At the Margins

Our latest insight into health care margin improvement efforts

Think bad debt can’t be beat? These four tips will change your mind.

Cassie Wolfe September 22, 2015

As patient financial obligation rises, so does bad debt—and the work that comes along with it.

The surge in high-deductible health plans (HDHPs) means patients must pay for a larger portion of their care. But Financial Leadership Council research has found that as the financial obligation increases, the propensity to pay any portion of that obligation decreases—for all patients, at all income levels.

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Why the Canadian ICD-10 experience doesn't tell the whole story

by Lulis Navarro September 15, 2015

By now it’s almost certain that the ICD-10 transition will occur on October 1 as scheduled, barring any last minute congressional intervention. Lately we’ve been talking to many members preparing for the transition and a consistent concern is coming through loud and clear: productivity.

More specifically, many organizations expect their coder productivity to take a hit as they adapt to the new coding system, along with additional downstream implications such as backlogs, payment delays, and potential changes in labor requirements—including outsourcing or additional hiring.

Naturally when attempting to prepare for the likely hit on their revenue cycle, many organizations have looked for benchmarks to help estimate what the initial coder productivity decline might look like. Sadly, much of the available literature doesn’t provide any concrete answers and doesn’t alleviate much of the uncertainty. Let’s look at some prior examples.

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Four quick takeaways on readmissions penalties for 2016

Eric Fontana September 11, 2015

Now that CMS’s final rule has been released, we get the first glimpse at the pay-for-performance penalties that will apply for hospital inpatient payments in FY 2016.

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Why you need outpatient docs to tackle inpatient clinical variation

Dennis Weaver, MD, MBA , Chris Rowe, MHA September 9, 2015

Many of our consulting clients have invested in aligning their physician networks to advance key clinical and operational efficiency goals in the ambulatory setting, with models like clinical integration, and by and large they are seeing results—better outcomes and reduced costs. Unfortunately, all too often, these outpatient improvements are not translating to similar improvements in the hospital setting.

But health systems realize that getting inpatient clinical variation under control is imperative, especially with the continued adoption of population health management and risk-based payment.

Recently, we have been helping some progressive systems tackle this issue of aligning their CI network around inpatient care variation by setting up what we are calling a hospital efficiency improvement program ("HEIP"). While these programs are still relatively new, we have seen improvements in inpatient clinical standardization that once would have taken years now happening within the timespan of a few months.

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Your questions about Comprehensive Care for Joint Replacement—answered

by Natalie McGarry September 3, 2015

On Monday Aug. 17 we hosted a webconference on CMS’s proposed rule for the Comprehensive Care for Joint Replacement (CCJR) model, Medicare’s first mandatory bundling program.

The webconference covered all the basics, the CCJR episode, the target price, and the reconciliation process, in addition to gainsharing rules, program waivers, and beneficiary considerations. But the rule is complex and there’s a lot of misinformation in the media discussion.

To help you cut through the noise, here are the most frequently asked questions we’ve received about the rule.

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Why the CFO wants to put off value-based care—but shouldn't

Eric Passon, MBA , Austin Weaver, MBA August 20, 2015

The other month, we were meeting with a health system CFO to discuss his system’s transition strategy, and he told us, "Since we’re not trying to lead the market, we are just investing the minimum in value-based care so we don’t get left behind."

There’s fear of the unknown associated with being a first mover, and that is one of many reasons CFOs give us for why they are not investing in value-based care. Their reasoning is understandable, but in most cases we believe that it’s shortsighted. At this point, putting off value-based care is going to do more damage than taking it on now, and as strategic consultants, we are often in the position of making the case for value-based care investments to skeptical CFOs.

Here are a few of the most common excuses we hear from CFOs, and the arguments we make back.

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The key to good problem solving in the revenue cycle

Jim Lazarus August 12, 2015

Not long ago, we met with a CFO discouraged by how long it takes to identify mid-revenue cycle performance issues (i.e. documentation, coding).

Most recently, her organization’s case mix index had fallen, but it was hard to pinpoint why. Had the patient mix changed? Had a cardio trauma doc been on vacation? Or was a larger documentation problem emerging?

It took her team three months to identify that a decrease in CC/MCC capture rate—caused by a handful of physicians—was the issue. And, it took another three months to engage those doctors and fix the problem. The six month lag time came with a steep price tag and, as the CFO shared her story, it was clear that the leg work to find the cause of the issue was tedious and labor intensive.

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Why self-contracting doesn't mean going it alone

Charles Moran August 10, 2015

If you feel like you’re not getting the same value from your group purchasing organization (GPO) that you used to, you aren’t alone.

Our 2013 Hospital-Supplier Alignment Survey found 54% of hospitals and suppliers are reporting less value from their GPO partnerships. This is a downward trend from the more recent heydays, when it seemed that volume, created through group purchasing, was the best strategy to drive cost savings in health care’s non-labor spend.

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