ACOs are leaving $886M in net payments on the table, analysis finds

http://www.beckershospitalreview.com/accountable-care-organizations/acos-are-leaving-886m-in-net-payments-on-the-table-analysis-finds.html

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ACOs in Track 1 of the Medicare Shared Savings Program are losing out on millions of dollars in additional net payments from CMS by not taking on more risk and missing out on the Quality Payment Program’s 5 percent lump sum bonus payment for ACOs in Track 2 and 3, according to an analysis from Avalere.

The analysis simulates how much Track 1 ACOs would earn if they were enrolled in Track 2 — based on 2015 performance — and the QPP was in place. Track 1 ACOs do not bear downside financial risk, and therefore share in a smaller portion of savings than their Track 2 and 3 counterparts. However, if these ACOs had taken on more risk in 2015, they would have earned $178 million more in shared savings, according to the analysis. And if the Track 1 ACOs took on downside risk, they would qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act’s QPP. These models have the opportunity to earn a bonus up to 5 percent on Medicare Part B expenditures — and based on 2015 performance, those ACOs would be leaving $1.1 billion in AAPM bonus payments on the table by not bearing the downside risk necessary to qualify, according to the report.

“The CMS’ new value-based payment incentives really tip the scales for doctors to assume greater financial risk,” Josh Seidman, PhD, senior vice president at Avalere, said in a statement. “For those physicians who were dipping their toes in the water with low-risk ACO models, the incentives now make it advantageous for a majority of them to move more aggressively into greater accountability for population health.”

Of course, some of the ACOs would have also generated net losses. The analysis indicates some of the ACOs in the simulation would have had to pay back CMS for spending above the benchmark. These shared losses would have totaled $437 million. Benefits and losses taken together, if all Track 1 ACOs joined Track 2 of the MSSP and performed as well as they did in 2015, they would earn additional net payments of $886 million, according to the analysis.

However, the majority of ACOs would still benefit by joining Track 2. Avalere found 79 percent, or 307 of the Track 1 ACOs, would have financially benefitted, compared to 21 percent, or 82, that would not.

This year 486 ACOs are participating in Track 1, accounting for most of the MSSP program. Track 2 counts just six participants and Track 3 has 36 ACOs.

Adventist Health closes Washington hospital

http://www.beckershospitalreview.com/finance/adventist-health-closes-washington-hospital.html

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Roseville, Calif.-based Adventist Health on Monday closed Walla Walla (Wash.) General Hospital along with its affiliated home health division and medical group.

The closure comes after Adventist called off plans in June to transfer ownership of Walla Walla General to Renton, Wash.-based Providence Health & Services. Under the deal, Providence agreed to assume ownership and operation of the Walla Walla campus and disburse $14 million over 24 years into a special fund for community health that Adventist would direct.

However, Adventist said late last month the proposed transaction encountered “unexpected regulatory challenges” that could possibly block the deal. The system discontinued negotiations with Providence and announced it would close the Walla Walla campus.

Adventist said Walla Walla General has faced financial troubles for the past decade. The system invested $68 million into Walla Walla General in recent years, but that wasn’t enough to save the hospital.

“We respect the legacy of this hospital, its place in the heart of our community, and the investments we have all made to sustain it for more than a century,” Adventist said. “Unfortunately, the current volatile healthcare environment, legislative challenges, and consistent low inpatient census have created an unsustainable future for Walla Walla General Hospital.”

Adventist said many of the Walla Walla General Hospital physicians will remain local and will inform patients of their future plans.

Walla Walla General Hospital was founded in 1899 and has more than 400 employees, including a medical staff of more than 175 clinicians.

Building a ‘nimble’ multi-state health system: 5 questions with Ascension CEO Dr. Anthony Tersigni

http://www.beckershospitalreview.com/hospital-management-administration/building-a-nimble-multi-state-health-system-5-questions-with-ascension-ceo-dr-anthony-tersigni.html

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With 2,500 sites of care — including 141 hospitals and 30 senior living facilities that sprawl across 23 states and Washington, D.C. — St. Louis-based Ascension may not seem well-suited to make sudden business changes. But Ascension President and CEO Anthony Tersigni, EdD, aims to make the nation’s largest nonprofit health system into one of America’s most agile hospital networks.

Here, Dr. Tersigni discusses the system’s recent national rebrand, how he instills a spirit of risk-taking and innovation and the issues he is focusing on over the next five years, despite uncertainty on Capitol Hill.

