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By Debra Stock, vice president of Member Relations, and Jim Bentley, PhD, senior vice president for Strategic Policy Planning, American Hospital Association
Leadership and oversight of dynamic organizations that operate in complex environments is demanding work. With so many ongoing issues competing for importance, it can be particularly challenging to keep all of the priorities on the board and executives' radar screen.
There is one ongoing challenge that must be a continuing priority for hospital boards and executives: building and keeping a thriving, engaged workforce that provides excellent patient care in safe and satisfying work environments. People are, after all, the foundation of the health care delivery.
In 2002, in the midst of a severe shortage of all types of hospital workers, the American Hospital Association Workforce Commission issued a report, In Our Hands: How Hospital Leaders Can Build a Thriving Workforce. Today, six years later, a more serious, long-term shortage of workers is on our heels, brought about by four significant trends: the aging of the U.S. labor force; shifting demographics with fewer potential workers replacing retiring baby boomers; an educational pipeline that cannot produce enough new workers, and high levels of dissatisfaction among current workers.
The 2002 In Our Hands report called upon hospital leaders – and particularly boards of trustees and executives – to take both immediate and sustained actions to prevent a major societal crisis in care. Those actions – in the following five areas – are even more relevant today.
- Foster meaningful work by transforming hospitals into modern day organizations in which all aspects of the work are designed around patients and the needs of staff to care for and support them. Workers must find meaning in their work and be supported in their efforts to provide high-quality patient care.
- Improve the workplace partnership by creating a culture in which hospital staff – including clinical, support and managerial staff – are valued, have a sustained voice in shaping institutional policies, and receive appropriate rewards and recognition for their efforts.
- Broaden the base of health care workers by designing strategies that attract and retain a diverse workforce of men and women, racial and ethnic minorities and immigrants, and older workers.
- Collaborate with others – including other hospitals, health care and professional associations, educational institutions, corporations, philanthropic organizations and governments to attract new entrants to the health professions.
- Build societal support for the public policies and resources needed to help hospitals hire and retain a qualified workforce, including adequate payment rates for hospital care; financial support for the introduction of information technology that facilitates improvements in the way hospital work gets done; and regulatory reform that reduces administrative burdens and promotes effective team approaches to providing quality care.
It is clear, six years after these recommendations were made, that demonstrable, sustained leadership from the top of the organization is key to achieving progress and outcomes on these strategies. It starts with a board and executive team that take a strategic, systematic and measured approach to the "people issues." Those organizations that are building and keeping a competent, engaged workforce integrate this issue as a stated priority in their long-term strategic plans. The board and executives clearly articulate the organization's mission, vision, values, and create a culture that supports the workforce and their abilities to meet the needs of patients. They align resources, incentives and reinforcement systems so that workforce priorities are visibly addressed.
One important means for the board to demonstrate its commitment to workforce as a top strategic priority is to incorporate human capital measures into the board's balanced scorecard. This was an original recommendation of the AHA Workforce Commission, but one that seems to have been adopted less frequently by hospital boards than other strategies.
A concept that was introduced in 1992 by Robert Kaplan and David Norton in the Harvard Business Review, a balanced scorecard helps boards and executives maintain their focus on key organizational performance indicators. Many hospital boards have scorecards that include measures for financial performance, quality of care, growth and development, and community benefit. Incorporating a set of measures that address the workforce issues will ensure that the board truly continues to have strategic oversight of this priority area. After all, one cannot make progress on an issue without measuring it and monitoring progress.
Based on input from hundreds of hospital executives and board members throughout the U.S., we created an approach to a set of strategic human capital measures for a board's balanced scorecard. This approach suggests that there are four key, strategic workforce questions that every board should be monitoring:
- Is our current supply of human capital adequate to meet the hospital’s strategic needs?
- To what extent are our employees satisfied or engaged?
- Is our future supply of human capital adequate to meet the hospital’s strategic needs?
- To what extent are we partnering with educational institutions to increase the supply of health care workers?
Two sets of performance metrics are then suggested: a basic, core set of measures that offers a broad-based picture of key performance indicators for the board's strategic workforce questions, along with a set of supplemental measures that provide a more in-depth assessment of the questions. Some boards will choose to use only the core measures or to assign monitoring of the more in-depth supplemental measures to a human resources committee or quality committee.
