The Supreme Court of Wisconsin has accepted for review Ferdon v. Wisconsin Patient Compensation Fund, a case in which the plaintiff is challenging the constitutionality of Wisconsin’s statutory cap on noneconomic damages in medical malpractice actions. The Wisconsin Hospital Association will request permission from the Supreme Court to file an amicus brief in the case in support of the constitutionality of the caps.

The plaintiff is arguing that the caps impermissibly violate the plaintiff’s state constitutional right to a jury trial, a certain remedy for wrongs committed on him, and equal protection and due process of law. The plaintiff further argues that the caps usurp the trial court’s exclusive remittitur role, violating the separation of powers doctrine. In addition, the plaintiff argues that the statutory requirement that the payment of future medical expenses awarded in excess of $100,000 be made to a special fund constitutes a wrongful taking.

If the Supreme Court agrees with the plaintiff, the comprehensive medical liability system carefully crafted by the legislature would be, at best, in jeopardy.

The Court of Appeals in its summary decision held that these arguments had been considered and rejected in Guzman v. St. Francis Hospital in 2001. Nonetheless, the plaintiff noted in its petition to the Supreme Court that the court originally heard Guzman directly from the trial court, but remanded that case to the Court of Appeals after the Supreme Court was equally divided (3-3) on whether to affirm or reverse the trial court’s finding that the cap was unconstitutional. It is important to note, however, that the Supreme Court less than six months ago in Maurin v. Hall cited Guzman with approval in upholding the noneconomic damage caps in wrongful death actions arising from medical malpractice (see July 2, 2004 Valued Voice).

Watch The Valued Voice for more information as this important case develops.

At the AHA Board of Trustee meeting in November, Rick Pollack, Executive Vice President for Advocacy & Public Policy, discussed the implications of the recent elections for hospital priorities and the outlook for 2005. There is a major concern that Medicare could be in the budget crosshairs, with a possibility that we could be heading back to the days of the 1997 Balanced Budget Act (BBA). As a field, we need to create a unified voice if we are to protect ourselves from what could be Draconian cuts in the Medicare budget beginning next year. There are also some serious implications for Wisconsin if the Bush Administration decides to move to administer Medicaid as a block grant program.

The AHA Board has focused on three major issues that could reshape the future of health care in this country. Describe these issues for the readers of Valued Voice.

One issue involves examining the effectiveness of the current physician-hospital staff relationship. How effective is the current model that has created the concept of an organized medical staff? The AHA Board is examining whether a more efficient model is needed in the future given the pressures we are experiencing around improving quality, providing more cost effective care, and holding ourselves more accountable to our communities through public reporting and other efforts that fall into the realm of increasing transparency.

The second issue relates to fragmentation of our community-based health system as a result of the development of "limited service" hospitals. That was the charge to the Task Force on Delivery System Fragmentation, which I chair. The Task Force was formed to develop and address two issues:

1. Assess the impact that these limited service hospitals (LSH) have on the broader hospital community and to pick up where the first AHA task force left off. The first Task Force was created to look at this issue, and they developed the moratorium that Congress passed last year.
   
2. The second part of the Task Force charge is to evaluate models for providing physicians with an opportunity to partner or invest in full service hospitals. Much of the impetus for developing the LSH was economically driven, and we are looking for ways to create a level playing field where physicians and hospitals can form mutually beneficial partnerships.

Two key issues have come into sharper focus since the first Task Force convened in 2002. These are:

1. Should existing provider arrangements that might be prohibited by a change in the law be Grandfathered in, and, if so, under what conditions? Where providers have set up these hospitals, many of them may be our own members. Are there conditions in which these LSHs could continue indefinitely and under what conditions would that be allowable?
   
2. The second issue is the scope of services to which the current federal ban on physician self-referral should be extended. That leads to the other issue of whether other investment relationships, like ambulatory surgery centers and imaging centers, should be included in the current federal ban on physician self-referral.

Another issue that came before the AHA Board relates to addressing the issue of how to develop affordable options that will provide everyone with coverage to meet basic health care needs—a unified health policy.

