Search

Hospital leaders who are contemplating participation in a bundled payment initiative should first assess current circumstances to determine the extent of the opportunity for their organizations. Those who have decided conditions are favorable for such an initiative should next perform a financial assessment that includes modeling direct contract results, assessing the financial impact of reduced utilization and of improved clinical care and operations, and evaluating the net financial impact. Hospital executives also should understand the competitive and strategic benefits that bundled payment offers.

In April 2012, the Ontario government introduced Health System Funding Reform (HSFR), a transformational shift in how hospitals are funded. Mount Sinai Hospital recognized that moving from global funding to a "patient-based" model would have substantial operational and clinical implications. Adjusting to the new funding environment was set as a top corporate priority, serving as the strategic basis for re-examining and redesigning operations to further improve both quality and efficiency. Two years into HSFR, this article outlines Mount Sinai Hospital's approach and highlights key lessons learned., (Copyright © 2014 Longwoods Publishing.)

Background: Resource consumption is a widely used proxy for severity of illness, and is often measured through a case-mix index (CMI) based on Diagnosis Related Groups (DRGs), which is commonly linked to payment. For countries that do not have DRGs it has been suggested to use CMIs derived from International Classification of Diseases (ICD). Our research objective was to use ICD-derived case-mix to evaluate whether or not the current accreditation-based hospital reimbursement system in Lebanon is appropriate., Methods: Our study population included medical admissions to 122 hospitals contracted with the Lebanese Ministry of Public Health (MoPH) between June 2011 and May 2012. Applying ICD-derived CMI on principal diagnosis cost (CMI-ICDC) using weighing similar to that used in Medicare DRG CMI, analyses were made by hospital accreditation, ownership and size. We examined two measures of 30-day re-admission rate. Further analysis was done to examine correlation between principal diagnosis CMI and surgical procedure cost CMI (CMI-CPTC), and three proxy measures on surgical complexity, case complexity and surgical proportion., Results: Hospitals belonging to the highest accreditation category had a higher CMI than others, but no difference was found in CMI among the three other categories. Private hospitals had a higher CMI than public hospitals, and those more than 100 beds had a higher CMI than smaller hospitals. Re-admissions rates were higher in accreditation category C hospitals than category D hospitals. CMI-ICDC was fairly correlated with CMI-CPTC, and somehow correlated with the proposed proxies., Conclusions: Our results indicate that the current link between accreditation and reimbursement rate is not appropriate, and leads to unfairness and inefficiency in the system. Some proxy measures are correlated with case-mix but are not good substitutes for it. Policy implications of our findings propose the necessity for changing the current reimbursement system by including case mix and outcome indicators in addition to accreditation in hospital contracting. Proxies developed may be used to detect miss-use and provider adverse behavior. Research using ICD-derived case mix is limited and our findings may be useful to inform similar initiatives and other limited-setting countries in the region.

Objective: This paper provides a comprehensive overview of hospital payment systems based on diagnosis-related groups (DRGs) in low- and middle-income countries. It also explores design and implementation issues and the related challenges countries face., Methods: A literature research for papers on DRG-based payment systems in low- and middle-income countries was conducted in English, French and Spanish through Pubmed, the Pan American Health Organization's Regional Library of Medicine and Google., Findings: Twelve low- and middle-income countries have DRG-based payment systems and another 17 are in the piloting or exploratory stage. Countries have chosen from a wide range of imported and self-developed DRG models and most have adapted such models to their specific contexts. All countries have set expenditure ceilings. In general, systems were piloted before being implemented. The need to meet certain requirements in terms of coding standardization, data availability and information technology made implementation difficult. Private sector providers have not been fully integrated, but most countries have managed to delink hospital financing from public finance budgeting., Conclusion: Although more evidence on the impact of DRG-based payment systems is needed, our findings suggest that (i) the greater portion of health-care financing should be public rather than private; (ii) it is advisable to pilot systems first and to establish expenditure ceilings; (iii) countries that import an existing variant of a DRG-based system should be mindful of the need for adaptation; and (iv) countries should promote the cooperation of providers for appropriate data generation and claims management.

To maintain their creditworthiness in a volatile market and prepare for changes ahead, middle-market hospitals are: Cutting costs beyond the low-hanging fruit. Preparing for population health management. Integrating with physicians and growing their primary care networks. Expanding outpatient services. Reviewing their merger and acquisition options and affiliating when it makes sense. Investing in IT.

Peer group comparisons can help revenue cycle leaders: Review their performance through an external lens. Set targets and motivate their teams. Provide informed answers to questions from the C-suite.

