7 AREAS CFOS MUST ADDRESS FOR ORGANIZATIONAL VIABILITY

https://www.healthleadersmedia.com/finance/7-areas-cfos-must-address-organizational-viability?utm_source=silverpop&utm_medium=email&utm_campaign=20180613_HLM_SPOTLIGHT_Cost-Containment%20(1)&spMailingID=13684315&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1421195534&spReportId=MTQyMTE5NTUzNAS2

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An upcoming CFO roundtable provides a peer-sharing platform to learn best practices for advancing a healthcare organization’s financial health.

Today’s healthcare financial leaders face escalating costs, quality improvement issues, difficult reimbursement environments, an increasingly complex service portfolio, and risk management associated with performance contracting.

Pressure mounts on CFOs to ensure their organizations remain viable as they deal with these issues, which makes gleaning proven strategies from colleagues imperative.

Four dozen executives will convene at a private roundtable forum during the 2018 HealthLeaders Media CFO Exchange, August 8–10 in Santa Barbara, California, to
address top-of-mind concerns.

In pre-event planning calls, Exchange participants—representing integrated health systems, academic medical centers, community hospitals, and safety net providers from across the U.S.—want to know how others are taking on risk, improving costs, addressing consumerism, and capturing additional reimbursement.

During the two-day event, a series of moderated roundtables will explore areas of special interest expressed by CFOs, including the following:

1. Cost improvement

Since costs are increasing at rates higher than reimbursement, how does a CFO drive cost performance to maintain sufficient operating margins? How are systems successfully leveraging scale to rationalize administrative and support services?

2. Proliferation of mergers and acquisitions

How can an independent organization survive in this environment? Should it consider other affiliations? For those involved in new entities, how are leaders achieving value?

3. Taking on risk

How does an organization prepare to take on and reduce risk, and when does an organization know that it is ready? How can CFOs build reserves to offset unexpected outlays?

4. Enhancing revenue cycle performance

How can financial leaders improve payer terms, reduce denials, ensure payer compliance, and improve clinical documentation? What are effective ways to deploy new workflow technologies in patient accounts?

5. Performance-based contracts

How are organizations engaging medical staff to reduce the cost of care and improve outcomes?

6. Medical group employment

How does a health system minimize provider subsidies for employed physicians and improve practice performance?

7. Medical consumerism

How can healthcare organizations compete against disruptors in the growing environment of consumer choice? What are creative ideas for meeting consumer demand without adding cost?

Additional information will be shared during the two-day gathering. The CFO Exchange is one of six annual HealthLeaders Media events for healthcare thought leadership and networking.

Revenue cycle and patient financial experience

Recently, HealthLeaders Media hosted a Revenue Cycle Exchange, which brought together 50 executives to discuss improving the patient financial experience; maximizing reimbursement; managing claims denials; technology adoption and data analytics; revenue cycle optimization; and creating a leaner, more effective team.

Noting how consumerism is influencing bill payment and giving rise to the patient voice, leaders are seeking ways to make paying easier. Consumer feedback suggested easy-to-understand and consolidated statements.

“We have a single business office with Epic, so regardless of where a patient gets their services, they get one bill from our organization,” says Cassi Birnbaum, director of health information management and revenue integrity at UC San Diego Health.

“We’ve also created a position for a patient experience director, so any complaint goes through that unit and they’ll contact one of my supervisors to ensure the patient gets the answers they need. That’s helped a lot and provides a one-stop, concierge, patient-facing experience to help ensure the patient’s balance is paid,” Birnbaum says.

Providing estimates and leveraging technology are also helpful for fostering patient payments. More health systems are promoting MyChart, an online tool for patients to manage their health information, as well as kiosks in key locations.

“We have a patient portal in which you can see any outstanding balance at a hospital or clinic and decide what you want to pay today,” says Mary Wickersham, vice president of central business office services at Avera in Sioux Falls, South Dakota.

