Setting the Record Straight

Setting the Record Straight / en Sat, 26 Apr 2025 01:19:56 -0500 Fri, 16 Aug 24 15:46:54 -0500 A Weak Attempt at Pitting Hospitals Against Each Other: Arnold Ventures Uses Third Way to Advance Its Latest Advocacy Strategy /news/blog/2024-08-16-weak-attempt-pitting-hospitals-against-each-other-arnold-ventures-uses-third-way-advance-its-latest For unclear reasons, Arnold Ventures, a private LLC backed by hedge fund billionaires John and Laura Arnold, has repeatedly targeted hospitals as part of a widespread misinformation campaign.On the surface their efforts sound noble – reduce the cost of health care for everyday Americans, employers and taxpayers. As representatives of hospitals across the country – large, small, rural, urban, academic, pediatric, rehabilitation, psychiatric, and long-term, among others – we strongly support this objective. Unfortunately, instead of using their immense wealth to truly understand the issues driving health care costs and the broad impacts on American society, the Arnolds have recklessly bought into and are working to advance an inaccurate narrative of hospitals. Part of this strategy includes pumping more than $100 million into think tanks, academics, public speaking sponsorships, political activities and the like, as well as encouraging these advocates to drive a wedge between different hospitals to advance their policy agenda at the state and national levels.And yet, hospitals stand together because every hospital recognizes that their 24/7 existence is essential to the health and well-being of the communities they serve. This is particularly important for hospitals because they are the only&nbsp;part of the health care system with this existential responsibility.First and foremost, the authors in this&nbsp;<a href="https://www.thirdway.org/report/tale-of-two-hospitals-why-some-hospitals-succeed-and-others-do-not">recent piece published by Third Way</a> compare hospitals that are located in two entirely different communities, treating different patient populations, and facing very unique challenges. Hospitals and health systems, just like the communities they serve, are not monolithic in the services they offer or how they operate. While all hospitals and health systems across the country have faced skyrocketing cost challenges acquiring drugs, supplies and labor, how those cost challenges impact each hospital inherently depends on the hospital’s financial situation and the unique needs of the patients and communities they serve.For example, each hospital encounters and is working to overcome different patient barriers to care like inadequate transportation, health literacy and cultural barriers, different levels of insurance coverage, and health conditions that require their own care interventions. The authors completely ignore these realities.&nbsp;Meanwhile, a hospital that cares for higher proportions of Medicare and Medicaid patients may face more financial challenges due to chronic underpayments from government payers. The report doesn’t acknowledge that, according to the government’s own data via the Medicare Payment Advisory Commission (MedPAC), the federal body charged with advising Congress on the Medicare program, hospitals’ Medicare margins for inpatient care in 2022 were negative 11.6%. Said another way, hospitals lost $100 billion by providing care to Medicare patients. This does not even account for other government payers, like Medicaid, that also grossly underpay hospitals, as well as losses from caring for the remaining uninsured. In fact, collective underpayments from Medicare and Medicaid totaled over half a trillion dollars between 2018 and 2022.The truth is hospitals are the only place in a community that serve all patients and provide many of the essential services that make up our health care safety net in this country. They do this despite incurring losses, often even after accounting for higher commercial insurer reimbursement rates. For example, 2023 hospital data from Strata shows that hospitals incurred negative 34.3% margins across all payers for behavioral health services, a vital service line for any community. In other words, the cost shift isn’t simply about employers making up for Medicare and Medicaid losses; it also is about employers’ payments for some services making up for the losses caused by employers’ underpayment of other services.The authors also make an illogical conclusion that the concept of “breaking even” is a sign of good financial management. This is simply not true. No organization in any field can operate by simply breaking even. This is particularly true for hospitals and health systems, where maintaining a positive margin is critical to ensuring they can withstand operational disruption or unexpected financial distress, as well as maintain the safety of their physical infrastructure and adapt it to rapidly changing clinical protocols that may require technological and other upgrades.It is no surprise that the authors drew these conclusions given their use of the highly flawed data and methodologies developed through other Arnold-funded work. Take, for example, the National Academy for State Health Policy (NASHP) Hospital Cost Tool that inflates hospitals’ margins by both undercounting hospital costs as well as incorrectly counting hospital revenue (including by assuming revenue that demonstrably does not exist).