iProtean Newsletter

Next Generation ACOs Cut Medicare Spending

Next Generation ACOs (NGACO) have been associated with model-wide reductions in spending without declines in quality, according to a new report from CMS. Based on their first performance year (2016), the participating NGACOS reduced Medicare spending by approximately $100 million.

 

The savings appeared to be associated with reductions in hospital and skilled nursing facility costs.

 

One analyst noted that these results show that the NGACO program “actually does what Medicare was hoping it would do around the cost and quality of care.” (“Next Gen ACO Savings Could Bolster Medicare ACO Changes,” HFMA Compass, August 27, 2018)

 

An independent study confirmed that most of the spending decline resulted from post-acute care spending, mostly skilled nursing facilities. Also, the number of inpatient hospital days as well as nonhospital evaluation and management visits dipped. Annual wellness visits increased 12 percent.

 

These authors noted that the NGACOs were continuing to develop their approaches to an evolving model in the program’s first year and may improve on their initial results. For instance, specific approaches allowed three NGACOs also to cut home health spending. Their findings suggest that there are multiple pathways across various care settings for ACOs to total lower Medicare spending. (“Next Gen ACO Savings Could Bolster Medicare ACO Changes,” HFMA Compass, August 27, 2018)

 

Some industry experts believe that the results in the CMS report confirm that ACOs that take downside risk tend to perform better than those in upside-only risk models.

 

CMS has proposed a rollout of a replacement for the Shared Savings Program to Pathways to Success, where the 516 existing Medicare ACOs must switch into one of two tracks and take on downside risk within two years. (See last two iProtean blogs.)

 

Many provider organizations have resisted the proposed rapid movement to Pathways to Success, noting they need more time in the upside-only models. The new report, however, gives policymakers more evidence to point to should they decide to finalize their proposals despite pushback from these provider organizations.

 

But requiring ACOs to move to downside financial risk in 2019 would cause more than 70 percent of those that responded to a May 2018 poll conducted by the National Association of ACOs to leave the program. (See last two iProtean blogs.) It has been suggested that upside-only ACOs who have not invested in the needed infrastructure or have not derived shared savings will leave the Shared Savings Program. (“Next Gen ACO Savings Could Bolster Medicare ACO Changes,” HFMA Compass, August 27, 2018)

 

 

 

Doing More with Less—The Cost Imperative, is now in your library. This advanced Finance course features Marian Jennings, Dan Grauman and Nate Kaufman. They discuss the issue of cost versus growth, traditional and innovative cost-cutting strategies, rationalization of services and the board’s role.

 

Our upcoming advanced Mission & Strategy course, Due Diligence on Deals, features Dan and Marian who discuss the pitfalls and advantages of due diligence during mergers, consolidation and partnerships.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Successful Medicare ACOs Bring In Less Money than FFS Payment System

According to a recent report on the 2016 Medicare Shared Savings Program (MSSP) results, Track 1 ACOs that earned shared savings still incurred a $31 per member per month (PMPM) loss on average, equating to $5.2 million in losses for an average organization.

 

For Track 1 ACOs earning shared savings, the average $27 PMPM savings payment was vastly offset by a $58 PMPM reduction in Medicare fee-for-service revenue. (“Even Successful Medicare ACOs Lose Money: Analysis,” HFMA Compass, August 22, 2018)

 

While Track 2 and 3 ACOs earning shared savings fared better financially, they still lost an average of $14 PMPM or $2.9M per organization. Next Gen ACOs earning shared savings lost $3 PMPM or $1.2M per organization.

 

The authors of the report by Navigant wrote “Many health systems thoughtfully built accountable care organizations (ACOs) and physician networks and moved a portion of their managed care contracting intentionally toward risk. For many, entering the Medicare Shared Savings Program (MSSP) Track 1 represented a ‘toe in the water’ step to embrace the new economic and clinical realities of population health. However, new data now indicates many ACOs are still not generating savings and, considering their investments in IT and capabilities such as care management, losing money as an organization. These leaders now face the prospect of whether or not to embrace two-sided risk starting in January of 2019. (Analysis: Is Your Health System Ready for Two-Sided Risk? Navigant, August 2018)

 

The National Association of ACOs (NAACOS) conducted a survey of 144 Medicare ACOs in 2016 and found the average operational cost of a single ACO is almost $2 million. NAACOS wants the Shared Savings Program to value needed investments in individual ACOs in calculations of ACO risk.

