Monthly Review & Commentary On Health Issues From A Rural Perspective - November 1st, 1997

RWHC Offers A Rural ORYX Option
At this point we are only allowed to say: "The RWHC Quality Indicators Program is being considered by the Joint Commission for possible inclusion in the ORYX initiative for purposes of participating in the accreditation process." We are optimistic that we will be approved by the Joint Commission at their November Board meeting as one of only two rural based performance measurement systems for the ORYX initiative. We believe the RWHC Quality Indicators Program will be of particular interest to rural hospitals and long term care organizations seeking quality performance measures from comparably situated facilities.
Please contact Carla Gorski for additional information, or to discuss the RWHC Quality Indicators Program in more detail, at (608) 643-2343, or e-mail Information is also available at the RWHC web site. The following ORYX description is from <>:
"The ORYX initiative is intended to be a flexible and affordable approach to progressively increasing the relevance of accreditation, and an important building block for supporting quality improvement efforts in accredited organizations. The use of performance measures as an integral feature of the new accreditation process should significantly enhance its value to health care organizations and to those who rely on accreditation information. Today, a growing number of accredited organizations are finding it necessary to have objective, quantifiable information about their own performance which they can use externally to demonstrate accountability. The ORYX initiative will help organizations meet this need."
"Specifically, by December 31, 1997, each accredited hospital and long term care organization must select (or already be participating in) one or more performance measurement systems that have been accepted by the Board of Commissioners as having met the initial requirements for inclusion in the accreditation process, and that have signed a contract with the Joint Commission."
"Secondly, and also by December 31, 1997, each accredited hospital and long term care organization must select from its performance measurement system(s) -- for future reporting purposes -- at least two clinical measures that relate to at least 20 percent of its patient or resident population. Each accredited organization will be asked to provide to the Joint Commission the identity of its performance measurement system(s) and the clinical measures it has selected by year end."
"Finally, each accredited hospital and long term care organization will be required to begin submitting data to the Joint Commission relative to its selected measures no later than the first quarter of 1999. Because the Joint Commission will need comparative data for monitoring purposes, it is expected that actual data submissions will be performed by the participating performance measurement systems."
Rural Input to Medicare: Where's Waldo?
Press Release, Washington D.C.--"Acting Comptroller General James F. Hinchman has appointed 15 members to the Medicare Payment Advisory Commission (MedPAC). MedPAC, established by the Balanced Budget Act of 1997 (Public Law 105-33), replaces the Physician Payment Review Commission and the Prospective Payment Assessment Commission."
While not noted in the press release, Public Law 105-33 requires that "the membership of the Commission shall include ... a balance between urban and rural representatives." The U.S. Census Bureau states that over 20% of the country are rural residents; accordingly, one would expect to find at least three MedPAC members with recognized rural health expertise.
MedPAC recommendations will be key to upcoming Medicare policy and operational reforms; rural representation is absolutely critical. Can you find rural representation among the following, let alone balance?
· president of an international consulting firm
· retired professor from City University of New York
· president of a state hospital association
· director of a national health care study
· professor at the University of Pittsburgh
· practicing nephrologist and internist
· professor at Tulane University
· senior vice president, Geisinger Health System
· director of health care for the Ford Motor Company
· professor at Harvard University
· corporate vice president, PacifiCare Health Systems
· chief actuary, WellPoint Health Networks
· president of a New York City medical school
· assistant to the president, AFL-CIO
· senior fellow at Project Hope

Wisconsin Requests Feds to Bless BadgerCare
From a Section 1115(A) Waiver Request by Governor Thompson to DHHS Secretary Shalala, 10/30/97:
"BadgerCare creates an integrated program of health care for low-income families with children.
First, by extending health care to all children and adults in families with income below 185% of the federal poverty level (FPL), BadgerCare expands health care coverage to low-income, working families who have not had access to employer-sponsored insurance.
Second, by providing a transition between welfare and work, BadgerCare creates a safeguard against unintentionally increasing the number of uninsured families and children through welfare reform.
Finally, by establishing a simplified, higher income test with cost-sharing of no more than 3.5% of income for families above 143% of the FPL, BadgerCare preserves the access and integrity of Wisconsin's current Medicaid program without supplanting private insurance."
