Archive for the ‘Healthcare Costs’ Category

Strong Signals Favor Bundled Payments to Reduce Cost of Care

October 21st, 2014 by Patricia Donovan

Besides piloting the use of bundled payments to enhance healthcare quality and efficiency, CMS's 2013 introduction of CPT codes for physician management of care transitions after discharge signals the federal payor's increased comfort with episodic-based reimbursement. Jay Sultan, associate vice president and chief product portfolio architect for TriZetto® offers his perspective on the future of bundled payments in healthcare.

Healthcare is such a cyclical industry. Anybody who says this is the new movement and it’s here to stay has a better ability to read the future than I do.

I believe that bundled payment is going to continue to increase adoption. And then I think we’ll see a pullback in rate of adoption that will be caused by two things: one will be just the fact that we’ll have picked off all the low fruit, and what’s left is harder. I’m sure there’s somebody out there who wants to do a bundle of fibromyalgia, but I don’t want any part of that. The second reason they’ll pull back is because they’ll learn some negative lessons.

One of the things about payment bundling to date, at least in the prospective payment bundling (think model four of the CMS program), is that many commercial programs are just getting started right now. One lesson to date is there just are no negative examples. There’s negative examples in retrospective payment bundling. For prospective payment bundling, we haven’t had failures yet. Those are inevitable and they’re going to come. And as they come, I think that will create a somewhat inhibiting effect.

But overall, it’s hard to imagine. What payment bundling does is change the inner purchase. We’re saying, we’re tired of buying CPT codes of services. Instead, we want to start buying longitudinal care as an episode, as a bundle. And that trend is exactly where capitation takes them, exactly where partial capitation takes us. It’s where our provider-run health plans take us. It’s just another point along the continuum of how much risk providers are taking.

I don’t think bundled payments are going to go away. CMS is signaling very, very strongly that this is part of its future, for a basic reason. It’s one of the few tools it has that can actually reduce the cost of care. For those who think that this is going to go away, I’d harken you back to the onset of DRGs. Today, DRG-based care is pretty pervasive. But it certainly doesn’t cover all of care. It doesn’t even cover all of hospital care. It doesn’t cover all of CMS hospital care.

value-based reimbursement
Jay Sultan is the associate vice president and product manager for value-based reimbursement at TriZetto®. With more than 12 years of consulting and development experience in the payer and hospital settings, Sultan is responsible for developing innovative solutions such as payment bundling and other forms of value-based reimbursement. He is also providing leadership on the adoption of clinical analytics into TriZetto solutions.

Source: Value-Based Reimbursement Answer Book: 97 FAQs on Healthcare Models, Measures and Methodology

Adventist Population Health Management Incentives Engage Employees, Curb Costs

October 16th, 2014 by Cheryl Miller

If employees are healthier, they're more effective, engaged in their work, and more present, says Elizabeth Miller, vice president of care management at White Memorial Medical Center (part of Adventist Health). Presenteeism is part of the company's "Engaged Health Plan," a patient engagement strategy that is targeted to save as much as $49 million overall.

To engage patients, you can offer incentives. For example, at Adventist Health we outreach to our entire organization, our own employees, and we are on track to save millions of dollars with that. We call it ‘The Engaged Health Plan’ and it’s a reduced monthly cost on their health insurance. It is a bi-weekly reduction of $50, which is significant. They’re saving $100 a month. We engaged by taking their blood pressure, their weight and their blood glucose. We created an exercise plan for them with their consent, talked to them about their physical conditioning and what they wanted to see in their physical. We also talked about the ideal health population, and how we consider a healthy employee a more effective employee.

It’s costing our organization money to put this on; even though it’s our own health plan, it does cost. Why did Adventist Health go in this direction? You can see with the cost and the savings that it will save us $49 million. It is a mission. We are a faith-based organization, but it is a mission of ours to improve the health status. And it is also going to improve us financially. If our employees are healthier, they’re more effective, more engaged in their work, more present. You’ve heard of presenteeism. These are things that we’ve looked at.

dual eligibles care
Elizabeth Miller, RN, MSN, is the vice president of care management, diabetes program at White Memorial Medical Center, Adventist Health. Ms. Miller is accountable for the daily operations of the care management team, nurse care managers, social workers and the diabetes program, ensuring optimal patient flow through the healthcare continuum of care.

Source: Population Health Framework: 27 Strategies to Drive Engagement, Access & Risk Stratification

4 Factors Driving Resurgence in the Physician-Hospital Organization Model Today

October 10th, 2014 by Cheryl Miller

As healthcare organizations seek the infrastructure to respond to emerging payment models like accountable care organizations (ACOs), bundled payments, narrow networks and direct contracts, the physician-hospital organization (PHO) model is experiencing a resurgence nationwide.

