CHICAGO – August 8, 2018 – Despite steady improvements, a new analysis shows academic medical centers (AMCs) generally trail non-AMCs across a variety of cost and quality metrics.
The study from Navigant (NYSE: NCI) also found that quality outcomes are not significantly better at high-cost AMCs and non-AMCs, compared to low-cost ones.
According to the analysis, Medicare median wage and case mix index (CMI)-adjusted cost per case was 5.8% higher at AMCs versus non-AMCs in 2017. This equates to an estimated $3.1 million in average added annual operating expenses for traditional fee-for-service (FFS) Medicare patients per AMC analyzed.
In addition, a 22% cost per case disparity exists between high (25th percentile) and low (75th percentile) performing AMCs, compared to 19.8% for non-AMCs. Thus, the differential for low performers would amount to approximately $12 million per AMC and $9.2 million per non-AMC in added annual operating expense attributed to Medicare FFS patients, compared to high performers.
Analysis results also suggest:
• AMCs received more overall value-based program penalties from 2016-2018, with 40% getting seven or more of nine possible penalties versus 23.1% of non-AMCs.
• Although AMC overall weighted performance on CMS readmission, hospital-acquired condition, and value-based program measures increased 10.4% from 2016 to 2018, AMC scores still trail non-AMCs by 1.3 points.
“While AMCs have earned strong reputations for cutting-edge and specialty care, our previous experience has found most AMC admissions and procedures could also be performed at non-AMCs,” said study author and Navigant Director Christopher Stanley, M.D. “As healthcare transparency increases, AMCs performing poorly on analyzed measures of care may face lower patient volumes, a decrease in revenue through CMS and commercial value-based payment models, and less favorable payer partnership opportunities. Results from this analysis reinforce the need for AMC quality and cost performance to be in line with non-AMCs.”
Facilities struggling with value-based programs could face further financial pressures due to such trends as:
• Quality indicators driving patient-care decisions: With consumers increasingly using value-based program indicators to decide where to seek care, poor performance on such metrics could impact patient volumes – specifically commercially-insured patients.
• Growing revenue at-risk through alternative payment models (APMs): Traditionally active APM participants, AMCs performing poorly on quality measures may face penalties and miss bonus opportunities under both public and commercial models.
