Saturday, April 01, 2006

PWC Health Research Institute Report

Charity Care at U.S. Hospitals on the Rise as Americans With No Health Insurance Grows

PricewaterhouseCoopers Health Research Institute reports that the community benefit hospitals provide may be underestimated because of the challenges hospitals face in determining who is eligible for charity care.

Washington, DC, March 6, 2006 -- The amount of free health care provided by U.S. hospitals to poor and uninsured Americans rose to $27 billion last year, up 30 percent from $20.7 billion in 1999, but hospitals are getting a black eye over discrepancies in charity care policies, aggressive bill collection practices and a broken health care pricing system, according to PricewaterhouseCoopers.

In a report titled Acts of Charity: Charity Care Strategies for Hospitals in a Changing Landscape by PricewaterhouseCoopers Health Research Institute, PwC asserts that the community benefit hospitals provide may be underestimated because of the challenges hospitals face in determining who is eligible for charity care. Further, the lack of clarity about the community benefit standard makes it difficult for hospitals to defend themselves amid growing public criticism over prices charged to individuals with no health insurance.

“There are 45 million Americans with no health insurance in this country, and the hardest hit are the working uninsured who are not covered by government programs but who make too much money to qualify for hospital charity care,” said Reatha Clark, partner, PricewaterhouseCoopers Health Industries Advisory practice. “The latter includes a growing population of 'underinsured' families who are covered by employer health insurance but can't afford the increased co-payments and deductibles that employers are shifting to the individuals.” “Much of the negative press against hospitals has focused on hospitals’ reportedly aggressive attempt to collect on their debts and criticism that the uninsured are charged higher prices for services than the discounted prices negotiated by managed care plans or what Medicaid and Medicare pay,” added Clark. “Few hospitals have the profit margin to provide substantial charity care and write off bad debt without regard for whether patients can actually pay.

Complicating the matter is that while hospitals apply discounts to the uninsured, hospital charges bear little resemblance to actual costs. At issue for our nation’s health leaders and policy makers is how to make health care pricing transparent and understandable to consumers.” Under fire from the media and federal and state lawmakers, hospitals are proactively changing or clarifying their pricing, billing and collection policies to expand coverage for uninsured Americans and to protect their goodwill reputation.

• In a PwC survey of 100 hospital executives, approximately 70 percent said their hospitals provide the uninsured with discounts off standard charges and 15 percent charge the uninsured their averaged managed care rate.

• Seventy-six percent of hospitals surveyed by PwC report charity care in terms of charges, rather than costs, and an additional 9 percent use a combination of charges and costs. All of these approaches are appropriate under generally accepted accounting principles, according to PwC. However the inconsistent reporting makes evaluating community benefits nearly impossible.

• The PwC report also suggests that many more uninsured Americans are eligible to receive charity care from hospitals, but because of personal disclosures required to determine financial eligibility, candidates are reluctant to complete the necessary paper work. Furthermore, the lack of regulatory guidance regarding patients' qualification has resulted in a patchwork of policies and practices that have led to patient frustration and public outcry

• The PwC survey showed that hospitals report providing charity care equivalent to an average of 5 percent of their net operating income, but 85 percent said part of their bad debt could be classified as charity care. Bad debt expense is the write-off hospitals take when patients who haven’t qualified for charity care are unable or unwilling to pay for services they receive. While charity care is considered a community benefit, bad debt is not.

“Not-for-profit hospitals need to be able to respond to challenges to their eligibility for state and local income tax, property tax and sales tax exemptions, as well as federal income tax exemption, which, among other privileges, allows for access to tax exempt financing,” said Robert Friz, Tax Partner, PricewaterhouseCoopers, Washington National Tax Service. “If the tax exemption for not-for-profit hospitals were modified or eliminated because hospitals fail to demonstrate their community benefit, the increased tax costs could significantly deplete the resources hospitals need to fulfill their charitable missions, including providing charity care.”“There is much that hospitals can do on their own to improve their charity care policies, but they also need to be proactive in demonstrating the amount of charity care and community benefit they provide,” commented Friz. “In this regard, the lack of uniform standards for quantification and disclosure of charity care can make it difficult for hospitals to defend themselves from such challenges. Further, they alone likely cannot solve the bigger pricing transparency problem without a major overhaul of the system, which will involve the public and private sectors working together.”