&nbsp;This is in part because the Tool fails to include any costs that are not assigned to the hospital’s license. These costs could be for things like physicians, behavioral health, post-acute and ambulance services, among others. Imagine the kind of care a hospital would provide if these services were not covered. Not only would that not be a hospital that anyone would want for their community, but such a hospital would very likely cease to exist. While that possibility may not be a concern for billionaires who can fly to any hospital in the country for care, that is not the world that the vast majority of Americans live in.So where does that leave us? We strongly discourage anyone from taking seriously the Arnold Ventures misinformation campaign and the flawed conclusions in this report.Molly Smith is AHA’s group vice president for public policy. Bharath Krishnamurthy is AHA’s director, health analytics &amp; policy . Fri, 16 Aug 2024 15:46:54 -0500 Setting the Record Straight Setting the Record Straight: Latest Arnold Ventures-funded Study Draws Many Faulty Conclusions, Including Incomprehensibly Linking Hospital Prices to Increased Suicides /news/blog/2024-06-24-setting-record-straight-latest-arnold-ventures-funded-study-draws-many-faulty-conclusions-including Last week, several academics released a <a href="https://sponsors.aha.org/rs/710-ZLL-651/images/StRS-0624-Upcoming_Paper.pdf?version=0">working paper</a> saying hospital prices lead to employment losses outside the health sector, among other faulty conclusions. The study uses extremely limited and disparate data and, unsurprisingly, was funded by Arnold Ventures, offering yet another example of that group’s willingness to back even the sloppiest work as long as it paints hospitals in the most negative light. The flaws in this study are best illustrated by the authors’ assertion that hospital price increases lead to increases in suicide. That preposterous claim undermines their entire analysis.The authors’ approach to their economic arguments is, in a word, odd. First, they start with the hypothesis that rising hospital prices lead to job loss. They then link job losses generally to increased risk of suicide. And yet, during the study period, employment increased – <a href="https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm">both overall</a> and <a href="https://www.healthsystemtracker.org/chart-collection/what-are-the-recent-trends-health-sector-employment/#Cumulative%20%%20change%20in%20health%20sector%20and%20non-health%20sector%20employment,%20January%201990%20-%20February%202024">even more so in the health sector</a>. However, the authors explicitly chose to exclude health sector jobs, including the 6.4 million employees who work in hospitals. They also say nothing about how spending on hospital care supports millions of other jobs in the economy, including food services, child care, housing, and retail needs of these millions of workers and their families.Worst of all, however, is their effort to link suicide rates with hospital pricing. Quite frankly, it is unconscionable given the lengths hospitals go to every day to save people who have attempted or are at risk of taking their own life.Hospitals and health systems know as much as anyone about the scourge of suicide in this country. Across the country, people in acute psychiatric distress (including children) are getting stuck in hospital emergency departments because there isn’t the space or the workforce available to care for them earlier or in the appropriate alternative setting. The emotional and physical toll of caring for these patients is incredibly hard on hospitals’ teams.To be clear: Hospital prices do not cause suicide. No single thing does. Indeed, the hospital is – or should be – a place of last resort for individuals in need of ongoing psychiatric care. And hospitals are the only part of the health care system that are open 24 hours a day, 7 days a week to be there when needed, regardless of whether someone has insurance or the ability to pay.We wish we did not have to make such an obvious point, but the weakness of this research compels us to. Perhaps Arnold Ventures should have directed this funding to research on how to reduce suicide rather than a shoddy attack on those who treat behavioral health problems every day. Mon, 24 Jun 2024 17:42:33 -0500 Setting the Record Straight An Irresponsible Take on Nonprofit Hospitals’ Value to Patients and Communities /news/blog/2024-06-13-irresponsible-take-nonprofit-hospitals-value-patients-and-communities The Committee for a Responsible Federal Budget is supposedly committed to being “an authoritative voice for fiscal responsibility.” That’s why it’s so disappointing that they would propose something so irresponsible <a href="https://www.crfb.org/papers/federal-tax-benefits-nonprofit-hospitals">in a new report</a> — repealing nonprofit hospitals’ tax exemption. In reality, eliminating that exemption could result in more burden being placed on taxpayers to cover the cost of all the benefits and services these hospitals provide to their patients and communities. Worse than that, eliminating the longstanding exemption would cause hospitals across the country to close their doors, which would be the epitome of fiscal recklessness.Nonprofit hospitals and health systems give back to their communities in a variety of important ways. In addition to providing charity care to those in financial need, hospitals help patients find health screenings, housing, and healthy food. They provide transportation to medical appointments that sick community members would otherwise skip. And they provide educational and other programs like vaccination clinics to address the many other needs that affect their community’s health and well-being. In 2020, the most recent year of data, nonprofit hospitals and systems provided nearly <a href="/system/files/media/file/2023/10/Results-from-2020-Tax-Exempt-Hospitals-Schedule-H-Community-Benefit-Reports.pdf">$130 billion in benefits to communities</a> — $20 billion more than the prior year.Hospitals tailor these benefits to the local needs of their communities, which can vary drastically based on location, patient demographics, and payer mix. In fact, the benefit that tax-exempt hospitals provided to their communities, as reported on the IRS Form 990 Schedule H, was estimated by the consulting firm EY at almost <a href="/system/files/media/file/2022/06/E%26Y-Benefit-of-of-Tax-Exemption-Report-FY2019-FINAL-with-links.pdf">nine times greater than