Value study rewrites cost-shifting gospel

May 1, 2010

It is possible for hospitals to provide high value to Medicare and commercial payers.

"Not all hospitals cost shift, and it is possible to deliver low cost to Medicare and commercial payers and to make money," says Bruce Pyenson, principal and consulting actuary for Milliman.

The study of 65 cities found a wide variety of market situations in each category, Pyenson says. Authors were surprised to find that the 16 best cities had little in common among the traditional key drivers, such as provider and payer concentration, wage index, primary-to-specialty provider ratios and levels of care intensity.

Akron, Ohio, ranks among the 16 cities offering the best value for Medicare and commercial plans, and it's one of the few cities that does so while managing high volumes of Medicare inpatient admissions.

AKRON PROVIDERS ONBOARD

Summa Health System, one of Akron's major providers, offers a unit dedicated to acute care for the elderly (ACE) as well as an intensivist program to manage complex needs, according to Kevin Theiss, vice president of revenue cycle for Summa Health. He says providers from around the country have come to Akron to see the system's ACE unit and study how they might be able to apply the care strategy in their own hospitals.

Part of the system's quality strategy leverages the use of computerized physician order entry and department-specific quality scorecards, which include employee satisfaction and patient satisfaction scores, he says.

"Our relationship with our insurance company has allowed us insight and a perspective for that side of the business," Theiss says. "This relationship has provided us awareness of the sensitivity and concerns that our community and its employers have about the costs associated with healthcare. SummaCare has also given us insight on the benefits of disease management through its programs and coordination of non-acute care through its nurse program for high-risk patients in the primary care setting."

Helen Darling, president of the National Business Group on Health, says the subsidization of public plans by commercial payers requires more study and a public policy debate because the sickest patients tend to be the uninsured-which are often included in uncompensated care-those in Medicaid and those in Medicare. She is concerned that the incentive to cost shift to the private-payer market isn't being addressed.

"If you can always get what you don't have from somebody else, then you don't have to worry about doing the hard work of controlling costs and being efficient," Darling says.