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OPERATING ROOMS: How much major surgery is infrequent? Is there an impact on costs?

Texas hospitals were studied to see how many inpatient major surgical procedures were not performed very often (once a month or less) at each hospital analyzed.  In this study of discharge data from 343 hospitals for the period late 2015 to early 2016, over half (54 percent)  of procedures were found to be uncommon (as defined above) for the hospital where they were performed.  These procedures accounted for 68 percent of inpatient costs.

Source: O’Neill, L. and others. (2017, September). Discharges with surgical procedures performed less often than once a month per hospital account for two-thirds of hospital costs of inpatient surgery. Journal of Clinical Anesthesia. 41, 99-103. Click here for publisher’s website: http://www.jcafulltextonline.com/article/S0952-8180(17)30659-1/fulltext   Posted by AHA Resource Center (312) 422-2050, rc@aha.org

VIOLENCE: $2.7 billion cost to hospitals and health systems

Overall, we estimated that proactive and reactive violence response efforts cost U.S. hospitals and health systems approximately $2.7 billion in 2016.”

In this analysis prepared for the American Hospital Association, the actuarial firm Milliman estimated the costs to hospitals and health systems associated with preventing and preparing for violence (such as security and training) as well as the portion of medical care for victims that is not covered by third party payers.  Violence occurring in the community and within health facilities was studied.  The two largest components of violence-related costs were found to be providing the security staff and infrastructure on hospital campuses and the costs of uncompensated/under compensated medical care provided to victims of violence.

Source: van den Bos, J., and others. (2017, July 26). Cost of community violence to hospitals and health systems. Milliman.  Click here: http://www.aha.org/content/17/community-violence-report.pdf  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

BENCHMARKS: Physicians per major gift officer

…each one-year increment of greater experience was associated with an additional $69,000 in donations per year…”

Finding quantitative data on major gift officers – and their workload – in the literature is unusual.  This study is based on a 2015 survey of seven academic medical centers.  The researchers had hoped to arrive at an optimal workload ratio, but although they found an average of just under 48 faculty physicians per major gift officer, they do NOT consider this average to be an optimal figure.  They did find a statistically significant relationship between a major gift officer’s experience and the amount of donations – as noted in the quote above – highlighting the not surprising importance of retaining staff who are experienced in fundraising.

Source: Wheeler, J.L., et al. (2017, Spring). How many physicians per gift officer? Healthcare Philanthropy Journal, 46(1), 26-32.  Click here for publisher’s website: https://www.ahp.org/Home/Resources_and_Tools/Journal/Home/Resources_and_Tools/Healthcare_Philanthropy_Journal.aspx?hkey=9d23727d-f194-43c6-85e2-cd1e6888419b   Posted by AHA Resource Center (312) 422-2050 rc@aha.org

 

HOSPITALS: How many DSH hospitals are there?

Hospitals that serve a higher proportion of low-income patients are eligible to receive disproportionate share payments from state Medicaid programs.

DSH hospital: A hospital that receives disproportionate share hospital (DSH) payments and meets the minimum statutory requirements to be eligible for DSH payments: a Medicaid inpatient utilization rate of at least 1 percent and at least two obstetricians with staff privileges that treat Medicaid enrollees (with certain exceptions” (page 57)

In this report from the Medicaid and CHIP Payment and Access Commission (MACPAC), there is a table that quantifies the number of disproportionate share hospitals (DSH) in the United States as of 2012.