The PricewaterhouseCoopers report outlines proactive charity care strategies for hospitals to consider taking. These strategies include:

• Align patient charges to the uninsured with payer reimbursement rates.
• Simplify eligibility procedures for financial assistance and charity care.
• Clearly communicate charity care policies to patients so they understand what to expect and how to access it.
• Rigorously train staff to communicate charity care policies and to be sensitive to cultural barriers toward applying for charity care.
• Provide complete and accurate information, with details about charity care and other community benefits on IRS Form 990.
• Proactively report to the community and local leaders through an annual community benefit report.

Tuesday, March 28, 2006

Aetna Wins Award for Diabetes Program

Aetna Wins Innovation And Excellence Award For Integrated Diabetes Program

America's Health Insurance Plans Foundation honors Aetna's efforts to integrate disease management services

HARTFORD, Conn., March 7, 2006 — America’s Health Insurance Plans (AHIP) recognized Aetna (NYSE: ΑET) yesterday with the 2006 Large/Affiliated Innovation and Excellence Award: Chronic Care for the company’s integrated approach to helping members with diabetes manage their condition.

The award was given to Aetna this week at the AHIP Foundation’s Innovation and Excellence Awards Dinner at the 2006 National Policy Forum in Washington, D.C. "This award recognizes the strong foundation of Aetna’s integrated approach to helping our members achieve optimal health," said Charles M. Cutler, M.D., head of National Quality Management at Aetna. "Using feedback gained during focus groups with consumers and care providers, we have successfully integrated services to address our members’ educational, psychosocial and cultural needs. This approach enables us to support each member as a whole person with overlapping and connected health needs, rather than focusing solely on their chronic condition. Further, it reflects our commitment to offering members with diabetes a range of innovative outreach and programs."

Approximately 6 percent of Aetna’s HMO-based members, or about 180,000 members with diabetes, benefit from these award-winning outreach services, receiving consistent reinforcement in their diabetes self-management efforts. Components of Aetna’s integrated approach to helping support members with diabetes include:

Member Education and Support- Helping members understand their condition, and the importance of monitoring their health and following their doctor-prescribed treatment plan is a core component of our integrated diabetes management services, and includes nurse outreach and support through our disease and case management programs, direct mail reminders, education and self-management tools, newsletters and web-based education and tools.

Psychosocial Support- Behavioral health issues can complicate an underlying medical condition and lead to ineffective self-management. Members in our diabetes disease management program are routinely screened for depression and referred to our Medical/Psychiatric Case Management program as needed for support with co-morbid depression, which frequently occurs among people living with a chronic condition like diabetes.

Cultural Diversity- Recognizing that the identical diabetes management plan will not suit all people, Aetna provides culturally sensitive materials to members and participating physicians to help them understand the disease and develop a treatment plan they can stick with for life. The Aetna Diabetes Care Kit for physicians treating Hispanic or Latino patients with diabetes received an eValue8™ Innovation Award from the National Business Coalition on Health last fall.

Physician Education and Support- According to the Centers for Disease Control and Prevention, more than 14.6 million Americans have been diagnosed with diabetes, and 6.2 million Americans suffer from undiagnosed diabetes.

Health plans can play a key role in supporting physicians in caring for their diabetic patients. Aetna provides direct mail patient educational materials and reminders, office tracking tools and rosters of Aetna members potentially in need of service.

Community Collaboration- Aetna works with local diabetes coalitions to promote compliance with recommended American Diabetes Association guidelines. In the Maryland/Washington D.C./Virginia market, Aetna implemented a pilot with the Network to Improve Community Health (NICH) by providing participating physician offices and lab draw stations with the NICH Patient Guidelines for Diabetes Care brochure to educate their patients.

