Reform and the Bottom Line

Michelle Ponte, for HealthLeaders Magazine , July 10, 2009
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To that end, Froedtert launched an approximately $100 million cancer facility last year built around an entirely different way of providing cancer care. The center is based on an interdisciplinary model. Specialists work in teams and patients have a single point of contact throughout their care so that they spend less time worried about how to understand and navigate through the system. Petasnick says the center's model of integrated and coordinated care ensures that patients are seen immediately by specialists and receive test results back in a timely manner. In the end, this system of care allows Froedtert to coordinate care better and track outcomes more effectively.

Petasnick says it is difficult to estimate how all of these changes have improved margin because of the economic crisis, which is impacting the organization's overall operating margin from the previous year. "We have seen an improvement in our patient satisfaction scores, which we feel have been impacted by better care coordination and multisdicipinary care centers."

From the academic medical center side of the business, however, Petasnick is particularly worried about a change in reimbursement because it means taking on more risk, something he readily admits Froedtert is not ready for. "We are not equipped to manage risk and capitation because of the kinds of patients we deal with that are very complex and don't necessarily match up with capitated payments," says Petasnick. "How does that translate into reimbursement?" None of the plans on the table address these details, Petasnick points out. "We don't know how educational costs will be covered, how acuity will be dealt with, or how the issue of disproportionate share will be handled."

Planning for rehospitalizations
From a bottom-line perspective, hospitals are also worried that a new payment system will not include coverage for things like rehospitalizations. Glenn Steele Jr., MD, PhD, president and CEO of Geisinger Health System in Danville, PA, says there is a "high likelihood" that hospitals are not going to be paid for some significant component of rehospitalization. "Right now, if and when patients have to be rehospitalized, we get paid again, and we are all pretty sure that is going to change," he says. "We want to make sure that when hospitals are given responsibility for what happens to the patients even after they are discharged that they have the ability to actually meet that responsibility," says Steele, who is also an American Hospital Association board member.

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