During the most intense period of healthcare consolidation in recent memory (see the exhibit below), many hospitals and health systems are uniting through formal mergers and acquisitions. Meanwhile, their independent-minded peers are seeking scale and efficiencies through strategic partnerships.
For two Texas healthcare giants—Baylor Health Care System and Scott & White Healthcare—a mega-merger was the chosen approach. As the CEOs of the two organizations met over breakfast to discuss ways to collaborate, they agreed that half-measures would not work. “We determined that a full merger was the most efficient and appropriate way to address what we want to see happen in the transformation of health care,” said Joel Allison, CEO of Baylor Scott & White Health.
In contrast, when Missouri’s BJC HealthCare evaluated alternatives for the future, the merger option was swept off the table early on. Instead, BJC joined with three other large systems to create a collaborative focused on increasing efficiency for its members. “We look at this as a way to get many of the benefits and efficiencies of collaboration without a lot of the difficult issues of a full-blown merger,” said Sandra Van Trease, BJC’s group president.
Like most things in healthcare business, there is no single right way to add needed scale. Providers are learning as they go.
In the last few years, many healthcare providers have gone from asking “if” they should merge or partner with other healthcare organizations to “how” and “when.” While the level of consolidation varies from market to market, current strategic and financial realities (e.g., lower payment rates, reduced volumes, needed investments to obtain value-based payer contracts, the desire to coordinate care across the continuum) have become such that many small or independent providers are having a more difficult time remaining autonomous.
The need for scale. Independent hospitals still maintain important competitive advantages over large health systems, including strategic agility and a positive public perception (i.e., the ability to provide a warmer touch), said CFOs of four stand-alone hospitals who gathered for a roundtable discussion at HFMA’s annual conference in June. However, the CFOs pointed to a number of challenges that stand-alone hospitals face due to their lack of scale, including recruiting physicians and obtaining value-based payer contracts.
“I think it is possible for community hospitals to provide value and compete on the quality-cost equation,” said Harold T. Dupper, CHFP, vice president finance and CFO, Platte Valley Medical Center, Brighton, Colo. “However, if you don’t have the size, it is a little difficult to participate in some of the commercial products. The challenge is having enough size and clout to influence the way that commercial payers structure their products to recognize a hospital that is on the fringe of the market.”
Colorado launched its health insurance exchange on Oct. 1, and payers continue to put together narrow network options. “We’re not sure how the networks will develop yet or how we will fit into that,” Dupper said.
Meanwhile, in northern California, independent Enloe Medical Center is “dabbling with affiliations” to ensure patients have access to needed clinical services, said Myron Machula, CFO. For instance, when Enloe’s cancer center can’t handle certain types of treatment, the patients are referred to an affiliated health system.
“I don’t believe where we are, we can avoid looking at other kinds of associations short of full mergers,” said Machula. “So we’ve reached out tentatively. At some point, we may have to decide if these associations should become something larger.”
Consolidation pushback. On the other side of the consolidation trend is a concern about mega-mergers expressed by healthcare purchasers, payers, and in some cases, regulators. Those questioning the appropriateness of mergers are concerned that consolidation generally results in higher healthcare prices, pointing to recent Robert Wood Johnson Foundation (RWJF) research (RWJF, The Impact of Hospital Consolidation—Update, June 2012).
Joseph J. Fifer, FHFMA, CPA, HFMA president and CEO, points out that the Federal Trade Commission can—and will—challenge and block mergers that it believes would stifle competition and run up prices; in fact, it did so 17 times in federal FY11.
Beyond that, increased transparency of prices and out-of-pocket patient financial obligations will force large, consolidated providers to be competitive, regardless of their market penetration, he said. “Mergers only make sense when they drive a lower-cost offering to the market (as measured by total cost per member per month) and create a better value proposition for consumers.”
The leaders at Catholic Health Initiatives (CHI), one of the nation’s largest systems, would concur. “Our focus is about moving from focusing on total revenues to total value—meaning the value of population health management—and how we deliver that,” said John F. DiCola, CHI’s senior vice president for strategy and business development.
CHI was officially born in 1996 with the mega-merger of three Catholic health systems that united in the hopes of creating a national Catholic health ministry. Since then, CHI has grown to include 87 hospitals and other facilities in 18 states with annual operating revenues of $12.5 billion.
