INDUSTRY NEWS 3 COMMENTARY 8 HOSPITALS & IDNs … · 2017-07-19 · Aviation comes to healthcare ... Powered by Citi are service marks of Citigroup Inc. Citi and Citi with ... to

SEPTEMBER2013

www.HealthcareFinanceNews.comMedTech Media/Vol. 8 No. 7

INDUSTRY NEWS 3

� Investing in technology � Aviation comes to healthcare � Shifting to lean

COMMENTARY 8

� Transforming Medicare � Managing litigation costs � Recruiting entry-level workers

HOSPITALS & IDNs 10

� Hospital redesign � Project BOOST � Patient Safety First collaborative

COMMUNITY CARE 18

� Subscribing to your doctor � Moving beyond scope of practice � MGMA goes coastal

PAYERS 22

� HIX plan premiums

� Delaying employer mandate � Boosting HIX education

SOLUTIONS & SERVICES 26

� Accurate product pricing � Cost, quality and outcomes � Reverse auctions

TRENDS 28

� GPO evolution

PRODUCT TECHNOLOGY 29

� Handling audits

JOB SPOT 30

� Empowering support staff

Investing in technologyINDUSTRY NEWS 3

Best Hospital Finance DepartmentsBFD 14

Subscribing to your doctorCOMMUNITY CARE 18

Revenue limits, structural changes lower healthcare spending

Fast economic growth could derail optimistic outlookBy Mary Mosquera, Senior Editor

UNDERLYING CHANGES IN some healthcare cost factors appear to be tak-ing root and have some economists wondering if

the slowdown in healthcare spending growth may last beyond the near term.

Fundamental changes in the way consumers have obtained insurance

in addition to the economic down-turn have taken revenue out of the healthcare system and reduced the revenue growth that was available to providers, said John Holahan, a fel-low at the Urban Institute’s Health Policy Center.

“This has forced them to change in fairly significant ways. Is this permanent? It probably depends on what happens with these revenue constraints,” he said at a recent Altarum Institute forum at which a number of economists discussed

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The slowed growth of healthcare spending is due to a number of reasons, but no one knows how long it’ll last.

Nonprofit hospitals face tax exemption scrutiny

Legislation enacted to ensure facilities provide appropriate community benefit

By Tammy Worth, Contributing Writer

THE BENEFIT OF nonprofi t hospitals to their sur-rounding community has increasingly been coming under scrutiny – at least in relation to whether or not the benefi t is equal to their tax-exempt status.

This past spring, for example, Pittsburgh’s mayor, Luke Ravenstahl, sued the University of Pittsburgh Medical Center, the city’s nonprofi t healthcare behemoth, questioning the nonprofit status of an organization that boasts nearly $10 billion in operating revenue annually.

TAX SEE PAGE 11

As the defi nition of community benefi t changes, nonprofi t hospitals will have to shift what they’re doing to keep their tax exemptions.

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Payers, providers follow diverse ACO paths

All organizations must balance risk and reward

By Mary Mosquera, Senior Editor

S OME ACCOUNTABLE CARE organizations started long before the term was coined, with providers and payers form-

ing risk-sharing agreements to improve outcomes and reduce costs.

Participants in these legacy ACOs, like Fairview Medical Group in Minneapolis, can provide a snapshot of progress for

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Payers and providers are taking various routes into the ACO market.

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Featured blogMedicare’s most maddening policy There are tens of thousands of policies in Medicare’s policy manual, which makes for stiff competition for the “Most Maddening” award. But blogger Bob Watcher’s vote goes to the policy around “observation status,” which is crazy-making for patients, administrators and physicians.

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inFographiCthe healthcare costs of war The wars in Afghanistan and Iraq have cost billions of dollars over the last decade, but the spending won’t stop when the fighting does. Just how much money are we spending on healthcare because of war?

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1 Top 5 medical claim denials

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4 Disruptive Innovators: Physician house calls making a return

5 5 tips for attaining real-time claims

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Time to reach out…finallyHIX publicity blitz

launching soon

A n army is amassing – composed of payers, pro-viders, healthcare orga-nizations, businesses,

community and consumer groups – to help educate and guide a large part of the population to sign up for coverage on the health insurance exchanges.

One of the many criticisms of the Obama administration’s handling of the affordable Care act is the lack of informa-tion to help consumers understand the law and how it will affect them.

The HiX public-ity blitz is timed to reach individuals shortly before they will make decisions about their health-care, when they are most engaged. This is key because it’s critical that large numbers enroll in the exchanges in the first year or two, and that they attract many young, healthy adults.

With little time left before enrollment opens in October, insurers and other organizations expect to educate and convince the uninsured, and those with pre-existing conditions, to enroll when they have been excluded for so long.

For example, the Blue Cross Blue shield association, with 38 state and local health plans, including 14 owned by WellPoint, has set up a website with drugstore chain Wal-greens to promote and distribute informa-tion about the aCa in the retailer’s 8,000 stores. They’re encouraging uninsured individuals to shop and enroll in coverage through health insurance exchanges, and discover if they are eligible for subsidies.

Blue Cross and Blue shield of north Carolina has opened several retail offices in strip malls to offer outreach and, come October, enroll individuals in coverage. Cigna is working to promote

mosquera see page 4

on the recordBy Mary Mosquera, Senior Editor

Investing in technologyHospital IT budgets

absorbed by EHRs but other investments neededBy Paul Cerrato, Contributing Writer

HOsPiTal eXeCuTives Have never been frivolous when it comes to investing in technology, but as reimbursements shrink, the need to carefully analyze

each purchasing decision has never been more urgent.

given all the worthwhile – and not so worth-while – options, what choices are hospital administrators currently making?

since iT spend is largely taken up by meet-ing meaningful use and iCD-10 requirements, said Chantal Worzala, director of policy at the american Hospital association, hospitals don’t have much left over for investments in other things.

Capital expenditure per bed for iT grew by 62 percent between 2010 and 2011, Worzala said, whereas total capital expenditure per bed grew by only 2.6 percent.

TeCH see page 6

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The bulk of hospital iT spend is on EHRs, making it hard for hospitals to make other investments.

disruptive innovators: Aviation comes to healthcare Crew resource management

is not just for pilotsBy Stephanie Bouchard, Managing Editor

neW glOuCesTer, me – lean may be the biggest craze these days in creating efficien-cies in hospitals and health systems, but some facilities are having success with a process that got its start at nasa.

Crew resource management – also known as cockpit resource manage-ment – developed out of the aviation industry said richard Doss, senior advisor for performance break-throughs and strategy at lifeWings Partners, a Tennessee-based pro-vider of teamwork training.

it was used in aviation to institute procedures to avoid human error and the disasters that can sometimes happen because someone makes a mistake.

Over the years, Crm has been adopted in a number of other industries. The healthcare industry began showing interest in the process about 12 years ago, said Doss, who has worked with a number of hospitals to introduce and train staff on Crm.

Crm is based on interpersonal communi-cation and decision making – qualities that, historically, are alien in many clinical settings, Doss noted, which means that instituting the

process often means changing a department’s or a facility’s culture.

at memorial Health system’s six hospitals in south Florida, surgeons and anesthesiologists had some concerns about Crm, said Joseph loskove, mD, the system’s chief of anesthesia.

mainly, they were worried the debriefing tool that was being established in the operat-ing rooms as a result of using Crm would add

time in the Ors. it had the oppo-site effect. using the debriefing tool has made surgeries more efficient because less time is spent having to leave the sterile environment to obtain additional needed instru-ments or assemble equipment, loskove said.

Overall, memorial has seen improved quality and safety, patient experience and satisfaction and

improved employee and physician satisfac-tion, loskove said.

The surgical areas at the university of new mexico Health sciences Center faced a tougher challenge than at memorial.

“you have to understand that our operating room was a tough, tough environment,” said David Pitcher, mD, unm Health sciences Cen-ter’s chief medical officer. “There was serious skepticism on the part of a number of staff and a number of the physicians.”

Crm see page 4

Joseph Loskove

4 Industry news www.healthcarefinancenews.com Healthcare Finance news September 2013

and explain the exchanges where it is ini-tially participating, in arizona, Colorado, Florida, Tennessee and Texas.

One group that surprisingly doesn’t know yet if they will obtain health insurance is uninsured individuals with pre-existing con-ditions – almost seven in 10 aren’t aware – according to insuranceQuotes.com.

Only 18 percent of uninsured indi-viduals with pre-existing conditions are definitely planning to purchase health insurance; 14 percent plan to remain uninsured; and 68 percent are undecided, the report said.

most said it was due to a lack of informa-tion, or misinformation. states have started publishing health plan premiums. Once the exchanges open, more costs will be avail-able so consumers can shop and compare plans, said sally mcCarty, a healthcare reform expert with the Center on Health insurance reforms at the georgetown uni-versity Health Policy institute.

Before the exchanges open, the federal government, many states and community organizations plan a publicity barrage with Tv commercials, billboards and ads to educate consumers. more than 100 national organizations and businesses have volunteered to spread the word about coverage available in the exchanges.

also, the Health and Human services Department recently granted $67 mil-lion to 105 navigator grant applicants in federally-facilitated and state partner-ship exchanges to serve as an in-person resource for those who want more assis-tance in shopping for and enrolling in plans in the exchanges.

Kicking off these publicity campaigns close to when the exchanges open will help make sure that the information is fresh in the minds of consumers when it’s time to start insurance shopping. n

mosqueraConTinued from page 3Based on the university of new mexico’s

albuquerque campus, unm Health sciences Center is the state’s largest academic health complex. Before the Ors began instituting Crm in 2009, the organization had a problem with harm events occurring in the Or. various tactics had been tried to reduce harm events in the Ors, said Pitcher, to no avail.

“it had gotten to the point where we rec-ognized that one of the reasons we couldn’t make any progress was the environment for communication and teamwork was so poor in the operating room that no one could agree on anything and nobody could work collab-oratively together,” he said.

The dysfunction in the Ors was known in the community, so the health center had a hard time hiring and retaining staff.

“There was general acknowledgement that we needed to do something differently, and there was general agreement that the root cause was poor communication and team skills,” said Pitcher.

after reviewing their options, the health center decided to try Crm and hired lifeWings to help. lifeWings staff trained leadership and met with the Or teams. each team received training on how to identify potential harm and communicate about that potential harm

and solve the problem as a team. each team developed their own tools based on what they decided as a group was needed to help them.

The initial skepticism at another “flavor of the month” solution turned into support.

The results in the Ors have been spectacu-lar, Pitcher said. The Ors had been having one

retained surgical device or object every quar-ter before Crm. For the eight or nine quarters following the start of using the Crm process, there were no such retensions.

When the health center started the Crm process, about half of the Ors’ nursing and technicians staff were travelers – an expen-sive means of staffing the Ors – but even with the travelers, the health center couldn’t keep all its Ors open.

Because of Crm, the environment in the Ors did an about-face and now it is the place to work, Pitcher said. The health center doesn’t have travelers staffing the Ors any more and because there is sufficient staff now, the Ors are open all the time, eliminating surgical bot-tlenecks and resulting in a sustained increase in surgical volume.

“i’m not a finance person,” Pitcher said. “it’s hard for me to fully quantify what that translates to in dollars, but i do know that the dollars saved from avoiding harm events is not insignificant in terms of risk pay out. it’s also not insignificant in terms of the

dollars saved from a staffing point of view and also it’s not insignificant in terms of the increased revenue we see through increased surgical volume ….”

The use of Crm has expanded at unm Health sciences Center to labor and delivery, behav-ioral health and psychiatry and interventional radiology. While the focus has been to bring Crm into the clinical settings, non-clinical environments are not barred from using the model. a couple of the lawyers from the cen-ter’s legal department were trained and brought what they learned back to their department, said Pitcher, and many other departments have shown interest.

“The initial organizational skepticism – after seeing what happened in our operating rooms – turned into ‘pick me, pick me next,’” Pitcher said. “really different areas of the organization are begging to be next because they’ve seen such positive results from the operating room – and it’s not just because we’re telling them good things have happened. it’s word of mouth. … it sells itself.” n

CrmConTinued from page 3

disruptive innovAtors: Shifting to leanBy Stephanie Bouchard, Managing Editor

neW glOuCesTer, me – in an effort to offset some of the expected impact of the affordable Care act, the executives at mountain states Health alliance (msHa) – one of the largest healthcare systems in northwest Tennessee and southwest virginia – knew they had to make a bold move. They chose to implement lean.

made famous by Toyota as an efficiency pro-cess, lean has been increasingly used in health-care to eliminate waste and reduce costs.

“We quickly realized that lean was not just a cost-cutting improvement tool; that it was more of a cultural transformation on how you run your organization and lead your organiza-tion,” said andrew Wampler, msHa’s assistant vice president.

msHa began its lean journey by making it part of its 10-year strategic plan and hiring simpler, a global management consulting firm, in 2011 as a lean coach. msHa selected four sites – three of its 13 hospitals, and mountain states medical group – to get things started.

administrators began tracking and bench-marking financial, clinical and patient sat-isfaction outcomes from the start, Wampler said. and even though msHa is just at the beginning of its lean experience, the health system is seeing encouraging results. Overall,

the health system has saved, so far, about $5 million, with an estimated return on invest-ment of $56.7 million.

Some specific results:■n at Johnson City medical Center, the

emergency department consolidated medi-cal supply space from five separate closets to one central closet, saving the staff time

and increasing productivity and workflow. By standardizing the supplies location, staff members could more easily monitor stock, reducing inventory costs by about $89,000 a year and supply expenses by about $150,000.

■n at Johnston memorial Hospital, a com-munications plan resulted in more admitted patients being placed in beds on the inpatient services floor, resulting in more space in the eD, which raised the average daily volume from 109 patients to 120 over a one-year peri-od. additionally, wait time to see a physician decreased by 17.24 percent and the decision time for admitting patients to inpatient ser-vices decreased by 43 percent, from an average 133 minutes to 73.

msHa is encouraged by the results it has had so far and the healthcare system plans to continue to roll it out throughout the organiza-tion, said Wampler. “This is going to get us to our goals,” he said. “it’s exceeded our expecta-tions of what we thought it could do, i think, but once we really figured out what it could do, i think our expectations now are even higher because we know this could really get us to a level that could put us out there – way out front of – a lot of other healthcare organizations.”

By using lean, mountain states is figur-ing out how to make its existing business

better as it positions itself for the future, said michael Chamberlain, president of simpler north america.

“They’ve taken a very serious approach to eliminating waste in their healthcare system,” said Chamberlain.

“The industry as a whole – while they believe they’ve made massive change, there’s so much more to do,” Chamberlain said. “mountain states is on the precipice of something really special because they’ve bought in to all the ele-ments that it takes for them to be successful.” n

David Pitcher, mD, and a member of the UNM Health Sciences Center’s OR staff prep for surgery. Before instituting CRM, the OR “was a tough, tough environment,” Pitcher said.

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“You have to understand that our operating room was a tough, tough environment.”– David Pitcher

mountain states is using lean to take it into the future.

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the Healthcare Finance News team is proud to present our disruptive innovators series to our readers. over the course of the year, we’ll be celebrating those individuals and organizations – large and small – that are thinking outside the box to change the direction of healthcare by bringing down costs and improving care.

if you know of anyone you think should be included in

our series, please drop us a line. send an email to us

at [email protected].

Payments n Processing Ser v ices n R isk & Compliance n Cus tomer & Channel Management n Insights & Opt imizat ion

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6 Industry news www.healthcarefinancenews.com Healthcare Finance news September 2013

other providers and payers just starting the aCO journey.

Fairview moved rapidly to avoid a long interim period between fee-for-service and value-based models, said Patrick Herson, mD, the practice’s senior executive medi-cal director. He said the medical group has delivered some measurable clinical quality improvements at a lower cost.

For example, from 2009 to 2011, Fairview improved optimal vascular care measures to 48.9 percent from 35.1 percent, as well as patient experience scores, with 88.1 percent of patients surveyed saying they would recommend its health facilities. inpatient utilization also fell 13.7 percent from 2009 to 2010, compared to 2010 to 2011 hospital use.

