Author: Freddie Sanchez

Alan Condon

CMS has updated guidance for hospitals interested in converting to a rural emergency hospital, a Medicare designation that was made available Jan. 1, 2023.

REHs are a provider type established by the Consolidated Appropriations Act, 2021, to address concerns over rural hospital closures and provide rural facilities a potential alternative to closure.

Since 2005, 106 rural hospitals have shut down, with another 86 facilities no longer providing inpatient services, according to data compiled by the University of North Carolina’s Cecil G. Sheps Center for Health Services Research. Of those, 37 closures have occurred since 2020.

Here are 16 things to know about REHs, including designation requirements, qualifying facilities, conditions of participation and how many hospitals have converted to REHs.

1. The designation aims to curb rural hospital closures by offering them a chance to close infrequently used inpatient beds and focus on outpatient and emergency department services.

2. CMS defines “rural emergency hospitals” as “facilities that convert from either a critical access hospital or a rural hospital with no more than 50 beds and do not provide acute care inpatient services, with the exception of post-hospital extended care services furnished in a distinct part unit licensed as a skilled-nursing facility.”

3. In exchange for giving up their expensive inpatient beds and focusing solely on emergency and outpatient care, rural emergency hospitals receive a 5% increase in Medicare payments as well as an average facility fee payment of about $3.2 million a year.

4. Conversion to the designation allows hospitals to continue providing emergency services, observation care and, if elected by the hospital, additional medical and health outpatient services, that do not exceed an annual per-patient average of 24 hours.

5. REH services include all covered outpatient department services required or elected to be provided by the REH, including relevant radiology, laboratory, outpatient rehabilitation, surgical, maternal health, and behavioral health. Copayments for REH services are based on the standard Hospital Outpatient Prospective Payment System rate (excluding the 5% increase).

What facilities qualify to be a REH?

6. Eligible CAHs and small rural hospitals can apply to enroll as REHs for free. Existing CAH or hospital enrollment ends once REH enrollment is approved.

7. A facility must meet the following   requirements to qualify as an REH:

• Enrolled in Medicare; and operating as a CAH as of Dec. 27, 2020; or operating as a small rural acute care, tribally operated, or Indian Health hospitals with no more than 50 certified beds as of Dec. 27, 2020, and either located in a rural county or treated as being located in a rural area.
• Facilities that were enrolled by Dec. 27, 2020, but closed after that date, can still qualify if they re-enroll in Medicare and meet REH requirements.

What requirements must REHs meet?

8. Once enrolled as an REH, a facility must meet the following requirements:

• Must not exceed an annual per patient average length of stay of 24 hours of services.
• Must meet staff training and personnel requirements, which include:
  • A staffed emergency department 24 hours a day, 7 days a week, with staffing requirements like those for CAHs
  • A physician, nurse practitioner, clinical nurse specialist, or physician assistant available to provide REH services in the facility 24 hours a day.
• Must have a transfer agreement in effect with a Medicare-certified Level I or Level II trauma center.
• Must not provide any inpatient services, except those delivered in a distinct part unit licensed as a skilled nursing facility.

9. Conditions of participation include:

• Hospitals must have a clinician on-call at all times and available on-site within 30 or 60 minutes depending on if the facility is located in a frontier area.
• Emergency departments must be staffed 24 hours a day, seven days a week by an individual competent in the skills needed to address emergency medical care. This individual must be able to receive patients and activate the appropriate medical resources to meet the care needed by the patient.
• Hospitals must develop, implement and maintain an effective, hospital-wide, data-driven quality assurance and performance improvement program, and it must address outcome indicators related to staffing.
• The annual per-patient average lengths of stay cannot exceed 24 hours and time calculation begins with registration, check-in or triage of the patient and ends with the discharge of the patient from the hospital.
• Hospitals must have an infection prevention and control and antibiotic stewardship program that adheres to nationally recognized guidelines.

How many hospitals have converted to REHs?

10. Thirty-two hospitals have transitioned to the REH designation so far:

Arkansas
Eureka Springs Hospital
Helena Regional Medical Center
South Mississippi County Regional Medical Center (Osceola)
St. Bernards Five Rivers Medical Center (Pocahontas)

Georgia
Blue Ridge Medical Center
Irwin County Hospital (Ocilla)
Taylor Regional Hospital (Hawkinsville)

Kansas
Mercy Hospital (Moundridge)
South Central Kansas Medical Center (Arkansas City)

Kentucky
Crittenden Community Hospital (Marion)

Louisiana
Assumption Community Hospital (Napoleonville)

Michigan
Sturgis Hospital

Minnesota
Mahnomen Health Center

Mississippi
Alliance Healthcare System (Holly Springs)
Green County Hospital (Leakesville)
Jefferson County Hospital (Fayette)
Panola Medical Center (Batesville)
Perry County General Hospital (Richton)
Sharkey Issaquena Community Hospital (Rolling Fork)

Missouri
Parkland Health Center (Bonne Terre)

Nebraska
Friend Community Healthcare System

New Mexico
Guadalupe County Hospital (Santa Rosa)

Oklahoma
Elkview General Hospital (Hobart)
Harper County Community Hospital (Buffalo)
Stillwater Medical-Blackwell
Stillwater Medical-Perry

Tennessee
Tristar Ashland City Medical Center

Texas
Anson General Hospital
Crosbyton Clinic Hospital
Falls Community Hospital and Clinic (Marlin)
St. Luke’s Health-Memorial Hospital – San Augustine
St. Mark’s Medical Center (La Grange)

11. The REH program is still very new, but more rural hospitals are pursuing the designation after doing financial analyses and seeing the progress made by some of the program’s inaugural class.

