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Managing Cost: The Next Wave of Worry

February 22, 2011
by Charlene Marietti
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As changes to the payment model continue to evolve, John Glaser, CEO of Siemens Health Services (Malvern, Penn.) foresees a challenging decade for healthcare providers. As receivables decline, they will not only be forced to do more with less, they must prove quality to get reimbursements. And to meet bundled payment mandates, they will need data—lots of data. "Anxiety about cost has become alarm about cost," he adds.

Most provider organizations are experimenting with what makes the most sense in dealing with the advance of accountable care organizations. Don Paulson is on the leading edge. As VP of Revenue Cycle Management at University Health System in Cleveland, Ohio, he identifies with bankers who don't like not knowing what is going to happen next.

The healthcare industry is sorely in need of payment reform, but the changes are going to be challenging. Accountable care organizations (ACO) are one response that comes from healthcare reform, but the concept is an amorphic blob, breathtaking in its complexity, and fluid, notes Glaser, who expects to see multiple flavors of ACOs.

As a beta partner with Siemens Soarian system, which stores all his organization’s data under one roof, Paulson is confident that his organization can cope. With three years of data, he believes he has the data to successfully negotiate with insurers as an ACO. He is sure that it can comply with the mandate for bundled payments, including generating a single bill from multiple independent provider partners and redistribute the earned share of incentive payments back to them.

Looking at the big picture, Glaser thinks most organizations are focused on the electronic health record (EHR), meeting meaningful use guidelines, and the transition to ICD-10 in the near term—but not seeing the next wave. “I’m not sure the industry is ready,” he notes.