From Dr. Tom's Desk
In a value-based world, hospitals are a center of cost, not profit.
Treat them as such.
One of the clients I’m working with now does so---and is enjoying phenomenal success.
From California to New York, hospitals are closing their ERs and opening up stand alone “acute medical centers.”
The health systems behind these hospitals have gotten the message.
Their inpatient services are just another “vendor,” another cost-center as they try to deliver healthcare under a fixed budget.
My partners and I recognized this problem early on. It took us years to overcome the Certificate of Need process in our state to license our own hospital---but license it we did. We did so because there was no other way to control how much an acute hospital day cost us.
Today, health systems are going further. A number of my health system clients are caring for their patients in “acute care centers” that are licensed by the state, but not approved by Medicare. They don’t bill for their services, they only act as inpatient facilities to get Medicare Advantage patients through an acute illness.
These systems have gone “all-in” on their Medicare Advantage contracts and have little financial interest in trying to profit from inpatient services.
They realize every nickel they don’t spend on care goes straight to their bottom line.
And of all their care costs, inpatient care is the “Big Kahuna.”
These “acute care centers” are still a grey area to most state regulators. They don’t need an ER to feed them patients, and they don’t bill Medicare. They are an excellent example of innovation moving ahead of regulations.
Sure, they divert resources away from traditional hospitals that depend on Medicare Advantage revenue to keep their doors open---but you can still support indigent care financially, as much as you desire, once your annual settlement check comes in.
Value-based care requires a change in your thinking
You, not Medicare, are not on the hook for every expense.
It’s up to you to plumb the depth of your ingenuity to deliver your care as cost-effectively as possible---with innovations that work completely outside the system if necessary.
Medicare Advantage will reward you for doing so.