Hospitals save $100 million in Medicare costs under state experiment

[Sun Devil 92]

Hospitals could save a lot of money if we allowed them to turn away people at the ER.

They can also save a lot of money if they get to people before they show up in the ER, as Maryland is showing. Once hospitals can generate margin by keeping people healthy instead of increasing service volume, they've got a whole new business model to operate under. One in which health care isn't just about waiting for acute events to hit and making money off them, but rather about focusing on the health of the community outside the hospital's walls.

How do they generate that margin ?

I understand the idea. I've mentioned that Australia runs all kinds of public service adds because they feel there is return on that investment in terms of improved medical costs....

Sure makes sense.

It's the mechanics I am interested in.

 

[Greenbeard]

If this means all hospitals, I find that amazing.

Of course the statement could be taken one of many ways.

Did they set all prices ? And who set them ? Was it a government agency ?

It's all forty-odd acute care hospitals in the state, plus a few specialty and psychiatric facilities. All of their inpatient and outpatient hospital (including ER) rates are set by an independent agency, the Health Services Cost Review Commission, established by the state in the '70s for this purpose.

But setting prices doesn't alter the underlying incentives of the system, nor does it allow hospitals to pursue more holistic models of patient care (that better serve the patient and save money). The critical piece is getting rid of the old business model. That's why the global budgets now exist.

Whose paying that revenue ?

The same payers as before the global budget system: the private insurers, employers, Medicaid, Medicare, and the consumer (to the extent they have out-of-pocket costs to cover).

They don't get their revenue upfront, they still get revenue from the payers as they go. The budgets are implemented through the existing rate-setting system. In other words, their prices are adjusted as they go through the year to achieve the budget that was identified in advance.

So what is this fixed revenue supposed to cover ?

Virtually all services provided to residents of the state treated in those hospitals.

How do they generate that margin ?

By coming in under budget. That is, by achieving efficiencies, finding savings, and better managing the health of the populations they serve. How they go about doing that will vary by hospital; I'm sure there will be plenty of hospital profiles written over the next five years.

Here's one so far: University of Maryland Upper Chesapeake Health: Increased Value Under a Fixed Hospital Budget

University of Maryland Upper Chesapeake Health (UM UCH) participates in Maryland’s Global Budget Revenue (GBR) program that fixes hospital revenue, regardless of volume. This has created much stronger financial pressure for hospitals to use resources more efficiently, since additional hospital services no longer translate into higher revenue. To limit acute hospital costs while maintaining or improving quality, UM UCH has implemented a variety of emergency department (ED), care coordination, and information technology interventions to improve care. These include developing a care pathway for low-risk chest pain, supporting post-discharge call backs, participating in a health information exchange, creating care plans for high-cost patients, and developing a post-emergency department (ED) and post-hospitalization clinic. These reforms have also required some reforms in how ED physicians are paid. To date, programs have been successful: care plans alone have reduced opioid prescriptions by 50% and hospital-based encounters in high-cost patients decreased by 40-50%

There are 3 main ways to reduce acute care costs: 1) preventing acute health problems and the associated care from happening in the first place; 2) create and expand less costly (and hopefully more convenient) alternatives to ED care so people with acute problems use less expensive hospital-based care; and 3) improve the function of the acute care system itself.

The link goes into more detail on the high-risk care plan program, new comprehensive care clinic, standardized care pathways, patient call-back program, and new IT tools they've implemented so far as part of their care redesign efforts.

 

[Sun Devil 92]

O.K.

This is sounding weird.

They already know their TOTAL Revenue before the year starts ?

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

 

[Greenbeard]

They already know their TOTAL Revenue before the year starts ?

That's what a global budget is. This is the entire point of the thread.

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

This is why they're investing in low-cost interventions outside the hospital to keep people healthy and prevent more expensive inpatient episodes where possible (not to mention improving care inside the hospital for those that do need inpatient level care).

 

[CrusaderFrank]

Worst US recovery ever, most debt in all human history -- but we saved $100MM by throwing old people to the curb

 

[Arianrhod]

Worst US recovery ever, most debt in all human history -- but we saved $100MM by throwing old people to the curb

You couldn't be more wrong.

