A list of the 14 top healthcare stories of the year, selected due to their repercussions on the nation, our industry and patients themselves.
2014 was a year of many changes and developments for healthcare and public health. Turnover in nearly every top federal healthcare post, the outbreak of Ebola and a scandal over falsified wait times at the VA had nearly every American's attention on healthcare this year. For those within the industry, a few less broad-reaching but noteworthy events will impact provider operations and care delivery for years to come. Heretofore, a list of the 14 top healthcare stories of the year, selected due to their impact on the nation, our industry and patients themselves.
Ebola outbreak comes to the U.S.
This year's Ebola outbreak in the West African nations of Guinea, Liberia and Sierra Leone, which was formally announced March 25 by the World Health Organization, is the largest and most deadly in history. And, unlike the Ebola outbreaks of years past — there have been 28, according to the Centers for Disease Control and Prevention — this one has spread to multiple countries, including the United States.
This year, the country experienced its first imported cases of Ebola ever, as well as the first transmission of Ebola virus disease. These events have had a major effect on hospitals and their protocol in various ways.
The Ebola outbreak-related event that sent the largest ripples through the country was the first diagnosis of a patient with Ebola on U.S. soil. Thomas Eric Duncan, who came to the U.S. from Liberia, presented at Texas Health Presbyterian Hospital in Dallas in Sept. 26 with symptoms of Ebola. He was sent home, then returned to the hospital Sept. 28, when he was placed in isolation and diagnosed with Ebola.
While treating Mr. Duncan, who later died from the infection, two nurses at Texas Health Presbyterian Hospital contracted the virus and became the nation's first transmitted cases of Ebola. Some nurses blamed this transmission on improper personal protective equipment provided to nurses and incomplete education on Ebola virus disease.
The missteps in handing Mr. Duncan's case were acknowledged by Texas Health Resources as "mistakes" and have been investigated. Those mistakes have led to process improvement, however. Since those events in Dallas, the CDC has updated its Ebola personal protective equipment guidelines to be more stringent. Additionally, the agency set up a dedicated CDC Response Team that can be at any hospital in mere hours if a patient is diagnosed with Ebola. The team can help healthcare professionals follow strict protocols, keep patients and healthcare workers safe and prevent further transmission of the illness.
The end of an Ebola outbreak in a country happens once 42 days have passed with no new transmitted cases, according to the World Health Organization. The WHO declared the end of the outbreak in Nigeria in October, but experts have said the Ebola outbreak worldwide will likely not be contained for months.
VA healthcare scandal
Late last year, a report filed by the U.S. Department of Veteran's Affairs found employees at one outpatient clinic in Fort Collins, Col., falsified appointment records to meet performance goals. According to the manipulated documents, patients seeking care were all seen within the 14-day required limit when, in fact, many patients were waiting months for an appointment.
The initial report in Colorado spurred more allegations of secret wait lists and manipulated appointment records against VA hospitals and clinics in several states across the country including facilities in Arizona, Colorado, Florida, Illinois and Wyoming. Additionally, investigations by HHS' Office of the Inspector General of the Phoenix VA Health Care System uncovered a secret patient wait list hospital leaders used to hide the actual amount of time patients were waiting for appointments.
The allegations against Phoenix VA also claimed 40 patients died while waiting for care. The Office of the Inspector General was unable, however, to prove that scheduling delays caused any patient deaths.
Even so, the scheduling and quality of care problems identified by the OIG eventually led to the resignation of Eric Shinseki, the former Secretary of Veteran's Affairs, in May. Robert Petzel, the VA's undersecretary for health, also stepped down.
In response to the scandal, President Obama signed into law the Veterans Access, Choice, and Accountability Act of 2014, allowing the VA Secretary to fire or demote VA executives or supervisors who have been found to have manipulated medical and patient data.
The law also appropriated roughly $16 billion in funding for the VA to hire more physicians and nurses, build more facilities to expand capacity, and generally overhaul the system.
Health insurance marketplaces meet targets but not without drama
One of the most closely watched healthcare stories during the early part of the 2014 was the continued rollout of the healthcare insurance marketplaces. Launched the same day as the federal government shutdown over failure to compromise on the spending bill, the federal marketplace site was plagued from the start, suffering numerous technical difficulties that impeded enrollment in the plans. As a result, the Obama administration pushed back the deadline by which Americans had to enroll in health coverage or face a fine to March 31, 2014 — six weeks after its initial deadline.
