2010 healthcare business market handbook

The 2010 Healthcare BusinessMarket Research Handbook

Richard K. Miller & Associates ————— since 1972 —————

THE 2010 HEALTHCARE

BUSINESS MARKET

RESEARCH HANDBOOK

By: Richard K. Miller and Kelli Washington

Published by:

Richard K. Miller & Associates4132 Atlanta Highway, Suite 110Loganville, GA 30052(770) 466-9709www.rkma.com

Richard K. Miller & Associates————— since 1972 —————

http://www.rkma.com

THE 2010 HEALTHCARE

BUSINESS MARKET

RESEARCH HANDBOOK

Copyright © 2010 by Richard K. Miller & Associates

All rights reserved. Printed in the United States of America.

Use of the electronic edition of this publication is limited to internal use within the purchasing organization.

The electronic edition may be stored on computers, Intranets, servers, and networks by organizations

which have purchased this publication, and those for which an employee has made such purchase.

Copies, including multiple copies, may be printed from the electronic edition for use within the purchasing

organization.

Libraries may store the electronic edition on an archival database or proxy server for access by library

users.

Governmental agencies purchasing this publication may share the content within the agency or

department. Universities and colleges may share the information within their campus, but not with other

universities. Membership associations may use the information within their internal organization, but may

not distribute to their membership.

This publication may not be stored on Internet websites, nor may it be file-shared through the Internet.

This publication may not be resold or distributed without prior written agreement with the publisher.

W hile every attempt is made to provide accurate information, the author and publisher cannot be held

accountable for any errors or omissions.

ISBN Number: 1-57783-157-8

Richard K. Miller & Associates4132 Atlanta Highway, Suite 110Loganville, GA 30052(770) 466-9709www.rkma.com

http://www.rkma.com

CONTENTS

PART I: AMERICA’S HEALTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 ARRA FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 DEMOGRAPHICS OF HEALTHCARE SPENDING . . . . . . . . . . . . . . . . . . 133 GEOGRAPHIC VARIATIONS IN HEALTHCARE SPENDING . . . . . . . . . . 174 NATIONAL HEALTH EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 OBESITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 SMOKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 STATE HEALTH RANKINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

PART II: HOSPITALS & HEALTHCARE PROVIDERS . . . . . . . . . . . . . . . . . . . . . . 278 CHILDREN’S HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 COMPARATIVE EFFECTIVENESS RESEARCH . . . . . . . . . . . . . . . . . . . . 3010 COMPLEMENTARY & ALTERNATIVE MEDICINE . . . . . . . . . . . . . . . . . . . 3311 CONVENIENT-CARE CLINICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3512 DEBT COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3713 DESIGN & CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3914 ECONOMIC CONTRIBUTION OF HOSPITALS . . . . . . . . . . . . . . . . . . . . . 4115 ELECTRONIC MEDICAL RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4316 EMERGENCY DEPARTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4417 FINANCIAL ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4818 GREEN HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5019 GROUP PURCHASING ORGANIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . 5120 HOME CARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5321 HOSPICE & PALLIATIVE CARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5522 HOSPITAL PATIENT DIAGNOSES, PROCEDURES & SPENDING . . . . . 5723 HOSPITAL-ACQUIRED INFECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5924 HOSPITALS IN PURSUIT OF EXCELLENCE . . . . . . . . . . . . . . . . . . . . . . 6125 IMPACT OF THE ECONOMIC CRISIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6226 INFECTION PREVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6327 INFORMATION TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6528 LARGEST HEALTHCARE SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6629 LARGEST HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6830 LONG-TERM CARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6931 MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7132 MEDICAL LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7333 MEDICAL TOURISM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7534 MEDICARE & MEDICAID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7835 NEW HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7936 OUTSOURCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8037 PATIENT SATISFACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8238 PATIENT SATISFACTION MEASUREMENT . . . . . . . . . . . . . . . . . . . . . . . 8439 PATIENTS FROM OVERSEAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8540 PAY-FOR-PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8741 PREVENTABLE MEDICAL ERRORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

42 PRIMARY CARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9143 PROFILE OF U.S. HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9444 QUALITY & PATIENT SAFETY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9745 READMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9946 RURAL HEALTHCARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10247 SPECIALTY HOSPITALS & CENTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 10448 STATE SPENDING FOR HOSPITAL CARE . . . . . . . . . . . . . . . . . . . . . . . 10749 TOP ISSUES CONFRONTING HOSPITALS . . . . . . . . . . . . . . . . . . . . . . 10850 UNCOMPENSATED HOSPITAL CARE . . . . . . . . . . . . . . . . . . . . . . . . . . 109

PART III: AWARD-WINNING HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11051 CIRCLE OF LIFE AWARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11152 COMMUNITY VALUE INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11253 CONSUMER CHOICE AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11554 DESIGN AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12455 MOST HIGHLY INTEGRATED HEALTHCARE NETWORKS . . . . . . . . . . 12556 MOST WIRED HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12857 NATIONAL QUALITY HEALTHCARE AWARD . . . . . . . . . . . . . . . . . . . . . 13158 NOVA AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13259 QUEST FOR QUALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13360 SPIRIT OF EXCELLENCE AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13461 TOP 100 HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13562 TOP CARDIOVASCULAR HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 13863 TOP HEALTHCARE SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14164 TOP-RANKED CHILDREN’S HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . 14365 TOP-RANKED HOSPITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

PART IV: HEALTH INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15366 BENEFICIARY SATISFACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15467 COST-CONTROL INITIATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15668 EMPLOYER-SPONSORED HEALTH INSURANCE PREMIUMS . . . . . . . 15869 INDIVIDUAL INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16170 LARGEST HEALTH INSURERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16371 MEDICAL SPENDING FOR PPO-COVERED FAMILIES . . . . . . . . . . . . . 16472 MEDICARE & MEDICAID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16673 STATE CHILDREN’S HEALTH INSURANCE PROGRAM . . . . . . . . . . . . 16974 TOP-RANKED HEALTH INSURANCE PLANS . . . . . . . . . . . . . . . . . . . . . 171

PART V: PHARMACEUTICALS & MEDICAL DEVICES . . . . . . . . . . . . . . . . . . . . 17375 DISTRIBUTION CHANNELS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17476 DRUG CLASSIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17577 LARGEST PHARMACEUTICAL COMPANIES . . . . . . . . . . . . . . . . . . . . . 17878 MARKET FORECAST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18079 MEDICAL DEVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18280 PERSONALIZED MEDICINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18481 PRESCRIPTION DRUG USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18682 PROMOTIONAL SPENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18783 STEM CELL RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

84 TOP-SELLING PHARMACEUTICAL PRODUCTS . . . . . . . . . . . . . . . . . . 19185 TOP-SELLING THERAPEUTIC DRUG CLASSES . . . . . . . . . . . . . . . . . . 192

PART VI: DISEASES & TREATMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19486 ALCOHOL ADDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19587 ALLERGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19788 ALZHEIMER’S DISEASE & DEMENTIA . . . . . . . . . . . . . . . . . . . . . . . . . . 20089 ARTHRITIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20390 ASTHMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20591 BARIATRIC SURGERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20892 BEHAVIORAL & MENTAL HEALTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21093 CANCER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21394 CARDIOVASCULAR DISEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21795 CHRONIC CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22096 CHRONIC OBSTRUCTIVE PULMONARY DISEASE . . . . . . . . . . . . . . . . 22297 COLDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22498 COSMETIC & RECONSTRUCTIVE SURGERY . . . . . . . . . . . . . . . . . . . . 22599 DIABETES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227100 END-OF-LIFE CARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230101 HEADACHES & MIGRAINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233102 HIV & AIDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235103 INFECTIOUS DISEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238104 INFLUENZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241105 KIDNEY DISEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243106 OPHTHALMOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245107 ORGAN TRANSPLANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248108 ORTHOPEDICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252109 OSTEOPOROSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256110 PAIN MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258111 ROBOTIC SURGERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260112 SLEEP DISORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262113 SUBSTANCE ABUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265114 SURGERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268

PART VII: HEALTHCARE PROFESSIONALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270115 HEALTHCARE WORKFORCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271116 HOSPITAL EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . 272117 MEDICAL SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273118 NURSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275119 NURSING SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279120 PHYSICIAN COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281121 PHYSICIANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283

_____________________________________________________________________THE 2010 HEALTHCARE BUSINESS MARKET RESEARCH HANDBOOK

• 8 •

PART I: AMERICA’S HEALTH


• 9 •

Of the $787 billion in funds for the AmericanRecovery and Reinvestment Act (ARRA) of2009 (P.L. 111-5), signed into law by Pres.Barack Obama in February 2009 andcommonly known as the stimulus package,$151 billion is designated to fund healthcareprojects. This funding is summarized in thischapter.

BIOMEDICAL RESEARCH

• $8.2 billion for expanding biomedicalresearch

• Agency: National Institutes of Health(NIH)

• Description: To expand jobs in biomedicalresearch to study diseases: $7.4 million willbe distributed to specific NIH institutes andcenters and to the common fund forbiomedical research grants; $800 millionwill be used by the Office of the Director forpurposes that can be completed within twoyears, including short-term grants focusedon specific scientific challenges, newresearch that expands the scope ofongoing projects, research on public andinternational health priorities, and toenhance central research support activities.

BROADBAND TECHNOLOGY

OPPORTUNITIES ACT

• $4.35 billion for grants and other initiatives• Agency: National Telecommunications

and Information Administration • Description: Grants for education on broad-

band technology, awareness, training,access, equipment, and support to medical

and healthcare providers to facilitategreater use of broadband services toenhance healthcare delivery. Granteesmay be non-prof it foundat ions,corporations, institutions, or associations.Other eligible grantees may be identified bythe Commerce Department by rule at alater time.

COBRA CONTINUATION

COVERAGE

• $24.7 billion for Consolidated OmnibusBudget Reconciliation Act (COBRA)Continuation Coverage

• Agency: U.S. Department of Labor, GroupHealth Plan

• Description: To provide individuals and theirfamilies with a premium subsidy of 65% ofthe COBRA continuation premiums for amaximum of nine months of coverage onlywith respect to involuntary terminations thatoccurred on or after September 1, 2008,and before January 1, 2010.

COMMUNITY HEALTH CENTER

INFRASTRUCTURE GRANTS

• $1.5 billion for Community Health Centers• Agency: U.S. Department of Health and

Human Services • Description: To renovate clinics and make

health information technologyimprovements. These funds will bedistributed through a competitive grantsprocess and are to be used forconstruction, renovation, and equipment,and for the acquisition of health

1 ARRA FUNDING


• 10 •

information technology systems forcommunity health centers, includinghealth center-controlled networksreceiving operating grants under section330 of the Public Health Service Act.

COMMUNITY HEALTH CENTER

SERVICES GRANTS

• $500 million for Community HealthCenters

• Agency: U.S. Department of Health andHuman Services

• Description: To increase the number ofuninsured Americans who receive qualityhealthcare. These funds will be dispersedthrough a competitive grants process andare to be used to support new sites andservice areas, to increase services atexisting sites, and to provide supplementalpayments for spikes in uninsuredpopulations.

COMPARATIVE EFFECTIVENESS

RESEARCH

• $1.1 billion to compare the effectivenessof different medical treatments

• Agencies: Agency on HealthcareResearch and Quality (AHRQ) andNational Institutes of Health (NIH)

• Description: This funding, to be dispersedthrough a competitive grants process, willbe used to conduct or support research toevaluate and compare clinical outcomes,effectiveness, risk, and benefits of two ormore medical treatments and services thataddress a particular medical condition.This research will not be used to mandatecoverage decisions or impose "one size-fits-all" medicine on patients. It will bedesigned to enable medical professionalsand patients to improve treatment. Of totalfunding, $300 million will be administeredby AHRQ, $400 million will be transferred to

NIH, and $400 million will be allocated atthe discretion of the Secretary of HHS.

FACILITIES CONSTRUCTION

• $415 million included for facilitiesconstruction, to be distributed as follows:$227 million for two new facilities on theIndian Priority Facilities List, $100 million for maintenance and improvements, $68million for construction, repair andmaintenance of sanitation facilities, and$20 million for purchase of medicalequipment

• Agency: U.S. Department of Labor • Description: The objectives of the Indian

Health Service health facilities manage-ment, healthcare facilities construction,sanitation facilities construction, andenvironmental health services programsare:

1. To provide optimum availability offunctional, well-maintained IHS and triballyoperated healthcare facilities and adequatestaff housing at healthcare deliverylocations where no suitable housingalternative is available

2. To reduce the incidence of environ-mentally related illness and injury by:

a. Determining and addressing factorscontributing to injuries

b. Working with the tribes to improveenvironmental conditions

c. Constructing sanitation facilities andensuring the availability of safe watersupply and adequate waste disposalfacilities in American Indian and AlaskaNative homes and communities. Fundingwill be used for facilities constructionprojects, deferred maintenance andimprovement projects, the backlog ofsanitation projects, and the purchase ofequipment.


• 11 •

HEALTH INFORMATION

TECHNOLOGY GRANTS

• $2.0 billion for discretionary grants topromote the adoption and use ofinteroperable health informationtechnology

• Agencies: Office of the National Coord-inator of Health Information Technology,Agency for Healthcare Research andQuality, CDC, and Indian HealthService/states or state-designated entities

• Description: To promote the use andexchange of electronic health information ina manner consistent with the Office of theNational Coordinator of Health InformationTechnology’s strategic plan. To awardplanning and implementation grants tostates or qualified state-designated entitiesto facilitate and expand electronic healthinformation exchange. To award grants tostates or Indian tribes to establish loanprograms for healthcare providers topurchase certified electronic health recordtechnology, train personnel in the use ofsuch technology, and improve the secureelectronic exchange of health information.To provide financial assistance touniversities to establish or expand medicalinformatics programs.

HEALTH INFORMATION

TECHNOLOGY IMPROVEMENTS

• $17.0 billion to improve investments andincentives through Medicare and Medicaidto ensure widespread adoption and use ofinteroperable health informationtechnology (HIT)

• Agency: Centers for Medicare andMedicaid Services (CMS)

• Description: Provides incentives for theearly adoption and use of interoperable HITto Medicare and Medicaid providers andpenalties in future years for providers notdemonstrating meaningful use of Electronic

Health Records (EHR). Provides eligibleprofessionals who show meaningful use ofan EHR in 2011 or 2012 with incentivepayments of $18,000 in the first year.Payment adjustments for eligibleprofessionals not demonstrating meaningfuluse of an EHR would begin in 2015.Provides eligible hospitals with incentivepayments starting in Fiscal Year 2011 andpayments adjustments for hospitals notdemonstrating meaningful use of an EHR inFY2015.

HEALTHCARE WORKFORCE

• $200 million for programs under Title VIIand Title VIII of the Public Health ServiceAct

• Agency: Bureau of Health Professions,Health Resources and ServicesAdministration

• Description: To provide for training of healthprofessions. These competitive grants,scholarships, and loan repayment programswill be used for all the disciplines trainedthrough the primary care medicine anddentistry program, the public health andpreventive medicine program, and thescholarship and loan repayment programsfor nurses and health professions.

MEDICAID FEDERAL MATCHING

ASSISTANCE PERCENTAGE

• $87.0 billion for increases in the Medicaidprogram

• Agency: Centers for Medicare andMedicaid Services

• Description: Provides each state with anincrease in federal matching funds for stateMedicaid expenditures in order to assiststates with budget shortfalls to avoid cuttingback Medicaid assistance. States arerequired to maintain at least currenteligibility for the Medicaid program in orderto receive this funding.


• 12 •

NATIONAL HEALTH SERVICE

CORPS

• $300 million for the National HealthService Corps

• Agency: Health Resources and ServicesAdministration

• Description: To address shortages ofprimary healthcare providers in specifichealth professional shortage areas. Thesecompetitive grants, scholarships, and loanrepayment programs will be used fortraining primary healthcare providersincluding doctors, dentists, and nurses aswell as helping to pay medical schoolexpenses for students who agree topractice in underserved communitiesthrough the National Health Service Corps.

PREVENTION AND WELLNESS

PROGRAM

• $1 billion for evidence-based clinical andcommunity prevention and wellnessprograms

• Agency: U.S. Department of Health andHuman Services, Center for DiseaseControl and Prevention

• Description: To support state and localefforts to fight preventable chronic diseasesand infectious diseases. Funds will bedispersed through a competitive grantsprocess to carry out evidence-based clinicaland community-based prevention andwellness strategies and public healthworkforce development activities, includingimmunization programs and state efforts toreduce healthcare-related infections.

RURAL COMMUNITY FACILITIES

PROGRAM ACCOUNT

• $130 million for loans and grants for con-struction, enlargement or improvement of“essential community facilities,” including

healthcare facilities in rural areas• Agency: U.S. Department of Agriculture• Description: Provides loans and grants for

non-profit corporations in rural areas (fewerthan 20,000 people) providing essentialcommunity services for construction,enlargement or improvement of “essentialcommunity facilities,” including healthcarefacilities. Funds to acquire land, payprofessional fees, and purchase equipment.

TRAINING AND EMPLOYMENT

SERVICES

• $250 million for grants• Agency: Department of Labor,

Employment and Training Administration • Description: Grants for worker training and

placement in high growth and emergingindustry sectors, including healthcare.

UNIVERSITY RESEARCH

FACILITIES

• $1.3 billion to renovate and equipuniversity research facilities

• Agency: National Institutes of Health,National Center for Research Resources

• Description: These funds will be distributedusing the competitive grants process andwill be used for the construction andrenovation of extramural research facilitiesand for the acquisition of sharedinstrumentation and other capital researchequipment.


• 13 •

This chapter presents an analysis ofconsumer out-of-pocket healthcare spending.The assessment is based on the ConsumerSpending Survey of the Bureau of LaborStatistics and is part of the 5 edition ofth

Who’s Buying Health Care, published by NewStrategist.

The assessment focuses on health insurance(including Medicare), medical services(including physician, hospital, and dentalservices), and pharmaceuticals (includingprescription and nonprescription). The totalannual consumer out-of-pocket spending inthese three areas is as follows:• Health insurance: $174.1 billion• Medical services: $ 79.7 billion• Pharmaceuticals: $ 61.0 billion

Further assessment is made of each of thethree healthcare areas for the followingdemographics:• Age of householder• Household income• Type of household• Race and ethnicity • Region• Education

HEALTHCARE SPENDING BY AGE

By age of householder, average annualconsumer out-of-pocket spending for healthinsurance is as follows:• Under age 25: $ 367• 25-to-34: $ 883• 35-to-44: $1,214

• 45-to-54: $1,310• 55-to-64: $1,676• 65-to-74: $2,718• 75 and older: $2,510• Average household: $1,465

By age of householder, average annualconsumer out-of-pocket spending for medicalservices is as follows:• Under age 25: $193• 25-to-34: $469• 35-to-44: $634• 45-to-54: $798• 55-to-64: $978• 65-to-74: $636• 75 and older: $692• Average household: $670

By age of householder, average annualconsumer out-of-pocket spending forpharmaceuticals is as follows:• Under age 25: $ 97• 25-to-34: $243• 35-to-44: $345• 45-to-54: $499• 55-to-64: $759• 65-to-74: $859• 75 and older: $916• Average household: $514

HEALTHCARE SPENDING BY

HOUSEHOLD INCOME

By household income, average annualconsumer out-of-pocket spending for healthinsurance is as follows:

2 DEMOGRAPHICS OF HEALTHCARE

SPENDING


• 14 •

• Under $20,000: $ 872• $20,000 to $39,999: $1,341• $40,000 to $49,999: $1,465• $50,000 to $69,999: $1,628• $70,000 to $79,999: $1,727• $80,000 to $99,999: $1,669• $100,000 to $119,999: $1,983• $120,000 to $149,999: $2,005• $150,000 and above: $2,282• Average household: $1,465

By household income, average annualconsumer out-of-pocket spending for medicalservices is as follows:• Under $20,000: $ 303• $20,000 to $39,999: $ 516• $40,000 to $49,999: $ 580• $50,000 to $69,999: $ 676• $70,000 to $79,999: $ 879• $80,000 to $99,999: $ 947• $100,000 to $119,999: $ 946• $120,000 to $149,999: $ 971• $150,000 and above: $1,654• Average household: $ 670

By household income, average annualconsumer out-of-pocket spending forpharmaceuticals is as follows:• Under $20,000: $337• $20,000 to $39,999: $505• $40,000 to $49,999: $461• $50,000 to $69,999: $588• $70,000 to $79,999: $499• $80,000 to $99,999: $588• $100,000 to $119,999: $603• $120,000 to $149,999: $699• $150,000 and above: $748• Average household: $514


HOUSEHOLD TYPE

By household type, average annual consumerout-of-pocket spending for health insurance isas follows:

• Married couples, no children: $2,416• Married couples, oldest child

under 6: $1,449• Married couples, oldest child

6-to-17: $1,570• Married couples, oldest child

18 or older: $1,839• Single parent with child

under 18: $ 644• Single person: $ 949• Average household: $1,465

By household type, average annual consumerout-of-pocket spending for medical servicesis as follows:• Married couples, no children: $1,000• Married couples, oldest child

under 6: $ 855• Married couples, oldest child

6-to-17: $ 864• Married couples, oldest child

18 or older: $ 894• Single parent with child

under 18: $ 383• Single person: $ 424• Average household: $ 670

By household type, average annual consumerout-of-pocket spending for pharmaceuticals isas follows:• Married couples, no children: $839• Married couples, oldest child

under 6: $336• Married couples, oldest child

6-to-17: $448• Married couples, oldest child

18 or older: $679• Single parent with child

under 18: $209• Single person: $348• Average household: $514


• 15 •


RACE AND ETHNICITY

By race and ethnicity, average annualconsumer out-of-pocket spending for healthinsurance is as follows:

• Asian: $1,363• Black: $ 927• Hispanic: $ 780• Non-Hispanic white and other: $1,651• Average household: $1,465

By race and ethnicity, average annualconsumer out-of-pocket spending for medicalservices is as follows:• Asian: $523• Black: $248• Hispanic: $504• Non-Hispanic white and other: $761• Average household: $670

By race and ethnicity, average annualconsumer out-of-pocket spending forpharmaceuticals is as follows:• Asian: $286• Black: $272• Hispanic: $305• Non-Hispanic white and other: $582• Average household: $514


REGION

By region, average annual consumer out-of-pocket spending for health insurance is asfollows:• Northeast: $1,462• Midwest: $1,505• South: $1,459• West: $1,437• Average household: $1,465

By region, average annual consumer out-of-pocket spending for medical services is asfollows:

• Northeast: $596• Midwest: $697• South: $614• West: $798• Average household: $670

By region, average annual consumer out-of-pocket spending for pharmaceuticals is asfollows:• Northeast: $412• Midwest: $500• South: $594• West: $489• Average household: $514


EDUCATION

By education, average annual consumer out-of-pocket spending for health insurance is asfollows:• Less than high school graduate: $1,123• High school graduate: $1,446• Some college: $1,323• Associate degree: $1,473• Bachelor degree: $1,690• Masters, doctoral degree: $1,912• Average household: $1,465

By education, average annual consumer out-of-pocket spending for medical services is asfollows:• Less than high school graduate: $ 368• High school graduate: $ 531• Some college: $ 627• Associate degree: $ 690• Bachelor degree: $ 937• Masters, doctoral degree: $1,018• Average household: $ 670

By education, average annual consumer out-of-pocket spending for pharmaceuticals is asfollows:• Less than high school graduate: $435• High school graduate: $504• Some college: $442• Associate degree: $599


• 16 •

• Bachelor degree: $577• Masters, doctoral degree: $604• Average household: $514

REFERENCES AND RESOURCES

New Strategist Publications, P.O. Box 242,Ithaca, NY 14851. (800) 848-0842. (www.newstrategist.com)

U.S. Bureau of Labor Statistics, 2 Massachusetts Avenue NE, Washington,DC 20212. (202) 691-5200. (www.bls.gov)

Who’s Buying Health Care, 5 edition, Newth

Strategist Publications, December 2008.

http://www.newstrategist.com

http://www.bls.gov


• 17 •

Researchers have long documentedvariations in healthcare spending. Variationsoccur across geographic areas and amongproviders, and even populations within ageographic area. Some researchers suggestthat reducing spending in high-spendingareas of the U.S. to the rates observed in thelowest spending regions could yieldsignificant savings for the healthcare systemwithout harming quality of care.

Figure 3.1 shows variations in Medicarespending per beneficiary.

DARTMOUTH ATLAS OF

HEALTHCARE

For more than 20 years, the Dartmouth AtlasProject has documented glaring variations inhow medical resources are distributed andused in the United States. The project usesMedicare data to provide comprehensiveinformation and analysis about national,regional, and local markets, as well asindividual hospitals and their affiliatedphysicians.

# < $7,000 # $7,000 – $7,500 # $7,500 – $8,000 # $8,000 – $9,000 # > $9,000 # Not populated

Figure 3.1. Medicare spending per beneficiary (sources: American Hospital Association based ionThe 2009 Dartmouth Atlas of Healthcare)

3 GEOGRAPHIC VARIATIONS IN

HEALTHCARE SPENDING


• 18 •

For its assessment, the Dartmouth AtlasProject uses the hospital care intensity index,or HCI, which reflects both the amount oftime spent in a hospital and the intensity ofphysician services delivered in the hospital.Chronically ill patients living in states andregions or using hospitals with a high HCI arelikely to spend more days in the hospital andsee more physicians during hospitalizations.

STATES RANKED BY HCI SCORE

Based on the HCI, New Jersey is the mostaggressive in providing healthcare services;Utah is the most conservative. States areranked as follows:1. New Jersey2. New York3. Louisiana4. Hawaii5. Nevada6. Florida7. California8. Mississippi9. Pennsylvania10. Delaware11. Texas12. Illinois13. Arkansas14. Tennessee15. Kentucky16. West Virginia17. South Carolina18. Maryland19. Alabama20. Michigan21. Oklahoma22. Massachusetts23. Missouri24. Virginia25. Rhode Island26. Ohio27. Connecticut28. Georgia29. Kansas30. North Carolina31. Indiana

32. Arizona33. Nebraska34. South Dakota35. Iowa36. Alaska37. Wisconsin38. Colorado39. Maine40. New Hampshire41. Minnesota42. New Mexico43. Vermont44. North Dakota45. Wyoming46. Montana47. Washington48. Idaho49. Oregon50. Utah


Dartmouth Atlas of Health Care, TheDartmouth Institute for Health Policy andClinical Practice, 35 Centerra Parkway,Suite 202, Lebanon, NH 03766. (603) 653-0800. (www.dartmouthatlas.org)

“Geographic Variation in Health CareSpending: A Closer Look,” Trend Watch,American Hospital Association, November2009. (www.aha.org/aha/trendwatch/2009/twnov09geovariation.pdf)

http://www.dartmouthatlas.org


• 19 •

The Centers for Medicare & Medicaid Services(CMS) assesses and forecasts national healthexpenditures by type of service delivered(hospital care, physician services, nursinghome care, etc.) and source of funding forthose services (private health insurance,Medicare, Medicaid, out-of-pocket spending,etc.) annually.

SPENDING Spending (growth) % of GNP

• 2000: $1.35 trillion (7.0%) 13.8%• 2001: $1.47 trillion (8.6%) 14.5%• 2002: $1.60 trillion (9.1%) 15.3%• 2003: $1.73 trillion (8.0%) 15.8%• 2004: $1.85 trillion (6.9%) 15.9%• 2005: $1.98 trillion (6.8%) 15.9%• 2006: $2.11 trillion (6.7%) 16.0%• 2007: $2.24 trillion (6.1%) 16.2%• 2008: $2.38 trillion (6.1%) 16.6%• 2009: $2.51 trillion (5.5%) 17.6%• 2010: $2.62 trillion (4.6%) 17.7%• 2011: $2.77 trillion (5.6%) 17.9%• 2012: $2.93 trillion (5.8%) 18.0%• 2013: $3.11 trillion (6.2%) 18.2%• 2014: $3.31 trillion (6.5%) 18.5%• 2015: $3.54 trillion (6.9%) 18.9%• 2016: $3.79 trillion (7.0%) 19.3%• 2017: $4.06 trillion (7.2%) 19.9%• 2018: $4.35 trillion (7.2%) 20.3%Note: Projections made prior to passage of healthcarereform legislation.

SOURCES OF FUNDS

The $2.51 trillion in health expenditures in2009 were distributed by source of funds asfollows (change from 2008 in parenthesis):• Private health

insurance: $854.4 billion (4.5%)• Federal: $873.2 billion (7.7%)• State and local: $317.3 billion (6.5%)• Out-of-pocket

payments: $282.7 billion (1.4%)• Other private funds: $181.8 billion (4.6%)

DISTRIBUTION OF EXPENDITURES

The $2.51 trillion in health expenditures in2009 were distributed by type of expenditureas shown in Table 4.1


National Health Expenditures, Centers forMedicare & Medicaid Services, 2009. (www.cms.hhs.gov/NationalHealthExpendData/)

4 NATIONAL HEALTH EXPENDITURES

http://www.cms.hhs.gov/NationalHealthExpendData/


• 20 •

TABLE 4.1

Distribution of 2009 health expenditures by type of expenditure (change from 2008 in parenthesis)

• Hospital care: $785.8 billion (5.7%)• Physician and clinical services: $539.1 billion (6.0%)• Prescription drugs (retail outlet sales): $244.8 billion (4.0%)• Government administration and net cost

of private health insurance: $178.8 billion (8.0%)• Nursing home care: $143.9 billion (4.8%)• Structures and equipment: $114.9 billion (5.9%)• Dental services: $101.9 billion (2.0%)• Other personal healthcare: $ 76.1 billion (7.9%)• Government public health activities: $ 72.3 billion (5.8%)• Home healthcare: $ 69.7 billion (8.1%)• Other professional services: $ 68.7 billion (4.4%)• Research: $ 44.5 billion (2.3%)• Non-durable medical products (retail outlet sales): $ 40.2 billion (3.0%)• Durable medical equipment (retail outlet sales): $ 25.2 billion (0.1%)


• 21 •

National and State Estimates of the Impact ofObesity on Direct Health Care Expenses, aNovember 2009 report by the AmericanPublic Health Association and United HealthFoundation, estimated the prevalence of adultobesity at 31.3%.

This estimate is higher than the 27% estimateby the Centers for Disease Control andPrevention (CDC), which is based on self-reported weight estimates from telephonesurveys. Kenneth E. Thorpe, Ph.D., at EmoryUniversity, has found individuals have atendency to under-report their weight ontelephone surveys by about 9.5%.

The prevalence of adult obesity in the U.S.has increased over the last 20 years, from12% in 1989 to 27% in 2008, according to theCDC.

PERCENTAGE OF ADULTS WHO

ARE OBESE, STATE-BY-STATE

• Alabama: 36.3%• Alaska: 31.4%• Arizona: 30.4%• Arkansas: 34.3%• California: 28.8%• Colorado: 23.8%• Connecticut: 26.1%• Delaware: 32.7%• District of Columbia: 26.4%• Florida: 29.4%• Georgia: 32.0%• Hawaii: 28.0%• Idaho: 30.1%• Illinois: 31.5%• Indiana: 31.7%• Iowa: 31.1%• Kansas: 32.8%• Kentucky: 34.8%• Louisiana: 33.9%• Maine: 30.3%• Maryland: 31.2%• Massachusetts: 26.0%• Michigan: 34.4%• Minnesota: 29.8%• Mississippi: 37.7%• Missouri: 33.5%• Montana: 29.3%• Nebraska: 32.0%• Nevada: 30.9%• New Hampshire: 29.1%• New Jersey: 28.1%• New Mexico: 30.6%• New York: 29.4%• North Carolina: 34.2%• North Dakota: 32.4%• Ohio: 33.9%• Oklahoma: 35.2%

5 OBESITY

“If current trends continue, 103million American adults will beconsidered obese by 2018. The U.S.would spend an estimated $344 billionon healthcare costs attributable toobesity in 2018, or 21% of directhealthcare spending, if rates continueto increase at their current levels. Ifobesity levels were held at theircurrent rates, the U.S. could save anestimated $820 per adult in healthcarecosts by 2018 – a savings of almost$200 billion dollars.”

United Health Foundation, 11/09


• 22 •

• Oregon: 29.2%• Pennsylvania: 32.6%• Rhode Island: 26.5%• South Carolina: 35.6%• South Dakota: 32.7%• Tennessee: 35.3%• Texas: 34.0%• Utah: 27.9%• Vermont: 27.8%• Virginia: 30.2%• Washington: 30.4%• West Virginia: 36.7%• Wisconsin: 30.7%• Wyoming: 30.3%


American Public Health Association, 800 IStreet NW, Washington, DC 20001. (202) 777-2742. (www.apha.org)

Centers for Disease Control andPrevention, 1600 Clifton Road NE, Atlanta, GA 30333. (404) 639-3311. (www.cdc.gov)

National and State Estimates of the Impactof Obesity on Direct Health Care Expenses,United Health Foundation, November 2009. (www.americashealthrankings.org/2009/report/Cost%20Obesity%20Report-final.pdf)

United Health Foundation, 9900 Bren RoadEast, Minnetonka, MN 55343. (www.unitedhealthfoundation.org)

http://www.apha.org

http://www.cdc.gov

http://www.americashealthrankings.org/2009/

http://www.unitedhealthfoundation.org


• 23 •

According to the Centers for Disease Controland Prevention (CDC), 20.6% of U.S. adultssmoke.

A June 2009 survey by Gallup reported thesame percentage, 20%. Among smokers,41% smoke at least one pack per week.

HEALTH IMPACT

According to the CDC, smoking-relateddiseases kill 440,000 Americans a year,including more than 35,000 exposed only tosecondhand smoke. The American CancerSociety estimates that smoking accounts for30% of all cancer deaths.

Smoking accounts for about 8% of allpersonal healthcare-related spending. Eachpack of cigarettes sold in the United Statescosts an average of $7.18 in health-relatedlosses, according to the CDC. Even thesenumbers are low, because the CDC does notinclude the impact of cigars, pipes, andsmokeless tobacco. Nor does it include lostproductivity from smoking-related disability,absenteeism, and smoke breaks. The CDCreports that the economic toll from smoking is$157 billion a year – increasing despite adecline in the number of people who smoke.

CORRELATION WITH PERSONAL

INCOME

Adult smoking in the U.S. correlates tohousehold income, with smoking habitsdropping as income rises. By annual income,the percentage who smoke is as follows

(source: Gallup):• Less than $12,000: 34%• $12,000 to $35,999: 28%• $36,000 to $59,999: 22%• $60,000 to $89,999: 16%• $90,000 and higher: 15%

The CDC has advocated further increasingthe price of cigarettes to help reducesmoking. The 2009 increase in cigarette taxreflected this philosophy.

PERCENTAGE OF ADULTS WHO

SMOKE, STATE-BY-STATE

• Alabama: 22.5%• Alaska: 22.2%• Arizona: 19.8%• Arkansas: 22.4%• California: 14.3%• Colorado: 18.7%• Connecticut: 15.4%• Delaware: 18.9%• District of Columbia: 17.2%• Florida: 19.3%• Georgia: 19.4%• Hawaii: 17.0%• Idaho: 19.1%

6 SMOKING

“The 62¢ increase in federal cigarettetaxes going into effect is nearly threetimes as likely to affect low-incomeAmericans as it is to affect high-income Americans.”

Gallup, 4/1/09


• 24 •

• Illinois: 20.1%• Indiana: 24.1%• Iowa: 19.8%• Kansas: 17.9%• Kentucky: 28.2%• Louisiana: 22.6%• Maine: 20.2%• Maryland: 17.1%• Massachusetts: 16.4%• Michigan: 21.1%• Minnesota: 16.5%• Mississippi: 23.9%• Missouri: 24.5%• Montana: 19.5%• Nebraska: 19.9%• Nevada: 21.5%• New Hampshire: 19.3%• New Jersey: 17.1%• New Mexico: 20.8%• New York: 18.9%• North Carolina: 22.9%• North Dakota: 20.9%• Ohio: 23.1%• Oklahoma: 25.8%• Oregon: 16.9%• Pennsylvania: 21.0%• Rhode Island: 17.0%• South Carolina: 21.9%• South Dakota: 19.8%• Tennessee: 24.3%• Texas: 19.2%• Utah: 11.7%• Vermont: 17.6%• Virginia: 18.5%• Washington: 16.8%• West Virginia: 26.9%• Wisconsin: 19.6%• Wyoming: 22.1%



Gallup Inc., 901 F Street NW, Washington,DC 20004. (202) 715-3030. (www.gallup.com)

http://www.cdc.gov

http://www.gallup.com


• 25 •

Since 1989, UnitedHealth Foundation hasdeveloped an annual healthcare index foreach state. The annual assessment uses acomposite of seventeen criteria measuringdemographic and lifestyle factors, access tohealthcare, occupational safety, and disease/mortality rates. Ranking score is based onthe weighted number of standard deviationsa state is above or below the national norm.

The following presents a summary of the2009 assessment.

2009 RANKINGS Ranking Score

1. Vermont: 1.0642. Utah: 1.0063. Massachusetts: 0.9054. Hawaii: 0.8925. New Hampshire: 0.8866. Minnesota: 0.8287. Connecticut: 0.7798. Colorado: 0.6069. Maine: 0.56910. Rhode Island: 0.55711. Washington: 0.53812. Wisconsin: 0.53413. Oregon: 0.53014. Idaho: 0.52415. Iowa: 0.50316. Nebraska: 0.47517. North Dakota: 0.42118. New Jersey: 0.41419. Wyoming: 0.34320. South Dakota: 0.28621. Maryland: 0.28121. Virginia: 0.28123. California: 0.27824. Kansas: 0.245

25. New York: 0.20326. Montana: 0.19227. Arizona: 0.08228. Pennsylvania: -0.03129. Illinois: -0.05630. Michigan: -0.06331. New Mexico: -0.06732. Delaware: -0.08233. Ohio: -0.08434. Alaska: -0.09135. Indiana: -0.18836. Florida: -0.20037. North Carolina: -0.20638. Missouri: -0.23839. Texas: -0.32040. Arkansas: -0.41641. Kentucky: -0.43442. West Virginia: -0.44643. Georgia: -0.46944. Tennessee: -0.48045. Nevada: -0.48246. South Carolina: -0.49247. Louisiana: -0.53048. Alabama: -0.54649. Oklahoma: -0.56650. Mississippi: -0.789(The District of Columbia is not included inthe assessment)

HEALTH SCORE IMPROVEMENTS

The following states had the greatestincrease in ranking score from 1990 to 2009:• New York: 37.5• Vermont: 36.5• Hawaii: 35.0• New Hampshire: 34.8• New Jersey: 32.5• Minnesota: 32.5

7 STATE HEALTH RANKINGS


• 26 •

The following states had the leastimprovement in ranking score: • Oklahoma: -2.7• West Virginia: 3.9• Mississippi: 6.2• Kentucky: 6.7


America’s Health Rankings: A Call ToAction For Individuals & Their Communities,United Health Foundation, 2009.(www.americashealthrankings.org)

United Health Foundation, 9900 Bren RoadEast, Minnetonka, MN 55343. (www.unitedhealthfoundation.org)

http://www.americashealthrankings.org

http://www.unitedhealthfoundation.org


• 27 •

PART II: HOSPITALS & HEALTHCARE

PROVIDERS


• 28 •

According to the National Association ofChildren’s Hospitals and Related Institutions(NACHRI), there are approximately 200children’s hospitals in the United States.These free-standing children’s hospitalsserve about 12% of all hospitalized children,are responsible for 20% of the cost of treatingchildren, and train about 25% of allpediatricians in the United States. More than8.3 million outpatient visits are provided bychildren’s hospitals.

Academic medical centers with children’shospitals admit 18% of all inpatient childrenand garner 29% of the revenue in that area.There are 60 independent children’s teachinghospitals.

According to the NACHRI, nearly two-thirdsof the care at children’s hospitals is for kids 5and younger, with 25% for newborns.Compared with the 9% of general hospitalbeds allotted to intensive care, children’shospitals devote 26% of their beds to theICU.

The largest children’s hospitals, as identifiedby the NACHRI Annual Survey on Utilizationand Financial Indicators of Children’sHospitals, Fiscal 2009, are presented inTable 8.1.

8 CHILDREN’S HOSPITALS

TABLE 8.1

Largest Children’s Hospitals

Staffed Beds Admissions

• Children’s Hospital of Atlanta: 502 22,925• Texas Children’s Hospital (Houston): 458 22,080• Cincinnati Children’s Hospital Medical Center: 449 15,938• Children’s Hospital of Philadelphia: 421 25,699• Riley Hospital for Children (Indianapolis): 393 9,866• Children’s Hospital Boston: 383 23,747• Cleveland Clinic Children’s Hospital: 372 6,663• Children’s Medical Center Dallas: 366 18,276• Nationwide Children’s Hospital (Columbus): 344 16,247• Phoenix Children’s Hospital: 344 12,248• Children’s Hospitals and Clinics of Minnesota: 332 14,166• Arkansas Children’s Hospital (Little Rock): 316 13,891• Children’s Hospital Central California (Madera): 315 12,680• Morgan Stanley Children’s Hospital of

New York Presbyterian: 300 12,489


• 29 •


National Association of Children’s Hospitalsand Related Institutions, 401 Wythe Street, Alexandria, VA 22314. (703) 684-1355. (www.childrenshospitals.net)

TABLE 8.1 (Con’t)

Staffed Beds Admissions

• Children’s Mercy Hospitals and Clinics (Kansas City): 295 15,325• Childrens Hospital Los Angeles: 286 10,784• Children’s Hospital (Aurora, Colorado): 284 11,649• Children’s Hospital of Alabama (Birmingham): 282 14,283• Cook Children’s Medical Center (Ft. Worth): 281 11,999• Miami Children’s Hospital: 272 12,066• Lucile Packard Children’s Hospital at Stanford (Calif.): 271 8,229• Loma Linda University Children’s Hospital: 270 9,704• Children’s Hospital Medical Center of Akron: 264 8,647• Kosair Children’s Hospital (Louisville): 261 9,220• Children’s Hospital of Pittsburgh of UPMC: 260 14,367• Rady Children’s Hospital (San Diego): 260 13,569

http://www.childrenshospitals.net


• 30 •

ARRA FUNDING FOR RESEARCH

The American Recovery and ReinvestmentAct (ARRA) of 2009 (P.L. 111-5), appropriated$1.1 billion for comparative effectivenessresearch (CER) to help identify which health-care services work best. This allocationreflects legislators’ belief that better decisionsabout the use of healthcare resources couldimprove the public’s health and reduce thecosts of care.

CER is the direct comparison of healthcareinterventions to determine which work best forwhich patients and which pose the greatestbenefits and harms, and under whatcircumstances.

The ARRA also appropriated $400 million tothe National Institutes of Health (NIH), $300million to the Agency for HealthcareResearch and Quality (AHRQ), and theremaining $400 million to the Secretary ofHealth and Human Services (HHS). TheARRA also directed the Institute of Medicine(IOM) to recommend national priorities forspending the $400 million designated for theHHS Secretary.

PRIORITIES FOR CER

In June 2009, the IOM published a list of 100recommendations as a starting point for asustained effort to conduct comparativeeffectiveness research in the United States.The l ist is available onl ine atwww.iom.edu/cerpriorities.

OUTLOOK

CER will expand medical research beyondstrictly controlled, randomized clinical trials toalso include studies involving ‘real patients’ in‘real settings.’ It will examine the differencein effectiveness between drugs, devices,and/or interventions for the same condition.

9 COMPARATIVE EFFECTIVENESS

RESEARCH

“Today, when a patient and physician,perhaps with other clinicians andfamily caregivers, are discussing thebest course of treatment for thepatient’s medical condition, they oftendo not have the scientific evidencethey need to make a determination. Although there may be studies thatindicate that a treatment is efficaciousrelative to a placebo, there frequentlyare no studies that directly comparethe different available alternatives orthat have examined their impacts inpopulations of the same age, sex, andethnicity or with the samecomorbidities as the patient.”

Institute of Medicine, 6/09

http://www.iom.edu/cerpriorities


• 31 •

The Obama Administration sees comparativeeffectiveness research as a key strategy forreforming the nation’s healthcare system.CER would help identify the treatment optionsthat are most effective for a given condition.Many healthcare providers, consumer groups,and professional organizations have alsoexpressed enthusiasm at the prospect ofidentifying new knowledge about how theeffectiveness of one treatment compares withothers.

Despite its far-reaching potential, some viewCER with skepticism. For instance, thePartnership to Improve Patient Care, acoalition of 36 industry, patient-advocacy, andclinician organizations, raised concerns thatCER will not take adequate account ofindividual patient differences and may impedethe development and adoption ofimprovements in medical care and stymieprogress in personalized medicine. Further,the drug and medical device industries haveexpressed concerns that research oncomparing medical treatments could be a firststep to government rationing of healthcare.


Alexander, G. Caleb and Randall S.Stafford, “Does Comparative EffectivenessHave A Comparative Edge?” Journal of theAmerican Medical Association, June 17,2009.

“This shift will correct a long-standinglimitation of traditional medicalresearch. Healthcare is probably theonly industry that doesn’t formallylearn from its daily work. We find outwhat works and what doesn’t inhealthcare in clinical studies. Theproblem is the studies are so strictabout who can enroll that theirfindings don’t always pan out whenapplied in other healthcare settings,where the patient population is morediverse. What we need to also do issay, ‘How can I be sure that thistherapy is also going to work when Itry it in a community hospital oroutside of the study?’ The way youdo that is by doing an effectivenessstudy. You loosen up the inclusioncriteria and say, ‘Let’s just see if I tryto do this therapy, what do I get in thereal world?’ ”

Prof. Peter J. Pronovost, M.D.Johns Hopkins UniversityH&HN, 11/09

“It can’t just be a comparison of thisdrug versus that drug. This missesimportant aspects of practice andends up exempting high-costprocedures from scrutiny. Researchers should focus oncomparisons that include lifestylemodifications, such as diet andexercise, as well as alternativetherapies that patients oftenimplement on their own. In addition,research is needed on the mosteffective ways of delivering care. Forinstance, some studies show betterchronic disease outcomes with nursecase managers compared withphysicians working alone.”

Prof. Randall Stafford, M.D. Stanford School of Medicine Stanford Health Policy, 6/16/09


• 32 •

Aston, Geri, “Comparative Effectiveness,”Hospitals & Health Networks, November2009, pp 22-24.

Garber, Alan M. and Sean R. Tunis, “DoesComparative-Effectiveness ResearchThreaten Personalized Medicine?” The NewEngland Journal of Medicine, May 7, 2009.

Initial National Priorities For ComparativeEffectiveness Research, Institute ofMedicine, June 2009.

Mundy, Alicia, “Drug Makers Fight StimulusProvision,” The Wall Street Journal,February 10, 2009.

Rhea, Shawn, “Decisive Moment,” ModernHealthcare, July 6, 2009, pp 8-9.


• 33 •

CAM USE IN AMERICA

According to a December 2008 report by theNational Center for Complementary andAlternative Medicine, 38% of adults in theUnited States aged 18 years and over and12% of children aged 17 years and under usesome form of complementary and alternativemedicine (CAM).

The most commonly used CAM therapiesamong U.S. adults are as follows:• Non-vitamin, non-mineral, and

natural products (most common of which are fish oil,omega 3/DHA, glucosamine, echinacea, flaxseed oil/pills, and ginseng): 18%

• Deep breathing exercises: 13%• Meditation: 9%• Chiropractic or osteopathic

manipulation: 9%• Massage: 8%• Yoga: 6%

Adults use CAM most often to treat pain,including back pain or problems, neck pain orproblems, joint pain or stiffness/other jointcondition, arthritis, and other musculoskeletalconditions.

CAM use is highest among the followingdemographic categories:• Women (43%, compared to men 34%)• Those aged 30-to-69 (30-to-39 years:

39%, 40-to-49 years: 40%, 50-to-59years: 44%, 60-to-69 years: 41%)

• Those with higher levels of education

(masters, doctorate or professional: 55%) • Those living in the West (45%) • Those who have quit smoking (48%)

Overall, CAM use among children is nearly12%, or about 1 in 9 children. Children arefive times more likely to be treated by CAM ifa parent or other relative uses CAM. Amongchildren, CAM therapies are most often forback or neck pain, head or chest colds,anxiety or stress, other musculoskeletalproblems, and attention deficit/ hyperactivitydisorder (AD/HD). The most commonly usedCAM therapies among children are asfollows:• Non-vitamin, non-mineral,

and natural products: 4%• Chiropractic or osteopathic

manipulation: 3%• Deep breathing exercises: 2%• Yoga: 2%

SPENDING

According to a July 2009 report by theNational Center for Complementary andAlternative Medicine, adults spent $33.9billion out of pocket on visits to CAMpractitioners and purchases of CAM products,classes, and materials in 2007.

Nearly two-thirds of the total out-of-pocketcosts that adults spent on CAM were for self-care purchases of CAM products, classes,and materials. Despite this emphasis on self-care therapies, 38.1 million adults made anestimated 354.2 million visits to practitioners

10 COMPLEMENTARY & ALTERNATIVE

MEDICINE


• 34 •

of CAM.

Distribution of CAM spending in 2007 was asfollows:• Non-vitamin, non-mineral, and

natural products: $14.8 billion• Office visits:• Classes (yoga, tai chi,

etc.): $ 4.1 billion• Homeopathic medicine: $ 2.9 billion• Relaxation techniques: $ 0.2 billion

HOSPITAL CAM PROGRAMS

According to the American HospitalAssociation, 21% of hospitals offer some typeof CAM, an increase from 17% in 2002 and8% in 1998 that had such programs.

A survey by Health Forum, a subsidiary of theAmerican Hospital Association, found thatamong hospitals that offered CAM, the toptherapies offered were as follows:Inpatient CAM Services• Massage therapy: 37%• Music/art therapy: 26%• Therapeutic touch: 25%• Guided imagery: 22%• Relaxation training: 20%• Acupuncture: 12%

Outpatient CAM Services• Massage therapy: 71%• Tai Chi, yoga, or qi gong: 47%• Relaxation training: 43%• Acupuncture: 39%• Guided imagery: 32%• Therapeutic touch: 30%

The following were the key reasons foroffering CAM services: • Patient demand: 87%• Reflecting organizational mission: 62%• Clinical effectiveness: 61%• Attracting new patients: 38%• Physicians’ requests: 37%• Differentiation from competitors: 28%

• Possible cost savings: 14%• Employee requests: 11%• Insurance coverage: 4%• Other: 9%

Eighty-one percent (81%) of CAM users paidfor CAM services out-of-pocket.


Barnes Patricia M., Barbara Bloom andRichard L. Nahin, Complementary andAlternative Medicine Use Among Adults andChildren: United States, National Center forHealth, December 2008.

Nahin, Richard L., Patricia M. Barnes,Barbara J. Stussman, and Barbara Bloom,Costs of Complementary and AlternativeMedicine (CAM) and Frequency of Visits toCAM Practitioners: United States, 2007,National Center for Health Statistics, July2009.

National Center for Complementary andAlternative Medicine, 9000 Rockville Pike,Bethesda, MD 20892. (888) 644-6226. (www.nccam.nih.gov)

http://www.nccam.nih.gov


• 35 •

RETAIL-BASED HEALTHCARE

A rising number of pharmacy and retailchains are opening in-store health clinics.

These retail health clinics are creating a newmodel: one with more limited services atlower prices and almost always staffed bynurses or physician assistants. For manyconsumers the clinics are attractive becauseof the low cost; most charge less than $65per visit.

CVS, Duane Reed, Osco Drug, Rite Aid, andWalgreens are among the drug store chainsoffering in-store clinics. In other retailsegments, Costco, Target, and Walmart alsooperate clinics at some locations. With 500MinuteClinics operating in its stores in 25states, CVS is the marketshare leader.

There were over 14,000 retail-based clinics inthe U.S. at year-end 2009, according to theConvenient Care Association

PATIENT SERVICES

An assessment by Rand Corporation and theUniversity of Pittsburgh School of Medicineanalyzing data from more than 1.3 millionvisits to retail clinics found the following:• Patients ages 18-to-44 accounted for 43%

of the people visiting retail clinics,compared to 23% for primary carephysician offices. Just 39% of the patientsat retail clinics say they had a primary carephysician; 80% of people surveyednationally say they have a personal doctor.

• When the concept of retail clinics firstlaunched, most patients paid out-of-pocket.Now most use insurance for reimburse-ment. The percentage of retail office visitspaid for out-of-pocket dropped from 100%in 2000 to 16% in 2007.

• About 90% of the visits to retail clinics werefor preventive care and 10 simple acuteconditions: upper respiratory infections,sinusitis, bronchitis, sore throat,immunizations, inner ear infections,swimmers ear, conjunctivitis, urinary tractinfections, and either a screening test or ablood test. The same conditions accountedfor 18% of visits to primary care physicianoffices and 12% of emergency departmentvisits.

A recent survey by Harris Interactive foundthat 7% of households had a family memberwho visited a retail-based clinic during theprior 12 months. Among those patients, 16%

11 CONVENIENT-CARE CLINICS

“Consumers are receptive toinnovations such as retail clinics. Sixteen percent of consumers haveused a walk-in clinic located in apharmacy, shopping center store orother retail setting, and 34% say theymight do so in the future. Forty-fourpercent of consumers say they wouldbe comfortable with the accuracy,safety and quality of care offered in aretail clinic that is staffed by a nursepractitioner.”

American Hospital Association 2009 AHA Environmental Scan


• 36 •

were uninsured, an increase from 22% in2007. Visits were for the following reasons:• Vaccination: 40%• Treatment for a common medical

condition like an ear infection, cold, strep throat, skin rash, or

sinus infection: 39%• Preventive screening tests for

conditions like high blood pressure, high cholesterol, diabetes, or

allergies: 24%• Physical exam for sports, school,

camp, etc.: 10%• Received a referral from family

physician or hospital emergencydepartment: 8%

• Other: 16%

PATIENT SATISFACTION

Harris Interactive found that almost all clinicpatients are very/somewhat satisfied with thequality of the care (90%), cost (86%), andstaff qualifications (88%). The biggest driverof satisfaction appears to be convenience,with 93% satisfied with the convenience ofthese clinics. Although an increasing numbersay they are satisfied with staff qualifications,65% have concerns that serious medicalproblems might not be accurately diagnosed.

CVS’ in-store MinuteClinics report a 95%customer satisfaction rating from the morethan five million patient visits the clinics havegenerated.

HOSPITAL-OPERATED CLINICS

Several healthcare systems have entered theretail market. Pennsylvania-based GeisingerHealth System operates five clinics in WeisMarket locations. Mayo Clinic opened aMayo Express Clinic in a Minneapolis mall.Alegent Health operates nine clinics at Hy-Vee grocery stores in Nebraska. Houston-based Memorial Hermann and Sutter Health,

in San Francisco, among others, also operateconvenient-care clinics.


Convenient Care Association, 260 SouthBroad Street, Suite 1800, Philadelphia, PA19102. (215) 731-7140. (www.ccaclinics.org)

Mehrotra, A., M.C. Wang, J.R. Lave, J.L.Adams and E.A. McGlynn, “Retail Clinics,Primary Care Physicians, and EmergencyDepartments: A Comparison of Patients’Visits,” Health Affairs, September/October2008, pp 1272-1282.

“New WSJ.com/Harris Interactive StudyFinds Satisfaction with Retail-Based HealthClinics Remains High,” Harris Interactive,May 1, 2008.

Vesely, Rebecca, “Where Are The RetailClinics?” Modern Healthcare, June 1, 2009,p. 16.

http://www.ccaclinics.org


• 37 •

OUT-OF-POCKET PAYMENTS

According to the Centers for Medicare andMedicaid Services, patients paid $24.5 billionout-of-pocket for hospital services in 2008.This amount includes payment of deductiblesand co-payments by those with healthinsurance as well as payments by uninsuredconsumers.

Hospitals generally find reimbursement fromindividuals more challenging than from healthinsurance companies.

BAD DEBT

Bad debt typically amounts to 3% to 4% ofhospitals’ gross revenue, one of the highestrates among all industry sectors. Bad debtamong California hospitals alone amountedto $8.0 billion in 2008, according to KurtSalmon Associates.

Denial of claims by health insurancecompanies for treatments that fall outside ofcoverage is a contributor to unpaid patientdebt.

FAIR BILLING FOR UNINSURED

PATIENTS

Following clarification of a federal policy bythe U.S. Department of Health & HumanServices (HHS) in 2004 stating there are nofederal rules preventing hospitals fromoffering discounts to uninsured patients,many large for-profit hospital chainsannounced discount policies. Most hospitalssubsequently revised pricing policies for theuninsured. Now most groups chargeuninsured patients no more than the highestmanaged-care rate.

Recent legislation in California requireshospitals to offer discounts to uninsuredpatients who earn up to 350% of the federalpoverty level, or a household income of about$72,000.

12 DEBT COLLECTION

“Insurance may provide patients littleprotection from catastrophic medicalbills. Health insurers are very creativein how they can erode the actual valueof a policy. Medical bills can escalaterapidly when patients need more thanroutine care and run into clauses thatlimit benefits or exclude certainspending from applying todeductibles.”

Prof. Karen Pollitz, Ph.D. Health Policy Institute Georgetown University Modern Healthcare, 8/17/09


• 38 •

Some hospitals have taken the lead in fairbilling for uninsured patients. UniversityMedical Center in Tucson, for example, nevercharges uninsured patients, regardless oftheir income, more than the rates Medicarepays.

COLLECTION STRATEGIES

Hospitals are implementing various measuresto reduce bad debt, such as capturing patientinformation at the time of service, requiringearly verification of insurance, institutingprocesses to reduce claims denials, andoffering a greater say in managed-carecontract negotiations. With less fanfare,some hospitals are adopting steps such ascollecting insurance and credit cardinformation before elective procedures,counsel ing pat ien ts on f inancialresponsibilities, collecting co-payments moreconsistently at the time of service, and billingpatients even receiving reimbursement frominsurance.

Conifer Health Solutions, the revenue-cyclesubsidiary of Tenet Healthcare Corporation,instituted a procedure in 2009 that profilespatients into 15 categories based on theirestimated ability to pay medical bills. Thesystem uses 44 variables, including thefollowing:• Credit score, available credit, mortgage

• U.S. Census Bureau figures for averageper capita income and home value byneighborhood

• Prior hospital visits and payment history

• Insured or uninsured?

• Emergency services or elective care?

• Did the patient pay part of the bill beforeleaving the hospital?

UPFRONT PAYMENTS

An increasing number of hospitals haveinstituted upfront payment policies.

Holy Name Hospital (Teaneck, New Jersey),for example, has targeted easily identifiablecopayments in the emergency room and out-of-pocket payments for elective and same-day procedures for upfront collection. In2008, cash payments from emergency roompatients contributed $186,900 to thehospital’s bottom line, while cash paymentsfrom elective admissions were $205,000.These cash payments amounted to 22% ofthe hospital’s operating margin.


Evans, Melanie, “Cash Is King,” ModernHealthcare, August 17, 2009, pp 28-30.

“Increasingly [hospitals] now knowexactly which patients will be able topay for visits. More hospitals andsystems are using credit scores andfinancial records in collectionstrategies – and they’re askingpatients to pay upfront.”

Modern Healthcare, 8/17/09

“Healthcare executives say patientsare more likely to pay before or duringa hospital visit rather then after.”



• 39 •

Modern Healthcare assesses the healthcareconstruction market annually. This chapterpresents a summary of the 2009 assessment.

HOSPITAL CONSTRUCTION

The cost of hospital construction projectscompleted in 2008 totaled $36.3 billion. Thisrepresented 3,728 projects of all types (newfacilities, expansions, and renovations) and38,296 beds. Distribution by type of facility ispresented in Table 13.1.

Representing 3,651 projects and 83,449beds, in total, $88.8 billion in hospital projectswere designed during 2008.

LARGEST HEALTHCARE DESIGN

AND CONSTRUCTION FIRMS

Design Firms• HDR Architecture

(www.hdrinc.com): $5.9 billion• HKS (www.hksinc.com): $4.4 billion• Perkins & Will

(www.perkinswill.com): $1.9 billion• NBBJ (www.nbbj.com): $1.4 billion• Granary Associates

(www.granaryassoc.com): $1.3 billion• Karlsberger

(www.karlsberger.com): $1.2 billion• Hellmuth, Obata + Kassabaum

(www.hok.com): $1.1 billion

Construction Management Firms• Turner Construction Co

(www.turnerconstruction.com): $2.6 billion

• Bovis Lend Lease(www.bovis.com): $1.8 billion

• McCarthy Building Cos.(www.mccarthy.com): $1.3 billion

• Skanska USA(www.skanskausa.com): $1.2 billion

• Jacobs Engineering Group(www.jacobs.com): $1.2 billion

• J.E. Dunn Construction (www.jedunn.com): $1.0 billion

• Whiting-Turner Contracting Co. (www.whiting-turner.com): $1.0 billion

• William A. Berry & Son (www.berry.com): $ 889 million

• Parsons Corp. (www.parsons.com): $ 767 million

General Contractors• Robins & Morton Group

(www.robinsmorton.com): $759 million• Brasfield & Gorrie

(www.brasfieldgorrie.com): $737 million• Hunt Construction Group

(www.huntconstructiongroup.com):$656 million

• DPR Construction (www.dprinc.com): $487 million

• Clark Construction Group(www.clarkconstruction.com): $450 million

• BE&K Building Group(www.bekbuildinggroup.com): $431 million

• Rodgers Builders (www.rodgersbuilders.com): $294 million

13 DESIGN & CONSTRUCTION

http://www.hdrinc.com

http://www.hksinc.com

http://www.perkinswill.com

http://www.nbbj.com

http://www.granaryassoc.com

http://www.karlsberger.com

http://www.hok.com

http://www.turnerconstruction.com

http://www.bovis.com

http://www.mccarthy.com

http://www.skanskausa.com

http://www.jacobs.com

http://www.jedunn.com

http://www.whiting-turner.com

http://www.berry.com

http://www.parsons.com

http://www.robinsmorton.com

http://www.brasfieldgorrie.com

http://www.huntconstructiongroup.com

http://www.dprinc.com

http://www.clarkconstruction.com

http://www.bekbuildinggroup.com

http://www.rodgersbuilders.com


• 40 •


Robeznicks, Andis, “The Pressure Builds,”Modern Healthcare, March 16, 2009, pp 24-30.

TABLE 13.1

Distribution Of Completed HealthcareConstruction Projects in 2008

• Acute-care hospitals: $21.9 billion (2,015 projects)- Entire acute-care hospitals: $11.1 billion (197 projects, 12,884 beds)- Hospital expansions: $ 6.7 billion (392 projects, 8,130 beds)- Hospital renovations: $ 4.2 billion (1,426 projects, 6,800 beds)

• Free-standing outpatient facilities: $ 3.8 billion (629 projects)• Specialty hospitals: $ 3.4 billion (179 projects)• Research facilities: $ 3.0 billion (127 projects)• Medical office buildings: $ 2.1 billion (530 projects)• Parking garages: $ 723 million (76 projects)• Rehabilitation facilities: $ 700 million (76 projects)• Assisted-living facilities: $ 486 million (66 projects)• Nursing homes: $ 118 million (30 projects)


• 41 •

The American Hospital Association publishedThe Economic Contribution of Hospitals inJanuary 2009.

This chapter sources data from this report.

HOSPITAL CARE AND THE U.S.

ECONOMY

Hospital care is the largest component of thehealthcare sector. This sector represents16.2% of GDP, or approximately $2.2 trillion.Hospital revenue accounts for $697 billion ofthat total.

Hospitals employ nearly 5.3 million peopleand are the second largest source of privatesector jobs. Hospitals pay $299 billion inwages and salaries annually.

Hospitals spend about $304 billion annuallyon goods and services.

Combining salaries/wages and spending forgoods and services, the direct annualcontribution to the U.S. economy by hospitalsis $603 billion.

