Healthcare reform: Strategize to monetize

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Kaitlyn Dmyterko, senior writer

As most hospital administrators brace for potential cuts to healthcare, it is still unknown which strategy will correctly buffer a hospital from the cuts' effects while maintaining value and quality of care.

Integration and physician employment remain at the forefront as administrators strategize. In fact, a report issued by Irving Levin Associates last month showed that the number of mergers and acquisitions spiked 44 percent.

As many private practices turn to hospital systems to be a safe haven from the impending cuts, a report this week casts doubt on just how lucrative integration and physician employment may be. Some look to physician-hospital employment as a way to reduce unnecessary and duplicative testing and up the ante of the referral base, but others argue that hospitals may not see much benefit and in fact, may suffer from high upfront costs.

The Center for Studying Health System Change (HSC) reported that these costs may be due to the fact that the physicians practice in a fee-for-service environment, which continues to provide incentives to increase the volume of services delivered. The authors argue that physicians may feel pressure from the hospital to perform and order more expensive care.

Previously, Alexander A. Stratienko, MD, of the Chattanooga Heart, Lung and Vascular Center in Chattanooga, Tenn., questioned whether physicians who are hospital employed will be able to keep a “balance of authority” and “autonomy” during the process.

While the government looks toward accountable care organizations (ACOs) as a savior, the ambiguity of ACOs remains a concern. This week, the Centers of Medicare & Medicaid Services invited providers to help test out four bundled payment models, which the agency says have the potential to save Medicare $50 billion over a 10-year period.

But will bundled payments be all they are chalked up to be? According to U.S. Department of Health and Human Services Secretary Kathleen Sebelius, the method will coordinate care and cut costs. The ACO and bundled payment method may hold promise, but it remains to be seen whether these strategies will be able to overhaul the current fee-for-service system and focus on quality and reduce overhead. Hospitals will need to find the best strategy to get the most bang for their buck.

What will you do to save your bottom line? E-mail me and let me know.

Kaitlyn Dmyterko, senior writer
Cardiovascular Business