Monday, August 27, 2012
www.enetshoppers.com online marketing: Financial Management | Operations & Business Manag...
www.enetshoppers.com online marketing: Financial Management | Operations & Business Manag...: More health systems bundling payments to cut costs More health systems bundling payments to cut costs Read more: More health systems bundlin...
Financial Management | Operations & Business Management
More health systems bundling payments to cut costs
More health systems bundling payments to cut costs
Read more: More health systems bundling payments to cut costs - FierceHealthcare http://www.fiercehealthcare.com/story/more-health-systems-bundling-payments-cut-costs/2012-08-24?utm_source=rss&utm_medium=rss#ixzz24mCC5RWo
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More health systems bundling payments to cut costs
Read more: More health systems bundling payments to cut costs - FierceHealthcare http://www.fiercehealthcare.com/story/more-health-systems-bundling-payments-cut-costs/2012-08-24?utm_source=rss&utm_medium=rss#ixzz24mCC5RWo
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www.enetshoppers.com online marketing: Hospitals Look To Become Insurers, As Well As Prov...
www.enetshoppers.com online marketing: Hospitals Look To Become Insurers, As Well As Prov...: Topics: Hospitals , Insurance , Marketplace By Roni Caryn Rabin Aug 26, 2012 This story was produced in collaboration with Michael D...
Hospitals Look To Become Insurers, As Well As Providers Of Care
This story was produced in collaboration with 
Michael Dowling, a burly Ireland native running one of New York’s largest hospital networks, is preparing to turn his business model on its head: He wants to keep his hospital beds empty, rather than full.
That’s because the North Shore-LIJ Health System, with 16 hospitals and more than 300 outpatient centers in Long Island and New York City, is laying the groundwork to be an insurer, as well as a provider of health care.
Like other hospital chains across the country, it’s under intense pressure from public and private insurers, as well as employers, to accept flat-rate payments for care, rather than reimbursements for every service. And that puts pressure on hospitals not just to manage costs, but to keep people well – in short, to act more like insurers.
“This is a huge, dramatic cultural shift,” said Dowling, president and CEO of North Shore-LIJ, who expects it will take several years to market coverage to the general public.
Once the system becomes an insurer, picking up the tab for a hospitalization rather than generating revenue from it, more resources will be devoted to preventive care, Dowling said.
“The last place I’ll want you to be is in the hospital,” he said. “I’ll be doing everything to get you to take care of yourself.”
Hospitals from Colorado to Virginia are exploring similar strategies spurred by rising costs and incentives in the health law. An estimated 20 percent of networks market an insurance product, including MedStar Health, serving the Washington-Baltimore region with Georgetown University Hospital and eight other facilities.
Another 20 percent are exploring doing so, according to a survey last year of 100 hospital leaders by The Advisory Board Company, a research firm.
“This trend is definitely picking up steam across the country,” said Chas Roades, the firm’s chief research officer.
Impact on consumers
Proponents say consumers would benefit from streamlined care and possible lower costs, but some also worry they could find themselves with fewer choices and limited access to outside experts and cutting-edge treatments.
“The idea of managing care for patients in a holistic fashion sounds great,” said Carmen Balber, who directs the Washington office of Consumer Watchdog. “The question is how it plays out. Are doctors given the freedom to make recommendations outside of cost calculations?”
Driving the change is the transition from fee-for-service payment schemes – which pay for each doctor’s visit, appendectomy or CT scan separately – to one that pays providers a global, or lump sum per-person-per -year. This will shift more of the financial risk of medical care from insurers to providers.
Once hospital systems are paid this way, “they’re sort of halfway toward being an insurance company,” Roades said. “The more hospitals take on risk and manage the care, the more they look like insurance companies. And ultimately you have to ask: Why do we even need an insurance company sitting between a health system and an employer?”
Of course, Americans rebelled against an earlier iteration of this model, known as managed care, when insurers ran the show.
“The big wild card is: how will patients view it?” he said. “Is it just going to be viewed as managed care 2.0 and engender the same kind of backlash, or will people engage with it because it can help them live healthier lives?
“I don’t think it’s a slam dunk one way or another.”
Managed care redux?
One change, experts say, is technology. Electronic medical records and a wealth of health databases that did not exist during the first wave of managed care can now guide appropriate medical treatment.
In the ’90s, “we were flying blind,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “Now we’ve got a whole wave of clinical algorithms to know what’s an appropriate referral.”
Several large hospital networks -- like The Ford Health System in Detroit and UPMC in Pittsburgh -- have entities that sell insurance policies. But that can complicate relations with insurance companies, and health systems like North Shore-LIJ, which depend heavily on contracts with commercial plans, would not want to jeopardize those relationships. Dowling said he might partner with an insurer to market a North Shore-LIJ insurance product; he envisions a hybrid system that would continue to contract with numerous plans in the future.