They already know their TOTAL Revenue before the year starts ?

That's what a global budget is. This is the entire point of the thread.

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

This is why they're investing in low-cost interventions outside the hospital to keep people healthy and prevent more expensive inpatient episodes where possible (not to mention improving care inside the hospital for those that do need inpatient level care).

I wonder if part of the problem here is that many people are not familiar with what goes into the process of preventing return hospitalizations? Maybe an example would help:

A patient is released from the hospital following heart surgery. Back in the day, he'd need to remain in the hospital for a week or more post-surgery. Aside from the added costs of multiple nights in the bed, extra meds, extra personnel to care for him, etc., the process of getting him back on his feet and fit to go home often involved physical therapy, transport to home (the longer you're immobilized, the harder it is to just bounce out of bed and drive home), etc.

Today patients are assessed and, unless there are complications, allowed to go home far sooner. Here's what happens at home for the first few weeks after surgery:

Someone from the cardiac team calls the patient daily to check up on him. If he's part of a clinical trial, he was given a blood pressure monitor that's connected to the hospital's computers so that when he takes his blood pressure every morning, the reading goes straight to the hospital.

A visiting nurse stops by once or twice a week (oftener if the patient lives alone) to take the patient's vitals and ask him questions. How is his appetite? How is his energy level? Is he in any pain? If he had invasive surgery, is he managing wound care (incisional infections are a major cause of rehospitalization)? Is there anything that concerns or worries him?

Yes, these interventions cost money, but not nearly as much as the costs of transport to the ER by ambulance and possible readmission.

From the patient's perspective, he's back home and able to resume his normal activities much sooner.

Win-win.

 

[CrusaderFrank]

Worst US recovery ever, most debt in all human history -- but we saved $100MM by throwing old people to the curb

You couldn't be more wrong.

They already know their TOTAL Revenue before the year starts ?

That's what a global budget is. This is the entire point of the thread.

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

This is why they're investing in low-cost interventions outside the hospital to keep people healthy and prevent more expensive inpatient episodes where possible (not to mention improving care inside the hospital for those that do need inpatient level care).

I wonder if part of the problem here is that many people are not familiar with what goes into the process of preventing return hospitalizations? Maybe an example would help:

A patient is released from the hospital following heart surgery. Back in the day, he'd need to remain in the hospital for a week or more post-surgery. Aside from the added costs of multiple nights in the bed, extra meds, extra personnel to care for him, etc., the process of getting him back on his feet and fit to go home often involved physical therapy, transport to home (the longer you're immobilized, the harder it is to just bounce out of bed and drive home), etc.

Today patients are assessed and, unless there are complications, allowed to go home far sooner. Here's what happens at home for the first few weeks after surgery:

Someone from the cardiac team calls the patient daily to check up on him. If he's part of a clinical trial, he was given a blood pressure monitor that's connected to the hospital's computers so that when he takes his blood pressure every morning, the reading goes straight to the hospital.

A visiting nurse stops by once or twice a week (oftener if the patient lives alone) to take the patient's vitals and ask him questions. How is his appetite? How is his energy level? Is he in any pain? If he had invasive surgery, is he managing wound care (incisional infections are a major cause of rehospitalization)? Is there anything that concerns or worries him?

Yes, these interventions cost money, but not nearly as much as the costs of transport to the ER by ambulance and possible readmission.

From the patient's perspective, he's back home and able to resume his normal activities much sooner.

Win-win.

Riiiiight, preventing return hospitalization -- for white and black seniors, if you're an Illegal with no ID, it's OK, no worries

 

[Arianrhod]

Worst US recovery ever, most debt in all human history -- but we saved $100MM by throwing old people to the curb

You couldn't be more wrong.

They already know their TOTAL Revenue before the year starts ?

That's what a global budget is. This is the entire point of the thread.

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

This is why they're investing in low-cost interventions outside the hospital to keep people healthy and prevent more expensive inpatient episodes where possible (not to mention improving care inside the hospital for those that do need inpatient level care).