Democrats and Republicans alike wanted to know: How many Americans enrolled? Did the glitches mean the Democrats fell far short of their goal of enrolling 7 million Americans in marketplace plans? And if so, how would they deal with the fall out?
In February, the Congressional Budget Office provided the answer. It lowered its estimate of marketplace enrollees to 6 million, a significant shortfall for the law's supporters. But, by summer, the pages had turned, and it appeared HHS' efforts to promote coverage for all had paid off. As of mid-August, the department reported some 7.3 million people were enrolled in marketplace plans and had paid their premiums. As of July, 8 million people had newly enrolled in Medicaid.
While the marketplaces did ultimately reach their enrollment targets (and decrease the number of uninsured Americans by roughly 9.5 million, according to The Commonwealth Fund), it was mostly just politicians and policy wonks who read this and similar follow-up studies. Most Americans simply remember the headlines about the site's major problems, which could influence their decision to enroll through an exchange through 2015 — a year that many analysts say could be even more challenging for the exchanges as even more Americans visit them to explore coverage options.
Obama administration's top healthcare officials keep leaving office
The healthcare industry has experienced major shifts over the past year, including changes in the very faces of healthcare leadership on the federal level.
Following the glitch-ridden rollout for the federal health insurance exchange website in 2013, many unhappy customers, critics of the Patient Protection and Affordable Care Act and Republican lawmakers began calling for the resignation of Kathleen Sebelius, then HHS Secretary.
In April, two weeks after the culmination of the first open enrollment period, Ms. Sebelius obliged by stepping down, acknowledging that the launch of HealthCare.gov was "flawed and unacceptable."
In June, the Senate voted to confirm the nomination of Sylvia Mathews Burwell — the former director of the Office of Management and Budget — to replace Ms. Sebelius as HHS Secretary. Since taking up her current role, Ms. Burwell has sworn to recover federal funds spent improperly on flawed state exchanges.
HHS isn't the only government body that underwent leadership changes in 2014. In August, U.S. Chief Technology Officer Todd Park announced his plan to resign his position by the end of the year to move to the West Coast, though he will continue to serve in the Obama Administration by recruiting technology professionals for government projects. Weeks later, Mr. Park was replaced as CTO by Megan Smith, the former vice president of new business development at Google.
Most recently, the Office of the National Coordinator for Health Information Technology underwent a major leadership change. National Coordinator Karen DeSalvo, MD, stepped down from her position at the ONC to join HHS' Ebola response team where she'll serve as assistant secretary for health and will work directly with the HHS Secretary, Ms. Burwell. Lisa Lewis, the COO of ONC, will serve as acting coordinator until the position is filled permanently.
CEO turnover hits record high
2014 has been marked by unprecedented CEO turnover in the healthcare industry. The rate at which these health system and hospital leaders are leaving their posts raises a new set of concerns to add to the list of issues the industry finds itself facing at the end of this year. If hospitals and health systems cannot retain leaders, how can they address the long-term goals they set for their institutions? How can CEOs establish culture and encourage change if they aren't around long enough to see change realized?
According to the American College of Healthcare Executives' latest report, CEO turnover reached 20 percent in 2013 — the highest since ACHE began tracking CEO turnover in 1981. The annual rate has fluctuated between 14 and 18 percent from 2003 to 2012, but has trended upward in recent years. The sharp increase can increase primarily be attributed to the emerging trend toward consolidation and baby boomer CEOs seeking retirement, according to Deborah J. Bowen, president and CEO of ACHE.
CEO turnover can negatively impact a hospital or health system in several ways. Abrupt or poorly planned leadership changes could disrupt the leadership model, affect the culture and thereby threaten the organization's overall performance and ability to achieve its long-term goals.
As a result, the ACHE has urged leaders and boards to ensure appropriate succession planning.
Community Health Systems data breach
As electronic data sharing, mHealth and health IT continued to grow, so did the concern surrounding cybersecurity and safeguarding protected health information. The number of data breaches in 2014 affecting more than 500 people surpassed 115, as reported by HHS' "Wall of Shame" data breach reporting tool.
