Federal and state governments have put considerable pressure on hospitals' Medicare and Medicaid payments as of late.
Mike Comer, president and CEO of wound center service company Wound Care Advantage in Sierra Madre, Calif., says a $300,000 to $400,000 loss in government reimbursement for an average hospital due to sequestration, for example, "might not be the end of the world." It's certainly a big deal, as any lost revenue strains healthcare organizations today, but he says hospitals can persevere through these challenges.
"Issues like the sequester offered an opportunity for hospitals to think more entrepreneurially, but not many hospitals are taking a creative approach to it," Mr. Comer says. "There are hundreds of thousands of dollars out there per hospital just with tweaks."
Here, he explains four concepts hospitals need to consider amidst the hits to their top-line revenue.
1. Work closely with the chief compliance and legal officer. The Patient Protection and Affordable Care Act, sequestration, HIPAA, ICD-10, meaningful use — the amount of government initiatives that directly touch reimbursement is immense today, and hospitals have to delegate at least one person to monitor all the major issues. In addition, the top C-suite leaders have to work closely with the compliance and legal department to ensure their hospital is guarded.
"One person has to be tasked with keeping an eye on the…impact of new changes in government full time," Mr. Comer says.
2. Don't rely on layoffs as a long-term solution. An increasing number of hospitals have resorted to layoffs over the past nine months, but Mr. Comer says this isn't a sound solution to a much deeper problem. Eventually, hospitals will have to rehire employees to manage the growing population that will utilize healthcare in some varying degree.
"It's going to be a difficult market to find good personnel," Mr. Comer says. "Layoffs are short-term. There are very few quality people to handle the difficulties of healthcare. I understand the concept of laying people off, but I feel it's very shortsighted."
3. Continue investment and focus on outpatient care. Mr. Comer says a solution to recouping lost government reimbursement instead of layoffs is, ironically, spending money. This may sound paradoxical, but hospitals that invest in the new future of hospital care — that is, outpatient services, ambulatory sites of care and primary care/wellness initiatives close to patients — will reap the benefits of future reimbursements.
"It's not about inpatient services anymore. It's about keeping [patients] out of the hospital," Mr. Comer says.
4. Open new service lines that make sense. Community hospitals cannot be all things to all patients, especially as they form collaborations with larger, tertiary organizations. However, there are some service lines hospitals can consider opening in a cash-strapped time that could recoup lost government revenue.
For instance, Mr. Comer says if a hospital started its own outpatient wound care program, it could garner new reimbursement while also avoiding future, expensive inpatient admissions. He says a typical outpatient wound care program within a hospital medical office building can see between 300 and 500 patients per year, which could lead to hundreds of thousands of dollars in revenue. Additionally, those patients can quickly receive a care plan on how they can heal their wounds, thus avoiding hospitalization, and the physicians and nurses can monitor the patients to make sure wounds don't reoccur.
"We thought the sequester, for example, was a good opportunity to look back on service lines," Mr. Comer says. "Instead of closing them, open them in an intelligent, cost-effective way."
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