“Patients can also extend their payments since we have a hyperlink that goes to the extended loan program if needed. With kiosks at our clinics, patients pull out their credit card and complete their copay. Nobody asks; they just automatically do it,” she says.

Staffing

Front- and back-end staff play an integral role in calculating payment estimates, collecting dollars in advance of procedures and tests, and communicating the often-puzzling connection between hospital charges for physician practice and provider-based department patients.

“One of our big challenges now is we’re bringing a lot of that back-end work to the front,” says Terri Etnier, director of system patient access at Indiana University Health in Bloomington, Indiana.

Centralizing processes

As facilities move toward centralized scheduling systems to manage reimbursement, some facilities are centralizing coding and billing processes.

“We don’t have a full comprehensive preregistration function for our clinics mainly due to volume. We’re piloting a preregistration group for our clinic visits to work accounts ahead of time since we are continuing to work toward automation,” says Katherine Cardwell, assistant vice president at Ochsner Health System in New Orleans.

“We have kiosks in some of our clinics. Epic has an e-precheck function where we can now do forms. You can sign forms on your phone, and make your payment and your copayment ahead of time. And you can actually get a barcode that you can just scan when you get to the clinic,” Cardwell says.

Ascension’s latest ad campaign touts online scheduling

https://www.beckershospitalreview.com/healthcare-information-technology/ascension-s-latest-ad-campaign-touts-online-scheduling.html

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St. Louis-based Ascension rolled out a national ad campaign June 4 across television, radio, billboards and direct mail to promote its online scheduling capabilities, which are available in all 22 Ascension markets.

The campaign is aimed at raising brand awareness and communicating patient scheduling options, even for last-minute or same-day appointments.

“Most of us use technology daily to simplify our lives, and the process of getting the care we need, when and where we need it, should be no different. Online scheduling allows consumers to view available appointments at their preferred location and select a time that fits their busy schedules,” Joseph Cacchione, MD, president of Ascension Medical Group, said in a press release. “As we work to improve access to compassionate, personalized care, we must also ensure we are letting consumers know about the new and innovative ways in which we are making the healthcare delivery process easier for them.”

Ascension currently offers online scheduling across 1,200 providers in primary care, urgent care and emergency department care. It has plans to add online scheduling capabilities for specialists and diagnostic and imaging services in the future.

 

 

Can Amazon do to health care what it did to books?

http://money.cnn.com/2018/02/01/news/economy/amazon-health-care/index.html

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First books. Then groceries. Now health care?

Amazon shook up the health care world on Tuesday, announcing it was partnering with fellow heavy hitters Berkshire Hathaway (BRKA) and JPMorgan Chase (JPM) to address soaring costs.

Amazon (AMZN), which has advanced light years from its origins as an online bookseller, has had a dramatic impact on many of the industries it’s touched. When it moved into cloud services and streaming shows, it left rivals scrambling to catch up. Last year, it bought Whole Foods, shaking up the grocery space.

The company is now one of the most valuable in the U.S. and its founder, Jeff Bezos, one of the richest people in the world.

But Bezos and his peers, Warren Buffett and Jamie Dimon, are taking on one of the nation’s thorniest challenges. Making health care more affordable has bested savvy business leaders in many industries. The announcement was met with cautious optimism and lots of skepticism.

Related: Jeff Bezos, Warren Buffett and Jamie Dimon want to fix health care

Not much is known about the threesome’s venture — a yet-to-be-named company that will give the firms’ U.S. employees and their families a better option on health insurance and will not be motivated by profit. Experts, are betting that the firm will eventually expand its services to other companies if the effort proves successful.

Health care costs have soared for both employers and their workers over the past decade. Premiums have jumped nearly 50% for family coverage since 2008 and more than tripled since 1999. Meanwhile, employees are shouldering more of the cost when they actually get medical care because their deductibles and co-pays are going up.

