Archive for the ‘Finance’ Category

Healthcare payment reform is a work in process. The Centers for Medicare and Medicaid Services (CMS) Innovation Center is rolling out various test projects to identify how to bend the curve of healthcare costs while improving quality outcomes. These projects are gravitating towards a common underlying reimbursement theme, a fixed payment for services covering the episode of care (ambulatory, acute, and post-acute services) with a linkage to quality outcomes. Present healthcare IT solutions do not meet the anticipated needs of the market for this new form of reimbursement. There are two key requirements a healthcare provider’s IT solution needs to provide:

• Episode of care (ambulatory, acute and post-acute services) integrated platform supporting the data acquisition, measuring and monitoring of total services delivered
• Financial accounting system to forecast, measure and manage the distribution of a fixed payment to various providers participating in the episode of …

Continue reading Healthcare Payment Reform Redefines Healthcare IT Solution Requirements »

As we ring in the New Year, many features of the Accountable Care Act (ObamaCare) will begin to take shape. State Benefit (Insurance) Exchanges will begin to unfold. The Medicare and Medicaid Innovation Center within HHS will continue to examine and support promising models of care delivery. Cost containment programs like Accountable Care Organizations (ACOs) will begin to reshape the way Medicare pays for healthcare services.

So what are Accountable Care Organizations (ACOs)?

ACOs are organizations created by either groups of doctors or hospitals that improve quality measures in five key areas that impact affect patient care:
• Patient (caregiver) experience and satisfaction;
• Care coordination;
• Patient safety;
• Preventive health; and
• At-risk population health management.

HHS wants to improve the quality of care Medicare patients receive. ACOs are seen as a way to drive improved care through better coordination of healthcare …

Continue reading Transforming Healthcare One Medicare Patient at a Time »

The recent reelection of President Obama solidifies the future of the Patient Protection and Affordable Care Act (PPACA). A number of healthcare providers (hospitals, physicians, post-acute services, etc.) sat on the sidelines awaiting the outcome of the Presidential election to determine if they needed to start rethinking their business model and what changes are required. Now that we have the answer the PPACA is here to stay, healthcare providers are starting to reassess how they need to redefine their businesses and strategic business relationships.

An underlying principle that all healthcare providers will base their strategic planning against is that the demand for healthcare will rise and the level of reimbursement will decline.  Various payment models are being tested by CMS, and we can expect more variations over the next year or two. With the power of the PPACA, CMS can rapidly adopt a payment model that demonstrates effective results reducing costs and make it a …

Continue reading The Affordable Care Act is solidified with the election – Healthcare providers will need to accelerate their plans for payment reform »

The Atlanta Journal-Constitution ran a print article earlier this month entitled “Health care called a money pit,” bringing to mind the similarly titled movie of the mid-80s that detailed a couple’s near split over struggles with never-ending home renovations. Tom Hanks and Shelley Long certainly brought levity to the predicament of high-cost, low-quality construction that resulted in extremely unsatisfied customers. It’s no stretch to see parallels to healthcare’s current situation regarding cost, treatment, and patient outcomes and satisfaction.

The AJC story’s statistics regarding the $750 billion a year squandered by today’s health system won’t bring much of a smile to anyone’s face. The Institute of Medicine’s (IOM’s) one-year estimate of healthcare waste is “more than the Pentagon budget and more than enough to care for the uninsured,” and combines:

• Unnecessary services worth $210 billion
• Inefficient delivery of care worth $130 billion
• Excess …

Continue reading Filling in Healthcare’s Money Pit »

According to a study recently published by the Commonfund Institute, not-for-profit hospitals throughout the United States are turning to riskier investment strategies in alternative assets as a means to make-up for the losses they incur from government reimbursement cuts.  The 2012 Commonfund Benchmarks Study® of Healthcare Organizations evaluated the investments and returns in FY 2011 of approximately 86 not-for-profit healthcare organizations, and compared them to previous benchmarks from the past three years.

The Study concluded that the participating healthcare organizations reported 0% returns on their investments in FY2011.  The Study went on to report that, “The flat returns followed net gains of 10.9% in FY2010 and 18.8% in FY2009 [...] Beyond the flat year-over-year return, the most important shift to emerge from the Study was in asset allocation, where healthcare organizations’ allocation to alternative investment strategies in their investable asset pools …

Continue reading Riskier Investment Strategies for Hospitals Could be Slippery Slope »

The Affordable Care Act has many benefits. The costs of some of these benefits will not be known for a while.

Continue reading Tax Implications of the ACA – Just Bad Timing Part II »

Over the past several years, the health care system has been attempting to define and create a “patient-centered model of care.” Most health policy experts, much less health care professionals, can’t seem to agree on what constitutes a patient-centered model of care. I think that a patient-centered model is less about discussing the comprehensive services offered to patients and is more about putting the patient in the middle of the relationship. A true patient-centered model surrounds the patient and provides a true coordinated personalized system of care.

In examining U.S. health care delivery, rarely are the words “coordinated,” “personalized” and “system” used in the same sentence ― much less actually delivered to patients.
Primary care medical homes (PCMH) were first developed several years ago in an attempt to develop a patient-centered experience. Even those physicians currently practicing in the PCMH model indicate that there are issues associated …

Continue reading Building a Patient-Centered Model of Care »

The tax provisions that the press prefers to call the “Bush tax cuts” will sunset and income tax rates (as well as phase-out provisions for itemized deductions and personal exemptions and numerous other provisions) will revert to pre-2001 levels. In addition, the individual income tax provisions contained in the ACA take effect. There are three primary taxes placed directly on individuals contained in the ACA.

Continue reading Tax Implications of the ACA – Just Bad Timing? »

As the healthcare industry continues coming to grip with the recently passed Obamacare legislation, we must now move on with other issues of importance that are contributing to the ongoing expansion of the industry, as well as economic development through jobs and new business growth.  There is perhaps no better place to observe this growth and the valuable contributions to the overall healthcare industry than what is taking place in healthcare technology, or “HCIT,” as it is commonly referred to in the industry.

HCIT has frequently been referred to as the fastest growing segment of the healthcare industry measured by revenues and investment activity, and one of the most rapidly expanding sectors in the entire US economy.  And as the industry has speculated about the changes that will come from Obamacare for some time now, HCIT companies are being pursued as some of the most influential and well-positioned players that will play a critical role in making those policies …

Continue reading Capital Continues to Pump into Healthcare Technology, What this Means for Georgia »

Recently, another columnist on this blog posed a very serious and very pertinent question that the healthcare industry has been facing for some time now.  The question relates to how the current evolution and changes of the fundamental healthcare delivery model is gradually moving physicians away from the center focus of that system.  This was posed in an article that Mr. Olsen alluded to from The Economist titled, “The Future of Medicine:  Squeezing Out the Doctor“.   Among other topics, the original article and Mr. Olsen on this blog continued to discuss the impact that technology is gradually having on the way healthcare is delivered, such that today much less of a patient’s primary point of care is exclusively provided by their actual physician.

One of the primary drivers that the original article discusses can be summed up with this quote:  ”To treat the 21st century’s problems with a 20th century approach to health care would require an impossible number of …

Continue reading Role of Clinical Integration in Question of Doctors’ Relevance »