RSSAuthor Archive for Kirk Mathews, MBA

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Kirk Mathews is the CEO, principal, and founder of Inpatient Management, Inc., a national hospitalist management company in St. Louis. Prior to cofounding Inpatient Management in 1997, he was senior vice president of Cejka & Company, responsible for managing one of the nation's largest physician recruiting enterprises with a search portfolio of over 300 clients. His experience includes management, sales, operations, recruiting strategy, physician compensation and benefits planning and design, and employment contract design and negotiations. In 1989, he served as vice president of Clayton Medical Associates after serving as senior recruiting consultant with Jackson & Coker, the nation's largest physician recruiting firm at the time. Mathews received his B.S. in accounting and MBA from Northwest Missouri State University. Mathews is a member of the the Society of Hospital Medicine.

ACO fuzzy math?

The details surrounding the proposed rules for creating an accountable care organization (ACO) continue to become more complicated—specifically the cost associated with establishing and sustaining an ACO.  The Centers for Medicare & Medicaid Services (CMS) originally estimated a cost of $1.8 million in its proposed rule for start-up and one year of ongoing operations.  Now, according to the American Hospital Association (AHA) study released in mid-May, the start-up investmentmay not be accurately represented by the number that CMS released.  The study found that the cost associated with the elements necessary to manage the care of a population is much higher.  The study revealed start-upcosts of $5.3 million to $12.0 million based on size of the hospital or health system.  That’s a far cry from $1.8 million.

According to the AHA, CMS falls well short on their estimation.  It doesn’t necessarily surprise me that CMS would underestimate the costs of establishing and running a successful ACO.  After all, they don’t operate a business.  However, these numbers are extremely far apart, and it seems to me that this is something that may reflect how little is truly certain or reliable about the costs associated with ACOs.  To me, it seems prudent to re-evaluate the ACO cost models before putting the regulations in place.  So what do you think? Whose estimation should we trust more? Should we believe the true number is somewhere in the middle? Or do we need to sharpen the pencils again to determine the real costs of launching an ACO?

The ACO proposed rules: A party starter or a party killer?

We all anxiously, and many hopefully, waited and watched as the CMS proposed rules for the accountable care organizations (ACO) were being prepared. Now that the rules have been released and many have had a chance to read them, what I’m hearing from hospitalists and administrators alike is a collective state of disappointment.

Some common observations that surround the ACO new rules: too much regulation, not enough potential or risk sharing and too much investment involved. The general feeling among those I’ve been talking to is that there will be muted participation in the ACO program because of all the barriers to entry.

For example, there are 65 quality measures that all must be met to qualify for any shared savings. How many practices can accurately collect and report data on even just a few Physician Quality Reporting Initiative (PQRI) metric? Another challenge is that 50% of providers in an ACO must meet the meaningful use definition for electronic health records. This represents a very large investment by physician practices regardless of size, many of which are not prepared to take on this burden. In addition, the rules call for a 25% holdback on funds earned in the shared savings program. This withhold is to protect against underperformance in future years when a repayment might be required of the ACO. However, as currently written, the withhold is never released! A successful ACO could accumulate several years of shared savings that they will never receive.

These are just a few of the elements of the proposed ACO rules that are taking the wind out of the sails of some in hospital medicine. It seems that the rules have not energized or empowered the potential participant organizations to embark on the effort to create ACOs. Instead, they seem to create barriers and skepticism. I am certain that large health systems that have already made most of the required investment in EHR, etc., will proceed with their plans, but I wonder how many smaller systems will view the return as being worth the risk and take the plunge.

What to do you think? What have you heard? Have the proposed rules put a damper on the ACO party? I am eager to hear from others on this topic.

Will accountable care organizations create restraint of trade?

A key element in healthcare reform is the accountable care organization (ACO). Proponents argue that ACOs will provide and manage care across the continuum of care settings, helping to contain costs and create reporting processes that lead to high-quality, efficient care. But what is the possible downside to ACOs?

How will the major players—large regional healthcare systems etc.—control ACOs? Will they see ACOs as an opportunity to drive other provider organizations out of a particular market?

I have visited recently with several hospitalists that have expressed this concern to me. In the past, the hospitalists have seen these “market share bullies” restrict their hospital privileges and the privileges of referring physicians, and they have a real fear that the implementation of ACOs makes constrained opportunity bound to happen. Many are waiting to see what rules the Centers for Medicare & Medicaid announce for models of mandatory or voluntary ACOs.

There have been highly successful, productive models for ACOs, for example, Geisinger Health System. ACOs have worked well in some smaller markets where alignment does help to control cost and deliver quality results, but will highly-structured ACOs also result in anti-trust, self-referral, and anti-kickback issues in larger markets? I am eager to see if the published rules will lead to or provide for relaxed Stark rules and regulations. What happens to that group of six hospitalists at the local hospital when it becomes part of an ACO? Will those hospitalists still be able to provide care? Will the primary care and specialty physicians still have privileges at the hospital?

