Robert FrombergEditor-in-Chief, HFMA
She is 83 percent happy, 9 percent disgusted, 6 percent fearful, 2 percent angry, less than 1 percent neutral, and not at all surprised. Mona Lisa, that is. At least, those are the findings of Dutch researchers using emotion-recognition software on the famously inscrutable smile of the woman in da Vinci’s portrait.
I read this finding in a news report a few months ago and have been thinking about it ever since: 83 percent happy, 9 percent disgusted, 6 percent fearful…where to begin with this? For one thing, we’d better hope our bosses can’t so easily ascertain what we’re feeling when we’re asked to trim another 10 percent from our expense budgets. Some feelings really need to remain private.
But if there is one question this finding begs more than any other, it’s this: Don’t some things transcend quantification? Wouldn’t we all like to think our emotions are so complex that they can’t be quantified? You say I’m 74 percent happy? Nonsense--I’m 76 percent happy!
Yet I can’t help but find that these seemingly silly research findings actually help me understand the Mona Lisa a little better. And it strikes me that healthcare finance is a great example of the need to apply analytical tools to things not so easily analyzed.
Jim AlexanderTechical Director, HFMA
The latest report on healthcare spending projections had more qualified statements than we’re likely to hear from politicians linked to Abramoff money. Not that it could have been otherwise, with the Medicare drug benefit just coming up to speed as various other Medicare Modernization Act and Deficit Reduction Act provisions continue to be assessed. More than at almost any time in recent past, the CMS researchers have demonstrated uncertainty approximating what healthcare providers endure year end and year out.
Does that mean the latest report is of “questionable” value? If you look past those numbers that are acknowledged to be off the mark (such as Medicare’s spending on physician services), you’ll find others that have to be taken seriously by healthcare planners, such as:
--Home health spending growth--The boomers’ push downward on the Medicare average age and improvement in relative health--A doubling, and almost tripling, of the number of Medicare beneficiaries in managed care plans by 2015
Scott MacStravic, Ph.D.
One of the many major challenges that healthcare organizations face is the internal need and demand by others for new and expensive IT investments. These relate to improving patient safety and overall quality of care, as well as enhancing efficiency and long-term cost savings. The challenge is how to obtain the necessary capital to be able to afford the necessary investments, since their ROI will often take years to show up, while the costs arise immediately.
But there is also a strong argument for “doubling up” on IT investments – not on the amounts of such investments, already at close to if not unaffordable levels, without outside aid – but on the purposes thereof. Most HCOs should begin, if they haven’t already, thinking in terms of IT’s uses in proactive health, not merely reactive sickness services. And IT is potentially far more useful and valuable, as well as far less expensive in this additional use as it is in traditional applications.
Jeni BellSenior Editor, HFMA
What makes a good hospital a great employer? We took a look at the hospitals that made Fortune magazine’s “100 Best Companies to Work For” list in 2006 to find out, as Fortune puts it, “what makes them so great.” Here’s what Fortune had to say about the two hospitals ranked in the top 20:
Griffin Hospital, Derby, Conn. (Rank: 4): “Money isn't everything. Despite pay scales that are 5 percent to 7 percent lower than hospitals in its area, Griffin received 5,100 applications for a range of 160 open positions in 2005, largely due to its top-notch reputation for patient care,” Fortune says.
Baptist Health Care, Pensacola, Fla. (Rank: 18): “New hires at this Southern hospital group wear an ID badge sticker for the first 90 days so that co-workers can offer a helping hand,” Fortune says. “To brush up on company culture, after five months they're invited to a day of skits, contests, and speakers.”
Six other hospitals made the top 100. Their attributes were a mixture of dedication to mission, great incentives, and innovative employee support. What makes your hospital a great place to work?
The battle is already waging over “full-service” hospitals vs. their “focused factory” rivals as specialty hospitals and ambulatory care facilities “skim the cream” of profitable patients and services, thereby threatening both the mission and viability of general hospitals. The specialty “narrow-service” rivals are often partially owned by the physicians who use them, adding financial to other incentives for steering profitable patients their way, and leaving general hospitals to deliver their full services to a low-profit segment of the market.