“While we started earlier than some, Fair-view’s healthcare transformation journey is far from over,” Herson said at a recent Pre-mier healthcare alliance briefing, adding that Fairview continues to refine its data analytics capabilities and care processes.

early on, Fairview shared risk with a local medicare advantage plan and later in 2009 entered into an aCO contract for shared sav-ings with commercial payer medico. Then Fairview negotiated similar agreements with other area payers. in 2012, it became a Pio-neer aCO member.

Herson explained that the speed of Fair-view’s aCO implementation was driven by a need to align the clinical and population

health model with the payer and business models. He said some providers were con-cerned about a drop in patient volumes.

Fairview is a large and diverse organiza-tion, and the speed of transformation was dif-ficult, but it had been “like we were between two operating systems with our business and clinical models,” Herson said. it was important to stop straddling different payment models so the clinical model could be built on population health. Focus and senior leadership from the CeO on down helped move Fairview where it needed to go, Herson said.

“By having the payer partners involved, once we got contracts and different kinds of financial arrangements, it became impera-tive that our operations realign their work and make sure it got done in a way that would be profitable for our payer partners and for Fairview Health services as a whole,” he said.

THe long ViewTodd sandman, vice president of strategy and customer engagement at Presbyterian Healthcare services in albuquerque, n.m., said his organization offers a longer view of what’s possible when sharing risk. The provider launched its own health plan 27 years ago.

“Because we share the same perspective as a provider and a payer, it changes the way we think about the changes in healthcare,” sandman noted.

“What it allows you to do is mitigate payer swings over time and deepen relationships with the patients and members. Where we

find ourselves three decades into this is very low utilization rates compared with the rest of the country,” he said. “We haven’t seen a proliferation of fee-for-service business models, specialty facilities or joint ventures – things that are hard to unwind and contrib-ute to variation in care and cost.”

in the last few years, Presbyterian has driven down unnecessary utilization of emer-gency departments (eDs) and found those patients primary care homes. “Because we are integrated, and because we’re bearing the same payments, we can make a decision as a system to forego that higher revenue, higher reimbursement eD visit,” he said.

a recent study by Premier found that some specialists are leery about account-able care contracts, as they’re concerned that medicare will emphasize reduced use of specialist physicians.

On the payer side, a common issue is readiness, said Joe Damore, vice president of population health management at Premier.

“in many markets across the country, commercial payers are not ready to partici-pate in value-based contracts yet,” he said. Currently, there are more than 250 com-mercial aCO arrangements. many payers are still unwilling to share claims data with providers.

a rapid pace of aCO implementation increases financial risk. With a slower tran-sition to the new care model, care manage-ment of patients and other cost reduction programs eventually are passed on to non-participating payers, who have not shared in their funding, Damore said. n

aCoConTinued from page 1

the slowed growth in healthcare spending.employer coverage for non-elderly fell from

69 percent to 58 percent from 2000 to 2011. The medicaid population grew by 19 million, the uninsured by 12 million. medicare enroll-ment grew by 2.4 percent per year.

“This means you have fewer people in better-paying, private, commercial health insurance plans, and many more people in public cover-age. so both the coverage changes and income changes has affected the revenues pouring into the health system,” Holahan said, leading pro-viders to seek efficiencies.

medicare is setting prices in a price-con-scious way, more so than private payers, with physicians paid a set fee schedule, said Chapin White, senior researcher, Center for studying Health system Change. “Providers are paid less and being paid more in bundled payment systems,” he said.

The affordable Care act also puts the brakes on cost growth. as of 2011, every year when medicare updates the prices it pays for ser-vices, it also subtracts an adjustment for pro-ductivity increases.

“The expectation that is now baked into the medicare system is that hospitals and nursing homes will get more productive in line with the rest of the economy,” White said. “The produc-tivity adjustments don’t get a lot of attention,

1 percent per year price cut, but it will have a profound effect on medicare spending trends.”

Other aCa provisions, such as for post-acute bundling, accountable care organizations (aCOs), value-based payment modifiers and readmission penalties don’t get at the heart of spending but “are planting flags for big future steps,” he said.

Besides reducing payments in medicare, aCa will shift people to medicaid and health insurance exchanges, both of which will be stingier in provider payments than typical pri-vate insurance today, White said. The Cadillac tax in 2018 will also provide a hard ceiling for generous employer-sponsored insurance.

in recent years, medicare and medicaid have had rapid increases in enrollment but lower spending per enrollee than the private sector, said stephen Zuckerman, co-director and senior fellow for the urban institute’s Health Policy Center.

“When hospitals have less pressure from non-medicare payers, they have high costs. Pri-vate insurers do not seem to have the leverage

to drive provider prices down,” he said, adding that there is a great deal of public and private sector activity to try to control costs.

The recession accounted for about one third of the slowdown in medical spending, but economic models include a fairly large unex-plained segment for the slowdown in spend-ing, said David Cutler, economics professor at Harvard university.

lower payments mixed with financial incentives to providers, more cost sharing by patients and fewer blockbuster technologies and products on the horizon that payers must pay for to treat patients are among the struc-tural changes that he and other economists have noted.

Hospital readmission rates have already declined. “as soon as we started paying dif-ferently, the rate went down quickly from the 30-percent average medicare readmission rate,” Cutler said.

“nobody knows for sure, but i think if you look at the weight of what’s going on, another way of saying it is, the world would have to change for costs to go up again,” he added.

But not everyone believes the lower spend-ing growth will last.

When economic growth is slower, healthcare spending follows and vice versa, said gene steuerle, an economist at the urban institute and former senior treasury tax official for Pres-ident george H.W. Bush. “if we don’t change policy, spending growth will return,” he said. n

sPenDingConTinued from page 1

“this means you have fewer people in better-paying, private, commercial health insurance plans, and many more people in public coverage.”– John Holahan

“the productivity adjustments don’t get a lot of attention, 1 percent per year price cut, but it will have a profound effect on Medicare spending trends.”– Chapin White

looking at the financial data from another perspective, capital expendi-ture for medical equipment replacement overall – including non-iT technology and other equipment – dropped from 30.4 percent in 2009 to 27 percent in 2013 and new medical equipment costs went from 44.5 percent to 13.8 percent, according to Jim adams, executive direc-tor, research and insights, at the advisory Board Company. During the same period, iT purchases went from 21.8 percent to 24.2 percent.

Trying to figure out if this increasing investment in iT will generate a return on investment is keeping C-suite executives

up at night. “CiOs say it is increas-ingly difficult to establish rOi for emrs,” said marty Conners, director of national health-care iT practice at eliassen group, an iT staf f ing company. Citing a

January 2013 Beacon Partners survey of more than 200 hospital CiOs, he pointed out that only 40 percent measure rOi on their emr implementations. and only 36 percent of this smaller group is convinced their rOi calculations are accurate.

But rOi may not be as important to hospitals, noted adams from the advisory Board. Hospitals, he said, are no longer looking at iT investments purely from an rOi perspective. adams, a former CFO, explained that iT is now part of “strategy enablement.”

as the industry shifts from a fee-for-ser-vice to an accountable care model, leading hospitals are investing in iT to manage the greater financial risk they are now facing. Technology that can improve coordination of care, for example, can help man-age that risk, said adams. and while many organizations are focused on buy-ing emrs, more sophisticated providers are putting their technology dollars into emr optimization.

Hospital administrators are mak-ing other major iT investments in data security – including encryption software – mobile device manage-ment software to enable ByOD, data loss prevention tools, cloud technol-ogy and health information exchange, said alaap shah, an attorney who specializes in iT for the law firm of epsteinBeckergreen.

But even with all this iT spending, critics continue to question whether providers are making the best use of their technology budgets. a recent Ponemon institute survey of more than 500 healthcare professionals concluded that “u.s. hospitals are absorbing an estimated $8.3 billion annual hit in lost productivity and increased patient dis-charge times” because they are not using mobile device and internet services as well as they should be in patient care. n

TeCHConTinued from page 3

Marty Conners

Alaap Shah

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ChaNgiNg the heaLthcare paradigm has always been part of the fabric of the John c. Lincoln health system (JcL) in arizona, and today they continue their

visionary work. JcL has recognized that mili-tary medics have been saving lives on the front lines all over the world where the United states military is engaged, and is leveraging their tal-ents to help design a new healthcare delivery system.

Nathan anspach, ceo of Phoe-nix-based John c. Lincoln health Network’s accountable care orga-nization (aco), saw military med-ica as a potentially transformative force, a Medicare healthcare corps. While gaining their medical credentials in the U.s., anspach recognized that former military medics can be instrumental in helping design and implement strategies to aid the legions of frail Medicare recipients in managing their healthcare. anspach’s vision was to employ this healthcare corps to stop the revolving door of hospital readmission for Medicare patients. to accomplish this, he created a three-pronged strategy:

First, focus on “preventable readmission” of the frail elderly who are discharged from hospitals. By monitoring vital signs and getting needed medications, costly readmission to a hospital or emergency room can be avoided.

second, work with these patients to ensure they get services needed to maximize their independence. this will keep them out

of nursing homes.Finally, serve as personal healthcare advo-

cates. healthcare corps members can answer questions to help Medicare patients navigate the discharge process and beyond.

anspach and his colleagues recognized that the future of heathcare – Medicare in particular – is based primarily on the ability to create and imple-ment innovative solutions that treat and manage the care of frail elderly patients. a management plan starts by helping Medicare patients under-stand instructions from their medi-cal team, then moves on to managing their medications. But, it doesn’t stop there. a seamless recovery includes active daily intervention

of a healthcare worker who serves both as the Medicare patient’s care transition coach and a lifeline to the outside world.

an absence of coordinated care transitions leads vulnerable Medicare patients back into an er or a nursing home. Because these fragile patients often see multiple physicians, there is a heightened possibility of medical errors, duplication of services, increased costs and haphazard care. Military medics skilled in war zone medical care are trained multi-taskers who are ideal for preventing care fragmentation.

the Lincoln aco Plan has had an immediate and remarkable impact at JcL.

since the program was implemented in october 2012, 309 frail Medicare patients have been discharged and only fi ve (or 1.62 percent year to date) have been readmitted. For this

same time period last year, 64 (or 20.7 percent) people were readmitted.

the centers for Medicare & Medicaid ser-vices has published tables on the three most frequent conditions for readmission:

at a time when one in fi ve Medicare benefi ciaries discharged from the hospital is readmitted within 30 days, costing an esti-mated $12 to $17 billion annually, the value proposition of the John c. Lincoln program is an extraordinary beginning.

creating a solution to aid the frail elderly by employing talented and dedicated former military medics underscores that the Medicare revolving readmission door can be slammed shut. imagine implementing the Lincoln aco Plan in every state.

as foundations and corporations look for pioneering and successful strategies to change the standard of care in the U.s., they should begin by understanding the John c. Lincoln aco strategy. n

Jeffrey Lewis is chief operating offi cer at

EHIM, Inc. Lewis served previously as the

president of PS2 Health Care and the Heinz

Family Philanthropies. He may be reached

at [email protected].

Managing healthcare litigation costsAn alternative

to the courthouse

HeaLthcare eXecUtives know that litigation costs and adverse publicity pose signif-icant risks to their business plans. differences arising out

of mergers, acquisitions, joint ventures and from arrangements with vendors, physicians, employees and managed care companies can result in highly contentious disputes. the time, expense and uncertainty of “going to war” in traditional litigation begs for a better way to resolve disputes.

the better way, in most cases, is to include tailor-made alternative dispute resolution procedures in legal agreements. Because such agreements are governed by principles of contract law, healthcare companies are generally free to include dispute resolution provisions in merger and acquisition agree-ments and in contracts with vendors, physi-cians, managed care organizations and even patients and employees.

the parties to a contract that includes requirements of a three-step process to resolve disputes – negotiation, mediation and, if all else has failed, binding arbitration – can effec-tively eliminate damaging publicity as well as much of the time, cost and uncertainty of tra-ditional litigation.

requiring principled negotiation at the

c-suite level as a fi rst step in the dispute resolu-tion process ensures that the dispute “rises to the top” before one side or the other “goes nuclear.”

if negotiation fails, mediation is the process where parties ask a neu-tral third person to help negotiate and possibly recommend a settle-ment. the mediator’s efforts and his or her recommendations are not binding, but they are private. should mediation not successfully resolve the dispute, arbitration will serve to bypass a court action so that the dispute is fully, fi nally and privately resolved by the binding decision of an arbitrator or a panel of arbitrators.

if arbitration proves necessary, the parties can, in advance, select their own private judge, agree to their own schedule and even create their own discovery process and procedural rules. the fi nal ruling of an arbitrator is just as binding as going to court and often comes more quickly than a traditional court ruling would, with less acrimo-ny, at a lower cost and with little or no publicity.

the benefi ts of carefully drafted alterna-tive dispute resolution strategies employing negotiation, mediation and arbitration include, among others, reduced costs compared to nor-mal in-court litigation; simpler procedural and evidence rules; less hostility among the parties and less disruption of ongoing dealings among the parties; and a wider range of relief – as more equitable remedies are available.

although mediation and arbitration are often better alternatives to traditional litigation, the process may not be best for every dispute, and

healthcare executives should care-fully weigh the pros and cons when entering a business contract or agree-ing to waive their company’s rights to the trial and appellate process.

to avoid legal challenge, spe-cial care should be taken when drafting alternative dispute reso-lution clauses in the patient and employment context. in addition, the danger of simply agreeing to boilerplate dispute resolution pro-

visions could bring about some unintended results. Failure to properly consider all of the issues includes the potential loss of impor-tant procedural guarantees; the application of unfavorable law; and the loss of appeal rights, among other risks.

healthcare executives should consider dis-pute resolution as an important component of their negotiated agreements. if drafted and implemented correctly, the dispute resolu-tion process will be enforceable. the needs of the deal or the relationship should be carefully considered when deciding whether to adopt mediation and arbitration procedures as part of an overall dispute resolution strategy.

When negotiating or drafting an alterna-tive dispute resolution agreement you must

davidson see page 9

JeFFreY LeWis

PaUL davidsoN

Condition Readmission rates nationally

Lincoln Plan

Heart failure 24.7% <1%

Heart attack 19.7% <1%

Pneumonia 18.5% <1%

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9September 2013 Healthcare Finance News www.healthcarefinancenews.com CommeNtary

Recruiting the entry-level workforce

The associate degree is emerging as a prime ticket into the healthcare workforce. of the 20 fastest growing healthcare occu-pations that require a college education, 10 are at the associate level, according to

data supplied by economic Modeling specialists inter-national (eMsi).

these occupations, which include radiologic technolo-gists, occupational therapy assistants, respiratory thera-pists and diagnostic medical sonographers, are projected to account for 806,000 new jobs in the U.s. by 2023. at an average of 28 percent, the growth rate for these technical occupations vastly outpaces projections for the entire U.s. jobs market, which stands to grow 11 percent over the next 10 years.

the growing demand of associate degree-level healthcare workers raises the question of whether employers will find the adequate sup-ply. Labor pressure data from careerBuilder’s supply & demand Portal and corresponding survey data suggests that many healthcare hiring manag-ers have a difficult time recruiting qualified workers in these fields. however, the story of why this is the case varies by occupation, carrying with it important implica-tions for healthcare employers.

No example illustrates this problem more than nurs-ing. We’ve been told for years that the U.s. faces a short-age of registered nurses, an occupation expected to grow 20 percent over the next decade. Perhaps as a result of these warnings, enrollment in nursing programs surged. in 2011, about 185,000 people graduated from rN, nursing science or nursing administration programs nationwide. this has led to an apparent surplus of job candidates, as eMsi estimates there will be around 115,000 rN job openings in 2013, including new positions and openings due to turnover and retirement.