the value of tax revenue forgone</a>. That is a striking return on investment.Drastically oversimplifying these complex hospital-community relationships by boiling them down to a single metric — charity care — serves no one except those committed to smearing hospitals at every opportunity. Yet that is exactly what the Committee for a Responsible Federal Budget has done in its report. This position would be surprising if not for the fact that this report was produced in conjunction with the well-known anti-hospital, billionaire-backed Arnold Ventures and in large part relies on prior studies also funded by Arnold Ventures that the AHA has debunked time and again.Particularly troubling is the report’s position on Medicaid shortfall — the amount of underpayments from the Medicaid program. The authors argue that this shortfall shouldn’t be considered a community benefit. But that argument seriously de-values the Medicaid program and its vital role in ensuring that Americans who need care have access to that care. It also ignores the complexity of Medicaid policy, including the extent to which Medicaid drastically underpays for services and the well-documented link between payment levels and health care access.It’s also important to recognize that the amount of charity care provided is often directly related to how many Medicaid patients a hospital cares for. Hospitals (and states) with high Medicaid enrollment typically have lower charity care — not because they are choosing to provide less, but because more patients are insured through Medicaid. In those cases, the way that hospitals serve their community is as a safety-net that absorbs the massive financial shortfall associated with caring for Medicaid patients.The reality is that hospitals and health systems are dedicated to providing high-quality 24/7 care to all patients in every community across the country. While that commitment never wavers, hospitals continue to face significant challenges, <a href="/costsofcaring">including high expenses</a>, underpayments from Medicaid and <a href="/system/files/media/file/2024/01/medicare-significantly-underpays-hospitals-for-cost-of-patient-care-infographic.pdf">Medicare</a>, and increasing administrative burden due to inappropriate commercial health insurer practices.Instead of pushing flawed policy proposals, let’s focus on ways we can support nonprofit hospitals and ensure they can be there 24/7 to care for the patients and communities that depend on them. Thu, 13 Jun 2024 16:29:57 -0500 Setting the Record Straight RAND 5.0 – The Health Policy Equivalent of Groundhog Day /news/blog/2024-05-23-rand-50-health-policy-equivalent-groundhog-day The RAND Corporation recently released the <a href="https://www.rand.org/pubs/research_reports/RRA1144-2.html" target="_blank">fifth iteration</a> of its biannual hospital price report. The AHA has <a href="/news/blog/2022-05-26-blog-rand-40-still-riddled-methodology-flaws-and-incomplete-data" target="_blank">previously highlighted</a> significant flaws with older versions of this report, and this latest iteration not only recycles but doubles down on those serious shortcomings — the health policy equivalent of Groundhog Day.To start, RAND’s insistence on using Medicare as a benchmark for commercial prices continues to distort and generate artificial eye-popping numbers that grab headlines and generate clicks but don’t tell an accurate story. By using Medicare as a benchmark, RAND continues to promote an inaccurate and inflated impression of what hospitals are getting paid to provide care. The truth is that in 2022, <a href="/system/files/media/file/2024/01/medicare-significantly-underpays-hospitals-for-cost-of-patient-care-infographic.pdf" target="_blank">Medicare paid hospitals just 82 cents for every dollar of care received</a>, resulting in nearly $100 billion in underpayments to hospitals. From 2021 to 2023, general economic inflation went up more than twice as much as Medicare rate increases. More to the point, Medicare pricing isn’t designed to be applied to the privately insured — something the authors themselves admit “may not be appropriate.”It’s not just the use of Medicare as a benchmark that is misleading. The notion that the study sample is anything close to representative at the national or state — let alone hospital — level would be laughable if the subject were not so serious. In fact, RAND’s dataset represents less than 2% of the nation’s spending on hospitals between 2020 and 2022. It produced price estimates for individual hospitals with as few as 11 inpatient or outpatient claims represented in their analysis. The inpatient prices in RAND’s analysis for the entire state of Hawaii, for example, is based on just 73 inpatient stays over a three-year period. To put this into broader context, in more than 40% of the hospitals included in RAND’s analysis, the total inpatient and outpatient payments that were included represented less than 1% of those hospitals’ total net patient revenues. When you then consider the fact that RAND reveals nothing about which employers chose to participate in the analysis — we have no line of sight into how more or less representative these employers are of the broader population.Also, notably absent from RAND’s analysis is discussion of the unique nature of the timeframe focused on in this version — 2020 to 2022. This two-year period includes: a massive drop-off in volume due to many people who chose to delay or avoid health care during the pandemic; multiple waves of COVID-19, which led to large fluctuations of sick patients being treated in hospitals; persistent increases in patient acuity and <a href="/system/files/media/file/2022/12/Issue-Brief-Patients-and-Providers-Faced-with-Increasing-Delays-in-Timely-Discharges.pdf" target="_blank">delays in transfers to post-acute care settings</a>; <a href="/costsofcaring" target="_blank">skyrocketing expenses</a> due to inflation and workforce pressures; and massive