I wonder if part of the problem here is that many people are not familiar with what goes into the process of preventing return hospitalizations? Maybe an example would help:

A patient is released from the hospital following heart surgery. Back in the day, he'd need to remain in the hospital for a week or more post-surgery. Aside from the added costs of multiple nights in the bed, extra meds, extra personnel to care for him, etc., the process of getting him back on his feet and fit to go home often involved physical therapy, transport to home (the longer you're immobilized, the harder it is to just bounce out of bed and drive home), etc.

Today patients are assessed and, unless there are complications, allowed to go home far sooner. Here's what happens at home for the first few weeks after surgery:

Someone from the cardiac team calls the patient daily to check up on him. If he's part of a clinical trial, he was given a blood pressure monitor that's connected to the hospital's computers so that when he takes his blood pressure every morning, the reading goes straight to the hospital.

A visiting nurse stops by once or twice a week (oftener if the patient lives alone) to take the patient's vitals and ask him questions. How is his appetite? How is his energy level? Is he in any pain? If he had invasive surgery, is he managing wound care (incisional infections are a major cause of rehospitalization)? Is there anything that concerns or worries him?

Yes, these interventions cost money, but not nearly as much as the costs of transport to the ER by ambulance and possible readmission.

From the patient's perspective, he's back home and able to resume his normal activities much sooner.

Win-win.

Riiiiight, preventing return hospitalization -- for white and black seniors, if you're an Illegal with no ID, it's OK, no worries

If you have evidence to support your opinion, kindly present it here. Or just continue to clutter up the thread with your trolling ignorance. It makes a good contrast to what the adults are discussing.

 

[Sun Devil 92]

Worst US recovery ever, most debt in all human history -- but we saved $100MM by throwing old people to the curb

You couldn't be more wrong.

They already know their TOTAL Revenue before the year starts ?

That's what a global budget is. This is the entire point of the thread.

This means they have incentives to keep people from coming to the hospital....or denying them access to the hospital ?

This is why they're investing in low-cost interventions outside the hospital to keep people healthy and prevent more expensive inpatient episodes where possible (not to mention improving care inside the hospital for those that do need inpatient level care).

I wonder if part of the problem here is that many people are not familiar with what goes into the process of preventing return hospitalizations? Maybe an example would help:

A patient is released from the hospital following heart surgery. Back in the day, he'd need to remain in the hospital for a week or more post-surgery. Aside from the added costs of multiple nights in the bed, extra meds, extra personnel to care for him, etc., the process of getting him back on his feet and fit to go home often involved physical therapy, transport to home (the longer you're immobilized, the harder it is to just bounce out of bed and drive home), etc.

Today patients are assessed and, unless there are complications, allowed to go home far sooner. Here's what happens at home for the first few weeks after surgery:

Someone from the cardiac team calls the patient daily to check up on him. If he's part of a clinical trial, he was given a blood pressure monitor that's connected to the hospital's computers so that when he takes his blood pressure every morning, the reading goes straight to the hospital.

A visiting nurse stops by once or twice a week (oftener if the patient lives alone) to take the patient's vitals and ask him questions. How is his appetite? How is his energy level? Is he in any pain? If he had invasive surgery, is he managing wound care (incisional infections are a major cause of rehospitalization)? Is there anything that concerns or worries him?

Yes, these interventions cost money, but not nearly as much as the costs of transport to the ER by ambulance and possible readmission.

From the patient's perspective, he's back home and able to resume his normal activities much sooner.

Win-win.

Riiiiight, preventing return hospitalization -- for white and black seniors, if you're an Illegal with no ID, it's OK, no worries

Clearly there is more to learn here.

What you describe COULD be an outcome. I am trying to read the OP again and get more details.

My concern isn't for what you described because in order for that to happen there would need to be a floating cap on revenue. The way it has been described.....you could hit the cap and then.....what ? I don't know.....they pay you to go to the ER ? Makes no sense, of course.

That is why I am sure there is more to it.

