Says PHC4 in a press release issued today:

Ambulatory surgery centers (ASCs) in Pennsylvania remained financially healthy overall in fiscal year 2010 (FY10), according to a new report from the Pennsylvania Health Care Cost Containment Council (PHC4). The statewide average operating and total margins for ASCs were 26.20% and 26.29%, respectively. The margins remained in the 26.00% to 26.30% range over the last three-year period (FY08 to FY10).

The ASCs’ average total margins among the nine regions in Pennsylvania ranged from a low of 17.66% to a high of 35.04%.

“In general, ambulatory surgery centers in Pennsylvania are thriving,” said Joe Martin, Executive Director of PHC4. “After a decade of considerable growth, the number of ASCs increased only marginally between FY09 and FY10.”

Eight new facilities opened and four closed, for a net growth of only four facilities in FY10. In the period from FY01 to FY09, the number of ASCs increased from 98 to 262, an average increase of 18 facilities per year.

In response, the Hospital & Healthsystem Association of PA released a statement saying that the data in the report continues to raise questions about the ability of the uninsured and people on Medicare and Medicaid to gain and maintain their access to health care.

Writes HAP in a press release:

According to PHC4, there are now 266 ambulatory surgery centers (ASC) in the state, up from 72 ten years ago, far exceeding the number of general acute care hospitals (165). ASC total profit margins have exceeded 26 percent in each of the past three years. This is in part due to the fact that Medicaid accounted for only 4.5 percent of ASC revenue in 2010, compared to 11.8 percent of general acute care outpatient revenue.

“As the congressional deficit-reduction ’super committee’ gets to work this fall, it is imperative that members of the panel—and by extension all members of Congress—understand the pivotal role that acute care hospitals play in providing a health care safety net for our most vulnerable citizens,” said HAP President and CEO Carolyn F. Scanlan. “With ASCs treating healthier, and usually better insured, patients, the financial and clinical demands on acute care hospitals, which are a safety net for all Pennsylvanians, continue to grow.”

“Under the original Affordable Care Act health reform law, hospitals nationwide already have accepted shared sacrifice amounting to $155 billion in payment reductions—$9 billion in Pennsylvania alone,” Scanlan said. “In addition, Pennsylvania’s fiscal year 2011-2012 state budget cut Medicaid payments to hospitals by 4 percent.”

Scanlan noted that these cuts do not include additional cuts imposed by regulations, and she said that the Medicare and Medicaid programs already underpay hospitals, paying less than the cost of care.

“The bottom line for our patients is access,” Scanlan said. “We continue to support maximizing insurance coverage for all Americans, but it cannot be done by reductions to providers, without whom nobody — insured or not — will be able to get care.”

Be it cereal or cars, buyers usually have an idea of how good the products are and how much they cost before they buy them.

That’s not how U.S. health care works. Patients rarely know which hospitals offer top-quality lung or aortic surgery, and which are more likely to harm them. Hospitals don’t compete on price and rarely publish measurements of their quality, if they measure it at all.

Except in Pennsylvania. For two decades, a state agency has published “medical outcomes” — death and complication rates — from more than 50 types of treatments and surgery at hospitals. The state has found that publishing results can prompt hospitals to improve, and that good medical treatment is often less expensive than bad care.

One reason is that high-quality treatment usually results in shorter hospital stays and fewer readmissions. The state has had less success in publishing hospital prices and has drawn criticism from hospitals that disagree with its reporting methods. But companies or unions in Pennsylvania that have agreed to work only with the best-performing hospitals say they have been able to drive down medical costs.

“High-quality care costs less — always,” says David B. Nash, a medical-quality expert and dean at Thomas Jefferson University’s School of Population Health in Philadelphia. “If the federal government could behave like a savvy shopper, that would change the health-cost game overnight. But the government is a bill payer, not a savvy shopper.”

The Senate Finance Committee could vote late this week on its sweeping health bill, seen as the backbone for any final legislation. That bill would make available $75 million annually for the U.S. Department of Health and Human Services to develop methods of improving quality, including potentially publishing outcomes.

Although at times premium care can be exorbitant, there’s evidence some in Pennsylvania saved money using top-rated hospitals. Hershey Co. offered workers medical coverage based on the state agency’s reported outcomes, and cut the company’s expenses by 50% over several years. The Philadelphia police union’s benefits-management company says it uses the state reports to steer officers to the best hospitals; as a result, it say its costs fall about 17% below those of comparable plans.

…

The theory underlying the Pennsylvania program is that, to create a truly competitive health-care market, consumers need hard information showing which hospitals perform better.