Amazon, however, is a master at wringing out inefficiencies in the supply chain. This could prove particularly useful in the health care arena, which is known for its bloat.

“One thing we know for sure is there’s a lot of overhead costs in health care,” said Frederick Isasi, executive director of FamiliesUSA, a health care advocacy group.

While many employers have tried to tackle health insurance costs in the past, they often didn’t have the bandwidth or resources to devote to the issue, Isasi said. The new venture, however, will be focused on its mission and will have the financial backing of three strong firms.

Some of the ways Amazon could use its know-how to make a dent in prices: Negotiate rates directly with health care providers and drug manufacturers, use technology to ease consumers’ ability to make appointments or consult with doctors outside of the office and improve access to price and quality information about physicians, procedures and prescriptions to allow consumers to shop around, Isasi said.

Amazon could also improve Americans’ interaction with their insurance companies and providers, which all-too-often involves ancient technologies such as faxing, said Bob Kocher, a partner who specializes in health care information technology at Venrock, a venture capital firm. After all, Amazon invented one-click ordering on its retail site. It could develop a similar process for paying medical bills, even grouping invoices for doctors, facilities and labs for care that takes place in a hospital, for instance.

And Amazon could make it easier for patients and providers to access their medical records, which would also reduce costs. The new venture could store all that information in the cloud, said Michael Pachter, managing director for equity research at Wedbush Securities.

That way “everything is all together in one place,” he said.

 

Expert Advice For The Corporate Titans Taking On Health Care

Expert Advice For The Corporate Titans Taking On Health Care

An announcement Tuesday by three of the nation’s corporate titans — Amazon, Berkshire Hathaway and JPMorgan Chase & Co. — that they are joining forces to address the high costs of employee health care has stirred the health policy pot. It immediately sent shock waves through the health sector of the stock market and reinvigorated talk about health care technology, value and quality.

Though details regarding the undertaking are thin, the companies said in a release that their partnership’s intent is to improve employee satisfaction and hold down costs by bringing “their scale and complementary expertise to this long-term effort.”

They plan to create an independent company, “free from profit-making incentives and constraints,” to focus on “technology solutions.”

Berkshire Hathaway CEO Warren Buffett described health care costs as “a hungry tapeworm on the American economy,” and Amazon founder and CEO Jeff Bezos said the partnership was “open-eyed about the degree of difficulty” ahead. Jamie Dimon, chairman and CEO of JPMorgan, said the results could benefit the employees of these companies and possibly all Americans

But what does all of this mean and how can it be successful when so many other initiatives have fallen short? KHN asked a variety of health policy experts their thoughts on this venture, and what advice they would offer these CEOs as they go forward. Some of the advice has been edited for clarity and length.


Tom Miller, resident fellow, American Enterprise Institute (Courtesy of Tom Miller)

Tom Miller, resident fellow, American Enterprise Institute:

“It’s great that someone theoretically with resources would try to build a better mousetrap. But it’s been difficult to do, and part of it is regulatory and competitive barriers are well-constructed in the health care sphere, which tend to make it less receptive or subject to competitive pressures.

“I welcome any new capital trying to disrupt health care. … The incumbents are comfortable and could use disruption. If Amazon has an idea, and is willing to put some money behind it, that’s wonderful. What they are willing to do other than fly low-cost providers for home visits in drones — I don’t know. They’d probably have to miniaturize them, wouldn’t they?”


Stan Dorn, senior fellow, Families USA (Courtesy of Stan Dorn)

Stan Dorn, senior fellow, Families USA:

“Number one, look at prices. America doesn’t use more health care than European countries, but we pay a lot more and that’s because of prices more than anything else. Look at hospital prices and prescription drug prices. I would also say, look to eliminate middlemen operating in darkness. I’m thinking in particular of pharmacy benefit managers. Often, the supply chain is hidden and complex and every step along the way the middlemen are taking their share, and it winds up costing a huge amount of money.”