But will it work this time? Four factors make the PHO attractive, says Travis Ansel, senior manager with the Healthcare Strategy Group, during Preparing for Value-Based Reimbursement Models: PHO Development for ACOs, Bundled Payments and Direct Contracting, a 45-minute webinar from the Healthcare Intelligence Network (HIN) now available for replay.

The first most immediate driver is independent physician alignment, says Mr. Ansel. While most markets are mature in terms of employment, there are still a number of markets where there are a significant number of independent physicians in key specialties. In these areas, the PHO model is more of an initial catchall type of alignment model, one that creates a loose tie between the hospital and the physicians in the market, and provides value to the physicians in terms of being protected as part of a larger group without having to become employed. One benefit for the hospitals is that they can align independent physicians en masse and create common incentives, instead of having to negotiate alignment models or arrangements with all independent physicians in their market.

The second driver is the increasing mutual accountability for quality and cost across providers. In the wake of transitioning payment models under payment and insurance reform, insurers and payors are trying to drive mutual accountability for patient costs to physicians and hospitals. The PHO is an appropriate response for those providers to work together to manage the cost of a population and of an episode of care in order to make sure everybody’s successful.

The third factor driving resurgence in PHO activity is the consolidation and distribution of resources that will allow providers to be successful in managing quality and cost. As healthcare reform and payment reform mature, information technology (IT) competencies, clinical competencies, care coordination practices, and exploring the patient-centered medical home (PCMH) concept are often unrealistic at the individual practice level. The PHO gives physicians and hospitals the platform to work on those care competencies together, build them in one place and then distribute them to PHO members — a “win-win for everybody,” Mr. Ansel says.

The final driver is the need for an effective framework for clinical integration. While there are already a number of clinically integrated organizations around the country, “For the bottom 90 percent of healthcare organizations in the country, clinical integration is still that thing that’s on our to-do list, but it always gets bumped to the back of the to-do list; because, we have more immediate needs, or more immediate strategic priorities,” Mr. Ansel says. Clinically integrated models are needed as a strategy to respond to payment reform, to allow joint contracts between physicians and hospitals, and to enable sharing of payments effectively, whether those are shared savings payments, bundled payments, etc. Adds Mr. Ansel:

"The PHO model provides a great initial step to building that clinically integrated network platform, and gives providers and the hospital a great model for working together to start building the competencies towards a clinically integrated network."

Click here for an interview with Mr. Ansel.

Infographic: Provider Payments Trends

October 6th, 2014 by Melanie Matthews

The healthcare payments industry is changing rapidly due to consumerism and regulatory mandates, according to the fourth annual Trends in Healthcare Payments Report by InstaMed. Patient payments to providers have increased 72 percent since 2011 due to these market forces.

InstaMed's new infographic based on the report looks at how patient provider payments are changing administrative requirements by providers, the need for payment plans and how credit card and mobile will impact provider payments in the future.

Provider Payment Trends

The New Hospital-Physician Enterprise: Meeting the Challenges of Value-Based Care Shifting reimbursement models are forcing hospital executives to rethink their approach to physician relationships. New cost and quality demands require hospitals to explore all alternatives—including tighter alignment with physicians. The New Hospital-Physician Enterprise: Meeting the Challenges of Value-Based Care provides expert advice on structuring and sustaining hospital-physician relationships in the post-reform environment.

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Infographic: Health Insurance Affordability Through ACA’s Marketplaces

October 1st, 2014 by Melanie Matthews

Sixty-one percent of adults paying health insurance premiums through the Affordable Care Act's marketplaces are reporting they are somewhat or very easy to afford.

The Commonwealth Fund summarizes the experiences of health insurance marketplace customers in terms of affordability and plan satisfaction in a new infographic.

Physician Adoption of Health IT

Public Exchanges Data: Premium Analysis and Carrier Participation for 2014 As health plan operators last year were preparing to offer plans on the state-run and federally facilitated health insurance exchanges, they could only guess at the age and health of the population that would enroll, and they had no information about how their competitors would price their plans.

Now that open enrollment is over, Public Exchanges Data: Premium Analysis and Carrier Participation for 2014 takes a look at how it all played out. This report offers a highly detailed overview of where carriers participated, the types of products they offered and how their prices stacked up against their competitors.