CHI’s goal is to build clinically integrated networks that allow patient care to be coordinated across a full spectrum of owned and affiliated providers. To this end, the pace of CHI acquisitions—of hospitals as well as ambulatory, post-acute, and physician providers—has picked up in recent years. Just this year, CHI acquired a six-hospital system in Houston and two medical centers in Washington state, where it also became majority owner of a physician-owned health plan. Last year, it became the sole sponsor of Alegent Creighton Health, the largest not-for-profit provider in Nebraska and southern Iowa.
Two growth strategies. CHI is primarily expanding in the markets it currently serves. For example, CHI expanded its presence in Kentucky in early 2012 when it consolidated its St. Joseph Health System (a major Lexington provider) with Jewish Hospital and St. Mary’s HealthCare (a dominant Louisville force) to form KentuckyOne Health, the largest system in the state. Several months later, CHI further consolidated its position in Kentucky by entering into a joint operating agreement with the University of Louisville for the operations of University Medical Center and the James Graham Brown Cancer Center as part of KentuckyOne.
At the same time, CHI plans to continue entering new markets when it finds the right mix of services, facilities, and capacity to create a major presence. The most recent example is its acquisition of the six-hospital St. Luke’s Episcopal Health System in Houston for more than $2 billion. “When we find those opportunities, either already in place or where we think there is the opportunity to build on a strong platform, then that kind of growth will make sense for us,” DiCola said. “We will continue to look for ways in which we strengthen CHI overall through some new market activity.”
Last year, CHI experimented with a different type of affiliation when it agreed to put roughly 20 percent of its hospitals in a new health system serving the Pacific Northwest via a joint venture with PeaceHealth. That deal fell apart this spring when CHI realized it was not going to achieve the value needed to make it worthwhile, DiCola said.
Even with a shared vision, a deal can be doomed if the parties are not aligned on how the deal needs to be configured to benefit both of them. “When you have not been clear about the value proposition to both organizations, you can find yourselves talking past one another when it comes to tackling some of the difficult technical issues that are always going to be there,” he said.
Growth decisions. Healthcare organizations that seek to be acquired by CHI are typically in need of capital for IT or other big-ticket expenses. Or they want access to CHI’s centralized corporate services, which include an integrated supply chain, human resources, revenue cycle improvement, and IT support. Initiatives to improve the efficiency and effectiveness of these support functions are expected to reduce costs by more than $400 million per year when they are fully implemented at the end of FY15. For example, supply chain initiatives, such as product standardization and inventory management, have cut supply costs nationwide by $16 million in the past year and are projected to save $70 million by FY15.
Importance of shared vision and standards. CHI gradually brings all of its new partners into the fold. “It doesn’t happen overnight, but we have a lot of programs and communications that help staff in all of our markets understand who we are—not just what we do, but how we do it,” DiCola said. “We also bring organizations into CHI by setting some standards and reinforcing those standards.”
For example, CHI’s national service lines set clinical standards with the goal of reducing variability and increasing the quality of care. National clinical programs in oncology, cardiovascular care, and hospitalist medicine are already setting care protocols, supply standards, and utilization guidelines. By collaborating with physicians to standardize clinical supplies, CHI is saving at least $4 million a year on cardiac rhythm management devices and $3 million on drug-eluting coronary stents. The next phase will target orthopedics, neurology/spine care, and general surgery.
In another initiative, CHI is asking all of its hospitals to improve quality and efficiency in clinical operations with an initial focus on emergency departments (EDs), inpatient care, and operating room utilization. Early results at the first two sites show what is possible: In Lincoln, Neb., a CHI hospital improved short-stay surgical preparation time by 13 percent, and in DesMoines, Iowa, a CHI hospital is discharging patients, on average, two hours earlier because of a change in the way discharge orders are prepared.
Completing a 10-month journey, Baylor Health Care system and Scott & White Healthcare finalized their merger on Sep. 30, creating the largest not-for-profit health system in Texas. The combined $8.3 billion entity, which is called Baylor Scott & White Health, has more than 43 hospitals, 500 patient care sites, more than 6,000 affiliated physicians, and a health plan.
Mutual benefits. Both were big, financially successful organizations before they decided to come together. However, as each organization started moving to population health management, their needs became as clear as their strengths.