Insights from five rural hospital leaders

12. Brooke Kensinger, CEO, MercyOne Elkader (Iowa) Medical Center: The REH program is still very new, and just as it took time for the hospital community to warm up to the critical access hospital designation, this will be no different. Hospital leaders and community boards are learning more about the pros and cons of this option, and whether it is truly the best path at this time for their community. We expect that as healthcare leaders and board members across the country continue to evaluate this program, there will be improvements made — similar to the CAH program — to better ensure access to care.

13. Dierdra Sorrell, MSN, RN, CEO, Clifton-Fine (Star Lake, N.Y.): For our hospital, with an inpatient census of one for the most part, [the REH designation] made a whole lot of sense. We really struggle with getting the inpatient census since we’re in a very remote location and the closest hospital to us is about a 50-minute drive.

14. Anna Doan, BSN, RN, Chief Nursing Officer, Anson (Texas) General Hospital: Our [inpatient] numbers drastically declined, and we knew that this was our only hope to stay open.

15. Donald Lloyd, II, President and CEO, St. Claire Healthcare (Morehead, Ky.): We must realize that it is not economically possible to sustain a full service acute care hospital in every rural community. Such a realization takes great political courage but also clinical creativity to meet the community’s needs. CMS and state Medicaid agencies must establish payment methodologies that sustain institutions in low volume and safety-net environments.

16. Jeff Thompson, MD, CEO Emeritus, Gundersen Health System (La Crosse, Wis.): Although more rapidly changing the payment system away from fee-for-service will help, the best hope and most progress is to change the behavior of the large systems and universities to view rural areas not as referral pipelines but as citizens and providers that need real population healthcare partners. Not closing, but re-focusing the work of rural providers and rural hospitals that have already been shifting to outpatient work [will help].

CMS updates guidance for rural emergency hospitals: 16 things to know (beckershospitalreview.com)

September 10, 2024- Owens & Minor, Inc. announced a new partnership with Google Cloud that combines Owens & Minor’s deep expertise in optimizing the healthcare supply chain with Google Cloud’s Vertex AI platform to help drive meaningful enhancements for QSight^®, an industry-leading cloud-based clinical inventory management system from Owens & Minor. By partnering with Google Cloud, Owens & Minor will strengthen QSight’s existing inventory management capabilities while laying the foundation for future platform and service innovations with the potential to dramatically improve the QSight customer experience.

The partnership between Owens & Minor and Google Cloud will focus on enhancing QSight’s ability to help hospitals and health systems optimize how they manage the thousands of medical-grade supplies, high-value surgical implants and human tissue products required for patient care. For providers, the implications of inefficient inventory management can reach beyond the stockroom and into the operating room, including a risk that expired products are used in patient care and inventory loss if products expire before they can be used.

Enterprise healthcare providers also face increasing pressure to deliver high-quality care while managing costs and optimizing efficiency — with less support from clinical staff. However, traditional clinical inventory management systems may lack the real-time visibility and predictive capabilities needed to effectively oversee complex healthcare supply chains, which can increase costs and lead to higher workloads for clinical staff.

Learn More

Owens & Minor announces new partnership with Google Cloud (repertoiremag.com)

July 8, 2024- Ansell Limited announced it had successfully completed the acquisition of Kimberly-Clark’s Personal Protective Equipment (KCPPE) business. This strategic acquisition strengthens Ansell’s position as a global leader in personal protection solutions, expands its product portfolio, and enhances its service capabilities to meet customer needs across industries and geographic markets.

As part of this agreement, Ansell will acquire the Kimtech™ brand of scientific PPE for customers in laboratory and cleanroom environments and the KleenGuard™ brand of safety PPE for customers in industrial environments. In addition, Ansell will add two new capabilities to its Ansell Services portfolio: The RightCycle™ Program, a sustainable solution for the disposal of non-hazardous personal protective equipment (PPE) waste, and APEX™, a best-in-class approach to cleanroom customer change management and contamination control.

As part of a transition services agreement, Kimberly-Clark Corporation will support the KCPPE business over the next year to allow sufficient time for a successful integration into Ansell. During this transition period, customers can continue to request Kimtech™, KleenGuard™, The RightCycle™ Program and APEX™ products and services from Kimberly-Clark Professional. Customers will be notified promptly when Ansell can begin taking orders.

