At the Margins

Our latest insight into health care margin improvement efforts

Have hospitals done enough to reduce costs?

John Johnston, CPA, MHA May 16, 2018

Editor's note: This blog post was updated on May 24, 2018.

Recent news about hospital margins has been increasingly worrisome. At the end of 2017, Moody's Investors Service predicted declining cash flow for hospitals while declaring a negative outlook for the industry. And in fact, in April they announced that the median hospital operating cash flow margin fell from 9.5% in 2016 to 8.1% in 2017, its lowest level in 10 years. The Medicare Payment Advisory Commission's latest report to Congress reported aggregate hospital Medicare margins fell to negative 9.6% in 2016 and suggested the 2017 run rate could hit negative 11%. After several years of steady margins for nonprofit hospitals and health systems, margins appear to be taking a downturn, and the issues are unlikely to be short lived.

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Do you provide non-emergency patients a pre-service bill? Maybe you should.

by Robin Brand and Trevor Goldsmith May 8, 2018

The unified (or consolidated) bill has captured the time and attention of many health system finance leaders trying to make their revenue cycle more responsive to consumers' expectations. Aggregating all the different fees from an inpatient stay together in one easy-to-understand format is a logical response to a consumer need. A consolidated bill eliminates the patient confusion that stems from the status quo: a series of bills full of medical jargon from various sources that may include the hospital, multiple physicians, and even lab and radiology.

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Get ready: Hospitals may have to post prices online—plus 9 other takeaways from the 2019 IPPS proposed rule

By Eric Fontana and Kenna Hawes April 25, 2018

Late yesterday, CMS released its Inpatient Proposed Rule for Fiscal Year (FY) 2019. Early reactions from stakeholders have been varied, with some health care stakeholders bemoaning "the death of Meaningful Use" while others praised the triumph of "Patients Over Paperwork" and the clear influence such efforts have played in this year's proposals.

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Three ways Medicaid expansion has affected revenue cycle performance

by Robin Brand and Lulis Navarro April 25, 2018

Since 2014, 32 states and the District of Columbia have expanded their Medicaid programs under the Affordable Care Act (ACA), thereby reducing the number of uninsured and improving access to care. Several studies have reported the substantial positive impact of the Medicaid expansion on overall hospital margins, mainly through a reduction in uncompensated care and an increase in Medicaid revenue. But using results from our 2017 hospital revenue cycle benchmarking survey, we have been able to take a deep dive into the impact of expansion on revenue cycle performance.

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Maximize your reimbursement with accurate HCC capture

Robin Brand and Jamie Landsman April 18, 2018

Hierarchical Condition Categories (HCCs) have been included in Medicare's methodology for risk adjusting provider payment since 2004. And while not new, they continue to be a topic of concern for many health systems. This concern is being driven by two larger industry trends: the tightening of margins, and increasing enrollment in Medicare Advantage (MA) plans.

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What do finance leaders have to do with high-reliability patient care?

John Johnston, CPA, MHA March 29, 2018

The challenges hospitals and health systems face in providing patient care with consistently high levels of safety and quality have never been more complicated, or more important. Inpatient admission data from hospital and health system members of Advisory Board's technology programs consistently show patient severity levels increasing over the past three years—indicating that hospital inpatients are sicker and that managing their outcomes is more difficult. At the same time, public awareness of safety failures—together with increased attention to quality metrics by consumers and payers—means that performance shortfalls are under greater scrutiny. Furthermore, publicly reported metrics such as rates of hospital-acquired conditions (HACs) and readmissions carry the potential for payment penalties imposed by health plans and government payers alike.

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'Change is coming': 4 takeaways on the HHS secretary's vision for our industry

by Trevor Goldsmith March 22, 2018

"Change is possible, change is necessary, and change is coming."

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3 reasons the Bipartisan Budget Act of 2018 might signal bad news to come for providers

Trevor Goldsmith March 14, 2018

With the benefit of hindsight, the Bipartisan Budget Act (BBA) of 2018 not only looks like the most significant health care legislation since 2015's MACRA—it also appears to validate the power of major advocacy organizations to push through incremental legislative change in an otherwise gridlocked political environment.

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