Scott & White will see economy-of-scale opportunities in merging with Baylor, which is roughly double its size in assets and revenues. And Baylor will benefit from access to the Scott & White Health Plan, which covers more than 200,000 lives in 50 counties in central Texas.
Baylor’s strategic plan called for developing a mechanism to take on the financial risk associated with emerging payment models, such as shared savings, that emphasize population health management. “We considered whether to buy an insurance company, build one, joint venture, or partner,” said CEO Joel Allison. “Then we started our discussions with Scott & White and, of course, they have a very good health plan, and we said ‘That’s our opportunity.’”
Scott & White Health Plan pays hospitals and clinics on a capitated basis, so contracted providers have long been incentivized to provide care at the lowest possible cost. The health plan is among the highest-ranked Texas plans, according to the National Committee for Quality Assurance.
Like other savvy insurers, Scott & White uses its claims data to inform operations. “The health plan is the focal point of our population health management efforts because it has the claims data that show the cost per person, not just the cost per visit,” said Robert Pryor, MD, president, COO, and chief medical officer of the newly combined health system.
Scott & White uses its operational assistance group—composed of clinicians, operations executives, and finance professionals—to help departments use patient-level cost data and identify opportunities for improvement related to both quality and costs. Quality improvement initiatives currently under way target catheter-associated urinary tract infections and bloodstream infections, unnecessary radiation from procedures, and ED patient flow.
Joined forces. The two systems have worked together as members of the High Value Healthcare Collaborative (HVHC), a group of 20 health systems that are seeking ways to improve the value of healthcare services. HVHC members are collaborating to identify best practices to improve care and lower costs for total knee replacements, diabetes, and other conditions.
The merger takes the standardization of best practices to a new level. “We’re going to look at best practices by saying there’s a Scott & White way of doing things, there’s a Baylor way of doing things—which is the best?” Pryor said. “Or now that we have combined our resources, is there a third way that we can create?”
Board approval. While the benefits of merging were obvious to the two CEOs, they were not immediately clear to the two boards of directors. “There was some effort to convince board members that this was the right thing to do because they are community trustees and they hold these assets in trust for the communities,” Allison said. “These are big decisions, and they really had to work through whether this is the right thing.”
Before they signed a letter of intent to merge, leaders of the two organizations had to reach some key decisions, such as the name of the merged health system (Baylor Scott & White Health), the headquarters location, and the top leadership of the merged organization. After the letter of intent was signed, the next step was a culture survey of all employees in both organizations to determine whether the cultures of the two organizations would work well together.
“While we always believed our cultures were a good match, the survey results confirmed it,” Allison wrote in a memo to Baylor employees that reported the survey highlights:
The parent company (Baylor Scott & White Health) of the newly merged health system is based in Dallas with responsibility for finance, human resources, mission and ministry, compliance, and other corporate functions. In addition, a service company in charge of operations will be based in Temple, Texas.
Allison is CEO of both companies; Pryor is president, COO, and chief medical officer of the parent company and president of the service company.
Based in the Midwest, BJC Collaborative, LLC, is owned by four equal partners:
Together, the four systems own 35 hospitals in Missouri, Illinois, and Kansas and have annual revenues of $7.5 billion.
The Collaborative was organized in late 2012. Since then, it has added two nonowner participants: Blessing Health System in Quincy, Ill., and Southern Illinois Healthcare in Carbondale, Ill. “We are approaching this from the perspective of managing for the future, recognizing the challenges that we are all facing,” said Sandra Van Trease, group president.
Value of independence. The idea for the Collaborative sprang from BJC HealthCare’s internal decisions about its own path forward. Its leaders identified several priorities, including:
“We believe that health care is local, and it was important to us that BJC HealthCare not lose that. We respected the fact that our Collaborative member partners also had that vision,” Van Trease said.
The Collaborative’s board is composed of the chair, the CEO, and one other senior executive from each of the four systems that own it.
Shared expenses and practices. The organization has two primary goals:
All four systems already belong to the same group purchasing organization, and the Collaborative has identified additional potential savings opportunities for both commodities and physician preference items. “Certainly, each of our health systems is engaging physicians very aggressively around supply chain costs, and that’s a clear objective of what we can do in the Collaborative,” Van Trease said.