A similar battle is beginning to emerge over HSAs and other high-deductible health insurance plans that tend to appeal to the “healthy, wealthy and wise” segment of society, leaving the rest forced by their limited income, greater needs and lesser ability to manage their health to traditional insurance, which will become far more expensive due to “anti-selection.” Since healthy, wealthy and wise segments are far more profitable segments, we can be sure there will be plenty of insurance companies ready, willing and able to serve them, while fewer may persist in serving the rest of humanity.
But there is little discussion of the potential for hospitals to become “full-spectrum,” rather than just full-service.
Ray Lefton, CPAVice President, FinancePrinceton HealthCare System
I want to alert you to a new accounting pronouncement FIN 47 described here. For an example worksheet that can be used for the calculation, click here. This will likely become an issue and a headache for you when you go through your year-end audit.
I have a situation where we have a conditional agreement to sell the entire hospital campus (we hope to start construction of a new hospital next year), the sale price of the campus greatly exceeds the net book value, we have phase 1 studies completed and no environmental issues exist that require any sort of remediation. Like all buildings constructed before 1980 we have sealed asbestos insulated pipe fittings and asbestos in some floor tiles. Taking this to the abstract every asset has a limited life and at some future time will be discarded, razed and dumped. We are asked to estimate this conditional asset retirement obligation even though no issues exist in the foreseeable future, let alone estimatable. I am at a point of pulling a number out of the air that we will need 50 years from now. Do readers have any pearls of wisdom for us? Given our situation, I have been debating the applicability of FIN 47 to our year-end statements.
Casey NolanNavigant Consulting, Inc.
Watching the Rolling Stones perform during the Super Bowl half time extravaganza recently made me think about several seemingly unrelated things. My first thought was, are these guys still out there performing? They must be close to qualifying for Medicare! As I watched the Stones perform, however, I also thought about the transition of the “Boomer” generation into their “golden years” and what that means for healthcare organizations striving to deliver outstanding customer service (in addition to superb quality health care).
One of the things that occurred to me was that virtually every healthcare organization seems to compare itself to the wrong benchmarks in terms of how well they satisfy their customers. Regardless of which patient satisfaction system or vendor they use, healthcare organizations tend to compare their patient satisfaction scores with those of their “peers.” The only problem with this is that their real “peers” are not other healthcare organizations but other service providers! After all, how many hospitals does a typical patient use in their lifetime? So when consumers are assessing their level of satisfaction with the service they received from their healthcare provider, they are likely to be comparing that level of service to the level of service they received from other service providers they use—like Amazon.com, ebay, any of the major banks, the web travel or shopping services, all of the major upscale hotel chains, etc.
Just think of it in this way: you can go on line today, book a flight around the world, check in and print your boarding pass at home, shop for hotel and car deals on the web, fly across the world and use your ATM card to get money in virtually any city in the developed world. Yet, in a hospital, you often can’t get from the admissions department to radiology without having to re-register. And as for booking something on line or price shopping, well, let’s just say that healthcare providers lag the rest of the service industries. As a result, while a healthcare provider’s patient satisfaction scores may benchmark favorably to their peer group, it is likely that they fall far short in comparison to other service providers.
So my bold proposition is that instead of assessing your performance against other healthcare providers of similar size and case mix intensity, you should assess your performance against that of the other service organizations that your customers, especially those picky, persnickety, profitable “boomers” patronize. In health care we talk a great deal about satisfaction, but to paraphrase the Stones it is unlikely that our customers are getting any satisfaction.
Richard L. Clarke, DHA, FHFMAPresident and CEO, HFMA
Politicians, policy wonks, economists, and consumer advocacy groups are beating the drum of price transparency in health care. But achieving meaningful transparency is not just a matter of replacing the walls of the business office with glass.
In a consumer-directed health care system, consumers have more financial stake in their care decisions. And in order to make an informed decision, consumers must have understandable and comparable information on quality and price.
