PODCAST: Why Doctors on Salary is a Bad Idea?

Is Fee-for-Service a Public Health Threat?

This Video Contains Feedback from Doctors Who Are Against Doctors on Salary.

By Eric Bricker MD

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CITE: https://www.r2library.com/Resource/Title/0826102549

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PODCAST: Hospital Innovation Will Happen

By Eric Bricker MD

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1. 18% of Healthcare Workers have left their job since 2020.

2. 66% of ICU and Acute Care Nurses have considered leaving.

3. ICUs are so short staffed that they have had to run at 4:1 patient to nurse ratios… the normal is 2:1.

4. A Florida hospital spent $24 Million in 2021 on temporary workers to cover for labor shortages… normally they spend $1 Million per year.

5. Nurses average age is 52 and 19% of nurses are over 65 … the nursing workforce is older because younger people do not want the job.

Why?

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PODCAST: Low-Value Healthcare Remains Even Without Fee-for-Service Incentives

BY ERIC BRICKER MD

YOUR COMMENTS ARE APPRECIATED.

MORE: https://medicalexecutivepost.com/2021/05/27/activity-based-medical-cost-accounting-and-management/

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A Novel HYBRID Physician Reimbursement Model 2.0?

MODERN CONSIDERATIONS

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By Dr. David E. Marcinko MBA CMP®

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

EMERGING HYBRID PAYMENT MODELS

Current reimbursement structures involve the submission and payment of medical CPT® coded claims. But, some doctors feel they need to “up-code” to maximize revenue or “down-code” for fear of having a claim denied. Contradictory business goals bastardize the system into a payer versus provider tug-of-war, with patient care as a potential bargaining chip. Instituting quality metrics should be included in this equation and, a hybrid reimbursement model may be a viable option while integrating quality care metrics and reducing costs for all stakeholders.

CITE: https://www.r2library.com/Resource/Title/0826102549

This hybrid reimbursement system might use a two-payment structure.

For the first payment, claims would be paid at hypothetical rate of 60% within one week of submission.

The second payment, consisting of the remaining zero to 40% of some total maximum allowable fee, be paid quarterly. It would be based on scores like patient satisfaction and stewardship of healthcare resources by analyzing a statistically valid sample of patient encounters taken from the electronic health record.

Such a hybrid system would remove unnecessary steps, like re-submitting claims, and would lower the operational and administrative costs of claims processing. These changes would decrease operational cost and drive quality stewardship of the healthcare dollar.

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INVITATIONS: https://wordpress.com/post/medicalexecutivepost.com/246863

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Bundled Payment Model Success Unaffected by Type of Participation

BY HEALTH CAPITAL CONSULTANTS, LLC

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Bundled Payment Model Success Unaffected by Type of Participation


Historically, Medicare has offered value-based payment models to healthcare organizations on both a voluntary and a mandatory participation basis. Because voluntary participants could self-select into programs to reduce spending, it was assumed that they achieved greater savings than mandated participants, but until recently, no data had tested this.

However, a June 2021 study in the Journal of the American Medical Association (JAMA) found no difference in risk-adjusted episodic spending between voluntary and mandatory payment model participants. (Read more…) 

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PODCAST: Medicare Launched the First VBC Initiative 40 Years Ago!

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See the source image

BY DR. ERIC BRICKER MD

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Value-Based Care Happened 40 Years

Why Was Medicare Able to Bring About So Much Value-Based Payment Change in 3 Years (’83-’86) Compared to the Relatively Little Change That Has Occurred in the 11 Years Since the Affordable Care Act?

Watch the Video to Find Out.

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PODCAST: Improving Healthcare Outcomes & Supporting Providers in Value-Based Care

BY NIHCM

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Value-based care has the potential to transform health care, improving quality and access for millions of people, while addressing COVID-19 related disparities. As a result of the pandemic, many rural communities and communities of color face significant reductions in access to health care.

