Way to go, legislators!

It is one of the enjoyable mysteries of legislative politics that last-minute bills often accomplish things that people have been talking about for months and even years. The MA Legislature goes out of session later today, and it is prepared to take an up-or-down vote on a comprehensive bill regarding health care costs, insurance premiums, and the like. I have just read the conference report. I can't say that I fully understand all the provisions, but there are some that are in the knock-your-socks-off category for those of us who care about transparency of rates, costs, and clinical outcomes. It is clear from these and other sections that the Attorney General's report on payment disparities among the various providers issued earlier this year had a major impact on the structure and scope of the bill.

Congratulations to the Senate and House leadership for moving things along and reaching this agreement!

[Saturday night addition: The bill later passed the Senate unanimously, 40-0, and likewise the House, 153-0.]

A recitation of a few sections:

Public reporting of relative prices -- Notwithstanding any special or general law to the contrary, the division of health care finance and policy, in consultation with the division of insurance, shall promulgate regulations on or before October 1, 2010 to establish uniform methodology for calculating and reporting relative prices paid to hospitals, physician groups, other health care providers licensed under chapter 112 of the General Laws, freestanding surgical centers by each private and public health care payer under section 6 of chapter 118G of the General Laws. The uniform methodology for calculating and reporting relative prices under this section shall, at a minimum: (i) specify a method for basing the calculation on a uniform mix of products and services by payer that is case mix neutral; (ii) specify a uniform method for including in the calculation all non­claims related payments to providers, including supplemental payments of any type, such as pay-­for­-performance, care management payments, infrastructure payments, grants, surplus payments, lump sum settlements, signing bonuses, and government payer shortfall payments; (iii) permit reporting of relative price in the aggregate for all physician groups whose price equals the payer’s standard fee schedule rates; and (vi) designate and annually update the comprehensive list of physician groups for which payers shall report relative prices.

Establishing uniform methodologies for hospital cost reporting -- Notwithstanding any special or general law to the contrary, the division of health care finance and policy, in consultation with the division of insurance, shall promulgate regulations on or before October 1, 2010 to establish uniform methodology for calculating and reporting inpatient and outpatient costs, including direct and indirect costs, for all hospitals under section 6 of chapter 118G of the General Laws. The division shall, as necessary and appropriate, promulgate regulations or amendments to its existing regulations to require hospitals to report cost and cost trend information in a uniform manner including, but not limited to, uniform methodologies for reporting the cost and cost trend for categories of direct labor, debt service, depreciation, advertising and marketing, bad debt, stop­loss insurance, malpractice insurance, health information technology, medical management, development, fundraising, research, academic costs, charitable contributions, and operating margins for all commercial business and for all state and federal government business, including but not limited to Medicaid, Medicare, insurance through the group insurance commission and federal Civilian Health and Medical Program of the Uniformed Services.

Outcomes reporting -- The department of public health shall promulgate regulations under section 25P of chapter 111 of the General Laws by December 31, 2010 requiring the uniform reporting of a standard set of health care quality measures for each health care provider facility, medical group, or provider group in the commonwealth hereinafter referred to as the “Standard Quality Measure Set.” The department of public health shall convene a statewide advisory committee which shall recommend to the department by November 1, 2010 the Standard Quality Measure Set. The statewide advisory committee shall consist of the commissioner of health care finance and policy or the commissioner’s designee, who shall serve as the chair; and up to 8 members, including the executive director of the group insurance commission and the Medicaid director, or the directors designees; and up to 6 representatives of organizations to be appointed by the governor including at least 1 representative from an acute care hospital or hospital association, 1 representative from a provider group or medical association or provider association, 1 representative from a medical group, 1 representative from a private health plan or health plan association, 1 representative from an employer association and 1 representative from a health care consumer group.....

At a minimum, the Standard Quality Measure Set shall consist of the following quality measures: (i) the Centers for Medicare and Medicaid Services hospital process measures for acute myocardial infarction, congestive heart failure, pneumonia and surgical infection prevention; (ii) the Hospital Consumer Assessment of Healthcare Providers and Systems survey; (iii) the Healthcare Effectiveness Data and Information Set reported as individual measures and as a weighted aggregate of the individual measures by medical or provider group; and (iv) the Ambulatory Care Experiences Survey.

Man's best friend

Apropos of nothing at all usually seen on this blog, I offer this very funny -- and oddly moving -- video as the weekend approaches:

(If you cannot see the video, click here.)

Helping patient-run organizations

This is a request for modest financial help, directed to my hospital colleagues.

In recent years, we have seen a burgeoning of small patient-run organizations. They are working hard to improve the quality, safety, and responsiveness of the health care system. Many of these organizations arose out of personal tragedy or injury, like Linda Kenney's MITSS. A common characteristic is that the founder has been able to get past the trauma and anger of his or her medical experience and has devoted time and effort to education, training, and advocacy.

But many of these organizations are tiny and do not have the financial wherewithall to reach their potential. So a small group of us have decided to try to help, under the auspices of the Institute for Healthcare Improvement.

Here's how it will get started. IHI wants to invite 35 to 50 patient advocates to its Annual Forum this December in Orlando, FL. The invitees will attend a special session at the beginning of the conference, and then they will attend the entire Forum as the week progresses. Their conference fee and travel expenses will be completely borne by IHI.

Our hope is to provide these folks with a terrific educational experience, but also use this first get-together as an organizational session for a "trade association" of patient advocacy groups. With planning and luck, we think we will be able to build an organization that will provide technical, educational, and marketing support to these small non-profits.

Here's the pitch. We need about $100,000 to get this up and running, and I am asking hospital CEOs across the country to consider making a contribution of $5 or $10 thousand from their hospitals towards the cause. BIDMC will do its part, and I am hoping that ten or twenty others of you will do the same. This is surely a good way to demonstrate our commitment to patient-run organizations.

If you are interested in joining in, please contact Sara Kolovitz at skolovitz [at] smithbucklin [dot] com. Thanks for considering this.

Them's fighting words!

A friend decided to help settle the dilemma-dilemna question below by sending a note to the etymologist at the Oxford English Dictionary. Here is her note:

To: Anatoly Liberman
Oxford Etymologist
Oxford University Press

Dear Mr. Liberman,
Reading your delightful blog makes me wonder this: many Americans -- highly educated ones -- between the ages of 50 and 65 were taught to spell dilemma with an n, "dilemna." It appears to be most common in the Northeast.

Do you have any idea why? Or thoughts?
Curiously yours,

The reply:

I Googled for DILEMNA!