 

The Navigant report noted increased investments (e.g., employing physicians, community-based sites of services such as ambulatory surgery centers and clinics) in an organization’s ACO decreases fee-for-service revenue. This has a direct impact on an organization’s top and bottom lines.

 

As noted in last week’s blog/newsletter, CMS plans to move from MSSP to Pathways to Success which requires accelerated movement to downside risk. A Navigant executive said that some Medicare ACOs facing a 2018 renewal decision have indicated to his organization that they will drop out, but a much larger “maybe half or more” could leave in 2019. “They don’t believe that continued downside risk participation in a CMS-based program is generally in their best interest.” (“Even Successful Medicare ACOs Lose Money: Analysis,” HFMA Compass, August 22, 2018)

 

Despite financial losses, Medicare ACOs are the only class of ACO models that have continued to grow recently. Health Affairs recently reported that the number of Medicare ACO contracts continued to grow in 2017, while commercial ACO contracts were flat. (“Recent Progress in The Value Journey: Growth of ACOs And Value-Based Payment Models In 2018,” Health Affairs Blog, August 14, 2018)

 

 

Doing More with Less—The Cost Imperative, is now in your library. This advanced Finance course features Marian Jennings, Dan Grauman and Nate Kaufman. They discuss the issue of cost versus growth, traditional and innovative cost-cutting strategies, rationalization of services and the board’s role.

 

Our upcoming advanced Mission & Strategy course, Due Diligence on Deals, features Dan and Marian who discuss the pitfalls and advantages of due diligence during mergers, consolidation and partnerships.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Possible ACO Overhaul Causes Concern

CMS has proposed an overhaul of the Accountable Care Organization (ACO) program, to take effect July 2019. The Medicare ACO program, called the Medicare Shared Savings Program (MSSP) would have a new name, Pathways to Success. It would require the 561 existing ACOs to switch to one of two tracks and would mandate that they take on downside risk within two years.

 

ACO advocates predicted the overhaul could cause massive departures from the program. (“ACO Advocates Issue Warning About Program Overhaul,” HFMA Compass, August 13, 2018)

 

CMS administrator Seema Verma noted in a press release: “Medicare cannot afford to support programs with weak incentives that do not deliver value. ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.” (CMS Proposes “Pathways to Success,” an Overhaul of Medicare’s ACO Program, CMS.gov Newsroom)

 

Here are the components of the new ACO program:

 

Basic Track

  • Begins as a one-sided model for new participants
  • After two and a half years, transition to downside risk
  • Downside risk at its highest level would allow organizations to qualify for advanced alternative payment model (APM) track of MACRA
  • Existing ACOs in Track 1 of the MSSP would start downside risk within one and a half years of the July 19 start date

 

Enhanced Track

  • To be based on existing MSSP Track 3
  • ACOs from Track 3, 2 or 1+ would be barred from the upside-only phase of the Basic Track.

 

Both CMS and ACO advocates expect the revamped Medicare ACO program to result in fewer ACOs. CMS estimated that the number of Medicare ACOs could decline by a net 109 over the next 10 years. “The overall drop in expected participation is mainly due to the expectation that the program will be less likely to attract new ACO formation in future years,” CMS officials wrote in the rule. (“ACO Advocates Issue Warning About Program Overhaul,” HFMA Compass, August 13, 2018)

 

The National Association of ACOs warned that this will cause more than 70 percent of ACOs that responded to its recent poll to leave the program.

 

And hospital advocates were not optimistic that the new approach would draw in new hospital participants. For example, the American Hospital Association issued a written statement expressing its concern: “For hospitals and health systems, and other providers that want to come together to provide the highest-quality care for patients, the proposed rule would create barriers to entry in transitioning to value-based care.” The tightened time frame to downside risk would not leave enough time to form the “new and different contractual relationships” and strategies to align hospitals and other providers in risk-bearing models.”

 

Read the proposed rule here:

 

Read the CMS press release here:

 

Read AHA’s written statement here:

 

Doing More with Less—The Cost Imperative, is now in your library. This advanced Finance course features Marian Jennings, Dan Grauman and Nate Kaufman. They discuss the issue of cost versus growth, traditional and innovative cost-cutting strategies, rationalization of services and the board’s role.

