Policymakers are struggling with the rapidly changing healthcare landscape (2023)

Senate Minority Leader Len Fasano speaks fondly of the days when his father was a family doctor in an independent practice who gave his patients lab tests and mammograms in his office to make sure they were well cared for.

"I think that era will be a memory 10 years from now, and unfortunately I don't think there's anything we can do right now to stop it," the North Haven Republican said, noting that most young doctors prefer to work for larger medical groups or hospitals.

But Fasano, like many lawmakers, worries about how the state's health care landscape is changing. Fasano worries that what he says is putting pressure on doctors to give up their independent practice and join larger organizations. He worries about the growth of large and powerful hospital networks, particularly the Yale New Haven Health System, which he sometimes refers to as "Jaws," which revolves around independent doctors and hospitals. He fears that large systems will gain too much market share, which will lead to less competition and choice for patients and higher prices.

Other lawmakers are concerned about the survival of small community hospitals, especially when federal funding is cut.

Some have reservations about the idea of ​​for-profit non-governmental corporations buying up Connecticut's non-profit hospitals. Others see for-profit buyers as a necessary option for small hospitals looking for partners and capital, and fear the state's regulatory environment will deter them.

The result is a flurry of legislative proposals that, taken together, reflect the challenge of adapting to a rapidly changing industry, an industry that is a major employer in many communities and a major driver of health care costs that put pressure on consumers. state, local and regional government businesses. budgets

There are bills that would require each hospital to negotiate insurance premiums separately, even if they share a common parent company; Elimination of tax exemption for satellite facilities of non-profit hospitals; and established a commission to monitor health care costs and mergers. There is a proposal intended to make the state more attractive to for-profit hospital operators and would force potential for-profit buyers to disclose more information when applying for a permit.

"It seems to be a very unstable situation right now," said Acting Senate President Martin M. Looney, D-New Haven. “One of our concerns is that there are a greater number of significant market changes happening at once and that a regulatory framework is struggling to keep up.”

Hospital officials say the changes lawmakers are responding to reflect their attempts to adjust to reduced state and federal funding and position themselves for major changes to service delivery and payment models driven by the federal care law. medical. And they say some of the proposals would undermine their ability to do so.

Some bills appear to be "attempts to really turn back time," said Dr. Rocco Orlando, senior vice president and chief medical officer at Hartford HealthCare, the parent company of Hartford, Windham and Backus hospitals, MidState Medical Center and the Central Connecticut Hospital.

“We are concerned that some of the proposed legislation actually goes against what we see as emerging national trends that are actually coming out of Washington,” he said.

What's behind the changes?

The need for hospitals to join larger organizations and acquire or affiliate with medical practices has increased in recent years, fueled by falling Medicare reimbursement rates, the need to purchase expensive electronic record-keeping systems, and other teams, and the desire for a better one. negotiations with private insurers and changes in the payment models of state and private insurers.

"Medical practice acquisitions and hospital consolidations are imperative," said Peter Karl, executive director of the Eastern Connecticut Health Network, which includes Manchester Memorial and Rockville General hospitals. “And the reason hospitals and healthcare systems need to do this is because of economies of scale. We need to reduce our costs and that is why we are all trying to merge.”

For example, Vin Petrini, a spokesman for Yale New Haven Health System, said savings from Yale-New Haven Hospital's purchase of St. Raphael's Hospital in 2012 totaled about $300 million and helped offset the cuts in Medicare and Medicaid payments.

Being part of a larger organization is also likely to be important when adjusting to new payment models. While current medical care is largely based on a fee-for-service, a separate payment for each visit, test, or procedure, future models are expected to tie compensation to the ability of providers to manage the health of patients. patients. This requires better coordination between hospitals, general practitioners, nursing homes, home care departments and other providers. And healthcare providers are expected to bear some of the financial risk of patient outcomes, so it's important to have a large number of patients to spread the risk, Orlando said.

Demands on medical practices have also increased, including the need to purchase expensive electronic filing systems. And independent physicians have no bargaining power with insurers, said Ken Ferrucci, senior vice president of government affairs for the Connecticut State Medical Society.

“You are at a disadvantage. A lot of doctors are raising their hands and saying, 'I can't keep up with it anymore,' they're going to hospitals and health care systems and asking them to buy them and put them in their system," Ferrucci said.

Fasano said he spoke to independent doctors who felt pressured to join the Yale system.

Petrini said that the system for the most part does not attract doctors. “The vast majority of these practices come to us,” he said.

Kurt Barwis, president and chief executive of Bristol Hospital, said lawmakers were right to worry that large health care systems could gain too large a slice of the market.

Barwis believes that community hospitals will continue to play a role, noting that they can perform routine procedures at a lower cost than larger hospitals that perform more specialized procedures.

But he said cuts in government funding were making it harder to make ends meet. Governor Dannel P. Malloy's proposed budget would eliminate a $15.1 million annual pool of money for low-cost hospitals and reduce Medicaid payment rates for health care providers. And Malloy has proposed eliminating the tax break nonprofit hospitals get for facilities off their main campus.

"I think the concerns are not unfounded, but they also need to think about how they encourage and support community hospitals that are not among the big players," Barwis said.

In Massachusetts, where changes to payment models are most advanced, only 11 of the state's 90 hospitals remain freestanding community hospitals, said Lynn Nicholas, president and CEO of the Massachusetts Hospital Association.