Following the implementation of HIPAA's privacy rule and the reporting requirements of the HITECH Act (from which the HHS Wall of Shame was born), healthcare providers are paying more mind to how they are protecting patient health information, and whether what they are doing is enough.
Then in August, Franklin, Tenn.-based Community Health Systems reported Chinese hackers gained access to the system's computer network and compromised the data of nearly 4.5 million patients. CHS operates 207 hospitals in 29 states, making it one of the largest hospital organizations in the country.
Stolen information included names, addresses, birth dates, telephone numbers and Social Security numbers. No financial, medical or clinical information was accessed.
Though no medical data were stolen, sensitive information including names, addresses and Social Security numbers are still protected under HIPAA. Different reports suggest the settlement could range anywhere from $20 million to $1.25 billion, depending on a number of regulatory factors.
CHS has been handed two class-action lawsuits, one in Alabama federal court and another in New Mexico, alleging CHS failed to adequately secure its patients' data.
This data breach of massive proportions highlighted the issues healthcare faces regarding cybersecurity. In fact, the FBI released a notice to healthcare providers (obtained and reported by Reuters) warning facilities of the threat of cyberattacks in April, just months before the hackers gained access to CHS' network.
"The healthcare industry is not as resilient to cyber intrusions compared to the financial and retail sectors, therefore the possibility of increased cyber intrusions is likely," reads the FBI release.
Largest-ever HIPAA settlement
The year 2014 brought the largest-ever HIPAA settlement to date. NewYork-Presbyterian Hospital and Columbia University paid a combined $4.8 million to the Office of Civil Rights to settle a HIPAA violation that occurred in 2010.
On Sept. 27, 2010, the two institutions filed a joint report with HHS (as required by the HITECH Act) regarding a data breach. They were notified of the breach when an individual complained after finding the personal information of a deceased partner online. The hospital and the university have a joint arrangement in which Columbia University faculty members serve as attending physicians at the hospital. The two operate a shared data network and network firewall.
The NewYork-Presbyterian/Columbia University Medical Second breach occurred when a physician employed by Columbia University tried to deactivate a personal computer that was connected to the NewYork-Presbyterian network that contained electronic protected health information. A lack of appropriate and effective safeguards led to the PHI of 6,800 patients being accessible on Internet search engines, including patient vital signs, medication and lab test results.
What's more, the OCR's investigation into the data breach found neither NewYork-Presbyterian Hospital nor Columbia University had conducted an adequate risk assessment of all their IT systems that access the PHI, and neither had a risk management plan addressing potential hazards and threats to the security of PHI. Additionally, the OCR found NewYork-Presbyterian Hospital did not have appropriate policies and procedures for authorizing access to its database and did not follow its own implemented information access policies.
Individually, NewYork-Presbyterian Hospital paid $3.3 million in the settlement, and Columbia University paid $1.5 million. Both institutions agreed to a corrective action plan.
The settlement served as a bitter reminder of not only the increasing risk of cybersecurity and safeguarding the ever growing amount of electronic data, but also the increasing fines associated with HIPAA violations.
CMS finalizes meaningful use flexibility for 2014 reporting year
In September, CMS issued a final rule granting providers the flexibility in meaningful use attestation the agency had originally proposed back in May and finalizing the extension of stage 2 through 2016 for providers that started attesting in 2011 or 2012.
The rule finalizes the proposed attestation flexibility for providers that were unable to implement 2014 CEHRT in time to successfully attest due to vendor delays. These providers will be able to use 2011 Edition CEHRT or a combination of 2011 and 2014 Edition to attest to either stage 1 or stage 2. They will also be able to attest to meaningful use under the 2013 reporting year definition and use 2013's clinical quality measures.
However, the final rule came after hospitals had to make a decision about meaningful use attestation for the 2014 reporting period. The rule was proposed in May but the last 90-day meaningful use reporting period for hospitals began July 1, meaning they either had to act on faith the proposal would be finalized or forge ahead with using 2014 CEHRT for attestation.
All providers will be required to use 2014 CEHRT in 2015, according to the final rule. Additionally, providers that received their first meaningful use payments prior to 2014 will be required to move on to stage 2 in 2015.