Human capital measures must be adapted to fit the individual needs of each hospital, and its board and executive leadership. What matters is that some set of standard "people" measures that matches the organization's strategic plan, workforce size, and unique characteristics be identified and agreed upon by the board and executives. Targets and ranges for performance and success should then be set for each measure, and management held accountable for executing the strategies that result in achievement of the goals set. Lastly, the board should commit to a review and discussion of the results and trend analysis of the data on a regular basis, generally quarterly, bi-annually or yearly depending on the particular measure.
With the certainty of a coming massive long-term shortage of health care workers, it is even more crucial that trustees and senior executives make workforce issues a sustained, visible strategic priority. By adopting and regularly monitoring a set of human capital measures as part of its balanced scorecard, hospital boards will make sure that they are rightly keeping the health and happiness of their workforce at the top of the agenda.
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You undoubtedly heard that the United States House of Representatives passed President Obama's economic stimulus bill by a vote of 244-188. Much has been reported in the media about the reluctance of Congressional Republicans to support the legislation. In fact, all three of Kansas' Republicans, Jerry Moran, Lynn Jenkins and Todd Tiarht voted against the bill. It is likely they had valid concerns about the bill in its entirety, but from our perspective, it contains a number of provisions that are very important to health care delivery in Kansas. Here is a quick synopsis of those provisions:
- Federal Medicaid Match: An immediate infusion of $89.5 billion for a temporary increase in the match rate the federal government pays for Medicaid - FMAP. Kansas would go from receiving a 60 percent match to nearly a 65 percent match. This would bring approximately $90 million in new federal Medicaid matching funds for the balance of the current state fiscal year and more than $120 million for the next fiscal year. These new funds would allow the State to provide the same levels of reimbursement and eligibility, while consuming less money from the State General Fund. This is an important provision not only for our state's Medicaid program but also for the State's ability to balance its budget this year and next.
- Newly Unemployed and Uninsured: The bill allows states to use their Medicaid programs to cover people who are both unemployed and uninsured who have exhausted unemployment benefits; individuals receiving food stamps that are not eligible for Medicaid; and individuals in families with gross incomes that are less than 200 percent of the poverty level.
- Expiring Medicaid Rules Moratoria: Of particular benefit for the State is the proposed rule requiring a change in how intergovernmental transfers and certified public expenditures are counted. Congress placed a moratorium on proposed Medicaid rules last May with the Iraq Supplemental. This rule would alter how state-operated facilities receive payments and would cause the State to provide an additional $25 million, if allowed, to be implemented. Right now, these rules moratoria are extended to June 30 (a three-month reprieve) in hopes that the new administration will re-evaluate them in light of the economy. We support this move and will work with Congress to remove the proposals altogether.
- Health Care Information Technology: $20 billion for health care information technology. Most of these funds would be funneled through increased Medicare and/or Medicaid payments directly to hospitals and physicians to encourage greater use of electronic health records. Unfortunately, the House bill excludes hospitals with fewer than 25 beds from receiving the HIT incentive payments. Instead, they included a provision for grants and loans, as well as allowing Critical Access Hospitals to consider HIT costs in their cost-based reimbursement. The Senate version does not contain this exclusion.
- Rural Broadband: $6 billion is provided to help implement broadband technology in rural and other underserved areas. Some $2.8 billion would be allocated to the Rural Utilities Service of the Department of Agriculture to give out as grants and loans to broadband providers.
- Workforce: $600 million to support training for primary care doctors and nurses. The money would double federal support for nurse scholarships, nurse faculty loans and advanced nursing programs, as well as expand the National Health Service Corps program.
- Community Health Centers: The bill appropriates $500 million for community health centers to provide care to uninsured and underserved rural and urban populations. It also provides for $1 billion for health centers to modernize through grants and awards.
- Access to Capital: Expands incentives for banks to purchase hospital's tax-exempt bonds.
- Wellness: $4.1 billion in prevention and wellness funds to better manage and treat chronic and infectious diseases. The funds would support hospital infection-prevention, immunization and evidence-based disease-prevention programs.
