Federal budget deal targets Medicare payments, and that means Kentucky hospitals won't be happy

Looking for a way to localize the budget deal announced by congressional negotiators last night? Call up your local hospital.

David Rogers of Politico reports that hospitals are "furious with the fact that the deal offers no relief from future cuts on Medicare providers – and even extends these annual 2 percent reductions into 2022 and 2023." The cuts would be a continuation of those imposed by the "sequester" legislation that took effect when Congress failed to reach an anticipated deal on the federal deficit and taxes.

The $28 billion extension of the cuts, almost a third of the $85 billion total, "helps to dress up the package with tens of billions in savings, but at a time when hospital networks are already feeling the impact of health-care reform, there is a fear that Congress is not seeing the long term impact of these budget assumptions," Rogers writes.

Most rural hospitals are already facing Medicare cuts because reform law reduces the extra payments made to hospitals that have large percentages of Medicare patients. Those hospitals are disproportionately rural.

The deal also includes "a provision that aims to prevent fraud and abuse in the Medicaid program for the poor and disabled," Modern Healthcare reports. "According to a summary, the provision allows states to delay paying for suspect claims as long as the delay does not harm a beneficiary's access to care. It also would allow states to collect medical child support in cases where health insurance is available from a non-custodial parent and allows Medicaid to recoup costs from beneficiary-liability settlements."

Why cut Medicare payments? "Congressional staffers were not prepared to talk about the cuts on the record, but said it boiled down to Medicare providers being the least painful target. Democrats, they noted, have not traditionally been strong supporters of preserving the payments to providers, being much more concerned with maintaining funds for beneficiaries. Republicans saw extending for two years cuts that are already in the law for mandatory programs as a simple way to add deficit reduction to the replacement of sequestration for discretionary programs," Michael McAuliff reports on The Huffington Post.

Feds say reform law has saved Kentuckians on Medicare an average of $928 this year on prescription drugs

The federal health reform law has saved seniors and the disabled millions of dollars on their Medicare prescription-drug coverage, says the Centers for Medicare & Medicaid Services.

CMS said 65,040 Kentuckians have saved a total of $60.4 million in the first 10 months of 2013, an average of $928 per person in Medicare. CMS said Kentucky seniors have saved $180.9 million on the coverage, known as Part D, since the passage of the reform law.

Seniors will also be free to use more of their Social Security cost-of-living adjustment as they choose, because the Medicare Part B premium will not increase in 2014 as a result of the law’s cost restrictions, CMS noted. The deductible for standard Part D plans will decline by $15 in 2014, to $310.

The data also show that since the Patient Protection and Affordable Care Act took effect, more than 7.3 million seniors and people with disabilities who reached the prescription coverage gap, commonly known as the "donut hole," have saved $8.9 billion on their prescription drugs, an average of $1,209 per person.

The "donut hole" is the gap in coverage after the basic coverage and before the catastrophic coverage takes effect.  Without rebates authorized by the law, Medicare beneficiaries would have to pay out-of-pocket for the entire cost of prescription drugs once they hit the hole, until they incur enough expense to reach catastrophic coverage.

Next year, Medicare Part D participants in the donut hole will save about 53 percent on the cost of brand name drugs and 28 percent on the cost of generic drugs, CMS says. These savings and Medicare coverage are to gradually increase until 2020, when the donut hole will be closed.

Ky. Hospital Association defends 'critical access' designation that gives small, rural hospitals a federal financial boost

The Kentucky Hospital Association came out strongly for continued federal support of small, rural hospitals Thursday, objecting to a proposal that the "critical access hospital" designation be based entirely on distance from other hospitals. Kentucky has 29 such hospitals, which get slightly higher Medicare and Medicaid reimbursements in return for limiting their size and services.

Until 2006, states were allowed to make the designation based on a community's health status, poverty rate, rural nature and other factors. So many were designated that they became the majority of critical access hospitals. That is also the case in Kentucky.

The Office of Inspector General of the U.S. Department for Health and Human Services said in August that the government could save up to $1 billion a year if the designation were limited to the original criterion, being at least 35 miles from another acute-care facility, or 15 miles in mountainous areas. KHA's initial repsonse is here.

"The OIG report seeks to eradicate rural health care by shutting down rural hospitals," said Charles Lovell, CEO of Caldwell Medical Center, a critical access hospital in Princeton. "People call us Band-Aid stations," but he could provide a long list of lives saved at his hospital, he said. Other speakers cited hospitals' important role in providing jobs and recruiting doctors for small towns. Cutting the list "would only hurt our communities' physical and economic health," said Susan Starling, CEO of Marcum and Wallace Hospital in Irvine.

Fran Feltner, director of the University of Kentucky Center of Excellence in Rural Health, noted that it was National Rural Health Day and said, "I believe every Kentuckian should have access to the right care at the right time, and close to home."

Critical access hospitals make up only 22 percent of Kentucky hospitals, but maintaining their extra reimbursement would also help the chains that own some of them, because costs of the chain can be allocated to individual hospitals. Here are the critical access hospitals in Kentucky, by county:
Allen: The Medical Center at Scottsville
Breckinridge Memorial Hospital, Hardinsburg
Caldwell County Hospital, Princeton
Carroll County Hospital, Carrollton
Casey County Hospital, Liberty
Cumberland County Hospital, Burkesville
Estill: Marcum and Wallace Hospital, Irvine
Floyd: McDowell Appalachian Regional Hospital; Saint Joseph Martin
Grant: St. Elizabeth Medical Center Grant County, Williamstown
Green: Jane Todd Crawford Hospital, Greensburg
Hart: Caverna Memorial Hospital, Horse Cave
Knox County Hospital, Barbourville
Leslie: Mary Breckinridge Hospital, Hyden
Lincoln: Ephraim McDowell Fort Logan Hospital, Stanford
Livingston Hospital and Healthcare, Salem
Madison: Saint Joseph Berea
Marshall County Hospital, Benton
Mercer: James B. Haggin Memorial Hospital, Harrodsburg
Morgan County Appalachian Regional Hospital, West Liberty
Nicholas County Hospital, Carlisle
Ohio County Hospital, Hartford
Owen: New Horizons Medical Center, Owenton
Russell County Hospital, Russell Springs
Simpson: The Medical Center at Franklin
Trigg County Hospital, Cadiz
Union: Methodist Hospital Union County, Morganfield
Wayne County Hospital, Monticello
Woodford: Bluegrass Community Hospital, Versailles

Scammers taking advantage of new health-insurance system

Scammers are using the new health-insurance system "as an opportunity to try to collect consumers’ personal information or to make false claims," Gov. Steve Beshear and Attorney General Jack Conway warned Tuesday.

Conway's office sent civil investigative subpoenas and cease-and-desist orders Monday to the operators of two websites that had brought complaints from consumers to the Cabinet for Health and Family Services, which oversees Kynect, the state's health-insurance marketplace.

Scam sites try to mimic legitimate government sites, the officials said. People who register on the sites have reported getting telephone calls as a result. That is not the way the secure, state-operated website works. Its web address is Kynect.ky.gov; beware of sites ending in .com or .net, Conway advised.

“If something seems suspicious, do not share your personal information, and if you suspect fraud, report it immediately,” Conway said. He also warned Kentuckians to be on guard for attempts by identity thieves to collect personal or financial information by email, phone or mail.