For example, Pennsylvania three years ago published its first report on hospitals’ infection rates that arise largely from intravenous catheters and tubes left in too long. Infection numbers the following year fell 7.8%, as hospitals responded with steps designed to lower infections.

The average payment in 2006 for hospitalization where a patient acquired an infection was $53,915; with no infection, the average payment was $8,311, according to state reports.

By simply getting rid of preventable infections, Pennsylvania estimates its hospitals could lower expenses by nearly $1 billion.

Read the rest of the WSJ’s article.

As controversies over the cost and effectiveness of health care have raged over the course of the decade, Pennsylvania hospitals gradually have improved their performance in several areas – especially in reducing patient mortality.

The Pennsylvania Health Care Cost Containment Council’s annual report on hospitals has found that the death rate, for 20 conditions it has tracked since 2002, fell from 5.1 percent in 2002 to 4.2 percent in 2008. That’s a decrease of more than 17.5 percent.

Most impressive was the decline in mortality rates for hemorrhagic stroke victims, which fell from 33.7 percent in 2002 to 26.2 percent in 2008, a decrease of more than 22.5 percent.

But the report also found that, as an industry, Pennsylvania hospitals have yet to get a handle on a key driver of the rapid escalation in health care costs – readmissions due to preventable hospital-acquired infections.

According to the PHC4, 57,582 patients were readmitted to hospitals in 2008, creating an additional $2.5 billion in costs and 350,000 billable hospital days.

Many of those readmissions are due to the regular course of care, such as for chemotherapy or a series of surgeries resulting from a single trauma. And some result from the declining mortality rates, as patients who might otherwise have died seek follow-up care.

But 38.2 percent of all readmissions were for treatment of hospital-acquired infections, the PHC4 reported. Those 22,094 readmissions created $1.1 billion in charges and 157,000 additional hospital days.

Reducing the number of infections that require readmission is one key to health care reform that has nothing to do with politics or government policy because doing so reduces overall costs.

Medicare has begun pilot programs to deny payments for treatment of some hospital-acquired infections, and some private insurers are considering doing so.

In Pennsylvania the rate of readmissions due to hospital-acquired infections has hovered around 19 percent. The PHC4 reporting process, the first in the nation, has helped to produce public pressure for vastly reduced infection rates. That rates have not grown indicates some progress, but state and federal regulators and hospitals themselves must increase the effort to reduce hospital-acquired infections, thus improving patient safety and slowing the rise of health care costs.

Meanwhile the Pennsylvania Health Care Cost Containment Council has to be happy they won’t be used as a political football this year, as Sen. Vance’s legislation to reauthorize the watchdog Council also become law.  And, Rep. DeLuca’s bill to deny payment for preventable serious adverse events (meant to crack down on healthcare-acquired infections) was also approved by Rendell, becoming Act 1.

Lastly, a bill which would require hospitals to obtain a certificate of need when purchasing expensive equipment or building new facilieis is set for a House Insurance hearing on June 24 in room 205 of the Ryan Office Building.

The state House passed legislation today that is one of the key components of Health PAct, the House Democrats’ package of bills aimed at improving access to quality, affordable health care in Pennsylvania. Senate Bill 89 would extend the Pennsylvania Health Care Cost Containment Council, commonly referred to as PHC4, for another five years.

The Senate proposal is a companion bill to legislation introduced by House Majority Leader Todd A. Eachus, D-Luzerne. The bill would reauthorize PHC4, an independent state agency that has been successful in addressing the quality and costs of health care in Pennsylvania, until June 30, 2014.

For more than a year, Gov. Ed Rendell has issued executive orders extending the council. Eachus said passage of legislation to reauthorize the agency is long overdue.

…

Eachus said PHC4’s strategy is to contain costs through stimulating competition in the health-care market. It gives comparative information about the most efficient and effective health-care providers to individual consumers and group purchasers of health services, as well as provides information to health-care providers to identify opportunities to contain costs and improve the quality of care they deliver.

Check out the rest of the release for more information.

On the Senate side, SB 189, which allows children from ages 18-29 to stay on their parents health insurance policy under certain circumstances, moved out of the House Insurance Committee and onto the House Appropriations Committee.

Also, SB 89, which reauthorizes the Pennsylvania Health Care Containment Council, moved from the House Health and Human Services Committee, recieved first consideration on the floor and is now in the House Appropriations Committee as well.

Rep. DeLuca’s bill (HB 84) that would deny payment to facilities for preventable errors recieved first and second consideration in the Senate and has moved to Senate Appropriations.