profits for commercial insurance companies. None of these historic and influential trends warranted even a mention by RAND.Another convenient omission from RAND’s analysis is any discussion of the role commercial insurers and third-party administrators play in driving up costs for employers — such as the issues highlighted by the recent <a href="https://www.nytimes.com/2024/04/07/us/health-insurance-medical-bills-takeaways.html" target="_blank">allegations against Multiplan</a>. Whether through convoluted fees passed on to unaware employers, and delays or outright denials of payment to providers for caring for patients, these entities play a significant role in driving up health care costs. Perhaps unsurprisingly, the origin of this report comes from RAND’s continued collaboration with the Employers’ Forum of Indiana, which, despite the folksy name, <a href="https://employersforumindiana.org/about/participants/" target="_blank">boasts membership</a> from a litany of the wealthiest commercial insurers and drug companies in the world.Despite these and other flaws, RAND and its collaborators promote this tool as a legitimate mechanism to lower the costs of hospital care. Employers and policymakers should be aware that this tool can’t be relied upon to tell you much more beyond the fact that Medicare prices don’t cover the costs of providing care and are far too low. Giving it credit for anything more risks doing very real harm to hospitals and the patients and communities that rely on them each day. It also does nothing to address the real challenge of rising costs of health care in this country. Thu, 23 May 2024 10:01:43 -0500 Setting the Record Straight AHA Statement on RAND 5.0 Hospital Pricing Study /press-releases/2024-05-13-aha-statement-rand-50-hospital-pricing-study Molly Smith Group Vice President for Public Policy&nbsp; �� AssociationMay 13, 2024In what is becoming an all too familiar pattern, the RAND Corporation’s latest hospital price report&nbsp;oversells and underwhelms.&nbsp;Their analysis — which despite much heralded data expansions — still represents less than 2% of overall hospital spending. This offers a skewed and&nbsp;incomplete&nbsp;picture of hospital spending.In benchmarking against woefully inadequate Medicare payments, RAND makes an apples-to-oranges comparison that presents an inflated impression of what hospitals are actually getting paid for delivering care while facing continued financial and other operational challenges.&nbsp;In addition to the ongoing flaw of relying on a self-selected sample of data, their analysis is suspiciously silent on the hidden influence of commercial insurers in driving up health care costs for patients, as evidenced by issues like the recent concerning allegations against MultiPlan.Disappointingly, and despite the many clear and compelling reasons to discount their results, RAND continues to promote their findings as a legitimate way for employers and policymakers to make decisions about provider pay — jeopardizing patient access to care. Ultimately, the RAND study only underscores what we already know— that hospitals are chronically underpaid for Medicare services. Anything beyond that should be taken with a healthy measure of skepticism.&nbsp;### Mon, 13 May 2024 09:58:55 -0500 Setting the Record Straight Unequal Transparency: How Hospitals Report More Data than Any Other Entity in the Health Care Sector /news/blog/2024-04-17-unequal-transparency-how-hospitals-report-more-data-any-other-entity-health-care-sector Imagine if the government required health insurance and drug companies to account for every dollar they spent, audit those data, and publicly report those numbers. The pushback would be tremendous, yet that is the reality for hospitals and health systems operating in the U.S.The complexity and volume of data reporting required from hospitals and health systems is far greater than any other entity in the health care sector. These data serve a range of purposes and are reported to a variety of federal and state governmental agencies, regularly audited and generally made public for scrutiny by policymakers, researchers, and patients, alike. However, hospitals also share data with a range of other organizations for a variety of purposes, including credit rating agencies and bondholders, and accrediting organizations. Despite this high degree of transparency by the hospital field,&nbsp;<a href="https://www.kff.org/health-costs/issue-brief/gaps-in-data-about-hospital-and-health-system-finances-limit-transparency-for-policymakers-and-patients/">observers and critics often argue that hospitals aren't reporting enough data</a>. Below, we set the record straight on this important issue and why additional hospital reporting is not going to magically solve the pressing issues facing the health care field:&nbsp; &nbsp;<ul><li>Hospital data reporting is comprehensive and widely accessible.&nbsp;Currently, hospitals report a variety of information to different audiences including through Medicare cost reports, IRS form 990 (Schedule H), audited financial statements, community health needs assessments, price transparency files and 340B annual registration requirements, to name just a few. Notably, these reporting mechanisms are the result of federal requirements only and do not include myriad hospital reports that may be required by individual states. These are all either publicly available through the government or easily accessible by the public through third-party websites. As a result of having to publicly report so much data in numerous forms through multiple different platforms, a common complaint is that there is no easy, clean singular source of data for hospitals. However, this approach fails to acknowledge that different audiences employ different data definitions that may serve one purpose but not the other. For example, CMS requires certain hospital data to set Medicare payment rates, which are different than the data a bond rating agency requires to set bond covenants and evaluate creditworthiness. Additionally, hospitals are not monolithic organizations — they vary widely in their size, patient characteristics, financial infrastructures, services provided and staffing needs. For this reason, a “one size fits all” data reporting structure would be difficult to operationalize.