Las Vegas Sun

March 28, 2024

Las Vegas Valley hospitals politely shamed into improving

Group of insurance providers proposes new payment system, pushes for transparency

LOW RANKING

Hospitals in Las Vegas rank among the lowest in the nation in the number of readmissions — or patients who have to return to the hospital within 30 days, according to a recent report prepared for Health Insight, a government-contracted quality-improvement organization. Among the findings: • 25 percent of Medicare fee-for-service beneficiaries in Las Vegas are readmitted within 30 days, compared with 19 percent nationwide. A significant majority of cases are unplanned.

A coalition of 24 self-funded insurance plans is urging Las Vegas hospitals to improve their quality of care — which is ranked as some of the worst in the nation — to earn the business of its 260,000 patients.

The Health Services Coalition is telling 13 acute-care hospitals that there is room for improvement, and is pushing for transparency and asking for ideas to change payment incentives to encourage improvement.

And if the Las Vegas hospitals don’t want to play ball, the coalition is open to sending patients out of state, suggesting it may send them to St. George, Utah, 120 miles northeast of Las Vegas, where nationally respected Intermountain Healthcare operates a facility.

“Depending on the situation, it might be less traumatic to help a patient get to St. George, get their treatment, not have a complication, and be done,” said Leslie Johnstone, executive director of the coalition.

Intermountain Healthcare would be happy to take paying customers from Las Vegas. “That would be outstanding,” a spokesman said.

The coalition’s initiative proposes transforming the normal method of paying hospitals, which includes standard day rates and a percentage of billed charges. The system does not reward quality and gives hospitals and providers the perverse incentive to perform procedures whether or not they’re in the best interests of patients. In a macabre sense, it rewards hospitals for poor performance by paying them additional money to fix their mistakes.

Health care experts say the coalition’s approach is on the cutting edge of a national trend. Employers are getting buried under the rising costs of health care and demanding better value for their dollar. The cost problems sparked the recent health care reform legislation in Congress, where discussions included realigning incentives to encourage hospitals to provide better care.

By many measures, Las Vegas hospitals are among the worst in the nation. Nevada ranks worst for readmissions — patients who have to return to the hospital within 30 days, according to a recent report prepared for Health Insight, a government-contracted quality-improvement organization in Las Vegas.

The report found:

• 25 percent of Medicare fee-for-service beneficiaries in Nevada are readmitted within 30 days, compared with 19 percent nationwide.

• 90 percent of the readmissions are unplanned and half might have been preventable.

• In 2009, Medicare paid $203 million for Nevada readmissions, and correcting the problems could save up to $102 million.

Health Services Coalition data show that from June 2008 to May 2009, there were 984 30-day hospital readmissions — 11 percent of the total cases. To say nothing of the human suffering caused by readmissions, each cost an average of $17,767, which puts the total one-year cost at nearly $17.5 million. That’s 7 percent of the $242.8 million the coalition spent with Las Vegas-area hospitals.

Johnstone points to several other indicators that show problems with Las Vegas hospitals. The Leapfrog Group, a national hospital quality organization that uses self-reported hospital data, reports that only four of the 13 Las Vegas hospitals had fully implemented its safety standards for preventing pressure sores in 2008, and none had in 2009.

Five hospitals had fully implemented Leapfrog’s injury prevention standards for 2008, and the number dropped to two in 2009. Seven hospitals did worse in the two categories in 2009 than in the previous year.

The Health Services Coalition was formed in 1989 and includes Boyd Gaming Corp., MGM Mirage, Metro Police and NV Energy. It is trying to balance calling attention to the problems with providing incentives for improvement. Johnstone said the coalition is shaming the hospitals, but “trying to be nice about it.”

The goal is collaboration, she said: Rather than the usual haggling over rates, the coalition is asking the hospitals to provide plans and information, some of it proprietary, to verify quality efforts and show efforts to improve.

Johnstone said the innovations could take a variety of forms. Hospitals that provide superior care for certain procedures could earn bonus payments and receive the greatest share of those cases. Hospitals could partner with doctors to accept a global payment for a procedure, receiving a higher reimbursement on the front end, but nothing extra if the patient needs to be readmitted for the same problem.

Payments could rise for facilities that improve over time, and patients would be steered toward the best hospitals, she said.

“If we can be successful with getting the hospitals to take this seriously and make it a win-win for both sides, then other payers are likely to take the same steps,” Johnstone said.

All the hospitals attended an informational meeting this month, and their proposals on how they would work with the coalition are due June 2. New contracts are due by the end of the year.

The hospitals that responded to the Sun’s request for comments were positive about the initiative.

Representatives of St. Rose Dominican Hospitals and Sunrise Health System said they are committed to quality and look forward to participating in the process started by the coalition.

Kathy Silver, CEO of University Medical Center, the only public hospital in Las Vegas, said the coalition’s proposal will create competition and may lead to some hospitals not being included in the contract because of cost or quality problems.

Kathy Silver

Kathy Silver

“It’s a new day and a new way of looking at the business,” Silver said. “I have to applaud them for thinking out of the box and a little bit ahead of everybody.”

Harold Miller, president and CEO of the Network for Regional Healthcare Improvement, a coalition of health care patients, payers, purchasers and providers working to improve quality and lower costs, said the Health Services Coalition’s proposal is part of a larger national movement but unique in that the insurance plans are asking hospitals for ideas to improve value.

It’s also different because the coalition represents the companies that are actually purchasing health care — as opposed to third parties such as Cigna or Aetna that administer health plans on behalf of payers. National health plans administering local benefits packages have not shown the same ability to innovate, he said. It’s unique and an “important step” to have payers directly communicating with providers, Miller said.

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