Most healthcare providers participating in Medicaid will see reimbursements reduced this summer when the state’s new budget goes into effect. In all, the 2008-09 budget for the state is about $66.2 billion, or about $6 billion less than the current year budget.
Ultimately the Florida Legislature passed a budget that trimmed Medicaid rates for nursing homes by $167 million, hospitals by $255 million and Medicaid HMOs by $55 million. Physicians who participate in the MediPass program will have a $1 reduction in the monthly fee they receive for managing care. Instead of receiving $3 per member per month, the physician will receive $2 per member per month. The administrative fee is on top of what the provider bills Medicaid for providing the care.
While the monthly fee was reduced, the fees that doctors are allowed to bill Medicaid for providing the care were not increased as organized medicine had hoped. In addition to lowering the administrative fees physicians receive for participating in MediPass, the Legislature included in the budget a requirement that people who participate in the primary care case management program reaffirm their participation in the program. If they don’t proactively choose to stay in MediPass, the state will assign them into a managed care plan, most likely a Medicaid HMO. The requirement could impact upward of 27,000 beneficiaries in 29 counties and only applies in areas of the state where there is a choice of two or more managed care plans to enroll in. The requirement is estimated to have a net savings of about $6 million this year.
Florida’s revenue collections have been falling for months, and legislators have already slashed by $1.5 billion the current year budget that covers spending until June 30. The new $66.2 billion budget will be sent to Gov. Charlie Crist, who has the power to veto individual spending items.
To lessen the impact of the budget cuts, the Legislature did agree to tap into $355 million from the Lawton Chiles Endowment, a reserve set up with proceeds from the state’s lawsuit with tobacco companies. That money helped the state fund for one year the Medically Needy program and the Med-AD program.
Medically Needy is an optional program that funds health care for people who—if not for a catastrophic illness or accident—would not qualify for the Medicaid program. MEDS-AD is a Medicaid buy in for elderly people who otherwise wouldn’t qualify for the program.
St. Louis-area hospitals reported profits of more than $318 million in 2005, according to the city's Business Health Coalition most recent annual report on the region's healthcare industry. St. Louis hospitals' average cost per patient stay increased 10% a year between 2003 and 2005, almost four times the rate of inflation, according to the findings. According to the coalition, the cost of unnecessary building projects is being reflected in price increases to patients and insurers. Hospitals see it differently, notes St. Louis Post-Dispatch columnist Mary Jo Feldstein.
Should anyone be surprised that health plans are exploring the most cost-effective ways to provide disease management (DM)?
Questions abound about whether DM is cost-effective so it only makes sense that health plans would look to provide those services in-house. Whether the grass is actually greener on the other (in-sourcing) side though is still in question.
Two Minnesota-based health plans, Blue Cross Blue Shield of Minnesota and Medica are the latest to announce they are in-sourcing DM services. BCBS of MN announced it is severing ties with Healthways and will begin offering in-house DM programs in January 2009.
Health plans that are in-sourcing DM programs point to the following:
In-sourced programs allow the health plan to have more control over its members
It allows for quicker program changes without having to deal with an outside vendor
It provides faster outreach to at-risk members
The health plan already has relationships with physicians that can spark greater collaboration than a third-party vendor
In place of Healthways' DM products, Blue Cross Blue Shield will offer its Whole Person Health Support program, which goes beyond traditional DM and is more expansive in the areas of identification and stratification, consent and engagement, and integration.
Moving those services in-house creates an integrated program that doesn't involve outside vendors.
"It's easier for us to deliver Whole Person Health Support with our in-sourced programs because we don't have handoffs, we don't have data being sent to outsourced programs. It's fully integrated," says David Plocher, MD, chief medical officer and senior vice president of health management and informatics at BCBS of MN.
BCBS of MN's plan is to in-source the majority of DM services in January and gradually move the remaining programs in-house later. Two programs that BCBS will continue to outsource at least temporarily are online health assessment and a nurse triage line.
Blue Cross will hire between 80 and 100 employees to handle the Whole Person Health Support services, a majority of whom will staff a nurse call-center. The health plan is also investing in technology for the call-center and decision health platform. BCBS of MN is following the lead of other health plans that have brought DM in-house. Horizon Blue Cross Blue Shield of New Jersey took over its asthma and chronic obstructive pulmonary disorder DM programs in 2003. It has since added DM programs with telephonic health nurses for patients with chronic kidney disease, diabetes, hepatitis C, multiple sclerosis, heart failure, coronary artery disease, and patients with weight management problems. Over the past five years, Horizon's DM department has grown to more than 100 employees who serve about 185,000 members.
Though health plans like Horizon and BCBS of MN see in-sourcing as a better alternative, there are other plans with in-house DM programs that are looking to outsource those services. There are still others that are searching for the right mix of in-sourced and outsourced programs.