It can get tricky, though. UPMC, for instance, has been embroiled in a nasty legal dispute with Highmark, a large insurer, over its acquisition of a rival hospital network in Pittsburgh, though the parties reached an agreement in May. Texas Health, which experimented with health plans in the 1990s, found the business a distraction from their primary mission and have sold them off.
“Hospitals think this is a way to cut out the middle person, tailor care more closely and save a lot of extra money, but there’s a history to this and it generally doesn’t work,” said Howard Berliner, a visiting professor of health policy at NYU. “It sounds easy, but it winds up being incredibly complicated.”
Several DC-area health systems already market plans or self-insure their employees. Besides MedStar, Sentara Health Care, a Norfolk, Va.-based health system that owns Sentara Northern Virginia Medical Center in Woodbridge, Va., markets Optima Health, a health plan with 433,000 members. And Inova Health System, a hospital network based in Falls Church, Va., recently announced it would partner with Aetna to establish a jointly-owned health plan that will start selling insurance products in northern Virginia next January.
The transition is complex and fraught with risk for hospitals, experts say. Insurance is a different business from health care, and requires a different mind-set and skills; Hospitals will have to change the way they are run and radically alter the way they take care of patients, possibly taking on powerful interests – like doctors.
To become licensed as an insurer, a health system also needs to have millions of dollars in capital reserves, and must run a regulatory gauntlet to prove it has an adequate provider network and can deliver required benefits. And a hospital system cannot dip into the health plan’s reserves to fund new services.
“Many hospitals sold their insurance plans even though they were profitable because the hospital had better use for the money – the money sitting in insurance reserves could be better devoted to building the tower,” said Paul Ginsburg, president of the Center for Studying Health System Change.
‘GPS system for patients’
The North Shore-LIJ system has entered into several new full-risk contracts with Medicaid and Medicare to treat some of the neediest patients, who are elderly, poor or both (the two government plans make up the majority of hospital patients). Many struggle with chronic illnesses, and require non-medical support services, from health education to nutrition and weight management programs.
Under the old model, there was little if any reimbursement for these services. As an insurer, North Shore could direct resources to them. Some of the new initiatives are basic, like making sure patients get needed medicines, know which symptoms indicate a worsening condition and have a number they can call for advice 24-7 --and can get in to see a primary care physician before a crisis develops.
Others are high-tech. A team generates detailed color-coded maps of the service area that enables it to zero in on neighborhoods, even city blocks, that are hot spots of diabetes, hypertension, asthma and heart disease.
“I can look at a map and see the pockets of diabetes, and where the patients come from and say, ‘Wouldn’t it be great if we had some educational resource close to them?’” said Dr. Tracy Breen, chief of endocrinology, who is recruiting diabetes educators to target these communities and translating the best patient materials into Russian, Spanish, Korean and two dialects of Chinese.
Another problem hospitals have is they usually see patients only during a crisis. So North Shore-LIJ computer analysts are developing a “GPS system for patients” to determine why some patients are admitted so frequently: Do they resort to the emergency room because the doctor isn’t available in the evening? Does the doctor need backup on weekends?
“We can wrap services around the physician to coordinate with patients and make sure prescriptions are refilled and there is coverage outside hours,” said Dr. Jeremy Boal, chief medical officer, who has started a house calls program for homebound and frail patients. “That would allow physicians to focus on what they do best – being at the bedside.”
As insurer, the health system may also have to make tough decisions that rub physicians the wrong way or reduce their income, Dowling said.
“If I find out that instead of surgery there is a more efficient way of doing something with better outcomes and less cost – I have to manage the doctors,” he said, referring to a study that found that inserting stents into narrowed arteries was no more beneficial for stable patients than standard drug therapy although it generates enormous revenues for doctors and hospitals.
“You can blame the insurance company now,” Dowling said, “but if you are the insurance company, now you’re the one telling your own doctors to do something they don’t want to do.”
That’s because the North Shore-LIJ Health System, with 16 hospitals and more than 300 outpatient centers in Long Island and New York City, is laying the groundwork to be an insurer, as well as a provider of health care.
Like other hospital chains across the country, it’s under intense pressure from public and private insurers, as well as employers, to accept flat-rate payments for care, rather than reimbursements for every service. And that puts pressure on hospitals not just to manage costs, but to keep people well – in short, to act more like insurers.
“This is a huge, dramatic cultural shift,” said Dowling, president and CEO of North Shore-LIJ, who expects it will take several years to market coverage to the general public.