</li></ul>&nbsp;<ul><li>Existing hospital reporting is extremely costly, time consuming, and ever changing.&nbsp;The existing data reporting that hospitals comply with comes at a significant financial and labor cost that is borne entirely by the hospital or health system. For example, completing the annual Medicare cost report alone is an incredibly time-consuming and complex endeavor, requiring dedicated staff to manage this process, expensive software and, in some cases, consultants and auditors to ensure accurate completion. Another example is the detailed reporting hospitals are required to perform demonstrating the quality of the services they provide their patients. &nbsp;</li><li>Hospital data requirements are constantly evolving as new and updated regulations are published or temporary crises arise. For example, during the COVID-19 public health emergency, hospitals temporarily were required to report detailed data such as infection rates, vaccination rates, level of staffing and daily counts of personal protective equipment. At the same time, regulatory changes through annual updates to the Medicare payment rules often require, for example, hospitals to report data on new or revised quality metrics. Under both scenarios, hospitals are forced to incur costs which can include additional staffing to manage new reporting requirements and modifying existing software systems to accommodate such changes.&nbsp; &nbsp;</li><li>Commercial insurers and drug companies are not held to the same data reporting standards as hospitals. For example, the publicly available Medical Loss Ratio (MLR) reported by Medicare Advantage insurers, which requires insurers to spend 80-85% of their premium dollars on medical care, is sparse compared to hospital data. The data not only lags as much as four years, but the data is often limited to just the contract MLR percentage, with no details about how the insurer is counting their medical care costs and revenues. Furthermore, these lax MLR reporting requirements not only provide no meaningful accountability to meet the 80-85% MLR requirement, but also create opportunities for insurers to take advantage of business verticals where they can count spending on their subsidiaries as “medical care” spending. Additionally, while the rate review process provides some transparency into how insurance rates are set, the details that are publicly available varies widely by state and much of the public information is at a very high level that makes any meaningful scrutiny difficult.&nbsp;</li></ul>&nbsp;Similarly, there is no public data transparency around how drug companies price their drugs, by how much those drug prices increase, and how much margin they achieve on each drug sold — it is complete “black box.” For example, a&nbsp;<a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2816824">recent study</a> published in the Journal of the American Medical Association estimated that it costs anywhere between $0.89 and $4.73 to produce a one-month supply of the blockbuster drug, Ozempic. The same drug is sold for nearly $1,000, earning Novo Nordisk, the drug’s manufacturer, a hefty margin on each dose of Ozempic sold. Similar margins are likely true for most drugs sold in the U.S., but the data to investigate this and lower drug costs for patients and providers is largely unavailable.The current level of public data reporting by hospitals already provides policymakers, researchers, and the public with a comprehensive set of data points that far exceeds any public data reporting by other entities within the health care sector.&nbsp;Therefore, requiring hospitals to report even more data will do little to bring additional insights not already available. Instead, it would result in additional costs for an already financially strained hospital field and would divert staff time away from patient care to data reporting with no real benefit to lower health care costs for Americans. Wed, 17 Apr 2024 11:06:30 -0500 Setting the Record Straight There is Nothing ‘Fair’ about the Lown Institute’s ‘Fair Share’ Report /news/blog/2024-03-25-there-nothing-fair-about-lown-institutes-fair-share-report America’s hospitals and health systems have proven their dedication to caring for their patients and communities time and again, particularly during the challenging circumstances in recent years. Though the Lown Institute’s so-called “Fair Share” report highlights the important contributions of certain hospitals, it misses the larger point, selectively relying on isolated data to paint a negative picture about the hospital field in general.In addition to ensuring access to 24/7 essential medical care, hospitals and health systems of all types, sizes and locations provide a wide variety of other important benefits to their communities. The most recent full year of data show that&nbsp;<a href="/guidesreports/2023-10-09-results-2020-tax-exempt-hospitals-schedule-h-community-benefit-reports">tax-exempt hospitals provided $129 billion in total benefits to their communities in 2020 alone</a>.&nbsp;Said another way, every dollar invested in non-profit hospitals results in&nbsp;<a href="/system/files/media/file/2022/06/E%26Y-Benefit-of-of-Tax-Exemption-Report-FY2019-FINAL-with-links.pdf">$9 in benefits delivered back to the community</a>, according to a study by the accounting firm, EY.In addition to medical care, hospitals often provide many other important social services, including food security programs, maternal and pre-natal education, vaccination clinics, nutrition and physical education classes, and subsidized transportation, to name just a few examples. In addition, hospitals are often one of the largest employers in their community, providing jobs and fostering economic development in the area.