Business Intelligence – the Next Implementation Priority

As with many other business and market drivers inspiring changes in healthcare, the need for improved business intelligence (BI) tools and capabilities is multifaceted.

Policy Drivers: 

  • HITECH Legislation – Meaningful use requirements, and the revenue associated with early attestation, have inspired many physicians and hospitals to implement EHRs to meet Phase 1 requirements.
  • ACA Legislation – Many of CMMI’s new models for ACOs, bundled payments, etc., include specific quality measures.  However, some new models from CMMI propose that institutions develop their own quality and other performance measures.

Financial Performance:

  • Cost Reductions – Federal and state healthcare funding continues to be reduced in current and projected budget cycles.
  • Payor Agreements – New payor agreements include both cost reductions and financial and performance measure improvements.

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Bundled Payments – Success Factors

Bundled payments are an effective starting point for going down the path of value-based reimbursement models.  The most important advantage in beginning with bundled payments is control – you can identify the episode of care and negotiate the payment agreement based on areas of strength in which your institution is most likely to be successful.

Success Factors

If you are considering a transition to value-based payment models, you will need at least the following in place:

  • Cost and reimbursement (medical spending) data for all services incurred during the defined episode of care.
  • Utilization data for services encompassing the episode of care, including all acute and non-acute providers involved.  Timely access to claims data is an important factor in bundled payment models, which may require new agreements with payors and/or the development of third-party administrator capabilities within your institution.
  • Risk stratification of the patient population as a way of projecting future comorbidities and complexities that need to be addressed.
  • Episodes of care in which you are either already competitive (as measured by medical spending and performance on a defined set of outcomes), or have reason to believe that you will be, to work to your advantage in bundled payment arrangements.

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Personalized Medicine – Putting It Into Practice

“Personalized medicine” conjures different images, depending on your perspective and understanding of the term. For some, personalized medicine is a very precise application of a clinical intervention (often a pharmaceutical therapy) based on the genetic sequence that has been shown to be responsive to that particular therapy for a specific biological dysfunction. Ruling out responsiveness to expensive interventions is equally important, based on genetic factors. Beyond genomics, personalized medicine can include lifestyle considerations and access to healthcare resources, resulting in a clinical care treatment plan that the patient is highly likely to comply with and which still effectively address an issue.

As patient outcomes become more important in clinical care reimbursement and in research, the effectiveness of personalized medicine will take a more critical role in the strategic, business, and operating plans of our healthcare institutions. Personalized medicine seems counter to population health, another focus area driven by changes in reimbursement such that the health issues of the population warrant better understanding if an institution is going to assume responsibility for improving the health of that population. Personalized medicine and population health can coincide, and need to, in the operations of our healthcare institutions.

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Funds Flow Trends – Integration and Incentive Alignment

A renewed interest in funds flow among academic medical centers (AMCs) is driven by efforts to improve integration across missions and incent behavior across a set of strategic goals.  Interest is also driven by a need to improve the financial performance of all assets as AMCs face funding reductions for each mission:  teaching, research, and clinical care.

ECG believes that AMCs will need to manage all sources of funds in a much more integrated fashion.  Efficient delivery of each service must be incorporated into system goals such that leaders have incentives in place to manage resources more effectively in order to maintain a financial performance that continues to allow the institution to invest in strategic priorities.  These investments must be done as an integrated institution.  Ramifications for departments include changing how reserves are accumulated and distributed.

Academic efforts will need to be better defined and managed, as well.  Administrative leadership efforts by role should be clear, and education and training efforts should be tracked in an accurate and transparent manner.  In addition, institutional research support and investments should be approved at a system-wide level and driven by the institution’s strategic plan.

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Supreme Court Review of Healthcare Reform Legislation

The U.S. Supreme Court will begin hearing arguments this week on four questions under consideration in relation to the Affordable Care Act (ACA) legislation:

  • Whether damages can be incurred (and therefore prosecuted) based on the minimum essential coverage provision before it is implemented in 2014.
  • Whether it is within Congress’ authority to enact the individual mandate for healthcare insurance coverage (also referred to as the minimum essential coverage provision).
  • Whether the minimum coverage provision can be removed from the remainder of the ACA if it is found to be unconstitutional.
  • Whether the Medicaid expansions amount to unconstitutional coercion, since the expansions are mandatory if states elect to continue to participate in the program.  The Medicaid expansion will also be evaluated for severability from the ACA if it is found to be unconstitutional.

If it is deemed that the first question, which relates to the Tax Anti-Injunction Act (AIA), is not relevant to this case, the Supreme Court will move forward with a review of the other three questions as scheduled.  If the Supreme Court finds that the AIA is relevant (or essentially that damages can be incurred and prosecuted prior to being assessed), then the court may wait until after the individual mandate and Medicaid expansion go into effect in 2014 before ruling on the other three questions.  At that time, additional cases would have to be established based on damages incurred by these two issues.

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