Monday, August 20, 2012

Wednesday, May 2, 2012

Forward Thinking - Healthcare Financial Management



This article is very relevant to your strategic planning efforts:

"An old rule of thumb is that a hospital needs (requires) 150 percent of depreciation in cash to maintain the physical plant and equipment, replace old technology and acquire new technology. Less than one in five hospitals met this standard in the most recently recorded fiscal year. More concerning, it is estimated that less than one percent of American hospitals broke even on the Medicare program last year.

Despite all of the political bickering in Washington, D.C. there is uncanny bi-partisan consensus to reduce federal support for the Medicaid and Medicare Programs for U.S. hospitals. Why? Two reasons; hospitals have minimal political support and the cost of healthcare has to be moderated. It is breathtaking to take in the political clout of the pharmaceutical industry. Medicare Part D was rammed through the George W. Bush Administration with no offsets and with extraordinary ease. American hospitals have not seen anything on this level since the passage of Medicare itself in 1965. With unlimited political contributions permitted by U.S. corporations to political campaigns and the extraordinary restrictions for political contributions from the hospital sector, we are simply outgunned in the political arena.

Medicare and Medicaid have to be tamed, and they will. The financial cost of Medicare and Medicaid are growing at a rate beyond the rate of growth of the U.S. economy and has been for decades. The natural conclusion of this growth is that our children and grandchildren will not have to worry about the cost of a gallon of gas. They will not own a car, house, clothes, food or anything else. The only thing that will be in the U.S. economy will be healthcare. Obviously, this will not be permitted. The cost of healthcare will be cut with an axe and with surgical precision. It will not be fair - it has to be done.

For those of you feeling warm and comforted by the Affordable Care Act (Obama Care), it is scheduled to remove $550B over the next ten years in federal support for the Medicaid and Medicare Programs. Of course, it is possible the U. S. Supreme Court will invalidate Obama Care in the June deliberations of the high court. Alternatively, if Governor Romney (R) is elected in November, he is committed to repeal Obama Care.

There are or have been other attacks on Medicaid and Medicare funding. Many state houses have already dramatically reduced Medicaid funding and hundreds of hospitals are reeling in an effort to balance their budgets as a consequence. And then there are the speculative proposals to whack away at the Medicare Program. When the congressional Super Committee was debating ways and means to reduce the federal budget late in 2011, the Obama Administration offered an additional $320B in Medicare cuts, over the next ten years, to move the process along. When the committee efforts failed, pre-agreed cuts hit many federal departments. Scheduled for January 1, 2013, under Medicare Sequestration, is a two-percent across the board cut to all Medicare payments to all Medicare providers. While the total is unknown, this is a serious blow to those communities with a heavy Medicare patient care load.

To illustrate that these cuts are by no means partisan, the point person for Republican federal fiscal policy is Wisconsin Representative Ryan (R) who just led the passage of a budget through the U.S. House of Representatives that includes $5.3T in budget cuts over the next ten years. The Ryan Plan provides some definition to the so-called “Medicare Voucher Option.” With respect to Medicare, the program would be privatized. Future beneficiaries will choose from a menu of private options and will not have the choice of the standard Medicare plan. Wealthier beneficiaries will get a small voucher and poorer beneficiaries will get a larger voucher. Vouchers grow at GDP+1%, whether or not Medicare does the same. The implications of this proposal are far reaching.

Under the Voucher Program, hospitals will be obligated to pursue payment from patients after the financial benefits of their “voucher” expire. This will call into question the tax-exempt status of U.S. hospitals. Where is the charity care?

With all of the political volatility in Washington, D.C., it is most likely that none of these cuts, as defined, will ever see the signature of a U.S. President on a piece of federal legislation. The people I trust are the leadership of the Healthcare Financial Management Association and they predict an eight to twelve percent cut in Federal support to the Medicaid and Medicare programs over the next five years. This will close hundreds of marginal U.S. hospitals and cripple essential community providers all over the United States. It is also predicted that 30 percent of U.S. hospitals will close over the next eight years."

Best,

Don Lyons

Monday, April 9, 2012

"At the Intersection" - Facilities, Architecture and Healthcare IT

Guest Blog Post - InterOPERANT
Ron Smith, President/CEO of Design At The Intersection, LLC

I just watched a wonderful video about an innovative Operating Suite at Bruges Saint John General Hospital that uses an "open theater landscape" concept. In the intro to the video, VK Architects make the provocative statement that over time architecture seems to become "dangerous" because it is "a static reality… a temporary answer to a question from the past".

Well, it's true… "Change Happens". And in a complex system like a healthcare facility it is challenging enough for a design team to know if a design solution will provide the organization with a platform for high performance. But even more so, what happens when a building is completed and occupied, and the organization changes how it works - or technology changes how information is accessed and shared?

I'm delighted to be teaming up in strategic partnership with Don Lyons and his group. Together InterOPERANT and Design At the Intersection, LLC have the knowledge and commitment to guide organizations through change with sustainable solutions.