 

[Maryland Patriot]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs

Maryland hospitals collectively generated more than $100 million in Medicare savings in the first year of an experimental payment system being watched closely by the federal government as a possible national model for reducing health care costs.

The state's medical institutions agreed last year to a five-year agreement with the U.S. Centers for Medicare and Medicaid Services. It drastically changed the way they did business and aimed to curb costs, in part by reducing expensive hospital stays and handling more patient care at the doctor's office.

"Hospitals at the blink of an eye really changed their systems into something that hasn't been broadly tested before — and we are pleased with the first year results," said Carmela Coyle, CEO of the Maryland Hospital Association.

Hospital officials — and health care advocates — also contend that the new cost-cutting effort has not come at the expense of patient care.

An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

 

[Arianrhod]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs

Maryland hospitals collectively generated more than $100 million in Medicare savings in the first year of an experimental payment system being watched closely by the federal government as a possible national model for reducing health care costs.

The state's medical institutions agreed last year to a five-year agreement with the U.S. Centers for Medicare and Medicaid Services. It drastically changed the way they did business and aimed to curb costs, in part by reducing expensive hospital stays and handling more patient care at the doctor's office.

"Hospitals at the blink of an eye really changed their systems into something that hasn't been broadly tested before — and we are pleased with the first year results," said Carmela Coyle, CEO of the Maryland Hospital Association.

Hospital officials — and health care advocates — also contend that the new cost-cutting effort has not come at the expense of patient care.

An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

 

[Maryland Patriot]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs

Maryland hospitals collectively generated more than $100 million in Medicare savings in the first year of an experimental payment system being watched closely by the federal government as a possible national model for reducing health care costs.

The state's medical institutions agreed last year to a five-year agreement with the U.S. Centers for Medicare and Medicaid Services. It drastically changed the way they did business and aimed to curb costs, in part by reducing expensive hospital stays and handling more patient care at the doctor's office.

"Hospitals at the blink of an eye really changed their systems into something that hasn't been broadly tested before — and we are pleased with the first year results," said Carmela Coyle, CEO of the Maryland Hospital Association.

Hospital officials — and health care advocates — also contend that the new cost-cutting effort has not come at the expense of patient care.

An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

trust me, they are faking it. At one time it was the best hospital you could go to, but over the last year they have gone so far down that I can only equate them to a crack corner clinic.

 

[Arianrhod]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs

Maryland hospitals collectively generated more than $100 million in Medicare savings in the first year of an experimental payment system being watched closely by the federal government as a possible national model for reducing health care costs.

The state's medical institutions agreed last year to a five-year agreement with the U.S. Centers for Medicare and Medicaid Services. It drastically changed the way they did business and aimed to curb costs, in part by reducing expensive hospital stays and handling more patient care at the doctor's office.

"Hospitals at the blink of an eye really changed their systems into something that hasn't been broadly tested before — and we are pleased with the first year results," said Carmela Coyle, CEO of the Maryland Hospital Association.

Hospital officials — and health care advocates — also contend that the new cost-cutting effort has not come at the expense of patient care.

An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

trust me, they are faking it. At one time it was the best hospital you could go to, but over the last year they have gone so far down that I can only equate them to a crack corner clinic.

Anything other than your opinion to support that?

 

[Maryland Patriot]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs

Maryland hospitals collectively generated more than $100 million in Medicare savings in the first year of an experimental payment system being watched closely by the federal government as a possible national model for reducing health care costs.

The state's medical institutions agreed last year to a five-year agreement with the U.S. Centers for Medicare and Medicaid Services. It drastically changed the way they did business and aimed to curb costs, in part by reducing expensive hospital stays and handling more patient care at the doctor's office.

"Hospitals at the blink of an eye really changed their systems into something that hasn't been broadly tested before — and we are pleased with the first year results," said Carmela Coyle, CEO of the Maryland Hospital Association.

Hospital officials — and health care advocates — also contend that the new cost-cutting effort has not come at the expense of patient care.