Scammers may also try to sell bogus “discount medical plans” or mislead older consumers on Medicare by making false claims that Medicare coverage is affected by the new law, Conway said. It is not, but the annual Medicare re-enrollment period runs through Dec. 7, perhaps creating confusion.

“It’s appalling to think there are individuals out there who would prey on Kentuckians during this process,” Beshear said. “Everyone should be on guard and report any questionable websites or businesses. There is a lot of misinformation on the Affordable Care Act, which is why we have qualified staff who can answer questions and point consumers in the right direction.”

The attorney general's Office of Consumer Protection offered these tips:

• Make sure you’re working with a registered insurance agent or certified Kynector. Only legitimate insurance agents and government-contracted assisters, called “kynectors,” are authorized to assist Kentuckians with signing up for health care. A list of approved agents and kynectors maintained by the Cabinet for Health and Family Services can be found online or by calling 1-855-459-6328.
• Protect your personal information. Only a registered insurance agent, a certified Kynector, or customer-service representative at a contact center should ask for your personal information to help you apply. Keep personal and account numbers private to any others who offer assistance. Don’t give your Social Security number, credit card or banking information to companies or individuals you didn’t contact. Never give your information to someone whose identity you question.
  
• Do not pay for help. Insurance agents and Kynectors will not solicit money. There is no charge to use Kynect services with the help of an insurance agent or certified Kynector. If consumers get an offer to register for a fee, they should hang up the phone or walk away.
• Remember that you can only get tax credits through Kynect. Most Kentuckians who buy insurance through Kynect will qualify for tax credits to subsidize their premiums. No one but Kynect can offer these credits, and there is no charge to apply for them.
  
• Beware of phishing scams online. Consumers should be cautious of any email claiming to be connected to the Affordable Care Act, including any emails claiming to be affiliated with kynect and asking for personal information.
  
• Ask questions. Don’t sign anything you don’t fully understand, and verify the answers you get with trained kynect representatives.

If people think their personal information may have been compromised, they can visit www.ag.ky.gov, the attorney general’s website, which has an identity-theft toolkit.

A Ky. guide to the Patient Protection and Affordable Care Act

By Molly Burchett
Kentucky Health News

Few laws have generated as much confusion, opposition or news coverage as the Patient Protection and Affordable Care Act. Despite the flood of news stories about the law widely known as Obamacare, there is still much confusion about it.

That's not surprising. The 906-page law is complex and is accompanied by 10,535 pages of regulations. This guide to the law is designed to clear up confusion and offer various perspectives about how the law may affect you, your family or your business.

What does the Affordable Care Act do?

The law is a set of reforms that impose many requirements on insurance companies and requires all Americans, with very few exceptions, to have health coverage or pay a penalty starting Jan. 1.

Kynect home page

In addition to those mandates, the law created online health-insurance marketplaces and encouraged states to expand the federally subsidized Medicaid program for the poor and disabled. Gov. Steve Beshear expanded Medicaid and decided the state would run its own marketplace or exchange, Kynect, which launched Oct. 1.

Why did Congress pass the law?

The law is designed to extend health coverage, either through private insurance or Medicaid, to Americans without health insurance. More than 47 million Americans were uninsured in 2012, says the Kaiser Family Foundation, and about 640,000 of them were Kentuckians.

The law's rules for insurance will increase costs for many, so it provides Medicaid or subsidized coverage to help qualifying individuals pay for coverage. Those with incomes under 138 percent of the federal poverty threshold qualify for Medicaid, and those with incomes up to 400 percent of the poverty line get premium subsidies. The line for a family of four is $23,550, so such a family would qualify for subsidies if it makes less than $94,200 a year.

Who will be affected by the law?

Obamacare will affect almost everyone, but it will have less impact on people 65 and up because they're eligible for Medicare. Virtually everyone must have health insurance coverage by 2014 or pay a penalty. Beginning in 2015, employers of 50 or more full-time workers (defined as working at least 30 hours a week) must provide coverage for their employees.

Insurance companies can no longer deny coverage because of pre-existing conditions such as a disability, pregnancy, or chronic disease. Under one part of the law that took effect early, parents are able to keep their children on their insurance until the children turn 26.

The law aims to help people who can't get affordable insurance through an employer or who aren't ineligible for public coverage through Medicare or Medicaid. It also affects the self-employed, small businesses and employees of businesses that don't provide coverage.

Because the law is making fundamental changes in the health-insurance system, "In the long run, pretty much every American will be affected by Obamacare," reports Abby Hayes of The Dough Roller, a financial-advice site. "Next year, employer-sponsored insurance premiums are likely to fluctuate as insurance companies adjust their offerings."

Will the law lower health costs?

It's too soon to tell what impact the law will have on costs. Remember, there are two types of health costs: the country's overall cost and the cost that you feel in your pocketbook from the money your household spends on health services.

If you buy an insurance policy through the state exchange, www.kynect.ky.gov, your cost will depend on your individual situation, such as the size of your household and the number of smokers in it, and your income, which will determine your eligibility for subsidies or Medicaid.

Most people who buy coverage in the individual market will pay higher premiums in 2014, mainly because companies are required to cover people with pre-existing conditions and a broader range of services, such as prescriptions, than many people have been paying for.

Rates in the individual market will change yearly, as explained in a report from the Kaiser Family Foundation. It says the broader coverage, and limiting surcharges due to age, will spread the overall cost of care across the insurance marketplace, tending to lower premiums for people who are older and sicker and raise them for people who are younger and healthier. Thus, the trade-off for pre-existing coverage is the individual mandate, which requires everyone to purchase coverage to spread the cost.

Think of it this way: When you go out to eat with two grade-school children, they can order off the kids' menu, so you pay less for their smaller portions. The total bill is $30. Your kids' chicken finger platters are $5 each, and you and your spouse both have $10 items. However, if the restaurant must charge all patrons equally for the same meal, the $30 cost would be assessed differently. The cost for each individuals would be $7.50; the cost of your kids' meals would be higher and you and your spouse's meal would cost less.

Many Kentucky businesses have expressed concern about rising premiums for employee coverage. Some are moving to high-deductible plans that require employees to pay a larger share of their costs, and some may drop coverage, letting employees obtain insurance and subsidies through the government exchanges.

How do I get coverage from the exchange?

The Kynect website will determine your eligibility for Medicaid or subsidies, allow you compare plans and process the insurance application. If you don't have a computer, you can call toll-free to 1-855-459-6328 to apply or locate a local "Kynector."

Unless you qualify for a special enrollment period, you must enroll in a health plan by March 31, 2014. A "life-changing event," such as moving to a new state, major changes in income and changes in family size, can make you eligible for a special enrollment period, says Healthcare.gov, the federal website. (Kentuckians do not use the federal site because the state has its own site, Kynect.)

The date coverage starts depends on when you buy it. If you enroll before Dec. 15 and pay your first premium, your coverage starts Jan. 1. Likewise, in succeeding months, if you enroll between the 1st and 15th, your coverage starts on the 1st of the next month. If you enroll after the 15th, coverage starts the month after the next one.

What do the health plans cover?

