A recent research discloses that community hospitals require transforming their revenue cycle management structures to sustain in business in the Massachusetts.
Community hospitals in Massachusetts will sustain to close if they don’t make suitable modifications to their revenue cycle management strategies, a study unveils.
The study, issued by the Health Policy Commission (HCP) in Massachusetts, indicates that community hospital revenues are suffering due to the prominence of academic medical centers (ACMs), a disproportionate volume of publicly insured sufferers, and latest hospital utilization trends, involving a decline in inpatient facilities and increase in non-hospital services. 2 recent closures of community hospitals in low income places prompted HCP to inquire the trend.
Of the 115 hospitals in Massachusetts, 9 have closed and twenty-two have been changed to non-hospital facilities since the year 1980.
The healthcare market moved away from community hospitals due to the prevalence of AMCs in Massachusetts. Despite easy and local approach, more sufferers are deciding or being suggested to AMCs.
Researchers claim that, with the trend of consolidating providers over the last 3 decades, healthcare is being delivered by a minor number of contributor systems.
In the year 2012, 75% of visits to a primary care physician were to physicians linked with one of the 8 greatest healthcare contributor systems in the state.
Fewer sufferers are being recommended to local hospitals, even for low-intensity care, due to physician affiliations with greater contributor systems.
“For community hospitals, the pressures of the transforming health care system are exacerbated by persistent market dysfunction,” the study claims. “The Massachusetts health care market is now influenced and dominated by some major health care provider systems; almost all anchored by major academic medical centers (AMCs) or teaching hospitals which pursue sufferers from across the state and beyond.”
Furthermore, the report claims that community hospitals perform comparably to ACMs, but sufferers pick up ACMs due to brand, reputation, and positive patient experiences.
“Increasing migration of sufferers away from community hospitals for regular care, along with the general decrease in the utilization of inpatient care statewide, decreases the volume of sufferers seeking care at community hospitals,” the study elaborates. “As community hospitals see fewer sufferers, these hospitals are likely to get lower commercial amounts as they have less bargaining leverage with commercial insurers.
Community hospitals also offer care for more sufferers with public insurance and that needing low intensity care.
“Various community hospitals facilitate high shares of publicly insured sufferers, and most have relatively low average case mix, showing that the bulk of the inpatient services they offer are relatively routine, low-intensity care,” the report claims.
Government payers pay out lower rates in comparison to commercial payers, which decrease the hospital revenue.
Community hospitals also end up offering lower-margin services, such as emergency care and behavioral health care, over higher margin care, such as surgical and obstetric services. In contrast to other healthcare contributors, community hospitals are paid less from commercial payers for the similar services.
From the time period of 2010 to 2013, the greatest-priced hospital in each of the 3 major commercial payers’ network had been paid rates that were 2.5 to 3.4 times larger in contrast to those paid to the lowest-priced hospital for the similar service.
Without dealing essential changes to the revenue cycle, community hospitals can’t channel money back into investments, fundraising, marketing, staff, and infrastructure, the report asserts.
“For instance, various community hospitals may require to make investments to victoriously transform operations, like in hiring or retraining staff, buying innovative equipment such as telehealth platforms, upgrading electronic health records (EHRs), reconfiguring hospital space to better meet sufferer requirements or establishing data analysis and performance checking capabilities. In several cases, community hospitals might lack the financial resources to undertake such contribution,” the authors write.
Latest trends of inpatient care may sustain to drive down community hospital revenues.
In accordance to the study, the number of sufferers requiring inpatient care will decline over 15% in the next ten years due to improvement to patient care, involving less readmissions and unessential hospitalizations.
There is also an increase in the figure of non-hospital contributors, like independent emergency department, urgent care centers, and retail clinics, in Massachusetts. These services create competition for community hospitals.
The Massachusetts research reiterates various concerns that smaller hospitals encounter when compared to greater healthcare contributor networks, such as accountable care organizations (ACOs). Smaller hospitals aren’t living up to the hype that greater healthcare networks have made with value-based care, EHR adoption, and health IT technologies.
As the research recommends, by reforming their revenue cycle management, community hospitals will be capable to contribute in the quality and affordable care they offer.
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