Aug. 9, 2018
Dive Brief:
- Academic
medical centers are lagging behind other facilities in terms of cost and
quality measures, according to a new Navigant
study.
- Researchers
found that costs per case were 5.8% higher at AMCs in 2017. That equals
$3.1 million on average in added annual operating expense per AMC.
- The cost per case disparity
between high and low performances was also larger for the centers
— 22% for AMCs and 19.8% for non-AMCs. That equals $12 million per
AMC and $9.2 million per non-AMC in additional annual operating costs.
Dive
Insight:
Big
payers are pushing health systems to make more patient care decisions based on
quality indicators, and alternative payment models are putting more revenue at
risk.
CMS
targets a small portion of revenue for alternative payment models. That's
expected to rise in the coming years, so AMCs, which have been active in
bundled payments and accountable care organizations, will need to improve
quality measures or lose out on funding.
It’s
not only happening in Medicare. Private payers are also moving more contracts
to risk-based payment models.
Navigant
said its results suggest facilities that don't meet value-based program
requirements may "face further financial pressures."
The
report used CMS data from the Hospital-Acquired Condition Reduction Program,
Hospital Value-Based Purchasing Program and Hospital Readmissions Reduction
Program for FY 2018 to create a weighted quality score.
Top
performing AMCs in the 25th percentile had costs 3.5% higher than
non-AMCs; median AMC performers had 5.8% higher costs; low AMC performers, who
were in the 75th percentile, had 5.4% higher costs.
The
report also found that AMCs received more Medicare value-based program
penalties between 2016 and 2018 than non-AMCs. Navigant said 40% of AMCs
received at least seven of nine possible penalties. Only 23% of non-AMCs
received that amount.
The
analysis found that AMCs have improved in some areas, such as readmission and
HAC scores. Those statistics are encouraging, but many AMCs still trail behind
others in value, Navigant said.
Also,
wage and case mix index-adjusted care delivery costs are higher at AMCs. There
are additionally higher costs per patient discharge in AMCs, which could hurt
those facilities with the shift to value.
“Despite
strong value-based program scores for 2018 compared to similar-sized non-AMCs,
AMCs need to improve consumer-facing metrics to be at least competitive with
non-AMC counterparts,” Navigant said.
Failing
to meet care measures lead to lower patient volumes and a loss of revenue
because of CMS quality penalties. Plus, fewer payers will want to partner with
AMCs. “To minimize these negative implications, AMCs must deliver
top-level performance in quality and cost outcomes,” according to the report.
Navigant
offered four bits of advice for AMCs: Benchmarking performance, empowering care
teams, emphasizing in-network customer retention and using evidence-based
clinical protocols.
Despite
Navigant's findings, it's not all bad news for AMCs. A recent Health Affairs study found
that Medicare patients in AMCs had lower 30-day mortality rates compared
to those at nonteaching hospitals.
Meanwhile,
a recent Avalere analysis found
that CMS' largest alternative payment model, the Medicare Shared Savings
Program, appreciably missed federal cost-saving projections. One
issue is that most MSSP ACOs are upside-only Track 1. That track doesn't
penalize providers with losses if spending exceeds their target.
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