This has been actively discussed at the AHA Board level and at the various Regional Policy Board (RPB) meetings. During the summer, several options were developed for extending coverage, which were sent to the RPBs for review and debate, and to determine if any consensus emerged among the Boards on a preferred model.

One option is to extend coverage through an employer-based model. Another is to create a single-payer system that could be either governmental or non-governmental in orientation and structure, or it could be done by creating a personal responsibility option, similar in concept to a Health Savings Account.

At the last AHA Board meeting, it was interesting to find that when the RPB reports came back, eight of the nine regional boards reported similar approaches on how to provide coverage for all. That preferred model revolved around kind of a hybrid in which there is some basic and catastrophic coverage options provided through a broader single payer system that could be administered in much the same way as the current Medicare program. So there would be a basic floor consisting of a current set of services, and some services that individuals would have to cover that would be paid for through personal Health Savings Accounts (HSAs), and a threshold level where catastrophic coverage would come into play. There was a consensus coming back from the RPBs for the hybrid concept, but it requires more definition on how this would work and how funds would flow.

The AHA Board has been discussing how community benefits could be communicated to the public.

Unrelated to the other topics, the AHA Board has spent a lot of time examining and discussing the public benefit issue. The staff at AHA has been asked to study this issue in depth to understand and examine its linkage to our tax-exempt status. That is part of what led the WHA Board to ask that this issue be placed on our February agenda, and to look at what other states have done in this area to come up with more uniformity in public benefit reporting.

The Centers for Medicare & Medicaid Services (CMS) published in the Nov. 15 Federal Register the final rule for the Medicare hospital outpatient prospective payment system (OPPS) for calendar year 2005. The final rule includes statutory changes that resulted from the Medicare Modernization Act (MMA) as well as policy changes, such as revisions to the Ambulatory Payment Classification (APC) weights and rates; payment amounts for drugs, devices and biologicals; and payment policy for outliers. The rule takes effect Jan. 1, 2005.

Key Provisions of the Final Rule

• Provides a full 3.3 percent market basket update in payment rates for hospital outpatient services. The rule also implements a 0.9986 wage index budget neutrality adjustment factor and a 1.2 percent increase in the conversion factor because of a reduction in new technology pass-through spending. The resulting impact of these adjustments is a conversion factor of $56.983 in 2005 – up from $54.561 in 2004. However, aggregate Medicare outpatient payments are still significantly less than costs.
  
• Establishes a new outlier fixed-dollar threshold and changes the existing APC multiplier threshold that will have to be met in order for a service to receive outlier payments. In order to qualify for an outlier payment in 2005, the cost of a service would have to be more than 1.75 times the APC payment rate (current threshold is 2.6 times the APC rate), and the cost of the service would have to be at least $1,175 more than the APC rate. The target for total outlier payments will remain at 2 percent of total outpatient spending in 2005.
  
• CMS anticipates it will spend only a fraction of the funding available by law for pass-through payments for new technology, new drugs and devices (0.10 percent of the total outpatient payments, rather than the 2 percent of total OPPS payments available). As urged by the AHA, CMS has reallocated the remaining dollars to fund all other outpatient services. Given the low estimate of spending, the rule does not include a pro-rata reduction in pass-through payments for new technology, drugs and devices.
  
• Requires hospitals to include device category codes (C codes) on claims when devices are used in conjunction with certain procedures billed under OPPS. However, consistent with AHA recommendations, CMS will provide a 90-day grace period for this C-coding requirement (until April 1, 2005) and will consider ways to simplify C codes for devices and facilitate correct coding.
  
• Institutes payment limits for certain outpatient drugs, as required by the MMA, including limiting payments for: "sole-source drugs" to between 83 percent and 95 percent of the average wholesale price (AWP); innovator multiple-source drugs to no more than 68 percent of AWP; and non-innovator multiple source drugs to no more than 46 percent of AWP. Also, before they are assigned a specific code, new FDA-approved drugs will be paid at 95 percent AWP but must be manually processed by Medicare fiscal intermediaries.

The WHA Board last week approved a white paper that creates a WHA (CheckPoint) and Wisconsin Collaborative for Healthcare Quality (WCHQ) Leadership Council. The new council is charged with identifying and coordinating specific initiatives that promote the common objectives of the two organizations and minimize public confusion regarding multiple statewide initiatives.