It is important to understand that there is a difference between accountable care and accountable care organizations. I believe that accountable care can be created without requiring physicians to be restricted to a single ACO, and I believe that “virtual” ACOs can achieve the results we all look for. However, I’d like to hear from you! Are you concerned about ACOs imposing restraint of trade? Are you concerned that the major health systems in your market will use an ACO as a vehicle to drive out competition?

Practice creep or value opportunity?

As hospital medicine continues to grow and demonstrate a positive impact on the nation’s healthcare delivery system, hospitalists are being asked to provide a greater variety of services. In some circles, this is known as the dreaded “practice creep,” but, in others, some of these services are viewed as an opportunity to add value to the hospital and local healthcare system, which, in turn, can lead to increased compensation. At my company, we have experienced both the good and the bad of this multi-faceted topic.
Here are some things to consider when administration comes knocking with a request for expanded services:

  • Is the current program staffed appropriately?
    If the current program is understaffed for the current workload and acuity, be prepared to articulate and defend the current staffing needs, explaining why more staff are needed to cover the current load. When administrators request expanded services, it’s a good time to revisit the current staffing model.


SHM goes to Washington – Part II: Bundled payments

In my last post, I wrote of visiting legislators on Capitol Hill along with my colleagues on the Society of Hospital Medicine (SHM) Public Policy Committee. The second day in DC was spent in a Public Policy Committee strategic planning session.

To begin the day, Karen Milgate, Director, Office of Policy, Centers for Medicare & Medicaid, treated us to a very informative briefing. Karen was very helpful in explaining the process of writing the rules and regulations required to enact the healthcare reform bill. I came away with a deeper understanding that, even though the bill is passed, reform is far from well-defined. We need to remain engaged as the regulatory agencies seek public comment on the endless rules and regulations required of this legislation.

SHM goes to Washington

On May 26 and 27, I was privileged, along with 25 other members of the Society of Hospital Medicine (SHM) Public Policy Committee, to visit the offices of senators and congressional members on Capitol Hill. Our mission was to educate and inform them on how hospital medicine is impacting the healthcare delivery system, as well as offer ourselves as resources for consultation on such topics in the future. I found this to be a fascinating experience on several fronts.

1. This was my first time to conduct such visits so I had no idea what to expect. There is a wide range in the level in understanding of what a hospitalist does and what hospital medicine really is. Some people I met with were very well informed about hospital medicine whereas others were only vaguely familiar with the term hospitalist. According to many of my colleagues on the committee, each year has revealed a little bit deeper understanding of our work. So I concluded that although we have come very far in educating legislators, there is still much work to do.


Does employment equal alignment?

With the massive healthcare reform bill now the law of the land, everyone is asking the question, “What does this mean for me?”  Accountable care organizations (ACO’s) and bundled payments, combined with Medicare cuts and paying for quality versus quantity, emphasize the need for better alignment across all elements of the healthcare delivery system.

So, is the answer for all hospitals to employ all the physicians? Physicians are adding plenty of fuel to the employment fire with their own anxiety about the new bill, combined with the increased hassles of operating a business in the complicated healthcare industry. Hospital administrators are taking steps now to employ physicians and try to create alignment to position themselves for success in the coming new era. Most view physician employment as an imperative strategy to accomplish alignment.  As a result, healthcare lawyers have already seen a huge surge in the business of negotiating physician employment deals on behalf of their hospital and/or physician clients. 

Health plan hospitalists: “Extensivists”?

By Kirk Mathews, MBA

In a recent article from Today’s Hospitalist, a concept emerges about a number of physicians called “extensivists” who are employed by health plans and work to increase post-discharge intervention. The primary goal of their post-discharge work is to reduce readmission rates.

Ensuring follow-up care upon discharge can be a challenge, especially with some unassigned, noncompliant patients. Most hospitalist programs encourage follow-up calls to primary care physicians (PCP) and patients within 72 hours of discharge, but health-plan hospitalists are doing more. According to this article, some health-plan hospitalists are going to see their discharged patients at integrated care centers and nursing homes after daily rounds in the hospital. And in some instances, they are rewarded with a significant bonus if readmission rate targets are met.


Hospitalist programs and critical access hospitals collaborate: How it works

By Kirk Mathews, MBA

Many of the hospitalists that serve in our client hospitals regularly accept transfers from smaller facilities, including critical access hospitals (CAHs). This is a service to both institutions, as well as the patients, and has been part of our practice for a long time. However, we are now seeing referrals from some of our larger client hospitals back to the CAH where hospitalists also care for patients.

Hospitalist programs have been springing up in CAHs for some time now. CAHs face some of the same challenges as large hospitals but often have significantly less resources with which to confront them. So how can they make them sustainable?  Well, administrators at CAHs can be very resourceful and creative.