"By establishing a simplified, higher income test, BadgerCare preserves the access and integrity of Wisconsin's current Medicaid program. Separate, distinct eligibility standards for Medicaid and Temporary Assistance to Needy Families, and the use of complex, obsolete AFDC rules for Medicaid fragment programs for low-income families, and create confusion for recipients, providers, county eligibility staff, advocates and the public. Furthermore, even under current AFDC standards and Healthy Start guidelines (which expand eligibility for pregnant women and certain children), many adults and children in low-income families remain uninsured."
"Many families who join the workforce have access to affordable, employer-provided health care. For many others, however, access and affordability is an issue. Through a comprehensive, integrated program, BadgerCare builds a bridge between Medicaid and employer-provided health care coverage, just as welfare reform is transforming ties between welfare and work."
"To preserve access to health care for low-income families and children, Medicaid must change to recognize that a majority of low-income families now work, that AFDC income standards required for Medicaid are significantly less than the minimum wage, and that health care is not always accessible or affordable through employment. Through strengthening the ability of both parents to be employed and to care for their children, BadgerCare supports the transition to independence."
"In building on the success of the State's existing HMO managed care program, BadgerCare will provide Wisconsin Medicaid's comprehensive benefits and services through a health care delivery system with strong quality assurance safeguards. Currently, 19 of 24 licensed HMOs in Wisconsin participate in the Wisconsin Medicaid HMO managed care program; in 1998, HMO participation is anticipated in 71 of the State's 72 counties (fee-for-service remains in the one remaining small, rural county). With clear and measurable performance standards, and ongoing, continuous quality improvement activities, the Wisconsin Medicaid HMO program has demonstrated improved health outcomes. The Wisconsin Medicaid HMO contract is frequently identified as one of the best in the nation."
State Health Care Reforms On Way Back
The following is from State Health Care Reform, Looking Back Toward the Future, A Special Report from the Robert Wood Johnson Foundation was prepared by the Alpha Center, 9/97:
"Although some states have made progress, none have eliminated the problems that stimulated reform efforts in the early years of this decade. Inevitably states must ask 'Okay, now what?' States will be addressing a host of health policy issues over the next several years, including:"
"Coverage for the Uninsured. Although major coverage expansions do not appear feasible in the sense considered in the early 1990s, there is still much concern among state and federal leaders about the number of uninsured children and low-income workers. Now with new federal funds available, states are likely to continue to build on past successes of children's programs--the least costly and most popular among the expansion initiatives."
"Subsidies of Uncompensated Activities. The health care system has long relied on a complex system of cross-subsidies to finance uncompensated care, graduate medical education, research and other programs with public benefits. As competition among health plans intensifies, funds for these activities are declining. States will be pressured to replace these implicit mechanisms with explicit subsidies or other assurances that maintain indirect subsidies."
"Managed Care Regulation. As more Americans are covered by managed care plans, concerns about access and quality of care grow among middle and upper income groups. State policymakers appear determined to address the real and perceived access and quality issues associated with managed care."
"Network Regulation. As provider networks of all shapes and sizes are attempting to assume different levels of financial risk without traditional insurance or HMO licensure, states are worried about the possibility of solvency. Several states have had Medicare contracts with provider sponsored networks for years, but only a handful regulate these entities explicitly.
"Competitive Market Assurances. As health care markets continue to undergo rapid change, consolidation among plans and providers increases. State policymakers are concerned about the size and leverage of some of the largest health plans and hospital corporations. While such concerns largely fall under the purview of federal anti-trust agencies, states must monitor their own markets to assist the Federal Trade Commission and Department of Justice."
"Consumer Information. A competitive market will require consumers to be increasingly informed about and involved in health coverage decisions. While the market is already producing better information for large purchasers, states will likely have to assure that adequate information is available to all consumers."
"Conversion of Non-Profits. In the past few years, there has been a wave of hospital and health plan conversions from non-profit to for-profit status. States worry about the loss of 'community benefit' that these organizations have provided in return for years of preferential tax treatment. Many states are working hard to make sure that these entities are appraised at their full value so that funds will continue to be available for charitable activities."
