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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.
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.
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.
Medicaid and State Level Alternative Payment Methods: 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.
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.
Using Data to Improve Patient OutcomesHarlan 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.
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
James 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
“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.
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
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.
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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