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Payers & Providers – Issue of February 10, 2011

Payers & Providers – Issue of February 10, 2011

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Published by PayersandProviders
Payers & Providers is California's premier healthcare business publication.
Payers & Providers is California's premier healthcare business publication.

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Published by: PayersandProviders on Feb 10, 2011
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Proposed cuts in California’s budget to care forlow-income seniors could force as much ashalf of that group into nursing homes and costtaxpayers more money in the long run, sayUCLA researchers.After examining the living conditions of 33 low-income seniors throughout California,the
UCLA Center for Health Policy Research
 reports they and their family members arealready under enormous
nancial andpsychological pressures to obtain care.“Interviews with people in this grouphave shown that they are commonly in poorphysical and/or psychological condition andare just barely managing to live safely in theirhomes,” stated a portion of the report. “At thesame time, all of them share the common goalof remaining in their homes and maintainingtheir independence.”All of the seniors studied are disabled andare enrolled in Medicare, Medi-Cal and theIn-Home Support Services program, whichprovides residential caretakers for up to 283hours per month. More than 440,000 seniorsreceive IHSS services, and its enrollment hasdoubled in the past decade, making itCalifornia’s fastest-growing social servicesprogram, according to state data.Another key program is the Adult DayHealth Care program, where more thanseniors spend their days engaged in socialactivities while also receiving medication andother healthcare services at more than 300sites statewide.Lawmakers cut the allotment for IHSShours by 3.6% last month. Gov. Jerry Brownhas proposed even more drastic cuts to thatprogram: an 8.4% across-the-board reductionin funding. Brown has also proposedeliminating the ADHC program entirely tosave $419 million, as well as addingemergency room and hospital co-pays andcaps on physician visits to those enrolled inMedi-Cal.
Stephen Wallace
, a Health PolicyResearch co-director and lead author of thestudy, called further cuts an “assault” on theindependence of low-income seniors and saidthat they would cause hospitalizations of thatgroup to skyrocket. As a result, Wallacepredicted that as many as half of the currentIHSS bene
ciaries could wind up in skillednursing facilities.“If these services are cut in June, theywon’t show up in the nursing homes in July,
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February 24-25February 23
Calendar 
10 February 2011
February 22-25
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E-Mailinfo@payersandproviders.comwiththe details of your event, or call(877) 248-2360, ext. 3. It will bepublished in the Calendar section,space permitting.
California Edition
Cuts Could Cost Low-Income Seniors
UCLA Says Many Might Wind up in Nursing Homes
 
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Payers & Providers
Page 2
Top Placement...Bottomless Potential
Advertise Here
(877) 248-2360, ext. 2
In Brief 
Knight Named NewJohn Muir CEO
The two-hospital
John Muir Health
system has named
Calvin Knight
itsnew chief executive officer. Knight,who has served as chief operatingofficer for
Swedish Health Service
sin Seattle since 1995, assumes thepost on April 4.Knight replaces
J. KendallAnderson
, who is retiring from JohnMuir after working for theorganization for nearly 40 years."After conducting a nationwidesearch, Cal Knight distinguishedhimself with his experience,passion for patient safety andquality care, communications skillsand leadership abilities," said JohnMuir Chair
Catherine Kutsuris
.Anderson’s retirement packagemade him the highest-paid not-for-profit hospital CEO in California in2008, when he received more than$7 million in compensation,according to a
Payers & Providers
 survey.John Muir operates hospitalcampuses in the East Bay Areacommunities of Walnut Creek andConcord.
UnitedHealth Invests$4.6 Million in Bay AreaClinic
Minneapolis-based health insurancegiant
UnitedHealth
is investing$3.9 million in a Bay Area clinicthat serves mostly low incomepatients.UnitedHealth is purchasing
LaClinica’s de La Raza’s
tax exemptrevenue bonds via its CaliforniaHealth Care Investment program,which it set up to provide funding
Continued on Page 3
NEWS
Seniors
(Continued from Page One)
but eventually they will wind up there,”Wallace said, noting that it takes anywherefrom three to nine months for a senior toreach a crisis stage regarding their ability tolive independently. “They’ll struggle andmove along for a while, but they’ll have morehealth problems, fall more often and getdehydrated, and they won’t have the supportto live on their own anymore.”Wallace’s assertions were con
rmed by a January 2010 report on IHSS conducted bythe non-partisan
Legislative Analyst’s Of 
ce
,which concluded that cutbacks in theprogram could lead to more seniors beingmoved to skilled nursing facilities. Accordingto that report, it costs about $10,000 perparticipant in the IHSS program, whilenursing home care may cost as much 5.5times more. However, the report did note thata larger cost share for the program is borne atthe county level, making it more
scallyattractive for state-level cuts to the program.As a result, the report concluded thatupward of 58% of the IHSS population wouldhave to be shifted into a nursing facilitybefore the state’s general fund began to spendmore on care in that setting.A report released last year by the
LewinGroup
concluded that seniors would alsohave to move into nursing homes if theADHC program is eliminated, costing thestate an additional $51 million per year.“These centers make sure the visitorshave their medicine and that their skin staysdry so it doesn’t break down,” Wallace said.“If you’re home alone that’s an indicator of receiving no care.”Wallace added that the group of 33seniors would continue to be studied todetermine how they will fare in the face of reduced services.A scenario where many of these seniorsmove into SNFs does not seem appealing tothe state’s nursing home industry. It wouldreceive a signi
cant portion of its payments forthese new patients through Medi-Cal, andWallace noted many SNFs do not acceptpayments from that program.Moreover, a recent study by long-termcare consulting
rm
Elijay
projects that thestate’s nursing home sector receive about$288 million a year less from Medi-Cal thanwhat it costs to care for the 200,000 programenrollees currently under its care. Brown’scurrent proposals call for a 10% cut in ratespaid to nursing homes to care for Medi-Calenrollees.
Deborah Pacyna
, spokesperson for the
California Association of HealthcareFacilities
, the primary lobby for the nursinghome industry, believed that the cuts may notbe as deep as
rst proposed.“The governor has publicly said there willbe modi
cations and we hope that will meansome relief for the frail and elderly on Medi-Cal,” Pacyna said.The next
ve years will be a scramble amongthe state’s acute care providers to
ll ever-growing vacancies for well-educated alliedhealthcare professionals, according to a newsurvey by the
California Hospital Association
.A poll of more than 120 hospitalsstatewide reveals what will be an ever-increasing demand to
ll vacant positionscaused by attrition and retirements, and ashortage of new graduates from the state’suniversity and community college system to
ll them.Altogether, the CHA forecasts that morethan 1 million new allied health professionalswill have to the state’s hospital workforce by2030, noting that population growth,healthcare reform and an aging populace willdrive demand. Meanwhile, the current groupof workers is quickly moving towardretirement, particularly those employed byrural hospitals.“It’s clear from this survey that retirementswithin the allied health occupations will havea serious impact on access to care for patientsif long-term strategies for replacing theseworkers are not developed and implemented,”said CHA President
C. Duane Dauner
.Two areas of particular concern areclinical laboratory scientists and pharmacists.According to the survey, nearly 850 clinicallab scientists will be eligible to retire at thosehospitals between now and 2015 –
Tough Prognosis For Allied Health
CHA Survey Says Filling Vacancies Will be Difficult
Continued on Next Page
 