Many DM vendors see the in-sourcing movement as a negative because they believe it means less business, but there are others who view it as an opportunity. One example is Health Dialog in Boston.
Instead of getting defensive and demanding that health plans take bundled DM services, Health Dialog offers programs a la carte. George Bennett, chairman and CEO of Health Dialog, a health management company, says his company is as interested in licensing intellectual property as it is in outsourcing. A large portion of the firm's resources are focused on predictive modeling, reaching and engaging members, developing sophisticated software tools, and licensing property.
That business model is working—Health Dialog is expected to grow 30% this year, breaking the $300 million mark.
The future of DM is very much in flux, and which is the best way to offer these services while containing costs and improving outcomes is debatable. The managed care landscape will remain fluid until health plans figure and DM companies figure out the best ways to offer these kinds of services. My money (particularly for the small and mid-sized health plans) is on the collaborative approach.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com .
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Marketing methods, techniques, and modes of delivery go in and out of style—sometimes so fast that it's hard to keep up. I only recently learned that starbursts in direct mail are out. One of our marketing folks actually used the word "passé" when I suggested we use a starburst in one of our own direct mail efforts. Whoops. But there are plenty of ideas that aren't outdated. Here are five that are "in" (for the moment, at least):
1. Outdoor: Back in
Billboards and other outdoor methods were on their way out, but now they're back in again, thanks to some new and emerging technologies. In fact, outdoor ads are one of the industry's true bright spots, Richard Schaps, CEO of Van Wagner Communications said in a recent interview.
This is the dark horse in my personal in list. It makes you wonder whether phone book ads are the next media poised to explode.
2. Hey, [insert name here]: You're in
I'm currently enamored with personalization, which is definitely "in" at the moment. I like getting direct mail pieces with my name incorporated in the message or design and I often post them on a bulletin board in my office that displays standout ads. (I took down all the ones with a starburst on them).
At some point, however, personalization will drop off the hot list. No matter how well you do it, your message won't stand out if every other piece that hits your customers' desk is personalized, too.
3. ROI: In the money
Proving a return on investment for your marketing has been and always will be in. But it's especially hot in a cool economic climate. If you want to keep your staff and your budget, you'd better make sure marketing is listed in the ledger as a source of profit, not an expense.
4. Segmentation: In the zone
Targeted efforts are in for the same reason that tracking and personalization are hot. In tight financial times, you can't afford to fling your message at a wide audience and hope that the right people catch it.
Meanwhile, inadequate customer data is the key obstacle facing marketing executives, according to a CMO council study. About half of the chief marketing officers in the survey said they have "fair" to "poor" knowledge of their customers.
5. Web 2.0: So in it's out
Thanks to HCAHPS, soliciting patient feedback is way, way in. And thanks to social media and Web 2.0 (a nickname I'm hoping will soon be out), the conversation is starting to go both ways. It's not just about collecting data. It's not just about talking to or even listening to your customers. It's about building relationships with them.
To that end, I'll admit that I had a hidden agenda when I chose the five items on my in list. I was hoping some of you would disagree with me . . . and tell me so.
What do you think is in? What's decidedly out? Leave a comment by clicking the link at the bottom of the page or e-mail me, and I'll share the responses in an upcoming column.
Many healthcare marketers are wondering how the recently-implemented Stark "Phase III" fraud and abuse regulations tangibly affect their ability to market to and for physician practices. Hospital marketers want to know, for example, how much they can spend to advertise physicians' services, who can or cannot appear in an ad, what the ad can say, who needs to be invited to hospital-sponsored programs where a medical staff physician speaks on a healthcare subject, and how the regulations affect the call center's activities.
These are all legitimate concerns, as failure to meet the Stark III regulations, even unknowingly, can result in potential loss of Medicare and Medicaid funds.
The Stark rules were initially instituted to prevent physicians from referring Medicare and Medicaid patients to certain health services from which they would stand to benefit financially because of a personal ownership or similar financial interest. Hospitals are prevented from attracting physician referrals through conveyances such as gifts, financial arrangements that are less than fair market value, and other like practices designed to encourage channeling of patients to their facility. Unless they meet certain exemptions, hospitals must not favor or even give the appearance of promoting the channeling of patients to physicians or designated health services in their marketing of physicians. Figure 1 describes various marketing activities and scenarios and how they might be judged according to the regulations.
(Note: The marketing of physicians' services is very fluid. What's in vogue today may be verboten tomorrow. Marketers are advised to consult professional counsel for specific legal, ethical, or clinical questions relating to the Stark regulations.)
See Figure 1, the Stark law's impact on hospital's marketing of non-employed physicians.