Question: What prompted the decision to rebrand Ascension’s healthcare facilities? What effect has the rebranding had within the organization and outside in the communities it serves since being implemented in 2016?

Dr. Anthony Tersigni: In 1999 we decided not to brand Ascension because the brand equity was in the local entities. But since then, we believe we’ve made enough inroads in safety, quality and high-reliability that we felt Ascension has developed a reputation of its own. How do we combine the national reputation with the local reputation? Since co-branding the Ascension name with the names of our hospitals in our communities in advertising and on the web, the results have been outstanding. It’s about making it easier for the people we serve to navigate our system within a particular community because they now understand we’re all connected. We’re going to roll this out throughout the country, but we’re doing it in a sequential way because it’s very costly. But we believe now is the time to position ourselves as the national system that we are.

Q: What are your primary goals for the organization for the next five years?

AT: We want to continue to grow our primary care, expand access and continue to move toward value-based care. We want to be able to take on risk in a way where we can move into first-dollar coverage so we can move the patient through the continuum of care. We promise healthcare that works, that is safe and that leaves no one behind — for life. For us to do that, we need to be able to put patients in the right setting for the right care at the right time. If we can take on risk and walk with our patients and their families through our clinically integrated systems of care, we believe we can keep them well.

When it comes to population health management, the mindset is we need to change the way we look at our current business. We are moving from fee-for-service, where we get paid for doing things, to fee-for-value, or how to keep people well. We’ve been so successful as a hospital company under fee-for-service, and now we have to change the mindset and culture of all of these stakeholders. We have to go in a different direction. It’s like changing a flat tire on a car while it’s moving. No one has figured out yet how to do it, but you’re going to have to figure it out.

Another priority is mental and behavioral health. That’s very important to us. It’s a core part of our mission, and we want to be partners with whoever else sees that as a key component.

Q: What are the most important management practices when leading such a vast system with thousands of employees?

AT: In the 18 years since we created Ascension, we’ve been trying to have a culture that’s transparent, candid and nonpunitive. That’s a dramatic departure from the healthcare industry of old. I like to think I surround myself with really bright individuals and subject matter experts, and I try to empower everyone to do what’s in the best interest of those we serve. That’s what this is really all about. I like to think I hire people who are brighter than I am and give them the resources to do their jobs. Then I get out of the way.

That’s one of the principles we try to instill in our Leadership Academy — a program where we take high-potential employees for two to three years and help them develop. They focus on spiritual health to better understand their inner self. The second thing is leadership development. Everyone comes to us with certain gifts. We want them to hone those gifts and develop other skills. And the other piece, which people don’t talk about often, is personal health and vitality management. We expect our executives to work eight, 10 or 12 hours per day at optimal performance level. That’s virtually impossible unless you understand the physiology of your body.

Q: How would people describe you personally as a boss?

AT: My job is to allow leaders across the country to do what they are capable of doing. I like to think I am the supporting cast to what they do, and therefore I want to give them as much leeway and support as possible, and I want them to take risks. I am a risk-taker. As long as you don’t hurt people, that’s how we learn — through making mistakes. So take that risk.

Q: How do you plan for the future amid the current uncertainty surrounding healthcare policy?

AT: We need to be the highest-quality, lowest-cost, best-outcome provider in every market that we’re in. Then regardless of what happens in Washington D.C., we are going to be there for our patients and they’re going to want to seek us out.

We are working to do our part to reduce costs and cut waste in healthcare. But at the other end of what we do are human beings whose lives can either be helped or ruined by our actions or inactions. We are constantly advocating as a voice for the voiceless because many of those folks don’t get a chance to have this kind of conversation. I feel compelled to represent them because we are at ground zero in terms of healthcare. We see the pain and suffering that’s happening in society. They are in our clinics; they’re in our emergency rooms; they’re in our hospitals; they’re in our nursing homes.

I spent a couple weeks on Capitol Hill meeting with every senator I could meet and say, “Look, we want to be a resource. If you have a policy idea, let us know what that is and we will tell you the practical implications of that policy on the people we serve.”

We will continue to advocate for the poor and vulnerable. Last year we provided $1.8 billion of community care, community benefit and charity care. Given where this is going, I believe that number is going to go up next year. Because we are a faith-based, Catholic organization, we are going to continue to serve those people. If it ends up being over $2 billion, we’re going to figure out a way to serve them. We have to do so until we find a national solution here.

Kaiser Permanente plans $200M medical hub in N. Va.

https://www.bizjournals.com/washington/news/2017/07/18/kaiser-permanente-eyes-200m-medical-hub-in-prince.html?lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BjOr1uQoFRSCV0kd0MJgD3Q%3D%3D

Kaiser Permanente of the Mid-Atlantic States is looking to build a medical center in Prince William County.