USA | Ansell completes acquisition of Kimberly-Clark’s Personal Protective Equipment Business

Learn More

New device combines Ethicon’s proven Gripping Surface Technology (GST) and 3D-stapling technology for greater staple line integrity

CINCINNATI, OH – May 27, 2024 – Ethicon*, a Johnson & Johnson MedTech** company, today announced the U.S. launch of the ECHELON LINEAR™ Cutter. It is the first linear cutter to market with combined innovative and proprietary technologies – 3D-Stapling Technology and Gripping Surface Technology (GST) – two advanced capabilities proven to enable greater staple line security, which can help surgeons reduce risks and support patient outcomes. Backed by science, this first-of-its-kind surgical stapler delivered 47% fewer leaks at the staple line to help reduce surgical risks. ^i,*** Its unique design provides surgeons with the option to keep the device halves locked, or to separate them, offering more control of the device placement when navigating the differing needs of each patient’s anatomy.^i,ii,****^,*****

In colorectal surgery, an anastomosis is a critical part of the procedure in which two ends of the colon are connected with staples after part of the organ has been resected or removed due to damage or disease. If this connection is faulty or weak, an anastomotic leak may occur, which can lead to lengthier hospitalization, increased healthcare costs, and/or death.^iii,iv  Studies show the mortality rate associated with anastomotic leaks can range from 10% to 15%.^v The risk of death can be 3- to 8-times greater if an anastomotic leak is present.^vi,vii

“Today, surgeons are treating an aging population as well as patients who are increasingly obese and presenting with comorbidities that can negatively impact surgical outcomes. This requires surgeons to manage various tissue types and navigate difficult-to-access anatomy, raising the risk of complications,” said Sandeep Makkar, Global President of Ethicon Energy and Endomechanical. “Informed by  surgeon experience, we’re pleased to add the new ECHELON LINEAR™ Cutter to the portfolio given its first-of-its-kind design to provide surgeons with greater control, while also leveraging our proven GST and 3D-stapling technologies to help reduce surgical risks.”

Complications associated with colorectal surgery can be severe, with anastomotic leaks remaining the most serious due to the dramatically increased associated risks of postoperative mortality and the need for a permanent stoma.ⁱⁱⁱ “As a leader in MedTech, it’s imperative that we continue innovating with purpose to help solve for the challenges surgeons are facing and make a profound impact along the continuum of care,” Makkar added.

Dr. Shekar Narayanan, board-certified colon and rectal surgeon and Chief of Surgical Oncology at Community Health Network, added: “The most critical safeguard of a successful operation is managing surgical risks wherever possible, and the advanced technologies behind ECHELON devices help our surgical team to do that.” 

“The combined technology of an ECHELON stapler plus GST reloads and 3D Stapling are remarkable in their ability to stabilize and compress tissue and reduce slippage, all of which are critical factors in reducing the potential for complications during colorectal surgery,” he continued.

The ECHELON LINEAR™ Cutter is the latest colorectal surgical solution added to the ECHELON portfolio, bringing forward similar stapling capabilities in advancing staple line security as ECHELON CIRCULAR™ Powered Stapler and ECHELON™ 3000. ECHELON LINEAR™ Cutter will soon be added to a clinical and real-world evidence program for advanced stapling that includes the publication of nine peer-reviewed studies in seven countries spanning more than 700 hospitals and over 46,000 patients, as clinical evidence is generated post-launch.

The design and development of the ECHELON LINEAR™ Cutter was informed by input from surgeons, as well as Ethicon’s deep understanding of the properties of living tissue and its interaction with devices. It’s these insights – coupled with a purpose-driven approach to innovation – that have resulted in the product’s greater device control, staple line integrity and staple consistency, ultimately helping to drive improved patient outcomes.

Ethicon partners with hospitals, surgeons, and surgical staff to capture the learnings gained from performing countless procedures to address unmet clinical needs and deliver on the transformative promise of digital surgery. Its latest technologies and state-of-the-art training connect the vast knowledge, resourcefulness, and deep experience across the continuum of care for more informed decision making and better connectivity on behalf of patients pre- and post-operatively.

For additional information about the ECHELON LINEAR™ Cutter, visit ethicon.com/LinearCutter

About Ethicon’s Gripping Surface Technology (GST) and 3D-Stapling Technology
ECHELON Gripping Surface Technology (GST) is designed to stabilize and compress the tissue where it is needed, resulting in lower potential of tissue slippage versus traditional linear cutters. 3D Stapling Technology has offset staple legs designed to distribute tissue compression load more evenly over a greater surface area and reduce potential leak pathways. Together these advanced stapling technologies offer exceptional staple line integrity across the broadest range of tissue thicknesses giving surgeons more flexibility to meet their needs in the OR.

About Ethicon
At Ethicon, a Johnson & Johnson MedTech company, putting humanity at the core of care is our passion and our purpose. In collaboration with clinicians and health care experts around the world, we develop clinically-differentiated surgical technologies and solutions to help address some of the most pressing health challenges of our time such as metabolic disease, cardiovascular disease and cancer. Through our efforts and ingenuity, we aspire to elevate standards of care and create a healthier future for the patients of today and tomorrow. Visit www.ethicon.com to learn more about us. 

About Johnson & Johnson MedTech
At Johnson & Johnson MedTech, we unleash diverse healthcare expertise, purposeful technology, and a passion for people to transform the future of medical intervention and empower everyone to live their best life possible. For more than a century, we have driven breakthrough scientific innovation to address unmet needs and reimagine health. In surgery, orthopaedics, vision, and interventional solutions, we continue to help save lives and create a future where healthcare solutions are smarter, less invasive, and more personalized. For more, visit https://thenext.jnjmedtech.com.