More information is available at <>.
Consumer Protection and Quality
The President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry now has a web page: <>.
The Commission was created by President Clinton to "advise the President on changes occurring in the health care system and recommend such measures as may be necessary to promote and assure health care quality and value, and protect consumers and workers in the health care system."
"The Commission is comprised of 32 members, selected from the private sector. Members include representatives of consumers, institutional health care providers, health care professionals, other health care workers, health care insurers, health care purchasers, State and local government representatives, and experts in health care quality, financing, and administration. The Commission is Co-Chaired by the Secretary of Health and Human Services, Donna E. Shalala, and the Secretary of Labor, Alexis M. Herman."
"The President has asked the Commission to develop a 'Consumer Bill of Rights' in health care and to provide him with recommendations to enforce those rights at the Federal, State, and local level. The Commission's final report is due to the President by March 30, 1998."
Non-Profit HMOs & AARP Propose Standards
Three major health maintenance organizations (HMOs) and two leading health consumer groups have announced agreement of 18 legally enforceable standards to protect Americans in managed health care plans. They are urging the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry to consider the 18 principles for national standards in their recommendations.
The organizations include: AARP, a national organization for people 50 and older; Families USA, a national organization for health care consumers; Group Health Cooperative of Puget Sound, the nation's largest consumer-governed, not-for-profit health care organization; HIP Health Insurance Plans, a not-for-profit with more than one million members, and Kaiser Permanente, America's largest not-for-profit health care organization.
In addition to a fair amount of "apple pie and motherhood type standards," a number of suggestions would be distinctly different from current practice in several key areas:
"Accessibility of Services. To ensure access to quality care, health plans should provide women members with direct access to obstetricians and gynecologists."
"Choice of Health Plans. Individuals should be given a choice of health plans."
"Continuity of Care. Members who are being treated for a serious illness or who are in the second trimester of pregnancy should be allowed to continue to receive treatment from their physician specialists for up to 60 days or through post-partum when their doctors' contracts are terminated by a plan (for reasons other than quality of care) or when, under their group coverage, their former health plan is replaced and they no longer have the option of continuing to receive care from their previous physician specialists."
"Coverage of Emergency Care. Health plans should cover emergency services, including services provided when a prudent layperson reasonably believes he or she is suffering from a medical emergency."
"Out-of-Area Coverage. Health plans should cover unforeseen emergency and urgent medical care for members traveling outside a plan's service area."
"Provider Reimbursement Incentives. Full-risk capitation should not be used for an individual provider. Where capitation is used for an individual provider, it should only apply to services directly provided by that provider."
"Utilization Management. Health plans should be prohibited from having compensation arrangements for utilization management services that contain incentives to make adverse review decisions."
The complete statement can be found at:

Insurance Portability Reform Incomplete
From "Health Insurers Skirting New Law, Officials Report" by Robert Pear in The New York Times, 10/5/97:
"When President Clinton signed the Health Insurance Portability and Accountability Act on Aug. 21, 1996, he said, 'It will eliminate the possibility that individuals can be denied coverage' because of pre-existing medical conditions and 'will require insurance companies to sell coverage to small employer groups and to individuals who lose group coverage.' The law, he said, will benefit 'as many as 25 million Americans.' "
"But officials say they see worrisome signs that some health insurance companies are circumventing a new law intended to make coverage more readily available to millions of Americans who change or lose their jobs. Insurers have found ways of discouraging sales to eligible individuals and groups, sometimes by charging very high premiums or by penalizing insurance agents who sell coverage to customers with pre-existing medical problems. 'Carriers are attempting to circumvent the law,' said Wisconsin Insurance Commissioner Josephine W. Musser, who is president of the National Association of Insurance Commissioners."
"For example, some companies have told agents that they will not get commissions for selling insurance to people with medical problems. In a recent bulletin to agents in seven states, American Community Mutual Insurance Co. of Livonia, Mich., said, 'We as an industry have greater exposure to more high-risk groups' because of the new law. Accordingly, it said, sales to such groups 'will not be eligible for commission' payments."