For most products and services, price information is fairly easy to communicate. Retailers advertise their prices, and through experience, word of mouth, and independent sources, consumers can judge the quality of the products and services they purchase. They can make a value assessment (that is, the relationship of price to quality) using readily available information.
In health care the model breaks down because understandable, comparable quality information is not readily available. And pricing is a mystery even to those of us who work in the field.
Some states have mandated that the price of certain procedures or diagnosis codes be published to facilitate consumer decision-making. This approach, however, ignores the very important impact of third party payment, deductibles, and co-insurance on the final bill. What the consumer wants and needs to know is the amount they will eventually pay for the services they receive.
So price transparency is not so much about the underlying charges for a service or episode of care, as it is about the total payment expected from the consumer after all other payments, adjustments, and discounts are applied.
In terms of commercial product and service strategies, the “new consumerism” means that consumers are better informed about their options, more demanding, less loyal, and generally a tougher sell. Progressive firms are investing in improving customer buying experiences, employing permission marketing, advising and educating consumers as much as persuading them. They are becoming “consumer-centric” not in the sense of just focusing on retaining and “developing” consumer customers, but also in seeking to understand and empower them to gain greater benefit from transactions and relationships.
In health care, this kind of consumerism is also increasing, but there is an entirely different kind being touted at the same kind. It reflects the belief (or perhaps merely the hope) among employers and insurers that shifting more of the responsibilities for making health and health care choices and sharing the costs of such decisions will end up reducing consumers’ use of and spending on care. Of course, since this is clearly aimed at benefiting payers first and foremost, it is difficult to accept that it is truly “consumer-centric.”
The misleading label of “consumer-driven/directed health plans” (CDHPs) means mostly that consumers are expected to pay a far greater share of the costs of such care, not that they are taking over the running of health care organizations and systems.
I left the HIMSS conference yesterday--a little earlier than 10,000 or 20,000 of the other attendees--but it's never that clean of a break. The airplane is a time to catch up on all the pieces of paper you pick up at a conference like this. I was reading the magazine Healthcare Informatics, which included a funny opinion piece about the HIMSS conference by Dave Garets and John Glaser, two of the healthcare IT industry's shining lights. (By the way, Glaser writes regularly for hfm magazine, including this month's cover story.) They made a series of what they called (with tongue in cheek, I should emphasize) "amazing predictions" about the conference. For example, they preducted that there will be many talks about the healthcare IT industry being on the cusp of a revolution and that vendors will tout their "interoperability" and that RHIOs (regional health information organizations) would be held out as the next great hope for connectivity...the punch line being, of course, that similar claims--in similarly idealistic tones--are part of every year's conference.
Garets and Glaser certainly were correct. Their amazing predictions came true. But I have to ask, What's wrong with that? What's wrong with one component of an annual conference being an annual dose of idealism?
Many of us at HFMA are getting ready for HFMA's annual conference--the Annual National Institute. I know a thing or two about the content, and I don't think I'm giving away any secrets to say that our conference, also, will have a dose of idealism.
David Brailer, National Coordinator for Health Information Technology, seems to have found the perfect way to describe how he would like the nation to adopt nationwide interoperable healthcare IT. Speaking yesteday at the HIMSS Annual Conference and Exhibition, Brailer told an overflow crowd that he and his son had recently seen a flock of geese migrating and thought it was the perfect metaphor for the IT initiative he leads. "There is no command and control," he said. "All move naturally together." He explained that "government plays a big part" in fostering an interoperable system, but his emphasis is on public-private collaboration, not "the Draconian top-down command that government can give." The federal government, he said, "will not build, own, or operate" the system.
Coming soon: results from HFMA's research on how healthcare financial executives view the government's role in encouraging IT adoption and helping overcome related financial barriers. We'll see whether you, too, favor a flock of geese in which "all move naturally together."