Cautions Concerning Forward-Looking Notices
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Ethicon, Inc., Ethicon Endo-Surgery, LLC, Ethicon Endo-Surgery, Inc.,  and/or Johnson & Johnson. Risks and uncertainties include, but are not limited to: challenges and uncertainties inherent in product research and development, including the uncertainty of clinical success and of obtaining regulatory approvals; uncertainty of commercial success; manufacturing difficulties and delays; competition, including technological advances, new products and patents attained by competitors; challenges to patents; product efficacy or safety concerns resulting in product recalls or regulatory action; changes in behavior and spending patterns of purchasers of health care products and services; changes to applicable laws and regulations, including global health care reforms; and trends toward health care cost containment. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s most recently filed Quarterly Report on Form 10-Q, and the company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. None of Ethicon, Inc., Ethicon Endo-Surgery, LLC, Ethicon Endo-Surgery, Inc.,  nor Johnson & Johnson undertake to update any forward-looking statement as a result of new information or future events or developments. 

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*Ethicon represents the products and services of Ethicon, Inc., Ethicon Endo-Surgery, LLC and certain of their affiliates. All other trademarks are the property of their respective owners. **Johnson & Johnson MedTech comprises the surgery, orthopedics, vision and interventional solutions businesses within Johnson & Johnson’s MedTech segment. 
Dr. Matthew Albert is a paid consultant for Ethicon. He has not been compensated for any media work. 
Dr. Shekar Narayanan is a paid consultant for Ethicon. He has not been compensated for any media work. 

Footnotes: 
*** Benchtop testing on porcine colon measuring staple line leak rate at 30mmHg, comparing rates of 52.8% for Medtronic GIA with TriStaple, Ethicon Linear Cutter, and Proximate Linear Cutter to 27.7% for Echelon Linear Cutter (n=36, p<0.001) 
**** Surgeon usability evaluation of one-handed positioning and placement when the halves are locked. 
***** Greater control supported by a surgeon usability evaluation = 65% agreed, n=37. 

ⁱ Ethicon. Echelon Linear Cutter (Cornerstone) Staple Line Leak Claims Testing. 1/28/2022. Windchill #500897557 Ethicon. 
ⁱⁱ Echelon Linear Cutter (Cornerstone) Customer Usability Claim Summary Report. 7/15/2022. Windchill #501027381 
ⁱⁱⁱ Trencheva K, Morrissey K, Wells M, et al. Identifying Important Predictors for Anastomotic Leak After Colon and Rectal Resection. Annals of Surgery. 2013; 257: 108. 
^iv Schiff A, Brady BL, Ghosh SK, et al. Estimated Rate of Post-Operative Anastomotic Leak Following Colorectal Resection Surgery: A Systematic Review. Journal of Surgery and Surgical Research. 2016;2(1): 060-067. 
^v Hyman, Neil MD; Manchester, Thomas L. MD; Osler, Turner MD; Burns, Betsy NP; Cataldo, Peter A. MD; Annals of Surgery: February 2007 – Volume 245 – Issue 2 – p 254-258 doi: 10.1097/01.sla.0000225083.27182.85 
^vi Gessler B, Eriksson O, Angenete E. Diagnosis, treatment, and consequences of anastomotic leakage in colorectal surgery. Int J Colorectal Dis .2017. 32:549–556. DOI 10.1007/s00384-016-2744-x 
^vii Turrentine F, Denlinger C, Simpson V. Morbidity, Mortality, Cost, and Survival Estimates of Gastrointestinal Anastomotic Leaks. J Am Coll Surg. 2015. DOI: /10.1016/i.jamcollsurg.2014.11.002

For complete indications, contraindications, warnings, precautions, and adverse reactions, please reference full package insert.

The third-party trademarks used herein are trademarks of their respective owners.

©Ethicon, Inc. 2024. All rights reserved. US_ETH_STAP_363133

By Heather Landi May 15, 2024

In 2024, the tariff rates on syringes and needles will increase from 0% to 50%. For certain personal protective equipment, including certain respirators and face masks, the tariff rates will increase from 0–7.5% to 25% in 2024. (ADELART/GettyImages)

To boost domestic medical supply manufacturing, the Biden administration is hiking up tariffs on syringes, needles, medical and surgical gloves and personal protective equipment from China.

The tariffs are designed to combat artificially low-priced exports coming in from China, the federal government said in a fact sheet released yesterday.

“American businesses are now struggling to compete with underpriced Chinese-made supplies dumped on the market, sometimes of such poor quality that they may raise safety concerns for health care workers and patients,” the White House said.

President Biden directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China.

In 2024, the tariff rates on syringes and needles will increase from 0% to 50%. For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0–7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026.

“These tariff rate increases will help support and sustain a strong domestic industrial base for medical supplies that were essential to the COVID-19 pandemic response and continue to be used daily in every hospital across the country to deliver essential care,” the federal government said.

The federal government and the private sector have made “substantial investments” to build domestic manufacturing for these and other medical products, according to the government.

The American Medical Manufacturers Association cheered the move to raise tariffs on Chinese medical supply imports.

“This signifies a pivotal moment in America’s quest for self-reliance and true resilience, particularly in personal protective equipment (PPE) and critical medical products,” the organization said in a statement.

“The White House understands that domestic manufacturers face an onslaught of underpriced, subpar Chinese imports. By sidelining high-quality American manufacturers, cheap Chinese imports threaten the safety of our healthcare workers and patients,” Eric Axel, the executive director of AMMA said in a statement.

