Category: health care

Whatever happened to grade inflation?

From the LA Times today:

UCLA Medical Center gets failing grade on patient safety: Leapfrog, a healthcare quality rating group, gives an F to UCLA Medical Center for performing poorly on several measures. UCLA officials dispute the failing grade.

A national report card on patient safety gave a failing grade to Ronald Reagan UCLA Medical Center, one of the country’s most prestigious hospitals and one of only 25 nationwide to receive such low marks. In a report issued Wednesday, the Leapfrog Group, an employer-backed nonprofit group focused on healthcare quality, gave a letter grade of F to UCLA Medical Center for performing poorly on several measures tied to preventing medical errors, patient infections and deaths. Leapfrog withheld a failing grade for UCLA in June when it released its first-ever hospital safety scores to give low-performing hospitals time to show improvement.

“UCLA is not an F hospital in quality and safety,” said Tom Rosenthal, chief medical officer at Ronald Reagan UCLA Medical Center. “It is not a fair scoring system and it does a disservice to the public.”…

Overall, Leapfrog gave an A or B to 1,468 hospitals, or 56% of the 2,618 reviewed nationwide. The group issued a C to 1,004 hospitals, or 38%. At the bottom, 146 hospitals, or 6%, were labeled D or F.  Leapfrog reviewed 246 hospitals in California. The ratings are available online at http://www.hospitalsafetyscore.org.

Full story at http://www.latimes.com/business/la-fi-ucla-hospital-grade-20121128,0,397898.story

Listen to Regents Meeting of Nov. 15, 2012

Now that the audio file has arrived, we are catching up with the parts of the mid-November Regents meeting not previously posted (not to be confused with the special meeting held yesterday).  Below is a link to the final day of the mid-November meeting.

During the public comment period, there were complaints about tuition increases and budget cuts.  There was more about the swap deals – see earlier posts on this matter – in which UC swapped a variable interest rate for a fixed one.  As it turned out, interest rates fell so that the “insurance” against a rise in rates provided by the fixed rate swap would have been better in hindsight not to have taken out.  But – as we have pointed out and the university pointed out in response to the student report – insurance is often a bad deal in the sense that the contingency insured against does not occur.  (My life insurance over the years has been costly and – as it turned out – a bad deal for me since I am here typing this message.)  The lasting effect of the student swap report is that it has disappeared from the media (as of this writing) except from the Howard Jarvis Taxpayers Assn. website (see the screenshot below):

There is some irony in the report ultimately appealing only to those on the political right.

My sense is that by Nov. 15, the authors realized the report had a “problem” so the complaint during the public comment period was mainly that the Regents should litigate to try and recover some of the lost money.  It would be nice if the university did respond to the litigation issue, although it may be that legal counsel doesn’t think there would be a case.  (I would have little chance through litigation in getting my life insurance premiums refunded because I am still here.)  But why not say so, if that is the reason?

There were also complaints about an actuarial report on the pension indicating that the expected return should be raised to 8% from the current 7.5% (which would lower the unfunded liability).  It was noted in subsequent regental discussion that pension funds presently are dropping their expected future returns if they are above 7.5% and that the governor and others think 7.5% may be too high. Since the report was done for AFSCME, the university reps said they would look at it in the context of collective bargaining on the pension.

In any event, some time after the public comment period ended (about an hour and ten minutes into the meeting), a demonstration over the various complaints erupted and the room was cleared. 

There were reports on student health centers and a proposed Davis med center partnership with a local nonprofit hospital which was said to be a way to lower costs.  A DOE lab report featured a presentation with a video on the Mars landing.  (It was after we landed on Mars that the demonstration reported above erupted.  The timing was unclear to yours truly; such demonstrations usually occur after the public comment period. Regents are from Mars; demonstrators are from Venus?)

The Haas management school at Berkeley asked for approval of a plan to spin off its extension-style (non-credit) executive ed programs into a separate entity which would be more flexible than allowed under university rules, make a profit, and contribute its profits to the academic side of the school.  Apparently, the Berkeley academic senate approved the plan.  There were some questions by regents as to what exactly the flexibility (in hiring and pay, apparently) entailed but the plan was approved.

Reports on the retirement program followed.  The pension was reported to be 77% funded on a market basis.  The totally-unfunded retiree health program’s unfunded liability was reported to be unchanged from last year.  Finally, there appears to be a push at the Regents to get more money out of technology transfers.  A regental committee is being set up to pursue that goal.

A link to the the audio is below:

Rice on Health: Event Sponsored by the Emeriti Assn.