The rule was generally welcomed by provider organizations and other stakeholders, with one notable point of contention — the final rule keeps the 2015 reporting period at a full 365 days rather than the 90-day period industry members had urged. Many industry groups have pointed to the current low attestation numbers for meaningful use stage 2 as evidence providers unable to meet the requirements during the last three months of 2014 would also not be able to meet them starting Oct. 1. These groups continue to lobby to have the reporting period reduced.
There may be legislative relief in sight — the Flexibility in Health IT Reporting Act, introduced by U.S. Representatives Renee Ellmers (R-N.C.) and Jim Matheson (D-Utah), would go around CMS and legislate a 90-day reporting period for 2015. As of the printing of this issue, the law had gathered more co-sponsors but is still in committee.
ICD-10 delay causes providers to put off transition process
The beginning of the year was full of buzz about ICD-10, as healthcare providers and payers hurried to meet the Oct. 1, 2014 compliance deadline for nationwide conversion to ICD-10 code sets. However, the transition date for ICD-10 was delayed, which brought relief to many providers.
In February, nearly half of all providers had only completed 25 percent or less of the ICD-10 implementation process, leaving roughly eight months to complete the transition, according to a study by Aloft Group, an international brand strategy and market firm.
Before the delay was announced, the American Medical Association sent a letter to former HHS Sec. Kathleen Sebelius, urging HHS to rethink the transition date, since the "crushing burden" of the transition deadline would be disruptive to the industry.
In March, to the excitement of the AMA and others, the House passed legislation, called the Protecting Access to Medicare Act, which stated HHS could not compel healthcare providers to transition to ICD-10 before Oct. 1, 2015. Shortly thereafter, the Senate passed the legislation in a 64-35 vote.
After the Act was passed, there was still uncertainty around ICD-10, since the legislation provided no exact transition date. To resolve the ambiguity, in May, CMS announced the official ICD-10 transition date would be Oct. 1, 2015.
After the ICD-10 implementation delay was confirmed, many providers either slowed down or suspended their efforts to prepare for the transition. As of August, only about half of providers had completed an ICD-10 impact assessment, and only one-third had begun ICD-10 testing, according to a Workgroup for Electronic Data Interchange survey.
Judge finds St. Luke's Health violated antitrust law with physician group acquisition
One of the most closely watched antitrust cases in healthcare was decided this year, and the ruling shed more light on the tense relationship between antitrust scrutiny and goals of the healthcare reform law.
In January, a federal judge sided with the Federal Trade Commission, ruling that Boise, Idaho-based St. Luke's Health System violated antitrust law with its 2012 acquisition of a 40-physician medical group.
As more hospitals and health systems acquire and align with physician groups to create integrated delivery systems, the FTC continues to examine the potential anticompetitive effects of such transactions. The expectation to collaborate for care paired with strict antitrust scrutiny can leave providers feeling as though they face two different regulatory messages from the government. It also presents a complicated case for the legal system. U.S. District Judge B. Lynn Winmill said the St. Luke's antitrust trial was "undoubtedly one of the most difficult" he's presided over.
In the end, Judge Winmill ruled St. Luke's violated antitrust law when it acquired Saltzer Medical Group in Nampa, Idaho, one of the largest independent multispecialty groups in the state. The judge said the combination of five-hospital St. Luke's with Saltzer resulted in control of 80 percent of primary care physicians in Nampa. Size was not the only factor in play, however: "[T]he sterling reputations" of Saltzer and St. Luke's made it the dominant provider in the Nampa area for primary care and gave it "significant bargaining leverage" over health insurance plans. He ordered St. Luke's to fully divest itself of Saltzer's physicians and assets.
Two of St. Luke's competitors, Saint Alphonsus Health System and Treasure Valley Hospital, both in Boise, were also plaintiffs in the case. The healthcare providers filed suit first, but their suit was consolidated in March with that of the FTC and Idaho attorney general.
The system filed its appeal in June, and the Ninth Circuit Court of Appeals ruled that St. Luke's can maintain ties with Saltzer Medical Group while it challenges the decision.
Partners HealthCare expansion sparks debate
Boston-based Partners HealthCare's plans to merge with a hospital and acquire a two-hospital system eventually led to a heated healthcare policy dispute this past year.