The purpose of this study is to develop an estimation model for health care costs and cost recovery, and evaluate service sustainability under an uncertain environment. The Palestinian National Authority's recent focus on improving financial accountability supports the need to research health care costs in the Palestinian territories. We examine data from Rafidya Hospital from 2005-2009 and use step-down allocation to distribute overhead costs. We use an ingredient approach to estimate the costs and revenues of health services, and logarithmic estimation to prospectively estimate the demand for 2011. Our results indicate that while cost recovery is generally insufficient for long-term sustainability, some services can recover their costs in the short run. Our results provide information useful for health care policy makers in setting multiple-goal policies related to health care financing in Palestine, and provide an important initiative in the estimation of health service costs.

To improve the bottom line of owned physician practices, hospitals should: Identify disparities between physician pay and performance, and understand the factors that are creating these disparities. Review fees to make sure they are aligned with insurer and Medicare fee schedules. Analyze the work load and job resposibilities of office staff and modify staffng levels and job descriptions, if needed.

Skyrocketing health care costs are forcing payers to demand delivery efficiencies that preserve and promote quality care while reducing costs. Hospitals are challenged to meet the pressure from payers to deliver value and outcome-based health care while preserving sufficient financial margins. The fee-for-service (FFS) model with its perverse incentives to incur high-volume services is no longer, if ever, sufficient to ensure quality, cost-efficient health care. In response, payers have sought to force the issue through accelerated efforts to bundle payments to providers. It is theorized that by tying together providers throughout the continuum or episode of care for a patient, efficiencies in delivery inclusive of cost reductions will be obtained. This article examines the bundled payment models and the financial considerations for hospital facility providers.

Hospitals can improve clinical documentation under ICD-10 by implementing three strategies: Bring clinical documentation improvement (CDI) specialists and coders together for daily or weekly communications to improve documentation quality, processes, and outcomes. Encourage CDI specialists to engage in direct, one-on-one conversations with physicians or generate queries, whether paper or EHR-based, to clarify missing or unclear documentation to promote better overall clinical documentation outcomes. Assess ICD-10 hot spots for documentation gaps to mitigate risk of lost revenue under ICD-10.

Many healthcare providers today are seeking to improve the value of the care they deliver by implementing standardized clinical practice guidelines aimed at reducing variations in care, avoiding complications, and lowering costs. To succeed, such an initiative requires the full support and participation of the clinicians who will use the guidelines. Providers also should have a fully developed infrastructure consisting of a clinical content system, an analytics system, and a deployment system.

Healthcare financing and insurance is changing everywhere. We want to understand the impact that financial pressures can have for the uninsured in advanced economies. To do so we focus on analyzing the effect of the introduction in the US of managed care and the big rise in financial pressures that it implied. Traditionally, in the US safety net hospitals have financed their provision of unfunded care through a complex system of cross-subsidies. Our hypothesis is that financial pressures undermine the ability of a hospital to cross-subsidize and challenges their survival. We focus on the impact of price pressures and cost-controlling mechanisms imposed by managed care. We find that financial pressures imposed by managed care disproportionately affect the closure of safety net hospitals. Moreover, amongst those hospitals that remain open, in areas where managed care penetration increases the most, they react by closing the health services most commonly used by the uninsured.

If there's one aspect of healthcare that's omnipresent - that is connected in some way to virtually every component of the medical trade - it's the revenue cycle; and vendors' solutions to manage it are as varied as the experts we queried on this topic. The revenue cycle actually touches on nearly everything related to healthcare - from the time a patient books an appointment with a healthcare facility, until the patient and insurance company provide final payments for services rendered to the healthcare provider. Over the past several decades, software programs and computers have replaced ledger books and calculators. And while the goal of revenue cycle management (RCM) remains essentially the same, healthcare reform will make this process infinitely more complex, due to reduced reimbursements and the onset of ICD-10 in October 2014. Additionally, reimbursement will be tied to quality, rather than quantity. According to an Information Week article by Ken Terry, outsourcing of billing and collections continues to grow, "because hospitals and physician groups are not very good at these non-core tasks." Think writers and math: I know a great many writers, including yours truly, who possess truly weak math skills. Granted, both skills involve opposite brain hemispheres - different parts of the brain. But what may be even more important is the fact that math is not generally an integral component of the main function of writing. A similar situation exists in healthcare facilities; just replace writing with providing care for people. A 2012 Black Book Rankings survey states 96 percent of organizations are in the process of acquiring several crucial accountable care organization (ACO) data solutions, including clinical decision support, RCM, health information exchange (HIEs), electronic health records (EHRs), e-prescribing, data center security and storage solutions, business intelligence and care coordination management. So it's clear that RCM will continue to remain a top-of-mind issue as we see how healthcare reform plays out. Here's what our select group of experts had to say about how automation helps to steer the revenue cycle process.

