The 2015 Compass Health Activation Conference had a fantastic presentation by The Advisory Board Company. As I wrote in Wednesday’s Blog on the Compass Health Activation Conference, Ben Umansky and Apoorva Shah spoke about the doctor and hospital system view of the current changes in healthcare. As I also mentioned in Wednesday’s Blog, The Advisory Board Company is one of THE TOP consulting firms for major healthcare systems across the country.
They Know Providers.
Here are some Takeaway Points from their presentation:
Hospitals are only paid 88% of what it costs them to provide services to Medicare and Medicaid patients (i.e. government payers).
Hospitals are paid 144% of what it costs them to provide services to privately insured patients (i.e. employers who are ultimately footing the bill).
This CROSS-SUBSIDY by employers to make up for Medicare and Medicaid underpayment is ONLY GOING TO GET WORSE because Medicare is going to make more reimbursement contingent on quality and hospitals will likely be penalized and paid LESS.
Healthcare consumers are also looking to curb spending because of higher out-of-pocket costs due to higher deductibles and consumer-directed health plans.
The more progressive hospital systems realize that traditional fee-for-service reimbursement that rewards patient VOLUME over anything else, is coming to an end. These progressive hospitals don’t just want to survive, they want THRIVE in this new environment by focusing on delivering VALUE.
Health Systems sincerely want to be a part of the solution, however they are not sure how to transition from their current economic model to the ‘new world.’
Population Health Management by the hospital system—rather than by the health insurance carrier—is seen as their natural competitive advantage. Healthcare consumers more traditionally ‘listen to their doctor’ and hospital systems can provide the care coordination necessary to improve quality, lower cost, and improve value.
I think Mr. Umanski and Mr. Shah paint a promising picture of the future. It is one that will be challenging to get to for all parties involved—doctors, hospital, healthcare consumers, employers, insurance carriers, government programs—however the ‘economic pain’ of almost $3 trillion a year in healthcare spending is causing the system to buckle under its own weight. It’s simply not sustainable and everyone knows it. If anything, health reform just accelerated the realization of how economical unsustainable it is (in my opinion, which could be wrong).
Bravo to The Advisory Board Company for such an excellent presentation. They made a wonderful addition to the 2015 Compass Health Activation Conference this past week.
To learn how Compass makes healthcare economically sustainable for 2,000+ employers across the country, visit www.compassphs.com