Regardless of which plan you chose, the law requires all plans offered by any insurance company to cover these essential health benefits:

1. Ambulatory patient services (outpatient care)
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance abuse services (including behavioral health treatment)
6. Prescription drugs
7. Rehabilitative and habilitative services/devices
8. Laboratory services
9. Preventative, wellness, and chronic disease management services
10. Pediatric services (including oral and vision care) 

What will I pay for a plan?

Premiums depend on individual circumstances, such as income and the level of coverage, such as the amounts of deductibles and co-payments. Kynect is connected to federal databases — including Internal Revenue Service databases — to determine whether you qualify for assistance in paying a premium. People on Medicaid do not pay premiums.

Plans on Kynect vary widely. In addition to comparing premiums, it is important to consider deductibles, co-payments and other plan details. Kynect offers four basic types, labeled bronze, silver, gold and platinum. Bronze plans have the lowest premiums but have a $6,300 deductible. As you move up the plan spectrum to platinum, your premiums increase and your deductibles decrease. The exchange also offers people under 30 a plan that provides only catastrophic coverage with a "very high deductible" and no subsidy.

Let's consider a basic example. A 45-year-old Floyd Countian named John Smith earns $36,000 a year, which means he is eligible to buy subsidized insurance through Kynect.

The individual market in Floyd County is limited to two companies, Anthem Blue Cross and the non-profit Kentucky Health Cooperative; Humana Inc. isn't offering individual coverage there. Depending on the type of plan John chooses, his premiums will range from $182 (bronze) to $421 (platinum), with deductibles ranging from $6,300 (bronze) to $500 (platinum).

Kynect shows selected plans' ranges of premiums, 
deductibles and out-of-pocket limts.

John has several options. Let's say he decides that he needs to keep his premium payments below $250 per month because he just bought a house and is on a tight budget. He doesn't expect to have many doctor visits because he's pretty healthy, but he doesn't have enough money saved to afford a $6,300 deductible if things went south.

Considering his obligations, John decides to set aside 15 percent of his monthly income for health care. Based on this budget, he narrows his options down to three plans. The Kynect website displays them.

After eliminating the gold plan, John decides he would prefer to pay an additional $40 per month to reduce his deductible to $2,000, so he purchases the cooperative's PPO Silver plan. About 7 percent of his income each month will go toward the premium. He will save the other 8 percent ($240) to apply to his deductible, prescription drug costs and co-pays for office visits.

A $2,000 deductible means that John must pay all of his medical costs, excluding certain preventive services like immunizations and screening, until he reaches this threshold. Co-payments and premiums cannot count toward the deductible.

John really likes his family doctor, whom he's been seeing for 20 years, and the doctor is in the cooperative's network. This plan has a $30 co-pay for primary care and mental health services, and he feels comfortable paying this amount for an office visit. If he were to see an out-of-network doctor, he would pay co-insurance: 60 percent of the doctor's full charge for the visit. For prescription drugs, there is a $500 deductible, and John will pay $20 per prescription for generic drugs after reaching this amount.

John has peace of mind knowing that he's covered if he were to have an accident. The total amount he may have to pay each year is his out-of-pocket limit of $6,350, and since he has purchased this plan during the enrollment period, he will not face a penalty for not having coverage.

As he navigates the site, John sees that he qualifies for a payment assistance in the form of a tax credit that will either reduce the amount John will pay in taxes or increase his refund, depending on his personal situation; or it will reduce his monthly premiums, if he so chooses.

What happens if I don't get covered?

The penalty for 2014 will be the larger of either $95 per adult and $47.50 per child under 18, up to a total of $285 per family or 1 percent of household income in excess of $10,000 for an individual or $20,000 for a family.

For example, let's say an individual making $40,000 per year doesn't buy health insurance in 2013. This person would would pay 1 percent of $30,000, or $300, in 2014. What about a family with a $50,000 household income? It would pay a penalty of 1 percent of $50,000, or $500.

The initial penalties are much less than the cost of health insurance, but will go up each year. The minimum penalty may increase to as much as $695 per person by 2016.

What if I'm on Medicare or Medicaid?

Almost nothing will change if you have coverage through Medicaid, but there are some changes for Medicare beneficiaries. The law doesn't require Medicare beneficiaries to buy more insurance and won't force beneficiaries to see different doctors, reports Andrea Adleman of U.S. News.

Obamacare does, however, increase premiums or prescription-drug costs for some Medicare beneficiaries, and it mandates $716 billion in Medicare payment reductions over the next 10 years. These cuts are made by changing payment formulas for hospitals, nursing homes, home-health agencies, hospice agencies and Medicare Advantage plans, says the Congressional Budget Office.

The law already affects higher-income Medicare beneficiaries. Those who earn more than $85,000 ($170,000 for a couple) are paying higher Part B premiums, which cover physician and outpatient services, and for Part D, which covers prescription drugs, says Kaiser Health News. As a result of this sliding scale, about 5 percent of Medicare beneficiaries are paying more for premiums and prescription drugs.

It is projected that by 2019, 7.8 million beneficiaries will be paying the higher Part B premiums and of that group, 4.2 million will pay the higher Part D premiums. Kaiser estimated the combined premium in 2019 would be $299 to $683 a month, depending on income.

However, typical Medicare beneficiaries, those below the $85,000/$170,000 income threshold, will pay less for their premiums since the the law closes the "doughnut hole," the coverage gap in prescription benefits, by 2020. The National Council on Aging estimates the savings could reach $1,800 for some beneficiaries.

Also, both Medicaid and Medicare beneficiaries will qualify for more free preventive care, such as a yearly wellness visit, vaccinations and colorectal screenings, starting Jan. 1.

What if my employer covers me?

About 57 percent of Americans have health insurance through an employer with fewer than 200 employees, and those who are covered do not have to purchase a new plan on Kynect. If your employer’s plan covers less than 60 percent of allowed medical expenses, or costs you more than 9.5 percent of your household income, you can shop on the exchange.

Over the past 10 years, employers have been shifting more health costs to employees. Worker contributions increased 89 percent during the decade, and are 14 percent higher than in 2009, Kaiser Health News reports. So, while the nature of your work plan may be changing, this is not a direct result of the health law.

If you aren't covered by your employer or if your employer decides to drop your coverage, you must obtain coverage or face a penalty. Religious conscience and hardship exemptions to this mandated coverage exist, and you will need to complete an application to request such an exemption.

What if I'm an employer?

Steve Wilson, senior vice president of Benefit Insurance Marketing in Lexington, said in an email that employers with fewer than 50 employees are facing 2014 premium increases that may lead them to drop coverage for their employees.

Wilson said unless companies act quickly to renew early based on 2013 underwriting rules, the average 2014 renewal for his company's small business clients will increase 63 percent. He said his clients represent a broad range of industries that will, on average, pay $3,508 more per employee for coverage next year.

On the other hand, a study by the RAND Corp. says Obamacare could alleviate some of the difficulties for small employers by putting their employees into a single risk pool. The study predicts that the number of workers offered coverage will increase after the reform, mainly because more small businesses will offer coverage.

If you have a small business with 25 or fewer employees, there may be significant tax credits available through Kynect to help cover the cost of insurance.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Physicians say they dislike regulations on use of electronic health records, but they don't want to go back to paper records

Doctors say use of electronic health records is one factor contributing to physician dissatisfaction because it interferes with patient care, says a new study.

