a third-quarter charge to cover the $294 million fine.
"We are pleased this investigation has been resolved," Ray Elliott, president/CEO of Boston Scientific, said in November. "Guidant and its employees acted in good faith and believed they complied with applicable laws and regulations. We elected to resolve this matter so we could put it behind us and devote our full energies and resources to developing our innovative technologies."
Monday's plea agreement marks the second time in four months that Boston Scientific has agreed to a sizeable fine for actions at Guidant. On Dec. 23, Boston Scientific entered an agreement with the Justice Department to pay $22 million to settle a civil complaint related to post-market surveys conducted by Guidant.
Amedisys, Inc., the Baton Rouge, LA-based home health and hospice company, announced Monday that it has acquired Bluewater Healthcare Inc., a private hospice agency in Killen, AL. Financial terms of the deal were not disclosed.
Bluewater, which generated $900,000 in revenues in 2009, covers seven counties in northwest Alabama, six which are new to Amedisys.
"We welcome the new employees from Bluewater into the Amedisys family and look forward to serving the hospice needs of the patients and families in northwest Alabama," William F. Borne, CEO of Amedisys, said in a media release. "We believe that this acquisition provides a good platform for the continued expansion of our hospice services as we strive to become the largest hospice provider in the U.S."
Amedisys operates 65 hospices in 22 states. Amedisys also has home health agencies in more than 500 locations in 42 states, the District of Columbia, and Puerto Rico.
Annual compensation for primary care and specialty care groups in academic practice grew by only 2.9% for primary care physicians and 2.4% for specialists between 2008 and 2009, a survey released by the Medical Group Management Association Monday shows.
Between 2005 and 2009, compensation for primary care providers in academic practice rose by almost 17%, and compensation for specialists increased nearly 21%. Internists' compensation grew 4.4% between 2008 and 2009, while annual compensation of family practitioners increased by less than half of 1%. Compensation for cardiologists increased 7.2%, while neurologists' compensation fell 2.5% between 2008 and 2009. Ophthalmologists saw a 9.3% rise in compensation over the year, while other specialists reported slight decreases.
Geography, faculty rank, and productivity contributed to the changes in compensation levels. Median compensation for primary care physicians increased in three of four geographic sections, the greatest increase occurring in the Midwest (6.75%). Physicians in the West reported a decline in compensation. Specialists reported similar trends; compensation in the West decreased by 2% between 2008 and 2009.
Survey respondents also reported compensation increases and decreases based on faculty rank. Primary care positions, including department chairs, saw compensation rise nearly 14% from 2008. Some subspecialists reported decreased compensation based on their rank. Compensation for assistant professors and professors fell by nearly 1%.
There were 581 surveys in the report, which represented 19,048 faculty providers (both physicians and non-physician providers) and 2,191 managers. The survey is conducted annually from about Mid-September through Mid-November.
One week, I'm fretting over hospital layoffs. The next week, I'm writing about the growth in healthcare sector jobs.
Forgive me for being all over the map. I'm aiming for consistency, but healthcare is such a huge, all-encompassing sector—with about 13 million professionals caring for more than 300 million Americans. It's difficult to differentiate between industry-wide trends and local events that don't travel beyond the walls of a particular hospital.
There's a new tool out there that I think might help us read what is going on in the healthcare labor market. Health Workforce Solutions LLC, the San Francisco-based healthcare research and consulting company, has developed a Labor Market Pulse Index—a quarterly barometer of local market healthcare workforce fluctuations in 30 markets across the country.
David Cherner, managing partner of HWS, says LMPl tracks things such as temporary health workforce shortages and surpluses, facility and bed closures, announced layoffs and expansions, and local economic trends. So, what did the LMPI show us for the first quarter of 2010? Not surprisingly, it's a mixed bag:
The near-term demand for healthcare workers grew the fastest in the San Francisco Bay, Seattle, Tampa, and Philadelphia metro areas.