 

Our upcoming advanced Mission & Strategy course, Due Diligence on Deals, features Dan and Marian who discuss the pitfalls and advantages of due diligence during mergers, consolidation and partnerships.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Hospital Deals Slow Down in 2nd Quarter

Hospital merger & acquisition (M&A) activity in the second quarter of 2018 decreased by nearly 50 percent from the first quarter according to a M&A tracking company. Analyses by other companies that track M&A activity reported a similar decrease.

 

However, physician practice acquisition remained steady in the second quarter.

 

Irrespective of these numbers, hospital M&A activity is expected to remain high in upcoming months because many health systems are in the beginning stages of discussions. Also, regional health systems are positioning themselves for future growth, according to a tracking company, citing letters of intent to affiliate issued by several organizations.

 

A recent survey of system executives by Premier found that nearly half of the systems had completed a merger or acquisition in the past two years and 77 percent expected to do so in the next two years. (To read the survey results, click here.)

 

Some analysts have questioned whether aggressive M&A is financially benefiting hospitals and health systems. And CMS has frequently questioned whether consolidation has benefited communities.

 

HFMA reported on a not-yet-released Navigant analysis of 104 of the largest U.S. health systems. The analysis “found 22 locally dominant systems each had operating earnings declines of more than $100 million from FY15 to FY17.” (“In Q2, Hospital M&A Slows, Practice Acquisition Stays Flat,” HFMA Compass, August 2, 2018)

 

From FY15 to FY17, two-thirds of the 104 health systems had declines in operating income that totaled about $5.5 billion. More than 20 percent of the health systems Navigant studied lost money on operations in both 2016 and 2017. However, those losses were masked by their investment earnings.

 

“It is so sudden and it is so weird because it’s happening at the top of the economic cycle,” a Navigant adviser said. “Usually hospitals’ profits disappear after a recession.” (“In Q2, Hospital M&A Slows, Practice Acquisition Stays Flat,” HFMA Compass, August 2, 2018)

 

The financial challenges have been compounded by expenses that have risen three points faster than revenues, consumer-directed health plans that have cut into consumer demand (particularly for surgeries), and “mergers that didn’t make sense,” the analyst added. (“In Q2, Hospital M&A Slows, Practice Acquisition Stays Flat,” HFMA Compass, August 2, 2018)

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

Our upcoming course focuses exclusively on costs and both traditional and innovative approaches to cost reduction. Look for it soon in your library!

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

CMS Proposed Rule Will Cut Medicare Spending by $760 Million

CMS recently released its proposed rule for changes to the Outpatient Prospective Payment System (OPPS) for FY19. In addition to a proposed 1.25 percent increase in hospital OPPS rates for FY19, CMS wants to reduce payment for hospital outpatient clinic visits at off-campus provider-based departments to 40 percent of the OPPS rate.

 

The “site-neutral” policy change will largely offset the OPPS rate increase by cutting payments by 1.2 percent, according to a CMS fact sheet. CMS estimated it would cut $760 million in FY19 Medicare spending. The clinic visit is the most commonly billed service under the OPPS. (“Medicare Proposes $760 Million 2019 Hospital Cut,” HFMA Compass, August 1, 2018)

 

CMS stated that it is proposing the payment cut for provider-based department clinics because of hospital purchases of physician practices. It claimed that the hospitals’ objective in these purchases is to earn higher payment rates by designating the practices as off-campus provider-based departments.

 

The industry has responded quickly.

 

  • America’s Essential Hospitals: “Today’s proposed rule for Medicare outpatient payments would make bad policies worse, impose draconian new cuts that jeopardize healthcare access for millions of vulnerable Americans, and undermine the foundation of support for our nation’s healthcare safety net.”

 

  • The American Hospital Association: “We will urge the agency to revise these punitive policies so that hospitals can continue to provide the highest quality health care.”