Reforming China's public hospitals to curb widespread overtreatment and improve the quality and affordability of care has been the most challenging aspect of that nation's ambitious health reform, which began in 2009. This article describes a pilot project under way in several of China's provinces that combines payment reform with the implementation of evidence-based clinical pathways at a few hospitals serving rural areas. Results to date include reduced length-of-stay and prescription drug use and higher patient and provider satisfaction. These early results suggest that the pilot may be achieving its goals, which may have far-reaching and positive implications for China's ongoing reform.

Drawing upon role theory and the literature concerning unintended consequences of financial pressure, this study investigates the effects of health care decision pressure from the hospital's administration and from the professional peer group on physician's inclination to engage in up coding. We explore two kinds of up coding, information-related and action-related, and develop hypothesis that connect these kinds of data manipulation to the sources of pressure via the intermediate effect of role conflict. Qualitative data from initial interviews with physicians and subsequent questionnaire evidence from 578 physicians in 14 French hospitals suggest that the source of pressure is a relevant predictor of physicians' inclination to engage in data-manipulation. We further find that this effect is partly explained by the extent to which these pressures create role conflict. Given the concern about up coding in treatment-based reimbursement systems worldwide, our analysis adds to understanding how the design of the hospital's management control system may enhance this undesired type of behavior., (Copyright © 2013 Elsevier Ireland Ltd. All rights reserved.)

Many policy makers believe that when Medicare constrains its payment rates for hospital inpatient care, private insurers end up paying higher rates as a result. I tested this "cost-shifting" theory using a unique new data set that combines MarketScan private claims data with Medicare hospital cost reports. Contrary to the theory, I found that hospital markets with relatively slow growth in Medicare inpatient hospital payment rates also had relatively slow growth in private hospital payment rates during 1995-2009. Using regression analyses, I found that a 10 percent reduction in Medicare payment rates led to an estimated reduction in private payment rates of 3 percent or 8 percent, depending on the statistical model used. These payment rate spillovers may reflect an effort by hospitals to rein in their operating costs in the face of lower Medicare payment rates. Alternatively, hospitals facing cuts in Medicare payment rates may also cut the payment rates they seek from private payers to attract more privately insured patients. My findings indicate that repealing cuts in Medicare payment rates would not slow the growth in spending on hospital care by private insurers and would in fact be likely to accelerate the growth in private insurers' costs and premiums.

Five elements have helped Advocate Lutheran General Hospital control the surgical quality, safety, and cost outcomes that are the focus of new payment models: Single-path scheduling, Document management, Presurgical testing, A daily huddle, Surgical safety initiative.

England, France, Germany, the Netherlands, and Sweden spend less as a share of gross domestic product on hospital care than the United States while delivering high-quality services. All five European countries have hospital payment systems based on diagnosis-related groups (DRGs) that classify patients of similar clinical characteristics and comparable costs. Inspired by Medicare's inpatient prospective payment system, which originated the use of DRGs, European DRG systems have implemented different design options and are generally more detailed than Medicare's system, to better distinguish among patients with less and more complex conditions. Incentives to treat more cases are often counterbalanced by volume ceilings in European DRG systems. European payments are usually broader in scope than those in the United States, including physician salaries and readmissions. These European systems, discussed in more detail in the article, suggest potential innovations for reforming DRG-based hospital payment in the United States.

Successful practices that help leverage revenue cycle data and analytics include: Starting the collections process early, Segmenting accounts, Holding agencies accountable for their performance, Using trend data to identify staff training needs.

It takes time, money and staff, but hospitals can get their arms around the RAC process.

Using ratios of costs to charges (RCCs) to estimate costs can cause hospitals to significantly over- or under-invest in service lines. A focus on improving cost estimation in cost centers where physicians have significant control over operating expenses, such as drugs or implants, can strengthen decision making and strategic planning. Connecting patient file information to purchasing data can lead to more accurate reflections of actual costs and help hospitals gain better visibility across service lines.

Physician employment is here to stay. The challenge for healthcare finance professionals is to make physician relationships work without the financial losses experienced by hospitals that tried physician employment in the past. Capturing market share should be a key strategy in any physician employment effort. Physicians who are engaged and actively involved in the process make great business partners because they understand the productivity, efficiencies, and cost controls needed to succeed.

