• June 26-29
    Las Vegas, NV
  • Session Spotlights

    Finding a Better Way Toward Patient-Centered Medicine

    Vivian Lee, PhD, MD, MBA will discuss how the University of Utah has simultaneously re-defined treatment success, improved patient expectations and engagement, and created real and measurable cost efficiencies.

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    Session Spotlights

    Competition, Consumerism, and Choice: Building a Better Healthcare Mar...

    David Johnson will discuss how consumerism and related forces are driving new levels of competition in the healthcare market.

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    Session Spotlights

    Provider-Sponsored Health Plan Analysis of Competitive Landscape

    Paul Keckley, PhD will discuss the current status of provider sponsored risk activities and the success of provider sponsored health plans.

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    Session Spotlights

    What Drives Patient Loyalty? Analyses from Inpatient, Outpatient, and ...

    Thomas Lee, MD, CMO, Press Ganey will discuss strategies organizations have used that combine patient survey data and financial incentives to engage physicians in performance improvement efforts.

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    Session Spotlights

    Industry Trends and Credit Issues

    Martin Arrick will discuss the strategic shifts from fee-for-service to value-based care and how that shift is leading institutions to focus less on volume and more on cost, safety and quality, outcomes, and payment.

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    Session Spotlights

    Getting to High Reliability Healthcare While Generating Positive ROI

    Mark Chassin, MD will discuss a promising strategy to reach high reliability with the promising goal of efforts causing zero harm - delivering health care without ever harming patients or healthcare workers.

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    Session Spotlights

    Enabling Physicians to Deliver Value-Based Care

    Sachin Jain, MD will share strategies and examples to leverage health data to improve patient health. Dr. Jain’s work uses the understanding of actual patient experiences and outcomes and applying that knowledge to improve care delivery through appropriate use of medications, medication adherence, and advancing medical discovery.

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  • Why Price Transparency Is a Multiyear Strategy

    HFMA News

    June 27—Complicating factors mean that the effort to move toward price transparency is a multiyear process for health systems.

    A growing number of hospitals and health systems are looking to revise their pricing structures as a necessary component of providing price transparency.     

    Why Price Transparency Is a Multiyear StrategyJames Sink, managing director at RSM, said Monday at HFMA’s National Institute that hospitals and health systems should be prepared to take three to five years to develop “rational pricing,” which reflects their actual costs.

    “They need to acknowledge it’s a multiyear transformation and requires the engagement of many different stakeholders throughout the organization,” Sink said.

    Sink noted that HFMA has supported aligning prices, charges, and costs, and that hospitals may be in the best position to educate low-income, uninsured patients about their financial liability. Additionally, employers providing insurance and insurers selling coverage directly to patients have a similar price education responsibility.

    Contract Impact

    Sink was told by executives at Florida Hospital that they wanted to cut charges by 25 percent to 50 percent as part of their price rationalization and transparency push. But such reduction in charges could significantly impact hospitals in managed care contracts.

    “I think there is a lack of realization by executive leadership of the degree of sensitivity that still exists in contracts,” Sink said.

    Up to 20 percent of hospitals’ charges are still driven by charges from outlier provisions, stop-loss provisions, or pure percentage-based contracts, according to Sink.

    “It’s more significant than we think because we simplify in our minds that we get paid under DRGs, APCs, fee schedules, and lab schedules, but there’s still a lot of sensitivity out there,” Sink said.

    Sink warned the hospital that it would lose its profitability if it cut prices by 50 percent and did not restructure its managed care agreements. The complicating factor of needing to restructure such agreements has contributed to Florida Hospital’s lengthy price transparency effort, which began in 2013.

    Another complicating factor in price rationalization is the frequently wide price variation among hospitals within the same health system.

    Starting Points

    One of the starting points in the price rationalization process is learning where the organization’s transparency risk and revenue cycle risk lie. For example, an analysis of one of his clients found that it derived nearly 80 percent of its revenue from just 560 procedures among more than 25,000 line items.

    “This allows you to really focus in on those line items and strategies” in the context of price rationalization, Sink said.

    Another organization with up to 52,000 line items found 52 percent of them “had virtually no activity.” That entity benefitted from streamlining its revenue cycle to reduce the number of line items to 15,000.

    Organizations also need to start by setting priorities and defining what is most important as part of their price rationalization effort.

    Sink advocates a process that rebases all of an organization’s prices by using cost-accounting data, determining the break-even point on a gross revenue level, and understanding the relationship between costs and current charges.

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