Hospital Business Acumen-10 Healthcare Terms You Should Know! Part 1

Are you becoming lost in the vast array of new healthcare terms, acronyms and abbreviations that are being introduced and bantered around? Don’t be alarmed! This is one of the challenges that sales professionals face in today’s market. For specialty sales representatives many of these new terms, and acronyms relate to the specific product or service they sell. For other sales professionals these terms are like a foreign language and they are unaware how it affects their business. In order to gain credibility, skilled sales professionals need to arm themselves with up to date healthcare industry knowledge.

Embracing the changes in language allows you to engage with multiple stakeholders throughout the healthcare community. In addition, you will increase your ability to become a respected partner with your customer. Mastering today’s health care terminology knowledge is mandatory to success.

Here are some definitions and explanations that should help reduce your anxiety and increase your knowledge base. In italics are the reasons why each term, acronym and abbreviation is important.

1. Accountable Care Organization (ACO)

An ACO is a group of healthcare providers (e.g., hospitals, physicians, and others involved in patient care) that work together to coordinate care for the patients they serve. Under the ACO model they accept collective accountability for the quality and cost of care delivered to a specific population of patients that are currently enrolled in a traditional fee-for-service program.

Within an ACO the patient is a partner in the care that they receive. Originally ACOs were designed with the goal to provide seamless, high quality care to Medicare beneficiaries (that is, those who are not in a Medicare Advantage private plan).

While ACOs began with Medicare patients, under the Affordable Care Act, all major payers are now offering a flavor of an ACO. Today an ACO may be sponsored by physicians, hospitals or payers that coordinate, manage and provide care for patients.

Practicing accountable care means that healthcare is organized for patients around five (5) key components: preventative care, coordination of the care team, electronic health records, treatment based on proof and access to care systems.

ACOs are being formed because the Affordable Care Act includes a provision that allows Medicare to reward healthcare organizations with a share of the savings that results from improving the quality of patient care while reducing the cost for their Medicare eligible populations.

2. Value Based Purchasing (VBP)

Value Based Purchasing is a business practice that improves the value of health care services, where value is a function of both quality and cost. The standard formula is:

Value = Quality ÷ Cost

The fundamental tenet of VBP states that healthcare buyers should hold healthcare providers accountable for a) the quality of care provided b) improved patient outcomes and c) complete health status and its cost. The focus of VBP is to reduce waste and inappropriate care and to reward the best performers.

VBP rewards hospitals for improving the quality of care by redistributing Medicare payments to hospitals with high performance in terms of quality scores (through core measures) and experience (through HCAHPS-The Hospital Consumer Assessment of Healthcare Providers and Systems survey) at the expense of lower performing hospitals.

3. Patient Centered Medical Home (PCMH)

The patient centered medical home is not a physical place but rather a method that delivers the core functions of primary health care.

The patient centered medical home has the following components:

  • Patient-Focused: it provides primary health care that takes into account the individual needs of each person while respecting their values, culture and preferences. It helps each patient manage their own care in conjunction with their family members.
  • Comprehensive in Scope: The patient centered medical home helps each patient manage:
    • Their physical and mental health
    • Wellness and prevention
    • Acute and chronic care needs

It uses a team approach that often includes physicians, nurses, physician assistants, pharmacists, nutritionists, social workers and care managers and others as needed.

  • Coordinated: The patient centered medical home coordinates the patient care across the entire continuum of care as it is required. This provides for a seamless transition and good communication between the patient, family and care-givers.
  • Accessible: The patient centered medical home provides a variety of services designed for prompt access to a member of the health care team such as through E-mail and telephone, extended hours of operation and prompt scheduling when needs arise.
  • Focused on quality and safety: The patient centered medical home uses evidence-based medicine and clinical decision-support tools, performance measurement and improvement and measurement of patient experiences as a standard practice with each patient.

The patient centered medical home is important because it has the capability of improving how primary care is organized and delivered in the U.S.

4. Health Insurance Exchange (HIE)

A health insurance exchange is another word for marketplace. It will be how many people buy healthcare coverage in the future. Open enrollment starts on October 1, 2013 and the health plans will begin to cover patients on January 1, 2014. Each state will have its own exchange for individuals or small businesses that want to buy their healthcare directly through the system. Anyone covered through an employer plan may continue to do so. Initially there will be three (3) types of exchanges: those run by each state, those by the federal government and those run in partnerships.

All plans within the exchange or marketplace will have to provide basic benefits such as hospitalization, physician visits, prescriptions, Emergency Department (ED) treatment, maternal and newborn care and prevention. Insurers will not be able to withhold coverage for people who have pre-existing conditions or charge them more.

If you are one of the 49 million uninsured people in the U.S. then healthcare exchanges will help you get a private plan.

5. Medicare Hospital Re-admissions

It is estimated that around 20% of re-admissions are for patients returning within (30) days of their previous hospital stay for the same diagnosis. There is mounting evidence that the rate of avoidable re-hospitalizations can be prevented by improving discharge planning and the transition of care to different providers and by providing proper patient coaching, education and support for patient self-management.

Under Medicare’s Inpatient Prospective Payment System (IPPS) which is part of the Affordable Care Act (ACA) there are specific reductions to payments and penalties being made for excessive readmissions that are directly related to the original diagnosis in acute care hospitals that began during the fiscal years beginning on or after October 1, 2012. Also, Medicare will no longer pay for the treatment of certain hospital-acquired infections that are considered preventable.

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