Fully Capitated Payment Breakeven Rate for a Mid-Size Pediatric Practice.

BACKGROUND AND OBJECTIVES: Payers are implementing alternative payment models that attempt to align payment with high-value care. This study calculates the breakeven capitated payment rate for a midsize pediatric practice and explores how several different staffing scenarios affect the rate. METHODS: We supplemented a literature review and data from >200 practices with interviews of practice administrators, physicians, and payers to construct an income statement for a hypothetical, independent, midsize pediatric practice in fee-for-service. The practice was transitioned to full capitation to calculate the breakeven capitated rate, holding all practice parameters constant. Panel size, overhead, physician salary, and staffing ratios were varied to assess their impact on the breakeven per-member per-month (PMPM) rate. Finally, payment rates from an existing health plan were applied to the practice. RESULTS: The calculated breakeven PMPM was $24.10. When an economic simulation allowed core practice parameters to vary across a broad range, 80% of practices broke even with a PMPM of $35.00. The breakeven PMPM increased by 12% ($3.00) when the staffing ratio increased by 25% and increased by 23% ($5.50) when the staffing ratio increased by 38%. The practice was viable, even with primary care medical home staffing ratios, when rates from a real-world payer were applied. CONCLUSIONS: Practices are more likely to succeed in capitated models if pediatricians understand how these models alter practice finances. Staffing changes that are common in patient-centered medical home models increased the breakeven capitated rate. The degree to which team-based care will increase panel size and offset increased cost is unknown.

An economic model to assess the cost-benefit of BNCT.

We have constructed a formal model on cost-benefit of new technology in health care, and apply it on boron neutron capture therapy (BNCT). We assume that the patient health benefit from getting cured in acute treatment is always higher than the patient utility resulting from any long term treatment or death. This assumption makes it possible to evaluate the monetary cost impacts of a new technology and relate these measures to the patient health benefit.

What is a hospital? Future roles and prospects for success: the business of medicine: a course for physician leaders.

As hospitals consolidate and take on more financial and clinical risk, they face numerous obstacles. While the past can provide answers to solving many of the challenges, some issues are new and require innovative approaches. This article, from a speech delivered to The Business of Medicine: A Course for Physician Leaders symposium presented by Yale-New Haven Hospital and the Medical Directors Leadership Council at Yale University in November 2012, discusses the models for these hospital organizations and the pitfalls they will face in coordinating care. The insights will help these systems overcome potential problems and enhance their chances of success.

Implementing successful quality outcome programs in ambulatory care: key questions and recommendations.

With recent increasing attention to rising healthcare costs, both public and private sectors are demanding more value from the services and products they purchase. To achieve this goal, programs such as pay-for-performance have been implemented with varying success. One of the reasons behind the failures is the lack of understanding of how standards are received and accepted in the provider community. The purpose of this article is to outline some steps that will facilitate standard development and monitoring, with the aim of improving the actual outcomes themselves.

Is it time to eliminate consultation codes?: an analysis of impact and rationale.

BACKGROUND: As issues of health care cost escalation and parity of payment between primary care and other physicians have become more important, one proposal has been to eliminate consultation codes. Little is known about the current payment accuracy or financial impact of such a change. METHODS: To assess the impact of consultation code elimination, 2 assessments were conducted. First, from June 1, 2008, to July 1, 2009, 500 consecutive referrals from primary care physicians to other specialists were reviewed and matched with claims for accuracy of coding and billing. Second, to evaluate the financial impact of this change, year 2007 data on outpatient consultations from the Centers for Medicare and Medicaid Services were reviewed. RESULTS: Of the 500 claims reviewed, 466 were appropriate for analysis. Overall, the coding error rate was 32.4%. When the requesting physician ordered a consultation, the error rate was 5.5%; however, with lower paid referral requests, the error rate was 78.0%. Changing ambulatory consultation codes to those for new patient visits would save Medicare $534.5 million per year. CONCLUSIONS: Consultation codes are being billed erroneously at a high rate. Furthermore, the differential cost to Medicare of these codes over those for new patient evaluation and management codes is over half a billion dollars per year. With the growing needs for cost savings as well as encouraging payment parity for cognitive services for primary care physicians, it is time these codes are reevaluated.

Diverse circumstances require diverse styles.

What characterizes effective leaders and how can we train them so that the future of the healthcare field will be secure and successful" In the lead paper, Leatt and Porter do an excellent job of summarizing the leadership literature. They then comment on the challenges for the healthcare field. A problem with their analysis is the narrow focus on provider organizations and its attendant limited perspective. Also, further consideration should be given to graduate programs that are actively engaged in lifelong learning opportunities and the best educational practices they demonstrate.