Surveyed physicians blame EHRs for reduced quality of care, saying that their daily interaction with "clunky" EHR systems contributes to their dissatisfaction, which is closely linked with their ability to provide quality care, reports Chris Kaiser of MedPage Today. The results were published in a study by the RAND Corp. and commissioned by the American Medical Association.

Physicians said the cumulative burden of rules and regulations affecting clinical practice, including “meaningful-use” rules for EHRs, also detracted from professional satisfaction, says the report brief. These rules were created by the federal Centers for Medicare & Medicaid Services; providers must certify that they are “meaningfully using” their EHRs by meeting established thresholds in order to qualify for the program's financial incentives. If providers accepting Medicare do not qualify by 2015, their Medicare payments will be reduced by 1 percent each year, says HealthIT.gov.

Despite their dissatisfaction with the regulations, physicians said they approved of the concept of EHRs, saying that their use has numerous benefits, including being able to remotely access patient information and improving in-practice communication, says the report. Only 20 percent of physicians said that practices should return to paper documentation.

“Physicians believe in the benefits of electronic health records, and most do not want to go back to paper charts,” said Dr. Mark Friedberg, a natural scientist at the RAND Corporation, in a news release. “But at the same time, they report that electronic systems are deeply problematic in several ways. Physicians are frustrated by systems that force them to do clerical work or distract them from paying close attention to their patients.”

The problem is that many EHR programs aren't user-friendly. This problem should be addressed, says the report, to ease physician workflow and free up time for the physician to spend with the patient. Here are some of the complaints physicians had about EHRs:

Time-consuming data entry 

User interfaces that do not match clinical workflow 

Interference with face-to-face patient care 

Information overload 

Lack of health information exchange between EHRs 

EHRs are expensive, threatening practice finances

Understanding physicians' professional satisfaction is important because better patient care is a potential "downstream" benefit of satisfaction. The researchers said knowing reasons for dissatisfaction can lead to targeted interventions to address the issues,says the news release.

"Aside from viewing better patient care as a potential consequence of better physician professional satisfaction, it may be useful to think of physician dissatisfaction, when it is caused by perceived quality problems, as an indicator of potential delivery system dysfunction," says the report.

Smokers shouldn't get Medicaid or Medicare, says freshman Republican lawmaker who grows tobacco

State Rep. Jonathan Shell of Lancaster, a young Republican who grows tobacco, is against a statewide smoking ban. No surprise there, but how about this: He also says people who use tobacco should't be able to get Medicaid benefits.

“As I don’t think we have should have a smoking ban, I also think if you’re going to be smoking, you should have to sign a waiver that you will not get onto Medicaid or Medicare ... so the taxpayers [don't] have to end up forking over those dollars because you made the wrong decision to smoke and put those carcinogens into your body,” Shell told Ryan Alessi on cn|2's "Pure Politics."

Shell, who is in his first term in the House, sponsored legislation this year to require drug testing for anyone who applies for government benefits such as Medicaid or food stamps, which he said "should be a last resort." His predecessor, Republican Lonnie Napier of Lancaster, was a leading advocate of such legislation.

Most of Alessi's five-and-a-half minute interview with Shell dealt with the workings of the tobacco industry. He said the free market will determine when he switches from growing tobacco to another crop, and he is already raising vegetables and flowers. He said his free-market and indiviphilosophy makes him oppose a smoking ban.

Kentucky poverty rate is fifth highest in U.S., but a larger share of Kentuckians had health insurance in 2012 than in 2011

By Molly Burchett
Kentucky Health News

In 2012, as U.S. incomes remained lower and poverty rates higher than in 2007, the year before the recession, Kentucky poverty rates increased and one in four Kentucky children were living in poverty, according to estimates released Thursday by the U.S. Census Bureau. However, the percentage of Kentuckians with health insurance increased.

Kentucky had the fifth highest percentage of residents living in poverty (19.4 percent) in 2012, up from 18.8 percent in 2011. It ranked behind Mississippi (24.2 percent), New Mexico (20.8), Louisiana (19.9) and Arkansas (19.8). However, it was statistically tied with the last two states for third place because the error margin for the estimates is plus or minus 0.5 percentage points. Nationally, 2012 was the second straight year that the U.S. poverty rate had failed to improve. It remained at 15 percent, with 46.5 million people earning at or below the federal poverty line. Click here for an interactive poverty rate map from Stateline.

These findings highlight the challenges that Kentuckians face regarding economic security relative to the rest of the country. The high poverty rate should also act as a warning since it presages troubles with education, health and other areas, Terry Brooks, director of Kentucky Youth Advocates, told Chris Kenning of The Courier-Journal.

The figures are three-year rolling averages from the American Community Survey, a continuing poll of Americans. It estimated that 595,260 Kentuckians were uninsured in 2012, indicating an uninsured rate decline to 13.9 percent, from 14.7 percent. Overall, the U.S. uninsured rate dropped from 15.7 in 2011 to 15.4 percent in 2012, with the number of the uninsured statistically unchanged at 48 million. Insured rates tend to rise as employment rises.

Among the estimated 1 million Kentucky households earning less than $25,000 a year, 22.6 percent do not have health coverage. Kentuckians aged 19 to 25 had the highest percentage of unisureds for a specific age group; about 400,000 Kentuckians are in that group, and 28.1 percent of them are uninsured.

The national decline in the uninsured rate was modest compared to a bigger drop in 2011 that resulted from the federal health reform law that allowed people 26 or younger to be covered on their parents' plans. The slight dip in the national uninsured rate for 2012 was due mostly to increases in government coverage, such as Medicaid and Medicare.

Nationally, the coverage by employer-provided health insurance for people under 65 remained stable. Kentucky, Michigan and Vermont were the only states to see a statistically significant increase in the rate of private health insurance coverage from 2010 to 2012.

The Census Bureau's American FactFinder report generator provides specific information about health insurance coverage.  For example, the chart below comes from a report about the types of health insurance coverage for specific age groups, and it shows estimates of the types of coverage for Kentuckians ages from 35 through 64.

When the main provisions of the health law take effect in 2014, expansion of the state Medicaid program with federal money is expected to provide free health care to as many as 308,000 Kentuckians at up to 138 percent of the federal poverty level -- currently $15,856 for an individual or $32,499 for a family of four.

The state will also offer federal tax credits for Kentuckians who lack job-based health insurance and buy private coverage through the new state health insurance exchange, Kynect, which opens for enrollment on Oct 1. Click here to read more about Kynect or to check your eligibility for coverage or subsidies.

Earlier, the Census Bureau reported there were 46.5 million people in the U.S. living in poverty median household income remained steady from the year before and was $51,017. Kentucky had a median household income of $46,362 in 2012, compared to the U.S. median of $51,371.  Click here for an interactive median income map from Stateline.

Ashland hospital lays off another 4 percent, citing lower revenue

King's Daughters Medical Center in Ashland is laying off another 4 percent of its payroll and closing satellite centers in Pikeville and Russell, citing lower numbers of patients and reduced federal and state reimbursements.

"It is the most recent in a series of layoffs for the medical center, which saw layoffs and shift reductions for more than 100 employees in 2010 and an undisclosed number of layoffs in 2012," reports Beth Hendricks of The Herald-Dispatch in Huntington, W.Va. "Most affected positions are in support, administration and supervisory areas, according to KDMC spokesman Tom Dearing. Staffing levels for direct patient care remain unchanged. Physicians at the closing family-care offices will be relocated to other centers."

