About Jason C. Lee

Jason is a member of the Healthcare practice at ECG. He has over a decade of consulting experience in strategic planning, hospital/physician alignment, and commercial contracting. His current practice focuses on managed care contract analysis and negotiation, development of hospital/physician financial relationships, and assessment of physician productivity. His projects have resulted in financial and operational success for a myriad of clients. He has a master of public health degree from San Diego State University and bachelor of arts degrees in both human biodynamics and molecular and cell biology from the University of California, Berkeley

Member Premium Support for Health Exchange Plans – Regulatory Update

The implementation of federally subsidized health insurance introduced a previously uninsured segment of the population to the payor mix of providers across the country.  A major concern has been whether these newly insured patients could afford to pay their insurance premiums, even with the subsidy.  Because the law allows patients a grace period of 90 days to pay missed premiums while still being eligible for coverage, the providers’ financial responsibility over the last 60 days of that 90-day period exacerbates this concern.  Many astute providers have asked if they could support patients by paying their premiums for them. Continue reading

The Future of Physician-Owned Orthopedic ASCs: From the Health System Executive Perspective

Health systems and physician-owned ambulatory surgery centers (ASCs) alike are seeking strategies to become more integrated and offer new value to patients by providing comprehensive, coordinated services across the healthcare continuum.  Additionally, as the growth of outpatient care continues to outpace inpatient growth, particularly in orthopedics, health systems will need to evaluate their current care offerings and determine the level and types of service necessary to remain viable in the future.  From the perspective of health system executives, the choices are no less complicated than they are for ASC owners: Continue reading

Health Exchange Premiums Being Published

The long-awaited first step toward evaluating the true impact of health exchanges has finally been taken in several states, including Oregon, Washington, and Colorado.  For those of you keeping track, the eagerly anticipated health exchange open enrollment period begins on October 1, 2013.  Hospitals, physicians, employers, and patients have been preparing for this date.  However, there has been one major missing piece to the puzzle; the premium rates that payors will charge for the health exchange products.  The wait is now over for states that have started to publish preliminary rate information. Continue reading

Is your organization at risk of going from a profit to a loss when Health Exchanges are introduced?

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.

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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?

Managed Care Contracting Strategies Will Be Significantly Impacted by the Supreme Court Decision on the Affordable Care Act

The SCOTUS decision on June 28, 2012, upholds the ACA.  Many observers were expecting the court to rule to strike one or more of the provisions in the law.  The only impact was to limit the expansion of the Medicaid program.  This decision means that the innovative programs from Medicare, such as shared savings ACOs and bundled payments, will continue to be implemented and that each state will be required to operate a health exchange.  Barring other attempts to derail the law through defunding or legal challenges, the ACA will be a driving force behind changes to the delivery of healthcare for the next several years.

Providers waiting for the decision to implement managed care strategies will be wise to begin doing so, even with the political threat of additional attempts to derail the ACA.  The key insurance regulations (e.g., community rating, individual mandate, guaranteed issue, adult children coverage) and the retention of health exchanges will have two implications:  a lower percentage of uninsured and the proliferation of health exchange-based products from commercial health plans.  Further, commercial plans will continue to introduce an array of reimbursement models that will use value- and population-based arrangements to moderate costs and utilization while optimizing outcomes.

Continue reading