It’s important to recognize that both WHA and WCHQ embrace the notion that improving health care quality, safety and service are common goals that transcend marketplace competition. Both initiatives are founded on the belief that public reporting will result in systemwide improvements of the state’s health care delivery system.

Here are the activities that have been identified as achievable goals for coordinated activity in 2005 and beyond:

1. A common Web site (portal) will be developed to coordinate public reporting.
2. Public education to promote awareness and use of health care quality performance measures will be a joint activity.
3. Provider education that drives performance improvement statewide will be jointly developed and coordinated.
4. Collaborative development of future measure sets will be a shared responsibility.

Guided by the "Aims for Improvement" identified within the Institute of Medicine’s Crossing the Quality Chasm: A New Health System for the 21^st Century, each organization has created public reporting initiatives that are improving clinical performance and enhancing public understanding of evidence-based quality, safety and service measures. Less than one year ago, WHA and WCHQ leaders agreed to develop a "complementary and coordinated working relationship that sets priorities for the collection and dissemination of health care quality performance information in a way that is meaningful for the consumers and purchasers of health care and useful and efficient for providers generating data." This new white paper moves us from the identification of shared principles to the embrace of specific initiatives that will advance our common missions.

Wisconsin is a national leader in the emergence of private sector initiatives that provide relevant quality performance data in an increasingly consumer-driven health care environment. This latest white paper helps maintain that national leadership.

WHA appointees to the new WHA/WCHQ Leadership Council will include Chuck Shabino, MD, Chief Medical Officer, Aspirus, Wausau; Terri Potter, President/CEO, Meriter Hospital, Madison; Loren Meyer, MD, V.P. Quality & Medical Education, All Saints Healthcare, Racine; Kay Wipperfurth, V.P. Patient Services, Fort Healthcare, Fort Atkinson; Patricia Schroeder, Senior V.P. Clinical Performance/CNO, Covenant Healthcare, Milwaukee; Ned Wolf, President, Lakeview Medical Center, Rice Lake; and WHA President Steve Brenton.

Steve Brenton, President

P.S. - This week’s Valued Voice mailing includes our 2004 RESULTS publication (our annual report). We had a productive year thanks to all of you. And our 2005 agenda is already significant and likely to grow as the Wisconsin Legislature and Congress reconvene in January. A note of special thanks to Chuck Shabino for his terrific leadership this year and to our fine and dedicated staff!

The new 100,000 Lives Campaign recently announced by the Institute for Healthcare Improvement (IHI) maintains that if hospitals implement a few proven patient safety interventions, 100,000 deaths can be avoided over the next 18 months, and every year thereafter.

This campaign aims to enlist thousands of hospitals across the country in a commitment to implement changes in care that have been proven to prevent avoidable deaths. They are starting with these six changes:

1. Deploy Rapid Response Teams…at the first sign of patient decline
2. Deliver Reliable, Evidence-Based Care for Acute Myocardial Infarction…to prevent deaths from heart attack
3. Prevent Adverse Drug Events (ADEs)…by implementing medication reconciliation
4. Prevent Central Line Infections…by implementing a series of interdependent, scientifically grounded steps called the "Central Line Bundle"
5. Prevent Surgical Site Infections…by reliably delivering the correct perioperative antibiotics at the proper time
6. Prevent Ventilator-Associated Pneumonia…by implementing a series of interdependent, scientifically grounded steps called the "Ventilator Bundle"

Whether a hospital chooses to apply all, or some, of the recommended interventions, their results will be routinely tracked and measured and will serve as a regular barometer for the campaign’s progress. There’s no cost to joining the 100,000 Lives Campaign, but the organization must be ready to make some changes and willing to report back on progress.

According to Dana Richardson, WHA vice president of quality, "As with Leapfrog, WHA will review all the measures in IHI and assess their applicability to Wisconsin hospitals and determine if they are relevant for the CheckPoint Web site."