My goodness! DILEMNA is known all over the English speaking world, from America to Australia, and no one has an idea where it originated. On the other hand, I am not alone: lots of people have never heard that this idiotic spelling exists.

MassINC exposes imaging

MassINC is a public interest research foundation that publishes Commonwealth magazine, an excellent public policy journal. The current issue has a fascinating article by Jack Sullivan about MRI imaging, entitled "Overexposed." Here's the link.

Here is a teaser, from the introductory passages:

Gov. Deval Patrick in April took the unprecedented step of rejecting double-digit rate increases being sought by most of the state’s health insurers for their small business plans. It was a popular move politically, but the governor was basically shooting the messenger because he didn’t like the message being delivered. He may have even shot himself in the foot because an appeals board within his administration later said the decision was wrong.

It was another reminder that rising health care costs are not subject to easy solutions. Health insurance rates keep rising because costs keep going up, and one of the biggest cost drivers in Massachusetts is medical imaging, the use of devices such as x-rays, MRIs, CT, and PET scans to take internal pictures of the body. These machines have revolutionized the practice of medicine, but their use in Massachusetts has grown faster than anywhere else on the planet.

Massachusetts, in fact, has become a medical imaging mecca. MRIs, or medical resonance imaging units, cost $1.5 million or more to purchase and an estimated $800,000 a year to operate. Massachusetts has 42 MRIs for every million residents, dwarfing the national average of 26, which is already higher than any other country. There are now more MRI units serving the 6.5 million residents of Massa­chusetts than there are for the 55 million residents of Australia and Canada combined.

At least $2 billion was spent on medical imaging in Massa­chusetts in 2008, up more than 20 percent from 2006. After medical procedures, imaging is the fastest growing health care expenditure in the state, exceeding the rate of increase for prescription drugs and administrative expenses.

From Helen

During my tenure here, I have always been able to count on Helen Fuller, RN, to send me emails when she saw things that were awry or could be done better -- either for patients or members of the staff. For example, she pointed out a need for an automatic door between two of our buildings because the ramp connecting them was making it difficult for patients in wheelchairs to open the connecting door. (We installed the door.) She also noticed that we were having fewer town meetings than we should to keep nurses informed. (We scheduled more sessions.) She was inevitably on target, the ultimate "caller-outer" who made life better for all.

Here is a note recently sent by Helen to our chief nursing officer that codifies her view of the world. We are so lucky to be in a place with people like her!

Dear Marsha,

I am about to retire. My last day is July 30. I will have missed 54 years by one month, and I must say the last ten years have been my best.

I have done many aspects of nursing and enjoyed every minute. I can never remember thinking "Why am I a nurse?" I always knew why. I was always proud of what I did, I always felt I was contributing to the well being of others, both staff and patients. I learned a long time ago that people respond to you as you respond to them.

I must say, you as administrators should be so proud of your staff. They are the greatest. It is truly a family. I was privileged to have had a party given in my honor last evening and as I looked around, I couldn't help but think, I am going to miss these friends. I am going to miss what they have given me through the years.

People look at retirement as a time to go off, enjoy and have fun. Oh, I will do that, but my heart will always be with the Case Management Department, the Farr 6 CIVCU staff, and with the folks I met in the corridors of BIDMC.

I will always cherish the 10 years I spent here and the people I have met. No one can match their wisdom, their ability to care for others and their fun loving ways. This includes all departments, from housekeeping to administration.

Thank you for letting me be a part of it.

Helen Fuller, RN, case management.

Request for links

It has been a long time since I have updated the links I post on this blog. Yes, over there ----> on the right.

If you know of any, including your own, that would be of general interest to readers here, please let me know. I am particularly interested in expanding the category of patient-centered blogs.

The illusion of security

Back in June, I suggested that corporate policies that block social media on company computers and networks were doomed to failure because they would simply be bypassed by staff members using their iPhones and other portable devices. Now comes an article on The HR Capitalist that proves the point with a lovely example:

I'm strolling through the office of fine, employment-focused government agency one recent morning, and what did I see?

A government worker hitting Facebook from her iPhone within her cube. So I did what any visiting HR pro would do - I asked her if the agency blocked Facebook and other social sites.

She said, "Mmm hmm. All of 'em. And Hotmail too".

... It seems wireless networks trump corporate will when it comes to an employee’s use of social networks in the workplace... If you’re still blocking access and patting yourself on the back, remember the image of your employees dialing their favorite social network up on their smart phone. You’re not managing liability, you’re transferring it to a network that you don’t control. The illusion of security.

(With appreciation to Mark Graban of Lean fame for forwarding the link to me.)

Can CMS be a venture capitalist?

Lisa Suennen, a venture capitalist, writes this post about the provision in the national health care reform act that created the Center for Medicare and Medicaid Innovation (CMI). This agency has $10 billion to “research, develop, test and expand innovative payment and service delivery models that will improve the quality and reduce the costs of care" for patients covered by CMS-related programs. Lisa notes, "What is great about CMI is that they have the authority to run their programs much more like a business would without many historical governmental constraints. "

I don't want to be a stick in the mud, particularly as my able friend Don Berwick takes charge of CMS, but I want to point out that previous efforts by the government to be innovative in other fields have failed because:

(1) Venture funding embodies risk-taking. Government usually does not do this because there is a political imperative never to be blamed for misspending taxpayer money. The bureaucracy, therefore, systematically eliminates ideas that are untested.

(2) Alternatively, the leaders of such agencies get seduced by good-sounding ideas that have not been able to meet a market test and whose efficacy is subject to the normal variations in markets. Then, they will persist with unsound investments because the concept of sunk costs is politically difficult to acknowledge. Private firms consider past investments as fiscally "gone" for purposes of evaluating future investments. But the government often behaves as if investments have a carry-forward risk of embarrassment, so it is more likely to throw good money after bad.

(3) Worse yet, agencies are encouraged to invest in those ideas that have political connections.

My favorite example of all of this was the Synthetic Fuels Corporation, created by Congress to move research and development of synthetic fuels out of the Department of Energy and into a public-private partnership that would hurry along new energy sources. And here is another more recent Massachusetts case. Let's hope these examples are inapposite to the vision for CMI, but history does provide warnings.

Joe Newhouse lays it out

Joe Newhouse is a very thoughtful professor of health care policy at Harvard. He recently published this article in Health Affairs, "Assessing Health Reform’s Impact On Four Key Groups Of Americans." It should be required reading for legislators and other public officials, plus the rest of us interested in the regime for financing health care.

