Experts: Calif. hospitals likely will direct patients to clinics, physician's offices
Preparing for a wave of reforms and payment changes, California hospital leaders are shaking up their financial models: they're seeking fewer patients, not more volumes, the Los Angeles Times reports.
Medicare and Medicaid—which account for more than 50% of California hospitals' gross revenue—are adopting new provisions intended to better reimburse hospitals for patient outcomes. Hospitals also are being increasingly penalized for preventable readmissions and hospital-acquired infections.
Less care could be good care—but also less revenue
Incenting hospitals to deliver better treatment is overdue, according to Anthony Wright, executive director of the Health Access advocacy group. "We were inadvertently subsidizing bad care," he added.
However, a new payment structure requires hospital leaders to change their goals, according to Michael Rembis, president and CEO of Hollywood Presbyterian Medical Center. Hospital leaders must shift their mindset "from how many patients we have in the beds to how many patients we are keeping healthy and out of the hospital," he said.
"Everyone is scrambling on the hospital side to prepare for fewer patients," says Hospital Association of Southern California EVP Jim Lott, who notes that the new reimbursement model will "change the paradigm." According to the California Hospital Association, hospitals that fail to anticipate the change may be forced to eliminate services or shut down.
Keeping patients out
Seeking to keep patients out of the hospital, experts say hospitals likely will encourage more patients to seek treatment in clinics and physicians' offices. Meanwhile, patients who are admitted to the hospital may experience shorter stays.
Despite efforts to keep patients out of the hospital, one health care consultant told the Times that hospitals may not reduce patient volumes because aging baby boomers may require more hospital stays in the coming years. "No matter how much we think we can decrease hospital admissions, we are still going to need the beds," he added (Gorman, Los Angeles Times, 3/5).
Where health care is going
The Health Care Advisory Board has created a graphical look at how trends in pricing, cost, payer mix, and case mix will impact operating margins—and what hospitals must do to respond. Click to view the Health Care Advisory Board infographic in full size. Members can log in to download a PDF or order a poster in hard copy.