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9 ways to cut hospital debt

 

Meg Bryant, writing for Healthcare Dive, discusses nine ways in which hospitals can reduce debt:

1. “Understand your costs of care. Hospitals make money taking care of patients, so their debt needs to be clinically proportionate to the types of services they provide….If a hospital has large surgery needs, it will require lots of operating rooms, which are expensive to implement and maintain. …. Make sure the capital structure is appropriate to the model of care needed or the risk profile of the patients the hospital treats.”

2. “Improve ICD-10 coding on claims forms. Not coding appropriately and not coding for the proper amount of time the doctor sees the patient or for interactive effects can cause reimbursement rates to plummet….”

3. “Renegotiate rates with insurers. Larger, more prestigious hospitals and health systems are able to extract much higher reimbursement from private payers than less prestigious ones, even in the same geographic area. Hospitals can increase volume and revenues by convincing health plans to increase rates and then direct patients toward the less-expensive hospital.”

4. “Increase efficiencies and productivity. Another thing hospitals can do is make sure nurse practitioners, nurse, LPNs, and other clinicians are operating at the top of their license. {N}urse practitioners can perform many of the tasks a physician does, but at a lower cost of care.”

5. “Manage risk. This is something that all hospitals are having to do under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), but it is also a good way to reduce costs and knock out debt. Focusing on high-risk patients to reduce costly inpatient stays can have a rapid return on the bottom line. Coupling that with narrow networks of high-quality, low-cost physicians may increase referrals from health plans and enhance reimbursement rates.”

6. “Refinance or restructure to cut debt. Hospitals can also work with capital market organizations to see if there are ways to refinance or restructure to reduce the debt burden….”

7. “Divest property.

8. “Reduce ‘bad’ debt. To increase the odds of getting paid, some hospitals are training patient access staff to identify patients who may default on payment and putting in point-of-service payment plans. Some hospitals have also set up space to enroll uninsured patients in Medicaid….”

9. “Join a health system.”  Get  the efficiencies from being in health systems, as opposed to being a single hospital. With a system you have the credit worthiness of the whole system behind you, probably getting you lower interest rates.

To read the entire article, please hit this link.


Advice on navigating narrow networks

narrow

Herewith advice via a Janet Kidd Stewart article in Medical Economics on how physicians and other providers can negotiate the increasing number of narrow networks.

In the piece, Jonathan Gruber, Ph.D., an economics professor at MIT, asserts that early evidence shows that narrow networks cut patient costs without lowering quality.

“Payers already are building algorithms to better answer the outcomes issue, and providers must decide if they will sit back and wait for the results or build their own data sets,” he told Ms. Stewart. “There will definitely be winners and losers.”

She says that Donald Fisher, Ph.D. president and chief executive of the American Medical Group Association, says that providers need to continue to fight  plans that  cherry-pick certain providers for narrow networks and and to  question  insurers’ quality and cost data.


Of retail strategies and narrow networks

 

Herewith some provocative questions for hospital executive, trustees and directors at a Society for Healthcare Governance symposium and reported in Hospitals & Health Networks:

Jamie Orlikoff, a healthcare-governance expert, asks  “How many of you  can say you have a retail strategy in place?”  Clearly, some hospitals and health systems are, as Orlikoff put it, “going to be blindsided by consumerism.”

Orlikoff noted that the first question a patient will ask if likely to be  “’How much will this cost me?’”

”The traditional reply from healthcare providers? ‘Don’t worry about it. Your insurance will cover it.”’

But, Orlikoff pointed out, today’s consumers would say: “Well, no, I have a $5,000 deductible. If you can’t give me that answer, I’ll go to someone who will.”

“And once they know how much a procedure is going to cost them, consumers have an immediate follow-up question: How good is the quality of what I’m paying for? If a hospital can’t provide proof of value, Orlikoff said, the individual again will either go elsewhere, or decide he might not need that procedure after all.”

Rich Umbdenstock, who recently retired as head of the American Hospital Association, discussed narrow networks and asked:  “If you were forming a narrow network, would you choose your hospital to be in it?”

Among the factors to consider, he said,  paraphrased here by H&HN:

• “How do we do less … with less … and get better outcomes for the customer/provider/partner’s return on investment?

• “Can we fund our strategic plan on the 10 to 30 percent less revenue we will be getting from Medicare and other payers?

• “Can we manage payment risk?

• “How are we solving the consumer/patient hassle map? In other words, how are hospitals improving customer service and making the health care experience less complex and onerous?

• “As a board, how are we adjusting our mission/plan/metrics/agenda/structure/composition/management incentives?

“How do we do less … with less … and get better outcomes for the customer/provider/partner’s return on investment?

• Can we fund our strategic plan on the 10 to 30 percent less revenue we will be getting from Medicare and other payers?

• “Can we manage payment risk?

• “How are we solving the consumer/patient hassle map? In other words, how are hospitals improving customer service and making the health care experience less complex and onerous?

• “As a board, how are we adjusting our mission/plan/metrics/agenda/structure/composition/management incentives?”

 

 

 


Single-payer system gaining adherents

 

This Medscape report suggests that more and more U.S. physicians, and Americans in general, are warming to the idea of single-payer health system — aka, “Medicare for all” — to succeed the convoluted Affordable Care Act.

While many still oppose it, many other experts see it as a way to increase efficiency and cut waste and costs by dramatically reducing the many-layered complexity and confusion of America’s current hybrid healthcare “system” — which it far and away the most expensive in the world on a per-capita basis and yet produces remarkably mediocre medical outcomes in world rankings.

As Medscape noted, eliminating the current private-sector-public-sector arrangement and making the  federal government the main payer “would virtually eliminate the entire commercial insurance industry—with $730 billion in revenues and a workforce of 470,000. And those who favor single-payer say that for all practices, administrative costs would plummet because there would be only one set of payment rules. Prior authorizations, narrow networks, and out-of-pocket payments would be eliminated, proponents of a single-payer system maintain.”

Single-payer proponents also assert that it would restore more authority to physicians, more and more of whom are health system employees and must often follow the dictates of insurance companies.

But we  at CMG, having lived in single-payer nations, would suggest that the elimination of the entire commercial-health-insurance industry would be highly unlikely since presumably individuals would still be able to buy extra insurance from private insurance companies as one can do in most single-payer nations.

 


Narrow networks generally don’t hurt care

 

Polls have suggested that consumers value low monthly premiums over access to prestigious healthcare institutions such as (expensive) teaching hospitals affiliated with famous universities, and thus are willing to be in narrow insurance networks.

Bruce Spurlock and Maribeth Shannon, writing in HealthAffairs, conclude  that “except for a handful of outlier networks, consumers can have confidence that the hospital care in their region is comparable to other plans’ product networks, and that network size does not seem to typically influence performance.

“The major caveat is that some extremely narrow networks with overall lower-performing hospitals probably would benefit from a more inclusive network structure or a marked improvement in performance of the participating hospitals.”


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