2 February 2012

California Edition
Calendar
February 23-24
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Motives Questioned in Nursing Strike

Hospital Lobby, Union Trade Unusually Harsh Barbs
A one-day walkout at Kaiser Permanente hospitals throughout California earlier this week triggered an unusually bitter confrontation between the states leading hospital lobby and its largest nurse union. Neither the California Nurses Association or the California Hospital Association are particularly friendly to one another, but the two sides this week traded accusations of nancial back-scratching and patient endangerment. The Jan. 31 walkout by the National Union of Healthcare Workers was its second in four months and fourth since 2010. The work stoppage was intended to fuel negotiations over what the union claimed is proposed reductions by Kaiser in health and retirement benets. The NUHW asked members of the much larger California Nurses Association/National Nurses United to walk out in sympathy. In such an action, the CNA does not need to authorize a walkout. NUHW members are committed!to!holding the line against these cuts, which!Kaiser!intends!to!impose upon tens of thousands!more!employees represented by other unions as their contracts come up for renewal over the next several years, the union said in a statement. The CNA has about 17,000 members statewide, compared to the NUHWs 4,000 members. The 650-member Stationary Engineers Local 39 was also invited to strike. The CNAs contract with Kaiser does not expire until 2014, meaning it cannot ofcially authorize any walkouts until it expires. The CHA claimed that the sympathy strike was due to the nancial ties between the two unions, citing a $2 million loan the CNA made to the NUHW in 2010. Why would CNA leaders tell nurses to walk away from their patients to support the efforts of another union? Perhaps its because there is a nancial relationship between NUHW and CNA, CHA President C. Duane Dauner. This strike is not about patient care. Its about CNAs ongoing attempts to grow its membership, increase its member dues and advance its aggressive political agenda. CHA spokesperson Jan Emerson-Shea noted that the loan, which is to come out of NUHW dues, has not yet been repaid. Whether or not the sympathy walkout was a success is debatable. Union ofcials say the walkout worked, but Kaiser ofcials say two-thirds of those eligible to walk out crossed the picket lines in Northern California on Tuesday. Data from
Continued on Next Page

February 28-March 1
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February 29
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Charity Care & Community Benets: The New Paradigm

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Please join Michael Bilton, Executive Director, Center for Community Health Improvement, Jane Haderlein, Senior V.P., external affairs, Huntington Memorial Hospital, and Ronald Sorensen, Director of Community Partnerships, Providence Health & Services, Southern California, to discuss the changes underway in crafting and report charity care and community benefits.

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NEWS
Strike (Continued from Page Two)
Kaiser for its Southern California facilities was not made available. An undisclosed number of registry and temporary nurses were brought in to ll in for the strikers. We took steps to ensure our ability to continue providing our members and patients with high-quality healthcare and service, said Kaiser spokesperson Won Ha. Industry observers also suggest that Kaiser and other hospital operators are concerned that sympathy strikes could become more commonplace, growing walkouts far beyond their originally authorized size. Asked whether the loan was a factor in

Page 2

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In Brief
Blue Shield, CDI Reach Settlement on Autism Coverage
The state Department of Insurance has reached a settlement with an afliate of San Francisco-based Blue Shield of California regarding its coverage of treatment for enrollees with autism. Under the terms of the deal, Blue Shield of California Life & Health Insurance Co. will no longer dispute covering applied behavior analysis therapy, a treatment found effective for some autistic children. Blue Shield had regularly objected to paying for such therapy, and often requested approval from an independent medical reviewer in order to pay for the treatment, or denied it outright as not medically necessary. California Insurance Commissioner Dave Jones led an enforcement action against Blue Shield last summer to compel it to cover the therapy. Under the terms of the settlement, Blue Shield will provide the therapy until July 1, when a new state law goes into effect mandating the coverage. "This favorable settlement agreement eliminates the frustration and insecurity so many families have faced when seeking autism treatment for their children," Jones said.

the sympathy walkout, CNA ofcials issued a statement that referred to the CHA as the Corporate Hospital Association and claimed that no other organization in the past decade has done more to erode patient safety. The irony of the CHA statement is that in condemning CNA for a sympathy strike...is that the only sympathy CHA has ever demonstrated is to greed and proteering by an out of control hospital industry, and their chief lobbyist CHA, said the statement, which was issued by spokesperson Chuck Idelson. Duane Dauners paycheck comes from dues paid by Kaiser Permanente and other big hospital chains, money that is directly diverted from patient care services.

