Health Care Law Blog
Since the approval of the Affordable Care Act in 2010, hospital consolidation has been on the rise and according to a report detailed in a recent Chicago Tribune article, 2014 followed suit with a “flurry of mergers, acquisitions and joint ventures.” The article features findings from a report issued by healthcare consulting firm Kaufman Hall, including that in 2014 95 deals were announced, down slightly from 98 in 2013 but up from 66 in 2010.
Passage of the Affordable Care Act (ACA) in 2010 increased pressure on hospitals to operate more effectively and efficiently, which has driven industry consolidation. The ACA favors a service model that rewards organizations for producing quality outcomes – not quantity – and many providers believe that compliance will be easier with the greater scale and integration enabled by mergers. Through consolidation, many also hope to be better positioned to attract new patients with expanded services and medical specializations.
Additionally, the ACA’s introduction of a massive wave of new patients into the healthcare system, combined with diminishing Medicaid and Medicare reimbursements, means that the business of healthcare is becoming increasingly expensive, especially for independent hospitals. Another challenge – and driving force behind consolidation – has been the need to upgrade IT systems and facilities to comply with rules and regulations beyond the ACA.
The Office of the National Coordinator for Health IT (ONC) released a report on January 29 that identifies optimal healthcare information exchange and implementation standards to enable a nationally interoperable health data information exchange system by 2017 (i.e. standards so that you can have your health records sent and read by all your doctors).
In healthcare, interoperability of IT systems allows providers to share data among different practitioners, insurers, billing and scheduling systems and health information exchanges. Interoperability has the potential to improve the quality of patient care by providing access to accurate, timely information in one location, save time previously used searching for information, and make critical medical information instantly available for clinical decisions.
Under the 2009 economic stimulus legislation’s electronic health records (EHR) incentive payment program, the ONC was directed to establish a governance mechanism for the nationwide health information network. Since that time, however, the ONC has been under increasing criticism about the lack of interoperability of EHRs despite the significant public investment.
The Michigan Court of Appeals recently decertified a class action suit against Henry Ford Health System (HFHS) and its subcontractor, a medical transcription service, for inadvertently disclosing sensitive patient information online. On December 18, 2014, a unanimous three-judge panel reversed the trial court’s denial of summary judgment in favor of the defendants. The court held that an invasion of privacy claim requires an intentional act rather than mere negligence and that the plaintiff’s claims for negligence and breach of contract require proof of an actual injury.
The class consisted of 159 patients who visited HFHS between June 3, 2008 and July 18, 2008. The case arose when the defendant subcontractor made a configuration change to its server which left certain patient records unsecured. As a result, Google’s automated web server, “Googlebot,” indexed the information and made it available for users to search online. The information included each patient’s name, date of service, and diagnoses. The unnamed lead plaintiff alleged that her records revealed a sexually transmitted disease.
