Hospital Rivals Explore Benefits of Partnership

by Mark Friedman  on Monday, Oct. 1, 2012 12:00 am  

Instead of a fee-for-service model, where health care providers are paid per patient, bundled payment programs are surfacing. Under the new model, a flat amount will be given to cover a patient’s hospital, physician and recovery costs. This payment for episodes is “driving the need for greater efficiencies,” Goldstein wrote.

Earlier this year, Arkansas unveiled the Arkansas Health Care Payment Improvement Initiative, which officially starts Monday. Under the new Medicaid reimbursement policy, Medicaid will financially reward health care providers who control costs while penalizing those who don’t.

The project started with a handful of procedures out of the more than 7,500 diagnoses that a person can have. Medicaid will set a target price for a procedure, such as a hip replacement. Doctors and hospitals that keep actual costs below that target price will then share in the savings, but those that go over the price may have to pay.

“The ability to demonstrate lower costs while providing high quality care will be the key driver in governmental and commercial reimbursement going forward,” Goldstein wrote.

 

Eliminating Duplication

It’s too early to tell what an alliance between St. Vincent and UAMS might look like.

Peter Banko, the CEO of St. Vincent, said he and UAMS’ Rahn had informally talked about the idea of working together during the past several years, but talks started to become more serious about a year ago.

He said St. Vincent was in a good financial position for

the next couple of years, but after that, it is unknown what its balance sheet will look like.

“It’s nice to think of your next step before you need to,” Banko said.

For the fiscal year that ended June 30, St. Vincent Infirmary Medical Center reported a profit of $7.7 million on total patient revenue of $1.1 billion. UAMS Medical Center reported a loss of $568,712 on patient revenue of $1.4 billion.

 

 

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