Wellspring+Stockamp, Huron Healthcare Releases Reform Briefing Focusing on Medicare Productivity Adjustments

Briefing Series Addresses Key Reform Initiatives and Implications for Hospitals

CHICAGO--(EON: Enhanced Online News)--While many elements of the Patient Protection and Affordable Care Act (PPACA) will not be implemented for several years, Medicare market basket productivity adjustments have already begun to shake the healthcare industry, affecting hospitals, health systems, nursing facilities, rehabilitation centers and many other providers.

According to Wellspring+Stockamp, Huron Healthcare experts, the clock is ticking. Healthcare organizations must reduce their expenses or increase revenue by 3-5% to offset these Medicare adjustments, which are already taking effect.

The adjustments are based on PPACA-mandated adjustments to Medicare reimbursement that will reduce payments to providers by an estimated $157 billion over the next 10 years. Healthcare organizations that improve their revenue cycle as well as reduce labor, non-labor and supply chain expenses will better weather the reductions. But long-term strategies must be developed to address the challenge of further improving the quality of care in an environment of reduced Medicare reimbursement rates – which often account for 45% or more of a healthcare provider’s total revenue.

To help prepare healthcare providers, Wellspring+Stockamp has released Key Healthcare Reform Initiatives: Medicare Market Basket Productivity Adjustments, which is the second of a multi-part briefing series aimed at providing hospitals and health systems with the best practices for success in a post-healthcare reform reality. To view the full briefing: http://www.huronconsultinggroup.com/instance.aspx?instanceId=2412.

Wellspring+Stockamp executives offered the following insights on the challenges hospitals face regarding the Medicare market basket productivity adjustments:

“These Medicare cuts are coming at a time when the ability to cost-shift is becoming a thing of the past. It is going to be very difficult, if not impossible, to offset the Medicare adjustments by increasing the charges or payment rates for commercial payers. Hospitals need to look deep and hard at how they will create fundamental improvements in performance that will allow them to operate at Medicare prices or below,” said George Whetsell, managing director, Wellspring+Stockamp, Huron Healthcare.

“We know that most organizations already experience a negative operating margin on Medicare patients. These reimbursement cuts are going to intensify the efforts many organizations currently have underway to determine how to, at least, break even on Medicare. Down the road, coming up with durable processes for driving revenue increases and expense reductions by way of transformational change will be crucial,” said Ken Saitow, managing director, Wellspring+Stockamp, Huron Healthcare.

To receive a copy of Huron’s Healthcare Reform briefing series or to speak with one of the Wellspring+Stockamp, Huron Healthcare experts about healthcare reform initiatives or other issues affecting hospitals and health systems, please contact:

Jennifer Frost Hennagir
312-880-3260
[e-mail]

Jenna Nichols
312-880-5693
[e-mail]

About Wellspring+Stockamp, Huron Healthcare

Wellspring+Stockamp, Huron Healthcare, which is led jointly by Gordon Mountford and West Johnson, partners with clients to provide comprehensive performance improvement solutions that improve quality, increase revenue, reduce expenses, and increase physician, patient, and employee satisfaction across the healthcare enterprise. Clients include national and regional integrated healthcare systems, leading academic medical centers, community hospitals and physician practices. Wellspring+Stockamp resides in Huron Consulting Group’s Health and Education Consulting segment. This segment accounted for nearly 60% of Huron’s revenues for the full year 2009. Modern Healthcare ranked Huron second on its 2009 list of the top 15 largest healthcare management consulting firms.

About Huron Consulting Group

Huron Consulting Group helps clients in diverse industries improve performance, comply with complex regulations, resolve disputes, recover from distress, leverage technology, and stimulate growth. The Company teams with its clients to deliver sustainable and measurable results. Huron provides services to a wide variety of both financially sound and distressed organizations, including leading academic institutions, healthcare organizations, Fortune 500 companies, medium-sized businesses, and the law firms that represent these various organizations. Learn more at www.huronconsultinggroup.com.