An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

trust me, they are faking it. At one time it was the best hospital you could go to, but over the last year they have gone so far down that I can only equate them to a crack corner clinic.

Anything other than your opinion to support that?

well lets see, who are you going to believe, you who most likely has never even seen the hospital, or me who has actually been in it. and the last two times I walked out do to inferior care and drive myself to Howard county hospital which is part of the John Hopkins network.
But, go ahead and think what you will.

 

[Dot Com]

..and by put them on a budget you mean they had to turn away the Untermenschen and hand them aspirins?

maybe they're giving them breathalyzers and telling them to go die or something

People still surprised that obamacare is such a total clusterfuck, look who invented it

The Heritage Foundation CrusaderFrank

 

[Arianrhod]

Interesting early results from one of the little state experiments enabled by the ACA.

Maryland's state government has been setting hospital prices for decades but last year they kicked it up a notch, using authority in the ACA to essentially put their state's hospitals on budgets.

Here's an article from last year looking at what Maryland has started doing and how it's changed the game: Global budgets pushing Maryland hospitals to target population health.

Now the state's hospital association is out with a preliminary look at the results in the first year and they're promising: Hospitals save $100 million in Medicare costs
An unusual approach but one to keep an eye on.

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

trust me, they are faking it. At one time it was the best hospital you could go to, but over the last year they have gone so far down that I can only equate them to a crack corner clinic.

Anything other than your opinion to support that?

well lets see, who are you going to believe, you who most likely has never even seen the hospital, or me who has actually been in it. and the last two times I walked out do to inferior care and drive myself to Howard county hospital which is part of the John Hopkins network.
But, go ahead and think what you will.

You could prove me wrong with a third-party report. That you can't be bothered gives me a not-unexpected answer.

 

[Maryland Patriot]

and the level of care has gone down incredibly in Maryland Hospitals over the last year. Its not working.
AAMC is looking like they are ready to just shut down. On the average night they might have one nurse in the ER.

They sure seem to be faking it online, then:

Anne Arundel Medical Center - Living Healthier Together

trust me, they are faking it. At one time it was the best hospital you could go to, but over the last year they have gone so far down that I can only equate them to a crack corner clinic.

Anything other than your opinion to support that?

well lets see, who are you going to believe, you who most likely has never even seen the hospital, or me who has actually been in it. and the last two times I walked out do to inferior care and drive myself to Howard county hospital which is part of the John Hopkins network.
But, go ahead and think what you will.

You could prove me wrong with a third-party report. That you can't be bothered gives me a not-unexpected answer.

actually I cant be bothered because unlike you, I have first hand experience of how downhill they have gone.
but, Im sure you have much greater knowledge of the hospital than I do.

 

[Greenbeard]

and the last two times I walked out do to inferior care and drive myself to Howard county hospital which is part of the John Hopkins network.

...which is also on a budget. Unless you're going to the VA, you're not going to find a hospital in the state that's in a different boat.

Also, how often are you visiting emergency rooms? If you're using it as a usual source of care (in nonemergent enough states that you're willing to drive 35 minutes for better service) perhaps you're part of the problem. Might be time to start picking a more appropriate setting for your acuity level.

 

[Maryland Patriot]

and the last two times I walked out do to inferior care and drive myself to Howard county hospital which is part of the John Hopkins network.

...which is also on a budget. Unless you're going to the VA, you're not going to find a hospital in the state that's in a different boat.

Also, how often are you visiting emergency rooms? If you're using it as a usual source of care (in nonemergent enough states that you're willing to drive 35 minutes for better service) perhaps you're part of the problem. Might be time to start picking a more appropriate setting for your acuity level.

I dont go into the ER for me, I go with others.
I have walked out of the regular area of the hospital the last two times I was there. Rude, uncaring and ignorant nurses.

 

[Greenbeard]

I dont go into the ER for me, I go with others.
I have walked out of the regular area of the hospital the last two times I was there. Rude, uncaring and ignorant nurses.

I have no idea what rudeness is supposed to have to do with global budgets. Particularly when your solution is to go to a different hospital that's also on a global budget.