Answer

Health Finance Management

Introduction

Over the course of time, various improvements have been made to the health finance management. These have been geared towards ensuring better patient outcomes as well as seeing to it that health finance resources are utilized in a sustainable manner, while being cognizant of the fact that without proper management, finances could cause a serious malfunction and collapse of the healthcare system altogether. The most recent development to this effect is now utilized through the Accountable Care Organizations (ACO) which signifies a shift from volume-based to value-based health finance management (Friedberg, et al., 2015). Herein a group of medics and medical institutions have electively come together to give harmonized excellent care specifically to Medicare patients so as to ensure the delivery of the best patient outcomes using minimal resources (Friedberg, et al., 2015). Resultantly, the medics and hospitals share in the benefits of the cost-cutting. This is an alternative health care payment method that signifies a movement away from the fee-for-service (FFS) payment method (Friedberg, et al., 2015).  Herein, neurosurgeons will be expected to conduct surgery only when it is very necessary, thus they will in coordination with other medics explore alternative treatment modalities that are cost-effective and more effective. The Accountable Care Organizations (ACO) payment modality will ensure better patient outcomes as well as better reimbursement of doctors.

The current Industry trend with respect to consolidation and hospitals acquiring physician practice is that physicians are increasingly moving towards employment by the hospitals and more hospitals are moving towards consolidation in general, such as the adoption of ACOs. When a hospital decides to be an Accountable Care Organization and a neurosurgeon joins this movement, more often than not, it follows that the hospital will acquire his physician practice. This practice has become a current industry trend. A report done by the “Medical Group Management Association’s (MGMA’s) Physician Compensation and Production Survey” indicates that “the percentage of physicians who were employed by hospitals increased from 20% in 2002 to over 50% in 2008” (Bishop, et al., 2016, pg. 173). It is further reported that the movement towards employment by the hospitals is as a result of policies that have been adopted by federal or state Governments such as changes in Medicare and Medicaid policies (Bishop, et al., 2016, pg. 173). Movement to Accountable Care Organization is also a significant factor with respect to the movement to hospital owned physician practice (Bishop, et al., 2016). This generally leads to the amelioration of quality of care for the patients since hospitals usually have more resources than physician practices (Bishop, et al., 2016). On the other hand, the physicians will have less autonomy since the hospital is accountable for the patient and the physician’s decision-making parameters are reduced, thus they will not give personalized care (Bishop, et al., 2016). The financial impact of acquiring physician practice for the hospital as aforementioned is that the hospital will share in the financial benefits that accrue as a result of cost-cutting.

Alternatives

It is not mandatory that the hospital or the doctors engages in Accountable Care Organization (ACO). This is especially so if the hospital or the doctor is not ready to take on the risks associated with ACOs. One of the modalities available is the pay-for-performance modality (The Camden Group, 2011). Herein, quality performance targets are set and when they are met, bonuses above the fee-for-services rates are paid (The Camden Group, 2011). This model does not need much integration and it also requires less IT infrastructure than the ACO model (The Camden Group, 2011).

Another alternative is the Medical home modality (The Camden Group, 2011). Herein, various medical professionals come together to improve the quality of care and lower cost especially for patients with chronic conditions by providing high functioning medical homes (The Camden Group, 2011). The medical homes will be equipped with electronic medical records, disease registries as well as central data repositories (The Camden Group, 2011). This modality will prevent emergency department visits and hospital readmissions (The Camden Group, 2011).

There are alternatives that may not be effective at the present time. One such alternative is the Fee-for-service (FFS) payment modality. Currently there is a general movement away from this payment modality. The government through the U.S. Department of Health and Human Services (DHHS) is focusing on incorporating sustainable payment methods that are cost-effective, yet they lead to better patient outcomes. Fee-for-service (FFS) has generally proven to be costly and cumbersome.

Recommendations

I recommend that the hospital continues implementing the Accountable Care Organization (ACO) and that Dr. Davidson sells his physician practice to the hospital. This is because the ACO is a proven modality for ensuring better treatment outcomes and it is a viable mechanism for heath finance management. He is also not likely to suffer any financial instability or unhealthy work-life imbalance. Alternative payment methods such as the ACO have seen to it that team approaches are undertaken in care management in the hospital (Friedberg, et al., 2015). This means that, for instance, if care is being given to a cancer patient, the nutritional aspects of treatment of cancer will also be explored alongside or apart from the surgical alternatives and it has been proven that these alternative treatment modalities breed better treatment outcomes. The doctors similarly do not suffer financial instability since they share in the benefits that come with the cost saving.