More than 8% of practicing physicians nationwide closed during COVID-19 despite 82 million Americans living in “health professional shortage areas.” The financial strain and burnout experienced by providers has fueled interest in accelerating the adoption of value-based care. As of 2017, only 34% of health care dollars were the result of value-based care payments. This low rate of adoption exists despite evidence tying payments to patient health outcomes and rewarding higher quality care leads to reduced costs.

This webinar brought together experts who are driving innovative initiatives, achieving excellence in health outcomes, and uncovering more effective ways to implement value-based care.

YOUR COMMENTS ARE APPRECIATED.

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INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

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PODCAST: Employee Health Plan MISALIGNMENT with Fee-for-Service Medicine

Current Partners Not Aligned With PLAN Goals

Dr. Boram (Kim) Park, MD - Dallas, TX | Internal Medicine

BY DR. ERIC BRICKER MD

Employee Health Plans Have Have a MISALIGNMENT Problem with the Current Fee-for-Service Healthcare System…i.e. Their Current Partners Are Not Aligned With Their Goals

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Health Insurance Carriers Are Misaligned by Owning PBMs That Make More Money in Rebate Kick-Backs When the Employee Health Plan Spends More Money on Expensive Prescription Drugs.

Doctors Are Misaligned When They *Are Employed by Hospitals That Tie Test and Procedure Ordering Volume to Doctor Compensation.

Hospitals are Misaligned When They Buy Physician Practices and Raise the Prices for In-Office Testing and Procedures by 300%… Even Though NOTHING Has Changed Other Than the Sign on the Door.

Accordingly, True Employee Health Plan Innovation is ALIGNMENT Innovation That Provides Care Outside the of the Status Quo Fee-for-Service System.

Onsite Clinics, Near Site Clinics, Direct Primary Care and Capitated Virtual Care All Provide Real Alignment Innovation for Employee Health Plans.

ASSESSMENT: Your comments are appreciated.

CITE: https://www.r2library.com/Resource/Title/0826102549

THANK YOU

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PODCAST: “Real ACOs Haven’t Been Tried Yet!”

What is an Accountable Care Organization?

DEFINITION: ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings.

Citation: https://www.r2library.com/Resource/Title/0826102549

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QUESTION: What happens when you’re a healthcare policy wonk and the pilot study for your pet program has failed miserably? 

ANSWER: You declare “Success!” in the editorial pages of the New England Journal of Medicine and demand that the program become nationwide and mandatory. I kid you not.  This is exactly what happens.

Thankfully, Anish Koka is vigilant and explains the blatant obfuscations and manipulations that the central planners engage in to have their way.

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And so, In this video, Anish and colleague Michel Accad, MD, will reveal the machinations, take the culprits to task, and discuss pertinent questions regarding health care organization: 

  • Does “capitation” reduce costs? 
  • Do employed physicians necessarily utilize fewer resources? 
  • What happens when a HMO and a traditional fee-for-service health system operate side-by-side in a community?
BMC and Accountable Care - Boston Medical Center

Enjoy!

PODCAST: http://alertandoriented.com/real-acos-havent-been-tried-yet/

Your thoughts are appreciated.

THANK YOU

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CEO ADMITS: Payments in Value-Based Contracts Were Actually Fee-For-Service Based

Fee-For-Service Physician Reimbursement Not to be Replaced Anytime Soon!

AN EXPOSE’

Image result for eric brixcker

By Eric Bricker MD

VALUE BASED CARE PROPONENTS?

Definition: Value-Based Care (VBC) is a health care delivery model under which providers — hospitals, labs, doctors, nurses and others — are paid based on the health outcomes of their patients and the quality of services rendered. Under some value-based contracts, providers share in financial risk with health insurance companies. In addition to negotiated payments, they can earn incentives for providing high-quality, efficient care.

VBC differs from the traditional fee-for-service model where providers are paid separately for each medical service. While quality care can be provided under both models, it’s the difference in how providers are paid, paired with the way patient care is managed, that provides the opportunity for health improvements and savings in a VBC environment.

