Change Before You Have To

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 - Justine Cadet
Justine Cadet, Editorial Director

Hospital administrators may have to learn this proactive business approach from the former CEO and Chairman of General Electric, Jack Welch.

While transformations to the U.S. healthcare payment model seem imminent, Medicare cuts were promised as part of the bipartisan deal to pass the debt-ceiling legislation at the eleventh hour in the beginning of August—which could further affect the bottom line of medical specialties.

Thus, many are speculating that Medicare margins could decrease by 1 to 2 percent per year. As reported in last month's cover story, it is estimated that community hospitals already lose approximately 12 cents on every dollar spent for Medicare patients and 35 cents per dollar for Medicaid patients.

How can hospitals survive reduced revenues? Many experts and specialists are suggesting that providers change now before the transformations are mandated by Uncle Sam.

One recommendation is to engage in disease management or coordinated care programs that seek to better manage disease states throughout the continuum of care, and include caregivers from outside hospital walls. Specifically, this month's cover story speaks to the necessity of engaging such tactics to better manage patients with heart failure, as well as the high rates of readmission with this fragile population.  

As of next year, CMS is enacting a policy where hospitals with a higher rate of risk-adjusted, all-cause rehospitalizations will receive lower reimbursement. This penalty is likely to be one of many to motivate hospitals to produce better patient outcomes. On the flip side, there also is promise for higher reimbursement for those hospitals that have low overall readmission rates.

To counteract high readmission rates for heart failure patients, specialists recommend that patients need to be followed up by varied caregivers—nurses, cardiologists, primary care physicians—after discharge.

"To improve outcomes and decrease costs, coordinated care would allow for communities of caregivers to be concerned with population health, providing an incentive to work together, which is lacking in the current fee-for-service model," says Harlan Krumholz, MD, director of the Center for Outcomes Research and Evaluation at Yale-New Haven Hospital in New Haven, Conn.

The onus is falling to administrators and physician champions to target areas with room for improvement in patient outcomes, while simultaneously employing different management strategies, even if it means less immediate revenues as it could ensure future protection. And, those who already recognize potential for improvement should start changing now.

We'd love to hear about unique patient management strategies to improve outcomes and the bottom line within your facility.