From Dr. Tom's Desk

Dear Dr. Davis
Back in May I took your newsletter about the new home care benefit to my supervisor (Editor’s Note: the issue, which was the first report of the new Medicare Advantage home care option for 2019 can be found here). Your ideas about saving money and weakening demand by internalizing home care services made it up the ladder and we soon were hiring our own home care aids like you suggested. It’s been a great success.  I wanted you to know how much I appreciated your help and to thank you for making me look good to my supervisor.
I called the professional, who wrote me such a kind acknowledgement of my contribution (and who also requested anonymity). Here are some excerpts from our conversation:
Our aids deliver services directly to patients through our care managers. They decide who needs them.
Because we started hiring first, we were able to get the first choice of aids despite the tight labor market.
A couple of months after we started, a local branch of a national start-up, which was planning to offer home aid services under Medicare Advantage, contacted us to see how we were going to work together. It was very interesting: They approached us like us doing business with them was a done deal. They were very surprised when my supervisor told them we weren’t interested.
They’ve since started hiring and have tried to hire some of our people away. Because of the computer documentation they’re going to have their home care aids do, none wanted the job, even with higher wages (we don’t have them do any documentation, only care). I’m told they are having a very hard time getting good people.
Our insurer told us to expect a little less than a two dollars pmpm bump in our capitation because of this new service. But because we internalized our costs and can target services, we expect our patients’ demand for these services to be much lower.  We project most of our share of that bump will go to the bottom line.  
Our insurer also told us that CMS is getting big pushback that the bump in capitation to cover home care services won’t be enough, so we can expect an even higher increase in capitation in the future to cover those services in the years to come. If internalizing these services keeps working, all that extra revenue is projected to go to our bottom line.
We’re your biggest fans, thanks for your ideas.
So much value, freely shared.
Imagine how well my paying clients do.

You Should Know

Some Medicare Advantage Plans Shift Risk to Providers
Medicare Advantage Plans Putting More Financial Risk on Providers
Florida Medicare Advantage Plans Shift Risk to Providers
It’s beginning to happen.
Taking a lesson from the relative success of primary care practices owned by large insurers such as United, other health systems are now starting to allow their primary care providers to accept financial risk under their Medicare Advantage products.
  • Some health systems are going to blunder about and lose money in a spectacular fashion---and probably end up blaming their poorly trained medical staff for their failure.
  • Some are going to do ok, though most of their revenue gain will be eaten up in paying for information management tools, ineffective care management and unfocused consultants with big names.
  • Some are going to do spectacularly well.
  • They’ll understand that the source of real value in Medicare Advantage is the relationship their primes have with their patients---and do everything possible to engender it. 
  • Since their primes will have strong (and cost-effective) relationships with their patients, they won’t have to waste money on overpriced surrogates such as information management or unfocused care management to improve their performance.
  • They’ll educate their docs, mentor them through the up-to-two-year revenue cycle of their contracts and have their specialists on board.
  • Most important, they won’t overwhelm their docs with excessive numbers of patients. Instead, they’ll lever their primes with APN who can serve as PCPs to their own, smaller, sets of patients.
Given the current tailwinds of the program, this last group will do even better than I did---all because the read my blog, subscribed to my newsletter and asked for my help.
Which group will you be in?

Tip From Tom

The more care you can deliver yourself in your own office, the less you need to refer out to specialists, and the lower your patient’s overall healthcare costs.  Self-evident advice, but so rarely taken.
Can telemedicine fill the gap when Samantha loses her doctor?  She learns more than she bargains for trying to keep her family safe. Share her journey.

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