Here is the summary:

Health reform can be assessed from the perspective of four groups that collectively include most Americans. For those who are now in Medicaid or who are uninsured, reform will be a major gain. For those who obtain health insurance in the individual and small-group markets, reform should bring improvements. For those who have health insurance from midsize- and large-group insurers, reform will bring little change. Finally, for Medicare beneficiaries, reform promises to bring positive change. However, financing future health spending overall, and Medicare spending in particular, poses a formidable challenge. Although not a panacea, all-payer rate setting, in which a federal or state agency establishes standard payment rates for each class of payer, may be the only feasible alternative, at least in the short run.

The article is too detailed to go through all of the logic behind Joe's conclusion here, but let me give some snippets to give you the color:

The bad news concerns paying for Medicare going forward. The discussion can best be framed with two quotes. The first is from Peter Fisher, undersecretary of the Treasury in 2002: "Think of the federal government as a gigantic insurance company ... which only does its accounting on a cash basis—only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting is not really an insurance company at all. It is an accident waiting to happen."

...There appears to be little appetite in the current electorate for a major tax increase. ... Clearly, if Medicare payment cuts in the law are avoided when future administrations and Congresses flinch at the prospect of losing the votes of the elderly, there will be a collision between force and object, with reverberations outside of health policy to the entire economy.

...Assume, however, that a substantial portion of the Medicare reductions called for in the health reform law are not made, and that further borrowing is off the table. If commensurate cuts cannot be made elsewhere in the budget, the immovable object will be forced to move. Taxes will need to increase to finance Medicare. Going out well past 2020, however, the implied tax increases are simply not plausible.

...In short, it is hard to imagine that reductions in the rate of Medicare spending growth will not be made at some point. One way or another, the steady-state growth rate will fall; the curve will be bent. But it is equally hard to imagine cutting only Medicare spending while spending by the commercially insured under age sixty-five continues to grow at historic rates, which would lead to a marked divergence between what providers are paid for treating the commercially insured relative to what they are paid for Medicare beneficiaries. This gap could jeopardize Medicare beneficiaries’ access to mainstream medical care.

...If Medicare payment cuts are just as problematic as allowing Medicare payments to continue growing unabated, what is the alternative? There is one, of course: reducing the rate of growth not just of Medicare spending, but of total health care spending. At some point this will be unavoidable.

...Ultimately, there is no panacea. Despite all of the substantive and political problems of price setting, some sort of all-payer regulatory regime may be the only feasible alternative. The other choices would be to allow a much larger discrepancy between commercial and Medicare rates than at present, raising the likelihood of access issues for Medicare beneficiaries, or keep Medicare rates within striking distance of commercial rates, allowing Medicare spending to claim a much larger share of GDP as time passes. To finance that larger share, however, taxes would have to rise—probably by a substantial amount. What to do about Medicare going forward is a boulder that remains at the bottom of the hill.

Camp Wamsutta Reunion

As we approach what would have been parents' visiting weekend, I write this as a remembrance that might appeal to those of a certain age, and on the off chance, too, that other alumni from this camp will read it and offer comments.

As a boy, I joined many of my fellow New Yorkers in attending a summer camp in Charlton, MA. This was when summer camp meant spending 8 weeks outside virtually all the time playing baseball, basketball, tennis, and swimming (at least 2 hours per day). It meant inspection of your bunk every day and winning double portions of ice cream if you had straight 10's -- floor swept clean, hospital corners and penny-bouncing tight blankets on your bed. It was boys only.

Camp Wamsutta was founded and run by Sam and Leah Sleeper, Worcester residents who decided in the late 1940's that they wanted to run a boys camp. They bought an old farmhouse, barn, chicken coop and land in Charleton. It had a small pond, and a river ran through the land. Ten years later, the Army Corps of Engineers built the Buffumville Dam, and the Sleeper's then had 100 acres of lakefront property, enabling them to have a real swimming and boating program as part of their camp activities.

Sam taught at Classical High School in Worcester. To get his job in the Worcester Public Schools in the 1930's, being Jewish, he had to change his name from Goldstein to Sleeper.

The Sleeper's had three sons, of whom the middle one, Marty, was most involved with the camp. In later years, Marty would become the beloved principal of Runkle School in Brookline, MA, and he now works for Facing History and Ourselves. My birthday greeting to him (courtesy of Facebook) led to a small reunion this week with four of the campers. A video follows with highlights.

The crowd included Howie and Eddie Gaynor, brought up in Framingham, MA. Their dad, Doctor Sidney Gaynor, was the mohel for the Boston Jewish community, conducting virtually every circumcision for miles around for several decades. Sidney, like Sam, changed his name (from Ginsburg) so that he could get into medical school in Philadelphia. Ironically, as Howie points out, "Gaynor" is now considered a Jewish last name in Framingham.

The other party at the dinner was Mike Sack, my boyhood (and lifetime) buddy, who was one of four brothers from his family to attend Camp Wamsutta.

Our first year at camp was 1959, when Howie, Mike, and I were 9 and Eddie was 8.

In the video below, you hear Marty explaining how the camp came to house so many Jewish campers. Sam would visit Central Massachusetts rabbis and ask them for names and address of boys in their community. One of them had a friend in New York, and from then on, the camp was dominated by Jewish boys from Long Island and Westchester.

Watch and listen as Eddie explains how Howie took away his double ice cream portion because his parents wanted the younger brother to lose weight, getting weighed every week by the camp nurse. Mike and Marty describe the special train from Grand Central Station that made unscheduled stops twice a year in Oxford, MA to drop off and pick up the campers. Howie, meanwhile, talks about how far away the camp seemed to be from Framingham (47 miles!).

And then there are images of the camp yearbooks from two years, 1959 and 1962, which provide a nostalgic view of the simple life of kids at the time. Also, there is a list of campers, so if you see someone you know, please forward this to him. Thanks.

If you can't see the video, click here.

Dilemma or Dilemna?

Within minutes of my previous posting, one of our very experienced press people sent an email with the terse subject line: headline typo. I wrote back and said, "No, that's how I learned to spell it."

He replied, "Never saw that before. Poses a real dilemma, dilemna, er, problem for me :-)"

(Even now, as I type this, Blogger desperately gives me a squiggle underneath "dilemna" courtesy of the automatic spell check!)

I asked my assistant, who is somewhat younger than I, how she spells the word. "D-i-l-e-m-m-a, of course."

My general counsel appeared for a meeting. She, of more comparable age, immediately included the "n". When I brought up the alternate view, she said, "It is wrong without the "n". I know that in my heart. I learned it that way."

