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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

Top 10 Issues Facing Community Hospital CEOs

Last month the American College of Healthcare Executives released the results of its annual CEO survey on the top concerns confronting community hospitals. The most pressing concerns of the CEOs in 2015 were:

  1. Financial challenges
  2. Patient safety and quality
  3. Governmental mandates
  4. Personnel shortages
  5. Patient satisfaction
  6. Physician-hospital relations
  7. Access to care
  8. Population health management
  9. Technology
  10. Reorganization [mergers, acquisitions, restructuring, partnerships]

Financial challenges has remained the top concern when compared to 2013 and 2014 surveys. Transition from volume to value, Medicaid reimbursement, bad debt, and increasing costs were among the financial challenges most often mentioned. Engaging physicians in improving the culture of safety/quality and in reducing clinically unnecessary tests and procedures were top concerns related to patient safety and quality.

Access to care and reorganization were new to the top 10 list in 2015, and personnel shortages rose to 4th place on the list, up from the 10th spot in 2014.

Source: Top issues confronting hospitals in 2015. American College of Healthcare Executives, Feb. 2, 1016. http://ache.org/pubs/research/ceoissues.cfm [press release: http://ache.org/pubs/Releases/2016/top-issues-confronting-hospitals-2015.cfm]

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

The Burden of Medical Debt: Survey Results

A quarter of U.S adults under age 65 report they or their household have had a problem paying a medical bill within the past year. While over half of the uninsured had medical bill difficulties, health insurance was no panacea against the problem. Around 20% of those with insurance also reported a problem paying medical bills. In fact, for households with medical bill payment issues, over 60% had health insurance.  Insurance deductibles make a difference in ability to pay a bill.

While those with low or moderate incomes are more commonly affected by the difficulty or inability to pay medical bills, people from all walks of life experience the problem. These are the findings from a survey jointly conducted by the Kaiser Family Foundation and the New York Times.

The report on the findings covers the circumstances leading to medical bill problems, the financial status of those with the problem, and the consequences that have resulted from the issue.

Sources:

Hamel L and others. The burden of medical debt: results from the Kaiser Family Foundation/New York Times medical bills survey. Kaiser Family Foundation, Dec. 2015. https://kaiserfamilyfoundation.files.wordpress.com/2016/12/8806-the-burden-of-medical-debt-results-from-the-kaiser-family-foundation-new-york-times-medical-bills-survey1.pdf

Sanger-Katz M. Even insured can face crushing medical debt, study finds. New York Times, Jan. 5, 2016. http://www.nytimes.com/2016/01/06/upshot/lost-jobs-houses-savings-even-insured-often-face-crushing-medical-debt.html

Related: Cohen RA. Problems paying medical bills among persons under age 65: early release of estimates from the National Health Interview Survey, 2011-June 2014. National Center for Health Statistics, Feb. 2015. http://www.cdc.gov/nchs/data/nhis/earlyrelease/probs_paying_medical_bills_jan_2011_jun_2014.pdf

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

HFMA Survey: Value-Based Payment Readiness

Earlier this year the Healthcare Financial Management Association surveying a sampling of senior financial executives in hospitals and health systems to learn more about healthcare’s readiness for value-based care. The survey probed for the current state of readiness, projected needs, anticipated gaps and penetration, the financial impact to date of their efforts, and perceptions on enabling risk-based contracting.

Here are some of the key findings:

  • Over half of respondents said their system had achieved a positive return on investment from a value-based program.
  • Yet nearly 40% don’t feel their organization has the needed capabilities to succeed within 3 years in risk-based value arrangements when if comes to interoperability, business intelligence, real-time data access, and effective chronic care management.
  • Such gaps are of concern when respondents expect 30-70% of their payments will include value-based mechanisms with 3 years.
  • Competencies involving data analytics ranked highest among respondents in the likelihood of enabling value-based payment success.

Sources:

HFMA’s executive survey: value-based payment readiness. Healthcare Financial Management Association; Humana, May 2015. http://www.hfma.org/WorkArea/DownloadAsset.aspx?id=30969

Value-based payment readiness; HFMA research highlight. Healthcare Financial Management Association, June 3, 2015. http://www.hfma.org/value-basedpaymentreadiness/

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

Role of Post-Acute Care in New Care Delivery Models

With new models for the delivery of health care, post-acute care provides — long-term care hospitals, skilled nursing  and rehabilitation facilities, and home health agencies — have an important role to play. They can help reduce hospital readmissions, improve care coordination and care setting transitions, and participate in the development of bundled payment approaches.

