Tag: EHRs

Hospital Credit Rating

Hospitals private or public have been relying on many different sources of income to continue operation. Many hospitals rely on bond funding for their development and the procure of new apparatus.  Revenue that is created by the hospital is then used to pay back the bondholders.  The risk to bondholders is that they are generally paid after the hospital pays its operational expenses.  Therefore, if the hospital is less profitable than expected (or not profitable at all), bondholders assume the financial risk.

Low-rated hospitals before have used strategies such as merging with higher-rated hospitals, diversifying payer mix, recruiting doctors, and opening new service lines in order to boost their credit ratings.  But these tactics may not always work in a system that rewards value rather than volume. Therefore a stable source of financial capital must be develop in order to increase the quality of healthcare services.

The CMS quality measures being tied more and more to hospital reimbursement CRAs are looking at ways to apply quality metrics to their hospital investment grade ratings.  These savvy agencies recognize the basic tenet that hospitals which give a higher level of quality care tend to be more profitable.  In the move from fee-for-service to value-based payment models in health care, it’s not surprising that CRAs are looking at different quality metrics when assessing investment risk.

The factors they are looking into include Medicare reimbursement rates publicly available quality scores, HCAPS scores, and commitment to establishing a culture of safety.  Some CRAs are also planning to highlight IT investments such as EHRs and data analytics platforms.They also looking at meaningful use and ICD-10 readiness.

The ultimate ability to change quality of care lies in the hands of the front-line health care providers. Tying these quality factors to hospital credit ratings and subsequent bond funding available should help to bring quality even more front and center in c-suite and hospital board meetings.  With the bottom-line becoming increasingly tied to quality and patient safety, hospital administrators need to work closer than ever with physicians and other constituents of the health care team to help them with the resources they need for institutional conversion.

Hospitals needs to be focusing on improving their eminence of care in advance of these changes. Those institutions that wait for the CRAs to act first may find themselves in an increasingly difficult place to receive bond financial support.  With the recognized inverse relationship between health care quality and expenditure, it would make sense to assume that those hospitals who might need bond funding the most may be the ones in worse shape to begin with.

Trends in Hospitals for 2013

Hospitals & Health Networks together with the American Hospital Association released a 2013 environmental check, a comprehensive review of the health care field that recognizes market forces likely to impact the field. The report identified 10 key themes which are generally not new to health care, but jointly indicate the industry’s sweeping changes. They are:

Information technology and e-health, such as ICD-10 execution, mobile health, big data, details exchange, and EHRs

  • Insurance and coverage, such as State Medicaid programs spending and registration growth, consumer-driven health plans, and Medical health insurance costsPolitical issues, such as the decrease of Medical health insurance company rates, the Supreme Court ruling State Medicaid programs expansion unconstitutional, and the decrease of federal support for hospital State Medicaid programs and Medical health insurance programsProvider organizations and doctors, such as the increase of retail treatment centers, the creation of a culture of performance quality and responsibility, and the need for hospitals to operate more leanly
  • Quality and individual safety, such as penalizations for low quality analytics, cost benefits opportunities in supply-sensitive care, care synchronization during hospital-to-home changes, and concern that public reports fairly and perfectly reflect hospital performance
  • Science and technological innovation, such as the capability to build and enhance virtual company networks, the use of mobile phones and tablets, the growth of e-visits, and the facilitation of hospital care through wireless technology
  • Human resources, such as trust between doctors and hospitals, demand for highly trained individual capital, and shortages of primary care physician
  • Consumers and census, along with a development of adult and weight problems in children, an increase in serious conditions, middle-agers working past the age of 65, and families providing the majority of proper care to the elderly
  • Economy and finance, along with a negative outlook for the charitable health care sector, a growth of hospital mergers and products, and $200 billion dollars of annual waste in health care