Seton Medical Center Fined $100K

Penalty Linked to Death at its Skilled Nursing Facility
The California Department of Public Health has ned Seton Medical Center in Daly City $100,000 and issued a citation for a medical error that led to a patient death at its skilled nursing facility last June. The patient, an 81-year-old woman, had been admitted to Setons 83-bed skilled nursing unit in 2009 for treatment of chronic respiratory failure. She was in a persistent vegetative state due to a stroke. Although she breathed on her own, it was via a tracheostomy. On June 24 of last year, a licensed vocational nurse replaced a t-shaped tube used to suction and keep the patients airway clear. It was replaced every three days. However, the nurse did not remove a cap on the port for the suction device, depriving the patient of ability to exhale. The manufacturers instructions for use warned that the cap must be removed prior to use if the patient is breathing on their own and not on a respirator. The San Mateo County Coroner ruled the patient died of asphyxiation. Interviews with Setons nursing staff concluded that no formal plan was in place to train personnel on properly using the device, and that the facility had deviated from a formal plan to monitor the patients levels of oxygen saturation in the days leading up to her death. The facilitys failure presented an imminent danger to the patient and was a direct proximate cause of death of the patient, read the CDPH report. The ne and AA citation issued to Seton is the most severe the agency can levy.

Kaiser Switches To Green Bags, Tubing

Kaiser Permanente has switched some of its intravenous medical equipment to alternatives that are more environmentally friendly. The Oakland-based hospital operator will now use intravenous solution bags and tubing that are completely free of polyvinyl chloride (PVC) and di-2-ethylhexyl phthalate (DEHP). Both chemicals have been

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Kaisers EHRs Now On Smartphones

Initiative Expected to Help Maintain Enrollee Health
Kaiser Permanentes enrollees have been able to access their healthcare records electronically for several years, but now they can do so while on the move and from the palm of their hand. The Oakland-based healthcare system has released applications that will allow its approximately 9 million enrollees the ability to access their medical records from their mobile smartphones. Kaiser has introduced an application that permits direct viewing from phones operating on the Android platform. An application for use with Apples iPhone is currently in the works, but owners of that device can create a shortcut on their phones desktop. In addition to viewing their medical records, users can also access laboratory results and diagnostic information, make appointments, ll prescriptions and have secure access to their physicians via e-mail. "The benets of mobile extend beyond member engagement," said Philip Fasano, Kaisers chief information ofcer. "Mobile solutions can have a positive impact on health. Kaisers internal data concluded that about 80% of its membership believe its website and the interactive tools it offers helps maintain their health.

In Brief
used in the manufacturing of plastic products for decades. PVC has been linked to the release of carcinogenic dioxins when exposed to high temperatures, making disposal or recycling of such plastics difcult. Studies have suggested that DEHP may leach out of tubing into patients, potentially causing reproductive harm or organ damage. Our efforts to remove harmful chemicals from hospitals and clinics reect our commitment to the total health of our members and our communities, said Raymond J. Baxter, a Kaiser senior vice president. Kaiser has been engaged in a variety of green healthcare initiatives, including the construction of facilities and the use of solar panels.

Salinas Discloses More Big Payouts

Other C-Suite Execs to Receive Seven Figures
Already under re for the multimillion dollar retirement package it gave to its former chief executive ofcer, the Salinas Valley Memorial Healthcare System has disclosed seven-gure payouts to two other high-level executives. The Monterery County Herald has reported that Chief Operating Ofcer Bev Ranzenberger will be paid a $1.33 million lump sum payment upon her retirement. She will also received an annual pension of $87,500. Chief Financial Ofcer John Fletcher will receive a $1.08 million lump sum payout on top of a $108,552 annual pension. Fletcher left Salinas Valley, which operates as a hospital district with a publicly elected board of directors, last month. Ranzenberger is scheduled to leave later this month. Neither have reached retirement age. Ranzenberger and Fletcher each earned salaries of about $340,000 per year. Although thats slightly below the average for non-prot hospital COO and CFO compensation among Californias not-for-prot hospitals, it is far above that for district hospital pay, which averages just $245,000 a year for CEOs. The district disclosed the information after California Public Records Act requests were made by several media outlets following the departure last year of longtime CEO Samuel Downing. He received a lump sum payout of nearly $4 million when he retired last April in addition to a six-gure annual pension. Downing had previously received another lump sum payout of about $1 million prior to his retirement. The hospital, which serves one of the poorest cities of its size in California, has had to lay off hundreds of employees in recent months due to mounting nancial losses.

