Posts Tagged ‘Medicaid’

ACO’s or SSP’s: “Change or Die”

September 6th, 2011

“Walk the Walk” author Alan Deutschman’s previous book kind of said it all in the title, “Change or Die.” In that book, Alan carefully lays out the statistical survivability matrix, and poses the question:

Alan Deutschman - Author of Change or Die and Walk the Walk - Nick Jacobs, HACHE - Healing Hospitals

Alan Deutschman

“What if you were given that choice? For real. What if it weren’t just the hyperbolic rhetoric that conflates corporate performance with life and death?…What if a well-informed, trusted authority figure said you had to make difficult and enduring changes in the way you think and act? If you didn’t, your time would end soon — a lot sooner than it had to. Could you change when change really mattered? When it mattered most? “

Then, he articulates the actual outcomes of studies. Talk about “tough love.”

“…The odds? You want the odds? Here are the odds that the experts are laying down, their scientifically studied odds: nine to one. That’s nine to one against you. How do you like those odds?”

So, as a nation, as healthcare leaders, as human beings in a country that is currently facing the realities of potential economic disintegration, we are faced with what can only be described as another enormous challenge: a financially unsustainable healthcare system. Regardless of your politics, regardless of your personal beliefs regarding the competency of the federal government and its ability or inability to fix anything, the law has been passed, the train is moving and it’s moving directly toward you and your hospital.

Over the past three years, we have repeatedly presented money-saving and money-making ideas to help begin to position your healthcare organization for the impending tsunami of change that has been launched. As a veteran of TQM, Six Sigma, Baldridge, and a half dozen other consultant-delivered “fixes,” I’m sure I can hear the words going round and round in your head, but, not unlike the clamor that arose from the HMO/PPO days of yesteryear, this ACO/SSP challenge has to be met and dealt with intelligently, and it has to be done in such a way as to not destroy your hospital or health system.

Let’s face it, we’re all pretty smart folks. We’ve all been in permanent white water for years, and the last thing that many of us want to take on is the ole captain of the ship without a rudder, during a hurricane while the lighthouses are being moved around on the shore.  But, once again, it’s here. It’s upon us, and we must deal with this challenge in an intelligent manner.

One possible alternative for smaller organizations is the SSP, a Shared Savings Program, the alternative put forth by CMS, the Center for Medicare and Medicaid Services, to a full-blown ACO, an Accountable Care Organization. Either way, however, SSP or ACO, the primary, overarching goal is to try to improve quality, decrease costs, and provide patient-centered care in a meaningful way. Not unlike the old HMO/PPO days, the effort requires infrastructure (and plenty of it…the average participant in the demonstrations spent about $1.7M on this one, single aspect of managing the healthcare new world order.)

What do you need? Well, you need 5,000 patients, to start. Then:

  1. Decide if you will use Medicare only or other patient groups.
  2. Determine the exact service area that you will target.  How many square miles?
  3. Decide which reimbursement model will work for your organization, i.e., an SSP that is more risk-based, or capitated.
  4. Figure out which provider groups will be involved.
  5. Examine IT reporting capabilities and process improvement methodologies.
  6. Identify patient-related strategies such as enhanced experience for the patients or faster throughput as well as reduction in errors.
  7. Then, dig deep into the organizational strategies for improvement.

Infographic: Medicare Margins - Nick Jacobs, FACHE - SunStone ConsultingLet’s face it. From 2001 until 2008, total Medicare inpatient margins for acute care hospitals have decreased every single year.  (Source: Journal of Healthcare Management)   Reimbursements have decreased while your bad debt has increased.  So, regardless of your tolerance for risk or change, cost control simply must become the culture of every healthcare organization in the United States. We have seen the variances in costs based on geography in this country and treble charges in one area as opposed to another will not go on into the future. Joel Allison, CEO of Baylor Health has stated that this movement is “All about…focusing on wellness, on prevention.” (Arnst, 2010)

We need our primary care docs, we need physician participation to a far greater degree than we currently have, and, at the same time, the physicians must be partners in the effort.  Employing physicians is also a critical element.

SunStone Management Resources can assist you in this effort on numerous levels, but the time to act is now!

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The Alpha and Omega of Healthcare in the United States

August 27th, 2011

While serving as a hospital administrator for over twenty years, I was aware of numerous people who had died in the emergency room because they had no insurance, had not yet qualified for Medicaid and were terrified that the cost of care would force them to live on the street.  Consequently, they waited too long to come in for treatment, and they died.