One approach to physician marketing
Midwest Health System (not its real name) owns a multi-specialty group that accounts for approximately 30% of hospital admissions and 40% of revenue. It also has a strong relationship with a large independent multi-disciplinary group practice from which it receives 60% of its admissions. There are also independent physicians (solos and small groups) on staff who account for the remainder of admissions.
As might be expected, all three groups of physicians felt that they should receive marketing support from the health system, and the marketing department was concerned that the non-employed physicians might perceive favoritism in the system's advertising.
The burning question: How to keep everybody productive, cooperative, and focused on customer satisfaction as opposed to questioning whether one physician is getting more than another.
The answer was to focus on the bigger picture such as what could be done to enhance relationships between the entire medical staff and hospitals, ways to enhance patient care relations and processes, and ways to enhance clinical programs and services to sustain quality of patient care. By taking this approach, the marketing director was able to find common ground for marketing all four physician groups without running afoul of the Stark regulations. Some of the tactics that were identified included:
Developing a formal physician/medical staff marketing issues action plan
Assigning managerial "go to" persons to each member of the medical staff to assure effective two-way communications and defuse rumors caused by inconsistent or no communication on issues of concern to physicians
Developing a physician leadership track
Sponsoring a speaker from a non-competitive market who could talk on issues such as reimbursement and customer service
Advertising from a "we're all in this together" approach, so that the employed physicians were not given any preference over the non-employed physicians.
As a result of implementing the above tactics, communications improved among all four groups. The health system also began to see a salutary effect on patient satisfaction scores.
A strategic framework
Within the context of the Stark regulations, marketers have three approaches to evaluate physician marketing opportunities. One is to take no chances and eliminate physician marketing altogether. A second is to let your general counsel review everything before going forward with anything.
Clearly, these first two options are not very realistic or advisable.
A third approach is to develop a strategic framework to evaluate all opportunities for hospital and physician relationship-building. Think in terms of physician relationship management, not in terms of what is OK or not OK under the Stark provisions. It's important to first understand the business proposition: Does this activity have mutual value to both parties? Then conduct the smell test: Could this activity be interpreted as an effort to favor or prefer specific physician practices over others in order to encourage an increase in patient referrals?
Figure 2 presents a decision algorithm for evaluating physician marketing opportunities.
Summary
The new Stark regulations require healthcare marketers to screen activities against a potential violation. However, this should not be what drives the decision-making process for determining whether to undertake an activity. Physician marketing efforts should be strategically sound for both parties, then evaluated for compliance.
Patrick T. Buckley is president and CEO of PB Healthcare Business Solutions LLC. He may be reached at 262-408-5549 or at www.pbhealthbiz.com.
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The patients at Fairview Southdale Hospital in Edina, MN, really take ownership of their medical conditions—and that's how the hospital's marketers like it. "My breast cancer. My doctors. My Fairview," reads the ad for the hospital's breast cancer care program. The seven other patient-testimonial ads have similar taglines relating to different service lines.
The 390-bed hospital decided to use patient testimonials when they launched the "Taking Exceptional Care of Patients" campaign in January because research showed that local consumers identify with real patients' stories. Intense competition in Fairview Southdale's market also contributed to the need for a strong campaign.
"The campaign is an outgrowth of an effort that spans operations, process improvement, physician alignment, and a system-wide effort to better focus efforts on areas of clinical excellence," says Kristin Smith, the director of marketing and public relations for the Fairview Southwest Care System. "Specific to Fairview Southdale Hospital, we are in a highly competitive geography, with key competitors within a 5–10 mile radius. To maintain or grow inpatient and outpatient market share, we must continue to have a presence in the marketplace."
To make their presence felt, the hospital advertised on the Internet, radio, buses, billboards, and in newspapers. The seven patients are each featured in seperate ads, and speak for the hospital's heart attack, peripheral artery disease, knee replacement surgery, weight loss, stroke, breast cancer, and lung cancer services.
The campaign is running in the hospital's primary and secondary service areas, including the city's 13-county metro area. Now, more than four months out, Smith says the campaign has received a great deal of positive feedback.
"Brand monitoring research reveals key indicators improved as well, particularly in the areas of unaided awareness improved and consumers choosing our hospital for life-threatening concerns," she says. "Web traffic improved dramatically during the campaign's run, as did attendance at on-site health education programs featuring physicians in strategic growth areas."
These results are good news, especially considering that Smith says the hospital had aimed to spread the word about their cardiovascular, oncology, orthopedic, emergency, and other multispecialty services. By creating a campaign in which patients take ownership of their healthcare, Fairview Southdale's marketers have also shaped a hospital that is taking ownership in its market.
Marianne Aiello is an editorial assistant with HealthLeaders Media. She may be reached at maiello@healthleadersmedia.com.