Volume 16

In today’s challenging environment, hospitals are being forced to manage risk with a greater accountability of prevention and wellness.  In a recent interview, Thomas Burke, M.D., executive vice president of the University of Texas MD Anderson Cancer Center, said, “Most hospitals are focused on those who are sick enough to require admission to the hospital and the reality is, if we really want to change the dynamic of the people who live in our country, we need to be focused on what prevents that from happening.”

Burke, who also chairs the American Hospital Association’s Committee on Performance Improvement, was quoted in an article by H&HN staff writer Marty Stempniak. The article focused on the need for leaders to “seek out the voices that aren’t being heard in typical board meetings,” in order to tackle health issues and improve overall community wellness.

Inviting patients into the boardroom

While not directly referenced in the article, the ongoing push to create more Accountable Care Organizations (ACO)undoubtedly has a significant influence on this thinking. The concept of asking local non-healthcare leaders (including service organizations like the YMCA, churches, and especially local business owners) to play a larger role in determining how healthcare is delivered in their community is a natural extension of the ACO conversation. If you are going to be paid and held accountable for the value your hospital creates instead of just the treatments it delivers, it makes sense to get more of the community involved in a wellness and preventative care conversation.

To ACO or not to ACO?

Leavitt Partners, a healthcare management consulting firm, reports that compared to the 491 ACOs in business as of September 2013, there are now 626 ACOs in the United States. Of these, 329 have government contracts, 210 have commercial contracts, and 74 have both government and commercial contracts.

Modern Healthcare reports a new Next Generation ACO initiative announced the week of March 9th raises questions about how much control hospitals and physicians will have over patients’ utilization patterns. Specifically, the tendency of patients to seek healthcare outside the ACO network can undermine the best quality and cost-control efforts. (The Next Generation ACO program will start in January, building on the administration’s goal to have half of Medicare spending in some type of value-based contract by 2018.)

HIPAA, ARRA and EHRs

Let’s not forget HIPAA. The Health Insurance Portability and Accountability  Act of 1996 was enacted to make it easier for people to keep health insurance, protect the confidentiality of healthcare information by making organizations accountable for the security of the data, and help the healthcare industry control administrative costs.

Whether it has achieved these goals – especially cost control – is arguable. However, one thing is for certain; providing accessibility to electronic health records across the spectrum of caregivers (in or out of an ACO) has created a rapidly growing data breach industry. With the passing of the American Recovery and Reinvestment Act (ARRA) in 2009, a tiered civil penalty structure for HIPAA violations was established. What once was a cottage industry has now blossomed into a full-fledged business sector.

On one side of the equation, the Office of Civil Rights (within the Department of Health and Human Services) enforces the privacy standards, while the Centers for Medicare & Medicaid enforce the transaction, code, and security standards. On the other side, a whole new raft of consultants built a business helping healthcare providers prevent, manage, and protect themselves from the outcomes of data breaches. It is apparent that you will be held accountable and accountability will cost.

An increasingly complex environment

Taking a closer look at the executive summary for the AHA Leadership Toolkit for Redefining the H: Engaging Trustees and Communities, the nature of the changes ahead are quite clear:

Among other things, the move from a fee-for-service to a value-based environment is prompting hospitals to intently focus on quality, embrace population health management (both defined as “attributed” and geographic populations) and promote more integrated, better coordinated care. Goals are now centered around improving the health of the community through increased access to primary care, appropriate admissions and reduced inappropriate readmissions, along with making measurable gains in improving outcomes of care and reducing harm. These challenges will require that hospital boards lead the way in forging community collaborations that:

• Appropriately allocate resources and define a shared responsibility for improving community health
• Bring insight, perspective, and support from the community into the hospital board room as hospital leaders consider paths for transformation
• Enter into strategic partnerships for improving community health and health outcomes

Participation in an ACO creates a swamp-like mix of shared risk and liabilities. A strategic partner’s mistake or lack of coverage can quickly become your problem. And, the almost entirely new idea of having outside people sit as board members brings a new wrinkle to the need to protect boards from personal financial loss.

The sweeping nature of these accountability-driven initiatives will require healthcare leaders to navigate a new, more complex risk environment. The new environment may, at first, be a challenge to navigate as it will be largely unfamiliar terrain filled with new, complicated, and unsuspected risks.

Shared accountability ahead

Whether or not an ACO is part of a hospital’s future, managing the risk inherent in the changes ahead is not for the faint of heart and certainly not something you have to do alone. The need to work closely with a highly qualified risk and insurance advisor is greater than ever and will become even more so as time goes on.

Go to the top

Benefit program designers and managers are faced with a growing number of increasingly complex challenges to the long-term survival and success of their organizations.

Opting in or opting out, defining part time employees, and offering an “affordable” healthcare program are new challenges heaped atop the already complex task of controlling costs while attracting and retaining the right employees for your organization.

An unconventional response

We believe it is essential to create and sustain a culture in which all employees share responsibility and accountability for delivering high quality patient care, controlling costs, and protecting profit.

In addition to providing a comprehensive and competitive tool chest of employee benefit capabilities, services and products, we offer an unconventional process for those who wish to replace the conventional and increasingly ineffective annual renewal and premium driven approach.

Our response is called the Shared Responsibility Process (SRP) and it enables healthcare organizations to create and sustain a culture in which all employees share responsibility for delivering high quality patient care, controlling costs, and protecting profits.

Shared alignment works

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