Much of the growth was fueled by newly announced expansion plans and/or large-scale hiring announcements at organizations including Genentech in South San Francisco, Swedish Hospital Group in Seattle, and Jefferson Health System in Philadelphia.
Of the 30 major markets tracked by the HWS Labor Market Pulse Index, the slowest areas for the quarter included the New York/Northern New Jersey, Sacramento, and the St. Louis metro areas.
The LMPI composite index, a representative basket of the 30 largest markets, posted an 8% drop in the first quarter of 2010 from the fourth quarter of 2009, after a nearly 20% increase the previous quarter.
For the fourth quarter ending Dec. 31, 11 markets of the 30 tracked by the LMPI showed signs of accelerated expansion (vs. 21 in the prior quarter).
"It can really vary from market to market," Cherner says. "Obviously a lot of this is determined by the size of the market. A layoff that might not seem big in a larger market can impact the near-term demand for healthcare workers in a smaller market much more notably."
"There are certain layoffs that are still occurring in certain markets, but at the same time we continue to see a lot of projects that were put on hold being put back," Cherner says. "As we talk to a number of different VPs of HR, CNOs, and other workforce planning people at large systems, we are also anecdotally noticing that folks are getting back to doing long-term workforce planning."
Two big reasons for the longer-term view: first, despite continued rough times for millions of Americans, it appears that the economy is in recovery, and second, the enactment of healthcare reform has ended more than one year of speculation.
"Now that there is more clarity around healthcare reform, we know what is happening, and how different constituencies are going to react and collaborate. Folks will refocus," Cherner says. "There has been a lot of flux and a lot of reactionary behavior over the last year on a quarter by quarter basis because nobody knew what was going to happen."
"My guess is we will see a lot more action this coming quarter and hopefully it will be positive. The larger elephant in the room is the general economy and who knows what impact that will have," he says.
What about all those "mass layoffs" affecting 50 or more hospital employees that we've been seeing in the first quarter?
"I think people have cut as much as they possibly can, and I can't imagine us continuing to see large-scale layoffs without hospitals closing their doors," Cherner says. "Hopefully, the volumes will pick up and there will be more cash flow and we know that the hiring environment is improving. It's still going to be a difficult year for new grads, but we are hearing anecdotally, from folks that they are planning to hire more new grads this year than they did last year, which is very positive."
Here's my take: I believe the healthcare sector is reacting like every other sector, and every other person. Everybody is waiting to see if the economic recovery is for real, or if there is a double-dip recession lurking out there. We are seeing the same thing with individuals and the housing market. Interest rates are low, there are plenty of houses available going at 20th Century prices. But nobody's buying. That's because we still don't know if housing prices will continue to drop.
We will see a continued upswing in healthcare sector hiring, maybe even a very strong uptick during the current quarter. Yes, there is a lot of anxiety out there, and deservedly so. But the demand for healthcare workers is real, and won't go away—no matter the shape of the economy. Our nation's aging demographics don't lie.
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After a week-long trial, West Bloomfield, MI, physician Alan Silber and an accomplice were convicted by a federal jury on Friday for their roles in a $1 million Medicare fraud scheme, the Department of Justice announced.
A U.S. District Court jury convicted Silber of six counts of healthcare fraud, which each carry a maximum 10-year prison sentence and a $250,000 fine. Sentencing is Aug. 6.
Hassan Reeves, an accomplice who was described by prosecutors as a patient recruiter, was convicted of one count of conspiracy to commit healthcare fraud and one count of conspiracy to pay healthcare kickbacks. Each count carries a 10-year prison term, and a $250,000 fine.
Prosecutors had charged that Silber and Reeves operated a sham infusion clinic called RDM Center Inc. Between December 2006 and March 2007, Silber, Reeves, and co-conspirators Denisse and Jose Martinez, of Miami, submitted $970,631 in false claims to Medicare, and were paid about $649,000.
Prosecutors said the Martinezes, owners of RDM Center, opened the clinic in Michigan because of a crackdown on Medicare fraud in South Florida. The Martinezes have already pleaded guilty in the scheme, DOJ said in a media release.