It started when Partners announced its pending merger with 378-bed South Shore Hospital in Weymouth, Mass., in December 2012. Nearly a year later, it revealed its intention to acquire two-hospital Hallmark Health System in Melrose, Mass. After reviewing the deals, the Massachusetts Health Policy Commission — an entity formed by Governor Deval Patrick's 2012 healthcare cost-control law — found the deals would increase healthcare spending in the state by up to $49 million per year. Unable to block transactions, the commission referred the matter to Massachusetts Attorney General Martha Coakley for further review.
Ms. Coakley, a Democratic candidate for governor of Massachusetts, reached a tentative conduct settlement with Partners in May after months of investigation. The agreement would let Partners complete its acquisitions if the system met a few conditions, including capping price increases across its entire network to the rate of general inflation (currently about 1 percent to 1.5 percent) through 2020. Another condition — intended to limit Partners' joint contracting abilities — would let commercial payers negotiate separately with different categories of Partners' providers, including distinct treatment for South Shore Hospital and the Hallmark hospitals.
The settlement sparked a wave of opposition from Massachusetts healthcare providers, many of which are competitors with one another. Beth Israel Deaconess Medical Center, Lahey Health, Tufts Medical Center and several other providers formed a coalition in opposition to the deal, claiming the settlement would "permanently transform how we deliver and receive healthcare." A significant portion of the opposition came from consumer advocacy and health policy groups with no financial ties to the deal.
Suffolk Superior Court Judge Janet L. Sanders noted the strength of the dissent, telling the Boston Globe, "This if the first time I have ever had this kind of opposition to a consent decree. It's pretty strong stuff." In a November hearing, Judge Sanders recommended delaying a decision until incoming Attorney General Maura Healey and Governor-elect Charlie Baker take office in January.
There are several issues at play in Partners' expansion ordeal, but one is simply timing. The fact that a conduct settlement was proposed during an election year cannot go unnoticed. Partners is the largest employer in the state and has a firm lobbying presence on Beacon Hill. The system's proposed expansion and surrounding controversy has major implications for lawmakers and their careers.
In another instance of remarkable timing, in October, Partners HealthCare CEO Gary Gottlieb, MD, plans to leave his role in July 2015 to serve as CEO of the nonprofit global health organization Partners in Health. A search for Dr. Gottlieb's successor is underway.
Apple targets consumers' desire for healthcare apps
In June, Apple introduced HealthKit, a mobile platform that combines data from other health-tracking apps and displays composite information in a dashboard format through a single interface on an app called Health. The platform, available with the iOS upgrade, is designed to un-silo data from the over 100,000 health and fitness apps currently in the iTunes store, making it easier for users to track their overall well-being.
This is not an entirely new idea. In March, Samsung introduced S Health, which compiles data from external sensors and user input into one dashboard, and Google has a similar product as well.
What makes HealthKit different from similar platforms are the partnerships. Apple has reportedly been working with Rochester, Minn.-based Mayo Clinic for years on the platform, and the health system is providing health information and content through HealthKit.
Apple has also been working with major EHR vendors to allow data flow between HealthKit and providers' EHR systems. The first partnership was with Epic, and has since resulted in several big-name health systems incorporating HealthKit into patient care. Stanford (Calif.) Children's Health and Duke Medicine in Durham, N.C., have launched pilot programs to use HealthKit to remotely monitor patients with chronic conditions. In October, Ochsner Health System in New Orleans became the first Epic client to fully integrate with HealthKit. Cerner EHR systems are also able to interface with HealthKit, and Allscripts is reportedly in talks with Apple to allow their clients to pull data from the platform as well.
There have been a couple hiccups in the HealthKit rollout to users. A bug delayed the launch of the platform's health and fitness apps in September, and another bug discovered in October forced Apple to temporarily remove Health's glucose monitoring feature.
In September, Apple introduced another health-related product — the Apple Watch. The smartwatch will have a variety of functionalities, from hotel key to car finder, but Apple CEO Tim Cook's presentation emphasized the watch's biosensing capabilities and its potential to help users monitor their health and fitness.