STATE-BY-STATE

HOSPITAL EXPENDITURES*

• Alabama: $ 7.99 billion• Alaska: $ 1.51 billion• Arizona: $10.06 billion• Arkansas: $ 4.73 billion

• California: $59.59 billion• Colorado: $ 8.61 billion• Connecticut: $ 7.35 billion• Delaware: $ 2.08 billion• District of Columbia: $ 3.26 billion• Florida: $33.10 billion• Georgia: $15.24 billion• Hawaii: $ 2.11 billion• Idaho: $ 2.42 billion• Illinois: $27.54 billion• Indiana: $13.58 billion• Iowa: $ 6.27 billion• Kansas: $ 4.78 billion• Kentucky: $ 8.89 billion• Louisiana: $ 8.17 billion• Maine: $ 3.36 billion• Maryland: $10.88 billion• Massachusetts: $20.14 billion• Michigan: $22.48 billion• Minnesota: $12.05 billion• Mississippi: $ 5.53 billion• Missouri: $14.78 billion• Montana: $ 2.02 billion• Nebraska: $ 4.37 billion• Nevada: $ 3.67 billion• New Hampshire: $ 3.32 billion• New Jersey: $16.11 billion• New Mexico: $ 2.90 billion• New York: $49.65 billion• North Carolina: $17.49 billion• North Dakota: $ 1.74 billion• Ohio: $28.05 billion• Oklahoma: $ 6.08 billion• Oregon: $ 6.84 billion• Pennsylvania: $30.84 billion• Rhode Island: $ 2.52 billion• South Carolina: $ 8.46 billion• South Dakota: $ 1.97 billion

14 ECONOMIC CONTRIBUTION OF

HOSPITALS


• 42 •

• Tennessee: $13.95 billion• Texas: $37.77 billion• Utah: $ 4.14 billion• Vermont: $ 1.48 billion• Virginia: $13.42 billion• Washington: $11.83 billion• West Virginia: $ 4.19 billion• Wisconsin: $12.72 billion• Wyoming: $ 908 million* Expenditures = wages/salaries + purchased goods

and services


The Economic Contribution Of Hospitals,American Hospital Association, January2009. (www.aha.org/aha/content/2009/pdf/011209-econmic-contrib-hosp.pdf)


• 43 •

The adoption of electronic medical records(EMRs), also called electronic health records(EHRs), is seen as an import effort in makingthe healthcare system more efficient. Thefederal government has set 2014 as thetarget for making interoperable EHRsavailable for all Americans.

By some estimates, it could cost more than$300 billion over a decade to create anational system of electronic health records –about the same amount that studies show iscurrently wasted on unnecessary orineffective medical treatments.

The Annual Leadership Survey, conducted bythe Healthcare Information and ManagementSystems Society (HIMSS), documentsprogress by hospitals in the adoption ofelectronic health records (see Table 15.1).

EMR VENDORS

According to the HIMSS Analytics Database,the top vendors of acute-care EMR systems,ranked by total installations as of January2009, are as follows:• Meditech (www.meditech.com): 1,185• McKesson Provider Technologies

(www.mckesson.com/): 630• Cerner Corp. (www.cerner.com): 560• Siemens Medical Solutions

(http://medical.siemens.com): 425• CPSI (www.cpsinet.com): 353• Epic Systems Corp.

(www.epicsys.com): 265• Eclipsys Corp.

(www.eclipsys.com): 243• Healthcare Management

Systems Inc. (www.hmstn.com): 237• Healthland (www.healthland.com): 198


Healthcare Information and ManagementSystems Society, 230 East Ohio Street,

Suite 500, Chicago, IL 60611. (312) 664-4467. (www.himss.org)

15 ELECTRONIC MEDICAL RECORDS

TABLE 15.1

EMR Implementation in Hospitals (source: HIMSS)

2006 2007 2008

• Fully operational system: 24% 32% 44%• Installation begun: 37% 37% 27%• Signed contract: 4% 6% 4%• Developed plan to implement: 24% 16% 14%• No plans yet: 12% 8% 10%

http://www.meditech.com

http://(http://infosolutions.mckesson.com/

http://www.cerner.com

http://(http://medical.siemens.com

http://www.cpsinet.com

http://www.epicsys.com

http://www.eclipsys.com

http://www.hmstn.com

http://www.healthland.com

http://www.himss.org


• 44 •

PROFILE OF EMERGENCY

MEDICINE

According to Hospital Statistics 2009, by theAmerican Hospital Association (AHA), thenumber of emergency department (ED) visitsand total number of EDs have been asfollows: Total ED Visits # EDs

• 2001: 106.0 million 4,621• 2002: 110.0 million 4,620• 2003: 111.0 million 4,570• 2004: 112.6 million 4,595• 2005: 114.8 million 4,611• 2006: 118.4 million 4,587• 2007: 120.8 million 4,565

The American College of EmergencyPhysicians (ACEP) provides the followingprofile of emergency medicine in the UnitedStates:• Emergency physicians in

clinical practice: 31,797• Emergency nurses: 89,300• EMS providers (EMT basics,

EMT intermediates paramedics,and first responders): 815,000

• Ambulance services: 17,000

PROFILE OF ED PATIENTS

According to the Agency for HealthcareResearch and Quality (AHRQ), the followingare the major reasons for hospitalizationsthrough EDs:• Circulatory disorders: 26%• Respiratory disorders: 15%• Injuries: 11%• Mental health and substance

abuse: 6%• Endocrine disorders: 5%• Genitourinary disorders: 5%• All other disorders: 18%

The immediacy of care needed for ED visitsis as follows:• Urgent: 35%• Emergent: 15%• Semi-urgent: 20%• Non-urgent: 13%• No triage/unknown: 17%

Contrary to popular perception, individualswho are uninsured and who do not have ausual source of care are actually less likely tovisit an emergency department than thosewho are insured and have a regularhealthcare provider. According to theNational Hospital Ambulatory Medical CareSurvey (NHAMCS), by the National Centerfor Health Statistics, only 17% of ED patientsare uninsured.

ACEP found that among frequent visitors(four or more visits a year) to EDs, 84% areinsured; 81% have a primary source of care.

Similar findings were reported by Ellen J.Weber, M.D., professor of clinical medicine in

16 EMERGENCY DEPARTMENTS

“The emergency department hasbecome the hospital’s front door. Notonly are more people using EDs, butmore than half of all hospitalinpatients are admitted through theED.”

Hospital Pulse Report 2009 Press Ganey Associates


• 45 •

the division of emergency medicine at theUniversity of California, San Francisco,whose research concluded that the biggestfactor driving people to seek emergency careis poor physical and mental health. TheUniversity of California study, based on asample of nearly 50,000 adults, found 83% ofemergency department visits were made bypeople who reported having a usual source ofhealthcare other than an emergencydepartment. Moreover, 85% reported havingmedical insurance and 79% reported havingincomes exceeding the poverty threshold.Individuals without health insurance were nomore likely to have had an emergency visitthan those with private health insurance.Individuals without a usual source of carewere 25% less likely to have had anemergency visit than those with a privatephysician. The study found 48% ofemergency department visits were by adultswho said they had poor physical health.

THE STATE OF EMERGENCY

CARE

In its 2009 National Report Card on the Stateof Emergency Medicine, ACEP gives thenational emergency medical care system anoverall grade of C-, which represents theaverage of grades for all 50 states and theDistrict of Columbia. An ACEP task forceuses a range of available data to develop 50measures for grading each state on a scaleof A through F for its support in four areas:access to emergency care, quality andpatient safety, public health and injuryprevention, and medical liability environment.

While no state received an overall A grade,California ranked highest in the nation,followed by Massachusetts, Connecticut, andthe District of Columbia, all earning overall Bgrades. The assessment reported that half ofstates are providing below-average supportfor their emergency medical systems, earning

poor or near-failing grades. Eleven statesreceived an overall grade of D.

The ACEP assessment concludes that thecountry’s emergency system suffers from avariety of problems, such as overcrowding inemergency rooms, unreimbursed costsrelated to caring for the uninsured, and ashortage of medical specialists.

OVERCROWDING AND

DIVERSIONS

According to the AHA, the percentages ofhospital EDs at or over capacity are asfollows:

At Over

• All hospitals: 25% 25%• Urban hospitals: 29% 39%• Rural hospitals: 21% 10%• Teaching hospitals: 28% 47%

When EDs exceed capacity, incomingpatients are generally diverted to other EDswhere they can be given more immediatecare. According to the NHAMCS, 16.2 millionpatients annually arrive at emergencydepartments by ambulance; about 501,000are diverted. According to Sg2, hospital EDsspend 3% of their time in diversion status. Anestimated 40% to 60% of hospitals report EDdiversion at least once a year.

According to a survey of California hospitalsby researchers from the University ofCalifornia, Los Angeles, the following are theprimary reasons for ambulance diversion:• Lack of staffed critical-care beds: 40%• Overcrowded ED: 19%• Lack of general acute-care beds: 17%• Staff shortages: 10%• Lack of specialty physician

coverage: 4%


• 46 •

WAIT TIME

According to the NHAMCS, waits foremergency care have increased to anaverage of 56 minutes from 38 minutes adecade ago. The median wait is 31 minutes.

A study by Harvard Medical School andresearchers at Cambridge Health Alliance,published in 2008 in an online edition ofHealth Affairs, reported a similar finding. Thestudy, which analyzed the time betweenpatients’ arrivals in the ED and when theywere first seen by a doctor, reported a 36%increase in wait time over the past sevenyears. For those whom a triage nurseclassified as needing immediate attention,waits increased from 10 to 14 minutes, up40%. Waits increased 150% for emergencypatients suffering heart attacks, to 20minutes.

Some hospital EDs use check-in kiosks tostreamline the admissions process. Besidesoffering patients more privacy, the kiosks canhelp nurses identify the most urgent cases.

ED PATIENT SATISFACTION

The 2009 Emergency Department PulseReport, by Press Ganey Associates, reportspatient satisfaction with care in the ED hasincreased since 2003. Still, patients admittedthrough the ED report lower satisfactionscores than those otherwise admitted tohospitals. The following are further findingsof the report:• There is a notable variation in overall

patient satisfaction among metropolitanareas. Ranking highest in patient satis-faction are EDs at hospitals in Miami,Detroit, Philadelphia, Pittsburgh, Boston,Chicago, Baltimore, Houston, Dallas, andNew York City.

• The average ED patient experience lastsfour hours and three minutes, a 2%decrease from a year prior.

• Patient satisfaction was lowest during theevening shift, 3:00 p.m.-11:00 pm, andhighest during the daytime, 7:00 a.m.-3:00p.m.

• The more patients an ED sees, the longereach patient spends in the ED. Theaverage time spent in the ED increases by30 minutes for every additional 10,000patients seen annually.

• Patient satisfaction drops significantlybased on amount of time spent in the ED.


2009 Emergency Department Pulse Report:Patient Perspectives on American HealthCare, Press Ganey Associates, June 2009.

2009 National Report Card on the State ofEmergency Medicine(www.emreportcard.org), American Collegeof Emergency Physicians, 2009.

Agency for Healthcare Research andQuality, 2101 East Jefferson Street, Suite501, Rockville, MD 20852. (301) 594-1364. (www.ahrq.gov)

American College of EmergencyPhysicians, 1125 Executive Circle, Irving,TX 75038. (800) 798-1822. (www.acep.org)

“Although overall patient satisfactiondeclines for patients who have spentmore than two hours in the ED,hospitals that cannot eliminate longwaits can give satisfaction aconsiderable boost by keepingpatients informed about delays.” 2009 Emergency Department Pulse Report Press Gamey Associates

http://www.emreportcard.org

http://www.ahrq.gov

http://www.acep.org


• 47 •

American Hospital Association, One NorthFranklin, Chicago, IL 60606. (312) 422-3000. (www.aha.org)

Andrews, Michelle, “A Wait At The ERMeasured In Minutes, Not Hours,” U.S.News & World Report, September 29, 2009,pp 79-80.

Cambridge Health Alliance, 1493Cambridge Street, Cambridge, MA 02139. (617) 665-2300. (www.challiance.org)

Emergency Medicine Network, c/o EMNetCoordinating Center, Department ofEmergency Medicine, MassachusettsGeneral Hospital, 326 Cambridge Street,Suite 410, Boston, MA 02114. (www.emnet-usa.org)

National Hospital Ambulatory Medical CareSurvey, National Center for HealthStatistics, June 2009.

Sg2, 5250 Old Orchard Road, Skokie, IL60077. (847) 779-5300. (www.sg2.com)

http://www.aha.org

http://www.challiance.org

http://www.emnet-usa.org

http://www.sg2.com


• 48 •

Based on discussions with health systemchief financial officers (CFOs), Ernst & Youngidentified the following as critical issues likelyto reshape the hospital industry in years tocome:

Healthcare Affordability• Hospital finances are being eroded by the

growing numbers of uninsured andunderinsured. Aging populations, high-price drugs and technology, and risinglabor costs have combined to create aperfect storm for the industry. Stepping upworkforce productivity is seen as the onlylast chance to improve margins.

Access to capital• Many hospitals have construction projects

on hold because financing is not available.Lower credit ratings and tighter creditmarkets have both played a role. With fewoptions, CFOs are seeking greaterconsolidat ion of resources andorganizations. The merging of hospitalscan bring savings, greater access totechnology, more leverage with suppliers,and the power to negotiate with largeinsurance companies.

Physician relationships• CFOs are seeking to develop more

mutually beneficial relationships withphysicians.

Workforce issues• With supply of nurses and other hospital

workers falling far short of demand, the costof labor is skyrocketing. While the numberof qualified applicants to nursing schools ison the rise, the dwindling number of faculty

means many applicants are turned away.

Quality and pay-for-performance (P4P)• While P4P proponents have argued that

initiatives will drive dramatic reform in thedelivery system, CFOs see goals fallingshort with incremental improvements atbest. CFOs have invested significant sumson quality measures, yet there are fewmeasures to gauge long-term outcomes.The need is great, CFOs say, to involvedoctors in the fabric of hospital leadershipand to collectively take ownership forquality.

The race for new technologies• CFOs observe that pressure on providers to

invest in new clinical and informationtechnologies is unprecedented. Yet CFOssay new technologies, often enormouslyexpensive, do not always produce improvedoutcomes or a return on investment. Inresponse, CFOs see scale as one answer.As hospitals consolidate, duplication will beavoided, and expenses and technologypurchases can be better leveraged.

Transparency and community benefit• The demand for transparency is great in

areas of patient safety, quality of care, andcosts and charges. Not-for-profit hospitalsare required to disclose even greater detailon bad debts and collection policies,charitable care, and community benefit.CFOs point to a very full and growingcompliance agenda that must be managedand integrated into business operations.

17 FINANCIAL ISSUES


• 49 •


Reform or Transformation? A CFOPerspective, Ernst & Young, June 2008.


• 50 •

ENVIRONMENTALLY FRIENDLY

CONSTRUCTION

According to the American Society forHealthcare Engineering (ASHE), 81% ofhospitals specify green or environmentallyfriendly construction materials in projects, anincrease from 55% that did so in 2006.

GREEN CONSTRUCTION

PRACTICES

The 2009 Construction Survey by ASHEreports the percentage of green constructionpractices hospitals are employing in buildingprojects as follows:• Use of physical/mechanical design

and building materials to improve indoor air quality: 49%

• Optimize layout and orientation of building to optimize energyperformance: 32%

• Reuse/recycle demolition materials: 31%

• Segregate construction and demolition waste: 31%

• Minimize site development footprint: 22%

• Add language to contract specifications that constructors will follow LEED requirements: 21%

• Maintain and restore site biodiversity: 12%

• Specify cogeneration, fuel cells, renewable energy systems, and other alternative energy sources: 11%

SUSTAINABLE DESIGN

FEATURES

The percentage of environmentally friendlyand sustainable features being incorporatedinto facilities design is as follows:• High-efficiency HVAC: 59%• High-efficiency building controls: 57%• Low-flow water fixtures: 49%• Sustainable wall coverings, and

paints and finishes with low VOCs: 47%• Low-emission glass for windows: 40%• Increased day-lighting: 34%• Chemical waste reclamation: 16%


The American Society for HealthcareEngineering of the American HospitalAssociation, One North Franklin, 28 Floor,th

Chicago, IL 60606. (312) 422-3800. (www.ashe.org)

18 GREEN HOSPITALS

http://www.ashe.org


• 51 •

After personnel costs, the supply chain is thesingle largest expense center for U.S.hospitals. Supply chain costs represent asmuch as 10% to 30% of net patient revenues.

According to the Health Industry GroupPurchasing Association (HIGPA), hospitalspurchase over $275 billion in suppliesannually, including over $30 billion inpharmaceuticals and $50 billion in medicaland surgical equipment.

Virtually all U.S. hospitals buy through grouppurchasing organizat ions (GPOs),cooperatives that marshal the collectivebuying power of their healthcare providermembers to broker deep-discounted dealswith suppliers and distributors. According toHIGPA, hospitals and nursing homespurchase as much as 80% of their suppliesunder GPOs and integrated delivery networkcontracts.

Most hospitals join GPOs because of thecontract negotiations and pricing services.Providers also rely on GPOs for productstandardization, revenue cycle management,labor staffing, and support for safety andquality initiatives.

According to an April 2009 study directed byProf. Eugene S. Schneller, Ph.D., at ArizonaState University, GPOs help hospitals saveover $36 billion in annual healthcare andrelated costs. Savings are as follows:• $8.5 billion for medical/surgical purchases• $6.8 billion for hospital pharmaceuticals • $1.9 billion in the cardiology implant

marketplace• $1.8 billion in reduced administrative

costs• $840 million in the orthopedic implant

marketplace

LARGEST GPOs

In it’s 2009 Group Purchasing Survey,Modern Healthcare identified the following asthe largest GPO organizations, ranked by2008 estimated volume:• Novation: $35.9 billion• HealthTrust Purchasing

Group: $17.0 billion• AmeriNet: $ 7.0 billion• Resource Optimization &

Innovation: $ 0.7 billion• FirstChoice Cooperative: $ 0.6 billion

REGIONAL GPOs

19 GROUP PURCHASING ORGANIZATIONS

“When regional GPOs consolidated

into a handful of national groups in the

1980s and ‘90s, the moves were based

on a belief that healthcare providers

leverage better pricing when large

organizations band together to contract

with suppliers. Regional GPOs are re-

emerging largely because national

supply chain organizations are

acknowledging they have limited

influence on their member’s use of

negotiated contracts and that it is

impossible for centralized

organizations to address the

idiosyncratic needs of their members.”



• 52 •


Health Industry Group PurchasingAssociation, 2025 M Street, Suite 800,Washington, DC 20036. (202) 367-1162. (www.higpa.org)

Rhea, Shawn, “Above And Beyond,”Modern Healthcare, August 31, 2009, pp S1-S5.

Schneller, Eugene S., The Value of GroupPurchasing 2009: Meeting the Needs forStrategic Savings, Health Care SectorAdvances Inc., April 2009.

http://www.higpa.org


• 53 •

Home care is a cost-effective service, notonly for individuals recuperating from ahospital stay, but also for those who, becauseof a functional or cognitive disability, areunable to care for themselves.

At any given time, 1.4 million Americans arereceiving some form of healthcare at homefor a period of one to three months. Thefollowing are characteristics of this market(sources: National Center for HealthStatistics):• Receive skilled nursing services: 75%• Over age 65: 70%• Rely on Medicare as primary

payment source: 52%• Heart disease: 11%• Diabetes: 8%• Congestive heart failure: 4%• Osteoarthritis: 4%• Fractures: 4%• Hypertension: 3%

COST ANALYSIS

According to The 2009 Market Survey ofLong-Term Care Costs, by the MetLifeMature Market Institute, the average hourlyrate for home health aides provided by ahome care agency is $21 per hour. Costsrange from an average of $30 per hour inRochester, Minnesota, to $13 per hour inShreveport, Louisiana.

According to the Centers for Medicare andMedicaid Services, national expenditures forhome healthcare in 2009 were $69.7 billion,an 8% increase over the prior year.

Home health industry expenditures aredistributed as follows (sources: DeutscheBank and Forbes):• Home nursing, excluding Medicare

(including commercial, Medicaid and other): 38%

• Equipment and other: 27%• Medicare home nursing: 25%• Hospice: 10%

Under some reimbursement systems,insurers pay hospitals based on illness, givinghospitals an added incentive to get patientsout of their beds as quickly as possible.Home care can assist in meeting this need,providing follow-up for patients who continueto need care but do not need to remain in thehospital.

Studies indicate that home care reduceshospital inpatient days. Providing regularcare in the home for certain conditions alsoreduces ED visits. Also it frees resources foracute-care patients and more profitableprocedures.

HOSPITALS IN THE HOME CARE

MARKET

According to Hospital Statistics 2009, by theAmerican Hospital Association, 66% ofcommunity hospitals are direct providers ofsome aspect of home care service (nursing,physical therapy, occupational therapy,respiratory care, equipment, etc.).

Of Medicare-certified agencies, free-standingproprietary agencies comprise 40%; hospital-

20 HOME CARE


• 54 •

based agencies make up 30%. This differsmarkedly from the industry composition in theearly 1980s, when public health agenciesdominated the ranks of certified agencies andproprietary and hospital-based agenciescombined accounted for only one-fourth ofthe total. The number of hospital-based andfree-standing proprietary agencies has beengrowing faster than any other type ofMedicare-certified agency, according to theNational Association of Home Care andHospice.

HOME CARE FOR SENIORS

Some three million people over age 65 canonly leave their homes with extreme difficulty,according to Joanne Schwartzberg, M.D., theAmerican Medical Association’s director ofaging and community health. Many sufferfrom a complex mix of chronic conditions thatrequire constant attention. One solution ishome care for this population.

A recent study directed by Prof. Bruce Leff,M.D., at Johns Hopkins University School ofMedicine found that providing acute, hospital-level care to elderly patients in their homesresults in better treatment outcomes, higherpatient satisfaction, and lower costs thantraditional hospitalization for some seriousillnesses.

According to Retooling for an Aging America,90% of those receiving care at home get helpfrom family and friends; 80% rely solely onthem.


2009 Market Survey of Long-Term CareCosts, MetLife Mature Market Institute,October 2009. (www.maturemarketinstitute.com)


National Association for Home Care &Hospice, 228 Seventh Street SE,Washington, DC 20003. (202) 547-7424. (www.nahc.org)

http://www.maturemarketinstitute.com

http://www.aha.org

http://www.nahc.org


• 55 •

Hospice and palliative services providepatient end-of-life care. The big differencebetween hospice care and hospital-basedpalliative care is that hospice care seeks tomove end-of-life patients out of the hospital toa home environment.

MARKET ASSESSMENT

Annual hospice and palliative careexpenditures in the U.S. are estimated at $3 billion to $4 billion.

Spending is distributed by payer as follows(source: Modern Healthcare):• Medicare: 79%• Private insurance: 13%• Medicaid: 5%• Private sources: 2%• Self-pay: 1%

HOSPICE CARE

Hospice Care in America - 2009 Edition,published by The National Hospice andPalliative Care Organization, provides thefollowing data on hospice care in the UnitedStates: Characteristics of U.S. hospice programs• 4,850 estimated operational hospice

programs• 50% of hospices are not-for-profit, 46%

are for-profit, and 4% are run bygovernment agencies

• 77% of hospices had fewer than 500 totaladmissions in 2008

Characteristics of patients served byhospice• An estimated 1.45 million patients were

served by hospice programs in 2008.• The median time spent receiving hospice

care is 21.3 days.• 57% of hospice patients are female; 43%

are male• 67% are 75 years of age or older• Primary diagnosis of hospice patients:

cancer (38%), heart disease (12%), anddementia (11%); 15% have unspecifieddebilities

• In 2008, 963,000 patients died underhospice care.

Volunteer commitment• Approximately 550,000 hospice

volunteers contributed 125 million hoursto hospices in 2008.

The following are the largest providers ofhospice care:• Beverly Enterprises

(www.beverlycares.com)• Manor Care (www.manorcare.com)• Odyssey Healthcare (www.odyssey-

healthcare.com)• VistaCare (www.vistacare.com)• Vitas (www.vitas.com)

HOSPITAL PALLIATIVE CARE

According to the Center to Advance PalliativeCare and the American Hospital Association,31% of hospitals offer palliative careprograms. Among hospitals with more than50 beds, 47% have palliative care programs;77% of hospitals with more than 250 beds

21 HOSPICE & PALLIATIVE CARE

http://www.beverlycares.com

http://www.manorcare.com

http://www.odyssey-healthcare.com

http://www.odyssey-healthcare.com

http://www.vistacare.com

http://www.vitas.com


• 56 •

have such programs.

Wherever a palliative care program has beenimplemented, treating a patient, attending toquality of life, and cost-effective service arenot mutually exclusive. Palliative caresystems have been shown to enhancecompliance with pain and quality accreditationstandards and improved support for staff whodeal with complex diagnoses and around-the-clock needs. Pain, nausea, fatigue, andweakness; depression or other psychologicalissues; family needs; and provider-patientcommunication – all of these interventionsimprove when a hospital puts a palliative caresystem in place.

In conjunction with the Center to AdvancePalliative Care, The Robert Wood JohnsonFoundation has funded Palliative CareLeadership Centers – model programs thatoffer hands-on technical assistance, training,and a year of mentoring to hospitals hoping tolaunch a palliative care program – at thefollowing hospitals:• Fairview Health Services (Minneapolis,

Minnesota)• Massey Cancer Center of Virginia

Commonwealth University Health System(Richmond, Virginia)

• Medical College of Wisconsin (Milwaukee,Wisconsin)

• Mount Carmel Health System (Columbus,Ohio)

• Palliative Care Center of the Bluegrass(Lexington, Kentucky)

• The University of California (SanFrancisco, California)


Center to Advance Palliative Care, 1255Fifth Avenue, Suite C-2, New York, NY10029. (212) 201-2670. (www.capc.org)

National Association for Home Care &Hospice, 228 Seventh Street SE,Washington, DC 20003. (202) 547-7424. (www.nahc.org)

National Hospice and Palliative CareOrganization, 1731 King Street, Suite 100,Alexandria, VA 22314. (703) 837-1500. (www.nhpco.org)

http://www.capc.org

http://www.nahc.org

http://www.nhpco.org


• 57 •

The 2009 Healthcare Cost and UtilizationProject, from the Agency for HealthcareResearch and Quality (AHRQ), providesstatistics for principal diagnoses, procedures,and spending for stays at communityhospitals.

Data for the most frequent diagnoses andprocedures are presented in this chapter.


Healthcare Cost and Utilization Project,Agency for Healthcare Research andQuality, 2009. (www.hcup-us.ahrq.gov)

22 HOSPITAL PATIENT DIAGNOSES,

PROCEDURES & SPENDING

TABLE 22.1

Most Frequent Primary Diagnoses

• Pregnancy, childbirth, and newborn infants: 9.25 million• Pneumonia: 1.22 million• Coronary atherosclerosis (coronary artery disease): 1.20 million• Congestive heart failure: 1.10 million• Non-specific chest pain: 857,000• Cardiac dysrhythmias (irregular heart beat): 749,000• Osteoarthritis (degenerative joint disease): 735,000• Mood disorders (depression and bipolar disorders): 729,000• Acute myocardial infarction (heart attack): 675,000• Disorders of intervertebral discs and bones in spinal column (back problems): 636,000• Complication of device, implant or graft: 634,000• Septicemia (blood infection): 611,000• Chronic obstructive lung disease: 598,000• Skin and subcutaneous tissue infections: 597,000• Acute cerebrovascular disease (stroke): 537,000

http://www.hcup-us.ahrq.gov


• 58 •

TABLE 22.2

Most Frequent Hospital Procedures

• Blood transfusion: 2.38 million• Diagnostic cardiac catheterization, coronary arteriography (diagnostic procedure to explore the functioning of the heart): 1.67 million• Repair of obstetric laceration: 1.37 million• Cesarean section (C-section): 1.35 million• Respiratory intubation and mechanical ventilation: 1.30 million• Circumcision: 1.22 million• Upper gastrointestinal endoscopy (procedure to view and biopsy the esophagus, stomach, and first portion of intestine through a lighted tube): 1.21 million• Artificial rupture of membranes to assist delivery: 1.01 million• Fetal monitoring: 958,000• Prophylactic vaccinations and inoculations: 945,000• Episiotomy (surgical incision into the perineum and vagina to prevent traumatic tearing during delivery): 393,000

TABLE 22.3

Spending For The Most Frequent Hospital Procedures

• Coronary atherosclerosis (coronary artery disease): $17.5 billion• Acute myocardial infarction (heart attack): $11.8 billion• Congestive heart failure: $11.2 billion• Liveborn (newborn infant): $10.8 billion• Osteoarthritis (degenerative joint disease): $10.3 billion• Septicemia (blood infection): $10.2 billion• Pneumonia: $ 9.9 billion• Complication of medical device, implant, or graft: $ 9.4 billion• Adult respiratory failure, insufficiency, or arrest: $ 8.1 billion• Disorders of intervertebral discs and bones in spinal column (back problems): $ 7.6 billion• Cardiac dysrhythmias (irregular heart beat): $ 6.8 billion• Acute cerebrovascular disease (stroke): $ 6.7 billion• Complications of surgical procedures or medical care: $ 5.1 billion• Rehabilitation care, fitting of prostheses, and adjustment of devices: $ 5.0 billion• Diabetes mellitus with complications: $ 4.5 billion• Biliary tract disease (gall bladder disease): $ 4.4 billion• Chronic obstructive lung disease: $ 4.2 billion• Fracture of neck of femur (hip fracture): $ 4.1 billion


• 59 •

INCIDENCE & MORTALITY

According to the Centers for Disease Controland Prevention (CDC), approximately twomillion patients contract infections while beingtreated in a hospital for a non-susceptibleillness or injury each year, and almost 88,000die because of their infections. Many victimsare old, with chronic conditions that weakentheir immune systems. Trauma patients, likevictims of car crashes or bad burns, are alsoespecially vulnerable, as are cancer patientsin for radiation or chemotherapy, andnewborns. An additional 340,000 infectionsoccur in home healthcare and another100,000 in long-term care centers, accordingto the CDC.

Four categories account for 78% ofhealthcare-related infections each year. Theyare as follows:

Infections Deaths

• Urinary tract: 561,667 8,205• Surgical site: 290,485 13,088• Ventilator-associated

pneumonia: 250,205 35,967• Central-line associated

pneumonia: 248,678 30,665

According to Greg Martin, M.D., of the EmoryUniversity School of Medicine, the continuedprevalence of hospital-acquired infectionsmay be due to several factors: increasedresistance to antibiotics; more invasiveprocedures, transplants, and use ofi m m u n o s u p p r e s s i v e d r u g s a n dchemotherapy; and more patients withillnesses that compromise immune systems,like AIDS. The numbers may also reflectgreater awareness and diagnosis of sepsis

and better record-keeping, according to Dr.Martin.

ANTIBIOTIC-RESISTANT

INFECTIONS

Bacteria like staphylococcus aureus roamhospitals freely, spreading by contact with thehands, a stethoscope, or a bed railing. Themore resistant to commonly used antibioticsthe bacteria become, the greater the threat.In 1974, only 2% of staphylococcus aureusinfections were MRSA (methicillin-resistant).That figure has now soared to over 70%,according to the CDC.

Most troubling are ‘superbugs’ likeClostridium difficile, or C. diff, that areresistant to a wide range of antibiotics.

INFECTION-CONTROL PROGRAMS

Hospitals must bear much of theresponsibility for the failure to preventhospital-borne infections. The 2009 HospitalQuality and Safety Survey, conducted by TheLeapfrog Group, found 65% of hospitals donot have all of the recommended policies inplace to prevent the most common hospital-acquired infections, and 75% do not fullymeet the standards for 13 evidence-basedsafety practices, ranging from hand washingto competency of the nursing staff.

Specific measures being taken by hospitals,as reported by the 2009 Infection Prevention& Hospital Cleaning Survey, are assessed inChapter 26 of this handbook. Most hospitals

23 HOSPITAL-ACQUIRED INFECTIONS


• 60 •

now have infection-control programs.

Some hospitals have implemented programsto aggressively screen for patients who mayhave problematic infections, isolating thosecarrying MRSA strains to prevent spreading.And hospitals are also increasingly usingdiagnostic tests and automated surveillancesystems to control infections.

Along with compromising patient safety,infections are costly to hospitals.



The Leapfrog Group, 1801 K Street NW,Suite 701-L, Washington, DC 20006. (202) 292-6713. (www.leapfroggroup.org)

“Antibiotic-resistant infectionsincrease direct costs by 30% to 100%,according to various studies. MRSA-specific studies suggest that theadditional cost of treating anantibiotic-resistant staph infectionversus an antibiotic-sensitiveinfection range from a minimum of$3,000 to more than $35,000 per case. This suggests that such infectionscost the healthcare system an extra$830 million to $9.7 billion, evenwithout taking into account indirectcosts related to patient pain, illnessand time spent in the hospital.”

Hospitals & Health Networks

http://www.cdc.gov

http://www.leapfroggroup.org

_____________________________________________________________________

THE 2010 HEALTHCARE BUSINESS MARKET RESEARCH HANDBOOK

• 61 •

In March 2009, the AHA Quality Center of theAmerican Hospital Association (AHA)released a guide to support the ongoingefforts to improve the patient experience andoutcomes in hospitals.

Titled Hospitals in Pursuit of Excellence, theguide shows how hospitals can reduce wasteand inefficiency, optimize the use ofresources, and enhance their ability to deliversafe, high-quality, affordable patient care.

Hospitals in Pursuit of Excellence focuses onfour areas identified as common opportunitiesfor improvement: healthcare-associatedinfections, patient flow, medicationmanagement, and patient safety (such asfalls and pressure ulcers).

CORE PRINCIPALS

Hospitals in Pursuit of Excellencerecommends the following six core principles:

Focus on the patient’s experience of care• Care must be respectful of, and responsive

to, individual preferences, needs, andvalues.

Create a culture of reliability• Culture defines the values and behaviors of

organizations. Highly reliable cultures areknown to be the safest organizations in theworld.

Manage organizational viability• Achieve consistency in structure and

function of staff and units, where possible. Remove waste• Removing waste, including unnecessary

steps, has a direct, positive impact on thebottom line.

Eliminate defects• Finding and resolving problem points will

result in greater efficiency and better healthoutcomes.

Reduce process variation• Using quality tools and frameworks can

increase consistency in processes of careand administration, thus reducing the risk oferrors.

REFERENCES


Hospitals in Pursuit of Excellence, AmericanHospital Association (www.apoe.org)

24 HOSPITALS IN PURSUIT OF

EXCELLENCE

http://www.aha.org

http://www.apoe.org


• 62 •

Based on a survey of hospital CEOs, theAmerican Hospital Association published TheEconomic Crisis: Ongoing Monitoring ofImpact on Hospitals in April 2009. Thefollowing are findings of the survey.

IMPACTS REPORTED BY THE

MAJORITY OF HOSPITALS

• The proportion of emergency departmentpatients without insurance is increasing.

• A higher proportion of patients are unableto pay for care and many hospitals areseeing more patients covered by Medicaidand other public programs.

• Fewer patients are seeking inpatient andelective services, raising concerns thatindividuals are putting off needed care.

• Community need for subsidized servicessuch as clinics, screenings, and outreach isincreasing even as charitable contributionsare down for many hospitals.

ACTIONS TAKEN

• Nine in 10 hospitals have made cutbacksto address economic concerns.

• Nearly half have reduced staff.

• Eight in 10 have cut administrativeexpenses.

• One in five have reduced servicescommunities depend on, including

behavioral health, post acute care, clinic,patient education, and other services thatrequire subsidies.

FINANCIAL HEALTH

• Despite the actions taken, seven of 10hospitals report a decline in overall financialhealth, which will impact their ability to carefor their communities.

• Forty-three percent (43%) of hospitalsreported financial losses in the first quarterof 2009, up from 26% for the same periodin 2008.

• Nearly all hospitals report that the capitalsituation has not improved or is stilldeteriorating since December 2008.

• Since the beginning of 2008, eight of 10hospitals have cut capital spending forfacility upgrades, clinical technology, and/orinformation technology.

• Eight in 10 hospitals report an increase inthe degree to which physicians are seekingthe financial support of hospitals, includingoncall pay and/or employment.


The Economic Crisis: The Toll on thePatients and Communities Hospitals Serve,American Hospital Association, April 27,2009. (www.aha.org/aha/content/2009/pdf/090427econcrisisreport.pdf)

25 IMPACT OF THE ECONOMIC CRISIS

http://www.aha.org/aha/content/2009/pdf/


• 63 •

The 2009 Infection Prevention & HospitalCleaning Survey was conducted by theAmerican Society for HealthcareEnvironmental Services, the Association forProfessionals in Infection Control andEpidemiology, Health Facilities Management,and Materials Management in Health Care.Infection preventionists from 686 hospitalsparticipated in the survey.

CLEANING PRACTICES

Cleaning practices and technologies hospitalsroutinely employ to disinfect patient roomsare as follows:• Quaternary ammonium disinfectant: 85%• Disinfectant-impregnated wipes: 77%• Sodium hypochlorite, household

bleach: 68%

• Microfiber mops: 68%• Change cubical curtains after

discharge of patients placed under contact precautions: 57%

• Microfiber cloths: 46%• Pour bottles to dispense

disinfectant: 42%• Copper and copper-alloy fixtures: 4%• Hydrogen peroxide vapor

decontamination system: 2%

CLEANING VERIFICATION

Hospitals using chemicals (e.g., fluorescingmarkers) to verify cleaning of the followinghigh-risk objects are as follows:• Bed rail: 16%• Tray table: 16%• Nurse call device: 16%• Bedside table: 15%• Bathroom doorknobs: 15%• Toilet seat: 15%• Patient telephone: 15%• Sinks: 14%• Toilet handle: 14%• Patient room doorknobs and

cabinet pulls: 14%• Bathroom light switch: 14%• Restroom grab bars: 13%

STAFF PERFORMANCE

OPTIMIZATION

Hospitals have taken the following steps tooptimize environmental services staffperformance:• Hands-on training in cleaning

protocols: 84%

26 INFECTION PREVENTION

“The important link betweenenvironmental cleanliness andinfection prevention has long beenappreciated, but how best to achievethese objectives remains a source ofever-changing science andapplication. So how are hospitalsfaring today in this all-important areaand how are they responding to therapid changes in cleaningtechnologies and processes, andverifying proper cleaning proceduresare followed?”

Materials Management in Health Care, 5/09


• 64 •

• Education on transmission of healthcare-associated pathogens and resultant infection: 81%

• Ongoing performance feedback: 62%• Predefined performance targets

for patient area cleaning: 31%• Patient interviews by supervisory

staff: 27%• Well-defined quality management

program for patient area cleaning: 24%• Use of visually observable feedback

tool (e.g., black-light marker): 20%• Quality control assessments tied

to compensation: 10%

MEASURING COMPLIANCE

Hospitals measure compliance with cleaningstandards in patient core areas as follows:• Observation-based audit: 87%• Patient satisfaction scores on

cleanliness of room: 78%• Monitor compliance with

performance targets: 34%• Risk-based audit: 15%• Environmental culture results: 14%• Measuring cleaning rates of

high-risk objects in patient area: 14%

TOP CHALLENGES

The following are the top challenges tocleaning and disinfecting the patientenvironment:• Pressure to expedite room turns

for incoming patients: 42%• Assigned responsibility for

cleaning mobile objects: 41%• High hospital occupancy: 35%• Inadequate time to properly clean

patient rooms and care areas: 32%• Reluctance to clean electronic

equipment with saturated cloths: 32%• Inadequate staffing levels: 31%• Too busy/insufficient time allowed

to consistently follow protocols: 28%

• High turnover rates among environmental services technicians: 26%

• Inadequate financial resources to invest in cleaning technologies and equipment: 26%

• Lack of objective microbiologic standards for hospital cleaning: 20%

• Lack of knowledge of the rolespecific high-risk objects play intransmitting healthcare-associatedpathogens: 20%


“2009 Infection Prevention & HospitalCleaning Survey,” Health FacilitiesManagement, December 2009, p. 17. (www.hfmmagazine.com/hfmmagazine/images/pdf/2009PDFs/12HFM_InfectionControl_16.pdf)

“2009 Infection Prevention & HospitalCleaning Survey,” Materials Management inHealth Care, May 2009, pp 18-22.(www.matmanmag.com/matmanmag_app/jsp/articledisplay.jsp?dcrpath=MATMANMAG/Article/data/05MAY2009/0905MMH_Coverstory&domain=MATMANMAG)

American Society for HealthcareEnvironmental Services of the AmericanHospital Association, One North Franklin,Suite 2800, Chicago, IL 60606. (312) 422-3860. (www.ashes.org)

Association for Professionals in InfectionControl and Epidemiology, 1275 K StreetNW, Suite 1000, Washington, DC, 20005. (202) 789-1890. (www.apic.org)

http://www.ashes.org

http://www.apic.org


• 65 •

The Healthcare Information and ManagementSystems Society (HIMSS) has conducted anannual leadership survey since 1989.

This chapter summarizes results of the 20th

Annual Leadership Survey, published inFebruary 2009.

TOP ISSUES FACING

HEALTHCARE

• Improving quality of care: 69%• Patient satisfaction: 55%• Medicare cutbacks: 52%• Increased need for healthcare

services: 45%• Adoption of new technology: 38%• Demand for capital: 31%• Government regulation/compliance

issues: 20%

TOP IT PRIORITIES

• Reduce medical errors/promote patient safety: 54%

• Inpatient clinical information systems: 48%

• Implement an EMR: 48%• Business continuity and disaster

recovery: 35%• Integrate systems in a multi-vendor

environment: 34%• Connect hospital with remote

environments: 33%• Upgrade network infrastructure: 25%• Implementing ambulatory care

systems: 23%

MOST IMPORTANT

APPLICATIONS

• Clinical information systems: 45%• Computer-based practitioner

order entry (CPOE): 42%• Electronic medical record (EMR): 31%• Enterprise-wide clinical information

sharing: 30%• Closed-loop medication

management: 30%• Clinical data repository: 29%• Point-of-care data collection: 21%• Clinical portal: 21%

BARRIERS TO ADOPTION

• Lack of financial support: 26%• Lack of staffing resources: 13%• Vendor’s inability to effectively

deliver product: 12%• Lack of time from clinicians: 9%• Lack of strategic IT plan: 8%• Providing quantifiable benefits/ROI: 5%• Difficulty achieving end-user

acceptance: 5%• Lack of clinical leadership: 5%


Healthcare Information and ManagementSystems Society, 230 East Ohio Street,Suite 500, Chicago, IL 60611. (312) 664-4467. (www.himss.org)

27 INFORMATION TECHNOLOGY




• 66 •

The 2009 Hospital Systems Survey is the 33rd

annual such survey conducted by ModernHealthcare. Rankings of the largesthealthcare systems from this survey arepresented in this chapter.

LARGEST HEALTHCARE

SYSTEMS RANKED BY REVENUE

• Department of Veterans Affairs: $40.7 billion

• HCA: $28.4 billion• Ascension Health: $12.7 billion• Tenet Healthcare Corp.: $10.8 billion• New York-Presbyterian

Healthcare System: $ 8.5 billion• Catholic Health Initiatives: $ 8.3 billion• Community Health Systems: $ 7.8 billion• Catholic Healthcare West: $ 7.6 billion• Sutter Health: $ 6.9 billion• Mayo Clinic: $ 6.1 billion

LARGEST HEALTHCARE

SYSTEMS RANKED BY

HOSPITAL COUNT

• HCA: 166• Department of Veterans Affairs: 153• Community Health Systems: 118• Catholic Health Initiatives: 77• Ascension Health: 67• Health Management Associates: 56• Tenet Healthcare Corporation: 53• LifePoint Hospitals: 48• Catholic Healthcare West: 41• Adventist Health System: 37

LARGEST FOR-PROFIT

HEALTHCARE SYSTEMS RANKED

BY STAFFED ACUTE-CARE BEDS

• HCA: 40,742• Community Health Systems: 17,245• Tenet Healthcare Corporation: 14,532• Health Management Associates: 8,019• Universal Health Services: 6,101• LifePoint Hospitals: 5,686• Vanguard Health Systems: 4,181• Iasis Healthcare Corp.: 2,502• Prime Healthcare Services: 2,311• Capella Healthcare: 1,556

LARGEST PUBLIC HEALTHCARE

SYSTEMS RANKED BY STAFFED

ACUTE-CARE BEDS

• Department of Veterans Affairs: 17,296• University of California: 2,881• Carolinas HealthCare System: 2,817• Jackson Health System: 1,858• Memorial Healthcare System: 1,797• Lee Memorial Health System: 1,462• Broward Health: 1,362• WellStar Health System: 1,122

LARGEST SECULAR NOT-FOR-

PROFIT HEALTHCARE SYSTEMS

RANKED BY STAFFED

ACUTE-CARE BEDS

• New York-Presbyterian Healthcare System: 8,090

28 LARGEST HEALTHCARE SYSTEMS


• 67 •

• Sutter Health: 5,208• North Shore-Long Island

Jewish Health System: 5,066• Banner Health System: 3,856• University of Pittsburgh

Medical Center: 3,448• BJC HealthCare: 3,259• MedStar Health: 2,799• Mayo Clinic: 2,717• Partners HealthCare: 2,538• Intermountain Healthcare: 2,306

LARGEST CATHOLIC

HEALTHCARE SYSTEMS RANKED

BY STAFFED ACUTE-CARE BEDS

• Ascension Health: 15,296• Catholic Health Initiatives: 8,267• Catholic Healthcare West: 7,249• Catholic Health East: 6,371• Christus Health: 5,463• Trinity Health: 5,401• Providence Health & Services: 4,938• Catholic Healthcare Partners: 3,963• Sisters of Mercy Health System: 3,363• SSM Health Care: 2,999

LARGEST NON-CATHOLIC

RELIGIOUS HEALTHCARE

SYSTEMS RANKED BY

STAFFED ACUTE-CARE BEDS

• Adventist Health System: 5,596• Advocate Health Care: 2,827• Texas Health Resources: 2,712• Baylor Health Care System: 2,467• Baptist Memorial Health Care: 2,347• Iowa Health System: 2,092• OhioHealth: 1,802• Fairview Health Services: 1,627• Methodist Hospital System: 1,464• Methodist Healthcare: 1,336


Carlson, Joe and Vince Galloro, “Into theRed,” Modern Helathcare, June 8, 2009, pp 26-30.


• 68 •

According to the American HospitalAssociation Guide, 2009 Edition, there are 20hospitals in the U.S. with 1,000 or morestaffed beds. These hospitals are listed inTable 29.1.



29 LARGEST HOSPITALS

TABLE 29.1

Largest U.S. Hospitals

• New York Presbyterian Hospital* (New York, New York): 2,207 staffed beds• Florida Hospital* (Orlando, Florida): 1,906 staffed beds• Jackson Health System* (Miami, Florida): 1,833 staffed beds• Central Texas Veterans Healthcare* (Temple, Texas): 1,532 staffed beds• Patton State Hospital (Patton, California): 1,510 staffed beds• UPMC Presbyterian* (Pittsburgh, Pennsylvania): 1,471 staffed beds• Lee Memorial Hospital* (Fort Myers, Florida): 1,462 staffed beds• Sonoma Development Center (Eldridge, California): 1,413 staffed beds• Methodist Hospital* (San Antonio, Texas): 1,405 staffed beds• Orlando Regional Medical Center* (Orlando, Florida): 1,387 staffed beds• Clarian Health* (Indianapolis, Indiana): 1,380 staffed beds• Methodist Healthcare - Fayette Hospital (Somerville, Tennessee): 1,316 staffed beds• Methodist University Hospital* (Memphis, Tennessee): 1,315 staffed beds• Napa State Hospital (Napa, California): 1,196 staffed beds• Atascadero State Hospital (Atascadero, California): 1,127 staffed beds• Kaleida Health* (Buffalo, New York): 1,161 staffed beds• Montefiore Medical Hospital* (New York, New York): 1,094 staffed beds• Barnes Jewish Hospital (St. Louis, Missouri): 1,087 staffed beds• Veterans Affairs Greater Los Angeles Healthcare System: 1,087 staffed beds• Central Virginia Training Center (Madison Heights, Virginia): 1,008 staffed beds

* includes multiple campuses

http://www.aha.org


• 69 •

NURSING HOMES

According to the American Health CareAssociation, there were 15,702 certifiedskilled nursing facilities in the U.S. as of June2009. Combined, they had 1.67 millioncertified beds and 1.41 million patients.

According to the Centers for Medicare andMedicaid Services, national expenditures fornursing home care in 2009 were $143.9billion.

ASSISTED LIVING FACILITIES

Assisted living is defined as a housing optionfor older adults that promotes independenceand autonomy while also providing servicesto assist individuals with daily living. Facilitiescan range in size from a small house to alarge apartment-style complex; most havebetween 25 and 125 units.

According to the 2009 Overview of AssistedLiving, more than 900,000 Americans live inapproximately 39,500 assisted livingresidences. The average age of an assistedliving resident is 86.9 years old; the averagelength of stay in assisted living isapproximately 28.3 months.

The senior assisted care business is an $18billion to $20 billion annual industry,according to the Assisted Living Federation ofAmerica (ALFA).

COST ANALYSIS

According to the 2009 Market Survey ofLong-Term Care Costs, by the MetLifeMature Market Institute, the average dailyrate for a private room in a nursing home in2009 was $219, or $79,935 annually, a 3.3%increase from 2009. For semi-private rooms,the average daily cost was $198. Costsrange from $594 per day in Alaska(statewide) to $132 per day in Baton Rougeand Shreveport, Louisiana.

The average monthly base price in 2008 forassisted living communities was $3,131, or$37,572 annually. The highest cost wasreported in Wilmington, Delaware, at $5,219per month. The lowest was in Nor\th Dakota,at $2,041.

According to MetLife, 59% of assisted livingfacilities offer dementia care; the additionalcosts for these services average $1,110 permonth.

FOR-PROFIT CHAINS

Approximately 75% of nursing homes areowed by for-profit chains. By comparison,only 15% of hospitals are owned by for-profitchains.

The largest chains are listed in Table 30.1.

30 LONG-TERM CARE


• 70 •


2009 Market Survey of Long-Term CareCosts, MetLife, October 2009.

2009 Overview of Assisted Living, co-published by the American Association ofHomes and Services for the Aging,American Seniors Housing Association,Assisted Living Federation of America,National Center for Assisted Living, andNational Investment Center for the SeniorsHousing & Care Industry, June 2009.

American Association of Homes andServices for the Aging, 2519 ConnecticutAvenue NW, Washington, DC 20008. (202) 783-2242. (www.aahsa.org)

American Health Care Association, 1201 LStreet NW, Washington, DC 20005. (202) 842-4444. (www.ahcancal.org)

American Seniors Housing Association,5100 Wisconsin Avenue NW, Suite 307,

Washington, DC 20016. (202) 237-0900. (www.seniorshousing.org)

Assisted Living Federation of America, 1650King Street, Suite 602, Alexandria, VA22314. (703) 894-1805. (www.alfa.org)

“Largest Skilled-Nursing Companies,”Modern Healthcare, November 23, 2009, p. 34.

MetLife Mature Market Institute, 57 GreensFarms Road, Westport, CT 06880. (203) 221-6580.(www.maturemarketinstitute.com)

National Center for Assisted Living, 1201 LStreet NW, Washington, DC 20005. (202) 842-4444. (www.ahcancal.org)

National Investment Center for the SeniorsHousing & Care Industry, 1997 AnnapolisExchange Parkway, Suite 110, Annapolis,MD 21401. (410) 267-0504. (www.nic.org)

TABLE 30.1

Largest Skilled-Nursing Companies

Facilities Beds

• RehabCare Group (www.rehabcare.com): 1,068 n/a• Golden Living (www.goldenliving.com): 324 33,356• HCR Manor Care (www.hcr-manorcare.com): 279 n/a• Kindred Healthcare (www.kindredhealthcare.com): 228 28,527• Genesis HealthCare (www.genesishcc.com): 208 25,277• Sun Healthcare Group (www.sunh.com): 184 23,345• Extendicare Health Services (www.extendicare.com): 171 17,615• Signature HealthCare (www.signaturehealthcarellc.com): 65 7,737• Advocate (www.irinfo.com/avc): 50 5,773• Covenant Care (www.covenantcare.com): 43 4,869• Revera Health Systems (www.reverahealthsystems.com): 30 3,732• Alden Network (www.thealdennetwork.com): 28 4,356

source: Modern Healthcare (November 23, 2009)

http://www.aahsa.org

http://www.ahcancal.org

http://www.seniorshousing.org

http://www.alfa.org

http://www.maturemarketinstitute.com

http://www.ahcancal.org

http://www.nic.org

http://www.rehabcare.com

http://www.goldenliving.com

http://www.hcr-manorcare.com

http://www.kindredhealthcare.com

http://www.genesishcc.com

http://www.sunh.com

http://www.extendicare.com

http://www.signaturehealthcarellc.com

http://www.irinfo.com/avc

http://www.covenantcare.com

http://www.reverahealthsystems.com

http://www.thealdennetwork.com


• 71 •

MARKETING BUDGETS

Health systems and hospitals spendapproximately 0.5% to 2% of their operatingbudgets on marketing. Marketingexpenditures are roughly evenly split betweenadvertising and community relations/educational/PR activities.

According to a recent survey by the 3,600-member Society for Healthcare Strategy andMarket Development, marketing budgets byhealthcare organizations are distributed asfollows:• Advertising: 48%• Publications: 17%• Collateral materials: 10%• Community events/giveaways: 9%• Marketing research: 6%• Website management: 5%• Call center: 2%• Other: 9%

ADVERTISING AND PROMOTIONS

Hospitals have engaged in advertising since1979, after the American Medical Association(AMA) was forced by a Supreme Courtdecision to drop its policy that discouragedmost forms of ads. Though some ads arelittle more than public services messages,most are direct-to-patient marketing effortsaimed at creating demand.

According to a survey of hospital executivesby Modern Healthcare, the following methodswere being used by hospitals to increasemarketshare:

• Print ads: 97%• Forming alliances or partnerships: 77%• Direct mail: 74%• Billboard ads: 40%• Television ads: 34%

Betsy Gelb, Ph.D., professor of marketingand director of the Institute for Health CareMarketing at the University of Houston,explains that marketers approach their workas a decision-making process like any otherin business. Prof. Gelb enthusiasticallysupports service enhancing, informationalmarketing. Though marketing encompassescontract negotiation, patient satisfaction,market research and more, half of hospitalmarketing budgets go to advertising.

According the Direct Marketing Association,healthcare provider companies spend$2.4 billion annually on direct marketing,approximately 90% of which targetsconsumers. Most spending goes towardoffline channels, particularly telephonemarketing and direct mail.

Hospitals are large distributors of promotionalitems, for example, giving away such itemsas bee sting kits, first aid kits, and healtheducation materials. Hospitals also focus oneducational programs and health promotionsto gain name recognition. Hospital-sponsored wellness and fitness programswithin the workplace and in communitiesnationwide have become popular. Evenshopping centers have become a placehospitals use to promote themselves to thepublic.

31 MARKETING


• 72 •

WORD-OF-MOUTH

According to a survey by The Henry J. KaiserFamily Foundation, when trying to findinformation on healthcare quality, 70% ofconsumers ask friends, family members, orco-workers; 65% ask a doctor, nurse, or otherhealthcare professional.

Exceptional service helps to attracts newpatients; retain patients, physicians, andemployees; recruit employees andphysicians; and foster a reputation that bringsbusiness to the hospital.

COMMUNITY OUTREACH

PROGRAMS

According to the AMA, the followingpercentages of hospitals offer selectedcommunity outreach programs:• Health screenings: 80%• Health fairs: 78%• Support groups: 67%• Patient education center: 60%• Health information: 49%• Enrollment assistance services: 45%


American Medical Association, 515 StateStreet, Chicago, IL 60610. (800) 621-8335. (www.ama-assn.org)

Direct Marketing Association, 1120 Avenueof the Americas, New York, NY 10036. (212) 768-7277. (www.the-dma.org)

Healthcare Online, Richard K. Miller &Associates (www.rkma.com), February2010.

Institute for Health Care Marketing, C.T.Bauer College of Business, University ofHouston, 334 Melcher Hall, Houston, TX77204. (713) 743-4600. (www.bauer.uh.edu/centers/ihcm)

Society for Healthcare Strategy and MarketDevelopment, One North Franklin, Chicago,IL 60606. (312) 422-3888. (www.shsmd.org)

The Henry J. Kaiser Family Foundation,2400 Sand Hill Road, Menlo Park, CA94025. (650) 854-9400. (www.kff.org)

“Patient’s perceptions of the care theyreceive at a facility has a positivecorrelation with that of employees ofthe facility. Organizations withpatients who are likely to recommendit for care have employees who arelikely to make the samerecommendation. And it is importantto note that employees are proud towork at a place that provides theexcellent care that patients want toreceive.”

American Hospital Association Hospitals & Health Networks

http://www.ama-assn.org

http://www.the-dma.org

http://www.rkma.com

http://www.bauer.uh.edu/centers/ihcm

http://www.shsmd.org

http://www.kff.org


• 73 •

Costs related to malpractice lawsuits areblamed for contributing to the high spendingon healthcare in the United States. But theimpact is difficult to estimate. Malpracticepremiums makeup less than 1% of U.S.healthcare spending. Defensive medicine isestimated by some analysts to increase totalspending by about 2% – studies show that upto 60% of medical tests are unnecessary,done in large part because doctors fear beingsued. Data, however, is not clear. Texas, forexample, has not seen healthcare spendingdrop since instituting award caps in 2003.

A number of states have instituted tortreform, limiting the size of damage awards byjuries in medical malpractice cases.

LIABILITY INSURANCE

Liability insurance costs f luctuatesignificantly. According to Medical LiabilityMonitor, in 2008, premiums for obstetriciansin Miami were approximately $200,000,about $80,000 in Los Angeles, but only$20,000 in Minneapolis.

According to the Handbook of HealthEconomics, 40¢ of every dollar spent onmalpractice insurance premiums goes towardawards; insurers spend much of the rest onlegal fees.

MALPRACTICE AWARDS

More than $4 billion is estimated to be paidout annually to settle malpractice claimsagainst doctors, according to The Wall Street

Journal. An exact figure is very difficult todetermine, however, since settlements areoften kept confidential. The contingent feescharged by plaintiffs’ lawyers vary widely andare often limited by law, but a common rate is33% of any payment.

Ninety-seven percent (97%) of cases aresettled out of court. The average malpracticeaward in 2008 was $326,931, according tothe Kaiser Family Foundation.

APOLOGIZING FOR ERRORS

In a recent survey by the American College ofPhysician Executives, almost 80% of doctorssaid physicians and hospitals that makemistakes should apologize for errors. In asurvey of patients, 57% said they would beless likely to sue if the provider issued anapology after an error; only 25% indicatedthat they would be more likely to sue.

Since 2001, prominent institutions – from theDana-Farber Cancer Institute to JohnsHopkins Hospital – have made it a policy tourge their doctors to own up to mistakes andapologize, according to The Wall StreetJournal. Consultants are increasingly indemand for seminars on how best to deliverlawsuit-deflecting apologies. At somemedical schools, including VanderbiltUniversity School of Medicine, courses incommunicating errors and apologizing arenow mandatory for medical students andresidents. Even some insurers are beginningto urge their clients to acknowledge errorsand to apologize.

32 MEDICAL LIABILITY


• 74 •

Since launching a program in which doctorsadmit errors and offer payments out of court,the University of Michigan Health System hascut claims in half.

COUNTERSUING UNWARRANTED

MALPRACTICE LAWSUITS

Medical Justice Corp., launched in 2002during the peak of the malpractice insurancecrisis, assists doctors in minimizing “get richquick” lawsuits by countersuing when lawsuitsare considered unwarranted. The approachappears to be effective. Of the 1,400physicians subscribing to the service, only 2%have been sued, compared with 8% to 12%of all U.S. doctors.


2009 Hospital Professional Liability andPhysician Liability Benchmark Analysis, AonConsulting (www.aon.com), 2009.

American Society for Healthcare RiskManagement, One North Franklin, 28th

Floor, Chicago, IL 60606. (312) 422-4580. (www.ashrm.org)

Culyer, Anthony J. and Joseph P.Newhouse, Handbook of Health Economics,Elsevier, 2000.

Medical Justice Corp., P.O. Box 49669,Greensboro, NC 27419. (877) 633-5878. (www.medicaljustice.com)

Medical Liability Monitor, 1100 Lake Street,P.O. Box 680, Oak Park, IL 60303. (312) 944-7900.(www.medicalliabilitymonitor.com)

Pickert, Kate, “Malpractice Reform,” Time,September 28, 2009.

http://www.aon.com

http://www.ashrm.org

http://www.medicaljustice.com

http://www.medicalliabilitymonitor.com


• 75 •

TRAVELING ABROAD FOR

MEDICAL PROCEDURES

A May 2008 study by McKinsey & Co.estimated 60,000 to 85,000 patients from theU.S. travel abroad annually for treatment atforeign hospitals. Taking into account travelfor cosmetic and dental procedures, thenumber of U.S. patients traveling abroad ismuch higher than the McKinsey & Co.estimate. Josef Woodman, author ofPatients Beyond Borders (2007, HealthyTravel Media), estimated that more than150,000 Americans travel abroad annually forhealthcare. The Deloitte Center for HealthSolutions put the number as high as 750,000.

Paul Mango, director of the healthcarepractice at McKinsey & Co., projects thepotential market for Americans seeking lower-cost care abroad at 710,000 procedures ayear. These 710,000 procedures, currentlybringing $35 billion of revenue to U.S.hospitals, could be done overseas at asavings of about $15,000 per procedure. Theextent that the overseas healthcare marketdevelops will depend upon whether insurers,

employers, and the U.S. government beginencouraging treatment abroad.

Cost is the primary driver attracting U.S.patients to other countries. Compared to$50,000 or more for a heart bypassperformed in the U.S., the procedure costs$8,000 to $15,000 in Thailand or India, forexample. In addition to excellent medicalcare, services in Asia typically include limopick-up and convalescence time in a hotel.

HEALTH PLANS ENCOURAGE

MEDICAL TOURISM

Some healthcare insurers have launchedinitiatives to eventually allow coverage foroverseas medical care for policyholders.

Blue Cross & Blue Shield of South Carolina,one of the first to launch such a program, hasalliances through its Companion GlobalHealthcare subsidiary with Bumrungrad

33 MEDICAL TOURISM

“Because medical tourism is primarilyfor the uninsured making independentdecisions, it is tough to judge theindustry, and very difficult to estimatethe number of people goingoverseas.”

Michael Chee Communications Director Healthplace America Modern Healthcare, 6/15/09

“Medical tourism is not somethingpatients by themselves will seek todo. It will be a product of whathappens with the insurancecompanies. More and more, theexpense of care is falling on patients,and there will be mounting pressurefor patients to leave their homes andgo overseas for less-expensive care.”

Richard Wade, Senior V.P. American Hospital Association Modern Healthcare, 5/7/08


• 76 •

International Hospital (Bangkok), ParkwayGroup Healthcare (owner of three hospitals inSingapore), and hospitals in Turkey, Ireland,and Costa Rica.

According to Ruben Toral, president of theInternational Medical Travel Association,three areas of concern limit employers andinsurers in adopting medical tourism as asolution to lower healthcare costs: quality,liability, and continuity of care. Payerstypically ask three basic questions:• How do I know these hospitals offer the

same quality services as U.S. hospitals?• What happens if something goes wrong?• Who is responsible for delivering aftercare

when these patients return fromoverseas?

CERTIFIED FOREIGN HOSPITALS

More than 290 foreign hospitals andhealthcare providers are certified by JointCommission International, a not-for-profitsubsidiary of the Joint Commission, whichaccredits U.S. hospitals. As of January 2010,the number of certified organizations bycountry are as follows:• Austria: 4• Bangladesh: 1• Barbados: 1• Bermuda: 1• Brazil: 20• Chile: 2• China: 5• Columbia: 1• Costa Rica: 3• Cyprus: 1• Czech Republic: 4• Denmark: 6• Egypt: 2• Ethiopia: 1• Germany: 5• India: 14• Indonesia: 1• Ireland: 20• Israel: 3

• Italy: 17• Japan: 1• Jordan: 5• Korea: 2• Malaysia: 6• Mexico: 8• Pakistan: 1• Philippines: 3• Portugal: 2• Qatar: 5• Saudi Arabia: 30• Singapore: 15• Spain: 17• Switzerland: 1• Taiwan: 7• Thailand: 9• Turkey: 35• United Arab Emirates: 31• Vietnam: 1

DOMESTIC COMPETITION

Some hospitals see the threat of patientsconsidering overseas options as a marketopportunity.

“At a time when patients are lookingfor more affordable quality healthcareoptions in the midst of a dismaleconomy, heart procedures and hipreplacements costing thousands ofdollars less in places such as CostaRica, India, or Malaysia can look veryattractive. Some hospitals in the U.S.,however, seeking to bulk up theirpatient base and fill beds duringlower-volume periods, have decidedthey can compete with theseinstitutions by offering discountedsurgeries.”



• 77 •

One such hospital is Calichia Heart Hospital(Wichita, Kansas), which structured its pricingfor self-pay patients to compete with thoseoffered overseas. For surgeries performedduring periods when patient load is low, forinstance, Calichia cut its price for a coronarybypass to $10,000 – down $40,000 to$50,000 from what the typical major medicalcenter would charge – and a hip replacementfor $12,000, about one-third of the going U.S.rate.


International Medical Travel Association,P.O. Box 9, Prasarnmitr Post Office,Bangkok, Thailand 10114.(www.intlmta.org)

Joint Commission International, 1515 West22 Street, Suite 1300W, Oak Brook, ILnd

60523. (630) 268-4800. (www.jointcommisisioninternational.org)

Lubell, Jennifer, “New Tourist Attractions,”Modern Healthcare, June 15, 2009, p. 28.

Medical Tourism Association, 10130Northlake Boulevard, Suite 214, West PalmBeach, FL 33412. (561) 791-2000.