California Gets Poor Marks For Tobacco Programs

The American Lung Association has given California poor marks in its tobacco control report. The Golden State received an F for its funding for tobacco prevention and control programs and a D for its cigarette tax. California currently ranks 33rd among the 50 states and the District of Columbia for its $0.87 per pack tax, far below the national average of $1.46, the ALA said in a statement. The state also received an F for its coverage of smoking cessation and treatment services. Recent statewide budget cuts have put nancial pressure on public programs, while there has been little bipartisan support in recent years for increasing the tobacco tax. California did receive an A grade for its policies barring smoking in many public places. A bill recently passed by the California Assembly would ban smoking on all sections of hospital campuses. The bill, AB 1278, is now being debated by the Senate.

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OPINION

Page 4

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A Startling Slowdown In Spending

CMS Growth Projects Well Below Prior Estimates
Healthcare spending in 2009 and 2010 grew Projected Medicare spending is even at the slowest rates in 50 years. This startling further below original estimates, and news, published in an article by staff of the provisions in the ACA play a major role in the Centers for Medicare and Medicaid Services new, lower numbers. Medicare spending in (CMS) in Health Affairs, was largely attributed 2020 is now estimated to be $922 billion, to the shrinking economy. (Payers & which is $150 billion lower than the $1.07 Providers, Jan. 17). Loss of jobs and insurance, trillion projected by CMS pre-reform. As the slow growth in wages and family incomes, authors note, Medicare savings come from and greater out-of-pocket healthcare costs ACA changes in payment rates for Medicare have undoubtedly caused uninsured, Advantage plans, home health agencies, and underinsured, and low-wage workers and their other providers (effective Oct. 1, 2009), fraud families to forgo care, contributing to the and abuse provisions, as well as requirements slowdown in health spending. An for prescription drug rebates for Medicare estimated 9 million people became managed care plans (effective Jan. 1, uninsured when they lost a job with 2010). The ofcial CBO health reform benets over 200810, and they were estimates included $397 billion in much more likely than those who did projected Medicare savings from ACA not lose coverage to report delaying provisions over the 201019 period. needed care. But it would now appear that the CMS is projecting lower health reduction in projected Medicare spending over the rest of the decade. outlays over a 10-year period is While the poor economy is having an almost twice that. effect on current spending, the At a minimum, dire predictions recession alone doesnt explain why that the ACA would fail to control projected health spending in 2020 is costs and, in fact, accelerate spending substantially below estimates made have not been borne out by the early just two years ago. Either the original experience. It now appears that both By estimates were too high, or the the costs of covering the uninsured Karen Davis and Medicare spending are tectonic plates underlying the health system are beginning to shift. substantially below pre-reform CMS's estimates of healthcare spending estimates. through the end of the decade have been The efforts made over the last decade to falling over the last year and a half. The most transform health care delivery may also have recent projection of national health spending contributed to slower spending growth. Private in 2020 is $4.6 trillion, or 19.8% of GDP, sector initiatives have been encouraging compared with its projection of $4.9 trillion, hospitals and physicians to adopt improved or 21.1% of GDP, in 2009 in the absence of safety methods, reach performance reform. This represents a $275 billion (5.6%) benchmarks, and reorganize care to achieve reduction for 2020, compared with pre-reform greater value. Private insurers and Medicaid estimates. Moreover, that projection represents have begun to pay for care differently, creating a cumulative reduction of $1.7 trillion over opportunities for new models of health care the 10 years from 2011 to 2020. delivery. There is much to celebrate in this This reduction in projected national health historic slowdown. After a half-century of spending is particularly important because the increas-ing as a share of the economy, the pre-reform projection of health care costs was health sector is now increasing at a more used by the Congressional Budget Ofce affordable rate. (CBO) and the CMS Ofce of the Actuary in Karen Davis is president of the estimating the cost and impact of health Commonwealth Fund, a New York-based reform. Already, spending is far below the healthcare research non-profit. trajectory projected to result from implementation of the Affordable Care Act. In fact, reduction in utilization and trims in Op-ed submissions of up to 600 words are payment rates under the ACA more than offset welcomed. Please e-mail proposals to editor@payersandproviders.com the projected cost of covering the uninsured.

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