Goal of the New Year: Cut costs, create change

Kaitlyn Dmyterko, senior writer

As the start of a new year rolls near, hospital staff and administrators have a lot to plan for and accomplish. Staff at hospitals will need to find creative and inventive ways to continuously provide high-quality care, gear up for new transitions (i.e. the ICD-10 conversion and meaningful use) and integrate ground-breaking technology. But how does one address all these moving targets while keeping spending at present levels or lower?

On Dec. 7, I spoke with a systems administrator of a large health system in Wisconsin who recently acquired a 16-physician private cardiovascular practice. While marrying EMR data from the practice setting to the hospital was a rather seamless conversion, transferring financial data was a nightmare. One of the major challenges was figuring out how to bill and collect as these types of integrations occur.

ThedaCare took on these issues, but they are not the only ones who face these challenges. In fact, this week, the American Hospital Association (AHA) reported that 2,127 hospitals have amassed a total of $355 million in denied claims since AHA began tracking data related to the Centers for Medicare & Medicaid Services’ (CMS) Recovery Audit Contractors (RAC) program in 2010.

The RAC program was initiated to help halt improper payments. While the majority of the denied claims were due to insufficient medical necessity, 17 percent were due to improper coding and 5 percent were due to lack of documentation. Additionally, this week CMS put forth three cost-saving projects to recover nearly $2 billion in improper payments.

As hospitals look for ways to decrease costs, they must first get a handle on perfecting how to handle, bill and document claims and patient data. Particularly, as the deadlines for meaningful use roll around, making these transitions will be imperative for hospitals to enter the 21st century and gain incentives for adopting helpful health IT such as e-prescribing, ICD-10 codes, etc.

Besides health IT, what else can be done to cut corners safely? Two economists in a working paper published by the National Bureau of Economic Research offered that using innovative, yet expensive, technologies sometimes may have only modest benefits for patients and substantially increase costs. While the authors pinpointed aspirin and beta-blockers as a Category I technology that is low in costs and highly effective, Category III technologies like arthroscopic surgery of the knee to treat osteoarthritis had only small benefits and was not cost-effective.

PCI and CABG accounted for 10 percent of total spending in cardiovascular treatments; however, these technologies were depicted as Category II technologies, which offer clear advantages to some patients but sometimes are only modestly cost-effective.

As the year moves ahead and more and more clinical trials begin to delineate technologies that are both safe and effective, physicians must compromise and utilize those that are both valuable and cost-effective.

To learn more about ThedaCare's practice integration, among others, check out our February issue of Cardiovascular Business.

On these topics or others, please feel free to contact me.

Kaitlyn Dmyterko
Cardiovascular Business, senior writer
Kdmyterko@cardiovascularbusiness.com