Rhea, Shawn, “Medical Migration,” ModernHealthcare, May 7, 2008, pp 6-10.

Rhea, Shawn, “Still Packing Their Bags,”Modern Healthcare, July 27, 2009, pp 28-30.

Toral, Ruben, “Quality, Liability, Aftercare,”Modern Healthcare, May 25, 2009, p. 20.

“This is all cash; patients areuninsured but with means, and theypay upfront. Consumers want highquality, discounted services, and ifthey can get that in the U.S., they’llpay for it.”


http://www.intlmta.org

http://www.jointcommisisioninternational.org


• 78 •

Payment rates for Medicare and Medicaid,with the exception of managed care plans,are set by law rather than through anegotiation process as with private insurers.

Each year, the American Hospital Association(AHA) collects aggregate information on thepayments and costs associated with caredelivered to beneficiaries of Medicare andMedicaid. The AHA finds that since 2000,payment rates have been set below the costsof providing care, essentially resulting inunderpayment. Moreover, the amount ofunderpayment is on the rise. Data for 2000through 2008 is presented in Table 34.1.Underpayment data in the table is defined asthe difference between the costs incurred andthe reimbursement received for deliveringcare to patients.

Hospital participation in Medicare andMedicaid is voluntary. However, as acondition for receiving federal tax exemptionfor providing healthcare to communities, not-for-profit hospitals are required to care forMedicare and Medicaid beneficiaries.Moreover, Medicare and Medicaid patientsaccount for 55% of all care provided byhospitals. Consequently, very few hospitalscan elect not to participate in Medicare andMedicaid.


Underpayment By Medicare and MedicaidFact Sheet, American Hospital Association,November 2009. (www.aha.org/aha/content/2009/pdf/09medicunderpayment.pdf)

34 MEDICARE & MEDICAID

TABLE 34.1

National Underpayment For Medicare and Medicaid

Medicare Medicaid Total

• 2000: $ 1.3 billion $ 2.5 billion $ 3.8 billion• 2001: $ 2.3 billion $ 2.0 billion $ 4.3 billion• 2002: $ 3.3 billion $ 2.3 billion $ 5.5 billion• 2003: $ 8.1 billion $ 4.9 billion $13.0 billion• 2004: $15.0 billion $ 7.1 billion $22.1 billion• 2005: $15.5 billion $ 9.8 billion $25.3 billion• 2006: $18.6 billion $11.3 billion $29.9 billion• 2007: $21.5 billion $10.4 billion $31.9 billion• 2008: $22.0 billion $10.4 billion $32.4 billion


• 79 •

HOSPITALS IN PLANNING PHASE

Engineering News-Record identified thehospital construction projects listed in Table35.1 as the largest in the planning stage as ofNovember 2009.


Dicker, Lisa Steakley, “Owners Start ToResume Work On Projects That Were OnHold,” Engineering News-Record,November 9, 2009, pp 30-32.

35 NEW HOSPITALS

TABLE 35.1

Largest Healthcare Construction Projects in Planning Phase

• Parkland Hospital (Dallas, Texas): $1.27 billion• MCLNO LSU Medical Center (New Orleans, Louisiana): $1.20 billion• UNMH North Campus Hospital (Albuquerque, New Mexico): $1.00 billion• Rush University Medical Center (Chicago, Illinois): $925 million• Saint Vincent Catholic Medical Centers (New York, New York): $835 million• San Francisco General Hospital Acute Care Hospital

(San Francisco, California): $717 million• Exempla St Joseph Hospital - Phase 1 (Denver, Colorado): $650 million• Kaiser San Leandro Hospital (San Leandro, California): $600 million• Stanford University Medical Center Hospital (Palo Alto, California): $500 million• Kaiser Hospital (Anaheim, California): $500 million• CPMC Cathedral Hill Hospital (San Francisco, California): $450 million• UMHHC C.S. Mott Children’s & Women’s Hospital

(Ann Arbor, Michigan): $423 million• Owensboro Hospital - Regional Campus (Owensboro, Kentucky): $400 million• Veterans Admin. Medical Center (Omaha, Nebraska): $400 million• Methodist Medical Center (Peoria, Illinois): $375 million• Albert Einstein Healthcare Network (Norristown, Pennsylvania): $369 million• Albany Medical Center Expansion (Albany, New York): $360 million• Scripps Cardiovascular Institute (La Jolla, California): $360 million• Southwestern Medical Center (Dallas, Texas): $360 million• University Hospital - Cancer/Critical Care (Columbus, Ohio): $356 million• Scripps Memorial Hospital (Encinitas, California): $350 million• Alta Bates Summit Acute Care Tower, Oakland, California): $350 million• Fort Riley Hospital (Fort Riley, Kansas): $334 million• Fort Benning Martin Hospital (Fort Benning, Georgia): $333 million


• 80 •

Modern Healthcare estimates that at leastthree-quarters of hospitals outsource at leastone hospital function.

OUTSOURCED SERVICES

According to Modern Healthcare’s 31 Annualst

Outsourcing Survey (September 28, 2009),the top hospital department managementcontracts, ranked by number of healthcarefacilities outsourcing various functions, are asfollows:• Laundry: 7,986• Clinical/diagnostic equipment

maintenance: 2,959• Housekeeping: 2,932• Foreign-language services: 1,512• Emergency departments: 1,091• Foodservice: 1,196• Hospital call centers: 862• Pharmacy: 499• Information systems: 460• Accounts receivable: 440• Medical records: 331• Facility operations/equipment

maintenance: 307• Security: 267• Rehabilitation: 179• Nursing staff: 162• Parking garages: 149• Reimbursement: 137• Anesthesia: 92• Radiology: 93• Other: 931

LARGEST OUTSOURCING FIRMS

Clinical/Diagnostic EquipmentMaintenance• GE Healthcare• TriMedx• HSS • Crest Services• Crothall Services Corp.

Emergency Department• EmCare• TeamHealth• Schumacher Group• Emergency Medicine Physicians• EXL Service

Foodservice• Morrison Management Specialists• Healthcare Services Group• HHA Services

Housekeeping• Healthcare Services Group• Crothall Services Group• HHA Services• Rite Way Service• ISS TMC Services

Information Systems• Perot Systems Corp.• CSC• PHNS• ACS• McKesson Technology Solutions

36 OUTSOURCING


• 81 •

Laundry• Angelica Corp.• Healthcare Services Group• Crothall Services Group• Unitex• HHA Services

Pharmacy• Comprehensive Pharmacy Services• Pharmacy Systems• EXL Service• CompleteRx• TeamHealth


Carlson, Joe, “Finding A Niche,” ModernHealthcare, September 28, 2009, pp 24-30.


• 82 •

According to Hospital Pulse Report 2009, byPress Ganey Associates, overall patientsatisfaction has steadily increased since2003.

The Press Ganey assessment is based onsurvey responses from 2.95 million patientswho had inpatient stays at 2,021 U.S.hospitals. Patient satisfaction is measured asthe average response to 38 standardquestions related to admission, rooms,meals, nurses, tests and treatments,visitation, physicians, discharge, personalissues, and overall satisfaction. Responsesare reported on a 100-point scale (very good= 100; good = 75; fair = 50; poor = 25; verypoor = 0). The overall Patient SatisfactionScore reported in the Hospital Pulse Report2009 was 85.0, an improvement from 83.3 in2003.

HIGHEST PRIORITIES

Patients surveyed by Press Ganey rankedtheir highest priorities with respect to overallsatisfaction as follows:1. Response to concerns/complaints made

during your stay2. Degree to which hospital staff

addressed your emotional needs3. Staff effort to include you in decisions

about your treatment4. How well nurses kept you informed5. Promptness in responding to the call

button

SATISFACTION SCORES

Satisfaction scores by various parameters areas follows:

Number of Beds• 50 or fewer beds: 87.8• 51-to-149 beds: 85.6• 150-to-299 beds: 84.4• 300-to-449 beds: 83.9• 450-to-599 beds: 83.8• 600 or more beds: 83.7

Patient Age• Under 18: 85.2• 18-to-34: 84.8• 35-to-49: 83.7• 50-to-64: 84.6• 65-to-79: 85.5• 80 and older: 83.0

37 PATIENT SATISFACTION

“Nurses play a critical role incommunications – patients expectthem to stay in touch and keep theminformed about what is happeningand what to expect, and to respondpromptly to their immediate needs.”


“A continual challenge for largehealthcare providers is to personalizethe inpatient experience.”



• 83 •

Specialists• Obstetrics/gynecology: 86.7• Intensive care unit: 85.6• Cardiology/coronary: 85.5• Pediatrics: 85.0• Orthopedics: 85.0• Rehabilitation: 84.8• Urology/renal: 84.8• Oncology: 84.2• Neurology: 83.3• Pulmonary/respiratory: 82.6

Type of Admission• Direct admission: 85.6• Emergency department: 82.6

Top 10 Metropolitan Areas• Columbia, South Carolina: 87.6• Greenville, South Carolina: 87.4• Indianapolis, Indiana: 87.4• Oklahoma City, Oklahoma: 87.0• Madison, Wisconsin: 86.7• Toledo, Ohio: 86.5• Tulsa, Oklahoma: 86.4• Miami-Ft. Lauderdale, Florida: 86.2• New Orleans, Louisiana: 86.2• Columbus, Ohio: 85.8

Top 10 States• Maine: 87.3• South Carolina: 86.9• New Hampshire: 86.6• Wisconsin: 86.6• Montana: 86.2• Iowa: 86.2• Oklahoma: 86.2• Vermont: 86.0• Indiana: 85.9• Mississippi: 85.9


Hospital Pulse Report, Press GaneyAssociates, 2009

Press Ganey Associates, 404 ColumbiaPlaza, South Bend, IN 46601. (800) 232-8032. (www.pressganey.com)

“Patients who are hospitalizedthrough direct admission are moresatisfied with their care. This may bedue, in part, to the unexpected natureand gravity of a situation requiring atrip to the ED followed by a hospitalstay. Patients who have more time toplan for an admission are more likelyto educate themselves on theircondition, know what to expect duringand after their stay, and even have thechoice of which hospital to use.”


http://www.pressganey.com


• 84 •

Modern Healthcare conducts an annualsurvey of companies that provide patientsatisfaction measurement services.

The 2009 Patient Satisfaction MeasurementFirm Survey ranked companies based ontotal number of engagements as presented inTable 38.1.


“Largest Patient-Satisfaction MeasurementFirms,” Modern Healthcare, December 7,2009, p. 34.

38 PATIENT SATISFACTION MEASUREMENT

TABLE 38.1

Largest Patient-Satisfaction Measurement Firms

Engagements

• Press Ganey Associates (www.pressganey.com): n/a• Avatar International (www.avatar-intl.com): 6,660• Strategic Healthcare Programs (www.shpdata.com): 3,250• OCS HomeCare (www.ocshomecare.com): 3,065• HealthStream Research (www.healthstreamresearch.com): 2,447• Professional Research Consultants (www.prconline.com): 2,285• PatientImpact (www.patientimpact.com): 2,151• Synovate (www.synovate.com): 1,550• Gallup (www.healthcare.gallup.com): 1,109• DSS Research (www.dssresearch.com): 987• National Business Research Institute (www.nbri.com): 727• DataStat (www.datastat.com): 675• Clinical Pharmacology Services (www.cpshealth.com): 432• Fazzi Associates (www.fazzi.com): 350• J.L. Morgan & Associates (www.jlmorganassociates.com): 254• Arbor Associates (www.arbor-associates.com): 173• Jackson Group (www.jacksongroup.com): 153

http://www.pressganey.com

http://www.avatar-intl.com

http://www.shpdata.com

http://www.ocshomecare.com

http://www.healthstreamresearch.com

http://www.prconline.com

http://www.patientimpact.com

http://www.synovate.com

http://www.healthcare.gallup.com

http://www.dssresearch.com

http://www.nbri.com

http://www.datastat.com

http://www.cpshealth.com

http://www.fazzi.com

http://www.jlmorganassociates.com

http://www.arbor-associates.com

http://www.jacksongroup.com


• 85 •

U.S. hospitals provide some of the bestmedical care in the world and have alwaysattracted wealthy foreigners.

MARKET ASSESSMENT

Most hospitals do not disclose theirinternational patient volumes, but analystsestimate the number of foreign patientsadmitted to U.S. hospitals in the tens ofthousands each year. The U.S. Departmentof Commerce has not tracked this marketsince 1998, when the U.S. international tradein medical services was reported at $915million. The market in 2009 is estimated at$1.6 billion.

Shannon O’Kelley, executive director ofinternational and corporate care at New York-Presbyterian Hospital, estimates that about3% of U.S. inpatient admissions at academicmedical centers and other specializedfacilities come from abroad. Since patientstypically bring family with them, each dollarthat foreign patients spend on inpatient careis estimated to generate another $3 ofspending elsewhere in the U.S. economy,including spending for lodging, hospitality,and shopping.

Until relatively recently, only a handful of highprofile U.S. medical centers were activeoutside the U.S. market. Now severalhospitals across the country attract foreignpatients.

Baptist Health South Florida, a seven-hospitalsystem, for example, serves about 12,000patients from Latin America annually. ItsGamma Knife Center, in Coral Gables, drawsa large number of patients with inoperablebrain tumors.

MARKETING OVERSEAS

Nine hospitals in the Philadelphia area joinedto establish Philadelphia InternationalMedicine, a group that focuses on attractingforeign patients. The group’s internationalservices center helps patients and theirfamilies with interpreters and travelarrangements to the U.S.

The top medical centers continue to expandtheir reach overseas. The Cleveland Clinic,for example, has a Global Patient Servicesprogram that focuses on the markets in Indiaand Japan. And Johns Hopkins Hospital hasdeveloped consult ing and referralrelationships with providers in India, Japan,and Singapore.

39 PATIENTS FROM OVERSEAS

“Once the domain of cutting-edgeresearch institutions like theCleveland and Mayo Clinics andJohns Hopkins, the internationalclientele are finding a wider array ofoptions.”

Hospitals & Health Networks, 6/08


• 86 •

U.S. HOSPITALS OPERATING

ABROAD

Several U.S. hospital systems have partneredwith local governments overseas to operatehospitals and clinics abroad. The followingare some examples:• Cleveland Clinic broke ground in 2008 for a

360-bed hospital slated to open in 2011 inAbu Dhabi. It also manages Sheikh KhalifaMedical City, a network of healthcarefacilities, also in Abu Dhabi.

• Harvard Medical School, through PartnersHarvard Medical International, partneredwith Dubai’s Healthcare City to buildUniversity Hospital.

• Johns Hopkins Medicine has a 10-year dealwith the United Arab Emirates to manageTawam Hospital in Abu Dhabi.

• The University of Miami Hospital MillerSchool of Medicine is negotiating to openclinics in both Colombia and in theCaribbean. The hospital also hopes forexpansions in Egypt, Saudi Arabia, andHaiti.


Partners Harvard Medical International, 131Dartmouth Street, 5 Floor, Boston, MAth

02116. (617) 535-6400. (www.phmi.partners.org)

Philadelphia International Medicine, 1835Market Street, 10 Floor, Philadelphia, PAth

19103. (215) 563-4733.(www.philadelphiamedicine.com)

Rotenberk, Lori, “As The World Flattens,U.S. Hospitals Expand Their Global Reach,”Hospitals & Health Networks, June 2008, p. 14.

Volz, David, “Reverse Medical Tourism,”Hospitals & Health Networks, June 2008, pp13-14.

http://www.phmi.partners.org

http://www.philadelphiamedicine.com


• 87 •

Pay-for-performance (P4P) programs paybonuses to providers based on quality andpatient safety data. According to MedVantage, there were approximately 160 activeP4P programs in the U.S. in 2009.

BACKGROUND

Several initiatives launched in the early 2000shave brought P4P incentives into themainstream. The following are the majorpioneering efforts in the P4P field:• The Bridges to Excellence initiative

launched in 2002 as a plan to pay bonusesto physicians who provide optimum care fordiabetes patients. The program now servesas a model for other groups entering thepay-for-performance arena. Some BlueCross and Blue Shield groups havelicensed the Bridges to Excellence model,and UnitedHealth and Cigna have adoptedit as well.

• The Integrated Healthcare Association(IHA) includes six California HMOs coveringapproximately 45,000 doctors and eightmillion patients. Insurers allied with IHApay $50 million annually in bonuses tophysicians.

• In 2003, Centers for Medicare & MedicaidServices and hospital alliance Premierlaunched the Hospital Quality IncentiveDemonstration project, with 274 hospitalsparticipating. Under the project, hospitalsin the top 10% in five clinical areas –coronary artery bypass graft, heart attack,heart failure, hip and knee replacement,and pneumonia – received a 2% bonusMedicare payment based on outcomes.The project was extended through 2010.

OUTLOOK

With the success of pilot P4P programs, thequestion now is what the future model ormodels for pay-for-performance will look likeand how will they affect hospitals.Researchers from the Harvard School ofPublic Health found that performancemeasures used to evaluate and rewardphysicians and hospitals have shifted from afocus on processes of care to emphasis onpatient outcomes, cost efficiency, and use ofinformation technology. They found, forexample, a sharp increase in use of outcomemeasures to reward physician and hospitalbehavior, with less focus on processes suchas keeping rates of mammography screeninghigh. Pay-for-performance adopters are nowbasing rewards on such things as whetherdiabetic patients have actually achievedhealthy cholesterol levels and blood pressurerates, not just whether or not a doctor hasprescribed pills.

Among P4P programs, there is little to noconsistency. A study by Pricewaterhouse-Coopers found great variation exists amongcommercial health plans’ P4P programs.Among nearly 60 indicators of physicianperformance being used by plans surveyed,no one indicator was used by all plans beingstudied. Also, among the plans surveyed, notwo reward providers for performance in thesame way. And all plans were administeredin widely different ways.

40 PAY-FOR-PERFORMANCE


• 88 •


Bridges to Excellence, 13 Sugar Street,Newtown, CT 06470. (www.bridgestoexcellence.org)

Centers for Medicare & Medicaid Services,7500 Security Boulevard, Baltimore, MD21244. (410) 786-3000. (www.cms.gov)

Integrated Healthcare Association, 300Lakeside Drive, Suite 1975, Oakland, CA94612. (510) 208-1740. (www.iha.org)

Premier Inc., 2320 Cascade Pointe Road,Suite 100, Charlotte, NC 28208. (704) 357-0022. (www.premierinc.com)

PricewaterhouseCoopers, Health ResearchInstitute, 2001 Ross Avenue, Suite 1800,Dallas, TX 75201. (214) 999-1400. (www.pwc.com)

http://www.bridgestoexcellence.org

http://www.cms.gov

http://www.iha.org

http://www.premierinc.com

http://www.pwc.com


• 89 •

NEVER EVENTS

The National Quality Forum (NQF) haspublished a list of 28 so-called never events– errors that should never occur in a hospital.Payers have embraced the list and some nowwithhold payment if a never event happens.The NQF never events are as follows:

Surgical Events• Surgery performed on the wrong body

part • Surgery performed on the wrong patient • Wrong surgical procedure on a patient • Retention of a foreign object in a patient

after surgery or other procedure • Intraoperative or immediately post-

operative death in a normal-health patient

Product or Device Events• Patient death or serious disability

associated with the use of contaminateddrugs, devices or biologics provided bythe healthcare facility

• Patient death or serious disabilityassociated with the use or function of adevice in patient care in which the deviceis used or functions other than asintended

• Patient death or serious disabilityassociated with intravascular air embolismthat occurs while being cared for in ahealthcare facility

Care Management Events• Patient death or serious disability

associated with a medication error • Patient death or serious disability

associated with a hemolytic reaction dueto the administration of ABO-incompatible

blood or blood products

• Maternal death or serious disabilityassociated with labor or delivery on a low-risk pregnancy while being cared for in ahealthcare facility

• Patient death or serious disabilityassociated with hypoglycemia, the onsetof which occurs while the patient is beingcared for in a healthcare facility

• Death or serious disability associated withfailure to identify and treathyperbilirubinemia in neonates

• Stage 3 or 4 pressure ulcers acquiredafter admission to a healthcare facility

• Patient death or serious disability due tospinal manipulative therapy

• Artificial insemination from the wrongdonor

Patient Protection Events• Infant discharged to the wrong person • Patient death or serious disability

associated with patient elopement(disappearance) for more than four hours

• Patient suicide, or attempted suicideresulting in serious disability, while beingcared for in a healthcare facility

Environmental Events• Patient death or serious disability

associated with an electric shock whilebeing cared for in a healthcare facility

• Any incident in which a line designated foroxygen or other gas to be delivered to apatient contains the wrong gas or iscontaminated by toxic substances

• Patient death or serious disabilityassociated with a burn incurred from anysource while being cared for in a

41 PREVENTABLE MEDICAL ERRORS


• 90 •

healthcare facility • Patient death associated with a fall while

being cared for in a healthcare facility • Patient death or serious disability

associated with the use of restraints orbed rails while being cared for in ahealthcare facility

Criminal Events• Any instance of care ordered by or

provided by someone impersonating aphysician, nurse, pharmacist, or otherlicensed healthcare provider

• Abduction of a patient of any age • Sexual assault on a patient within or on

the grounds of a healthcare facility • Death or significant injury of a patient or

staff member resulting from a physicalassault (i.e., battery) that occurs within oron the grounds of a healthcare facility

NON-REIMBURSEMENT

The Centers for Medicare and MedicaidServices has taken action to reduce medicalerrors, no longer paying hospitals for treatingeight particular preventable medical errors.The following ‘complicating conditions’ havebeen deemed non-reimbursable:• Stage III and IV pressure ulcers• Falls or trauma resulting in fractures,

burns, or other serious injuries• Foreign object accidentally left behind

after surgery• Air embolism• Blood incompatibility• Vascular catheter-associated infections• Catheter-associated urinary tract

infections• Mediastinitis after coronary artery bypass

graft, a surgical site infection

Reimbursement policies in several stateMedicaid programs followed Medicare in notreimbursing for certain never events. Suchstate policies include the following:• The California Association of Health Plans

passed a resolution in favor of no longerpaying for the CMS’ list of eight conditionsas well as three other preventablemistakes.

• Massachusetts officials announced thestate would no longer pay for care relatedto 28 serious reportable events as definedby the National Quality Forum.

• The New York State Medicaid program hasstopped paying for the eight hospital-acquired conditions identified by Medicare.

• Maine and Pennsylvania passed laws thatpreclude hospitals from billing patients if anerror occurs.

• The Tennessee Hospital Associationapproved a policy for hospitals not to seekpayment from patients or their insurancecompanies for care related to seriouspreventable adverse events.



National Quality Forum, 601 13 Street NW,th

Suite 500 North, Washington DC 20005. (202) 873-1300. (www.qualityforum.org)

http://www.cms.gov

http://www.qualityforum.org


• 91 •

PHYSICIAN VISITS

According to the National Center for HealthStatistics, consumers make 465 million visitsto doctors’ offices each year. Including visitsto hospitals and clinics, the total number ofmedical visits is 1.1 billion. The number ofdoctor visits has increased 26% over the pastdecade, a rise attributed in large part to anaging population.

Eighty percent (80%) of people surveyednationally in 2008 by Rand Corporation andthe University of Pittsburgh School ofMedicine said they have a personal doctor.

A recent survey by Gallup found that 71% ofAmerican adults had been to a doctor, nursepractitioner, or physician’s assistant at leastonce in the previous six months. Thefollowing are percentages among individualswith specific health-related attributes:• Define their health status as

“excellent” or “good”: 76%• Define health as “fair” or “poor”: 87%• Aged 50 and older: 81%• Very/somewhat overweight: 78%• Smoke every day: 71%

According to IMS Health, the following are theleading diagnoses by total number of patientvisits for primary care:• Essential hypertension: 86 million• Diabetes mellitus without

complications: 42 million• Hyperlipidemia: 32 million• Acute respiratory infection: 27 million• Otitis media: 22 million• Depressive disorder: 20 million• Chronic sinusitis: 17 million

• Asthma: 17 million• Esophagitis: 17 million• Allergic rhinitis: 16 million

STRENGTHENING PRIMARY

CARE

Access to primary care physicians is critical tothe healthcare system. A 2008 white paperfrom the American College of Physiciansconcluded that the proportion of primary caredoctors in a community is relative to healthoutcomes and system costs.

According to a study by researchers from theJohns Hopkins University School of Medicinepublished in the February 2009 issue to theAmerican Journal of Medicine, a 15%increase in the number of primary carephysicians in a metropolitan area would yieldthe following benefits:• Reduced emergency department visits by

10.9%• Reduced number of surgeries by 7.2%• Reduced inpatient admissions by 5.5%• Reduced outpatient visits by 5.0%

In a metropolitan area with a population of775,000, increasing the proportion of primarycare physicians from 35% to 40% would yieldthe following:• Reduced emergency department utilization

by 15,000 visits a year• Reduced surgery by about 2,500 cases a

year• Reduced hospital admissions by 2,500 a

year, saving an estimated $23 million

42 PRIMARY CARE


• 92 •

According to Merritt Hawkins & Associates, aphysician search firm, primary carephysicians are in greater demand today thanany other type of doctor. For the year endingMarch 31, 2009, the company fielded 23%more requests for primary care doctors(defined as family physicians, internists, andpediatricians) than the previous 12-monthperiod.

MEDICAL HOMES

The ‘medical home’ concept is a model inwhich a physician receives compensation forcoordinating patient care that enhancespatient access to physicians and engagespatients in their own care management.

The following are some pilot programs testingthe medical homes concept:• Nationwide, 27 of 39 Blue Cross Blue

Shield insurers are testing some type ofmedical home pilot.

• Bridges to Excellence is testing theapproach with an incentive plan that paysannual rewards of up to $125 per patientper year to physicians who demonstratemedical homes for patients connected toproven positive outcomes.

• Six Pennsylvania insurers, includingIndependence Blue Cross and Aetna, arespending $13 million over three years tohelp doctors in 32 primary care practicesset up medical homes.

In the 2008 Healthcare Leaders OpinionSurvey, conducted by Commonwealth Fundand Modern Healthcare, 84% of respondentssupported providing supplemental paymentsto primary-care physicians – on top of fee-for-service payments – for deliveringcomprehensive, coordinated, and accessiblecare.

The concept is supported by the AmericanAcademy of Family Physicians, AmericanAcademy of Pediatrics, American College ofPhysicians, and American Osteopathic Assn.The AARP and employers including IBM,Dow Chemical, and General Motors advocatemedical homes.

CONCIERGE PHYSICIAN

PRACTICES

Physician practices that provide exclusivemedical services to affluent clientele arespringing up around the country. They havebeen called ‘boutique practices,’ ‘white-gloveservice,’ and ‘concierge physician practices.’Frustrated with long hours and hassles withmanaged care, physicians who start or joinsuch ventures say they spare themselves thetraditional payment hassles, and they don’thave to rush through their patients.

Virtually unknown 10 years ago, there arenow about 5,000 such practices, according tothe Society for Innovative Medical PracticeDesign, a professional society of conciergephysicians.

At least two chains have emerged in thisniche: Seattle-based MD2 (www.md2.com)and MDVIP (www.mdvip.com) in Boca Raton,Florida.

“Virtually every hospital or largemedical group in the United Stateswould be happy to add a familyphysician or general internist. Theresimply are not enough primary caredoctors to go around.”

Mark Smith, President Merritt Hawkins & Associates Hospitals & Health Networks, 7/09

http://www.md2.com

http://www.mdvip.com


• 93 •


American Academy of Family Physicians,11400 Tomahawk Creek Parkway,Leawood, KS 66211. (800) 274-2237. (www.aafp.org)

American Academy of Pediatrics, 141Northwest Point Boulevard, Elk GroveVillage, IL 60007. (847) 434-4000. (www.aap.org)

American College of Physicians, 190 NorthIndependence Mall West, Philadelphia, PA19106. (800) 523-1546. (www.acponline.org)


Bridges to Excellence, 13 Sugar Street,Newtown, CT 06470. (www.bridgestoexcellence.org)

Gallup Inc., 901 F Street NW, Washington,DC 20004. (202) 715-3030. (www.gallup.com)

IMS Health, 901 Main Avenue, Suite 612,Norwalk, CT 06851. (203) 845-5200. (www.imshealth.com)

Kravet S.J., A.D. Shore, R. Miller, G.B.Green, K. Kolodner and S.M. Wright,“Health Care Utilization and the Proportionof Primary Care Physicians,” AmericanJournal of Medicine, February 2009.

Medical Group Management Association,104 Inverness Terrace East, Englewood,CO 80112. (303) 799-1111. (www.mgma.com)

Merritt, Hawkins & Associates, 5001Statesman Drive, Irving, TX 75063. (800) 876-0500. (www.merritthawkins.com)

Meyer, Harris, “The Disappearing PrimaryCare Physician,” Hospitals & HealthNetworks, November 2008, pp 29-32.

National Center for Health Statistics, 3311Toledo Road, Hyattsville, MD 20782.(800) 232-4636. (www.cdc.gov/nchs)

Rand Corporation, 1776 Main Street, SantaMonica, CA 90401. (310) 393-0411. (www.rand.org)

“Physician Search Firm Finds HigherDemand For Primary Care,” Hospitals &Health Networks, July 2009, p. 79.

Physicians’ Foundation, 77 Summer Street,8 Floor, Boston, MA 02110. th

(617) 399-0417. (www.physiciansfoundations.org)

Society for Innovative Medical PracticeDesign, P.O. Box 448, Richmond, VA23219. (877) 448-6009. (www.simpd.org)

The Commonwealth Fund, 1 East 75th

Street, New York, NY 10021. (212) 606-3800.(www.commonwealthfund.org)

http://www.aafp.org

http://www.aap.org

http://www.acponline.org


http://www.bridgestoexcellence.org

http://www.gallup.com

http://www.imshealth.com

http://www.mgma.com

http://www.merritthawkins.com

http://www.cdc.gov/nchs

http://www.rand.org

http://www.physiciansfoundations.org

http://www.simpd.org

http://www.commonwealthfund.org


• 94 •

DATA SUMMARY

Hospital Statistics 2009 by the AmericanHospital Association provides current data onU.S. hospitals.

Table 43.1 provides a summary of data aboutU.S. hospitals.

UTILIZATION

Inpatient, emergency department, andoutpatient utilization in community hospitals ispresented in Table 43.2.

FINANCIAL PERFORMANCE

Total Revenue Profit Margin

• 2002: $435.8 billion 4.4%• 2003: $472.7 billion 4.8%• 2004: $507.5 billion 5.2%• 2005: $544.7 billion 5.3%• 2006: $587.1 billion 6.0%• 2007: $626.0 billion 6.7%

HOSPITAL SERVICES

The following percentages of U.S. communityhospitals offer specialized healthcareservices: • Birthing, labor, and delivery: 65%• Chemotherapy: 57%• Sleep center: 49%• Sports medicine: 40%• Hospice: 25%• Ambulatory surgery center: 24%

• Dental services: 23%• Bariatric/weight control: 22%• Complementary medicine services: 21%• Alzheimer’s center: 4%• Free-standing emergency center: 4%

The following percentages of U.S. communityhospitals provide services beyond traditionalinpatient and outpatient care: • Health fair: 78%• Home health service: 66%• Hospice: 65%• Skilled nursing facility: 55%• Assisted living: 18%• Other long-term care: 16%• Meals on wheels: 13%



Chartbook: Trends Affecting Hospitals andHealth Systems, American HospitalAssociation, 2009. (www.aha.org/aha/research-and-trends/chartbook/index.html)

43 PROFILE OF U.S. HOSPITALS

http://www.aha.org


• 95 •

TABLE 43.1

Profile Of U.S. Hospitals

• Total number of all U.S. registered hospitals: 5,708- U.S. community hospitals*: 4,897

- Non-government not-for-profit community hospitals: 2,913- State and local government community hospitals: 1,111- Investor-owned (for-profit) community hospitals: 873

- Non-federal psychiatric hospitals: 444- Federal government hospitals: 213- Non-federal long-term care hospitals: 136- Hospital units of institutions (prison hospitals, college infirmaries, etc.): 18

• Total staffed beds in all U.S. registered hospitals: 945,199- Staffed beds in community hospitals: 800,892

• Total admissions in all U.S. registered hospitals: 37,120,387- Admissions in community hospitals: 35,345,986

• Number of urban community hospitals: 2,900• Number of rural community hospitals: 1,997

• Number of community hospitals in a system**: 2,730• Number of community hospitals in a network***: 1,472

* Community hospitals are defined as all non-federal, short-term general, and other special hospitals. Otherspecial hospitals include obstetrics and gynecology; eye, ear, nose, and throat; rehabilitation; orthopedic; andother individually described specialty services. Community hospitals include academic medical centers or otherteaching hospitals if they are non-federal short-term hospitals. Excluded are hospitals not accessible by thegeneral public, such as prison hospitals or college infirmaries.

** System is defined by AHA as either a multi-hospital or a diversified single hospital system. A multi-hospitalsystem is two or more hospitals owned, leased, sponsored, or contract managed by a central organization. Single, freestanding hospitals may be categorized as a system by bringing into membership three or more, andat least 25%, of their owned or leased non-hospital pre-acute or post-acute healthcare organizations. Systemaffiliation does not preclude network participation.

*** Network is a group of hospitals, physicians, other providers, insurers and/or community agencies that worktogether to coordinate and deliver a broad spectrum of services to their community. Network participation doesnot preclude system affiliation.


• 96 •

TABLE 43.2

Inpatient, Emergency Department, and Outpatient Utilization

• Total inpatient admissions: 35,345,986• Inpatient admissions per 1,000: 117.2• Total inpatient days: 194,549,348• Inpatient days per 1,000: 645.0• Inpatient surgeries: 10,189,630• Average length of stay: 5.5• Emergency department (ED) visits: 120,800,000• ED visits per 1,000: 401• Outpatient visits: 603,300,374• Outpatient visits per 1,000: 2,000.2• Outpatient surgeries: 17,146,334


• 97 •

HEALTHCARE QUALITY

INITIATIVES

There have been concerted efforts by U.S.hospitals to improve quality and patientsafety. The quality movement was sparked,to a large extent, by the report To Err isHuman: Building a Better Healthcare System,published in 1999 by the Institute of Medicine,which estimated that between 44,000 to98,000 people die each year from medicalerrors – at a total national cost of up to $29billion. Efforts to improve quality in health-care have been spearheaded nationally byseveral organizations and initiatives.

The Leapfrog Group, a coalition of more than100 member companies, works with itsemployer members to encourage healthcaresafety, quality, transparency and easy accessto healthcare information. Leapfrog’sconsortium of companies, most of whom arein the Fortune 500, spend more than $56billion annually for health benefits to their 33million employees.

Another organization, The Institute forHealthcare Improvement (IHI), launched the100,000 Lives Campaign, an effort to avoid100,000 patient deaths through theimplementation of improvements in basicpatient care. IHI also implemented the 5Million Lives campaign, which focuses onincidents of harm. Over 3,000 hospitals haveparticipated in the initiatives.

There are several other quality initiatives andmodel quality guidelines. So many, in fact,that the need for the quality movement tocoalesce around a strategy has become

apparent. The IOM has called for thecreation of a national quality-coordinationboard to oversee existing initiatives and todevelop clinical performance measures.

QUALITY REPORTING

In 2005, the U.S. Department of Health &Human Services, along with the nation’smajor hospital groups, launched HospitalCompare (www.hospitalcompare.hhs.gov), anonline database that reports quality measuresfrom more than 4,200 acute-care hospitalsnationwide. Hospitals must provide data forthe Hospital Compare assessment to receivefull Medicare and Medicaid reimbursementfrom HHS.

44 QUALITY & PATIENT SAFETY

“The granddaddy of quality reportingsites, Hospital Compare scoreshospitals in 26 clinical quality and 10patient satisfaction areas. Patientscan get granular level data, such asthe percentage of heart attackpatients who are given aspirin onarrival or the percentage ofpneumonia patients whose bloodculture was performed in theemergency department prior to thefirst dose of antibiotics. The site alsodiscloses how much Medicare paysfor the reported services.”

Hospitals & Health Networks

http://www.hospitalcompare.hhs.gov


• 98 •

There are also quality reporting systems byn o n - g o ve r n m e n t a l o r g a n iza t ion s .HealthGrades (www.healthgrades.com), forexample, examines mortal ity andcomplication rates for 28 procedures anddiagnoses.

In addition, hundreds of hospitals post theirown quality data for consumers.



Association For Professionals In InfectionControl and Epidemiology, 1275 K StreetNW, Suite 1000, Washington, DC 20005. (202) 789-1890. (www.apic.org)

Institute for Healthcare Improvement, 20University Road, 7 Floor, Cambridge, MAth

02138. (617) 301-4800. (www.ihi.org)

Institute for Safe Medication Practices, 200Lakeside Drive, Suite 200, Horsham, PA19044. (215) 947-7797. (www.ismp.org)


Suite 500 North, Washington DC 20005. (202) 873-1300. (www.qualityforum.org)



http://www.healthgrades.com

http://www.ahrq.gov

http://www.apic.org

http://www.ihi.org

http://www.ismp.org


http://www.kff.org



• 99 •

THE COST OF READMISSIONS

The Medicare Payment Advisory Commission(MedPAC) reported that 17.6% of Medicarepatients discharged from a hospital arereadmitted within 30 days, costing Medicarealone more than $15 billion annually.Medicare spent an average of $7,200 foreach of those potentially avoidablereadmissions. Experts estimate that 76% ofthose readmissions are for reasons that mayhave been preventable.

A similar finding was reported by researchersfrom the Centers for Medicare and MedicaidServices (CMS), published in the April 2,2009 issue of The New England Journal ofMedicine. The CMS reported cumulative re-hospitalizations as follows:• Within 30 days: 19.5%• Within 90 days: 34.0%• Within 365 days: 56.1%

The researchers found wide variation in re-hospitalization rates among states. The fivestates with the highest re-hospitalization rates(Maryland, New Jersey, Louisiana, Illinois,and Mississippi) had rates 45% higher thanthe five states with the lowest rates (Idaho,Utah, Oregon, Colorado, and New Mexico).

According to MedPAC, seven conditionsaccount for 30% of Medicare spending onreadmissions (Table 45.1).

45 READMISSIONS

“Millions of patients each year leavethe hospital only to return withinweeks or months for lack of properfollow-up care. It is one of the biggestavoidable costs on the nation’smedical bill.”

The New York Times, 5/9/09

TABLE 45.1

Leading Causes Of Readmissions

Readmission Avg. Medicare Admissions Rate Payment Total Spending

• Heart failure: 90,273 12.5% $ 6,531 $590 million• COPD: 52,327 10.7% $ 6,587 $345 million• Pneumonia: 74,419 9.5% $ 7,165 $533 million• AMI: 20,866 13.4% $ 6,535 $136 million• CABG: 18,554 13.5% $ 8,136 $151 million• PTCA: 44,239 10.0% $ 8,109 $359 million• Other vascular: 18,029 11.7% $10,091 $182 million


• 100 •

REDUCING READMISSIONS

Some health systems have been successfulin reducing readmissions. Fuqua HeartCenter at Piedmont Hospital, in Atlanta, forexample, reported a dramatic 75% reductionof 30-day readmission rates for heart failurethrough use of a telehealth program thatmonitored patient health status. AndIntermountain Health Care, in Salt Lake City,recorded a 40% decrease in heart failurereadmissions after implementing JointCommission quality measures across thesystem.

A July 2009 assessment found BaylorUniversity Medical Center had the lowestreadmission rate for heart failure among allU.S. hospitals, 15.9%. Nationally, about one-quarter of heart failure patients need to bereadmitted within 30 days of discharge. Thehospital’s success is attributed, in large part,to follow-up care.

Such gains, however, do not come easily.Park Nicollet Health Services, in Minnesota,spends as much as $750,000 annually onstaffing more nurses and on sophisticatedsoftware to track heart failure patients afterthey leave the hospital. Readmissions forsuch patients were reduced to only 1 in 25from nearly 1 in 6, however, the gain hasbeen a losing proposition financially.Although the effort saves Medicare roughly$5 million a year, Park Nicollet is not paid to

provide the follow-up care. Park Nicolletearned a bonus of $247,000 from Medicare in2008, but that payment equaled only about athird of the cost of running the program.

Catholic Healthcare Partners, in Cincinnati,has dropped a similar follow-up programbecause it could not afford the additionalexpense. With the help of a federal grant,provided from 2002 to 2006, the hospitalsystem had hired six nurses to oversee thecare of its high-risk heart failure patients.Return visits dropped sharply. But when thatgrant ended, Catholic Healthcare could notpersuade insurers to pay for the program.

FEDERAL INITIATIVES

The focus by the federal government onreadmission rates is increasing. PresidentBarack Obama’s 2010 budget blueprint citedreducing hospital readmission rates as an$8.4 billion cost-saver over 10 years.

MedPAC has recommended that hospitalswith relatively high readmission rates bepenalized with lower Medicare reimbursementas part of a larger plan to improve hospitalefficiency.

“One of the most important elementsof Baylor’s program has been tojettison the notion that patients are‘discharged’ from the hospital. Instead, hospital workers have begunto think of discharge as a transitionfrom the hospital to care in thecommunity.”

USA Today, 7/9/09

“Even when hospitals find ways togreatly reduce the return trips, savingmoney for Medicare and otherinsurers, their efforts go unrewarded. In fact, because insurers typically payhospitals to treat patients – not tokeep them away by keeping themhealthy – hospitals can actually losemoney by providing better care.”



• 101 •

In April 2009, the CMS launched a pilotproject to eliminate unnecessary hospitalreadmissions in 14 communities across thecountry.


Abelson, Reed, “Hospitals Pay For CuttingCostly Readmissions,” The New YorkTimes, May 9, 2009.


DerGurahian, Jean, “Reading IntoReadmissions,” Modern Healthcare, July20, 2009, p. 16.

Favole, Jared A., “Readmitted Patients CostBillions,” The Wall Street Journal, April 2,2009.

Jencks, S. F., M. V. Williams, and E. A.Coleman, “Rehospitalizations AmongPatients in the Medicare Fee-for-ServiceProgram,” New England Journal ofMedicine, April 2, 2009, pp 1418-1428.

Lubell, Jennifer, “Red Flags Raised,”Modern Healthcare, April 20, 2009, pp 8-9.

Medicare Payment Advisory Commission,601 New Jersey Avenue NW, Suite 9000,Washington, DC 20001. (202) 220-3700. (www.medpac.gov)

Sternberg, Steve and Jack Gillum, “BaylorLeads The Way To Lower Readmissions,”USA Today, July 9, 2009, p. 6D.

“In order for hospitals to continuedoing business with Medicare, it’svery likely that some sort of financialmodel will be established onreadmissions in the future.”

Margaret Namie, V.P. of Quality Mercy Health Partners Modern Healthcare, 4/20/09

http://www.cms.gov

http://www.medpac.gov


• 102 •

According to Hospital Statistics 2009, by theAmerican Hospital Association, there are1,997 rural hospitals in the U.S., representing41% of all hospital locations. This numberhas declined by 10% over the past decade.

STAFFING CHALLENGES

The rural population of the U.S. is about 20%,or 61 million people. However, less than 9%of physicians practice in non-metropolitancounties. In recent years, shortages of non-physician providers, including pharmacists,nurses, dentists, radiology and laboratorytechnicians, and mental health professionals,have also become more apparent.

Rural doctors can be difficult to recruit. Theprimary reason is that rural doctors generallyearn less than those in metro areas. Further,social and cultural isolation deters manyphysicians from locating in rural areas.

According to a study by Howard Rabinowitz,M.D., director of the Physician Shortage AreaProgram at Jefferson Medical College, only3% of the roughly 17,100 medical studentswho graduate each year, or about 513graduates a year, plan to practice in a rural orsmall-town setting.

MEDICARE REFORM PROVISIONS

FOR RURAL HEALTHCARE

The Medicare Modernization Act of 2003(MMA) authorized more than $25 billion over10 years for the purpose of ensuring the long-term fiscal health of rural hospitals as well asaddressing the physician shortage in smalland outlying communities. The Medicarereform law boosts payments to rural hospitalsand provides incentives aimed at enticingphysicians to practice in underserved areas,such as 5% reimbursement bonuses tophysicians and 15% bonuses to doctorsperforming outpatient services at critical-access hospitals.

Medicare has programs through which ruralhospitals and medical centers can earnhigher levels of reimbursement. Theseprograms and the number of participatinghospitals in FY2009 were as follows:• Critical-Access Hospitals: 25 or

fewer beds and certain criteria to be met, including providing emergency services and nursing services 24 hours-a-day: 1,313

• Sole Community Hospitals: located more than 35 miles from other like hospitals: 460

46 RURAL HEALTHCARE

“Problems with the distribution ofphysicians and other healthprofessionals, as well as recruitmentand retention issues in general, are anongoing problem for rural areas thatcompete with urban areas to maintainan adequate workforce.”

National Rural Health Assn., 1/9/10


• 103 •

• Medicare-dependent Hospitals: at least 60% of inpatient days attributable to patients covered by Medicare: 169

Cost-based, efficiency-indifferent payments tocritical-access hospitals totaled about $5billion in FY2009, about $1.3 billion more thanthe prospective payment system (PPS)schedule, according to the Medicare PaymentAdvisory Commission. Inpatient payments tocritical-access hospitals that filed cost reportstotaled $1 billion, about 1.1% of all Medicarepayments for inpatient care.

AMERICAN RECOVERY AND

INVESTMENT ACT OF 2009

Along with the funding of various healthcareinitiatives of benefit to all Americans, theAmerican Recovery and Reinvestment Act of2009 (ARRA) contains provisions specificallyaimed at rural healthcare, as follows:• The Rural Community Facilities Program

Account provides $130 million foressential community facilities in ruralareas.

• Critical-Access Hospitals can fullydepreciate costs of electronic healthrecord systems in one year beginning inFY2011.




National Rural Health Association, 1108 KStreet NW, 2 Floor, Washington, DCnd

20005. (202) 639-0550. (www.nrharural.org)

Rural Health and the American Recoveryand Reinvestment Act Of 2009, NationalRural Health Association, May 13, 2009.

“The American Recovery andReinvestment Act of 2009 was, dollar-for-dollar, the largest investment inrural health in our country’s history.”

Beth Landon, President National Rural Health Assn., 5/12/09

http://www.aha.org


http://www.nrharural.org


• 104 •

The landscape of the U.S. healthcare systemhas been transformed in recent years with theemergence of specialty facilities. Theseinclude ambulatory surgery centers, specialtyhospitals focusing on cardiac and orthopedicprocedures, and diagnostic imaging centers.

Hospitals generally view specialty facilities ascompetitors. Administrators of communityhospitals say that losing profitable patients tospecialty competitors threatens their ability toprovide unprofitable services like emergencycare, which it subsidizes in part with profitsfrom procedures like cardiac surgery.

Hospitals in states with certificate-of-needlaws are somewhat insulated from directcompetition from niche providers, who arerequired to show a basis for qualification toget facilities built.

SPECIALTY HOSPITALS

According to Modern Healthcare, 127specialty hospitals opened in 2008 (mostrecent data available), bringing the total in theU.S. to about 350.

According to the Medicare Payment AdvisoryCommission (MedPAC), the following are theshare of specialty hospitals owned byphysicians:• All specialty hospitals: 60%• Heart hospitals: 35%• Orthopedic hospitals: 67%• Surgical hospitals: 73%

A backlash against specialty hospitals, led bythe American Hospital Association (AHA),began in 2003, culminating with provisionsthat were incorporated in The MedicareImprovement Act of 2003, which effectivelyhalted development or significant expansionsof specialty hospitals. The moratorium onspecialty hospitals expired in 2006, butcontroversies remain. The Obama Admin-istration has made addressing the financialconflicts of interest in physician-ownedspecialty hospitals a budget priority for 2010.

Proponents say specialty hospitals andfacilities are more efficient and provide equalor better care to patients. But detractors,including mainstream hospital groups, accusethe specialty hospitals of isolating thoseprocedures that bring the most profitablereturns under federal Medicare and private-insurance schedules, leaving nonprofitcompetitors with the sickest patients andmost costly businesses.

An April 2009 study by the Center forStudying Health System Change concludedthat specialty hospitals have not done seriousharm to their general hospital competitors.Among the many serious financial challengesfaced by general hospitals, competition fromspecialty hospitals does not rank high on thelist.

AMBULATORY SURGERY

CENTERS

Ambulatory Surgery Centers (ASCs), whichcompete with hospital outpatient departmentsfor procedures that don’t require overnight

47 SPECIALTY HOSPITALS & CENTERS


• 105 •

stays, like colonoscopies and some jointsurgeries, are hollowing out hospitals as well.Four in five ASCs are at least partly owned byphysicians, many in partnership with hospitalsseeking to minimize losses.

From the early 1980s to present, the share ofoutpatient surgeries performed in hospitalshas declined from more than 90% to 45% asthe result of ASCs.

There was rapid growth in ambulatorysurgery centers from 1996 through 2005;more recent growth has been moderate.According to Hospital Statistics 2009, by theAmerican Hospital Association, there are5,876 freestanding ambulatory care surgerycenters in the U.S.

The following companies are the largest ASCoperators:• AmSurg (www.amsurg.com)• NovaMed (www.novamed.com)• Surgical Care Affiliates

(www.scasurgery.com)• United Surgical Partners International

(www.unitedsurgical.com)

In 2007, the Centers for Medicare & MedicaidServices (CMS) issued a series of rules thatset a new compensation rate of 65% of thatwhich hospital outpatient departments getpaid under Medicare. Previously, ASCs werereimbursed at 83% of the hospital rate. Thenew payment schedule is being phased inover a period of four years, through 2011.The CMS also expanded the list ofprocedures ASCs could get paid for underMedicare.

The CMS paid approximately $3 billion toASCs in 2008.

Ambulatory surgery is further assessed inChapter 114 of this handbook.

IMAGING CENTERS

According to SDI Health, there are about6,200 free-standing imaging centers in theU.S., a number that has increased 80% from3,300 in 2000.

Total annual spending on scans performed atimaging centers, including hospitaldepartments, is estimated at more than $100billion. Medicare’s annual imaging spendingis more than $15 billion, an amount that hasbeen increasing 16% a year.



Carlson, Joe, “Specialty Hospitals OK:Study,” Modern Healthcare, April 27, 2009,p. 8.

Center for Studying Health System Change,600 Maryland Avenue SW, Suite 550,Washington, DC 20024. (202) 484-5261. (www.hschange.com)


“More than 95 million high-tech scansare done each year, and medicalimaging, including CT, MRI, and PETscans, has ballooned into a $100-billion-a-year industry in the UnitedStates.”


http://www.amsurg.com

http://www.novamed.com

http://www.scasurgery.com

http://www.unitedsurgical.com

http://www.aha.org

http://www.hschange.com

http://www.cms.gov


• 106 •

Kolata, Gina, “Good Or Useless, MedicalScans Cost The Same,” The New YorkTimes, March 2, 2009.


SDI Health, 220 West Germantown Pike,Plymouth Meeting, PA 19462. (610) 834-0800. (www.sdihealth.com)

Tynan, Ann, Elizabeth A. November,Johanna Lauer, Hoangmai H. Pham, andPeter Cram, “General Hospitals, SpecialtyHospitals and Financially VulnerablePatients,” Center For Studying HealthSystem Change, Research Brief No. 11,April 2009.


http://www.sdihealth.com


• 107 •

According to Health Expenditures by State,published in 2007 (most recent data availableas of January 2010) by the Centers forMedicare & Medicaid Services (CMS),spending for hospital care accounts for36.5% of total U.S. healthcare spending.

PERCENTAGE OF TOTAL

HEALTHCARE SPENDING FOR

HOSPITAL CARE• Alabama: 34.2%• Alaska: 40.2%• Arizona: 36.0%• Arkansas: 38.1%• California: 34.8%• Colorado: 35.1%• Connecticut: 31.7%• Delaware: 36.7%• District of Columbia: 49.2%• Florida: 33.1%• Georgia: 35.6%• Hawaii: 37.1%• Idaho: 37.1%• Illinois: 38.3%• Indiana: 38.7%• Iowa: 38.9%• Kansas: 35.0%• Kentucky: 36.6%• Louisiana: 30.4%• Maine: 35.3%• Maryland: 37.2%• Massachusetts: 39.2%• Michigan: 39.6%• Minnesota: 33.9%• Mississippi: 41.9%• Missouri: 41.5%• Montana: 41.3%• Nebraska: 40.3%

• Nevada: 32.5%• New Hampshire: 35.7%• New Jersey: 33.8%• New Mexico: 39.0%• New York: 36.1%• North Carolina: 36.8%• North Dakota: 41.5%• Ohio: 37.8%• Oklahoma: 38.4%• Oregon: 34.2%• Pennsylvania: 36.4%• Rhode Island: 36.5%• South Carolina: 38.8%• South Dakota: 42.7%• Tennessee: 33.4%• Texas: 37.6%• Utah: 36.1%• Vermont: 38.4%• Virginia: 37.1%• Washington: 33.9%• West Virginia: 41.1%• Wisconsin: 37.3%• Wyoming: 41.1%


Health Expenditures by State of Residence,Centers for Medicare & Medicaid Services,2009. (www.cms.hhs.gov/NationalHealthExpendData/)

48 STATE SPENDING FOR HOSPITAL CARE

http://www.cms.hhs.gov/NationalHealthExpendData/


• 108 •

A 2009 survey conducted by the AmericanCollege of Healthcare Executives (ACHE)found the following top issues confrontinghospitals (based on the percentage of surveyrespondents indicating that an issue is one ofthe top three concerns presently confrontingtheir hospital):• Financial challenges: 77%• Patient safety and quality: 43%• Care for the uninsured: 41%• Physician/hospital relations: 32%• Personnel shortages: 30%• Governmental mandates: 26%• Patient satisfaction: 22%• Capacity: 16%• Technology: 9%• Issues about not-for-profit status: 2%• Malpractice insurance: 2%• Disaster preparedness: 1%

For the three top issues, specific concernsare ranked as follows:

FINANCIAL CHALLENGES

• Medicaid reimbursement: 83%• Bad debt: 78%• Increasing costs for staff,

supplies, etc.: 75%• Medicare reimbursement: 73%• Inadequate funding for capital

improvements: 63%• Managed care payments: 46%• Other commercial insurance

reimbursement: 40%• Revenue cycle management: 40%• Emergency Department: 36%• Competition from specialty hospitals: 20%• Other: 9%

PATIENT SAFETY & QUALITY

• Redesigning care processes: 66%• Redesigning work environment to

reduce errors: 66%• Compliance with accrediting

organizations: 60%• Medication errors: 57%• Nosocomial infections: 47%• Nonpayment for “never events”: 43%• Pay for performance: 41%• Leapfrog demands: 40%• Public reporting of outcomes data: 40%• Surgical mistakes: 24%

CARE FOR THE UNINSURED

• Medicaid: 87%• Advocacy for funding: 75%• Underwriting costs: 61%• Reaching out to all community

members: 27%• Other: 20%• Response to other hospital closings: 10%


American College of Healthcare Executives,One North Franklin, Chicago, IL 60606. (312) 424-2800. (www.ache.org)

49 TOP ISSUES CONFRONTING HOSPITALS

http://www.ache.org

http://www.ache.org


• 109 •

Each year, the American Hospital Associationpublishes aggregate information on the levelof uncompensated care – care provided forwhich no payment is received – delivered inU.S. hospitals. Data for 2000 through 2008 ispresented in Table 50.1.


Uncompensated Hospital Care Cost FactSheet, November 2009, American HospitalAssociation, November 2009. (www.aha.org/aha/content/2009/pdf/09uncompensatedcare.pdf)

50 UNCOMPENSATED HOSPITAL CARE

TABLE 50.1

National Uncompensated Care Costs

% of Total Hospitals Cost Expenses

• 2000 4915 $21.6 billion 6.0% • 2001 4908 $21.5 billion 5.6% • 2002 4927 $22.3 billion 5.4% • 2003 4895 $24.9 billion 5.5% • 2004 4919 $26.9 billion 5.6% • 2005 4936 $28.8 billion 5.6% • 2006 4927 $31.2 billion 5.7% • 2007 4897 $34.0 billion 5.8% • 2008 5010 $36.4 billion 5.8%


• 110 •

PART III: AWARD-WINNING HOSPITALS


• 111 •

The Circle of Life Award honors innovation inpalliative and end-of-life care.

The award is sponsored by the AmericanAcademy of Hospice and Palliative Medicine,the American Association of Homes andServices for the Aging, the American HospitalAssociation, the Archstone Foundation, theCalifornia Healthcare Foundation, theCatholic Health Association, the Hospice andPalliative Nurses Association, the NationalHospice and Palliative Care Organization,and the National Hospice Foundation.

2009 WINNERS

• Four Seasons (Flat Rock, North Carolina)• Oregon Health and Science University

Palliative Medicine & Comfort CareProgram (Portland, Oregon)

• Wishard Health Services Palliative CareProgram (Indianapolis, Indiana)

2009 CITATIONS OF HONOR

• Palliative Care Service, St. John’sRegional Medical Center (Oxnard,California) and St. John’s Pleasant ValleyHospital (Camarillo, California)

• Gilchrist Hospice Care (Towson,Maryland) and Greater Baltimore MedicalCenter (Baltimore, Maryland)


American Academy of Hospice andPalliative Medicine, 4700 West Lake

Avenue, Glenview, IL 60025. (847) 375-4712. (www.aahpm.org)

American Association of Homes andServices for the Aging, 2519 ConnecticutAvenue NW, Washington, DC 20008. (202) 783-2242. (www.aahsa.org)


Archstone Foundation, 401 E. OceanBoulevard, Suite 1000, Long Beach, CA90802. (562) 590-8655. (www.archstone.org)

California Healthcare Foundation, 1438Webster Street, Suite 400, Oakland, CA94612. (510) 238-1040. (www.chcf.org)

Catholic Health Association, 1875 I StreetNW, Suite 1000, Washington, DC 20006. (202) 296-3993. (www.chausa.org)

Hospice and Palliative Nurses Association,One Penn Center West, Suite 229,Pittsburgh, PA 15276. (412) 787-9301. (www.hpna.org)

National Hospice & Palliative CareOrganization and National HospiceFoundation, 1731 King Street, Suite 100,Alexandria, VA 22314. (703) 837-1500. (www.nhpco.org)

A list of past award winners is presented atwww.aha.org/aha/news-center/awards/circle-of-life/awardees.html.

51 CIRCLE OF LIFE AWARD

http://www.aahpm.org

http://www.aahsa.org

http://www.aha.org

http://www.archstone.org

http://www.chcf.org

http://www.chausa.org

http://www.hpna.org


http://www.aha.org/aha/news-center/awards/circle-of-life/awardees.html

http://www.aha.org/aha/news-center/awards/circle-of-life/awardees.html


• 112 •

Since 2004, Cleverly + Associates hasevaluated hospitals using the CommunityValue Index® (CVI) as a tool for assessment.The CVI contains four core areas ofevaluation, as follows: • Financial viability and plant reinvestment• Cost structure• Charge structure• Quality performance

Each area contains metrics that compare ahospital’s performance to an appropriate peergroup. The combined performance in eacharea is the CVI score.

2009 TOP 100 CVI HOSPITALS

• Adair County Health Center (Stilwell,Oklahoma)

• Adena Regional Medical Center(Chillicothe, Ohio)

• American Fork Hospital (American Fork,Utah)

• American Legion Hospital (Crowley,Louisiana)

• Anna Jaques Hospital (Newburyport,

Massachusetts)• Augusta Health Care (Fishersville,

Virginia)• Aultman Hospital (Canton, Ohio)• Baptist Hospital East (Louisville,

Kentucky)• Baptist Medical Center (Little Rock,

Arkansas)• Bay Medical Center (Bay City, Michigan)• Baystate Medical Center (Springfield,

Massachusetts)• Beverly Hospital (Beverly, Massachusetts)• Brockton Hospital (Brockton,

Massachusetts)• Bronx-Lebanon Hospital Center (Bronx,

New York)• Buffalo General Hospital (Buffalo, New

York)• Butler Memorial Hospital (Butler,

Pennsylvania)• Calvert Memorial Hospital (Prince

Frederick, Maryland)• Carney Hospital (Boston, Massachusetts)• Carolinas Medical Center - Behavioral

Health (Charlotte, North Carolina)• Cascade Valley Hospital (Arlington,

Washington)• Central Washington Hospital (Wenatchee,

Washington)• Cookeville Regional Medical Center

(Cookeville, Tennessee)• Craig General Hospital (Vinita, Oklahoma)• Dixie Regional Medical Center (St.

George, Utah)• EMH Regional Medical Center (Elyria,

Ohio)• Franklin Square Hospital Center

(Baltimore, Maryland)• Froedtert Memorial Lutheran Hospital

(Milwaukee, Wisconsin)

52 COMMUNITY VALUE INDEX

“Measurement in these areas suggestthat hospitals operating with a highdegree of community value are thosethat are low cost, low charge, use astrong financial position to reinvestback into the provision of care at thefacility, and provide high quality careto patients.”

The 2009 Community Value Index


• 113 •

• Good Samaritan Medical Center(Brockton, Massachusetts)

• Griffin Hospital (Derby, Connecticut)• Hardin Memorial Hospital (Elizabethtown,

Kentucky)• Hartford Hospital (Hartford, Connecticut)• Heritage Hospital (Taylor, Michigan)• Heywood Hospital (Gardner,

Massachusetts)• Hospital Metropolitano San German (San

German, Puerto Rico)• Immanuel-St. Joseph’s-Mayo Health

System (Mankato, Minnesota)• Inova Alexandria Hospital (Alexandria,

Virginia)• Jamaica Hospital Medical Center

(Jamaica, New York)• John Dempsey Hospital (Farmington,

Connecticut)• Kootenai Medical Center (Coeur D’alene,

Idaho)• Lahey Clinic Hospital (Burlington,

Massachusetts)• Lakeview Medical Center (Rice Lake,

Wisconsin)• Lawrence General Hospital (Lawrence,

Massachusetts)• Long Beach Memorial Medical Center

(Long Beach, California)• Lowell General Hospital (Lowell,

Massachusetts)• LSU Health Sciences Center - Shreveport

(Shreveport, Louisiana)• Lutheran Medical Center (Brooklyn, New

York)• Maine Medical Center (Portland, Maine)• Mary Hitchcock Memorial Hospital

(Lebanon, New Hampshire)• Mercy Hospital (Springfield,

Massachusetts)• Mercy Medical Center (Canton, Ohio)• Meriter Hospital (Madison, Wisconsin)• Metrohealth Medical Center (Cleveland,

Ohio)• Morton Hospital and Medical Center

(Taunton, Massachusetts)• Mount Auburn Hospital (Cambridge,

Massachusetts)• Mount St. Mary’s Hospital (Lewiston, New

York)• New York Presbyterian Hospital (New

York, New York)• Northeast Medical Center (Concord, North

Carolina)• Owatonna Hospital (Owatonna,

Minnesota)• Parkland Health and Hospital System

(Dallas, Texas)• Providence St. Vincent Medical Center

(Portland, Oregon)• Regional Medical Center (Madisonville,

Kentucky)• Robert Packer Hospital (Sayre,

Pennsylvania)• Rutherford Hospital (Rutherfordton, North

Carolina)• Saint Marys Hospital (Rochester,

Minnesota)• Sisters of Charity Hospital (Buffalo, New

York)• Southcoast Hospitals Group (Fall River,

Massachusetts)• Southern Maryland Hospital (Clinton,

Maryland)• Spectrum Health - Butterworth Campus

(Grand Rapids, Michigan)• St John North Shores Hospital (Harrison

Township, Michigan)• St Vincent Healthcare (Billings, Montana)• St Vincent’s Hospital Staten Island

(Staten Island, New York)• St. Agnes Hospital (Baltimore, Maryland)• St. Bernard Hospital (Chicago, Illinois)• St. Bernard’s Regional Medical Center

(Jonesboro, Arkansas)• St. Elizabeth Hospital (Appleton,

Wisconsin)• St. Francis Hospital (Roslyn, New York)• St. James Mercy Hospital (Hornell, New

York)• St. John Medical Center (Longview,

Washington)• St. Joseph Medical Center (Towson,

Maryland)• St. Joseph’s Medical Center (Yonkers,


• 114 •

New York)• St. Mary Hospital (Livonia, Michigan)• St. Mary’s Hospital (Waterbury,

Connecticut)• St. Mary’s Medical Center (Racine,

Wisconsin)• St. Vincent’s Medical Center (Bridgeport,

Connecticut)• Staten Island University Hospital (Staten

Island, New York)• Sturgis Hospital (Sturgis, Michigan)• The Chambersburg Hospital

(Chambersburg, Pennsylvania)• The Gettysburg Hospital (Gettysburg,

Pennsylvania)• The Moses H. Cone Memorial Hospital

(Greensboro, North Carolina)• The Mount Sinai Hospital (New York, New

York)• The NY Hospital Medical Center of

Queens (Flushing, New York)• The Union Memorial Hospital (Baltimore,

Maryland)• Thorek Hospital and Medical Center

(Chicago, Illinois)• Uniontown Hospital (Uniontown,

Pennsylvania)• Unity Hospital (Rochester, New York)• University of North Carolina Hospital

(Chapel Hill, North Carolina)• University of VA Medical Center

(Charlottesville, Virginia)• UPMC Bedford (Everett, Pennsylvania)• Wayne General Hospital (Waynesboro,

Mississippi)• Yale-New Haven Hospital (New Haven,

Connecticut)


The 2009 Community Value Index, Cleverly+ Associates, 438 East Wilson BridgeRoad, Suite 200, Worthington, OH 43085. (888) 779-5663. (www.cleverleyassociates.com/Information/CommunityValueIndex.aspx)


• 115 •

Since 1998, National Research Corporationhas presented Consumer Choice Awards forthe most-preferred hospitals in over 300 U.S.markets annually. Winners, named inModern Healthcare each October, areselected based on responses in surveys ofover 250,000 households.

