Here's a statistic to make you feel ill: In the relentless upward march of U.S. healthcare spending, almost two-thirds (63%) goes to just 10% of patients, and nearly half (52.5%) is spent on 5% of patients, according to a recent study from the National Institute for Health Care Management.
Who are these high spenders? Increasingly, and not surprisingly, they are chronic care patients. This trend should be a call to action for healthcare financial leaders: this is where you should invest dollars now to prevent future losses in reimbursements. Chronic care patients were a money-maker under volume incentives, but they will be a drain to the bottom line when pay-for-performance and new readmission rate standards take hold.
At HealthLeaders' recent CFO Exchange event in La Jolla, CA, healthcare financial leaders agreed that their budgets will require deep cuts – as much as 20% – over the next few years. Doing so means going beyond the low-hanging fruit of efficiencies. Healthcare leaders must implement programs that address areas of greatest potential reimbursement loss under the Patient Protection and Affordable Care Act. Chronic care, with all its costs and complexity, is a great place to start.
How many chronic care patients are treated at your hospital today, and how many are likely to be enter your facilities in the future? Medicare will cease paying for 30-day readmissions. The chronic care patient has a proclivity to land in that category.
There is no shortage of pilot programs addressing chronic care populations, and the medical home concept, which incorporates a model for chronic care, is spreading rapidly. In the September edition of HealthLeaders magazine, I look at some innovative approaches group practices are taking for chronic care, as well as how medical homes can make margin.
Yet treating chronic care patients is a losing battle, in a sense. Wouldn't it be wiser to stop the problem before it happens? This is the line of thinking behind an innovative program launched by Ochsner Health System, an eight-hospital, nonprofit, academic healthcare system based in New Orleans.