Axel added, “Our member companies can compete with manufacturers globally. All they ask is for a level playing field because they have no doubt that American ingenuity and quality will win out.”

In November, the FDA began investigating reports of China-made plastic syringes breaking and leaking. In March the agency confirmed the quality issue and the following month it issued a recommendation that consumers and healthcare providers stop using plastic syringes made by certain Chinese manufacturers.

The U.S. government also is raising tariffs for other sectors including steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells and ship-to-shore cranes.

The White House raises tariffs on medical supplies from China (fiercehealthcare.com)

WASHINGTON (May 2, 2024) — The American Hospital Association (AHA) today released a new report showing that hospitals and health systems continue to experience significant financial pressures that challenge their ability to provide 24/7 care for the patients and communities they serve.  

In 2023, data show that hospitals and health systems continued to face substantial challenges due to higher costs for labor, drugs, and supplies. At the same time, reimbursements from Medicare and Medicaid did not keep pace with these mounting costs, and hospitals and health systems increasingly encountered challenges navigating onerous commercial insurer practices such as denying and delaying access to and payment for patient care. These headwinds persist in 2024 and have been further exacerbated by the recent unprecedented Change Healthcare cyberattack, forcing many hospitals to dip into their diminishing cash reserves to maintain operations. 

Key findings from the report include:

• Economy-wide inflation grew by 12.4% between 2021 and 2023, more than double the 5.2% growth in Medicare reimbursement for hospital inpatient care. This makes it harder for hospitals to maintain access to care and invest in cybersecurity and cutting-edge treatment.
• Hospitals and health systems incurred significant underpayments for several essential and complex health care services in 2023, including: 
  • Payments for inpatient behavioral health services were on average 34% below costs across all payers.
  • In the outpatient setting, payments for costly burn and wound services were on average 43% below costs across all payers.
• Hospitals and health systems face mounting administrative burden and costs due to certain commercial health insurer practices like prior authorization and denials. At the same time, health insurance premiums grew twice as fast as hospital prices in 2023.
• Increasing drug prices and workforce challenges continue to cause hospitals financial stress.
  • In 2023, the median annual list price for a new drug was $300,000, an increase of 35% from the prior year.
  • 2023 saw the most drug shortages in over a decade; there were an average of 301 drugs in shortage per quarter, an increase of 13% from the previous year.
  • Hospitals’ labor costs, which on average accounts for 60% of a hospital’s budget, increased by more than $42.5 billion between 2021 and 2023. 

“As this report clearly highlights, increased expenses, workforce challenges, and growing administrative burden are unsustainable and creating headwinds and obstacles that threaten access to care for millions of Americans,” said AHA President and CEO Rick Pollack. “The AHA urges Congress and the Administration to take action to strengthen hospitals and health systems and bolster access to care for all patients and communities.”

The full report, along with a one-page executive summary, can be found HERE. More information on the AHA’s advocacy agenda to support hospitals and health systems can be found HERE. 

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About the American Hospital Association (AHA)
The American Hospital Association (AHA) is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA advocates on behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners – including more than 270,000 affiliated physicians, 2 million nurses and other caregivers – and the 43,000 health care leaders who belong to our professional membership groups. Founded in 1898, the AHA provides insight and education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at www.aha.org.

New AHA Report: Hospitals and Health Systems Continue to Face Rising Costs, Economic Pressures | AHA

By Dave Muoio Apr 30, 2024 4:30pm

Hospitals are off the hook for data reporting requirements that have been in place since the early days of the COVID-19 pandemic.

Per guidance documents from the Department for Health and Human Services released in November, April 30 is the last day hospitals must report their COVID-19 data to the Centers for Disease Control and Prevention’s (CDC’s) National Healthcare Safety Network (NHSN).

The required data included how many adult and pediatric patients were admitted to a reporting hospital for COVID-19, whether those patients’ conditions were laboratory-confirmed or suspected and whether they were being cared for in an ICU.

Requirements to report these and other related measures each day have been listed among the Conditions of Participation for Medicare since the fall of 2020. The CDC used these data to update public online tools for monitoring COVID-19 activity and other agency forecasting.

Though the COVID-19 public health emergency officially expired May 11, 2023, the reporting was extended on a non-daily basis with several fields removed or made optional “in an effort to reduce burden.” The CDC also ended its requirement for daily reporting on COVID-19 cases in favor of weekly reports.

Since then, the government expanded the NHSN in November to include optional fields for hospitals to report cases of influenza and respiratory syncytial virus, which it noted at the time can also “result in substantial burden on hospitals” and potentially strain personal protective equipment inventories.

The CDC said it is encouraging “ongoing, voluntary reporting of hospitalization data.” It will begin making those voluntary data available for online viewing beginning May 10, per its COVID Data Tracker webpage.  

The expiring reporting requirement lands as COVID-19 numbers continue to trend downward. Hospitalizations, the portion of positive COVID-19 tests and other metrics of case severity have generally dipped on a week-by-week basis since reaching a low peak at the top of the year, according to the CDC’s online numbers.

Since the beginning of the pandemic, the U.S. has recorded more than 6.9 million hospitalizations and nearly 1.2 million deaths attributed to COVID-19.

Hospitals no longer required to report COVID-19 data to CDC (fiercehealthcare.com)

By Heather LandiApr 30, 2024 4:15pm

Walmart’s plan to close down its medical clinics in five states underscores the major challenges retail players face in their aim to “disrupt” primary care, healthcare leaders say.