Rep. Paul Ryan (R-W) and Gov. Peter Shumlin (D-VT) - Nick Jacobs, FACHE - Healing HospitalsModern Healthcare’s August 22nd edition has listed the 100 Most Influential People in Healthcare in 2011. (Somehow they’ve missed me again.)  They’ve listed Republican  Congressman Paul Ryan of Wisconsin as the number one most influential person, and the Democratic Governor of Vermont, Peter Shumlin, as number two. Ryan is interested in a complete re-make of the Medicare and Medicaid programs, and Shumlin wants to move the citizens of the State of Vermont to a government-run, single-payer system.

Needless to say, these are very different views. It’s interesting that they both agree that employer-based insurance should be eliminated, so that neither portability nor employment is an issue. They differ in that Ryan believes that each individual citizen should receive a refundable tax credit for healthcare and that providers should compete based upon quality, price and outcomes. Shumlin, on the other hand, wants to do away with “fee for service healthcare,” but clearly understands the American’s public’s concern about government-run anything, and even says, “Government has gotten it wrong, every single time.”

According to Modern Healthcare, both want to fix the system that is bankrupting the nation. Ryan wants to “maintain a world class system built on innovation and excellence,” while Shumlin wants that single payer system to eliminate waste, administrative overhead and insurance company profits. It is Shumlin’s contention that enacting all of the Tea Party cuts and taxing the wealthy would still lead to the same federal budget challenges in the trillions of dollars that we face now.

Ryan wants to cut $750 billion in Medicare spending by making the allocation a block grant. People like Rose Ann DeMoro, executive director of the AFL-CIO- affiliated National Nurses United labor union say, “The market isn’t magic and it doesn’t trickle down…the Paul Ryans of the world don’t want a society.  They want individuals and corporations to make ungodly amounts of money.”

And so the debate continues. There is no magic elixir that will fix this without huge disagreements and turf battles.  As the Obama legislation began to unfold, the initial reaction from many within his own party was that his administration had “sold out” to Big Pharma and numerous other lobbies, and, as the Republican plan continued to be unveiled, the response was similar to DeMoro’s, because it was so heavily skewed toward big business and the free market, while providing only marginal assistance for the underserved of this nation.

UPMC vs. Highmark (Illustration by Ted Crow, Post-Gazette) - Nick Jacobs, FACHEIronically, as I look out my window and then drive a block from my apartment in Pittsburgh, I see another new “colony” of homeless people living under the bridge, and as I round the corner under Route 279N, there is a virtual apartment building under that road comprised of sheets and blankets hung to create separate partitions for the individual homeless people to live. At the next light leading to the North Side, a 30ish young mom begs on the corner for money for her kids, and two blocks past her is a homeless Veteran asking for money as well.

In the midst of all of this, the $9 billion UPMC battle with the nearly $4 billion Highmark juggernaut continues over an insurance company owning a hospital, and a hospital owning an insurance company.  Surely, in the richest country in the world, there are answers to these challenges that do not bankrupt the pharmaceutical or insurance companies, do not make our physicians second class citizens, and do not close two thousand small and medium sized hospitals while still providing care for everyone.

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Geographic Variances in Medicaid Spending – And the Winner Is?

July 7th, 2011

Health Affairs cover - Nick Jacobs, FACHE - Medicare - MedicaidWhen Health Affairs released a first-ever study of geographic variances in Medicaid spending on July 7th, it was a new twist on transparency that is just the beginning of what will become a detail-by-detail exposé of care and treatment of patients in the United States.  Just imagine a few years from now, when every record is electronic and every detail will be instantly available to the government.  Like this variance report, we will begin to see the good, the bad and the ugly of how medicine is practiced in this country.  So… how do you spell transparency?

A few weeks ago, the New York Times ran an article in which the “overuse of Medicare-funded CT scans” was explored. Featured in the digital version of this article was an interactive map showing virtually every hospital in the United States, and as the mouse was passed over each hospital, the percentage of inappropriate CT scans appeared above the facility’s name. If yours was one of the hospitals that was 80+ percent over using this device in multiple single-day scans, you were, as they say, “busted.”

Well, this release exposed at least one entire section of the country that is overusing Medicaid on numerous levels.  Although the study revealed a wide variance in per-beneficiary spending, one geographic region outshined them all.  The findings showed that after adjusting for the case-mix of patients, variations are driven mostly by volume of services provided and, to a lesser degree, by price.  Per-beneficiary spending in the ten highest states was $1,650 above the national average, mostly caused by the greater number of services provided.

