Daily Briefing Blog

A crash course on 'health care jargon'


About 1,000 Advisory Board members signed up for last week's crash course on health care jargon with Michael Koppenheffer and Dan Diamond. The slides and the recording are now posted, but attendees had a number of follow-up questions that can be boiled down to...

  • Can you offer an index of the terms that you reviewed?
  • Where can we get those infographics that you used?
  • And will you offer a crash course in jargon (maybe a new set of jargon) again?

So the third question is the trickiest—we're still figuring out whether to schedule a sequel—but the first two are easily answered!

Listed out below are the 15 key terms that Michael and Dan reviewed, as well as links to the graphics from the presentation and other key resources to help demystify some of health care's most common (and commonly misunderstood) terms. 

Frontline accountability: This term refers to making staff at your organization feel personally responsible for the success of overall organizational goals, not for just their own specific work. (And as Michael stressed, it has nothing to do with accountable care.)

You can see this idea fleshed out in the HR Investment Center infographic to the left, which reviews five common challenges to instilling frontline accountability. Alternately, head to the frontline accountability topic page for further resources and research.

Accountable care: The guiding principle behind many of the delivery system and payment reforms that are underway. The belief that a provider organization needs to be accountable for making sure patients get the right care, at the right time, with the right follow-up steps. 

For an example of how this principle plays out in one service line, you can see the Oncology Roundtable's infographic on defining accountable cancer care, which reviews six imperatives that oncology leaders should be focusing on to drive greater value in cancer care. Here's our accountable care resource page, too. 


Accountable Care Organization (ACO): A group of providers—doctors, hospitals, sometimes even pharmacies—that have voluntarily joined together to manage the overall health of a certain population of people. If these providers do their job well, this coordinated approach to care will cut down on errors and repeat visits, and likely lead to better outcomes. And in theory, that will lead to lower-cost health care.

Some ACOs have been coordinated through private payers; for example, a number of providers have set up ACOs with United Healthcare. But more than 200 are being piloted for Medicare beneficiaries, and our January 2013 map of the newest Medicare ACOs offers a view of where they are. Check out the ACO topic page here.


Shared Savings: Medicare's flagship ACO effort is called the "Shared Savings Program." And here's the simple way to understand why: the ACO gets to share in the savings if it helps Medicare cut costs. Basically, the ACO is given certain quality and spending targets to hit; if it's successful, Medicare will reward the ACO and its participants.

The graphic on the left is taken from a larger poster that details Medicare payment innovations. And to learn more about shared savings, visit the topic page or check out the Health Care Advisory Board's blog on Medicare payment innovation, "Toward Accountable Payment."


Health care reform: A broad term that's often used as shorthand for the 2010 Affordable Care Act, which is frequently called "Obamacare" in the popular press. But "health care reform" also can mean the ongoing efforts at the state, federal, and programmatic level to change how health care is made available, delivered, and paid for. 

The Imaging Peformance Partnership chart on the left, "How Capitol Hill will impact your imaging business," offers a look at the effects of health care reform on one service line. Here's our topic page on health care reform, too.


Value-based care: This is similar to the concept behind accountable care, but as Dan explained, value-based care is more focused on the treatments themselves—the goal to make sure procedures are efficient and a good use of dollars. Essentially, cutting out the waste.

Under value-based care, doctors and hospitals are put at financial risk for how much patients’ health care costs and how good the health care actually is. And this notably differs from fee-for-service, which is the dominant form of provider payment. Under traditional fee-for-service, or FFS, providers get paid for providing services, so the higher your volumes, the better it usually was for your organization's revenue. That's starting to change with the value-based care push, though.

The infographic to the left is the full poster on Medicare payment transformation, which touches on a range of changes related to value-based care (and the similar concept of value-based purchasing): Penalties for readmissions, a push for pay-for-performance, and so on.


'Costs' vs. charges: The term "costs" seems simple, but the word gets bandied about a lot in health care settings, and speakers often can mean different things. 

During the webconference, Michael broke down some of the common reasons that "costs" get invoked and when they differ. For example, providers incur costs as part of their regular operations, Michael noted. There are the direct costs of providing care to patients, like drugs and implants. Alternately, there are the indirect costs of keeping their operations running, like electricity, janitorial services, and so forth. And then there are patients' actual "hospitalization costs," which refers to the payments that cover patient care.

The graphic to the left offers an example of several different costs in action—using a joint replacement procedure to illustrate the wide variation in, say, hospitalization costs and hospital input costs—and it's drawn from Michael's blog post, which goes into further detail on the six types of costs. (And why they differ from "charges," which are essentially hospital’s list prices for their services, but have been so scrutinized in TIME magazine and other forums in recent weeks.)


Avoidable readmissions: A readmission is when someone has already been in the hospital for treatment; he's been discharged; and then he needs to go back into the hospital again. Many of these readmissions are preventable, however, if health care providers are able to do a better job of making sure that patients are taking their medicines and going to check-ups after they leave the hospital.

What are four common drivers of readmissions? Take a look at the graphic to the left, which is drawn from the Cardiovascular Roundtable's study on Reducing Preventable Readmissions. You can find additional research and tactics at our topic page on readmissions.


Bundled payments: This is an arrangement where—instead of each player in health care getting a separate payment, as under fee-for-service—there’s just one payment for an episode of care. Dan offered an example during the call: a Medicare beneficiary undergoes a hip replacement, and the participating doctors, hospitals, and other providers receive a single payment and have to decide how to split the payment up.