DICTIONARY CITATION: https://www.amazon.com/Dictionary-Health-Insurance-Managed-Care/dp/0826149944/ref=sr_1_4?ie=UTF8&s=books&qid=1275315485&sr=1-4

MEDICAL EXECUTIVE-POST REVIEW:

Advocacy: https://medicalexecutivepost.com/2015/10/19/the-case-for-value-based-medical-care/

Status: https://medicalexecutivepost.com/2018/12/07/the-state-of-value-based-care-vbc/

Transition: https://medicalexecutivepost.com/2017/08/06/transitioning-to-value-based-medical-care-payments/

Physicians: https://medicalexecutivepost.com/2016/02/03/value-based-care-vbc-and-physician-performance/

THE SHOCKING EXPOSE’

But – During a Panel Discussion Captured on YouTube at the 2019 HLTH Conference in Las Vegas, Blue Cross Blue Shield of Arizona CEO Pam Kehaly Admitted that Only 10% of the Payments in Value-Based Contracts Were Value-Based.

So, what gives?

VIDEO: https://www.youtube.com/watch?v=PfAxOpyP-sA

Your thoughts are appreciated.

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Capitation? What Capitation?

Capitation? What Capitation?

headless-skeleton

By Ira Nash MD

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements.

Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

DOCTORS:

“Insurance & Risk Management Strategies for Doctors” https://tinyurl.com/ydx9kd93

“Fiduciary Financial Planning for Physicians” https://tinyurl.com/y7f5pnox

“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8

HOSPITALS:

“Financial Management Strategies for Hospitals” https://tinyurl.com/yagu567d

“Operational Strategies for Clinics and Hospitals” https://tinyurl.com/y9avbrq5

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Capitation?

Join Our Mailing List

What Capitation?

667b38c1cda2544ecd5459c58dbecdf1

By Ira Nash, MD

By Policy makers who are responsible for shaping how the federal government (the country’s biggest payer of health care services) pays physicians are pushing CMS on a rapid path away from traditional …

Capitation? What Capitation?

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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The Evolution of Care Bundles for Sepsis

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Latest complimentary resource reviews the rationale for bundled interventions

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[By Winifred Hayes RN PhD]

Sepsis is a deadly condition with a high mortality rate.

In an effort to improve survival in patients with sepsis, clinicians have adopted care bundles—sets of clear evidence-based practices that, when reliably performed together, result in better patient outcomes than when they are implemented individually. The Evolution of Care Bundles for Sepsis, the latest white paper from Hayes, Inc., reviews how and why sepsis care bundles came to be and discusses how they may evolve in the future.

“Sepsis may lead to death in a large percentage of patients who come to the hospital for treatment,” says David Wade, MD, FACS, Chief Medical Officer at Hayes, Inc., and the author of the white paper. “Rapid treatment within the first few hours of diagnosis is the key to reducing mortality and morbidity.”

Studies

Many studies have reinforced the importance of early diagnosis and rapid treatment. Dr. Wade explains, “In thinking about this, I am struck by a phrase that comes from the world of fighter pilots and aerial combat. When you talk to fighter pilots about dog fighting, a phrase repeatedly rises to top as the most important thing. That phrase is Speed is Life. Sepsis is similar; the sooner you realize what is going on and start doing something about it, the better chance the patient will have of surviving.”

Care Bundles

Care bundles enable clinicians to act quickly and strategically. In the United States, the most widely known sepsis care bundles are those published by the Surviving Sepsis Campaign. Interesting developments in sepsis management also are coming out of the United Kingdom, where clinicians have embraced the Sepsis Six 1-hour bundle, a set of 6 interventions to be performed within 1 hour of diagnosis.

Download your complimentary copy of The Evolution of Care Bundles for Sepsis today to learn more about how these practices are improving survival for patients with sepsis.

About Hayes, Inc.