Once the system becomes an insurer, picking up the tab for a hospitalization rather than generating revenue from it, more resources will be devoted to preventive care, Dowling said.
“The last place I’ll want you to be is in the hospital,” he said. “I’ll be doing everything to get you to take care of yourself.”
Hospitals from Colorado to Virginia are exploring similar strategies spurred by rising costs and incentives in the health law. An estimated 20 percent of networks market an insurance product, including MedStar Health, serving the Washington-Baltimore region with Georgetown University Hospital and eight other facilities.
Another 20 percent are exploring doing so, according to a survey last year of 100 hospital leaders by The Advisory Board Company, a research firm.
“This trend is definitely picking up steam across the country,” said Chas Roades, the firm’s chief research officer.
Impact on consumers
Proponents say consumers would benefit from streamlined care and possible lower costs, but some also worry they could find themselves with fewer choices and limited access to outside experts and cutting-edge treatments.
“The idea of managing care for patients in a holistic fashion sounds great,” said Carmen Balber, who directs the Washington office of Consumer Watchdog. “The question is how it plays out. Are doctors given the freedom to make recommendations outside of cost calculations?”
Driving the change is the transition from fee-for-service payment schemes – which pay for each doctor’s visit, appendectomy or CT scan separately – to one that pays providers a global, or lump sum per-person-per -year. This will shift more of the financial risk of medical care from insurers to providers.
Once hospital systems are paid this way, “they’re sort of halfway toward being an insurance company,” Roades said. “The more hospitals take on risk and manage the care, the more they look like insurance companies. And ultimately you have to ask: Why do we even need an insurance company sitting between a health system and an employer?”
Of course, Americans rebelled against an earlier iteration of this model, known as managed care, when insurers ran the show.
“The big wild card is: how will patients view it?” he said. “Is it just going to be viewed as managed care 2.0 and engender the same kind of backlash, or will people engage with it because it can help them live healthier lives?
“I don’t think it’s a slam dunk one way or another.”
Managed care redux?
One change, experts say, is technology. Electronic medical records and a wealth of health databases that did not exist during the first wave of managed care can now guide appropriate medical treatment.
In the ’90s, “we were flying blind,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “Now we’ve got a whole wave of clinical algorithms to know what’s an appropriate referral.”
Several large hospital networks -- like The Ford Health System in Detroit and UPMC in Pittsburgh -- have entities that sell insurance policies. But that can complicate relations with insurance companies, and health systems like North Shore-LIJ, which depend heavily on contracts with commercial plans, would not want to jeopardize those relationships. Dowling said he might partner with an insurer to market a North Shore-LIJ insurance product; he envisions a hybrid system that would continue to contract with numerous plans in the future.
It can get tricky, though. UPMC, for instance, has been embroiled in a nasty legal dispute with Highmark, a large insurer, over its acquisition of a rival hospital network in Pittsburgh, though the parties reached an agreement in May. Texas Health, which experimented with health plans in the 1990s, found the business a distraction from their primary mission and have sold them off.
“Hospitals think this is a way to cut out the middle person, tailor care more closely and save a lot of extra money, but there’s a history to this and it generally doesn’t work,” said Howard Berliner, a visiting professor of health policy at NYU. “It sounds easy, but it winds up being incredibly complicated.”
Several DC-area health systems already market plans or self-insure their employees. Besides MedStar, Sentara Health Care, a Norfolk, Va.-based health system that owns Sentara Northern Virginia Medical Center in Woodbridge, Va., markets Optima Health, a health plan with 433,000 members. And Inova Health System, a hospital network based in Falls Church, Va., recently announced it would partner with Aetna to establish a jointly-owned health plan that will start selling insurance products in northern Virginia next January.
The transition is complex and fraught with risk for hospitals, experts say. Insurance is a different business from health care, and requires a different mind-set and skills; Hospitals will have to change the way they are run and radically alter the way they take care of patients, possibly taking on powerful interests – like doctors.
To become licensed as an insurer, a health system also needs to have millions of dollars in capital reserves, and must run a regulatory gauntlet to prove it has an adequate provider network and can deliver required benefits. And a hospital system cannot dip into the health plan’s reserves to fund new services.
“Many hospitals sold their insurance plans even though they were profitable because the hospital had better use for the money – the money sitting in insurance reserves could be better devoted to building the tower,” said Paul Ginsburg, president of the Center for Studying Health System Change.
‘GPS system for patients’
The North Shore-LIJ system has entered into several new full-risk contracts with Medicaid and Medicare to treat some of the neediest patients, who are elderly, poor or both (the two government plans make up the majority of hospital patients). Many struggle with chronic illnesses, and require non-medical support services, from health education to nutrition and weight management programs.
