3) Consolidation, vertical integration, and the emergence of the financial risk-bearing customer for Medtronic Payers are consolidating, providers are merging, and both are vertically integrating, creating a new breed of hybrid clinical and risk-bearing customers for Medtronic. Their struggle to effectively manage outcomes and costs exposes a need that Medtronic can address. The current health care landscape has been characterized by large scale consolidation and vertical integration of payers and providers. This has led to a handful of dominate players with substantial influence, and an increasing overlap in responsibilities between payers and providers. Although payers and providers have traditionally been on opposing sides, battling each other about quality of care versus cost-effective care, they are shifting to working together to achieve better value. Consolidation within health plans has included several large scale mergers such as Anthem and Cigna as well as Aetna and Humana, primarily driven by a need for growth, with a particular focus on growth within the Medicare Advantage market. If successful, the deals would collapse the health-insurance industry’s top five players into …show more content…
Along the same lines as the capability gap for bundled payment models, ACOs are experiencing a similar need. CMS reported the financial results for more than 300 ACOs in August of 2015, and together, the ACOs generated savings of over $400 million. Despite these aggregate savings, more than 40% of those ACOs increased spend relative to their baseline expenditure. (Source: CMS, Medtronic analysis) As a result, there is significant opportunity for Medtronic to leverage the breadth of its product line and VBHC capabilities to play a role in bridging care settings and connecting disparate care teams in order to improve outcomes and lower costs over a longer time
Furthermore, uncertainty of new reimbursement models, diminishing reimbursement, and complicated compliance regulations are playing the role of a catalyst for streamlining the Chargemaster process in majority of healthcare organizations. A good example of these challenges was prompted by the Center for Medicare and Medicaid with the release of data and chargemasters from several healthcare facilities. The release of the chargemasters sends a wave shock across the healthcare industry as it depicts a huge price discrepancies among health care providers, and due to this exposure many healthcare organizations attempt to rectify their charges. The main purpose the CMS release the chargemasters was to encourage transparency in hospital’s billing
This consolidation, along with others in the health services industry, factors a drive to cut costs and thus, increase revenues. By combining purchasing power and control over a large percentage of the drug industry, PBM’s can negotiate reductions in drug costs for themselves and their consumers. They can procure less expensive generic drugs from generic manufacturers, negotiate rebates and disc...
It would be necessary for a hospital administrator to look closely at ways to lower healthcare costs and provide more efficient care when a large employer like BRPP states they are thinking of relocating their employee inpatient hospital services to a company like InduShealth. InduShealth is offering substantially lower prices for several surgical procedures and a U.S. hospital administrator would not want to lose this large consumer population if it was possible to find more efficient methods of providing healthcare to their patients (McLaughlin & McLaughlin, 2008). One pricing strategy that a hospital administrator could advocate for is a bundled...
Formed in 1998, the Managed Care Executive Group (MCEG) is a national organization of U.S. senior health executives who provide an open exchange of shared resources by discussing issues which are currently faced by health care organizations. In the fall of 2011, 61 organizations, which represented 90 responders, ranked the top ten strategic issues for 2012. Although the issues were ranked according to their priority, this report discusses the top three issues which I believe to be the most significant due to the need for competitive and inter-related products, quality care and cost containment.
The healthcare industry has already begun the transition from a fee-for-service model to a pay-for-service model. This migration will continue as efforts are made to decrease the cost of care while improving patient
Schmidt, R., & Altus, G. (2010). Reshaping the healthcare delivery network. Healthcare Financial Management, 64(1), 100-104.
In order to effectively implement the managed care delivery system in the country, Medicaid managed care organization should plan new strategies that minimize barriers, embrace new technologies, and create incentives for providers to deliver cost-effective, patient centered care. Some of the innovative strategies are (1) New ways of working with and paying providers to
The balance between quality patient care and medical necessity is a top priority and the main concern of many of the healthcare organizations today. Due to the rising cost of healthcare, there has been a change in the focus of reimbursement strategies that are affecting the delivery of patient care. This shift from a fee-for-service towards a value-based system creates a challenge that has shifted many providers’ focus more directly on their revenue. As a result, organizations are forced to take a hard look at the cost of services they are providing patients and then determining if the services and level of care are appropriate for the prescribed patient care.