In clinical engineering, Collaborative leaders are exploring operational efficiencies—for example, centralized maintenance of CT scans, MRIs, and other equipment—as well as opportunities to save money through the larger purchasing power of the Collaborative. In its first six months, the Collaborative saved its owners “in the several millions of dollars related to clinical engineering opportunities alone,” Van Trease said— and that’s just the beginning.
Meanwhile, Collaborative groups are being convened in various specialties (human resources, compliance, clinical quality, population health, marketing, and others) to identify best practices and spread them from one organization to the others.
Lessons learned. The Collaborative approach requires hands-on participation from each partner’s top leaders, creating a new time-consuming priority for people who are already extremely busy. Likewise, work groups for specific areas require leadership from the top.
“They have to be staffed with the senior-most people in your organization,” Van Trease said. “If they’re not, they will crumble from the bottom.”
To date, the Collaborative has no staff or infrastructure. BJC HealthCare provides resources, including much of Van Trease’s time, until the new organization proves its worth and its staffing needs become evident. “We didn’t go in throwing a whole lot of bodies or money at this,” she said. “The objective is to save money, not add another layer, ideally. That’s our first focus.”
That said, maintaining the momentum of a virtual organization is a challenge that requires organization, diligence, and visibility. “The easy part is setting something like this up,” Van Trease said. “The hard part is when you start actually getting into the work, and focus on delivering the results that the boards expect.”
Ingalls Health System, serving Chicago’s south suburbs, is a one-hospital system with annual revenues of more than $300 million. Ingalls just opened its fifth outpatient clinic, and about 55 percent of revenues now come from outpatient services.
That means Ingalls is well-positioned for the future, said Andrew Stefo, senior vice president and CFO. “We think ambulatory is where the profitability lies, and it dovetails very well with the accountable care philosophy, which includes moving to a more cost-effective model,” he said.
He and other Ingalls leaders believe that a health system’s size should be measured not by its inpatient capacity but by the number of lives managed and the effectiveness of that management. They used that perspective to consider how to grow—and decided that merging with another organization held little appeal.
Strategic analysis. “If you’re looking to merge or to be acquired, you should do it to address the deficiencies that you see in your future ability to thrive,” Stefo said. “You shouldn’t do it just because you think it’s a neat idea.”
Ingalls’ analysis considered these factors:
Thus, for the foreseeable future, Ingalls’ board has chosen to remain independent. But that does not mean maintaining the status quo. “If you are going to remain independent, you are going to have to be more innovative than larger organizations,” Stefo said. “You cannot mirror someone who is bigger than you are and hope to survive that type of competitive landscape.”
Power of relationships. To address marketplace challenges, Ingalls has developed strategic relationships with other organizations. For example, Ingalls serves low-income neighborhoods that are associated with high 30-day readmission rates, leading to a nearly 1 percent penalty on Medicare revenues. Most of its local competitors have the same problem, which is exacerbated by the fact that patients bounce from one hospital to the next, making it difficult to track readmissions, let alone manage those patients’ care.
To address these issues, Ingalls teamed with four competing hospitals in one of the Community Care Transitions programs supported by the Centers for Medicare & Medicaid Services. Staff hired by Catholic Charities connect with recently discharged patients from all five hospitals to help avoid readmissions. So far, it looks to be effective, Stefo said.
In a bid to achieve scale without merging, Ingalls is also working with other independent systems across the Chicago market to build the Founders Network. Still under development, the Network’s goal is to create a vehicle in which several health systems can jointly enter into shared-savings contracts with commercial payers without violating antitrust laws.
Ingalls also recently became an affiliate member of Catholic Contracting Group (CCG), an alliance of six Catholic health systems that combine their purchasing power to get the best prices from their group purchasing organization. In addition to lower supply prices, CCG also helps its affiliates narrow the range of orthopedic implants and other physician preference items they purchase. The CCG relationship helps Ingalls communicate with its physicians about how the standardization of devices and implants both improves quality and reduces costs. In the first year, Ingalls saved more than $800,000 on physician preference items.
As the healthcare industry restructures itself, the forces encouraging consolidation are not likely to dissipate soon, and every organization’s board should analyze the options and set the strategic direction. A wait-and-see approach may allow competitors to decide an organization’s fate.