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Page 3
Payers & Providers
Longer ALOS!*
Advertise Here
(877)248-2360, ext. 2
*For our ads, not your hospital
NEWS
In Brief 
to safety net providers throughoutthe state. The intent is to distribute$200 million over the next twodecades.In addition to the investment,UnitedHealth also provided asubsidy of more than $700,000 tohelp pay for the underwriting of the bonds.La Clinica officials say theywill use the funds to renovate andadd clinic space, and to move itscorporate headquarters. 
CNA Study SaysInsurers Routinely DenyClaims
A new study by the
California NursesAssociation
says the state’s largesthealth plans routinely deny millions of enrollee claims for healthcare servicesevery year.According to the labor union,California’s insurers denied 13.1million claims during the
rst threequarters of 2010, or 26% of all claimssubmitted. According to the CNA,insurers denied 26.8% of claimsduring the same period in 2009.The CNA said that
Paci
Care/UnitedHealth
denied nearly 44% of all claims, while Cigna denied nearly40%.
Kaiser Foundation Health Plan
 and
Aetna
had the lowest rates of claim denial on the CNA list, at20.2% and 5.9% respectively."These obscene rejection ratesdemonstrate one reason medical billsare a prime source of personalbankruptcies as doctors and hospitalswill push patients and their families tomake up what the insurer denies," saidCNA President
DeAnn McEwen
.Along with criticizing insurers,the labor union demanded moretransparency in the industry’s claimdenial process.Altogether, insurers have deniedmore than 67 million claims since theCNA began tracking such data nearlya decade ago, according to astatement issued by the union.
representing nearly a third of all jobs in thatcategory. However, the state universitysystems graduate only 125 such students eachyear that would qualify to replace thoseretirees. Such graduates are also in demand to
ll non-hospital jobs at public healthdepartments and outpatient labs.Pharmacists – considered by the hospitalssurveyed to be the highest-impact positionamong the allied health categories – are alsounder pressure. More than 400 pharmacistsare eligible to retire in the next four years – a job that requires a doctorate degree forlicensure.Physical therapists are also in shortsupply – the hospitals surveyed say nearly 8%of positions are currently vacant. That job willrequire a doctorate starting in 2015, whichof 
cials say could exacerbate the shortage.However, the survey noted that theongoing funding cuts to the public universityand community college systems are in con
ictwith industry needs.CHA Workforce Coalition Director
CathyMartin
noted that colleges already havetrouble attracting quali
ed faculty becausethey cannot offer high enough compensation,and in-hospital programs are often too costly.The report recommended that courseworkbe closely aligned with actual jobrequirements; credits transfer more easilybetween institutions, and the bureaucracyrequired for hospitals to provide training tostudents be reduced.“California’s educational leaders andpolicymakers must give consideration toinnovative models of education, and fundingfor health science education and healthworkforce preparation must become a priorityfor the state,” Dauner said.
]
Kaiser Arm Gets $3M Diabetes Grant
Money From CDC is to Continue Study of Disease
Allied
(Continued from Page Two)
The research arm for
Kaiser Permanente’s
Southern California division has received agrant of more than $3 million from the
Centers for Disease Control and Prevention
 to study the progression of diabetes inadolescents.The grant is to continue until 2015what is known as the SEARCH study, whichhas been in progress for the past decade. It isexamining the impact of the disease onchildren in six states, including California. Of particular interest has been why far morechildren are developing the disease than inthe past.“Although diabetes mellitus is one of the most common chronic diseases of childhood, we had limited data before theSEARCH study began to evaluate not only thetemporal trends in the diagnosis of type 1 andtype 2 diabetes, but also the complications,quality of life, and quality of care received bychildren with diabetes from diversebackgrounds,” said
Jean M. Lawrence
, ascientist with Kaiser Southern California’sdepartment of research & evaluation and thestudy’s principal investigator in California.About 24 million Americans havediabetes, and more than a quarter of thepopulation exhibits pre-diabetic symptoms.Nearly 2 million new cases of the disease arediagnosed in the U.S. every year. 

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