Image credit: New York Times

One of the most significant findings revealed by this study was that the supply of primary care physicians in specific areas was associated with reduced rates of admissions for diabetes, lung disease, and adult asthma.  The authors suggest that this finding might point to the fact that increased access to primary care providers may result in improved management of common chronic diseases for people on Medicaid.

So, by now you’re asking, “Who won?  Who used more money per capita to treat Medicaid patients?”  It was The Mid-Atlantic States : New Jersey, New York and Pennsylvania used more Medicaid funds per capita than any of the regions in the United States. For example, the per beneficiary cost in New York was twice that of California; $21,195 for New York vs. $11,200 for California.

As a region, New England used the least amount of Medicaid resources and as a state, Washington provided the best example of “how things should be.”  How did they do it?  They increased access to primary care and reduced hospital care.

Todd P. Gilmer, Ph.D.

Todd P. Gilmer, Ph.D. - UCSD

Finally, places that had higher numbers of hospital beds and specialists were associated with higher numbers of hospital admissions while higher numbers of primary care physicians were associated with reduced rates of hospital admissions… Todd P. Gilmer, PhD, professor of health economics in the Department of Family and Preventive Medicine at the University of California – San Diego said, “By looking at service mix, access and price, states can find ways to make their programs work better.”

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Along the Way…Things Became Very Interesting

January 31st, 2011

Two years ago I began this new journey, but not until a few months ago did my work in consulting really begin to take shape in a way that could never have been predicted.

As the challenges of our present economic times have become increasingly daunting, my personal and professional journey has become even more dedicated to innovation and creativity. One goal has been to provide new alternatives to past practices that will create value for patients. This means making a contribution to saving and transforming lives, while producing cost savings and financial stability, and developing new markets to enable provider growth in their missions.

Olympic National Park, Port Angeles, WA - Nick Jacobs, FACHE - Healing Hospitals - SunStone Consulting

The driving force behind my exploration began with asking how we can begin to control those out of control expenses that are currently blurring the lines between continued care for our population, and rationing or elimination of services?  But, the answer(s) must enable us to continue to add healing opportunities for our patients at every turn.

Because my creative energies have always been focused on producing more ways to generate new monies for whatever organizations I have personally represented,  it seemed somewhat foreign to me to spend more time on fiscal issues than creative alternatives.  However, with literally millions of Baby Boomers coming of age each year, it was obvious that our entire culture is at risk both fiscally and socially. Consequently, after listening carefully to my peers, several opportunities presented themselves that would address all levels of these concerns.

Through the combination of their proprietary software and dozens of years of combined knowledge in the healthcare finance field, SunStone Consulting, LLC, spends each and every working day addressing the challenges of finding monies that should already have been captured by hospitals and physician practices, while also creating new opportunities that have heretofore not been explored. That’s where SunStone Management Resources comes into play.

SunStone Consulting - Nick Jacobs, FACHE

We have identified new companies, new entrepreneurs and new creatives who can not only improve healthcare, but also significantly improve the bottom line of those organizations willing to embrace their programs. One such company with whom we are partnering can increase Emergency Room productivity by as much as 35 to 50%.  They can also help do the same for cancer centers and operating rooms. They utilize robotic systems that communicate patient needs and simultaneously seek out the appropriate medical services required as soon as the patient is triaged. The patient’s condition and potential requirements are communicated to every individual who will or should have contact with them throughout their hospital stay.

We have also identified what I refer to as “no brainer” opportunities. By making otherwise locked fiscal percentages  a commodity, even small and medium sized organizations can save huge dollar amounts. How? By changing out only the electronic reading devices used hospital-wide. This simple change has resulted in huge fiscal savings for clients.

Add to examples like those above the introduction of  a new invention that, in the right hands, can help to extend some types of Stage 3B and Stage IV cancer patients’ lives from months to years through a relatively simple post-surgical procedure. Also consider the invention of new materials that would support bone growth, while virtually eliminating the need for casts or even slings. Imagine a series of protocols that have brought over 40 people out of deep, irreversible comas. Then, on a completely different path, consider having access to  the cumulative knowledge garnered from over a hundred million dollar investment in breast cancer care.  (This is about to be made available to small and medium sized hospitals across the world.)

These are but a sampling of  just some of the opportunities currently driving my passion in this new healthcare world order.

You may want to make a simple inquiry into what’s behind the innovative, practical, and incredible creations of the brilliant people doing this work.  It’s not just so many words on a page.  It is the future, and the future for you and your organization could be now.

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