Blog Post

Risky reforms? How one Australian hospital executive pushed back against rule makers

December 6, 2017

    We hear time and again from our members that managing the impact of health reform is one of their key priorities. But this is often a tall task—health reform can be unexpected, and it is directed from policymakers and other payers who don't necessarily understand the complexity of the challenges that providers face on a daily basis.

    We've recently discussed how one of the first things that providers should do is to engage with policymakers. This helps to have their concerns heard and provides them a means with which they can influence the process. But providers shouldn't stop there, because engagement is only one part of an effective reform management strategy.

    Don’t accept new rules at face value

    Some reforms have good objectives. They may seek to improve quality, reduce costs, or eliminate barriers in the patient care continuum. Yet these goals are not always accompanied by well-designed rules. This is where hospital leaders should push back against these kinds of policies and inject their own extensive experience into the conversation.

    Showing rule makers that a reform can be detrimental to your organisation's core mission—delivering the best patient care—can be an effective means of shifting the reform discussion. But it's important to engage in a constructive way, utilising data or hard evidence to show why a new regulation may be inappropriate. It helps to build your credibility and to redirect the conversation.

    Tough but necessary discussions lead to a better outcome

    One hospital in Australia that we spoke with told us how they pushed back against one of their insurer's new and aggressive quality standards. The insurer wanted to reduce the incidence of hospital-acquired conditions using a complex formula, but the hospital's executives knew that the proposed rules would expose them to an unmanageable amount of risk.

    Before entering negotiations over the new rules with their insurer, this hospital contacted the author of the formula and then worked with the Australian Quality Commission on Safety in Healthcare. Both agreed that the insurer's proposed formula would not necessarily lead to improvements in patient care.

    With this data in hand, the hospital successfully renegotiated new rules with its insurer. It would adopt the formula, as long as it was amended to better measure the rate of hospital-acquired infection and included a cap on financial penalties. While the process wasn't easy, this hospital succeeded in reducing its financial exposure without compromising on its mission to deliver excellent patient care.

    This is just one part of a successful strategy to prepare for health policy reform, but it's a critical one. Our latest research briefing, Preparing for Health Policy Reform: Seven Lessons for Hospital Chief Executives, provides other tactics that hospital leaders can use to better prepare for and manage the impact of policy changes. It can help make the process less uncertain, and ensure your organisation's continued success into the future.

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