A Model for Medicare Breakeven: New Hospital Guidebook Published

Medicare breakeven is an Everest for hospital leaders, elusive despite bountiful guidance and analysis from the Advisory Board, HFMA and others.

MedicareBreakevenCoverImageBut it’s achievable. And sustainable. So say the authors of a new publication titled “Medicare Breakeven Challenges?: A Model to Achieve Sustainable System Performance.” Download it here: http://www.carelogistics.com/landing-and-redirect-pages/achieving-medicare-breakeven-a-care-model-for-sustainable-hospital-performance-request.aspx

Hospital transformation and operational veterans Samantha Platzke and Ben Sawyer posit that efficient, system-focused care coordination makes operations reliable, drives down costs and enables sustained delivery of quality care with margin at Medicare reimbursement rates.

Their “Hospital Leadership Guidebook for Operational Efficiency” includes:

  • Formulas for two critical hospital efficiency metrics you probably aren’t measuring but should be
  • A model for care that squeezes out unproductive “white space” and ensures sustained efficient operations
  • The reasons why greater efficiency goes hand-in-hand with improved clinical outcomes and patient experience

Here is an excerpt:

“To eliminate white space you have to be able to measure it. The good news is that there are two operational efficiency measures that clarify the amount of non-value added white space in patient throughput operations. With this clarity comes the motivation to make the operational changes necessary to thrive, not just survive, in the volume-to-value transition.

CMI-Adjusted Combined LOS Ratio

The first is the CMI-Adjusted Combined LOS Ratio, a high level, operational efficiency measure. It is defined as the ratio of the number of days of hospital care that were utilized to care for patients adjusted for the documented severity of the illnesses. This includes patients admitted for both inpatient and observation care so that the payer prescribed changes in the definition of patient status do not skew the health system’s overall length of stay.

The CMI-Adjusted Combined LOS Ratio demonstrates the overall efficiency of the hospital’s operating system in providing predictable and reliable patient-centered care. Understanding this ratio enables a health system to begin to identify opportunities for improving patient flow, increasing capacity, improving revenue performance, and reducing case costs. A good reference CMI-Adjusted Combined LOS Ratio is 2.75 or below, which will be explained further in the Sample Efficiency Measure Analysis section of this paper.”

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