Bob Kocher, partner, Venrock (Courtesy of Bob Kocher)

Bob Kocher, partner, Venrock:

“It has been said that health care is complicated. One thing that is not complicated is that the way to save money is to focus on the sickest patients. And that’s the only thing that has proven to work in great primary care. I hope Amazon realizes this early and does not think that [its smart digital assistant] Alexa and apps are going to make us healthier and save any money.

“It would sure be nice if they invest in a ‘post-CPT-ICD-10-and-many-bills-per-visit’ world where we know prices, can easily know what is known about quality and experience, and have same-day service.”


Tracy Watts, senior partner, Mercer (Courtesy of Tracy Watts)

Tracy Watts, senior partner, Mercer:

“Everyone thinks millennials want to do everything on their phones. But that’s not necessarily the case.

“[There was a recent] survey about this — specifically, millennials are the most interested in new health care offerings, but it wasn’t as much high-tech as it is convenience they are interested in — same-day appointments with a family doctor, guaranteed appointments with specialists, home visits, a wider array of services available at retail clinics. That was kind of an ‘aha’ — this kind of convenience and high-touch experience is what they’re looking for. And when you think of ‘health care of the future,’ that’s not what comes to mind.”


John Rother, president and CEO, National Coalition on Health Care (Courtesy of John Rother)

John Rother, president and CEO, National Coalition on Health Care:

“Health care is complex and expensive, so the aim should always be simplicity and affordability. Three keys to success: manage chronic conditions recognizing the life context of the patient, emphasize primary care-based medical homes and aggressively negotiate prescription drug costs.”


Suzanne Delbanco, executive director, Catalyst for Payment Reform (Courtesy of Suzanne Delbanco)

Suzanne Delbanco, executive director, Catalyst for Payment Reform:

“The biggest driver of health care costs is prices. Those are being driven up by health care providers who have consolidated and will continue to consolidate and amass more market power.

“It sounds like they [the companies] are limiting the use of health plans, but if they’re going to get into that business, they’re going to come up with the same challenges health plans face. What would be really innovative would be to build some provider systems from the ground up where they can truly get a handle on the actual costs and eliminate the market power that drives the prices up, and they can have control over their prices.”


Brian Marcotte, president and CEO, National Business Group on Health (Courtesy of Brian Marcotte)

Brian Marcotte, president and CEO, National Business Group on Health:

“They recognize this is [a] long-term play to get involved in this. I’d have to say, this industry is ripe for disruption.

“I think we know technology will continue to play an increasing role in how consumers access and receive health care. We’ve also learned most consumers do not touch the health care delivery system with enough frequency to ever be a sophisticated consumer. What’s intriguing about this partnership is Amazon for many consumers has become part of their day-to-day world, part of their routine. It’s intriguing to consider the possibilities of integrating health care into consumer routine.

“And I think that therein lies the opportunity. Employers offer a lot of resources to their employees to help them maximize their experience, and their No. 1 challenge is engagement.”


Joseph Antos, health economist, American Enterprise Institute (Courtesy of Joseph Antos)

Joseph Antos, health economist, American Enterprise Institute:

“My first suggestion is to look at what other employers have done (some unsuccessfully) and consider how to adapt those ideas for the three companies and more broadly. Change incentives for providers. Change incentives for consumers. Work on ways to reduce the effects of market consolidation. The bottom line: Don’t keep doing what we are doing now. I don’t see that these three companies have enough presence in health markets to pull this off anytime soon, but perhaps this should be viewed as the private-sector version of the Affordable Care Act’s Innovation Center— except, this time, there may be some new ideas to test.”


Ceci Connolly, president and CEO, Alliance of Community Health Plans (Courtesy of Ceci Connolly)

Ceci Connolly, president and CEO, Alliance of Community Health Plans:

“We know that 5 percent of any population consumes 50 percent of the health care dollar. I would encourage this group to focus on how to better serve those individuals who need help managing multiple chronic conditions.”