The Apple Watch has an accelerometer to measure body movement, a heart rate sensor and a pedometer linked to GPS to measure distance. The smartwatch comes with a couple fitness apps that feed data to the user's iPhone (Apple Watch only works in conjunction with one of the newer iPhones), though Apple executives stressed the platform would be open to developers to create more health and fitness apps. Data from Apple Watch would be able to be read and displayed by HealthKit apps.
The Apple Watch will be available at the start of next year and retail for $349. Morgan Stanley analyst Katy Huberty told Time magazine she expects Apple to sell between 30 and 60 million Apple Watches in the first year, which would make it the fastest-selling product Apple has ever introduced.
CEO, CIO resign following troubled EHR implementation
Less than two weeks after Athens (Ga.) Regional Health System announced the launch of its new Cerner EHR, clinician leaders wrote a letter to CEO James Thaw and CIO Gretchen Tegethoff alleging the system was compromising patient safety.
According to the physicians' letter, the EHR had led to "medication errors ... orders being lost or overlooked ... (emergency department) patients leaving after long waits; and of an inpatient who wasn't seen by a physician for (five) days."
The EHR troubles persisted, and at a meeting of the hospital's board of trustees meeting May 22, Mr. Thaw received a vote of no confidence from the hospital's medical staff. His resignation was announced the next day. A few days later, Ms. Tegethoff resigned as well.
The story can be seen as a cautionary tale about leaving end users out of IT builds and go-lives. Cerner Vice President Michael Robin told the Athens Banner-Herald the company noticed about halfway through the implementation the health system's IT department was leading the project, with clinical leadership on the sidelines. Athens Regional CMO James Moore, MD, confirmed the implementation was fairly one-sided. "Could there have been more information shared at the administrative level? I suppose you could make that argument," he told the Banner-Herald. "The implementation was through the CIO, and so that's where the information was held."
Even though the CIO was leading the implementation, the vote of no confidence and resignation of Mr. Thaw suggests CEOs are ultimately responsible for the success or failure of IT projects within their organizations.
Health system joint ventures, affiliations proliferate
Consolidation of healthcare providers is hardly new, but several unique relationships were struck in 2014. Some were between rather unlikely partners, such as for-profit hospital operators and Catholic systems, or a health insurer and large pool of competing health systems. Here are just a handful of the most remarkable affiliations or joint ventures from last year.
Three diverse healthcare giants — San Francisco-based Dignity Health, Dallas-based Tenet Healthcare and St. Louis-based Ascension Health — reached an agreement for a joint venture in the summer. [Editor's note: At the time of publication, the deal had not yet closed.] Under the agreement, for-profit Tenet would hold majority ownership in three-hospital Carondelet Health Network in Tucson, Ariz., an underperforming subsidiary of the country's largest nonprofit Catholic health system, Ascension Health. Ascension would then split its stake with the nonprofit Dignity.
Three North Carolina systems formed new ties by creating a shared services operating company, which falls short of a merger or acquisition. Greenville-based Vidant Health, Raleigh-based WakeMed Health & Hospitals and Winston-Salem-based Wake Forest Medical Center will retain their independence and governance structures while gaining benefits of scale. The systems, which are not direct competitors, said the relationship is intended to alleviate financial pressures from declining Medicare and Medicaid reimbursement, particularly since North Carolina did not expand Medicaid under the healthcare reform law.
Several health systems in Washington state created a health network, stretching from Everett to Tacoma, that will essentially function as an accountable care organization for companies with 50 or more employees. The eight-hospital network includes Tacoma-based CHI Franciscan Health; Edmonds (Wash.) Family Medicine; The Everett (Wash.) Clinic; Kirkland-based EvergreenHealth Partners; Bothell-based Lakeshore Clinic; Bellevue-based Overlake Medical Center and Seattle-based Virginia Mason Medical Center.
A payer was also involved in one of the most interesting deals of 2014. In September, California insurer Anthem Blue Cross struck a joint venture with seven health systems in the state to create a 15-hospital network, called Vivity, to better rival Oakland, Calif.-based Kaiser Permanente. The arrangement involves competing hospitals and health systems that aren't owned by the health plan, such as UCLA Health System, Cedars-Sinai Medical Center and Fountain Valley-based MemorialCare Health System. They would still contract with other insurers as well. Through the JV, Anthem will offer coverage for patients who use Vivity providers at a cost that could be 10 percent lower than what employers currently pay.