At the Helm

Insights for the C-suite

Why health systems need to stop treating cost-cutting like that new dieting fad

Christopher Kerns , Emily Connelly December 14, 2017

Editor's note: This blog post was updated on May 17, 2018.

Managing health care margins isn't new, but it's certainly getting more difficult.

In 2017, hospital and health system profitability margins hit a low they haven’t seen in a decade. Cost growth continued to outpace revenue growth by a wide margin; the difference swelled from 0.7% in 2016 to 1.2% in 2017. What’s worse: we don’t expect these financial pressures to abate in the near future. Hospital and health system leaders are facing an unavoidable margin management challenge.

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5 things we've learned from state-level care transformation efforts—so far

by Yulan Egan and Kathryn Martucci December 11, 2017

While federal payment reform efforts often dominate the headlines, states have also been key players in experimenting with new payment models. Lessons learned from states offer leaders—health system executives and policymakers alike—opportunities to better understand how to approach delivery and payment system reform moving forward.

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3 mandatory bundles canceled, a 4th scaled back. Here's what you need to know.

November 30, 2017

On Thursday morning, CMS issued a final rule that canceled three mandatory bundled payment programs, significantly rolled back a fourth, and canceled a cardiac rehabilitation incentive payment model.

Specifically, the final rule:

  • Rolled back the Comprehensive Care for Joint Replacement Model (CJR) bundled payment model, which has been in effect since April 2016, from 67 mandatory geographic regions to 34 mandatory regions;
  • Canceled the mandatory Surgical Hip and Femur Fracture Treatment (SHFFT) bundled payment model, which had been scheduled to begin in CJR's 67 regions on Jan. 1;
  • Canceled the mandatory Acute Myocardial Infarction (AMI) and Coronary Artery Bypass Graft (CABG) bundled payment models, also known as the Episode Payment Models (EPMs), which had been scheduled to begin in 98 metropolitan areas on Jan. 1; and
  • Canceled the Cardiac Rehabilitation (CR) Incentive Payment model, a program designed to incentivize providers in 90 U.S. regions to increase patient utilization of cardiac rehabilitation, which had been scheduled to begin on Jan. 1.

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6 experts on what the 2018 MACRA final rule means for you

November 15, 2017

Since CMS released its final rule to implement year two of MACRA's Quality Payment Program (QPP) last week, our experts have analyzed the 1,000+ pages. They plan to share key insights and action items their upcoming webconferences:

  • An expert panel discussion on the strategic implications of the 2018 MACRA Final Rule on Monday, November 20 at 3 p.m. ET. (Register now to secure your spot).
  • A detailed analysis of the 2018 MACRA Final Rule and operational action items on Tuesday, December 12 at 1 p.m. ET. (Register now to secure your spot).

Here's a sneak peek of their reactions to the rule:

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To achieve real progress in reducing care variation, move beyond the 'bubble up'

by John Johnston, National Partner November 13, 2017

John Johnston

Many health systems wrestle with the hardest decisions of their annual budgeting this time of year and the conversation typically turns to cost cutting. Increasingly, many health systems find, as my colleague Sean Angert recently told me, that they've "addressed the obvious places to raise productivity or cut costs long ago. The efforts that remain are tough challenges."

Eventually, the budget conversation will rise to reduce unnecessary clinical cost. Many health systems suspect that the cost of treatments that do not improve patient outcomes can add up to millions of dollars, but aren't sure how to engage physicians effectively on making care more reliable, affordable, and accessible.

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Duke Health CEO's advice for young leaders: Take more risks

by Eric Larsen, Managing Partner, larsene@advisory.com November 10, 2017

Welcome to the "Lessons from the C-suite" series, featuring Managing Partner Eric Larsen's conversations with the most influential leaders in health care.

In this edition, Dr. Eugene Washington, Chancellor for Health Affairs at Duke University and President and CEO of Duke University Health System, talks to Eric about why he sees population health improvement as the system's "ultimate goal," his thoughts on the future of AMCs, and his phone-free approach to unwinding.

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10 takeaways on the 2018 MACRA final rule

Tony Panjamapirom, PhD , Rob Lazerow November 3, 2017

CMS on Nov. 2 released the 2018 final rule with comment period to implement the second year of MACRA's Quality Payment Program (QPP). Public can submit comment through January 1, 2018.

We've thoroughly analyzed the 1,653-page rule and presented comprehensive insights and action items to in our on-demand webconferences. Watch them now to:

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After the Charlottesville violence, UVA Health System saved lives. Two leaders share their lessons learned.

by Jennifer Stewart and Josh Zeitlin October 4, 2017

UVA Health System was on the front lines responding to the violence that erupted in Charlottesville on August 12. Advisory Board's Jennifer Stewart and Josh Zeitlin spoke with UVA Health leaders about their lifesaving strategies—including their decision in advance of the protest to free up hospital beds, their coordination with other local providers on how best to respond to casualties, and their monitoring of social media to learn about a terrorist attack in real time. This interview was conducted prior to the Oct. 1 mass shooting in Las Vegas.

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