COVID-19 Financial Relief Available to Hospitals and Physicians

COVID-19 Financial Relief Available to Hospitals and Physicians

By Health Capital Consultants, LLC

The COVID-19 global pandemic has brought a time of grave uncertainty for U.S. healthcare and the greater economy.

While the focus of healthcare providers is, appropriately, on the access and delivery of care to those impacted by the COVID-19 outbreak, there are many providers who will require financial resources to persevere during a time when all sectors of the U.S economy are being significantly impacted.

The federal government has announced a myriad of programs in the form of grants and loans to reimburse hospitals and physicians for some expenses and loss of revenue. (Read more…) 

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Assessment: Your thoughts are appreciated.

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How Will COVID-19 Change Healthcare Delivery?

How Will COVID-19 Change Healthcare Delivery?

By Health Capital Consultants, LLC

Spurred by how unprepared the American healthcare system was for a pandemic, the current COVID-19 emergency may present the conditions necessary to commence a healthcare delivery model paradigm shift.

In response to the public health emergency, the federal government, which has a record of reducing regulatory “burdens” under the Trump Administration, has taken aggressive actions to create regulatory flexibilities for healthcare providers and suppliers.

At least some of the various actions taken to reduce provider burden as they treat COVID-19 patients are likely to stay intact following the end of this pandemic, potentially revising the fundamental tenets of U.S. healthcare delivery. (Read more…)

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R.I.P Robert James Cimasi

In Memoriam

By Dr. David Edward Marcinko MBA

[Publisher Emeritus]

Robert James Cimasi MHA, ASA, FRICS, MCBA, CVA, CM&AA, CMP served as CEO of Health Capital Consultants, a nationally recognized healthcare financial and economic consulting firm headquartered in St. Louis, MO, serving clients in 49 states since 1993.

Mr. Cimasi had over 35 years of experience in serving clients, with a professional focus on the financial and economic aspects of healthcare service sector entities including: valuation consulting and capital formation services; healthcare industry transactions, including joint ventures, mergers, acquisitions, and divestitures; litigation support & expert testimony; and, certificate-of-need and other regulatory and policy planning consulting.

Bob served as an expert witness on cases in numerous courts, and has provided testimony before federal and state legislative committees. He and the experts at HCC also contributed greatly to our many textbooks and related publications. He will be missed.

https://www.healthcapital.com/hcc-news/hcc-news-archives

“Requiem in Pace” 

Rest in peace my friend. Robert Pine said it well when he noted,

“What we have done for ourselves is soon forgotten but what we have done for others remains and is immortal.”

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On The State Licensing Process of Physicians

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By State Medical Boards

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By ROBERT JAMES CIMASI; MHA, ASA, FRICS, MCBA, AVA, CM&AA, CMP

By TODD A. ZIGRANG; MBA, MHA, ASA, FACHE

(C) Health Capital Consultants, LLC All rights reserved. St. Louis, MO USA

A SPECIAL ME-P REPORT

USA

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Every state and the District of Columbia require the licensure of all allopathic (M.D.) and osteopathic (D.O.) physicians [1] Although the specific criteria for licensure vary by state, each state requires candidates to submit proof of completion of the requisite number of years of graduate medical education and passage of examinations verifying that “the physician is ready and able to practice competently and safely in an independent setting [2].

Moral Character

Additionally, a physician applying for licensure is typically required to have “good moral character,” absent his or her involvement in illegal activities [3] Most physicians satisfy the exam requirement by submitting proof of their successful completion of the United States Medical Licensing Examination (USMLE) or the Comprehensive Osteopathic Medical Licensing Examination (COMLEX-USA) to the licensure board [4] However, as some practicing physicians may have been licensed under a previously administered exam, certain state licensing boards may consider a combination of other examinations sufficient to meet licensure requirements, so long as those exams were completed prior to 2000 [5]

Of State Medical Boards

The licensure of physicians is governed by a state medical board, the “primary responsibility” of which board, according to the Federation of State Medical Boards, is to “protect consumers of health care by ensuring that all physicians…are properly licensed and comply with various laws and regulations pertaining to the practice of medicine[6] To accomplish this goal, state legislatures have delegated certain powers to the state’s medical board, including the power to grant, suspend, and revoke licenses; conduct investigations into complaints against physicians; and, release guidelines related to best medical practices [7] State medical boards have traditionally consisted solely of physicians; however, there has recently been an increase in the number of non-physician board members on state medical boards [8].

