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The Truven Health Blog


The latest healthcare topics from a trusted, proven, and unbiased source.


Why Bundled Payments Should Be on Your Mind


By Bob Kelley /Thursday, February 04, 2016

By now, every healthcare provider and payer has heard of the new Centers for Medicare & Medicaid Services (CMS) bundled payment model that will launch on April 1, 2016.

The model will test bundled pricing based on regional averages for total joint replacements (TJRs) for complete episodes of care from the initial hospitalization through 90 days post-discharge. TJRs, or hip and knee replacements, were chosen for this pilot program because they’re not only common surgeries, but also ones known for costs that can vary by more than $15,000 depending on geographic region of the country, according to CMS. The goal of its Comprehensive Care for Joint Replacement Model, then, is to encourage hospitals and post-inpatient providers to work together to improve coordination and lower the costs of Medicare-paid TJRs.

But bundled payments should be on the radar of every provider and payer — not just those involved with Medicare. The fact is, bundled pricing pilots are well underway in private insurers’ financial strategies, too — affecting another large swath of providers along the way.

So it’s on the radar. Now what should you do?

The first step is to figure out where you stand today and analyze how bundled pricing may play out for your business.

For instance, whether you are a payer or a provider, you’ll need to know the current variations by geographic region and by your individual markets for every cost included in the potential bundles — such as inpatient, physician, rehabilitation, readmissions, and more. You’ll want to know how those costs vary by provider type, too — and understand what’s causing those pricing variations.

Providers can use this information to develop ways to close any gaps between their pricing and current market averages. Understanding those gaps may lead to efficiency needs or care quality improvements.

Commercial payers may need to do some predictive modeling on how to structure potential bundled pricing in a way that can reduce costs without affecting patient outcomes.

And both payers and providers may be interested in seeking additional partnerships for episodes of care, or renegotiating existing partnerships.

Bundled pricing is complex. But the benefits could very well outweigh the work necessary to succeed when they become a new industry norm.

At Truven Health, we’re working on a comprehensive research series on bundled pricing for TJRs in the commercially insured population. We’re using simulated bundles based on recent claims data — looking at those cost variations and drivers. We’ll be sharing those in the first quarter of 2016. 

Bob Kelley
Truven Health Senior Research Fellow, Advanced Analytics




How Much is Worker’s Compensation Costing You?


By Truven Staff/Thursday, January 21, 2016

EMPAQ® (Employer Measures of Productivity, Absence and Quality™) is an employer-developed and driven-measurement tool. Workers' compensation is a critical issue for employers, which is why National Business Group on Health (the Business Group) and Truven Health Analytics partnered to conduct a study to determine the financial impact workers' compensation has on companies.

EMPAQ tracked average annual claim incidence per 100 full-time employees (FTE), average cost per FTE, and average lost Temporary Total Disability (TTD) workdays per 100 FTEs in its research.

We found that:

  • The average workers’ compensation incidence rate was highest in the healthcare industry. Healthcare employees saw 5.56 claims per 100 FTEs versus 3.56 per 100 for all other industries combined.  
  • The energy and utilities industry had fewer, but more expensive claims: Their claim-incidence rate was 34 percent lower than the all-industry average, but their cost per FTE was 70 percent higher.
  • There was also a lot of variation in the average lost workdays for workers’ compensation per employee across industries.
Using EMPAQ Data to Improve the Company

By leveraging EMPAQ data you can improve the health and wellness of your employees. To keep workers’ compensation costs under control:

  • Consider a wellness program – Employers who offered a wellness and fitness program had an average workers’ compensation cost of $323, which is 21 percent lower than firms without programs.
  • Leverage on-site clinics – Employers who provided access to on-site clinics saw a reduced rate of lost workdays per FTE, with a 0.39 correlation.

EMPAQ provides employers with a framework by which to measure and monitor the return on investment they’re receiving from their human capital investments. The EMPAQ insight report delivers an overview of the EMPAQ metrics for program year 2014. It was developed by analyzing responses to EMPAQ surveys from more than 100 large employers representing nearly 4 million employees. For more information, download the Insights Report or visit EMPAQ.org. 

The EMPAQ data collected for 2014 included information for four distinct categories, including workers’ compensation, and six key health and productivity programs. Organizations that participate in the survey process receive a customized benchmarking report. Download a sample customized report.

 


Did you Know That Short Term Disability Costs $374 Per Employee?


By Truven Staff/Thursday, December 10, 2015

National Business Group on Health (the Business Group) and Truven Health Analytics partnered to conduct a study to determine the per-employee financial impact short term disability has on companies.