Managed care, managed care has become the dominant health care delivery source. Gaining popularity in 1990s, managed care increased from 27% in 1988 to 99% in 2009 and enrollment in Fee for Service plans decli...
Healthcare is considered of one of the most complex business models in the American Industry because it is one of the only industries where the consumer actually does not technically pay for the service he or she receives (Kudyba, 2010, p. 2). When consumers go to nail salons or hair salons, he or she pays the beautician for the specific service he or she asks for. In the healthcare industry it is totally different and most consumers do not understand the complexity of this business model. The consumer actually pays insurance companies and the insurance companies pay the provider/hospital based on negotiation arrangements from the data exchanges they receive (Kudyba, 2010, p. 2).
In recent times, healthcare organization across the nation are facing unprecedented challenges as they strive to improve the overall quality of care provided to their patient’s population, while improving their organization’s financial performance. Furthermore, uncertainty of new reimbursement models, diminishing reimbursement, and complicated compliance regulations are playing the role of a catalyst for streamlining the Chargemaster process in majority of healthcare organizations.
Today’s healthcare is very complex and complicated. Healthcare has many stakeholders including patients, medical providers, the government, healthcare facilities, payers, pharmaceutical companies, and insurance companies. Each stakeholder has their own vision of how the healthcare system should work. Each stakeholder is very important to the survival of continuation of healthcare services for millions of Americans. Every stakeholder has a different job but they all need to coordinate, work together, and combine their efforts to maintain the well fair of our healthcare system. This is easier said than done. Each stakeholder’s relationship with each other is complex and complicated. This author will compare and contrast different visons of healthcare among mentioned stakeholders and how these can be seen in our healthcare delivery system.
Clinical integration is an unceasing method of orientation across the care gamut that provisions the triple aim of health care: improved quality of care; reduced cost of care; improved access to care. Clinical integration does not require the procurement of practices. Independent physicians that align with systems of providers perform a substantial part in clinically integrated care. Clinical integration stresses that providers uphold a more unvarying, high standard of care. Developments in health information technology (HIT) allow health care leaders to look to numerous types of HIT solutions to support the clinical integration model. Clinical integration is a solid basis for moving in the direction of new compensation representations that recompense providers for high-quality, high-value care. Additionally, clinical integration aids in dropping total costs by handling costs at the patient level instead of at the
Many hospitals are changing business practices to gain patient satisfaction, and are doing this by providing high quality care at competitive rates, such as competitive pricing on lab work, procedures, and outpatient treatments. Nemours Children’s Hospital, for example, lists the Florida Agency for Healthcare Administration’s (AHCA) price transparency on their website, so consumers can view an estimate of costs for all components of care. In addition, patients can decide where to seek treatment based on hospital quality metrics, including readmissions data, mortality rates, complication rates, infection rates, patient experience and other patient safety indicators; which is also available through the Nemours Children’s Hospital website. Many hospitals have discovered other business practices that foster higher satisfaction rates such as proactive rounding by nurses as well as physicians, leaders and
Technology is defined as wasteful when considered unsafe and ineffective. This cost containment strategy will help save money without diminishing the quality of care. One of the most recent changes in health care within the last five years is the Affordable Care Act (ACA), or Obama Care. The main goal of the ACA is to make healthcare affordable for all citizens by changing many of the rules set my insurance companies (Snell, 2013). A major issue that contributes to the rising cost of healthcare is the lack of communication among healthcare providers leading to unnecessary repetition of expensive treatments. The ACA has planned to solve this buy establishing the Accountable Care Organization (ACO’s). This will be a group of healthcare providers working together to ensure effective treatment, while limiting the amount of unnecessary tools and test. The goal is to send patients to providers in the same network, with the hope of saving money. Another way the ACA plans to lower cost is by bundling payment systems. The system will provide patients a single payment that will cover all expenses, public and private. This will be extremely beneficial for patients who have chronic illnesses such as, hypertension and diabetes (Snell,