DSH Hospitals: Counts by Type of Hospital

  • 1,865 (55 percent) of Short-term acute care hospitals
  •    565 (42 percent) of Critical access hospitals
  •    129 (26 percent) of Psychiatric hospitals
  •      47 (58 percent) of Children’s hospitals
  •      32 (  7 percent) of Long-term hospitals
  •      32 (13 percent) of Rehabilitation hospitals

Counts by Location

  • 1,681 (40 percent) of urban hospitals
  •    989 (54 percent) of rural hospitals

Counts by Teaching Status

  • 1,921 (39 percent) of non-teaching hospitals
  •    392 (59 percent) of “low-teaching” hospitals
  •    357 (79 percent) of “high-teaching” hospitals

Source: Medicaid and CHIP Payment and Access Commission. (2017, March). Report to Congress on Medicaid and CHIP (pp. 57, 59). Washington, D.C.: MACPAC.  Click here for access: https://www.macpac.gov/wp-content/uploads/2017/03/March-2017-Report-to-Congress-on-Medicaid-and-CHIP.pdf  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

 

Health Care Payment Methods: How They Work

Health care is undergoing a shift from volume to value-based payment methods, although a blend of both volume and value reimbursement mechanisms are typically used together. Each payment method has its pros and cons and can affect both providers and consumers differently. Insurance benefit design also has an influential role on payment.

A new collaborative report from the Urban Institute and Catalyst for Payment Reform examines the intersection of payment and benefit design. It looks at different payment methods and identifies the key objectives, strengths, weaknesses, design choices to mitigate weaknesses, compatibility with other payment methods and benefit designs, the focus on performance measurement, and the potential impact on provider prices for each method. The following payment methods are covered:

  • Fee schedules for physicians and other health professionals
  • Primary care capitation
  • Per diem payment to hospitals for inpatient stays
  • Diagnosis Related Groups-based payment to hospitals for inpatient stays
  • Global budgets for hospitals
  • Bundled episode payment
  • Global capitation to an organization
  • Shared savings
  • Pay-for-performance

Source: Berenson RA and others. Payment methods: how they work. Payment methods and benefit designs: how they work and how they work together to improve health care. Urban Institute; Catalyst for Payment Reform, updated May 17, 2016. http://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000776-Payment-Methods-How-They-Work.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

HIP REPLACEMENT: You might have to go to school first

Total joint replacement procedures – hips and knees – are commonly performed on Medicare patients, costing an estimated $7 billion annually for the hospital care alone.  The Centers for Medicare & Medicaid Services (CMS) has developed a bundled payment pilot initiative with mandatory participation for 67 selected health care markets nationwide.  One cost-reduction approach that is being tried by several providers is the idea of having elective hip and knee patients go to an “academy,” or otherwise receive patient education, before surgery to remove or lessen risk factors that might complicate their recovery.  Among the hospitals and health systems trying this out are: DCH Regional Health System (Tuscaloosa, Ala.), Catholic Health Initiatives (Englewood, Colo.), and BayCare Health (Clearwater, Fla.).

For more information about the CMS initiative, click here: https://innovation.cms.gov/initiatives/cjr

Source: Evans, M. (2016, Mar. 28). Ready or not, the bundled-payment challenge is about to start. Modern Healthcare, 46(13), 8-9.  Click here for publisher’s website: http://www.modernhealthcare.com/article/20160326/MAGAZINE/303269996  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

FORECASTING: Hospital payer mix 2014 and 2024, U.S.

What are the projections for U.S. hospitals’ Medicare margins over the next 10 years?  This brief article by a staff specialist at the Healthcare Financial Management Association takes a look at data from the Congressional Budget Office and the Medicare Payment Advisory Commission to address this issue.  I especially like the inclusion of payer mix statistics for the two endpoint years.  Here they are:

RECENT HOSPITAL PAYER MIX: 2014

  • 37.8 percent  Commercial
  • 35.1 percent Medicare
  • 18.2 percent Medicaid
  •   5.8 percent Other governmental
  •   3.1 percent Self-pay

FUTURE HOSPITAL PAYER MIX: 2024 projections

  • 40.0 percent Medicare
  • 33.0 percent Commercial
  • 18.4 percent Medicaid
  •   5.7 percent Other governmental
  •   2.9 percent Self-pay

Source: Mulvany, C. (2016, Apr.). Margins under pressure. HFM. Healthcare Financial Management, 70(4), 30-33. Click here: https://www.hfma.org/Content.aspx?id=47230 Posted by AHA Resource Center (312) 422-2050, rc@aha.org