While Leaders ‘Summit,’ N.J. Hospitals Are Testing Healthcare Solutions

I watched with great interest last week as President Obama and congressional representatives met in a bipartisan summit on healthcare reform. One of the lead discussion points was the need to find innovative ways to eliminate wasteful spending and consumption of healthcare services. One promising strategy is already underway here in New Jersey, where NJHA and 12 of its member hospitals and their participating physicians have received approval from the federal government to test an innovative new incentive method called “gain-sharing,” which aims to reduce healthcare costs while improving quality of care.

The three-year trial program could provide hospitals with an effective tool to align physician and hospital priorities, essentially making them partners in an effort to reduce the cost of healthcare. The strategies are endless, but one specific example could be a new timetable for physician rounds. By simply moving patient rounds to the morning and discharging patients early in the day, hospital expenses are reduced and patients are allowed to continue recovering in the comfort of their homes. This is one of many common sense approaches that could lead to significant cost savings.

Clearly, there is much work to be done to reform our healthcare system, reduce costs and extend health coverage to more Americans. Hospitals are ready to be part of the solution – as evidenced by this promising pilot project. We encourage Congress to continue examining such innovative ideas and lead us in the search for viable solutions to our healthcare system’s growing problems.

Written by Betsy Ryan at 13:49

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Steve Kelly said...
I found it refereshing to read about actual solutions to containing healthcare costs rather than just accusations . The idea of gain sharing is one that has merit. The present system is flawed in that providers are , in many case ,incented to utilize and treat . That isn't because they are evil ; that is the way they get paid. Insurers are incented to control utilization and reduce the amount of treatments . These conflicting incentives have been colliding for too long and the argument has grown stale.
I think there is another opportunity for hospitals to change the game dramatically. That would be direct contracting with employers who self insure thier health benefits. A self insured plan is one that pays claims directly from a trust fund . So any profit ( i.e. the difference in the amount in the fund and the amount of claims paid ) would inure to the benefit of the self insured employer. Hospitals might directly contract with these plans so that if care is delivered more efficiently and costs are reduced , the hospital and the employer could share in the gains. No middle man ( i.e. insurer ) would be adding a layer of cost and administration .
Can hospitals and self funded plans work together to accomplish cost reduction ? I would say yes. There are hurdles ( i.e the physician piece ) to clear , but , as Ms. Ryans article points out , aligning incentives is key . No two parties have more at stake in this health care battle than the local hospital and the employer in the same community whose employees treat at the hosptital. And yet these parties rarely speak directly and are seperated by walls of intermediaries.
A self funded plan is exempt from many of the state regulations that make innovation so difficult. These plans are more nimble and can be tailored to meet the specific needs and capapbilities of a local provider and employer. Health care is ultimately a very local proposition ; inner city Camden and Morris County have very different issues. There is no satewide solution ( let alone national ) that willl apply evenly across New Jersey. Start with dialogue and deals between one employer and one hospital and build outward.
Again , great to hear of possible solutions and I hope more people will respond with what might work going forward.
March 7, 2010 10:52