Tom Rice
Thomas Rice, Professor, Department of Health Services, UCLA School of Public Health.  “U.S. Health Policy: Prospects After Recent Elections”
Day/Date/Time/Place: Thursday, Dec. 6, Hacienda Room of the Faculty Center. 
An informal reception with light refreshments will begin at 1:00 p.m.  The presentations begin at 1:30 and will allow opportunity for questions and discussion.
Professor Rice is a health economist who received his doctorate in Economics from UC-Berkeley.  His research focuses on problems inherent in competition and markets in health care.  He has conducted studies on how large numbers of Medicare prescription drug plans affects the quality of choices made by Medicare beneficiaries. Author of The Economics of Health Care Reconsidered, Third Edition. Prof. Rice was elected to the Institute of Medicine of the National Academy of Sciences in 2006.
We have seen major events, including the election of President Obama, the belabored passage of the Affordable Care Act, hailed as a major accomplishment by some, despised by others as “Obamacare” and leading to Republican congressional victories in 2010, the Supreme Court decision upholding the major parts of the Act, and the heated debates on health care as we approached the 2012 presidential election.  Issues ahead now are (a) the goal of universal coverage, (b) cost containment in the context of federal budget deficits, (c) the future of Medicare, (d) the goal of improved quality and efficiency, and (e) questions of financing.

Professor Rice will help us understand these issues and give a sense of what we might expect in the future. There will also be two discussants: Professor Gerald Kominski (Public Health) and Professor Allison Hoffman (School of Law).

How High?

A prior post on this blog noted that CalPERS was considering raising its rates for long-term care insurance by 75%.  We noted that although UC was not under CalPERS, as state employees, UC employees have been allowed in the past to participate in the program. We also noted that such insurance is a very iffy proposition since it is hard to forecast costs many years ahead for long-term care and thus rates could go up (a lot).

Turns out, that CalPERS is indeed planning to raise the rates.  But now the increase may be as high as 85%.  From the Sacramento Bee:

CalPERS is preparing to impose a rate hike of up to 85 percent on most of its long-term care insurance policyholders. The rate hike would begin in 2015 and would be phased in over two years. It would affect three-fourths of the 150,000 CalPERS members who’ve bought long-term care policies, which pay for stays in nursing homes, convalescent homes and so on.

The proposed increase is somewhat higher than the 75 percent rate hike contemplated by CalPERS officials the past several weeks. The earlier estimate “was a work in progress,” CalPERS spokesman Bill Madison said Wednesday. As an alternative, CalPERS staff said the pension fund could raise rates 79 percent but do it in one year instead of two…
Full story at:
So how high could rates go in the future?  One might ask, how high is the moon?
[youtube http://www.youtube.com/watch?v=bZFKeyGpgK0?feature=player_detailpage]
Update: Jon Ortiz of the Sacramento Bee provides a link to the CalPERS agenda item:
CalPERS LTC Recommendation and Analysis

Update: It looks like they are going ahead with the rate hike:
http://www.sacbee.com/2012/10/16/4916230/calpers-committee-votes-to-hike.html

Cautionary Note About CalPERS Long-Term Care

Although UC employees are not covered by the basic CalPERS retirement plan, they are eligible to buy long-term care insurance through CalPERS as state employees, if such policies are offered. Some UC employees, who would be reluctant to buy such policies from commercial insurance companies, may have bought or considered the CalPERS version in the past.

Today’s Sacramento Bee carries a cautionary story for you, if you have bought a CalPERS long-term care policy or might consider doing so in the future (if they are again offered).  Excerpts below:

…CalPERS is considering imposing a 75 percent increase in premiums on the vast majority of its long-term care policyholders… Leading private insurers, facing declining profits and many of the same financial issues confronting CalPERS, are dropping coverage or restricting sales. Because it’s difficult to buy coverage once someone turns 80, many CalPERS policyholders would have no alternative but to pay the higher premiums if they wanted to stay covered… Details on the proposal will be presented to CalPERS’ pension and health benefits committee Oct. 16, with final approval by the full governing board expected a day later…

Because of the program’s financial problems, CalPERS has suspended selling new policies since 2008…  CalPERS also plans to give members the option of switching to a less comprehensive policy as a way of mitigating the rate hike.  Currently, most policies provide lifetime benefits with inflation protection. The new plan would cap benefits at 10 years without inflation protection. Because most people don’t need more than a few years of nursing home care, CalPERS says the cheaper policy will prove popular.