Kaiser Permanente of the Mid-Atlantic States is seeking approval to build a $200 million medical facility in Woodbridge as a “hub” for its ongoing growth in Greater Washington.

According to an application filed with Prince William County, Kaiser officials propose a 270,000-square-foot, five-and-a-half story medical center on a 15-acre parcel the company already owns at 13285 Minnieville Road. The project would include 1,270 surface and structured parking spaces and a plan for future expansion of about 65,000 square feet.

Kaiser officials declined Tuesday to comment about the project, but the application says Kaiser wants to make it the health system’s sixth hub in the region to offer urgent and specialty care. The company has been aggressively growing its footprint across the region in recent months in an apparent bid to gain market share in the already highly competitive Northern Virginia health care business.

The Woodbridge space would include space for adult and pediatric care, women’s health services and pharmacy, lab, optometry and outpatient surgery. It will also include virtual visit technology, an MRI suite and consult rooms. The Kaiser hub model offers specialty care for issues that are too complex for a doctor’s office but do not require a multiple-day hospitalization.

“Kaiser plans to continue to expand throughout Maryland, Virginia and Washington D.C. based on the needs of the community and its growing membership base,” officials said in the application.

The company, an affiliate of health care giant Kaiser Permanente, is headquartered in Rockville. It has more than 710,000 members in Maryland, Virginia and D.C. and comprises Kaiser Foundation Health Plan of the Mid-Atlantic States Inc. and The Mid-Atlantic Permanente Medical Group PC, an independent medical group of more than 1,300 physicians.

Kaiser has partnerships with 11 area hospitals, including Virginia Hospital Center, Reston Hospital Center and Stafford Hospital, as well as Sibley Memorial Hospital and Children’s National Health System in the District, Suburban Hospital in Bethesda and Holy Cross Hospital in Silver Spring.

Kaiser officials said they plan to employ 185 people at the Woodbridge site, which would accommodate an additional 60 jobs following future expansion. They also expect the project would create 200 temporary construction jobs.

Kaiser officials said they will create a “health park” with recreational elements such as workout stations, trails, woodlands and “sensory nooks.”

Documents show Kaiser is working with HKS Architects Inc. Law firm Cooley LLP is listed as the authorized agent and Annandale-based Dewberry Consulting LLC is listed as the engineer.

The project is among of a blitz of real estate moves by the health care in giant in Greater Washington this year.

Kaiser officials said they have invested more than $446 million across the region between 2012 and 2016.

 

Texas Health Resources utilizes work-from-home model to increase revenue cycle productivity

http://www.healthcarefinancenews.com/news/texas-health-resources-utilizes-work-home-model-increase-revenue-cycle-productivity?lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BjOr1uQoFRSCV0kd0MJgD3Q%3D%3D#.WXC_Vgx95F4.linkedin

Whatever hours they’re at their best is when Texas Health Resources wants them to work, system says.

When Texas Health Resources hires new staff members to work in its revenue cycle department, it’s now required — for most functions, anyway — that they work virtually from home. Staff who have been there since before the virtual implementation have the choice, but many choose to go the route of the new hires. It’s a nice perk for the employees, but an even nicer one for the system, which has seen productivity increase significantly since taking this approach.

James Logsdon, THR’s vice president of revenue cycle operations and strategic revenue services, said the concept emerged in 2011 during the Super Bowl.

Dallas was the host city that year, and the big game took place in the midst of a rare ice storm. Logsdon came into work with the wind still whipping and noticed immediately that the office was like a ghost town, with few employees in sight. The system lost three to four days of productivity because people simply couldn’t make it into work, and thus a challenge was born: Turn revenue cycle operations 100 percent virtual within a year.

“It started out as a business continuity plan, but progressed into an initiative,” said Logsdon, recalling the event during the Healthcare Financial Management Association‘s annual ANI conference in Orlando. “It was a drive.”

It took longer than a year, and it may never reach 100 percent; some functions have to stay in-house, particularly with the jobs that involve direct patient interaction. But the effects have been noticeable. Employee satisfaction and morale are at an all-time high, and the turnover rate has been reduced substantially. The system used to lose revenue cycle employees to jobs that paid 10 or 15 cents an hour more, but no longer.

The linchpin of the program’s success is quality. It can’t budge an inch, and employees have to be held accountable.