Wanting to know the story, I sought the wisdom of the crowd (aka, the Internet). I found interesting theories there. There is no etymological reason to suggest that "dilemna" is correct. The Greek origin of the word is apparently lemma, which clearly lacks an "n".

But Wordwizard goes on to present many examples of "dilemna" from the near past and further back. The commenter who produced these noted:

I did note with some interest that all the 19th-century quotes I found . . . seemed to have their origin in publications from the U.S. Northeast (New York, Pennsylvania, and Connecticut), so there is a chance that this is the area in which the errant spelling was born. . . . .

[T]he nonstandard spelling was not just used by doofuses and the ignorati, but by very respectable folks . . . in journal articles, newspapers, magazines, etc., all of which I assume had editors to catch this type of thing. Well, it seems, many editors were similarly misinformed.

My best guess as to how this came about . . . is that on the model of such words as condemn, column, indemnity, and solemn someone mistakenly substituted an N for an M in a popular 19th-century school spelling book or guide and the misspelling propagated. It’s hard to imagine how, other than with a scenario similar to this, such a spelling, which appeared in no dictionaries, could have so thoroughly infiltrated the system and been so convincing to so many people who normally should have known better. But until a smoking gun is found, no one will be able to say for certain how this came about. In the mean time, I would definitely rate this up there as a great English orthographical mystery.

Finally, I had dinner tonight with a close boyhood friend who grew up with me in New York. He, without hesitation, used the "n", and we both remember being corrected in spelling bees when we failed to spell the word this way.

To return to my press guy, after a bit of back and forth on all this, he cried, "Uncle!"

To which I replied, "Umcle!"

The insurers' dilemna

This has to be a very difficult time for insurance companies in Massachusetts. Notwithstanding that they are non-profits, they are under a lot of scrutiny with regard to reserve margins and profitability. Much of this is unfair, but I think that is just a sign of the times. Hospitals face a similar issue, too. Doctors are certainly next in line.

But the Massachusetts insurers have an additional problem. As we have discussed here, they have been participants in creating a very large disparity in payment rates among hospitals, rate differentials based mainly on providers' market power. They are now under pressure to limit rate increases to hospitals, but the ones that come up for renewal are not necessarily the ones that have received higher rates.

Nonetheless, insurers are telling those who are up for renewal that they should expect no rate increase at all, or at best, an increase well below the rate of medical cost inflation. Those hospitals, by definition, are the ones without market power. So if the insurers hold them to low rate changes, the disparity between the have's and the have-not's will grow. This enhances the market power of their competitors, allowing them to poach doctors into their networks and gain still more market power. This increases the percentage of patients who go to the high-rate providers, aggravating the overall health care cost situation.

Thus far, I have seen no effort by insurers to cut this Gordian knot. One company promotes capitation, or global payments, as an answer to the problem. But capitation based on embedded reimbursement patterns does not solve the problem of rate differentials. Indeed, it perpetuates the problem.

Transparency with regard to rates could create a moral imperative that would help lead to a shift in the negotiations that would move things in the right direction. I see no move on the part of the insurance carriers, either individually or collectively, to ask the state to publish existing rates.

Transparency with regard to quality and safety could help create a marketplace for insurance products based on outcomes rather than market power. I see no move on the part of the insurance carriers, either individually or collectively, to ask the state to publish useful data on this front -- or to use their own commercial authority to require such publication as part of their contracts with providers.

Properly constructed and implemented administrative rate-setting likewise could help resolve disparities over time. I see no move on the part of the insurance carriers, either individually or collectively, to ask the state to engage in rate-setting.

So, while I am sympathetic to the unfair attacks on insurers that are part of the political environment, I am left to wonder. What is it that they are in favor of to help resolve an uncontroverted problem, a problem that itself aggravates the very situation facing the insurance industry?

Sausage making: Fast food version

Continuing my occasional series for out-of-state readers.

Even for Massachusetts, this is hard to keep up with. The leadership of the House of Representatives has issued a comprehensive bill that would introduce rate setting for payments from insurers to hospitals. The plan is to ask for a vote tomorrow.

Here's the summary from Jim O'Sullivan at the State House News Service:

STATE HOUSE, BOSTON, JULY 20, 2010……Health care cost control legislation the House expects to debate Wednesday would limit insurance premium hikes, curb the practice of convenience insurance purchases, and seek to spread premium increases over multiple years.

The House rewrite of Senate President Therese Murray’s proposal drops her plan to impose an assessment on large hospitals and ignores Gov. Deval Patrick’s effort to reopen provider contracts, which Patrick proposed in February as an offset to his “soft cap” on insurer rate hikes.

Authored by Assistant House Majority Leader Ronald Mariano, the House leadership draft authorizes the state’s Division of Health Care Finance and Policy to tax 50 percent of the savings in provider rates of reimbursement for deposit in a trust fund devoted to hospitals that provide a disproportionate share of care subsidized by the state, for which they receive lower reimbursement. The remaining proceeds would go toward premium savings for employers.

The bill also offers patients access to prescription drug discounts.

The Massachusetts Hospital Association offered this preliminary analysis to its members.

The House bill is extraordinarily complex and appears impossible to model. The bill proposes sweeping regulation of every hospital's rate of payment from every insurer, as well as numerous other new regulatory changes from Determination of Need to massively increased data reporting requirements. Without any public input or hearing process, in less than 48 hours, the House will be voting on an entire overhaul of the Commonwealth's healthcare regulatory system. Definitions and specifications are left to state regulators -- the impact of the bill is impossible to accurately predict.

Regular readers know that I am sympathetic to the idea of rate-setting. (Most of my colleagues are not.) And I also think it is important to reduce the differential paid to different hospitals for doing the same thing. But, I am also sympathetic to the idea of doing all this thoughtfully and correctly. It is hard to imagine how a bill that has traveled so quickly without public review and comment is likely to get it right.

But wait, maybe it is not meant to be adopted. Another excerpt from State House News:

Mariano has described the House bill a sort of conversation-starter for the 2011-2012 legislative session, for which the state will have either reelected Patrick or chosen another governor, and when at least 34 of the 200 legislative seats will have new occupants.

Time with the chief residents

I had the pleasure today of conducting a small seminar for our Department of Medicine chief residents. These are the people who were the cream of the crop as residents, and as a "reward," we give them even more extensive teaching and administrative responsibilities! It was a pleasure to spend time with them and together explore the elements of effective leadership.

