Learning health for Michigan: The path forward

In the United States, health care purchasers, consumers, and policymakers are demanding improvements in the quality and efficiency of medical care. A promising approach to meet this demand is the development of what is known as a learning health system (LHS). A learning health system has the capability to continuously study and improve itself. Among many types of benefits it can bring about, the learning health system makes it possible for providers to make faster and better decisions about which treatment options would produce the best outcomes for patients. Today, the Michigan-based stakeholder initiative, Learning Health for Michigan (LH4M), is proposing the use of a learning health system approach to address persistent health care problems in Michigan. Unwarranted and costly hospital readmissions—which are discussed in this paper—are one example of a problem that could benefit from a learning health system approach.

In 2013, the Center for Healthcare Research and Transformation (CHRT) convened a group of patients, clinicians, researchers, public health professionals, and payers to discuss ways to apply the idea of the learning health system at a state level: to turn Michigan into what might be called a “learning health state.” The initiative was named “Learning Health for Michigan,” or LH4M. Later convenings of the LH4M stakeholder group were organized by the Michigan Health Information Network (MiHIN) Shared Services and the Department of Learning Health Sciences at the University of Michigan Medical School.

Michigan has many resources that are key ingredients for a state-wide learning health system.

Read the full brief, Learning Health for Michigan: The Path Forward.


Publicly Reported Hospital Quality Rankings

Publicly-reported hospital rankings are released annually and are widely publicized by both the sponsors of the rankings and hospitals that are highly ranked as indicators of hospital quality or safety. Meant to be a useful way for consumers to assess hospital quality, these ranking systems produce inconsistent, contradictory, and confusing results, as some hospitals are highly ranked in some systems but not in others.

The use of a unique set of criteria by each ranking system contributes to these inconsistent results. For example, a 2015 Health Affairs study compared hospital rankings from four prominent ranking systems and found that no hospital was ranked as a “top performer” by all four systems and only 10 percent were ranked highly by more than one ranking system, suggesting a lack of agreement regarding what constitutes high-quality hospital performance.

Federal ranking systems are no exception. For example, the Centers for Medicare & Medicaid Services (CMS) star ranking system was recently criticized for purportedly giving a disproportionate amount of low rankings to teaching hospitals and hospitals that serve low-income populations.

Moreover, there is some evidence that consumers do not utilize hospital rankings to make healthcare decisions, calling into question the value of these rankings from a consumer perspective.

This brief builds on previous findings by examining hospital rankings in Michigan and nationwide from nine well-known hospital ranking systems. This brief also examines the measures and methods used to assess hospital quality, and the extent to which hospital rankings address consumer needs regarding hospital choice. It includes summarized information from a 2014 systematic review of hospital quality rankings, an analysis of 2015 Michigan hospital rankings, and results from three consumer focus groups that were convened in 2016 to understand how consumers interpret and understand these rankings (see Methodology for more information regarding the analyses and focus groups).

Key Findings

  • In 2012, more than one-third (37 percent) of U.S. hospitals were highly ranked(1)Hospitals were counted as “highly ranked” according to the methodology used by each individual ranking system. Because Leapfrog Safety Grade assigns a grade (“A” through “F”) to all hospitals, we counted hospitals that received an “A” as “highly ranked.” on one of nine hospital ranking systems;
  • In 2015, over half of Michigan acute care hospitals (52.7 percent) received a high rank on at least one of nine hospital ranking systems but less than one-fourth (22.5 percent) received a high rank on at least two ranking systems;
  • Each ranking system’s unique approach to evaluating hospital performance, including different goals, measures, and data sources, contributes to inconsistent results; and
  • Consumers report that they are not using rankings to choose a hospital because the rankings do not always include information that consumers are interested in and are not presented in a consumer-friendly manner.

Editor’s Note: This brief was based on a CHRT-funded unpublished manuscript by Kim, BoRin; Hu, Hsou-Mei; Bahl, Vinita: An Analysis of Publicly Reported Hospital Rankings of Hospital Quality.

References   [ + ]

1. Hospitals were counted as “highly ranked” according to the methodology used by each individual ranking system. Because Leapfrog Safety Grade assigns a grade (“A” through “F”) to all hospitals, we counted hospitals that received an “A” as “highly ranked.”

Hospital Uncompensated Care, 2014

2014 marked the launch of the health insurance marketplaces and Medicaid expansion under the Affordable Care Act (ACA). These programs expanded health insurance coverage to many previously uninsured residents, resulting in sharp decreases in the uninsured rate both nationwide and in Michigan. Expanded access to health insurance can benefit health care providers, such as hospitals, financially through reducing their uncompensated care burden.

Hospitals have traditionally provided care for free and/or at reduced prices to indigent and uninsured patients as part of their own social mission and to meet regulatory requirements. For example, non-profit hospitals are required to participate in community benefit activities, such as providing charity care, in order to maintain their tax-exempt status, a financial benefit for hospitals. Tax exempt status for hospitals nationwide was valued at over $24 billion in 2011.

Charity care is delivered without the expectation of receiving payment, and bad debt occurs when a hospital bills for but is unable to collect the entire amount due from a patient. In order to see if hospitals have benefited from the ACA coverage expansion, particularly the optional Medicaid expansion, CHRT examined uncompensated care trends and other indicators for hospitals in Michigan and other states.