“As I have told our board, if you want me to sell the hospital, I could write a work plan for that. If you want me to merge, I could write a work plan for that. If you want me to acquire another provider, I could write you a work plan for that,” Stefo said. “And if you want to remain independent, there is a work plan for that, and we have to be very realistic about what that means.”
Even as Ingalls leadership works its stay-independent plan, Stefo constantly monitors the competitive landscape, prepared to pivot if changes occur that jeopardize it. “We are very sensitive to the fact that the local marketplace is very fluid,” he said. “You have to continually reassess what’s going on and whether the tactics that you had adopted 18 months ago are still appropriate.”
Lola Butcher is a freelance writer and editor based in Missouri and a regular contributing writer to Leadership.
Quoted in this article (in order of appearance): Joel Allison, CEO, Baylor Scott & White Health, Dallas. Sandra Van Trease is group president, BJC HealthCare, St. Louis. Harold T. Dupper, CHFP, is vice president finance and CFO, Platte Valley Medical Center, Brighton, Colo., and a member of HFMA’s Colorado Chapter. Myron Machula is CFO, Enloe Medical Center, Chico, Calif., and a member of HFMA’s Northern California Chapter. Joseph J. Fifer, FHFMA, CPA, is president and CEO, HFMA, Westchester, Ill. John F. DiCola is senior vice president, strategy and business development, Catholic Health Initiatives, Englewood, Colo. Robert Pryor, MD, president, COO, and chief medical officer, Baylor Scott & White Health, Dallas. Andrew Stefo is senior vice president and CFO, Ingalls Health System, Harvey, Ill., and a member of HFMA’s First Illinois Chapter.
Healthcare executives in the midst of expansion efforts offer these pieces of advice:
Be realistic. For organizations that choose to consolidate, an honest assessment of potential relationships is essential. Robert Pryor, MD, president, COO, and chief medical officer, Baylor Scott & White Health, said his system’s long history of collaborating with Baylor Health Care System bodes well for their merger. Equally important, however, is the fact that they were never enemies. “We never had a history of competing with each other,” Pryor said. “I think it’s difficult for two close neighbors that, historically, have had a competitive relationship, to suddenly become friends.”
Make communication a top priority. Different organizations may use different terminologies, and their protocols and processes may be so different that leaders cannot track what one another is talking about. And staff members assigned to implement a new vision may have even more trouble.
“Clarity is a key to success, and you cannot go into this assuming that anyone understands anything,” said Sandra Van Trease, the BJC Collaborative leader who is helping six health systems learn to work together. “You cannot underestimate the challenges of organizations the size and scale of all of ours cascading information across, between, and throughout. The big objective here is to try to make communication a strength, not a weakness.”
Monitoring success. Regardless of how organizations work together to build scale, successful relationships require that benefits accrue to all parties. But those benefits must be measured with a broad view over the long term.
In the collaborative model, for example, different benefits will accrue to each organization at different points in time, depending on the focus of a particular initiative, Van Trease said. “The parties don’t all expect to win at the same amounts at the same time in all the same respects,” she said. “And everyone has to be comfortable with that.”
Professional Credit: ‘The New Deal’ Approach to Healthcare Collections is Data-Driven and Consumer-Focused
Medxcel Facilities Management: Working Smarter to Make Organizations Safer
The Claro Group: Partnering for Performance Improvement
In this Business Profile, Larry Volkmar, a managing director in the performance improvement
practice at The Claro Group, discusses key strategies for improving
clinical and financial performance.
Deloitte: Taking Data Analytics to the Next Level
In this Business Profile, Christine Santos, chief of strategic business analytics for
Providence Health Services and Chris DeBeer, principal at Deloitte
Consulting LLP explain the value of enterprise data analytics.
PatientMatters: A Patient-Centered Financial Experience
In this Business Profile, Sheila Schweitzer, founder and CEO of PatientMatters, offers insights
on ways hospitals and healthcare systems can address rising patient
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
The Future of Online Patient Billing Portals
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
Revenue Cycle Payment Clarity
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Streamlining the Patient Billing Process
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Wallace Thomson Hospital Automates to Maximize Limited Resources
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
7 Steps for Building and Funding Sustainability Projects
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Key Capital Considerations for Mergers and Acquisitions
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
Key Capital Considerations for Mergers and Acquisitions
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.