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Wednesday, August 28, 2013

My Response to Barry Ronan's Informative Blog Entry About Finances and Efficiency Changes at W.M.H.S., Similar To a Featured Article By, "The New York Times" the Following Day

If you are intrigued with modern health care, and most especially as we as a nation transition into new mostly uncharted territory, read these articles from two days of writing/publishing with an open mind, and see what is truly possible with a new state of the art facility run with exceptional management and making profits already under some of the strictest  guidelines in place by any state in the union, Maryland.

This is my home hospital here in charming Cumberland, Maryland and they are indeed setting an example here for what the model of proper, capable, affordable, efficient health care will look like once properly embraced under the new and forthcoming guidelines, and why the onus is upon the politicians to move forward with these cost setting and money saving initiatives that are going to revolutionize the industry in only positive ways for both the industry and the citizens.

There is no reason for any hospital in the nation to not emulate this model to the tee, as it provides better health care, shorter hospital stays, and more conclusive medical treatment for the patients and less re-admissions and all the while bolsters the bottom line of profit for the individual hospital while almost un-intuitively saving money for the government, which is adopted properly as set forth soon to take place will certainly save trillions of dollars nationwide on health care expenses,money we must start saving right away while we right our economic ship through progressive efficient programs such that we are among the leaders of here at home.

I say a heartfelt congratulations to Mr, Ronan in his expertise and his excellent staff from the top down at the Western Maryland Health Care's Cumberland Campus, (W.M.H.S.), and kudos on a job thus far exceptionally well accomplished in a short three year window after transitioning to a brand new facility from two former campuses, and well ahead of the coming timely and needed reforming changes so direly needed.

An ounce of prevention after all is most certainly worth at least a pound of cure!

"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Friday, August 23, 2013

Barry P. Ronan It Was a Very Good Year

At today's Board Finance Committee, Kim Repac, our CFO, provided a report on the FY 2013 Year End Review.  Wow!  Our admissions were down 774, which under our new payment methodology is a good thing.  Our Case Mix Adjusted Length of Stay was also down to 4.09 days.  The way we use Observation Beds has improved and we saw an 8% decrease over last year.  Our regulated outpatient visits were down by 10.5%, which is also a good thing; and our ED visits were up, but ED admissions were down by 4.5%.  Our readmission rate continues to come down each year.  We saw dramatic improvement in our potentially preventable conditions producing a reward of $1.78 million out of a potential of $2 million putting WMHS in the top 10% for all Maryland hospitals.  We also saw improvements in the financial performance related to physician practices by $900,000.  Overall, we had a net income from operations of $10,861,000 or a 3.6% operating margin and a total revenue over expense of $15,151,919 or a 5% total margin.  What a difference a year makes.  Now in fairness, we cut supply and labor expenses by almost $7 million during the fiscal year, along with convincing the Cost Review Commission to revise their formula related to averted bad debt, which cost us millions during Fiscal Years 11 and 12.  They also agreed to provide us with a one-time settlement of over $2 million based on a flawed formula on Medicaid expansion.  In summary, we turned around our financial condition from a FY'12 loss of almost $2 million in total revenue to over $15 million; we dramatically improved our Quality Based Reimbursement; our patient satisfaction results improved and we reduced admissions and readmissions along with our ancillary use rates for the third consecutive year. It was a very good year and hopefully one that we can continue to repeat year after year.



I have had a run of poor health for a while and as I have been a patient, most especially in the ED more then I care to, of course, I can see an over all settling in by the staff and better efficiency along the lines of better diagnostics and faster more thorough chart reviews. I can see where that has had an overall affect on shorter hospital stays and less often returning patients. The treatment I have received by Dr. Lamm and Dr. May has been better then my own PCP as I can tell they are able to quickly review my charts and familiarize themselves well with my many conditions and treat me effectively and I very much appreciate that they ask me what has worked well for me or what has not and are able to cater my care to my specific needs at the moment and get me quickly on my way to healing with these recent sudden onset events. I was raised to only utilize the ED when it was an emergency, of course, and as I find it harder and harder to get a quick appointment with my PCP and I am most often told to go to the ED instead, especially if my symptoms worsen rapidly. I must say I have a confidence now that I did not feel at first after the initial transition to the new facility. I am very impressed with the protocol in place as a patient, and having been in management a better part of my productive working life, the keen management style is impressive to say the least. I very often read your blog. I will one day require cervical fusion and I want to know that what ever hospital I finally choose will be one that is comforting to me as well as capable and competent, and I am starting to feel that trust building due to the marked change that only comes from listening to patients well and closely analyzing cost efficiency while increasing the quality of health care.