“The metrics have to be award-winning,” said Logsdon. “You’ve got to set the expectation that this is a privilege. It’s something that could potentially be taken away. Basically, the message was, ‘Don’t let me down.'”

So far they haven’t, and part of the reason is the flexibility the virtual job affords them. Workers are allowed to set their own schedules as long as they put in the minimum eight hours. At whatever hours they’re at their best is when THR wants them to work.

Benefits aren’t just limited to reduced turnover and higher productivity, either. The system allows for better use of its real estate. Where there were cubicles packed tightly together like honeycomb bees, there are now classrooms, war rooms and revenue cycle training areas.

All that saves the system money, since it now uses its existing space for such purposes rather than expanding its footprint. New revenue cycle personnel are expected to work at least 90 days in the office while they undergo their training and education, but after that, they’re released to their virtual offices.

That’s not to say there aren’t challenges. Logsdon said that in some instances employees feel a sense of entitlement, resisting requests to return to the office when the need arises. There are also distractions that differ from the usual office distractions — children, neighbors, friends and family can sometimes intercede. To address this, THR conducts unannounced site visits to make sure everything’s copacetic.

The arrangement has created some new challenges for management, as they now have to ensure employees are using the right equipment and protocols and have an appropriately speedy internet connection. Few issues have arisen.

“Productivity is a topic that always comes up,” said Logsdon. “The requirement for employees, in writing, is to increase productivity by 5 percent. They have no problem hitting it. It’s amazing what you can pull out of people when they’re motivated by the right reasons.”

72 healthcare layoffs so far in 2017

http://www.beckershospitalreview.com/hospital-management-administration/72-healthcare-layoffs-so-far-in-2017.html

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The following healthcare layoffs were reported by Becker’s Hospital Review so far in 2017. They are listed below, beginning with the most recent.

Amid tension with CHS, 3 more executives and advisory board member quit Lutheran Health Network

http://www.beckershospitalreview.com/hospital-management-administration/amid-tension-with-chs-3-more-executives-and-advisory-board-member-quit-lutheran-health-network.html

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Three top executives of Fort Wayne, Ind.-Lutheran Health Network and a member of the system’s advisory board have resigned due to actions by LHN’s parent company, Franklin, Tenn.-based Community Health Systems.

LHN Medical Staff President James Cameron, MD, Lutheran Hospital President-elect Matt Carr, MD, and Lutheran Hospital Medical Staff Vice President Marlene Bultemeyer, MD, announced their resignations in a letter sent Friday to the system’s acting CEO Mike Poore, according to the News-Sentinel.

“Although we had the most sincere intentions of guiding the medical staff in the years to come, the events of the past days and weeks have shown that this process will take more than we could individually or collectively accomplish without compromising the quality of care we now provide our patients,” they wrote.

Tom Kelley, a member of the advisory boards for LHN and Lutheran Hospital also resigned Friday, according to The Journal Gazette. He resigned one day after Chuck Surack stepped down from the advisory boards.

The new resignations come after CHS rejected a buyout offer from a group of LHN physicians in May. After saying no to the deal, CHS fired Lutheran Health Network CEO Brian Bauer and CMO Geoff Randolph, MD. Lutheran Hospital CMO Matthew Sutter, MD, resigned in June and Steven Orlow, MD, the system’s CMIO, resigned earlier this month.

How hospitals got richer off Obamacare

http://www.politico.com/interactives/2017/obamacare-non-profit-hospital-taxes/

After fending off challenges to their tax-exempt status, the biggest hospitals boosted revenue while cutting charity care.

decade after the nation’s top hospitals used all their advertising and lobbying clout to keep their tax-exempt status, pointing to their vast givebacks to their communities, they have seen their revenue soar while cutting back on the very givebacks they were touting, according to a POLITICO analysis.

Hospitals’ behavior in the years since the Affordable Care Act provided them with more than 20 million more paying customers offers a window into the debate over winners and losers surrounding this year’s efforts to replace the ACA. It also puts a sharper focus on the role played by the nation’s teaching hospitals – storied international institutions that have grown and flowered under the ACA, while sometimes neglecting the needy neighborhoods that surround them.

And it reveals, for the first time, the extent of the hospitals’ behind-the-scenes efforts to maintain tax breaks that provide them with billions of dollars in extra income, while costing their communities hundreds of millions of dollars in local taxes.

One example of the hospitals’ efforts to remain tax-free: the soaring, minutelong TV commercial that popped up on stations across Western Pennsylvania in 2009 by the University of Pittsburgh Medical Center, the area’s flagship hospital and one of the largest teaching hospitals in the country.