From left to right, you see Dan Meyer, Kelly Graham, Suma Magge, Ethan Ellis, Jed Gonzalo, and Janice Hwang. The picture behind them is of Howard Hiatt, a former chief of medicine at the Beth Israel Hospital, who is still active around town on many issues.

Author in the Room

I am pleased to post this announcement:

IHI and JAMA Announce Author and Article for the July 21st Call

Kenneth J. Mukamal, MD, MPH, author of A 42-Year-Old Man Considering Whether to Drink Alcohol for His Health.

Join the Institute for Healthcare Improvement (IHI) and The Journal of the American Medical Association (JAMA) on Wednesday, July 21, 2010,from 2:00 PM - 3:00 PM Eastern Time for “Author in the Room,” an interactive conference call aimed at closing the gap between knowledge – what is published in an article - and action – how much of this knowledge is put into practice to improve care. This interactive call will help readers consider the implications of the study results for improving their practice. To read more and access this month's article, click here.

To help launch this unique collaboration between IHI and JAMA, IHI's Don Berwick, MD, MPP, and JAMA Editor Catherine D. DeAngelis, MD, MPH, co-authored a JAMA editorial.

There is no fee for this innovative initiative but enrollment is required. Enrollment grants you one telephone connection and unlimited participation at your site. Please note there are limited lines available for this call so early enrollment is encouraged. A free audio recording of the call will be posted to the "Archive" tab of the program web pages after the call.

Enroll now for the July 21st "Author in the Room" call.

A soccer field emerges at Fenway Park

I dropped by Fenway Park today to get an update on the preparations for tomorrow night's soccer match between Celtic and Sporting.

In the video below, the penalty box and goal box have been painted, and the end line and touch line were in progress. Dave Mellor, Director of Groundskeeping, gave me permission to walk on the grass to provide you the panorama of the view from the middle of the field. Eat your heart out, Jimmy Fallon! ("How did the grass feel? Kinda spongy?")

If you cannot see the video, click here.

Pathologists helping in Haiti

Von Samedi is a fellow in our Department of Pathology who has figured out how to allocate some of his time to assist with the rebuilding of the Haitian health care system. This article in the Journal of the American Society of Clinical Pathology documents the work being done by Von and his colleagues. Excerpts:

Near the collapsed presidential palace and the sprawling tent-and-tarp city across the street, sits the diagnostic laboratory at the State University Hospital of Haiti, the largest public hospital in the country. The lab operates under two large white tents shaded by several large trees. Six months after an earthquake brought Haiti to its knees and in the middle of the rainy season, the dirt all around the lab had become mud.

...Everyone knew this assignment for ASCP’s volunteers would not be simple. After all, one of the laboratories is operating under a tent. But more broadly, the laboratories were affected just like everything else here by the Jan. 12 earthquake.... Some laboratory technicians had died, or moved out of Port-au-Prince. Many who remained were living in tents themselves. And Haiti, a country of 9.6 million people, had just 10 pathologists, only three of them clinical pathologists.

...The volunteers produced reports that included recommendations for lab procedures, organizational charts, workflow charts, employee position descriptions, policies for orientation and competency testing, a form and schedule for the preventive maintenance of equipment, and checklists for keeping track of the functions of the lab.

The volunteers also ran safety procedure trainings on topics such as why it’s important to wash hands and what to do if there were a fire or if a technician were punctured.

Other recommendations included streamlining the clinical-order-to-result process to eliminate steps that do not help patients; eliminating interaction among staff and the public; registering tests in the morning and issuing test results in the afternoon; and reducing the amount of time the laboratories hold samples of urine, blood, and stool from seven days to three days.

“The space issues are tremendous,” Dr. Samedi said. “Plus, these samples just become bacterial time bombs.”

ACL survey for soccer coaches

Speaking of soccer, Susan Sigward, Assistant Professor of Clinical Physical Therapy Director at the USC Community Health and Wellness Research Center, is conducting a survey of soccer coaches. She writes:

USC’s Division of Biokinesiology and Physical Therapy is dedicated to preventing knee injuries in female soccer players. Please take a look at this link describing ProjectPrevent.

We have come to realize that we do not have enough information from a very important source…COACHES. As coaches on the front lines with your athletes, you have valuable information that we need. Please share this information with us by taking this short, anonymous, online survey asking you what you know about these injuries and what you need or want to help prevent them.

We need as many coaches as possible to give us feedback. We would appreciate it, if you could take 10 minutes to complete this online survey. It will be open for the next two weeks. Thank you for your time.

Getting ready for soccer at Fenway

I just had a chance to watch the initial stages of a unique Fenway Park makeover. The baseball field has to be rebuilt as a soccer pitch. Why? This Wednesday, July 21, at 8pm at "America's Favorite Ballpark," perennial Scottish Premier League contender Celtic Football Club will take on the storied Portuguese futebol club Sporting Clube de Portugal.

This is a good remedy for those of us suffering World Cup withdrawal. I also have a feeling that, for the huge Portuguese speaking constituency in New England, this will be the place to be on Wednesday night.

And for Scots who are Rangers fans? A great opportunity to root against an old rival.

How do you transform a baseball diamond into a soccer pitch? Here are some of the scenes from shortly after the crowd left the ballpark at the end of the fourth Sox-Rangers game.

In this video, you see only the early stages of the transformation. The man in charge of the conversion, Dave Mellor, Director of Groundskeeping, reminds us that attention to detail is the key. The pitching mound is removed and carted away. Bases and base mountings are likewise removed. All surfaces are flattened to a high tolerance. Later, new grass will be laid down to fill in the infield and other dirt surfaces. Lines will be painted. Goals will be erected and corner flags will be placed.

If you cannot see the video, click here.

A delicate balance

Kay Lazar writes in the Boston Globe today about an aspect of the Massachusetts universal health care law that has been developing recently. Under that law, an employer pays a penalty to the state if it choose not to offer health insurance. The lede:

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

The article notes,

The state’s landmark 2006 health insurance overhaul included regulations designed to discourage low-wage employees from opting for state health insurance over their companies’ often more pricey coverage. It denied eligibility to any one whose employer had offered him or her coverage in the past six months and paid at least 33 percent toward the individual’s plan.

Most health care advocates and brokers had widely interpreted that to include even workers whose companies had dropped coverage. But recently, some companies that have terminated their group plans have tested those waters and found that their employees were accepted for state-subsidized coverage.

Additionally, company owners say, it has become far cheaper to pay the state penalty for not covering their workers — roughly $295 annually per employee — than to pay thousands more in premiums.

