Jeffrey Brenner, MD
Tag Archives: Health System
Nonacute Care: The New Frontier
What happens outside the hospital is increasingly important to success, so healthcare leaders need to influence or control care across the continuum.
If you’re running a hospital, one irony in the transformation toward value in healthcare is that your future success will be determined by care decisions that take place largely outside your four walls. If you’re running a health system with a variety of care sites and business entities other than acute care, the hospital’s importance is critical, but its place at the top of the healthcare economic chain is in jeopardy.
Certainly, the hospital is the most expensive site of care, so hospital care is still critically important in a business sense, no matter the payment model. But if it’s true that demonstrating value in healthcare will ensure long-term success—a notion that is frustratingly still debatable—nonacute care is where the action is.
For the purposes of developing and executing strategy, one has to assume that healthcare eventually will conform to the laws of economics—that is, that higher costs will discourage consumption at some level. That means delivering value is a worthy goal in itself despite the short-term financial pain it will cause—never mind the moral imperative to efficiently spend limited healthcare dollars.
So no longer can hospitals exist in an ivory tower of fee-for-service. Unquestionably, outcomes are becoming a bigger part of the reimbursement calculus, which means hospitals and health systems need a strategy to ensure their long-term relevance. They can do that as the main cog in the value chain, shepherding the healthcare experience, a preferable position; but physicians, health plans, and others are also vying for that role. Even if hospitals or health systems can engineer such a leadership role, acute care is high cost and to be discouraged when possible.
Catholic Health Initiatives pulls out of insurance business
As more hospitals across the country consider launching their own health insurance plans, one big hospital operator is pulling out of the business.
Catholic Health Initiatives (CHI), a large nonprofit health system based in Colorado, no longer plans to develop a “wholly owned and nationally driven” insurance business, according to The Wall Street Journal. Instead, it’s going to sell portions of the health insurance business.
The provider, which operates 103 hospitals in 18 states, lost nearly $110 million during the last fiscal year, according to the article.
Dean Swindle, chief financial officer and president of its enterprise business lines for CHI, didn’t agree to an interview for the latest news, but told the publication in April that “it’s tough in the health plan business. You lose money. You make mistakes. You plow forward. It takes cash.”
Partners HealthCare suffers $108M in operating losses in FY 2016
Dive Brief:
- Operating revenues at Boston-based Partners HealthCare increased 7% from the previous year to $12.5 billion, but $12.6 billion in operating expenses canceled out those gains, according to the health system’s financial statements.
- The operating loss is the largest posted in the system’s 22-years of history, which has struggled financially since it acquired Neighborhood Health Plan in 2012, a Medicaid managed care subsidiary that had a $89-million operating loss two years ago.
- A nursing strike and implementation of a new EHR system also contributed to poor financial performance at Partners in fiscal year 2016, according to the Boston Herald.
Why Catholic Health is bowing out of the insurance field
http://www.healthcaredive.com/news/why-catholic-health-is-bowing-out-of-the-insurance-field/421923/
Dive Brief:
- Tired of steep losses, Catholic Health Initiatives is looking to sell its health plan subsidiary, Modern Healthcare reported.
- QualChoice Health, previously known as Prominence Health, sells Medicare Advantage and commercial plans to employers in six states.
- CHI began buying up health plans three years ago as a way to adhere to the Affordable Care Act and compete with other carriers.
Uncertainty. Opportunity. It’ll all be there for healthcare in 2017, PwC says
You reap what you sow. The idea is the push behind countless movie plots and rock songs but it’s also a central theme to PricewaterhouseCooper’s (PwC) Health Research Institute’s (HRI) new report on healthcare trends to watch out for in 2017. The seeds for next year were planted in 2007, according to the new report.
There will be certain uncertainty over the fate of the Affordable Care Act next year. However, many of the trends that should be on top-of-mind for hospital administrators next year will relate to value-based care, Trine Tsouderos, PwC’s Health Research Institute director, told Healthcare Dive. “If you think about the political changes as the waves on the surface of the ocean, there’s a very strong current underneath that is the shift to value-based care,” she said. “We do not see that changing. We see the shift continuing industry-wide despite any changes in Washington, DC.”
For example, only 90 or so retail clinics were in operation and about one in 10 consumers have been to one in 2016. Today, more than 3,000 such clinics have been propped up across the U.S. with one in three consumers having visited one. This drift highlights the continued move to more convenience in healthcare access as well as price transparency for patients.
Sticking with the nautical theme, Tsouderos likened the healthcare industry to a battleship in explaining why ideas from 10 years ago are now coming to fruition. It takes a long time to change the course of such a large and complex ship. “You can’t turn [the industry] on a dime,” she said.