2009 AWARD WINNERS

Akron, Ohio• Akron General Medical Center • Cleveland Clinic Foundation

Albany, New York• Albany Medical Center

Albuquerque, New Mexico• Presbyterian Hospital

Alexandria, Louisiana• CHRISTUS Hospital-St. Frances Cabrini

Allentown, Pennsylvania• Lehigh Valley Hospital & Health Network

Altoona, Pennsylvania• Altoona Regional Health

Amarillo, Texas• Baptist St. Anthony’s Health System

Ann Arbor, Michigan • University of Michigan Health System

Appleton, Wisconsin• ThedaCare

Asheville, North Carolina• Mission Health and Hospitals

Atlanta, Georgia• Emory University Hospital• Northside Hospital

Atlantic City, New Jersey• AtlantiCare Regional Medical Center-

Atlantic City Campus

Augusta, Georgia • University Health Care System

Austin, Texas• Seton Medical Center Austin

Bakersfield, California• Mercy Southwest Hospital

Baltimore, Maryland • Johns Hopkins Hospital

Bangor, Maine• Eastern Maine Medical Center

Baton Rouge, Louisiana • Our Lady of the Lake Regional Medical

Center

Beaumont-Port Arthur, Texas• CHRISTUS Hospital-St. Elizabeth

Bergen-Passaic, New Jersey• Hackensack University Medical Center

Bethesda, Maryland• Johns Hopkins Hospital• Shady Grove Adventist Hospital

53 CONSUMER CHOICE AWARDS


• 116 •

Biloxi, Mississippi• Memorial Hospital at Gulfport

Binghamton, New York• Our Lady of Lourdes Memorial Hospital

Birmingham, Alabama • UAB Hospital

Blacksburg, Virginia• Carilion New River Valley Medical Center

Bloomington, Indiana• Bloomington Hospital

Bloomington, Illinois• Bromenn Regional Medical Center

Boise, Idaho • St. Luke’s Regional Medical Center

Boston, Massachusetts• Massachusetts General Hospital

Boulder, Colorado• Boulder Community Hospital• Longmont United Hospital

Bowling Green, Kentucky• The Medical Center

Bremerton, Washington• Harrison Medical Center

Buffalo, New York• Buffalo General Hospital• Millard Fillmore Suburban Hospital

Camden, New Jersey• Cooper University Hospital• Virtua

Canton, Ohio • Aultman Hospital

Champaign-Urbana, Illinois• Carle Foundation Hospital

Charleston, South Carolina • Medical University of South Carolina

Medical Center

Charleston, West Virginia • Charleston Area Medical Center

Charlotte, North Carolina • Carolinas Medical Center

Charlottesville, Virginia• University of Virginia Medical Center

Chattanooga, Tennessee • Memorial Hospital

Chicago, Illinois • Northwestern Memorial Hospital

Chico, California• Enloe Medical Center

Cincinnati, Ohio • The Christ Hospital

Clarksville, Tennessee • Vanderbilt University Medical Center

Cleveland, Ohio • Cleveland Clinic

College Station-Bryan, Texas • St. Joseph Regional Health Center

Columbia, Missouri• Boone Hospital Center

Columbia, South Carolina • Lexington Medical Center

Columbus, Georgia• Columbus Regional Medical Center• St. Francis Hospital

Columbus, Ohio • Riverside Methodist Hospital


• 117 •

Corpus Christi, Texas• CHRISTUS Spohn Hospital-Shoreline

Dallas, Texas • Baylor University Medical Center at Dallas

Daphne-Fairhope, Alabama• Thomas Hospital

Davenport, Iowa• Genesis Davenport East

Dayton, Ohio • Miami Valley Hospital

Daytona Beach, Florida • Halifax Health

Denver, Colorado• Swedish Medical Center

Des Moines, Iowa• Mercy Medical Center - Des Moines

Detroit, Michigan• Henry Ford Hospital• Beaumont Hospital, Royal Oak

Duluth, Minnesota• St. Luke’s• St. Mary’s Medical Center

Durham, North Carolina• Duke University Medical Center

Eau Claire, Wisconsin• Luther Midelfort

Edison, New Jersey• Robert Wood Johnson University

Hospital-New Brunswick

El Paso, Texas• Sierra Providence Health Network

Elizabethtown, Kentucky• Hardin Memorial Hospital

Elkhart-Goshen, Indiana• Elkhart General Hospital

Elmira, New York• Arnot-Ogden Medical Center

Erie, Pennsylvania• Hamot Medical Center

Eugene-Springfield, Oregon • Sacred Heart Medical Center

Evansville, Indiana• Deaconess Hospital

Fargo, North Dakota• Meritcare Medical Center

Fayetteville, North Carolina• Cape Fear Valley Medical Center

Fayetteville-Springdale, Arkansas • Washington Regional Medical Center

Flint, Michigan • Genesys Regional Medical Center

Florence, South Carolina• McLeod Regional Medical Center

Fort Collins, Colorado• Poudre Valley Hospital

Fort Myers, Florida • Lee Memorial Hospital

Fort Smith, Arkansas• St. Edward Mercy Medical Center

Fort Wayne, Indiana• Lutheran Hospital• Parkview Hospital

Fort Worth, Texas • Texas Health Harris Methodist Hospital


• 118 •

Fresno, California • Saint Agnes Medical Center

Gainesville, Florida• Shands at the University of Florida

Gary, Indiana• The Community Hospital

Grand Junction, Colorado• St. Mary’s Hospital

Grand Rapids, Michigan • Spectrum Health

Green Bay, Wisconsin• Bellin Memorial Hospital

Greensboro, North Carolina • Moses H. Cone Memorial Hospital

Greenville, South Carolina • Greenville Memorial Hospital

Hagerstown, Maryland• Johns Hopkins Hospital• Washington County Hospital

Harrisburg, Pennsylvania• Penn State Milton S. Hershey Medical

Center

Hartford, Connecticut • Hartford Hospital

Hickory-Morganton, North Carolina• Frye Regional Medical Center

Holland-Grand Haven, Michigan• Spectrum Health

Houston, Texas• University of Texas, Maryland Anderson

Huntington-Ashland, West Virginia-Kentucky-Ohio• Kings Daughters Medical Center

• St. Mary’s Medical Center

Huntsville, Alabama • Huntsville Hospital

Indianapolis, Indiana • St. Vincent Hospitals and Health Services

Iowa City, Iowa• University of Iowa Hospitals and Clinics

Jackson, Mississippi • Baptist Medical Center• University of Mississippi Medical Center

Jacksonville, Florida• Baptist Medical Center

Johnson City-Kingsport-Bristol,Tennessee• Johnson City Medical Center• Wellmont Holston Medical Center

Johnstown, Pennsylvania • Conemaugh Memorial Medical Center

Joplin, Missouri• Freeman Hospital

Kalamazoo, Michigan • Bronson Methodist Hospital

Kennewick, Washington• Kadlec Regional Medical Center

Knoxville, Tennessee • University of Tennessee Medical Center

Lafayette, Indiana• St. Elizabeth Central

Lafayette, Louisiana• Lafayette General Medical Center

Lake Charles, Louisiana• CHRISTUS St. Patrick Hospital


• 119 •

Lake County, Illinois & Kenosha County,Wisconsin• Lake Forest Hospital

Lakeland, Florida• Lakeland Regional Medical Center

Lancaster, Pennsylvania • Lancaster General Hospital

Lansing, Michigan • Sparrow Health System

Las Cruces, New Mexico• Memorial Medical Center-Las Cruces• Mountain View Regional Medical Center

Las Vegas, Nevada• Summerline Hospital and Medical Center• Sunrise Hospital and Medical Center

Lawton, Oklahoma• Comanche County Memorial Hospital

Lexington, Kentucky • Central Baptist Hospital

Little Rock, Arkansas • Baptist Health Medical Center-Little Rock

Longview, Texas• Good Shepherd Medical Center

Los Angeles, California • Cedars-Sinai Medical Center

Louisville, Kentucky • Baptist Hospital East

Lubbock, Texas• Covenant Medical Center-Lubbock• University Medical Center-Lubbock

Lynchburg, Virginia• Centra Lynchburg General Hospital

Macon, Georgia • The Medical Center of Central Georgia

Madison, Wisconsin • University of Wisconsin Hospital and

Clinics

Manchester-Nashua, New Hampshire• Elliot Hospital

Medford, Oregon• Rogue Valley Medical Center

Melbourne, Florida • Holmes Regional Medical Center

Memphis, Tennessee • Baptist Memorial Hospital - Memphis

Miami, Florida• Baptist Hospital of Miami

Milwaukee, Wisconsin • Froedtert Hospital

Minneapolis-St. Paul, Minnesota • Mayo Clinic

Mobile, Alabama• Providence Hospital

Modesto, California • Memorial Medical Center

Montgomery, Alabama • Baptist Medical Center

Morgantown, West Virginia• Ruby Memorial Hospital

Myrtle Beach, South Carolina • Grand Strand Regional Medical Center

Naples, Florida• NCH Healthcare System


• 120 •

Nashville, Tennessee • Vanderbilt University Medical Center

Nassau-Suffolk, New York• North Shore University Hospital• Stony Brook University Medical Center

Neenah, Wisconsin• Theda Clark Medical Center

New Haven, Connecticut • Yale-New Haven Hospital

New Orleans, Louisiana • Ochsner Medical Center

New York - Bronx County • Montefiore Medical Center

New York - Kings County• Maimonides Medical Center• New York Methodist Hospital

New York - Queens County • Long Island Jewish Medical Center

New York - Richmond County• Staten Island University Hospital

New York - Westchester County• Westchester Medical Center• White Plains Hospital Center

Newark, New Jersey • Morristown Memorial Hospital• Saint Barnabas Medical Center

Niles-Benton Harbor, Michigan• Lakeland HealthCare

Norfolk-Virginia Beach, Virginia • Sentara Norfolk General Hospital

Norwich-New London, Connecticut• Lawrence & Memorial Hospital

Oakland, California • John Muir Medical Center-Walnut Creek

Ocala, Florida • Munroe Regional Medical Center

Ogden, Utah• McKay-Dee Hospital Center

Oklahoma City, Oklahoma• INTEGRIS Health • Mercy Health Center

Olympia, Washington• Providence St. Peter Hospital

Omaha, NE• The Nebraska Medical Center

Orange County, California • Hoag Memorial Hospital Presbyterian

Orlando, Florida• Florida Hospital - Orlando

Panama City-Lynn Haven, Florida• Bay Medical Center-Panama

Parkersburg-Marrietta, West Virginia-Ohio• Camden-Clark Memorial Hospital

Pascagoula, Mississippi• Ocean Springs Hospital

Pensacola, Florida • Sacred Heart Health System

Peoria, Illinois • OSF Saint Francis Medical Center

Philadelphia, Pennsylvania• Hospital of the University of Pennsylvania

Phoenix, Arizona• Mayo Clinic


• 121 •

Pittsburgh, Pennsylvania • UPMC-Presbyterian

Port St. Lucie, Florida• Martin Memorial Medical Center

Portland, Maine• Maine Medical Center

Portland, Oregon• OHSU Healthcare• Providence St. Vincent Medical Center

Poughkeepsie, New York• Vassar Brothers Medical Center

Prescott, Arizona• Yavapai Regional Medical Center

Providence, Rhode Island • Rhode Island Hospital

Provo-Orem, Utah• Utah Valley Regional Medical Center

Pueblo, Colorado• Parkview Medical Center

Raleigh, North Carolina • Rex Healthcare

Reading, Pennsylvania• The Reading Hospital and Medical Center

Redding, California• Mercy Medical Center-Redding

Reno, Nevada• Renown Health

Riverside-San Bernardino, California• Loma Linda University Medical Center

Roanoke, Virginia• Carilion Medical Center • Lewis-Gale Medical Center

Rochester, Minnesota• Mayo Clinic

Rochester, New York • Strong Memorial Hospital

Rockford, Illinois • SwedishAmerican Hospital

Rockingham-Strafford, New Hampshire• Massachusetts General Hospital• Wentworth-Douglass Hospital

Rocky Mount, North Carolina• Pitt County Memorial Hospital

Sacramento, California • UC Davis Medical Center

Saginaw-Saginaw Township, Michigan• Covenant Medical Center

Saint Louis, Missouri • Barnes-Jewish Hospital

Salem, Oregon • Salem Hospital

Salinas, California• Community Hospital of the Monterey

Peninsula

Salt Lake City, Utah • University of Utah Hospital

San Antonio, Texas• Methodist Hospital

San Diego, California • Kaiser Foundation Hospital-San Diego • Scripps Memorial Hospital-La Jolla

San Francisco, California • UCSF Medical Center

San Jose, California • Stanford Hospital & Clinics


• 122 •

San Luis Obispo-Paso Robles, California• French Hospital Medical Center

Santa Barbara, California • Santa Barbara Cottage Hospital

Santa Cruz, California • Dominican Hospital

Santa Rosa, California• Santa Rosa Memorial Hospital

Sarasota, Florida • Sarasota Memorial Health Care System

Savannah, Georgia• St. Joseph/Candler

Seattle, Washington • Swedish Medical Center

Sherman-Denison, Texas• Texoma Medical Center• Wilson N. Jones Medical Center

Shreveport, Louisiana• Willis-Knighton Health System

Sioux City, Iowa• St. Luke’s Regional Medical Center

Sioux Falls, South Dakota• Sanford USD Medical Center

South Bend, Indiana • Memorial Hospital of South Bend

Spartanburg, South Carolina• Spartanburg Regional Medical Center

Spokane, Washington • Sacred Heart Medical Center & Children’s

Hospital

Springfield, Illinois• Memorial Medical Center

Springfield, Massachusetts • Baystate Medical Center

Springfield, Minnesota• St. Cloud Hospital

Springfield, Missouri• St. John’s Health System

State College, Pennsylvania• Geisinger Medical Center

Stockton, California • St. Joseph’s Medical Center-Stockton

Syracuse, New York • St. Joseph’s Hospital Health Center

Tacoma, Washington• St. Joseph Medical Center• Tacoma General Hospital

Tallahassee, Florida• Tallahassee Memorial Healthcare

Tampa, Florida• Tampa General Hospital

Temple, Texas• Scott and White Memorial Hospital

Terre Haute, Indiana• Union Hospital

Toledo, Ohio • The Toledo Hospital

Topeka, Kansas• St. Francis Health Center • Stormont Vail Healthcare

Trenton, New Jersey• Robert Wood Johnson University

Hospital-Hamilton

Tucson, Arizona• Tucson Medical Center• University Medical Center - Tucson


• 123 •

Tulsa, Oklahoma • Saint Francis Hospital

Tuscaloosa, AlabamaDCH Regional Medical Center

Tyler, Texas• Trinity Mother Frances

Utica, New York• Faxton - St. Luke’s Healthcare• St. Elizabeth Medical Center

Ventura, California• Community Memorial Hospital of San

Buenaventura• Los Robles Hospital & Medical Center

Visalia, California• Kaweah Delta Health Care District

Waco, Texas• Providence Health Center

Washington, D.C.• Inova Fairfax Hospital

Waterloo-Cedar Falls, Iowa• Covenant Medical Center• Allen Memorial Hospital

Wheeling, West Virginia• Wheeling Hospital

Wichita, Kansas • Via Christi Regional Med Center-St.

Francis Campus • Wesley Medical Center

Wilmington, Delaware • Christiana Care Health System -

Christiana Hospital

Wilmington, North Carolina• New Hanover Regional Medical Center

Winston-Salem, North Carolina• Wake Forest University Baptist Medical

Center

Worcester, Massachusetts• UMass Memorial Medical Center -

University Campus

Yakima, Washington• Yakima Valley Memorial Hospital

York, Pennsylvania • York Hospital

Youngstown, Ohio • St. Elizabeth Health Center


Consumer Choice Awards, NationalResearch Corporation, 1245 Q Street,Lincoln, NB 68508. (402) 475-2525. (http://hcmg.nationalresearch.com/Default.aspx?DN=7,1,Documents)

http://(http://hcmg.nationalresearch.com/Default.aspx?DN=7,1,Documents)

http://(http://hcmg.nationalresearch.com/Default.aspx?DN=7,1,Documents)


• 124 •

Since 1985, Modern Healthcare’s annualDesign Awards program has recognizedexcellence in the design and planning of newand remodeled healthcare facilities.

2009 AWARDS

Award of Excellence• Grand Itasca Clinic & Hospital (Grand

Rapids, Minnesota)

Honorable Mentions• Children’s Medical Center at Legacy

(Plano, Texas)

• Kennedy Krieger Institute, Harry andJeanette Weinberg Building, OutpatientCenter (Baltimore, Maryland)

• Stanford Medicine Outpatient Center(Redwood City, California)

Citations• Cleveland Clinic Abu Dhabi (United Arab

Emirates)

• Miller Family Pavilion and GlickmanTower (Cleveland, Ohio)

• SSM St. Clare Health Center (St. LouisCounty, Missouri)


“24 Design Awards,” Modern Healthcare,th

September 7, 2009, pp 16-32

54 DESIGN AWARDS

“In recent years, judges in the ModernHealthcare annual Design Awardscontest noted how award-winningprojects made exceptional use ofnatural light, and how the newfacilities fit into and matched theirenvironments. This year – the 24th

annual design competition – judgesnoted these features again. But theyalso chose the projects that took aregional approach to the use ofmaterials; made extraordinary effortsto accommodate family members andpersonal caregivers; incorporatedway-finding elements as well aspatient-safety and energy-efficiencyconcepts into their designs;attempted to ergonomically engineera workplace that made life easier forhospital staff; and added amenitiesthat could help recruit and retain toppersonnel.”



• 125 •

Since 1997, SDI has ranked the 100 mosthighly integrated healthcare networks (IHNs).The assessment evaluates each of the 570non-specialty, local, and regional networks inthe U.S. based on their ability to operate as aunified organization.

IHNs are ranked based on scores in eightcategories: integration, integrated technology,contractual capabilities, outpatient utilization,financial stability, services and access,hospital utilization, and physicians.

The following is the most recent ranking.

2009 RANKING

• St. John’s Health System (Springfield,Missouri)

• ProMedica Health System (Toledo,Ohio)

• Intermountain Healthcare (Salt LakeCity, Utah)

• Sentara Healthcare (Norfolk, Virginia)• Sutter Health (Sacramento, California)• MultiCare Health System (Tacoma,

Washington)• Providence Health & Services (Portland,

Oregon)• Franciscan Health System (Tacoma,

Washington)• Community Health Network

(Indianapolis, Indiana)• University Hospitals (Cleveland, Ohio)• WellStar Health System (Marietta,

Georgia)

• Novant Health (Winston-Salem, NorthCarolina)

• Sharp HealthCare (San Diego,California)

• Fairview Health Services (Minneapolis,Minnesota)

• Bon Secours Richmond Health System(Richmond, Virginia)

• McLaren Health Care Corporation (Flint,Michigan)

• Alegent Health (Omaha, Nebraska)• Carilion Clinic (Roanoke, Virginia)• Henry Ford Health System (Detroit,

Michigan)• North Shore - Long Island Jewish

Health System (Great Neck, New York)• Advocate Health Care (Oak Brook,

Illinois)• Banner Health (Phoenix, Arizona)• Gundersen Lutheran Health Care

Network (La Crosse, Wisconsin)• University of Wisconsin Hospital &

Clinics (Madison, Wisconsin)• OSF HealthCare (Peoria, Illinois)• Roper St. Francis Healthcare

(Charleston, South Carolina)• Wheaton Franciscan Healthcare

(Glendale, Wisconsin)• St. Johns Mercy Health Care (St. Louis,

Missouri)• Affinity Health System (Menasha,

Wisconsin)• OhioHealth (Columbus, Ohio)• Baystate Health (Springfield,

Massachusetts)• Scripps Health (San Diego, California)• Health First (Rockledge, Florida)• Emory Healthcare (Atlanta, Georgia)

55 MOST HIGHLY INTEGRATED

HEALTHCARE NETWORKS


• 126 •

• UPMC (Pittsburgh, Pennsylvania)• Aurora Health Care (Milwaukee,

Wisconsin)• Mercy Health System (Janesville,

Wisconsin)• Presbyterian Healthcare Services

(Albuquerque, New Mexico)• Baptist Memorial Health Care

Corporation (Memphis, Tennessee)• Norton Healthcare (Louisville, Kentucky)• Baylor Health Care System (Dallas,

Texas)• Beaumont Hospitals (Royal Oak,

Michigan)• Covenant Health (Knoxville, Tennessee)• Group Health Cooperative (Seattle,

Washington)• Inova Health System (Falls Church,

Virginia)• Monroe Clinic (Monroe, Wisconsin)• Spectrum Health (Grand Rapids,

Michigan)• North Mississippi Health Services

(Tupelo, Mississippi)• CoxHealth (Springfield, Missouri)• TriHealth (Cincinnati, Ohio)• Methodist Healthcare (Memphis,

Tennessee)• UC Davis Health System (Sacramento,

California)• Riverside Health System (Newport

News, Virginia)• Sanford Health (Sioux Falls, South

Dakota)• Archbold Medical Center (Thomasville,

Georgia)• JPS Health Network (Fort Worth,

Texas)• Legacy Health System (Portland,

Oregon)• Lehigh Valley Hospital and Health

Network (Allentown, Pennsylvania)• MaineHealth (Portland, Maine)• Broward Health (Fort Lauderdale,

Florida)• Geisinger Health System (Danville,

Pennsylvania)• Saint Lukes Health System (Kansas

City, Missouri)• Cook Childrens Health Care System

(Fort Worth, Texas)• Catholic Health System (Buffalo, New

York)• Lahey Clinic (Burlington,

Massachusetts)• MemorialCare (Huntington Beach,

California)• Carolinas HealthCare System

(Charlotte, North Carolina)• Memorial Hermann Healthcare System

(Houston, Texas)• Bon Secours St. Francis Health System

(Greenville, South Carolina)• Genesys Health System (Grand Blanc,

Michigan)• Spartanburg Regional Healthcare

System (Spartanburg, South Carolina)• Swedish American Health System

(Rockford, Illinois)• St. Francis Health System (Tulsa,

Oklahoma)• Fletcher Allen Health Care (Burlington,

Vermont)• WellSpan Health (York, Pennsylvania)• Rochester General Health System

(Rochester, New York)• Kaleida Health (Buffalo, New York)• Trinity Mother Frances Hospitals and

Clinics (Tyler, Texas)• ProHealth Care (Waukesha, Wisconsin)• Oakwood Healthcare (Dearborn,

Michigan)• University Health Systems of Eastern

Carolina (Greenville, North Carolina)• NorthShore University HealthSystem

(Evanston, Illinois)• Western Maryland Health System

(Cumberland, Maryland)• Mountain States Health Alliance

(Johnson City, Tennessee)• Crozer-Keystone Health System

(Springfield, Pennsylvania)• Renown Health (Reno, Nevada)• Ochsner Health System (New Orleans,

Louisiana)


• 127 •

• Stormont-Vail HealthCare (Topeka,Kansas)

• Memorial Health System (Springfield,Illinois)

• Greenville Hospital System (Greenville,South Carolina)

• St. Josephs/Candler (Savannah,Georgia)

• Orlando Health (Orlando, Florida)• Genesis Health System (Davenport,

Iowa)• Lifespan (Providence, Rhode Island)• Akron General Health System (Akron,

Ohio)• University of Chicago Medical Center

(Chicago, Illinois)• Altru Health System (Grand Forks,

North Dakota)• Sparrow Health System (Lansing,

Michigan)• Appalachian Regional Healthcare

(Lexington, Kentucky)• Yale New Haven Health System (New

Haven, Connecticut)


SDI, 220 West Germantown Pike, PlymouthMeeting, PA 19462. (610) 834-0800. (www.sdihealth.com)



• 128 •

Hospitals & Health Networks, published bythe American Hospital Association, identifiesthe 100 Most Wired Hospitals annually basedon their use of IT in the following five areas:• Safety and Quality: Reducing errors in

prescribing medications, monitoringchanges in patient conditions and sendingalerts to staff in real time, providing hospitalclinicians with patients’ health records inelectronic form, and more.

• Customer Service: Helping patientsresearch illnesses and pre-registering themfor hospital admissions.

• Business: Using software to streamlinepurchasing operations and to coordinateand track transactions with insurancecompanies, and similar upgrades.

• Workforce: Training physicians, nurses,and other clinicians, measuring staffperformance, and related matters.

• Public Health: Safeguarding patientprivacy with security measures,participating in cooperative health effortswith other institutions, and improvingspecific clinical practices.

2009 LIST OF MOST WIRED

HOSPITALS AND HEALTHCARE

SYSTEMS

• Advocate Health Care (Oak Brook,Illinois)

• Akron General Medical Center (Akron,Ohio)

• AtlantiCare (Egg Harbor Township, NewJersey)

• Aurora Health Care (Milwaukee,Wisconsin)

• Avera Health (Sioux Falls, South Dakota)• Baptist Health South Florida (Coral

Gables, Florida)• Battle Creek Health System (Battle Creek,

Michigan)• Beaufort Memorial Hospital (Beaufort,

South Carolina)• Beth Israel Deaconess Medical Center

(Boston, Massachusetts)• Billings Clinic (Billings, Montana)• Blanchfield Army Community Hospital

(Fort Campbell, Kentucky)• Carilion Clinic (Roanoke, Virginia)• Carolinas HealthCare System (Charlotte,

North Carolina)• Centra (Lynchburg, Virginia)• Central DuPage Health (Winfield, Illinois)• Children’s Hospital & Medical Center

(Omaha, Nebraska)• Children’s Hospital Boston (Boston,

Massachusetts)• Children’s Medical Center of Dallas

(Dallas, Texas)• Citizens Memorial Hospital (Bolivar,

Missouri)• Clarian Health (Indianapolis, Indiana)• Community Health Network (Indianapolis,

Indiana)• Concord Hospital (Concord, New

Hampshire)• Continuum Health Partners (New York,

New York)• Covenant Health (Knoxville, Tennessee)• Crittenton Hospital Medical Center

(Rochester, Michigan)• Crozer-Keystone Health System

(Springfield, Pennsylvania)• Denver Health and Hospital Authority

(Denver, Colorado)• Detroit Medical Center (Detroit, Michigan)

56 MOST WIRED HOSPITALS


• 129 •

• Dublin Methodist Hospital (Dublin, Ohio)• Duke University Health System (Durham,

North Carolina)• Eastern Maine Medical Center (Bangor,

Maine)• Fairview Health Services (Minneapolis,

Minnesota)• Geisinger Health System (Danville,

Pennsylvania)• Genesis Health System (Davenport, Iowa)• Greenville Hospital System University

Medical Center (Greenville, SouthCarolina)

• Greenwich Hospital (Greenwich,Connecticut)

• H. Lee Moffitt Cancer Center & ResearchInstitute (Tampa, Florida)

• Hartford Hospital (Hartford, Connecticut)• Health First (Rockledge, Florida)• Henry County Health Center (Mount

Pleasant, Iowa)• Hunterdon Healthcare System

(Flemington, New Jersey)• Inland Northwest Health Services -

Washington and Idaho Region (Spokane,Washington)

• Inova Health System (Falls Church,Virginia)

• Intermountain Healthcare (Salt Lake City,Utah)

• Kootenai Medical Center (Coeur d’Alene,Idaho)

• Lehigh Valley Health Network (Allentown,Pennsylvania)

• Loyola University Medical Center(Maywood, Illinois)

• Madigan Army Medical Center (Tacoma,Washington)

• Maimonides Medical Center (Brooklyn,New York)

• MedCentral - Mansfield Hospital(Mansfield, Ohio)

• MedCentral - Shelby Hospital (Shelby,Ohio)

• MedStar Health (Columbia, Maryland)• Memorial Healthcare (Owosso, Michigan)• Memorial Hermann Healthcare System

(Houston, Texas)

• Memorial Sloan-Kettering Cancer Center(New York, New York)

• Memorial University Medical Center(Savannah, Georgia)

• Mercy Health Partners of Southwest Ohio(Cincinnati, Ohio)

• Meridian Health (Neptune, New Jersey)• MeritCare Health System (Fargo, North

Dakota)• Methodist Hospital System (Houston,

Texas)• Mission Hospitals (Asheville, North

Carolina)• Montefiore Health System (Bronx, New

York)• MultiCare Health System (Tacoma,

Washington)• Naval Hospital Lemoore (Lemoore,

California)• North Mississippi Medical Center (Tupelo,

Mississippi)• NorthShore University HealthSystem

(Evanston, Illinois)• Northwestern Memorial Hospital (Chicago,

Illinois)• Ochsner Health System (New Orleans,

Louisiana)• Park Nicollet Health Services (St. Louis

Park, Minnesota)• Partners HealthCare (Boston,

Massachusetts)• Piedmont Fayette Hospital (Fayetteville,

Georgia)• Piedmont Hospital (Atlanta, Georgia)• Poudre Valley Health System (Fort

Collins, Colorado)• ProMedica Health System (Toledo, Ohio)• Providence Sacred Heart Medical Center

& Children’s Hospital (Spokane,Washington)

• Richard L. Roudebush Veterans AffairsMedical Center (Indianapolis, Indiana)

• Riverside Health System (Newport News,Virginia)

• Rush University Medical Center (Chicago,Illinois)

• Saint Clare’s Hospital (Weston,Wisconsin)


• 130 •

• Saint Luke’s Health System (Kansas City,Missouri)

• Sentara Leigh Hospital (Norfolk, Virginia)• Sharp HealthCare (San Diego, California)• Spartanburg Regional Healthcare System

(Spartanburg, South Carolina)• Susquehanna Health (Williamsport,

Pennsylvania)• Texas Health Resources (Arlington,

Texas)• ThedaCare (Appleton, Wisconsin)• TriHealth (Cincinnati, Ohio)• UAMS Medical Center (Little Rock,

Arkansas)• University of California San Diego Medical

Center (San Diego, California)• University of Illinois Medical Center at

Chicago (Chicago, Illinois)• University of Kansas Hospital (Kansas

City, Kansas)• University of New Mexico Hospitals

(Albuquerque, New Mexico)• University of Pittsburgh Medical Center

(Pittsburgh, Pennsylvania)• University of Tennessee Medical Center

(Knoxville, Tennessee)• VA Central California Health Care System

(Fresno, California)• VA Medical Center (Washington, DC)• VA Northeast Region 4 (Brooklyn, New

York)• Valley Health System (Ridgewood, New

Jersey)• Vanderbilt University Medical Center

(Nashville, Tennessee)• Yale-New Haven Hospital (New Haven,

Connecticut)


Hospitals & Health Network’s Most Wired,Health Forum Inc., 155 North Wacker Drive,4 Floor, Chicago, IL 60606. th

(www.hhnmostwired.com)

http://www.hhnmostwired.com


• 131 •

The National Quality Healthcare Award wascreated in 1993 to recognize outstandingquality-driven healthcare organizations. For16 years, first through the NationalCommittee for Quality Health Care and nowthrough the National Quality Forum, theaward has provided encouragement forimprovements in quality through publicrecognition of organizations’ accomplish-ments.

AWARD WINNERS

• 1994: Henry Ford Health System(Detroit)

• 1995: Evanston (Illinois) Hospital Corp.• 1996: Intermountain Health Care (Salt

Lake City)• 1997: St. Luke’s Health System (Kansas

City)• 1998: University of Pennsylvania Health

System (Philadelphia)• 1999: BJC Health System (St. Louis)• 2000: Munson Medical Center (Traverse

City, Michigan)• 2001: Catholic Health Initiatives (Denver)• 2002: Carilion Health System (Roanoke)• 2003: Lehigh Valley Hospital and Health

Network (Allentown, Pennsylvania)• 2004: Trinity Health (Novi, Michigan)• 2005: Northwestern Memorial Hospital

(Chicago)• 2006: Brigham and Women’s Hospital

(Boston)• 2007: Health Partners (Bloomfield,

Minnesota)• 2008: Baylor Health Care System

(Dallas)• 2009: Memorial Hermann Healthcare

System (Houston)



Suite 500 North, Washington, DC 20005. (202) 783-1300. (www.qualityforum.org)

57 NATIONAL QUALITY HEALTHCARE

AWARD



• 132 •

Presented annually by the American HospitalAssociation, NOVA Awards honor hospitalsand health systems that improve communityhealth through healthcare, economic, orsocial initiatives – and do so collaboratively,working with other organizations.

2009 WINNERS

• Brigham and Women’s Hospital (Boston)• Duke Raleigh Hospital (Raleigh, North

Carolina)• Holy Cross Hospital (Taos, New Mexico)• Jacobi Medical Center and North Central

Bronx Hospital (New York City)• Mission Health System (Asheville, North

Carolina)

2009 FINALISTS

• Baylor Health Care System (Dallas)• Bellevue Hospital Center (New York City)• Bucyrus Community Hospital (Bucyrus,

Ohio)• Chilton Memorial Hospital (Pompton

Plains, New Jersey)• Intermountain Healthcare (Salt Lake City,

Utah)• McLeod Medical Center (Dillon, South

Carolina)• Oakwood Healthcare System (Dearborn,

Michigan)• Owensboro Medical Health System

(Owensboro, Kentucky)



58 NOVA AWARDS

http://www.aha.org


• 133 •

The American Hospital Association (AHA) -McKesson Quest for Quality Prize, givenannually since 2002, aims to raise awarenessof the need for a hospital-wide commitment tohighly reliable, exceptional quality, patient-centered care; reward successful efforts todevelop and promote a systems-basedapproach toward improvements in quality ofcare; inspire hospitals to systematicallyintegrate and align their quality improvementefforts throughout the organization; andcommunicate successful programs andstrategies to the hospital field. The prizehonors hospitals that have committed in asystematic manner to achieving the Instituteof Medicine’s six quality aims – safety,patient-centeredness, effectiveness,efficiency, timeliness, and equity.

2009 AWARDS

• Winner: Bronson Methodist Hospital(Kalamazoo, Michigan)

• Finalist: Beth Israel Deaconess MedicalCenter (Boston)

• Citation of Merit: Duke University Hospital(Durham, North Carolina)

2008 AWARDS

• Winner: Munson Medical Center(Traverse City, Michigan)

• Finalist: University of Michigan Hospitalsand Health Centers (Ann Arbor)

• Citation of Merit: Avera McKennanHospital & University Health Center (SiouxFalls, South Dakota)

• Citation of Merit: Saint Vincent Health

Center (Erie, Pennsylvania)

2007 AWARDS

• Winner: Columbus Regional Hospital(Columbus, Indiana)

• Finalist: Cedars-Sinai Medical Center (Los Angeles)

• Finalist: INTEGRIS Baptist MedicalCenter (Oklahoma City)

• Citations of Merit: Amarillo VA HealthCare System (Amarillo, Texas)

• Citations of Merit: McLeod RegionalMedical Center (Florence, South Carolina)

2006 AWARDS

• Winner: Cincinnati Children’s HospitalMedical Center

• Citation of Merit: Bronson MethodistHospital (Kalamazoo, Michigan)

• Citation of Merit: Baptist MemorialHospital for Women (Memphis,Tennessee)


American Hospital Association, One NorthFranklin, Chicago, IL 60606. (312) 422-3000. (www.aha.org/questforquality)

59 QUEST FOR QUALITY

http://www.aha.org/questforquality


• 134 •

Modern Healthcare and Sodexo Health CareServices have sponsored the Spirit ofExcellence Awards since 1992, honoringorganizations and individuals that go beyondwhat’s expected in serving their patients andcommunities. Five awards are given as partof the program:• Service Spirit Award, which recognizes

excellence in service and in patient andresident satisfaction

• Quality Spirit Award, which recognizesquality, safety, and performanceimprovement

• Community Spirit Award, whichrecognizes community education, support,and outreach

• Team Spirit Award, which recognizesemployee recruitment and retention

• CARES Spirit Award, which recognizes ateam or group of individuals whosecollective actions, attitudes, and behaviorspersonify compassion, accountability,respect, enthusiasm, and service

2009 AWARDS

Service Spirit Award• Winner: Tanner Medical Center

(Carrollton, Georgia)• Honorable Mention: Good Shepherd

Rehabilitation Network (Allentown,Pennsylvania)

Quality Spirit Award• Winner: Primary Stroke Center at Mary

Washington Hospital (Fredericksburg,Virginia)

• Honorable Mention: Bon SecoursMemorial Regional Medical Center

(Mechanicsville, Virginia)

Community Spirit Award• Winner: Family Health Center of San

Diego• Honorable Mention: Kaiser Permanente

Team Spirit Award• Winner: Starlight Community Services

(Oakland, California)• Honorable Mention: Avera McKennan

Hospital & University Health Center (SiouxFalls, South Dakota)

CARES Spirit Award• Winner: Sts. Mary & Elizabeth Hospital

(Louisville, Kentucky)• Honorable Mention: Sinai Urban Health

Institute (Chicago, Illinois)


“Getting Into The Spirit,” ModernHealthcare, December 14, 2009, pp 27-32.

Sodexo Health Care Services, 9801Washington Boulevard, Gaithersburg, MD20878. (800) 763-3946. (www.sodexousa.com)

60 SPIRIT OF EXCELLENCE AWARDS

http://www.sodexousa.com


• 135 •

Since 1992, Thomson Reuters Healthcarehas developed an annual list of the 100 TopHospitals based on a comparison of Medicaredata for eight measures utilizing the Agencyfor Healthcare Research and Quality’s public-safety indicators. The assessment compareshospitals’ actual patient-safety performancewith expected performance.

2009 BENCHMARK LIST

Major Teaching Hospitals• Advocate Lutheran General Hospital

(Park Ridge, Illinois)• Beth Israel Deaconess Medical Center

(Boston, Massachusetts)• Duke University Hospital (Durham, North

Carolina)• Mayo Clinic - Saint Marys Hospital

(Rochester, Minnesota)• NorthShore University HealthSystem

(Evanston, Illinois)• Northwestern Memorial Hospital (Chicago,

Illinois)• Providence Hospital and Medical Center

(Southfield, Michigan)• Scott and White Memorial Hospital

(Temple, Texas)• St. Joseph’s Hospital and Medical Center

(Phoenix, Arizona)• The Western Pennsylvania Hospital

(Pittsburgh, Pennsylvania)• University Hospitals Case Medical Center

(Cleveland, Ohio)• University Medical Center (Tucson,

Arizona)• University of Michigan Hospitals & Health

Centers (Ann Arbor, Michigan)• University of Virginia Medical Center

(Charlottesville, Virginia)• Vanderbilt University Medical Center

(Nashville, Tennessee)

Teaching Hospitals• Avera McKennan Hospital & University

Health Center (Sioux Falls, South Dakota)• Bryn Mawr Hospital (Bryn Mawr,

Pennsylvania)• Cleveland Clinic Florida (Weston, Florida)• Good Samaritan Hospital (Cincinnati,

Ohio)• Gundersen Lutheran Health System (La

Crosse, Wisconsin)• Hamot Medical Center (Erie,

Pennsylvania)• Hillcrest Hospital (Mayfield Heights, Ohio)• Lancaster General Hospital (Lancaster,

Pennsylvania)• Mercy Medical Center-North Iowa (Mason

City, Iowa)• Metro Health Hospital (Wyoming,

Michigan)• MidMichigan Medical Center-Midland

(Midland, Michigan)• Munson Medical Center (Traverse City,

Michigan)• North Mississippi Medical Center (Tupelo,

Mississippi)• Providence St. Vincent Medical Center

(Portland, Oregon)• Riverside Methodist Hospital (Columbus,

Ohio)• Robert Packer Hospital (Sayre,

Pennsylvania)• Rose Medical Center (Denver, Colorado)• St. Cloud Hospital (St. Cloud, Minnesota)• St. Elizabeth Medical Center (Edgewood,

Kentucky)

61 TOP 100 HOSPITALS


• 136 •

• St. Luke’s Boise Medical Center (Boise,Idaho)

• St. Vincent Indianapolis Hospital(Indianapolis, Indiana)

• Saint Joseph Regional Medical Center-South Bend (South Bend, Indiana)

• Union Memorial Hospital (Baltimore,Maryland)

• Waukesha Memorial Hospital (Waukesha,Wisconsin)

• Wheaton Franciscan Healthcare-St.Joseph (Milwaukee, Wisconsin)

Large Community Hospitals• Advocate Good Samaritan Hospital

(Downers Grove, Illinois)• Alegent Health Bergan Mercy Medical

Center (Omaha, Nebraska)• Baptist Hospital East (Louisville,

Kentucky)• Centennial Medical Center (Nashville,

Tennessee)• Central DuPage Hospital (Winfield,

Illinois)• Citizens Medical Center (Victoria, Texas)• Doctors Hospital at Renaissance

(Edinburg, Texas)• King’s Daughters Medical Center

(Ashland, Kentucky)• Memorial Health Care System

(Chattanooga, Tennessee)• Memorial Hospital West (Pembroke

Pines, Florida)• Mercy Medical Center-Dubuque

(Dubuque, Iowa)• Missouri Baptist Medical Center (St.

Louis, Missouri)• Providence Regional Medical Center

Everett (Everett, Washington)• Saint Elizabeth Regional Medical Center

(Lincoln, Nebraska)• Saint Thomas Hospital (Nashville,

Tennessee)• San Antonio Community Hospital (Upland,

California)• Silver Cross Hospital (Joliet, Illinois)• Southwest General Health Center

(Middleburg Heights, Ohio)

• St. John’s Regional Medical Center(Joplin, Missouri)

• St. Mary Mercy Livonia Hospital (Livonia,Michigan)

Medium Community Hospitals• Aurora Sheboygan Memorial Medical

Center (Sheboygan, Wisconsin)• Aurora West Allis Medical Center (West

Allis, Wisconsin)• Columbus Regional Hospital (Columbus,

Indiana)• Gratiot Medical Center (Alma, Michigan)• Holland Hospital (Holland, Michigan)• Licking Memorial Hospital (Newark, Ohio)• Marion General Hospital (Marion, Indiana)• Memorial Hospital and Health Care

Center (Jasper, Indiana)• Memorial Regional Medical Center

(Mechanicsville, Virginia)• Mercy Hospital Clermont (Batavia, Ohio)• Middlesex Hospital (Middletown,

Connecticut)• Riverside Medical Center (Kankakee,

Illinois)• Rutherford Hospital (Rutherfordton, North

Carolina)• St. Francis Hospital-Indianapolis

(Indianapolis, Indiana)• Saint Joseph East (Lexington, Kentucky)• Sycamore Medical Center (Miamisburg,

Ohio)• The Monroe Clinic (Monroe, Wisconsin)• Union Hospital (Dover, Ohio)• West Anaheim Medical Center (Anaheim,

California)• Wooster Community Hospital (Wooster,

Ohio)

Small Community Hospitals• Castleview Hospital (Price, Utah)• Central Michigan Community Hospital

(Mount Pleasant, Michigan)• Chambers Memorial Hospital (Danville,

Arkansas)• Desert Valley Hospital (Victorville,

California)


• 137 •

• Douglas County Hospital (Alexandria,Minnesota)

• Duncan Regional Hospital (Duncan,Oklahoma)

• Jamestown Hospital (Jamestown, NorthDakota)

• Lake Whitney Medical Center (Whitney,Texas)

• Lakeview Hospital (Stillwater, Minnesota)• Major Hospital (Shelbyville, Indiana)• Meadows Regional Medical Center

(Vidalia, Georgia)• Mercy Hospital Cadillac (Cadillac,

Michigan)• Parkland Health Center-Farmington

(Farmington, Missouri)• St. Elizabeth Community Hospital (Red

Bluff, California)• St. Mary’s Jefferson Memorial Hospital

(Jefferson City, Tennessee)• St. Mary’s Medical Center of Campbell

County (LaFollette, Tennessee)• Sacred Heart Hospital on the Emerald

Coast (Miramar Beach, Florida)• Saint Joseph-London (London, Kentucky)• Saint Joseph Mercy Saline Hospital

(Saline, Michigan)• The King’s Daughters’ Hospital & Health

Services (Madison, Indiana)


Center for Healthcare Improvement,Thomson Reuters Healthcare, 777 EastEisenhower Parkway, Ann Arbor, MI 48108. (734) 913-3000. (www.top100hospitals.com)

http://www.top100hospitals.com


• 138 •

Since 1998, The Center for HealthcareImprovement at Thomson Reuters hasconducted an annual study identifying the100 U.S. hospitals that set the nation’sbenchmarks for inpatient cardiovascularservices. The assessment examines theperformance of 971 hospitals by analyzingoutcomes for patients with heart failure andheart attacks and for those who receivedcoronary bypass surgery or percutaneouscardiovascular interventions (PCI) such asangioplasties.

Compared with peer hospitals, performanceof the 100 Top Cardiovascular Hospitals is asfollows:• 27% lower mortality for bypass surgery

patients• 22% lower mortality following PCI• 17% lower mortality rates for heart attack

patients • 12% lower cost per case• 10% lower mortality rates for heart failure

patients• Close to 12% shorter average hospital

stay• Fewer post-operative complications - 99%

of patients were complication-free

The top performing hospitals perform over50% more cardiac surgeries than peerhospitals.

2009 LIST OF TOP

CARDIOVASCULAR HOSPITALS

Teaching Hospitals with CardiovascularResidency Programs

• Advocate Christ Medical Center (OakLawn, Illinois)

• Advocate Lutheran General Hospital(Park Ridge, Illinois)

• Albany Medical Center (Albany, NewYork)

• Aurora St. Luke’s Medical Center(Milwaukee, Wisconsin)

• Baystate Medical Center (Springfield,Massachusetts)

• Beth Israel Deaconess Medical Center(Boston, Massachusetts)

• Caritas St. Elizabeth’s Medical Center(Boston, Massachusetts)

• Cleveland Clinic Florida (Weston, Florida)• Dartmouth-Hitchcock Medical Center

(Lebanon, New Hampshire)• Fletcher Allen Health Care (Burlington,

Vermont)• Geisinger Medical Center (Danville,

Pennsylvania)• Good Samaritan Hospital (Cincinnati,

Ohio)• Grandview Medical Center (Dayton, Ohio)• Hackensack University Medical Center

(Hackensack, New Jersey)• Kettering Medical Center (Kettering, Ohio)• Lahey Clinic Medical Center (Burlington,

Massachusetts)• Loyola University Medical Center

(Maywood, Illinois)• Maine Medical Center (Portland, Maine)• Mercy Medical Center-North Iowa (Mason

City, Iowa)• Providence Hospital and Medical Center

(Southfield, Michigan)• Scott and White Memorial Hospital

(Temple, Texas)• St. Vincent Indianapolis Hospital

(Indianapolis, Indiana)

62 TOP CARDIOVASCULAR HOSPITALS


• 139 •

• 2St. Joseph’s Hospital and MedicalCenter (Phoenix, Arizona)

• Staten Island University Hospital (StatenIsland, New York)

• The Ohio State University Medical Center(Columbus, Ohio)

• UMass Memorial Medical Center(Worcester, Massachusetts)

• University of Virginia Medical Center(Charlottesville, Virginia)

• University of Wisconsin Hospital andClinics (Madison, Wisconsin)

• UPMC Passavant (Pittsburgh,Pennsylvania)

• Vanderbilt University Medical Center(Nashville, Tennessee)

Teaching Hospitals WithoutCardiovascular Residency Programs• Altru Hospital (Grand Forks, North

Dakota)• Aspirus Wausau Hospital (Wausau,

Wisconsin)• Ball Memorial Hospital (Muncie, Indiana)• Bethesda North Hospital (Cincinnati,

Ohio)• Billings Clinic (Billings, Montana)• Carolinas Medical Center-NorthEast

(Concord, North Carolina)• Centra Health (Lynchburg, Virginia)• Firelands Regional Medical Center

(Sandusky, Ohio)• Gundersen Lutheran Health System (La

Crosse, Wisconsin)• Hamot Medical Center (Erie,

Pennsylvania)• Henry Ford Macomb Hospitals (Clinton

Township, Michigan)• Marquette General Hospital (Marquette,

Michigan)• Memorial Hospital of Carbondale

(Carbondale, Illinois)• Mercy Medical Center Redding (Redding,

California)• Mercy Medical Center (Canton, Ohio)• Mercy Medical Center-Des Moines (Des

Moines, Iowa)

• MeritCare Hospital (Fargo, North Dakota)• Morton Plant Hospital (Clearwater,

Florida)• Mount Carmel (Columbus, Ohio)• Munson Medical Center (Traverse City,

Michigan)• North Shore Medical Center (Salem,

Massachusetts)• Park Nicollet Methodist Hospital (St. Louis

Park, Minnesota)• PinnacleHealth (Harrisburg,

Pennsylvania)• Providence St. Vincent Medical Center

(Portland, Oregon)• Rapides Regional Medical Center

(Alexandria, Louisiana)• Riverside Methodist Hospital (Columbus,

Ohio)• Robert Packer Hospital (Sayre,

Pennsylvania)• Rochester General Hospital (Rochester,

New York)• Saint Joseph’s Hospital (Marshfield,

Wisconsin)• Spectrum Health Hospitals (Grand

Rapids, Michigan)• St. John West Shore Hospital (Westlake,

Ohio)• St. Luke’s Boise Medical Center (Boise,

Idaho)• St. Joseph Mercy Oakland (Pontiac,

Michigan)• St. John’s Hospital (Springfield, Illinois)• St. Joseph Mercy Hospital (Ann Arbor,

Michigan)• St. John Macomb-Oakland Hospital

(Warren, Michigan)• St. Mary’s Hospital (Richmond, Virginia)• St. Mary’s Hospital and Regional Medical

Center (Grand Junction, Colorado)• St. Peter’s Hospital (Albany, New York)• William Beaumont Hospital-Troy (Troy,

Michigan)

Community Hospitals• Arizona Heart Hospital (Phoenix, Arizona)• Arrowhead Hospital (Glendale, Arizona)• Aurora BayCare Medical Center (Green


• 140 •

Bay, Wisconsin)• Avera Heart Hospital of South Dakota

(Sioux Falls, South Dakota)• Dixie Regional Medical Center- St.

George, Utah)• DuBois Regional Medical Center (DuBois,

Pennsylvania)• EMH Regional Medical Center (Elyria,

Ohio)• Fairview Southdale Hospital (Edina,

Minnesota)• French Hospital Medical Center (San Luis

Obispo, California)• Harlingen Medical Center (Harlingen,

Texas)• Heart Hospital of Austin (Austin, Texas)• Hoag Memorial Hospital Presbyterian

(Newport Beach, California)• JFK Medical Center (Atlantis, Florida)• Medcenter One (Bismarck, North Dakota)• Mercy Hospital (Coon Rapids, Minnesota)• Munroe Regional Medical Center (Ocala,

Florida)• Northwest Community Hospital (Arlington

Heights, Illinois)• Oklahoma Heart Hospital (Oklahoma City,

Oklahoma)• Parma Community General Hospital

(Parma, Ohio)• Providence Regional Medical Center

Everett (Everett, Washington)• Saint Joseph-London (London, Kentucky)• Southwest General Health Center

(Middleburg Heights, Ohio)• St. Vincent Heart Center of Indiana

(Indianapolis, Indiana)• St. Joseph Medical Center (Towson,

Maryland)• The Indiana Heart Hospital (Indianapolis,

Indiana)• Thomas Hospital (Fairhope, Alabama)• Trinity Regional Medical Center (Fort

Dodge, Iowa)• Tucson Heart Hospital (Tucson, Arizona)• Venice Regional Medical Center (Venice,

Florida)• Western Baptist Hospital (Paducah,

Kentucky)





• 141 •

Thomson Reuters Healthcare evaluated252 healthcare systems on measures ofclinical quality and efficiency. The list oftop-rated healthcare systems, which waspublished in the August 11, 2009 issue ofModern Healthcare, is as follows:

10 BEST-PERFORMING

HEALTHCARE SYSTEMS

• Advocate Health Care (Oak Brook,Illinois)

• Catholic Healthcare Partners (Cincinnati,Ohio)

• Health Alliance of Greater Cincinnati(Cincinnati, Ohio)

• HealthEast Care System (St. Paul,Minnesota)

• Henry Ford Health System (Detroit,Michigan)

• Kettering Health Network (Dayton, Ohio)• OhioHealth (Columbus, Ohio)• Prime Healthcare Services (Victorville,

California)• Trinity Health (Novi, Michigan)• University Hospitals (Cleveland, Ohio)

50 BEST-PERFORMING

HEALTHCARE SYSTEMS

In addition to the 10 healthcare systemslisted above, the following were rankedamong the top 50 in clinical quality andefficiency:

• Affinity Health System (Menasha,Wisconsin)

• Alexian Bros. Health System (Arlington

Heights, Illinois)• Allina Health System (Minneapolis,

Minnesota)• Ascension Health (St. Louis, Missouri)• Aurora Health Care (Milwaukee,

Wisconsin)• Avera Health (Sioux City, South Dakota)• Baptist Health System of East Tennessee

(Knoxville, Tennessee)• BayCare Health System (Clearwater,

Florida)• Beaumont Hospitals (Royal Oak,

Michigan)• Cascade Healthcare Community (Bend,

Oregon)• Catholic Health Initiative (Denver,

Colorado)• Centegra Health System (Crystal Lake,

Illinois)• Clarian Health (Indianapolis, Indiana)• Cleveland Clinic (Cleveland, Ohio)• Community Health Network (Indianapolis,

Indiana)• Community Healthcare System

(Hammond, Indiana)• Detroit Medical Center (Detroit, Michigan)• East Regional Hospitals of the Cleveland

Clinic Health System (Independence,Ohio)

• Exempla Healthcare (Denver, Colorado)• Fairview Health Services (Minneapolis,

Minnesota)• Genesis Health System (Davenport, Iowa)• Gutherie Healthcare System (Sayre,

Pennsylvania)• Iowa Health System (Des Moines, Iowa)• Maury Regional Healthcare System

(Columbia, Tennessee)• Mayo Foundation (Rochester,

Minneapolis)

63 TOP HEALTHCARE SYSTEMS


• 142 •

• McLaren Health Care Corp. (Flint,Michigan)

• MedStar Health (Columbia, Maryland)• Memorial Health Services (Long Beach,

California)• MidMichigan Health (Midland, Michigan)• Oakwood Healthcare (Dearborn,

Michigan)• PeaceHealth (Bellevue, Washington)• Premier Health Partners (Dayton, Ohio)• Provena Health (Mokena, Illinois)• Resurrection Health Care (Chicago,

Illinois)• Spectrum Health (Grand Rapids,

Michigan)• SSM Health Care (St. Louis, Missouri)• SMDC Health System (Duluth, Minnesota)• University of Pittsburgh Medical Center

(Pittsburgh, Pennsylvania)• Via Christi Health System (Wichita,

Kansas)• Wheaton Franciscan Healthcare of

Southeast Wisconsin (Glendale,Wisconsin)



Wilson, Linda, “A Systematic Approach,”Modern Healthcare, April 11, 2009.



• 143 •

U.S. News & World Reports has annuallyranks the best U.S. children’s hospitals byspecialty. The 2009 assessment analyzeddata on 160 children’s medical centers in 10specialty fields. The annual assessmentconsiders reputation, outcomes, and care-related indicators.

By category, this chapter presents the top-ranked children’s hospitals in 2009.

CANCER

1. Children’s Hospital of Philadelphia2. Children’s Hospital Boston3. St. Jude Children’s Research Hospital

(Memphis)4. Texas Children’s Hospital (Houston)5. Cincinnati Children’s Hospital Medical

Center6. Seattle Children’s Hospital7. Memorial Sloan-Kettering Cancer

Center (New York City)8. Childrens Hospital Los Angeles9. Johns Hopkins Children’s Center

(Baltimore)10. Children’s Hospital (Denver)

DIABETES & ENDOCRINE

DISORDERS

1. Children’s Hospital of Philadelphia2. Children’s Hospital Boston3. Johns Hopkins Children’s Center

(Baltimore)4. Cincinnati Children’s Hospital Medical

Center5. Childrens Hospital Los Angeles

6. UCSF Children’s Hospital (SanFrancisco)

7. New York-Presbyterian MorganStanley-Komansky Children’s Hospital

8. Children’s Hospital of Pittsburgh ofUPMC

9. Texas Children’s Hospital (Houston)10. Children’s Hospital (Denver)

DIGESTIVE DISORDERS

1. Cincinnati Children’s Hospital MedicalCenter

2. Children’s Hospital of Philadelphia3. Children’s Hospital Boston4. Texas Children’s Hospital (Houston)5. Children’s Hospital, Denver6. Children’s Hospital of Pittsburgh of

UPMC7. Nationwide Children’s Hospital

(Columbus, Ohio)8. Mattel Children’s Hospital UCLA (Los

Angeles)9. Children’s Hospital of Wisconsin

(Milwaukee)10. Johns Hopkins Children’s Center

(Baltimore)

HEART & HEART SURGERY

1. Children’s Hospital Boston2. Children’s Hospital of Philadelphia3. Texas Children’s Hospital (Houston)4. University of Michigan C.S. Mott

Children’s Hospital (Ann Arbor)5. Lucile Packard Children’s Hospital at

Stanford (Palo Alto, California)

64 TOP-RANKED CHILDREN’S HOSPITALS


• 144 •

6. New York-Presbyterian MorganStanley-Komansky Children’s Hospital

7. Children’s Healthcare of Atlanta8. Children’s Hospital of Wisconsin

(Milwaukee)9. Cincinnati Children’s Hospital Medical

Center10. Childrens Hospital Los Angeles

KIDNEY DISORDERS

1. Texas Children’s Hospital (Houston)2. Children’s Hospital of Philadelphia3. Mattel Children’s Hospital UCLA (Los

Angeles)4. Seattle Children’s Hospital5. Children’s Hospital Boston6. Massachusetts General Hospital for

Children (Boston)7. Johns Hopkins Children’s Center

(Baltimore)8. UCSF Children’s Hospital (San

Francisco)9. Childrens Hospital Los Angeles10. Holtz Children’s Hospital at UM-

Jackson Memorial Hospital (Miami)

NEONATAL CARE

1. Children’s Hospital of Philadelphia2. Rainbow Babies and Children’s

Hospital (Cleveland)3. Children’s Hospital Boston4. Cincinnati Children’s Hospital Medical

Center5. Lucile Packard Children’s Hospital at

Stanford (Palo Alto, California)6. New York-Presbyterian Morgan

Stanley-Komansky Children’s Hospital 7. Texas Children’s Hospital (Houston)8. Children’s Hospital, Denver9. Johns Hopkins Children’s Center

(Baltimore)10. Children’s National Medical Center

(Washington, DC)

NEUROLOGY & NEUROSURGERY

1. Children’s Hospital Boston2. Children’s Hospital of Philadelphia3. Johns Hopkins Children’s Center

(Baltimore)4. Children’s Hospital Cleveland Clinic5. Texas Children’s Hospital (Houston)6. St. Louis Children’s Hospital-

Washington University7. New York-Presbyterian Morgan

Stanley-Komansky Children’s Hospital8. Cincinnati Children’s Hospital Medical

Center9. Seattle Children’s Hospital10. Mayo Eugenio Litta Children’s Hospital

(Rochester, Minnesota)

ORTHOPEDICS

1. Children’s Hospital Boston2. Children’s Medical Center-Texas

Scottish Rite Hospital for Children(Dallas)

3. Children’s Hospital of Philadelphia4. Rady Children’s Hospital (San Diego,

California)5. Children’s Healthcare of Atlanta6. Cincinnati Children’s Hospital Medical

Center7. Childrens Hospital Los Angeles8. Children’s Hospital, Denver9. St. Louis Children’s Hospital-

Washington University10. Johns Hopkins Children’s Center

(Baltimore)

RESPIRATORY DISORDERS

1. Children’s Hospital of Philadelphia2. Texas Children’s Hospital (Houston)3. Cincinnati Children’s Hospital Medical

Center4. Children’s Hospital Boston5. Children’s Hospital, Denver


• 145 •

6. Johns Hopkins Children’s Center(Baltimore)

7. Children’s Hospital of Pittsburgh ofUPMC

8. St. Louis Children’s Hospital-Washington University

9. Seattle Children’s Hospital10. Rainbow Babies and Children’s

Hospital (Cleveland)

UROLOGY

1. Children’s Hospital of Philadelphia2. Children’s Hospital Boston3. Riley Hospital for Children Clarion

Health Partners (Indianapolis)4. Johns Hopkins Children’s Center

(Baltimore)5. Cincinnati Children’s Hospital Medical

Center6. Monroe Carell Jr. Children’s Hospital at

Vanderbilt (Nashville)7. Children’s Memorial Hospital (Chicago)8. Seattle Children’s Hospital9. Texas Children’s Hospital (Houston)10. Children’s Medical Center (Dallas)


Comarow, Avery, “America’s BestChildren’s Hospitals,” U.S. News & WorldReport, August 2009, pp 84-112.(http://health.usnews.com/health/best-hospitals/childrens-hospitals)


• 146 •

Since 1989, U.S. News & World Reports hasranked the best U.S. hospitals by specialtyannually, from cancer and heart disease torespiratory disorders and urology. The 2009assessment analyzed data on 4,861 medicalcenters in 16 specialty fields. Theassessment considered affiliation with amedical school, availability of keytechnologies such as robotic surgery, andperformance of a minimum number ofspecified procedures on Medicare inpatients,reputation, death rate, and care-relatedfactors such as nursing and patient services.

By category, this chapter presents the top-ranked specialty hospitals in 2009.