One of our hospitals receives quite a number of transfer patients from a CAH located about 50 minutes away. Our service is a sizable program at a busy full-service hospital. When this particular CAH wanted to start a hospitalist program, they spoke with our client hospital, as well as with our hospitalists. The resulting program provided a win for all involved.

Our service uses a seven-on/seven-off schedule. Each week, there are enough physicians off who are interested in moonlighting that they can cover the CAH for most of the daytime hours. They get help from the CAH emergency room docs when they cannot be there, including at night. Keep in mind that this hospital had an average daily census less than eight patients. The local over-burdened PCPs welcomed the program.

As you might suspect, patients scheduled for hip or knee replacement surgeries would go to the larger hospital for the surgery. However, the acute rehab facility at the larger hospital is very busy. Once the patient (from out of the area) is stable, they transfer back to the CAH for their rehab and are followed by the hospitalists. Since the physicians on both ends are on the same team, transfers are seamless. These rehab patients greatly help offset the cost of the hospitalist program.

This is just one example of a creative way to make the hospitalist model work at a CAH. There are many others. Please comment and tell us of your experience in this area.

Nurse practitioners as hospitalists: A few things to consider

By Kirk Mathews, MBA

I read with great interest a recent question-and-answer article in the November issue of The Hospitalist regarding the use of nurse practitioners (NP) in hospital medicine. This article did a very nice job of presenting the topic from the NP’s perspective.  It is clear that more and more hospital medicine programs are turning to NPs to supplement their practice in the face of a very challenging recruiting environment. I believe this is both logical and appropriate as the demand for hospitalists continues to grow.

However, here are a few things to consider when making the decision to add NPs to your hospital medicine team:

1. What is the level of medical staff and referring physician acceptance that NPs enjoy in the inpatient setting?
More and more specialties are using NPs and advanced practice nurses to assist them in the hospital, so NPs are clearly more visible than in previous generations. However, are the referring primary care physicians in your community expecting their patients to be seen by a physician when they are admitted to the hospitalist service? This is an important question to answer before adding NPs to your staff.

2. What are the rules in your hospital (and state) regarding the physician oversight/supervision of NPs?
One of our client hospitals required a physician to cosign every progress note made by our NP.  This made the use of the NP less attractive from a practical and financial standpoint.

3. How comfortable are the physicians on your hospital medicine team in the supervision of NPs?
In our experience, not every physician easily adapts to the role of supervising NPs. This can create scheduling challenges when trying to match up compatible providers.

4. What cases will the NPs be assigned?
In some of our practices, our physician and nurse director of hospitalist operations work hard to assure that the NPs are assigned less challenging cases. This not only increases the comfort level of all parties involved but is good risk management as well.
All in all, I believe nurse practitioners are serving, and will continue to serve, a very valuable role in hospital medicine but require a certain set of circumstances to maximize their effectiveness.

How about your practice? Do you currently use NPs? What challenges/successes have you seen? Comment below and let us know!

Greeley Medical Staff Institute and bundled payments

By Kirk Mathews, MBA

I recently had the privilege of speaking at the Greeley Medical Staff Institute Symposium in Naples, Florida, November 8-9, and found the experience to be both very enjoyable and educational.  I really enjoyed serving on the opening plenary session panel discussion regarding healthcare reform. I was amazed at the prophetic abilities of the organizers in having the panel speak about reform exactly nine hours after the House of Representatives passed the 1,990-page bill! I had the honor of sharing the podium with Dr. Jon Burroughs of the Greeley Company and Dr. John Maa, one of the nations thought leaders on surgicalists. The session was moderated by Dr. Rick Sheff, executive director of the Greeley Company.

One of the questions posed was regarding the effect of the proposed “bundled payments.” Predictably, this has proven to be a very volatile topic amongst physicians. The Phoenix Group, of which I am a member, published a white paper earlier this year on the topic. The first draft stated that “healthcare reform legislation holds the potential for a cataclysmic uprooting of the traditional fee-for-service payment system.” In final form the word cataclysmic was removed. I suppose “cataclysmic” is in the eye of the beholder, but one thing is clear: The current bill is designed to change how providers get paid, and even how their businesses are structured and aligned and, ultimately, how care is rationed. Consider the following:

The “one-visit follow-up clinic”

By Kirk Mathews, MBA

A frequent impediment to reducing length of stay with the unassigned (or “no-doc”) patients is the lack of an outpatient physician with whom the patient can get an appointment. In many, many places around the country, primary care physicians have overflowing practices and cannot take on the unassigned patient very easily.

One solution to this dilemma is what I call the “one-visit follow-up clinic”. At Inpatient Management Inc., we are about to launch our first such clinic. The idea works like this: we, as the hospitalist team, will provide one follow-up visit to patients who do not have a primary care physician. The clinic might see patients two half-days per week, depending on volume, and can be staffed by a nurse practitioner with supervision from one of the hospitalists.