 

(Both quotes from “Medicare Proposes $760 Million 2019 Hospital Cut,” HFMA Compass, August 1, 2018)

 

In its fact sheet, CMS explained its rationale as follows:

 

“. . . changes that would encourage site-neutral payment between sites of services and make healthcare prices more transparent for patients so that they can be more informed about out-of-pocket costs. . . [the] proposed rule would further advance the agency’s priority of creating a patient-centered healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that hospitals and ambulatory surgical centers can operate with better flexibility and patients have what they need to become active healthcare consumers.” (CMS proposes Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System changes for 2019 (CMS-1695-P), CMS.gov, July 25, 2018)

 

A summary of other proposed changes follows:

 

  • Extension of 340B Medicare payment rate to 340 B drugs furnished in non-grandfathered provider-based departments
  • New drugs and biological products to be paid at the rate of the wholesale acquisition cost plus 3 percent (a 50 percent reduction)
  • Changes to the patient experience measures specific to three metrics related to pain communication
  • Changes to the Outpatient Quality Reporting program including removal of 10 measures
  • A 2 percent increase in ASC rates for CY19.

 

Included in the proposed rule was a CMS solicitation for comments on the following:

 

  • Whether providers and suppliers should be required to inform patients about charges and payment information for healthcare services and out-of-pocket costs
  • Suggested changes to encourage interoperability of electronic health records or other ways to share data between providers
  • Whether CMS should revise the Conditions of Participation to require interoperability

 

Comments on the proposed rule are due by Sept. 24, with a final rule expected by around Nov. 1.

 

Read the CMS fact sheet here.

 

Read the 2019 Hospital Outpatient Prospective Payment System (OPPS) proposed rule here.

 

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

Our upcoming course focuses exclusively on costs and both traditional and innovative approaches to cost reduction. Look for it soon in your library!

 

 

For a complete list of iProtean courses, click here.

 

For more information about iProtean, click here.  

Competition and Value Lead CMS Policy Priorities

The head of CMS outlined the agency’s policy shift to competition and choice in a recent interview.  Seema Verma noted, “Coming incentives will encourage Medicare beneficiaries to shop among providers, with those that have the lowest prices and deliver better-coordinated care gaining a competitive advantage.” (“Public Poll, Verma Reject Single-Payer,” HFMA Compass, July 27, 2018)

 

Specific points made in her interview include:

 

  • “Patients are the most valuable force in our healthcare system to create value,” emphasizing the need to cater to patients, “not providers.”
  • All levels of CMS should drive a system where providers compete for patients.
  • Pricing and clinical outcomes’ transparency is required to allow patients to shop; e.g., posting online the full chargemaster price list
  • Patients should be able to access and share their electronic health record—CMS has suggested that providers may be required to share all patient’s electronic health records as a condition of participation in Medicare.
  • CMS will “double down” on value-based payments.

 

She also noted that the president “believes competition is the key ingredient to drive down healthcare spending.” (“Public Poll, Verma Reject Single-Payer,” HFMA Compass, July 27, 2018)

 

Value-based Care Models

 

Ms. Verma criticized the Obama administration’s approach to value-based care models. She listed three specific shortfalls:

 

  1. The models overlooked the patient—providing incentives for providers but neglecting to empower the patient.
  2. Most payment models were set up to encourage consolidation in the marketplace. She noted that consolidation actually reduces competition.
  3. The models did not go far enough to make providers responsible for their own budgets.

 

She criticized one-sided risk models and claimed that “those are not the most effective way.” She said the industry needs models that will encourage the provider to take responsibility for the budget.

 

To increase Medicare provider participation in value-based payment arrangements, she said she plans to waive more program integrity rules and offer new models for primary care physicians. (“Public Poll, Verma Reject Single-Payer,” HFMA Compass, July 27, 2018)

 

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

Our upcoming course focuses exclusively on costs and both traditional and innovative approaches to cost reduction. Look for it soon in your library!

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Advocates Want CMS to Increase APM Options for Clinicians

The recently released “massive” Medicare physician proposed payment rule included a “surprise” projection that alternative payment model (APM) participation may decline. Provider organizations are planning member briefings on the rule. (“Providers Examining Why APMs Are Expected to Stall,” HFMA Weekly News, July 23, 2018)

 

The proposed rule continues the implementation of revisions to physician payment including the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Under MACRA, physicians are paid by Medicare either through the Merit-based Incentive Payment System (MIPS), advanced APMs or an exempted class.

