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  • June 25‐28
    Orlando, FL
  • Session Spotlights

    Using Data to Improve Patient Outcomes

    Harlan Krumholz, MD will share his experience using data from EHRs and claims to improve care delivery. His approach focuses on “asking” the right questions and choosing measurable metrics that will illuminate operational improvements that result in better clinical outcomes at a lower total cost of care.

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    Session Spotlights

    Behavioral Economics and Better Results

    David Asch will focus on innovative ways of applying insights from behavioral economics toward the goal of improving individual health behaviors.

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    Session Spotlights

    Driving Transparency and Innovation in Health Care

    In this session, Eddie Segel will outline the forces and trends behind the industry-wide trend toward transparency and consumer empowerment.

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    Session Spotlights

    Medicaid and State Level APMs: Implications for Health Plans, Hospitals, and Physicians

    Francois de Brantes will discuss how states across the country are working to develop or implement payment and delivery system reform programs.

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    Session Spotlights

    Patient Centered Leadership for Accountable Care

    Susan Frampton will share successful strategies for developing a patient-centered leadership culture that creates the foundation for accountable care.

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    Session Spotlights

    A Total Systems Approach to Improving Patient Safety

    In this session, Tejal Gandhi, MD will address health care’s progress in the patient safety arena, the intangible dimensions of patient harm, and the strategies and tools needed to ensure that patient safety.

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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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