CANCER

1. University of Texas M.D. AndersonCancer Center (Houston)

2. Memorial Sloan-Kettering CancerCenter (New York)

3. Johns Hopkins Hospital (Baltimore)4. Mayo Clinic (Rochester (Minnesota)5. Dana-Farber Cancer Institute (Boston)6. University of Washington Medical

Center (Seattle)7. Massachusetts General Hospital

(Boston)8. University of California, San Francisco

Medical Center9. Duke University Medical Center

(Durham (North Carolina)10. Stanford Hospital and Clinics (Stanford

(California)11. Ronald Reagan UCLA Medical Center

(Los Angeles)12. Cleveland Clinic

13. Vanderbilt University Medical Center(Nashville)

14. Hospital of the University ofPennsylvania (Philadelphia)

15. Brigham and Women’s Hospital(Boston)

16. H. Lee Moffitt Cancer Center (Tampa)17. University of Chicago Medical Center18. Ohio State University James Cancer

Hospital (Columbus)19. University of Michigan Hospitals and

Health Centers (Ann Arbor)20. Fox Chase Cancer Center

(Philadelphia)

DIABETES & ENDOCRINE

DISORDERS

1. Mayo Clinic (Rochester, Minnesota)2. Massachusetts General Hospital

(Boston)3. Johns Hopkins Hospital (Baltimore)4. University of California, San Francisco

Medical Center5. New York-Presbyterian University

Hospital of Columbia and Cornell6. Cleveland Clinic7. Brigham and Women’s Hospital

(Boston)8. Ronald Reagan UCLA Medical Center

(Los Angeles)9. Yale-New Haven Hospital (New Haven,

Connecticut)10. Hospital of the University of

Pennsylvania (Philadelphia)11. Barnes-Jewish Hospital/Washington

University (St. Louis)12. University of Virginia Medical Center

(Charlottesville)

65 TOP-RANKED HOSPITALS


• 147 •

13. Joslin Clinic and Beth IsraelDeaconess Medical Center (Boston)

14. University of Chicago Medical Center15. Vanderbilt University Medical Center

(Nashville)16. Washington Hospital Center

(Washington, DC)17. University of Michigan Hospitals and

Health Centers (Ann Arbor)18. Beaumont Hospital (Royal Oak,

Michigan)19. Cedars-Sinai Medical Center (Los

Angeles)20. University of Washington Medical

Center (Seattle)

DIGESTIVE DISORDERS

1. Mayo Clinic (Rochester, Minnesota)2. Cleveland Clinic3. Johns Hopkins Hospital (Baltimore)4. Massachusetts General Hospital


(Los Angeles)6. University of Chicago Medical Center7. Mount Sinai Medical Center (New York

City)8. Hospital of the University of

Pennsylvania (Philadelphia)9. University of California, San Francisco

Medical Center10. Cedars-Sinai Medical Center (Los

Angeles)11. Brigham and Women’s Hospital

(Boston)12. New York-Presbyterian University

Hospital of Columbia and Cornell13. Clarion Health (Indianapolis)14. University of Michigan Hospitals and

Health Centers (Ann Arbor)15. Barnes-Jewish Hospital/Washington

University (St. Louis)16. Methodist Hospital (Houston)17. Duke University Medical Center

(Durham, North Carolina)18. UPMC-University of Pittsburgh Medical

Center19. Beth Israel Deaconess Medical Center

(Boston)20. Medical University of South Carolina

(Charleston)

EAR, NOSE & THROAT

1. Johns Hopkins Hospital (Baltimore)2. University of Texas M.D. Anderson

Cancer Center (Houston)3. University of Iowa Hospitals and Clinics

(Iowa City)4. UPMC-University of Pittsburgh Medical

Center5. Massachusetts Eye and Ear Infirmary

(Boston)6. Hospital of the University of

Pennsylvania (Philadelphia)7. Mayo Clinic (Rochester, Minnesota)8. Ronald Reagan UCLA Medical Center

(Los Angeles)9. Cleveland Clinic10. Barnes-Jewish Hospital/Washington

University (St. Louis)11. University of Michigan Hospitals and

Health Centers (Ann Arbor)12. University of Washington Medical

Center (Seattle)13. Memorial Sloan-Kettering Cancer

Center (New York City)14. Stanford Hospital and Clinics (Stanford,

California)15. University of California, San Francisco

Medical Center16. Vanderbilt University Medical Center

(Nashville)17. Mount Sinai Medical Center (New York

City)18. Ohio State University Hospital

(Columbus)19. New York-Presbyterian University

Hospital of Columbia and Cornell20. University of Miami (Jackson Memorial

Hospital)


• 148 •

GERIATRIC CARE

1. Ronald Reagan UCLA Medical Center(Los Angeles)

2. Johns Hopkins Hospital (Baltimore)3. Mount Sinai Medical Center (New York

City)4. Massachusetts General Hospital

(Boston)5. Duke University Medical Center

(Durham, North Carolina)6. Mayo Clinic (Rochester, Minnesota)7. Yale-New Haven Hospital (New Haven,

Connecticut)8. UPMC-University of Pittsburgh Medical

Center9. University of California, San Francisco

Medical Center10. Cleveland Clinic11. Johns Hopkins Bayview Medical Center

(Baltimore)12. New York-Presbyterian University

Hospital of Columbia and Cornell13. Emory University Hospital (Atlanta)14. University of Washington Medical

Center (Seattle)15. University of Michigan Hospitals and

Health Centers (Ann Arbor)16. University of Alabama Hospital at

Birmingham17. Beth Israel Deaconess Medical Center

(Boston)18. NYU Langone Medical Center (New

York City)19. Northwestern Memorial Hospital

(Chicago)20. Hospital of the University of

Pennsylvania (Philadelphia)

GYNECOLOGY


2. Johns Hopkins Hospital (Baltimore)3. Mayo Clinic (Rochester, Minnesota)4. Duke University Medical Center

(Durham, North Carolina)

5. University of California, San FranciscoMedical Center

6. Cleveland Clinic7. Magee-Womens Hospital of UPMC

(Pittsburgh)8. New York-Presbyterian University

Hospital of Columbia and Cornell9. Massachusetts General Hospital


(Los Angeles)11. Parkland Memorial Hospital (Dallas)12. University of Texas M.D. Anderson

Cancer Center (Houston)13. Memorial Sloan-Kettering Cancer

Center (New York City)14. Stanford Hospital and Clinics (Stanford,

California)15. University of Washington Medical

Center (Seattle)16. Vanderbilt University Medical Center

(Nashville)17. Hospital of the University of

Pennsylvania (Philadelphia)18. Northwestern Memorial Hospital

(Chicago)19. Yale-New Haven Hospital (New Haven,

Connecticut)20. Ohio State University Hospital

(Columbus)

HEART & HEART SURGERY

1. Cleveland Clinic2. Mayo Clinic (Rochester, Minnesota)3. Johns Hopkins Hospital (Baltimore)4. Massachusetts General Hospital

(Boston)5. Texas Heart Institute at St. Luke’s

Episcopal Hospital (Houston)6. Brigham and Women’s Hospital


Hospital of Columbia and Cornell8. Duke University Medical Center

(Durham, North Carolina)9. Hospital of the University of


• 149 •

Pennsylvania (Philadelphia)10. Ronald Reagan UCLA Medical Center

(Los Angeles)11. NYU Langone Medical Center (New

York City)12. Barnes-Jewish Hospital/Washington

University (St. Louis)13. Emory University Hospital (Atlanta)14. Stanford Hospital and Clinics (Stanford,

California)15. Cedars-Sinai Medical Center (Los

Angeles)16. University of Michigan Hospitals and

Health Centers (Ann Arbor)17. Vanderbilt University Medical Center

(Nashville)18. Mount Sinai Medical Center (New York

City)19. Methodist Hospital (Houston)20. Washington Hospital Center

(Washington, DC)

KIDNEY DISORDERS


2. New York-Presbyterian UniversityHospital of Columbia and Cornell

3. Mayo Clinic (Rochester, Minnesota)4. Massachusetts General Hospital

(Boston)5. Cleveland Clinic6. Johns Hopkins Hospital (Baltimore)7. Ronald Reagan UCLA Medical Center

(Los Angeles)8. Barnes-Jewish Hospital/Washington

University (St. Louis)9. Vanderbilt University Medical Center

(Nashville)10. University of California, San Francisco



Center13. University of Alabama Hospital at

Birmingham

14. Hospital of the University ofPennsylvania (Philadelphia)

15. University of Colorado Hospital(Aurora)

16. University of Washington MedicalCenter (Seattle)

17. University of Chicago Medical Center 18. University of Michigan Hospitals and

Health Centers (Ann Arbor)19. Yale-New Haven Hospital (New Haven,

Connecticut)20. Cedars-Sinai Medical Center (Los

Angeles)

NEUROLOGY &

NEUROSURGERY

1. Mayo Clinic (Rochester, Minnesota)2. Johns Hopkins Hospital (Baltimore)3. University of California, San Francisco

Medical Center4. Massachusetts General Hospital


Hospital of Columbia and Cornell6. Cleveland Clinic7. Ronald Reagan UCLA Medical Center

(Los Angeles)8. Barnes-Jewish Hospital/Washington

University (St. Louis)9. St. Joseph’s Hospital and Medical

Center (Phoenix)10. NYU Langone Medical Center (New

York City)11. Northwestern Memorial Hospital

(Chicago)12. Rush University Medical Center

(Chicago)13. Methodist Hospital (Houston)14. Emory University Hospital (Atlanta)15. Cedars-Sinai Medical Center (Los

Angeles)16. Mount Sinai Medical Center (New York

City)17. UPMC-University of Pittsburgh Medical

Center


• 150 •

18. Duke University Medical Center(Durham, North Carolina)

19. University of Chicago Medical Center20. University of Texas Southwestern

Medical Center (Dallas)

OPHTHALMOLOGY

1. Bascom Palmer Eye Institute at theUniversity of Miami

2. Wilmer Eye Institute - Johns HopkinsHospital (Baltimore)

3. Wills Eye Hospital (Philadelphia)4. Massachusetts Eye and Ear Infirmary,

Massachusetts General Hospital(Boston)

5. Jules Stein Eye Institute, UCLAMedical Center (Los Angeles)

6. University of Iowa Hospitals and Clinics(Iowa City)

7. Duke University Medical Center(Durham, North Carolina)

8. Doheny Eye Institute (USC UniversityHospital (Los Angeles)

9. Emory University Hospital (Atlanta)10. University of California, San Francisco

Medical Center11. Cleveland Clinic12. Mayo Clinic (Rochester, Minnesota)13. Cullen Eye Institute (Methodist Hospital

(Houston)14. Barnes-Jewish Hospital/Washington

University (St. Louis)15. New York Eye and Ear Infirmary16. W.K. Kellogg Eye Center - University of

Michigan (Ann Arbor)17. University of Illinois Medical Center at

Chicago

ORTHOPEDICS

1. Mayo Clinic (Rochester, Minnesota)2. Hospital for Special Surgery (New York

City)3. Massachusetts General Hospital

(Boston)

4. Cleveland Clinic5. Johns Hopkins Hospital (Baltimore)6. Duke University Medical Center

(Durham, North Carolina)7. New York-Presbyterian University

Hospital of Columbia and Cornell8. University of Iowa Hospitals and Clinics

(Iowa City)9. NYU Hospital for Joint Diseases10. UPMC-University of Pittsburgh Medical

Center11. Barnes-Jewish Hospital/Washington

University (St. Louis)12. Rush University Medical Center

(Chicago)13. Ronald Reagan UCLA Medical Center

(Los Angeles)14. Brigham and Women’s Hospital

(Boston)15. University of Washington Medical

Center (Seattle)16. Stanford Hospital and Clinics (Stanford,

California)17. Thomas Jefferson University Hospital

(Philadelphia)18. Harborview Medical Center (Seattle)19. University of California, San Francisco

Medical Center20. University Hospitals Case Medical

Center (Cleveland)

PSYCHIATRY

1. Massachusetts General Hospital(Boston)

2. Johns Hopkins Hospital (Baltimore)3. McLean Hospital (Belmont,

Massachusetts)4. New York-Presbyterian University

Hospital of Columbia and Cornell5. UCLA’s Neuropsychiatric Hospital (Los

Angeles)6. Sheppard and Enoch Pratt Hospital

(Baltimore)7. Mayo Clinic (Rochester, Minnesota)8. UPMC-University of Pittsburgh Medical

Center


• 151 •

9. Menninger Clinic (Houston)10. Emory University Hospital (Atlanta)11. Yale-New Haven Hospital (New Haven,

Connecticut)12. Austen Riggs Center (Stockbridge,

Massachusetts)13. Duke University Medical Center

(Durham, North Carolina)14. Barnes-Jewish Hospital/Washington

University (St. Louis)15. Stanford Hospital and Clinics (Stanford,

California)16. Hospital of the University of

Pennsylvania (Philadelphia)17. University of California, San Francisco

Medical Center18. NYU Langone Medical Center (New

York City)19. Hartford Hospital’s Institute of Living

(Hartford, Connecticut)20. University of California, San Diego

Medical Center)

REHABILITATION

1. Rehabilitation Institute of Chicago2. Kessler Institute for Rehabilitation

(West Orange, New Jersey)3. University of Washington Medical

Center (Seattle)4. TIRR Memorial Hermann (Houston)5. Mayo Clinic (Rochester, Minnesota)6. Spaulding Rehabilitation Hospital

(Boston)7. Craig Hospital (Englewood, Colorado)8. NYU Rusk Institute of Rehabilitation

Medicine9. Shepherd Center (Atlanta)10. Ohio State University Hospital

(Columbus)11. Thomas Jefferson University Hospital

(Philadelphia)12. National Rehabilitation Hospital

(Washington, DC)13. Baylor Institute for Rehabilitation

(Dallas)14. UPMC-University of Pittsburgh Medical

Center15. MossRehab (Elkins Park,

Pennsylvania)16. Johns Hopkins Hospital (Baltimore)17. University of Colorado Hospital

(Aurora)18. Rancho Los Amigos National

Rehabilitation Center (Downey,California

19. Mount Sinai Medical Center (New YorkCity)

20. Virginia Commonwealth UniversityHealth System (Richmond)

RESPIRATORY DISORDERS

1. National Jewish Health (Denver)2. Mayo Clinic (Rochester, Minnesota)3. Johns Hopkins Hospital (Baltimore)4. Cleveland Clinic5. Massachusetts General Hospital

(Boston)6. Duke University Medical Center


Center8. Hospital of the University of

Pennsylvania (Philadelphia)9. Barnes-Jewish Hospital/Washington

University (St. Louis)10. University of California, San Francisco

Medical Center11. New York-Presbyterian University

Hospital of Columbia and Cornell12. University of Colorado Hospital

(Aurora)13. Brigham and Women’s Hospital

(Boston)14. University of California, San Diego

Medical Center15. University of Michigan Hospitals and

Health Centers (Ann Arbor)16. University of Washington Medical

Center (Seattle)17. Ronald Reagan UCLA Medical Center

(Los Angeles)18. Vanderbilt University Medical Center


• 152 •

(Nashville)19. Yale-New Haven Hospital (New Haven,

Connecticut)20. Wake Forest Univ. Baptist Medical

Center (Winston-Salem, NorthCarolina)

RHEUMATOLOGY

1. Johns Hopkins Hospital (Baltimore)2. Cleveland Clinic3. Hospital for Special Surgery (New York

City)4. Mayo Clinic (Rochester, Minnesota)5. Ronald Reagan UCLA Medical Center

(Los Angeles)6. Massachusetts General Hospital

(Boston)7. Brigham and Women’s Hospital

(Boston)8. University of Alabama Hospital at

Birmingham)9. University of California, San Francisco

Medical Center10. UPMC-University of Pittsburgh Medical

Center11. NYU Hospital for Joint Diseases12. Northwestern Memorial Hospital

(Chicago)13. University of Michigan Hospitals and

Health Centers (Ann Arbor)14. Stanford Hospital and Clinics (Stanford,

California)15. Hospital of the University of

Pennsylvania (Philadelphia)16. Medical University of South Carolina

(Charleston)17. Duke University Medical Center

(Durham, North Carolina)18. Barnes-Jewish Hospital/Washington

University (St. Louis)19. University of Colorado Hospital

(Aurora)20. New York-Presbyterian University

Hospital of Columbia and Cornell

UROLOGY

1. Johns Hopkins Hospital (Baltimore)2. Cleveland Clinic3. Mayo Clinic (Rochester, Minnesota)4. Ronald Reagan UCLA Medical Center

(Los Angeles)5. University of California, San Francisco


(Durham, North Carolina)7. New York-Presbyterian University

Hospital of Columbia and Cornell8. Memorial Sloan-Kettering Cancer

Center (New York City)9. University of Texas M.D. Anderson

Cancer Center (Houston)10. Vanderbilt University Medical Center

(Nashville)11. Massachusetts General Hospital

(Boston)12. Hospital of the University of

Pennsylvania (Philadelphia)13. Methodist Hospital (Houston)14. University of Michigan Hospitals and

Health Centers (Ann Arbor)15. University of Texas Southwestern

Medical Center (Dallas)16. Clarion Health (Indianapolis)17. Stanford Hospital and Clinics (Stanford,

California)18. University of California (Irvine Medical

Center (Orange)19. Brigham and Women’s Hospital

(Boston)20. NYU Langone Medical Center (New

York City)


Comarow, Avery, “America’s BestHospitals,” U.S. News & World Report,August 2009, pp 84-112. http://health.usnews.com/health/best-hospitals

http://health.


• 153 •

PART IV: HEALTH INSURANCE


• 154 •

A study by researchers at CommonwealthFund, published in Health Affairs in May2009, found that elderly Medicarebeneficiaries are more satisfied with theirhealthcare, and experience fewer problemsaccessing and paying for their healthcare,than Americans with employer-sponsoredinsurance (ESI). The assessment issummarized in this chapter.

OVERALL SATISFACTION:

MEDICARE VS. ESI

Medicare Employer

Beneficiaries Plan Members

• Excellent: 37% 20%• Very Good: 30% 33%• Good: 24% 27%• Fair/poor: 8% 18%

SURVEY FINDINGS

Access to Care• In spite of having poorer health and lower

incomes than those with ESI, elderlyMedicare beneficiaries were less likely(20% versus 37%) to report access

problems due to cost, such as not filling aprescription or not visiting a doctor for amedical problem.

Choice of Physicians• Ten percent (10%) of elderly Medicare

beneficiaries said their physician didn’t taketheir insurance, compared to 17% of thosewith ESI and 24% of those with individualcoverage.

Financial Pressure• Medicare beneficiaries reported fewer

problems with medical bills, such as aninability to pay or being contacted bycollection agencies. Fifteen percent (15%)of them reported at least one of theseproblems, compared to 26% of those in theemployer-coverage group. Additionally,elderly Medicare beneficiaries were nomore likely than those with ESI to bedevoting 5% to 10% of their income ormore to healthcare.

Quality of Care• Sixty-one percent (61%) of elderly Medicare

beneficiaries said that they had receivedexcellent or very good care, compared tojust half of those with ESI. Moreover, 57%of elderly Medicare beneficiaries wereconfident that they could get high-quality,safe care in the future, versus 46% of thosein the employer group.

66 BENEFICIARY SATISFACTION

“The favorable ratings given Medicareby beneficiaries suggest that they arefundamentally more satisfied withtheir coverage relative to those withemployer-sponsored insurance.”

Karen Davis, President Commonwealth Fund, 5/12/09


• 155 •


Commonwealth Fund, 1 East 75 Street,th

New York, NY 10021. (212) 606-3800 (www.commonwealthfund.org)

Davis, Karen, Stuart Guterman, Michelle M.Doty, Ph.D., and Kristof M. Stremikis,“Meeting Enrollees’ Needs: How DoMedicare and Employer Coverage StackUp?” Health Affairs, May 12, 2009.



• 156 •

Milliman Inc. has assessed that increases inaverage annual family healthcare spendingdropped from 9.6% in 2006 to 7.4% in 2009.Cost-control initiatives are, in large part,responsible for stemming the growth.

INPATIENT COST-CONTROL

INITIATIVES

• Renewed focus on inpatient utilizationreview by commercial payers to identifymedically unnecessary hospital stays anddays spent in hospitals

• 2009 nationwide rollout of MedicareRecovery Audit Contractor (RAC)programs with a focus on recoveringpayments for admissions not meetingmedical necessity

• Focus on reducing admissions equatedwith poor quality, including readmissions,ambulatory-care-sensitive admissions,and preference-sensitive admissions

• Mandatory reporting of hospital-acquiredinfections in some states

• Adoption of Medicare payment policy bycommercial payers to not pay for “neverevents” (hospital-preventable errors)

• Growing use of hospitalists to improveinpatient throughput

OUTPATIENT COST-CONTROL

INITIATIVES

• Medical home model primary-caredelivery intended to coordinate care,reduce unnecessary specialist care, andreduce duplication of diagnostics andtreatments

• Wellness programs that provide financialincentive for behavior changes andclinical outcomes

• Increased adoption of radiological benefitmanagement

• Increased focus on conducting andutilizing comparative effectiveness

67 COST-CONTROL INITIATIVES

“Heightened federal, state,commercial payer, and businesscommunity initiatives are focusing oninpatient efficiency and quality. Morepervasive adaption of prevention,wellness, and disease managementprograms intended to improve thehealth of individuals is apparent. Thishas been coupled with moreaggressive utilization management ofoutpatient services and use of patientdecision-support programs aimed atreducing the supply of medicallyunnecessary services. Enhancedpharmacy-management techniquesare becoming the norm. Last, there isa resurgence of provider organizationrisk contracting and a movement toestablish non-risk-bearingaccountable care organizations.”

2009 Milliman Medical Index


• 157 •

research to evaluate treatment options

• Patient decision-support educationprograms to foster shared patient/physician treatment decision making

PHARMACEUTICAL COST-

CONTROL INITIATIVES

• More aggressive pharmacy benefitmanagement, including programs thatemploy step edits, therapeuticsubstitution, dose optimization, priorauthorization, day supply limits, refill-too-soon supply limits, and promotion ofgenerics

• Medicare Part D requirement to providemedication management therapy program

• Targeted value-based insurance designs(VBID) that reduce copays for compliantpatients, not across-the-board copayreductions


2009 Milliman Medical Index, Milliman Inc.,May 2009. (www.milliman.com/expertise/healthcare/publications/mmi/pdfs/milliman-medical-index-2009.pdf)

Milliman Inc., 1301 Fifth Avenue, Suite3800, Seattle, WA 98101. (206) 624-7940. (www.milliman.com)

http://www.milliman.com/expertise/

http://www.milliman.com


• 158 •

In 2008, approximately 161 million Americanswere covered by employer-sponsored healthinsurance.

PREMIUMS FOR FAMILIES AND

INDIVIDUALS

According to an August 2009 report by TheCommonwealth Fund, premiums foremployer-sponsored health insuranceaveraged $12,298 for families and $4,386 forindividuals.

Nationally, family premiums for employer-sponsored health insurance increased 119%between 1999 and 2008. Between 2003 and2008, the increase was 33% for families and26% for individuals.

Employer-based premiums for familycoverage ranged from a high of 45% inIndiana and North Carolina to a low of 25% inMichigan, Texas, and Ohio. In 2008, averagefamily premium costs were highest in Indiana,Massachusetts, Minnesota, and NewHampshire, at more than $13,500. Idaho,Iowa, and Hawaii had the lowest averagefamily premiums, around $11,000.

By state, premiums and five-year increases(2003-to-2008) are presented in Table 68.1.

OUT-OF-POCKET SPENDING BY

EMPLOYEES WITH EMPLOYER-

SPONSORED HEALTH PLANS

According to a June 2009 report by TheCommonwealth Fund, adults with employercoverage face an average of $729 annually inout-of-pocket costs for medical services,including deductibles and other forms of costsharing such as copayments andcoinsurance.


Schoen, Cathy, Jennifer L. Nicholson, andSheila D. Rustgi, “Paying the Price: HowHealth Insurance Premiums Are Eating UpMiddle-Class Incomes,” TheCommonwealth Fund, August 2009.

Gabel, Jon R., Roland McDevitt, Ryan Lore,Jeremy Pickreign, Heidi Whitmore and TinaDing, Trends In Underinsurance And TheAffordability Of Employer Coverage, HealthAffairs, June 2, 2009.

The Commonwealth Fund, 1 East 75th

Street, New York, NY 10021. (212) 606-3800 (www.commonwealthfund.org)

68 EMPLOYER-SPONSORED HEALTH

INSURANCE PREMIUMS



• 159 •

TABLE 68.1

Single and Family Average Health Insurance Premium, by State, in 2008and Five-Year Increases

Premium Increase Single Family Single Family

• Alabama: $4,139 $11,119 31% 38%• Alaska: $5,293 $13,383 32% 27%• Arizona: $4,214 $12,292 31% 37%• Arkansas: $3,923 $11,220 25% 41%• California: $4,280 $12,254 30% 35%• Colorado: $4,303 $11,952 18% 26%• Connecticut: $4,740 $13,436 29% 33%• Delaware: $4,733 $13,386 23% 27%• District of Columbia: $4,890 $13,427 31% 25%• Florida: $4,517 $12,697 26% 36%• Georgia: $4,160 $11,659 15% 35%• Hawaii: $3,831 $11,044 27% 40%• Idaho: $4,104 $10,837 23% 27%• Illinois: $4,643 $12,603 26% 30%• Indiana: $4,495 $13,504 29% 45%• Iowa: $4,146 $10,947 27% 30%• Kansas: $4,197 $11,662 23% 31%• Kentucky: $4,009 $11,506 17% 26%• Louisiana: $4,055 $11,207 22% 28%• Maine: $4,910 $13,102 27% 27%• Maryland: $4,360 $12,541 27% 36%• Massachusetts: $4,836 $13,788 38% 40%• Michigan: $4,388 $11,321 20% 20%• Minnesota: $4,432 $13,639 20% 35%• Mississippi: $4,124 $11,363 25% 41%• Missouri: $4,124 $11,557 25% 29%• Montana: $4,355 $11,438 24% 34%• Nebraska: $4,392 $11,648 25% 27%• Nevada: $3,927 $11,487 10% 30%• New Hampshire: $5,247 $13,592 47% 39%• New Jersey: $4,798 $12,789 26% 26%• New Mexico: $4,074 $12,071 21% 30%• New York: $4,638 $12,824 29% 36%• North Carolina: $4,460 $12,308 31% 45%• North Dakota: $3,830 $11,178 28% 42%• Ohio: $4,089 $11,425 20% 25%• Oklahoma: $4,072 $11,053 24% 26%• Oregon: $4,384 $12,585 30% 42%• Pennsylvania: $4,499 $12,339 30% 35%


• 160 •

TABLE 68.1 (con’t)

Premium Increase Single Family Single Family

• Rhode Island: $4,930 $13,363 32% 41%• South Carolina: $4,477 $12,068 33% 35%• South Dakota: $4,233 $11,382 26% 34%• Tennessee: $4,276 $12,302 19% 33%• Texas: $4,205 $11,967 24% 25%• Utah: $4,197 $11,783 25% 41%• Vermont: $4,900 $13,091 36% 38%• Virginia: $4,202 $11,935 26% 30%• Washington: $4,404 $13,036 25% 42%• West Virginia: $4,892 $12,887 28% 41%• Wisconsin: $4,777 $12,956 27% 35%• Wyoming: $4,622 $12,734 25% 32%


• 161 •

According to The Henry J. Kaiser FamilyFoundation, 18 million people are coveredthrough private individual heath insurance;they make up about 5% of the total healthbenefits market nationwide.

ADULTS WITH INDIVIDUAL

INSURANCEAmong adults with individual insurancecoverage, employment status is as follows:• Unemployed: 36%• Working for firms with

>20 employees: 28%• Self-employed: 22%• Working for firms with

<20 employees: 13%Source: The Commonwealth Fund

COVERAGE CHALLENGES

According to a July 2009 study by TheCommonwealth Fund, 73% of adults whotried to buy insurance on their own in the lastthree years did not purchase a policy,primarily because premiums were too high.More than half (57%) said it was very difficultor impossible to find coverage they couldafford, 47% said it was very difficult orimpossible to find a plan with the coveragethey needed, and 36% were denied coverageor charged more because of a pre-existingcondition, or had the condition excluded fromtheir coverage.

Those who are able to purchase individualhealth insurance are more likely to see limitedcoverage, including going without prescriptiondrug coverage (20%); limits on the total dollar

amount their insurance will pay for healthcare(49%); doctors charging more than insurancewill pay and being forced to pay thedifference (39%); and expensive bills thattheir insurance will not cover (36%). Inaddition, 41% of individually insured adultsreported forgoing needed healthcare becauseof costs, an increase from 24% who did so in2001. Over one-third of those with individualcoverage (36%) also reported medical bill ordebt problems.

OUT-OF-POCKET SPENDING

A recent study by the California HealthCareFoundation found that a consumer withindividual coverage pays almost three timesmore in out-of-pocket expenses than aconsumer with small-group coverage.Among patients with chronic conditions, thefollowing is a cost comparison of average out-of-pocket expenses for small group vs.individual coverage: Group Individual

• Asthma: $ 886 $2,607• Cancer: $1,010 $2,951• Chronic obstructive

pulmonary disease: $ 859 $2,528• Diabetes: $1,100 $3,275• Hypertension: $ 933 $2,759

MARKET OPPORTUNITIES

Recent declines in the proportion of peoplewith employer-sponsored insurance and asizeable population of younger, healthierpeople who are forgoing insurance haveprompted insurers to recognize the growth

69 INDIVIDUAL INSURANCE


• 162 •

potential of the individual market.


California HealthCare Foundation, 1438Webster Street, Suite 400, Oakland, CA94612. (510) 238-1040. (www.chcf.org)


Commonwealth Fund, 1 East 75 Street,th

New York, NY 10021. (212) 606-3800 (www.commonwealthfund.org)

M. M. Doty, S. R. Collins, J. L. Nicholson,and S. D. Rustgi, Failure to Protect: Whythe Individual Insurance Market Is Not aViable Option for Most U.S. Families,Commonwealth Fund, July 2009.

November, Elizabeth A., Genna R. Cohen,Paul B. Ginsburg, and Brian C. Quinn,“Individual Insurance: Health Insurers Try toTap Potential Market Growth,” Center ForStudying Health System Change,November 2009.


“Insurers are pursuing strategies totap the growth potential of theindividual health insurance market,including entering less-regulatedmarkets and developing lower-cost,less-comprehensive productstargeting younger, healthyconsumers.”

Center For Studying Health System Change, 11/5/09

http://www.chcf.org



http://www.kff.org


• 163 •

According to TheStreet.com Ratings andModern Healthcare, the 25 largest healthinsurance groups, listed in Table 70.1, had $363.6 billion in combined revenue in 2008,garnering 66% share of the U.S. healthinsurance market.


“Largest Health Insurers,” ModernHealthcare, June 1, 2009, p. 32.

TheStreet.com Ratings, 15430 EndeavourDrive, Jupiter, FL 33478. (800) 289-9222. (www.thestreetratings.com)

70 LARGEST HEALTH INSURERS

TABLE 70.1

Largest Health Insurance Groups

• UnitedHealth Group (www.unitedhealthgroup.com): $69.56 billion• WellPoint (www.wellpoint.com): $56.79 billion• Kaiser Foundation (www.kaiserpermanente.org): $46.90 billion• Aetna (www.aetna.com): $25.45 billion• Humana (www.humana.com): $24.60 billion• Health Care Service Corp. (www.hcsc.com): $16.62 billion• American Family Corp. (www.aflac.com): $13.39 billion• Health Net (www.healthnet.com): $13.37 billion• Highmark (www.highmark.com): $11.09 billion• Cigna Group (www.cigna.com): $10.35 billion• Coventry Health Care (www.cvty.com): $10.28 billion• Independence Blue Cross (www.ibx.com): $10.02 billion• Blue Cross and Blue Shield of Michigan (www.bcbsm.com): $ 9.04 billion• Blue Shield of California (www.blueshieldca.com): $ 8.80 billion• Blue Cross and Blue Shield of Florida (www.bcbsfl.com): $ 7.76 billion• Horizon Healthcare Services (www.horison-healthcare.com): $ 7.59 billion• CareFirst Blue Cross and Blue Shield (www.carefirst.com): $ 6.82 billion• Regence Group (www.regence.com): $ 6.71 billion• Blue Cross and Blue Shield of Massachusetts (www.bcbsma.com): $ 6.67 billion• American International Group (www.aigcorporate.com): $ 6.41 billion• MetLife (www.metlife.com): $ 5.74 billion• HIP Health Plan (www.hipusa.com): $ 5.58 billion• Lifetime Healthcare Cos. (www.lifethc.com): $ 5.12 billion• Blue Cross and Blue Shield of North Carolina (www.bcbsnc.com): $ 4.71 billion• Universal American Corp. (www.universalamerican.com): $ 4.25 billion

http://www.thestreetratings.com

http://www.unitedhealthgroup.com

http://www.wellpoint.com

http://www.kaiserpermanente.org

http://www.aetna.com

http://www.humana.com

http://www.hcsc.com

http://www.aflac.com

http://www.healthnet.com

http://www.highmark.com

http://www.cigna.com

http://www.cvty.com

http://www.ibx.com

http://www.bcbsm.com

http://www.blueshieldca.com

http://www.bcbsfl.com

http://www.horison-healthcare.com

http://www.carefirst.com

http://www.regence.com

http://www.bcbsma.com

http://www.aigcorporate.com

http://www.metlife.com

http://www.hipusa.com

http://www.lifethc.com

http://www.bcbsnc.com

http://www.universalamerican.com

_____________________________________________________________________


• 164 •

Since 2005, Milliman Inc. has measuredaverage annual medical spending for atypical American family of four covered by anemployer-sponsored preferred providerorganization (PPO) program. The Millimanassessment, which refers to annual spendingas the Milliman Medical Index (MMI), looks atvarious components of spending, includingcost changes for employers and employees.Medical spending figures for 14 metropolitanareas show that medical costs vary widely byregion.

AVERAGE ANNUAL MEDICAL

SPENDING

Average medical spending for a family of fourhas been as follows (increase from theprevious year in parenthesis):• 2005: $12,214 (9.1%)• 2006: $13,382 (9.6%)• 2007: $14,500 (8.4%)• 2008: $15,609 (7.6%)• 2009: $16,771 (7.4%)

COMPONENTS OF SPENDING

The distribution of the $16,771 medical costspaid by and on behalf of the typical Americanfamily in 2009 was as follows:• Physician: $5,760• Inpatient: $5,088• Outpatient: $2,772• Pharmacy: $2,484• Other: $ 667

GEOGRAPHIC VARIATIONS

The 2009 MMIs for 14 metropolitan areaswere as follows:• Miami: $20,282• New York City: $19,684• Chicago: $19,008• Boston: $18,119• Memphis: $17,734• Washington, DC: $17,453• Minneapolis: $17,374

71 MEDICAL SPENDING FOR

PPO-COVERED FAMILIES

“The current economic environmenthas significant implications forhealthcare costs. The consequencesof employers’ lost business,consumer insecurity, and providerrevenue pressures affect healthcareutilization, charges for healthcareservices, and who pays for thehealthcare. The unprecedenteduncertainty has accelerated costincreases in some ways and at thesame time has reduced certaincategories of utilization (e.g., electiveprocedures).”

2009 Milliman Medical Index

_____________________________________________________________________


• 165 •

• Philadelphia: $17,292• Los Angeles: $16,965• Dallas: $16,849• Denver: $16,517• Atlanta: $15,979• Seattle: $15,564• Phoenix: $15,857

EMPLOYEE SHARE OF SPENDING

The distribution of employer and employeespending for healthcare in 2009 was asfollows:• Employer contribution: $9,947• Employee contribution: $4,004• Employee out-of-pocket: $2,820


2009 Milliman Medical Index, Milliman Inc.,May 2009. (www.milliman.com/expertise/healthcare/publications/mmi/pdfs/milliman-medical-index-2009.pdf)

Milliman Inc., 1301 Fifth Avenue, Suite3800, Seattle, WA 98101. (206) 624-7940. (www.milliman.com)

http://www.milliman.com/expertise/

http://www.milliman.com


• 166 •

MEDICARE OVERVIEW

Created in 1955, Medicare provides healthinsurance coverage to people who are aged65 and over and to those who meet otherspecial criteria. Medicare is funded entirely atthe federal level. In general, individuals areeligible for Medicare if (1) they are a U.S.citizens or have been a permanent legalresidents for 5 continuous years and are 65years or older, (2) they are under 65,disabled, and have been receiving eitherSocial Security benefits or the RailroadRetirement Board disability benefits for atleast 24 months from date of entitlement (firstdisability payment), (3) they get continuingdialysis for end stage renal disease or needa kidney transplant, or (4) they are eligible forSocial Security Disability Insurance and haveamyotrophic lateral sclerosis (ALS-LouGehrig’s disease). All Medicare benefits aresubject to medical necessity.

The Medicare program has four parts, whichare as follows:• Part A covers hospital stays (including

stays in a skilled-nursing facility) if certaincriteria are met.

• Part B helps pay for some services andproducts not covered by Part A, generallyon an outpatient basis. Part B is optionaland may be deferred. Part B coverageincludes physician and nursing services, x-rays, laboratory and diagnostic tests,influenza and pneumonia vaccinations,blood transfusions, renal dialysis, outpatienthospital procedures, limited ambulancetransportation, immunosuppressive drugsfor organ transplant recipients,

chemotherapy, hormonal treatments suchas lupron, and other outpatient medicaltreatments administered in a doctor’s office.

• In 1997, Medicare beneficiaries were giventhe option to receive their Medicare benefitsthrough private health insurance plans,instead of through the original Medicareplan (Parts A and B). These programs areknown as Medicare+Choice or Part Cplans.

• Medicare Part D, prescription drugcoverage, went into effect in January 2006following passage of the MedicarePrescription Drug, Improvement, andModernization Act. In order to receive thisbenefit, a person with Medicare must enrollin a stand-alone Prescription Drug Plan(PDP) or Medicare Advantage plan withprescription drug coverage (MA-PD).Unlike Parts A and B, Part D coverage isnot standardized. Providers choose whichdrugs or classes of drugs they wish to coverand at what level they wish to providecoverage.

STATE-BY-STATE

MEDICARE SPENDING

The 2009 Dartmouth Atlas of Health Carereported Medicare reimbursements perenrollee as follows: Part A Part B

• Alabama: $4356.83 $3476.79 • Alaska: $4511.94 $3202.47 • Arizona: $4273.44 $3566.84 • Arkansas: $4166.92 $3304.12 • California: $4898.02 $4000.86

72 MEDICARE & MEDICAID


• 167 •

• Colorado: $4016.09 $3479.15 • Connecticut: $5081.77 $3885.55 • Delaware: $4105.62 $3539.22 • Florida: $4401.57 $4978.33 • Georgia: $3996.33 $3454.22 • Hawaii: $2732.17 $2574.64 • Idaho: $3362.87 $3045.60 • Illinois: $4816.96 $3637.81 • Indiana: $4295.92 $3402.40 • Iowa: $3545.48 $3026.89 • Kansas: $4070.27 $3350.07 • Kentucky: $4721.78 $3543.54 • Louisiana: $5142.93 $4257.73 • Maine: $3763.34 $3188.06 • Maryland: $5120.97 $3862.90 • Massachusetts: $5451.40 $3920.09 • Michigan: $4728.67 $4056.99 • Minnesota: $3711.57 $2889.31 • Mississippi: $4442.31 $3413.05 • Missouri: $4332.63 $3377.21 • Montana: $3358.03 $2980.35 • Nebraska: $3663.53 $3259.81 • Nevada: $4784.25 $3930.33 • New Hampshire: $4380.93 $3434.42 • New Jersey: $5328.46 $4220.23 • New Mexico: $3630.68 $3168.85 • New York: $5380.05 $4180.67 • North Carolina: $4138.12 $3354.44 • North Dakota: $3105.45 $3006.30 • Ohio: $4692.48 $3555.90 • Oklahoma: $4868.77 $3777.40 • Oregon: $3294.91 $2826.46 • Pennsylvania: $4619.61 $3591.88• Rhode Island: $4939.91 $3603.57 • South Carolina: $4185.99 $3422.17• South Dakota: $3275.65 $2977.43 • Tennessee: $4541.01 $3610.02• Texas: $4875.75 $4480.19 • Utah: $3648.03 $3209.48 • Vermont: $4046.71 $3238.61 • Virginia: $3603.60 $3252.77 • Washington: $3834.55 $3275.06 • West Virginia: $4548.11 $3288.83

MEDICAID OVERVIEW

Created in 1965, Medicaid is the healthprogram for individuals and families with lowincome and resources, based on eligibility.Jointly funded by states and the federalgovernment, it is managed by the states.Among the groups of people served byMedicaid are low-income people withdependents, seniors, and people withdisabilities. Being poor, or even very poor,does not necessarily qualify an individual forMedicaid. It is estimated that approximately60% of Americans classified as poor are notcovered by Medicaid. Medicaid is the largestsource of funding for medical and health-related services for people with limitedincome in the United States. With the agingpopulation, the fastest growing aspect ofMedicaid is nursing home coverage.

STATE-BY-STATE

MEDICAID SPENDING

Health Care State Rankings 2009, based ondata from the National Association of StateBudget Officers, estimates reimbursementsper Medicaid enrollee as follows:• Alabama: $ 928• Alaska: $1,766• Arizona: $1,044• Arkansas: $1,251• California: $ 997• Colorado: $ 556• Connecticut: $1,229• Delaware: $1,213• Florida: $ 814• Georgia: $ 799• Hawaii: $ 901• Idaho: $ 793• Illinois: $1,082• Indiana: $ 824• Iowa: $ 910• Kansas: $ 849• Kentucky: $1,133• Louisiana: $1,362


• 168 •

• Maine: $1,824• Maryland: $ 986• Massachusetts: $1,269• Michigan: $1,014• Minnesota: $1,239• Mississippi: $1,075• Missouri: $1,291• Montana: $ 813• Nebraska: $ 964• Nevada: $ 449• New Hampshire: $ 950• New Jersey: $1,025• New Mexico: $1,497• New York: $1,593• North Carolina: $1,192• North Dakota: $ 868• Ohio: $1,227• Oklahoma: $1,020• Oregon: $ 889• Pennsylvania: $1,454• Rhode Island: $1,732• South Carolina: $1,099• South Dakota: $ 892• Tennessee: $1,225• Texas: $ 912• Utah: $ 586• Vermont: $1,532• Virginia: $ 688• Washington: $ 914• West Virginia: $1,306• Wisconsin: $ 874• Wyoming: $ 946• National average: $1,059



The 2009 Dartmouth Atlas of Health Care,The Dartmouth Institute for Health Policyand Clinical Practice. (www.dartmouthatlas.org)

Morgan, Kathleen O’Leary and ScottMorgan, Health Care State Rankings 2009,CQ Press, 2009.

National Association of State BudgetOfficers, 444 North Capital Street NW,Suite 642, Washington, DC 20001. (202) 624-5382. (www.nasbo.org)

http://www.cms.gov

http://www.dartmouthatlas.org

http://www.nasbo.org


• 169 •

Created in 1997, the State Children’s HealthInsurance Program (SCHIP) providesmatching funds to states for health insuranceto families with children. The program isintended to cover uninsured children infamilies with incomes that are modest but toohigh to qualify for Medicaid. States are givenflexibility in designing their SCHIP eligibilityrequirements and policies within broadfederal guidelines.

In spite of SCHIP, the number of children withno health insurance has continued to rise,particularly among families that cannot qualifyfor SCHIP. In February 2009, PresidentBarack Obama signed legislation expandingthe program to an additional four millionchildren and pregnant women.

Approximately 7.2 million children – 9.7% ofchildren ages 17 and younger – are enrolledin SCHIP. Annual spending is $6 billion.

STATE-BY-STATE

SCHIP ENROLLMENT & SPENDING

Health Care State Rankings 2009, based ondata from the Centers for Medicare andMedicaid Services, provides the SCHIPenrollment and spending statistics presentedin Table 73.1.



Morgan, Kathleen O’Leary and ScottMorgan, Health Care State Rankings 2009,CQ Press, 2009.

73 STATE CHILDREN’S HEALTH

INSURANCE PROGRAM

TABLE 73.1

SCHIP Enrollment and Spending

Enrollment % of Children Spending

• Alabama: 107,000 9.5% $ 95.2 million• Alaska: 18,000 9.6% $ 16.2 million• Arizona: 104,000 6.2% $117.7 million• Arkansas: 90,000 12.8% $ 68.8 million• California: 1.54 million 16.4% $980.7 million• Colorado: 85,000 7.1% $ 65.9 million

http://www.cms.gov


• 170 •


Enrollment % of Children Spending

• Connecticut: 24,000 2.9% $ 30.1 million• Delaware: 11,000 5.4% $ 8.6 million• Florida: 324,000 8.0% $261.7 million• Georgia: 356,000 14.1% $318.7 million• Hawaii: 24,000 8.4% $ 28.1 million• Idaho: 33,000 8.1% $ 27.4 million• Illinois: 346,000 10.8% $448.5 million• Indiana: 130,000 8.2% $ 92.1 million• Iowa: 50,000 7.1% $ 51.3 million• Kansas: 50,000 7.1% $ 45.1 million• Kentucky: 69,000 6.6% $ 81.2 million• Louisiana: 154,000 14.2% $119.9 million• Maine: 31,000 11.1% $ 31.2 million• Maryland: 133,000 9.8% $138.4 million• Massachusetts: 184,000 12.9% $211.5 million• Michigan: 114,000 4.7% $171.6 million• Minnesota: 5,000 0.4% $ 64.4 million• Mississippi: 82,000 10.6% $107.5 million• Missouri: 82,000 5.7% $ 79.4 million• Montana: 20,000 9.2% $ 18.2 million• Nebraska: 46,000 10.4% $ 33.2 million• Nevada: 42,000 6.3% $ 30.3 million• New Hampshire: 12,000 4.1% $ 11.1 million• New Jersey: 150,000 7.3% $280.0 million• New Mexico: 17,000 3.3% $ 49.9 million• New York: 652,000 14.8% $324.4 million• North Carolina: 240,000 10.8% $166.6 million• North Dakota: 5,000 3.8% $ 10.5 million• Ohio: 232,000 8.4% $186.9 million• Oklahoma: 117,000 13.0% $ 96.4 million• Oregon: 63,000 7.3% $ 66.6 million• Pennsylvania: 227,000 8.2% $190.0 million• Rhode Island: 26,000 11.2% $ 47.7 million• South Carolina: 60,000 5.7% $ 31.4 million• South Dakota: 15,000 7.6% $ 9.8 million• Tennessee: 41,000 2.8% $ 4.1 million• Texas: 711,000 10.7% $385.7 million• Utah: 45,000 5.5% $ 38.9 million• Vermont: 6,000 4.7% $ 5.9 million• Virginia: 144,000 7.9% $110.7 million• Washington: 15,000 1.0% $ 36.8 million• West Virginia: 39,000 10.0% $ 35.4 million• Wisconsin: 63,000 4.7% $ 84.5 million• Wyoming: 9,000 6.8% $ 7.8 million


• 171 •

Annually, U.S. News & World Report rankshealth insurance plans based on membersatisfaction, prevention and treatment, andaccreditation by the National Committee forQuality Assurance.

This chapter presents the top-ranked healthinsurance plans in 2009.

COMMERCIAL PLANS 1. Harvard Pilgrim Health Care

(HMO/POS/Maine and Massachusetts)2. Harvard Pilgrim Health Care of New

England (HMO/POS; New Hampshire)3. Tufts Associated Health Maintenance

Organization (HMO/POS;Massachusetts, New Hampshire, andRhode Island)

4. Grand Valley Health Plan (HMO;Michigan)

5. Capital Health Plan (HMO; Florida)6. Geisinger Health Plan (HMO/POS;

Pennsylvania)7. Fallon Community Health Plan

(HMO/POS; Massachusetts)8. Health New England (HMO/POS;

Connecticut and Massachusetts)9. CIGNA HealthCare of New Hampshire

(HMO/POS)10. Group Health Cooperative of South

Central Wisconsin (HMO)11. Health Net of Connecticut (HMO/POS)12. Blue Cross and Blue Shield of

Massachusetts (HMO/POS;Massachusetts)

13. Kaiser Foundation Health Plan ofColorado (HMO)

14. CDPHP Universal Benefits (POS; NewYork)

15. Capital District Physicians’ Health Plan(HMO/POS; New York)

16. Anthem Blue Cross and Blue Shield(HMO/POS; Maine)

17. HealthAmerica Pennsylvania(HMO/POS; Pennsylvania)

18. Health Alliance Medical Plans(HMO/POS; Illinois, Iowa)

19. Anthem Blue Cross and Blue Shield -Connecticut (HMO/POS)

20. Anthem Blue Cross and Blue Shield(HMO/POS; New Hampshire)

MEDICARE PLANS

1. Kaiser Foundation Health Plan ofColorado (HMO)

2. Fallon Community Health Plan (HMO;Massachusetts)

3. Geisinger Health Plan (HMO,Pennsylvania)

4. Tufts Associated Health MaintenanceOrganization (HMO; Massachusetts)

5. Capital Health Plan (HMO; Florida)6. MVP Health Care - Rochester Area

(HMO; New York)7. Kaiser Foundation Health Plan of the

Northwest (HMO; Oregon andWashington)

8. Kaiser Foundation Health Plan ofSouthern California (HMO)

9. Kaiser Foundation Health Plan of theNorthwest (HMO; Oregon andWashington)

74 TOP-RANKED HEALTH INSURANCE

PLANS


• 172 •

10. Capital District Physicians’ Health Plan(HMO; New York)

MEDICAID PLANS

1. Kaiser Foundation Health Plan ofHawaii (HMO)

2. Boston Medical Center HealthNet Plan(HMO)

3. Fallon Community Health Plan (HMO;Massachusetts)

4. Neighborhood Health Plan (HMO;Massachusetts)

5. Blue Cross and Blue Shield of RhodeIsland (POS; Rhode Island)

6. Capital District Physicians’ Health Plan(HMO; New York)

7. Neighborhood Health Plan of RhodeIsland (HMO)

8. HIP Health Plan of New York (HMO;New York)

9. Excellus BlueCross BlueShield (HMO;New York)

10. Health Plan of Michigan (HMO;Michigan)


Comarow, Avery, “America’s Best HealthInsurance Plans,” U.S. News & WorldReport, December 2009, pp 91-94.(http://health.usnews.com/health/best-hospitals/childrens-hospitals)

National Committee for Quality Assurance,1100 13 Street NW, Suite 1000,th

Washington, DC 20005. (202) 955-3500.(www.ncqa.org)

http://www.ncqa.org


• 173 •

PART V: PHARMACEUTICALS &

MEDICAL DEVICES


• 174 •

According to the National Association ofChain Drug Stores (NACDS), there areapproximately 55,600 pharmacies in theUnited States, distributed as follows:• Traditional chain drug

stores: 22,000• Independent pharmacies: 16,900• Supermarkets: 9,300• Mass merchants: 7,400

Prescription drug sales in 2008 were $253.6billion; 3.53 billion prescriptions were filled.

DISTRIBUTION BY

PRESCRIPTION SALES

• Traditional chain drug stores: $104.4 billion

• Mail order: $ 55.1 billion• Independent drug

stores: $ 43.8 billion• Supermarket: $ 25.8 billion• Mass merchants: $ 24.8 billion

DISTRIBUTION BY

PRESCRIPTIONS FILLED

• Traditional chain drug stores: 1.68 billion

• Independent drug stores: 732 million

• Supermarket: 481 million• Mass merchants: 400 million• Mail order: 238 million


National Association of Chain Drug Stores,413 North Lee Street, Alexandria, VA22314. (703) 549-3001. (www.nacds.org)

75 DISTRIBUTION CHANNELS

http://www.nacds.org


• 175 •

Pharmaceutical drugs are classified by theAnatomical Therapeutic Chemical (ATC)Classification System, which is controlled bythe World Health Organization CollaboratingCentre for Drug Statistics Methodology(WHOCC). The classification system dividesdrugs into different groups according to theorgan or system on which they act and/ortheir therapeutic and chemical characteristics.

Drugs are classified by five-level codes, asfollows:• The first level of the code indicates the

anatomical main group and consists of oneletter. There are 14 main groups.

• The second level of the code indicates thetherapeutic main group and consists of twodigits.

• The third level of the code indicates thetherapeutic/pharmacological subgroup andconsists of one letter.

• The fourth level of the code indicates thechemical/therapeutic/pharmacologicalsubgroup and consists of one letter.

• The fifth level of the code indicates thechemical substance and consists of twodigits.

There are 14 primary drug groups, asfollows:

A - Gastrointestinaltract/metabolism

• Anti-diabetics• Anti-obesity drugs • Antidiarrhoeals/Antipropulsives • Antiemetics • Dietary minerals

• Laxatives

2• Stomach acid (Antacids, H antagonists,Proton pump inhibitors)

• Vitamins

B - Blood and Blood FormingOrgans

• Antithrombotics (Antiplatelets,Anticoagulants,Thrombolytics/fibrinolytics)

• Antihemorrhagics (Platelets, Coagulants,Antifibrinolytics)

C - Cardiovascular System

• Antihyperlipidemics (Statins, Fibrates, Bileacid sequestrants)

• Antihypertensives • Beta blockers • Calcium channel blockers • Cardiac therapy/antianginals (Cardiac

glycosides, Antiarrhythmics, Cardiacstimulants)

• Diuretics • Renin-angiotensin system (ACE inhibitors,

Angiotensin II receptor antagonists, Renininhibitors)

• Vasodilators

D - Dermatologicals

• Antipruritics • Antipsoriatics • Cicatrizants • Emollients • Medicated dressings

76 DRUG CLASSIFICATION


• 176 •

G - Genito-Urinary System andSex Hormones

• Hormonal contraception • Fertility agents • SERMs • Sex hormones

H - Systemic HormonalPreparations (excluding sexhormones) and Insulins

• Corticosteroids (Glucocorticoids,Mineralocorticoids)

• Hypothalamic-pituitary hormones • Sex hormones • Thyroid hormones/Antithyroid agents

J and P - Infections andInfestations

• Antibiotics (Antimycobacterials) • Antifungals • Antivirals • Antiparasitics (Antiprotozoals,

Anthelmintics) • Ectoparasiticides • Intravenous immunoglobulin • Vaccines

L - Antineoplastic andImmunomodulating Agents

L01-L02 - Malignant Disease• Anticancer agents (Antimetabolites,

Alkylating, Spindle poisons,Antineoplastic, Topoisomerase inhibitors)

L03-L04 - Immune Disease• Immunomodulators (Immunostimulants,

Immunosuppressants)

M - Musculo-Skeletal System

• Anabolic steroids • Anti-inflammatories (NSAIDs) • Antirheumatics • Bisphosphonates • Corticosteroids • Muscle relaxants

N - Brain and Nervous System

• Analgesics • Anesthetics (general, local) • Anticonvulsants/Mood stabilizers (Lithium

pharmacology) • Antimigraines • Anti-Parkinson drugs• Psycholeptics (Anxiolytics, Antipsychotics,

Hypnotics/Sedatives) • Psychoanaleptics (Antidepressants,

Stimulants)

R - Respiratory System

• Bronchodilators • Cough medicines • Decongestants

1• H antagonists

S - Sensory Organs

• Ophthalmologicals • Otologicals

V - Other

• Antidotes• Contrast media• Dressings• Radiopharmaceuticals


• 177 •


World Health Organization (WHO)Collaborating Centre for Drug StatisticsMethodology, Norwegian Institute of PublicHealth, P.O.Box 4404 Nydalen, 0403 Oslo,Norway. Tel: + 47 21 07 81 60. (www.whocc.no)

http://www.whocc.no


• 178 •

RANKED BY U.S. SALES

IMS Health provides the assessmentpresented in Table 77.1 of the largestpharmaceutical companies, ranked by U.S.prescription drug sales for the 12-monthperiod ending September 2009.

RANKED BY 2008 GLOBAL SALES

• Pfizer: $43.4 billion• GlaxoSmithKline: $36.5 billion• Novartis: $36.2 billion• Sanofi Aventis: $35.6 billion• AstraZeneca: $32.5 billion• Roche: $30.3 billion• Johnson & Johnson: $29.4 billion

• Merck & Co.: $26.2 billion• Abbott Laboratories: $19.7 billion• Eli Lilly: $19.1 billion• Amgen Corp.: $15.8 billion• Wyeth Corp.: $15.7 billion• Teva Pharmaceuticals: $15.3 billion• Bayer: $15.7 billion• Takeda: $13.8 billion



“Top 20 Pharmaceutical Companies,”Modern Healthcare, January 4, 2010.

77 LARGEST PHARMACEUTICAL

COMPANIES

TABLE 77.1

Top 20 Pharmaceutical Companies

• Pfizer (www.pfizer.com): $20.1 billion• AstraZeneca (www.astrazeneca.com): $17.6 billion• GlaxoSmithKline (www.gsk.com): $16.5 billion• Merck & Co. (www.merck.com): $14.8 billion• Hoffman-LaRoche (www.rocheusa.com): $13.7 billion• Johnson & Johnson (www.jnj.com): $13.4 billion• Novartis (www.novartis.com): $12.9 billion• Eli Lilly and Company (www.lilly.com): $12.9 billion• Amgen Corp. (www.amgen.com): $12.4 billion• Teva Pharmaceuticals (www.tevapharm.com): $12.1 billion• Sanofi Aventis (http://en.sanofi-aventis.com): $11.2 billion• Abbott Laboratories (www.abbott.com): $ 9.5 billion


http://www.pfizer.com

http://www.astrazeneca.com

http://www.gsk.com

http://www.merck.com

http://www.rocheusa.com

http://www.jnj.com

http://www.novartis.com

http://www.lilly.com

http://www.amgen.com

http://www.tevapharm.com

http://(http://en.sanofi-aventis.com

http://www.abbott.com


• 179 •


• Bristol-Myers Squibb Co. (www.bms.com): $8.7 billion• Takeda Pharmaceuticals (www.tpna.com): $8.2 billion• Wyeth Corp. (www.wyeth.com): $7.7 billion• Boehringer Ingelheim (www.boehringer-ingelheim.com): $7.2 billion• Schering Plough Corp. (www.sch-plough.com): $4.8 billion• Forest Laboratories (www.frx.com): $4.3 billion• Eisai (www.eisai.com): $4.3 billion• Mylan (www.mylan.com): $3.9 billion

http://www.bms.com

http://www.tpna.com

http://www.wyeth.com

http://www.boehringer-ingelheim.com

http://www.sch-plough.com

http://www.frx.com

http://www.eisai.com

http://www.mylan.com


• 180 •

According to IMS Health, globalpharmaceutical sales have been as follows(increase from previous year in parenthesis):• 2001: $393 billion (11.8%)• 2002: $429 billion (9.2%)• 2003: $499 billion (10.2%)• 2004: $560 billion (7.9%)• 2005: $605 billion (7.2%)• 2006: $648 billion (6.8%)• 2007: $715 billion (6.6%)• 2008: $773 billion (4.8%)• 2009: $786 billion (1.8%)

IMS Health forecasts the value of the globalpharmaceutical market in 2010 to increase4% to 6% on a constant-dollar basis,exceeding $825 billion, driven by strongernear-term growth in the U.S. market. Globalpharmaceutical market value is expected toexpand at a 4% to 7% compound annualgrowth rate through 2013, reaching $975billion in 2013.

IMS identifies five key market dynamics, asdescribed in the following sections.

GROWTH PROSPECTS IN THE

U.S. MARKET IMPROVE

• Near-term growth prospects in the U.S.have strengthened in recent months,reflecting both sustained levels of priceincreases and changing inventory stockingpatterns. Pharmacy chains are more tightlymanaging their inventory levels based onexpectations of patient demand, which hasled to greater purchasing volatility than inprevious years. This played a role inunusually high sales growth in the firstquarter of 2009 relative to forecastexpectations. U.S. market growth in 2009is estimated at 4.5% to 5.5%, and 3% to5% in 2010. While payers seek to limitprice increases and boost the use of lower-c o s t g e n e r i cs , pha rm ace u t i c a lmanufacturers are expected to maintaintheir pricing practices, competing on thebasis of clinical evidence and value.

ECONOMIC DOWNTURN

AFFECTS MARKETS TO

VARYING DEGREES

• Growth has slowed in countries where thereis high out-of-pocket spending onpharmaceuticals and steep declines inmacroeconomic activity, especially inRussia, Mexico, and South Korea. At thesame time, growth has been less affectedto date in countries where drugs are largely

78 MARKET FORECAST

“Overall, market growth is expected to

remain at historically low levels, but

stronger-than-expected demand in the

U.S. is lifting both short- and longer-

term forecasts. The economic climate

will continue to be a dampening

influence in most mature markets,

particularly in those countries with

rising budget deficits and publicly

funded healthcare systems. In the U.S.,

pricing flexibility and inventory

management actions are contributing to

higher growth.”

Murray Aitken, Sr. V.P.IMS Health, 10/7/09


• 181 •

funded publicly, such as in Germany, Japanand Spain. However, new cost-containment measures expected to beintroduced during the forecast period likelywill impact the pace of growth in thesemarkets. In the U.S., pharmaceuticalmanufacturers’ efforts to expand access toand awareness of patient assistanceprograms, as well as co-pay subsidies forpatients in need, are limiting the impact ofthe economic downturn to some extent.

IMPACT OF THE INNOVATION/

PATENT LOSS IMBALANCE

DAMPENS GROWTH PROSPECTS

• Consistent with trends of the past severalyears, the next five years are expected toreflect a significant imbalance between newproduct introductions and patent losses.This is the primary factor limiting globalpharmaceutical market growth to the mid-single digits through 2013. During the nextfive years, products that currently generatean unprecedented $137 billion in sales areexpected to face generic competition,including Lipitor®, Plavix®, and Seretide®.At the same time, new products that willenable innovative approaches for treatingpatients suffering from diseases such asosteoporosis, respiratory ailments,thrombosis, multiple sclerosis, and cancerare not expected to generate the samemagnitude of sales as products losingpatent protection.

PHARMERGING MARKETS IN

AGGREGATE SUSTAIN STRONG

GROWTH

• Despite economic conditions significantlyaffecting some markets – notably Russia,Turkey, South Korea, and Mexico – theseven “pharmerging” countries are

expected in aggregate to grow by 12% to14% in 2010, and 13% to 16% over thenext five years. China’s pharmaceuticalmarket is expected to continue to grow at a20% pace annually, and to contribute 21%of overall global growth through 2013.Russia and Turkey may be impactedsignificantly by new measures intended toreduce the level of healthcare spending inthose two markets.

HEALTHCARE ACCESS AND

FUNDING UNDER INTENSIFYING

PRESSURE

• The economic climate has heightenedconcerns by payers about healthcarefunding, and intensified their efforts to limitaccess to non-generic drugs. During thenext five years, markets will be impacted bynumerous payer actions, including theimposition of price cuts on existing drugs,the raising of standards required to achievereimbursement of innovative therapies, andthe use of economic incentives forprescribers and pharmacists to drive a shiftto generic alternatives. Evidence of thevalue that medicines bring to healthcaresystems will be required to achieve accessand funding in both developed andemerging markets.





• 182 •

MARKET ASSESSMENT

Medical technology products include thefollowing categories, as defined by the NAICCode Grouping of the U.S. Department ofCommerce:• 325413 - Diagnostic Reagents• 334510 - Electromedical Devices and

Equipment• 334517 - Irradiation Apparatus• 339112 - Surgical & Medical Instruments• 339113 - Surgical Appliances and

Supplies• 339114 - Dental Equipment and Supplies• 339115 - Ophthalmic Goods

According to the Advanced MedicalTechnology Association, U.S. spending formedical technology products was $131.6billion in 2006 (most recent data available asof January 2010), an 8.5% increase over theprior year. Extrapolating this data suggests amarket of approximately $168 billion in 2009.This represents approximately 6.2% of totalnational health expenditures.

According to a 2009 estimate by McKinseyGlobal Institute, annual U.S. spending for thesix highest-cost implanted devices is $13billion.

LARGEST SUPPLIERS

Implantable Medical Devices• Abbott Laboratories• ABIOMED Incorporated• Advanced Medical Optics• Akzo Nobel (Organon International)• Allergan Incorporated (EndoArd, Groupe

Corneal Laboratories, and Inamed)• American Medical Systems Holdings• Bausch & Lomb• Biomet Incorporated• Boston Scientific (EndoTex Interventional

Systems, Guidant)• Cochlear Limited• Coloplast A/S• Cook Group• C.R. Bard Incorporated (Davol)• Cyberonics Incorporated• Edwards Lifesciences• Johnson & Johnson (ALZA, Codman &

Shurtleff, Conor, Cordis, DePuy, Ethicon,Hand Innovations)

• Medtronic Incorporated• Mentor Corporation• Optobionics Corporation• Smith & Nephew (OsteoBiologics)• St. Jude Medical (Advanced

Neuromodulation Systems, Savacor)• Stryker Corporation• Synthes Incorporated• Theragenics Corporation• W.L. Gore & Associates• Zimmer HoldingsSource: The Freedonia Group

In Vitro Diagnostics• Abbott Laboratories• Bayer AG• Beckman Coulter (Lumigen)• Becton, Dickinson and Company

(BD GeneOhm, Cytopeia, TriPath)• Bio-Rad Laboratories• bioMerieux SA• Celera Corporation• Danaher Corporation (Leica Biosystems)• Gen-Probe Incorporated• Hologic Incorporated (Cytyc, Third Wave)

79 MEDICAL DEVICES


• 183 •

• Inverness Medical Innovations (Biosite,Cholestech, First Check, RedwoodToxicology, Swiss Precision)

• Johnson & Johnson (LifeScan, Ortho-Clinical Diagnostics, Veridex)

• Life Technologies (Applied Biosystems,Invitrogen)

• Meridian Bioscience• Olympus Corporation• QIAGEN NV (Digene)• Quidel Corporation• Roche Holding (454 Life Sciences,

BioVeris, NimbleGen, Ventana)• Siemens AG (Dade Behring, Oncogene

Science)• Sysmex Corporation• Thermo Fisher Scientific• Trinity Biotech Source: The Freedonia Group


Advanced Medical Technology Association,701 Pennsylvania Avenue NW, Suite 800,Washington, DC 20004.(202) 783-8700. (www.advamed.org)

Implantable Medical Devices To 2013, TheFreedonia Group, August 2009.

In Vitro Diagnostics To 2013, TheFreedonia Group, March 2009.

Meier, Barry, “Costs Surge For MedicalDevices, But Benefits Are Opaque,” TheNew York Times, November 5, 2009.

Orthopedic Implants To 2012, TheFreedonia Group, July 2008.

The Freedonia Group, 767 Beta Drive,Cleveland, OH 44143. (440) 684-9600. (www.freedoniagroup.com)

http://www.advamed.org

http://www.freedoniagroup.com


• 184 •

Personalized medicine uses new methods ofmolecular analysis to better manage apatient’s disease or predisposition toward adisease. It aims to achieve optimal medicaloutcomes by helping physicians and patientschoose the disease management approacheslikely to work best in the context of a patient’sgenetic and environmental profile. Suchapproaches may include genetic screeningprograms that more precisely diagnosediseases and their sub-types, or helpphysicians select the type and dose ofmedication best suited to a certain group ofpatients.

People vary from one another in many ways– what they eat, the types and amount ofstress they experience, exposure toenvironmental factors, and their DNA. Manyof these variations play a role in health anddisease. For example, the natural variationsfound in a person’s genes could influencetheir risk of developing a certain disease, aswell as how their bodies respond to thatdisease. The combination of these variationsacross several genes can affect eachindividual’s risk of developing a disease orreacting to something in the environment, andcan be one of the reasons why a drug worksfor one patient and not another.