ImageProxy

Achieving best patient outcomes by using proven medical technologies is the basis on which Hayes was founded. Our team of analysts and clinicians is a trusted resource for unbiased and timely research, evidence analysis, and guidance that drive effective health care and contribute to cost management. For over 25 years, Hayes has been empowering clinicians, health plan policymakers, and government agencies in their mission to make sound evidence-based decisions that balance cost, quality and patient outcomes.

More:

Conclusion

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How to Handle Incurred But Not Reported Health Insurance Claims [Webinar]

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Event Information
[Live Audio Conference – Webinar]
Dr. David E. Marcinko MBA
Presenter: Dr. David Edward Marcinko; MBA CMP™
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Conference Date: Tue, Apr 02, 2013
Aired Time: 1 pm ET | 12 pm CT | 11 am MT | 10 am PT
Length: 60 Minutes
Product Description
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Here’s How to Augment Bottom-Line Revenues by Understanding IBNR Healthcare Claims

One of most relevant financial issues of the PP-ACA and contemporary healthcare and medical reimbursement is known as Incurred But Not Reported (IBNR) healthcare claims. IBNR claims are an indirect result of prospective payments systems, the insurance industry and commercial risk contracts, and to some extent fee-for-service medicine. IBNR claims represent a risk and an opportunity for managed care companies, healthcare organizations, clinics, physicians and related medical providers alike.

Join this enlightening event presented by expert speaker Dr. David Edward Marcinko MBA CMP™ who will provide you detailed insights on IBNR claims so that you do not face any compliance risk and optimize your organization’s bottom line.

Here is a brief sample of some details you may learn:

  • Historical Review
  • What Is an IBNR Claim?
  • IBNR Problems for Healthcare Organizations
  • IBNR Claims — Management Volume and Consequences
  • Inadequate Cash Flows
  • Reserve Shortfalls and Fiscal Instability
  • Inaccurate Pricing
  • Administrative Cost Increases
  • Regulatory Sanctions
  • Managed Care Organization Exacerbation of IBNR Claims
  • IBNR from a Net Present Value Perspective
  • Tax Strategies for IBNRs
  1. IRS Rules and Regulations
  2. IBNR Tax Qualifications for Managed Care Organizations
  3. How Managed Care Organizations Intensify IBNRs
  4. How Does IBNR Affect Net Present Value?
  • IBNR Challenges and Solutions

1. Tax and Court Penalties

  • IRC Section 4958
  • Excess Benefit Definition
  • Taxes under Section 4958

2.  Tax Deductibility

  • Potential Solutions to the IBNR Challenge
  • IBNR Calculations and Methodology
  1. Actuarial Data Analysis
  2. Open Referral Analysis
  3. Historic Cost Analysis

Ask a question at the Q&A session following the live event and get advice unique to your situation, directly from our expert speaker.

Who should attend? All charge-master coordinators, coding personnel, billing and claims transaction personnel, internal auditing personnel; and financial and compliance personnel! And, all administrators, accountants, comptrollers, office managers, billing clerks and physician-executives, CFOs, CXOs and other interested parties.

IBNRs

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http://www.audioeducator.com/medical-coding-billing/ibnr_problems-040213.html

ORDER HERE FOR WEBINAR

ACO Opinion and Voting Poll

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Are Accountable Care Organizations Another Form of Medical Capitation Reimbursement?

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

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Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Useful Managed Care Provider, Staffing, Activity and Financial Trends

Part Two

By Dr. David Edward Marcinko MBA

[Publisher-in-Chief]

Dr. DEMIf you read this ME-P regularly or have read my earlier blogs, you know that I am writing a book on practice management for the private medical practitioner.

The Business of Medical Practice [Transformational Health 2.0 Skills for Doctors]; third edition: www.BusinessofMedicalPractice.com

Link: Front Matter BoMP – 3

A recent story in the Chicago Tribune on the difficult business life of private practitioners today reminds me that I need to keep my nose to the grindstone.