History

Over the last 50 years, state medical boards have faced intense scrutiny regarding their commitment to disciplining physicians based on quality concerns [9] In 1960, the American Medical Association (AMA) heard “sobering” facts from the Federation of State Medical Boards that “much confusion over the definitions and objectives exists” related to state medical board enforcement of medical standards [10] From 1963 to 1967, 0.06% of all physicians were subject to discipline, while in 1981, 0.14% of all physicians were subject to discipline, due in large part to the problems identified by the AMA [11] Although the rate of physician discipline rose eightfold by the mid-1990s, to date, there are continuing concerns regarding state medical board enforcement of quality standards.

A March 2011 report by advocacy group Public Citizen found that over 55% of physicians who faced clinical privilege disciplines by hospitals from 1990 to 2009 did not have a corresponding action from a state medical board [12] Additionally, in 2011, state medical boards imposed 3.06 “serious disciplinary actions” (e.g., revocations, surrenders, suspensions, and probations of medical licenses) per 1,000 physicians, an increase from the 2010 rate of 2.97 per 1,000, but a decrease from the 2004 rate of 3.72 per 1,000 [13] Numerous reasons have been offered to explain the disparity in quality enforcement by state medical boards, the most prominent being that physicians are loath to report fellow physicians for major disciplinary actions such as licensure revocation[14]

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Assessment

Other reasons include a focus by state medical boards on “character-related misconduct” over clinical quality standards [15] as well as a lack of resources to investigate and enforce quality standards, which forces state medical boards to rely on physicians and hospitals to “police” themselves [16].

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Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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 REFERENCES

[1]       “State Medical Boards: Future Challenges for Regulation and Quality Enhancement of Medical Care,” By James N. Thompson, Journal of Legal Medicine, Vol. 33, No. 9 (January-March 2012).

[2]       “State Medical Boards: Future Challenges for Regulation and Quality Enhancement of Medical Care,” By James N. Thompson, Journal of Legal Medicine, Vol. 33, No. 9 (January-March 2012); “Healthcare Valuation: The Four Pillars of Healthcare Value,” By Robert James Cimasi, MHA, ASA, FRICS, MCBA, AVA, CM&AA, Hoboken, NJ: John Wiley & Sons, Inc., 2014, p. 449-450.

[3]       “Medical Practice: Education and Licensure,” in “Legal Medicine,” By S. Sandy Sanbar et al., 6th Ed., Mosby, 2004, p. 81.

[4]       “Medical Licensure,” American Medical Association, 2014, http://www.ama-assn.org/ama/pub/education-careers/becoming-physician/medical-licensure.page, (Accessed 12/19/14); “COMLEX-USA,” National Board of Osteopathic Medical Examiners, 2014, http://www.nbome.org/exams-faq.asp (Accessed 12/19/14).

[5]       “Medical Licensure,” American Medical Association, 2014, http://www.ama-assn.org/ama/pub/education-careers/becoming-physician/medical-licensure.page, (Accessed on 12/19/14); “Healthcare Valuation: The Four Pillars of Healthcare Value,” By Robert James Cimasi, MHA, ASA, FRICS, MCBA, AVA, CM&AA, Hoboken, NJ: John Wiley & Sons, Inc., 2014, p. 450.

[6]       “What is a State Medical Board?” Federation of State Medical Boards, 2014, http://www.fsmb.org/policy/what-is-a-smb-faq (Accessed 12/19/14).

[7]       “What is a State Medical Board?” Federation of State Medical Boards, 2014, http://www.fsmb.org/policy/what-is-a-smb-faq (Accessed 12/19/14).

[8]       “What is a State Medical Board?” Federation of State Medical Boards, 2014, http://www.fsmb.org/policy/what-is-a-smb-faq (Accessed 12/19/14); “Character, Competence, and the Principles of Medical Discipline,” By Nadia N. Sawicki, Journal of Health Care Law & Policy, Vol. 13, No. 1, 2010, p. 291.

[9]       “Character, Competence, and the Principles of Medical Discipline,” By Nadia N. Sawicki, Journal of Health Care Law & Policy, Vol. 13, No. 1, 2010, p. 287, n. 7; “To Err is Human: Building a Safer Health System – Summary,” Institute of Medicine, 2000, http://www.iom.edu/~/media/Files/Report%20Files/1999/To-Err-is-Human/To%20Err%20is%20Human%201999%20%20report%20brief.pdf (Accessed 12/19/14).

[10]     “Medical Licensure Statistics for 1960,” Journal of the American Medical Association, Vol. 176, No. 8 (May 27, 1961), p. 694.

[11]     “Medical Licensing Board Characteristics and Physician Discipline: An Empirical Analysis,” By Mark T. Law & Zeynep K. Hansen, Journal of Health Politics, Policy and Law, Vol. 35, No. 1 (February 2010), p. 66.