A new Trendwatch report from the American Hospital Association looks at the factors driving changes in post-acute care and highlights innovative examples of how leading post-acute care providers and health systems are adjusting and creating new business models to improve patient care.

A separate addendum report provides more background on Medicare spending by sectors within post-acute care and their patient characteristics. Medicare’s current fee-for-service system by post-acute care venue is also summarized.

Source: Role of post-acute care in new care delivery models. Trendwatch, American Hospital Association, Dec. 2015. http://www.aha.org/research/reports/tw/15dec-tw-postacute.pdf  Addendum: Background On Post-Acute Care. http://www.aha.org/research/reports/tw/15dec-tw-postacute-adden.pdf

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

BENCHMARKS: Five year trends for days in patient accounts receivable data for U.S. hospitals

TAKEAWAY: The median value for the accounting metric “Days in Patient Accounts Receivable” for all U.S. hospitals has increased from 2010 to 2014.

WHAT IS THIS METRIC?  WHAT DOES IT MEAN?

“This ratio provides a measure of the average time that receivables are outstanding, or average collection period.  High values for this ratio imply longer collection periods and thus a need for the hospital to finance its investment in accounts receivable.” (p. 74).

This source provides data from two different databases – one based on hospitals’ audited financial statements and the other based on Medicare cost reports.  Here are a couple of comparative data points from these two separate databases.

DATA FOR ALL U.S. HOSPITALS: Median values: Audited Financial Statements

  • 47.1 days  2010
  • 48.5 days  2014

DATA FOR ALL U.S. HOSPITALS: Median values: Medicare Cost Report Data

  • 52.3 days  2010
  • 57.2 days  2014

This data source has much more granular data according to characteristics of hospitals.  These metrics vary by region of the country – with the Northeast having the lowest values (this is desirable).  System-affiliated hospitals, as a group, have lower values (again, this is desirable) than independent hospitals do.

Source: Optum. (2015). Almanac of hospital financial & operating indicators: a comprehensive benchmark of the nation’s hospitals (2016 ed., pp. 74-79). Publisher’s website here: https://www.optumcoding.com/Product/43409/  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

What happens in a government shutdown?

September 30 marks the end of the federal government’s fiscal year, which makes early fall one key time when political contention sometimes brings the threat of a government shutdown.  Sometimes it remains merely a threat, but there were, in fact, shutdowns in 1995 (21 days) and in 2013 (16 days).  I am writing this post on September 30, 2015, and the New York Times is reporting today that it looks like a shutdown will be averted this year.

However, agencies prepared contingency plans for a 2015 shutdown – and you can read them on the website of the Office of Management and Budget here:  https://www.whitehouse.gov/omb/contingency-plans

Modern Healthcare reported that a short shutdown would probably not have much impact on health care providers.  Medicare reimbursement comes from a trust fund separate from annual federal appropriations.  Veterans Affairs hospitals were expected to remain open.

A particular challenge for 2015 would be trying to implement the ICD-10 coding system at the time that a government shutdown would hit.

Sources: 

Herszenhorn, D.M. (2015, Sept. 30). Senate passes spending bill to avert government shutdown. The New York Times. http://www.nytimes.com/2015/10/01/us/politics/government-shutdown-congress.html?_r=0

Kessler, G. (2011, Feb. 25). Lessons from the great government shutdown of 1995-1996. The Washington Post. http://voices.washingtonpost.com/fact-checker/2011/02/lessons_from_the_great_governm.html

Kutscher, B. (2015, Sept. 28). Prolonged government shutdown would affect providers. Modern Healthcare, 45(39), 4.  http://www.modernhealthcare.com/article/20150926/MAGAZINE/309269941/prolonged-government-shutdown-would-affect-providers

Conn, J. (2015, Sept. 28). CMS preps for an upload and a shutdown. Modern Healthcare, 45(39), 4.  http://www.modernhealthcare.com/article/20150926/MAGAZINE/309269940

Mercia, D. (2013, Oct. 4). 995 and 2013: three differences between two shutdowns. CNN Politicshttp://www.cnn.com/2013/10/01/politics/different-government-shutdowns/