 

The vast majority of physicians continue in the exempted category, and MIPS participation is expected to slowly increase. “But provider advocates were surprised to see that Medicare expects clinician participation in APMs to stagnate or decline in FY19.” (“Providers Examining Why APMs Are Expected to Stall,” HFMA Weekly News, July 23, 2018)

 

CMS estimated that between 160,000 and 215,000 clinicians will earn APM bonuses of 5 percent of their Part B payments in FY19. That range was a decline from FY18 projections of 185,000 to 250,000, which CMS estimated in the previous physician payment rule.

 

“We are disappointed in the stagnation of the number of providers projected to be in Advanced APMs in 2019 compared to previous years,” said an executive for the National Association of Accountable Care Organizations

 

An executive from the Medical Group Management Association (MGMA) agreed and noted that MGMA will ask CMS to reverse the declining enrollment by creating more APM options for clinicians.

 

Although CMS officials didn’t address why they expected APM enrollment to stagnate or decline in FY19, some analysts offered possible explanations:

 

  • A combination of tightening qualifications for clinicians seeking the APM bonus and a lack of new models in which they can participate
  • A lack of new or returning accountable care organizations (ACOs); advocates have expressed concern that CMS has not issued guidance for starting the application process for ACOs to renew or launch in 2019—this typically happens in May
  • A lack of agency follow through on strengthening APMs, including ACOs
  • A lack of new physician-led models— the Physician-focused Alternative Payment Model Technical Advisory Committee was expected to review, assess and propose physician-proposed models to vastly increase the number of APMs and allow many more physicians to qualify for APM bonuses; however, no such models have been accepted or implemented by HHS

 

List of Current Models

 

Currently, physicians can qualify for the APM bonus if they meet participation requirements for the following models in FY19:

 

  • Next Generation ACO model
  • Comprehensive Primary Care Plus (CPC+) model
  • Comprehensive ESRD Care model (two-sided risk arrangement)
  • Vermont All-Payer ACO model
  • Comprehensive Care for Joint Replacement Payment model (CEHRT track)
  • Oncology Care Model (two-sided risk arrangement)
  • Medicare ACO Track 1+
  • Bundled Payments for Care Improvement Advanced
  • Maryland Total Cost of Care model (Maryland Care Redesign Program; Maryland Primary Care Program)
  • Medicare Shared Savings Program Tracks 2 and

 

 

Read rule here:

 

(Source: “Providers Examining Why APMs Are Expected to Stall,” HFMA Weekly News, July 23, 2018)

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

Our upcoming course focuses exclusively on costs and both traditional and innovative approaches to cost reduction. Look for it soon in your library!

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here. 

Executives’ Increasing Concerns About Hospital Costs Suggest Innovative Cost Control Measures

A recent survey of hospital/health system CEOs by a national healthcare consulting company reported that cost control is their top priority. CEOs responding to the survey noted “innovative approaches to expense reduction” as the second leading priority.

 

The survey results supported an April report from Moody’s Investors Service that the median operating cash flow margin for its hospitals in 2017 declined to 8.1 percent—below levels recorded during the 2008-2009 recession. (Click here for iProtean blog/newsletter, May 29, 2018, Moody’s: Preliminary Medians Show Declining Hospital Profitability.)

 

Moody’s noted that the decline in median operating cash flow margin came amid accelerating expenses and reduced revenue growth, with expense growth in FY17 outpacing revenue growth for the second year in a row. Its analysts referred to an increase in operating expenses of not-for-profit and public hospitals, with the increase stemming at least partly from the tight labor market.

 

Similarly, the American Hospital Association’s 2018 chartbook found the percentage of hospitals with negative total and operating margins had increased by the end of 2016 to recession-era levels. (Click here for the report.)

 

 

These reports and others emphasized increased hiring and high labor costs as major contributors to escalating costs. Hospitals have talked about reducing labor costs for years, even as hiring has steadily increased. Total hospital employment rose from 3.7 million workers in 1995 to nearly 5 million in 2016, according to AHA data.

 

Health consultants and analysts have made several observations on potential innovative solutions. For example:

  • Rather than absolute labor force cuts, focus on slowing labor expense growth
  • Focus on administrative costs including achieving economies of scale when consolidating
  • Consider decreasing corporate overhead
  • Divest and outsource non-core functions
  • Undertake a critical analysis of costs incurred by acquired physician practices, and refocus on reducing tasks that detract from clinical productivity of these physicians
  • Hire more non-physician clinicians to relieve time constraints on physicians who currently are concerned that documentation requirements overshadow time for patient care

 

(Source: “What’s Driving Increased Hospital Cost Concerns?” HFMA Weekly News, July 13, 2018)

 

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

Our upcoming course focuses exclusively on costs and both traditional and innovative approaches to cost reduction. Look for it soon in your library!