But interestingly, the graduate surplus has not led to a smoother recruitment process. the average job opening for nurses goes unfilled for longer than a month, according to a summer 2013 survey of health-care employers conducted by careerBuilder and har-ris interactive. one in five nursing jobs remains open for longer than three months. the survey identified three major reasons for these extended vacancies: 1) employers are looking for experienced workers – not new graduates. 2) employers need nurses trained in a specialized area. 3) employers are often unable to offer competitive pay.

students have answered the healthcare industry’s call for more nurses. Now schools and employers must collaborate in such a way that accelerates the careers of the profession’s next generation – either by modify-ing experience requirements or increasing headcount in understaffed areas to make room for young nurses. Meanwhile, employers in need of veteran or special-ized nurses must ensure wages are competitive in order to attract experienced outside talent. they must also redouble continuing education and career development

efforts for internal prospects. Both tactics will inevitably open up more positions for entry-level workers.

alternatively, a key reason for the talent mismatch, or skills gap, in other associate degree-level healthcare occupations is clearer: college completion rates lag behind demand.

For example, there is nearly double the amount of annual job openings nationwide for medical equipment repairers than associate’s degree graduates in that pro-

fession, according to eMsi. other occupations have a surplus of graduates nationally, but face shortages at the regional level due to uneven geographic distribution of workers with the requisite degree.

For instance, physical therapist assistant jobs in the New York city metro area will increase nearly 50 percent by 2023 to more than 4,000 jobs. however, the annual number of graduates in Pt technician/assistant pro-grams is about half the number of projected annual job openings. across the metro area,

similar numbers are seen for veterinary technologists and dental hygienists.

While some of these associate degree-level occupa-tions do not make up a substantial share of the total healthcare labor market, they are all generally good-paying jobs, stepping stones to more advanced degrees, and often essential functions in many facilities. at an

early age, students need to be made aware of the full panel of healthcare vocational opportunities.

healthcare executives, meanwhile, must ensure extended vacancies aren’t disrupting day-to-day operations. the careerBuilder/harris interactive survey showed that 24 percent of healthcare employ-ers said vacancies had a negative impact on patient care. More than a third of respondents stated that extended vacancies caused employee morale to suffer due to an overworked staff, one in five said patients get less attention, and one in 10 see a corresponding spike in voluntary turnover.

all of these outcomes can have a detrimental financial effect, but can be mitigated by integrating workforce and labor market analytics within the organization’s broader talent acquisition strategy. n

Jason Lovelace is president of CareerBuilder Healthcare.

determine whether to include negotiation, media-tion and arbitration; what is to be the applicable law; the location of the mediation and/or arbitra-tion; the manner of selecting the mediator and/or arbitrators; which procedural rules to use; whether similar disputes are to be consolidated; the scope and limits of pre-mediation or of pre-arbitration discovery; whether the arbitrator will be required to give a reasoned judgment; the scope of judicial review of the arbitrator’s decision; the extent of allowable damages; and whether attorneys’ fees will

be awarded to the prevailing party.healthcare executives looking for an alternative

to the time, expense and uncertainty of traditional litigation will find that the final resolution of busi-ness disputes often comes sooner, with less acrimony, at a lower cost, and with little or no adverse pub-licity if a well-crafted procedure is adopted on the front end that calls for negotiation, mediation and arbitration. n

Paul Davidson is a partner in the trial and appellate

practice at Waller Lansden Dortch & Davis and

co-chair of the firm’s healthcare litigation group.

davidsonContinued fRom page 8

Nancy-Ann DeParleFormer Director, White House Office of Health Reform, and former Administrator, Centers for Medicare & Medicaid Services

Partner, ConsonanCe CaPital Partners, new York CitY

You recently rejoined the private equity world after a number of years working in the national healthcare policy arena. Why did you re-enter private equity and what are some of your investment goals with Consonance Capital Partners?I was very happily working in private equity, helping to grow really interesting compa-nies, when I got the call from the president to try and get health reform done. But I had a lot of fun (in private equity). One company we grew was in the managed care space, managing 60,000 Medicare Advantage patients and getting great results with them. Another was a hospital company that we built from the ground up, working with physicians and the community.

Working with the president was an incredible experience. Presidents have been trying to do this since Harry Truman, so you’d have to say the odds were long when I went there but I’m proud to say we got health reform done.

Then I stayed at the president’s request to get implementation up and running, and then I became the deputy chief of staff of policy. It was a very rich experience. But I was ready to get back to working with companies again, to working with management teams. I was fortunate enough to be able to rejoin three of my former partners. This seems like an incredible time to invest in good ideas in healthcare, but it’s not for the faint of heart.

Are there particularly hot sectors in the industry that you’ll focus on?Yes. We’re looking at businesses that have figured out how to manage care effi-ciently and take cost out of the system. You’re seeing a confluence of a number of trends. First, millions of consumers without insurance now able to get it. Secondly, a real drive for value in healthcare. Things that make care more cost-effective are appealing, whether it’s products that achieve it, or information technology tools that help to manage care. Consumerism is another trend that we see as being very impactful. We’re looking at things that help hospitals and clinicians manage their businesses better – collecting money they’re owed in an efficient way, managing the revenue cycle.

Are there any aspects of the healthcare reform legislation that will push your investments in certain identifiable directions?It’s really too early to say, but two things are clear: reform declared that we would get everyone covered by health insurance, and we need to make sure we get value for dollars spent. You’ll have millions of new consumers with health insurance. What are the services that they’re going to need? What will help these consumers make good choices? Whatever we do, we want to make sure the patient is at the center, and is getting better value for his or her healthcare dollar.

What do you think about the future of independent hospitals in the new reimbursement environment? Will we see more consolidation?That trend was beginning in early 2000. I observed that when I was investing at the time. It’s hard to achieve some of the things we want to in the healthcare delivery system without more team-based care. I would never say that an independent hos-pital or physician can’t survive, but they will need to work together with others who work on prevention, post-acute care and other aspects of team-based care. Most of the research we have indicates that it delivers a better and more cost-effective result, and it will be what patients want. It’s possible to survive but you have to be smart about partnering.

Another thing that’s changing is the incentives. Your job used to be meeting a set of numbers based on volume of patients. Now the incentive is to manage the health of a population or an episode of illness. We’re experimenting with some of these things. When I ran the Centers for Medicare & Medicaid Services in the late 1990s, I implemented the Balanced Budget Act, which was the last big reimburse-ment change for most providers. What’s different is that this time we have a faster way to move on if something doesn’t work.

2013 NewsmAker

JasoN LoveLace

CorreCtionsHealthcare Finance News is published by medtech publishing Company, LLC, which is solely responsible for its editorial content. editors are expected to meet the highest professional standards for accuracy, objectivity, fairness and independence. errors of fact are corrected as soon as the error is estab-lished and corrections are published in the medium in which the error appeared. inquiries or disputes about the factual accuracy of the record should be directed to the editor.

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deParle see page 25

10 Hospitals and idns www.healthcarefinancenews.com Healthcare Finance news September 2013

Revenue Cycle | Patient Accounts | Real Estate | IT | Business Management

hosPITAls & IdnsBriefs

New York health sYstem liceNsed as iNsurerThe New York State Department of Financial Services approved North Shore-LIJ Insur-ance Company’s application for an insurance license, making the health system the first in the state to create its own controlled insur-ance company (branded as North Shore-LIJ CareConnect) available to sell commercial insurance plans to individuals, families and employers. Consumers will be able to pur-chase North Shore-LIJ CareConnect insur-ance through the New York Health Benefit Exchange of North Shore-LIJ CareConnect starting in October. The insurance plans will go into effect on Jan. 1, 2014.

FY 2014 iNpatieNt paYmeNt rule issuedThe Centers for Medicare & Medicaid Ser-vices (CMS) issued a final rule updating the fiscal year 2014 Medicare payment poli-cies and rates for inpatient stays at general acute care and long-term care hospitals. The final rule will increase overall hospital payments (both capital and operating) by $1.2 billion, and will move forward certain Affordable Care Act (ACA) reforms, including a new program aimed at improving safety in hospitals and refining the Hospital Read-missions Reduction program.

coNsumer reports rates hospitals For scheduled surgeriesA recent Consumer Reports analysis has rated U.S. hospitals based upon how patients fare during or following several dif-ferent categories of elective surgeries or pro-cedures and found that big-name hospitals don’t always live up to their reputations, that rural and urban hospitals performed better than expected, and specialty hospitals tend-ed to have high ratings, among other results. The ratings include an overall surgery rating, which combines results for 27 categories of scheduled surgeries and individual ratings for five specific procedure types.

reimbursemeNt models challeNge device makersThe authors of a recent Moody’s Investors Service report say that as healthcare deliv-ery and reimbursement models transition to ensuring quality care versus quantity of care, they will have a mixed effect on various healthcare sectors. Diana Lee, vice president and senior credit officer at Moody’s Investors Service and author of the report, said that under these new healthcare models, medical device manufacturers will be the most vulner-able, while both for-profit and nonprofit hospi-tals will also face risks during the transition from fee-for-service models to value models. Meanwhile, insurers will benefit from lower use rates and cost-effective care.

Project holds promise for reducing avoidable rehospitalizationsStudy finds Project BOOST’s

processes are making an impact on readmissions

By Kelsey Brimmer, Associate Editor

CHICAGO – A program developed by the Soci-ety of Hospital Medicine and in use by 140 hos-pitals nationwide has the potential to improve the discharge process and prevent avoidable rehospitalizations, according to a new study published in the Journal of Hospital Medicine.

According to Luke Hansen, study author and assistant professor at the Feinberg School of Medicine at Northwestern University, Project BOOST (Better Outcomes by Optimizing Safe Transitions) is a mentoring program that focus-es on identifying patients at the highest risk for readmissions, communicating discharge plans effectively and ensuring close follow-up through phone calls and doctors’ appoint-ments. The hospitals involved in BOOST range from large academic medical centers to small rural or community hospitals, Hansen said.

Hansen said in order to assess the effective-ness of BOOST, he and his fellow researchers studied hospitals varying in geography, size and

academic affiliation that implemented BOOST. While 30 hospitals had implemented the program when the study was initiated back in 2010, only 11 were able to provide hospital unit-specific data for the study.

The researchers found that the average rate of 30-day rehospitalizations in BOOST units was 14.7 percent prior to implementing the program and 12.7 percent a year later, reflecting an absolute reduction of 2 percent and a relative reduction of 13.6 percent. The average absolute reduction in readmission rates in BOOST units compared with other units was 2.0 percent, or a nearly 14 percent relative reduction.

The BOOST program includes a discharge checklist for physicians and nurses, patient discharge instructions that are “very patient-friendly and readable,” user-friendly medica-tion instructions and follow-up phone calls within 48 hours, said Hansen, who serves as a mentor in the BOOST program.

“With patient discharge instructions, his-torically we’ve been giving them the ‘New York Times’ version, but what they really need is the ‘USA Today’ version of instructions,” he said.

One of the most important components of boost SEE pAgE 11

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part of project boost includes using patient-friendly and very readable discharge instructions for each patient before they leave the hospital.

Hospital design elements can lead to ROI

Innovative design features are good for patients, too

By Kelsey Brimmer, Associate Editor

NEW GLOUCESTER, ME – When it comes to hospital construction and design, the decisions around what is built and how it’s built all have significant impact on not only an organization’s bottom line, but also the quality of care given to patients.

For many years it was difficult to get hospital executives interested in the concept of certain healthcare building design features, as well as

“green” initiatives that could have a substan-tial impact on a hospital’s long-term bottom line and ROI, said Roz Cama, board chair of the Center for Health Design and president and principal interior designer of Cama, Inc., a healthcare design firm.

“It seemed we had to find a direct correlation between design and patient outcomes,” said Cama. One of those correlations came when it was realized that having single-patient rooms resulted in better patient outcomes because fewer people in a room reduced the spread of

desigN SEE pAgE 12

kaiser permanente westside medical center in Hillsboro, Ore., which opened in August 2013, is a Gold LEED-certified facility.

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Collaborative saves hospitals $63M

Patient Safety First focuses on four avoidable

harm initiatives to improve patient

care and save moneyBy Kelsey Brimmer, Associate Editor

WOODLAND HILLS, CA – By focusing on reducing early elec-tive deliveries and hospital-acquired

infections, a collaborative called Patient Safety First (PSF) has helped California hospitals avoid 3,576 deaths and more than $63 million in unnecessary hospi-tal costs between 2009 and 2012.

PSF is a statewide collaborative harm SEE pAgE 12

11September 2013 Healthcare Finance News www.healthcarefinancenews.com Hospitals aNd idNs

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the program is the use of physician mentors to facilitate the implemen-tation of BOOST at the participat-ing hospitals – a component that has only become more important now that hospitals are being penal-ized financially for excessive patient readmissions within 30 days for cer-tain conditions, Hansen said.

“The business case for reducing readmissions has gotten much easier since we started this program because of the readmission penalties and that the scale of the penalties will grow,” he said. “It started with the Centers for Medicare & Medicaid Services incentivizing to reduce avoidable readmissions, but I think other pay-ers will begin to do this as well.”

“Our goal is to avoid the emotional and social cost of avoidable readmis-sions, and there may be financial implications or there may not be,” he added. “On a system level, it’s always cheaper to take care of patients out-side the hospital than in.”

It was with an eye on avoiding readmissions penalties that got Lodi Hospital in Lodi, Calif., to implement BOOST over a year ago.

Valerie Cronin, director of utiliza-tion management at the facility, said her organization decided to imple-ment the program on every floor of the hospital, utilizing nurse case managers and what they call patient

discharge advocates for every aspect of the patient transition process, including rides home and to follow-up appointments, and targeted com-munications with patients’ families and support systems.

“We knew the upcoming penal-ties for readmissions were going to be coming and it was important to start working on patient transitions. Preventing readmissions became part of our organization’s strategic processes,” said Cronin.

Northwest Community Hospital in Arlington Heights, Ill., has used its involvement with Project BOOST to focus on patient communications, utilizing the project’s techniques, such as the “teach-back” method, follow-up phone calls within 48 hours and easy-to-understand patient dis-charge instructions, said Mary Webb, a medical clinical nurse special-ist who is the site lead for Project BOOST at the hospital.

“I was excited as a nurse because it’s such a huge benefit to patients,” Webb said. “It’s directly making a difference for patients in helping them take bet-ter care of themselves so they don’t keep ending up back at the hospital.”

Project BOOST was supposed to be just a one-year initiative at the hospital, but the programs put in place because of the hospital’s par-ticipation will be continued, making Webb confident that those measures will eventually impact costs and readmission scores. n

boostCONTINUED FROM pAgE 10

With revenues like that, it is no wonder that nonprofit hospitals are being scrutinized by states and the federal government.

This scrutiny is not new; some have been looking at the issue for decades. But there are a few things that have helped bring it back to the surface, including the move toward more transparency in healthcare in general and the fiscal crises of state and local governments.

“(State and local governments) are looking for additional revenue and they see all those nonprofit hospitals and are starting to ask if they should at least be paying something in turn for services they receive, like police or fire protec-tion,” said Bruce McPherson, presi-dent and CEO of the Alliance for Advancing Nonprofit Health Care.

In an effort to make sure non-profit hospitals are providing the appropriate amount of commu-nity benefit in exchange for its tax breaks, the federal government and state and local governments are creating legislation.

The Affordable Care Act man-dates that nonprofit hospitals create a community needs assess-ment every three years. In the assessment, nonprofit hospitals must demonstrate their commu-nity benefit and provide a plan for

addressing identified needs. States are addressing the issue

in a variety of ways.In legislation passed in Illinois

during the 2012 spring session, lawmakers created new require-ments for hospitals seeking tax exemption. Nonprofit hospitals will only be eligible for property and sales tax exemptions if the estimated value of their commu-nity services is greater than the amount of tax they should pay.

“It is really important to under-stand the landscape is changing and our old views about charity care and tax exemption are rap-idly changing,” said Danny Chun, spokesperson for the Illinois Hos-pital Association.

For the most part, the amount of charity care hospitals must provide to remain tax exempt is not regulated. A majority of char-ity care is typically for uninsured patients, but how much each hos-pital spends varies widely.