The Senate's version, which is being crafted by the Finance Committee, differs from the House version in how the money is to be spent. Again, in a demonstration of the political volatility of this issue, the Committee voted 14-9 to approve their bill, sending it to the Senate floor for debate.
Senator Pat Roberts was very instrumental in amending two key provisions of the bill. The first was equalizing how CAHs and prospective payment system hospitals can access HIT dollars. The second was eliminating cuts to Medicare capital indirect medical education payments for fiscal year 2009. To have both of these important-to-Kansas amendments passed by a Republican demonstrates how respected he has become on the Finance Committee. Once the full details of the Senate bill are released, we will have a better opportunity to evaluate which different provisions we prefer.
It now appears likely that an economic stimulus bill with a number of provisions important to Kansas hospitals will be enacted and signed by the President. While the partisan political disagreements over the bill will likely continue, we will continue to make sure our Congressional Delegation knows that the legislation contains elements that are beneficial to health care in Kansas.
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In its 2009 session, the Kansas Legislature began amid talks of deep budget cuts. And while health care may not be the focal point of budget discussions, it will be an important part of the legislative debates. In Topeka, virtually no part of the State's budget will be untouched by the budget ax. The State's public colleges and universities, stand to lose 3 percent of their operating budget, or $24 million, in the current fiscal year; and $56 million, or 7 percent, in the budget year that begins July 1. The Governor's budget would protect current K-12 school funding, but also would forego $165 million in school spending that lawmakers already approved. Another major part of the Sebelius budget is the withholding of payments promised to cities and counties, which could amount to $150 million. While the Governor is not proposing any direct tax increase, part of her budget proposal would delay elimination of two taxes – the estate tax and the corporate income tax – that were being phased out.
Despite some media statements to the contrary, health care isn't spared in the Governor's budget. She proposes that state expenditures to the Department of Social and Rehabilitation Services, the Department on Aging and the Kansas Health Policy Authority be reduced by about $60 million. These savings would come mainly from a freeze on nursing home rates, an 18-month limit on Medikan and General Assistance, and grant reductions to community mental health centers and community developmental disability organizations.
Republicans in the legislature have signaled that while the Governor's budget may be a starting point, they don't intend that it will be adopted without substantial changes. The main area of disagreement appears to be K-12 education. While the Governor proposes to freeze funding, Republican leaders argue that the size of the budget problem mandates that public education be on the table. They also contend that the elimination of the estate and corporate income tax phase out, as well as the withholding of payments to cities and counties, amounts to a tax increase.
As this process moves forward, two things could happen. It is possible that everyone, including interest groups, might come together and agree that all should share equally in reductions that would solve the State's budget woes. But you can bet that those who are the initial targets of budget cutting proposals will not stand idly by as their programs are threatened. The more likely scenario is that there will be a session-long battle among lawmakers (and interest groups) about how the pain of fixing the State budget is distributed. That is the scenario for which we must be prepared. Hospital and health care advocates must be vigilant this session that those least able to shoulder the burden are not asked to carry a disproportionate burden.
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Mark your calendars and plan to attend this year's Rural Health Symposium, Feb. 12, at the Capitol Plaza Hotel in Topeka. We are trying something new and combining this education program with our Advocacy Day Luncheon, so your trip to Topeka will be a day packed full of education, advocacy and networking opportunities.
Our keynote speaker for this event will be Brian Wong, MD. For the past 16 years, Dr. Wong has worked with hospitals across the country to revamp interpersonal relations and strategize methods for creating a high-trust, highly-productive and profitable environment. Other topics for discussion: advocating for hospital issues, health reform, quality issues, replacement construction and an update from the Centers for Medicare and Medicaid Services.
The registration brochure is now available on the KHA Web site. If you have questions, contact the KHA Education Department at (785) 233-7436.
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The 2008 Kansas Rural Health Works' county economic impact analysis reports were recently mailed to all Kansas hospitals. The Kansas Rural Health Options Project again teamed up with the Office of Local Government, a unit of the Department of Agricultural Economics and K-State Research and Extension, to develop this report. Similar reports were developed in 2004 and 2006. The purpose of the report is to provide information resources that may be used to communicate to community leaders, policymakers and concerned citizens on the relative importance of health care to the local economy.