David Lansky, CEO, Pacific Business Group on Health (Courtesy of David Lansky)

David Lansky, CEO, Pacific Business Group on Health:

“The incumbent providers of services to our members are not doing as much as we need done for affordability and quality. So, we are pleased to see them go down this path. We don’t know what piece of the puzzle they will tackle.

“We know well-intended efforts over the years haven’t added up to material impact on cost and quality. I would suspect they are looking at doing something broader, more disruptive than initiatives we have tried before.

“I think across the board they have the opportunity to set high standards for the health system in whatever platform they use. These companies have a history of raising the bar. Potentially, it could be a help to all of us.”

Top 10 challenges for healthcare executives in 2018

http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/top-10-challenges-healthcare-executives-2018?cfcache=true&ampGUID=A13E56ED-9529-4BD1-98E9-318F5373C18F&rememberme=1&ts=10012018

 

 

 

Site-neutral payments called an assault on the financial stability of hospitals

http://www.healthcarefinancenews.com/news/site-neutral-payments-called-assault-financial-stability-hospitals?mkt_tok=eyJpIjoiWVdWa1lXTTBORFJpWTJSayIsInQiOiJndXNTdWM2czNvZzR6dDlRVXA4N3ZZWUhiV29FTzZ4VndOT3VGeUkzSGtGcms1QnlhSnNRTTlQbGRmcmY5UEpEY2VuWWg1UHIwTXVQUkg1ZklLZGN6SGYxMmpwc3lmZGJtK1pBcTNDNnZZZ0FmYzQ3Q2R2YWloNjVJSlorWStcL3QifQ%3D%3D

To integrate care, provide more services and stay competitive, hospitals are still building outpatient facilities.

Site-neutral payments all but stopped hospitals from building outpatient facilities in 2016.

Outpatient development effectively froze in 2016, down from $19.6 million in projects in 2015, to $16.4 million in 2016, according to Revista, a resource for healthcare property data.

Historically, hospital-owned outpatient centers received significantly higher reimbursement than private physician offices or ambulatory surgical centers performing the same procedures.

The Medicare Payment Advisory Commission recommended closing the gap between the rates. There was also concern that hospitals were buying up physician practices to take advantage of the higher reimbursement rate.

Congress enacted the Bipartisan Budget Act of 2015, putting site-neutral payments into effect.

New outpatient facilities that used to be paid on the outpatient prospective payment system are now reimbursed by Medicare on the physician fee schedule. The estimate on savings to Medicare runs into the billions.

Those hospitals that had new off-campus departments and began billing before Nov. 2, 2015, were still reimbursed at the higher outpatient rate. Outpatient facilities built later than the cut-off date are now paid under the less lucrative physician fee schedule.

The result of the legislation that went into effect on January 1, was to effectively freeze the geographic footprint of hospitals that rely heavily on Medicare reimbursement, according to Larry Vernaglia, an attorney and chairman of Foley & Lardner’s healthcare practice group in Boston.

For some hospitals, Medicare represents half of their operating revenue.

“It’s one more assault on the financial stability of hospitals,” Vernaglia said. “It definitely means the economics of outpatient services are dramatically different now. Hospitals have to work twice as hard to structure their outpatient buildings to get proper reimbursement.”

While some experts predicted a continued freeze in outpatient building, a surprising thing happened in 2017. The amount of outpatient projects soared to $22.9 million, the highest it has been in four years, according to Revista. However, that could be driven by the latest way skirt site-neutral rules.

“There was a big jump in 2017, that may come down a little bit,” said Revista principle Hilda Martin. “There was a sudden hold-off while systems wrapped their head around (the new policy). It is coming back. I’m wondering if this is beginning of a new trend, because so much inventory is starting this year.”

Martin said Revista is still analyzing the building boom, especially the new focus on micro-hospitals.

There’s been a significant uptick in micro-hospital development, she said. At medical real estate conferences, micro-hospitals are the hot topic because they offer a way to circle around the change in reimbursement, Martin said.