Key Findings:

  • Uncompensated care costs for Michigan hospitals decreased by almost 23 percent from 2013 to 2014, with most of the decrease occurring for charity care.
  • Hospitals in Medicaid expansion states experienced much sharper decreases in uncompensated care costs from 2013 to 2014 (27 percent) compared to those in non-expansion states (3 percent).
  • In Michigan, uncompensated care’s share of operating expenses fell in 2014, and operating margins also improved from 2013 levels. However, operating margins varied by location.
  • The number of Medicaid inpatient days and outpatient visits at Michigan hospitals increased by almost 8 percent in 2014, while other patient volume fell by almost 3 percent. Overall, patient volume was relatively stable from 2013 to 2014.

Acute care readmission reduction initiatives: An update on major programs in Michigan

Inpatient hospitalizations account for 32 percent of the total $2.9 trillion spent on health care in the United States. In the majority of cases, it is necessary and appropriate to admit a patient to the hospital. However, patients returning to the hospital soon (e.g., within 30 days) after their previous stay account for a substantial percentage of admissions.

Research has shown that many factors—including a patient’s socioeconomic status, clinical conditions, and their communities’ characteristics—can influence hospital readmissions. In 2013, CHRT published an issue brief on the major programs aimed at reducing hospital readmissions, including the Hospital Readmissions Reduction Program (HRRP) established under the Affordable Care Act (ACA). This paper is an update on the HRRP and other programs previously highlighted. Read more.

Related content:

Learning health for Michigan: The path forward

A tale of three cities: Hospital and health system costs in the Midwest

A tale of three cities: Hospital and health system costs in the Midwest

There is tremendous variation in health care spending by geographic region in the United States. To better understand this variation, CHRT analyzed health care markets, state-level regulation, and hospital cost variation in three Midwestern states, focusing on the largest city in each state: Detroit, Michigan; Indianapolis, Indiana; and Milwaukee, Wisconsin. These states were chosen for their diverse health care policies and market conditions. This brief describes trends in state-level health spending and factors that may contribute to the differences in spending among the three states.

Key Findings

  • From 2001 to 2009, Michigan had the lowest overall health care spending per capita among the three states in this analysis, while Wisconsin had the highest. Michigan also had the lowest average annual growth in spending per capita from 1991 to 2009, and Wisconsin had the highest. Many complex factors contributed to these differences, and likely included market conditions and regulations that varied by state.
  • In fiscal year 2013, Michigan had the lowest and Wisconsin had the highest per capita hospital spending among the three states in this analysis.
  • Market conditions and policies affecting the size of hospitals’ profit margins varied by state. See our report for details for Indiana, Michigan, and Wisconsin.
  • In fiscal year 2013, health system operating and total profit margins varied greatly in the three cities in this analysis. See our report for details for Detroit, Indianapolis, and Milwaukee.

Read Full Brief Here

Suggested citation: Dreyer, Theresa; Koss, Joseph; and Udow-Phillips, Marianne. A Tale of Three Cities: Hospital and Health System Costs in the Midwest. April 2015. Center for Healthcare Research & Transformation. Ann Arbor, MI.

Special thanks to Dean G. Smith, PhD, for guidance on the financial analysis.

Medicaid and Medicare disproportionate share hospital programs

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stethoscope moneyCongress created the Disproportionate Share Hospital (DSH) program in the early 1980s to help hospitals offset the costs of providing care to low-income individuals. Medicaid and Medicare each have a distinct DSH program, with a unique structure and financing mechanism.

In addition to giving a brief overview of the Medicaid and Medicare DSH programs, this document will:

  • Discuss the role of the state and federal governments in running the Medicaid DSH program;
  • Explain how the Michigan Medicaid DSH program is financed and structured; and
  • Examine the changes to the Medicaid and Medicare DSH programs under the Patient Protection and Affordable Care Act (ACA).

Read the Full Brief Here

Suggested Citation: Hatch-Vallier, Leah; Udow-Phillips, Marianne. Medicaid and Medicare Disproportionate Share Hospital Programs. January 2014. Center for Healthcare Research & Transformation. Ann Arbor, MI.

Special thanks to Ellen Rabinowitz and Eileen Ellis.

Acute care readmission reduction initiatives: Major program highlights

Beginning October 1, 2012, the Centers for Medicare and Medicaid Services (CMS) began reducing hospitals’ Medicare payments based on 30-day hospital readmission rates. The reductions are based on hospitals’ 30-day risk-adjusted readmission rates relative to national averages. Penalties are imposed for each hospital’s percentage of potentially preventable Medicare readmissions for those conditions.

Under the Patient Protection and Affordable Care Act (ACA), acute care hospitals with high readmission rates for acute myocardial infarction (AMI), heart failure (HF), and pneumonia may lose up to 1 percent of their Medicare payments for fiscal year (FY) 2013, up to 2 percent for FY 2014, and up to 3 percent for FY 2015.

In FY 2015, four additional conditions will be included under the Readmission Reductions Program: Chronic obstructive pulmonary disease (COPD), coronary artery bypass graft (CABG), percutaneous transluminal coronary angioplasty (PTCA) and “other vascular” surgical procedures.

Two-thirds of all applicable hospitals (2,213) nationally, including approximately one-third of Michigan hospitals (55), were penalized in FY 2013 as a result of this provision. Total penalties were approximately $280 million nationally and $14 million in Michigan.

Read the Full Brief Here