For example, according to the sanofi-aventis Pharmaceutical Company Managed Care Digest Series, for 2008-10, the following patterns and comparative trend information has been empirically determined and may provide a basic starting point for medical practitioners to share business management, facilities, personnel, and records information for enhanced success www.managedcaredigest.com

Mid-Level Provider and Staffing Trends

  • Mid-level provider use increased among multi-specialty groups, especially in those with more than half of their revenue from capitated contracts. Use also rose with the size of the practice and was highest with OB/GYN groups.
  • Medical support staff for all multi-specialty groups fell and was lowest in medical groups with less than 10 full-time equivalent (FTE) physicians. However, groups with a large amount of capitated revenue actually added support staff. Smaller groups limited support staff.
  • Compensation costs of support staff increased and the percentages of total operating costs associated with laboratories, professional liability insurance, IT services, and imaging also increased. Support staff costs increase with capitation levels and more than half of all operating costs are tied to support staff endeavors.

Managed Care Activity and Contracting Trends

  • More medical group practices are likely to own interests in preferred provider organizations (PPOs) than in HMOs and the percentages of groups with managed care revenue continues to rise. Multi-specialty and large groups also derive more revenue from MCOs than single specialty or smaller groups.
  • Managed care has little effect on physician payment methods that are still predominantly based on productivity. Physicians were paid differently for at-risk managed care contracts in only a small percentage of cases.
  • Most medical groups (75%) participating in managed care medicine have PPO contracts. Group practices contract with network HMOs more often than solo practices. Single-specialty groups more often have PPO contracts.
  • Capitated lives often raise capitation revenues in large group practices. Group practices are more highly capitated than smaller groups or solo practices. Almost 30% of highly capitated medical groups have more than 15 contracts and 22% have globally capitated contracts.
  • Higher capitation is linked with increased risk contracting. Larger groups have more risk contracting than smaller groups.

Physician Health

Financial Profile Trends

  • Medicare fee-for-service reimbursement is decreasing. Highly capitated groups incur high consulting fees.
  • The share of total gross charges for OB/GYN groups associated with managed care at-risk contracts is rising while non-managed care, or not-at-risk charges are declining.
  • Capitated contracts have little effect on the amount of on-site office non-surgical work. Off-site surgeries are most common for surgery groups, not medical groups.
  • Half of all charges are for on-site non-surgical procedures.
  • Highly capitated medical groups have higher operating costs and lower net profits.
  • Groups without capitation have higher laboratory expenses than those who do.
  • Physician costs are highest in orthopedic surgery group practices. Generally, median costs at most specialty levels are rising and profits shrinking.

Assessment

Obviously, the above information is only a gauge since regional differences, and certain medical sub-specialty practices and carve-outs, do exist.

Part One: Useful Managed Care Patterns and Procedural Utilization Trends

Conclusion

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How to Evaluate a Managed Care Contract Proposal?

ASK AN ADVISOR

To Join -or- Not to Join is the Question

By Staff Reporters

www.HealthcareFinancials.com

A new-wave West-Coast managed care organization (MCO) wanted a multi-specialty medical group to contract with them to provide medical services to all subscribers. Compensation would be in the form of a fixed-rate capitated payment system, a.k.a. per member / per month (PM/PM).

Ask an Advisor

The medical group practice administrator reviewed their request for proposal (RFP) very carefully, but is still not sure what to do. So, allow us to “crowd-source” as we ask ME-P readers, advisors and management consultants for a solution.

Key Issues

Facts to know for an informed PM/PM capitated reimbursement decision:

  • annual frequency or service-rate per 1,000 patients
  • unit cost of medical services per unit-patient
  • co-payment dollar amount per patient
  • co-payment frequency rate per 1,000 patients
  • variable cost per patient
  • under-capacity medical group office utilization rates, and
  • fixed overhead office-cost coverage [+/-].

Assessment

Visit: www.CertifiedMedicalPlanner.com

More case models: https://medicalexecutivepost.com/2010/03/12/healthcare-case-models-cd-rom/

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. What is your solution; accept or reject the contract proposal? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe. It is fast, free and secure.

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Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

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Take the Lost Managed Care Contract Challenge!

Illustrative Case Model – Are You CMP™ Worthy?

