Not-for-Profit Hospitals Must Prepare for Reimbursement Shift toward Quality over Quantity

Guest Blogger Donna Fincher, Marketing Manager at Diversified Account Systems of Georgia, Inc.

Hospitals and other healthcare providers have been measuring the value of their services based simply on the numbers of patients they treat for generations. Today incentive changes imbedded in the Patient Protection and Affordability Act are forcing hospitals and physicians to reevaluate their methods of measuring and proving the value of the care they provide.

Historically, full hospital beds and busy physician schedules drove the success of providers; however emerging trends in the industry are leaning toward higher reimbursement levels for better quality services. In short, both government and commercial payers are beginning to reward providers who see patients less often because their original treatment plan was better and more comprehensive resulting in fewer office visits and hospital stays for those patients.

Medicare has already implemented a strict readmissions policy with which many hospitals are scrambling to comply. Currently, when a hospital’s readmissions rate is higher than Medicare’s established thresholds, that hospital will be penalized on future reimbursements. Medicare is looking closely at patients who are readmitted for the same illness within 30 days of being discharged to make these reimbursement determinations.

A recent Moody’s Investors Service Report identified four objectives currently being pursued by forward-thinking hospital financial directors and CFOs:
• Achieving breakeven performance with Medicare rates;
• Building scale through non-traditional methods;
• Improving the patient experience;
• Cultivating more informed leadership.

Adjusting to this new focus on quality of patient outcomes rather than sheer volume of patients seen will undoubtedly result in growing pains for hospitals and other healthcare providers. The shift is inevitable though, and the providers that start changing their care plans now will be the ones that survive the change.

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