Tuesday, March 10, 2009

Stimulus Modeling and Accountability

As well all prepare for the work ahead, many in healthcare are beginning to model the potential payments and design the reporting systems needed to account for the money spent.

I've promised to share all the BIDMC work we're doing as it happens, so here's a near real time update.

Our CFO, Steve Fischer used the guidance from the American Hospital Association to compute BIDMC's share.

You'll see that we are expecting $6.3 million because we anticipate "meaningful use of EHRs" by all our clinicians in 2011.

The computation for hospitals is calculated as Medicare’s share of the sum of $2 million plus an additional discharge-related amount. A hospital receives $200 for each discharge for discharges starting with its 1,150th and continuing through its 23,000th discharge. There is no additional payment for discharges outside of this range – which means that the largest discharge-related amount available to any hospital equals $4,370,200. The largest total amount available would be $6,370,200 ($2 million plus $4,370,200). This figure is multiplied the medicare share of inpatient days, then summed over 4 years with a decreasing payment each year - 100%, 75%, 50%, 25%

In addition to direct Medicare funding, we're anticipating grants for research, education, and health information exchange. I'm often asked how we'll report our use of such funds. Pete Orszag, the Director of OMB, has offered detailed guidance based on 5 guiding principles:

• Funds are awarded and distributed in a prompt, fair, and reasonable manner;
• The recipients and uses of all funds are transparent to the public, and the public benefits of these funds are reported clearly, accurately, and in a timely manner;
• Funds are used for authorized purposes and instances of fraud, waste, error, and abuse are mitigated;
• Projects funded under this Act avoid unnecessary delays and cost overruns; and
• Program goals are achieved, including specific program outcomes and improved results on broader economic indicators.

I hope this background is helpful to you as you prepare for the Stimulus work ahead

3 comments:

Alvin said...

Hi John,

This looks fairly complicated since I'm not a finance person.

Do you think we'll be able to use some of these funds to help save Health Care jobs in Boston before the next fiscal quarter?

Rajesh Bhutani said...

John,

Report: U.S. health care system is a liability
http://www.msnbc.msn.com/id/29641091

This article appeared today. AS per the report, US spends $1,928 per capita on health care, at least two-and-a-half times more than any other advanced country.

When comparing costs to outcomes, the US is 23 points behind five leading economic competitors: Canada, Japan, Germany, the United Kingdom and France.

So we spend more but get less. My two questions are:

1. Is the comparison between US and these countries fair and on a level playfield?

2. In the stimulus package, are we relating costs to the outcomes, thereby putting in place a mechanism that will reduce this gap over next 5-10 years?

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