LBA management update summer 2014
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Transcript of LBA management update summer 2014
Lund Byrne Associates
Summer 2014
Management Update
Contents in a
Nutshell:
Living with less
and Physician
Culture
Cost of customer
acquisition
Population
health
Helping Physicians and Hospitals to Collaborate
22747 VINE COURT : SUITE 100 : ROCKY RIVER : OHIO : 44116 : (440) 333-2921 : www.lundbyrne.com
Change
Management
Change is the law of
life. And those who
look only to the past
or present are
certain to miss the
future.
John F. Kennedy
Please direct all questions
and inquiries to:
440-333-2921
www.lundbyrne.com
Can we Learn to Live with Less ?
We are beyond a tipping point and are heading rapidly toward:
More people with health insurance
Lower reimbursement across the board
More complex methods of getting paid
More data on providers and patients
For hospital finances it is hard to argue that the first item is not good;
the reduction in disproportionate share may now be offset by these
newly insured resulting from Medicaid expansion. But the other items
cut to the heart of the existing status quo, if there is such a thing in
healthcare. Where does the old system begin to breakdown?
In the attempt to stabilize costs insurers are shifting more of their
financial risk in the form of higher deductibles, co-pays and more
complex payment methods. For patients this means there will be
more scrutiny of the services being provided and for the providers
more non traditional payment methods that need a high degree of
monitoring and add cost to the traditional delivery model.
However, with the greater access to data being available to payers
and providers it can be shown that certain treatment plans can
provide more predictable outcomes. Armed with this knowledge
payers are now reducing payments to those not meeting average
costs of care (e.g.; CMS Value Based Purchasing) or shifting them out
of network. This does not immediately help providers who see
reductions in income from both volume and fees.
The future for providers is to leverage the cost of care to the lowest
cost provider. Like many businesses, what was once “rocket science”
can now be done by a well trained individual leaving the more
complex problems to those who have the skills to solve them.
(See: “The Innovators Prescription: A Disruptive Solution for Health-
care” Clayton Christensen et al)
Hospitals must redesign their own networks and go beyond the lip
service of “engaging physicians”. Physicians must see real
opportunities for them to contribute to the health systems success.
How?
Physicians are THE clinical leaders and must lead in the design
of the clinical process.
Employed physicians cannot be solely responsible for driving
revenue through their work RVU’s. For now it is important but
preparing for new a model of reimbursement is essential.
Employed physicians are highly qualified technical people but
are not treated as part of the administrative team that
contributes through collaboration to the organizational success.
The employment contract and “group practice” must recognize
and position the skill sets to contribute as part of the team.
> Looking to transform your employed group? Call us for information.
Something (and Someone) will have to give
Mayo Gonda Bldg
Heart Valve Replacement
What is it & at what cost
There are four valves in the
heart:
Aortic valve
Mitral valve
Tricuspid valve
Pulmonary valve
Where appropriate there are 2
approaches to surgery: open
heart (very invasive) and
minimally invasive.
If the surgeon determines the
valve can be repaired, you may
have:
Ring annuloplasty -- The sur-
geon repairs the ring-like part
around the valve by sewing a
ring of plastic, cloth, or tissue
around the valve.
Valve repair -- The surgeon
trims, shapes, or rebuilds one
or more of the leaflets of the
valve. The leaflets are flaps
that open and close the
valve.
Valve repair is said to be the
best for the mitral and
tricuspid valves.
The aortic valve is usually not
repaired but it may be replaced
with a mechanical product or a
tissue replacement.
According to the
“Healthcare Blue Book”
Hospital Services
$40,386
Physician Services
$5,367
Anesthesia
$3,749
There are always variables in
these costs. Go to: https://healthcarebluebook.com/
page_ProcedureDetails.aspx?
id=283&dataset=MD
Seeking Price
Transparency
Lund-Byrne Associates
22747 VINE COURT : SUITE 100 : ROCKY RIVER : OHIO : 44116 : (440) 333-2921 : www.lundbyrne.com
Are we all on the same page with population health?
The Cost of Customer Acquisition in Healthcare
The AMA Council sets guidelines for Telemedicine use and billing: Each patient should have an initial face to
face encounter prior to use of telemedicine systems. However, this recommendation does not explicitly de-
scribe what it means by "face-to-face examinations," the Council's report on which the guidelines are based
provides that "[t]he face-to-face encounter could occur in person or virtually through real-time audio and
video technology."
Most marketers will tell you that there
are three key things that will drive
business to your product. These are:
brand loyalty or “the promise”
product quality, and
price
Marketing to attract consumers in
healthcare is a complicated business.
Perhaps even more complex is
responding to C-Suite requests for
measuring the results of those
marketing efforts. Factors that are
known to inf luence healthcare
consumer decisions include:
physician referral recommendation
reputation of provider and Hospital
recommendation from colleagues
awareness
quality data
posted cost data
Some of these can be measured by
frequency or by consumer surveys with
some interpretation assigned for cause
and effect. The cost of advertizing,
reach out programs and internet
connectivity are all understandable
costs.
One of the challenges, however, is that
there are many other influencers on the
process of customer acquisition and
each of these components has a hidden
cost. If you believe in the old maxim
that says “it is the purpose of everyone’s
job to get and retain customers” then
you will understand how each and every
deliverable is being evaluated by the
consumer.
Consider the cost to capture and make
available hospital and physician quality
data or the cost of discounts from
charges in order to capture a specific
managed care contract.
Discounting to retain contracts is
perhaps the most expensive customer
acquisition cost and yet it is not
included in the current marketing
thought process.
There are two other businesses that are
similar to healthcare in terms of the
overhead costs that need to be covered.
Specifically the Hotel business and the
Airline industry. Each has a high capital
investment in equipment and premises
and each has a huge payroll. How do
they look at customer acquisition as it
relates to “bulk acquisition”
Interestingly, they share the same
concerns that other third party
aggregators and search engines will
ultimately control the consumer path
and that their products will be
commoditized. They then become
passive recipients of business and will
pay third parties for the traffic. As for
hospitals, they will still have to invest in
the patient experience and clinical
quality to stay in the game.
Ensuring the brand promise (customer
experience) is fulfilled remains a key
strategy for marketers; gett ing
operations to buy in, the key challenge.
Thoughts?
Nothing that has value,
real value, has no cost.
Not freedom, not food,
not shelter, not
healthcare.
Dean Kamen
Without a clear definition for the term “population health”
many have set their own interpretations. Some see it as a
pure clinical activity where the focus is on managing high
cost patients and those with chronic conditions with:
Case Management
Protocols for care and patient hand off
Intervention teams
Drug management
Outreach programs.
These are the things that healthcare providers are good at.
The problem that clinicians struggle with in using this ap-
proach is that their at-risk patients often return to home
environments that are working against the care being given
by the clinicians. This makes patient compliance a major
factor in success. However, Telemedicine may be coming to
the rescue with systems for monitoring, reminders and
intervention that automatically communicate between
clinicians and the devices.
This still does not change the community environment in which
patients have to reside. More cities are getting smart about the
built environment and are exploring how to build healthier
communities and are looking at Health Impact Assessments to
help define best practices for urban development, form-based
zoning and building codes.
Given the growing interest, we believe that providers need to be
knocking on the doors of their City Planning Departments to
look into how they can participate in future city planning
initiatives. A healthier urban plan is a win / win.
Lund-Byrne Associates is working with one major city on a simi-
lar initiative and has the experts to support your community
efforts. For information call us 440-333-2921.