Personalized medicine hopes to use thesevariations – both in the patient and in themolecular underpinnings of the disease itself– to develop new treatments and to identifythe sub-groups of patients for whom they willwork best. It can also help determine whichgroups of patients are more prone todeveloping some diseases and, ideally, helpwith the selection of lifestyle changes and/or

treatments that can delay onset of a diseaseor reduce its impact.

FUTURE POTENTIAL

Personalized medicine is poised to transformhealthcare over the next several decades.New diagnostic and prognostic tools willincrease our ability to predict the likelyoutcomes of drug therapy, while theexpanded use of biomarkers – biologicalmolecules that indicate a particular diseasestate – could result in more focused andtargeted drug development. Personalizedmedicine also offers the possibility ofimproved health outcomes and has thepotential to make healthcare more cost-effective.

The potential of genetic testing for guidingpatient care is vast. Experts say that mostdrugs, whatever the disease, work for onlyabout half the people who take them. Theresult is wasted spending and use ofcountless patients to unnecessary sideeffects. Genetic testing has the potential ofscreening patients for the applicability ofmedications.

Personalized medicine promises manymedical innovations and has the potential tochange the way treatments are discoveredand used. The implications for currentsystems, such as healthcare payer andphysician incentives, medical records privacy,and clinical trial ethics, must be explored byall stakeholders, who will need to reachagreement on what modifications should bemade.

80 PERSONALIZED MEDICINE


• 185 •

CURRENT STATUS

Though sometimes described as aphenomenon of the future, personalizedmedicine is already having an impact on howpatients are treated. Molecular testing isbeing used to identify those breast cancerand colon cancer patients likely to benefitfrom new treatments, and newly diagnosedpatients with early stage invasive breastcancer can now be tested for the likelihood ofrecurrence. In another example, a genetictest for patients with an inherited cardiaccondition can help their physicians determinewhich course of hypertension treatment toprescribe in order to avoid serious sideeffects.

According to the Personalized MedicineCoalition, there were 37 products on themarket in 2009 that facilitate personalizedtherapy. Most of those were in oncology. Anincreasing percentage are in other areas,such as products in cardiology and centralnervous system disorders, in diseases suchas autism, and in diabetes.


Evaluation of Genomic Applications inPractice and Prevention, Centers forDisease Control and Prevention,(www.cdc.gov/genomics/gtesting/index.htm)

Guidance on Pharmacogenomics Tests andGenetic Tests for Heritable Markers, Foodand Drug Administration. (www.fda.gov/OHRMS/DOCKETS/98fr/06d-0012-gdl0001.pdf)

Hobson, Katherine, “Era Of PersonalizedMedicine,” U.S. News & World Report,August 2009, p. 35.

Personalized Medicine Coalition, 1225 NewYork Avenue NW, Suite 450, Washington,DC 20005. (202) 589-1770. (www.personalizedmedicinecoalition.org)

Pharmacogenetics Research Network andKnowledge Base, National Institutes ofHealth.(www.nigms.nih.gov/Initiatives/PGRN)

“In 15 or 20 years, personalizedmedicine ... will just be the waymedicine is practiced.”

Edward Abrahams, Ph.D.Executive DirectorPersonalized Medicine CoalitionU.S. News & World Report, 8/09

http://www.cdc.gov/genomics/gtesting/index.htm

http://www.fda.gov/OHRMS/DOCKETS/98fr/06d-0012-gdl0001.pdf

http://www.fda.gov/OHRMS/DOCKETS/98fr/06d-0012-gdl0001.pdf

http://www.personalizedmedicinecoalition.org

http://www.nigms.nih.gov/Initiatives/PGRN


• 186 •

Consumers are increasing their use ofprescription drugs at a rapid pace. In 2008,51% of American adults and children weretaking one or more prescription drugs for achronic condition, according to Medco HealthSolutions.

INCREASED USEExpress Scripps found that the increase from2000 to 2006 in usage of prescriptionmedications for cholesterol, depression,diabetes, high blood pressure, and stomachproblems drove up drug spending by 50%, or$12 billion.

Researchers observe that while the higherusage may prevent heart attacks, strokes,and other problems, more preventive effortscould reduce the need for drugs.

Express Scripps found significant variationsin drug use among states. Some differencesappear to be linked to health factors in eachstate, such as varying rates of smoking, diet,and exercise. States with high rates ofobesity, for instance, such as Mississippi andWest Virginia, had high usage of drugs forcholesterol, diabetes, and high bloodpressure, conditions that can be associatedwith obesity. The following are some otherdistinctions:• Diabetes drug use in Mississippi is nearly

double that in Minnesota. • Michigan has the highest rate of cholesterol

drug use at 13.7%; Oregon has the lowestat 9.4%.

• About 18% of Utah residents wereprescribed anti-depressants, twice that ofthe lowest prescribed state, New York, atabout 9%.


Express Scripts, 1 Express Way, St. Louis,MO 63121. (314) 996-0900. (www.express-scripts.com)

Medco Health Solutions, 100 Parsons PondDrive, Franklin Lakes, NJ 07417. (201) 269-3400. (www.medcohealth.com)

81 PRESCRIPTION DRUG USE

TABLE 81.1

Percentage of Insured Adults Taking Prescription Drugs

2000 2006

• High blood pressure: 8.0% 14.1%• Cholesterol: 6.1% 13.2%• Diabetes: 3.1% 5.5%

http://www.express-scripts.com

http://www.medcohealth.com


• 187 •

TYPES OF PROMOTIONS

Marketing by pharmaceutical companiesprimarily consists of professional promotion,direct-to-consumer (DTC) advertising, andadvertising in professional journals.

Professional Promotion

• Promotional spending includes the practiceof pharmaceutical companies sendingrepresentatives to doctors’ offices, referredto as ‘detailing,’ and direct gifts to doctors.

Direct-to-Consumer

• Direct-to-consumer promotion representsthe expenditures for direct-to-consumerpharmaceutical advertising for prescriptionproducts on television, radio, magazinesand newspapers, as well as outdooradvertising.

Journal Advertising

• Journal advertising reflects advertisingexpenditures for prescription productsappearing in medical journals.

IMS Health assesses promotional spendingin these three categories as follows:

DETAILING

• 2004: $7.72 billion• 2005: $6.96 billion• 2006: $6.93 billion• 2007: $6.43 billion• 2008: $6.45 billion

DTC ADVERTISING


JOURNAL ADVERTISING

• 2004: $544 million• 2005: $476 million• 2006: $527 million• 2007: $470 million• 2008: $387 million

TOTAL PROMOTIONAL SPENDING


TRENDS

Pharmaceutical marketing increaseddramatically during the first half of the pastdecade, peaking in the mid-2000s.

The industry employs an estimated 90,000detailers – a ratio of one representative forevery 4.7 office-based physicians.

Drug company spending for one-on-onemarketing to doctors increased 78% between

82 PROMOTIONAL SPENDING


• 188 •

1999 and 2003, peaked in 2004, thendeclined 15% from 2005 to 2008.

Drug companies spend about $7 billion (notincluding drug samples) annually marketingto doctors. This works out to about $8,400 to$15,400 per doctor per year. Studies showthat such marketing works: interaction withdrug company representatives are associatedwith changes in doctor’s prescribing patterns.

The practice of detailing has becomecontroversial because gifts to doctors canundermine the doctor-patient relationship bycreating the appearance of impropriety.

Direct-to-consumer advertising of prescriptiondrugs surged after 1997, when the Food andDrug Administration relaxed restrictions onthe advertising of drugs to consumers.

Critics say DTC ads, which are permitted infew other countries, inflate healthcare costsby prompting patients to request brand-namemedicines, rather than cheaper genericalternatives. The pharmaceutical industry,however, cites a statement from the FederalTrade Commission that argues that the adseducate consumers about drug options andhave not been shown to lead to higher prices.

DTC advertising peaked in 2006, thendeclined 10% from 2007 to 2008.





• 189 •

Stem cell therapy has the potential todramatically change the treatment of humandisease. Several adult stem cell therapiesalready exist. One example is bone marrowtransplants that are used to treat leukemia.Medical researchers anticipate that in thefuture stem cell therapy will treat a widevariety of diseases including cancer,congestive heart failure, multiple sclerosis,Parkinson’s disease, and spinal cord injuries,among other diseases and impairments.

A primer on stem cells from the NationalInstitutes of Health is available online athttp://stemcells.nih.gov/info/basics.

FEDERAL POLICY

In August 2001, former President George W.Bush announced federal policy that restrictedfunds for certain types of stem cell research.This policy was reversed in March 2009 whenPresident Barack Obama issued ExecutiveOrder 13505, Removing Barriers toResponsible Scientific Research InvolvingHuman Stem Cells (http://edocket.access.gpo.gov/2009/pdf/E9-5441.pdf).

NATIONAL INSTITUTES OF

HEALTH

The National Institutes of Health is theFederal government’s leading biomedicalresearch organization and primary supporterof stem cell research.

The objectives and findings of over 2,800current and completed NIH-funded research

projects are provided online athttp://clinicaltrials.gov/search/term=stem+cells?term=stem+cells.

CALIFORNIA INSTITUTE FOR

REGENERATIVE MEDICINE

The California Institute for RegenertiveMedicine (CIRM) was established inNovember 2004 with the passage ofProposition 71, the California Stem CellResearch and Cures Act. The statewideballot measure provided $3 billion in fundingfor stem cell research at Californiauniversities and research institutions. As ofyear-end 2009, CIRM had approved 328grants totaling more than $1 billion, makingCIRM the largest source of funding for humanembryonic stem cell research in the world.

An overview of CIRM research is presentedin Table 83.1.


American Society for Cell Biology, 8120Woodmont Avenue, Suite 750, Bethesda,MD, 20814. (301) 347-9300. (www.ascb.org)

California Institute for Regerative Medicine,210 King Street, San Francisco, CA 94107. (415) 396-9100. (www.cirm.ca.gov)

Genetics Policy Institute, 11924 Forest HillBoulevard, Suite 22, Wellington, FL 33414. (888) 238-1423. (www.genpol.org)

83 STEM CELL RESEARCH

http://stemcells.nih.gov/info/basics

http://(http://edocket.

http://www.ascb.org

http://www.cirm.ca.gov

http://www.genpol.org


• 190 •

National Institutes of Health, Stem Cell Unit,9000 Rockville Pike, Bethesda, MD 20892. (301) 496-5787. (http://stemcells.nih.gov/research/nihresearch/)

Figure 83.1. Overview of research projects funded by the California Institute forRegenerative Medicine.

http://(http://stemcells.nih.gov/


• 191 •

IMS Health provides the following rankings oftop-selling pharmaceutical products in 2008:

RANKED BY U.S. SALES

• Lipitor (Pfizer): $7.8 billion• Nexium (AstraZeneca): $5.9 billion• Plavix (Bristol-Myers Squibb): $4.9 billion• Advair Diskus

(GlaxoSmithKline): $4.4 billion• Seroquel (AstraZeneca): $3.9 billion• Singulair (Merck): $3.5 billion• Enbrel (Immunex): $3.4 billion• Neulasta (Amgen): $3.1 billion• Actos (Takeda

Pharmaceuticals): $3.1 billion• Epogen (Amgen): $3.1 billion• Prevacid (TAP): $3.1 billion• Abilify (Bristol-Myers Squibb): $3.1 billion• Remicade (Centocor): $3.1 billion• Effexor XR (Wyeth Ayerst): $3.0 billion• Lexapro (Forest

Laboratories): $2.7 billion

RANKED BY NUMBER OF U.S.

DISPENSED PRESCRIPTIONS

• HYCD/APAP: 124 million• Lisinopril: 76 million• Simvastatin: 67 million• Levothryroxine sodium: 61 million• Lipitor: 58 million• Azithromycin: 51 million• Amoxicillin: 50 million• Hydrochlorothiazid: 48 million• Amlodipine Besylate: 44 million

• Furosemide: 43 million• Metformin Hcl: 42 million• Alprazolam: 42 million• Atenolol: 41 million• Metoprolol Succinate: 40 million• Omeprazole: 35 million

RANKED BY GLOBAL SALES

• Lipitor (Pfizer): $13.7 billion• Plavix (Bristol-Myers

Squibb): $ 8.6 billion• Nexium (AstraZeneca): $ 7.8 billion• Seretide (GlaxoSmithKline): $ 7.7 billion• Enbrel (Immunex): $ 5.7 billion• Seroquel (AstraZeneca): $ 5.4 billion• Zyprexa (Eli Lilly): $ 5.0 billion• Remicade (Centocor): $ 4.9 billion• Singulair (Merck): $ 4.7 billion• Lovenox (Sanofi-Aventis): $ 4.4 billion• Mabthera (Hoffman

LaRoche): $ 4.3 billion• Takepron (Takeda): $ 4.3 billion• Effexor (Wyeth Ayerst): $ 4.2 billion• Humira (Abbott): $ 4.1 billion• Avastin (Genentech): $ 4.0 billion



84 TOP-SELLING PHARMACEUTICAL

PRODUCTS



• 192 •

IMS Health assessed the 2008 U.S. marketfor prescription drugs at $291.5 billion, anincrease of 1.3%. Dispensed prescriptionvolume in the U.S. grew at a 0.9% pace.

Factors influencing the market’s slowergrowth in 2008 included higher demand forless-expensive generic drugs, lower newproduct sales, and reduced consumerdemand due to the economic downturn.

TOP DRUG CLASSES (U.S.)

RANKED BY SALES

The top therapeutic drug classes, ranked by2008 U.S. sales, were as follows:• Antipsychotics: $14.6 billion• Lipid regulators: $14.5 billion• Proton pump inhibitors: $13.9 billion• Seizure disorders: $11.3 billion• Anti-depressants: $ 9.6 billion• Angiotensin II

antagonists: $ 7.5 billion• Antineo monoclonal

antibodies: $ 7.5 billion• Erythropoietins: $ 7.2 billion• Anti-arthritics, biological

response modifiers: $ 6.0 billion• Anti-platelets, oral: $ 5.3 billion• Analogs of human

insulin: $ 5.1 billion• Steroid, inhaled

bronchial: $ 4.8 billion• Analeptics: $ 4.8 billion• GI anti-inflammatory: $ 4.4 billion• Codeine and combinations: $ 4.3 billion

TOP DRUG CLASSES (U.S.)

RANKED BY DISPENSED

PRESCRIPTIONS

• Lipid regulators: 202 million• Codeine and

combinations: 194 million• Anti-depressants: 164 million• ACE Inhibitors: 160 million• Beta Blockers: 131 million• Proton pump inhibitors: 113 million• Seizure disorders: 109 million• Thyroid hormone, synth.: 105 million• Calcium blockers: 89 million• Benzodiazepines: 85 million• Angiotensin II

antagonists: 84 million• Oral contraceptives: 82 million• Anti-arthritics, plain: 76 million• Macrolides and related

antibiotics: 66 million• Penicillins: 61 million

TOP DRUG CLASSES (GLOBAL)

RANKED BY SALES

• Oncologics: $48.2 billion• Lipid regulators: $33.8 billion• Respiratory agents: $31.3 billion• Antidiabetics: $27.3 billion• Acid pump inhibitors: $26.5 billion• Angiotensin II antagonists: $22.9 billion• Antipsychotics: $22.9 billion• Antidepressants: $20.4 billion• Anti-epileptics: $16.9 billion• Autoimmune agents: $15.9 billion

85 TOP-SELLING THERAPEUTIC DRUG

CLASSES


• 193 •

• Platelet aggr. inhibitors: $13.6 billion• HIV antivirals: $12.2 billion• Erythropoietins: $11.5 billion• Non-narcotic analgesics: $11.2 billion• Narcotic analgesics: $10.6 billion





• 194 •

PART VI: DISEASES & TREATMENTS


• 195 •

PREVALENCE

The National Institute on Alcohol Abuse andAlcoholism (NIAAA) estimates that almost 18million people in the U.S. abuse or areaddicted to alcohol. More than 30% ofAmericans engage in risky drinking at somepoint in their lives, according to the NIAAA.Estimates of the number of people withalcohol addiction vary.

Alcohol use has seen slight increases,according to the Substance Abuse andMental Health Services Administration(SAMHSA), with 51% of people in 2008reporting they drank alcohol during theprevious 30 days. States with the highestincrease in drinking are Alabama, Arizona,Kansas, Minnesota, Tennessee, Texas, andWisconsin.

MEDICAL TREATMENT

Since 1935, when Alcoholics Anonymous(AA) was founded, the vast majority oftreatments for alcoholism in the U.S. havebeen based on AA’s 12-step program, which

encourages behavioral changes and faith ina higher power in treatment. Up to a millionalcoholics connect with AA programsannually.

According to SAMHSA, 41% of patientsseeking admission to state-licensed orcertified substance abuse treatment facilitiesdo so because of alcohol abuse.

Approximately 500,000 alcohol abusers eachyear seek treatment at centers such as theBetty Ford Center, Ridgeview Institute, theHazelden Foundation, Par Village, DelanceyStreet in San Francisco, and a host of otherinpatient and outpatient treatment centers.

Until recently, physicians weren’t sought foror involved in alcoholism treatment –counselors, recovering drinkers, and clergywere most commonly sought out for help.The NIAAA recently published HelpingPatients Who Drink Too Much: A Clinician’sGuide, which simplifies alcohol screening andoffers step-by-step guidance for conductingbrief interventions and managing patient care.The guide is available at no cost on theNIAAA website.

Despite the fact that up to 18 millionAmericans are alcoholics, the U.S. market forrelated drug treatments is less than $60million annually. Only about 140,000alcoholics in the U.S. receive medication fortheir disease, with treatment ranging fromsuch drugs as Antabuse or Naltrexone toanti-depressants to anti-seizure drugs.

A clearer understanding of the biologicalunderpinnings of alcoholism is opening the

86 ALCOHOL ADDICTION

“Researchers have made up dozens ofscreening tests over the years. Butthere’s no consensus on exactly whatan ‘alcoholic’ is. Even AlcoholicsAnonymous relies on alcoholics todiagnose themselves.”

The Wall Street Journal


• 196 •

way to better drugs. Scientists, for example,have identified a number of genes that confera predisposition to alcohol addiction. Theyhave also found that the brain goes throughprofound changes when a person startsdrinking to excess.

Cognitive therapy is being used to aid addictsin forming new, healthier habits by helpingthem recognize what situations or patterns ofthinking trigger an urge to abuse alcohol. Ithas been found that treatments combiningmedication and such psychotherapy workbetter than either strategy does by itself.


National Institute on Alcohol Abuse andAlcoholism (NIAAA), 5635 Fishers Lane,MSC 9304, Bethesda, MD 20892. (301)443-3860 (www.niaaa.nih.gov)

Substance Abuse and Mental HealthServices Administration, P.O. Box 2345,Rockville, MD 20847. (www.samhsa.gov)

http://www.niaaa.nih.gov

http://www.samhsa.gov

_____________________________________________________________________


• 197 •

PREVALENCE AND ECONOMIC

IMPACT

According to the Asthma and AllergyFoundation of America (AAFA), more than 50million people in America (about one of everyfive adults and children) have allergies.Annual direct costs for treating allergies are$6 billion ($5.7 billion in medications and$300 million in office visits).

Among adults, allergies are the fifth leadingchronic disease and a major cause of workabsenteeism, resulting in nearly four millionmissed or lost workdays each year, andaccounting for more than $700 million in totallost productivity. An estimated two millionschool days are lost each year due toallergies.

The AAFA provides the following additionalfacts about the impact of allergies:• Allergies have a genetic component. If

one parent has allergies, chances are onein three that each child will have an allergy.If both parents have allergies, it is evenmore likely (7 in 10) that their children willhave allergies.

• Allergies are the most frequently reportedchronic condition in children, limitingactivities for more than 40% of them.

• Each year, allergies account for more than17 million outpatient office visits, primarilyin the spring and fall; seasonal allergiesaccount for more than half of all allergyvisits.

There are no cures for allergies, however,allergies can be managed through preventionand treatment.

TYPES OF ALLERGIES

AAFA classifies allergies as follows:

Indoor and Outdoor Allergies• Indoor and outdoor allergies include

allergic rhinitis, hay fever, nasal allergies,and seasonal/perennial allergies.

• The most common indoor/outdoor allergytriggers are tree, grass and weed pollen;mold spores; dust mite and cockroachallergen; and cat, dog, and rodent dander.

• Approximately 75% of all allergy sufferershave indoor/outdoor allergies as theirprimary allergy.

• Approximately 10 million people areallergic to cat dander, the most commonpet allergy.

Skin Allergies• Skin allergies include atopic dermatitis,

contact allergies, eczema, hives, andurticaria.

• Approximately 7% of allergy sufferers haveskin allergies as their primary allergy.Plants such as poison ivy, oak, and sumacare the most common skin allergy triggers.However, skin contact with cockroach anddust mite allergen, certain foods, or latexmay also trigger symptoms of skin allergy.

87 ALLERGIES

_____________________________________________________________________


• 198 •

• Skin allergies alone account for more than7 million outpatient visits each year.

Food and Drug Allergies• Approximately 6% of allergy sufferers have

food/drug allergies as their primary allergy.

• Food allergy is more common amongchildren than adults.

• Ninety percent (90%) of all food allergyreactions are cause by eight foods: milk,soy, eggs, wheat, peanuts, tree nuts, fish,and shellfish.

• Food allergies account for 30,000 visits tothe emergency room each year.

• More than 200 deaths occur each year dueto food allergies.

• For drug allergies, penicillin is the mostcommon allergy trigger. Nearly 400Americans die each year due to allergicreactions from penicillin.

Latex Allergy• Approximately 4% of allergy sufferers have

latex allergy as their primary allergy.

• An estimated 10% of healthcare workssuffer from latex allergy.

• Exposure to latex allergen alone isresponsible for over 200 cases ofanaphylaxis (severe allergic reactions)each year.

• An average of 10 deaths each year areattributed to severe reactions to latexallergy.

Insect Allergies• Approximately 4% of allergy sufferers have

insect allergies (bee/wasp stings andvenomous ant bites, cockroach and dust

mite allergen) as their primary allergy.

• Each year nearly 100 Americans die dueto insect allergies.

Eye Allergies• Eye allergies include allergic conjunctivitis

and ocular allergies.

• Approximately 4% of allergy sufferers haveeye allergies as their primary allergy, oftencaused by many of the same triggers asindoor/outdoor allergies.

ALLERGY CAPITALS

The Asthma and Allergy Foundation ofAmerica publishes an annual list of the top100 American cities dubbed “Allergy Capitals”(www.allergycapitals.com), where allergiesare most severe for sufferers. The rankingsare based on analysis of three factors, asfollows:• Pollen scores (airborne grass/tree/weed

pollen and mold spores)• Number of allergy medications used per

patient• Number of allergy specialists per patient

The lists are part of the organization’snationwide Allergy Action Plan, created tohelp consumers recognize, prevent, andsafely relieve allergy symptoms.

The following were the Spring AllergyCapitals in 2009:• Louisville, Kentucky• Knoxville, Tennessee• Charlotte, North Carolina• Madison, Wisconsin• Wichita, Kansas• McAllen, Texas• Greensboro, North Carolina• Dayton, Ohio• Little Rock, Arkansas• Augusta, Georgia

http://www.allergycapitals.com

_____________________________________________________________________


• 199 •

The following were the Fall Allergy Capitals in2009:• McAllen, Texas• Wichita, Kansas• Louisville, Kentucky• Oklahoma City, Oklahoma• Jackson, Mississippi• Dayton, Ohio• Augusta, Georgia• Tulsa, Oklahoma• Knoxville, Tennessee• Little Rock, Arkansas


Asthma and Allergy Foundation of America,1233 20 Street NW, Suite 402,th

Washington, DC 20036. (800) 727-8462. (www.aafa.org)

http://www.aafa.org


• 200 •

PREVALENCE

According to the Alzheimer’s Association, anestimated 5.3 million Americans of all ageshave Alzheimer’s disease. This figureincludes 5.1 million people age 65 and overand 200,000 individuals under age 65 whohave younger-onset Alzheimer’s. Another300,000 Americans under age 65 have adementia other than Alzheimer’s disease.

Alzheimer’s disease is the most frequentcause of dementia, accounting for 70% of allcases of dementia in Americans ages 71 andover. Vascular dementia accounts for 17% ofcases of dementia. Other diseases andconditions, including Parkinson’s disease,Lewy body disease, frontotemporal dementia,and normal pressure hydro-cephalus,account for the remaining 13%.

The following are other facts aboutAlzheimer’s disease and dementia providedby the Alzheimer’s Association in 2009Alzheimer’s Disease Facts and Figures:• Each year over 420,000 people are

diagnosed with Alzheimer’s. The longer aperson lives, the more likely he/she is tocontract Alzheimer’s.

• Because women live longer, on average,than men, they are more likely to haveAlzheimer’s disease and dementia.Fourteen percent (14%) of all people age71 and over have dementia, including 16%of women and 11% of men in that agegroup.

• People with more years of education areless likely to develop Alzheimer’s diseaseand dementia. One study found that peoplewith less than 12 years of education have a

35% greater risk of developing dementiathan people with more than 15 years ofeducation.

• The number of Americans surviving intotheir 80s and 90s is expected to growbecause of advances in medicine, medicaltechnology, and social and environmentalconditions. Since the incidence andprevalence of Alzheimer’s disease anddementia increase with age, the number ofpeople with these conditions is likely to alsogrow. The Alzheimer’s Associationforecasts cases to increase to 615,000 newcases a year in 2030 and 959,000 newcases a year in 2050. The number ofpeople age 65 and over with Alzheimer’sdisease is estimated to reach 7.7 million in2030, a greater than 50% increase from thefive million ages 65 and over who arecurrently affected.

• Alzheimer’s disease is among the top 10leading causes of death for people of allages and ranks fifth for those ages 65 andolder. In 2005 (most recent data available),about 72,000 death certificates reportedpeople to have died of the disease; thisnumber is likely to be low because manystudies say that death certificatessubstantially underreport the occurrence ofdeaths due to Alzheimer’s.

No treatment has proven successful inreversing the course of Alzheimer’s disease.

COSTS AND ECONOMIC IMPACT

According to 2009 Alzheimer’s Disease Factsand Figures, the direct and indirect costsassociated with care of persons with

88 ALZHEIMER’S DISEASE & DEMENTIA


• 201 •

Alzheimer’s and other dementias amount tomore than $148 billion annually. This cost isassessed and projected to increase asfollows:• Medicare costs for care of beneficiaries with

Alzheimer’s and other dementias were $91billion in 2005; this figure is projected toincrease to $160 billion by 2010 and $189billion by 2015.

• State and federal Medicaid costs fornursing home care for people withAlzheimer’s and other dementias in 2005were $21 billion; this figure is projected toincrease to $24 billion in 2010 and $27billion in 2015.

• Indirect costs to businesses for employeeswho are caregivers of people withAlzheimer’s and other dementias areestimated at $36.5 billion.

The $148 billion estimate does not includethe costs of care for people with Alzheimer’sand other dementias that are paid by the U.S.Department of Veterans Affairs, privatehealthcare and long-term care insurance, andother public and private payers. It also doesnot include out-of-pocket expenditures, long-term care, and end-of-life care services thatare not covered by Medicare, Medicaid, andother public and private payers.

PATIENT CARE

Nearly 70% of those afflicted with dementiaAlzheimer’s disease live at home and arecared for by family and friends. In the laststages of the disease, it is often necessaryfor those afflicted to be cared for in a nursinghome. Nearly 50% of all nursing homepatients in the United States suffer fromAlzheimer’s disease.

In 2009, ten million family members and other(unpaid) caregivers of people withAlzheimer’s and other dementias provided 8.5billion hours of care, according to the

Alzheimer’s Association.

Most people with Alzheimer’s and dementiahave one or more other serious medicalconditions. Among those diagnosed withdementia, the following percentages havecoexisting medical conditions:• Hypertension: 60%• Coronary heart disease: 26%• Stroke late effects: 25%• Diabetes: 23%• Osteoporosis: 18%• Congestive heart failure: 16%• COPD: 15%• Cancer: 13%• Parkinson’s disease: 8%

Further, people with Alzheimer’s disease andother dementias have more than three timesas many hospital stays as other older people.Their total Medicare costs for hospital careare more than three times higher than otherMedicare beneficiaries.

Treatment of these patients poses achallenge for hospitals.

People with dementia are high users of homeand community services such as personal

“Hospitalized patients withAlzheimer’s or another dementia areat greater risk of a number of seriouscomplications, including falls,infections, bed sores, worsening oftheir dementia or onset of delirium. These patients often aren’t able toeffectively communicate when they’refeeling feverish or in pain. They don’tunderstand or can’t remember that anurse asked them to stay in bed or tocall if they wanted to get up. Patientswith dementia also are at risk of poornutrition and dehydration.” Hospitals & Health Networks, 11/09


• 202 •

care and adult day center services. At anyone time, about 30% of people with dementiaare living in such long-term care settings.

RESEARCH FOR TREATMENTS

The category of Alzheimer’s medications is a$1.4 billion business, according to SDIHealth, despite the fact that treatment onlyacts on the symptoms, not the underlyingdisease. According to Todd Golde, M.D.,professor of neuroscience at the Mayo Clinic,the large expenditures reflect the desperationof patients and their families to treat thedisease. This suggests the huge marketpotential should an effective treatment bedeveloped.

More than 60 dementia drugs are now inhuman testing trials. The New York Timesreported that one pharmaceutical companyalone has spent $450 million on researchefforts.

Researchers are also achieving a betterunderstanding of genetic links to Alzheimer’sdisease. Researchers from the University ofSouthern California published findings in theArchives of General Psychiatry suggestingthat 58% to 79% of the risk of developinglate-onset Alzheimer’s is genetic. Also,researchers from the Duke University MedicalCenter presented findings at the 2009International Conference on Alzheimer’sDisease that the gene TOMM40 may helppinpoint the age at which the disease begins

to manifest itself. If these findings areconfirmed, researchers could develop a bloodtest that would identify at-risk people whohave the abnormal gene.

The long-range hope is that geneticscreening and pharmaceutical remediescombined could eventually lead to preventionof dementia.

INFLUENCE OF MENTAL

ACTIVITY

Medical research studies have producedsometimes conflicting conclusions, butexperts increasingly say lifestyle factors suchas physical activity, challenging hobbies, andlots of friends or social engagements mighthelp keep the brain more nimble and fit as itages.

In a recent editorial in the Journal of theAmerican Medical Association, SallyShumaker, M.D., a professor of public healthsciences and associate dean for research atWake Forest University, said that sheforesees programs that include exercise,cognition, and things like meditation beingcombined with drug programs to treatdementia.


Alzheimer’s Association, 225 NorthMichigan Avenue, 17 Floor, Chicago, IL th

60601. (800) 272-3900. (www.alz.org)

Aston, Geri, “Alzheimer’s Disease: AGrowing Patient Imperative,” Hospitals &Health Networks, November 2009, pp 26-29.

SDI Health, 220 West Germantown Pike,Plymouth Meeting, PA 19462. (610) 834-0800. (www.sdihealth.com)

“Virtually every major pharmaceuticaland biotech company is trying todevelop a drug that can reverse ordelay Alzheimer’s, the biggest unmetmedical need out there.”

BusinessWeek

http://www.alz.org



• 203 •

PREVALENCE

Arthritis is the number one cause of disabilityin America, affecting an estimated 46 millionpeople, according to an April 2009 report bythe Centers for Disease Control andPrevention (CDC). As a cause of disability, itaffects more people than back pain, heart orlung conditions, diabetes, or cancer.

Arthritis can affect any age. Seventy-ninepercent (79%) of arthritis sufferers are overage 45. However, approximately 285,000children and 8.4 million Americans age 17-to-44 are affected by arthritis. Almost alljuvenile arthritis is rheumatoid arthritis, asystemic immune problem. Especially withchildren, early diagnosis and treatment arevery effective.

As the U.S. population ages, the prevalenceof arthritis will significantly increase.

The 2009 CDC study found that females hada higher prevalence of the disease. Womenare more likely to cite arthritis as the cause oftheir disability than men (6.4 million womenvs. 2.2 million men). More African-Americansthan whites say it limits their activities. It isless prevalent among Hispanics.

ECONOMIC IMPACT

Arthritis costs the U.S. economy $128 billionper year in medical care and lost wages. It isresponsible for 427 million days of restrictedactivity, 156 million days in bed, and 45million days lost from work each year,according to the Arthritis Foundation.

The CDC reports a correlation betweenarthritis and diabetes. The inactivity causedby arthritis hinders the successfulmanagement of both diseases, and peoplewith diagnosed diabetes are nearly twice aslikely to have arthritis. According to ChadHelmick, M.D., an epidemiologist at CDC,people with arthritis face barriers to physicalactivity. Many have concerns aboutaggravating their arthritis pain, possiblycausing further joint damage, and areuncertain about which types and amounts ofactivity are safe for their joints.

The disability caused by arthritis often robspeople of the ability to live independently.People with arthritis commonly report needinghelp getting around inside their home, gettingout of bed or a chair, bathing, dressing,eating, and other important activities of dailyliving.

89 ARTHRITIS

The numbers of individuals witharthritis who have a disability and areprevented from living their lives to thefullest are already staggering, andthey are projected to worsenconsiderably. With the aging of babyboomers, the prevalence of arthritis isexpected to rise by 40% – that is up to67 million people – by the year 2030. These findings suggest a critical needto expand the reach of effectivestrategies aimed at disability

prevention and management.”

John H. Klippel, M.D., PresidentArthritis Foundation, 4/30/09


• 204 •

TYPES OF ARTHRITIS

There are more than 100 types of arthritis,with osteoarthritis affecting approximately50% of the sufferers, most of them over theage of 45. Other serious and common formsof arthritis include gout, lupus, scleroderma,and fibromyalgia.

Nearly 21 million Americans haveosteoarthritis, arthritis that causes aprogressive degeneration of the cartilage,and their ranks are expected to explode aspeople get older. The joint disease often hitspeople 65 years and older, but it can appeardecades younger. By 2030, when 70 millionpeople will be 65 and older and at risk for thedisease, the number of people withosteoarthritis is projected by the CDC to be at41.1 million.

Genetic defects are estimated to causeapproximately 25% of osteoarthritis cases.According to Dr. Roland Moskowitz of CaseWestern Reserve University, who was thefirst to discover an osteoarthritis gene,identifying the genes in arthritis givesresearchers a handle in treating andpreventing the disease.

Rheumatoid arthritis, an autoimmunedisease, affects approximately 2.5 millionpeople in the United States. Patients’ ownimmune systems go awry and attack joints,causing inflammation and stiffness as rogueimmune cells eat away cartilage andeventually erode bone. The disease strikesmainly women, usually between ages 25 and50. Within 10 years of incurring the disease,approximately 50% of patients are toodisabled to work. No cures are available,only treatments to relieve symptoms. Manyfactors influence this breakdown of cartilage,including genetic defects; sports injuries,especially in young people; the stressesassociated with being overweight, whichstrain the weight-bearing joints; and somemetabolic conditions.

Unlike arthritis, in which joint pain isaggravated by movement, the musclesymptoms of fibromyalgia are always present,even at rest. In addition to pain, individualswith fibromyalgia suffer from constant fatigue.They tend to wake repeatedly during thenight, and awaken in the morning still tired.They are also apt to be depressed, and manysuffer from a nervous stomach. Othersymptoms include sore throat; diarrhea orconstipation; sensitivity to changes intemperature, bright light, odors and loudsounds; and mottled skin. Fibromyalgia isestimated to affect approximately six millionAmericans, or 2% of the population. Themost effective treatment for fibromyalgia isregular exercise. Some medications relievethe symptoms.

TREATMENT

According to a 2009 estimate by the CDC,there are approximately 44 million arthritis-related outpatient visits and 992,000hospitalizations annually.

Health experts believe that a combination ofproper diet, weight control, exercise, andregular medical treatment are effective incontrolling both the prevalence and severityof arthritis.

The annual arthritis drug market is $6.6billion, according to Newsweek. The currentdrugs used to treat arthritis are aimed only atsymptomatic relief. There are more than 40approaches to treatment nearing or already inclinical trials.


Arthritis Foundation, 1330 West PeachtreeStreet NW, Atlanta, GA 30309. (800) 283-7800. (www.arthritis.org)

http://www.arthritis.org


• 205 •

PREVALENCE AND MORTALITY

According to the Centers for Disease Controland Prevention, approximately 15 millionadults suffer from asthma. An additional 4.8million children have the disease.

Approximately 1.8 million emergency roomvisits per year are for asthma. Asthmaresults in approximately 500,000hospitalizations each year. The femalehospitalization rate from asthma is 38%higher than the male rate.

For adults, asthma is the fourth leading causeof work loss, resulting in nine million lostworkdays each year. Asthma attacks alsoresult in uncommonly high rates of missedschool days.

Approximately 5,000 people die from asthmaeach year. There are 3.5 average annualdeaths from asthma per million among five to34 year olds. Blacks are twice as likely to diefrom the disease as whites. The death ratefrom asthma has increased 6% each yearsince the late 1970s.

Asthma rates have more than doubled in theU.S. since 1980, hitting particularly hard theinner-city poor. One theory for the increasesuggests that germ-conscious Americans areshielding infants so much that immunesystem development is stunted, causingimmune cells to overreact to normallyharmless substances, like dust.

The Pew Environmental Health Commissionpredicts 29 million Americans will suffer fromasthma by 2020.

COST

Asthma accounts for approximately $12.7 billion in healthcare costs annually,according to the CDC.

ASTHMA CAPITALS

While no place is free from asthma triggers,some cities are more challenging places tolive for those with the disease than others.

The Asthma and Allergy Foundation ofAmerica conducts an annual assessment ofmajor U.S. cities, ranking the 100 mostchallenging places to live with asthma asAsthma Capitals. Factors that contribute tosuch designation include higher than averageannual pollen levels, high air pollution, andlack of 100%-smoke-free laws. The followingwere the top 10 Asthma Capitals for 2009:• St. Louis, Missouri• Milwaukee, Wisconsin• Birmingham, Alabama• Chattanooga, Tennessee• Charlotte, North Carolina• Memphis, Tennessee• Knoxville, Tennessee• McAllen, Texas• Atlanta, Georgia• Little Rock, Arkansas

The state with the highest rate of peoplecurrently suffering from asthma is Maine, withalmost 9%. Louisiana has the lowest, at 5%.

90 ASTHMA


• 206 •

ASTHMA IN CHILDREN

The CDC estimates that 6.2% of children inAmerica have asthma, a figure that hasdoubled since 1980. Experts can provide nospecific explanation for the dramatic rise.The estimated cost of treating people underthe age of 18 with asthma is $3.2 billion ayear.

Fall is the most severe season for asthmaattacks in children. Researchers speculatethat the increase in asthma attacks has to dowith kids getting together in small indoorspaces, as they do in school and classrooms,and passing around viruses. Getting arespiratory virus such as the flu or a cold cantrigger an asthma attack. Increasedexposure to pollutants – from mold growingon classroom ceiling tiles to diesel-poweredschool bus exhaust fumes – is also a factor.For millions of children with asthma, the startof the school year can bring a rise in severeattacks and trips to the emergency room.More than six times as many asthmaticchildren of elementary school age areadmitted to the hospital in early fall,compared with the hot, smoggy days ofsummer.

According to a five-year federally financedstudy conducted at eight medical centers inseven cities, as experts had long suspected,children are at high risk of asthma attacks ifthey are allergic to cockroaches and theirhomes show high levels of the insects’ bodyparts and droppings. Dr. David Rosenstreich,an allergy specialist at Albert Einstein Collegeof Medicine in the Bronx and the seniorinvestigator of the study, estimated thatcockroaches cause about 25% of all asthmain inner city areas.

TREATMENT

There are more than 17 million physicianvisits for asthma each year, according to IMS

Health.

More than half of adults with serious asthmabelieve they only have asthma when theyexperience symptoms, and many foregousing medications when they feel symptom-free, according to researchers at Mount SinaiSchool of Medicine. Patients who have this“no symptoms, no asthma” belief are one-third less likely to take their asthmamedication daily. Male patients, those over65 years old, and patients with no consistentplace of care are most likely to have the “nosymptoms, no asthma” belief. The study alsofound that 20% of the patients felt they willnot always have asthma, and 15% expecttheir doctor to cure them of the disease.

Americans spend approximately $5 billionannually on inhaled steroids and other dailyinflammatory asthma drugs. The top sellingrespiratory drug is Singulair (Merck), withU.S. sales of $3.5 billion in 2008, according toIMS Health.


American Academy of Allergy, Asthma andImmunology, 555 East Wells Street, Suite1100, Milwaukee, WI 53202. (414) 272-6071. (www.aaaai.org)

American Association for Respiratory Care,9425 North MacArthur Boulevard, Suite100, Irving, TX 75063. (972) 243-2272.(www.aarc.org)

American Lung Association, 61 Broadway,6 Floor, New York, NY 10006. th

(212) 315-8700. (www.lungusa.org)

Asthma and Allergy Foundation of America,1125 15th Street, NW, Suite 502,Washington, DC 20005. (800) 727-8462. (www.aafa.org)

http://www.aaaai.org

http://www.aarc.org

http://www.lungusa.org

http://www.aafa.org


• 207 •


Pew Environmental Health Commission,901 E Street NW, Washington, DC 20004. (202) 552-2000. (www.pewtrusts.com)


http://www.pewtrusts.com


• 208 •

According to the National Center for HealthStatistics, approximately 33% of adults in theU.S. are obese. The National Institutes ofHealth (NIH) has endorsed bariatric surgeryas the only proven procedure for weight lossin severely obese patients. As with anysurgery, there are associated risks, whichmay be compounded by the health problemsof the morbidly obese patient. When aperson becomes morbidly obese, however,the risk of doing nothing may exceed the riskof surgery, making surgery a reasonableoption.

According to The American Society forMetabolic & Bariatric Surgery (ASBS), thenumber of bariatric procedures have been asfollows:• 2002: 62,000• 2003: 105,000• 2004: 144,000• 2005: 171,000• 2006: 178,000• 2007: 205,000• 2008: 220,000

People considered medically eligible forbariatric surgery are those overweight with abody mass index (BMI) of over 40, or a BMIof 35 to 40 with an obesity-related diseasesuch as Type 2 diabetes, heart disease orsleep apnea; criteria established by the NIH.Among the 22 million people in the U.S.meeting this criteria, only 0.4% actually getthe surgery.

Clinical studies show that most bariatricsurgery patients lose weight quickly andcontinue to lose weight 18-to-24 months afterthe procedure. Patients may lose 30% to

50% of their excess weight in the first sixmonths and 77% of excess weight as early as12 months after surgery. Studies have alsoshown that patients can maintain a 50% to60% loss of excess weight 10 to 14 yearsafter weight loss surgery.

Bariatric surgery typically costs $17,000 to$25,000.

IMPACT ON OBESITY-RELATED

DISEASES

A recent study published in the Journal of theAmerican Medical Association reportedbariatric surgery patients showedimprovements in the following obesity-relatedconditions: • Type II diabetes eliminated in 77% of

patients, eliminated or improved in 86%• Hypertension eliminated in 62% patients

and resolved or improved in 78% • Obstructive sleep apnea or sleep-

disordered breathing eliminated in 86% ofpatients

• High cholesterol levels or hyperlipidemiadecreased in more than 70% of patients

Most noteworthy about bariatric surgery isthat in some cases it appears to curediabetes, a disease otherwise consideredincurable. Studies have shown that patientswho had bariatric surgery are five times morelikely to see their diabetes symptomsdisappear over the following two years thanare patients who have standard diabetescare. According to Prof. David Cummings,M.D., at the University of Washington,practitioners and patients are increasingly

91 BARIATRIC SURGERY


• 209 •

seeing bariatric surgery not as a last resortbut as a really good option – as well as a wayto learn more about the mechanisms behindthe diabetes.

RISKS

The Longitudinal Assessment of BariatricSurgery (LABS) Consortium, a NationalInstitutes of Health (NIH)-funded consortiumof six clinical centers, reported on the safetyof bariatric surgery in the July 30, 2009 issueof the New England Journal of Medicine.Findings were as follows:• Risks of bariatric surgery have dropped

dramatically and now are no greater thangallbladder or hip replacement surgery.

• Risks are lower than the longer-term risk ofdying from heart disease, diabetes, andother consequences of carrying moreweight than a person’s organs can tolerate.

• At 30 days post-surgery, researchers foundthe mortality rate among patients whounderwent a Roux-en-Y gastric bypass orlaparoscopic adjustable gastric banding tobe 0.3%, and a total of 4.3% of patients hadat least one major adverse outcome.


American Society for Metabolic & BariatricSurgery, 100 SW 75th Street, Suite 201,Gainesville, FL 32607. (352) 331-4900. (www.asbs.org)

“Perioperative Safety in the LongitudinalAssessment of Bariatric Surgery by theLongitudinal Assessment of BariatricSurgery (LABS) Consortium,” New EnglandJournal of Medicine, July 30, 2009, pp 445-454.

“The findings of this research verystrongly reaffirm the safety ofbariatric surgery and should help toinspire greater confidence from thegeneral public and policymakers, thusmaking it more difficult to deny ordelay coverage of these life-savingand life-extending procedures. Thesafety and effectiveness of bariatricsurgery on morbid obesity andexpensive obesity-related conditionsis emerging as an even more powerfulforce in this new era of healthcarereform.”

American Society for Metabolic & Bariatric Surgery, 7/30/09

http://www.asbs.org


• 210 •

PREVALENCE & COST

Estimates suggest that in the U.S., 10.3million people have serious mental illness. Ofthese, approximately 60% are treated inhospitals or public health facilities, 90% asoutpatients.

According to the World Health Organization,mental illness tops all other diseases as acause of disability in the United States,Canada, and Western Europe, accounting for25% of all disability.

According to the National Alliance on MentalIllness (NAMI), the economic cost ofuntreated mental illness in the United Statesis more than $100 billion annually. Theconsequences of untreated mental illness forthe individual and society are staggering:unnecessary disability, substance abuse,unemployment, homelessness, incarceration,and suicide, not to mention wasted lives.

MENTAL HEALTH EXPENDITURES

Of the more than $100 billion spent on mentalhealthcare annually in the U.S., governmenthealthcare programs pay about 60% of thetotal.

According the Healthcare Cost and UtilizationProject, from the Agency for HealthcareResearch and Quality (AHRQ), the followingare the top five behavioral health-relatedhospitalizations (primary diagnosis) and totalcharges: Discharges Charges

• Mood disorders: 713,377 $8.9 billion• Schizophrenia and

other psychotic disorders: 372,749 $6.9 billion

• Substance-related disorders: 229,269 $2.5 billion

• Screening: 71,507 $2.4 billion• Delirium, dementia,

amnestic, and othercognitive disorders: 133,004 $2.3 billion

In 2008, sales in the U.S. of anti-psychoticand anti-depressant medications were $14.6billion and $9.6 billion, respectively, accordingto IMS Health.

REIMBURSEMENT PARITY

The Paul Wellstone and Pete DomeniciMental Health Parity and Addiction Equity Actof 2008, part of the federal bailout packagesigned into law in October 2008, requiresgroup health plans of 50 or more employeesthat provide medical-surgical coverage andmental health and substance-abuse benefits

92 BEHAVIORAL & MENTAL HEALTH

“Mental-health and substance-abuseconditions account for more disabilitythan any other condition in America. Approximately 217 million days ofwork are lost annually because ofproductivity decline related to mental-illness and substance-abusedisorders, costing U.S. employers $17billion each year.”

David Shern, CEO Mental Health America Modern Healthcare, 1/12/09

http://www.ahrq.gov


• 211 •

to ensure that financial requirements andtreatment limitations for mental healthcoverage are on par with those for medical-surgical services. According to NAMI, 42states had some form of parity legislationprior to the federal law. However, self-insured plans, which cover some 82 millionpeople, didn’t fall under the jurisdiction ofstate parity laws. The federal parity law tookeffect in 2010.

The Medicare Improvements for Patients andProviders Act of 2008 calls for the reductionof co-insurance for outpatient mental healthservices from 50% to 20% – which is thesame level as non-psychiatric services – by2014.

THE STATE OF MENTAL HEALTH

AND TREATMENT

In 2009, NAMI conducted its secondcomprehensive state-by-state analysis ofmental health services. Each state wasscored on 39 specific criteria resulting in anoverall grade and four sub-category grades.The national average grade was D. No statereceived an A. Fourteen states improvedtheir grades from the previous assessment,conducted in 2006; grades for 12 statesdeclined. The assessment graded each stateas follows:• Alabama: D• Alaska: D• Arizona: C• Arkansas: F• California: C• Colorado: C• Connecticut: B• Delaware: D• District of Columbia: C• Florida: D• Georgia: D• Hawaii: C• Idaho: D• Illinois: D

• Indiana: D• Iowa: D• Kansas: D• Kentucky: F• Louisiana: D• Maine: B• Maryland: B• Massachusetts: B• Michigan: D• Minnesota: C• Mississippi: F• Missouri: C• Montana: D• Nebraska: D• Nevada: D• New Hampshire: C• New Jersey: C• New Mexico: C• New York: B• North Carolina: D• North Dakota: D• Ohio: C• Oklahoma: B• Oregon: C• Pennsylvania: C• Rhode Island: C• South Carolina: D• South Dakota: F• Tennessee: D• Texas: D• Utah: D• Vermont: C• Virginia: C• Washington: C• West Virginia: F• Wisconsin: C• Wyoming: F

COMMUNITY HOSPITAL

SERVICES

Many community hospitals are not adequatelyprepared to provide services for patients withbehavioral health problems. According to theAmerican Hospital Association, only 1,349 of4,919 community general hospitals, or 27%,


• 212 •

have an organized inpatient psychiatric unit.

According to the AHRQ, approximately 25%of all hospitalizations involve depressive,bipolar, schizophrenia, substance abuse, orother behavioral health disorders as a primaryor secondary diagnosis.

Emergency departments have become thesafety net for many patients with severebehavioral health disorders who often seekcare in general hospitals that are designed forshort-stay medical-surgical patients.

General hospitals that lack adequatepsychiatric services generally attempt tomove behavioral health patients to otherfacilities with such capabilities.

BEHAVIORAL HEALTH

HOSPITALS

According the National Association ofPsychiatric Health Systems (NAPHS),occupancy rates at behavioral healthhospitals have been at record highs. In The2008 NAPHS Annual Survey, published inMarch 2009, inpatient behavioral hospitaladmissions were found to have increased3.5% (to an average of 2,688). Hospitallengths of stay increased 1% to 9.7 days.Residential treatment admissions remainedsteady at average of 175.

Behavioral health facilities scaled back bedsfor decades because of low occupancy rates.In Illinois, for example, there were as manyas 55,000 behavioral health beds during the1950s; now there are only 1,400. Thenumbers are now increasing in some areas.



Grading The States, National Alliance onMental Illness, March 2009.

Huff, Charlotte, “Something New For MentalHealth Services,” Hospitals & HealthNetworks, February 2009, pp 32-33.


National Alliance on Mental Illness, 2107Wilson Boulevard, Suite 300, Arlington, VA22201. (703) 524-7600. (www.nami.org)

National Association of Psychiatric HealthSystems, 701 13 Street NW, Suite 950,th

Washington, DC 20005. (202) 393-6700. (www.naphs.org)

Shern, David, “Parity Pays Dividends,”Modern Healthcare, January 12, 2009, p. 24.

The 2008 NAPHS Annual Survey, NationalAssociation of Psychiatric Health Systems,March 2009.

http://www.ahrq.gov


http://www.nami.org

http://www.naphs.org


• 213 •

PREVALENCE

Cancer is the second-leading cause of deathin the United States, exceeded only by heartdisease.

According to Cancer Facts and Figures 2009,by the American Cancer Society, anestimated 1.48 million people in the U.S. werediagnosed with cancer in 2009, and anestimated 562,300 died of the disease.

As America’s population ages, incidences ofcancer are likely to increase, since cancer ismuch more common in the elderly than in theyoung. As diagnostic technology improvesand more treatment options becomeavailable, however, survival rates areimproving. The 5-year survival rate for allcancers combined is 66%, according to theAmerican Cancer Society.

CANCER IN MEN

According to the American Cancer Society,766,130 new cancer cases were estimatedamong men in 2009. The following are theleading sites:• Prostate: 192,280• Lung and bronchus: 116,090• Colon and rectum: 75,590• Urinary bladder: 52,810• Non-Hodgkin lymphoma: 35,990• Melanoma: 39,080• Kidney and renal pelvis: 35,430• Leukemia: 25,630• Oral cavity and pharynx: 24,240• Pancreas: 21,050

The American Cancer Society estimates that292,540 men died from cancer in 2009. Thefollowing are the leading sites:• Lung and bronchus: 88,900• Prostate: 27,360• Colon and rectum: 25,240• Pancreas: 18,030• Leukemia: 12,590• Liver: 12,090• Esophagus: 11,490• Urinary bladder: 10,180• Non-Hodgkin lymphoma: 9,830• Kidney and renal pelvis: 8,160

CANCER IN WOMEN

The American Cancer Society estimates713,220 new cancer cases among women in2009. The following are the leading sites:• Breast: 192,370• Lung and bronchus: 103,350• Colon and rectum: 71,380• Uterine corpus: 42,160• Non-Hodgkin lymphoma: 29,990• Melanoma: 29,640• Thyroid: 27,200• Kidney and renal pelvis: 22,330• Ovary: 21,550• Pancreas: 21,420

The American Cancer Society estimated that269,800 women died from cancer in 2009.The following are the leading sites:• Lung and bronchus: 70,490• Breast: 40,170• Colon and rectum: 24,680• Pancreas: 17,210• Ovary: 14,600• Non-Hodgkin lymphoma: 9,670

93 CANCER


• 214 •

• Leukemia: 9,280• Uterine corpus: 7,780• Liver: 6,070• Brain: 5,590

CANCER IN CHILDREN

According to the American Cancer Society,childhood cancers are rare. An estimated10,730 new cancer cases occurred amongchildren under age 14 in 2009. An estimated1,380 deaths are estimated to have occurredamong children in 2009, about one-third fromleukemia.

TRENDS IN INCIDENCE

AND MORTALITY

The Annual Report to the Nation on theStatus of Cancer, published in December2009, reported decreases of 1.0% and 1.6%,respectively, in incidence and death rates forall cancers combined. The drops are drivenlargely by declines in rates of new cases andrates of death for the three most commoncancers in men (lung, prostate, and colorectalcancers) and for two of the three leadingcancers in women (breast and colorectalcancer).

Overall cancer rates continue to be higher formen than for women, but men experiencedthe greatest declines in incidence (newcases) and mortality (death) rates. Forcolorectal cancer, the third most frequentlydiagnosed cancer in both men and women,and the second leading cause of cancerdeaths in the United States, overall rates aredeclining – but increasing incidence in menand women under 50 years of age is ofconcern.

The 2009 Annual Report used modelingprojections to estimate that with acceleratedcancer control efforts to get more Americans

to adopt more favorable health behaviors(such as quitting smoking) and higher use ofscreening (such as colonoscopy), as well asoptimal treatment outcomes for colorectalcancer (such as more ef fect ivechemotherapy), there could be an overallcolorectal cancer mortality reduction of 50%by 2020.

Other highlights from the report show that inmen, incidence rates have declined forcancers of the prostate, lung, oral cavity,stomach, brain, colon and rectum, butcontinue to rise for kidney/renal, liver, andesophageal cancer, as well as for leukemia,myeloma, and melanoma. In women,incidence rates decreased for breast,colorectal, uterine, ovarian, cervical, and oralcavity cancers, but increased for lung,thyroid, pancreatic, bladder, and kidneycancers, as well as for non-Hodgkinlymphoma, melanoma and leukemia.

“The continued decline in overallcancer rates documents the successwe have had with our aggressiveefforts to reduce risk in largepopulations, to provide for earlydetection, and to develop newtherapies that have been successfullyapplied in this past decade. Yet wecannot be content with this steadyreduction in incidence and mortality.We must, in fact, accelerate ourefforts to get individualized diagnosesand treatments to all Americans andour belief is that our research effortsand our vision are moving us rapidlyin that direction.”

John E. Niederhuber, M.D., Director National Cancer Institute, 12/7/09


• 215 •

Among racial/ethnic groups, cancer deathrates were highest in black men and womenand lowest in Asian/Pacific Islander men andwomen. Although trends in death rates byrace/ethnicity were similar for most cancersites, death rates from pancreatic cancer, thefourth most common cause of cancer deathin the United States, increased among whitemen and women but decreased among blackmen and women.

First issued in 1998, the annual report is acollaboration among the National CancerInstitute, the Centers for Disease Control andPrevention, the American Cancer Society,and the North American Association ofCentral Cancer Registries.

The report can be accessed online athttp://seer.cancer.gov/report_to_nation/.

THE MEDICAL TREATMENT

MARKETPLACE

The U.S. spends about $200 billion annuallyon cancer care.

According to the National Center for HealthStatistics and the National Institutes ofHealth, cancer care in the U.S. is distributedas follows:Inpatient care• Number of discharges: 1.2 million• Length of stay: 6.6 days

Ambulatory care• Number of visits to office-

based physicians: 27.7 million• Number of hospital

outpatient visits: 2.5 million

Approximately 85% of cancer care isdelivered in community-based centers orphysicians’ offices. According to oneestimate, there are over 1,000 outpatientambulatory-care cancer centers in the U.S.

Driven by increasing demand, for-profitchains continue to add facilities.

Changes in reimbursement and advances indrug therapy, which has made it easier foroncologists to administer care in their offices,has prompted hospitals to push cancer careinto the outpatient setting, according to LeeMortenson of the Association of CommunityCancer Centers. The shift to outpatientsettings began increasing in the mid- andlate-1990s.

With 90 outpatient centers nationwide, U.S.Oncology (www.usoncology.com) is thelargest for-profit company in outpatientcancer services.

Another key player is Aptium Oncology(www.aptiumoncology.com), which partnerswith hospitals. Hospitals maintain their ownbrand in centers co-developed and operatedby Aptium.

PREVENTION

According to the American Cancer Society,the cancer burden from tobacco smoking(approximately 30% of all cancer deaths) andthe combination of poor nutrition, lack ofphysical activity, and obesity (35%) canlargely be avoided. Heredity factors, whichaccount for 20% to 25% of cancer deaths,present a greater challenge for prevention,but can be minimized through screening.

The American Cancer Society estimates thatin 2008 more than 168,000 cancer deathswere caused by tobacco use alone, all ofwhich could have been prevented.

“Half of all those who continue tosmoke will die from smoking-relateddiseases.”

Cancer Facts & Figures 2009

http://seer.cancer.gov/report_to_nation/

http://www.usoncology.com

http://www.aptiumoncology.com


• 216 •

In the U.S., obesity contributes to 14% to20% of all cancer-related mortality.

Certain cancers are related to infectiousexposures (e.g., hepatitis B virus [HBV],human papillomavirus [HPV], humanimmunodeficiency virus [HIV], helicobacter,and others) and could be prevented throughbehavioral changes, vaccines, or antibiotics.

In addition, many of the occurrences of skincancer could have been prevented withproper sun protection, according to theAmerican Cancer Society.

Screenings and examinations by a healthcareprofessional can lead to detection of cancersof the breast, colon, rectum, cervix, prostate,oral cavity, and skin at earlier stages, whentreatment is more likely to be successful. Aheightened awareness of breast changes orskin changes may also result in detection oftumors at earlier stages. Cancers that can bedetected earlier by screening account forabout half of all new cancer cases. The five-year relative survival rate for these cancers isabout 84%. If all of these cancers werediagnosed at a localized stage throughregular cancer screenings, five-year survivalwould increase to about 95%.


American Cancer Society, 2200 LakeBoulevard, Atlanta, GA 30319. (404) 816-7800. (www.cancer.org)

Annual Report to the Nation on the Statusof Cancer, National Cancer Institute,December 2009.

Association of Community Cancer Centers,11600 Nebel Street, Suite 201, Rockville,MD 20852. (301) 984-9496.(www.accc-cancer.org)

Cancer Facts & Figures 2009, AmericanCancer Society, January 2009.

National Cancer Institute, 6116 ExecutiveBoulevard, Bethesda, MD 20892.(800) 442-6237. (www.cancer.gov)

North American Association of CentralCancer Registries, 2121 West White OaksDrive. Suite B, Springfield, IL 62704. (217) 698-0800. (www.naaccr.org)

“For the majority of Americans whodo not use tobacco, dietary choicesand physical activity are the mostimportant modifiable determinants ofcancer risk.”

Cancer Facts & Figures 2009

http://www.cancer.org

http://www.accc-cancer.org

http://www.cancer.gov

http://www.naaccr.org


• 217 •

PREVALENCE

According to 2009 Heart Disease and StrokeStatistics, by the American Heart Association,80.0 million Americans have one or more typeof cardiovascular disease (CVD). Of them,48% are male and 52% are female; 38% areages 65 and older.

Approximately six million U.S. patients showup in emergency rooms or doctors’ officeseach year complaining of chest pain. Only10% to 15% are actually having a heartattack. An additional 30% to 40% have someother cardiac ailment. Approximately 50% ofpatients with chest pain likely have no heartproblems. Heartburn, joint inflammation,pleurisy, a little-understood condition calledchest-all pain, and a blood clot in the lung areamong problems whose symptoms mimic aheart attack.

There are approximately 60 million physicianoffice visits and six million outpatientdepartment visits with a primary diagnosis ofCVD.

The following is a breakdown of the 864,480annual deaths in the U.S. attributed to CVD:• Coronary heart disease: 52%• Stroke: 17%• Congestive heart failure: 7%• High blood pressure: 7%• Other: 18%

COST

According to 2009 Heart Disease and StrokeStatistics, direct costs of cardiovasculardiseases and stroke in 2008 were $313.8billion, distributed as follows:• Hospitals: $150.1 billion• Drugs and other medical

durables: $ 52.3 billion• Nursing homes: $ 48.2 billion• Physicians/other

professionals: $ 46.4 billion• Home healthcare: $ 16.8 billion

Indirect costs (i.e., lost productivity frommorbidity and mortality) were estimated at$161.5 billion.

94 CARDIOVASCULAR DISEASE

TABLE 94.1

Incidences Of Specific Cardiovascular Diseases

• High blood pressure: 73.6 million• Coronary heart disease, total: 16.8 million

- Angina pectoris: 9.8 million- Myocardial infarction: 7.9 million

• Stroke: 6.5 million• Congestive heart failure: 5.7 million• Congenital cardiovascular defects: 1.3 million to 650,000


• 218 •

Regardless of its size or scope of services,cardiovascular services can account for up to40% of the net revenue of an acute carehospital, according to the HealthcareFinancial Management Association.Successful cardiovascular programs can helpmake up for revenue declines in a hospital’sother service areas.

TRENDS IN CARDIOVASCULAR

DISEASE

The Centers for Disease Control andPrevention had set as a goal a 25% reductionin the heart disease mortality rate for the2000-2009 decade. The goal was reachedfive years early, as heart disease ratesdropped 25.8% between 1999 and 2005,from 195 to 144 deaths for every 100,000people. Stroke deaths dropped 24.4% duringthe same period, from 61 to 47 deaths per100,000. Extrapolating this data suggeststhat as many as 260,000 lives were saved in2009.

The biggest hurdle to continued progress inthe nation’s heart health is the growingprevalence of obesity and diabetes.According to Daniel Jones, M.D., president ofthe American Heart Association, unless a

new strategy to stem diabetes and obesity isfound, a new wave of cardiovascular diseasedeaths can be anticipated.

PREVENTION

Recent studies have confirmed that four riskfactors – high blood pressure, bad cholesterolnumbers, diabetes, and smoking – explain atleast 80% to 90% of all heart disease. Whilethese root causes of cardiovascular and otherhealth conditions are well known – by boththe medical community and general public –a high percentage of the population in theserisk categories continues to ignore theirnecessary lifestyle changes and/or medicaltreatments.

Several studies have presented accounts ofhow well statins work in helping patientsavoid heart attacks after undergoingangioplasty procedures that clear outdiseased coronary arteries. These findingsadd to the host of previous studiessuggesting that patients benefit from statinsregardless of how high their cholesterol is.Positive findings like these have made statinsthe largest therapeutic class in the U.S., withannual sales of $15 billion.

TABLE 94.2

Distribution of Direct Costs of Cardiovascular Disease

• Heart disease (includes coronary heart disease, congestive heart failure, part of hypertensive disease, cardiac dysrhythmias,rheumatic heart disease, cardiomyopathy, pulmonary heart disease, and other heart diseases): $183.0 billion

• Coronary heart disease (included in the above total): $ 92.8 billion• Hypertensive disease: $ 52.4 billion• Stroke: $ 45.9 billion• Congestive heart failure: $ 33.7 billion


• 219 •

CARDIAC SURGERY

According to 2009 Heart Disease and StrokeStatistics, the following number of inpatientcardiovascular operations and procedureswere performed in the U.S. in 2006 (mostrecent data available):• Diagnostic cardiac

catheterizations: 1,271,000• Angioplasty: 1,265,000

- Stenting (in conjunction with angioplasty): 620,000

• Open-heart surgery: 699,000• Cardiovascular revascularization

(bypass): 469,000*• Pacemakers: 180,000• Valve procedures: 106,000• Endarterectomy: 103,000• Implantable defibrillators: 91,000*number of procedures, including multiple procedures

on patients; the total number of patients was 261,000

ANGIOPLASTIES

In the past decade, angioplasty has displacedbypass surgery as the primary treatment forblocked coronary arteries. One reason is thatangioplasty is a minimally invasive procedure,requiring a mere slit in the groin and onenight in the hospital.

