Healthcare

Many rural hospitals are struggling in the new health care marketplace. Reimbursement from government and (soon) private payors is now more dependent on providing a collaborative and leaner process that rewards reducing variations in patient care and treatment in the appropriate setting. Additionally, hospitals in states that have opted out of receiving Affordable Care Act (ACA) funding face increased costs with no funding to cover them. 

Continue reading >

Team-based Care – Part II

Look into many markets in the U.S. and you’re likely to find non-physician providers in greater demand and better paid than in the past few years. The 2013 HORNE Medical Office Staff Salary Survey supports this by reporting a significant upswing in the demand for non-physician providers. Survey results show a startling 68% jump in the number of non-physician providers added to hospitals and practices from 2009 to 2013. But perhaps the quick rise in demand isn’t as surprising when put into the context of the Affordable Care Act, and shrinking reimbursement. 

Continue reading >

The consequences of a shift in the Fee-for-Service (FFS) revenue model to outcomes-based compensation is creating a tsunami of change for hospitals. Let’s look at how this shift is affecting the valuation of hospitals in a buy or sell situation. 

In an FFS revenue model, valuations were based on how much revenue generated was attributed to volume. That is all changing with the Affordable Care Act (ACA). Today, hospitals face a variety of issues that impact day-to-day operations and the bottom-line:

• Declining inpatient volumes
• Lower reimbursement rates  per patient from Medicaid and Medicare with private payors starting to follow the trend
• The advent of high deductible plans in private pay
• Changing diagnosis codes
• Enhanced regulatory vigilance 

These factors contribute to a financial model where  operating expenses are outpacing revenue.

Continue reading >

Here is a round-up of health care stories that are catching our interest this week.

Is the Health Care Workforce Prepared for an Increase in Alzheimer Patients?

The April issue of Health Affairs is devoted to the latest research and thinking about Alzheimer’s disease. Alzheimer’s cases already overwhelm health care facilities and families. The challenge is expected to worsen with an increase from 5 million cases in 2013 to 13.8 million cases in 2050. Here is detailed look at how to increase and train a work force that is prepared for the challenge. 

Continue reading >

Median expenditures for emergency department (“ED”) call coverage, according to the 2012 Sullivan, Cotter & Associates Physician On-Call Pay Survey Report, increased for both trauma and non-trauma hospitals between 2009 and 2012. So paying close attention to fair market value in ED on-call arrangements is as important as ever. This means that filtering through anecdotal information is critical to avoid missteps when hospitals enter into on-call payment arrangements.

An important distinction in ED on-call pay is found in the difference between independent physicians and many physicians employed by the hospital. Two central economic concepts related to ED on-call pay – compensation for physician availability and reimbursement for uncompensated care – may be vastly different for an independent and an employed physician. Continue reading >

Few subjects have provoked as much passionate debate in the health care valuation community as relying on the asset approach as the sole basis for a conclusion of physician practice value when the income approach indicates no supportable intangible value, including the value of a trained and assembled workforce. A new white paper, Intangible Asset Valuation, Cost Approach Methods and Procedures, authored by highly regarded valuation expert Robert Reilly and published by the AICPA, is a much needed and generally well-written technical resource on the application of cost approach methodology to the valuation of intangibles.

Continue reading >

As hospitals continue to ramp up efforts to acquire and contract with physician practices, they must do so in a way that reflects not only good market strategy, but also protects future financial stability and regulatory compliance. Hospitals that are in an aggressive acquisition mode often point to the looming changes in reimbursement models that shift payments from fee-for-service to an outcomes-based model focused on episodes of care. Many hospitals feel that in order to stay competitive in this changing market , they need to align with physician practices, and do it expeditiously before competitors beat them to the punch. But at what cost?

Continue reading >

There are a flurry of stories lately about telemedicine and they are not just in health care publications. Whether it is the New York Times or Forbes or other major outlets, telemedicine is being talked about and here’s why:

Continue reading >

There have been serious, but somewhat quiet experiments going on for years around using bundled care to improve patient outcomes and cut costs. Prepare for some noise as states like Arkansas start figuring out the formula for making it work. The spotlight on bundled care as a potential successor to the Fee-for-Service (FFS) model is getting brighter driven by the Affordable Care Act (ACA) and the search for new payment models that can support the high costs of offering health care benefits to an expanding (and aging) population.

Continue reading >