Hospital readmissions can add unnecessary cost to the healthcare system and can adversely affect patient health. Readmission rates are key metrics for measuring the performance of hospitals, health plans, accountable care organizations, physicians, and post-acute care facilities because they are tied to financial rewards and penalties for those entities. This article by Milliman consultants Maggie Alston and Michele Berrios identifies key elements that should be considered when evaluating readmission rates across populations or when comparing readmission rates with different methodologies.
The Milliman RBRVS for Hospitals™ Fee Schedule provides a simple solution for comparing hospital contractual allowed amounts, billed charge master levels, relative efficiency, and patient mix differences. The fee schedule is based on Relative Value Units (RVUs). There are several advantages of RBRVS for Hospitals. For example, RVUs have been developed for all hospital services, so they reflect the relative resources required to perform the care. Also, a single conversion factor can be used to benchmark a hospital contract. Milliman actuaries provide some perspective in this paper.
Hospital and health system leadership teams now recognize the importance of a thorough post-acute care (PAC) integration strategy. Many of them are developing networks that integrate physicians and investing in population health analytics, positive steps towards value-based delivery. However, many of these organizations will not see the meaningful financial and patient care benefits of these initiatives for several more years. Given current market conditions, PAC integration is likely to immediately enhance the value of patient care and have a positive impact on hospitals’ financials in the near-term. Milliman’s Ed Jhu and Sean Slattery and Kurt Salmon’s Ross Armstrong offer more perspective in a recent Becker’s Hospital Review article.
Milliman today announced that its Hospital Performance Index (HPI) software, a benchmarking tool for payers and providers that uses statistical methods to identify opportunities for increased efficiency in patient populations, has added two new capabilities.
The first new feature involves observation status benchmarks, which have become more important over the last two years with the institution of the 72-hour rule. HPI can now produce national and regional averages for observation statistics, allowing for quick comparison of individual facilities to national, regional, and state norms. Custom reporting is also available. With such wide discrepancy in rates regarding observation status by facility throughout the United States, this tool can now shed light on the relative performance of every facility in the country.
The second new feature involves readmission rate benchmarks by diagnosis-related group (DRG). HPI now provides data on the relative readmission rate performance of each hospital in the country, information that is crucial for both hospitals and payers. This new feature will enhance the existing functionality around potentially avoidable admissions and potentially avoidable inpatient days.
“These additions to HPI were very much driven by market demand,” said John Cookson, a principal at Milliman. “Hospitals and payers want more and better data so that they can make smarter decisions, improve efficiency, and contain costs. Now that HPI has information on observation status and readmissions rates, they are in a much better position to accomplish those goals.”
Milliman has announced the launch of a next generation Hospital Performance Index software, a benchmarking tool for payors and providers that uses statistical methods to identify opportunities for increased efficiency in patient populations. The new product significantly enhances the granularity of hospital benchmarking available to payors and providers and fits the needs of accountable care organizations (ACOs) by identifying instances where care management may yield improved quality and increased efficiency.
“The move toward accountable care spurred by the Affordable Care Act requires payors and providers to constantly benchmark their populations in search of opportunities for increased efficiency,” said John Cookson, Milliman principal. “The enhanced Hospital Performance Index, which builds on technology with a 20-year track record, is optimized for today’s market and allows national, regional, and local benchmarking. This benchmarking can be performed using multiple variables, including diagnosis-related groups (DRGs), major disease category, readmissions, and avoidable inpatient days.”
The enhanced Hospital Performance Index includes an updated user interface that brings these benchmarks to payors and providers in an intuitive fashion. The benchmarks can be applied against Medicare, Medicaid, and commercial populations and allow for comparison with every hospital in the country. The updated tool can help payors and providers prioritize their care management efforts, highlight instances where better management could result in cost reduction, and aid in contract negotiations and in the creation of accountable care partnerships. For more information, click here.
A new article in HFM Magazine looks at how a lagging economy may complicate the medical malpractice claim reserving process for self-insured hospitals. Here’s an overview:
The financial markets took a severe downturn between October 2007 and March 2009, resulting in the lowest investment returns in decades. With this financial instability, questions regarding the appropriate discount rate used in financial reporting of medical malpractice reserves by self-insured hospitals became common. Should the discount rate be maintained at levels consistent with historical rates, or should it match the current market conditions? What source(s) should hospitals look to in selecting a discount rate? Does any official guidance exist on this issue? What dollar impact will a change in the discount rate have on the discounted reserves recorded? Should such reserves be discounted at all?
The full article is available here.