Scenario
Metropolitan Memorial is seeking to expand its service offerings into underserved rural communities. The Board of Directors has expressed concerns given the emergence of new payment models, low reimbursement from Medicare and Medicaid, and uncertainty in terms of provider incentives offered through the Affordable Care Act. The Board of Directors has requested an executive summary outlining the organization’s financial viability given the challenges facing health organizations, particularly those operating in rural communities.
Instructions
The CEO has asked you to prepare an executive summary to present to the Board of Trustees, discussing the following information:
Identify the different types of healthcare payment models that could be utilized by Metropolitan Memorial.
Research the Triple AIM and discuss ways the organization can achieve the goals of the Triple AIM (improving the experience of care, improving the health of populations, and reducing per capital costs of health care ).
Discuss possible ways the payer mix may impact hospital revenue.
Explain how value-based healthcare delivery could be utilized to save money.
Full Answer Section
This executive summary will outline the organization's financial viability given the challenges facing health organizations, particularly those operating in rural communities.
Different Types of Healthcare Payment Models
There are a number of different healthcare payment models that Metropolitan Memorial could utilize. Some of the most common types of payment models include:
- Fee-for-service: This is the traditional payment model, in which providers are paid for each individual service they provide.
- Capitation: Under this model, providers receive a fixed payment per patient, regardless of the number of services the patient receives.
- Value-based payment: This model rewards providers for delivering high-quality, efficient care.
The Triple AIM
The Triple AIM is a framework for improving the quality, affordability, and access to healthcare. The three goals of the Triple AIM are:
- Improving the experience of care
- Improving the health of populations
- Reducing per capita costs of health care
Metropolitan Memorial can achieve the goals of the Triple AIM by:
- Focusing on preventive care and wellness programs
- Investing in technology to improve care coordination and efficiency
- Collaborating with other healthcare providers in the community
Payer Mix
The payer mix is the percentage of revenue that a hospital receives from different types of payers, such as Medicare, Medicaid, and commercial insurers. The payer mix can have a significant impact on hospital revenue, as different payers reimburse hospitals at different rates.
For example, Medicare and Medicaid typically reimburse hospitals at lower rates than commercial insurers. As a result, hospitals with a higher percentage of Medicare and Medicaid patients tend to have lower revenue.
Value-Based Healthcare Delivery
Value-based healthcare delivery is a model of healthcare that focuses on providing high-quality, efficient care at a lower cost. Value-based healthcare delivery can be achieved by:
- Investing in preventive care and wellness programs
- Reducing unnecessary tests and procedures
- Using technology to improve care coordination and efficiency
Conclusion
The expansion of Metropolitan Memorial's services into underserved rural communities is a challenging undertaking. However, it is an important undertaking, as it will help to improve access to healthcare for underserved populations.
By utilizing new payment models, focusing on the Triple AIM, and adopting value-based healthcare delivery, Metropolitan Memorial can mitigate the financial risks associated with this expansion.
Additional Recommendations
In addition to the above recommendations, Metropolitan Memorial may also want to consider the following:
- Partnering with local businesses and organizations to provide healthcare services at their facilities.
- Offering telemedicine services to patients in rural areas.
- Developing mobile health clinics to provide care to patients in remote areas.
By taking these steps, Metropolitan Memorial can expand its services into rural communities in a financially viable way.
Sample Answer
Executive Summary: Metropolitan Memorial Expansion into Rural Communities
Introduction
Metropolitan Memorial is seeking to expand its service offerings into underserved rural communities. This expansion is in line with the organization's mission to provide high-quality, affordable healthcare to all members of the community. However, the Board of Directors has expressed concerns about the financial viability of this expansion, given the emergence of new payment models, low reimbursement from Medicare and Medicaid, and uncertainty in terms of provider incentives offered through the Affordable Care Act.