Walmart is shuttering all 51 of its Walmart Health centers along with its virtual care services, the retail giant announced Tuesday morning.

“Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue,” company executives announced in a press release.

Walmart Health launched in 2019 and has since expanded to 51 facilities in five states.

Company executives said the decision to close all Walmart Health centers and shut down the virtual care offering “was not easy.” 

“This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” executives wrote.

Walmart did not share a specific date for when each center will close.

The move is a dramatic turnaround from the retailer’s previously announced plans to expand its health clinics. Earlier this month, Walmart Health announced plans to open a new clinic in Houston, Texas, though headwinds have forced the company to push back the opening of clinics in certain regions until early 2025.

The retail giant said a year ago that it intended to nearly double its footprint by the end of 2024, opening 75 locations by the end of the year. However, a Walmart spokesperson told Fierce Healthcare in early April that pressures related to construction resources led it to pump the brakes on six health centers planned for the Phoenix region and four in Oklahoma City, delaying them to the beginning of next year.

That said, Walmart said it was still on track to open the planned 75 locations by early 2025, the spokesperson said last month.

The move comes as other retailers struggle with primary care businesses. Walgreens is scaling back the footprint of its primary care clinic chain VillageMD. The drugstore chain is in the process of shuttering 160 VillageMD locations.

VillageMD has already exited 140 locations and has exited or already notified patients that it is exiting Florida, Indiana, Chicago, Boston, Rhode Island and Las Vegas, Walgreens CEO Tim Wentworth told investors during the company’s fiscal 2024 second-quarter earnings on March 28. ​Walgreens reported a steep quarterly loss in Q2, reflecting a nearly $6 billion write-down in the value of its investment in VillageMD.

The retail pharmacy operator invested $1 billion in VillageMD in 2020 and then sunk $5.2 billion into the primary care company in 2021, making it the majority owner with a 63% stake.

Over the past five years, retailers like Walgreens, Walmart and CVS along with online retailer Amazon have been aggressively expanding their reach into healthcare to provide medical services. With their sights set on “disrupting” primary care, these companies touted more convenient access to care and affordable services.

Amazon bought One Medical in a $3.9 billion deal in 2022 while CVS picked up senior-focused Oak Street Health for $10.6 billion in 2023. CVS also bought home health and technology company Signify Health.

These deals helped to advance these companies’ push into value-based care.

But retailers are facing headwinds in their efforts to put a dent in the primary care space, noted Forrester Principal Analyst Arielle Trzcinski. “In what was already a tall order, additional headwinds have only increased in the last couple of years,” she said.

Like other brick-and-mortar providers, retailers face rising labor costs and clinician shortages along with tighter reimbursement rates from insurers, Trzcinski said.

“Primary care is often a loss leader for larger health systems but serves a critical role as a feeder of patients and customers for specialty care and procedures. Without those higher revenue opportunities, retailers must achieve high levels of adoption and volume to unlock profitability,” Trzcinski said.

“The news is a significant setback for retail health players, some of whom are now realizing that delivering retail-driven primary care may not be economically viable and certainly isn’t causing the disruption in local healthcare markets that many predicted,” said Rajiv Leventhal, Emarketer senior analyst, in an emailed comment.

As chain retailers offer more low acuity care services, it can create more fragmentation and siloed patterns of care, noted Sara Vaezy, executive vice president and chief strategy and digital officer at Providence.

“These low acuity types of services, whether in the primary care or virtual care space, have relatively low barriers to entry. A lot of folks can get involved in them and they can seem relatively commoditized. And then they’re competing with each other, and with us, as large health systems, for the right clinical talent and the right administrative talent to really operate these organizations to their full potential,” Vaezy said in an interview.

“I think they’re just realizing that it’s not just about dipping your toe and taking your share of the $4 trillion of healthcare spending in this country. It’s a lot more nuanced and complicated than that. When they don’t have a continuum of care to connect the patients to, it doesn’t really work from a numbers perspective,” she said.

Health systems offer primary and urgent care services along with access to specialty care that provides an integrated care experience and builds a longitudinal relationship with patients.

Vaezy contends that the most effective long-term strategy in healthcare is incumbent healthcare organizations collaborating with tech companies, digital health startups, big chain retailers and other players. These partnerships can help to provide care continuity for patients, she noted.

While Walgreens is scaling back clinics and Walmart is getting out of healthcare completely, CVS and Amazon are maintaining their growth plans. CVS chief executive officer Karen Lynch told Forbes in February the healthcare giant is sticking with its expansion strategy for Oak Street Health to open 50 to 60 clinics for seniors next year.

Amazon’s One Medical is building out its employer relationships and signing more health system partnerships. The primary care provider inked a major partnership with Health Transformation Alliance, expanding access to its services to 67 employers and nearly 5 million employees. CommonSpirit Health’s Virginia Mason Franciscan Health is teaming up with One Medical to provide specialty care to the online retailer’s primary care patients. It’s one of about 18 health system partnerships.

One Medical also is working with Hackensack Meridian in New Jersey to open multiple locations over the next several years.