I well remember Jon Kingsdale, the first director of the Health Connector, the agency in charge of all these issues, discussing the delicate balance needed between the penalty to be set, the design of state-subsidized products, and other aspects of the health care market. Too high a penalty, and it is overly punitive to businesses. Too low, and employers would accept the fee to avoid the cost of health benefits and make a run to the state's plans.

The balance seemed about right for the first few years. Now -- if this article is to be believed -- things may have shifted. Politically, it would be very difficult during a recession to start to impose higher penalties on businesses. Likewise, it is would be difficult to make the state plans a less attractive option.

On the other hand, most employers still have an interest in offering an attractive benefit to recruit and retain staff. So maybe the reporter is picking up something happening at the margins that does not have tremendous significance. It is difficult to know, and will bear watching -- both for Massachusetts and for the country, as a similar national plan goes into effect.

Unboxing e-Patient Dave's book

Here is a parody by Mark Graban of the "unboxing" videos that accompany new high tech devices. If you can't see the video, click here.

Drowning doesn't look like drowning

A change of topic as a warm weekend approaches here in New England and elsewhere. Jim Weadick, CEO of Newton Medical Center, in Covington, Ga sent me this note, which I share with you. Short version: The person in this picture is probably not drowning.

Paul, I am a big fan of your blog and follow it regularly. The thing I have enjoyed is your dissemination of safety tips and practices. The Oconee Sailing and Yacht Club sent the attached out to all of its members emphasizing water safety awareness. I never read anything quite like it and it was very informative. I know your blog gets wide readership and I thought you might want to include it in a future issue. With water activities at their peak in the summer months perhaps someone will read it and save a life.

This article is on what it looks like when someone is drowning. It's not like in the movies.

All-star softball in the park

The Friends of the Public Garden celebrated its 40th anniversary last night (i.e., Tuesday) with an "all star" game of its own in the Boston Common. This was a fund-raising softball game with representatives -- several of the over-the-hill variety -- from local corporations and some elected officials as well. Parks Commissioner Antonia Pollak and Friends President Henry Lee managed the teams.

Regular readers know that soccer, not football, is my game. I'm just not used to using my hands. Nonetheless, I subbed in as the pitcher for the blue team at the top of the third inning, confident of holding our 5-3 lead. By the end of the inning, we were behind 12-5. I issued the following statement to my teammates in this morning's follow-up email:

I hereby issue an apology for my playing: The good news, speaking as the pitcher, was that several of the runs scored during my pitching stint were unearned. The bad news was that at least three of them were attributable to my own fielding errors! (Two or three others were earned, but only because the shortstop couldn't bend down fast enough to nab some ground balls.)

Tom gives a Reason to Ride

Tom DesFosses is a grateful cancer survivor who has organized a biking event to raise funds for cancer research. It will be held on September 12, in Danvers, MA. See here for scenes from last year's ride.

You can register now, here.

Here's Tom making a pitch for the ride. If you can't see the video, click here.

Does Pronovost wear Kevlar?

A friend of mine once said that Dr. Peter Pronovost deserves a Nobel Prize for the work he has done to improve patient safety and reduce harm. Of course, that won't happen because the Nobel Committee does not recognize lives saved through process improvement. (Hmm, maybe someone could start a prize for that.)

The latest contribution is an article in JAMA today entitled, "Learning Accountability for Patient Outcomes." An excerpt*:

Each year, an estimated 100 000 patients die of health care–associated infections, another 44 000 to 98 000 die of other preventable errors, and tens of thousands more die of diagnostic errors or failure to receive recommended therapies. Physicians are overconfident about the quality of care they provide, believing things will go right rather than wrong, assuming they provide higher-quality care than the evidence suggests, and thinking they alone have sufficient knowledge and skills to provide care. Teamwork failures are common contributors to harmful errors. In many cases, someone knew something was wrong and either did not speak up or spoke up and was ignored. It is unclear how many teamwork and communication failures result from arrogance. Most clinicians have personal stories of arrogance causing patient harm.

I have seen two responses among physicians to the things Peter says and does. One reaction is resentment and anger -- ironically often proving thereby the very points he has raised. The other is a respectful recognition and acceptance and desire to learn and improve.

Kudos to Peter for willing to take the heat from those in his own profession for saying the things that need to be said. It cannot be a lot of fun.

Kudos, too, to those in the profession who have taken his lessons to heart and are saving lives every day. They are the ones who provide the "Kevlar" vest, offering Peter the protection of actual clinical outcomes that prove his worth every single day.

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*Wouldn't you love to read the whole thing? Maybe, someday this influential journal will understand that it would be still more influential if it permitted free access to articles of public import like this.

I have to ask one more time

Thanks to a friend for forwarding me this link to this story in the Washington Post: "Hospital infection deaths caused by ignorance and neglect, survey finds."

The pertinent quote: "Pronovost said part of the problem was that many hospital chief executives aren't even aware of their institution's bloodstream infection rates, let alone how easily they could bring them down."

Ugh.

Ours are here for the world to see, mainly to help us hold ourselves accountable to the standard of care to which we aspire. The target is zero, zilch, nada. No other target is intellectually or morally defensible.

I have to ask one more time: What if the Boston hospitals all decided to do this together like those folks in Ohio?

Fat chance of controlling costs

This Wall Street Journal article from a few weeks ago notes that Colorado is now the only state to have an obesity rate below 20%. If you want to watch the pattern of obesity spread over time, check out this post from April 2008.

About a year ago, I made suggestions about the primary causes of health care cost increases and included obesity as one of them.

Paradoxically, now that we have provided more universal access to care, we can expect costs to rise faster. Look here to see evidence of that in France.

Thus far, it has been politically unacceptable to address problems related to obesity. We even have trouble designing a Food Pyramid without the influence of lobbying groups.

Can that change? Unfortunately, cuts in local budgets often flow through in the form of reducing physical education time in schools.

But I remember being a boy and hearing from President Kennedy about the importance of physical fitness. It made a big impression. Would it be possible for today's presidents and governors and mayors to do the same?

Baby arriving soon

e-Patient Dave deBronkart tells us that a birth announcement for his forthcoming book -- Laugh, Sing, and Eat Like a Pig -- will be sent out by Amazon if you sign up here. This is a great story about his experience with kidney cancer and his journey to patient empowerment and collaboration with his doctors.

Now, Mr. President, about the nurses

Sometimes I am just proud and like to brag about our folks. Here's one of those times. Our Charlotte Guglielmi is President of AORN, the Association of periOperative Registered Nurses. You see her here at a national meeting with the patient-in-chief.