Mike James of The Independent in Ashland reports, "Some workers had their hours cut from full time to part time, Dearing said. . . . CEO Fred Jackson ... said the cuts were part of a national slump in the health care business. . . . Jackson’s email blamed 'a perfect storm of a shifting business model, changing federal and state reimbursements, increasing demand for charity care, and a weak economy' and said the hospital would look to outpatient services and its community outreach centers for future growth."

Jackson has been under fire from the Service Employees International Union for his total compensation of $1.37 million in 2010, the figure reported on the not-for-profit hospital's most recent IRS Form 990. "By comparison, a CEO at a Huntington-based hospital earned $725,744," Hendricks reports. "Five additional KDMC senior management officials saw a combined $300,000 in increased wages over the same period."

Hendricks writes, "Ashland City Commissioner Kevin Gunderson said the layoffs Thursday, coupled by layoffs in recent years, raises questions about whether the board and management at King's Daughters have overspent on various outreach clinics, some of which are closing. 'They should have focused on their core medical center instead of building outreach centers in Pikeville, Prestonsburg, Flatwoods, Cannonsburg, Russell and South Shore and Jackson, Ironton, Burlington and a large one in Portsmouth,' Gunderson said. 'I just drove by there today, and they had people out planting shrubbery.' . . . This week's layoffs are the latest in a string of woes for the hospital, which lost its contract with Medicaid managed-care organization CoventryCares in late 2012. King's Daughters is also under a Department of Justice investigation into its cardiac program."

Federal report says many hospitals wouldn't keep critical-access designation if distance rules were strictly enforced

More than two dozen Kentucky communities still have hospitals because of the critical-access hospital program, in which small, isolated hospitals get higher Medicare and Medicaid reimbursements in return for limiting their size and services. Now federal officials appear to be considering a move that could cost the hospitals money and perhaps put them at risk of closing.

Most of the hospitals would not meet current location requirements if required to re-enroll to get reimbursements from Medicare, and the Centers for Medicare and Medicaid Services could realize substantial savings by revoking certification to some of these hospitals and reimbursing them at lower rates set by prospective payment systems and fee schedules rather than at 101 percent of costs, according to a report by the Department of Health and Human Services.

The agency found that "the program costs the government and Medicare beneficiaries up to a billion dollars a year more than the original parameters of the law allowed," Jenny Gold reports for Kaiser Health News. If forced to re-enroll, 849 of the 1,329 hospitals in the program would not meet the requirements -- having 25 or fewer beds and being at least 35 miles away from another facility (15 miles in mountainous terrain) in communities that would otherwise have limited access to health services.

"Until 2006, states were allowed to waive the distance requirement and designate small hospitals considered 'necessary providers' as critical access hospitals as well, even if they were close to other facilities," Gold reports. "The program grew quickly and now nearly one in four acute care hospitals are getting the extra payments. Congress got rid of the loophole in 2006, but hospitals that already had the exemption were grandfathered." (Read more)

Critical-access hospitals are located in Barbourville, Berea, Burkesville, Cadiz, Carlisle, Carrollton, Franklin, Greensburg, Hardinsburg, Hartford, Harrodsburg, Horse Cave, Irvine, Liberty, Martin, McDowell, Monticello, Morganfield, Owenton, Princeton, Russell Springs, Salem, Scottsville, Stanford, Versailles and Williamstown. For a detailed list, click here.

Critics say new Medicare rate-setting board has too much power; former budget chief says new system requires it

Critics as diverse as Republican state Rep. Addia Wuchner and former national Democratic chairman and Vermont governor Howard Dean, a physician, are criticizing the Independent Payment Advisory Board, a panel created by the federal health-care reform law to hold down health-care costs. But a finance executive who helped create the board says the critics are off base.

Dean wrote recently in The Wall street Journal that the board "is essentially a health-care rationing body," and Wuchner said in an op-ed piece in several Kentucky newspapers that the board's recommendations "will result in reduced care access" and "would intrude and erode the physician-patient relationship."

Despite Dean's assertion, the law "specifically states that the board is not allowed to make any recommendations that would ration care," Peter Orszag wrote for Bloomberg View. Orszag is vice chairman of corporate and investment banking at Citigroup, and was President Obama's budget director after running the bipartisan Congressional Budget Office.

Orszag says Congress already sets Medicare rates, and the board is designed to "be more facile and dynamic" as the law changes the medical funding system from the current fee-for-service" model "toward paying for value in health care." He says that is already happening faster than expected, because the CBO says Medicare's net costs have risen only 2.7 percent in the current fiscal year, which ends Sept. 30. "Redesigning the payment system is a fundamentally different approach to containing costs," which requires "a process for tweaking our evolving payment system in response to incoming data and experience," Orszag argues.

Wuchner, a registered nurse bioethicist from Florence, says the board has too much power. She notes, "Unlike typical advisory-board recommendations that have to be accepted or rejected by Congress, IPAB’s recommendations become law unless Congress passes its own plan with a three-fifths majority in the Senate in relatively short order that brings comparable savings."

Obama and allies tout preventive-services and drug benefits of health-reform law to Medicare beneficiaries in Ky.

The federal health-reform law has made drugs more affordable for seniors, broadened coverage for preventive services and made Medicare more solvent, the Obama administration and its allies are pointing out today, the 48th anniversary of the enactment of the Medicare program.

According to the Department of Health and Human Services, Medicare beneficiaries in Kentucky have saved nearly $141 million on prescription drugs because of the Patient Protection and Affordable Care Act. Last year, 72,391 Kentuckians saved more than $51 million, or an average of $703 each, on prescriptions because those in the “donut hole” of Medicare Part D got a 50 percent discount on covered brand-name drugs and a 14 percent discount on generic drugs. The law will keep expanding coverage for both types of drugs until it closes the donut hole, the gap in coverage between modest and huge prescription needs.

The law also eliminated deductibles and co-payments for screening and other preventive services for seniors and people with disabilities. Last year, 485,843 Kentuckians with traditional Medicare used one or more free preventive service.

"The health care law extends the life of the Medicare Trust Fund by 10 years," said a news release from U.S. Rep. John Yarmuth, D-Louisville. From 2010 to 2012, Medicare spending per beneficiary grew 1.7 percent a year, much more slowly "than the per capita rate of growth in the economy," the release said. "And the health care law helps stop fraud with tougher screening procedures, stronger penalties, and new technology."

Earlier, the administration noted that Americans received $504 million in rebates from insurance companies because of the law's requirement that a certain percentage of premiums paid must be used for health care. In Kentucky, the rebates totaled $14.4 million to 206,771 consumers (slightly more than half, totaling almost $11 million, in the individual market) and averaged $100 per family. For other data on the effects of the law in Kentucky, click here.

AMA calls obesity a disease; could spur coverage for treatment

The American Medical Association now recognizes obesity as a disease, which may make it easier for Kentuckians to fight the state's obesity epidemic by gaining insurance coverage for necessary medical treatment. Under the leadership of newly elected President Ardis Hoven of Lexington, the physicians' group voted to approve this new obesity policy June 18 during its annual meeting in Chicago. Click here to read the report by the AMA’s Council on Science and Public Health.

