INSIDE THE ISSUE
Another Bleak Hospital Financial Report
The perilous financial state of the Massachusetts hospital sector was reaffirmed last week with the release of two reports from the Center for Health Information and Analysis (CHIA) report showing that nearly three-quarters of hospital health systems are reporting negative operating margins – meaning they are spending more money than they are taking in. CHIA’s latest reports confirm the well-documented growth in temporary labor spending across Massachusetts hospitals and their affiliated health system providers, which exceeded $1.7 billion in FY2022 according to CHIA. The findings reflect trends occurring across the country.
The most recent hospital financial data shows that FY 2022 was one of the worst financial years for hospitals in recent memory, and that the first three quarters of FY2023 are only marginally better. The statewide median total margin in FY2022 was negative 4.2%, while the statewide median acute hospital operating margin was negative 1.3%. During that bleak financial year, 77% of hospital health systems reporting experienced negative operating margins.
Now, through the third quarter of the current fiscal year (2023), the statewide median total margin is 1.6%, and the statewide median operating margin has crept above zero to 0.2%. However, 71% of hospital health systems reporting are still experiencing negative operating margins.
One of the greatest sources of the financial hit to hospitals – temporary labor costs – is tracking closely in FY2023 to the previous year’s unsustainable spending trends. CHIA reported $1.54 billion in hospital temporary clinical staffing expenses for FY22, or $1.2 billion more than pre-pandemic year of FY19. So far this fiscal year, CHIA reports $886.5 million in temporary clinical staffing costs through Quarter 3 for 47 acute hospitals, which annualizes to 97% of FY2022 temporary staffing expenses for the respective group of hospitals. Continuing the trend would mean temporary labor expenses across all Massachusetts acute hospitals will likely approach the FY2022 highwater mark of $1.5 billion by the end of FY2023. Hospital health system affiliated providers also have experienced staffing cost growth, incurring $194 million in temporary staffing expenses during FY2022, and $176 million through Q3 of FY2023.
“The more than $2.6 billion spent on temporary labor over the past two years thus far represents one of the largest unsustainable cost pressures for providers everywhere in the commonwealth,” said Dan McHale, MHA’s vice president, Healthcare Finance & Policy. “This is a system that is still fighting to re-stabilize. MHA and our members are deeply thankful for the support elected leaders have devoted to ensuring healthcare providers can maintain the high-quality services our communities deserve. It is essential that these challenges remain front-and-center as our state engages in important discussions on the future of healthcare policy, workforce, and costs.”
ARPA-H Hub Proves Strength of Mass. Hospitals, Life Sciences
A concerted year-long effort between Massachusetts hospitals, life science interests, businesses, and state and federal government paid off last week when Massachusetts was chosen as the site of the ARPA-H Investor Catalyst Hub, which will attempt to unite federal funding, private investment, and medical knowledge in innovative, fast-tracked ways to address diseases such as Alzheimer’s and cancer.
The Investor Catalyst Hub is one of three regional components of the federal government’s new ARPA-H, or Advanced Research Projects Agency for Health. Its Bay State location was chosen over other national candidates following an initial written proposal from Massachusetts, followed by a comprehensive site visit this spring. VentureWell, a Massachusetts non-profit, will run and manage the Massachusetts-based hub.
The Catalyst Hub will be supported by “spokes” across the country – hospitals, health centers, and research and academic institutions that will work together to accelerate solutions to fight diseases.
Governor Maura Healey said, “This hub leverages our state’s world-class life science ecosystem while building a national network of researchers and entrepreneurs to invest in meaningful solutions to the biggest healthcare challenges.”
“In choosing Massachusetts, ARPA-H becomes a part of the most innovative and connected system of hospitals and healthcare providers anywhere,” said MHA’s President & CEO Steve Walsh. “This is an extraordinary testament to the collaboration seen every day among our commonwealth’s healthcare institutions, life sciences community, and elected leadership. MHA and our members are grateful for the Healey-Driscoll Administration’s leadership throughout this process, and we are ready to get started in making the Investor Catalyst Hub come to life.”