An article released in April in the New England Journal of Medicine looked at 1,800 non-profit hospitals across the country. Researchers found that 7.5 percent of nonprofit hospitals’ operating expenses, on average, went toward community benefits.

“If you have an organization that is only providing about 1 percent of its total operating costs toward

community benefit, then the board of that hospital is going to be doing some soul searching and asking why they are not doing more than that,” McPherson said.

Approximately 85 percent of the total was made up of patient care; 10 percent went toward pro-fessional education and research; and 5 percent toward community health expenditures.

The expansion of Medicaid and the creation of state health exchanges in 2014 should reduce the number of patients need-ing charity care. This will likely require hospitals, and others, to expand the definition of commu-nity benefit beyond charity care.

“The community benefit stan-dard was adopted in 1969 and many feel it is no longer consistent with the industry we have today and what we really should expect from hospi-tals for tax exemption,” said Gary Young, co-author of the NEJM study.

Young said it may be as much a matter of doing things differently as it will be doing more to keep tax exemption.

“Things like community out-reach, population health, screening initiatives for cancer … hospitals spent almost nothing on those kinds of activities,” Young said of the results found in his study. “We may see some expectation that hospitals will shift what they are doing.” n

taXCONTINUED FROM pAgE 1

12 Hospitals and idns www.healthcarefinancenews.com Healthcare Finance news September 2013

infection. “This caught peoples’ atten-tion and for the first time we could build the business case,” Cama said.

Cama added that with healthcare reform and cuts to reimbursements for unnecessary readmissions and hospital-acquired infections, higher quality care and “doing more with less money” has become even more important to hospitals. Making sure patients are exposed to a lot of natural lighting as opposed to more artificial lighting, and appropriate noise levels on each floor to reduce patient stress are both factors that can lead to better patient outcomes and faster healing, said Cama.

When designing any of their new facilities, Princeton HealthCare Sys-tem, based in Princeton, N.J., keeps in mind two categories of design ele-ments that lead to cost savings for the hospital, said Barry Rabner, pres-ident and CEO of the health system: sustainability elements that reduce energy costs and operational ele-ments that keep staffing costs down and improve patient care.

For example, when the healthcare

system began planning the design of its University Medical Center of Princeton in Plainsboro, N.J., in 2003, their goal was to reduce energy costs by 25 percent and their carbon

footprint by at least 50 percent com-pared to what energy costs and their carbon footprint would have been had they used conventional technol-ogy within the new building.

The hospital has been opened a little over a year now and so far their plans are on track, Rabner said. “Any sustainable feature within the building had to have a payback to us within 15 years and preferably much sooner,” he said. “So far, most of these features are on the track to payback within three years.”

Some of the sustainable features built into the hospital include a

co-generation natural gas plant with the ability to buy and sell power, a chilled water energy storage system and solar cell panels powered by the employee parking lot.

Rabner added that the opera-tional design elements within the hospital have also been successful.

“When we were designing the building, we got a lot of consulting help to think through how materi-als enter the building and move through it – ultimately to the staff and patients,” he said. “We designed it so nurses can access all materials right in the room instead of hunting

and gathering and wasting time.”At Kaiser Permanente, based in

Oakland, Calif., John Kouletsis, vice president of facilities planning and design at Kaiser, said the organiza-tion has made the commitment that any new healthcare facility they build must be, at the very least, Gold LEED certified by the U.S. Green Building Council (USGBC) for sustainable designs, green building materials and energy-efficient systems.

LEED stands for Leadership in Energy and Environmental Design and is the accepted benchmark for sustainable building practices in renovating existing facilities or building new ones. Using a stringent rating system, the USGBC certifies projects Silver, Gold or Platinum.

“Kaiser has a long-standing com-mitment to sustainability, and we have a strong business reason for it,” said Kouletsis. “We believe very strongly that the degradation of the environment causes problems to human health.”

Kouletsis added that when health-care organizations are considering redesigns, many are concerned about the extra costs involved with making sure the facility has sustain-ability features.

“There’s a perception that LEED can be expensive, and while that might be true in some cases, we’ve dis-covered that we’ve been able achieve Silver or Gold status with no cost increase or a very small cost increase,” said Kouletsis. “Even the extra costs that were spent, in the long run, these things will dramatically lower health-care costs in many cases.” n

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university medical center of princeton at Plainsboro in Plainsboro, N.J., has been open for just over a year now and was built with a number of sustainable design features, such as solar panels in the employee parking lot and a chilled water energy storage system.

“Any sustainable feature within the building had to have a payback to us within 15 years and preferably much sooner.”– Barry Rabner

between the Hospital Council of Northern & Central California, the Hospital Association of Southern California, the Hospital Associa-tion of San Diego & Imperial Coun-ties, Anthem Blue Cross, National Health Foundation and 180 Cali-fornia hospitals with a mission to improve quality and reduce health-care costs across the state.

Since 2010 – when the collabora-tive first began – PSF hospitals have shown significant improvement in four hospital-based avoidable harm initiatives that the collaborative has mainly focused on: sepsis mortality, ventilator-associated pneumonia, central line blood stream infections (CLBSIs), catheter associated uri-nary tract infections (CAUTIs) and perinatal gestational age deliveries under 39 weeks, said Darrel Ng, public relations director for Anthem Blue Cross.

Of the 180 participating hospitals, 40 consistently reported before and after data for each quarter of the year said Eugene Grigsby, president and CEO of the National Health Foundation. The results from those 40 hospitals showed a 74 percent reduction in early elective deliver-ies prior to 39 weeks gestational age; a 57 percent reduction in cases

of ventilator-associated pneumonia; a 43 percent reduction in cases of CLBSIs; a 24 percent reduction in the CAUTI rate; and a 26 percent reduction in sepsis mortality.

“The importance of the program is showing that when over 180 hospitals identify a problem, utilize a common database and work collaboratively to make hospitals safer, significant prog-ress can be made,” said Grigsby.

PSF uses a peer-to-peer learning model, Grigsby said, which involves periodic meetings set up with hospi-tals and subject matter experts. “It was about learning from individual hospitals that have already set up a successful plan,” Grigsby explained.

“This coaches and shows some people that under all these condi-tions with so much to think about, you can still bring about change in a meaningful way.”

At one of PSF’s flagship hospitals – Glendale Adventist Medical Center (GAMC) in Glendale, Calif., – bring-ing about meaningful change meant

setting a zero tolerance policy for hos-pital-acquired infections, said Arby Nahapetian, MD, vice president of medical affairs and quality at GAMC.

“In the healthcare industry there’s always been a tolerance for bad things that happen at times, and we decided that was unacceptable and aimed for zero,” said Nahapetian.

Whenever an incident happens, he said, it is investigated so that every-one understands what happened and knows how to make sure it doesn’t happen again.

“A lot of this is about culturally changing the tolerance for anything going wrong,” he said.

In a one-year period, GAMC was able to reduce CLBSIs by 60 percent and brought down CAUTI incidences to zero, he said. Additionally, GAMC also reduced its overall risk-adjusted mortality rate by 53 percent.

“This reduction was the result of multiple quality initiatives here. It really speaks to how powerful these initiatives can be,” he said. n

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hospitals involved in the Patient Safety First program have seen a 43 percent reduction in cases of central line blood stream infections since 2010.

“It was about learning from individual hospitals that have already set up a successful plan.”– Eugene Grigsby

Apply online at www.OwensboroHealth.org/Careers

It All Adds Up. . .

to SUCCESS.At Owensboro Health, our employees are making big things happen. From a new medical record system toa brand-new hospital, important changes are happening that will strengthen health care in our region foryears to come.

But success would not be possible without talented and dedicated people working together to accomplishour goals. And that’s where the Owensboro Health finance department comes in. Your commitment tothe organization’s core values is a shining example of what we are all about.

To every member of the finance team, we say thank you for a job well done. Because of your contributions,Owensboro Health has the strong financial base necessary for continued innovation, growth and quality.Your award confirms what we’ve already known; that excellence is a part of everything you do.

Change isn't easy, but when it comes to building a healthier region, it's worth it.

OH Recruit Finance 10.625x13.875_Layout 1 8/22/13 12:03 PM Page 2

14 2013 BEST HOSPITAL FINANCE DEPARTMENTS www.healthcarefinancenews.com Healthcare Finance News September 2013

MEET THE WINNERS!

#1 Large: Sisters of Charity Providence Hospitals, Columbia, S.C.The Sisters of Charity Providence Hospitals finance department clearly defines

expectations, encourages innovation and allows employees to work from home.

“It doesn’t matter where you get it done or how you get it done or when you get it done,”

said Jho Outlaw, executive director of revenue cycle. “It just matters that you get it done –

as long as it’s legal, moral and ethical.”

#3 LaRgE: Memorial Healthcare System, Hollywood, Fla.The finance department at Memorial Healthcare System meets regularly to discuss

upcoming deadlines and priorities, share topics of importance and to see if monthly

expectations were met. “Our vision is to be a world-class finance organization, which is a

never-ending journey,” said Dave Alexander, vice president of corporate finance.

#2 LaRgE: McLeod Health, Florence, S.C.The management team in McLeod Health’s finance department considers the ideal

employee a go-getter who is not afraid to take on new challenges. “We want people who

are willing to jump in; there’s no point in having prima donnas,” said Mark Cameron, vice

president of finance.

#5 LaRgE: Owensboro Health Regional Hospital, Owensboro, Ky.Owensboro Health Regional Hospital minimizes stress in the finance department by

keeping staff involved and aware of goals and targets. “It’s all about being

transparent, about letting people know how high the hill is that we have to climb,”

said CFO John Hackbarth.

#4 LaRgE: The Valley Hospital, Ridgewood, N.J.The Valley Hospital’s Finance Morale Committee organizes soup and stew days and

other activities for staff each quarter. “We’ve found that investing in employee morale

will get your staff to go the extra mile,” said Josette Portalatin, director of patient

finance services.

#2 MEdIuM: Baptist St. anthony’s Health System, amarillo, TexasAt staff meetings, finance employees are encouraged to discuss challenges and bring up

new ideas for driving efficiencies. And when it comes to retaining employees, it all goes

back to “hiring people that want to grow in their career and be part of a team and a

successful department,” said Brian Walton, CFO.

#1 MEdIuM: Schneck Medical Center, Seymour, Ind. Employees in Schneck Medical Center’s finance department understand how their jobs

contribute to patient care, and that is not always apparent in finance. “They each have a

strong understanding of why their particular job is important to putting our patients first,”

said Controller Deborah Ridlen.

By Mike Moran, Project Editor

These two pages display the 15 winners in Healthcare Finance News’ inaugural “Where to Work: BEST Hospital Finance Departments.” To read profiles of the winning departments, review data gathered from the program’s extensive employee survey and to learn how the winners were selected, visit www.healthcarefinancenews.com.

#1LARgE

#3LARgE

#5LARgE

#2MEDIUM

#2LARgE

#4LARgE

#1MEDIUM

15September 2013 Healthcare Finance News www.healthcarefinancenews.com 2013 BEST HOSPITAL FINANCE DEPARTMENTS

#4 MEdIuM: Inspira Health Network (formerly South Jersey Regional Medical Center), Vineland, N.J.The finance department at South Jersey Regional Medical Center grew from 21 to 36

when the facility recently merged with Underwood-Memorial Hospital. VP of Finance Tom

Baldosaro faces the “unique challenge” of ensuring that the new department, now part of

the Inspira Health Network, fully embraces technology.

#3 MEdIuM: union Hospital, Terre Haute, Ind.Flexible schedules boost employee satisfaction at Union Hospital. Many employees in the

finance department have children, and flextime allows them to attend to their families as

well as to their jobs. What’s more, the longevity of the staff has engendered a family-like

atmosphere. “We back each other up,” said Controller Shantha Aaron.

#1 SMaLL: Wichita County Health Center, Leoti, Kan.Employees in Wichita County Health Center’s high-energy finance department are driven to

get things done said CEO Vicki Hahn. “They don’t wait until the last minute. If it needs to

be done, they get it done today. We let our board know – we brag about them.”

#5 MEdIuM: altru Hospital, grand Forks, N.d.Long-tenured staff in Altru Hospital’s finance department have found a path to what they

do best and are more or less self directed. “I don’t manage that much. It’s more a matter

of letting them go,” said CFO Dwight Thompson.

#3 SMaLL: Simi Valley Hospital, Simi Valley, Calif.At Simi Valley Hospital, there’s more to cross training then just learning a new job.

Stretching breaks have been added to the wellness program. Now, twice a day, employees

take a break to re-energize with a stretching regimen that is often accompanied by music.

#2 SMaLL: St. Francis Healthcare, Wilmington, del.The finance team at St. Francis Healthcare regularly participates in community

outreach events. “Besides doing your job, you’re helping others as well, and that

helps the department feel like a team,” said Mary Thibodeau, accounting and financial

reporting manager.

#5 SMaLL: armstrong County Memorial Hospital, Kittanning, PaIn an era of seemingly constant change, Armstrong County Memorial Hospital’s finance

department strives for a good work-life balance. “If we sit down and talk rationally

(about things like ICD-10), we eliminate panic and fear,” said Sharon Urban, director of

general accounting.

#4 SMaLL: Fairfield Medical Center, Lancaster, OhioFairfield Medical Center’s CFO Sky gettys embraces a hands-off philosophy with his staff – but

not completely. He regularly makes rounds through the finance department to show that he

values each employee as a person. “In a department where you only have 10 positions, you

have to look for ways to give them opportunities to expand and grow,” he said.

#4MEDIUM

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#1SMALL

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#5SMALL

#5MEDIUM

#2SMALL

#4SMALL

GE CapitalHealthcare Financial Services

© 2013 General Electric Capital Corporation. All rights reserved. All transactions subject to credit approval by GE. Funding may be provided through GE Capital, Healthcare Financial Services affiliate, GE Capital Bank, Member, FDIC.

Fast Facts

Website: http://www.gehealthcarefinance.com

Sales/Marketing Contact: Al Aria

Title: Senior Managing Director, Corporate Finance

Phone: 301-664-9876

E-mail: [email protected]

Address: GE Capital, Healthcare Financial Services2 Bethesda Metro CenterSuite 600Bethesda, MD 20814

Financial Product Offerings:

– First Lien Loans– Asset Based/Backed Loans– Second Lien Loans– Senior Secured Loan Program (SSLP)

Company ProfileWith in-depth industry knowledge and expertise, GE Capital, Healthcare Financial Services has provided more than $60 billion in financing over ten years to companies in over 40 healthcare sectors including senior housing, skilled nursing, hospitals, healthcare services, pharmaceuticals and medical devices. Our team of professionals creates business and financial solutions tailored to meet individual needs of our customers.

Our PhilosophyGE Capital, Healthcare Financial Services is a leading middle-market lender to the healthcare industry. Our team has decades of experience and expertise delivering customized financing solutions to businesses across the healthcare landscape. We offer a one-stop source for the comprehensive range of GE’s lending solutions and the expertise of GE’s 130+ year industrial heritage.

What we offerIn 2012, GE Capital, Healthcare Financial Services completed over 130 senior secured term loans, revolvers and asset-based credit lines ($5.7 billion in committed capital), playing a lead agent role in over 80 transactions, which included 40 new customers. We invested over $500 million across four transactions through our Senior Secured Loan Program (“SSLP”). The SSLP structure enables us to commit up to $400 million in a single transaction in as little as three weeks, without flex, ratings, or syndication, thereby providing greater certainty of execution. For more information, visit www.gecapital.com/healthcarefinancenews1.

A successful collaborationWe utilize our deep healthcare domain expertise to develop long-lasting relationships with middle-market healthcare companies and sponsors, and deliver valuable financing solutions with certainty of execution over time.

GE CapitalHealthcare Financial Services

At GE Capital, we’re not just bankers, we’re builders. To an industry where insight and execution are critical, healthcare companies and investors continue to look to GE Capital, Healthcare Financial Services for customized financing solutions. With in-depth industry knowledge and expertise, we have provided more than $60 billion in financing over the last ten years to companies in over 40 healthcare sectors. Stop just banking. And start building.

