<\/p>\n
There is a widely held belief, perhaps unspoken but no less strongly held, that the healthcare business is a zero-sum game.<\/span><\/p>\n Consider how healthcare dollars are generated. \u00a0 A hospital system, care facility, or provider provides a service to the surrounding area, termed a catchment area. \u00a0Those covered lives in the catchment are expected to generate a certain amount of healthcare expenditures on an aggregate, population basis. \u00a0This is modeled by insurers and hospital systems for budgetary purposes. \u00a0Given the number of people in the catchment area, the age, socio-economic status, general degree of illness, and type of insurance, finance professionals and actuaries can make an estimate of expected healthcare dollars by payors (insurers, government) to providers and facilities on a per patient basis.<\/span><\/p>\n While modifiers, complications, and co-morbidities can alter the real billing for a particular patient and encounter, on aggregate most in the healthcare industry tend to think that these care dollars will either be captured by their system or a competitor. \u00a0Hence, zero-sum. \u00a0That understanding probably accounts for the \u2018me too\u2019 effect in healthcare, as once one system purchases a gamma knife, the other system will to, as they are unwilling to let the competitor capture those lives with the resulting profit strengthening one system over the other. \u00a0<\/span><\/p>\n But this zero-sum mentality trickles down as well from the CEO level to employees, particularly middle management. \u00a0Consider the service line manager – given a fixed budget, bonused on cost savings vs that budget ceiling. \u00a0You have value-added services that earn revenue. \u00a0However, you also have compliance-related non-value add mandatory services which are essentially costs. \u00a0What\u2019s one way to improve the service line budget? \u00a0By keeping the valued added work and pawning off the non-value added work as much as possible on someone else. \u00a0By having your clinicians bill separately for services, and requiring by medical staff privileges that \u2018cherry picking\u2019 is not allowed, you make sure your clinicians will provide services to the indigent as well as the insured. \u00a0But you don\u2019t have to pay your clinicians for that work. \u00a0By requiring department chairpeople to design standard orders, you avoid having to hire consultants to do the same thing. \u00a0Cost-shifting onto the non-employed physician is a well-known phenomenon. \u00a0Don\u2019t think that it doesn\u2019t work the other way, however! \u00a0On a busy friday afternoon, a family practitioner sends a complicated elderly patient to the ER with a weak complaint which requires evaluation. \u00a0When it is time to discharge the patient, the family members can\u2019t be found and the physician, who does not have privileges at the hospital, won\u2019t answer the phone. \u00a0An economist would argue that each of these individuals acted in their own best interest, but the cost to the patient and the system, as well as the payor, is high.<\/span><\/p>\n As physicians are employed in the hospital system, \u00a0the situation gets more complex. \u00a0Cost-shifting behavior dies slowly, but the mid-level administrator is merely shifting costs within the system to another service line manager to meet their own budgetary \u00a0or productivity goals. \u00a0Without an institutional understanding of why this behavior is maladaptive, and management processes in place to make sure this does not happen, the result is that employed physician is cost shifted upon – and that person has lost the ability to cost-shift herself back to maintain equilibrium by virtue of employment. \u00a0This is a problem, because it can cause physician dissatisfaction, a declining quality of care, and ultimately physician burnout. \u00a0And currently, there does not seem to be any governance model in place to prevent this (At least, I\u2019m unaware of them). \u00a0What will ultimately happen is service lines will be missing key players, resulting in missed revenue opportunities for the system – essentially giving their competition the edge – in light of positive budgets and productivity goals. \u00a0This will leave most executives scratching their heads, as the relationship is not directly seen. \u00a0The bottom line is that you can\u2019t cost shift onto yourself. \u00a0Systems employing physicians in significant numbers would be wise to learn this quickly.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" There is a widely held belief, perhaps unspoken but no less strongly held, that the healthcare business is a zero-sum game. Consider how healthcare dollars are generated. \u00a0 A hospital system, care facility, or provider provides a service to the surrounding area, termed a catchment area. \u00a0Those covered lives in the catchment are expected […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"New Friday Post: Cost Shifting in Healthcare","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[8,2,3],"tags":[],"class_list":["post-6225","post","type-post","status-publish","format-standard","hentry","category-finance","category-healthcare","category-physician-executives"],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mtfP-1Cp","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/6225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/comments?post=6225"}],"version-history":[{"count":4,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/6225\/revisions"}],"predecessor-version":[{"id":13645,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/posts\/6225\/revisions\/13645"}],"wp:attachment":[{"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/media?parent=6225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/categories?post=6225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/n2value.com\/blog\/wp-json\/wp\/v2\/tags?post=6225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}