What emerging trends administrators should know for 2017
https://www.pwc.com/us/en/health-industries/top-health-industry-issues.html
What Are the Implications of Repealing the Affordable Care Act for Medicare Spending and Beneficiaries?
The 2010 Affordable Care Act (ACA) included many provisions affecting the Medicare program and the 57 million seniors and people with disabilities who rely on Medicare for their health insurance coverage. Such provisions include reductions in the growth in Medicare payments to hospitals and other health care providers and to Medicare Advantage plans, benefit improvements, payment and delivery system reforms, higher premiums for higher-income beneficiaries, and new revenues.
President-elect Donald Trump, Speaker of the House Paul Ryan, Health and Human Services (HHS) Secretary-nominee and current House Budget Committee Chairman Tom Price, and many other Republicans in Congress have proposed to repeal and replace the ACA, but lawmakers have taken different approaches to the ACA’s Medicare provisions. For example, the House Budget Resolution for Fiscal Year 2017, introduced by Chairman Price in March 2016, proposed a full repeal of the ACA. The House Republican plan, “A Better Way,” introduced by Speaker Ryan in June 2016, proposed to repeal some, but not all, of the ACA’s Medicare provisions.
This brief explores the implications for Medicare and beneficiaries of repealing Medicare provisions in the ACA. The Congressional Budget Office (CBO) has estimated that full repeal of the ACA would increase Medicare spending by $802 billion from 2016 to 2025.1 Full repeal would increase spending primarily by restoring higher payments to health care providers and Medicare Advantage plans. The increase in Medicare spending would likely lead to higher Medicare premiums, deductibles, and cost sharing for beneficiaries, and accelerate the insolvency of the Medicare Part A trust fund. Policymakers will confront decisions about the Medicare provisions in the ACA in their efforts to repeal and replace the law.
10 hospital bankruptcies in 2016
http://www.beckershospitalreview.com/finance/10-hospital-bankruptcies-in-2016-decmeber13.html
From increased competition to reimbursement landscape challenges, many factors led hospitals and health systems to file for bankruptcy in 2016.
Here are 10 hospitals and health systems that have filed for bankruptcy protection since Jan. 1, beginning with the most recent.
Trend to watch: Payer-provider joint ventures
Joint ventures are gaining steam as plans and providers look for ways to work together to provide higher-value care.
Anthem and Aurora Health, Anthem’s Vivity, Aetna’s Inova, Presbyterian Health Services in New Mexico, and now Aetna and Texas Health Resources—all of these organizations and partnerships combine the strongest skills of a payer and a provider.
These partnerships allow providers to lean on the analytical and actuarial power of the payers, while focusing on improving health outcomes.
CopelandAbout 13% of all U.S. health systems offer health plans, covering about 18 million members—or 8% of insured lives. according to a report from McKinsey & Company. Also according to the company, the number of provider-owned health plans is increasing about 6% each year.
Bill Copeland, vice chairman of Deloitte and leader of the company’s U.S. Life Sciences & Health Care industry group, says payers aren’t usually as effective as providers at working with patients, and providers don’t have the necessary capital to fully invest in high-value care. Joint ventures that marry the strengths of both parties have mutual benefit and should result in lower overall costs with better patient outcomes.
Three reimbursement changes to watch in 2017
By far, the biggest change Health Partners’ Donna Zimmerman sees in terms of reimbursement in 2017 is the increased momentum behind bundled payments for orthopedic care.
Zimmerman“Hospitals need to be prepared for more of this,” says Zimmerman, who is senior vice president of government and community relations at the Bloomington, Minnesota-based nonprofit healthcare provider and payer. That’s because employers are increasingly interested in bundled payments for orthopedic and other types of procedures, and they’re often offering incentives related to bundled episodes of care in benefit plans, she says.
Offering a bundled payment option for a joint replacement, in particular, is getting more common. Even with physical therapy that lasts a few months, these are “fairly discrete episodes of care,” says Zimmerman, who adds that bundled payments are particularly attractive to employers and payers since they allow them to manage the total cost of care.
As a result, provider organizations will need to continue to focus on improving their quality scores, since this is one of the primary ways to distinguish their facilities from competing hospitals. In addition to the total cost of care, Zimmerman highlights that payers will be keeping tabs on providers’ complication rates and will adjust the prices they’re willing to pay providers for bundles of care as a result.
Here’s more on how bundled payments will evolve in 2017, and two other reimbursement changes to watch.
HENRY KOTULA 