&nbsp;Despite all the available evidence showing hospitals’ devotion to their communities, the latest iteration of the&nbsp;<a href="https://lownhospitalsindex.org/hospital-fair-share-spending-2024/">Lown Institute’s so-called “Fair Share” report on hospital community benefits</a> suffers from the same biases, flaws and shortcomings as its previous reports.&nbsp; Some of the most glaring issues with Lown’s report include:<ul><li>The report cherry-picks categories of community benefit and ignores other areas of great importance by omitting the very real underpayments from Medicaid and Medicare that hospitals must absorb.For example, hospitals “lessen government burden,” an IRS cornerstone of tax exemption, by accepting payment rates from government programs such as Medicaid and Medicare that do not cover the cost of providing care. Importantly, hospitals cannot deny care to patients based on their insurance status, which means that hospitals must absorb these underpayments. In 2022, combined Medicaid and&nbsp;Medicare underpayments totaled&nbsp;$130 billion. Apart from these Medicaid and Medicare underpayments, Lown also dismisses investments in researching life-saving treatments and cures, and training and educating the next generation of doctors, nurses, and other caregivers – all categories of benefits identified by the IRS for reporting.&nbsp;</li><li>The report does not grapple with state-level policy differences that can seriously skew the data.Policy decisions at the state level can have a major impact on the level of uncompensated care and Medicaid shortfalls that hospitals face. For example, the decision whether to expand Medicaid has a significant impact on a hospital’s financial assistance levels.&nbsp;Hospitals in states that have expanded Medicaid may encounter lower levels of uninsured patients but higher Medicaid underpayments. Conversely, hospitals in states that have chosen not to expand Medicaid may encounter more uninsured patients but lower Medicaid underpayments. The Lown report drastically oversimplifies an incredibly complicated set of policy, payment, and demographic realities by arguing that hospitals make a “choice” to provide financial assistance but not incur Medicaid shortfalls. This kind of error is indicative of the lack of sophistication throughout the entire Lown report.</li><li>Lown applies an arbitrary “fair share” threshold based on a standard established using data from before implementation of the Affordable Care Act coverage provisions, such as Medicaid expansion.&nbsp;Lown uses this standard without acknowledging how the health care landscape has changed significantly in the last decade and how those changes impact the results. In addition, data from 2021 in particular should be viewed with a heavy dose of speculation as hospitals were still very much in the midst of the COVID-19 pandemic and the government stepped up to provide desperately needed temporary support in the form of relief payments and coverage expansions. And by 2022, hospitals faced a new set of challenges, like skyrocketing expenses, many of which persist today.</li><li>A series of flawed policy proposals that flow from the report’s flawed data analysis.There is a concept in computer science called “garbage in, garbage out,” in which flawed input produces a similarly flawed output. So too here. Because the Lown report’s analysis is so biased and the data so limited, its policy proposals are equally bad. For example, the Lown report proposes a minimum threshold of community benefit spending for hospitals, but by failing to account for swaths of relevant community spending, the recommendations would result in distorted and rigid standards. Likewise, the report would seek to establish one-size-fits all requirements for financial assistance without accounting for the vast swings in hospital finances that can occur year to year. Take just the first three months of 2024: no one could have expected the adverse fallout from the cyberattack on Change Healthcare, but rigid requirements like those proposed by Lown would have serious impacts on hospital finances and the communities they serve.&nbsp; Having started this exercise with limited data and a biased perspective, it is not surprising that the report ends with equally bad and biased policy ideas.</li></ul>We welcome a good-faith discussion about the many benefits hospitals provide to their communities, but this flawed report does not merit inclusion in that discussion. Contrary to their purported intent, misleading reports like this one do more to undermine rather than improve access to high-quality care for all Americans. Mon, 25 Mar 2024 18:56:02 -0500 Setting the Record Straight Setting the Record Straight: Washington Post Editorial on Site-neutral Deeply Flawed and Poorly-timed /news/blog/2024-03-15-setting-record-straight-washington-post-editorial-site-neutral-deeply-flawed-and-poorly-timed A March 14&nbsp;<a href="https://www.washingtonpost.com/opinions/2024/03/14/medicare-hospitals-chemotherapy-site-neutral/">editorial</a> in the Washington Post calling for Congress to enact so-called site-neutral policies is deeply flawed and incredibly out of touch with the realities hospitals and health systems are experiencing right now.First, the editorial was published while many hospitals and health systems have not been reimbursed for weeks for care they have provided to patients. On February 21, Change Healthcare, a subsidiary of UnitedHealth Group, was the victim of the most significant and consequential cyberattack on the U.S. health care system in American history. Since this attack, billions of dollars have stopped flowing to providers, thereby threatening the financial viability of hospitals and health systems.Besides the editorial’s clumsy timing, it also fundamentally misses the point that all sites of care are not created equal. We cannot do away with a payment differential that is appropriate for services provided in hospital outpatient departments (HOPDs) that care for everyone, maintain emergency stand-by services, take care of more complicated patients, and have to meet tougher regulatory requirements than other sites of care.Here are just four reasons why these policies are misguided and would reduce access to 24/7 care for patients and communities.Medicare already severely underpays hospitals for the care they provide to patients.