"Sen. Edward Kennedy, D-Mass., a co-author of the 1996 law, said: 'Efforts to skirt the spirit and letter of the law are intolerable. Not only does this practice deny coverage to people who need health care because they are ill, it also disrupts the market because honest companies are put at a competitive disadvantage.' The measure is often called the Kassebaum-Kennedy law. Nancy Kassebaum Baker, R-Kan., who retired from the Senate this year, was its other author."
"The law says that employers who provide benefits to their workers must generally cover pre-existing medical problems like cancer. But new employees qualify for this protection only if they were previously enrolled in a group health plan, and they lose credit for all prior insurance if there is a break in coverage of 63 days or more."
"Insurers say that the law, while guaranteeing access to health benefits for many 'eligible individuals,' did nothing to regulate what insurers may charge for such coverage. On the other hand, state officials say the law does indicate that there should be some means to spread the costs or subsidize premiums so high-risk customers will not have to bear the full cost themselves."
"Some insurers and health plans assert that they can charge up to five times the standard rate to individuals and families who qualify for health insurance under the new law. One company, American Medical Security of Green Bay, Wis., a subsidiary of United Wisconsin Services, described such charges as 'reasonable and appropriate' for people with an extensive history of medical problems."
Update Re Medicare Wage Index "Reform"
Last month we reported that the Health Care Financing Authority (HCFA) was convening a work group to look at long-standing technical problems with the Medicare wage index. (Problems with the wage index have long constituted a major reason why states like Wisconsin and rural areas within states are paid by Medicare at a lower rate than the national average.) In a positive development, a request by the National Rural Health Association (NRHA) to participate was quickly accepted. Glen Grady, CEO for Neillsville Memorial Hospital and Home, is representing NRHA and attended the first meeting of the work group on October 9th.
A first impression from that meeting is that some states have been much more effective than others in assuring individual hospitals properly submit the appropriate wage data. States noted as being particularly aggressive about maximizing provider input include New York, Nebraska, Kentucky and Texas. Improper data submission can lead to a calculation that understates wages and consequently leads to lower Medicare payment rates. A key part of the problem is that a successful intervention requires a coordinated, statewide campaign.
The perennial problem of Medicare double counting the higher wages paid specialty staff at large regional referral centers continues as a divisive issue--recognized by some and dismissed by others. HCFA could contract with the Bureau of Labor Statistics to obtain the data necessary to properly fine tune the wage data and create an occupational mix adjustment. Whether this work group will recommend eliminating this payment bias against rural areas is not yet clear.
How to Access Telecommunication Subsidy
Universal service support will be available for eligible health care providers on January 1, 1998. It is my understanding that applications for a 1998 subsidy will be due by December 31st. Application forms were not available at this writing but the draft application forms may be worth reviewing given the impending deadline. They (and when ready the final form) can be down loaded from:

The following is from the Federal Communications Commission web site, "Health Care and the FCC" The complete set of Frequently Asked Questions is available at <>.
On May 8, 1997, the Federal Communications Commission (Commission) released a Report and Order on Universal Service that requires that public and non-profit rural health care providers have access to telecommunications services necessary for the provision of health care services at rates comparable to those paid for similar services in urban areas.
#1 Q: Which health care providers are eligible for universal service benefits?
A: The Commission concluded that only public or non-profit health care providers are eligible to receive supported telecommunications services. Eligible health care providers, except those requesting only access to an Internet service provider, must also be located in a rural area.
#5 Q: Which telecommunications services will be supported for eligible health care providers?
A: The Commission concluded that rural health care providers should receive support for any telecommunications service employing a transmission speed of up to and including 1.544 Mbps, including limited distance-based charges. Any health care provider that does not have toll-free access to an Internet service provider available may receive limited support.
#6 Q: What kinds of services are included within "any telecommunications service employing a transmission speed of up to and including 1.544 Mbps?"
A: Services included in this definition would include, for example, POTS (plain old telephone service), T-1 service to an urban health center, quarter T-1 service, Primary Rate ISDN service, or equivalent wireless services.
#8 Q: What does the Commission mean by limited support for toll-free access and which health care providers are eligible for this support?