By Staff Reporterscmp-logo

The Hope Outreach Medical Clinic (HOMC) is a private, for-profit, single specialty medical clinic in a south-eastern state. It submitted its bi-annual Request for Proposal (RFP) to continue its current managed care fixed-rate contract. Upon review of the RFP, however, Sunshine Indemnity Insurance Company, the managed care organization (MCO), denied the contract request for the upcoming year.

Seeing Economic Estimates

In shock, the clinic’s CEO asked the clinic’s administrator to work with its legal team to develop a defensible estimate of economic damages that would occur as a result of the lost contract. The clinic intended to bring suit against the MCO for breach-of-contract. However, the administrator is not an attorney and is loathe to-enter the fray. After consideration however, he decided to assist in filing the Statement of Claim (SOC) because he realized that changes in patient services (unit) volume would be a valid economic surrogate. He then requested the following information from his controller, in order to develop a change in economic profit [damages] estimate.

Change in patient visits (unit) volume

  1. Fees (price) per patient (unit)
  2. Marginal (incremental) cost per patient (unit)
  3. Change in current fees (prices)
  4. Patient volume (units) affected

Key Issues:

  1. Fee (price) per patient (units) may be obtained from the fee schedule used by the MCO to pay HOMC.
  2. Marginal (incremental) costs per patient (unit) are approximated using variable costs.
  3. Higher cost payors exist because lower patient volumes raise the average cost per patient (unit) due to existing fixed costs.

Assessment

Medical management consultants, are you up to answering this challenge? We dare you to respond!

Visit: www.CertifiedMedicalPlanner.com

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com 

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Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

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Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

More about Healthcare Organizations [Financial Management Strategies]

Our Print-Journal Preface

By Hope Rachel Hetico; RN, MHA, CMP™hetico1

As Managing Editor of a two volume – 1,200 pages – premium quarterly print journal, I am often asked about our Preface.

A Two-Volume Guide

As so, our hope is that Healthcare Organizations: [Financial Management Strategies] will shape the hospital management landscape by following three important principles.

What it is – How it works

1. First, we have assembled a world-class editorial advisory board and independent team of contributors and asked them to draw on their experience in economic thought leadership and managerial decision making in the healthcare industrial complex. Like many readers, each struggles mightily with the decreasing revenues, increasing costs, and high consumer expectations in today’s competitive healthcare marketplace. Yet, their practical experience and applied operating vision is a source of objective information, informed opinion, and crucial information for this manual and its quarterly updates.

2. Second, our writing style allows us to condense a great deal of information into each quarterly issue.  We integrate prose, applications and regulatory perspectives with real-world case models, as well as charts, tables, diagrams, sample contracts, and checklists.  The result is a comprehensive oeuvre of financial management and operation strategies, vital to all healthcare facility administrators, comptrollers, physician-executives, and consulting business advisors.

3. Third, as editors, we prefer engaged readers who demand compelling content. According to conventional wisdom, printed manuals like this one should be a relic of the past, from an era before instant messaging and high-speed connectivity. Our experience shows just the opposite.  Applied healthcare economics and management literature has grown exponentially in the past decade and the plethora of Internet information makes updates that sort through the clutter and provide strategic analysis all the more valuable. Oh, it should provide some personality and wit, too! Don’t forget, beneath the spreadsheets, profit and loss statements, and financial models are patients, colleagues and investors who depend on you.ho-journal9

www.HealthcareFinancials.com

Assessment

Rest assured, Healthcare Organizations: [Financial Management Strategies] will become an important peer-reviewed vehicle for the advancement of working knowledge and the dissemination of research information and best practices in our field. In the years ahead, we trust these principles will enhance utility and add value to your subscription. Most importantly, we hope to increase your return on investment [ROI] in some small increment.

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Conclusion

And so, your thoughts and comments on this Medical Executive-Post, complimentary e-companion are appreciated. If you would like to contribute material or suggest topics for a future update, please contact me. Subscribers, have we attained our goals and objectives, as a work-in-progress in this preface statement?

