Post-ACA healthcare organizations have become increasingly focused on the areas that can have the greatest impact on reimbursement and operating costs. Brant Roth, vice president, business development, The Sullivan Group, explains the role re/insurers can play in maximizing both risk management efficiency and patient care.
To say that there has been a significant disruption in the mechanics of the healthcare industry over the last five years would be an understatement. With the changing reimbursement models, physician integration, enterprise rollouts of electronic health records, the shift in volume from inpatient to outpatient, and significant merger/acquisition/affiliation activity, many healthcare organizations are somewhat overwhelmed. In order to respond effectively to these changes, healthcare chief executive officers (CEOs) have identified the need to improve performance by 20 to 40 percent over the next three to five years, according to an October 2014 report by Huron Healthcare Consulting.
In fact, since the passage of the Affordable Care Act in 2010, many of the top-tier providers have already undertaken significant changes aimed at greater operational efficiency and improved clinical performance. As it turns out the two are intertwined, and that is causing a fundamental shift in the way healthcare providers, especially large integrated healthcare institutions, view their insurance and re/insurance partners.
The simplistic risk transfer model is now obsolete as chief financial officers, CEOs and risk managers continue to demand greater alignment from their re/insurance partners. As a result, we are now seeing an emerging appetite for an enterprise-wide risk financing model that is forcing a clear delineation in the marketplace. On the one hand, there are re/insurance carriers with sophisticated healthcare platforms capable of providing a blend of re/insurance solutions and clinical risk management solutions that support a long-term vision; on the other, there are carriers selling access to basic and sometimes naïve capacity.
A delicate balancing act on the road to clinical integration
Although healthcare organizations are continuously being nudged in the direction of value-based reimbursement models, a large portion of their reimbursement remains contingent on a fee-for-service model. For many organizations, this has become an increasingly difficult balancing act to manage, and at times they find themselves acting against their own financial interests during this murky transition period. In order to become clinically integrated and advance through this difficult phase successfully, several industry leaders still believe that the biggest missing piece of the puzzle is a sustainable mechanism for reducing the variability in clinical practice patterns.
"We take on the risk healthcare organizations are not willing to bear; we provide access to the world’s best clinical experts to help improve clinical performance." Wesly Guiteau
“We find ourselves in an interesting time in healthcare,” says Dan Sullivan, president and CEO of The Sullivan Group (TSG).
“Our efforts at TSG have always been focused on changing clinical behavior to improve patient safety and reduce liability. Over the last 17 years, we have been very fortunate to work with some of the largest healthcare providers, and the claims data from clients confirm that we are on mission.
“Given the recent changes to reimbursement models, we are discovering an increased desire for scalable solutions that can effectively change clinical behavior. In response, we have organized a performance-based reimbursement (PBR) training program that focuses on level-setting the entire organization’s clinical workforce on the significant issues related to value-based reimbursement, readmissions reduction, and hospital-acquired conditions programs.
“Unique to the PBR program, our expert authors connect those important clinical parameters to our existing case-based scenarios, emphasizing key teaching points of patient safety and clinical risk management. We believe this is right on point for our healthcare clients, and we feel that it is on mission for patient safety.”
A common thread between patient safety, liability, and reimbursement
Knowing that at least 6 percent of the Center for Medicare & Medicaid Services (CMS) reimbursement for acute care facilities will be dependent on clinical performance and patient outcomes in the coming years, healthcare organizations have become increasingly focused on the areas that can have the greatest impact on reimbursement and operating costs. There are some common links between key areas of the PBR world and everyday clinical practice.
After a casual review of the litigation landscape, you will notice that a failure to diagnose or delay in diagnosis of transient ischaemic attack/stroke continues to be a significant issue for many in the urgent and emergency medicine environments. After a closer analysis, you will notice that a consistent theme emerges in many of those claims: a delay in administering thrombolytics (tPA) in a timely manner. In addition to having an impact on patient safety and liability, a delay in administering tPA in a timely manner also has an impact on a healthcare organization’s Total Performance Score in the Value-Based Purchasing Program (STK–4).
Identifying these common threads and strengthening healthcare organizations’ performances on these key clinical areas will have a significant impact on both reimbursement and liability costs.
NICU admissions and C-section rates
Within the last decade, many large healthcare systems have promulgated oxytocin patient safety guidelines for their clinicians to follow when interpreting electronic fetal heart rates. However, until recently, there wasn’t clear evidence that indicated a significant benefit in patient outcomes based on compliance with these guidelines. An April 2015 article in the American Journal of Obstetrics & Gynecology explores the relationship between adherence to a patient safety guideline and the impact on neonatal intensive-care unit (NICU) admissions (reduced by 34 percent), C-section rates (reduced by 16 percent), and Apgar scores.
Although these outcomes are not currently tied to statutory PBR programs, they can be a significant part of an organization’s drive towards greater clinical integration, patient safety improvement, and reduction of healthcare costs.
Aligning your organization with a winning team
It is evident that we are indeed in a brave new world of healthcare; those who fail to effectively navigate these changes will most likely not survive.
“For many years, we have been attentive to these issues, listening to clients’ concerns in order to provide the right solutions at the right time,” says Wesly Guiteau, senior vice president of the healthcare practice at XL Catlin.
“Our partnership with The Sullivan Group illustrates that commitment. Together we offer the most sophisticated blend of re/insurance solutions and clinical risk management services available in the marketplace. Our philosophy is simple: we take on the risk healthcare organizations are not willing to bear; we provide access to the world’s best clinical experts to help improve clinical performance, thereby unleashing potential to save more lives and make the world a healthier place.”
The Sullivan Group, Wesly Guiteau, XL Catlin, US