Valerie Fleishman, MHA’s senior vice president and chief innovation officer, along with leaders from Mass General Brigham and others were part of a core team led by Massachusetts Secretary of Economic Development Yvonne Hao and the Healey Administration. The team worked in concert with members of the Massachusetts congressional delegation and the Coalition for Health Advances and Research in Massachusetts (CHARM), which coalesced in the commonwealth shortly after President Biden announced the ARPA-H initiative in 2022.
Hospitals Continue Focus on Workplace Violence Prevention
Throughout the state, Massachusetts hospitals are focused sharply on stopping abusive behavior and violence in their facilities. In January, MHA released a report – An Untenable Situation & A Call to Protect the Workforce – showing that every 38 minutes in a Massachusetts healthcare facility, someone – most likely a clinician or employee – is either physically assaulted, endures verbal abuse, or is threatened. The MHA Board of Trustees in January endorsed the United Code of Conduct Principles that is included in the report. Since then, hospitals have adopted the code, or tailored their existing codes, to incorporate the new language that allows, among other things, an offender to be barred from a facility.
Now, the healthcare community is pushing to have strong, statewide violence prevention measures codified. A hearing on Wednesday before the Joint Committee on Public Safety and Homeland Security at the State House will focus on a series of proposed bills, including MHA’s priority legislation, H.2381/S.1538, An Act Requiring Healthcare Facilities to Develop and Implement Programs to Prevent Workplace Violence, from Rep. Michael Moran (D-Brighton) and Sen. Jason Lewis (D-Winchester).
Developed by MHA’s Healthcare Safety & Violence Prevention Workgroup, the proposed legislation requires DPH, in collaboration with the Office of Health Equity and other health interests, to issue statewide standards for evaluating and addressing known security risks at healthcare facilities. Hospitals would then be required to develop and submit a workplace violence prevention plan, and report each on-site instance of assault and battery, workplace violence, and aggravated (felony) and non-aggravated (misdemeanor) interference with the conduct of a healthcare facility. Importantly, criminal charges would be reserved to only patients or visitors who intentionally impede the ability of workers to safely deliver care services.
“MHA and its members believe strongly that behavioral health, medical conditions, and equity circumstances must be taken into account as individual incidents are reviewed,” said MHA President & CEO Steve Walsh. As such, the bills would expand state-run treatment options to patients in mental health crisis who are displaying violent behavior and would establish new pathways to trigger the forensic behavioral health system for individuals who should not be subject to arrest.
Under the legislation, any employee who is a victim of violence or interference can take paid leave to address criminal or other legal action, which protects the workers sick and vacation time. Additionally, it protects the workers by allowing them to use their employer’s or union’s address – and not their home address – for any subsequent legal communications. The bill also tasks state agencies with developing recommendations to improve information sharing between hospitals and public safety officials, expanding state-run treatment and placement options for patients in mental health crisis exhibiting violent behavior, and establishing new pathways to trigger the forensic behavioral health system that do not require a patient to be arrested.
“The rise in abusive incidents being seen here in Massachusetts and across the country is simply unacceptable. Our healthcare leaders have made this much clear: we will not stand for it,” said MHA’s Walsh. “This legislation would give the commonwealth bold, sensible tools to protect the dedicated caregivers who stop at nothing to care for us. We applaud Leader Moran and Senator Lewis for leading on this urgent issue and we are hopeful that this is the session in which new violence prevention reforms can become reality.”
“Healthcare facilities are a place of refuge,” said Therese Hudson-Jinks, R.N., chief nursing officer, chief experience officer, and senior vice president of Patient Care Services at Tufts Medical Center. “Great patient care is only possible when all our employees — from nurses and physicians to security personnel and administrative staff – feel safe and secure. These bills would provide hospital employees with critical protections at a time when they remain under enormous pressure.”
“Every Massachusetts hospital has robust policies and procedures in place to mitigate violent incidents. It is truly an around-the-clock effort. But there is even more we can do to take united action at the state level,” said Bonnie Michelman, vice president and chief security officer at Massachusetts General Hospital and Mass General Brigham. “We are proud that the commonwealth has a tight-knit community of security, clinical, and quality leaders that is committed to this work and that helped inform this legislation.” Michelman serves as the chair of MHA’s Healthcare Safety & Violence Prevention Workgroup, which meets regularly to share best practices, aggregate data, and establish system-wide solutions.