A: Any health care provider that does not have toll-free access to an Internet service provider available can receive the lesser of $180 in toll charges per month or the toll charges incurred for 30 hours of access to an Internet service provider per month.
#9 Q: What if an eligible health care provider requests a telecommunications service that is not offered in its local area or that could not be supported by the infrastructure or facilities currently in place? Will there be universal service support for infrastructure development?
A: There will be no universal service support for infrastructure development at this time.
#11 Q: How much funding will be available to support eligible rural health care providers?
A: There will be a cap of $400 million per year on total universal service support for health care providers. The amount of the cap was based on an estimate of what it would cost if every eligible health care provider obtained universal service support for T-1 service and for limited toll free access to an Internet service provider.
#12 Q: Is there a limit on the amount of funding each rural health care provider can receive?
A: Yes. A rural health care provider is eligible to receive, for each separate site or location, the most cost-effective, commercially available telecommunications service with a bandwidth capacity of 1.544 Mbps at a rate no higher than the urban rate. Support will be provided for this service over a distance not to exceed the distance between the health care provider and the nearest city with a population of 50,000 or more.
#15 Q: What is the source of the money used to pay for universal service support for eligible health care providers?
A: All telecommunications carriers that provide interstate telecommunications services are required to contribute to universal service support mechanisms.
#16 Q: How much will eligible rural health care providers be required to pay for supported services?
A: Rural health care providers will pay an amount no higher than the urban rate for similar services. Health care providers need not calculate urban rates because the calculations will be done by the telecommunications carrier and the universal service administrator.
#27 Q: Who is responsible for administering the health care portion of universal service?
A: The Universal Service Administrative Company (USAC). USAC will perform temporarily billing and collection functions associated with the universal service support mechanisms for rural health care providers. In addition, a Rural Health Care Corporation has been established whose responsibilities include, for example, administering the application process for eligible health care providers, creating and maintaining a web site on which applications for services will be posted, and performing outreach and public education functions.
#29 Q: Will eligible health care providers receive funds from the universal service administrator to cover the cost of eligible services ordered?
A: No. Eligible health care providers will benefit from the universal service support mechanism by receiving lower bills.
#30 Q: When will health care providers start receiving universal service support?
A: Universal service support will be available for eligible health care providers on January 1, 1998. The Commission is currently developing an application process for universal service support.
#31 Q: What is the best way to stay informed about the Commission's universal service benefits for rural health care providers?
A: Visit the Commission's health care web site at <>. Those without Internet access can call 1-888-CALL-FCC.
Nibbling Constantly, Sweetly at Power's Ear
The following is from "Party Favors" by Robert Reich in The New Yorker, 10/13/97:
"The distinction between buying access and buying influence is important: money does corrupt politics, and the current system stinks, but to think about it in terms of purchasing specific policies or pieces of legislation misses the real corruption in the system."
"The access that the [Washington] politician provides the wealthy and the access that the politician thereby gains to the ever expanding network of money reinforces each other. Increasingly the politician hears the same kind of suggestions, the same voicing of concerns and priorities."
"Meanwhile, the politician hears only indirectly and abstractly from the less comfortable members of society. The pollster shows him how focus groups of average, working-class people have answered a blizzard of questions. But they do not play golf with him. They do not tell the politician directly and repeatedly in casual banter or through personal stories, how they view the world. They do not speak continuously into the politician's ear about such concerns as job security, wages, child care, the cost of housing and health insurance, and a mounting credit card debt."
"Access to the network of the wealthy does not buy a politician's mind; instead, it nibbles constantly, sweetly, at his ear."
Rural Health Services Research Database
From the National Rural Health Services Research Database web site at:

"This project is funded by the Federal Office of Rural Health Policy. Its goal is to create, disseminate and maintain a database of funded rural health services research projects underway in the United States. We define rural health services research to include research having to do with the financing, organization, and/or delivery of health, mental health, and/or substance abuse treatment services in rural areas or to people residing in rural areas."
"It also includes studies of the prevalence of health, mental health, or substance abusing conditions among rural population groups. Rural/urban comparison studies are included in this definition, as are studies of the effects of changes in the rural health care system on the rural economy, and of the experiences of rural residents in receiving health, mental health or substance abuse treatment services."
