LUMINA Insights Blog

Financial challenges again rank No. 1 on the list of hospital CEOs’ top concerns, according to the American College of Healthcare Executives’ annual survey of top issues confronting hospitals. In addition, Moody’s recently confirmed its negative outlook for nonprofit hospitals, citing weak volume, reimbursement constriction, and increased numbers of Medicare patients.

Financial issues are especially challenging for tertiary and quaternary hospitals, whose financial success is dependent upon referrals to their advanced care services. Because mergers can often prove impractical or might even be prohibited, Lumina Health Partners and the law firm Hogan Marren Babbo & Rose have developed a strategy to for tertiary and quaternary hospitals to integrate clinical programs with current or potential referring partners. This approach involves service line integration among hospitals and physicians, focusing on quality and “best site of care” principles.

The next opportunity to join the MSSP will be in January 2020, when the program returns to its typical schedule of ACOs joining at the start of the calendar year. You can find more information about the application process, which opened July 1, on the CMS website.

For providers considering joining Pathways to Success for the first time and current ACOs considering whether to continue in the program, here are some questions to consider:

1. What can we do to forecast our potential financial outcomes (savings or losses)?
2. How can we prepare to obtain shared savings, and, if applicable, minimize our losses?
3. Overall, how can we prepare for success in the Pathways program?

Several years ago, I was working with a client reviewing quality and cost measures when we identified an individual who was a “frequent flyer,” or high utilizer, of the emergency department (ED). Upon further investigation, we learned that this person was seeking shelter and a hot meal, and he found the ED to be the best place to access both.

Each time this individual visited the ED and the providers asked him what was ailing him, he would vaguely declare, “I have pain!” It took many conversations to get to the root of his suffering: homelessness.

His misuse of the ED posed a problem to the healthcare providers who tended to his needs each time he paid a visit because it inflated the cost, or the medical spend, for this patient. They were running unnecessary tests on his behalf.