“UPMC is proud to be part of our city’s past, present and, more importantly, its future,” the narrator enthuses, as the camera pans around Pittsburgh scenes of priests, grocery-store workers, even a ballet dancer before coming to rest on the sprawling medical campus — one of the five largest in the world.

At the time, Congress was considering not only whether to remove tax-exempt status for teaching hospitals, a cause of Sen. Chuck Grassley (R-Iowa), but also whether to add requirements forcing hospitals to do more for the low-income, urban communities in which so many of the top hospitals are located. And local leaders in many states were attempting to claw back billions of dollars in forgone tax revenue — a battle that would soon break out between UPMC and the mayor of Pittsburgh, too.

But the hospitals, aided by their good-neighbor initiative, prevailed. The ACA did nothing more to force the hospitals to share their revenue with their neighbors or taxpayers generally.

The result, POLITICO’s investigation shows, is that the nation’s top seven hospitals as ranked by U.S. News & World Report collected more than $33.9 billion in total operating revenue in 2015, the last year for which data was available, up from $29.4 billion in 2013, before the ACA took full effect, according to their own financial statements and state reports. But their spending on direct charity care — the free treatment for low-income patients — dwindled from $414 million in 2013 to $272 million in 2015.

To put that another way: The top seven hospitals’ combined revenue went up by $4.5 billion per year after the ACA’s coverage expansions kicked in, a 15 percent jump in two years. Meanwhile, their charity care — already less than 2 percent of revenue — fell by almost $150 million per year, a 35 percent plunge over the same period.

Revenue up, charity care down

While operating revenue increased under Obamacare for not-for-profit hospitals like the Cleveland Clinic and UCLA Medical Center, the amount of charity health care they provided fell. For example, while UCLA saw operating revenue grow by more than $300 million between 2013 and 2015, charity care fell from almost $20 million to about $5 million.

Lahey, Beth Israel and others ink merger agreement to create 13-hospital system

http://www.beckershospitalreview.com/hospital-transactions-and-valuation/lahey-beth-israel-and-others-ink-merger-agreement-to-create-13-hospital-system.html

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Five Massachusetts hospitals and health systems have signed a definitive agreement to merge.

The agreement was signed by two Boston-based organizations — Beth Israel Deaconess Medical Center and New England Baptist Hospital — as well as Burlington, Mass.-based Lahey Health, Mount Auburn Hospital in Cambridge, Mass., and Anna Jaques Hospital in Newburyport, Mass.

Under the agreement, the hospitals will operate under a parent organization but retain their names, licenses and independent boards.

The deal, which requires regulatory approval, would create the second largest health system in Massachusetts, according to the Boston Business Journal.

This is the first time Beth Israel and Lahey have signed a definitive agreement, but it marks the fourth time they’ve tried to merge.

In addition to the 13 hospitals, the new system would include 800 primary care physicians and more than 3,500 specialists.

 

CEOs of Ascension, Dignity, Trinity, Providence, CHI to Trump, Congress: Work with us on healthcare legislation

http://www.beckershospitalreview.com/hospital-management-administration/ceos-of-ascension-dignity-trinity-providence-chi-to-trump-congress-work-with-us-on-healthcare-legislation.html

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The leaders of five major nonprofit health systems are calling on Congress to work with them and draft healthcare legislation that encourages improved quality of care and ensures Americans maintain their insurance coverage, according to an op-ed penned in The Hill.

Anthony Tersigni, EdD, president and CEO of St. Louis-based Ascension, Kevin Lofton, CEO of Englewood, Co.-based Catholic Health Initiatives, Lloyd Dean, CEO of San Francisco-based Dignity Health, Richard Gilfillan, MD, CEO of Livonia, Mich.-based Trinity Health, and Rodney Hochman, MD, CEO and president of Renton, Wash.-based Providence St. Joseph Health all emphasized the need for Congress not to pass the Better Care Reconciliation Act as it is written and risk millions of Americans losing their health insurance.

“Together, we can fix this,” the CEOs wrote. “There is still plenty of room for improvement in our healthcare system. Healthcare is too expensive, coverage must be more affordable, Medicaid programs must become more innovative and efficient, the individual market must be stabilized and more payments for healthcare services must be made through value-based contracts.”

“…we invite the Trump administration and members of Congress to work together with us to create a health system that always puts people first and never forgets that each of us is only one disease or one accident away from vulnerability, ” wrote the group.

The CEOs’ organizations combined have a presence across 40 states and Washington, D.C.