Tony ChenDirector, Product Innovation, HFMA
Recently I had a conversation with my friend and fellow blogger, Nick Jacobs, who is CEO of Windber Medical Center. Given that his hospital has received dozens of accolades and media mentions (featured on the Today show, Forbes Magazine, and the WSJ), I asked him about the secret of his success. What are the one or two things that they do really well? This is what he said: "My team is excellent at taking pure air, a.k.a., one of my ideas, and operationalizing it in a very brief amount of time. For example, we decide to buy a piece of equipment that is so new that most physicians in the area have no real understanding of its capabilities. The team puts together a business plan, adapts the building, begins an educational blitz of all of the physicians in a four-county area, establishes billing/coding solutions, prints appropriate forms for every aspect of registration and billing, identifies key physicians for interpretation of the diagnostics, puts together a marketing plan, hires the expert staff and launches the new modality within a period of three months after the decision was made to move forward."During the past year, the above description has effectively occurred with the launching of a 16 slice PET/CT; 3T-MRI; 4D ultrasound; a new minimally invasive surgery practice; sleep lab; respiratory center and a new OB/GYN practice with three new physicians. "Because we're under 100 beds, my team is small, but they also are very bright, highly skilled, and extremely agile. 'Hire five, work like ten, and pay like eight.'"In other words--a great team (and great leadership). And by the way, his team has also implemented Planetree, hired a hotel manager for their patient access area, and brought in a baker to bake fresh bread on the premises twice a day.
Jim AlexanderTechnical Director, HFMA
The President signed Senate Bill 1932, the Deficit Reduction Act of 2005 (DRA), February 8. The DRA will bring reductions in direct Federal spending of about $39 billion over the 2006-2010 period and approximately $99 billion from 2006-2015. The impact on Medicare is roughly $6 billion for 2006-2010 and $22 billion over the 10-year stretch, while Medicaid is cut approximately $5 and $26 billion for the respective time periods.
But, counted with Medicare’s numbers is Medicare DSH savings due to “clarification” of what can be counted as Medicaid services. The Congressional Budget Office says the Medicare savings on DSH are $1.2 billion for 2006-2010, $3 billion for 2006-2015. Add this to the spending reductions of Medicaid’s that may come to rest in large part on hospitals through “cost sharing,” benefit changes, and constraints on states’ Medicaid funding (read by hospital folk as more bad debt or charity) and the numbers hospitals should be concerned with are getting into the neighborhood of $4 billion for 2006-2010 and $16 billion for the longer haul, 2006-2015 attributable to Medicaid changes and the Medicare DSH reduction.
Hospitals part of the safety net, dependent on Medicaid, may find this justifies a close look at this legislation and factoring some more financial constraint into the budgets.
Click here to download the 181-page bill.
Read the HFMA News story about the DRA.
A comparison of two HFMA News stories in the last two days offers a striking commentary on the competing pressures and perspectives surrounding the financial well-being of hospitals, with yesterday's story seeming to paint a rosy picture of hospitals' financial health, and today's story painting a dire picture.
Today's story tells of Illinois not-for-profit hospitals protesting a bill that would require them to contribute 8% of operating costs to charity care--in essence, asking for more tangible, quantifiable evidence of community benefit. In response, the state hospital association has documented the significant community benefit already provided by state hospitals, and the association president warns that the law will push many hospitals already in the red to the brink of disaster, and will push many hospitals that are in the black into the red.
In contrast, yesterday's story summarizes the recent Standard & Poor's report that appears to depict hospitals' financial health in glowing terms, predicting "substantial improvement in credit quality" for 2006 and strong capital spending.
MarieAnn North, MBA, FACMPEDirector, Navigant Consulting, Inc.
There are some definite signs that the holidays are over. It’s not the dreary weather or the lack of daylight—it’s the time of year when we once again start focusing on filling all those open positions in our organizations. Labor shortages exist at all levels of health care—from entry level staff to academic physicians—it seems that overwhelmingly our labor force is finding more lucrative and less demanding positions, or early retirements!
I worry about the future of the health care labor force, and wonder if the work environment really has to be so unattractive and challenging. It’s then that I think of Mike. Mike was my first “real boss.” It was under his watch that I entered management and progressed to my first VP title. Mike shaped who I would become as an executive, and how I would view my healthcare career. A really great boss can do that!
