Stay in the know with Becker's Hospital Review's weekly roundup of the nation's biggest healthcare news. Here's what you need to know this week.
1. Hospitals picking up the pace with value-based contracts, Kaufman Hall survey finds
As of February, 42 percent of hospitals reported that 10 percent or more of their revenue stems from value-based contracts, a Kaufman, Hall & Associates survey found. This rate is nearly double the survey response from six months ago. In August 2014, just 22 percent of hospitals reported that 10 percent or more of their revenue stemmed from these types of contracts. The results of the survey also indicated even greater growth is expected for future use of value-based payments. Compared with the August survey results, the percentage of responding hospitals anticipating value-based contracts will constitute 50 percent or more of their revenue within the next two years tripled, from 7 percent to 22 percent.
2. CMS finalizes 2016 Medicare Advantage payment rates
CMS announced Monday that Medicare Advantage payment rates will increase by 1.25 percent on average in 2016. The announcement was unexpected given CMS' proposal in February that suggested health insurers offering Medicare Advantage plans would see their rates cut by approximately 0.95 percent in 2016. Under the finalized payment rates, CMS says health insurers will see Medicare Advantage payment rates increase by 3.25 percent on average after expected growth in plan risk scores due to coding are factored in. The rate increase was based on a higher estimate of traditional Medicare spending and does not stem from a change in policy, according to CMS.
3. VA wait times have not improved, despite efforts
The Department of Veterans Affairs largely continues to fall short of its goal to see patients within 30 days of the preferred time of care, despite that the agency hired 8,000 employees between April and December, started opening new health centers and added the Choice program. According to an analysis from the Associated Press, the number of appointments with wait times between 30 and 90 days has not improved. Nearly 894,000 appointments between Aug. 1, 2014 and Feb. 28, 2015 involved a delay of more than 30 days, and of those appointments, approximately 232,000 clocked wait times of more than 60 days.
4. Cleveland Clinic Innovations launches digital healthcare product spinoff
Cleveland Clinic Innovations, the health system's business development branch, launched an e-commerce company to sell digital healthcare products directly to hospitals, private practice physicians and patients. The company, ADEO, is an online marketplace that quietly went live last October with 13 products like educational toolkits and apps from Cleveland Clinic and its partners. Before going to market, the products have to be licensed to third parties, according to Crain's Cleveland Business.
5. Epic, Cerner join CMS' Designated Test EHR Program
Epic and Cerner are joining iPatientCare as CMS Designated Test EHR Program Participants. In this program, the two IT giants will provide CMS with test EHRs to allow providers to demonstrate they can electronically share information with disparate systems, according to Health Data Management. More than 4,000 providers have registered with the program to conduct tests, and more than 5,000 have attested to the care transitions core objective. McKesson and MEDITECH previously participated in the program but are no longer doing so. athenahealth participated in the pilot program before its official launch in January 2014, according to the report.
6. Q1 2015 digital health funding down year-over-year
Funding for digital health startups raked in $6.7 billion in 2014, setting a new record. However, funding levels for the first quarter of fiscal 2015 indicate a decline, as total funding fell for the first time since 2010, according to a StartUp Health Insights report. The first three months of this year brought in $0.9 billion in funding for digital health startups, lower than the $1.5 billion in funding in Q1 of 2014. Despite this dip, Q1 2015 funding totals are still higher than what they were in Q1 2013 ($579 million). Digital health startup funding totaled $6.7 billion overall in 2014. In comparison, funding totals in 2013 were $2.9 billion. Despite the decline in funding in Q1 2015, it still appears to be on track to surpass 2013's funding totals.
7. Shares of Ventas spike after announcing $1.75B Ardent deal
The Chicago-based real estate investment trust Ventas signed a definitive agreement to acquire Nashville, Tenn.-based Ardent Health Services, which is owned by private equity funds managed by Welsh Carson Anderson & Stowe. Under the deal, Ventas will own 10 hospital properties, which have a combined 2,045 beds. Ventas plans to separate its hospital operations into entities that will be owned by current Ardent management, along with other equity sources, which will hold long-term leases with Ventas. The transaction is expected to close by the middle of this year.