The United States Pharmacopeia (USP) recently released the results of their five year analysis of trends and patterns of medication errors. The report is based on information collected between 1999-2003 through the MEDMARX medication error reporting program. This program is used by more than 775 hospitals and health systems as part of their quality improvement activities. Key findings of the report include:

• In 2003, more than 98 percent of reported medication errors did not result in patient harm.
• The percentage of reported medication errors that were intercepted before reaching the patient increased from 23 percent (1999) to 38 percent (2003).
• The number of patients harmed by a reported medication error decreased by nearly half from its peak of 3 percent (2000) to 1.5 percent (2003).
• Insulin products were most often cited in errors overall and errors that resulted in harm.

In evaluating the use of technology to support medication delivery, the analysis indicates that the use of computerized prescriber order entry (CPOE) systems and automated dispensing devises has increased steadily, as has the number of errors reported with the use of these systems. This information indicates that despite the perception that technology is the solution to improve patient safety, the health care delivery system is now seeing that the design of the computer system and user competence are key factors that are creating new points for potential errors. The advantage of this technology may be in reducing harmful errors, since errors leading to patient harm occurred in only 0.1 percent of errors when CPOE systems where used as compared to 1.5 percent of all errors.

Patients enrolled in the Department of Veterans Affairs health system were more likely than similar patients in the general population to receive preventive and chronic care recommended by established national guidelines, according to a study in the December 21 Annals of Internal Medicine. The researchers used quality indicators from Rand Corp. to evaluate inpatient and outpatient care for 26 conditions. The 348 indicators included measures such as aspirin for patients presenting with acute myocardial infarction, diet and exercise counseling for diabetes, and screening for colorectal cancer. Overall, VA patients received 67 percent of the recommended care compared with 51 percent in the national sample; 72 percent of the indicated chronic care compared with 59 percent in the national sample; and 64 percent of the indicated preventive care compared with 44 percent in the national sample. The quality of care for acute conditions was similar across both study populations. The differences between the VA and national sample were greatest in processes subject to the VA health system’s performance measurement system.

According to Nathan Geraths, director of the William S. Middleton Memorial Veterans Hospital in Madison, the computerized patient record system (CPRS) contributed significantly to the VA’s high marks in patient care, safety and access. CPRS allows clinicians immediate access to patients’ records from practically any location: inpatient units, clinics, exam rooms, nursing stations, operating rooms, offices—even from the physician’s home.

"In addition to improved access, the system has raised the quality and safety of patient care by electronically notifying clinicians about clinically significant events, such as abnormal X-rays or critical lab values," Geraths said. "The system incorporates clinical reminders to notify providers when patients need preventive care such as immunizations, exams or follow-up based on clinical diagnosis. VA continues to lead the nation in its use of information technology to provide veterans the right care, at the right time, at the right place."

"Wisconsin is fortunate to have two of the three VA hospitals participating in CheckPoint," said Dana Richardson, WHA vice president of quality. "Their participation in CheckPoint demonstrates their commitment to publicly report in Wisconsin, while supporting and participating in the national effort."

Creating a safe environment for patients and health care workers was a focus of discussion at the Select Committee on Health Care Workforce meeting on December 13. Presented by the Recruitment and Retention Subcommittee, they felt that in order to keep older workers healthy and in the workforce, new ways of lifting and turning patients must be used to reduce the physical demands of the job and reduce the potential of injury. ARJO, a vendor of lifting equipment, told the group about the equipment that is available to assist in safe lifting practices.

Nicole Einbeck of the Monroe Clinic reported on the hospital’s lift reduction program and the resulting reduction in worker’s compensation claims. The Select Committee and WHA will sponsor a Safe Patient Lifting Conference on March 18 at the Chula Vista Resort in Wisconsin Dells. Details are forthcoming.

The Wisconsin Technical College System reported on their progress with projects related to the health care workforce. Enrollment in health care programs has grown by 138 percent and graduations by 125 percent since 1999 and 11 new programs have been implemented. The colleges now offer seven programs that can be completed via distance education and 25 that can be completed during weekends and evenings. WTCS is making progress in aligning their curriculum statewide and they are evaluating the admission processes.

Department of Workforce Development Secretary Roberta Gassman offered staff support to a small and focused number of projects most likely to impact the health care workforce and agreed, at the Committee’s request, to provide leadership to the group.

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