The financial incentives for achieving meaningful use of electronic health records (EHRs), coupled with the broader need to better coordinate patient care, have generated a flurry of IT activity among physician practices. Problems arise, however, when the stated goal of the organization is to “implement an EHR.” When implementation itself becomes the goal, progress is generally slow, there can be extensive rework of failed attempts, and the frustration levels run high among both providers and managers. To avoid such frustration, implementation goals and associated metrics should focus on improving patient care, the real “prize” of a successful EHR.
Although everyone may recognize the importance of establishing meaningful clinical and operational goals for an EHR, most often organizations either have no explicit goals or settle for goals that focus on the process of EHR implementation, rather than on desired outcomes. Continue reading
The U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) recently issued Advisory Opinion 12-22 addressing an existing comanagement arrangement between a rural hospital and a cardiology group. Under the arrangement, the group manages the hospital’s four cardiac cath labs; recommends equipment, supplies, and devices; and provides strategic planning, medical direction, staff development, and other services. This is the first OIG opinion that specifically addresses comanagement arrangements. Advisory Opinion 12-22 provides useful guidance for structuring a comanagement arrangement, including compensation parameters and safeguards against the reduction of services and the inducement of referrals. Continue reading
Michael Porter defines value in healthcare as health outcomes achieved per dollar spent. So our goals are to maximize the numerator by achieving optimal outcomes and minimize the denominator by better managing resources. These goals are best accomplished simultaneously; options to do so include:
- Improving case management.
- Optimizing care delivery teams.
- Enhancing outcomes measurement.
- Providing clinicians with real-time access to information.
- Implementing bundled payment systems.
Easier said than done. And the financial implications of improving value are not always clear-cut. CFOs are left to figure out how to make money when Continue reading
The challenges facing many healthcare organizations today require enterprise wide strategic planning efforts addressing issues that profoundly impact the organization’s vision and organizational structure. Health systems, hospitals, and medical groups are considering merger and acquisition options to address the increased importance of scale and scope of services. But they are also concerned about the potential to lose their autonomy, history, and focus on their community that may accompany such a transaction.
Merging, acquiring, or being acquired are not the only options. Continue reading
I recently analyzed client data to evaluate the potential impact of health exchanges entering a market. Although I expected a moderate impact, I was surprised at how much a hospital could be affected by poor health exchange contracts.
As shown in the table below, the introduction of health exchanges to an example hospital’s market is expected to significantly reduce the number of patients covered under commercial insurance. In addition, the number of Medicaid beneficiaries will go up, and the number of self-pay patients will go down. Ultimately, this hospital will shift from a profit of $2.1 million to a loss of approximately $1.2, a change of $3.3 million. Analyzing the potential financial impact for your organization within a likely range of both reimbursement rates and payor mix shift will be a key component of your strategic planning for health exchanges.
Be aware of the potential utilization and cost-of-care risks of health exchange-covered patients. You will need to determine if the care for any given patient population is manageable based upon likely rates of reimbursement. Preparing for health exchanges will require significant due diligence to analyze the potential impact and develop a proactive negotiation approach to secure network agreements that place your organization in a positive financial position.
Read more about how health exchanges might have an effect on your bottom line. What are some of your concerns about health exchanges?
Virtually all hospital integration initiatives include physicians in administrative capacities (e.g., medical director) and the formation of a physician advisory committee to ensure doctors are included in at least some of the decision-making processes. While necessary and important, these limited roles must evolve over time into a true partnership, with physicians being embedded in all financial, clinical, operational, and strategic aspects of the integrated network. Creating an integrated system means combining two types of businesses into a single healthcare enterprise. Establishing the physician partnership is the fourth and final phase of physician integration and involves sharing control and changing the historical culture for both hospitals and physicians.
This is more difficult than it appears, because hospitals and doctors frequently have very different goals and ways of operating prior to an affiliation. Although this challenge is not specific to those organizations moving from Phase 3 into Phase 4, it is important that administrative and medical leaders recognize the motivational differences in order to effectively align and move forward.
Major differences in traditional hospitals and physician organizations include:
While the table above may be oversimplified, the point is Continue reading
The ultimate goal of physician acquisitions is enhanced coordination of care and integration across the care continuum. The sad reality is that most providers currently share very little clinical information with each other. Diagnostic and/or therapeutic information from one location or encounter is often unavailable to others who treat the patient at another location. In developing a physician network, the coordination of care is too often deferred until “later” because physicians and management are not comfortable with how to proceed.
First, it should be recognized that clinical integration is different than economic integration. Clinical integration requires different operational activities and decision-making approaches than those of typical hospital systems. It should start with Continue reading