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The Re-Emergence of Medical Capitation?

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Re-Thinking Fixed Payment Medicine 

[By Dr. David Edward Marcinko; MBA, CMP™ ]

[By Hope Rachel Hetico; RN, MHA, CMP™]

In February 2008, the industry leading California legislature passed “Welfare and Institutions” Code Section 14105.19. It required a 10% fee-for-service payment reduction to Medi-Cal physicians and mental healthcare providers. The new law took effect on July 1, 2008 and the rush seeking managed care capitated contracts was on. 

Capitation Back-in-the-Day

Yet, only a decade ago, astute physician executives and healthcare administrators thought it incredulous that they should accept pre-payment for unknown commitments to provide an unknown amount of medical care or health services. It seemed to create an unnatural and difficult set of incentives where fewer patients were seen, and less care rendered. It never equated to additional reimbursement. And, more than a few medical providers and healthcare facilities had a natural aversion to capitated, fixed payment or contractual medicine. It had always been associated with the worst components of managed care; hurried office visits and soul-less physicians.

Fixed Payments Re-Emerging

Today, the national conversion to a modified form of capitation financing is again re-emerging as a marketing force, and not merely a temporary healthcare business trend. More than 40% of all physicians in the country are now employees of a managed care organization that uses, or is re-considering, actuarially-equivalent medical capitation.

The Promise?

Has medical capitation reimbursement finally fulfilled its promise as a quality improving and revenue enhancing machination; or is it just another managed care cost reduction strategy that financially squeezes doctors and hospitals, and limits patient care and choice? To answer this query, one needs to review the Stark Laws.

Whole-Sale Medicine

Curiously, Stark Laws I, II and III were created to eliminate self-referral concerns potential leading to excessive medical care and fee-for-service payments. Ironically, these types of economic enriching paradigms of less-care were perfectly acceptable. Many, also never understood how a commitment to treat an entire patient population cohort could be made with little or no actuarial information. Hence frustration was the initial exposure of many medical providers to capitated reimbursement; also known as “wholesale medicine.”

Aligned Incentives

But, since inception, more modern medical cost accounting endeavors have gradually demonstrated that capitation has some advantages over traditional fee-for-service care. For example, it can create and align incentives that help patients, providers and payers by limiting their contingent fiscal liabilities. So, capitation in the current credit-deprived nationally economy is increasingly being viewed in a more positive way. More importantly, those healthcare organizations and providers that embrace it may thrive going forward; while those opposed may not!

Assessment

So, how should physician and nurse executives, administrators, CXOs, managers and financial advisors navigate these treacherous fixed-payment waters?  One sound approach is to rely on a leader in the hospital, medical clinic and healthcare administration publication industry.  Our 2-volume, 24 chapters, quarterly journal-guide is relevant to the entire fluctuating healthcare space and can be a valuable navigation tool – in these troubling economic times. 

Capitation “ReDux” – Part Two

MORE: Capitation & Actuarial Medical Econometrics

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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The Healthcare Financial Crisis

Will the Economy Affect the Healthcare Industry?

By Dr. David Edward Marcinko; MBA CMP™

Publisher-in-Chiefdr-david-marcinko

The past decade has seen the healthcare industry move toward, away, and then back to capitation which is a system that provides a: “1) Method of payment for health services in which a physician or hospital is paid a fixed amount for each person served regardless of the actual number or nature of services provided, (2) A method of paying health care providers or insurers in which a fixed amount is paid per enrollee to cover a defined set of services over a specified period, regardless of actual services provided, and (3) A health insurance payment mechanism that pays a fixed amount per person to cover medical services,” according to the Dictionary of Health Insurance and Managed Care www.HealthDictionarySeries.com

Others simply called it “wholesale medicine.”