Internet Has Your Map
The Yahoo web site at <> has added a useful new free service, especially for we men famous for hating to ask for directions. You type in the street address, city, state and zip code and a map showing the location is provided. The adjacent sample shows the Washington D.C. office of the National Rural Health Association

How 'Statistics' Lead to Being Mislead
From a "Glossary of Mathematical Mistakes" by Paul Cox at <>.
"Astrology Amnesia - When your Astrological forecast comes true one day, you forget about the last three weeks when the forecast failed."
"Cancer Cluster Syndrome - Making a lot of fuss over an above average number of cancer cases in a confined region. Note that all random functions have a tendency to cluster. For every reported cancer cluster there is also a cancer deficit region that does not get reported at all. This is not to say that all "cancer clusters" are just statistical abnormalities, there may be some toxic pollutant present in the area, but false reporting of cancer clusters is very common."
"Compound Blindness - An 'impressive' growth rate that does not take into account inflation, population growth, or other forms of natural compound growth."
"The Law of Averages thinking - A belief by gamblers that the more often you win or lose the more likely your luck will change on the next try. If you flip a coin and it lands heads 10 times in a row, what are the odds that it will land heads on the 11th try? Answer 1:1. The odds are the same on each toss."
" 'Shooting the Barn' Statistics - A Texas sharpshooter who shot his gun into the side of a barn 30 times, then painted a circle around where most of the bullets landed, calling that his target."
Networking-Undoing the Perfected
From "New Rules for the New Economy, Twelve dependable principles for thriving in a turbulent world," by Kevin Kelly in Wired, 9/97, available at <>.
"The Digital Revolution gets all the headlines these days. But turning slowly beneath the fast-forward turbulence, steadily driving the gyrating cycles of cool technogadgets and gotta-haves, is a much more profound revolution - the Network Economy."
"This emerging new economy represents a tectonic upheaval in our commonwealth, a social shift that reorders our lives more than mere hardware or software ever can. It has its own distinct opportunities and its own new rules. Those who play by the new rules will prosper; those who ignore them will not."
"We have been awash in a steadily increasing tide of information for the past century. Many successful knowledge businesses have been built on information capital, but only recently has a total reconfiguration of information itself shifted the whole economy."
"The grand irony of our times is that the era of computers is over. All the major consequences of stand-alone computers have already taken place. Computers have speeded up our lives a bit, and that's it. In contrast, all the most promising technologies making their debut now are chiefly due to communication between computers - that is, to connections rather than to computations. And since communication is the basis of culture, fiddling at this level is indeed momentous."
"The new rules governing this global restructuring revolve around several axes. First, wealth in this new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown. Second, the ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of networks. Third, the domestication of the unknown inevitably means abandoning the highly successful known - undoing the perfected."
Foundation Fundraising and Grant Writing
The Leadership Toolbox will present a seminar on Foundation Fundraising and Grant Writing from 9:00 am - 4:30 pm on November 14th at the University of Wisconsin in Madison. Tuition is $100, 10% off for 3 or more. For more information call Anja Speerforck at 1-800-234-9389 or visit <>.
The seminar will be led by Katherine Wertheim, an independent consultant who has raised money for the American Red Cross and Special Olympics as well as countless local agencies in the Washington, D.C. Area. Ms. Wertheim will guide participants through the entire fundraising process, from identifying appropriate funding sources to writing a successful request. This is the first of several Leadership Toolbox seminars that will take place in Madison during the next two years. Future seminars will include Effective Media Strategies, Building Better Boards and Organizational Needs Assessment and Strategic Planning. The series is also being offered at ten other sites around the country.
Trudy Karlson Joins WI Policy Network
Trudy Karlson, Ph.D., former director of Wisconsin's Office of Health Care Information, will serve as a senior scientist at the Wisconsin Network for Health Policy Research. "Dr. Karlson is uniquely qualified to help us achieve our goal of becoming a resource for stimulating, creating and communicating useful health policy research and analysis," said Network Director Dr. David Kindig. With major funding from the University of Wisconsin Medical school, the Network seeks to bridge the gap between academics, policy makers, health care providers and consumer groups.

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