Evidence in the week-long trial revealed that Silber was hired to be the physician at the clinic, and Reeves was hired to recruit and pay kickbacks to Medicare beneficiaries. RDM Center reportedly billed Medicare for services that were medically unnecessary and/or never provided. The Martinezes bought a fraction of the medications for which they billed Medicare, and many medications were prescribed based not on medical need, but on what would generate reimbursements, according to DOJ.
Denisse Martinez, with no medical training, completed the clinic's patient records by filling in the "diagnosis" and "treatment" sections, which Silber signed, even though he made no diagnosis or made any medical judgment about the treatment, according to DOJ. Prosecutors showed there was no legitimate medical basis for the medications that Silber prescribed, and that in several instances the medications could have harmed patients, said DOJ.
Medicare beneficiaries at RDM Center were recruited by Reeves in downtown Detroit and driven 27 miles to the clinic. In exchange for the kickbacks—which included cash, and prescriptions for controlled substances—the beneficiaries signed documents indicating that they had received the services, said DOJ.
In one of its first steps to carry out the new healthcare law, the Obama administration announced that it was establishing a temporary insurance pool where uninsured people with medical problems could buy coverage at reduced rates. Kathleen Sebelius, the secretary of health and human services, said the program would "help provide affordable insurance for Americans who have been locked out of the insurance market." Federal health officials said the program would be available from late June of this year to Jan. 1, 2014.
The Carle Foundation in Urbana, IL, has purchased the Carle Clinic Association and its assets, including Health Alliance Medical Plans, for $250 million, the foundation announced.
The sale takes effect immediately because federal and state regulatory approvals have been obtained.
"This is an exciting step for Carle, one that positions us well for providing our communities high quality, high value care for years to come," said James C. Leonard, MD, president/CEO of The Carle Foundation, in a media release. "As a comprehensive health system, we will continue striving to improve health and wellness of people in the region with patient-focused, world-class care rooted in advanced research and technology."
The nonprofit Carle Foundation includes Carle Foundation Physician Services and the 325-bed Carle Foundation Hospital, which admitted more than 19,900 patients and treated more than 56,700 patients in the emergency room in 2009. The acquisition will include Carle Physician Group, which includes more than 300 physicians, and Health Alliance Medical Plans, which has 310,000 members in Illinois and Iowa. The newly integrated system employs about 5,800 people in central Illinois and Iowa.
This is the fourth time the two healthcare entities have considered integration.
"The time is right for this transition. Under this patient-focused, physician-led structure, we will enhance the continuum of care by aligning hospital, clinic, and health plan quality initiatives and improving efficiency by focusing on high standards of care, disease management, and implementing a single electronic medical record," said R. Bruce Wellman, MD, CEO of Carle Physician Group.
"As an integrated delivery system, Carle will be prepared to implement national healthcare policy changes as people will receive care in an accountable care environment where all hospitals, physicians, and health plans will be focused on value-driven and efficient care," he said.
Carle says the acquisition opens a process to fully integrate the healthcare system that will ultimately combine resources to preserve local ownership and control of healthcare services, strengthen community stewardship, provide discounted care to qualifying patients, and create jobs and support for health initiatives that improve healthcare access and quality.
Saying it could "no longer subsidize the record profits of a health insurance conglomerate," Stellaris Health Network this week announced that its contract with Empire Blue Cross Blue Shield expired April 1 after six months of fruitless negotiations.
The nonprofit health system based in Armonk, NY, sent a sharply worded notice of the contract termination this week to thousands of Empire policyholders, who use the four Stellaris hospitals, including Lawrence Hospital Center in Bronxville, Northern Westchester Hospital in Mount Kisco, Phelps Memorial Hospital Center in Sleepy Hollow, and White Plains Hospital Center.
"Our nonprofit community hospitals can no longer subsidize the record profits of a health insurance conglomerate, and that is what Empire expects us to do," said Arthur A. Nizza, president/CEO of Stellaris Health. "Our hospitals are committed to providing quality medical services to the communities we serve. However, that commitment cannot be met if we are forced to accept reimbursement rates that are far below the cost of providing the services."