More than one million angioplasties areperformed in the U.S. annually. Virtually all ofthese are performed in hospitals withcardiovascular surgical capabilities.

Recent studies, however, indicate that usingthe procedure to open blocked arteries totreat chest pain, or angina, may be riskier andno more beneficial than medication. Theresearch suggests angioplasty is used toooften, and in many cases, the modestbenefits don’t justify the procedure’s cost,which ranges from $10,000 to $12,000.

According to an analysis by Qforma usingdata from IMS Health, the number of

angioplasty procedures performed each yearhas declined by 10% to 15% since 2006.


2009 Heart Disease and Stroke Statistics,American Heart Association, March 2009.

American College of Cardiology, 240 NStreet NW, Washington, DC 20037. (202) 375-6000. (www.acc.org)

American Heart Association, 7272Greenville Avenue, Dallas, TX 75231. (800) 242-8721. (www.americanheart.org)

Edelson, Ed, “Angioplasty No Better ThanDrug Treatment In Long Run,” U.S. News &World Report, August 13, 2008.

Healthcare Financial ManagementAssociation, Two Westbrook CorporateCenter, Suite 700, Westchester, IL 60154. (800) 252-4362. (www.hfma.org)


Landro, Laura, “Guidelines For Heart CareShow Promise,” The Wall Street Journal,April 15, 2009.

Qforma, 20 Nassau Street, Suite 119,Princeton, NJ 08542. (609) 391-8071. (www.qforma.com)

http://www.acc.org

http://www.americanheart.org

http://www.hfma.org


http://www.qforma.com


• 220 •

PREVALENCE

According to a 2008 report by the Agency forHealthcare Research and Quality, 60% ofAmericans have at lease one chroniccondition. By age, the percentages withchronic disease are as follows:

None One Two +

• All adults: 40.0% 21.6% 38.2%• 18-to-34: 63.6% 22.0% 14.4%• 35-to-54: 41.8% 24.8% 33.4%• 55-to-64: 22.7% 20.3% 57.0%• 65 and older: 8.5% 14.9% 76.6%

HEALTHCARE SPENDING

People with chronic conditions account for adisproportionately high percentage ofhealthcare spending. According to a recentstudy by the Agency for Healthcare Researchand Quality, about 5% of the U.S. populationaccounts for nearly one-half of all medicalexpenditures. For comparison, the half of thepopulation with the lowest medicalexpenditures represents 3% of overallnational medical expenses. The following isa distribution of healthcare expenditures byage: Top 5% Bottom 50%

of spenders of spenders

• Birth-to-18: 5% 37%• 19-to-34: 9% 27%• 35-to-44: 10% 16%• 45-to-54: 15% 11%• 55-to-64: 18% 5%• 65-to-79: 29% 3%• 80 and above: 14% 1%

According to the American HospitalAssociation, chronic conditions account forapproximately 75% of total healthcarespending. People with chronic conditionsspend six times more per year on healthcarethan do healthy people, while those who havefunction limitation in addition to a chroniccondition spend 16 times more on healthcare.

FINANCIAL BURDEN

According to an April 2009 study by theCenter for Studying Health System Change,among the 39% of the working-agepopulation, or 72 million people, that have atleast one chronic health condition, 28% arewithin families with problems paying medicalbills, an increase from 21% in 2003. Whileproblems paying medical bills are especiallyacute and still rising for uninsured people withchronic conditions (62%), medical-billproblems also are significant and growingamong people with private insurance andhigher incomes.




95 CHRONIC CONDITIONS

http://www.ahrq.gov



• 221 •

Tu, H.T. and Genna R. Cohen, Financialand Health Burdens of Chronic ConditionsGrow, Center for Studying Health SystemChange, April 2009.


• 222 •

Chronic obstructive pulmonary disease(COPD) encompasses a group of lungdisorders including chronic bronchitis,emphysema, and asthmatic bronchitis. Eachof these conditions is characterized by anarrowing of the airways (bronchi) and loss ofthe lungs’ elasticity. This airway narrowing,most often caused by smoking, developsslowly; however, early detection of COPD canhelp slow the progress of the disease andallow those diagnosed to maintain activelives.

PREVALENCE

According to the American Lung Association,COPD is the fourth leading cause of death inAmerica, claiming the lives of 120,000Americans annually. In 2008, more than 12million people were diagnosed with COPD.The disease is associated with over 650,000hospital discharges annually.

The American Association for RespiratoryCare estimates that there are as many as 15million people in the United States withundiagnosed COPD. The majority of thesepeople will have lost 20% to 40% of their lungfunction before they show any signs of theillness.

Approximately 80% to 90% of COPD deathsare caused by smoking. Smokers are about12 times more likely to die from COPD thanthose who have never smoked.

COST

According to the American Lung Association,the cost to the nation for COPD isapproximately $37.2 billion, including directhealthcare expenditures of $20.9 billion, $7.4billion in indirect morbidity costs, and $8.9billion in indirect mortality costs.

According to the Agency for HealthcareResearch and Quality, $10.3 billion is spenton treatment of chronic COPD biannually,distributed as follows:• Medicare: $6.6 billion• Medicaid: $2.0 billion• Commercial: $1.3 billion• Other: $0.4 billion

TREATMENT

Medications are used to treat COPD, asfollows:• Bronchodilators relax the muscles around

the airways• Anti-inflammatory medicines, also called

corticosteroids or steroids, help by reducingthe swelling and mucus production insidethe airways

• Combination medicines combine inhaledbronchodilators and inhaled corticosteroids

• Antibiotics treat flare-ups that may becaused by bacterial or viral infections

With severe COPD, lung function is reducedto the extent that supplemental oxygen, alsocalled oxygen therapy, is needed to continuenormal bodily functions.

96 CHRONIC OBSTRUCTIVE PULMONARY

DISEASE


• 223 •

Pulmonary rehabilitation teaches patients tomanage COPD through exercise, allowingthem to become more active with lessshortness of breath. Medicare beganreimbursing for pulmonary rehabilitation in2010.

PREVENTION

Quitting smoking is the single most importantthing a person can do to prevent COPD alongwith a host of other diseases. It is alsoimportant to avoid exposure to secondhandsmoke, chemicals, dust and fumes, andpolluted air.

Smoking is assessed in Chapter 6 of thishandbook.


American Association for Respiratory Care,9425 North MacArthur Boulevard, Suite100, Irving, TX 75063. (972) 243-2272.(www.aarc.org)

American Lung Association, 61 Broadway,6 Floor, New York, NY 10006. th

(212) 315-8700. (www.lungusa.org)

http://www.aarc.org

http://www.lungusa.org


• 224 •

PREVALENCE

The common cold is caused by not onecommon virus but five different viral familiesencompassing a couple of hundred uniqueviral strains among them. The strains aresufficiently different from one another thateven after catching one, people can later beinfected by all the others. An adult catchesan average of two to four colds each year.Children are the primary targets of coldviruses, suffering from six or more colds eachyear. It total, it has been estimated thatAmericans get 1.4 billion colds each year.

COSTS

In a recent study by the Consortium forHealth Outcomes, Innovation, CostEffectiveness Studies (CHOICES) at theUniversity of Michigan in Ann Arbor,published in the Archives of InternalMedicine, researchers estimate that cold-related costs topped $39.5 billion a year inthe United States. The study excluded viralrespiratory tract infections related to the flu.Over 55% of the cost of colds, or $22.5billion, is a result of missed workdays. Muchof the rest of the cost stems from ineffectivemedical care, mainly doctors’ visits andantibiotic prescriptions. The University ofMichigan researchers estimated that coldslead to 110 million doctor visits and six millionemergency room visits annually.

Prof. Mark Fendrick, M.D., at the School ofPublic Health at the University of Michigan,estimates that more than $1.1 billion is spentannually on 41 million antibiotic prescriptions

for colds. An additional $5 billion is spentannually on over-the-counter cold remedies.There are approximately 800 different over-the-counter cold remedies, most with thesame basic ingredients.

DIAGNOSIS & TREATMENT

Distinguishing between colds and flu can be tough, even for doctors. A recent study byresearchers from Vanderbilt University foundonly 28% of children hospitalized and 17% ofthose treated in clinics who had lab-confirmedflu had been accurately diagnosed by theirdoctors. It’s not that doctors can’t make anaccurate diagnosis, rather it’s not easy to geta rapid diagnosis that is specific andaccurate. Rapid tests are available but notwidely used, according to the researchers.Even still, they are only 75% to 80%accurate.

Clearly, patients need to be better informedabout colds. A recent survey by Boston’sChildren’s Hospital of parents with childrenunder age six found that nearly all of thefamilies knew that viruses cause colds, butmore than half thought antibiotics are neededto treat them. Nearly two-thirds of parentssaid they would take their child to the doctorif the child had a cold, while nearly a quartersaid they’d take their child to the emergencyroom.

A cure for colds does not appear to be on thehorizon.

97 COLDS


• 225 •

MARKET ASSESSMENT

According to the American Society of PlasticSurgeons (ASPS), 12.1 million cosmeticprocedures were performed in 2008, a 3%increase from 2007. Total spending was$10.3 billion, a 9% decline from 2007.

Cosmetic procedures were performed by typeof provider facility as follows:• Office: 7.8 million• Hospital: 1.8 million• Ambulatory surgical center: 2.4 million

The cosmetic surgery market is being driven,to a large extent, by Baby Boomers desiringto maintain a youthful appearance.

98 COSMETIC & RECONSTRUCTIVE

SURGERY

TABLE 98.1

Top Cosmetic Surgical Procedures Among Women

Number Avg. Cost

Surgical • Breast augmentation: 307,000 $3,348• Liposuction: 218,000 $2,881• Nose reshaping: 204,000 $4,197• Eyelid surgery: 190,000 $2,963• Tummy tuck: 117,000 $5,167

Minimally Invasive• Botox injection: 4.7 million $391• Hyaluronic acid: 1.1 million $578• Chemical peel: 962,000 $815• Laser hair removal: 717,000 $456• Microdermabrasion: 668,000 $200

source: American Society of Plastic Surgeons


• 226 •

MARKET TRENDS

Among the more popular cosmetic surgicalprocedures, the following experienced thehighest growth between 2000 and 2008:• Botox: 537%• Soft tissue fillers: 144%• Laser skin resurfacing: 134%• Tummy tuck: 94%• Dermabrasion: 87%• Breast lift: 75%• Thigh lift: 71%• Breast augmentation: 45%• Laser hair removal: 21%

The following procedures declined between2000 and 2008:• Collagen fillers: -70%• Forehead lift: -65%• Hair transplantation: -61%• Sclerotherapy: -57%• Breast implant removals: -49%• Chin augmentation: -48%• Eyelid surgery: -32%

• Liposuction: -31%• Facelift: -26%• Chemical peel: - 9%• Laser treatment of leg veins: -10%


American Society of Plastic Surgeons, 444 E. Algonquin Road, Arlington Heights,IL 60005. (847) 288-9900. (www.plasticsurgery.org)

TABLE 98.2

Top Cosmetic Surgical Procedures Among Men

Number Avg. Cost

Surgical • Nose reshaping: 75,000 $4,197• Eyelid surgery: 31,000 $2,963• Liposuction: 27,000 $2,881• Breast reduction: 18,000 $3,282• Hair transplantation: 13,000 $4,451

Minimally Invasive• Botox injection: 314,000 $ 391• Microdermabrasion: 174,000 $ 200• Laser hair removal: 174,000 $ 456• Chemical peel: 86,000 $ 815• Laser skin resurfacing: 49,000 $1,359

source: American Society of Plastic Surgeons

http://www.plasticsurgery.org


• 227 •

PREVALENCE AND MORTALITY

The Centers for Disease Control andPrevention estimated in 2009 there were 24.0million Americans, or 8% of the population,with diabetes. Of those, 6.5 million people (ornearly one-third) are unaware they have thedisease. This represents a 15% increasefrom the 20.8 million who had the diseasethree years prior. The CDC has classifieddiabetes as reaching “epidemic levels” in theUnited States.

An additional 10 million Americans are at riskof diabetes because of obesity or a familyhistory of the disease. Diabetes hasincreased in recent years in all demographics– male and female, old and young, white andblack, rich and poor.

A 2008 report from the Robert Wood JohnsonFoundation reported a dramatic increase indiabetes among children, a condition broughtabout almost entirely by the increasing rate ofyouth obesity.

The National Institute of Diabetes andDigestive and Kidney Diseases (NIDDK)

reports that 26% of adults have impairedfasting glucose, a form of pre-diabetes,putting them at risk of developing diabetes.Combined, those with either diabetes or pre-diabetes number more than 77 million.

Diabetes, for which there is no cure, is thesixth-leading cause of death in the UnitedStates. Approximately 800,000 new cases ofdiabetes develop each year. By 2030, thetotal number of Americans with diabetescould reach 50 million, with at least 300million cases worldwide.

Almost 200,000 people die from diabetes andrelated complications each year. The YaleSchools of Public Health and Medicine predictthat the number of annual deaths due todiabetes in the U.S. could triple by 2025, to622,000.

TYPE I AND TYPE II DIABETES

Type I diabetes, formerly called juvenilediabetes, is the most common chronicchildhood disease, less common than Type IIand imminently life-threatening. It mainlystrikes children and young adults. It affectsan estimated 700,000 to one millionAmericans. With these diabetics, the body’simmune system destroys the insulin-producing beta cells in the pancreas. Type Idiabetics require daily insulin, either byinjection or a pump, to keep blood sugar fromincreasing to dangerous levels. The medicalcost to raise a child with diabetes throughadulthood is $600,000. Type I diabetestypically reduces life expectancy by 15 years.

99 DIABETES

“Nearly 200,000 individuals under theage of 20 have Type II diabetes andtwo million adolescents ages 12-to-19have pre-diabetes symptoms. Theseare illnesses that formerly were seenonly in adults.”

Robert Wood Johnson Foundation

http://www.niddk.nih.gov


• 228 •

Type II diabetes, formerly called adult-onsetdiabetes, is the most common form ofdiabetes. It affects 15 million Americans.Experts estimate only half of all cases haveactually been diagnosed. Type II is causedby a combination of insulin resistance and theimproper secretion of insulin. Approximately80% of people with Type II diabetes areoverweight; there are other causative factors.Type II usually can be controlled with diet,exercise, and oral drugs in the early stages.Typically, 40% of Type II diabetics eventuallyrequire insulin injections.

Prenatal factors, such as gestational(pregnancy-induced) diabetes, whichincreases the risk of Type II diabetes inmother and child, can also play a role.

Recent research shows that 20% of Type IIdiabetes has a genetic cause. The gene,identified in a study of Iceland’scomprehensive genetic records, is carried by38% of the Northern European populationsstudied, and it is also common amongAfrican-Americans.

ECONOMIC IMPACT

According to the American DiabetesAssociation (ADA), annual direct medicalexpenditures related to diabetes treatmentare $92 billion; approximately 44% of thosecosts are attributed to inpatient hospital stays.The American Association of ClinicalEndocrinologists estimates $23 billion isspent annually on treating complications,primarily cardiovascular disease. Includinglost productivity and other indirect costs, theannual cost of diabetes is estimated at $132billion.

According to the National Changing DiabetesProgram, diabetes accounts for 12% offederal healthcare spending. Treatment forpeople with diabetes costs nearly $80 billionmore than treatment for those without it.

TREATMENT

What was thought to be the optimal treatmentfor diabetes was called into question in 2008when the National Heart, Lung, and BloodInstitute called a halt to part of its ACCORD(Action to Control Cardiovascular Risk inDiabetes) study, saying it posed a risk topatients. Conventional wisdom suggestedthat diabetes patients who kept blood sugarclose to normal levels were better off. TheACCORD study was designed to betterunderstand how controlling blood sugar levelscould reduce the risk of heart disease in TypeII diabetics. The ACCORD test had twogroups of patients: an intensive-managementgroup with the goal of driving blood sugarsdown to less than 6% on the A1C test and ausual-care group, who were supposed to getsugars to the standard range of 7% to 7.9%.(The A1C is a measure of how much sugar isin the blood; people without diabetes have anA1C of 4% to 6%.) The hope was that theACCORD study would show that near-normalblood sugars could also protect diabeticsfrom heart disease and stroke. Four years

“People think its their fault, but that’snot true. Roughly 20% of the peoplewith Type II diabetes are thin and 75%of obese people never get it. Peoplewith a lot of genetic loading can get itat a younger age and a lower bodyweight.”

Robin Goland, M.D., Co-Director Naomi Berrie Diabetes Center Columbia University The Wall Street Journal, 5/19/09

http://www.diabetes.org


• 229 •

into the study, 257 people in the intensive-management group had died, compared with203 people getting the standard treatment.

The Veterans Affairs Diabetes Trial (VADT),developed to address the effect of intensiveglucose therapy in Type II diabetes, alsoreported in 2008 a possible link betweenintensively lowering blood sugar and possibleincreases in cardiovascular complications andheart-related deaths.

Analysis of the ACCORD and VADT data,presented in June 2009 at the AmericanDiabetes Association’s 69 Scientificth

Sessions, suggested that intensively loweringblood sugar in the early years of diabetesmay reduce the chance of heart problemsand premature death, but the sameaggressive treatment does not appear to yieldsimilar benefits in longtime Type II diabetics.

Prof. Matthew Riddle, M.D., at Oregon HealthScience University and a member of theGlycemia Manage Group of ACCORD,reported that the Type II patients in the studywho quickly lowered A1C levels during thefirst year of treatment appeared to have alower risk of death.

William Duckworth, M.D., director of diabetesresearch at the Carl T. Hayden VA MedialCenter in Phoenix, reported that the VADTdata reveals an age factor. In general, thedata show intensive treatment within the first15 years of diagnosis has an increasedchance of yielding improved health, whileintensive treatment after 20 years of havingdiabetes has an increased chance of doingharm.


American Diabetes Association, 1701 NorthBeauregard Street, Alexandria, VA 22311. (800) 342-2383. (www.diabetes.org)

Beck, Melinda, “Hidden Risk: Millions OfPeople Don’t Know They Are Diabetic,” TheWall Street Journal, May 19, 2009.


Marcus, Mary Brophy, “Age May Be Key ToDiabetes Risk,” USA Today, June 10, 2009.

National Changing Diabetes Program, 100College Road West, Princeton, NJ 08540. (www.ncdp.com)

National Heart, Lung, and Blood Institute,P.O. Box 30105, Bethesda, MD 20824. (301) 592-8573. (www.nhlbi.nih.gov)

National Institute of Diabetes and Digestiveand Kidney Diseases, 31 Center Drive,MSC 2560, Bethesda, MD 20892. (301) 496-3583. (www.niddk.nih.gov)

Robert Wood Johnson Foundation, P.O.Box 2316, College Road East and Route 1,Princeton, NJ 08543. (888) 631-9989. (www.rwjf.org)

http://www.diabetes.org

http://www.cdc.gov

http://www.ncdp.com

http://www.nhlbi.nih.gov


http://www.rwjf.org


• 230 •

Approximately 70% of Americans say that ifthey were terminally ill they would prefer todie at home; only about 25% do so.

Approximately one-quarter of Medicare isspent on patients in the last year of life, andabout one-third goes for care of patients intheir last two years. Of concern is that muchof this spending is without benefit to patientsand, in some cases is counterproductive.

A study by researchers from Yale University,published in October 2009 in the Journal ofthe American Society of Nephrology (JASN),reported that the fastest growing group ofpatients starting dialysis is those age 75 andolder. Yet, among those beginning dialysis intheir 80s and 90s, nearly one-half aresuffering from congestive heart failure andone-third from diabetes or cardiovasculardisease. And a survey of nephrologists(kidney specialists) found that nearly 50%would be willing to continue dialysis in apatient who develops severe dementia.

SPENDING DISPARITIES

Research at Dartmouth Medical School foundthat Medicare spends twice as much on end-of-life care among patients in some parts ofthe country as in others. The average cost ofa Medicare patient in Miami is $16,351; theaverage in Honolulu is $5,311. In the Bronx,New York, it’s $12,543, while in Fargo, NorthDakota, it’s $5,738. The average Medicarepatient undergoing end-of-life treatmentspends 21.9 days in a Manhattan hospital. InMason City, Iowa, he or she spends only 6.1days. While spending is frequently higher inbig cities than in small towns, there aresignificant disparities in towns that areotherwise very similar. In Boulder, Colorado,the average cost of Medicare treatment is$9,103, while an hour away in Fort Collins,Colorado, the cost is $6,448. The disparity isexplained by the fact that in some placesdoctors are more likely to order more tests

100 END-OF-LIFE CARE

“Physicians are often willing toprovide dialysis care to patients withgreatly diminished quality of life. Yetresearch suggests that dialysisprovides little benefit to the oldest,sickest patients. It’s main effect:increasing the chance that patientswill die in a hospital instead of athome or in a hospice. Manyphysicians are not well-trained in end-of-life care.”

Prof. Felix Knauf, M.D. Yale School of Medicine, 10/09 JASN, 10/09

“Research has suggested that, givena choice, the majority of people facinga terminal illness, debilitating disease,or simply old age would prefer lessintervention to more.”



• 231 •

and procedures, and more specialists areinvolved. The Dartmouth researchers foundthat extra tests and treatment do notnecessarily buy better care. In fact, theyfound worse outcomes in many states andcities where there is more healthcare.

HOSPICE AND PALLIATIVE CARE

Hospice and palliative care, which is furtherassessed in Chapter 21, is on the rise, inlarge part because of the benefits theyprovide with their focus on pain managementand emotional support. In a recent survey byresearchers from Brown University, reportedin the Journal of the American MedicalAssociation, some 70% of family membersrated the care in hospice as excellent, whilemore than one-third reported receivinginsufficient emotional support or inadequatetreatment in a hospital or nursing home.

Hospice and palliative care are also morecost-effective. A recent study of 40,000Medicare beneficiaries by researchers fromDuke University, published in Social Science& Medicine, found that hospice use reducedMedicare program spending by an average of$2,309 per beneficiary.

PSYCHOLOGICAL SUPPORT

Some hospitals have found that providingpsychological support through added nursingattention or counseling improves care whilereducing costs.

A program at Massachusetts GeneralHospital, for example, assigns nurses to thehospital’s 2,600 sickest – and costliest –Medicare patients. Along with providing basiccare, such as making sure the patients taketheir medications, they also act asgatekeepers, deciding if a visit to the doctor isreally necessary. The program cut costs by5% while providing patients with what theywant and need most: caring human contact.

Counseling initiatives about end-of-life issuesprovide patients with important support. Anassessment published in the Archives ofInternal Medicine reported that suchconversations between doctors and patientscan decrease costs by about 35% whileimproving the quality of life at the end.

“It’s not about rationing care – thereal problem is unnecessary andunwanted care.”

Prof. Elliott Fisher, M.D. Dartmouth Medical School Newsweek, 9/21/09

“The last year of life has been top-of-interest given the cost. More accessto palliative and hospice care will betremendously important in reducinghealthcare costs.”

Donald Schumacher, President NHPCO Modern Healthcare, 7/20/09


• 232 •


National Hospice and Palliative CareOrganization, 1731 King Street, Suite 100,Alexandria, VA 22314. (703) 837-1500. (www.nhpco.org)

Rubin, Rita, “Kidney Doctors QuestionDialysis Guidelines,” USA Today,September 14, 2009.

Thomas, Evan, “Rethinking End-of-LifeCare,” Newsweek, September 21, 2008, pp34-40.

Vesely, Rebecca, “How Will It End?”Modern Healthcare, July 20, 2009, pp 30-31.



• 233 •

PREVALENCE & COST

As many as 50 million Americans suffer fromheadaches. The following are several typesof chronic headaches (source: NationalHeadache Foundation):• Tension headache is the most common,

accounting for more than 75% of allheadaches.

• Migraine is the second most common formof primary headache, affecting anestimated 30 million Americans; 18% of allwomen and 6% of all men.

• Cluster headaches are a variant of amigraine. They are not as common andoccur almost exclusively in men who smokeor drink heavily. They are called clusterheadaches because after the first onestarts, headaches usually keep comingback for the next few weeks, or evenmonths. Each attack lasts no more than acouple of hours and is associated withsevere pain in one eye.

• Rebound headaches occur when a personexperiences one of the above mentionedheadaches and becomes dependent onpain killers. When the last dose begins towear off, the headache comes back.

• Seventy-three percent (73%) of headachesufferers report experiencing more thanone type of headache. For this majority, itis essential to determine headache type inorder to develop a specific treatmentregimen.

Headaches and migraines are one of theleading health-related causes of workabsenteeism.

TREATMENT

With recent developments, physicians nowhave at their disposal a growing arsenal ofheadache drugs – medications that can stopan accelerating migraine in its tracks, reducethe risk of recurrence, or, in some cases,keep one from happening in the first place.Scientists are starting to uncover subtledefects in brain chemistry andelectrophysiology that lead not just tomigraines but to all kinds of headaches.Indeed, many neurologists now believe thatthe most severely disabling headaches areactually migraines in disguise and so aremore likely to respond to migrainemedications than to standard analgesics suchas aspirin, ibuprofen, or acetaminophen.

Migraine sufferers have long been told totreat their headaches at the onset. Now,many doctors are prescribing daily drugs toprevent migraines from ever starting at all.Prevention therapy typically providessignificant relief only for about half of thepeople who try it. While it may reduce thefrequency of migraines, it rarely eliminatesthem entirely. And some doctors questionwhether the benefit is always worth the

101 HEADACHES & MIGRAINES

“Headaches and their aftermaths costthe U.S. economy $17 billion a year inlost work, disability payments, andhealthcare expenses.”

Prof. David W. Dodick, M.D. Mayo Clinic Scientific American, 8/08


• 234 •

potentially high cost and the range of sideeffects that can be caused by some dailydrugs. Patients with one or two attacks amonth are likely better off with one-dosetreatments, rather than preventive therapy.

HEADACHE CLINICS

There are over 80 headache clinics acrossthe U.S., many of which are affiliated withhospitals. While themselves a specialty, afew specialize further by patientdemographic. The Headache Clinic at theChildren’s Hospital of Pittsburgh, for example,focuses on the treatment of juvenileheadaches. The Women’s Headache Centerat Somerville (Massachusetts) Hospital, thefirst just for women, opened in 2006.

A directory of headache specialists andclinics available from the National MigraineAssociation is available online athttp://www.migraines.org/help/helpclin.htm.


Dodick, David W. and J. Jay Gargus, “WhyMigraines Strike,” Scientific American,August 2008, pp 56-61.

National Headache Foundation, 820 NorthOrleans, Suite 217, Chicago, Illinois 60610.(312) 274-2650. (www.headaches.org)

http://www.migraines.org/help/helpclin.htm

http://www.headaches.org


• 235 •

PREVALENCE & MORTALITY

The HIV/AIDS Surveillance Report: Cases ofHIV Infection and AIDS in the United Statesand Dependent Areas, is published

annually by the Centers for Disease Controland Prevention. A summary of prevalenceand mortality data from the 2009 report ispresented in Table 102.1.

An estimated 21% of adults with HIV infectionare undiagnosed. This puts the total numberof persons living with HIV or AIDS, diagnosedor undiagnosed, at approximately 1.1 million.

COST

The estimated annual cost of HIV infectionsin the U.S. is approximately $30 billion,roughly evenly split between direct andindirect costs.

According to the Henry J. Kaiser FamilyFoundation, federal, state, and local

governments spend $14 billion domesticallyon HIV/AIDS annually, distributed as follows:• Care and assistance: 75%• Research: 18%• Prevention: 7%

An additional $4 billion is spent by the U.S.government for funding in developing nations,particularly in sub-Saharan Africa. This aidprovides life-extending drugs to 1.3 millionpeople and palliative care for another threemillion.

102 HIV & AIDS

TABLE 102.1

HIV/AIDS Prevalence and Mortality in the United States

• Total reported cases; persons living with HIV (not AIDS): 256,400• Total reported cases; persons living with AIDS: 455,600• Race/ethnicity of persons living with HIV/AIDS

- African-American: 48% - Hispanic: 17%- Caucasian: 33% - Other: 2%

• Gender - Male: 73% - Female: 27%

• New diagnosis,HIV or AIDS (annual): 56,300• New AIDS diagnosis (annual): 36,000• Deaths of persons with AIDS (annual): 14,600


• 236 •

THE CURRENT AIDS EPIDEMIC

America’s AIDS epidemic has changeddramatically since the late 1990s. Twodecades ago the U.S. epidemic looked“simple” and homogenous – AIDS was aproblem for gay men some felt. Today, aboutone-third of new infections are transmittedthrough heterosexual intercourse, up from 3%in 1985. According to the CDC, 53% of newinfections have occurred in gay and bisexualmen. Black/African-American men andwomen are also strongly affected, and areestimated to have an incidence rate 7 timesas high as the incidence rate amongCaucasians.

Women now account for 26% of newlydiagnosed AIDS cases – nearly four times theproportion they made up in 1986 – and girlsaccount for the majority of new HIV infectionsamong teens.

The number of people over 50 with HIV/AIDSis growing significantly due to an agingpopulation, despite the fact that newHIV/AIDS diagnoses are not increasing inthat age group. Of 100,000 New Yorkersliving with HIV/AIDS, 31% are over 50.Research shows that this group is likely tohave high rates of depression, and manyhave numerous age-related medicalconditions that are complicated by theiralready compromised health.

In 1990, as many as 2,000 babies were bornin the U.S. infected with HIV. As of 2009,that number had been reduced to less than800. The Elizabeth Glaser Pediatric AIDSFoundation, founded in 1988, has beencredited with nearly wiping out pediatric AIDSin the United States.

TREATMENT

According to IMS Health, annual HIV antiviral(J5C) sales are approximately $7 billion

globally. The top 10 products, which hold acombined marketshare of 86%, are asfollows:• Combivir (GlaxoSmithKline)• Crixivan (Merck & Co.)• Epivir (GlaxoSmithKline)• Kaletra (Abbott)• Serit (Bristol-Myers Squibb)• Sustiva (Bristol-Myers Squibb)• Trizivir (GlaxoSmithKline)• Viracept (Pfizer)• Viramune (Boehringer Ingelheim)• Ziagen (GlaxoSmithKline)

The FDA approved in 2003 the first fusioninhibitor that works against AIDS, Fuzeon,which is produced by Roche. At roughly$20,000 a year, Fuzeon costs three times asmuch as most AIDS medicines.

In 2006, FDA approved Atripla, the first HIVtreatment that packs a triple-drug cocktail intoa one-a-day pill. The pill includes doses ofBristol-Myers Squibb’s Sustiva and GileadPharmaceutical’s Truvada, a combo of Vireadand Emtriva. The single dose pill vastlysimplifies AIDS care, which a few years agowas a regimen of 20 or 30 tablets.

Since 1987, AIDS Drug Assistance Programs(ADAPs), which are federally and state-funded, but administered by each state, havemade treatments available to patients withoutinsurance or the resources to purchasedrugs. These programs are often a lastresort for people who are HIV-positive anddon’t qualify for Medicaid. To be eligible forMedicaid, patients usually have to be amongthe low income and already have developedfull-blown AIDS. Today, ADAPs buy 20% ofthe HIV drugs prescribed in the U.S., enoughfor 92,000 people; the remaining 80% arepaid for by insurance or are covered byfederal programs.


• 237 •

PREVENTION STRATEGIES

Prevention strategies such as intensivecounseling, needle exchanges, and treatmentfor drug addiction cost $5,000 to $40,000 perinfection averted. This is very cost effectivecompared to the costs of AIDS therapies,especially since addiction treatment also paysoff in decreased crime and higheremployment among the afflicted population,according to Dr. James G. Kahn, University ofCalifornia at San Francisco.

Early detection, which helps prevent thespread of AIDS, is being enhanced by theavailability of rapid point-of-care test product.The OraQuick Advance Rapid HIV-1/2Antibody Test, which provides 99% accuracydetection of HIV using an oral swab, wasrecently approved by FDA.

In April 2009, the CDC launched a $45million, five-year public awareness campaignincluding radio ads, transit signs, airportdioramas, online banner ads, and onlinevideo in English and Spanish. It is the firstsuch media barrage on the HIV/AIDSepidemic aimed at the public since 1987.

Prof. David R. Holtgrave, Ph.D., chairman ofthe Bloomberg School of Public Health atJohns Hopkins, has calculated annualspending of $800 million to $1.3 billion forprevention measures would be required to cutthe number of new HIV infections in half.



Elizabeth Glaser Pediatric AIDSFoundation, 1140 Connecticut Avenue NW,Suite 200, Washington, DC 20036. (202) 296-9165. (www.pedaids.org)

HIV/AIDS Surveillance Report: Cases ofHIV Infection and AIDS in the United Statesand Dependent Areas, Centers for DiseaseControl and Prevention, December 2009.

Sternberg, Steve, “Putting AIDS Back OnThe Nation’s Radar,” USA Today, April 8,2009.


“The CDC campaign will confrontcomplacency and put HIV/AIDS backon the nation’s radar screen.”

Kevin Fenton, Director HIV/AIDS Prevention Programs CDC, 4/8/09

http://www.cdc.gov

http://www.pedaids.org

http://www.kff.org


• 238 •

Various infectious diseases are assessed inthis handbook as follows:• Colds: Chapter 97• HIV/AIDS: Chapter 102• Influenza: Chapter 104

Other infectious diseases are assessed inthis chapter.

PREVALENCE

The number of cases and incidence rates(per 100,000 population) in 2008 for commoninfectious diseases were as follows:• Salmoneliosis: 46,151/15.2• Chickenpox (Varicella): 26,924/8.8• Lyme Disease: 26,739/8.8• Hepatitis A and B: 5,853/1.9• E.Coli: 5,164/1.7• Rabies (animal): 4,911/1.6• Legionellosis: 2,815/0.9• Rocky Mountain spotted

fever: 2,276/0.7• Malaria: 1,075/0.4• Meningococcal infections: 1,057/0.3

MORTALITY

The following are the most fatal infectiousdiseases in the United States, according toDeaths: Final Data for 2006, published by theNational Center for Health Statistics in April2009:• Influenza and pneumonia: 63,001• Viral hepatitis: 5,529• Tuberculosis: 648

HEPATITIS C

More than 170 million people worldwide areinfected with hepatitis C. Most of theestimated four million Americans with hepatitisC are not aware they have the disease. Mostoften there are no symptoms, but when theydo occur they include fatigue, abdominal pain,loss of appetite, nausea, and vomiting. Asmany as 10,000 of those infected die eachyear. People most at risk are intravenousdrug users, but healthcare workers,hemodialysis patients, and sexually activeindividuals are also at risk. According to theCDC, hepatitis C, or HCV, is the mostcommon chronic blood-borne infection in theUnited States. Doctors call it the ‘BabyBoomer Disease’ because many victimscontracted it as teens in the 1960s and 1970swhile injecting or inhaling drugs. The damageit does to the liver, typically for 10-to-20 yearsbefore symptoms develop, is the biggestreason for undergoing liver transplants.

Over the next 10 years, annual deaths linkedto hepatitis C are expected to at least double,perhaps triple. And cases of liver failure andcancer, the two most serious complications ofhepatitis C, are rising and will probably climbfaster.

103 INFECTIOUS DISEASES

“We’re on the edge of a liver-diseaseepidemic.”

Ian Williams, M.D. Chief of Epidemiology Div. of Viral Hepatitis, CDC


• 239 •

NORWALK VIRUS

Norwalk virus, formally known as norovirus(better known to the public as stomach flu) isthe most common cause of gastrointestinalillness in North America, affecting anestimated 23 million Americans each year.No treatment exists. Those infectedgenerally recover on their own within two tothree days.

Though often associated with cruise shipsbecause it thrives in closed environments andbecause cruise lines are required by law toreport all gastrointestinal illnesses, the viruscan be found many places. Cruise shipscalling at North American ports reportedgastrointestinal outbreaks to the CDC asfollows: # Reports Total Sick

• 2007: 41 4,570• 2008: 35 3,551• 2009: 27 3,627

According to the CDC, norovirus outbreaksare common in healthcare settings. Whenhospitals face an outbreak of the highlycontagious Norwalk virus, standard infection-control procedures are not adequate,researchers say. Moreover, an outbreakplaces hospital staffs at extreme risk and thecosts involved are significant. A report on athree-month Norwalk outbreak at The JohnsHopkins Hospital found that total hospitalcosts – including extra cleaning supplies, staffsick leave, diagnostic tests, replacementstaff, salaries, and lost revenue from closedbeds – exceeded $650,000.

PNEUMONIA & PNEUMOCOCCAL

DISEASE

Because of antibiotics, pneumonia is nolonger the leading cause of death in theUnited States. However, death rates haveincreased dramatically in recent years. Up to

three million cases of infectious pneumoniaoccur annually, resulting in approximately61,000 deaths.

More than 100 different organisms can causepneumonia, an acute or chronic inflammationof the lungs. Depending on the kind ofpneumonia, symptoms range from a chroniccough (due to mycoplasma pneumonia, orwalking pneumonia) to a fever, cough, andshortness of breath (associated with bacterialpneumonia). Pneumonia is not a singledisease. It can have over 30 different causes,the most common of which are bacteria,viruses, and mycoplasma. Viral andmycoplasma pneumonia are not as serious asbacterial pneumonia, which can be life-threatening.

Pneumococcal, among the deadliest bacteriain the U.S., kills approximately 40,000 peopleannually. The microbe causes 500,000 casesof pneumonia yearly as well as an estimatedseven million to 10 million middle-earinfections in children and thousands of casesof brain (meningitis) and bloodstream(bacteremia) infections. Pneumococcalpneumonia kills about one out of 20 peoplewho get it. Bacteremia kills about one personin five and meningitis about three people in 10.

SEXUALLY TRANSMITTED

DISEASES

According to the CDC, 15 million Americansbecome infected every year with a STD, 50%of which are incurable viral infections such asherpes or human papilloma virus (HPV), thecause of genital warts and cervical cancer.Such incurable STDs affect a total of 65million Americans. Some STDs, such assyphilis, have been brought to all-time lows.Others, however, such as genital herpes,gonorrhea, and chlamydia, continue to surgeand spread through the population. Genitalherpes alone affects a total of 20 million


• 240 •

Americans.

The number of cases and incidence rates(per 100,000 population) in 2008 (most recentdata available) for STDs were as follows: Cases Rate

• Chlamydia: 1,210,523 401.3• Gonorrhea: 336,742 111.6• Syphilis: 13,500 4.5

TUBERCULOSIS

According to the CDC, there were 12,898tuberculosis (TB) cases reported in the U.S.in 2008, a 3.8% decline from 2007 to 4.2cases per 100,000 population. There hasbeen a decline of more than 50% from thepeak of TB resurgence in 1992. TB amongforeign-born persons accounted for themajority (55%) of cases in the United States.In 2008, the TB rate in foreign-born personsin the United States was 10 times higher thanin U.S.-born persons.

The U.S.-Mexico Binational TB Referral andCase Management Project, initiated in 2003by the American Lung Association of Texas,is credited with helping improve treatmentcompletion by TB patients who cross theborder between the two nations.

WEST NILE VIRUS

The effects of West Nile virus, which isspread through bites of infected mosquitos,range from flu-like symptoms to more seriouscases that result in encephalitis andmeningitis. About 10% of the more seriouscases are fatal, according to the CDC.

The spread of the West Nile virus was aprominent public health story in 2002 and2003. Some 4,156 cases of infection by thevirus were reported nationwide in 2002, with284 confirmed deaths. The number of casesand deaths was on the decline in 2004

through 2009, with recent cases and deaths asfollows:• 2006: 4,269• 2007: 3,630• 2008: 1,356• 2009: 663

The number of reported cases has beendeclining over the past few years because ofnatural cycles in weather and the mosquitopopulation.


Centers for Disease Control and Prevention,1600 Clifton Road NE, Atlanta, GA 30333. (404) 639-3311. (www.cdc.gov)

http://www.cdc.gov


• 241 •

Influenza, commonly called the flu, is acontagious lung disease caused by a virus.

The hospital industry anticipates, monitors,and analyzes the flu season regularly.Hospitals factor into their planning when theflu season will arrive, how long outbreaks willlast, and how severe they will be.

Clinicians say only the most fragile patients –the very young and the very old – are typicallyhospitalized for flu.

PREVALENCE AND COST

Approximately 40 million Americans catch theflu each year, resulting in 15 million lost workdays, 200,000 hospitalizations, and about36,000 deaths. Influenza health costs arebetween $3 billion and $5 billion each year.

According to the Centers for Disease Controland Prevention (CDC) the Winter 2008-2009flu season was one of the mildest in severalyears. One reason is that the flu vaccine waswell-matched to the circulating flu viruses.Flu vaccines are often 70% to 90% effective.In the 2007-2008 season, which wasconsidered severe, the vaccine was only 44%effective.

FLU VACCINATION

Flu shots are considered most essential forschool-age children and the elderly.According to the CDC, 70% to 75% of adultsaged 65 and older typically received flu shotseach year.

As of November 2009, about 32% of alladults had been inoculated against theseasonal flu, and an additional 17% plannedto have vaccinations. The number of personsreceiving flu shots was about sevenpercentage points higher than a year prior.

Among unvaccinated adults who did notintend to be vaccinated against the seasonalflu in 2009, about 20% said they thought theydid not need the vaccine, another 20% saidthey do not believe in flu vaccines, andslightly less than 20% said they wereconcerned about getting sick or experiencingside effects.

THREAT OF A FLU PANDEMIC

Influenza pandemics, which occur when anew strain of the influenza virus is transmittedto humans from another animal species, areone of the most serious public health threats.In contrast to regular seasonal epidemics ofinfluenza, pandemics occur irregularly. The1918 Spanish flu epidemic, which originatedamong birds and then mutated and spread tohumans, was the root cause of 50 milliondeaths and is the most severe pandemic inrecent history. More recent epidemics werethe Asian Flu in 1957 and the Hong Kong Fluin 1968.

104 INFLUENZA

“That 1918 experience is in ourminds.” Ann Schuchat, M.D., Interim Deputy Director for Science and Public Health CDC, 5/27/09


• 242 •

H1N1

There was concern throughout Fall andWinter 2009 that the spread of a new strain ofH1N1 influenza, first detected in April 2009,might develop into a pandemic.

According to the CDC, there wereapproximately 50 million cases of H1N1 as ofDecember 2009. There were more than200,000 hospitalizations and about 10,000deaths from the strain.

Unlike most strains, H1N1 had the greatestimpact among children and young adults.Among those who died from H1N1, at least7,500 were adults aged 18-to-64 and 1,000were children under age 18. In a typical fluseason, roughly 80 children die.

Although the spread of H1N1 waned inDecember 2009, the virus remained highlyinfectious and the threat of a resurgenceremained.



http://www.cdc.gov


• 243 •

PREVALENCE AND

EXPENDITURES

According to the National Kidney Foundation(NKF), at year-end 2009 approximately 26million Americans – or 1 in 10 adults –suffered from chronic kidney disease (CKD).Another 20 million are susceptible due to riskfactors such as diabetes, high bloodpressure, cardiovascular disease, familyhistory of kidney disease, and racial or ethnicheritage. African-Americans and Native-Americans have a significantly higher risk ofdeveloping CKD; rates are also elevatedamong Hispanics, Asians, and PacificIslanders. Most of those at risk are not evenaware of it.

According to the 2008 Annual Data Report,by the U.S. Renal Data System, part of theNational Institute of Diabetes and Digestiveand Kidney Diseases (NIDDK), more than485,000 patients suffer from end-stage renaldisease (ESRD) and receive dialysis; about17,500 die of kidney disease each year.

KIDNEY TRANSPLANTS

In 2008, 17,354 kidney transplants wereperformed in the U.S. As of January 2010,90,598 people were on the wait list for akidney transplant. Organ transplants arediscussed in Chapter 107 of this handbook.

More and more people with failing kidneysare skipping dialysis and going directly totransplant. Pre-emptive kidney transplantsrepresented 15% of all transplants in 2009,according to the U.S. Renal Data System, an

increase from 9% in the early 1990s.

RENAL DIALYSIS SERVICES

While awaiting a kidney transplant, patientsundergo dialysis to cleanse their blood. Thistypically involves a three-hour sitting, threetimes per week. At year-end 2009, 341,000people in the U.S. were relying on dialysis tokeep them alive, according to the NKF. Theannual cost per patient is approximately$64,000. There are 3,600 dialysis facilities inthe U.S., 260 of which are hospital-based.

The largest providers of renal dialysisservices are Fresenius Medical Care andDaVita, reporting revenues of $10.6 billionand $5.7 billion, respectively, in 2008.

MEDICARE SPENDING

For dialysis patients, Medicare pays acomposite rate that covers dialysis treatmentcosts and certain routinely furnished ESRD-related drugs, laboratory tests, and supplies.The composite rate is adjusted by a drugadd-on payment and by basic case-mixadjustment factors including age and bodysize. A special adjustment is applied forservices to pediatric patients. In addition, thecomposite rate is adjusted for geographicdifferences in costs using a wage index. For2009, the unadjusted composite rate was$133.81 and the drug add-on payment was$20.33.

In 2007, Medicare paid approximately $9.2billion for dialysis and related services, of

105 KIDNEY DISEASE



• 244 •

which $5.7 billion, or about 62%, was paidunder the composite rate. In comparison,$3.5 billion, or about 38%, paid for separatelybillable ESRD-related items and services,including injectable drugs, non-routinelaboratory tests, supplies and services forhome dialysis patients who dealt directly witha durable medical equipment supplier, andESRD-related drugs paid under Part D.

DAILY AT-HOME DIALYSIS

New technology – including the firsthemodialysis machine the size of a suitcaseinstead of a refrigerator – makes daily at-home dialysis possible for a growing numberof patients. The FDA has approved twomachines for daily home use: Aksys Ltd.’sPHD System and NxStage Medical’s portableSystem One.

Home dialysis gives patients the ability tohave treatment more frequently, evenperhaps daily and for shorter periods ratherthan three hours per session. The hope isthat more frequent home dialysis could offeran improvement over current treatment.

Kaiser Permanente statistics indicate thathome dialysis users require lesshospitalization, potentially saving $10,000 to$20,000 in annual healthcare costs perpatient.

Medicare reimburses the same amount for at-home or dialysis center care.

WEARABLE ARTIFICIAL KIDNEY

At the University of California, Los Angeles,Victor Gura, M.D. has invented a wearableartificial kidney. Weighing 5 kg, the deviceuses disposable cartridges that capture toxinsfrom cleansing water so that it can berecycled.


2008 Annual Data Report, U.S. Renal DataSystem, March 2009.

“A Clean Break: Kidney Machines GoMobile,” The Economist, October 3, 2009,p. 99.

National Institute of Diabetes and Digestiveand Kidney Diseases, 31 Center Drive,MSC 2560, Bethesda, MD 20892. (301) 496-3583. (www.niddk.nih.gov)

National Kidney Foundation, 30 East 33rd

Street, New York, NY 10016. (800) 622-9010. (www.kidney.org)

U.S. Renal Data System, 914 South 8th

Street, Suite S-206, Minneapolis, MN55404. (612) 347-7776. (www.usrds.org)


http://www.kidney.org

http://www.usrds.org


• 245 •

COST

The American Academy of Ophthalmology(AAO) estimates that eye disease costs theU.S. about $51.4 billion each year. Costs toMedicare for indirect expenses related to eyedisease, including nursing care and assisted-living facilities, are about $2 billion.

To increase public awareness of eyediseases, the AAO has launched EyeSmart,a campaign focusing on five major eyediseases: age-related macular degeneration,cataracts, diabetic retinopathy, dry eye, andglaucoma.

PREVALENCE

Blindness or low vision affects 3.3 millionAmericans ages 40 and over, or one in 28,according to the National Eye Institute (NEI).This figure is projected to reach 5.5 million by2020. Further, low vision and blindnessincrease significantly with age, particularlyamong people over age 65. People 80 yearsof age and older currently make up 8% of thepopulation, for example, but account for 69%of blindness.

Of the 3.3 million vision-impaired Americans,937,000 are blind (0.8% of the population)and 2.4 million have low vision. An additional30.4 million people have myopia(nearsightedness) and 11.7 million havehyperopia (farsightedness).

EYE DISEASE

The NEI identified age-related maculardegeneration (AMD), glaucoma, cataracts,and diabetic retinopathy as the most commoneye diseases in Americans ages 40 and over.The leading cause of blindness among whiteAmericans is AMD, accounting for 54% of allblindness. Among African-Americans, theleading causes of blindness are cataract andglaucoma. Among Hispanics, glaucoma isthe most common cause of blindness.

Age-Related Macular Degeneration• Approximately nine million Americans suffer

from AMD, the leading cause of blindnessin people over 50. By 2020, three millionAmericans will have advanced cases, anincrease from almost two million in 2009.

• Eight out of 10 people with AMD have themilder, ‘dry’ form of the disease, but thatcan develop into the more serious, ‘wet’form of AMD that accounts for 90% of theafflicted population’s vision loss. AMD candistort and block central vision within daysof its onset, or slowly take its toll overyears. Sufferers can still see well from theperiphery and may be affected in only oneeye.

• The NEI estimates that every year 260,000people will develop the disease, and therate will increase as the population ages.

• Until recently, the only AMD treatment onthe market was Visudyne, a laser-activateddrug from QLT Inc. and Novartis that stopsblood vessels from leaking. Approved in2000 by the FDA, Visudyne treats only aparticular type of macular degeneration,one that afflicts 25% of all wet-AMDpatients. Though it generates $350 million

106 OPHTHALMOLOGY


• 246 •

in annual sales, Visudyne hasn’t lived up tooriginal expectations, with most patientscontinuing to lose their vision.

• A breakthrough drug from Genentech(www.genentech.com) offers hope forpatients with the wet form of AMD.Lucentis, approved in June 2006, isessentially a fragment of the monoclonalantibody that was used to make thecompany’s colon cancer drug Avastin.Lucentis halts blood-vessel growth wheninjected into the side of the eye. In twolarge-scale trials it stopped vision loss in95% of patients and improved vision in one-third. The downside of Lucentis is its cost:$1,950 per monthly dose.

• At least 18 companies are now pursuingtreatments for macular degeneration,including stem-cell treatments, anti-inflammatory medicines, and implants thatslowly release protective proteins to staveoff cell damage.

Cataracts• A cataract is a clouding of the lens in the

eye that results in blurred vision. Cataractsare formed when proteins that comprise thelens clump together and start to cloud asmall area of the lens. Over time, thecataract can enlarge, cloud more of thelens, and impair vision.

• Approximately 1.3 million cataract surgeriesare performed annually in the U.S.

• Medicare pays about $3.4 billion a year totreat cataracts.

• Researchers at the Harvard School ofPublic Health recently found that peoplewith high lead concentrations in their bodieshave a much higher risk of developingcataracts and estimated that lead maycontribute to 42% of cataract cases.

Diabetic Retinopathy• Diabetic retinopathy (DR) is a complication

of diabetes that results from damage toretina blood vessels. At first, DR maycause no symptoms or only mild visionproblems. Eventually, however, DR can

result in blindness.• The NEI estimates that 4.1 million adults

have diabetic retinopathy, a figure that isprojected to increase to 7.2 million by 2020.

• Up to 45% of adults diagnosed withdiabetes in the United States have somedegree of diabetic retinopathy, according tothe NEI.

Glaucoma• Glaucoma, the leading cause of

preventable blindness, is an eye diseasethat causes vision loss by damaging theoptic nerve.

• Prevent Blindness America estimates thatmore than 3 million people in the U.S. haveglaucoma. Less than half know it.

• The only known treatment for glaucoma isa method of lowering eye pressure, usuallywith prescription eye drops.

• The number of Americans affected by thedisease is expected to increase by about600,000 by 2020.

MYOPIA AND HYPEROPIA

An estimated 95 million wear prescriptioneyeglasses and 35 million to 40 million usecontact lenses to correct for myopia andhyperopia. Other medical options are asfollows:

Refractive Surgery• Over 10 million Americans have had

successful LASIK (laser assisted in situkeratomileusis) surgery for correctingmyopia, hyperopia, and astigmatism; aboutone million are treated annually.

• Photorefractive keratectomy (PRK), analternative laser surgery, is used forpatients where LASIK is not feasible, suchas for those with a thin cornea. Mostpatients prefer LASIK because of the initialirritation and long healing time associatedwith PRK.

• LASIK accounts for 87% of laserprocedures, according to Market Scope.

http://www.genentech.com


• 247 •

Corneal Refractive Therapy• Corneal refractive therapy (CRT), or

corneal reshaping, was approved in 2002by the FDA. No surgery is involved.Doctors use computers to map the surfaceof the eye, then make lenses that patientswear while they sleep that work to correctthe problem. The lenses reshape theepithelium, the surface of the cornea,redistributing cells from the center to theperiphery to compensate for refractiveerrors and astigmatism. Vision is improvedafter only a week although patients need towear the lenses at least every other night orthe effect subsides, according to ParagonVision Sciences (www.paragoncrt.com),maker of CRT lenses.

• Fitting the lenses and treating both eyescosts $1,000 to $1,500, with an additional$300 to $500 in later years for replacementlenses. CRT is marketed as an alternativeto LASIK.

• Studies show that 93% of CRT patientsachieve 20/32 vision or better; 67% improveto 20/20 vision.

Intraocular Lenses• Intraocular lenses are emerging to become

a preferred solution for nearsightedness. In2004, the FDA approved the Verisyse lens,the U.S. market’s first intraocular lens.Although more than 150,000 lenses havebeen implanted worldwide over the past 17years, the popularity of laser surgery in theU.S. had for many years discouraged thedeveloper from the arduous testing neededto obtain FDA approval. The approval wasthe culmination of seven years of U.S.tests.

• Unlike LASIK, the intraocular lenses arecompletely reversible. And implantablecontact lenses tend to provide better qualityof vision than LASIK. Also, the lenses canbe designed to provide optimal vision,whereas with laser treatment vision adjustsby the way the person heals.


American Academy of Ophthalmology, P.O.Box 7424, San Francisco, CA 94120.(415) 561-8500. (www.aao.org)

Market Scope, 9859 Big Bend Boulevard,Suite 202, St. Louis, MO 63122. (314) 835-0600. (www.mktsc.com)

National Eye Institute, 2020 Vision Place,Bethesda, MD 20892. (301) 496-5248.(www.nei.nih.gov)

Prevent Blindness America, 211 WestWacker Drive, Suite 1700, Chicago, IL60606. (www.preventblindness.org)

The Vision Council, 1700 Diagonal Road,Suite 500, Alexandria, VA 22314.(703) 548-4560. (www.thevisioncouncil.org)

“Right now they’re more invasive thanLASIK, so they’re not reallyappropriate for people with lowerlevels of nearsightedness. But overtime as the implantable lenses getbetter, I think they’ll gradually replaceLASIK. My personal belief is that 15-to-20 years from now, we won’t bedoing LASIK any more. Futuregenerations of implantable lenses willcompletely replace it.”

Robert Maloney, M.D. Maloney Vision Institute (L.A.)

http://www.paragoncrt.com

http://www.aao.org

http://www.mktsc.com

http://www.nei.nih.gov

http://www.preventblindness.org

http://www.thevisioncouncil.org


• 248 •

The Health Resources and ServicesAdministration, Division of Transplantation,administers and oversees two contracts tofacilitate the nation’s allocation system fororgan transplantation. They are as follows:• The Organ Procurement and

Transplantation Network (OPTN),contracted by the United Network for OrganSharing (UNOS), is responsible foroperating the national network for organprocurement and allocation and works topromote organ donation. Under federallaw, all U.S. transplant centers and organprocurement organizations must bemembers of OPTN to receive funds throughMedicare.

• The Scientific Registry of TransplantRecipients (SRTR), contracted by the ArborResearch Collaborative for Health, providesanalytical support for the ongoingevaluation of scientific and clinical status ofsolid organ transplantation.

ORGAN TRANSPLANT CENTERS

There are approximately 320,000 organtransplant centers in the United States. Thenumber of organ-specific transplantprograms, of which some centers may haveseveral, is approximately 1,000.

The SRTR website provides statistics andoutcomes data for each program.

TRANSPLANTS AND DONORS

The number of transplants in 2008, by organ,are as follows:

• Kidney: 16,517• Liver: 6,318• Heart: 2,163• Lung: 1,478• Kidney/pancreas: 837• Pancreas: 436• Intestine: 185• Heart/lung: 27

Rates of organ donation in the United Stateshave increased in recent years. But thisgrowth lags far behind the increasing need;approximately 40,000 individuals are addedto the U.S. transplant waiting list each year.

According to OPTN, the number oftransplants in recent years have been asfollows:• 2003: 25,452• 2004: 27,037• 2005: 28,113• 2006: 28,938• 2007: 28,361• 2008: 27,961

Of transplants in 2008, 21,744 were throughdeceased donors; 6,217 from living donors.

WAIT LIST

There were 113,758 candidates waiting onorgans as of January 2010. The wait list byorgan was as follows (source: OPTN):• Kidney: 88,334• Liver: 16,454• Heart: 3,029• Kidney/pancreas: 2,264• Lung: 1,852• Pancreas: 1,515

107 ORGAN TRANSPLANTS


• 249 •

• Intestine: 233• Heart/lung: 77

ORGAN PROCUREMENT

A single individual can help as many as 50patients by donating tissue and organs. It ispossible to transplant 25 different parts of thebody, including the corneas, the heart, heartvalves, the liver, kidneys, bone and cartilage,marrow, skin, and the pancreas.

Medical studies estimate that organs could beobtained from 10,500 to 26,000 brain-deadvictims each year if more people consentedto the donations.

In spite of numerous campaigns aimed ateducating healthy Americans about donatingtheir organs after they die, a donor shortagepersists. A recent survey from Donate LifeAmerica found that 90% of Americanssupport organ and tissue donation, androughly one-half say they are registered asan organ donor, but only about 30% haveactually signed up as a donor. One recentsurvey found 66% of people were not clearon how to sign up to become a donor. Lawsthat govern donation vary from state to state.The coalition offers state-specific guidelinesat www.donatelife.net.

Americans who want to become organdonors opt in, that is they indicate on adriver’s license, for example, that when theydie their organs should be made available.Many European and Asian countries take theopposite approach. In Singapore, forexample, all residents receive a letter whenthey come of age informing them that theirorgans may be harvested unless theyexplicitly object. In Belgium, which adopted asimilar presumed-consent system 12 yearsago, less than 2% of the population hasdecided to opt out.

Complicating the situation in the U.S. is thefact that whatever decision one makes can beoverruled by family. The final say is left tosurviving relatives, who must decide aboutallowing donation in the critical hours afterbrain death has been declared. In nearly halfof donation cases, relatives step in and vetothe wishes of the deceased.

Organ procurement organizations (OPOs), ofwhich there are 58 across the U.S., oftenfacilitate donation from brain-dead patients bycounseling families.

According to the Department of Health andHuman Services, the nation’s organtransplantation system needs to be reformedto ensure allocation of scarce organs will bebased on common medical criteria, notgeography. Under the current system,organs are first offered to the region in whichthey become available. Federal regulationsdictate that organs go to the sickest patientsfirst, ranking patients based on the severity oftheir disease. For example, when a liversuitable for transplant is identified, localStatus One patients – those who are neardeath – are considered first. If no Status Onepatients are in the local area or if the organ isnot a biological match, the search for arecipient then expands to the organ

“An OPO representative, known as afamily-care coordinator, is there tocomfort the families of the victim intheir time of grief, to offer whateverassistance they might request, and,when it appears appropriate, to seekpermission for donation. This ...makes it unnecessary for the doctorto mention donation, which is usuallyregarded as an unpleasant task orpossibly a conflict of interest.”

Thomas Mone, CEO OneLegacy Modern Healthcare, 4/20/09

http://www.donatelife.net


• 250 •

transplant region, which can include severalstates. If no Status One patient in the regionis a match, the transplant surgeons in the citywhere the liver was recovered can give theorgan to the patient ranked highest by thedisease severity score, known as the Modelfor End-stage Liver Disease. If no match isfound, the organ is then offered nationwide.The emphasis on treating local transplantpatients means less-ill patients may receive atransplant while patients with more urgentmedical needs continue to wait. Revisedcriteria could provide for wider sharing toensure organs are made available to patientswith greatest medical need.

A number of state legislatures are passinglaws to bar donated hearts, lungs, kidneys,livers, and pancreases from being shippedbeyond their state to people elsewhere in thecountry. Wisconsin was the first. Four otherstates (Louisiana, Oklahoma, South Carolina,and Florida) adopted laws similar to that ofWisconsin.

INCENTIVES FOR ORGAN

DONATION

The American Medical Association and theAmerican Society of Transplant Surgeonshave called for Congress to authorize tests offinancial incentives to see whether suchincentives would increase organ donations.So, too, has the United Network for OrganSharing, which operates the national organdistribution system.

While federal law clearly bans the sale oforgans, kidney swaps are becoming anaccepted practice. Such exchanges are anoption in cases where there are willing butmismatched donors (because of blood type).Since the first kidney swap at Rhode IslandHospital in 2000, there have been about 230such exchanges. Johns Hopkins Hospitalhad done more than 40 swaps. Congress is

expected to pass a law clarifying that sucharrangements are legal, codifying a recentJustice Department ruling.

The following are some organ donationincentive ideas under consideration oralready underway:• There have been several proposals to offer

the families of brain-dead donors a “deathbenefit” of $5,000 to $10,000 for the use ofhealthy organs. Organs would go into thedonor system, not be sold to individuals. APennsylvania plan to offer a $300 “funeralbenefit” several years ago was blocked bythe federal ban.

• LifeSharers, a non-profit network of organdonors, is working to increase the organsupply by putting incentives to work now.LifeSharers’ members direct that theirorgans first be offered to other members.Non-members can have a member’sorgans if no member can use them whenthey become available. As LifeSharersgrows (people can join at no charge atwww.lifesharers.com), so does the incentiveto become a registered donor. This shouldmake the system more fair becausechances of receiving an organ will begreater for those who have agreed to be adonor. So far none of the 9,000-membergroup has received an organ from anothermember.

• Since 2004, MatchingDonors.com, anonprofit website, has aided patients whoneed a liver or kidney in finding livingdonors. Patients seeking to bypass thenormal wait for an organ can joinMatchingDonors for fees starting at $295.There some 2,000 donors offer organs fornothing more than goodwill. There areethical concerns about the process ofonline-assisted organ procurement,however. UNOS has come out against thewebsite, saying it takes advantage ofvulnerable transplant candidates anddonors and subverts the equal allocation oforgans.

http://www.lifesharers.com


• 251 •

• Arkansas, Georgia, Iowa, Minnesota, NewMexico, North Dakota, Utah, and Wisconsinallow tax deductions of up to $10,000 tocompensate living donors for travel,expenses, or lost income. This is legalbecause the money comes from the state.Still, it is controversial.

Financial incentives for organ donation havebeen effective in other countries. In Iran, forexample, because the government pays$2,000 to anyone willing to donate a kidney;there is no wait list there. Other countriesdon’t subsidize donation but tacitly permitpayment for organs. U.S. federal law, likethat of most other countries, absolutelyforbids paying for or receiving payment fororgans.


American Society of Transplant Surgeons,2461 South Clark Street, Suite 640,Arlington, VA 22202. (703) 414-7870. (www.asts.org)

Arbor Research Collaborative for Health,315 West Huron Street, Suite 360, AnnArbor, MI 48103. (734) 665-4108.(www.arborresearch.org)

Donate Life America, 700 North FourthStreet, Richmond, VA 23219. (804) 782-4920. (www.shareyourlife.org)

Health Resources and ServicesAdministration, Healthcare SystemsBureau, Division of Transplantation, 5600Fishers Lane, Rockville, MD 20857. (www.hrsa.gov/hsb)

OrganDonor.org, the U.S. governmentwebsite for organ and tissue donation andtransplantation

Scientific Registry of Transplant Recipients,315 West Huron Street, Suite 360, AnnArbor, MI 48103. (800) 830-9664. (www.ustransplant.org)

United Network for Organ Sharing, P.O.Box 2484, Richmond, VA 23218. (804) 782-4800. (www.unos.org)

http://www.asts.org

http://www.arborresearch.org

http://www.shareyourlife.org

http://www.hrsa.gov/hsb

http://www.ustransplant.org

http://www.unos.org


• 252 •

ORTHOPEDIC SURGERY

The American Association of OrthopedicSurgeons lists the following as the primaryorthopedic subspecialties:• Hand surgery • Shoulder and elbow surgery • Total joint reconstruction (arthroplasty) • Pediatric orthopedics • Foot and ankle surgery• Spine surgery (also performed by

neurosurgeons) • Musculoskeletal oncology • Surgical sports medicine • Orthopedic trauma

According to applications for boardcertification, the most common procedures (inorder) performed by orthopedic surgeons areas follows:• Knee arthroscopy and meniscectomy • Shoulder arthroscopy and decompression• Carpal tunnel release • Knee arthroscopy and chondroplasty • Removal of support implant • Knee arthroscopy and anterior cruciate

ligament reconstruction • Knee replacement • Repair of femoral neck fracture • Repair of trochanteric fracture • Debridement of skin/muscle/bone/fracture• Knee arthroscopy repair of both menisci • Hip replacement • Shoulder arthroscopy/distal clavicle

excision • Repair of rotator cuff tendon • Repair fracture of radius (bone)/ulna • Laminectomy • Repair of ankle fracture (bimalleolar type) • Shoulder arthroscopy and debridement

• Lumbar spinal fusion • Repair fracture of the distal part of radius • Low back intervertebral disc surgery • Incise finger tendon sheath • Repair of ankle fracture (fibula) • Repair of femoral shaft fracture • Repair of trochanteric fracture

BACK PAIN AND SPINAL

SURGERY

Nationwide, people visit doctors’ offices forback pain 14 million times a year, making itthe second most common reason people seea doctor. Those who receive medicalattention represent less than half of the over30 million Americans who suffer from backpain. The World Health Organization hasdeclared lower back pain an official epidemic.