"I think the Connecticut legislature is putting its head in the sand if it thinks it can continue to keep independent community hospitals thriving in an increasingly complex environment where free healthcare is going to require different strategies and different resources, and independent hospitals won't. will be able to do this in the long term,” he said.

Price concerns

But some Connecticut officials say too many changes are happening too quickly, and without proper oversight or recognition of the potential impact.

“I think we've been a little hesitant on that for a while, and now we have to step in,” said Victoria Veltri, the state's public health attorney. "I think we missed it and it happened very quickly. We are trying to fix the problem that the horse has already left the stable."

Hospitals say consolidation and acquisition of practices can lead to lower costs and better care, but Veltri said more transparency was needed to determine if that was the case. "Actually, I don't think we're going to see that anymore," he said.

Critics say consolidation could save hospitals money, but also increase the cost of care. Patients receiving care at hospital facilities can expect higher rates, and larger health care systems can affect insurers.

If the talks collapse and a major hospital system leaves an insurer's network, thousands of patients could be left without access to many facilities. Veltri cited last year's dispute between Hartford HealthCare and Anthem Blue Cross and Blue Shield, the state's largest insurer.

"If these two hadn't resolved their contractual dispute, we would have had over 100,000 people in the network without an affiliated hospital," he said.

Trying to influence the tone

Looney and Fasano, the co-chairs of the Senate, have joined to propose a series of bills that they say aim to increase transparency in health care costs and create a level playing field for doctors and hospitals seeking to remain independent.

This includes invoices that:

— Allow health care providers to work together to deliver and coordinate care to a population of patients to jointly negotiate contracts with insurers without violating antitrust laws. The idea is to allow independent medical practices to participate in new payment models without having to join larger organizations.

– Prevent health systems from collectively negotiating insurance payment rates for all their facilities. Instead, hospitals in the same market would have to negotiate separately, even if they belong to the same parent company.

- Prohibition of certain facility fees, which may be billed to patients treated at hospital outpatient facilities, and limiting other facility fees to $100 and requiring insurers to cover them as medical expenses.

— Established an independent agency to monitor health care cost, delivery and payment trends and review proposed mergers and acquisitions to determine their impact on the market.

– Require for-profit and non-profit hospital buyers to adhere to the same standards when seeking approval, and require that the health officer, when considering imposing conditions on transactions, consider the potential negative impact if the proposed sale does not occur. Fasano said this could help make the state more attractive to for-profit health care systems in other states that could partner with Connecticut hospitals, potentially increasing competition in the market.

— Promote interoperability of statewide electronic medical record systems so providers can access their patients' information when needed. Hospitals would have to subsidize the purchase of electronic patient record systems by independent physicians.

Hospital officials believe some of the proposals are contradictory and said requiring hospital chains to negotiate each facility separately would go against the new payment models.

The contradictions of hospital regulation

In discussions about health care, Matt Ritter, vice chair of the Committee on Public Health, said there is one thing everyone agrees on: "You can't put the genie back in the bottle." The question, he added, is what are the reasonable guidelines for them?

For Ritter, mergers are the product of basic economics. And in 20 years, he said, it's likely that not all hospitals will provide the same services.

But the Hartford Democrat said it's important to recognize that health care isn't just a business, and also to recognize when the consequences of a lack of flexibility could mean closing a hospital.

Ritter said an appropriate approach might be for lawmakers to figure out which services to prioritize, rather than scrambling to get all services in all places. He gave an example: if he knew his local hospital was going to lose its maternity ward, he would eat it. But if changes in the market meant he had to drive 20 miles to get to an outpatient rehab center, he wasn't sure sleep would hurt him, Ritter said.

In the past, lawmakers have been quick to change regulatory tack after an unpopular result.

In 2010, legislators removed the requirement for hospitals to obtain state approval to contract for most inpatient and outpatient services to make the approval process more responsive to changes in health care delivery.

But soon after, Rockville General Hospital closed its birthing center without getting state approval, sparking local resentment.

The following year, lawmakers reintroduced the requirement that hospitals obtain a permit.

This year's hospital debates come amid the failure of for-profit national chain Tenet Healthcare's plans to buy five Connecticut hospitals. To make the deal easier, lawmakers last year amended a state law that restricted the operations of for-profit hospitals. But Tenet backed down after the state Office of Health Care Access proposed terms for the purchase of Waterbury Hospital that included strict controls on staffing, services and prices.

Some, including Fasano, say this created the impression that Connecticut was not friendly to for-profit hospitals, making it difficult to attract systems from other states that could compete with Yale and Hartford.

Others, however, are wary of for-profit companies and say even more transparency is needed when it comes to buying a Connecticut hospital.

The co-chair of the Public Health Committee, Senator Terry Gerratana, D-New Britain, developed a bill that would expand the information prospective for-profit buyers would be required to submit, including information on expected staffing levels and the services that will be significantly reduced. reduced or he would be hired. Buyers would also have to pay for a separate monitor.

"Good healthcare is quality healthcare, and people in these communities should get no less," he said after the Tenet deal fell through. "I really didn't feel like the different conditions were so stressful in my opinion that it made it easier for people to come in and offer less quality."

Mark Bergman, Malloy's communications director, said the governor and his staff would monitor the proposals. He said the governor "believes that any legislation passed must protect patients, the quality of care in hospitals and the workers employed in those facilities."

Arielle Levin Becker will report for The Connecticut Mirror.(http://www.ctmirror.org.Copyright 2015 (c) The Connecticut Looking Glass.

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