[12]     “State Medical Boards Fail to Discipline Doctors with Hospital Actions Against Them,” By Alan Levine et al., Public Citizen, March 2011, http://www.citizen.org/documents/1937.pdf (Accessed 12/19/14).

[13]     “Public Citizen’s Health Research Group Ranking of the Rate of State Medical Boards’ Serious Disciplinary Actions, 2009-2011,” By Sidney M. Wolfe, M.D., et al., Public Citizen, May 17, 2012, http://www.citizen.org/documents/2034.pdf (Accessed 12/19/14).

[14]     “Medical Boards are Too Lax, Critics Claim,” By Wayne J. Guglielmo, MA, MedScape, October 17, 2014, http://www.medscape.com/viewarticle/833141 (Accessed 12/3/14);

[15]     “Character, Competence, and the Principles of Medical Discipline,” By Nadia N. Sawicki, Journal of Health Care Law & Policy, Vol. 13, No. 1, 2010, p. 287.

[16]     “Medical Licensing Board Characteristics and Physician Discipline: An Empirical Analysis,” By Mark T. Law & Zeynep K. Hansen, Journal of Health Politics, Policy and Law, Vol. 35, No. 1 (February 2010), p. 90; “Medical Licensure Statistics for 1960,” Journal of the American Medical Association, Vol. 176, No. 8, May 27, 1961, p. 694.

NC Update: H543v2 – 04152015

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)* 8

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Recognizing the Differences between Healthcare and Other Industries

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Why Hospitals, Clinics and Medical Offices are Not Hotels, or Manufacturing Plants or Production Assembly Lines, etc.

By Dr. David E. Marcinko FACFAS, MBA, CMP™

[Editor-in-Chief]

The rising cost of health insurance remains a major concern for business; despite the Affordable Care Act [ACA] of March 2010. Local and national news publications have trumpeted that healthcare costs are not just rising but are growing in proportion to the cost of other goods and services.

Many of these publications have expressed the widely held view that because of the “inflation gap,” the cost of medical expenses needs curbing.  Proponents of this viewpoint attribute the growth in the gross domestic product (GDP) devoted to personal medical services (from 5% in 1965 to approximately 14% in 2005 and 17% in 2012) to increases in both total national medical expenditures as well as prices for specific services, and then conclude that there is a need to rein in the growing costs of healthcare services for the average American, even if it be through a legislative mandate.

Healthcare Is the Economy

According to colleague Robert James Cimasi MHA, AVA, CMP™ of Health Capital Consultants LLC in St. Louis, MO, healthcare cannot be separated from the economy at large. Although economists have cited the aging population as the reason for the increase in healthcare’s share of the GDP, other voices assert that financial greed among HMOs, pharmaceutical companies, hospitals, and medical providers like doctors and nurses is responsible.  In reality, the rise in healthcare expenditures is, at least in large part, the result of a much deeper economic force.

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As economist William J. Baumol of New York University explained in a November 1993 New Republic article: “the relative increase in healthcare costs compared with the rest of the economy is inevitable and an ineradicable part of a developed economy. The attempt [to control relative costs] may be as foolhardy as it is impossible”.

Baumol’s observation is based on documented and significant differences in productivity growth between the healthcare sector of the economy and the economy as a whole.

Low Productivity Growth

Healthcare services have experienced significantly lower productivity growth rates than other industry sectors for three reasons, according to Cimasi:

1) Healthcare services are inherently resistant to automation. Innovation in the form of technological advancement has not made the same impact on healthcare productivity as it has in other industry sectors of the economy.  The manufacturing process can be carried out on an assembly line where thousands of identical (or very similar) items can be produced under the supervision of a few humans utilizing robots and statistical sampling techniques (e.g., defects per 1,000 units). The robot increases assembly line productivity by accelerating the process and reducing labor input. In medicine, most technology is still applied in a patient-by-patient manner — a labor-intensive process. Patients are cared for one at a time. Hospitals and physician offices cannot (and, most would agree, should not) try to operate as factories because patients are each unique and disease is widely variable.

2) Healthcare is local. Unlike other labor-intensive industries (e.g., shoe making), healthcare services are essentially local in nature. They cannot regularly be delivered from Mexico, India or Malaysia.  They must be provided locally by local labor.  Healthcare organizations must compete within a local community with low or no unemployment among skilled workers for high quality and higher cost labor.