Brava, Maureen!

I was out of town when President Obama made his recess appointment of Don Berwick to head CMS, and when the Institute for Healthcare Improvement announced that Maureen Bisognano would take over as CEO. This article from the Wall Street Journal gives more background about Maureen's qualifications and intentions.

Regular readers have often seen Maureen's name on this blog. Her suggestions, for example, have made a huge difference in the way we have made our ICUs more patient- and family-centered.

I think Don would readily admit that she has been the not-so-secret ingredient that has led to IHI's success. I can't think of a more worthy person to take charge of this important organization. Congratulations!

Lupine carpets

And, a more peaceful scene from the Iceland travelogue.

There are many beautiful wildflowers, most living very close to the ground in the windy environment. But there is one vertical exception. At this time of year, the hills are covered with lupine. Even from miles away, they appear to be coated with a blue carpet. A short video follows from the base of the mountain next to Skagaströnd, called Spákonufell.

Click here if you cannot see the video.

There is wind, too

(Continuing the Iceland travelogue.)

Lots of wind, in fact. You can look up real time weather conditions throughout the country. Click on this map to get the local wind velocity and pattern. An example of my locale on one of the northern peninsulas, here.

This is an important service because sometimes the wind is too strong to drive on the roads. Before you head out, it is good to know if you can get there.

A short video below of what it feels like at ground level when the speed is between 20 and 30 meters/second, or over 50 miles per hour. It took my full strength to walk against the wind. If you walk with the wind, it makes you run. If you park your car wrong, the wind will whip the door out of your hands and almost off the hinges.

Recently, a man was blown off a cliff to his death when he approached it standing up on a gusty day, rather than lying down.

If you can't see the video, click here.

Fishing in Iceland

I'm just back from a short vacation to Iceland, where my biggest personal accomplishment, under the watchful eye and keen instruction of my friend Jacob, was to learn how to catch trout in one of the local rivers. Here are the before and after pictures of the unlucky fish.

I had been to Iceland before on a business trip, but this time I hung out in Skagaströnd, a fishing village of about 550 people on a peninsula in the north part of the island. There is an old house there where the fortune-teller works (really), and there is a great collection of household items from the very early 1900's. The items show the self-reliance and frugality of the people. Here, for instance, is a plate that someone dropped and cracked over a century ago. It could not be easily replaced, and so you can see how it was reconstructed using supplies that would be available in an isolated village. First, holes were very carefully drilled, a milk-based glue was applied to the joined edges, and then twine was used to hold the plate together. It is still holding.


This town has a great sense of civic pride and lots of interesting stuff going on. Notwithstanding its small size, it hosts an artist residency program, drawing painters, sculptors, and writers from around the world. Each group is welcomed with a pot luck supper provided by local residents. The town is also famous as the home of Hallbjorn Hjartarson, the "Cowboy of the North," Iceland's best known (and maybe only) country Western singer. It hosted a huge annual music festival for many years.

Finally, at the most local level, the teenagers are employed by the town to do local clean-up and beautification work during the summer months. Here, for example, a couple of girls are hand trimming the grass under and next to a fence.

They signed this

I'm taking a blogging break for several days (including no way to post your comments till I start up again) and want to leave you with a treat. Every year, the Boston Globe publishes the Declaration of Independence on its editorial page to remind us about this document. I am doing the same here. Although I take patriotic pleasure in the Declaration, I also present it as one of the finest examples of political argument that exists. Please read it in that way: A group of upstarts trying to persuade established political leaders across the ocean that they have the reason and right to declare independence from one of the world's powers. Also, they are trying to build confidence among their own population that their cause is just.

It is a marvelous piece of writing and worth studying for its form and substance. It is also worth noting that it was signed. (The version above and below, the Dunlap broadside, only has two signatures, but the original had those of all the delegates assembled.) In so doing, people were putting their lives and property at risk -- their own and their families -- setting a firm and clear example of the responsibilities of political freedom and public discourse.

In Congress, July 4, 1776.
A Declaration
By the Representatives of the
United states of America,
In general Congress assembled.

When in the course of human Events, it becomes necessary for one People to dissolve the Political Bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature’s God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.

We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness—-That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or abolish it, and to institute a new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security. Such has been the patient Sufferance of these Colonies; and such is now the Necessity which constrains them to alter their former Systems of Government. The History of the Present King of Great-Britain is a History of repeated Injuries and Usurpations, all having in direct Object the Establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid World.

He has refused his Assent to Laws, the most wholesome and necessary for the public Good.

He has forbidden his Governors to pass Laws of immediate and pressing Importance, unless suspended in their Operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the Accommodation of large Districts of People; unless those People would relinquish the Right of Representation in the Legislature, a Right inestimable to them, and formidable to Tyrants only.

He has called together Legislative Bodies at Places unusual, uncomfortable, and distant from the Depository of their public Records, for the sole Purpose of fatiguing them into Compliance with his Measures.

He has dissolved Representative Houses repeatedly, for opposing with manly Firmness his Invasions on the Rights of the People.

He has refused for a long Time, after such Dissolutions, to cause others to be elected; whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the Dangers of Invasion from without, and Convulsions within.

He has endeavoured to prevent the Population of these States; for that Purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their Migrations hither, and raising the Conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone, for the Tenure of their Offices, and Amount and Payment of their Salaries.

He has erected a Multitude of new Offices, and sent hither Swarms of Officers to harass our People, and eat out their Substance.

He has kept among us, in Times of Peace, Standing Armies, without the consent of our Legislature.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a Jurisdiction foreign to our Constitution, and unacknowledged by our Laws; giving his Assent to their Acts of pretended Legislation:

For quartering large Bodies of Armed Troops among us:

For protecting them, by a mock Trial, from Punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all Parts of the World:

For imposing taxes on us without our Consent:

For depriving us, in many Cases, of the Benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended Offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an arbitrary Government, and enlarging its Boundaries, so as to render it at once an Example and fit Instrument for introducing the same absolute Rule in these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with Powers to legislate for us in all Cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our Seas, ravaged our Coasts, burnt our Towns, and destroyed the Lives of our People.

He is, at this Time, transporting large Armies of foreign Mercenaries to compleat the Works of Death, Desolation, and Tyranny, already begun with circumstances of Cruelty and Perfidy, scarcely paralleled in the most barbarous Ages, and totally unworthy the Head of a civilized Nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the Executioners of their Friends and Brethren, or to fall themselves by their Hands.