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Guest Post: What the United States Can Learn from Healthcare Delivery Abroad – And at Home

September 23rd, 2014 by Shan Padda

How can the United States provide its citizens with the best healthcare in the world, while also managing costs?


Many reports over the years have pointed out how much more Americans pay for medical procedures versus those in other countries. The European model functions in a way that less care provides more outcomes for patients, whereas the U.S. model offers more care, but yields fewer outcomes.

What drives such a divide in care systems between all of these nations? In this guest post, Shan Padda, CEO of Health Integrated, details the strategic care coordination that is essential for a balanced healthcare system and how healthcare outcomes can become streamlined between the United States and European nations.

As a healthcare company executive who has traveled extensively and observed healthcare delivery in a variety of regions, including Cuba, France, Germany, the Middle East, Switzerland and the Asia-Pacific area, I’ve had an opportunity to see what works—and what doesn’t—from an outcomes and efficiency perspective.

Most healthcare executives know that the United States spends twice as much per capita as any other nation on healthcare without a corresponding realization of outcomes. Clearly, we need to change the way we deliver healthcare, and via the Affordable Care Act (ACA) and other reform measures, efforts are underway to achieve improvement.

Singapore and New Zealand Healthcare Models

But have we learned the right lessons? And are we following the appropriate models? Of all the healthcare delivery systems I’ve had the opportunity to observe, two stand out as models for excellence that are worthy of emulation: New Zealand and Singapore. Both maintain public and private systems. The public systems aren’t built on a single-payor model yet manage to provide a baseline level of care to their populations.

Through a combination of community-based care and other delivery methods, both New Zealand and Singapore make certain their citizens have the full spectrum of non-acute care, including preventive treatment. This ensures that treatable conditions don’t worsen and require a costly ER visit or hospitalization.

To provide access to basic care, Singapore creates coverage pools and makes healthcare coverage purchases mandatory, much like the controversial individual mandate in the ACA. People in Singapore who want to upgrade their plans at their own expense can purchase additional health insurance coverage on the free market.

The Singapore healthcare system also features elements of consumerization. For example, all hospitals in Singapore are required to post costs for common procedures on their Web sites. Since the mandatory baseline health coverage has coinsurance features that give patients a financial stake in the pricing, they have an incentive to review hospital information from a cost perspective as well as from a quality of care standpoint.

Israel's Centralized Records Model

Outside of the New Zealand and Singapore models, another country that has handled one facet of the healthcare delivery process particularly well is Israel. That country has successfully transitioned to an electronic, centralized medical records model. This enables medical professionals in Israel to instantly access their patients’ entire medical history, which streamlines care coordination and enables better population health management. EMR adoption in Israel also allows for longitudinal collection and evaluation of one’s medical record both on an individual basis for the physician and on a de-identified manner for research and innovation purposes

Americans are rightly proud of their achievements in healthcare: U.S. innovators have made invaluable contributions to medical research, vaccine development and technically advanced treatment tools. But we still lag behind the rest of the world in delivering access to healthcare coverage for our population and in optimizing healthcare data to improve treatment.

Despite its error-prone rollout, the ACA is now expanding access to coverage, and some of the effects can already be seen: A recent Gallup poll shows that the uninsured rate in the United States fell to a historically low 13.4 percent in the second quarter of 2014 as millions of people received coverage under exchange plans and Medicaid expansion. A Commonwealth Fund survey in California found that ACA coverage cut the number of uninsured Californians in half.

Improving access to coverage and preventive care is an excellent first step in controlling overall costs, as it can promote early intervention to prevent treatable conditions from worsening. But as the experience of other countries demonstrates, there are additional techniques the United States could adopt to improve outcomes, including encouraging patients to take a more active role in managing their care and accelerating the adoption of electronic medical records, which would generate data that is invaluable for both population health management initiatives and for individual treatment plans.

One of the most important elements of healthcare reform is the shift away from a fee-for-service model to a system that emphasizes quality. Countries that have embraced this model, including New Zealand and Singapore, have experienced better outcomes and have controlled costs far more effectively than the United States currently does.

Acknowledging this, U.S. healthcare reformers are focused on achieving a similar shift by offering incentives for population health improvement and establishing Accountable Care Organizations (ACOs). Provider groups and plan administrators are also exploring innovative new ways to improve patient compliance, such as identifying and addressing the individual psycho-social factors that increase a patient’s sense of isolation and negatively affect their ability to actively manage their own care.

By combining the lessons we can learn from how other nations successfully manage healthcare delivery with America’s legendary spirit of innovation, there’s no reason we can’t come together and provide our citizens with the best healthcare in the world, while also managing costs.