For more information, visit www.gecapital.com/healthcarefinancenews1.

LIKE A BANK: WE FINANCE HEALTHCARE COMPANIES.

UNLIKE A BANK:HEALTHCARE FINANCING IS ALL WE DO.

© 2013 General Electric Capital Corporation. All rights reserved. All transactions subject to credit approval by GE.Funding may be provided through GE Capital, Healthcare Financial Services affiliate, GE Capital Bank, Member, FDIC.

GE CapitalHealthcare Financial Services

© 2013 General Electric Capital Corporation. All rights reserved. All transactions subject to credit approval by GE. Funding may be provided through GE Capital, Healthcare Financial Services affiliate, GE Capital Bank, Member, FDIC.

Fast Facts

Website: http://www.gehealthcarefinance.com

Sales/Marketing Contact: Al Aria

Title: Senior Managing Director, Corporate Finance

Phone: 301-664-9876

E-mail: [email protected]

Address: GE Capital, Healthcare Financial Services2 Bethesda Metro CenterSuite 600Bethesda, MD 20814

Financial Product Offerings:

– First Lien Loans– Asset Based/Backed Loans– Second Lien Loans– Senior Secured Loan Program (SSLP)

Company ProfileWith in-depth industry knowledge and expertise, GE Capital, Healthcare Financial Services has provided more than $60 billion in financing over ten years to companies in over 40 healthcare sectors including senior housing, skilled nursing, hospitals, healthcare services, pharmaceuticals and medical devices. Our team of professionals creates business and financial solutions tailored to meet individual needs of our customers.

Our PhilosophyGE Capital, Healthcare Financial Services is a leading middle-market lender to the healthcare industry. Our team has decades of experience and expertise delivering customized financing solutions to businesses across the healthcare landscape. We offer a one-stop source for the comprehensive range of GE’s lending solutions and the expertise of GE’s 130+ year industrial heritage.

What we offerIn 2012, GE Capital, Healthcare Financial Services completed over 130 senior secured term loans, revolvers and asset-based credit lines ($5.7 billion in committed capital), playing a lead agent role in over 80 transactions, which included 40 new customers. We invested over $500 million across four transactions through our Senior Secured Loan Program (“SSLP”). The SSLP structure enables us to commit up to $400 million in a single transaction in as little as three weeks, without flex, ratings, or syndication, thereby providing greater certainty of execution. For more information, visit www.gecapital.com/healthcarefinancenews1.

A successful collaborationWe utilize our deep healthcare domain expertise to develop long-lasting relationships with middle-market healthcare companies and sponsors, and deliver valuable financing solutions with certainty of execution over time.

GE CapitalHealthcare Financial Services

At GE Capital, we’re not just bankers, we’re builders. To an industry where insight and execution are critical, healthcare companies and investors continue to look to GE Capital, Healthcare Financial Services for customized financing solutions. With in-depth industry knowledge and expertise, we have provided more than $60 billion in financing over the last ten years to companies in over 40 healthcare sectors. Stop just banking. And start building.

For more information, visit www.gecapital.com/healthcarefinancenews1.

LIKE A BANK: WE FINANCE HEALTHCARE COMPANIES.

UNLIKE A BANK:HEALTHCARE FINANCING IS ALL WE DO.

© 2013 General Electric Capital Corporation. All rights reserved. All transactions subject to credit approval by GE.Funding may be provided through GE Capital, Healthcare Financial Services affiliate, GE Capital Bank, Member, FDIC.

18 Community Care www.healthcarefinancenews.com Healthcare Finance news September 2013

Physician Practices | Clinics | Long-Term Care | Home Care

CommuniTy CareBriefs

AAHomecAre And AmePA mergingThe American Association for Homecare and the Accredited Medical Equipment Pro-viders of America merged effective August 1. The merged organizations will use the AAHomecare name. AMEPA’s former presi-dent, Rob Brant, has become AAHomecare’s director of industry relations.

direct-cAre workforce dAtA by stAtePHI has updated its web-based tool provid-ing state-by-state profiles of nursing home aides, home health aides and personal care aides. The PHI State Data Center profiles include the most recent wage, employ-ment and demographic data available and descriptions of training standards for each of these three direct-care occupations. The tool allows users to download charts or share them through social media. Informa-tion in the tool is based on data from the U.S. Census Bureau’s Current Population Survey and the Bureau of Labor Statistics’ Occupational Employment Statistics and Employment Projections Programs.

societies releAse AdditionAl cHoosing wisely listsIn the fall of 2013 and through the winter of 2014, a number of medical specialty societies will release more than 30 new lists of specific tests or procedures they say are commonly ordered but not always necessary and could cause harm. Part of the Choosing Wisely campaign, these new lists add to a library of more than 130 tests and procedures already identified.

AnA to oversee oPerAtions of nAQcThe American Nurses Association will over-see and manage day-to-day operations of the Nursing Alliance for Quality Care. NAQC will transition from its headquarters at The George Washington University School of Nursing and will maintain its membership structure and continue to accept additional member organizations.

nurse AssistAnt trAining grAnts AvAilAbleThe Walmart Foundation is granting $3.5 million to the American Red Cross to help 2,500 students receive training through the Red Cross’ Nurse Assistant Training pro-gram. The grant will be awarded primarily to those female students with incomes below the poverty line. It is the first credential-spe-cific training grant the Walmart Foundation has awarded as part of its Global Women’s Economic Empowerment Initiative. The Red Cross’ program equips students with the skills required to become CNAs and provide basic care so they can work in long-term care facilities such as nursing homes.

MGMA goes coastalThe annual conference

is in San DiegoBy Stephanie Bouchard, Managing Editor

The Medical Group Manage-ment association is holding its annual conference a bit early this year – from oct. 6 to 9 – in the ocean-side city of San diego. here is our top

10 list (in no particular order) of how you can make your conference experience a memorable one.

1. tAste of sAn diego culinAry And bAr tour in tHe exHibit HAll on Sunday, oct. 6 from 4:30-6:30 p.m., visit exhibit hall booths and other areas in the hall to experience culinary flavors and drinks from San diego’s districts, including

mgmA SEE PAGE 19

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Subscribing to your doctorWhite paper suggests paying

doctors a monthly subscription fee will reduce

costs and improve careBy Stephanie Bouchard, Managing Editor

NeW GlouceSTer, Me – in a white paper released last spring written for the physicians Foundation, healthcare industry analyst Jeff Goldsmith argued for a subscription model in which patients would pay a monthly fee to their doctor. it’s a proposal that set the foundation talking and is sure to result in strong opinions from payers, providers and patients.

in “a Blueprint for a More effective, physi-cian-directed health System,” Goldsmith, an associate professor of public health sciences at the university of Virginia, argues that instead of paying their primary care physician for vis-its and tests, patients should pay a monthly subscription fee for the relationship with their physician. That monthly fee would be in addition to what patients pay for their health insurance plans, but is not concierge medicine.

The physicians Foundation commissioned and released the white paper but hasn’t endorsed it, said lou Goodman, phd, the foun-dation’s president. “We’ve had a lot of debate on this and there are many elements of it that we wouldn’t disagree with,” he said. however, there were concerns about how patients and

doctors would react, in particular to the sub-scription model recommendation.

acknowledging that there are barriers to overcome, Goodman feels strongly that this model has merit.

fee SEE PAGE 20

greenfield Health in Portland, ore. charges its patients a monthly subscription fee that allows for a more in-depth relationship between patients and clinicians.

Moving beyond scope of practice

Doctors and NPs encourage a new

conversationBy Stephanie Bouchard, Managing Editor

NeW GlouceSTer, Me – The argu-ments surrounding nurse practitioner scope of practice have been heated from both the Np side and the physi-cian side but some in these fields are pushing for conversations that move beyond the rhetoric.

instead of fighting about training levels, research supporting or not sup-porting the quality of care provided by Nps and other non-physician clinicians, expanding scope of practice for non-physician clinicians and who is best to lead team-based care (physicians versus others), Nps and doctors should be leading the way toward effective team-based care said a trio of practitioners during a live web presen-tation in July sponsored by the alliance for health reform and the robert Wood Johnson Foundation.

“No nurse practitioner i know is say-ing their training is equal to mine,” said Kavita patel, Md, a primary care inter-nist at John hopkins Medicine and fel-low in the economics studies program at the Brookings institution. “The problem is, i think, we’ve unfortunately – and it’s a disservice to ourselves as profes-sionals – we’ve been put into these lit-tle cages to battle each other because we’ve been made to perceive that we can be substituted for each other.”

doctors and nurses are not the same, agreed reid Blackwelder, Md, president-elect of the american acad-emy of Family practitioners (aaFp).

“in order for america to realize the promise of team-based care, we all have to come to a better and shared understanding of what it means for

Kavita Patel

scoPe SEE PAGE 21

19September 2013 Healthcare Finance News www.healthcarefinancenews.com CommuNity Care

TIME IS MONEY IN HEALTHCARE. STACK THE ODDS IN YOUR FAVOR.

Play Cash Stacker at Booth 731 during the MGMA 2013 Annual Conference and enter for a chance to take home a new iPad® mini. Also stop by to learn how Emdeon applications, services and analytics integrated with “big data” fueled by our universal health information exchange can help you thrive in the uncertainty driven by healthcare reform.

Go to www.emdeon.com/mgma2013for more information.

iPad® is a trademark of Apple Inc., registered in the U.S. and other countries. Emdeon is not affiliated with, endorsed by or sponsored by Apple Inc.

Emdeon Healthcare Finance News Jr Page Ad September_Layout 1 8/14/13 2:33 PM Page 1

harbor-flavored treats and special-ties from Mission Viejo and the Gaslamp Quarter.

2. tHe gAslAmP QuArter if Sunday evening’s introduction to the Gaslamp Quarter intrigues you, check out the real thing. it is 16-plus blocks of history living jowl-by-cheek with modernity. Featuring Victorian-era buildings, the quarter is a historic district that’s on the National register of historic places, and is known for its entertainment opportunities, shops, nightclubs and restaurants.

3. bAlboA PArk described as a must-see, Balboa park is home to 15 major museums, including the San diego Museum of art, the San diego Natural his-tory Museum and the San diego air & Space Museum. The San diego Zoo is also part of the park, as are a variety of entertainment venues, gardens and trails.

4. sAn diego Zoo part of Balboa park, the zoo takes up 100 acres and is home to more than 3,700 animals. it specializes in open-air, cageless exhibits. it is one of the only zoos in the world to house giant pandas – the zoo is home to four, the youngest born in July 2012.

5. tHe fAscinAtion AdvAntAge on Wednesday, oct. 9 from 7:30 to 8:30 a.m., Sally hogshead, the author of FASCINATE: Your 7 Trig-gers to Persuasion and Captiva-tion and creator of the Fascination advantage assessment, a test that measures how a person fascinates, talks about how to identify and use your personality’s most captivating aspects.

6. wAlk tHe embArcAdero embracing San diego Bay on the east side is the embarcadero (“the landing place”). administered by the port of San diego, this stretch takes in the uSS Midway Museum, the San diego Maritime Museum and the restaurants and shops of Seaport Village. look for companies offering narrated harbor tours if you want to get out on the water.

7. george will And tHe wAsHington scene on Monday, oct. 7 from 8 to 9:15 a.m., political columnist George Will shares his insights into the work-ings of lawmakers and Washington’s political scene.

8. deeP dive sessions New to the conference this year, deep dive sessions range from 1½ to 2½ hours long. of the five deep dives on the agenda, topics include training billing office staff, under-standing personalities and physi-cian leadership.

mgmACONTINUED FROM PAGE 18

san diego’s gaslamp Quarter is just steps away from MGMA’s annual conference.

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9. cAtcH A wAve Surfing is good at the beaches in San diego. confident surfers can check out Mission Beach, pacific Beach or ocean Beach, but beginners might want to head to la Jolla Shores, where the waves are gentler, or look for opportunities to take a surfing lesson.

10. dAtA exPerience also new to the conference this year is an education area focused on the power of data management. Various interactive sessions will explore how to effectively use data in your practice. n

20 Community Care www.healthcarefinancenews.com Healthcare Finance news September 2013

“What i guess i’m arguing is that i think this is a good idea because it lowers the trans-action costs associated with being a primary care provider and it lowers the overhead asso-ciated with maintaining the relationship, if you do it properly,” Goldsmith said.

“You’re paying for the relationship. You’re not paying for the practice.”

in exchange, patients get 24/7 connectivity and same-day access.

it’s a deal Goldsmith thinks won’t be a tough sell with patients. “i don’t think it’s

going to be very difficult to sell a product where they can see their doc-tor on demand, where they can email them, where they can text them,” he said. “i think the difficult sell is to the health insurers who are wedded to an incred-ibly high-maintenance, expensive fee-for-service model for paying for a lot of physician care. That’s the hard sell.”

But Josh Trutt, a board certified emer-gency room physician who practices age

management at physioage Medical Group in New York city, thinks it won’t be that easy to sell this model to patients.

patients pay a monthly subscription fee at physioage Medical Group, and that model works well for the group said Trutt. The monthly fee pays for things not covered by reimbursements such as responding to emails from patients. however, physioage Medical Group is not strictly a primary care practice and its patients are highly engaged and pro-active about their health. Most patients, he said, are not proactive about their health, and furthermore, consider the emergency room same-day access.

“They’re not worried on the weekend that they can’t see their doctor,” he said. “… they’ll go to an urgent care or (the er) and not only won’t they pay a monthly fee, some-times they won’t even pay the er fee because by law if you go to the er and can’t give them your identifying information, they still have to see you.”

The monthly subscription model as imag-ined by Goldsmith is not as revolutionary as it seems at first. There are institutions in the u.S. that already do it, including GreenField health in portland, ore.

GreenField opened 12 years ago, born out of the idealized primary care design

feeCONTINUED FROM PAGE 18

collaborative devised by the institute of healthcare improvement said Steve rallison, GreenField’s administrator.

GreenField has always been subscription based. Monthly fees, based on age ranges, run from $12 a month to $65 a month. Medicare and Medicaid patients are accepted but Green-Field caps the number to 50 Medicaid patients per panel and 30 per-cent of the practice for Medicare patients.

The idea was to reject the visit-centric model built around maximizing a physician’s time to generate as much revenue as possible to cover compensation and the practice’s expenses, rallison said.

instead, the model allows patients to have contact with their physician beyond the annual exam (which lasts at least an hour). patients can call any time (a real person answers the phone) to get their problem resolved without having to go into the office for a face-to-face visit (unless warranted).

“Since we’re not billing the insurance com-pany for having you come in for a problem-focused visit, we’re saving the insurance company money,” rallison said. “They’re the ones that should be paying for this, but you’re paying for it through the subscription service.”

The subscription model’s biggest vulnera-bility is healthy people, rallison said, because they don’t usually need follow-up health ser-vices. These folks sign up because they want out of the traditional system and are excited about the model. They have their annual exam and then nothing more.

“and then we send them the bill for their annual fee 12 months later and they go ‘huh.’ They go, ‘350 bucks on top of what i’m paying for health insurance, my copayment? i can’t justify the added expense,’” said rallison. “For people over 50, they go ‘this is the greatest deal. You should charge us more money.’”

in order to counteract this vulnerability, GreenField is looking at ways to offer value-added services, rallison said. Things like mak-ing available nutrition specialists or offering discounts to fitness centers.

While the subscription model works for GreenField – it has grown to include 13 cli-nicians and 4,500 patients – GreenField is small scale. rallison is not sure this model could work on a national scale, as Goldsmith suggests, but it could, he said, have an influ-ence on the way the payment practices are designed by the health plans.

“i don’t think we have all the answers yet, but i think it’s clearly going in the right direction,” he said. “We need to find a way to replicate what we do here … because it’s hitting the right things: relationships, service and reliability at all levels.” n

Steve Rallison

Josh Trutt

A DIVISION OF HIMSS MEDIA

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medical providers to work together,” Blackwelder said. “as with any team structure, we must define roles. each team member is critical but they’re not interchangeable.”