The Last Decade

Only a decade ago, astute physician executives and healthcare administrators found it hard to believe that they would ever accept pre-payment for unknown commitments to provide an unknown amount of medical care. They argued that it would mean fewer patients seen and less care rendered. More than a few medical providers and healthcare facilities had a natural aversion to capitated, fixed payment or contractual medicine. It had always been associated with the worst components of managed care — hurried office visits and soul-less physicians.

Today’s Marketing Force

Today, a modified form of capitation reimbursement is re-emerging as a market force, and not merely a temporary healthcare business trend. More than 40% of all physicians in the country are now employees of a managed care organization that uses, or is re-considering, actuarially equivalent medical capitation in a reincarnated form.

Legislative Example:

For example, in February 2008, the California legislature passed Welfare and Institutions Code section 14105.19. It required a 10% fee-for-service payment reduction to Medi-Cal physicians and mental healthcare providers. The new payment reform law took effect on July 1, 2008. The Centers for Medicare and Medicaid Services plan to launch similar demonstration projects in Colorado, New Mexico, Oklahoma and Texas in January 1, 2009. The rush to find capitated contracts may be on once again.

Is Capitation the Answer?

Has capitation finally fulfilled its promise as a quality-improving and revenue-enhancing model? Or is it just another cost reduction strategy that squeezes doctors and hospitals, and limits patient care and choice during this financial crisis? To answer this query, one needs to review the Stark Laws.

Stark Laws I, II and III

Curiously, Stark Laws I, II and III were created to eliminate concerns that self-referral could lead to excessive medical care and fee-for-service payments. Ironically, this system, with its potential for self-enrichment, had long been perfectly acceptable. Many also never understood how a commitment to treat an entire patient population could be made with little or no actuarial information. Hence, frustration was the initial reaction of many medical providers to capitated reimbursement.

Capitation Advantages

Contemporary medical cost accounting has demonstrated that capitation has some advantages over traditional fee-for-service care. For example, it can create and align incentives that help patients, providers, and payers by limiting their contingent fiscal liabilities. In the current credit-deprived economy, capitation is increasingly being viewed in a more positive way.

Where Are We Heading?

How should physician and nurse-executives, hospital administrators, CXOs, managers and financial advisors navigate these treacherous fixed-payment waters? What’s the trend?

Micro-capitation … Is the Word … Is the Word!

What is it — and how does it work? Most importantly, how can a healthcare organization profit by it?

For the financial cognoscenti, micro-capitation [termed by Scott Shreve; MD – personal communication] focuses on medical conditions, or subsets of clinical conditions rather than traditional CPT® codes or MS-DRG patient activities. Care is delivered in discrete “self-organized medical care packages,” not patient care packages, as before. This creates a true healthcare marketplace where price, quality, and medical outcomes can be compared side-by-side, or provider-by-provider, or facility-by-facility.

New Level of Expertise

For instance, services provided by vertically or virtually integrated medical teams would enable a new level of expertise. High-volume providers would develop additional experience, which would enable them to introduce innovations and efficiencies in a classic economies-of-scale cycle. With additional delivery and outcomes experience, providers would be much more willing to put out a set-fee for a standard grouping of clinical services, because they would have confidence in their ability to deliver care for that price.

Still Capitation, but Better

Philosophically, this is still capitation, but it is distinguished by a finer “micro-capitation” at the medical condition level (lowest common unit of care delivery that can be measured), not the patient level. So, the healthcare delivery marketplace is again attempting to control economic risk — not with toxic credit default swaps [CDSs] or other financial derivatives, but by moving to micro-capitated “units” that can be understood, measured, and marketed.

Assessment

As the domestic corporate credit crisis escalates, the pharmaceutical industry implodes, the population ages, and the media focuses on the increasing number of uninsured citizens, a growing number of hospitals are shuttered, re-sized, or struggling onward with trepidation. Nevertheless, by considering alternate reimbursement models, like microcapitation and others, healthcare organizations might again thrive going forward.

More info: www.HealthcareFinancials.com print-journal and November 2008 – February 2009 issue: http://healthcarefinancials.com/Nov08Jan2009.aspx

Conclusion

Your comments are appreciated.

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies].

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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