I would like to suggest you write the local paper as well, if you have not and forgive me if you did and I missed it, and share a brief synopsis of these wonderful changes that are being made. I expect with the new facility that you will be attracting even finer doctors such as Dr. Lamm and Dr. May to further compliment your excellent staff and become the leader in this entire area that we need while the country transitions now into a new arena of healthcare that you all seem more then competent to be the example of while so many other institutions, politicians, and citizens, seem resistant to this needed change. I know that will not be an easy task what so ever, but with your numbers in FY2012 in comparison to FY2013, and the scrutiny of the Medicaid formula and resulting credit, it is again great to observe you have an excellent staff and impeccable leadership. My hat is off to W.M.H.S., and as usual I will still speak my voice as the consummate observer, and I will equally always give credit where credit is due. I like your style and transparency, and going back in time I appreciated your factual reporting on the concerns with Bath Salts that were epidemic at the time and not reported to the extent you shared anywhere else at all! I started a petition, addressed a local meeting in person siting your statistics amoung other specific details of the deadly molecular structures skirting the federal state and local laws, wrote and was published in the paper and wrote a blog entry as well that has been more widely read then my published article at the U.S. Department of Energy (Google; Swygert HRDC)  and I believe your blog was at least one instrumental part in a victory we should all be proud of! Your transparency was a major catalyst along with friends stories of family members ruing their lives with the


abuse of these drugs. I sincerely hope perhaps you will entertain writing an entry of the after effects of the laws passage and if it has helped as I pray it has, and what the statistics are now in relation to their usage. I earned a degree in Science with a Major in Police in Police Science so these figures are of great interest to me as I hope we can always be so collectively efficient locally when any need arises. Your leadership shines and I hope one day to volunteer and offer back smiles and caring service as has been offered to me when ill. Sorry to be so long winded, but the expertise I have received while at the Ed has had me slowly back to a more productive level I was dearly missing. Cumberland is a better city and a healthier city with your experts and professionals caring for us all. If you have a day to blog about the one item I mentioned earlier and another day to blog about volunteer help desired and requirements and contact information, I would gladly share that and make myself available at any capacity from time to time. Thanks for your consideration in publishing this reply and offering a space where we may all interact.

Sincerely, John "Stephen" Swygert 

The following day, Mr. Ronan had a wonderful new blog entry and the following, "New York Times" article sighting the expertise and example that W.M.H.S. has become for the nation to follow! ; as follows.

Wednesday, August 28, 2013

The New York Times Article

It's not every day that your health system is featured in the NY Times, actually it's not any day as it has never happened before.  About two weeks ago, Kathy Rogers, Director of Community Relations, received a call from Eduardo Porter, a reporter from the NY Times.  Eduardo was calling to interview me upon recommendation from Maryland's Secretary of Health and Mental Hygiene, Joshua Sharfstein, MD.  Dr. Sharfstein visited with us several weeks ago and was impressed with our innovative approaches to population health and he suggested to Eduardo that he call us for his story on health care delivery in Maryland.

Eduardo and I spoke on the phone and he decided to visit Cumberland to interview Dr. George Garrow, Chief Medical Officer for W.M.H.S., and me.  George and I met with Eduardo last Thursday for over an hour providing him with a perspective on how we moved from a volume-based delivery model for health care to one of value.  George and Kathy then took Eduardo on a tour of our health system, highlighting those areas where we have dramatically changed how we deliver care to our patients.  Eduardo was especially impressed with Dawn Snyder, our Nurse Practitioner for our Congestive Heart Failure Clinic.  Dawn's photo was featured in the attached article. 

Eduardo left Cumberland and said that the article would run this week and it did.  It is tough to write on such a complicated subject, but Eduardo did a nice job.  Thank you, Dr. Sharfstein and Eduardo Porter, for recognizing the very innovative practices that have been put in place in western Maryland as we work to meet the triple aim of health care reform (better quality, reduced cost and a healthier community).

Lessons in Maryland for Costs at Hospitals

J.M. Eddins Jr. for The New York Times
Dawn Snyder, a registered nurse, runs a heart failure clinic at Western Maryland Health System.

CUMBERLAND, Md. — This hardscrabble city at the base of the Appalachians makes for an unlikely hotbed of health care innovation.

Economic Scene

Eduardo Porter writes the Economic Scene column for the Wednesday Business section.

Yet Western Maryland Health Systems, the major hospital serving this poor and isolated region, is carrying out an experiment that could leave a more profound imprint on the delivery of health care than President Obama’s reforms.
Over the last three years, the hospital has taken its services outside its walls. It has opened a diabetes clinic, a wound center and a behavioral health clinic. It has hired people to follow up with older, sicker patients once they are discharged. It has added primary care practices in some neighborhoods.
The goal, seemingly so simple, has so far proved elusive elsewhere: as much as possible, keep people out of hospitals, where the cost of health care is highest. Here, the experiment seems to be working.
Hospital admissions here are down 15 percent. Readmissions have fallen, too. In 2011, 16 percent of people who had been discharged went back into the hospital. Now, that figure is 9 percent. Many patients report that they are happier with the care.
And Western Maryland has reaped financial rewards. In the fiscal year ending in June, the system made an operating profit of $15 million on about $370 million in revenue, said Barry P. Ronan, the chief executive. That’s a spectacular return, given that the average margin at hospitals across the state is a meager 0.8 percent.
Western Maryland’s initiatives to take charge of people’s health, rather than simply provide services for a fee, fit a core objective of federal health care reform: changing hospitals and related facilities into something resembling an Accountable Care Organization.
Yet the innovations taking place in this corner of Appalachia rest on a policy that the architects of President Obama’s health care reforms never tried to emulate. Indeed, this innovation was only possible because in Maryland, hospital fees are subject to government price controls.
Western Maryland Healthcare System is one of 10 rural hospitals that agreed with the state’s Health Services Cost Review Commission to accept a guaranteed budget every year to take charge of the health care of the community they serve.
If revenue comes in under the budget one year, the hospitals are allowed to increase prices the next to make up for the deficit. If revenue exceeds the budget, however, they must reduce prices to give the surplus back.
The system, adopted by Western Maryland in 2010, helps spur innovation. But it was only possible because Maryland has a commission that sets the fee that hospitals can charge patients regardless of whether they are covered by Medicare or private insurance, or are uninsured. Everyone pays roughly the same.
Price controls are not unique to Maryland. Medicare has regulated prices for decades. Other states — including New York, New Jersey and Connecticut — experimented with them in the 1970s, only to drop them in the 1980s and ’90s when, for a time, managed care seemed to keep a lid on prices. In West Virginia, price controls have been in place since the 1980s.
Maryland has the longest track record, however. Price controls were put in place in the mid-1970s, when hospital costs had been rising at an alarming pace.
They addressed “the price dominance of hospitals, which are often monopolies or oligopolies and have a lot of price-setting power,” John Colmers, who heads the commission, told me.
At a stroke, the controls turned hospitals into something like public utilities — with regulated prices and a low but stable profit. Four decades on, the state’s experience offers fairly solid evidence that the hospital-as-utility model can work.
Not only could it help usher in changes called for by the Affordable Care Act, as it has at Western Maryland, it could also address head-on Obamacare’s main weakness, providing a direct means to rein in the cost of care.
From 1977 to 2010, Maryland’s price-regulated hospitals experienced the slowest rise in costs per patient in the country, according to the commission. Before the advent of price controls, the cost per each patient admitted into a Maryland hospital exceeded the national average by 26 percent. In 2011, it was 4 percent lower.

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What’s more, costs are more evenly spread. On average, hospitals across the country charge private patients about 44 percent more than patients on Medicare and Medicaid. The uninsured — who don’t have the clout to negotiate lower fees — must pay a sticker price that includes a 220 percent markup over costs, on average.

Economic Scene

Eduardo Porter writes the Economic Scene column for the Wednesday Business section.
This, hospitals say, makes up for uncompensated care and the fact that Medicare and Medicaid pay almost 8 percent less than cost.
In Maryland, Medicare and Medicaid get only a 6 percent volume discount compared to private payers. And the sticker price markup over costs is only 33 percent. All hospitals contribute proportionately to a pot to cover uncompensated care — and this cost is incorporated into their regulated rates.
Unsurprisingly, health insurance in Maryland is among the cheapest in the country. Health plans that will operate on the new health exchanges created under the federal reforms will charge among the lowest premiums of any state.
Could price controls work nationwide? Studies have foundthat they helped manage costs in other states that later abandoned them, including New York, Massachusetts and New Jersey.
They didn’t work everywhere, however. Maryland hospitals bought into the system because Medicare accepted paying the higher rates set by the commission as long as increases in the cost per patient — measured from the base year of 1981 — came in lower than Medicare’s national average. This provided hundreds of millions in extra revenue from the federal government.
But in Washington State, regulation couldn’t keep costs down in the face of resistance from the hospital industry. And even Maryland’s regulations have had trouble controlling the volume of care.
The commission has no control over physicians’ decisions, the primary drivers of health expenditures. It hasn’t figured out how to transport the global budget used in Western Maryland to urban settings, where hospitals could cut costs simply by encouraging patients to go to the hospital down the block.
Indeed, Maryland’s cost controls are an example of how difficult calibrating regulation could be.
As Maryland’s hospitals have done a better job keeping healthier people out, they have ended up with sicker, more expensive patients, raising their unit cost. At hospitals like Western Maryland, a fixed budget means that each person kept out of the hospital automatically raises the cost of each patient in it.
This is threatening the Medicare waiver, which relies on keeping costs per patient low. It has forced the commission to authorize very small price increases of late. “Hospitals have taken it in the stomach in the last four years,” said Carmela Coyle, president of the Maryland Hospital Association.
The problems seem fixable, though. Global payments might be brought to urban areas by defining the population each hospital must serve and shaping compensation schemes for patients who are treated elsewhere. Mr. Ronan at Western Maryland suggests that global payments could be extended to physicians, too.
Maryland is now negotiating a new measure with the federal government to keep the Medicare waiver — one that will take account of the growth of hospitals’ total costs, rather than the cost per patient.
The rewards seem worth it. Robert Murray, a former head of Maryland’s rate-setting commission, estimated that if every hospital in the nation followed Maryland’s price guidelines, we would have saved $2 trillion between 1976 and 2008 in lower hospital costs.
Given that health care consumes 18 percent of the nation’s economic output, Maryland’s experiment seems worth a try.
Twitter: @portereduardo