Design for Healthcare ultimately involves three "domains"..
Architecture is part of the solution.. Designing Space
Care Delivery is another part of the solution… Designing Workflow
Health IT is another part of the solution…. Designing Connectivity and Access to Information

Said another way, a Human Organization lives and works in the Space, and is connected by Data. Design At The Intersection is all about knowing the important relationships among these three, collaboratively evaluating those in the context of whatever change issue is on the table, and setting design criteria with measurable outcomes in all three "domains" based on that knowledge. And then keeping the important relationships 'on the radar' during design, modeling, simulations, prototyping and even into activation and occupancy, so that the inevitable and necessary changes in one domain can be made with knowledge of the design intent of the whole system.

A direct application of this is in Designing for Patient Safety where the healthcare system has many inherent latent conditions (holes and weaknesses) that interact in complex ways and result in adverse events (Reason, 2000). Check out this article in Healthcare Design Magazine on a workshop that I participated in last October on this topic:


I welcome your comments here, or on my blog at www.designattheintersection.com.

Best,

Don Lyons
InterOPERANT




Monday, April 2, 2012

"CLINICAL INTEGRATION" - read this book!

Hi All,

Read this:

CLINICAL INTEGRATION: A ROADMAP TO ACCOUNTABLE CARE

Bruce Flareau, MD
Ken Yale, DDS, JD
J.M. Bohn
Colin Konshcack

My good friend Colin sent me this book a month ago. I read it cover to cover and I would say that it represents the most comprehensive treatise on the subject I have seen since the idea was introduced...

There is much ado about various models of clinical integration and how to deploy an ACO model in your organization. This quick guide will help you align your thinking and develop a structure that will flex in the direction of advancing regulatory thought.

Colin has a great advisory practice and certainly I would refer him to work with any of our clients.

Best,

Don Lyons
InterOPERANT

Wednesday, March 28, 2012

"Integrated care cuts hospital admissions by a fifth"

Several of our clients have requested that we continue our BLOG updates column on our site. With the deluge of new information, I had to think - who will read another BLOG? Well, we will respond with updates that provide strategic direction and a condensation of current mainstream beliefs all rooted in improving efficiency and operating improvements.

Over the last few years we have been very busy building a successful practice. In addition, I have been teaching at the graduate level, course work in healthcare management. Combining the two has yielded a constant source of new ideas and innovations that we propose will move our clients toward the higher aim of improvement - both fiscally and operationally. That is our guiding principle at InterOPERANT.

As an example, please read this recent article:

"Integrated care can cut hospital admissions for elderly patients by at least one-fifth, according to a new report from RAND Europe, Ernst & Young, University of Cambridge and the Nuffield Trust.

Researchers studied integrated care pilots in the U.K., two-year initiatives that explored ways of providing health and social care services to improve the health and wellbeing of seniors and patients with long-term conditions, dementia and other mental health problems or substance misuse. Most of the pilots were horizontally integrated, such as community-based services like general practices, community nursing services and social services, rather than vertically integrated with primary care and secondary care.

In instances where case managers coordinated care for senior patients at risk for hospital admission, outpatient visits dropped 22 percent and planned admissions dropped 21 percent, leading to a 9 percent decrease in costs, Health Investor reported.


"It is possible to reduce [utilization] and associated costs of hospital care, but it seems to be very hard to reduce emergency admissions," authors wrote in the report. Although they did see reductions in planned admissions and outpatient attendance, researchers found no evidence of cutting emergency admissions.

Staff also reported better patient care. More than half of the staff (54 percent) thought patient care improved compared to the previous year; only 1 percent thought it had got worse, according to the summary brief. Most of the improvements stemmed from process-related changes, such as using care plans more and new roles for staff.

Patients, however, didn't really notice a difference in improved care. In fact, 15 percent fewer patients reported feeling that their opinions and preferences were taken into account by social services or their care workers. Five percent fewer patients said they felt involved by their doctors in decisions about their care, and 9 percent fewer patients felt they were able to see the nurse of their choice.

"We believe that the lack of improvement in patient experience was partly due to professional rather than user-driven change, partly because it was too early to identify impact within the timescale of the pilots, and partly because, despite having project management skills and effective leadership, some pilots found the complex changes they set for themselves were hard to deliver than anticipated," authors wrote."

Read more: Integrated care cuts hospital admissions by a fifth - FierceHealthcare http://www.fiercehealthcare.com/story/integrated-care-cuts-hospital-admissions-fifth/2012-03-26?utm_medium=rss&utm_source=rss#ixzz1qQnjfhSp
Subscribe: http://www.fiercehealthcare.com/signup?sourceform=Viral-Tynt-FierceHealthcare-FierceHealthcare"

Ok, but how do we improve our revenue streams?

We believe that cutting inappropriate admissions is very important but only part of the answer. The other side of the equation is to improve throughput, and decrease the cost of the admission - eliminate the waste. Under this scenario admissions could actually increase by freeing up "virtual beds" already in your system.

For more perspectives on this, please contact us and we will happily meet with you.

Best,

Don Lyons