&nbsp;For Medicare, which covers more than 60 million people, new data shows that the program paid a record-low 82 cents for every dollar spent by hospitals caring for Medicare patients in 2022 — the most recent data available.&nbsp;This resulted in about $100 billion in Medicare underpayments that year alone.&nbsp;The federal government’s own Medicare Payment Advisory Commission recently agreed that Medicare margins hit a record-low that year.This chronic underpayment combined with hospitals experiencing skyrocketing expenses for the cost of providing care&nbsp;over the last several years, fighting against growing cybersecurity threats, and ensuring patients have access to cutting-edge services and treatments, just to name a few, continues to put hospitals’ ability to provide quality and accessible care 24/7 to all who need it at risk. Chronic underpayments also hobble the ability of hospitals to reinvest in people and communities, expand or upgrade facilities, or to pursue the research and technological advances that advance health for all.HOPDs treat sicker, lower-income patients with more complex and chronic conditions than those treated in independent physician offices or ambulatory surgery centers.&nbsp;This is in part because hospitals are better equipped to handle complications and emergencies, which often require the use of additional resources that other care settings do not typically provide.Patients, particularly those in rural and medically underserved communities, could lose access to local hospital care.&nbsp;Most rural hospital funding comes from government payers, and Medicare comprises nearly half of their revenue. Medicare’s chronic underpayments have contributed to&nbsp;at least 149 rural hospitals closing or converting to another type of provider&nbsp;since 2010. Further site-neutral cuts would lead to devastating financial hardship, reduced access to essential services and programs, and additional hospital closures.&nbsp;Site-neutral proposals do not account for key differences between HOPDs and other sites of care.&nbsp;The cost of care delivered in hospitals and health systems takes into account the unique benefits only they provide to their communities. This includes maintaining standby capacity for natural and man-made disasters, public health emergencies and other unexpected traumatic events. In addition, hospital facilities must comply with a much more comprehensive scope of licensing, accreditation and other regulatory requirements compared to other sites of care.Instead of considering flawed policies that put patient access to care in jeopardy, Congress should focus on ways to make sure hospitals and health systems have the resources they need to continue providing 24/7 care to all patients in every community.&nbsp; Fri, 15 Mar 2024 14:52:20 -0500 Setting the Record Straight Anti-hospital Group Misleads on Site-neutral Impact on Rural Access to Care /news/blog/2024-02-07-anti-hospital-group-misleads-site-neutral-impact-rural-access-care Once again, the anti-hospital, billionaire-backed Arnold Ventures is pushing its anti-hospital agenda with a “report” that is so disingenuous and has so many limitations that it cannot be taken seriously. In this case, a&nbsp;<a href="https://craftmediabucket.s3.amazonaws.com/uploads/AV-Site-Neutral-Reforms-Protect-Rural-Patients-v2.pdf">one-pager from the group</a> twists numbers to make the Orwellian claim that “site-neutral payment reforms will protect rural patients.” They go on to diminish the extent to which rural hospitals serve their communities and flippantly write-off the proposed site-neutral cuts facing rural hospitals as “minimal.” However, the facts tell a far different story.&nbsp;In reality, the rural hospitals that would be impacted by the Lower Costs, More Transparency Act — many of which operate with negative or break-even margins — would face $272 million in cuts over ten years. These impacted rural hospitals alone:<ul><li>Provide 33 million total outpatient visits a year;</li><li>Deliver nearly a third of all babies delivered in rural areas;</li><li>Care for over four million emergency visits a year;</li><li>Already experience a negative 16.4% Medicare outpatient margin and a negative 12.1% overall Medicare margin.</li></ul>More cuts will drive these margins even further into the red and jeopardize access to care for patients and communities.&nbsp;In addition to downplaying the impact of these cuts, Arnold Ventures also purposefully belittles the importance of the rural hospitals that would be subject to these cuts. In the one-pager, Arnold Ventures claims that the “facilities subject to reforms only account for 2% of all rural outpatient spending,” which implies that the outpatient spending at those hospitals account for a very small share of total spending. This is misleading at best.&nbsp;It appears that what they have done is examine just a sliver of spending at the hospital outpatient departments of the affected hospitals, ignoring the true magnitude of all the services that the impacted hospitals provide to their communities.&nbsp;The reality is that the impacted rural hospitals&nbsp;account for 18% of all rural outpatient prospective payment system (OPPS) hospitals, but almost 40% of OPPS spending across all rural hospitals; and provide care for 33% of Medicare beneficiaries seen in rural hospitals.