Planning (strategic, business plans)

What Is Uncompensated Care?

Uncompensated care is an overall measure of hospital care provided for which no payment was received from the patient or insurer. It is the sum of a hospital's "bad debt" and charity care. Charity care is care for which hospitals never expect reimbursement. A hospital incurs bad debt when it cannot obtain recompense for services rendered.  EMTALA, ability, or willingness to pay influence the latter and determine the vigor of institutional response when faced with shortfalls in payment. Hospitals must attempt to assist patients' when they are unable to meet their obligations however.  Current law mandates they make these efforts and risk their reputation and then some, if they abrogate caregiving duty.  As a reminder, you may recall this fiasco. Uncompensated care comprises 5-6% of total expenses for an average hospital and has risen the past few years due to the recession. Payer mix and hospital locale influence its effect on revenue, with urban and…

Observation Units: Society Wins?

However, where is the part about changing the instruction manual? A new study out today in Health Affairs looks at observation units and their potential to reduce direct spending on inpatient care.  The investigators found: "Using a systematic literature review, national survey data, and a simulation model, we estimated that if hospitals without observation units had them in place, the average cost savings per patient would be $1,572, annual hospital savings would be$4.6 million, and national cost savings would be $3.1 billion. Future policies intended to increase the cost-efficiency of hospital care should include support for observation unit care as an alternative to short-stay inpatient admission." In analyses such as this, estimates are based on literature availability and quality, and admittedly, diversity in diagnoses goes beyond chest pain.  Recall many of the studies you read on this subject are "chip shot" presentations (like chest pain), and extrapolating findings to all…

Measure Me, My Group, or the Hospital?

CMS is overseeing a physician initiative in four states, and you likely know little about it.  Additionally, you are probably unaware of the program it seeks to inform. In 2015, Medicare will begin to assess physician performance on cost and quality data.  Through a value-based code, our newly adjusted fees will reflect these measurements, relative to our peers—with the intent of raising the care delivery bar at the doctor level.  The public will have also access to this information. (more…)
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