Richard L. Gundling, FHFMAVice President, Product Development, HFMA
Constraining the cost of entitlement programs is the theme in President Bush's proposed 2007 budget. As part of his "American Competitiveness Initiative," he has stated that these entitlement programs are the biggest challenge to our long-term fiscal health.
Bush has proposed to squeeze $36 billion in savings from Medicare over five years. This is coming mainly from hospitals, nursing homes, and other healthcare service providers. The proposed budget has used MedPAC's recommendations of a 0.45 percent reduction in the market basket increases to hospitals. This is always the politically easy way to trim a lot of money from providers. Though Bush's proposed savings would come principally from cutting payments to providers, it also includes a mechanism that could cut Medicare more broadly if certain spending thresholds are met. This is to prod Congress to take additional action to slow Medicare growth. The President's budget proposal provides the start of negotiations with Congress, which has the final say over government expenditures. But the Medicare reductions that we have been warning about over the past several may be rearing their ugly heads.
The “medical tourism” market used to reflect the number of people, usually wealthy royalty, politicians, and business executives, who were willing and able to travel from foreign countries to the U.S. for medical care. This market took a severe hit, particularly among those from Islamic countries, after 9/11 when visa requirements became far more stringent, and often produced delays longer than patient prospects cared to wait. Moreover, less expensive and competitive quality options have increasingly become available in other countries, including Brazil, Thailand, and India.
One newer category of medical tourists is people within the U.S. who are willing to travel to distant cities, even to other states, in pursuit of the best care they can find.
David W. Young, DBAProfessor of Management, Healthcare Management Program, Boston University School of Management
During his 2006 State of the Union address, the President, as many predicted, threw down the healthcare gauntlet. As a result, during the current legislative session (and perhaps the next), we can expect to see some heated debates about how to contain rapidly escalating healthcare costs while simultaneously providing access to the healthcare system for the currently uninsured.
On the surface, the goals of expanding access and containing costs would appear to run contrary to each other, but both can be achieved with a little creative thinking. That creative thinking must address several contentious issues involving cross subsidization that no one has wanted to discuss for decades. Yet, these issues are the dry rot of the healthcare system; until we eliminate (or at least minimize) them, we will not be able to make progress in any meaningful way toward expanded access and reasonable costs.
In this posting, let’s take just one of these types of cross-subsidization: subsidies for nonprofit hospitals. (I'll cover more of these missing elements in the healthcare debate in a forthcoming article in hfm magazine.)
I was surrounded by obstetricians—at least 30 of them, probably more.No, this was not an anxiety dream about childbirth. I was sitting in a hotel conference room, and these obstetricians were talking about what could go wrong and what should go right in obstetrical care. It was 1986, and this group was one of several gathered by the Joint Commission on Accreditation of Healthcare Organizations and charged with recommending indicators of quality.
Today's focus on electronic health records is causing me to look back on quality-improvement efforts when the technology support was not, shall we say, robust...and to look forward toward what EHRs can do to improve quality.
In his State of the Union speech last night, President Bush was far more timid on healthcare issues than I would have expected. The realities of the political and fiscal environments that he is working under have tempered his proposals. There was no large-scale ambitious plan for health care but a series of proposals to help the market forces operate more efficiently. The major thrust of his comments focused on expanded health savings accounts, electronic health records, and limiting medical malpractice litigation. President Bush again is pushing for the private sector to control healthcare costs and improve quality, which he believes, will eventually trickle down to help the uninsured. Though he did not mention many specifics in his speech, the White House did release more details of President Bush health initiatives. These include making health insurance more portable and improving information on price and quality to make health care more transparent. He also called for a commission to examine Social Security, Medicare, and Medicaid and the impact from baby boomer retirees. Notably absent from his speech was any mention of Medicare Part D prescription drug benefit which became effective January 1. With the Administration struggling to implement this complex plan, senior citizens have been voicing their frustrations. Voters have immediate concerns over health care and, though President Bush didn't have anything to lose by making grand healthcare proposals, he does not want to lose a Republican majority in Congress.
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800-659-8883
revenue cycle solutions
www.perotsystems.com/revenuecycle