“Given their scale, it’s not very believable that Walmart ‘cannot’ operate primary care clinics profitably, which calls into question why they haven’t – lack of interest, poor execution, etc.” said Hal Andrews, president and CEO of healthcare data analytics company Trilliant Health, in a written comment provided to Fierce Healthcare. “Whatever the reason, if the largest company in the largest country in the world cannot – or won’t – operate primary care clinics profitably, it is ominous for the future of rural healthcare in America.”

Trzcinski also noted that Walmart’s exit from primary care clinics could have a significant impact on patients in rural areas. “As medical deserts continue to expand, other retailers operating in healthcare should take action now to reassure patients of their long-term strategy to protect customer retention,” she said.

John August, program director of healthcare labor relations at Cornell University’s School of Industrial and Labor Relations, said he expects the healthcare consolidation trend to continue.

“Reimbursement rates have been flat and will continue to be, but my view is that this is less about reimbursements and more about profitability. Increased costs for staffing and retention of employees are driving consolidation in all sectors of healthcare. This dynamic is what recently drove Walgreens and Rite-Aid to close a number of their retail pharmacies,” August said in an emailed comment.

Walmart will no longer operate health centers but will continue to provide health and wellness services across the country through its nearly 4,600 pharmacies and more than 3,000 vision centers, the company said. Walmart said it has expanded the clinical capabilities of its pharmacies and touted the presence of its stores in medical provider shortage areas, often serving as the “front door of healthcare.”

Walmart said its optical business is growing and recently expanded with more than 200 vision centers along with new tech-enabled optical tools, like virtual try-on capabilities.

“We will continue to innovate as we grow our core businesses and launch even more services like the Walmart Healthcare Research Institute and health programs to join our fresh food and OTC offerings in helping our customers live better,” Walmart executives said.

Walmart Health shutting down, along with virtual care services (fiercehealthcare.com)

The paper focuses on preventing and mitigating drug shortages

Janette Wider

April 2, 2024,

On April 2, the U.S. Department of Health and Human Services (HHS) announced via a press release that it has released a white paper highlighting steps HHS has taken to prevent and mitigate drug shortages and proposing additional solutions for policymakers to consider.

The press release says that “Drug shortages have occurred in the nation’s health care system for several decades, largely due to market failures and misaligned incentives. With today’s white paper, HHS offers solutions and stands ready to work with Congress to ensure no patient faces the devastating consequences of drug shortages or goes without needed medicines.”

Further, “Through the Assistant Secretary for Planning and Evaluation (ASPE), Administration for Strategic Preparedness and Response (ASPR), the Food and Drug Administration (FDA), the Centers for Medicare & Medicaid Services (CMS), and others, HHS has been working to improve how the department monitors the pharmaceutical supply chain and responds to disruptions. HHS has established a new Supply Chain Resilience and Shortage Coordinator role to strengthen implementation of strategies to enhance supply chain resilience for pharmaceuticals and other medical products, and has issued guidance to increase supply chain transparency, while continuing to consider additional long and short-term solutions. FDA discloses certain inspection information to provide the public with an understanding of actions the Agency takes to protect public health and is also developing a quality management maturity framework that may support adoption of manufacturing practices that are more resilient. HHS has also collaborated with other government agencies on this critical issue. For example, last month HHS and the Federal Trade Commission jointly issued a Request for Information to better understand the causes – and potential solutions – of generic drug shortages.”

HHS has also taken steps to increase resilience and redundancy within the market, according to the press release. Additionally, HHS acknowledges that longer-term solutions may require additional input from authorities and resources.

HHS has the press release.

HHS Publishes White Paper on Supply Chain | Healthcare Purchasing News (hpnonline.com)

Molly Gamble February 28th, 2024

Below are the adjusted expenses for nonprofit, for-profit and government hospitals per inpatient day in 2022 in every U.S. state, according to the latest estimates provided by Kaiser State Health Facts. 

The figures are based on information from the 2022 American Hospital Association Annual Survey. They are an estimate of the expenses incurred in a day of inpatient care and have been adjusted higher to reflect an estimate of outpatient service volumes, according to the Kaiser Family Foundation. 

The foundation notes the figures are “only an estimate of expenses incurred by the hospital” for one day of inpatient care and do not substitute actual charges or reimbursement for care provided.

National average 
Nonprofit hospitals: $3,167
For-profit hospitals: $2,383 
State/local government hospitals: $2,857

Alabama
Nonprofit hospitals: $1,984
For-profit hospitals: $1,723
State/local government hospitals: $1,929

Alaska 
Nonprofit hospitals: $2,130
For-profit hospitals: $3,152
State/local government hospitals: $1,905

Arizona
Nonprofit hospitals: $3,430
For-profit hospitals: $2,746
State/local government hospitals: $2,833

Arkansas
Nonprofit hospitals: $2,082
For-profit hospitals: $1,942
State/local government hospitals: $4,263

California
Nonprofit hospitals: $4,719
For-profit hospitals: $2,655
State/local government hospitals: $4,338

Colorado 
Nonprofit hospitals: $3,862
For-profit hospitals: $3,408
State/local government hospitals: $2,528

Connecticut 
Nonprofit hospitals: $3,223
For-profit hospitals: $2,584
State/local government hospitals: $5,234

Delaware
Nonprofit hospitals: $3,399
For-profit hospitals: $1,429
State/local government hospitals: n/a

District of Columbia
Nonprofit hospitals: $4,272
For-profit hospitals: $3,081
State/local government hospitals: n/a