Kentucky ranks 10th highest in the U.S. for adult obesity, and the state's obesity rate is predicted to jump from 30 percent in 2011 to more than 60 percent in 2030. This year, $2.3 million is expected to be spent on medical costs linked to obesity, and that number is estimated to rise to $6 billion in 2018, says a report by the College of Public Health at the University of Kentucky.

Read more here: http://www.kentucky.com/2012/09/24/2349167/recent-report-on-kys-obese-future.html#storylink=cpy

Being overweight or obese greatly increases the risk of developing other chronic diseases like diabetes, stroke, arthritis, sleep apnea, asthma, heart attack and certain cancers or other complications like asthma, joint problems and psychological issues, says the report. Kentucky children also suffer from high rates of obesity, and if the current trend continues, one in every three American children will develop Type 2 diabetes.

"Recognizing obesity as a disease will help change the way the medical community tackles this complex issue," AMA board member Dr. Patrice Harris said in a statement. Although Medicare and Medicaid do cover obesity treatment associated with another disease or disorder, they do not cover interventions and counseling about lifestyle changes necessary to fight obesity. The AMA declaration could lead to coverage and help increase funding for obesity research, reports Jacque Wilson of CNN. With the AMA now calling obesity a disease, "insurers can stop ducking their responsibility" in paying for obesity treatments, Dr. Virginia Hall, an obstetrician from Hershey, Pa., said in a Forbes magazine report by Bruce Japsen.

Also, identifying obesity as a disease help reduce the stigma often associated with being overweight, Joe Nadglowski, president of the Obesity Action Coalition, told Wilson. "Obesity has been considered for a long time to be a failure of personal responsibility -- a simple problem of eating too much and exercising too little," he said. "But it's a complex disease. . . . We're hoping attitudes will change."

UK Board of Trustees OKs $31 million plan to outfit another floor of new hospital with eye toward federal certification for heart work

The University of Kentucky Board of Trustees has given UK HealthCare the green light for its $31 million plan to outfit the eighth floor of Pavilion A at UK Chandler Hospital over the next few months to make room for a growing cardiovascular program and to clear the way for a federal "Center of Excellence" certification.

After the project is complete, the floor will hold 64 beds, including 24 intensive-care beds for the cardiovascular program that offers heart transplantation, artificial hearts and ventricular devices, reflecting UK's focus on receiving the federal certification.

In the near future, such a designation will be necessary to get enough referrals from doctors and smaller hospitals to maintain important services, including cardiovascular services, and to guarantee that Kentuckians can get the care they need inside the state, Dr. Michael Karpf, executive vice president for health affairs, said in an interview with Kentucky Health News this spring.

Karpf and other UK HealthCare officials are also recommending a $30 million cost-reduction program for their system because Medicare and Medicaid reimbursements are expected to decline as competition stiffens over the next few years, reports Linda Blackford of the Lexington Herald-Leader.

In response to these forces, UK has a goal to secure half the available business from out-of-state competitive areas over the next 10 years to remain viable in a highly competitive market. And, focusing on complex care should drive revenue for the hospital because UK makes money on the complex stuff, Karpf told KHN.

Read more here: http://www.kentucky.com/2013/06/10/2673382/uk-healthcare-using-30-million.html#storylink=cpy

The $592 million, 12-floor patient tower has remained half-empty since 2010, and when the estimated $530 million project to fully occupy the tower is added to the initial cost of constructing Pavilion A, the total price tag will top $1 billion over 20 years, reports Blackford.

The overall construction and expansion is expected to support patient care for the next 100 years, says a recent UK press release. Once it's fully occupied, the the 1.2 million-square-foot facility will include 512 private patient rooms.

Read more here: http://www.kentucky.com/2013/06/10/2673382/uk-healthcare-using-30-million.html#storylink=cp

Could Medicare Part D be an inadvertent enabler of prescription drug abuse?

By Molly Burchett
Kentucky Health News

An examination of the Medicare Part D program that Congress established a decade ago, dedicating billions of dollars to subsidizing prescription drug purchases for 35 million elderly and disabled Americans, uncovers the program's risky lack of oversight -- and suggests that it might be contributing to Kentucky's prescription-drug abuse epidemic.

An analysis of Medicare prescription records by ProPublica, an independent, nonprofit newsroom, found that the program has failed to properly monitor safety, ProPublica's Tracy Weber, Charles Ornstein and Jennifer LaFleur write in The Washington Post. And despite their findings that many providers prescribe antipsychotics, narcotics and other drugs known to be dangerous for older adults, Medicare officials told them it's not their job to monitor for unsafe prescribing or to stop doctors with criminal histories.

The largely unchecked prescribing habits of Medicare providers and the increased availability of prescription drugs suggests that Part D has inadvertently enabled prescription drug abuse, by making drugs available for abuse by Medicare patients, their friends, acquaintances and family members, particularly teenagers. A 2010 national survey by the U.S. Department of Health and Human Services found that 65 percent of teens who report that they have abused prescription medicine got them from friends, family and acquaintances rather than illegal drug dealers.

In Kentucky, drug overdose, mostly from prescription drugs, is the leading cause of death, and the widespread availability of drugs and easy access to drugs are some reasons for this trend, says the 2012 combined report from the Kentucky Justice & Public Safety Cabinet. In addition to taking the lives of loved ones, drug overdose takes a huge financial toll on the state, and a recent study shows that the Medicare program bankrolls the single largest percentage of drug overdose inpatient hospitalizations.

Inpatient hospitalizations for drug overdoses by percentage of total charges,
among Kentucky residents treated in Kentucky acute-care hospitals, 2010

Medicare alone was billed for 30 percent of all inpatient hospitalizations for drug overdoses in Kentucky from 2000 through 2010, totaling over $440.7 million, says a report by the Kentucky Injury Prevention Research Center. During those 11 years, the number of unintentional drug-overdose hospitalizations of Medicare beneficiaries increased 222 percent.

The fact that almost a third of overdose hospitalizations involve Medicare patients is concerning, said Van Ingram, executive director for the Kentucky Office of Drug Control Policy. In addition to these alarming statistics, Medicare and Medicaid incurred nearly $4 million worth of charges for drug-overdose visits to emergency rooms in 2010, which represents 41 percent of the total charges, says the KIPRC report. Also, during the period from 2008 to 2010, the number of unintentional Medicare drug-overdose emergency visits increased almost 44 percent.

Among prescription drugs, opiates and similar narcotics are most likely to be abused and most likely to lead to death. Since Medicare Part D began covering prescription drugs in 2006, drug overdose deaths involving opiates have increased almost 80 percent in Kentucky, says the KIPRC report.

ProPublica's Prescriber Checkup database shows that 30 percent of Medicare Part D patients have filled at least one narcotic prescription. The most common drug provided by Part D in Kentucky is hydrocodone-aceteminophen, which is an opiate painkiller known commercially as Lortab, Lorcet or Vicodin. Part D paid more than $12.6 million on 958,933 claims for hydrocodone-aceteminophen from 2007 to 2010.

Medicare officials told ProPublica that the government isn't responsible for monitoring these types of prescriptions because that is the duty of private health plans administering the program. Yet, health plans aren't given the tools to do so, the reporters write, and no one party has been slated the task of ensuring safe medication-use. This complacent mentality suggests Medicare officials, who also say it's not the providers' duty to "prevent inappropriate prescribing for individual patients," could be passively contributing to the drug-safety issue of prescription medications covered by Part D.