In addition to the 2008 economic impact county report, several other resources were provided to hospitals, including an executive summary report, a PowerPoint presentation and media resources. The 2008 reports also are available on the Kansas Rural Health Works Web site.
In addition, the following statewide economic impact resources are available: The Importance of the Health Care Sector to the Kansas Economy; Economic Impact brochure; Economic Impact PowerPoint; Economic Impact Media Advisory; Economic Impact Newsletter article; and order form.
For more information regarding economic impact, please contact the KHA office at (785) 233-7436.
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Defining the community benefits hospitals provide has become more than just a mission of not-for-profit hospitals. It also is now a requirement as a result of the new Internal Revenue Service 990 Schedule H. To assist hospitals in organizing this information, the Kansas Hospital Association has partnered with Lyon Software to provide the Community Benefits Inventory for Social Accountability software. This software will assist hospitals in creating an annual community benefit report.
The CBISA software is based on reporting guidelines developed by the Catholic Health Association and VHA. It is a Web-based tool, so there is no software to load onto your computer systems, no backup required, and it is accessible to you anywhere you have Internet access. The CBISA survey is offered free to our member hospitals, with the option of "upgrading" to the CBISA online comprehensive software offered by Lyon Software at a discounted price.
The KHA statewide, voluntary, community benefit project started in July of 2008. Since that time, monthly conference calls have been conducted to assist the community benefit hospital coordinators in becoming familiar with the software and to allow them time to ask questions. CBISA is a cost-effective and efficient way to implement your hospital's community benefit program. KHA also will use aggregate data in a statewide report to demonstrate the role, value and benefit of community hospitals in Kansas. This report is a powerful tool for advocacy and public education.
If your hospital is not currently participating in CBISA and would like a brief overview, contact KHA at (785) 233-7436.
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The Centers for Medicare and Medicaid Services recently announced three national coverage determinations to establish uniform national policies that will prevent Medicare from paying for certain serious, preventable errors in medical care. The following errors, called "never events," covered in these NCDs, are identified in the National Quality Forum's list of Serious Reportable Events:
- Wrong surgical or other invasive procedures performed on a patient;
- Surgical or other invasive procedures performed on the wrong body part; and
- Surgical or other invasive procedures performed on the wrong patient.
In addition, consistent with current policy for non-covered services, Medicare does not cover any services related to these non-covered services. Unlike the HAC provisions, which affect only payments to hospitals for inpatient stays, these NCDs may affect payments to hospitals, physicians, and any other health care providers and suppliers involved in the erroneous surgeries.
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Last year, the Kansas State Board of Nursing requested an opinion from the Attorney General's office on two issues related to the scope of practice. The first question posed concerned the ability of Certified Registered Nurse Anesthetists to issue orders for preoperative and postoperative medications and diagnostic tests related to anesthesia or analgesia care as outlined in K.S.A. 65-1158. The second inquiry was whether a physician can delegate to a CRNA the authority to order preoperative and postoperative medications and diagnostic tests related to anesthesia or analgesia care.
In January, Attorney General Opinion No. 2009-4 was issued to address the two questions posed. The Opinion states that a CRNA is not authorized under K.S.A. 65-1158 to issue preoperative and postoperative orders for medications and diagnostic tests, but the Opinion declines to comment on whether the physician can delegate such activity due to ambiguity in the physician delegation statutes. The Kansas State Board of Nursing will review this Opinion at its March meeting and decide whether it wishes to pursue legislation regarding physician delegation. Click here to view the complete opinion.
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Kansas hospitals need to be aware that state surveyors with the Kansas Department of Health and Environment are making sure tornado preparedness plans/drills are part of your disaster preparedness policies. Kansas Statute K.A.R. 28-34-3a (g) External Disaster Plan states: "The hospital shall establish written plans, based on its capabilities, for proper and timely care of casualties arising from external disasters. The external disaster plan shall be rehearsed at least twice a year. A written report and evaluation of all drills shall be maintained for at least two years."