Florida 
Nonprofit hospitals: $3,063
For-profit hospitals: $2,301
State/local government hospitals: $2,884

Georgia 
Nonprofit hospitals: $2,556
For-profit hospitals: $2,312
State/local government hospitals: $814

Hawaii
Nonprofit hospitals: $3,551
For-profit hospitals: n/a
State/local government hospitals: $1,598

Idaho
Nonprofit hospitals: $4,570
For-profit hospitals: $2,944
State/local government hospitals: $2,406

Illinois 
Nonprofit hospitals: $3,168
For-profit hospitals: $2,403
State/local government hospitals: $3,862

Indiana
Nonprofit hospitals: $3,327
For-profit hospitals: $2,865
State/local government hospitals: $2,686

Iowa
Nonprofit hospitals: $1,847
For-profit hospitals: $1,596
State/local government hospitals: $1,942

Kansas
Nonprofit hospitals: $2,287
For-profit hospitals: $2,551
State/local government hospitals: $2,314

Kentucky
Nonprofit hospitals: $2,485
For-profit hospitals: $2,637
State/local government hospitals: $3,484

Louisiana
Nonprofit hospitals: $2,788
For-profit hospitals: $2,336
State/local government hospitals: $2,345

Maine
Nonprofit hospitals: $2,944
For-profit hospitals: $1,154
State/local government hospitals: $1,082

Maryland
Nonprofit hospitals: $3,617
For-profit hospitals: $1,734
State/local government hospitals: n/a

Massachusetts
Nonprofit hospitals: $3,670
For-profit hospitals: $2,559
State/local government hospitals: $2,545

Michigan
Nonprofit hospitals: $2,546
For-profit hospitals: $2,449
State/local government hospitals: $893

Minnesota 
Nonprofit hospitals: $2,813
For-profit hospitals: n/a
State/local government hospitals: $2,273

Mississippi
Nonprofit hospitals: $1,615
For-profit hospitals: $1,753
State/local government hospitals: $1,229

Missouri
Nonprofit hospitals: $2,864
For-profit hospitals: $2298
State/local government hospitals: $2,379

Montana
Nonprofit hospitals: $2,192
For-profit hospitals: $2,708
State/local government hospitals: $750

Nebraska 
Nonprofit hospitals: $2,832
For-profit hospitals: $4,769
State/local government hospitals: $1,765

Nevada 
Nonprofit hospitals: $2,771
For-profit hospitals: $2,127
State/local government hospitals: $2,972

New Hampshire
Nonprofit hospitals: $3,030
For-profit hospitals: $2,720
State/local government hospitals: n/a

New Jersey
Nonprofit hospitals: $3,415
For-profit hospitals: $2,361
State/local government hospitals: $2,451

New Mexico 
Nonprofit hospitals: $2,973
For-profit hospitals: $2,686
State/local government hospitals: $3,710

New York 
Nonprofit hospitals: $3,721
For-profit hospitals: n/a
State/local government hospitals: $3,675

North Carolina 
Nonprofit hospitals: $2,810
For-profit hospitals: $2,391
State/local government hospitals: $2,411

North Dakota
Nonprofit hospitals: $2,308
For-profit hospitals: $4,196
State/local government hospitals: n/a

Ohio
Nonprofit hospitals: $3,402
For-profit hospitals: $2,447
State/local government hospitals: $3,761

Oklahoma
Nonprofit hospitals: $2,450
For-profit hospitals: $2,580
State/local government hospitals: $1,964

Oregon
Nonprofit hospitals: $3,827
For-profit hospitals: $3,368
State/local government hospitals: $5,155

Pennsylvania 
Nonprofit hospitals: $3,045
For-profit hospitals: $2,251
State/local government hospitals: $1,609

Rhode Island 
Nonprofit hospitals: $3,102
For-profit hospitals: n/a
State/local government hospitals: n/a

South Carolina 
Nonprofit hospitals: $2,430
For-profit hospitals: $1,874
State/local government hospitals: $2,598

South Dakota 
Nonprofit hospitals: $1,673
For-profit hospitals: $4,275
State/local government hospitals: $780

Tennessee
Nonprofit hospitals: $2,960
For-profit hospitals: $2,133
State/local government hospitals: $2,019

Texas
Nonprofit hospitals: $3,291
For-profit hospitals: $2,325
State/local government hospitals: $3,768

Utah
Nonprofit hospitals: $3,550
For-profit hospitals: $3,232
State/local government hospitals: $3,542

Vermont
Nonprofit hospitals: $3,079
For-profit hospitals: n/a
State/local government hospitals: n/a

Virginia
Nonprofit hospitals: $2,813
For-profit hospitals: $2,194
State/local government hospitals: $4,208

Washington
Nonprofit hospitals: $3,753
For-profit hospitals: $3,696
State/local government hospitals: $4,079

West Virginia
Nonprofit hospitals: $2,447
For-profit hospitals: $1,206
State/local government hospitals: $1,500

Wisconsin 
Nonprofit hospitals: $2,796
For-profit hospitals: $3,055
State/local government hospitals: $3,641

Wyoming 
Nonprofit hospitals: $3,092
For-profit hospitals: $3,133
State/local government hospitals: $1,485

Hospital expenses per inpatient day across 50 states (beckershospitalreview.com)