In addition to indicating that providers should not industriously discourage dangerous prescription drug usage, ProPublica’s examination of Part D data showcases numerous examples of Medicare officials failing to act against providers with troubled prescribing backgrounds. Such examination initiates a worthwhile discussion about the program's role in encouraging, or well, at least not actively combating, prescription drug abuse. Click here to visit Kentucky's Medicare Part D Prescriber Checkup. Individual doctors can be looked up.

Medicaid expansion would have 'a big health impact,' and critical-access hospitals need to change, rural-health expert says

Expansion of the Medicaid program under federal health-care reform would have a major beneficial impact on the health of Kentucky, a doctor who ran the state and national rural-health agencies told a rural-health meeting in Louisville Tuesday.

"Medicaid expansion has a big health impact," Dr. Wayne Myers, left, told those at "Doing Care Differently in Rural Kentucky," a seminar sponsored by the Foundation for a Healthy Kentucky and the Kentucky Rural Health Association in Louisville, just before the opening of the National Rural Health Association's three-day conference in the city.

Myers said that in the three states that expanded Medicaid eligibility since 2000, one life was saved for every 176  people added to the program, according to a study by the Harvard University School of Public Health, published in the New England Journal of Medicine. If that figure were extrapolated to the entire nation, the number of lives saved would be greater than if breast, prostate and stomach cancer were eliminated, Myers said.

Skeptics argue that Kentucky can't afford the estimated 6.3 percent annual cost increase for expanding Medicaid eligibility up to 138 percent of the federal poverty level, but Myers said, "It would be nice to shift that argument from dollars to health impact." He said that if the three cancers were curable with a certain amount of money, and you argued that the nation should not spend it because of the cost, "You'd have an uphill argument."


Myers also said Eastern Kentucky would be an ideal place for Medicaid and Medicare to start rewarding small, rural hospitals for increasing their role in health promotion and disease prevention.

The federal designation of "critical access hospital" has kept open many rural hospitals, which get greater Medicare and Medicaid reimbursements in return for limiting beds, procedures and patient stays, but President Obama's proposed budget calls for revoking the CAH status of some hospitals, and rural political clout has declined with the rural share of the nation's population, Myers noted.

"The old models aren't working too well," Myers argued, saying "What people don't realize is that [critical-access] hospitals get three-fourths of their money from the outpatient department" and have relatively few traditional admissions. He said half of them have fewer than four acute-care patients per day, and fewer than two patients who are recuperating or getting skilled-nursing care.

Then he displayed maps showing that life expectancies of rural Americans are not keeping pace with the rest of the country, and in some areas, including Eastern Kentucky, are declining. "That's really scary," he said.

Myers said those trends mean that CAHs should add health promotion and disease prevention to their job description, and Medicare and Medicaid -- which provide 85 percent of their revenue -- should pay them for performing that function.

He said hospitals have space, expertise and equipment to serve as exercise and medical-education centers, while most rural health departments are "overwhelmed" with a wide array of duties.

The federal payments for disease prevention and health promotion could be limited to hospitals in counties that have a certain percentage of their population on government-subsidized insurance, he said.

"If it makes sense anywhere, does it not make sense in Kentucky?" Myers asked, reiterating the question to focus on the state's Fifth Congressional District, which he said has the nation's lowest life expectancy. When a questioner mentioned the district's congressman, House Appropriations Committee Chairman Hal Rogers, Myers suggested the program could be named for the Somerset Republican.

Other speakers at the seminar called for new approaches in rural health, despite obstacles.

"Change is not easy. . . . Almost all federal policy tends to shortchange rural, at least initially," said Craig Blakely, dean of the University of Louisville's School of Public Health and Information Sciences.

He said two important targets for prevention activities in rural America are smoking and obesity, which he said is exacerbated by high soft-drink consumption. Soft drinks are a $57-billion-a-year industry, jhe said, "so there's a lot of pushback we're going to be facing if we want to take that on."

Blakely added that much of rural America is poor, and that is associated with poor health, so rural health providers also need to focus on education and employment opportunities for their communities.

W. Va. plans private-public model to provide school breakfast, improve child health, fight obesity; could this approach help Ky.?

By Molly Burchett
Kentucky Health News

Breakfast has been said to be the most important meal of the day, and it can be important in fighting obesity. Policymakers in West Virginia are pushing for breakfast food programs in schools through public-private partnerships, and a new report says similar programs could save $41 billion in federal dollars long-term by preventing obesity. Does this make sense, and does it make sense for Kentucky?

Like West Virginia, Kentucky has a high obesity rate among middle and high school students but has many children who don't always get the food they need to live a healthy life. Kentucky ranks fourth highest in food insecurity among children because 23 percent of Kentucky's children do not always know where they will find their next meal, according to Feeding America’s "Map the Meal Gap" study. (Here's a link to its interactive map, where you can see food insecurity rates by county in order to find out more about your county. One example appears below; orange dots are headquarters of regional food banks.)

A recent bill passed by West Virginia lawmakers addresses the problems of food insecurity, obesity and education simultaneously and serves as the first example for a statewide public-private funding partnership to improve school meals programs, reports David Gutman of The Associated Press. The bill would also require every county to set up a fund to collect private food donations.

The bill aims to require every school to have breakfast food programs so no student goes without it because of costs, says Gutman. Poor nutrition and diet are sometimes issues of cost and income level since healthy foods can be more expensive than unhealthy ones. For example, a bag of 10 apples may costs $4.99, but a package of Little Debbie oatmeal creme pies could be $1.79. A medium-sized apple has 93 calories and less than 1 gram of fat while an oatmeal creme pie has 318 calories and 13 grams of fat.

What does this have to do with obesity? The research-based logic is that a healthy, daily breakfast improves diet and can replace sugary alternatives such as donuts. Eating a healthy breakfast also improves education by combating hunger and aiding concentration and has been found to be associated with overall health and mental functioning. Overall, these factors may work together to improve education and diet, reports Gutman.

Such a program could help Kentucky address the state's problems related to food insecurity, obesity and education, while generating long-term savings. Similar food programs that provide meals to low-income children could generate as much as $41 billion in long-term federal saving by preventing obesity, says a new report from the Campaign to End Obesity.

The report says that the S-CHIP childhood obesity demonstration project, which combines changes in preventive care with community and school efforts to reduce childhood obesity in low-income communities, could prevent a child from becoming obese, saving an estimated $41,500 for an average female and $30,600 for an average male Medicaid beneficiary, says the report.

Three other programs were highlighted as huge cost-savers because they would prevent obesity and related chronic conditions in the long run, which would reduce health care costs and increase wages, says the report. These include increasing obesity screenings by physicians, bringing the Diabetes Prevention Program to scale and covering certain weight loss drugs under Medicare Part D. Preventive health policies aimed at obesity prevention could significantly reduce government expenditures, could save tax dollars and could improve the overall health of Kentuckians.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Survey shows most rural doctors in Southern Kentucky aren’t ready for electronic health records; grant will help them switch

A recent survey found that 63 percent of rural health providers in Southern Kentucky have not installed electronic health records software, so more than 280 of the small and rural doctor practices surveyed could face financial penalties from Medicaid and Medicare if they do not install it by 2015. Federal grant money will help them make the switch.