He has excited domestic Insurrections among us, and has endeavoured to bring on the Inhabitants of our Frontiers, the merciless Indian Savages, whose known Rule of Warfare, is an undistinguished Destruction, of all Ages, Sexes and Conditions.

In every stage of these Oppressions we have Petitioned for Redress in the most humble Terms: Our repeated Petitions have been answered only by repeated Injury. A Prince, whose Character is thus marked by every act which may define a Tyrant, is unfit to be the Ruler of a free People.

Nor have we been wanting in Attentions to our British Brethren. We have warned them from Time to Time of Attempts by their Legislature to extend an unwarrantable Jurisdiction over us. We have reminded them of the Circumstances of our Emigration and Settlement here. We have appealed to their native Justice and Magnanimity, and we have conjured them by the Ties of our common Kindred to disavow these Usurpations, which, would inevitably interrupt our Connections and Correspondence. They too have been deaf to the Voice of Justice and of Consanguinity. We must, therefore, acquiesce in the Necessity, which denounces our Separation, and hold them, as we hold the rest of Mankind, Enemies in War, in Peace, Friends.

We, therefore, the Representatives of the United States of America, in General Congress, Assembled, appealing to the Supreme Judge of the World for the Rectitude of our Intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly Publish and Declare, That these United Colonies are, and of Right ought to be, Free and Independent States; that they are absolved from all Allegiance to the British Crown, and that all political Connection between them and the State of Great-Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm Reliance on the Protection of the divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.

Signed by Order and in Behalf of the Congress,
John Hancock, President.

Attest.
Charles Thomson, Secretary.

Verve and optimism versus caution and pessimism

Many people involved in hospitals wonder how it can be financially prudent for investors to put their money into for-profit ventures that buy non-profit hospitals. (Examples here and here.) After all, the argument goes, the newly privatized entities will have to pay taxes, issue taxable rather than tax-exempt debt, lose the benefit of philanthropy, and otherwise be at a competitive disadvantage compared to their antecedents.

In answer, some might make the case that for-profit firms will run hospitals more efficiently. But this is an unproven and unreliable basis for such transactions. Even if there were some efficiency gains, they would be unlikely to offset the additional costs listed above.

No, the answer lies in the risk-reward expectations of equity investors and of purchasers of high-yield taxable debt.* Those expectations are quite different from purchasers of the municipal or other tax-exempt bonds that support the capital needs of non-profit hospitals. It is the difference between a forward-looking, optimistic view of the world and a backward-looking, cautious view of the world.

Let's start with the tax-exempt debt market, one characterized by risk-averse investors focused on debt coverage ratios and other protections built into indenture agreements. The rating agencies who serve these investors look at the past performance of the non-profit hospitals and ask, "What could go wrong in the future that might put debt service at risk?" There is a highly limited pool of people interested in such debt, and when ratings fall to near or below investor grade, the number of investors becomes smaller still.

Contrast this with people willing to risk their money in the for-profit world. They are sold on the potential for financial gain, not on the proposition of protecting principal. Those offering this paper present business plans and pro forma's based on what might be. Sure, due diligence allows an assessment of the downside, but this pool of investors has hedged their bets by building a diversified portfolio.

How does an equity investor make money in this kind of transaction? Leverage is important. The capital structure of theses deals includes equity, but also a significant component of debt. If the hospital throws off enough cash to pay down the debt, the equity holders see a growing opportunity to earn a current cash return. And hospitals do throw off enough cash -- even hospitals with low or zero margins.

Why? Because the income statement includes a substantial non-cash expense, depreciation. It is the earnings before depreciation that are most meaningful to these investors. As long as immediate capital needs do not exceed available cash, debt will be serviced and equity will likely be rewarded as well on a current basis.

The real payoff, though, occurs when the properties are flipped to another purchaser after a few years.** By then, debt levels have been reduced, and the proceeds from the asset sales enure mainly to the benefit of the shareholders.

We are currently in a phase of capital markets in the United States in which there is a virtually insatiable demand for equity investments of this sort, and also for high yield debt that supports each deal's overall financial structure.

We are also in a period in which non-profit hospital boards and tax-exempt investors are worried about the future. In an odd divergence of perspectives, non-profits worry about decreased reimbursement levels resulting from the national health care reform law; they therefore fear that they will lack capital for renewal and replacement of physical facilities and clinical equipment. For-profit investors, in contrast, see the new law as enabling an increased number of insured citizens to show up as patients in their hospitals; they therefore look forward to growing cash flows to reward their risk-taking.

Mark Twain said, "It is difference of opinion that makes a horse race." Here it is the verve and optimism of the equity markets compared to the caution and pessimism of the non-profit sector. Expect a huge influx of investment capital to change the face of the hospital world over the next two years.

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* High-yield bonds bear a greater resemblance to equity than they do to traditional tax-exempt debt.
** Or, when the private equity firm sells the venture to a broader group of investors with an initial public offering.

Is it plugged in?

Submitted by a friend of a friend. It is from a cancer patient's on-line journal. This did not take place at our hospital. It could happen almost anywhere, I'm guessing.

In our hospital, this situation would have prompted a "Trigger" because the low oxygen saturation is a Trigger standard, as is "marked nursing concern." Would our Trigger team notice the root cause?

I thought I'd wait until I'd left the hospital to recount this story. One evening, my friend was visiting and the nursing assistant came in to take my vital signs. My level of blood oxygenation (02 saturation) was lower than normal, and so she called the nurse, who turned up the level of oxygen I was getting through my nose from 3 liters to 6 liters. It didn't seem to help. Then the Reiki lady came to give me my "sample" Reiki treatment (which I liked). Afterward, my oxygen level was no better.

The nursing shift changed and the new nurse was concerned about my "sats". She called a doctor, who couldn't see anything wrong, but was concerned, since I clearly should not have been "desatting". She gave me an EKG. She gave me another EKG. She called another doctor. She ordered a portable chest X-ray. She gave me a nebulizer treatment. This all lasts until nearly midnight.

By this time, I am getting anxious (no matter how hard I try to breathe in deeply through my nose and out through my mouth, I can't seem to get the sats up). So she is also giving me ativan. She suggests to the nurse that she call respiratory therapy and ask them to bring up a mask, so that I can breathe in through both my mouth and my nose. The respiratory therapy guy comes, but before he gives me the mask, he firmly attaches the oxygen tubing to the oxygen source on the wall. It had come loose. No one else checked.

So, I had two doctor visits, two EKGs, a chest X-ray and a nebulizer treatment because it wasn't plugged in.

It's funny.....now.