About the Author: Shan Padda is chairman and chief executive officer of Health Integrated, where he provides the overall strategic leadership and visionary direction for Health Integrated and has a consistent track record of leadership and success in the healthcare industry. Before joining Health Integrated, Shan cofounded and directed a number of companies in the medical technology area, one of which approached $70 million in annual sales and had market capitalization of approximately $450 million. Shan currently sits on a number of private company boards and is a graduate of Harvard University.

HIN Disclaimer: The opinions, representations and statements made within this guest article are those of the author and not of the Healthcare Intelligence Network as a whole. Any copyright remains with the author and any liability with regard to infringement of intellectual property rights remain with them. The company accepts no liability for any errors, omissions or representations.

Infographic: U.S. Hospital Administrative Costs

September 17th, 2014 by Melanie Matthews

Twenty-five percent of all U.S. healthcare spending is for administrative costs...the highest among eight other nations.

The Commonwealth Fund, in a new infographic, looks at the differences in administrative healthcare spending between the United States and the Netherlands, England and Canada, spending per person in these countries and the potential for savings if the United States could reduce its administrative costs.

U.S. Hospitals Have the Highest Administrative Costs

Data Sources for Rate-Setting in ACOs, Exchanges and Narrow NetworksGreater cost transparency and consumer engagement are front-and-center in the health insurance revolution that is underway, and the use of data is driving these monumental changes.

Data Sources for Rate-Setting in ACOs, Exchanges and Narrow Networks examines the various ways claims data can be used in the new health insurance marketplace. In addition to helping support the adjudication of out-of-network claims, claims data can provide the building blocks for ACO development, as well as the foundation for pursuing a narrow-network strategy, developing consumer-oriented tools to promote effective plan selection and plan management, and building internal dashboards for strategic decision making.

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Infographic: Aetna’s Approach to Value-Based Healthcare

September 15th, 2014 by Melanie Matthews

With a new focus on quality of healthcare over quantity, Aetna is reporting improvements in outcome-based measures and reduced costs. In its new infographic, Aetna details its value-based healthcare options and results its achieving.

Quality over Quantity

Value-Based </p>
<p>Reimbursement Answer Book: 97 FAQs on Healthcare Models, Measures and MethodologyIf one trend has transformed the healthcare industry post-ACA more than any other, it is the market's new business model rewarding value over volume.

Value-Based Reimbursement Answer Book: 97 FAQs on Healthcare Models, Measures and Methodology provides a framework for healthcare's new value proposition, with advice from thought leaders steeped in the delivery and reimbursement of value-based care.

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Infographic: Large Employers Lead the Way With Worksite Wellness

September 10th, 2014 by Melanie Matthews

As a growing number of employers realize the impact that employees' health has on the bottom line, the number of employer-sponsored wellness programs has increased with larger employers leading the way.

An infographic by MBA Healthcare examines the types of wellness programs that employers are offering and the impact the programs have on employee health.

Big Companies Leading the Way in Preventive Care

7 Patient-Centered Strategies to Generate Value-Based ReimbursementHealthcare companies seeking a roadmap to richer reimbursement should begin with the seven value-based healthcare priorities for 2014 identified by the healthcare C-suite: population health management, care coordination, integrated care delivery, e-health and telehealth, access to care, health and wellness, and dual eligibles. 7 Patient-Centered Strategies to Generate Value-Based Reimbursement explores the seven healthcare areas ripest for development in 2014, prioritized by 136 respondents to HIN’s ninth annual Trends & Forecasts survey.

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Infographic: Trends in Employer-based Healthcare Benefits Strategy

August 29th, 2014 by Melanie Matthews

Nearly all employers are changing their healthcare benefit strategy in light of the Affordable Care Act and rising healthcare costs, according to a new report by Towers Watson depicted in this infographic.

The infographic examines the changes that employers are making to their benefit plans and the top five focus areas for best practices in employer-sponsored coverage.

Employers Act to Control Health Care Costs

Narrow Network Strategies and Trends for Health Plans and PBMsNarrow networks — for both medical and pharmacy providers — are gradually becoming more accepted by carriers, plan sponsors and patients. Smaller provider networks allow payers to manage overall healthcare costs while still maintaining access to benefits — an important consideration as plan designs become more commoditized in the age of public and private health insurance exchanges. Narrow Network Strategies and Trends for Health Plans and PBMs outlines the tactics health plans are using to restrict medical and pharmacy networks while still maintaining adequate access to care and positive relationships with providers. It also summarizes case studies of health plans and PBMs that have formed narrow networks and the results they’ve seen.

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