But defining roles means allowing for some flexibility for the type of care being delivered. each member of the team should be able to fully use their knowledge and training without having to seek permission from someone else on the team, said Geraldine “polly” Bednash, ceo and executive director of the american association of colleges of Nursing, and it shouldn’t be assumed that a physician should be the person who always leads the team.

it is a mistake to treat all primary care models the same way – with a doctor always being the leader, agreed patel. “What we need to do is to have team-based care with physi-cians leading these efforts for when we need a physician to be involved in the first place,” she said.

“i can’t think of anybody who doesn’t want to be part of a high-functioning team,” she added. “Most doctors i know – including myself – will say ‘i don’t care what label you use on me. i just want to know that the patients that i get

to see really need to be seen by me and the work that i’m doing isn’t just in a silo.’”

Many of the primary care models that put physicians as the default leader of the team do so because of payment structures, patel said. Figuring out how to move away from fee-for-service and who gets paid what in evolving primary care models will be a challenge. There is evidence that team-based care models in which the team mem-bers are salaried are those that are demonstrating the most success, she said. n

scoPeCONTINUED FROM PAGE 18

“As with any team structure, we must define roles. Each team member is critical but they’re not interchangeable.”– Reid Blackwelder

MichiGAn Gets hoMe-bAsed priMAry cAreBy Mary Mosquera, Senior Editor

A MichiGaN piloT To bring primary care to the home for patients living with

advanced chronic illness will now spread across the state. priority health, a Michigan-based nonprofit health plan, tested the concept last year with Spectrum health Medical Group for 90 of its patients.

among Spectrum’s pilot patients, emergency room and hospital

inpatient visits have dropped 47 per-cent, said priority health in a recent news release.

Spectrum health is part of an inte-grated system in western Michigan. it has home healthcare and skilled nursing facilities, as well as home physical therapy services.

The program is financed as a pilot program through priority health’s integrated delivery system, providing reimbursement for infrastructure and

billable services. “at the end of the pilot we will reconcile to assure our delivery system is kept whole, and they have not lost money on the pro-gram,” said Jay laBine, Md, priority health’s medical director. “We antici-pate that as we gain more experience with this program, we will build a shared savings model.”

patients need to be referred by their primary care physician and meet other qualifications to be

eligible. once in the program, the patient receives around-the-clock medical support; a plan of care that evolves with the patient’s needs; a nurse care manager to monitor the patient; and occupational, physical, respiratory and speech therapy.

The program also offers patients education about their medications, telemonitoring procedures and preparations in case of a health emergency. n

22 Payers www.healthcarefinancenews.com Healthcare Finance News September 2013

Managed Care | Insurers | Medicare & Medicaid | Claims

payersBriefs

NYC looks to aCCouNtable CareFor the first time in 15 years, New York City will rebid the contract for city workers’ health insurance. Mayor Michael Bloomberg said his office is developing a request for propos-als and wants the city’s health plan to expand medical group re-purchasing, develop col-laborative and accountable care programs and create long-term provider incentive pro-grams. The city’s current insurer, Emblem, uses some accountable care initiatives in the city’s health plan, which covers about 1 million public employees and retirees.

Private exChaNges to work with state hixs Hoping to bring as many Americans into exchange insurance pools as possible, the Centers for Medicare & Medicaid Services is signing agreements with private online exchanges to help with enrollment. eHeal-thInsurance, an early proponent of working with public exchanges as a quasi-broker “web-based entity,” was the first to sign an agreement with CMS and is now set to enroll subsidy-eligible residents in the 36 federally-run insurance exchanges. In the web-based entity process, online exchanges like eHealth will show consumers available health plans and subsidy support, and then redirect their information to federal agencies. The private exchanges won’t receive public funding but can earn commissions from health plans.

gao questioNs MediCaid waiver Costs CMS waivers for states trying new Medic-aid policies have sometimes deviated from budget neutrality standards, a Government Accountability Office review found. The GAO has had “long-standing concerns” with the criteria used in Medicaid demonstration waiv-ers, which are supposed to cost no more than traditional fee-for-service. In a review of 10 recently approved waivers, the GAO found that four included spending limits higher than the states’ baseline rates – potentially add-ing an extra $21 billion in federal spending and $11 billion in state spending. In Medic-aid waivers for Arizona, Indiana and Rhode Island, the spending models used limits “that exceeded benchmark rates,” and in Texas, hypothetical costs were used to model the base year of spending, the GAO found.

CigNa earNs NCqa CertifiCatioNCigna’s physician and hospital performance measurement programs for quality and cost have earned the National Committee for Quality Assurance’s Physician and Hospital Quality Certification for the third time. NCQA’s PHQ certification program evaluates how well health plans measure and report the quality and cost of physicians and hospitals.

HIX plan premiums won’t stabilize until 2016

Insurers say pricing plans is challenging without

population experienceBy Mary Mosquera, Senior Editor

Premium rates published by a number of states for health insurance exchange plans appear to be lower than originally expected, but experts anticipate

it won’t last. most say insurers won’t become sufficiently familiar with the populations they serve to align affordability and plan variety until at least 2016.

“if you look at rates in the individual market, they are likely to go up compared with what we see today, especially for younger people,” said Jenna stento, senior manager in the health reform practice of avalere health.

exchange plans are categorized as precious

metals – bronze, silver, gold or platinum – with lower premium plans having higher out-of-pocket costs in deductibles, co-pays and cost-sharing. all plans must offer essential health benefits.

the affordable Care act (aCa) limits how much insurers can raise rates according to increased patient age. the most expensive plans may only be three times the price of the least expensive ones. that means older, sicker individuals may pay less than they otherwise would have, and younger, healthier people may pay more in 2014 than 2013.

premiums will vary across states between $50 and $100 or more a month for a similar plan, much like today, stento said. “despite new requirements at the federal level, much of it still falls to state regulatory decisions, state benefit designs and the local dynamics in the marketplace,” she said.

rates SEE PAGE 24

Despite ACA delay, employers should offer 2014 health plan

Without an attractive offering, employees

may not join in 2015By Mary Mosquera, Senior Editor

The delay of the affordable Care act’s employer mandate gives businesses and health plans an opportunity to better prepare, not to put off what they

know they must do.the pay-or-play delay has positive potential for

the employer-employee relationship, as employ-ees will be able to see what plan sponsors want to do before they have to do something, said dave morgan, senior employee benefits advisor

at morris & Garritano insurance services.“it widens the window for plan sponsors to

recalibrate their contribution to new compli-ant plan designs and communicate their value proposition in the new context of the aCa mar-ketplaces,” he said.

in July, the obama administration said busi-nesses with more than 50 employees have until 2015 instead of 2014 before they must offer them insurance. the delay is meant to allow employers to update their coverage and report-ing systems as required by law.

employers had faced a $2,000 penalty beginning Jan. 1 for each full-time employee who did not get health coverage. some crit-ics of the aCa had predicted that employers

MaNdate SEE PAGE 25

“... it may be difficult in 2015 to attract employees who have enjoyed subsidized coverage the previous year.” – Dave Morgan

HHS doles out $67M to boost HIX education

Hospitals, advocacy groups among recipients of “navigator” grants

By Phil Galewitz, Contributing Writer

WashiNGtoN – hospitals, universities, indian tribes, patient advocacy groups and local food banks were among orga-nizations awarded $67 million in federal grants in august to help people sign up for coverage in new online health insur-ance exchanges that open for enroll-ment oct. 1.

planned parenthood, the united Way and the National urban league are some of the best known organizations among the 105 awarded “navigator” grants in 34 states that will rely on the federal government to operate all or part of their exchanges. states setting up their own exchanges are getting substantially

more money in a separate funding pool created by the affordable Care act.

the amount is more than had been expected for these states and comes on top of the $150 million the government granted in July to nearly 1,200 commu-nity health centers nationwide to hire navigators.

“Navigators will be among the many resources available to help consumers understand their coverage options,” health and human services secretary Kathleen sebelius said in a statement.

Navigators will provide assistance on the phone and in person to help people

Navigator SEE PAGE 24

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the federal government released $67 million in grants to support navigators, who will provide assistance on the phone and in person to help people understand the health law’s new benefits.

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a large part of the population coming to the exchanges will be highly cost conscious and predominantly uninsured, stento said. “so if you enroll in a bronze plan, you can expect an average patient pays 40 percent of the cost out of pocket compared with the platinum plan, which is 10 percent,” she said. “the premium is going to be a large driver in the decision to enroll.”

the lowest rates for silver plans in 10 states and the district of Columbia are clustering around $300 a month, said linda

blumberg, senior fellow at the urban insti-tute, during a recent alliance for health reform webinar. to put it in perspective, the employer single premiums average in 2014 is about $516 a month, she said. and a large number of exchange enrollees will be eligible for tax credits.

premiums will vary by location because of the differences in medical spending standards and states’ different choices for essential benefi t benchmark plans. the level of com-petition in both insurer and provider markets also differs signifi cantly. “these differences have long preceded the aCa. much of it will persist after full implementation of the law,”

blumberg said.some insurers are already modifying their

rates after seeing competitors’ rates, in order to remain competitive, she said.

tom miller, resident fellow at the amer-ican enterprise institute, described the early premium reporting states as “eager beavers” that want to demonstrate lower rates under reform using a somewhat “arti-ficial Cbo extrapolated baseline.”

“We’re waiting to hear what the real rates are, but the early indications depend on what your assumptions are,” he said in the alliance for health reform webinar. “the second and third years may be very different.”

miller noted some issues that will affect future rates, including the impact of the indi-vidual mandate; the health status of those who enroll in the exchanges; the extent of medicaid expansion; and how generous sub-sidies are for those with incomes above 200 or 250 percent of poverty level.

blumberg said insurers are uncertain about the best pricing strategies. “in years two, three and beyond, insurers will have a better under-standing of the healthcare characteristics of exchange enrollees.”

stento agreed. “i think we will have a volatile market for a few years – certainly through 2015.” �

ratesCONTINUED FROM PAGE 22

understand the health law’s new benefits, including evaluating health plans for sale on the exchanges. they have to balance explain-ing what’s offered without expressly telling people which policy to choose.

Consumers will be directed to them from the healthcare.gov website as well as through national call centers. the organiza-tions receiving grants will use staff as well as volunteers.

the grant total awarded was $13 million more than had been anticipated. in april, hhs said $54 million would be available. federal offi cials said they took the $67 million from the prevention and public health fund estab-lished by the aCa, which started out with $15 billion but was cut by $6.5 billion last year as part of a defi cit reduction package.

the largest navigator grants went largely to groups in states with the highest uninsured rates. among the biggest grants were:

� $5.9 million, united Way of metropolitan tarrant County, texas

� $4.2 million, university of south florida in tampa

� $2.2 million, structured employment eco-nomic development Corporation in atlanta

� $2 million, North Carolina Community Care Networks

� $2 million, ohio association of foodbanks� $1.3 million, michigan Consumers for

healthcareplanned parenthood chapters in montana,

iowa and New hampshire received grants totaling about $654,000. among hospitals get-ting awards are ascension health, the nation’s largest Catholic hospital system, university of mississippi medical Center, randolph hospi-tal in North Carolina and Children’s hospital medical Center in ohio.

like some other components of obamacare, the navigator grants are not without contro-versy. Critics see navigators as potential com-petitors to insurance brokers, and say they should be subject to more rigorous screening before they can work with consumers. all types of enrollment assisters – including navigators – are subject to federal criminal penalties for violations of privacy or fraud statutes, in addi-tion to any relevant state penalties.

as of July at least 19 states with federal exchanges (including state-federal partnership exchanges) had passed or were considering legislation setting requirements for navigators, according to the Commonwealth fund. among the 14 that had passed laws were florida, Geor-gia, ohio, texas, Virginia and Wisconsin. �

Kaiser Health News is an editorially independent

program of the Henry J. Kaiser Family

Foundation, a nonprofi t, nonpartisan health

policy research and communication organization

not affi liated with Kaiser Permanente.

NavigatorCONTINUED FROM PAGE 22

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25September 2013 healthcare finance News www.healthcarefi nancenews.com PaYers

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would cut hours or employees to avoid the requirement.

businesses who wish to sponsor a plan in 2015 should strongly consider a 2014 offering that will encourage high participation in the group, morgan said.

“if there is no 2014 offering or if it is inadequate or unaffordable, it may be diffi cult in 2015 to attract employees who have enjoyed subsidized coverage the previous year,” he said.

the Congressional budget office (Cbo) estimated that the one-year delay of the employer mandate would cost the government $10 billion in pen-alty payments that would have been assessed on businesses in 2014 and col-lected the next year. similarly, the cost of health insurance exchange subsidies will increase by $3 billion because some individuals will obtain their coverage in the online marketplaces when their employer doesn’t offer it.

“most large employers currently offer health insurance coverage to their employees, and because the delay is only for one year, few employers will change their decisions about offering such coverage,” said douglas elmendorf, Cbo director, in the July 30 report.

still, as a result of the delay, Cbo expects about 1 million fewer individu-als to enroll in employer-based coverage in 2014 than was projected in may. about one half will go uninsured and the others may obtain coverage through medicaid.

in a recent survey of 881 employers conducted before the delay, the con-sulting firm mercer found one third reported that they do not extend cov-erage to all employees working 30 or more hours per week, although many had made plans to do so in 2014. “most have not announced changes yet, and if they have an extensive part-time work force, the money to be saved by not expanding coverage in 2014 could be considerable,” said tracy Watts, a mercer senior partner in a news release.

moreover, half of the employers in the survey expressed concern about how to handle employee questions about health insurance exchanges and 43 percent were apprehensive about establishing processes and systems for interacting with exchanges.

timothy Jost, Washington and lee university law professor, told a recent congressional hearing that the department of treasury’s approach for establishing employer reporting requirements was complex.

“if taking a little more time could result in simplification, that should relieve a burden on american busi-nesses. there is little evidence that employers will rush to exit employee coverage, (but) employers have been dropping employee health coverage for some time, and this is likely to con-tinue,” Jost said.

he cited a recent survey by the inter-national foundation of employee ben-efi ts plans, in which less than 1 percent of large employers reported that they would drop coverage in the next year. and 70 percent said they offered health insurance to retain current employees and 65 percent to attract future staff. �

MaNdateCONTINUED FROM PAGE 22

You mentioned consumerism in healthcare. Do you have any thoughts about the future of mobile health tools that will help patients monitor their own care?I am increasingly using them, and from watching my own teenage children I can tell you that they’re hooked on them. Whether it will apply to the population at large is still something of a question. In the last few weeks, I’ve been speaking with CEOs at insurance companies, and they are all over this trend. They see mobile apps and tools as a way to help manage patient engagement. They are trying to go where people are living these days, which is on their

smartphones, their tablets, and giving them something that can help them manage their health.

Are you concerned about patient education in regard to the health insurance exchanges?Sure, it’s a huge change. Most of us believe that those who have been locked out of the market because of pre-existing conditions or because of cost will come and use the exchanges. It’s the younger, healthier people who we have to make sure get there to balance out the costs of the older, sicker population. That’s a bigger task. I am encouraged by what’s going on in some of the states. There are terrifi c ads running to promote the exchanges in certain states, the health plans are reaching out and community groups are helping. People are underestimat-ing the desire of hospitals and health plans to get this

done. They are motivated not just by their bottom lines, but because they have a personal involvement; they are very committed to making sure people know about this. This is something that those of us who have worked in healthcare have wanted to see for a long time.