Also, the outpatient slowdown in 2016 may reflect in pause as providers submitted applications to the Centers for Medicare and Medicaid Services to show they were far enough along in planning to get an exemption and remain on the outpatient prospective payment system.

The 21st Century Cures Act provided exemptions. Hospitals in the middle of building an off-site facility could submit an application under the mid-build requirement by Feb. 13.

Many hospitals submitted mid-build applications before the deadline, including 40 in New York, seven in Massachusetts and five in Maine, Vernaglia said.

Applications are still being reviewed, and CMS did not respond to a request for information on the total number of submitted requests, or the names of the applicants.

“I’m familiar with at least 86 of them,” said Vernaglia, who also did not give specific information.

Exemptions allow hospitals to build new outpatient settings on-campus and be reimbursed at the outpatient rate.

“You’re going to see hub and spoke arrangements,” Vernaglia predicted of facility design.

Hospitals can also can build an emergency facility and still receive the higher reimbursement.

In a proposed 2017 payment rule, CMS originally required off-campus provider-based sites to offer the same services they did on Nov. 2, 2015, in order to be excluded from the site-neutral payment provisions, but opted not to include that requirement in the final rule.

For 2017, CMS finalized a Medicare physician fee schedule policy to pay non-excepted, off-campus provider-based departments at 50 percent of the outpatient rate for most services. For 2018, CMS proposed to reduce those payments further, by 25 percent.

Site neutrality creates hardships for hospitals trying to provide more services, integrate care and stay competitive in regions where patients have numerous choices for healthcare.

“There is quite a bit of cynicism in Congress and others that led to passage of Section 603 of the Bipartisan Budget Act of 2015,” Vernaglia said. “It assumed the only reason hospitals were developing these sites was to take advantage of preferential outpatient payment.”

Site neutrality also gave an advantage to hospitals that were early movers in getting their outpatient facilities built. The downside, said Vernaglia, is they’re stuck with what they’ve got. They can’t build another one or relocate. And if they don’t own the building, they can’t threaten to move if the landlord jacks up the rent.

“Soon we’ll see facilities getting long in the tooth,” he said. “There will be fewer outpatient facilities off-campus. I think you’ll see more on-campus. It’s status quo for sure, unless you do some creative things like off-campus emergency.”

Developer Henry Johnson, chief strategy officer for Freese Johnson in Atlanta, Georgia, said hospitals are still building, because not to do so would mean the loss of a competitive edge. The ambulatory facilities may be less profitable now, but there’s the risk that the gap for off-site care will be filled by another facility, or physician practice.

“There’s a greater impact not filling these gaps in the marketplace,” Johnson said. “Right now it’s a battle for marketshare, rather than site-neutral payments.

Johnson has been in the business for over 20 years, working with healthcare systems and large physician practices.

“We’re building micro hospitals, ambulatory surgery centers, outpatient surgery centers,” Johnson said. “Everyone is trying to build a network.”

Value-based care has also given incentives to have patients visit outpatient clinics, rather than the more expensive emergency room.

“They want to keep less expensive procedures in a less expensive environment,” Johnson said.

Providers are being cost-conscious on square-foot costs as well, he said.

“Most of our clients are saying, ‘This is expensive real estate. Let’s build a building that costs half as much, that’s what we want to do.'”

The two trends he’s seeing are micro hospitals, and smaller, acute care facilities, which he likens to “a hospital without beds.”

These freestanding ER facilities are still reimbursed at outpatient rates.

Patients would also rather go to a local, smaller facility, than drive to a hospital, try to find parking and walk the long hallways.

“They’re not going to go places if it’s inconvenient,” Johnson said.

Off-campus buildings, he said, invite people in.

“I’m personally seeing in healthcare, patients aren’t just patients now, they’re consumers,” Johnson said. “The biggest trend we’re seeing, is the consumerization of healthcare.”