Developing Healthcare

With the growth of health-care spending declining significantly to 3.9% in 2010, according to federal analysts, the American people are not the only ones looking to cut back on the costs of health care. Hospitals, now more so than ever, are looking for new ways to save money as costs escalate and reimbursements dwindle.

There are many cost effective solutions hospitals may venture into, however, several viable options that have been gaining notoriety of late are a transition to accountable healthcare practices, increasing the workload and responsibilities of advanced care providers, and as I posited in my last post, outpatient centers.

3 Ways Hospitals Can Help Control Costs

Accountable Care:

Be it accountable care organizations (ACOs) or healthcare practices like value based purchasing and the medical home model where hospitals are held accountable for patients, they help curb costs. While there are up front costs for implementation, the enhanced quality makes financial gains a reality. For ACOs, new incentive rules allow for estimated benefit-cost ratio of 2.9, and that’s just for participating ACOs in the median percentile.

The patient centered medical home can help curb readmissions while providing quality one-on-one time with patients. A study by Group Health Cooperative found that after one year medical home patient visits to emergency rooms decreased by 29%, the rate of hospitalizations dropped by 11% and the medical home had 6% fewer in-person visits. Being held “accountable” for their patients’ health and well being is a powerful and intimidating concept, but one that if executed correctly can have tremendous benefits.

Advancing Roles of Advanced Care Providers:

Advanced-care providers, commonly called registered nurses (RNs) or physicians’ assistants (PAs) are a beacon of hope for hospitals struggling with Medicare reimbursements and trying to reduce readmissions. According to Tricia Marriott, director of reimbursement for the AAPA, NPs and PAs are reimbursed at 85% of the physician rate. However, since they are not paid the same as a physician, less than half of the average physicians’ salary actually, about $88,000, the hospital comes out ahead. Likewise, with enough NPs and PAs on staff, they can delegate admission checks and facilitate a clear communication pathway, while physicians take care of the more pressing and life threatening cases.

Developing Outpatient Centers:

From urgent care centers to satellite emergency departments (EDs) to ambulatory surgery centers, all incur less operating costs than a hospitals emergency room while providing financially impressive returns. The American Hospital Association reported, from 2006-2009 satellite EDs grew 25% and with hospitals operating them in at least 16 states.

Outpatient centers promote health systems’ market share allowing the hospital to offset uncompensated ER visits and provides residents, especially in rural communities, emergency care access proximal to them, helping the hospital market its brand. I expect outpatient centers to continue to grow and we’ll continue to see how widespread their effects can be.

Your Medical Real Estate Adviser

Jim Ellis

Photo Credit: Fotopedia