What will the U.S. healthcare system look like 10 years from now?My perspective is informed by a basic optimism in my nature. What I hope is that it will be a more compassion-ate system, with all Americans having access to decent, basic, affordable coverage. I think our delivery system will work better to deliver value, and we’ll have clinicians and administrators who feel good about the product they’re delivering. �

– Interviewed by Richard Pizzi, Editorial Director

deParleCONTINUED FROM PAGE 9

26 SolutionS & ServiceS www.healthcarefinancenews.com Healthcare Finance news September 2013

Vendors | Accounting Services | Legal Services | New Products

SoLutioNS & SerViceSBriefs

Atrius tries vAlue-bAsed purchAsing AnAlytics toolAtrius Health, a nonprofit alliance of six community-based medical groups and home healthcare and hospice agencies in Massa-chusetts, is trying ArborMetrix value-based purchasing software to analyze cost and vari-ations in practice patterns for several surgical specialties, including hip fracture and replace-ment, knee replacement and heart attack. Information on clinical and medical expense drivers will be based on surgical specialty, both by hospital and surgeon; physician and hospital outliers; and preferred provider net-works for orthopedic and cardiology services.

usA.gov offers website to help businesses with AcA The Obama administration has launched a website, http://business.usa.gov/health-care, to help businesses understand changes under the Affordable Care Act that affect their operations, insurance options and health-related resources such as health insurance exchanges and the small business health options program. The website offers tools, links to provisions in the regulation, how to calculate the number of full-time employees under the law, ACA implementation timeline, glossary and frequently asked questions and answers for businesses based on the state where the business is located and size.

ihie, predixion to develop reAdmission insight AnAlytics tool The Indiana Health Information Exchange (IHIE), with 90 of Indiana’s 120 hospitals connected, and Predixion software are jointly developing a predictive tool for hospitals and accountable care organizations (ACOs) in Indiana to reduce preventable hospital read-missions. The readmission insight applica-tion enables risk stratification of patients to help identify appropriate interventions to improve patient outcomes and reduce costs. Predixion will use IHIE’s Indiana Net-work for Patient Care, the country’s largest inter-organizational clinical data repository and a statewide network that offers physi-cians a virtual longitudinal patient record, to generate more predictive tools.

rfid cAbinets help mAnAge inventory, pAtient chArgesMcKesson has introduced vendor neutral radio-frequency identification (RFID) cabinets that integrate with clinical workflow, making it easier for providers to monitor inventory and manage expenses, especially in high-cost areas like cardiology and radiology and operating room departments. The RFID cabi-nets provide supply chain management with clinical documentation, including new capa-bilities to track lot numbers, serial numbers and expiration dates.

Achieving accurate product pricingBy David Weldon, Contributing Writer

As medical supply prices have steadily risen in recent years, many hospitals have

turned to group purchasing orga-nizations to buy in bulk and keep costs down, but group product purchasing also complicates the product supply trail, often leading to errors that prevent fulfillment, delivery and payment.

The primary reason that medi-cal supply orders go astray is pricing mismatches, said steve inacker, president of hospital sales and services, medical segment at cardinal Health in dublin, Ohio.

There are four participants in the process of getting medical products to the healthcare provid-er: the manufacturer, who sets the price; the group purchaser, who contracts the price; the distribu-tor, who administers the price; and the customer, who pays the price. a

single inventory number, address, or other key data point that is incorrect at any of those four steps will stop the order in its tracks.

“if any of these four don’t match up, you get a rejection, either because information is

not current, or it is just bad,” inacker said.

There are two leading causes of pricing mishaps, according to inacker. One occurs when a cus-tomer negotiates a special price directly with the manufacturer,

and buyers and distributors aren’t in that loop. if the product normal-ly has other prices affixed to it, or different ordering information, it will red flag and not process.

The second is when one of the pricing sEE PAgE 27

the more touch points there are from manufacturer to customer, the more opportunities there are for pricing mismatches.

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Turn it around on the vendors

Reverse auctions could yield better supply contracts

By Chelsey Dougherty, Contributing Writer

In TOday’s HealTHcare environment, providers must carefully balance the need to control costs against their mission to deliver the

highest quality care. One of the multiple paths to this end may be the use of reverse auction services

to strategically source and negoti-ate contracts.

The average health system is comprised of many regional pro-viders. each of these providers requires goods and services to fuel their operations – everything from maintenance, legal and iT to medical and surgical equip-ment and pharmaceuticals. and they may all be purchasing these products from different vendors.

as a result, the health system Auction sEE PAgE 27

the ohio state university Wexner Medical Center in Columbus, Ohio, uses the reverse auction process to narrow down a list of suppliers for various products. The health center calls the process “streamlined” and “very efficient.”

Outcomes matter to hospital supply chainCost and quality focus gaining momentum

By Chelsey Dougherty, Contributing Writer

W iTH HealTHcare refOrm a top priority for most organizations, the cost, quality and outcomes (cQO) movement is garner-ing some popularity among supply chain leaders at hospitals.

The aim of the cQO movement is to provide first-class quality of care, continuity of care and lower readmissions while reducing costs to an organization, supply chain experts say. it is an approach that requires organizations to examine the intersec-tion of all the factors that touch the supply chain.

in order to implement the cQO approach, there are five areas an orga-nization should focus on, according to John Willi, senior director of supply chain management at dana-farber cancer institute in Boston and board member for the association for Healthcare resource & materials management (aHrmm) of the american Hospital association.

The first key factor is the supply chain professional, Willi said. These people should be seeking and finding spend data, analyz-ing it, benchmarking, using predictive analytics, making sure

supply sEE PAgE 27

John Willi

27September 2013 Healthcare Finance News www.healthcarefinancenews.com SolutioNS & ServiceS

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four participants fails to notify the others of changes within required time frames, not giving the other parties enough time to make adjust-ments in their databases.

each of the four participants in the process has a variety of conver-sion tables they use to ensure they are all talking about the same items, in the same quantities, for the same destinations, but ultimately, errors occur, inacker noted.

Overall, the healthcare industry enjoys a 99.6 percent to 99.8 per-cent accuracy rate on medical prod-uct orders, inacker said, but with millions of orders involved here, that 2.2 percent to 2.4 percent has significance.

“We run millions of lines of code daily,” inacker said. “Our pricing process is very complicated. We have three people who do nothing but load and fix pricing.”

Other factors that can throw a wrench in the works are late or last minute price negotiations, and retroactive price changes. To guard against such problems, organizations usually require price change notifi-cation within a certain number of days – 45 at cardinal Health.

Because errors can occur at any state of the process, customer involve-ment in the entire process is impor-tant, said Bill abrams, president of the distributed products division at medline industries in mundelein, ill.

“The system needs to be improved,” abrams said. “Be engaged in the process. and negotiate early. Give everyone a chance to get the pricing loaded and connected, so that that invoice can just sail right through.”

system improvements are on the way in the form of new legislation taking effect next year that man-dates standards in the medical prod-uct supply chain. n

pricingCONTINUED FROM PAgE 26

is not effectively leveraging its pur-chasing power to get the best prices from the best suppliers, according to Oscar may, director of healthcare for ariba, a sap company.

“The first step in evaluating whether a service is right for a reverse auction is to determine where there is spend that can be consolidated,” he said. “innova-tive providers have found that by connecting to a business network, they could discover, connect and collaborate with suppliers who can meet their needs on both fronts.”

may said providers using ariba’s discovery reverse auction plat-form can search for suppliers of the goods and services they need, view detailed profiles of their

capabilities and even get ratings from other providers who have used them.

“By reaching out and touch-ing more suppliers we are able to increase competition and as a result of increased competition we are able to get more value for the products and services in the prices that we’re paying,” said

Karen sherrill, senior commodity manager at The Ohio state uni-versity Wexner medical center in columbus, Ohio. Osu Wexner uses the ariba discovery platform.

“We are able to reach a large crowd of suppliers, they’re able to narrow down and disqualify themselves,” sherrill said. “Those who feel they qualify can go on to the next step

and continue on with the process. it’s very streamlined, very efficient, and suppliers can realize business opportunities much quicker.”

World energy solutions is anoth-er firm that has organized reverse auctions for healthcare providers. The Worcester, mass.-based firm operates online exchanges for energy and green commodities and serves various industries.

phil adams, World energy’s president, said his company uses an “anglo-dutch” reverse auction approach in their online auctions, which is designed to get suppliers to offer their best prices.

“Hospitals have a very sophisti-cated procurement process and are always looking to be careful with their costs,” he said. “They can clearly see the value proposition in the reverse auction method.” n

AuctionCONTINUED FROM PAgE 26

“Hospitals have a very sophisticated procurement process and are always looking to be careful with their costs.” – Phil Adams

supplies are sufficient for patient flow, and determining that the healthcare environment is sterile.

a second area of focus is engage-ment with suppliers. Organizations could adopt a touch-less procure-ment process or touch-less buys to improve their costs.

according to Brent Johnson, vice president of supply chain and support services at intermountain Healthcare in midvale, utah, and an aHrmm board member, the number one key to success for a supply chain manager is talent, but strategy comes second. “you need to strategically manage suppliers – some of them are still just trying to make money,” he said.

The third cQO factor is creating and building consensus to motivate change.

“Hospitals have got to start engag-ing the right executives and physi-cians and share data with them,” Willi said. “They’re scientists by nature. you’ve got to give doctors input on what is being used.”

“cost, quality and outcomes is nothing but a total cost of owner-ship of our buying strategies,” John-son added.

The fourth critical area to focus on is how the healthcare supply chain can mitigate risk.

“We want to make sure that our supply chain is not disrupted,” Willi said. “Our role in procurement is to really understand the pipeline of medications, capital items, what-ever it is, to meet demand. no other department is responsible for the flow of supply chain.”

finally, providers must under-stand the impact of the items they wish to procure, such as devices and pharmaceuticals, on

patient outcomes. physicians and nurses need to become revenue enhancers, Willi said. This means that everything from physicians’ rounds to nursing huddles must be part of an integrated approach to supply – because it impacts cost, quality and outcomes.

“Hospitals need to be integrat-ing all five points to really be ready for the continuing impact

of healthcare reform,” said Willi. “facilities are not surviving financially because they do not understand the cost, quality and outcomes in healthcare.”

Johnson agrees. “We have to invest more into supply chain management to get ready for healthcare reform. a supply chain organization in a fee-for-service model is a thing of the past.” n

supplyCONTINUED FROM PAgE 26 “A supply chain

organization in a fee-for-service model is a thing of the past.” – Brent Johnson

28 Trends www.healthcarefinancenews.com Healthcare Finance news September 2013

THE GPO EVOLUTIONACOs demand new perspective on group

purchasingBy John Andrews, Contributing Writer

The establishment and predicted growth of accountable care orga-nizations is giving group purchasing organizations

a new wrinkle to consider regard-ing procurement, membership and services they offer to hospital mem-bers. as the inpatient-centric busi-ness model is gradually transitioned into the post-acute care provider sector, GPOs must re-think their own approaches, relationships and sourcing patterns as it relates to this stratified new provider landscape.

at this point, the change is still in its nascent stage, but anticipa-tion about how the industry will evolve over the next few years is paramount, said les Popiolek, senior vice president of strategic sourcing for atlanta-based medassets.

“aCOs may be causing some changes, but they aren’t dramatic as it relates to sourcing at this point,” he said. “What the whole aCO model and the affordable Care act have done so far is get everyone thinking about a more collaborative environment, with the formation of acquisitions and partnerships to offer incentives about working together. it has made us think about our strategies around collaboration and managing costs.”

medassets has a national col-laborative in which it aligns clients around sourcing medical/surgical

supplies at one-third to one-half of total customer spend for a single sourcing event, Popiolek said.

“to get size and scale, if you get it at national level, that is the best leverage,” he said. “Regional and local sourcing do make sense in certain ways – if they result in great outcomes, it could lead to greater collaboration. but there is no one solution for every challenge.”

GPOs & ACOsalthough aCOs are still in a gesta-tional phase, some early results have been charted in The Many Journeys to Accountable Care, a white paper by the Charlotte, n.C.-based Premier Research institute and supported by the Commonwealth Fund. the report is a firsthand look into the experienc-es of the diverse groups of providers attempting to develop aCOs.

“as more providers move toward accountable care, it’s vital to under-stand the capabilities needed to create and participate in an effective model that improves quality while constrain-ing healthcare costs,” said co-author R. Wesley Champion, senior vice presi-dent of Premier Performance Part-ners. “there’s no better way to learn than from firsthand experiences of these innovative health systems that have taken steps to become aCOs.”

the Premier team gauged the performance of four health systems during their formative periods, including Fairview health services in minneapolis; memorial health-care system in hollywood, Fla.; atlantiCare in egg harbor town-ship, n.J.; and Presbyterian health-care services in albuquerque, n.m.

the white paper chronicles the challenges these early adopters of accountable care faced, their lessons learned and the implications of their work for policymakers, commercial payers and other providers.

all four organizations “identi-fied determining the ideal speed at which to implement accountable care as one of the most challenging aspects of transformation,” said co-author Joseph F. Damore, Premier’s vice president of population health management.

One of the most interesting aspects of the study, Damore said, was how each health system approached organizing their aCOs.

“every community is so different – they are not generic or homoge-nous at all,” he said. “based on their geographies, every organization faced different challenges. Our goal was to make this paper a learning document for others so they could see there isn’t one way to go into it – there are multiple ways to do it.”

AddinG vAluePremier facilitates the PaCt Popu-lation health Collaborative, one of the industry’s largest aCO collabora-tives, comprised of approximately 80 health systems with 350 hospitals and 17,000 physicians across 40 states. launched in 2010, it rep-resents about 25 medicare aCOs. through this initiative, Damore plans to continue charting the prog-ress of aCO formation and report the findings.

“there is a lot of building that needs to happen. so, are they able to build those components and get value agreements from the payer?” he wondered. “as most of those organizations have contracts, we’re measuring how they are doing. We want to know what is happening with quality of care. We are just starting to do that, so over the next year we will look at the data and publish the results.”

to date, Premier has a team of 30 people who have worked in 130

communities on this issue, so the group is heavily invested in learning as much as it can about how aCOs will influence healthcare going for-ward, Damore said.

“aCOs will transform the entire healthcare system eventually,” he said. “Our philosophy is to add value where we can, whether it is through purchasing or collabora-tives or informatics. Our goal is to find ways to do that by work-ing with suppliers, physicians and delivery systems.”

A new viewGroup purchasing organizations – which now prefer to be called alliances or membership organiza-tions – built their reputations on negotiating the lowest prices for volume purchases on commodity products. but in recent years they have evolved into multiple service groups that offer consulting, educa-tion and training, outsourcing and financial services.

“Price is a metric that is easy to measure and is probably the most single quantifiable thing in the equation,” Popiolek said. “but move ahead in time and as more informa-tion became available, the demands and expectations have gone beyond that into margin management. it has gone from price to cost into price plus utilization.”

actually, the main components are price, utilization and outcomes, he said. “it is delivering efficacy for care and service is a big part of it. sourcing is a combination of provi-sion, procurement, utilization and outcomes.” n

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with the predicted growth of ACOs, GPOs will have to re-think their approaches, possibly turning to forming new partnerships and collaborations.

Brought to you by the publishers of Healthcare IT News, mHealth News(www.mHealthNews.com) provides the mobile health ecosystem with news, resources and industry insights on the use of mHealth technology to improve outcomes in the U.S. and abroad.

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29September 2013 Healthcare Finance News www.healthcarefi nancenews.com PRODUCT TECHNOLOGY

2. START AT THE STARTBoth clinical and case management staff play crucial roles in preventing revenue loss through Medicare and Medicaid audits, experts say, by gathering the right information up front.

Brewer said that properly trained and staffed front-line workers ensure that charges are made fi rst to primary and sec-ondary payers before Medicare or Medicaid is charged. When it’s appropriate to bill Medi-care or Medicaid, it’s important the agen-cies are billed correctly, say, as bundled or unbundled charges.

“It’s important to have some system of sup-port for the process,” Brewer said, “so that you’ll have the necessary red fl ags for where the process is broken down, since people make mistakes.”

She said organizations that efficiently respond to audits tend to collect needed data up front, so that when a claim is produced, it refl ects all the data required.

“If you really want to avoid difficulty with audits and, of course, collect the cash, it’s bet-ter to (collect data) more at the front end rather than back end.”

Karen Bowden is senior vice president at Craneware and an expert on audits and revenue recovery. In a January 2013 blog, Bowden offered tips on preparing for the possibility of Congress extending RACs’ reach back another two years. The ideas apply here as well, specifi cally those regarding “simulated fi re drills” and checklists.