In short, although long-term care plans may seem appealing, as a practical matter it is very difficult for individuals to lock in a benefit and cost that will extend years into the future.  Long-term care is really part of that more general U.S. healthcare system which is in flux.

Read more here: http://www.sacbee.com/2012/10/04/4880202/calpers-weighs-hugh-premium-hike.html#storylink=cpy
Read more here: http://www.sacbee.com/2012/10/04/4880202/calpers-weighs-hugh-premium-hike.html#storylink=cpy
Read more here: http://www.sacbee.com/2012/10/04/4880202/calpers-weighs-hugh-premium-hike.html#storylink=cpy

They gotta have their meds!!

UC Riverside medical school clears hurdle

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Larry Gordon, LA Times, October 3, 2012 (excerpt)

A national accrediting agency has approved UC Riverside’s long-embattled plan to open a full medical school and to start enrolling future doctors next summer, officials announced Tuesday. It would be the sixth medical school in the University of California system and the first to open since the late 1960s. Last year, the same panel rejected the proposal because it looked too risky after the state refused to fund the school. But UC Riverside officials have since secured enough other public and private financing for a program that they say will help ease a doctor shortage in the Inland Empire and improve public healthcare there.

…(T)he medical school will still need about $15 million a year in state general revenue funds if it is to expand and win full accreditation over the next six years. Observers say that the state may find it hard to keep denying funding and to threaten the school’s permanent future once the doors are open to students. 

Critics, however, contend that a new medical school is the kind of unnecessary expansionism that UC and the state can no longer afford while basic education programs have suffered large funding cuts and tuition has increased rapidly…  

Full article at
http://www.latimes.com/health/la-me-1003-uc-riverside-20121003,0,3497398.story

Critics? What do they know?  They don’t understand:

Update 10-8-12: 

UCR’s medical school plays catch-up in recruiting students

After a brief celebration of last week’s announcement that UC Riverside’s School of Medicine was approved to open next fall, the school’s administrators quickly refocused their energy from gaining accreditation to finding students. Not only are they recruiting for a school that has no track record, the medical school accreditation decision was announced well past the usual application period…
Plans are to accept 24 applicants from UCR. They are students who, in the past, would be entering the first year of the school’s Haider Program. That program, started in 1974, is a cooperative venture with UCLA. Haider students have spent their first two years of medical school studying at UCR before transferring to UCLA for the final two years. Now, they will stay at UCR.  Another 26 applicants will come from outside UCR…

UCLA History and Follow Up: Selection and Adverse Selection

The caption of this 1951 photo from the LA Public Library collection reads “Edward A. Dickson, chairman of the University of California Regents, signs contracts for UCLA’s $20,000,000 Medical Center, while architect Carl C. McElvy looks on.”  The selection of the design for the original UCLA med center suggests a follow-up observation on our prior post about Anthem/Blue Cross dropping UCLA (and Cedars-Sinai) from its plan for LA City workers.  Not surprisingly, there were some angry letters about that decision in the LA Times today.  See http://www.latimes.com/news/opinion/letters/la-le-0923-sunday-cedars-ucla-anthem-20120923-4,0,5880599.story.  Our prior post is at
http://uclafacultyassociation.blogspot.com/2012/09/there-will-be-repercussions.html

One of the letters to the editor asks why Anthem/Blue Cross did not continue coverage for those City employees willing to pay extra for the higher quality of UCLA and Cedars-Sinai.  I don’t have any inside knowledge but one of the key problems in insurance – including health insurance – is adverse selection.  Generally, the phrase means that those most at risk are most likely to take out insurance.  But when that happens, the cost of insurance no longer reflects some average of the population but rises to reflect the increased risk.  A dynamic process can be set in motion whereby the premiums rise, filtering out those of moderate risk, until all that are left are high risk individuals.  In effect, the system can self-destruct.  (Avoiding adverse selection is the rationale behind such the individual mandate in both the federal “Obamacare” plan and the Massachusetts “Romneycare” plan; everyone is in the pool.)  It may be that a system for City workers in which those who wanted to stay with UCLA and Cedars-Sinai at a cost of out-of-pocket extra premiums was viewed as unsustainable.

There will be repercussions

If you woke up to see the front-page healthcare headline in the LA Times, you know there will be more about this story in the future.  The article refers specifically to LA City employees not being covered for care at UCLA.  However, the report is indicative of the ongoing turmoil in the U.S. healthcare system.  Although it has been a commonplace to say that uncompensated or under-compensated healthcare costs are passed along to those who do pay, in fact that kind of cost shifting is becoming more difficult to do.

