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Challenges, opportunities in reimbursement change

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This Becker’s Hospital Review piece looks at how shifting reimbursement regimes are both a problem and opportunity.

Becker’s reported that Barry Arbuckle, president and CEO of Fountain Valley, Calif.-based MemorialCare Health System, said:

“We need to get people to the right venue of care.”

Becker’s said he outlined “MemorialCare’s push to ambulatory, community-based centers. Often, patients of independent physician groups typically wouldn’t seek care from a hospital outpatient department; rather, they’d go to a community-based ambulatory center. As hospitals and health systems acquire these physician groups, the hospital outpatient department becomes a cash cow for hospitals where both Medicare and commercial payer rates are higher than they would be in an ambulatory setting.”

“Gregg Beeg, CFO of Oaklawn Hospital in Marshall, Mich., said reimbursement change can be especially problematic for smaller hospitals such as his, a 77-bed independent hospital, as they navigate the shift from inpatient to outpatient. ‘Insurance companies continue to want to ratchet that reimbursement down,’ he said.

“What’s more, Mr. Beeg’s hospital faces the economic uncertainty tied to the rocky state of Michigan’s finances and how employee retention poses a burden to hospitals.”

“The market pressures to open and operate in facilities outside the four walls of a traditional hospital are also affecting Toledo, Ohio-based ProMedica. Randy Oostra, president and CEO of ProMedica, said the health system is strategizing how to rationalize inpatient consolidation and moving to outpatient over a period of time.”

He told Becker’s: “The idea down the road is how do you begin to think about rationalizing, consolidating [or] maybe not doing everything at every location.” ProMedica is opening six urgent care centers, largely in response to other healthcare organizations in the market doing the same thing. “We didn’t want to just give that away,” Mr. Oostra said.

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