3) Healthcare quality is — or is believed to be — correlated with the amount of labor expended. For example, a 30-minute office visit with a physician is perceived to be of higher quality than a 10-minute office visit. In mass production, the number of work-hours per unit is not as important a predictor of product quality as the skills and talents of a small engineering team, which may quickly produce a single design element for thousands of products (e.g., a common car chassis).

Assessment

Healthcare suffers a number of serious consequences when its productivity grows at a slower rate than other industries, the most serious being higher relative costs for healthcare services. The situation is an inevitable and ineradicable part of a developed economy.

For example, as technological advancements increase productivity in the computer, and eHR, manufacturing industry, wages for computer industry labor likewise increase. However, the total cost per computer produced actually declines.  But in healthcare (where technological advancements do not currently have the same impact on productivity), wage increases that would be consistent with other sectors of the economy yield a problem: the cost per unit of healthcare produced increases.

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Paradigm Shift to “Defined Health Contributions” from “Defined Health Benefits” Plans

What it is – How it Works

By Staff Reporters

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In the past, according to Robert James Cimasi MHA AVA CMP™ of Health Capital Consultants LLC in St. Louis MO, many employers had defined retirement benefits for employees. Today, most retirement benefits are in the form of 401K plans where companies make defined contributions, effectively shifting the financial risk of paying for retirement to employees.

Defined Health Contributions

Defined health contributions are similar to employer-funded defined retirement contributions like 401K plans. Currently, employers pay for some portion of about half of Americans’ health insurance. Traditional employer-funded plans are those for which the employee simply fills out a form; that is, an employer will offer one or possibly two health insurance plans, and the employee fills out application paperwork. The employer administers the plan and may charge the employee a portion of the monthly premium or pay the entire premium themselves. A defined contribution plan allows companies to shift the financial risk of paying for rising health insurance costs.

Defined Health Benefits

Although part of the “benefit” of a health benefit plan is that the employer also takes care of all the administrative paperwork related to the insurance, companies are increasingly uninvolved in the administration process, opting instead to let the employee decide which plan out of many choices suits them best. For example, if an employer typically spends about $5,000 per employee per year on health benefits, the employer would use that money as a “defined contribution.” The employee then has $5,000 to spend per year on benefits, but instead of using the employer-defined health plan, the employee may choose from a variety of HMOs, preferred provider organizations PPOs, or other health plans. If the insurance premiums rise above this amount, the employee must make up the difference.

dhimc-book24Defined Contribution Package

Many employers are currently offering a defined contribution package to their employees. The definition of “defined contributions,” however, can range from one in which employers are completely uninvolved in the administration of benefits and simply give their employees cash or vouchers for the amount contributed that they can use to buy coverage, to a more “defined choice model” where employers offer a variety of health options at differing price levels along with a premium dollar contribution, and a variety of other options in between.

Risk Shifting

Thus, defined contributions shift the financial risk from the employer to the employee. Defined care is not a replacement for managed care, but will probably cause managed care to adapt under these new systems. That is, HMOs, PPOs and other managed care plans still appear to be the main choices in a defined care environment, so they are in fact a part of the system.

Assessment

Another challenge with a defined health benefit program is that the concept of risk-pooling becomes more difficult. In traditional employer-sponsored plans, rates are usually based on the pool of employees; a chronically ill employee who tries to find insurance independently may face rates drastically higher than if they had participated in an employer-sponsored plan.

MORE: www.CertifiedMedicalPlanner.org

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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Defining Hospital Competitive Markets

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Clarifying Often Nebulous and Contentious Terminology

[By Staff Reporters]

According to Robert James Cimasi; MHA, CMP™ of Health Capital Consultants LLC in St. Louis, MO; the definition of a hospital’s “market” is often nebulous.

Ambiguous Terms

Some entities are defined by terms as ambiguous as “acute care inpatient hospitals,” “specialty hospitals,” or “anchor hospitals.” This ambiguity occurs because healthcare is increasingly provided on an outpatient basis, and general acute care inpatient hospitals face competition from a range of allied healthcare providers for the medical services they deliver.

Link: www.HealthcareFinancials.com

US Supreme Court Explains

For example, none other than the US Supreme Court has explained that the determination of relevant hospital product and geographic markets is “a necessary predicate” to deciding whether a hospital merger contravenes the Clayton Act (antitrust).

Assessment

For additional information, please see United States v. Marine Ban Corporation Inc., 418 U.S. 602, 618 (1974) (citing United States v. E.I. Du Pont De Nemours & Co., 353 U.S. 586, 593 (1957); Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962).

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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[HEALTH INSURANCE, MANAGED CARE, ECONOMICS, FINANCE AND HEALTH INFORMATION TECHNOLOGY COMPANION DICTIONARY SET]

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