We don’t have a single-payer system but the insurance coverage for those with insurance is becoming increasingly concentrated among a few players, in L.A. and the U.S. generally.  You might call it a few-payer system.  Much of the local area is covered by Anthem/Blue Cross and Kaiser (and the latter is a separate system with its own docs and facilities).  So, as a big payer in the local area, Anthem/Blue Cross has negotiating strength and it – and the employers who contract with it – don’t have to accept the idea of having to carry “passed along” uncompensated care costs above and beyond the costs of providing services for their members.  Passing along costs that arise because UCLA is a teaching and research institution, to the extent there are such extra costs, also becomes unacceptable.  There are other healthcare providers around who will accept payments reflecting marginal cost without the markup.

The LA Times article is at:
http://www.latimes.com/business/la-fi-hospital-costs-20120921,0,2292633.story

The UC-Riverside Med Saga Continues

Readers of this blog will know that UC-Riverside has been trying to get a med school  going for some time but can’t get the needed dollars from the state. Inside Higher Ed today has a feature article on various universities either trying to merge med schools with others or trying to set up new ones. Riverside is mentioned in the article which notes it already has a joint med program with UCLA:  

Securing funding has also been a problem for UC-Riverside’s medical school. The university currently has a “two-and-two” program where students spend two years at Riverside taking the science courses required for an M.D. before going to UCLA’s medical school for the final two years of the degree.  But G. Richard Olds, dean of the medical school at UC-Riverside, says the region around Riverside called the Inland Empire – two of the largest counties in the country and also two of the fastest-growing – needs doctors to stay in the region. “There are two drivers of where doctors end up practicing: where they come from and where they finish,” Olds said. “My challenge is building huge pipeline by preferentially taking students from my own communities.” …
Full article at:
Editorial Note: There is a concept of “evidence based medicine” in vogue nowadays.  Has the claim that a) there is a shortage of docs in Riverside that can’t be filled by the national labor market and b) that those docs who go through the 2/2 program with UCLA don’t go back to Riverside simply because they end their education in Westwood been subject to any evidence based analysis?  Just asking.  Might the fact that the Inland Empire economy is in the pits since it was one of the centers of the mortgage/foreclosure fiasco have anything to do with where a doc with loans to pay off might end up practicing?  (Yes, the economy there has been fast growing if you count the period of the boom.  And locations that were particularly hard hit from the financial/mortgage crisis may show rapid growth in recovery because they fell so far.) Just asking about that, too. 

Anyway, with those uncomfortable questions and the squeezed state budget, it appears this is the fix Riverside is in:
[youtube http://www.youtube.com/watch?v=Lx0bLBk-BNM?feature=player_detailpage]


Listen to Audio of Regents Morning Session of 9-13-12

Below is the morning agenda of the Regents.  The audio link at the bottom of this entry is provided only for the open sessions.


Agenda, Thursday, September 13, 2012, Morning
8:30 am Committee of the Whole – Public Comment (open session)
Concerns were expressed by speakers over the discussion at the retreat the day before about taking more out-of-state and international students for budgetary reasons.  Also, a group of law students expressed concern about rising law school tuition.

The Academic Council representatives made in clear they would recommend a tuition increase if Prop 30 – the governor’s tax initiative – doesn’t pass in November.
9:30 am Committee on Long Range Planning (open session)

Discussion on admissions noted that although all UC-eligible undergrads are admitted somewhere in the system, it may not be to the campus of their choice.  It was noted that Riverside now is able to fill its slots from students who want Riverside as their first choice.  So Riverside no longer gets overage from other campuses which are full.  The question was raised about what happens if all the overage goes to Merced.  There was also a presentation by the student regent about student advocacy efforts.  [Editorial comment and hint to student regent: Given the continued general popularity as shown in polling data of Prop 13 of 1978 – the cap on property taxes and requirement of a 2/3 vote for tax increases – it might not be best to “demand” changes in Prop 13 in public forums when the issue at the moment is developing public sympathy for Prop 30.  Prop 13 is not on the November ballot; Prop 30 is.]

9:45 am Committee on Health Services (open session)

There was some discussion about the effect of the new federal health program on student health centers.  Apparently, there was to be a more detailed discussion about the federal health law and the med centers in the closed session.
10:00 am Committee on Health Services (Regents only session)
10:40am Committee on Finance (Regents only session)
11:20am Committee on Compensation (Regents only session)
11:45am Committee on Compensation (closed session)
12:15 pm Board (Regents only session)
12:30 pm Lunch
You can hear the morning session (except the closed portions) at: