July 8, 2016
Total Cost of Care: A Moving Target
Within the reams of data contained in the Medicare Trustees' most recent report, released June 22, there's a single number that should attract the attention of every hospital executive in Maryland: 0.7 percent.
 
That figure represents the rate of Medicare's projected total cost of care spending growth for the nation for calendar year 2016. In most circumstances, this would be just one more data point among thousands in the trustees' report, but here in Maryland, as discussions are underway about next steps for the all-payer model and the $2 billion it brings each year to the state, it's critically important.
 
The 0.7 percent growth is 0.5 percentage points less than what President Obama projected in his federal budget just a few months ago. That means health care spending is slowing down, and quickly. And because of the all-payer model contract, it means Maryland's hospitals will be under even more pressure in the second half of 2016 to keep costs down.
 
Here's why: under the all-payer model, hospitals agreed to hold total cost of care spending growth to less than 1 percentage point above the national growth rate every year. In 2014, hospitals succeeded, with a 0.6 percent reductionin the spending rate compared to a 1.01 percent increase for the nation. In 2015, that wasn't the case, as Maryland's spending growth rose 2.3 percent compared to 1.6 percent for the nation. Under the contract, if Maryland exceeds the national growth rate in a given year, in the subsequent year, we lost that 1 percentage point safety net - our growth rate must not exceed the national growth rate. So in 2016, Maryland must realize a growth rate lower than the national rate or incur a "triggering event" under the all-payer model that could require a corrective action plan.
 
This was at the heart of the debate over the recent global budget update: how close are we as a state to the total cost of care guardrail. From the HSCRC's perspective, the loss of the 1 percentage point safety net above the national growth rate, triggered by the 2015 performance, constituted a missed target, despite the fact that no corrective action was required by the contract and that the five-year cumulative hospital savings target in the contract has already been met after two-and-a-half years.
 
Although the total cost of care growth is cause for concern, it's not being driven by hospitals. Rather, reductions in hospital spending are actually mitigating increases in other health care sectors, like skilled nursing facilities. If, in the second half of 2016, the margin between Maryland's growth rate and the nation's continues to shrink, the HSCRC could enact a hospital rate reduction, to avoid the need for a corrective action required by the Center for Medicare & Medicaid Innovation.
 
That's why we continue to pay close attention to the ever-shifting national trends, and why Maryland's hospitals will need to expand their engagement with non-hospital providers to reduce costs. Until other providers are connected to the Maryland model, it will be difficult, if not impossible, for hospitals alone to carry the burden - one support beam cannot bear the weight of a whole bridge. That's why MHA continues to provide tools like detailed SNF reports, which depict spending and volume trends for patients who utilized SNFs within 30 days of a hospital discharge, so that you can best determine how to work with partners in your community to provide efficient, coordinated, care for the patients you all serve. 
MHEI Hosting Health Disparities Discussion
The Maryland Healthcare Education Institute is hosting an informal discussion on reducing health disparities in Maryland. The discussion, scheduled for 9 a.m. July 19 at MHA's offices in Elkridge, is intended to be a starting point for hospitals to begin building momentum to reduce disparities. Joining the meeting, intended for hospital employees charged with working to reduce disparities, will be Maulik Joshi, Executive Vice President of Integrated Care Delivery and Chief Operating Officer of Anne Arundel Medical Center. Joshi is the former President of the Health Research & Educational Trust and was the driving force behind the national Equity of Care Campaign. In May, Maryland became the first state to reach 100 percent participation by community hospitals in Equity of Care, which aims to improve the quality of care for every patient by: 
  • increasing the collection and use of race, ethnicity and language preference data
  • increasing cultural competency training
  • increasing diversity in governance and leadership 
If you'd like to attend, please email Mark Rulle.
Webinar to Give Details of Care Redesign Amendment
Health Services Cost Review Commission Executive Director Donna Kinzer will host a webinar on Wednesday, July 13, at 8:30 a.m. on the care redesign amendment to the all-payer model that was submitted to the Center for Medicare & Medicaid Innovation earlier this year. The amendments is still awaiting approval. Click here to register.
Grant Program Available for Rural Health Organizations
The Rural Maryland Council (RMC) will hold a webinar Tuesday, July 26, at 10 a.m. for those who want to learn more about the Rural Maryland Prosperity Investment Fund Grant. For fiscal year 2017, the RMC is interested in proposals that address the following: Regional Planning and Development Councils, Rural Entrepreneurship Development, Regional Infrastructure Projects, and Rural Health Care Organizations. Register for the webinar here. Grant applications are being accepted until August 15. Visit the RMC website for more details.
MHEI Leadership Conference Examines "What's Next?"
 
While recognizing the many advances and multiple changes health care organizations have made over the past few years, we can observe that we cannot stop now.

Looking for a Cutting Edge Provider for Blood and Associated Services?
 
For more than 60 years, Blood Bank of Delmarva (BBD) has provided blood and blood components to hospitals throughout the Delmarva region, helping avoid blood shortages and saving thousands of lives with assistance from more than 150,000 current donors.

Hospital Groups Urge CMS To Address Concerns With Star Ratings Methodology
 
The AHA, Association of American Medical Colleges, America's Essential Hospitals, and Federation of American Hospitals this week urged the Centers for Medicare & Medicaid Services to share additional information with hospitals and the public about how accurately its overall hospital quality star ratings portray hospital performance and work with hospitals to validate the methodology, or continue to withhold publication of the ratings.

THE WEEK AHEAD
Thursday, July 14
- MHA Financial Technical Work Group meeting
TOP NEWS FROM THE WEEK
The Baltimore Sun, By Andrea K. McDaniels, July 1
 
The Daily Record, By Daniel Leaderman, July 1
 
The Baltimore Sun, By Meredith Cohn, July 5
 
The Baltimore Sun, By Andrea K. McDaniels, July 5
 
Baltimore Business Journal, By Morgan Eichensehr, July 6
 
Baltimore Business Journal, By Tina Reed, July 6