You can see that concept illustrated in the graphic to the left, which depicts the difference between paying per service and paying per episode. The Health Care Advisory Board's study on Succeeding Under Bundled Payments reviews key tactics like how to build bundling-compatible relationships with physicians and design effective gainsharing models. Find more research on bundled payments at our topic page.


Medical home: One of the emerging models that stress more partnership between a primary care doctor, specialists, the patient and the patient's family. It's another way of implementing accountable care—often with the primary care provider at the center of the arrangement—leading the charge to make sure that care is accessible and being coordinated. (As Dan said during the call, think of all the specialists in a medical home as a football team, and the PCP playing the role of quarterback, getting the patient where she needs to go.)

The infographic to the left from the Population Health Advisor team reviews the benefits of the medical home under different payment scenarios; for example, how a medical home enabled a Minnesota health system cut appointment wait times, or helped hospitals partner with a New Jersey health insurer to lower ED visits. 

Want more? Here's our medical home topic page, too.


Clinical integration: This refers to a specific type of legal arrangement that allows hospitals and physicians to collaborate on improving quality and efficiency, while remaining independent entities. The physicians invest in infrastructure and performance improvement; in exchange, they get special permission to negotiate collectively for better payment rates or bonuses from insurance companies. (We realize; that's still kind of wonky. So here's a blog post that further demystifies clinical integration.) 

As Michael also noted on the call, these arrangements usually are against the law, but the government has decided in the case of clinical integration that the broader benefits for health care quality are worth the risk of prices going up. These arrangements also are crucial because health systems typically have just a few ways to align with doctors, and if they're not going to employ them outright, clinical integration is pretty much the best option.

Here's our topic page on clinical integration, which goes deeper on how to work with physicians through CI models.


Integration: But "clinical integration" isn't the same as plain-old "integration," which references what happens when organizations combine and their operations and strategies need to be aligned.

The infographic to the left details what integration looks like from a nursing perspective, and you can learn more about how to integrate nurse operations in this Nursing Executive Center study, which offers lessons from a number of cross-continuum organizations.

"Integration" also cuts across a few different areas of the hospital, so we have a number of resources on site to help you get deeper. Here's our topic page on cross-continuum integration strategies, as well as our topic page on mergers and acquisitions.


Health insurance exchanges: The exchanges, which were created through the Affordable Care Act, are basically online marketplaces that let individuals and small businesses purchase health insurance coverage. As Dan mentioned on the call, it's easy to think about them as like "Orbitz" or "Expedia"—but just for buying health care, not plane tickets.

Meanwhile, plans that want to participate have to make sure they offer minimum essential benefits—where an insurer has to cover certain treatments or providers—and each state gets to set what those minimum benefits are.

The graphic to the left is drawn from the Financial Leadership Council's recent white paper on navigating health insurance exchanges, which offers background on the exchanges that are supposed to be launching this fall and officially going online in early 2014. However, there’s some question about whether they’ll be up and running in time.


Medicaid expansion: This typically refers to a provision in the federal health reform law. And originally, the Affordable Care Act was going to expand access to Medicaid nationwide—every state had to raise the eligibility threshold to about 138% of the poverty line, which would have helped millions of poor people suddenly become eligible for the program—but the Supreme Court said that was unconstitutional and states should get to decide.

At this point, most states have signaled whether they'll be opting into the expansion next year or sitting out. (You can see your state's current status in our news team's tracker.) In some cases, it's been a tricky fight. Let's say the governor wants to expand Medicaid—but the State Senate says no. Who wins? Usually, the State Senate—the governor needs the legislature to authorize funding for the expansion, and without it, the expansion is a no-go.

And keep this in mind: If a state says yes to Medicaid expansion, there will be a number of ripple effects. Most immediately, lots of previously uninsured people will now have access to health coverage; if Florida ends up expanding the program, for example, that will affect more than 1 million state residents. And that would lead to a likely downstream surge in physician visits and hospital volumes.


Care transformation: So here at the Advisory Board, we call the process of how health care providers are going to get better, “care transformation." And it's arguably the biggest change that the American health care system has seen in many decades.

It's such an important development, in fact, that we've launched a new Care Transformation Center to track this industry shift. You can learn more and read their blog here.

The graphic to the left walks through three key elements of care transformation. Element #1 is care management: Taking care of patients before they become acutely sick, and ensuring that patients are cared for in the right setting and the right time. Element #2 is plan management: Using the tools of insurance companies, like co-pays and incentives, to make sure that patients get the right kind of care, at the right price. And element #3 is what we’ve called, partner engagement—which is just a fancy way of saying, “health care providers working together to improve quality and lower costs.”



Popular on the blog

Where the 'Best Hospitals' are

Certain (perhaps predictable) regions of the country tend to have a concentration of award-winning organizations.

 

Health spending is slowing. Jobs are growing. What gives?

One of health care's biggest mysteries: The cost curve is slowing. One of health care's biggest certainties: Jobs numbers keep growing. Read those two sentences again.

 

A year later, 13 governors still oppose Medicaid expansion

One year after the Supreme Court ruling, 13 governors have held strong in their opposition to the Affordable Care Act and its Medicaid expansion. And they're running out of time to change their minds.

 

If the Affordable Care Act had been struck down...

A world without the ACA is only a thought experiment today, but it didn't seem so hypothetical a year ago.