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

An Argument for Growing High-Value Service Lines

Hospitals/systems may be considering the pro’s and con’s of growing their service lines, even as they grapple with cost reduction strategies. Experts have noted the many benefits including increased patient volumes, improved health outcomes, increased market share and improved physician loyalty. If hospitals/systems focus on high-value service lines, a key benefit would be a significant return on investment and financial growth.

 

Objectives of high-value service line growth include:

 

Optimizing limited resources.  By focusing on specific services lines that show the greatest growth potential, hospitals/systems can allocate resources to achieve the greatest effect in driving revenue. The best candidates for growth potential would be identified. Then, through use of data analytics, specific strategies could be developed to improve and market the service line.

 

Driving patient satisfaction. Most U.S. cities have multiple hospitals vying for “healthcare provider of choice” for the community. To compete effectively, hospitals/systems should have effective, even aggressive strategies for attracting the consumers they want and providing them “with an exemplary experience.” Patients want “prompt service tailored precisely to their specific needs, with personalized customer service.” (“How to Grow High-Value Service Lines Effectively,” hfm Magazine, July 2018)

 

Healthcare organizations that achieve high rates of patient satisfaction realize financial benefits, according to a 2016 study by Deloitte. The authors reported that hospitals whose patients rate their experience as “excellent” have higher profitability than those with lower ratings. (Engaging with Tomorrow’s Patients: The New Health Care Customer, Deloitte, 2016)

 

Achieving lifelong relationships with patients. Marketing experts note that it’s costlier to acquire new customers than retain them. Patients who remain involved with a healthcare organization over long periods of time are for all intents and purposes repeat customers. (“How to Grow High-Value Service Lines Effectively,” hfm Magazine, July 2018)

 

Having a reputation for service-line excellence is one of the best ways to foster patient loyalty. Expertise in high-value fields often is the initial draw for patients. It creates the opportunities for the organization to engage patients and, through service excellence, high satisfaction that ensures they will continue to bring business into the organization. (“How to Grow High-Value Service Lines Effectively,” hfm Magazine, July 2018)

 

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

New Report: Readmissions Reduction Program Doesn’t Increase Observation Stays

Through Congressional direction and previous Administration initiatives, Medicare has implemented incentives to reduce hospital readmissions. One example is the Hospital Readmissions Reduction Program (HRRP), which financially penalizes hospitals with relatively high rates of Medicare readmissions.

 

One of the criticisms of the program has been the anticipation of an increase in the number of observation stays—that is, to avoid readmission penalties, providers are placing these patients in “observation” rather than readmitting them.

 

A new analysis of the program, however, reports the program is not increasing the number of observation stays. The Medicare Payment Advisory Commission (MedPac) analysis noted that there is no evidence of an increase in observation stays because of HRRP.

 

Readmission rates from 2010 to 2016 for heart attacks, heart failure and pneumonia all dropped between 1.4 percent to 3.6 percent, saving Medicare $2 billion annually, according to MedPAC’s analysis recently sent to Congress. Over that same period, the commission found only a small increase in observation stays and noted that the increase did not offset savings from the readmissions program. (“Medicare readmissions program not causing observation stay spike,” Modern Healthcare A.M., June 18, 2018)

 

MedPac said in its report that “. . .  the reduction in readmission rates reflects real changes in practice patterns and not simply a shifting of short-stay admissions into observation stays to avoid readmission penalties.” (Report to the Congress, Medicare and the Health Care Delivery System, MedPac, June 2018)

 

However, some industry analysts dispute the validity of MedPac’s findings.  One noted that the analysis relied on observational studies that are prone to bias. Other studies found evidence that the readmission program does increase the duration and frequency of observation stays.

 

To read MedPac’s report to Congress, please click here.

 

 

The Volume to Value Paradox advanced Quality course, featuring Nate Kaufman, Marian Jennings and Dan Grauman, is in your library. These experts discuss their perspectives of moving from volume to value, the pitfalls to avoid, how to involve physicians, the impact of consolidation and scale on value and the overall challenges of inserting value into the reimbursement formula.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.