HB 1089, mini-COBRA legislation, was reported from the Senate Banking and Insurance Committee, recieved first and second consideration on the floor and is also now in Senate Appropriations.

Spring cleaning is a good time to clear out items that have been collecting dust around the house, a situation that also is true at the people’s house, the state Capitol in Harrisburg.

Four pieces of health-care legislation that contain nearly identical language have passed in the House and in the Senate, but legislators should reconcile any differences and enact them now before the bills get tangled up in the wheeling and dealing of budget negotiations in June.

That’s what happened last year to the Pennsylvania Health Care Cost Containment Council, known as PHC4, the neutral, nonpartisan advocate for holding down the cost of medical treatment. This state agency needs to be reauthorized by the Legislature periodically or it goes out of business. That nearly happened last year because its future was tied to proposals for expanding health insurance coverage and helping doctors pay for malpractice insurance.

Gov. Ed Rendell kept the council alive by executive order, but a stronger lifeline is warranted. The agency issues quarterly reports on hospital performance on 50 common procedures, annual reports on heart surgery success and rates of hospital-acquired infection and other studies. Last August, the American Journal of Medical Quality estimated that its public reporting process prevented 1,500 deaths in one year. Both House Bill 173 and Senate Bill 89 would keep PHC4 going until 2014, eliminating any annual uncertainty for this healthy body.

The other three legislative proposals that also need attention are:

• Expansion of COBRA coverage so Pennsylvanians who work for businesses with fewer than 20 employees but lose their jobs will be able to continue to purchase group health benefits through their former companies. The departing employees would have to pay for the coverage, but temporary assistance is available for qualified individuals because of federal stimulus funds. Without a change in state law, eligible state residents will miss out on that federal aid. Senate Bill 442 passed that chamber, and House Bill 1089 was amended last week.

• Extension of parents’ health insurance plans so their children can be covered up to age 30. SB 189 and HB 838 would allow parents to continue to pay for coverage for their adult dependent children under their own group plans. Seventeen other states already have extended the age limit.

• Exclusion of reimbursements to hospitals when patients experience so-called “never events,” errors that are serious, preventable and should never happen such as operating on the wrong patient or performing the wrong procedure. The state Department of Public Welfare has prohibited hospitals from billing Medicaid in such instances since January 2008. SB 443 and HB 84 would mean other health insurers would not have to reimburse hospitals under these circumstances.

Each of these measures already has received overwhelming and bipartisan support from legislators. It shouldn’t take long for the House and Senate to work together and turn the bills into law.

The Pennsylvania Senate [yesterday] passed legislation authored by Sens. Pat Vance (R-Cumberland/York) and Wayne D. Fontana (D-Allegheny) reauthorizing the Pennsylvania Health Care Cost Containment Council (PHC4). 

Under Senate Bill 89, PHC4 would be reauthorized until 2014.  The council collects data from hospitals, freestanding ambulatory surgery centers and some managed care plans, and provides it to consumers in a comparative format so they may make educated decisions on the purchase of their health care.  PHC4 has required legislation to extend its existence periodically since its founding in 1986.  The authorizing statute expired most recently on June 30, 2008, and the council was temporarily extended by executive order until June 30, 2009.   

The bill now goes to the House for consideration. 

“Enactment of this legislation will end the uncertainty regarding the current status of PHC4,” Vance said.  “In these economic times it is vital to have information that allows us to use our health care dollars more effectively.  The council offers a valuable service to consumers and health care providers by supplying them with information concerning quality of care and charges for procedures.”

Comments Morning Call reporter John Micek on his blog, Capitol Ideas:

“A State House Committee narrowly voted yesterday to reauthorize the Pennsylvania Health Care Cost Containment Council. As regular readers know, this is the traditional first step toward lawmakers and the administration once again batting the agency around like a pinata during negotiations over Gov. Ed’s health care plan.” [The House bill is HB 173.]

The Senate’s bill is SB 89.

The Senate failed to reauthorize the Council this fall, after they couldn’t come to agreement with the governor on a health insurance plan or MCARE abatement.

Sens. Pat Vance and Wayne Fontana have announced their intent to introduce legislation in the new session to extend the Council for a longer period of time. 

“Rising health care costs continue to hurt employers and employees alike – and is why the formal reauthorization of PHC4 has to be a priority,” said Fontana. “The work of PHC4 guarantees that health care purchasers and consumers have reliable and transparent information about the value of their health care. With that information, competition is increased, money and lives are saved, and consumer-directed health care continues to advance.”