Healthcare leaders reveal some challenging decisions they have made—and the payoffs that came from making the right choice.

Payer Shares Its Secrets 

juan davilaWhen we were forming our first accountable care organization with provider partners, we had to get past our history of fighting over money and start trusting each other. We decided that the only way to make that happen was for me to put our entire pricing engine—the black box that the providers had never seen—on the table. There was a risk that they would see our projected payments to them and then use that against us in negotiations. We just decided to run that risk. And both provider organizations took it in the spirit it was given. Then they started sharing, “OK, now that we see what you do… here is how we make our margin.” That is what allowed a positive circle of trust to start occurring.

Juan Davila is executive vice president for health care quality and affordability, Blue Shield of California, San Francisco.

Hospital Saves on Supplies

stephen bowermanThe work that we did with the Texas Purchasing Coalition around supply options and pricing has been rewarding and challenging. At first, there was a lot of concern and pushback from physicians and staff. We did many trials with new products to ensure everyone was comfortable that the new product was equivalent to the current product, and we would be able to administer it safely. From pharmaceuticals to implantable devices and commodity items, we have been able to deliver savings of 10 percent on our total hospital supply costs through strategic pricing negotiations with vendors and utilization best practices. The struggle that all hospitals face in obtaining everyday supplies at a reasonable cost must be addressed as we move into the core of the Affordable Care Act.

Stephen Bowerman is CFO, Midland Memorial Hospital, Midland, Texas.

Health System Increases Charity Care

bob lewinterOne of the most difficult decisions I have faced is how to operationalize a financial assistance program for our 16-hospital system. We needed to maintain our self-pay revenue flow while serving our patients appropriately and complying with New York State financial assistance laws. We created a centralized, standardized program that kept administration costs under control. By partnering with a credit bureau, we were able to use advanced, credit-based analytics. We were also able to use these data to facilitate telephone financial assistance applications, which reduced the cost of administering a large volume of paper applications. This helped us increase patient-requested charity care by more than 700 percent in a few years.

Bob LeWinter is vice president, Regional Claims Recovery Service, a division of North Shore-LIJ, New Hyde Park, N.Y.

Oncologists Form Medical Home

john sprandioOne of the most difficult strategic decisions we made was to forgo the pursuit of scale through forming a regional oncology independent practice association. Instead, we focused intently, within our own practice, on the operational and management deficiencies that were impeding quality and driving costs upwards. By standardizing care and reporting on performance metrics, we have been able to produce positive patient- and payer-centric outcomes. But doing so presented us with another difficult challenge: whether to continue funding these efforts in the absence of payer support. Our decision to do so led to the creation of the Oncology Patient-Centered Medical Home®

John D. Sprandio, MD, is chief physician, Consultants in Medical Oncology and Hematology, and chairman, Oncology Management Services, Drexel Hill, Penn.

Publication Date: Friday, March 01, 2013