DPH: More Needs to Be Done to Fight Hep C
Hepatitis C is dangerous but it can be cured. But first clinicians must test patients far more frequently than is now occurring. That’s the message that the Department of Public Health stressed last week.
“In Massachusetts, cases of hepatitis C are rising,” according to DPH. “An estimated 250,000 people are now infected with hepatitis C. Hispanic/Latinx individuals are infected with hepatitis C at 1.3 times, black individuals at 1.2 times, and American Indian/Alaska Native individuals at 1.1 times the rate of white individuals. Not enough testing is done, especially in primary care settings, where opportunities to identify and treat cases are being missed.”
DPH estimates that only about 14% of Massachusetts residents have been tested for hepatitis C virus infection at least once.
DPH recommends universal testing for all adults aged 18 and over at least once in their lifetimes, and testing all pregnant people, and people regardless of age who may be at risk due to use of injectable drugs, HIV, or people with certain medical conditions such as those receiving hemodialysis. Treatment for hepatitis C virus infection is curative for more than 95% of people and requires only 8-12 weeks of simple oral therapy.
Government Shutdown Averted, For Now
Late Saturday night, President Joe Biden signed a temporary funding bill that keeps the federal government running through November 17.
House Speaker Kevin McCarthy (R-Calif.) relied on Democrat votes Saturday to pass the measure, which does not contain additional funding for Ukraine, but does contain the full $16 billion in disaster relief that the administration had pushed for. The Senate late on Saturday passed the measure 88-9, sending it to the president’s desk, where Biden signed it before midnight.
Hard line Republicans in the House who had supported an initial spending bill that would have cut many federal programs by 30% vowed yesterday to try to oust McCarthy as speaker.
Patient & Family Advisory Council Reporting Transitions to Lehman Center
Under state law, all hospitals are required to maintain a Patient and Family Advisory Council (PFAC) and to share an annual report on the activities, recruitment, and engagement of it. This initiative has been important in bringing together patients, family members, and hospital staff to improve the care experience involving those who know it best — the patients. In the past, these reports have been submitted to Health Care For All for sharing with the broader community. As of this year, the Betsy Lehman Center for Patient Safety will collect and publish the reports via its website. Download the 2023 report template here.
MHQP Announces Measured Equity Initiative
MHQP (Massachusetts Health Quality Partners) has announced that in the coming years it will stratify data by race and ethnicity in its public reporting of statewide patient experience results. The new initiative, which MHQP is calling “Measured Equity,” will allow participants to identify the systemic issues driving disparities, compare performance across organizations, focus on best practices for organizational improvements, and track progress over time.
Last year, MHQP consulted with various stakeholders to add demographic questions to its long-standing patient experience survey to align with the state’s new health equity data standards that are included in the Medicaid waiver. The new questions were included in the 2023 survey. MHQP this year has been testing models of social risk-adjustment to ensure fair comparisons across organizations. This methodology will be deployed in its analyses beginning in 2024.
“In 2024, we will provide participating organizations private reports which will include comparison vs. de-identified peer groups, utilizing the agreed-upon risk adjustment methodology,” MHQP said. “This information will not be made public in 2024, so participating organizations will have exclusive access to survey results from the 2023 and 2024 cycle, which will enable them to compare how their organization performed versus peer organizations on measures related to racial and ethnic disparities before we begin to incorporate these metrics in our public reporting of 2025 results.”
Organizations wishing to participate going forward should contact MHQP’s Natalya Martins, at firstname.lastname@example.org.
Milford Regional and UMass Memorial Explore Merger
The 148-bed Milford Regional Medical Center has signed a non-binding letter of intent to explore a merger with UMass Memorial Health. Milford Regional and UMass Memorial Medical Center have been clinically affiliated since 1991. The Milford Regional Physician Group is also part of the potential merger.
In a media release, Milford Regional stated that it “has become increasingly challenging” to maintain its status as an independent community hospital, especially given “the lasting impacts of the pandemic and sustained financial losses.”
“Milford Regional is committed to a path forward that maintains the high quality and wide-reaching health care services that we provide our community,” said Milford Regional President and CEO Edward Kelly. “Our financial and strategic analysis shows that the best way to do so is to corporately affiliate with a like-minded organization that shares our commitment to community health.”