Nearly 80% of physicians say EMR is not worth the cost. Read post.


At the Margins

Our latest insight into health care margin improvement efforts

The ACA from the inside: A system CFO’s perspective

Robin Brand November 20, 2014

Ann Pumpian is the CFO of Sharp HealthCare in San Diego, Calif. Read the first part of our two-part interview on her experience leading Sharp through the roll-out of the Affordable Care Act and how the health system has adapted to market changes.

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Year 2 of the exchanges begins tomorrow. Here's what we learned from Year 1.

Dan Diamond November 14, 2014

There are lots of questions surrounding what’s going to happen with the Affordable Care Act’s insurance exchanges. Will the Supreme Court upend insurance subsidies? Will CMS hit its sign-up projections?

And most relevantly, what will happen when the exchanges open for business on Saturday?

Those are all things we’re watching closely on the Daily Briefing, the Advisory Board’s flagship newsletter. (I’m the executive editor.) They're also major issues being tracked in the Health Care Advisory Board's ongoing meeting series, which I recently attended.

As we prepare for the ACA marketplaces’ second enrollment period, here are some lessons from the first.

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Will bundled payment cost you a bundle? Not if you do it right.

Harry Kirschner November 13, 2014

Bundled payment finally appears to be coming into its own. Between the rapidly expanding Medicare Bundled Payments for Care Improvement (BPCI) initiative and analogous private-payer efforts, it looks like as much as two-thirds of payment will be delivered through bundled contracts by 2020.

But not all providers are biting. Of the hospitals given the green light for participation in the early rounds of the recent BPCI expansion, more than a quarter decided to pass.

Why the cold feet?

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Restrictions on tax-exempt bonds complicate soft capital investments

by Corbin Santo November 4, 2014

We’ve spoken with health system finance leaders from across the country about how their organization’s capital strategy is shifting as the industry transitions from volume to value. One thing we’ve learned is that more nonprofit organizations are exploring alternatives to tax-exempt bond financing. In many ways, this trend is simply a result of the shift in underlying assets being emphasized in capital plans. But other forces in the bond market are also at play.

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Top questions from CFOs about CDI

Robin Brand October 22, 2014

With a shift toward risk-based payments and the transition to ICD-10, hospitals across the country are evaluating their clinical documentation improvement programs. When I meet with CFOs on this topic, there’s never a shortage of questions. I thought I’d share some of the most common questions I heard during the Q&A session at the recent CFO Forum:

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CDI in outpatient settings: Are you ready for the challenge?

Robert Linnander October 14, 2014

We’re starting to get a lot of interest in outpatient clinical documentation improvement programs, whether in the ED, another ambulatory setting, or in physician practices. The more we start taking on risk for managing an entire population of patients across the care continuum, the more important accurate documentation across the continuum becomes. An accurate chart inflects outcomes for patients and impacts reimbursement.

Focus on quality to protect your revenue: The evolving role of CDI

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Three reasons finance leaders are scaling back on GPO contracting

Harry Kirschner October 7, 2014

A lot of us have gotten used to thinking of GPOs as a safe and easy route to supply savings. But more and more hospitals are waking up to the hidden costs of putting their purchasing on autopilot.

The logic of group purchasing can seem so obviously “right” that you may never have thought to question it. But a lot of your peers are having second thoughts. By way of just one example, a recent Advisory Board poll showed more than half of CFOs reporting reduced value from their GPO contracts.

While aggregation is certainly appropriate for low-dollar, fragmented commodity purchasing, I’m seeing more hospitals than ever partnering with suppliers to self-contract on the larger, strategic portion of their spend.   I’m also seeing a lot of these partnerships produce true win-win contracts that deliver benefits well beyond price.

Just this year I’ve personally talked with executives from more than ten hospitals and health systems who are shifting big chunks of their spend to local negotiation.  And it’s not just huge organizations either.  We’re seeing all sorts of hospitals--small and large, integrated and standalone—taking a closer look at their aggregated purchasing and realizing just how much of it they can get better value on by going directly to suppliers.

Recognizing that we’re well beyond a trend, I’ve spent time asking hospital execs why they’re rethinking aggregation as their “go-to” cost lever. Here are their top three reasons:

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Your approach to cost could be costing you narrow network contracts

John Johnston September 30, 2014

I was recently talking to the CEO of a regional health system in the Southeast (the largest system in his market) who was shocked to have lost a narrow network bid from the region’s largest payer.

The shock came in part because the health system had just undergone a huge financial improvement effort, which positively impacted the system’s margins by over $100 million. The effort included reducing staffing levels, lowering supply costs, and improving the revenue cycle. You would think that this health system would be well-positioned to win a narrow network contract.

So where did they go wrong? They weren’t looking at cost improvement from the payer’s perspective. They corrected supply and labor costs, as well as revenue. However, the payer’s priorities included utilization and variation in practice, continuum of care resources, and care management capabilities, and none of these priorities were addressed in the $100 million improvement effort.

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