Under the old model, there was little if any reimbursement for these services. As an insurer, North Shore could direct resources to them. Some of the new initiatives are basic, like making sure patients get needed medicines, know which symptoms indicate a worsening condition and have a number they can call for advice 24-7 --and can get in to see a primary care physician before a crisis develops.
Others are high-tech. A team generates detailed color-coded maps of the service area that enables it to zero in on neighborhoods, even city blocks, that are hot spots of diabetes, hypertension, asthma and heart disease.
“I can look at a map and see the pockets of diabetes, and where the patients come from and say, ‘Wouldn’t it be great if we had some educational resource close to them?’” said Dr. Tracy Breen, chief of endocrinology, who is recruiting diabetes educators to target these communities and translating the best patient materials into Russian, Spanish, Korean and two dialects of Chinese.
Another problem hospitals have is they usually see patients only during a crisis. So North Shore-LIJ computer analysts are developing a “GPS system for patients” to determine why some patients are admitted so frequently: Do they resort to the emergency room because the doctor isn’t available in the evening? Does the doctor need backup on weekends?
“We can wrap services around the physician to coordinate with patients and make sure prescriptions are refilled and there is coverage outside hours,” said Dr. Jeremy Boal, chief medical officer, who has started a house calls program for homebound and frail patients. “That would allow physicians to focus on what they do best – being at the bedside.”
As insurer, the health system may also have to make tough decisions that rub physicians the wrong way or reduce their income, Dowling said.
“If I find out that instead of surgery there is a more efficient way of doing something with better outcomes and less cost – I have to manage the doctors,” he said, referring to a study that found that inserting stents into narrowed arteries was no more beneficial for stable patients than standard drug therapy although it generates enormous revenues for doctors and hospitals.
“You can blame the insurance company now,” Dowling said, “but if you are the insurance company, now you’re the one telling your own doctors to do something they don’t want to do.”
We want to hear from you: Contact Kaiser Health News
Sunday, August 26, 2012
Stocks & economy
By CHRISTINA REXRODE
NEW YORK — The stock market keeps getting tossed around by the Fed.
Stocks opened lower Friday but reversed course after a letter surfaced from Federal Reserve Chairman Ben Bernanke suggesting there was room for the central bank to do more to help the economy."There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Bernanke wrote to California Rep. Darrell Issa, a Republican, in a letter obtained by The Wall Street Journal.
The Dow Jones industrial average was down 30 points at its low but finished 100.51 points higher, at 13,157.97, its first gain all week. It was still the first losing week for the Dow since early July.
The Standard & Poor's 500 index rose 9.05 to 1,411.13 but also snapped a six-week winning streak. The Nasdaq composite index rose 16.39 to 3,069.79, ending five straight weeks of gains.
In a typically slow August, without much else to influence trading, investors have grasped for hints about what the Fed might do.
On Wednesday afternoon, investors pushed stocks higher after the Fed released meeting minutes that appeared to signal it was ready to take more action to prop up the economy.
On Thursday, stocks declined when a Fed regional bank president cast doubt on the idea, saying in an interview with CNBC that the economic recovery appeared to be gaining strength.
Then on Friday, Bernanke shook up the market again. His letter was in response to questions from Issa, the head of the House oversight committee, who had asked whether it was premature to consider additional steps.
The Fed has several options, including buying bonds, as it has done twice since the 2008 financial crisis, to try to lower interest rates and drive investors into the stock market.
Still, it's debatable how much future Fed action would help the market or the economy. On Friday, some analysts thought it strange that the market moved so decisively on just an inkling about what the Fed chairman might be thinking.
Major Market Indices
For the most part, the market has been hard to read this month. Without much news, trading volume has been low, and investors haven't had much conviction either way about the economy.
Of 18 trading days in August, only once has the Dow moved more than 1 percent. On five days, it has been virtually flat, moving less than one-tenth of a percentage point.
The turbulence likely lies ahead. The Fed's annual meeting in Jackson Hole, Wyo., is at the end of the month. German courts are set to decide next month whether the country can keep participating in bailouts for weaker European countries.
And the presidential election in November, which will help determine whether taxes go up and government spending is cut next year, could throw the markets into turmoil for weeks beforehand.
"People look forward to a lot of questions being answered in the months ahead," said Tony Fratto, a former aide to President George W. Bush and managing partner at Hamilton Place Strategies in Washington. "But they don't have answers today."
Economic reports that have trickled out this week have been mixed at best.
Europe, though quiet, still showed signs of tension Friday. Britain reported that its economy shrank in the second quarter, the latest confirmation that the country is still in recession.
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