KDHE surveyors verify the disaster plan was rehearsed at least twice a year, and a written report and evaluation of all drills (i.e. tornado, fire, etc.) is maintained for at least two years. The regulation does not state how often a tornado drill must be conducted. Kansas is at high risk for tornado activity. It is essential that you have a policy in place for your facility. If an event occurs, the plan could save lives. Surveyors will look at the hospital's policy to see how frequent it states a tornado drill is to be conducted. The surveyor will then compare that frequency with the hospital's written report and evaluation to ensure compliance with the hospital's policy. If you have questions, please contact Dan Leong at (785) 233-7436.
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Kansas Hospital Association members responded to KHA's Pulse, a poll about current issues. The results of the quick questions related to the impact of the economic downturn indicated that 13 percent of the respondents have made staff reductions, and another 14-18 percent are planning either administrative or clinical staff reductions. Over 20 percent are either eliminating vacant positions or initiating a hiring freeze. Forty-one percent of the respondents have deferred plans for capital investment for new services, and 28 percent deferred plans for general maintenance and repairs. Finally, over 30 percent have experienced decreases in patient volume over this time last year, which they attribute to the economic downturn. For a full report, you can find the results of the survey on KHA's Web site.
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A Centers for Medicare and Medicaid Services' study, published in Health Affairs, found that in 2007, health care spending growth slowed to its lowest rate since 1998. Slower growth was largely attributed to retail prescription drug spending and government administration. Growth in spending for administering the Medicare benefit decelerated, from 62.5 percent in 2006 to 10.7 percent in 2007. This dramatic drop was mainly due to the one-time impact of the Medicare Part D prescription drug benefit, which began in 2006.
Overall, U.S. health care spending increased 6.1 percent to almost $2.2 trillion, or $7,421 per person. The health care portion of the gross domestic product was 16.2 percent, slightly higher than the 16.0 percent share in 2006. With the exception of prescription drugs, most other health care services grew at about the same rate as or faster than in 2006.
Hospital spending growth increased 7.3 percent in 2007, to $696.5 billion. This marks the third straight year of relatively stable growth in the range of 6.9 -7.3 percent after an average annual rate of 8.0 percent from 2000 to 2004 (during the managed care years of roughly between 1990 and 2000 the average annual growth for hospital services was 5.2 percent). The growth in payments to hospitals for patient services slowed from 4.4 percent in 2006 to 3.5 percent in 2007. The cost of providing that care also increased by 3.5 percent. Increased utilization accounted for just over half of the growth in spending on hospital care.
Public spending for health care continues to outpace spending by the private sector. Between 2004 and 2007, public spending for health care grew at an average annual rate of 7.2 percent, compared with 5.9 percent for private spending. The report shows that the total share of national health spending from public sources increased from 37.6 percent in 1970 to 45.3 percent in 2004, and 46.2 percent in 2007. At the same time, federal government financing for health care slowed significantly, growing 7 percent compared to 10.1 percent in 2006. State and local governments spent nearly a quarter of their revenues on health care in 2007. Medicaid, which accounted for 41 percent of all state and local government health spending, was the main driver of the increase in overall state and local financing in 2007.
Out-of-pocket medical spending grew 5.3 percent in 2007 to $268.6 billion, a significant rise from 3.3 percent growth in 2006, when Medicare Part D took effect and offered prescription drug coverage to beneficiaries. The increase was mainly due to increased out-of-pocket spending for retail prescription drugs, nursing home services and nondurable medical goods. The share of household income devoted to health care grew to 6 percent in 2007, up slightly from 5.4 percent in 2001.
The study notes that recent history has shown that health spending remains somewhat insulated from the effects of a slowing economy and has increased as a share of the GDP. In this uncertain economy, however, nothing can be taken for granted. With a slowing economy, patients and communities will depend upon their hospitals more than ever. More patients will lack coverage options and ultimately seek treatment through the emergency room – the costliest option for care. Employers already are facing difficulties providing insurance coverage to their employees. If more companies find it difficult to provide health care coverage, hospitals will see more patients who have less ability to pay for their care.
In this time of economic crisis, finding solutions to help care for those most in need must be a top priority. This includes making sure that the nation's community hospitals have the resources necessary to care for an aging and sicker population.
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