Recommendations for responding to changes in reimbursement policy.

With profound changes in reimbursement policy on the horizon, organizations are preparing a variety of responses to ensure long-term success. Most are anticipating decreases in reimbursement rates from most payers. Whether due to nonpayment for hospital-acquired complications and infections, reductions due to high readmission rates, or a move toward value-based purchasing and bundled payment models, the impact is predicted to be substantial. Because of these sweeping changes, organizations must quickly prepare a thoughtful, effective response to ensure their financial stability. At the heart of these global changes in reimbursement, including those in the healthcare reform legislation, is a drive toward integration, the formation of integrated delivery systems in response to changing financial incentives. However, the new integrated systems must be not just an assemblage of the required components, but a true functional integration in which patients experience a seamless continuum of care that is highly coordinated, efficient, effective, and accessible. In this article, we'll address changes in reimbursement and recommended responses from three perspectives. First, we offer a three-pronged approach for managing general decreases in reimbursement. Second, we highlight strategies for managing nonpayment for readmissions, focusing on the demonstration project in the state of Michigan, MI STAAR. And finally, we review managing patient care in an environment of bundled payment, including the interventions at the center of the PROMETHEUS demonstration project.

Moving quality and cost to the top of the hospital agenda.

Award-winning healthcare organizations have used the following four tactics to move quality to the top of the hospital agenda: Leverage the strategic plan to support the organization's quality and safety goals. Use "budget-like" tactics to set quality and safety goals. Emulate the finance model of reporting and accountability to meet quality goals. Base a portion of incentive compensation, salary adjustments, and annual performance reviews on the achievement of quality-related goals.

The people structure of quality improvement.

The effectiveness of a quality improvement (QI) program developed by Spectrum Health in Grand Rapids, Mich., is in many ways exemplified by its Acute Myocardial Infarction/Percutaneous Coronary Intervention (AMI/PCI) Improvement project, launched in 2003. Team structure played a major part in the AMI/PCI Improvement project's success. Indispensable members of the project team included two medical directors and a nursing director serving as team co-chairs, a quality medical director, a QI specialist, a data analyst, and a financial analyst.

A guide to highly effective quality programs.

To dramatically improve quality while decreasing costs, hospitals should: ensure all executives are vocal and visible supporters of quality improvement; focus the board of directors on quality as a strategic priority; strategically target quality resources to improve care for the majority of patients; use the finance system as the foundation for automated quality reporting; form a strong alliance between the CFO and chief quality officer, with each playing a leadership role in the quality program; rely on a well-executed quality program to improve efficiency and decrease the cost of care.