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What Drives Your Success? Maybe Not What You Think
Those systems are in good shape to weather rate controls that are already being implemented at the state level in many instances across the country, but many so-called high performers may not be as the practice becomes more widespread.
That's why Kaufman says that if you aren't getting substantially higher commercial rates than your competitors right now, it's time to start thinking about a merger, or at the very least a precursor to a merger that helps your finances survive a big hit to reimbursements. All the higher current commercial rates buy you is some indeterminate amount of time.
Some 37 states, according to Kaufman, already have some ability to approve requests from commercial insurers regarding premium increases, and more will start to do so. Massachusetts has been on the front lines of this trend most recently, but other states are broke too, and increasingly are getting involved when insurers insist that they need to raise premiums at double-digit rates of increase each year.
Executives should take an honest look at their level of preparedness, Kaufman says.
"If, in fact, they've eliminated waste and redesigned care, and taken all the steps necessary to be as efficient as they possibly can, they may be in good shape," he says.
It's up to you to make that determination.
Philip Betbeze is senior leadership editor with HealthLeaders Media.
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Comments are moderated. Please be patient.
Dr. Rob (8/21/2012 at 2:00 PM)
"That's why Kaufman says that if you aren't getting substantially higher commercial rates than your competitors right now, it's time to start thinking about a merger, or at the very least a precursor to a merger that helps your finances survive a big hit to reimbursements. All the higher current commercial rates buy you is some indeterminate amount of time." I do not follow the logic. You are recommending facilities to cost shift to HMO's, or until the Stae and Federal enrolled members bleed them dry. You are essentially adding another unfair burder on the working class and those who can afford healthcare coverage - essentially another "tax" to subsidize the care rendered in Federal/State programs? How will this sustain "quality healthcare for all"? It won't. IT would be more prudent to reduce the current services offered, or cost shift to the current enrolled members of Medicare and Medicaid? When the money runs out of these programs, further reductions will need to be realized, or further co-payments by these members will need to be implemented in the Federal/State programs. It is only a matter of time until this happens. Current levels of spending in Medicare and Medicaid are NOT sustainable. Current levels of reimbursement have never been close to actual costs. Members are receiving "Mercedes" care on "Model-T Ford" budgets.