Bowden recommends that organizations conduct random internal audits. She says providers must ensure all charges are correct, complete and compliant pre-bill and submit claims using automated tools that can iden-tify charge patterns and pinpoint areas for improvement.

You can make the process easier by prepar-ing complete verifi cation check-off sheets for all records that could possibly be requested, ensuring that all key components are included.

3. USE RIGHT TOOLSExperts agree that technology tools ease the process and instill peace of mind.

“In terms of return on investment, a tool like this is not going to bring $5 million to the bot-tom line,” Brooke said. “But it will prevent you from letting things fall through the cracks that are going to result in a massive take-back that you really shouldn’t have had.

“It functions as a virtual employee and keeps managers from waking up in the middle of the night, worrying about having missed something.” �

Collect relevant reimbursement data upfront,

whenever possibleBy Greg Reid, Contributing Writer

PUT TO REST any hopes that Recovery Audit Contractors, or RACs, will be going away anytime soon.

In 2012, RAC auditors collected $2.29 billion in overpayments from provider organizations on behalf of the Centers for Medicare & Medicaid Services. In the first quarter of 2013, the program has racked up another $1.37 billion.

Add to these payment clawbacks the costs to providers associated with responding to audits. Yes, CMS may reimburse your organization for copying fees, but the rest of the audit process is on your dime.

The best way to prepare for a Medicare or Medicaid audit is to proceed as if a notice will arrive at any moment, and thus collect as much relevant reimbursement data as you can, as early in the process as you can. By collecting relevant data as a matter of day-to-day busi-ness, you not only reduce the risk of error, you have also captured the needed data for refer-ence purposes should an audit notice come across your desk.

Here are three steps to prepare for the (vir-tually) inevitable arrival of an audit letter:

1. HAVE PROCESSES IN PLACE“If you have a process in place in your compli-ance and revenue cycle areas that can verify the appropriateness of charges, you’ll limit the damage that could occur in a lot of situations,” said Carla Brewer, a senior health information system consultant at Stoltenberg Consulting.

The absence of an effective data collection process may result in both inaccurate data and troublesome billing errors.

“If the processes are not in place at the beginning of the cycle, you spend many hours trying to meet compliance rules after the fact,” Brewer said. “That results in more rework of the patient accounts, and gathering data as it’s happening.”

Audit response is a team sport, said John Brooke, vice president of sales, healthcare, pharma and life sciences for SAI Global’s Compliance 360 line. Audits routinely include requests for information on 400 to 500 patients. Because of the large number of groups within an organization that are involved – fi nance, compli-ance, revenue cycle, legal, case management, clinical, among others – and the tight deadlines afforded for response, the cost of responding to an audit may exceed the cost in question.

“Our most efficient customers suffer the least,” Brooke said. “They look at audit response as a system-wide project.”

CompliancePRODUCT TECHNOLOGY

The best way to prepare for a Medicare or Medicaid audit is to proceed as if a notice will arrive at any moment.

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Audits are inevitable, poor results are not

30 Job Spot www.healthcarefinancenews.com Healthcare Finance News September 2013

EMPOWERING SUPPORT STAFFWhile doctors and nurses get

the most attention, it’s important for employers to

engage all employeesBy David Weldon, Contributing Writer

Mention healthcare employ-ees to most people, and the two job roles that come to mind are doctors and nurses. But there

are dozens – perhaps hundreds – of job roles in healthcare that contribute to patient care and operations, not one of which is unimportant. the unfortunate thing is that they too often go overlooked when the conversation turns to empowering healthcare workers.

“no one is in a position that their job isn’t

important,” said terry Bennett, president of the national association for healthcare recruitment. “it is important that each employee know what their value is, and how what they do matters. the responsibility for that lies with the front line manager.”

articles and columns about empowering healthcare workers inevitably discuss the top levels of the organization, especially physicians

and nurses that have direct patient care responsibility. that obviously makes sense. But some organizations stop there, Bennett said, and they miss opportunities to positively impact the patient experience.

in some respects, empowering workers in the healthcare industry isn’t really all that different from any industry, Bennett noted. it involves giving employees a voice at all lev-els of the organization. empowerment means telling employees that the organization values their work and their opinions; that employees should feel able to express those opinions; that the organization encourages structured and focused risk taking; and that employees understand their role in the larger organiza-tional mission.

“there are a number of ways to get staff more involved, and to improve the quality of

care,” Bennett said, but it all starts with com-munication. “ask questions of your staff,” Ben-nett advised. “ask ‘how are things going?’ and ‘is there anything that keeps you from doing your job?’”

Bennett stressed the need to get employee feedback by whatever means available. this communication can take many forms, Bennett said, including employee surveys, focus groups

and corporate meetings. But front line managers should make the

effort to reach out on a more personal level, engaging each of their reports on a regular basis. this includes helping employees under-stand how their job role fits into the larger picture; how their work impacts other employ-ees; and especially how it affects the quality of patient care.

“it is important for managers, and the orga-nization, to seek out employee ideas whenever possible,” Bennett said. “and while there is always a potential for risks, some of the most successful organizations are the ones that aren’t afraid of risks.”

Still, Bennett noted that most organizations are not comfortable with risk taking, and that

this is a cultural hurdle for many.“there are not a lot of organizations that will

take risks,” Bennett said. “it takes a certain type of leader to accept that.”

Short of risk taking, an organization wants to motivate workers to do their best. to inspire that, share their success stories, Bennett advised. an employee council can help in this area.

More than a Morale boosterempowering staff does much more than boost morale, noted June Fabre, owner of Smart healthcare llc, and author of Smart Nurs-ing: Nurse Retention and Patient Safety Improvement Strategies. it improves patient safety, lowers healthcare costs and can even generate revenue.

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empowering support staff boosts morale, improves patient safety, lowers healthcare costs and can even generate revenue.

CAREER SOLUTIONS FOR THE HEALTHCARE FINANCE COMMUNITY

Retention and recruitment of talent is mission critical to address the unprecedented business challenges organizations are facing today.

Healthcare Finance JobSpot allows you to find a job in your niche field without having to shuffle through positions that don’t apply to you.

Visit www.healthcarefinancenews.com/jobs to find the perfect open job position to further your career.

UPDATE YOUR RESUME!Get in front of executives and recruiters at hospitals, ambulatory care facilities, clinical service providers, insurance companies, vendors and consulting firms.

To find the perfect position, you can:• View jobs by state• View jobs by title or keywords• Post an anonymous resume• Set up email job alerts• Subscribe to the Healthcare Finance JobSpot e-newsletter• Browse jobs in the Healthcare Finance News monthly newspaper

ATTENTIONJOB

SEEKERS!

“No one is in a position that their job isn’t important. It is important that each employee know what their value is, and how what they do matters.”– Terry Bennett

empowerment can lower healthcare costs by eliminating unnecessary steps in the care process, reducing the need for every matter to be brought to a manager’s attention. in one of Fabre’s blogs, she recounts the example of a patient asking for a banana, and the ensu-ing chain of command decisions that must be made before the patient ultimately receives the banana. Fabre’s example has the banana costing over $100 by the time it is given to the patient.

Fabre offered several steps toward creating an environment of empowerment, in which healthcare workers feel they are appreciated and have a stake in the organization’s success. those include:

■■ hospitals should empower front line work-ers to be able to solve problems on the spot.

■■ the organization should foster a culture of trust, which will encourage employees to act faster on important issues.

■■ employers should build a positive work environment, in which respect, consistency and integrity are fostered and protected.

■■ collaboration should be encouraged among all departments and employees, so that they collectively work as a team.

■■ Staff meetings should go beyond opera-tional matters to identify challenges and opportunities for the organization and solicit input on how to best address them.

■■ communication should be respectful, informative and frequent.

■■ Grant authority to employees to solve problems as soon as they are identified. ■

31September 2013 Healthcare Finance News www.healthcarefi nancenews.com DIVIDENDS

People | Upcoming Events | Reading List | Busted

DIVIDENDS

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HEALTHCARE FINANCE NEWS (ISSN 1932-7021) is published monthly, except in January and July, by MedTech Media, 71 Pineland Drive, Suite 203, New Gloucester, ME 04260. Phone: 207-688-6270; FAX: 207-688-6273. Qualifi ed subscribers receive HEALTHCARE FINANCE NEWS free of charge. Non-qualifi ed subscribers in the U.S. are charged $72/year. Canadian subscriptions $96/year. Foreign subscriptions $150/year, includes airmail delivery. Single copy, $8. Periodicals Postage Paid at New Gloucester, ME and additional mailing offi ces. POSTMASTER: Please send address changes to HEALTHCARE FINANCE NEWS, P.O. Box 47707, Minneapolis, MN 55447. ©2013 by MedTech Media. All rights reserved. No part of this publication September be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without permission in writing from the publisher.

PLANNERSEPTEMBER 18-19 – Annual HIMSS Policy Summit, Washington, D.C.18-20 – HBMA 2013 Fall National Conference, Las Vegas22-26 – Medicare Conference, Washington, D.C.23-24 – Privacy and Security Forum, Boston24 – Dual Eligibles Summit, Washington, D.C.24-28 – AAFP Scientifi c Assembly, San Diego25 – Medicaid Summit, Washington, D.C.29-Oct. 2 – Health 2.0 Fall Conference 2013, Santa Clara, Calif.

OCTOBER6-9 – MGMA 2013 Annual Conference, San Diego9 – AAMI/FDA Summit on Healthcare Technology in Nonclinical Settings, Herndron, Va.26-Nov. 3 – AHIMA Annual Conference, Atlanta27-29 – HFMA Map Event, Revenue Cycle Conference, Fort Lauderdale, Fla.

OnTheMoveDaVita HealthCare Partners announced that Craig Samitt, MD is joining the company

as executive vice president of its healthcare partners division. Avantas named Ron Rheinheimer as vice president. Emergent BioSolutions appointed Barry Labinger as vice president of the company and president of its bioservices division. Nancy-Ann DeParle has joined Consonance Capital Partners as a partner. Merz North

America named John Donofrio as CFO and head of North American

business development. PharMerica appointed David W. Froesel as executive vice president, CFO and treasurer. Perry C. Thomilson Jr. was appointed CEO of Alliance Healthcare Services. Mark

Miller has joined LHP Hospital Group as its new CFO. The American Association for

Homecare announced Thomas H. Ryan as president and CEO. Healthcare Trust of

America hired Judy Klein Romero as regional vice president for the South-Southwest

region. Richard Shimota is the new president and CFO of InVentiv Health Clinical.

James C. Scoggin, Jr., president of HCA’s North Texas division, is retiring effective

Oct. 1. Erol R. Akdamar, CEO of HCA’s Medical City Dallas Hospital will replace Scoggin. Thomas O.

Corley, CFO of HCA’s North Texas division, will retire Dec. 31. HCA’s Richard Bracken will retire from

his role as CEO at the end of 2013 but will remain chairman of the board. R. Milton Johnson will

become CEO.

Nancy-Ann DeParle

Thomas H. Ryan

QUOTEDJohn Holahan ..........................Urban Institute .............................1Chantal Worzala ......................AHA ..............................................3Joseph Loskove .......................Memorial Health System ..............3David Pitcher ...........................UNM .............................................3Richard Doss ...........................Life Wings Partners ......................3Sally McCarty ..........................Georgetown Health Policy Inst .....4Andrew Wampler .....................MSHA ...........................................4Michael Chamberlain ..............Simpler ........................................4Stephen Zuckerman ................Urban Institute .............................6Chapin White ...........................CSHSC ..........................................6David Cutler ............................Harvard ........................................6Gene Steuerle .........................Urban Institute .............................6Patrick Herson .........................Fairview Medical Group ...............6Todd Sandman ........................Presbyterian Healthcare Services .6Joe Damore .............................Premier ........................................6Marty Conners .........................Eliassen Group .............................6Jim Adams ...............................The Advisory Board Company .......6Alaap Shah ..............................EpsteinBeckerGreen .....................6Nancy-Ann DeParle..................Consonance Capital Partners .......9Diana Lee ................................Moody’s Investors ......................10Luke Hansen ...........................Northwestern University .............10Roz Cama ................................Center for Health Design ............10 Valerie Cronin ..........................Lodi Hospital..............................11 Mary Webb ..............................Northwest Community Hospital ..11Bruce McPherson ....................AANH ..........................................11Danny Chun .............................Illinois Hospital Association .......11Gary Young...............................Northeastern University ..............11Barry Rabner ...........................Princeton Healthcare System .....12John Kouletsis .........................Kaiser .........................................12Darrel Ng .................................Anthem ......................................12Eugene Grisby..........................National Health Foundation .......12Arby Nahapetian .....................GAMC .........................................12Jeff Goldsmith .........................University of Virginia ...................18Lou Goodman .........................Physicians Foundation ...............18Kavita Patel .............................Johns Hopkins Medicine ............18Reid Blackwelder .....................AAFP ...........................................18Josh Trutt .................................PhysioAge Medical Group...........20Steve Rallison .........................GreenField..................................20Geraldine Bednash ..................AACN ..........................................21Jay LaBine ...............................Priority Health ............................21Jenna Stento ...........................Avalere Health ............................22David Morgan ..........................Morris & Garritano .....................22Kathleen Sebelius ...................HHS ...........................................22Linda Bloomberg .....................Urban Institute ...........................22Tom Miller ...............................American Enterprise Institute .....24Douglas Elmendorf ..................CBO ............................................25Tracy Watts ..............................Mercer .......................................25Timothy Jost ............................Washington & Lee University ......25Steve Inacker ..........................Cardinal Health ..........................25John Willi .................................Dana-Faber Cancer Institute ......26Bill Abrams ..............................Medline Industries .....................27Oscar May ...............................Ariba ..........................................27Karen Sherrill ..........................OSU ............................................27Phil Adams ..............................World Energy ..............................27Brent Johnson .........................Intermountain Healthcare ..........27Les Popiolek ............................MedAssets ..................................28R. Wesley Champion ................Premier Performance Partners ...28Joseph F. Damore ....................Gateway EDI ...............................28Carla Brewer ............................Stoltenberg Consulting ...............29John Brooke ............................SAI Global ..................................29Karen Bowden .........................Craneware ..................................29Terry Bennett ...........................NAHR .........................................30

The owner of South Louisiana Home Health Care Inc., Louis T. Age Jr., and his former wife, Verna Age, the director of nursing for the Louisiana home health agency, were sentenced for their roles in a Medicare fraud scheme. They were ordered to spend 180 months and 60 months in prison, respectively, and to forfeit $9.2 million and pay $17.1 million in restitution. After a jury trial in March 2013, Louis Age and Verna Age each were convicted of one count of conspiracy to commit healthcare fraud, and Louis Age also was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal healthcare kickbacks.

Hemal Bhagat, a greater Detroit-area physical therapist who was also an owner of a home health agency, plead guilty to one count of conspiracy to commit healthcare fraud for his role in a $22 million scheme. According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit healthcare fraud through billing Medicare for home healthcare services that were not actually rendered and/or not medically necessary. At sentencing, scheduled for Nov. 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fi ne.

Oncologist Farid Fata, owner of Michigan Hematology and Oncology Centers, was arrested in August for his role in a healthcare fraud scheme. The criminal complaint alleges that Fata falsifi ed and directed others to falsify documents to justify cancer treatments for billing purposes. The complaint also alleges that Fata directed the deliberate misdiagnosis of patients and distribution of controlled substances to patients without medical necessity or through administering the drugs at dangerous levels.

READING LIST

IN MEDICARE MELTDOWN: How Wall Street and Washington are Ruining Medicare and How to Fix It, ($25, Rowman & Littlefi eld), authors

Rosemary Gibson and Janardan Prasad Singh explore the ties that bind Wall Street and Washington and how that impacts the country’s healthcare system.

Go to www.healthcarefi nancenews.com

for our Q&A with Rosemary Gibson.

BUSTEDSan Diego, CA

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