Stellaris sought a reimbursement increase of 15%, while Empire's counter-offer was "in the single digits," Empire Director of Public Relations Sally Kweskin confirmed.
Empire, a subsidiary of WellPoint Inc., disputed Nizza's interpretation of events in its own contract termination notice to policyholders.
"The issue at the center of the negotiation is Stellaris' demand for higher-than-market reimbursement rate increases," Empire said. "Though Stellaris earns a substantial profit on Empire's business and operates profitably overall, they continue to demand annual double-digit rate increases during the proposed period of the new agreement."
Nizza countered that Stellaris did not ask Empire for reimbursement increases that are any greater than what they already receive from other insurers in the market.
"In order to maintain their position in providing high-quality health services, Stellaris Hospitals need an adequate revenue base," he said. "In the past six months, Stellaris Hospitals have reached renewal agreements with two national and two regional insurance companies. Empire has stood alone in its refusal to agree to reimbursement rates that are even close to those that other insurance companies in the market are paying."
Empire called Nizza's justification inadequate. "With hospitals' costs being almost 50% of healthcare costs, the rate increase Stellaris is demanding would be directly reflected in increases in member premiums, medical expenses, and cost share amounts," Empire said. "Stellaris has made no effort to justify this increase other than to say that what they want from Empire is what they get from other payers. They are ignoring the fact that their rates already provide them with market competitive reimbursement."
Nizza said hospitals and physicians are struggling while Empire's parent WellPoint reported record revenues and profits in 2009, with total revenues of $61 billion with net income of $4.7 billion, nearly double its 2008 results.
"This is the same WellPoint that was recently criticized by a Congressional committee for raising rates by as much as 39% for individual insurance plans in California. The Congressional committee also rebuked WellPoint for raising rates for subscribers while spending millions on lavish corporate retreats," Nizza said.
However, Empire said the insurer and WellPoint are operating on a 4% margin, and that Stellaris is profitable too. "Nonprofit is a tax designation only—it doesn't mean for a second that Stellaris isn't profitable," Empire said, in a follow-up media release addressing Nizza's complaints. "When hospitals attempt to deflect from the issue by pointing to our profits, they ignore one key fact—most of our business is self-funded. That means that the customer directly pays the claims expense. There is no mark-up or margin. If the claims is $50, the customer pays $50; if it's $25,000, the customer pays $25,000, so increases impact our customers dollar for dollar."
Empire said that more than 70% of its commercial business at Stellaris hospitals come from customers in self-funded arrangements. "Frankly, our customers who pay these costs deserve a better explanation for a 15% increase—when the system is already earning a 20% margin on Empire's business," Empire said. "The truth is that systems, such as Stellaris, have market power that enables them to effectively cost shift to private payers and, therefore, they haven't had to focus on cost structure."
Nevertheless, Nizza said Empire and WellPoint have "not yet gotten the message" sent through health reform.
"The era of health insurance companies running roughshod over hospitals and patients in their unbridled quest to reap huge profits for their investors is over," Nizza said. "For the health of our nation and our communities, the time has come for the insurance conglomerates to join with the hospitals and healthcare community to invest in our healthcare system and not just bleed the system to gain record profits for their investors."
The healthcare sector created 26,800 jobs in March and the overall economy created 162,000 new jobs, according to Bureau of Labor Statistics preliminary data released this morning.
The national jobless rate remained steady at 9.7%.
Ambulatory services accounted for 15,500 payroll additions in March, after reporting 6,700 payroll additions in February. Hospitals accounted for 1,900 new payroll additions. Nursing and residential care facilities reported 9,400 payroll additions, and physicians' offices reported 1,000 payroll additions.
The healthcare sector has been one of the few areas of job growth during the recession, creating 228,700 new jobs in 2009, and 588,000 new jobs since the recession began in December, 2007.
BLS information from February and March is considered preliminary and may be revised.
