Friday, April 22, 2011

Shared Sacrifice

The Internet is abuzz with Attestation fever. CMS has officially opened its website service for physicians and Hospitals to attest to achievement of Meaningful Use for 2011. It is expected that stimulus incentives, as mandated by ARRA’s HITECH Act, will soon be flowing out to the new Meaningful Users to the tune of $20 Billion (or more) over the next five years. Meaningful Users are a very diverse population and range in scope from a solo practice in the middle of nowhere with a rickety EHR purpose bought for these incentives, to Kaiser Permanente with thousands of employed physicians, dozens of hospitals and gold-plated enterprise technology worth many billions of dollars, purchased and implemented years before HITECH saw the light of day.

Last year Becker’s Hospital Review published a list of “52 Not-for-Profit Hospital Systems to Know”. Those are the largest and most excellent integrated health delivery systems in the country. Between them these 52 leaders in health care delivery have about 900 hospitals of various sizes and most have hundreds and thousands of employed physicians, both in inpatient and outpatient practice. Many of these organizations are faith based and were founded years ago with the goal of providing care and comfort to the sick. Today, these non-profit systems are leading the way in quality improvements, adoption of health care information technology and innovative ways to provide better and more cost-effective medical care, and most, if not all, have healthy and profitable bottom lines, while actively engaging in charitable contributions to their communities.

As CMS is gearing up to disburse the ARRA stimulus incentives, it stands to reason that a significant portion of the money would go to these non-profit leaders of our health care system. As anyone trying to figure out the exact amount of incentives for any given hospital knows, the exact calculations are rather cumbersome. HIMSS estimated that the Medicare incentives for a hospital could range from $3.5 million for a 75 bed facility to over $11 million for a 750 bed hospital, over the entire stimulus period. It is worth noting that, unlike physicians, hospitals can qualify for both Medicare and Medicaid incentives, significantly increasing the estimated amounts for Hospitals with a large enough Medicaid population. What follows is a very conservative attempt to estimate the percentage of the proposed $20 Billion ARRA incentive that will more than likely flow to these 52 non-profit Hospital systems.

Let’s assume that the average hospital in this group will collect only $5 Million from both Medicare and Medicaid, which puts the average hospital at about 200 beds and accounts for some hospitals that will not be able to qualify for incentives. Let’s also assume that an outpatient physician has 5000 patient visits per year (which is very high), and when encounter data is not available, let’s assume that only half of employed or affiliated physicians qualify for incentives under Medicare, and none qualify for the higher Medicaid stimulus. For very large systems, where data is not readily available, let’s assume that there are no eligible professionals and all incentives will come from the Hospital side of the house. Based on these very conservative assumptions and any 2010 annual report data found on various systems websites, here is how some numbers shape up:
  • Kaiser Permanente – 35 hospitals and 36.6 million doctor visits – is looking at about $0.5 Billion total incentive payments.
  • Trinity Health – 45 hospitals and about 8000 physicians – will collect around $0.3 Billion in the next five years
  • Sutter Health – 25 hospitals and 3500 physicians – comes in at around $0.17 Billion in incentives
  • Providence Health – 26 hospitals and 7 million visits – will qualify for almost $0.2 Billion
  • North Shore LLJ – 14 hospitals and 7500 physicians – should obtain over $0.2 Billion in stimulus payments
  • Intermountain – 23 hospitals and 750 physicians in their medical group – will receive well over $0.1 Billion
All in all, if we just consider the 900 hospitals these systems have in common, and ignore the outpatient payments, the total incentives due are around $4.5 Billion total. This number will go up significantly if we account for the various eligible professionals payments, running at $44,000 per physician under Medicare.

In the large scheme of things, a few Billion dollars is not that much money. Withholding those billions will not fix the deficit and will not put a visible dent in our health care expenditures. No single act of savings will solve the dire problems present in our health care system and the country in general. President Obama is calling for us all to contribute to a solution and share the sacrifices needed to rectify the situation. In a perfect world, Shared Sacrifice is not something that should be imposed by government. It should be a grassroots effort where everybody agrees to give up a little and come together in one unified force for the public good, but someone has to go first, someone has to step forward and make the first sacrifice. Today is Good Friday.

To these 52 benevolent paragons of health care, in the spirit of the selfless and saintly men and women who, many years ago, founded your organizations with the single mission of aiding and comforting the sick: Don’t take the money. 

And if you must take the money, because of irrelevant legislative technicalities, turn around and give it all to the poor and sick and needy people in your community. A few billion dollars will not solve the big problems, but a few dollars may be enough to provide a sick elderly person one more hot meal, or buy one more pair of glasses for a child so he can stay in school, or provide one more bottle of prenatal vitamins to a pregnant woman and maybe even allow for one more hospice day for a dying man. And above all, you will set an example for us all, and maybe even change the spirit of this country, so we can all do better by doing good first.


  1. Beautifully written. If only our "not-for-profit" hospitals were truly more service-oriented. You have issued a call for action that I hope will be heeded!

  2. Thank you Dr. Middleton. I hope so too, but I am not very optimistic.

  3. great post thank you.I think that electronic medical service are necessary today more than ever. It will simply save so much time and money both to the doctors and to the patients.