8. UV robots go to court: Clorox, Xenex feuding
Xenex Disinfection Services and Clorox, two major manufacturers of ultraviolet disinfection robots, are feuding over claims made in advertisements, resulting in Xenex taking Clorox to court. Both companies make robots that use ultraviolet light to kill pathogens to help prevent healthcare-associated infections in patients. Clorox Healthcare Optimum-UV System uses mercury bulbs, and Xenex "Germ-Zapping Robots" use pulsed xenon gas. The battle between the two companies heightened in December 2014 when Clorox challenged, before the Better Business Bureau's National Advertising Division, certain advertising claims Xenex was making about its robots' effectiveness in killing pathogens and reducing the risk of HAIs in online, print and social media campaigns. Xenex replaced the claims Clorox objected to with more specific language focused on the science of its technology and its customers' success using them to reduce infection rates. In response to new objections from Clorox, Xenex filed a declaratory judgment action against Clorox.
9. Wyoming broadens personal information definition to include health information
The state of Wyoming updated its data breach notification statute's definition of "personal identifying information" to include medical and insurance information. Data breach notification statutes are determined by each state and dictate when companies must notify affected individuals in the event of a lapse in cybersecurity. The definition of personal identifying information in Wyoming now includes a first name or first initial and last name in combination with any of the following information: Social Security number, driver's license number, bank account number, credit card number or debit card number with a security code, access code or password, tribal ID, federal or state government-issued ID card, share login secrets or security tokens, a username or email address with a password or security question and answer, birth or marriage certificate, medical history, mental or physician condition or diagnosis or treatment by a healthcare professional, health insurance policy number or subscriber ID number, unique biometric data or a tax PIN.
10. Citizens Medical Center negotiates mutual separation with CEO
Victoria, Texas-based Citizens Medical Center CEO Stephen Thames will step down from his position, following negotiations Thursday morning for a mutual separation agreement with hospital board members, according to the Victoria Advocate. The negotiations followed a physicians' meeting Wednesday night, in which physicians signed a letter requesting Mr. Thames' termination. Physicians at the hospital have voiced their concerns about Mr. Thames' over the past several weeks. Talk of leaving the hospital if the board didn't act started last month, and last week eight physicians threatened to take a leave of absence until Mr. Thames' contract was terminated.
11. Zimmer voluntarily recalls knee device
Zimmer is initiating a voluntary recall of Persona Trabecular Metal Tibia, according to the FDA. The device is used in either posterior cruciate retaining or sacrificing surgical procedures to treat knee conditions. Zimmer recalled the device following an increase in complaints of radiolucent lines and loosening. All sizes and lots of the affected devices are being removed from distribution. Additionally, all affected products will be located and quarantined immediately.
12. Death of Sherif Abdelhak, former health system CEO, reported one year later
Sherif S. Abdelhak, past CEO of former Pittsburgh-based Allegheny Health, Education and Research Foundation, died quietly last year in Florida at age 68 after an 18-month battle with cancer, according to Philly.com. AHERF, which at its peak had been the largest health system in Pennsylvania and largest insolvency in the U.S., went bankrupt after purchasing two medical schools and eight hospitals in Philadelphia. Mr. Abdelhak was blamed for the failure after not acknowledging the system had stretched itself too thin until the financial damage was beyond repair — the system lost about $1 million a day, and owed creditors nearly $1.5 billion altogether. Mr. Abdelhak was charged with more than 1,500 counts related to AHERF's downfall, and in 2002 pleaded guilty to the misdemeanor charge of misusing charitable funds. He was sentenced to 23 months in prison, which he was permitted to serve in alternate housing. John Abdelhak, one of Mr. Abdelhak's sons, said his father carried a heavy burden from what happened with AHERF, and his death was intentionally quiet.