According to data compiled by researchersfrom the University of Washington School ofMedicine, annual spending on spine problemsis approximately $85 billion. Studies suggestthat much of the spending for x-rays, CTscans, injections, and surgeries isunnecessary. Most acute back problemsresolve themselves on their own. Although it might seem counterintuitive for adegenerative disease, the middle-aged aremore likely to have back operations than theelderly. The median age for spine surgery is42. Many of the cases are work-related backconditions, the leading cause of disability inadults. Workers’ compensation pays for ahigher proportion of spine surgeries than forany other condition.

108 ORTHOPEDICS


• 253 •

The number of incidences of back surgeryactually declines after age 60. This is notbecause back pain stops in the elderly,according to Dr. Scott Blumenthal of theTexas Back Institute, but because the bodytakes so much stress from life’s woescompared to the knees and hips that backpain just appears earlier in life than otherarthritic types of pain.

For sufferers of back pain who need surgery,the most accepted procedures arediscectomy (removal of part of the disc) andspinal fusion combined with discography, inwhich a surgeon watches on a screen as hepricks each disc to pinpoint the source ofpain. Once the culprit is found, a smallsection of the back is cut open and part or allof the damaged disc is removed. Thesurrounding vertebrae are fused with screws,rods, or cages. Almost 200,000 people ayear undergo fusions, with an 80% rate ofimprovement.

A large-scale randomized trial comparinghaving surgery vs. delaying surgery as aremedy for sciatica, directed by James N.Weinstein, M.D., chairman of orthopedics atDartmouth Medical School, found that peoplewith ruptured disks in their lower backsusually recover whether or not they havesurgery. Patients who had surgery oftenreported immediate relief. But by three to sixmonths, patients in both groups reportedmarked improvement. After two years, about70% of both the patients who underwentsurgery and those that did not said they hada major improvement in their symptoms.None of the patients who waited for treatmenthad serious consequences, and none whohad surgery had a disastrous result.

For some back problems, however, surgery isrecognized as the best solution. Researchersat Dartmouth Medical School reported thatsurgery for spinal stenosis and degenerativespondylolisthesis, two common spinalproblems, results in significantly reduced

back pain and better physical function thantreatment with drugs and physical therapy.

FOOT AND ANKLE PROBLEMS

According to the American Academy ofOrthopaedic Surgeons, one in six people inthe U.S., or 43 million, has foot problems. Ofthose, 36% regard theirs as serious enoughfor medical attention.

More than three million Americans each yearseek treatment for inflammation of the plantarfascia, a gristle-like connector that runsbetween the heel and toes and helps supportthe arch; an estimated seven million moredeal with the discomfort on their own. Footspecialists say they are seeing a surge incases as Baby Boomers jog into middle age.Runners and women in their 40s and 50s areespecially vulnerable. Anyone who spends alot of time on his or her feet, walks or runs onhard surfaces, is overweight, or has tightAchilles tendons is susceptible. The worstchronic cases have traditionally been treatedwith surgery to snip part of the fascia toloosen it. According to Glenn Pfeffer, M.D.,president of the American Orthopaedic Foot& Ankle Society (AOFAS), about 5% ofrecalcitrant cases require surgery. Formoderate sufferers, simple, inexpensivehome remedies, such as stretching exercisesto loosen the Achilles tendon, can besufficient to provide relief.

According to the AOFAS, the nationalexpenditures for surgery to correct footproblems from tight-fitting shoes is $2 billiona year. If time off from work for the surgeryand recovery is included, the annual cost is$3.5 billion. Women have approximately 90%of the almost 530,000 surgeries annually.

HIP SURGERY

Surgeons in the U.S. performedapproximately 270,000 artificial hip implants


• 254 •

in 2009, according to Millennium ResearchGroup (MRG), making it the second mostcommon replaced joint surgery, followingknees and ahead of shoulders. Theprocedure typically costs between $30,000and $50,000. Based on patients’ achievingrelatively pain-free mobility after a recoveryperiod of a few months, the success rate ishigher than 90%.

In traditional hip replacements, doctorsreplace the top of the femur with a metal ballafter removing portions of the damaged hipsocket. Approximately 5% of artificial hipimplants are ceramic.

Hip resurfacing, which involves thereplacement of hip socket but retains thefemoral ball, became widely available in theU.S. in 2006. About 13,000 of theprocedures were performed in 2009,according to MRG. Though seemingly a less-drastic operation, a hip resurfacing is typicallymore difficult for a surgeon to perform thanreplacing the total joint.

KNEE SURGERY

Surgeons in the U.S. perform 455,000 kneereplacements annually, according to theAmerican Association of OrthopedicSurgeons.

In knee replacements, the most commonjoint-replacement procedure, doctors cut intothe joint and remove the damaged portions of

the tibia (the lower leg bone), patella(kneecap), and femur (thigh bone), which arereplaced with metal and plastic components.A National Institutes of Health study reportedthat 90% of people with knee replacementsreport fast pain relief, increased mobility, anda better quality of life.

Arthroscopic knee surgery has been apopular treatment for people whose kneesare racked by osteoarthritis. Minimallyinvasive, it flushes out debris in the joint andsmooths bone surfaces. But a surprisingstudy, published in the New England Journalof Medicine, showed that the operation is nomore effective than a placebo. One in threepatients reported improvement, whetherhaving had real surgery or a simulatedprocedure with all the same pre- and post-opprocedures but no actual treatment. Even ifthe placebo benefit is ignored, the study stillcasts doubt on surgery that succeeds onlyone-third of the time. Patients may begenerally better off doing strengtheningexercises and taking off a few pounds toease the burden on their aching knees, orconsider total knee replacement if warranted.Prior to the study, more than 200,000Americans had arthroscopic knee surgeryannually, with a typical cost of $5,000.


American Association of OrthopedicSurgeons, 6300 North River Road,Rosemont, IL 60018. (847) 823-7186. (www.aaos.org)

American Orthopaedic Foot & AnkleSociety, 6300 North River Road, Suite 510,Rosemont, IL 60018. (800) 235-4855. (www.aofas.org)

Millennium Research Group, 175 BloorStreet East, South Tower Suite 701,Toronto, Ontario Canada M4W 3R8.(416) 364-7776. (www.mrg.net)

“To be sure, hip surgery of any type isoften difficult. Patients can generallyexpect to be hospitalized and then beon crutches for at least a few weeks. Physical therapy might go on for acouple of months.”

The Wall Street Journal, 6/4/09

http://www.aaos.org

http://www.aofas.org

http://www.mrg.net


• 255 •

Tergesen, Anne, “Doubts Raised Over NewType Of Hip Surgery,” The Wall StreetJournal, June 4, 2009.


• 256 •

PREVALENCE

According to the National OsteoporosisFoundation (NOF), an estimated 10 millionindividuals in the U.S. have osteoporosis, andalmost 34 million more have low bone mass,which places them at increased risk forosteoporosis. Eighty percent (80%) of thoseaffected by osteoporosis are women.Osteoporosis-related f ractures areresponsible for an estimated 1.5 million bonefractures and $19 billion in medical costseach year.

According to the Office of the SurgeonGeneral, unless more older Americans startgetting the calcium, vitamin D, and physicalactivity needed, an osteoporosis epidemic isinevitable.

TREATMENT

The cause of osteoporosis is unknown;however for women the body’s rapid drop inestrogen that occurs during menopause is arisk factor. Other risk factors include a thinbody build, low bone mass, smoking,Caucasian or Asian descent, and a familyhistory of the disease. Although there is nocure for osteoporosis, there are severalmedications available to help stop furtherbone loss, increase bone density, and reducerisk of fracture.

Osteoporosis patients typically take Fosamax(Merck) or Actonel (Sanofi-Aventis) – drugs inthe bisphosphonate family – once a week toreduce the risk of fractures. Other optionsinclude Evista (Eli Lilly), a selective estrogen

receptor modulator, which reduces bone loss,and the injectable drug Forteo (Eli Lilly), oneof a new class of drugs to stimulate bone-forming cells known as osteoblasts.Fosamax, which garnered 55% of the $7billion market in 2007, became generic in2008.

For those who have suffered anosteoporosis-related fracture, a follow-uposteoporosis program is important to reducethe possibility of recurring fractures.

According to Adrianne Feldstein, M.D., aresearcher at the Kaiser Permanente Centrefor Health Research, such programs targetedto patients with a previous fracture lead toimprovements from 13% to 44% of patientsbeing evaluated and/or tested for the disease.

PREVENTION

Osteoporosis is largely preventable for mostpeople. Prevention of this disease is veryimportant because while there are treatmentsfor osteoporosis there is currently no cure.

There are four steps to prevent osteoporosis.They are as follows (source: NationalOsteoporosis Foundation):• A balanced diet rich in calcium and

vitamin D• Weight-bearing exercise• A healthy lifestyle with no smoking or

excessive alcohol use• Bone density testing and medications

when appropriate

109 OSTEOPOROSIS


• 257 •

No one step alone is enough to preventosteoporosis but all four may.

BONE HEALTH PROMOTION AND

RESEARCH ACT

In 2009, the Bone Health Promotion andResearch Act was proposed by members ofCongress to enhance the activities of theCenters for Disease Control and Preventionand augment educational activities on bonehealth at the national and state levels; toestablish an Osteoporosis and Related BoneDisease Advisory Committee to advise theCDC and the National Institutes of Health; toexpand and intensify research activities of theNIH on osteoporosis and related bonediseases; and to authorize grants andcooperative agreements to facilitate thecollection, analysis, and reporting of dataregarding osteoporosis.


National Osteoporosis Foundation, 123222 Street NW, Washington, DC 20037.nd

(202) 223-2226. (www.nof.org)

“Bone health is a family issue,particularly as genetics and heredityare among the key factors thatinfluence a person’s risk ofdeveloping osteoporosis. There aremany lifestyle choices that familiescan make to help build strong bonesand prevent osteoporosis later in life.”

Robert Recker, M.D., President NOF, 5/1/09

“The bill would provide for greatercomprehensive osteoporosis andrelated bone disease control andprevention programs along withnational educational outreachactivities. This act would create aNational Bone Health Program toaugment education and outreachinitiatives through the Centers forDisease Control and Prevention andprovide state grants forcomprehensive osteoporosis andrelated bone disease surveillance,control, and prevention programs andactivities. This bill would also expandand intensify research activities of theNational Institutes of Health onosteoporosis and related bonediseases.”

NOF, 11/10/09

http://www.nof.org


• 258 •

PREVALENCE

Chronic pain – commonly defined as painpersisting longer than six months – affects anestimated 70 million Americans and is atragically overlooked public health problem,according to the American Pain Foundation.

The American Pain Society (APS) estimatesthat 45% of the population seeks medicalhelp for persistent pain at some point. Anestimated 9% of adults suffer moderate tosevere chronic pain caused by back injuries,arthritis, and other non-cancer conditions.

According to the American Chronic PainAssociation, 85% of all patients who seekcare from physicians and dentists do so forpain-related complaints. Pain accounts for25% of all sick days taken in the UnitedStates. About 17% of adult Americans, or 34million people, experience mild to moderatechronic pain to the degree that they seekrelief from a physician.

ECONOMIC IMPACT

Medical economists estimate pain costs theU.S. over $100 billion each year, including515 million lost workdays and 40 milliondoctor visits.

Chronic pain is the leading cause of disabilityin America, costing employers more than $60billion in lost time and productivity annually.

It is estimated that treating soldiers returningfrom Iraq and Afghanistan for chronic painwill cost $340 billion in coming years.

PAIN MANAGEMENT IN

HOSPITALS

Pain is the number one reason people seekmedical attention, and it is the leadingcomplaint that goes unresolved. Hospitalsare looking for ways to assess, record, andtreat pain more aggressively.

Unrelieved pain causes waste and excessivecosts in the healthcare system. Significantcosts are borne by patients, health plans, andhealthcare institutions. A Michigan ChronicPain Study found, for example, that one infive adults had significant chronic pain, with29% using emergency departments fortreatment. A study by the University ofPittsburgh Medical Center found thatimplementing a post-operative clinicalpathway for outpatient orthopedic surgerysignificantly decreased the number ofunscheduled post-op admissions forrefractory pain, nausea, and vomiting. Thepathway reduced the unscheduledadmissions from more than 10% oforthopedic outpatients to less than 2%.

Beginning in 2001, 20,000 hospitals,healthcare networks, long-term and assisted-living facilities, behavioral health centers, andother health services certified by the JointCommission were mandated to make painassessment a priority. Joint Commissionstandards require organizations to recognizeand address patients’ rights to appropriatepain assessment and management.Assessments that same year found 93% ofhospitals in compliance.

110 PAIN MANAGEMENT


• 259 •

PAIN MANAGEMENT IN

CHILDREN’S HOSPITALS

There are an estimated 10 million Americansage 18 and younger with chronic or recurrentpain. They suffer from a variety of conditions:migraines, cancer, cystic fibrosis, sickle-cellanemia, and nerve injuries from accidents orfractures. Doctors estimate that of the 72million Americans under age 18, 5% sufferfrom back pain, 5% endure facial pain, 10%suffer from migraines and severe headaches,and 12% experience significant abdominalpain.

New methods of measuring pain anddiscomfort in children are now being utilized.Doctors are also rethinking the treatment ofacute pain for children who go to emergencyrooms for more common injuries like brokenlimbs or cuts that need stitches.

Still, too few hospitals offer comprehensivepain programs for children, and pediatric painunits are expensive to run.

PAIN MEDICATIONS

Over $20 billion worth of pain reliefmedications are sold annually in the U.S., notsurprising when over 30 million Americanstake a nonsteroidal anti-inflammatory drug, orNSAID, every day.

Living with chronic pain, millions of Americanscurrently face a dilemma regarding how tomanage symptoms with narcotic drugs andother therapies. Confusion related to painrelievers has abounded since Vioxx waswithdrawn from the market in 2004.

Already fearful about the widespread abuseof prescription narcotics, some doctors areworrying more about legal risks in prescribingmany pain medications while somepharmacists are balking at dispensing pain

medications for ethical reasons.


American Chronic Pain Association, P.O.Box 850, Rocklin, CA 95677. (800) 533-3231. (www.theacpa.org)

American Pain Foundation, 201 NorthCharles Street, Suite 710, Baltimore, MD21201. (888) 615-7246. (www.painfoundation.org)

American Pain Society, 4700 West LakeAvenue, Glenview, IL 60025. (847) 375-4715. (www.ampainsoc.org)

Mayday Fund, Special Committee on Painand the Practice of Medicine, 127 West 26th

Street, Suite 800. New York, NY 10011. (www.maydayfund.org)

The Joint Commission, One RenaissanceBoulevard, Oakbrook Terrace, IL 60181. (630) 792-5000. (www.jointcommission.org)

http://www.theacpa.org

http://www.painfoundation.org

http://www.ampainsoc.org

http://www.maydayfund.org

http://www.jointcommission.org


• 260 •

Using robots to perform surgery onceseemed a futuristic fantasy, but no more. Anestimated 125,000 robotic procedures wereperformed in 2008 – from heart-bypasssurgeries to kidney transplants tohysterectomies – more than double the36,600 performed two years prior.

Since FDA approval in 2000 of the da Vincisurgical system by Intuitive Surgical – still theonly general-purpose surgical robot to receiveapproval – over 1,000 units have beenpurchased, at a cost of $1.4 million per unit.

BENEFITS OF ROBOTIC SURGERY

Surgeons who use the system have foundthat patients have less blood loss and pain,lower risk of complications, shorter hospitalstays, and quicker recovery times than thosewho have open surgery, and in many cases,laparoscopic procedures. The robotic systemhas already transformed the field of prostatesurgery, for which it was approved in May2001.

Acceptance of robotic-assisted procedureshas been positive by both physicians andpatients. Because different specialists usethe same robotic system to assist in varioustypes of procedures, many hospitals end upwith several robots. Hackensack UniversityMedical Center, for example, has six. Inaddition to medical benefits, offering roboticsurgery sends a signal that a hospital iscutting edge, which can be attractive forpatients. Research shows that the firsthospital in a market to incorporate roboticsurgery systems generally sees a favorablereturn on investment.

Northwestern Memorial Hospital (Chicago)reported the number of hospital days amongoncology patients was down 60% to 65%following the introduction of roboticprocedures.

TRAINING

Physicians require special training to usesurgical robots. Training centers serve thisneed.

111 ROBOTIC SURGERY

“A surgery using a robotic arm can cost

$12,000 to $15,000 less than a typical

surgery, with fewer complications and a

shorter length of stay.”

Douglas Murphy, M.D.Chief of Cardiothioracic SurgerySt. Joseph’s Hospital (Atlanta)Modern Healthcare, 7/6/09

“Patients experience less bleeding,less pain, and are back to work fasterafter procedures done robotically,which saves costs for hospitals.”

Julian Schink, M.D.Chief of Gynecologic OncologyNorthwestern Memorial HospitalModern Healthcare, 7/6/09


• 261 •

There are 21 training centers for roboticsurgery in the U.S., as follows:• Boston Children’s Hospital• Clarian North (Carmel, Indiana)• East Carolina University Hospital

(Greenville, North Carolina)• Ethicon Endosurgery Institute (Cincinnati)• Florida Hospital, Celebration (Orlando)• Good Samaritan Hospital (Cincinnati)• Hackensack University Medical Center• University of Pennsylvania Hospital

(Philadelphia)• Intuitive Surgical Headquarters

(Sunnyvale, California)• Johns Hopkins University Hospital

(Baltimore)• Memorial Hermann Medical Center

(Houston)• Methodist Hospital (Houston)• Newark Beth Israel Medical Center• Ochsner Hospital (New Orleans)• Ohio State University Hospital (Columbus)• Oklahoma University (Tulsa)• St. Joseph’s Hospital (Atlanta)• Uniformed Services University of the

Health Sciences (Bethesda, Maryland)• University of California, Irvine• University of California, San Diego• University of Illinois, Chicago

ROBOTIC TELESURGERY

Perhaps the most intriguing aspect of roboticsurgery is the potential for telesurgery,operations from remote locations.

Robotic telesurgery dates to 2001 whensurgeons at Mount Sinai Hospital performeda gallbladder operation on a patient in Franceby remote control. Research advancescontinue at Johns Hopkins Hospital, theUniversity of Cincinnati Medical School, theUniversity of Washington School of Medicine,and elsewhere for the da Vinci surgicalsystem.

The acceptance of telesurgery still faces a lotof obstacles. Any signal delay exceeding 200milliseconds poses a potential risk to thepatient. There are also issues about theethics of a surgeon operating on a patientwho is in another city, or country, with no wayto physically intervene if something goeswrong.


DerGurahian, Jean, “Robo-School,” ModernHealthcare, July 6, 2009, pp 26-28.

Intuitive Surgical, 950 Kifer Road,Sunnyvale, CA 94086. (408) 523-2100. (www.intuitivesurgical.com)

“Despite claims by many doctors thatthe robot makes minimally invasivesurgeries easier to perform, providersaren’t clamoring to use them. Part ofthe reluctance is on the part ofsurgeons who aren’t sure aboutlearning to use a machine when theycan perform the procedures wellusing their own hands.”


http://www.intuitivesurgical.com


• 262 •

PREVALENCE

According to the National Commission onSleep Disorders Research (NCSDR),approximately 70 million people in the UnitedStates are affected by a sleep problem.About 40 million Americans suffer fromchronic sleep disorders, and an additional 20-30 million are affected by intermittent sleep-related problems. An overwhelming majorityof sleep disorders remain undiagnosed anduntreated.

2009 Sleep in America, by the National SleepFoundation, found that the number ofAmericans who sleep less than six hours anight increased to 20% in 2009 from 13% in2001, and those who reported sleeping eighthours or more dropped from 38% to 28%.Only 49% say that they get a good night’ssleep almost every night.

According to the National Sleep Foundation,the following percentages of adults believethat they have symptoms of sleep disorders:• Insomnia: 58%• Snoring: 37%• Restless leg syndrome: 16%• Pauses in breathing: 9%

Twenty million Americans suffer sleep apnea,according to a study by the NCSDR.According to a recent University of Michiganstudy, 5% to 10% of all men ages 30-to-60could unknowingly be in need of apneatreatment. Estimates indicate that untreatedsleep apnea may cause $3.4 billion inadditional medical costs.

Approximately 10% of the population, or 20million adults, have chronic insomnia, whichis inadequate or poor quality sleep nightly forone month or more. Studies indicateuntreated insomnia may put people at higherrisk for major depression and may causeelderly people to be placed in nursing homessooner than if the condition had been treated.Fewer than 15% of people who suffer fromchronic insomnia receive treatment,according to surveys. According to a study by researchers atStanford and Johns Hopkins Universities, asmuch as 15% of the U.S. population could beaffected by restless-legs syndrome (RLS), asleep and movement disorder characterizedby unpleasant (tingling, crawling, creeping,and/or pulling) feelings in the legs, whichcause an urge to move in order to relieve thesymptoms.

Narcolepsy, another sleep disorder, is achronic neurological disorder that involves thebody’s nervous system. People withnarcolepsy experience sudden ‘sleep attacks’that can occur at any time. Narcolepsy isbelieved to affect approximately 300,000people in the U.S., according to theNarcolepsy Network. People with narcolepsyare overcome by uncontrollable urges tosleep, often at inconvenient times, such aswhen driving. Studies show narcolepticsspend less time in the deeper states of sleepand do not get enough undisturbed sleep andoften nod off from sheer fatigue during theday.

Approximately 50 million Americans snore.According to the NSF, 55% of all adult

112 SLEEP DISORDERS


• 263 •

Americans report being told they snore, withmore men (68%) than women (48%) snoring.Only 43% admit to it. There are more than3,000 patented devices to keep people fromsnoring, but doctors agree few are effective.

ECONOMIC IMPACT

Sleep deprivation costs Americans more than$100 billion annually in lost productivity,medical expenses, sick leave, and propertyand environmental damage, according to theNSF.

The National Highway Traffic SafetyAdministration estimates that 100,000 police-reported motor vehicle crashes are causedeach year by drowsy drivers.

2009 Sleep in America reports that 54% ofadults – some 110 million licensed drivers –have driven when drowsy at least once in thepast year; 28% say that they have nodded offor fallen asleep while driving a vehicle.

Short attention spans, fuzzy thinking, andfrayed tempers caused by sleep deprivationcost American businesses $15 billion a yearin reduced productivity, according to theNational Commission on Sleep DisordersResearch.

SLEEP AND OVERALL HEALTH

There is convincing evidence that untreatedsleep disorders can increase the risk of highblood pressure, coronary-artery disease,heart failure, and stroke. According to Dr.Carl E. Hunt, director of the NCSDR,researchers also think lack of sleep canincrease the odds of developing obesity anddiabetes.

2009 Sleep in America provides data showingthat inadequate sleep is associated withunhealthy lifestyles and negatively impactshealth and safety. Those in good health aretwo times more likely than those in poorhealth to work efficiently, exercise, and eathealthy, because they are getting enoughsleep. About 40% of Americans agree thatsleep is as important as diet and exercise tooverall health and well-being; yet, only 32% ofAmericans who report sleep problemsdiscuss them with their doctor.

Surveys by the National Sleep Foundationhave found a direct correlation between thenumber of diagnosed medical conditionsreported by America’s older adults and thequality of their sleep – the more medicalconditions reported, the more sleep problemsare likely to occur. Eighty percent (80%) ofthose with four or more medical conditionsreport a sleep problem, compared to 53% ofthose with no reported medical conditions.Sleep problems are reported by the following:• 82% of those diagnosed with depression• 81% who have suffered a stroke• 76% being treated for heart disease• 75% diagnosed with lung disease• 72% being treated for diabetes or arthritis• 71% of those diagnosed with hypertension

Poor sleep is also associated with body pain,excess weight, and ambulatory limitations,according to the NSF.

A study published in the December 23, 2008issue of the Journal of the American MedicalAssociation reported that just one extra hourof sleep a day appears to lower the risk ofdeveloping calcium deposits in the arteries, a

“Getting enough sleep everyday is asimportant to your health as eatinghealthy and being physically active.”

Woodie Kessel, M.D. Assistant Surgeon General, 3/2/09


• 264 •

precursor to heart disease. According to thestudy, people ages 35-to-47 who on averageslept longer were at reduced risk ofdeveloping new coronary artery calcificationsover five years. Among subjects who hadslept less than five hours a night, 27% haddeveloped artery calcification. That droppedto 11% among those who slept five to sevenhours, and to 6% among those who sleptmore than seven hours a night.

Researchers at Yale University School ofMedicine found those with sleep apnea weretwice as likely to have a stroke as those whodid not have the condition.

TREATMENT

Sleep disorders are diagnosed and treated bymany different healthcare professionals,including general practitioners and specialistsin neurology, pulmonary medicine, psychiatry,psychology, pediatrics, and other fields.

According to the American Academy of SleepMedicine, there are approximately 1,400sleep clinics or medical centers in the U.S.The Academy accredits facilities that havesleep laboratories that adhere to qualitystandards as well as appropriate medicalexpertise. A directory is available atwww.aasmnet.org/listing.

According to IMS Health, over 50 millionprescriptions for sleep medications are filledannually, at an approximate cost of $3 billion.Ambien (Sanofi-Aventis) dominates thesector with a marketshare of about 75%.Lunesta (Sepracor) and Rozerem (TakedaPharmaceutical), introduced in 2005, aredesigned for longer-term use than drugspreviously on the market. The use of someof these medications has come under attackbecause of dangerous (although rare) sideeffects, such as occurrences of sleepwalkingand even driving under the drug’s influence.

According to the National Center forComplimentary and Alternative Medicine,4.5% of Americans use some type ofalternative medicine to treat their sleepproblems. Most common among thesetreatments are herbal therapies or relaxationtechniques.


2009 Sleep in America, National SleepFoundation, March 2009.

American Academy of Sleep Medicine, OneWestbrook Corporate Center, Suite 920,Westchester, IL 60154. (708) 492-0930. (www.aasmnet.org)


National Commission on Sleep DisordersResearch, Building 31, Room 5A52, 31Center Drive, MSC 2486, Bethesda, MD20892. (301) 592-8573. (www.nhlbi.nih.gov/about/ncsdr/)

National Sleep Foundation, 1522 K StreetNW, Suite 500, Washington, DC 20005. (202) 347-3471. (www.sleepfoundation.org)

U.S. Sleep Market, Marketdata Enterprises,October 2008.

http://www.aasmnet.org/listing

http://www.aasmnet.org


http://www.nhlbi.nih.gov/about/ncsdr/

http://www.sleepfoundation.org


• 265 •

PREVALENCE AND COST

The National Institute on Drug Abuse reportsthat approximately 22 million people in theU.S. are suffering from drug abuse andaddiction. Of those who abuse drugs, some3.2 million Americans are addicted to harddrugs such as heroin, cocaine, and speed,according to a recent report by the UnitedNations.

According to a May 2009 report from theNational Center on Addiction and SubstanceAbuse at Columbia University (CASA),federal, state, and local governments spend$467.7 billion a year related to substanceabuse. Of that amount, 96% is used to dealwith consequences, including 58% forhealthcare and 13% for prosecuting andjailing offenders.

According to the Substance Abuse andMental Health Services Administration(SAMHSA), illicit drug use is declining slightlyin the U.S. About 8% of people use illicitdrugs in any given month. Illicit drug use ishighest in Alaska, Colorado, Connecticut,Maine, Massachusetts, Montana, New York,Oregon, Rhode Island, Vermont, andWashington, D.C.

MEDICAL TREATMENT

Approximately $12 billion is spent annually inthe United States to treat drug addiction.According to the Center for Substance AbuseResearch at the University of Maryland,patients who seek admission to substanceabuse facilities because of drug addictions do

so because of the following primarysubstances:• Opiates: 30%• Marijuana: 27%• Cocaine: 24%• Stimulants and other: 19%

The American Medical Associationrecognized addiction as a disease back in1956. But only now are treatments that targetthe underlying biochemistry of that diseasebeginning to be developed.

According to a survey by researchers atBrown University, which appeared in Archivesof Internal Medicine, approximately one-thirdof primary care doctors reported they do notroutinely ask new patients if they use illicitdrugs, and 15% do not routinely offer anyintervention to drug-abusing patients. Ofthose doctors who do offer intervention, 61%recommend 12-step programs, whichresearch has suggested may be lesssuccessful than formal addiction therapy,according to Dr. Peter Friedmann, anassistant professor of Medicine andCommunity Health at Brown University. Only55% of providers surveyed reported routinelyrecommending formal addiction therapy, suchas methadone treatment or residentialtreatment centers.

Researchers are developing a range ofvaccines against such highly addictivesubstances as cocaine, nicotine, heroin, andmethamphetamine. Unlike medications nowused to treat addiction, the vaccines underdevelopment are designed to preventaddictive drugs from entering the brain.

113 SUBSTANCE ABUSE

http://www.casacolumbia.org


• 266 •

NicVax, from Nabi Biopharmaceuticals,currently in a phase-two clinical trial, is thefurthest advanced of the vaccines.

PREVENTION

According to a May 2009 report by CASA,only 2% of the $467.7 billion spent by federal,state, and local governments on substanceabuse, or about $9.4 billion, is used forprevention programs.

The Substance Abuse and Mental HealthServices Administration provides fundsdirectly to states through the Substance

Abuse Prevention and Treatment (SAPT)Block Grant. Those grants, administered bySAMHSA’s Center for Substance AbuseTreatment (CSAT), support almost 40% of allsubstance abuse treatment provided throughstate agencies. Using these federalresources, states are able to providetreatment to over 340,000 people annually.Recognizing the importance of prevention,the block grant program also provides thatstates use a minimum of 20% of their fundsto deliver substance abuse preventionservices in community and school settings.These services are targeted to populationswith the greatest need, including high-riskyouth, youth involved with the criminal justicesystem, pregnant and postpartum women,and people with HIV infection. Researchshows that for every $1 spent on drug abuseprevention, communities can save $4 to $5 incosts for drug abuse treatment andcounseling.


Center for Substance Abuse Research,University of Maryland, 4321 HartwickRoad, Suite 501, College Park, MD 20740. (301) 405-9770. (www.cesar.umd.edu)

National Center on Addiction andSubstance Abuse at Columbia University,633 Third Avenue, 19 Floor, New York, NYth

10017. (212) 841-5200. (www.casacolumbia.org)

National Institute on Drug Abuse, c/oNational Institutes of Health, 6001Executive Boulevard, Room 5213,Bethesda, MD 20892. (301) 443-1124. (www.nida.nih.gov)

Shoveling Up II: The Impact of SubstanceAbuse on Federal, State and LocalBudgets, National Center on Addiction and

“We are spending 96¢ of every dollarwe spend on substance abuse andaddiction to shovel up the humanwreckage. We’re making this reallytiny investment in prevention andtreatment when we have enoughexperience to know that preventionand treatment can reduce theshoveling-up burden. Thesegovernments have it backwards. They’re wasting billions of dollars oftaxpayers’ money and not makingsome relatively simple investmentsthat could sharply reduce theconsequences of drug and alcoholaddiction. The main reason thatfederal and state governments aren’tready to change priorities is becausethere is a stigma attached to alcoholand drug addiction. To reduce theamount spent on substance abuse,the government needs to mount majorprevention programs, with a focus onkids.”

Joseph Califano, Jr., Chairman CASA, 5/28/09

http://www.cesar.umd.edu

http://www.casacolumbia.org

http://www.nida.nih.gov


• 267 •

Substance Abuse at Columbia University,May 2009.

Substance Abuse and Mental HealthServices Administration, P.O. Box 2345,Rockville, MD 20847. (www.samhsa.gov)

http://www.samhsa.gov


• 268 •

Including surgeries performed at hospitals,ambulatory surgery centers, and in physiciansoffices, over 75 million surgical proceduresare performed annually.

INPATIENT PROCEDURES

The top inpatient procedures are presented inTable 114.1.

AMBULATORY PROCEDURES

According to data released in August 2009 bythe National Center for Health Statistics,hospitals perform more ambulatory surgeriesthan did free-standing surgery centers. Thenumbers of ambulatory procedures in 2006(most recent data available) were as follows:• Hospital-based: 30.76 million• Ambulatory centers: 22.57 million

QUALITY STANDARDS

The American Hospital Association teamedwith the Centers for Medicare and MedicaidServices, the Agency for Healthcare

Research and Quality, the American Collegeof Surgeons, and the Institute for HealthcareImprovement, among others, to launch in 2005the Surgical Care Improvement Project(SCIP). SCIP is an effort to use evidence-based practices to target four of the mostcommon surgical complications: blood clots,heart attacks, surgical site infections, andventilator-associated pneumonia. The goal isto reduce the incidences of thesecomplications nationally by 25% by 2010.Guidelines for deep vein thrombosis (DVT), forexample, which occurs in about 25% of majorsurgeries without prophylaxis, helps cliniciansdetermine the appropriate prophylactictreatment. And, guidelines for the reduction ofcardiac events, which occur in 2% to 5% ofpatients undergoing non-cardiac surgery,

114 SURGERY

TABLE 114.1

Top Five Inpatient Hospital Procedures(source: Healthcare Cost and Utilization Project,

Agency for Healthcare Research and Quality)

Procedures Total Charges

• Cesarean section: 800,000 $14.6 billion• Upper gastrointestinal endoscopy to diagnose

ulcers, stomach cancer, and other problems: 712,000 $14.5 billion• Catheterization to diagnose heart problems: 707,000 $17.3 billion• Respiratory intubation and mechanical ventilation: 617,000 $35.4 billion• Angioplasty to widen narrowed arteries: 676,000 $26.5 billion


• 269 •

outline the appropriate use of beta blockersand how to identify patients who are at risk.

The Leapfrog Group established evidence-based quality standards for five surgicalprocedures – pancreatic surgery, esophagealsurgery, open heart surgery, percutaneouscoronary interventions (such as angioplasty),and abdominal aortic aneurysm repair – thathospitals must meet to be on the group’spreferred list. If all hospitals met the qualitystandards for the five high-risk surgeries setby the Leapfrog Group, 7,818 lives each yearwould be saved, according to a recent studyby researchers at the University of MichiganHealth System. Open heart surgery alonewould see about 4,089 fewer deaths, andprocedures such as angioplasty would seeanother 3,016 fewer deaths if all patientswere treated at hospitals who meet andmaintain these standards.



American College of Surgeons, 633 NorthSt. Clair Street, Chicago, IL 60611. (312) 202-5000. (www.facs.org)

National Center for Health Statistics, 3311Toledo Road, Hyattsville, MD 20782.(800) 232-4636. (www.cdc.gov/nchs)


http://www.ahrq.gov

http://www.facs.org

http://www.cdc.gov/nchs



• 270 •

PART VII: HEALTHCARE PROFESSIONALS


• 271 •

HEALTHCARE OCCUPATIONS

The U.S. Bureau of Labor Statistics assessesgrowth in healthcare occupations as shown inTable 115.1.

Employment by healthcare setting is asfollows:• Hospitals: 4.73 million

• Nursing and residential care facilities: 3.06 million

• Physician offices: 2.33 million• Home healthcare services: 1.02 million• Outpatient facilities: 539,700

Despite the recession, overall healthcareemployment increased by nearly 20,000workers monthly during the first half of 2009.

LARGEST EMPLOYERS

According to the American HospitalAssociation, the following health systemshave the largest number of full-timeemployees:• HCA: 128,896• Ascension Health: 74,601• Community Health Systems: 67,084• Tenet Healthcare Corp.: 51,726• Kaiser Foundation Hospitals: 47,961• Catholic Health Initiatives: 45,363• Quorum Health Resources: 43,791• Catholic Healthcare West: 38,943• Trinity Health: 37,284

• Adventist Health System: 33,293• Catholic Health East: 31,930• New York City Health and

Hospitals Corp.: 29,916


U.S. Bureau of Labor Statistics, Office ofOccupational Statistics and EmploymentProjections, Suite 2135, 2 MassachusettsAvenue NE, Washington, DC 20212. (202) 691-5700. (www.bls.gov/emp)

115 HEALTHCARE WORKFORCE

TABLE 115.1

Healthcare Occupation Employment and Projected Growth

2008 2018 Growth

• Registered nurses: 2,618,700 3,200,200 22%• Nursing aids, orderlies, and attendants: 1,469,800 1,745,800 34%• Home aide: 921,700 1,382,600 19%• Physicians and surgeons: 661,400 805,500 22%• Medical assistants: 483,600 647,500 34%

http://www.bls.gov/emp


• 272 •

Modern Healthcare has conducted itsExecutive Compensation Survey since 1980.The 29 annual survey was conducted inth

2009 based on data compiled by Sullivan,Cotter and Associates. This chapter presentsa summary of that survey.

CEO MEDIAN TOTAL

COMPENSATION

Free-Standing Hospitals• All hospitals: $560,100• Hospitals with net

revenue < $250 million: $415,800• Hospitals with net

revenue > $250 million: $703,800

System Hospitals• All hospitals: $400,800• Hospitals with net

revenue < $250 million: $364,300• Hospitals with net

revenue > $250 million: $499,700

Systems• Hospitals with net

revenue < $1 billion: $ 615,000• Hospitals with net

revenue > $1 billion: $1.14 million

HOSPITAL TOP-EXECUTIVE

MEDIAN TOTAL COMPENSATION

• Chief Medical Officer: $329,500• Quality Management (M.D.): $309,000• Legal services: $255,800• Chief Financial Officer: $244,200• Chief Operating Officer: $242,600• Chief Information Officer: $217,700• Ambulatory services: $215,100• Patient-care services: $210,500• Planning: $209,800• Nursing services: $206,000• Human resources: $197,400• Professional services: $189,600• Fund development: $177,100• Facilities and engineering: $169,500• Managed care: $167,000• Quality Mgt. (non-M.D.): $157,500• Public affairs: $156,500• Marketing: $136,700


Carlson, Joe, “A Cut In Pay,” ModernHealthcare, August 3, 2009, pp 26-30.

Sullivan, Cotter and Associates, 3011 W.Grand Boulevard, Suite 2800, Detroit, MI48202. (313) 872-1760. (www.sullivancotter.com)

116 HOSPITAL EXECUTIVE COMPENSATION

“Many healthcare execs are seeingsmaller raises, flat salaries, or evendecreases in compensation,according to our annual survey.”


http://www.sullivancotter.com


• 273 •

ENROLLMENT AND GRADUATES

The Association of American MedicalColleges (AAMC) represents the 125accredited U.S. medical schools. For the2009-2010 entering class, medical schoolsreceived 562,694 applications from 42,269applicants, an average of 13 per applicant.There were 31,063 first-time applicants.Among applicants, 18,390 were accepted forenrollment in 2009, a 2% increase over theprior year.

Enrollment for the 2009-2010 school yearwas 77,722.

The class of 2009 had 16,468 medical schoolgraduates.

To meet projected demand for physicians inthe United States, the AAMC has called for a15% increase in medical student enrollments,or about 2,500 per year, by 2015.

LARGEST MEDICAL SCHOOLS

RANKED BY 2009 ENROLLMENT

• University of Illinois Collegeof Medicine: 1,426

• Wayne State University Schoolof Medicine: 1,234

• Indiana University School of Medicine: 1,211

• Drexel University College of Medicine: 1,099

• Jefferson Medical College ofThomas Jefferson University: 1,079

• University of Texas Southwestern

Medical School: 976• University of Texas Medical

School at Houston: 939• University of Texas Medical

Branch at Galveston: 929• University of Texas Health Science

Center School of Medicine: 897• Ohio State University College

of Medicine: 895• University of Washington

School of Medicine: 871• Albert Einstein College of Medicine

of Yeshiva University: 857• Medical College of Wisconsin: 850• University of Minnesota Medical

School: 841• Harvard Medical School: 839

TEACHING HOSPITALS

The U.S. healthcare system relies onteaching hospitals – and their clinics,emergency rooms, free-standing ambulatorycare centers, chronic care facilities, hospices,and individual and group practices – for theclinical education of medical students andresidents. Some 400 in number, they are thetraining ground for more than 100,000 newphysicians, nurses, and other healthprofessionals each year.

A listing of teaching hospitals is provided atwww.aamc.org/teachinghospitals.htm.

NEW MEDICAL SCHOOLS

Seven allopathic medical schools and fiveosteopathic schools were accredited in 2007-

117 MEDICAL SCHOOLS

http://www.aamc.org/teachinghospitals.htm


• 274 •

2009, as follows:

Allopathic Medical Schools• Commonwealth Medical College

(Scranton, Pennsylvania)• Florida International University College of

Medicine (Miami)• Hofstra University School of Medicine

(Hempstead, New York)• Oakland University Beaumont Medical

School (Rochester, Michigan)• Paul L. Foster School of Medicine at

Texas Tech Health Sciences Center (ElPaso)

• Touro University College of Medicine(Hackensack, New Jersey)

• University of Central Florida College ofMedicine (Orlando)

Osteopathic Medical Schools• A.T. Still University of Health Sciences

College of Osteopathic Medicine-Mesa(Mesa, Arizona)

• Lincoln Memorial University-DeBuskCollege of Osteopathic Medicine(Harrogate, Tennessee)

• Pacific Northwest University of HealthSciences, College of OsteopathicMedicine (Yakima, Washington)

• Rocky Vista University College ofOsteopathic Medicine (Parker, Colorado)

• Touro College of Osteopathic Medicine(New York City)


Association of American Medical Colleges,2450 N Street NW, Washington, DC 20037. (202) 828-0400. (www.aamc.org)

“Officials who accredit medicalschools are busier than usual thesedays. The creation of new campusesand the expansion of existing oneshas accreditation agencies hoppingas state officials and medicaleducators seek more physicians toprevent a shortage.”

American Medical News American Medical Association

http://www.aamc.org


• 275 •

LICENSED REGISTERED NURSES

According to the National Sample Survey ofRegistered Nurses, conducted by the HealthResources and Services Administration,nursing is the largest healthcare profession,with more than 2.9 million Registered Nurses(RNs) nationwide. Of all licensed RNs, 2.42million, or 83.2%, are employed as nurses.

With more than four times as many RNs inthe United States as physicians, nursingdelivers an extended array of healthcareservices, including primary and preventivecare by advanced nurse practitioners in suchareas as pediatrics, family health, women’shealth, and gerontological care.

Nursing’s scope also includes services bycertified nurse-midwives and nurseanesthetists, as well as care in cardiac,oncology, neonatal, neurological, andobstetric/gynecological nursing and otheradvanced clinical specialties.

Nearly 57% of RNs work in general medicaland surgical hospitals, where RN salariesaverage $60,970 per year. Nurses comprisethe largest single component of hospital staff,are the primary providers of hospital patientcare, and deliver most of the nation’s long-term care.

Registered Nurse distribution by state ispresented in Table 118.1.

118 NURSES

TABLE 118.1

Total number of nurses by state, rate of nurses per 100,000 population, and rank by state (source: Health Care State Rankings 2009, based on

data from the Bureau of Labor Statistics):

Number Rate Rank

• Alabama: 42,180 912 17• Alaska: 5,150 756 38• Arizona: 34,580 544 50• Arkansas: 21,920 774 35• California: 233,200 641 46• Colorado: 36,850 761 37• Connecticut: 34,690 994 10• Delaware: 8,420 977 12• District of Columbia: 8,110 1,380 n/a• Florida: 148,180 814 30• Georgia: 62,230 653 44• Hawaii: 9,620 753 39


• 276 •


Number Rate Rank

• Idaho: 9,600 642 45• Illinois: 104,130 812 31• Indiana: 54,770 864 27• Iowa: 29,550 999 11• Kansas: 24,070 867 26• Kentucky: 39,120 923 16• Louisiana: 39,090 894 21• Maine: 13,850 1,053 4• Maryland: 48,840 869 24• Massachusetts: 78,280 1,210 2• Michigan: 84,480 841 29• Minnesota: 52,690 1,017 5• Mississippi: 25,350 868 25• Missouri: 56,290 958 14• Montana: 7,160 748 41• Nebraska: 17,870 1,010 7• Nevada: 14,670 574 49• New Hampshire: 12,730 970 13• New Jersey: 78,510 907 19• New Mexico: 11,400 580 48• New York: 166,990 859 28• North Carolina: 80,090 886 23• North Dakota: 7,000 1,097 3• Ohio: 114,920 1,001 9• Oklahoma: 25,700 712 42• Oregon: 29,700 795 33• Pennsylvania: 126,370 1,017 5• Rhode Island: 10,600 1,007 8• South Carolina: 35,040 795 33• South Dakota: 9,670 1,215 1• Tennessee: 54,960 894 21• Texas: 157,870 662 43• Utah: 16,670 625 47• Vermont: 5,660 912 17• Virginia: 57,740 750 40• Washington: 49,910 774 35• West Virginia: 16,970 938 15• Wisconsin: 50,690 905 20


• 277 •

NURSES AND HEALTHCARE

QUALITY

In many ways, nurses are the key to safety inhospitals and nursing homes. A landmark2002 study found that for every additionalpatient a hospital nurse has to handle,complications increase and mortality rises7%. Similarly, a recent study by Prof. SusanHorn, Ph.D., at the University of Utah, foundthat when nurses spend less than 15 minutesa day with each nursing home resident, as istypical, patients suffer more pressure sores,falls, infections, and hospitalizations. At 30-to-40 minutes of daily nursing time, accordingto Prof. Horn, outcomes are so much betterthat “it is actually cheaper to hire morenurses.”

Researchers from Baystate Medical Center(Springfield, Massachusetts) found that whilefewer patients per hospital nurse is cost-effective, lower nurse-to-patient ratios are stillcostly – at a cost of anywhere from $24,000to $136,000.

In July 2009, the Institute of Medicine (IOM)and the Robert Wood Johnson Foundation(RWJF) launched The Initiative On TheFuture Of Nursing, a study to address criticalissues in nursing, including the following:

• What role should nurses play in thecontext of the entire healthcareworkforce?

• Where can nurses innovate in caredelivery?

• How can the various care settings attractthe right nurses, including acute,ambulatory, primary and long-term care,and community and public health?

The IOM/RWJF study will publish its findingsin Fall 2010.

NURSE STAFFING

REQUIREMENTS

Since 2005, California hospitals have beenrequired to have one nurse on duty for everyfive patients at all times. While Californiaremains the only state with nurse-ratiorequirements, seven states – Illinois, Maine,New Jersey, Oregon, Rhode Island, Texas,Vermont – have some type of legislationaffecting staffing.

NURSE SHORTAGES

The need for new nurses has never beenmore acute. An aging population willincrease the demand over the comingdecades. At the same time, with more andmore nurses approaching retirement, thesupply will further decline. An increasingdemand for nurses outside of hospitalsmakes shortages at hospitals even moreacute.

As recently as 2007, almost 70% of hospitalsreported a nursing shortage, according to theAmerican College of Healthcare Executives.

The current downturn in the U.S. economyhas eased the nursing shortage to someextent. According to Dr. Peter Buerhaus,Director of the Center for Interdisciplinary

“The Initiative ... is intended as acritical examination that could shatterexisting conceptions of the field andlay out a blueprint for 21 centuryst

nursing.”



• 278 •

Health Workforce Studies at VanderbiltUniversity, the economy is bringing manyretired nurses back into the workforce. Also,some nurses who had planned to retire areholding on to their positions, and others whowere working part-time have taken full-timepositions.

While some hospitals reported an end to theshortage, a significant nursing shortage stilllooms. Dr. Buerhaus projects the shortfall inthe number of nurses needed is expected togrow to 260,000 by 2025.


American Association of Colleges ofNursing, One Dupont Circle NW, Suite 530,Washington, DC 20036. (202) 463-6930. (www.aacn.nche.edu)

American Nurses Association, 8515Georgia Avenue, Suite 400, Silver Spring,MD 20910. (301) 628-5000. (www.nursingworld.org)

Carlson, Joe, “Rethinking Nursing,” ModernHealthcare, July 20, 2009, pp 6-7.

Health Resources and ServicesAdministration, 5600 Fishers Lane,Rockville, MD 20857. (www.hsra.gov)

National League for Nursing, 61 Broadway,33 Floor, New York, NY 10006. rd

(212) 363-5555. (www.nln.org)

http://www.aacn.nche.edu

http://www.nursingworld.org

http://www.hsra.gov

http://www.nln.org


• 279 •

ENROLLMENT AND GRADUATES

According to the 2009 State of the Schools,by the American Association of Colleges ofNursing (AACN), there are 762 nursingschools in the U.S. with baccalaureate andgraduate programs. Combined enrollment isas follows:• Baccalaureate: 201,407• Master’s degree: 69,565• Doctoral (research-focused): 3,976• Doctoral (practice-focused): 3,416

Graduations were as follows:• Baccalaureate: 62,141• Master’s degree: 17,247• Doctoral (research-focused): 555• Doctoral (practice-focused): 362

For the 2008-2009 school year, 49,948qualified applications were not accepted dueprimarily to a shortage of faculty and resourceconstraints.

Nursing schools experienced decliningenrollment from 1995 through 2000, thenincreased for seven consecutive years,peaking with 16.6% growth in 2003.Enrollment more recently has begun toplateau.

STATE REQUIREMENTS

Requirements for educating new nurses areregulated under different standards in the 50states. Many within the profession believethat educational requirements for nursesshould be standardized across the U.S.

LARGEST NURSING SCHOOLS

Ranked by enrollment, the following are thelargest U.S. nursing schools (source: NationalLeague of Nursing):• Excelsior College School of

Nursing: 15,080• University of Phoenix College

of Health and Human Services: 6,650• Kent State University College of

Nursing: 2,690• Northwestern State University

College of Nursing: 1,928• Southeastern Louisiana University

College of Nursing: 1,815• Trinitas School of Nursing: 1,740

119 NURSING SCHOOLS

“This year’s minimal 2.2% growth inthe baccalaureate student populationmay signal that schools have reachedenrollment capacity.”

Fay Raines, President AACN 2009 State of the Schools

“It makes no sense that so manylevels of education are available tonurses, including two-year associatedegrees, three-year nursing diplomas,and four-year baccalaureateprograms. We favor a singleeducational standard based on theavailable scientific evidence.”

Rebecca Patton, PresidentAmerican Nurses AssociationModern Healthcare, 10/15/08


• 280 •

• University of Louisiana - Lafayette College of Nursing: 1,575

• Maricopa Community Colleges District Nursing Program: 1,510

• University of Wisconsin -Milwaukee College of Nursing: 1,505

• Hawaii Pacific University Schoolof Nursing: 1,446

DOCTORATE IN NURSING

More than 200 nursing schools haveestablished or plan to launch doctorate ofnursing practice (DNP) programs to equipgraduates with skills the schools say areequivalent to those of primary-carephysicians. The two-year programs,including a one-year residency, create a‘hybrid practitioner’ with more skills,knowledge, and training than a nursepractitioner with a master’s degree.According to Mary Mundinger, R.N., Ph.D.,dean of the Columbia University School ofNursing, DNPs are being trained to havemore focus than doctors on coordinating careamong many specialists and healthcaresettings.

The Council for the Advancement ofComprehensive Care, in conjunction with theNational Board of Medical Examiners is in theprocess of establishing a national standardfor doctors of nursing practice. By 2015, theAmerican Association of Colleges of Nursingaims to make the doctoral degree thestandard for all new advanced practicenurses, including nurse practitioners.


American Association of Colleges ofNursing, One Dupont Circle NW, Suite 530,Washington, DC 20036. (202) 463-6930. (www.aacn.nche.edu)

Carlson, Joe, “Rethinking Nursing,” ModernHealthcare, July 20, 2009, pp 6-7.

Council for the Advancement ofComprehensive Care AT ColumbiaUniversity, 630 West 168 Street, Box 6,th

New York, NY 10032. (212) 305-3254. (www.caccnet.org)

http://www.aacn.nche.edu

http://www.caccnet.org


• 281 •

COMPENSATION FOR PHYSICIAN

SPECIALITIES

In 2009, Modern Healthcare published its 14 annual Report on Physician Income. th

Table 120.1 presents a summary of the findings of that report.

120 PHYSICIAN COMPENSATION

“Physicians are seeing smaller paygains, with many failing to keep upwith inflation. With cash in shortsupply, hospitals and physicianpractices are forced to get creative. This creativity has manifested itselfwith growing use of guaranteedincome, signing bonuses, trainingstipends, education debt forgiveness,and even housing.”


TABLE 120.1

Compensation Ranges For Physician Specialities

• Orthopedic surgery: $363,600 to $615,600• Urology: $328,800 to $502,300• Radiation oncology: $377,800 to $501,300• Cardiology (invasive): $387,600 to $496,100• Radiology: $391,000 to $483,000• Gastroenterology: $358,300 to $478,000• Plastic surgery: $327,000 to $445,600• Cardiology (noninvasive): $346,800 to $432,500• Anesthesiology: $327,600 to $413,800• Oncology (including hemotology): $301,800 to $408,000• Dermatology: $297,000 to $401,600• General surgery: $287,500 to $369,900• Pathology: $233,700 to $334,200• Emergency medicine: $224,200 to $327,400• Obstetrics/gynecology: $240,700 to $321,700• Intensivist: $255,900 to $299,000• Neurology: $211,500 to $295,300• Neonatology: $230,900 to $290,000• Psychiatry: $184,900 to $232,100• Hospitalist: $183,200 to $226,900• Internal medicine: $179,900 to $222,400• Pediatrics: $150,000 to $217,000• Family practice: $166,800 to $212,000


• 282 •

SALARY SURVEYS

The following groups conduct healthcaresalary surveys:• American Medical Group Association,

1422 Duke Street, Alexandria, VA 22314. (703) 838-0033. (www.amga.org)

• Cejka Search, 4 CityPlace Drive, Suite300, St. Louis, MO 63141. (800) 678-7858. (www.cejkasearch.com)

• Daniel Stern Associates, 10 Duff Road,Suite 215, Pittsburgh, PA 15235.(800) 438-2476. (www.danielstern.com)

• Delta Physician Placement, Four HickoryCentre, 1755 Wittington Place, Suite 175,Dallas, TX 75234. (800) 521-5060. (www.tdcpeople.com)

• Hay Group, The Wanamaker Building,100 Penn Square East, Philadelphia, PA19107. (215) 861-2000. (www.haygroup.com)

• Hospital & Healthcare CompensationService, P.O. Box 376, Oakland, NJ07436. (201) 405-0075. (www.hhcsinc.com)

• Jackson & Coker, 3000 Old AlabamaRoad, Suite 119-608, Alpharetta, GA30022. (800) 272-2707. (www.jacksoncoker.com)

• Martin Fletcher, 909 Lake CarolynParkway, Suite 1300, Irving, TX 75039.(800) 377-0730. (www.martinfletcher.com)

• MD Network, 9901 E. Valley RanchParkway, Suite 1040, Irving, TX 75063. (800) 705-7055. (www.md-network.com)

• Medical Group Management Association,104 Inverness Terrace East, Englewood,CO 80112. (303) 799-1111. (www.mgma.com)

• Medicus Partners, 14114 North DallasParkway, Suite 380, Dallas, TX 75240. (972) 759-0331. (www.medicuspartners.com)

• Merritt, Hawkins & Associates, 5001Statesman Drive, Irving, TX 75063. (800) 876-0500. (www.merritthawkins.com)

• Pacific Communications, 675 AntonBoulevard, Suite 900, Costa Mesa, CA92626. (714) 427-1900. (www.pacific-com.com)

• Pinnacle Health Group, 5887 GlenridgeDrive, Suite 200, Atlanta, GA 30328. (800) 492-7771. (www.phg.com)

• Sullivan, Cotter and Associates, 3011 W.Grand Boulevard, Suite 2800, Detroit, MI48202. (313) 872-1760. (www.sullivancotter.com)

• Warren Surveys, 3218 Fawnridge Drive,Rockford, IL 61114. (815) 877-8794. (www.demarcowarren.com)


Robeznieks, Andis, “Feeling The Pain,”Modern Healthcare, July 13, 2009, pp 20-28.

http://www.amga.org

http://www.cejkasearch.com

http://www.danielstern.com

http://www.tdcpeople.com

http://www.haygroup.com

http://www.hhcsinc.com

http://www.jacksoncoker.com

http://www.martinfletcher.com

http://www.md-network.com

http://www.mgma.com

http://www.medicuspartners.com

http://www.merritthawkins.com

http://www.pacific-com.com

http://www.pacific-com.com

http://www.phg.com

http://www.sullivancotter.com

http://www.demarcowarren.com


• 283 •

PHYSICIAN SUPPLY

According to Physician Characteristics andDistribution in the U.S. 2009, by the AmericanMedical Association (AMA), there are941,000 practicing physicians in the UnitedStates.

Physician distribution by state is presented inTable 121.1.

DEMOGRAPHICS

Seventy-two percent (72%) of U.S. physiciansare male; 28% are female. Distribution byage is as follows:• Under 35: 16%• 35-to-44: 26%• 45-to-54: 27%• 55-to-64: 18%• 65 and older: 12%

121 PHYSICIANS

TABLE 121.1

Total number of physicians by state, rate of physicians per 100,000 population, and rank by state (source: Health Care State Rankings 2009, based on

data from the American Medical Association):

Number Rate Rank

• Alabama: 11,239 243 41• Alaska: 1,717 252 37• Arizona: 15,710 247 38• Arkansas: 6,548 231 44• California: 112,776 310 17• Colorado: 14,515 300 19• Connecticut: 14,753 423 5• Delaware: 2,456 285 25• District of Columbia: 5,152 876 n/a• Florida: 55,037 302 18• Georgia: 23,239 244 39• Hawaii: 4,665 365 7• Idaho: 2,993 200 50• Illinois: 39,986 312 16• Indiana: 15,478 244 39• Iowa: 6,536 219 46• Kansas: 7,180 259 35• Kentucky: 11,024 260 34• Louisiana: 12,741 291 23• Maine: 4,305 327 11• Maryland: 26,402 470 2



• 284 •

SPECIALISTS

According to the AMA Physician Medical File,764,783 physicians practice specialities.Distribution is as follows:• Allergy & Immunology: 4,220• Anatomic/Clinical Pathology: 15,562• Anesthesiology: 38,691• Cardiovascular Disease: 21,497• Child & Adolescent Psychiatry: 7,310• Dermatology: 10,385• Emergency Medicine: 30,718

• Endocrinology, Diabetes & Metabolism: 5,441

• Family Medicine/General Practice: 103,182

• Gastroenterology: 12,083• General Surgery: 26,751• Geriatric Medicine: 3,767• Hematology & Oncology: 11,789• Infectious Disease: 6,415• Internal Medicine: 104,699• Internal Medicine/Pediatrics: 3,182• Neonatal-Perinatal Medicine: 4,053• Nephrology: 7,543


Number Rate Rank

• Massachusetts: 33,313 515 1• Michigan: 28,356 282 26• Minnesota: 17,178 331 10• Mississippi: 5,961 204 48• Missouri: 15,968 272 30• Montana: 2,580 270 31• Nebraska: 4,942 279 28• Nevada: 5,591 219 46• New Hampshire: 4,232 322 13• New Jersey: 30,595 354 8• New Mexico: 5,533 282 26• New York: 85,304 439 4• North Carolina: 26,046 288 24• North Dakota: 1,769 277 29• Ohio: 34,472 300 19• Oklahoma: 7,245 201 49• Oregon: 12,048 323 12• Pennsylvania: 43,257 348 9• Rhode Island: 4,430 421 6• South Carolina: 11,514 261 33• South Dakota: 2,012 253 36• Tennessee: 18,137 295 21• Texas: 56,531 237 42• Utah: 6,269 235 43• Vermont: 2,735 441 3• Virginia: 24,162 314 15• Washington: 20,353 316 14• West Virginia: 4,760 263 32• Wisconsin: 16,485 294 22• Wyoming: 1,165 223 45


• 285 •

• Neurological Surgery: 4,918• Neurology: 12,612• Obstetrics & Gynecology: 39,665• Ophthalmology: 17,841• Orthopedic Surgery: 20,028• Otolaryngology: 9,218• Pediatrics: 54,016• Physical Medicine &

Rehabilitation: 8,068• Plastic Surgery: 6,670• Preventive Medicine: 7,080• Psychiatry: 39,355• Pulmonary Disease & Critical

Care Medicine: 11,558• Radiation Oncology: 4,208• Radiology & Diagnostic

Radiology: 27,550• Rheumatology: 4,559• Thoracic Surgery: 4,820• Urology: 9,915• Vascular Surgery: 2,609

PHYSICIAN SHORTAGES

A physician shortage is developing in theUnited States, a situation which will likelyintensify in coming years. Increasing demandfor medical services is expected as thepopulation ages – the number of Americansolder than 65 is projected to double by 2030.In addition, over 200,000 physicians areprojected to be retiring in the next 15 years.

The shortage is most acute for primary carephysicians, and many specialists fields arealso experiencing shortages. The number ofpracticing general surgeons per 100,000population has dropped 26% over the pasttwo decades, for example, creating shortagesin that field.

A shortage of 124,000 physicians in 2025 Isprojected by the Association of AmericanMedical Colleges.

GROUP PRACTICES

According to the Medical Group ManagementAssociation, a total of 226,231 doctors workin 19,747 physician groups in the U.S.,distributed by group size as presented inTable 121.2.

Approximately 70% of group practices aresingle-specialty.

“More than 250,000 active physiciansare over age 55. Whether the UnitedStates will have enough doctors in thefuture is subject for debate.”

American Hospital Association, 8/09

TABLE 121.2

Physician Group Distribution By Group Size

• 3 or 4 physicians: 8,478 groups; 29,081 physicians• 5-to-9 physicians: 7,096 groups; 45,027 physicians• 10-to-25 physicians: 2,989 groups; 43,781 physicians• 26-to-75 physicians: 862 groups; 34,675 physicians• 76-to-99 physicians: 81 groups; 6,883 physicians• 100 or more physicians: 241 groups; 66,784 physicians


• 286 •

HOSPITALISTS

Hospitalists, physicians who exclusivelymanage the care of inpatients, represent anew and rapidly growing specialty.

The Society of Hospital Medicine (SHM)estimates approximately 23,000 hospitalistsare currently working in U.S. hospitals, anincrease from only about 2,000 a decadeago.

The SHM estimates 40% of U.S. hospitalsemploy hospitalists. For those with 200 to499 beds, the figure is estimated at 55%; and45% for those with 100 to 199 beds.

About 75% of practicing hospitalists aretrained in general internal medicine, withanother 5% in an internal medicinesubspecialty, such as pulmonary or criticalcare medicine. About 3% are trained infamily practice; the remaining 11% are mostlypediatric hospitalists trained as generalpediatricians. There are now several earlyresidency tracks and fellowship programs totrain future hospitalists.

LOCUM TENENS

Temporary physician staffing, or ‘locumtenens,’ firms continue to grow market sharein a niche industry that is estimated at $2billion. Hospitals and health systemscontinue to be the largest users of locumtenens physicians, accounting for 60% to70% of all physician placements, or about26,000 doctors per year.

According to Profile of a Locum TenensPhysician, by CompHealth, locum tenensphysicians have the following number ofyears in practice:

• 31 or more years: 33%• 21-to-31 years: 19%• 11-to-20 years: 17%• 6-to-10 years: 9%• 4-to-5 years: 7%• 2-to-3 years: 8%• 1 year or less: 6%


AMA Physician Medical File, AmericanMedical Association, January 2009.



CompHealth, 6440 South Millrock Drive,Suite 175, Salt Lake City, UT 84121.(800) 453-3030. (www.comphealth.com)

Medical Group Management Association,104 Inverness Terrace East, Englewood,CO 80112. (303) 799-1111. (www.mgma.com)

Society For Hospital Medicine, 1500 SpringGarden, Suite 501, Philadelphia, PA 19130.(800) 843-3360.(www.hospitalmedicine.org)

http://www.aha.org


http://www.comphealth.com

http://www.mgma.com

http://www.hospitalmedicine.org