EMPAQ® (Employer Measures of Productivity, Absence and Quality™) is an employer-developed and -driven measurement tool. Short-term disability (STD) is one of the categories researched in the recent study. STD payments provide some income protection to employees who can’t work due to medical disability, though policies don’t cover the medical-related expenses that may be paid by a separate group health policy. The EMPAQ research findings on STD programs include:

  • On a per-industry basis, the cost per-employee for short-term disability varied. On average, the cost per covered employee was $374.
  • The average rate of lost work days was 321.4 per 100 employees.
  • The manufacturing industry experienced the highest rate of STD lost workdays (390.6 per 100 employees) and the
  • College and university industry reported the lowest rate (216.4 per 100 employees).
  • Employers offering a fitness program had a 16 percent lower incidence rate of short-term disability
Use EMPAQ Data to Improve Your Work Programs

Having access to data on the management of absence, health, and productivity programs is one aspect of having a successful workforce. But it’s important to use the statistics to improve the company:

  • Companies that provided employees with a fitness program had a 16 percent lower rate of STD-claim incidence. Consider offering a fitness program or incentives to lower disability claims.
  • Consider a stay-at-home work policy that enables employees to continue to work while recovering.

EMPAQ provides employers with a framework by which to measure and monitor the return on investment they’re receiving from their human capital investments. The EMPAQ insight report delivers an overview of the EMPAQ metrics for program year 2014. It was developed by analyzing responses to EMPAQ surveys from more than 100 large employers representing nearly 4 million employees. For more information, download the Insights Report or visit EMPAQ.org. 

The EMPAQ data collected for 2014 included information for four distinct categories, including STD programs, and six key health and productivity programs. Organizations that participate in the survey process receive a customized benchmarking report. Download a sample customized report.


Lean: Empowering Employees, Eliminating Waste


By Truven Staff/Monday, November 30, 2015

Patty Gabow, MD, had first-hand experience implementing Lean at a hospital as the CEO of Denver Health. In an HFMA article, she says one of her biggest take-aways is that you have to set an audacious, inspiring goal for Lean transformation  at Denver Health, it was to become a model for the nation. Mortality rate was a key metric for Denver Health, and while doing Lean their observed mortality rate was below the expected mortality rate for the kinds of patients they saw.

According to Dr. Gabow, "the core philosophy of Lean is that transformation is built on two pillars: respect for people and continuous improvement." Lean works to remove waste as viewed from the customer perspective, and does this with respect for the customer and for employees. "Many people who work in health care today feel unempowered, and Lean is both empowering and democratizing: It relies on the people who actually do the work to solve the problem." The importance of Lean's respect for people  came home to Dr. Gabow when she realized that "Lean returns joy to the work, which is something a lot of people in health care don't feel anymore."

See more of Dr. Gabow's comments at http://www.hfma.org/Leadership/Archives/2015/Fall/What_Lean_Can_Mean_to_Your_Organization%E2%80%94If_It_s_Done_Right/#sthash.PXIxFd2i.G19u79jB.dpuf

 

 


Employees Lose Average of Six Days to Sick Time Each Year


By Truven Staff/Tuesday, November 24, 2015

 

According to a recent study by the National Business Group on Health (the Business Group) and Truven Health Analytics, total lost workdays averaged six days per employee in 2014 for all industries. For an employer with thousands of employees, that can equate to significant lost productivity. 

EMPAQ® (Employer Measures of Productivity, Absence and Quality™) is an employer-developed and -driven measurement tool. Incidental absence, one of the categories we researched, allows employers to see the impact of unscheduled leaves on the overall company. Here are some more incidental absence details from the EMPAQ research:

  • The healthcare industry’s higher incidence of lost workdays (12 per employee versus the all-industry average of 6) may be an indication of generous sick leave policies or the nature of the job, which can involve engaging with populations suffering from contagious illnesses.
  • The hospitality and retail industry had the second lowest incidental absence rate, at 2.3 days per employee
  • Employers experienced total FMLA leaves of 19.6 per 100 covered employees in 2014. This varied from a low of 12.8 in the pharmaceutical industry to a high of 27.7 in the hospitality and retail industry
  • Employers experienced 164.3 non-concurrent FMLA leaves per 100 covered employees in 2014.
Put the EMPAQ® Data to Work 

It’s important to know statistics about the management of absence, health, and productivity programs. But it’s even more important to use the data to improve the company:

  • Allow employees to work from home when possible to give them the option to manage their personal life without taking time off.
  • Determine whether certain locations or departments have a higher rate of incidental absences to pinpoint areas of focus and come up with a resolution.
  • Implement or improve absence notification processes to help determine which employees take the most incidental absences.

EMPAQ provides employers with a framework to measure and monitor the return on investment from human capital investments. The EMPAQ insight report delivers an overview of the EMPAQ metrics for program year 2014. It was developed by analyzing responses to EMPAQ surveys from more than 100 large employers representing nearly 4 million employees. For more information, download the Insights Report or visit EMPAQ.org. 

The EMPAQ data collected for 2014 included information for four distinct categories, including Incidental Absence and Family Medical Leave, and six key health and productivity programs. Organizations that participate in the survey process receive a customized benchmarking report. Download more information here.

 

 


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