"It’s such a great honor to have our efforts recognized externally against more than 35 other judged entries," said Judy Langley, health care quality manager for National Quality Management (NQM). "It’s very rewarding to see that our integrated programs proved to be more innovative and differentiated in this competition."

Aetna’s integrated programs have led to demonstrated success, as measured by the HEDIS® Comprehensive Diabetes Care measure components, Aetna’s annual physician and office manager surveys, member and physician/office manager focus groups and the Med/Psych SF12® Health Survey. Aetna significantly improved HEDIS rates of cholesterol (LDL) control (<100) by 14.2 percent, nephropathy screening by 12.9 percent and the SF12 Mental Health Component by 44.9 percent.

The AHIP Foundation is a non-profit, 501(c)(3), educational, scientific, and research arm of AHIP. It strives to create, support, and enhance programs throughout the health plan industry that improve quality, effectiveness, and value in health care through research, education, information sharing, and other activities which reward exemplary practices by individuals and organizations.

Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 27.9 million unique members with information and resources to help them make better informed decisions about their health care.

Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, long-term care and disability plans, and medical management capabilities. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans and government-sponsored plans.

Sunday, March 26, 2006

PacifiCare Funds Latino Health Scholarships

The following press release outlines the scholarships offered by the UnitedHealthcare Latino Health Scholars Program...the scholarships are funded by The PacifiCare Foundation...

The UnitedHealthcare Latino Health Scholars program to award 75 $2,000 scholarships

The Freedom Award: two $25,000 scholarships also available

CYPRESS, Calif. - March 22, 2006 – Seventy-five $2,000 scholarships are available for Spanish-speaking, bicultural high-school students who want to pursue careers in the health care industry. The scholarships, funded by the PacifiCare Foundation, are offered on behalf of the UnitedHealthcare Latino Health Scholars program, which helps educate and encourage Hispanic and Latino students to pursue career opportunities in health care.

High-school seniors with a minimum grade point average (GPA) of 3.0 and who are fluent in Spanish and English are eligible. Applicants must show proof of acceptance into a university, community college or accredited technical college and must be enrolled in an approved health care program at the time they receive the scholarship. Applications are due May 29, 2006 , and are available online at

“The Office of Minority Health cites a nationwide shortage of bilingual and bicultural health care professionals and calls for improvements in recruiting and retaining minority students into health care professions,” said Russell Bennett, vice president of Latino Health Solutions at UnitedHealthcare. “For example, in the nursing field, a recent policy report by the Online Journal of Issues in Nursing states that the proportion of Latino nursing students continues to lag behind the number of Latinos in the population. “Nationwide, many Latinos do not have access to culturally and linguistically appropriate care, and this has a far-reaching effect on their health and quality of life,” Bennett added. “Studies show that patients respond better when care instructions are delivered in their own language and their cultural background is taken into account.”

Once again, the Latino Health Scholars program has been expanded to include – in addition to the seventy-five (75) $2,000 scholarships – two $25,000 Freedom Awards for the two most qualified applicants.
Since it was introduced in 2003, the Latino Health Scholars program has awarded $356,000 to 155 students across the country who are pursuing diverse health care careers such as Nursing, Pre-Med, Biology, Psychology, Biomedical Engineering and other allied health professions.

“We applaud UnitedHealthcare’s commitment to help pave the way for the next generation of Hispanic health care professionals,” said Elena Rios, M.D., president and chief executive officer of the National Hispanic Medical Association. “We believe the Latino Health Scholars program can inspire these students to succeed in school and pursue rewarding, fulfilling health care careers that will make a positive impact in their communities.”

“We are encouraging our scholarship recipients to utilize their bilingual and bicultural skills and health care education by ‘giving back’ to their communities once they graduate,” Bennett added. “We are doing our part in the community by enlisting the help of many of our employees who have volunteered to serve as ambassadors by visiting the high schools and assisting students interested in a career in health care.”