Hospital Stocks Tank Amid New Talks to Repeal the ACA

Hospital stocks tank amid reports that House Republicans are again looking at ways to repeal Obamacare repeal. The sudden drop follows days of hospital stocks in the green, rallying on the news that the Republican’s proposed American Health Care Act (AHCA) bill was yanked from consideration. The GOP’s plan was largely opposed on the expectation that the number of Americans without health insurance would dramatically increases, directly impacting hospital losses.

Tenet Healthcare was down 5% in early afternoon trading, while Community Health Systems shares dropped more than 7% at one point Tuesday. Overall, hospital operator stocks closed the day down.

According to one analyst, hospital-related companies are at risk because of innovation and shrinking margins. The potential revival of the Republicans’ healthcare bill adds more risk:

Volumes in hospital land have been coming down,” Mizuho’s Sheryl Skolnick warned Monday on CNBC’s “Closing Bell.” And even with the Affordable Care Act, or Obamacare, remaining intact, hospital stocks such as Tenet and its peers could start to drop, she said.

Innovation is allowing an increasing number of physicians to make decisions for their patients based on data and analytics, Skolnick said — a conversation that can happen over video chat. Innovation shifts such as this are slowing hospital growth rates, including emergency rooms visits, she explained.

That could spell a problem for the part of [a hospital’s] business, where you’ve deployed the most capital, and that’s the outpatient hospital bed.

The AHCA’s demise was likely welcomed by hospitals and other care providers. Such organizations were some of the big winners under the ACA as more and more patients became insured and started to enter the care delivery system. While they may have been sicker than expected, that was more of a thorn in insurers’ side as hospitals are still trying to find their footing in a new value-based payment world. So while still in a fee-for-service model, many hospitals were open to the idea of more patients potentially equaling more revenue.

U.S. hospitals, which have been steadily declining, won’t be saved by by the demise of the AHCA. In 1997 there were more than 6,000 hospitals registered with the Centers for Medicare and Medicaid Services (CMS). In 2016 there are fewer than 5,000. Additionally, hospital use is falling due to increasing expenses and disappearing beds.

In addition, most hospitals are hiring more employees in order to implement and support expensive health IT system. A recent Health Affairs blog post, with the help of Bureau of Labor Statistics data, showed an 11% increase in hospital jobs in the 10 year period from 2007 to 2017.

Rising expenses, declining admissions and the rise of telehealth creates a difficult financial situation for a growing number of hospitals. What’s certain is that improving the stability of individual health insurance markets, which is central to the AHCA, will not improve hospital financials.

1 in 20 U.S. Adults Affected by Outpatient Diagnostic Errors

Diagnostic errors–missed opportunities to make a timely or correct diagnosis based on available evidence–occur in about 5 percent of adults in the United States, according to a new study published in the April 21 issue of BMJ Quality & Safety. The study, partially funded by the Agency for Healthcare Research and Quality (AHRQ), estimates that approximately 12 million adults in the United States could experience an outpatient diagnostic error each year.

The study, “The frequency of diagnostic errors in outpatient care: estimations from three large observational studies involving U.S. adult populations,” used data from three previous studies of errors in general primary care diagnosis, colorectal cancer diagnosis, and lung cancer diagnosis. In all three studies, diagnostic errors were confirmed through rigorous chart review. The authors estimated that about half of the diagnostic errors they found could have severely harmed patients.

Diagnostic errors can harm patients by delaying their treatment. For example, a delayed or incorrect cancer diagnosis could make the disease harder to treat or more deadly.

“Keeping patients safe begins with a correct and timely diagnosis,” said AHRQ Director Richard Kronick, Ph.D. “Diagnostic errors made in outpatient care can be difficult to measure, and this is a relatively new area for patient safety researchers. Health care professionals are typically accurate in making diagnoses, but finding ways to improve diagnoses and eliminate errors is an important goal. This study helps us better understand the extent of the problem and focus our efforts on reducing the harm to patients.”

Patient safety has long been a focus of the U.S. health care quality improvement movement. HHS’ Office of the Inspector General estimated in 2010 that about one in seven Medicare patients discharged from hospitals experienced at least one adverse event. Much of the patient safety effort has been concentrated on hospitals and nursing homes. More recently, these efforts are focusing on other settings of care such as ambulatory settings, where many types of health conditions or illnesses are often first diagnosed.

In this study, researchers led by Hardeep Singh, M.D., M.P.H., chief of the health policy, quality & informatics program at the Center for Innovations in Quality, Effectiveness and Safety, based at the Michael E. DeBakey Veterans Affairs Medical Center in Houston, Texas, and an associate professor at Baylor College of Medicine in Houston, built estimates of diagnostic error by compiling and analyzing data from three previous studies. These studies evaluated situations such as unexpected return visits and lack of timely follow up and provided researchers with an estimated frequency of diagnostic error. This frequency was then applied to the general adult population.

The findings are consistent with recent data from the general public about diagnostic errors, the authors said. This study is significant because it is based on a large sample size and is the most robust estimate thus far to address the frequency of diagnostic error in routine outpatient care.

“Misdiagnosis is clearly a serious problem for the health care field,” said Singh. “This population-based estimate should provide a foundation for policymakers, health care organizations and researchers to strengthen efforts to measure and reduce diagnostic errors.”

Ensuring that test results are not lost or misplaced, including through the use of health information technology, is a critical part of reducing diagnostic errors. AHRQ recently published a toolkit to help doctors, nurses and medical office staff improve their processes for tracking, reporting and following up with patients after medical laboratory tests. Approximately 40 percent of primary care office visits involve some type of diagnostic medical test, such as a urine sample or blood test, provided on site or at a laboratory. However, if test results are lost, incorrect or incomplete, the wrong treatment may be prescribed and patient harm can occur. The toolkit, Improving Your Office Testing Process, can be found at www.ahrq.gov/professionals/quality-patient-safety/quality-resources/tools/ambulatory-care/office-testing-toolkit/.

Additionally, the Office of the National Coordinator for Health Information Technology recently released the “SAFER Guides” –a new set of guides and interactive tools to help health care providers more safely use electronic health information technology products, including test results reporting and follow up. These guides are available at www.healthit.gov/safer/safer-guides.

AHRQ, a research agency within HHS, works to make health care safer by investigating the ways that patients are harmed in health care, why this harm occurs and how to prevent it. The findings from this research inform policy and are translated into practical tools for providers. In addition to AHRQ, funding for this work was provided by the National Institutes of Health, the Veterans Affairs National Center for Patient Safety, and the Veterans Affairs Health Services Research and Development Service. For more information, visit www.ahrq.gov or www.wvhealthywomen.org.

SOURCE: Agency for Healthcare Research & Quality