Many rural Kentucky providers are near retirement and are deciding between making the necessary investment of capital and personnel that is required to make the switch to electronic records or to just close their practice, according to a release from Kentucky Highlands Investment Corp., which led the effort to get the grant

Decisions to close practices and to avoid using electronic health records could be problematic to rural areas in Kentucky, since the state already has doctor shortages, especially in rural areas. If the state expands the Medicaid program under federal health reform, the number of insured patients could increase much more than the number of physicians in Southern Kentucky, an area where many people are uninsured.

“Large hospitals in the region such as ARH, Baptist Regional and others have successfully installed this software, and they are using the system with quality results,” Richard Murch, an IT consultant who specializes in electronic health records and is working on the project, said in teh release. But he said the process is complicated and requires extra staff and resources that are sometimes difficult to find in the area.

The U.S. Department of Agriculture has funded a project called Stronger Economies Together to improve the biomedical and life-science practices in the region. SET plans to provide resources and training to help providers and health systems make a successful switch to electronic health records, which the release said could create about 100 jobs over the next few years.

The survey showed 73 percent of doctors’ practices have asked for help transferring to and using electronic records. “SET reviewed industry sector research to determine health care and health related businesses as the fastest growing business segment of our rural economy,” said Jerry Rickett, president and CEO of Kentucky Highlands. For more information about SET and its partner programs, click here.

Death rates for heart and pneumonia patients at critical-access hospitals are rising nationally, study finds

Death rates are rising at rural critical-access hospitals for Medicare patients who have heart attacks, heart failure and pneumonia, according to a study published in the Journal of the American Medical Association.

Hospitals designated as critical-access get slightly higher Medicsare and Medicaid reimbursements in exchange for limiting their size, procedures and patient stays. In 2002, they had a death rate of 12.8 percent for such ailments, under the 13 percent rate at other hospitals. But from 2002 to 2010, mortality rates at critical-access hospitals increased 0.1 percent each year, to 13.3 percent, while the rates at other hospitals fell 0.2 percent each year, to 11.4 percent.

There are 1,331 hospitals in the critical access program, Jordan Rau reports for USA Today. "Congress started the critical access program in 1997 to stave off hospital closures in places where patients had no good alternative because the next hospital was at least 35 miles away by regular roads or 15 miles by secondary roads. To qualify hospitals need 25 or fewer beds."
 
The authors of the study "suggested that the hospitals' care may suffer because they don't have the latest sophisticated technology or specialists to treat the increasingly elderly and frail rural populations," Rau reports. "Since hospitals are not required to submit performance evaluations to Medicare, the government may not realize that facilities could need additional assistance in caring for sicker patients."

Brock Slabach of the National Rural Health Association told Rau that the statistics don't always tell the complete story and that "The association's own research has found that rural hospitals do better in patient satisfaction surveys than do urban hospitals," Rau writes.

Kentucky hospitals gave $1.96 billion to communities in 2011, including $576.7 million cover of Medicare, Medicaid shortfalls

In 2011, despite economic and financial obstacles, Kentucky hospitals' estimated value of benefits to their communities up 17 percent from the year before, to $1.96 billion. So says the Kentucky Hospital Associated 2011 Community Benefits Report, compiled by the Kentucky Hospital Association with data submitted by hospitals. (Chart gives a breakdown of hospitals' total community benefits and services expenditures in 2011.)

Kentucky hospitals say they absorbed $576.7 million in 2011 shortfalls from Medicaid and Medicare, which cover 19 and 55 percent of Kentucky hospital patients; those losses were 26 percent larger than 2010, and may nearly double under federal health reform, to an estimated $852 million by 2019.

Bridging gaps created by Medicaid and Medicare underpayment is only one example of how the 131 Kentucky hospitals demonstrate their commitment to local communities by investing in community needs, the report says. In addition to covering government shortfalls, community benefits include providing charity care, forgiving bad debt and supporting medical research.

In 2011, the reports says, Kentucky hospitals financed $451 million in charity care, which means they cared for the sick and injured even if those patients could not afford care.

In Glasgow, T.J. Sampson Community Hospital and Dr. Bharat Mody (left), a general surgeon, have teamed up to fulfill the unmet health care needs of low-income, working, uninsured or under-insured adults of Barren County through a charity program called Community Medical Care. The program provides assistance with basic coverage for those who qualify, in addition to helping cover the cost of medications, glasses or hearing aids.

In 2011, Kentucky hospitals absorbed $426.5 million in bad debts, losses due to patient non-payment that often occur in hospital emergency rooms. Dennis Manners, who had a $500,000 medical bill and sometimes visited the ER 25 times a month, is one patient out of the total 22 percent of University of Louisville patients who cannot afford care and often cannot even afford their $15 co-pay. Highlighting its efforts to give back to the community, the reports says U of L developed a new treatment plan for Manners, which included sending him to a treatment center outside of Cincinnati.

Many health-improvement services in Kentucky communities, such as health fairs, screening programs, immunization clinics, health needs assessments and community planning, are financed by Kentucky hospitals. According to the report, $43.7 million was spent by these hospitals on such outreach programs that serve all ages and a number of special needs populations. For example, Northern Kentucky's St. Elizabeth Healthcare is fighting against cardiovascular disease, diabetes and stroke with its Cardiovascular Mobile Health Unit that brings vascular services to the community for easy access, screenings, risk appraisals and education.

Hospitals also spend a lot of money, an estimated $127.5 million in 2011, to ensure health professionals are properly educated -- a great need in Kentucky, where 59 of the 120 counties are designated as health professional shortage areas. One effort, the Rural Physician Leadership Program on the campus of St. Claire Regional Medical Center in Morehead, addresses this shortage by training physicians to serve in rural areas of Kentucky and the nation.

Other community benefits include subsidized health services, estimated at $32.3 million, to support programs like Highlands Regional Medical Center's Highlands Center for Autism in Prestonsburg (left). The center is the first of its type in the state and was created in 2009 to address autism in Kentucky, which is estimated by the Center for Disease Control to be diagnosed in one out of every 88 children, says the report. Each child at the Highlands center has a customized treatments plan involving psychologists, educators, behavior analysts, speech pathologists, pediatricians and neurologists, who collaborate to help children with autism reach their full potential.

The annual KHA report reminds people what hospitals do for the state and provides education about ongoing efforts. A more recognizable contribution is that Kentucky hospitals had a combined spending of $6.4 billion in 2011 on staff salaries, purchases or supplies and services that create a‘ripple effect” in the overall economy to generate state businesses, jobs, and tax revenue. The reports says St. Joseph Mount Sterling, for example, provided 213 jobs and generated about $12 million in annual local payroll in 2011. Kentucky hospitals' compensation comprises 5.8 percent of all wages and salaries in the state.

The reports says hospitals are more important than ever to the overall economic health of Kentucky communities. This is the fourth year for the report, generated by the voluntary KHA survey and other data sources, including the annual survey by the American Hospital Association; Kentucky Hospital Statistics, 2013; and Kentucky Hospitals’ Economic Importance to Their Communities, 2011. The KHA report covers community benefit expenditures made in 2011, which is the most recent year for which statewide data is available.