An effective hospital turnaround plan includes speed, transparency and legal savvy.

The nation's annual growth rate of medical costs could be halved if the nation were to rigorously pursue the following initiatives, among others: Move rapidly from fee-for-service to value-based contracting. Increase the supply and effective utilization of primary care physicians and physician extenders. Focus more on chronic disease management. Pass tort reform. Encourage the formation of multispecialty group practices and integrated systems. Reduce administrative complexity.

Proposed regulations set forth detailed rules for implementing the new tax-exemption requirements of Section 501(r) of the Internal Revenue Code for not-for-profit organizations operating hospital facilities. The proposed regulations provide guidance on the written financial assistance policies (FAPs) that hospital facilities are required to establish. The regulations propose methodologies for determining the amounts that a hospital facility can charge FAP-eligible individuals for emergency and other medically necessary care. They prescribe procedures that hospital facilities would be required to follow before engaging in extraordinary collection actions against an individual.

Granting autonomy to public hospitals in developing countries has been common over recent decades, and implies a shift from hierarchical to contract-based relationships with health authorities. Theory on transactions costs in contractual relationships suggests they stem from relationship-specific investments and contract incompleteness. Transaction cost economics argues that the parties involved in exchanges seek to reduce transaction costs. The objective of this research was to analyse the relationships observed between purchasers and the 22 public hospitals of the city of Bogota, Colombia, in order to understand the role of relationship-specific investments and contract incompleteness as sources of transaction costs, through a largely qualitative study. We found that contract-based relationships showed relevant transaction costs associated mainly with contract incompleteness, not with relationship-specific investments. Regarding relationships between insurers and local hospitals for primary care services, compulsory contracting regulations locked-in the parties to the contracts. For high-complexity services (e.g. inpatient care), no restrictions applied and relationships suggested transaction-cost minimizing behaviour. Contract incompleteness was found to be a source of transaction costs on its own. We conclude that transaction costs seemed to play a key role in contract-based relationships, and contract incompleteness by itself appeared to be a source of transaction costs. The same findings are likely in other contexts because of difficulties in defining, observing and verifying the contracted products and the underlying information asymmetries. The role of compulsory contracting might be context-specific, although it is likely to emerge in other settings due to the safety-net role of public hospitals.

By identifying and applying advanced revenue cycle analytics, healthcare providers can: Free up cash. Find new revenues without harming core services. Improve productivity, profitability, and patient care.

Unclaimed property audits are on the rise at hospitals and health systems. Healthcare organizations often have unclaimed property in the form of accounts payable, payroll, accounts receivable credit balances, unpaid credit balances, and more. Hospitals and health systems should consolidate unclaimed property analysis and reporting to reduce compliance risk and generate savings.

In a reform environment, hospitals and health systems should be able to control-rather than simply understand-their costs. Senior managers and line managers throughout a healthcare organization should be solidly behind-and deeply involved in-the organization's cost-control efforts. Physicians also should be heavily engaged in cost control, as they are the only ones who can both establish clinical pathways and monitor their colleagues' use of them.

Background: Strategic planning has been presented as a valuable management tool. However, evidence of its deployment in healthcare and its effect on organizational performance is limited in low-income and middle-income countries (LMICs). The study aimed to explore the use of strategic planning processes in Lebanese hospitals and to investigate its association with financial performance., Methods: The study comprised 79 hospitals and assessed occupancy rate (OR) and revenue-per-bed (RPB) as performance measures. The strategic planning process included six domains: having a plan, plan development, plan implementation, responsibility of planning activities, governing board involvement, and physicians' involvement., Results: Approximately 90% of hospitals have strategic plans that are moderately developed (mean score of 4.9 on a 1-7 scale) and implemented (score of 4.8). In 46% of the hospitals, the CEO has the responsibility for the plan. The level of governing board involvement in the process is moderate to high (score of 5.1), whereas physician involvement is lower (score of 4.1). The OR and RPB amounted to respectively 70% and 59 304 among hospitals with a strategic plan as compared with 62% and 33 564 for those lacking such a plan. No statistical association between having a strategic plan and either of the two measures was detected. However, the findings revealed that among hospitals that had a strategic plan, higher implementation levels were associated with lower OR (p < 0.05)., Conclusions: In an LMIC healthcare environment characterized by resource limitation, complexity, and political and economic volatility, flexibility rather than rigid plans allow organizations to better cope with environmental turbulence., (Copyright © 2012 John Wiley & Sons, Ltd.)