<a href="#_ftn1" title="">[1]</a>The&nbsp;<a href="/system/files/media/file/2024/01/analysis-hospitals-health-systems-are-critical-to-preserving-access-to-care-for-rural-communities-report.pdf">AHA recently demonstrated</a> that hospitals and health systems play critical roles in preserving access to care for patients and communities in rural America. They have increasingly stepped up to fill voids in care by reinvesting through access points like hospital outpatient departments, also known as “HOPDs.” These sites of care provide essential services for many rural and low-income communities across the country. Oftentimes, hospitals have been a lifeline for struggling rural physician practices — helping to keep their doors open so they can continue caring for their patients.Misrepresenting the scope and importance of rural hospitals — as Arnold Ventures does — is a great disservice to the patients and communities that rely on them for access to care that too often cannot be found elsewhere and is not provided by others in the health care sector.&nbsp;Aaron Wesolowski is AHA’s vice president of research strategy and policy communications. &nbsp;<div><hr><div id="ftn1"><a href="#_ftnref1" title="">[1]</a> These figures and other statistics reported above are calculated from a variety of sources including the 2022 �� Association Annual Survey; sources cited in the Dec. 2023 AHA <a href="/fact-sheets/2023-12-08-estimated-impact-analysis-site-neutral-provisions-lower-costs-more-transparency-act-hr-5378">fact sheet</a> showing impacts of the site-neutral provisions in the Lower Costs, More Transparency Act (H.R. 5378); and 2022 Medicare cost reports.&nbsp;</div></div> Wed, 07 Feb 2024 10:33:38 -0600 Setting the Record Straight Article Misleads on Hospitals’ Charity Care Spending /news/blog/2023-11-30-article-misleads-hospitals-charity-care-spending A recent <a href="https://www.modernhealthcare.com/providers/nonprofit-hospital-charity-care-spending-2020-2022" target="_blank">Modern Healthcare article</a> misleadingly suggests that hospitals and health systems provided less charity care between 2020 and 2023. The truth is much different. In fact, the author’s own data tells a very different story, and it is important to set the record straight. In reality, hospitals’ overall charity care increased over the last three years. According to the data cited in the article from Merritt Research Services, median charity care spending for all hospitals grew by 13% between 2021 and 2022 alone. Hospitals’ expenses also increased during this period — at a far greater pace. The AHA has documented — <a href="/costsofcaring">again</a> and <a href="/guidesreports/2023-04-20-2022-costs-caring">again</a> — how operating expenses have skyrocketed. Costs grew 17.5% between 2020 and 2022, driven by increases in labor expenses, drug costs, and spending on medical supplies and equipment. These expenses created historic financial headwinds, with record numbers of hospitals incurring negative operating margins. This massive growth in expenses has pushed many hospitals and health systems to the brink. These twin realities contradict the article’s disingenuous headline, as well as its lead quotation from a professor whose research agenda has been funded by an anti-hospital dark money organization. Put simply, Modern Healthcare is able to break the entirely unremarkable news of a “proportional” decrease in the ratio of charity care and hospital expenses only because hospital expenses grew so precipitously. It’s basic math: When the denominator (expenses) increases as much as it has over the past three years, but the numerator (charity care) does not increase as much, then of course the overall proportion will look different. But rather than reporting that “news,” and rather than reporting the truly newsworthy fact that hospitals provided increasing levels of financial assistance despite facing historic growth in expenses, Modern Healthcare misleads readers into thinking that hospitals were not adequately providing care to the patients and communities they serve. That journalistic defect alone would be enough to undermine Modern Healthcare’s misleading thesis. But its math is doubly flawed because the author leaves out many of the total benefits that hospitals and health systems provide to their communities. Put another way, by erroneously focusing on just one metric of how hospitals support their communities (charity care), the numerator is actually far smaller than reality reflects. For example, benefits to communities include things like financial assistance for patients, other community programs to advance health and wellness, and perhaps most important, significant Medicaid and Medicare underpayments (i.e., the difference between what those programs pay for care and what it costs to provide care and treatment to Medicare and Medicaid patients). And according to a recent AHA study, <a href="/system/files/media/file/2023/10/Results-from-2020-Tax-Exempt-Hospitals-Schedule-H-Community-Benefit-Reports.pdf">total hospital benefits to communities</a> were $130 billion in 2020 alone (the most recent year for which comprehensive data is available). This was a nearly $20 billion increase from 2019. It is reckless and wrong to allege that hospitals are somehow deliberately “squeez(ing) their charity care spending to maintain financial viability” without presenting any evidence to back up this outrageous assertion. It is equally wrong for Modern Healthcare to offer that quote without reporting that the speaker is funded by Arnold Ventures — a shadowy organization with an obvious bias against hospitals. The truth is that hospitals have been rocked by wave after wave of external financial challenges over the last three years, but that has not stopped them from providing critical care to the most vulnerable and needy patients and communities. This is the important news that Modern Healthcare should be reporting. Thu, 30 Nov 2023 09:31:08 -0600 Setting the Record Straight