July 2015

By Dawn Samaris, Kaufman, Hall & Associates, Inc.   The Centers for Medicare & Medicaid Services (CMS) is taking a carrot-and-stick approach in its efforts to decrease medical costs, reduce preventable hospital readmissions, and improve care quality through value-based care initiatives. These varied efforts include payment penalties for issues such as hospital-acquired infections, and alternative payment models that offer providers incentives to deliver efficient and effective care. Sylvia Mathews Burwell, secretary of the U.S. Department of Health and Human Services, recently announced goals for Medicare payments over the next several years: 30 percent of payments will be made through alternative payment models such as accountable care organizations (ACOs) and bundled payments by the end of 2016, with the share expanding to 50 percent by the end of 2018 85 percent of fee-for-service payments will be tied to value-based or quality-incentive programs by the end of 2016, with the share expanding to 90 percent by the end of 2018 Recognizing that one program will not work for all, the agency continues to announce diverse initiatives aimed at attracting a range of healthcare providers to the new business model. For individual hospitals and health systems, CMS’s efforts could result in significant payment penalties or bonuses in coming years. Healthcare executives should be aware of the initiatives underway, project the potential range of impacts on their organization, and prepare accordingly. Sticks: Penalties for Failing to Meet Quality Standards CMS is using three major “sticks” that, taken together, expose hospitals to a Medicare payment…

By Jeff Hoffman, Health Care Expert Kurt Salmon Developing integrated, value-based care delivery models requires unraveling existing systems and processes and weaving together new ones in new ways. It’s an uncomfortable, disruptive effort with few guidelines, and most hospitals and health systems in the midst of it are finding it messy and complicated. The reality is that many will fail. Mergers and acquisitions to build scale won’t be enough to meet population health goals. Integrated care solutions call for larger, fiscally strong health organizations—not necessarily with shared balance sheets—to partner with one another and with other area providers to jointly develop systems of care that offer value-based solutions. Difficulties typically arise when goals lack focus or there is a reluctance to challenge current clinical processes and physician-referral patterns, and success won’t be dictated by who is involved or the structure and process they use. Ultimately, it will boil down to who can actually put these symbiotic relationships together—integrate cultures, technologies, geographies and financial circumstances—then deliver results and get paid for the value of these results. Untangle the Value Conundrum Two of the biggest issues a partnership must clarify relate to value: How will the network define value, and how do participants equitably distribute the value that is created among the participants? The answers form the framework onto which all other relationships are woven. Getting agreement among partners about how to define value creates a framework for these new partnerships and prioritizes goals. Is the partnership about making care more efficient?…

By Elliot Kaple, Lancaster Pollard   Customer reviews have become a powerful force in recent years, as everything from apartments to restaurants have seen the success of their business affected by online comments and ratings. With the introduction of its new star rating system, the Center for Medicare & Medicaid Services’ (CMS) Hospital Compare database now offers consumers a way to assess hospitals based on patient reviews. Some, however, are already suggesting the system needs revamping to include other quality measurements in addition to patient survey responses. Hospital Compare and the HCAHPS Choosing a doctor or hospital is no easy task. For years, patients have searched for useful tools that would allow them to compare hospitals and services to help ensure they are making the best decision. Originally established in 2002, Hospital Compare is a consumer-oriented website that allows prospective patients to compare hospitals in regard to the following categories: • Patient survey results. • Timely and effective care. • Readmissions, complications and deaths. • Use of medical imaging. • Linking quality to payment. • Medicare volume. The first category mentioned above, patient survey results, provides information from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. The HCAHPS survey set the national standard in 2006 when it began collecting and publicly reporting data to allow comparisons of hospitals in local markets and across the country. In addition to compiling and reporting data for thoughtful consideration in the comparison of hospitals, the survey hopes to establish incentives to…