Activity 2: At-Risk Contracting
You are a practice manager for Accelerated Health (AH), a 25-physician hospitalist group that practices at St. James Hospital, a large hospital in an urban area. The hospital currently contracts with five hospitalist groups, but AH manages the largest share of the hospital's 1,500 monthly patient cases. AH has performed better than the other hospitalist groups in some of the hospital's key performance indicators, such as average length of stay (LOS). Currently, AH operates entirely on a fee-for-service model with no risk-based contracts. Their payer mix is 50% Medicare or Medicaid, 46% private insurance, and 4% self-pay. Referrals from primary care providers and other specialists drive most of their patient volume, and they continue to remain competitive in managing patient volumes at St. James. AH is only one of two hospitalist groups that covers the emergency department and also manages patients at a long-term acute care hospital. Managed care and capitation payments have yet to be widely adopted in your market, but there may be an opportunity for AH to be a first mover considering their payer mix and the patients they serve.
You're approached by Opti Health, an insurance payer, to manage their dual-eligible patients admitted to St. James under a capitated arrangement. Most of these patients have multiple comorbidities and require more intensive care, but Opti Health has a history of transferring its patients from other local hospitals to St. James Hospital. The initial contract would include a $600 payment per patient admission for an anticipated 20 patients per month. It would also require AH physicians to frequently meet with Opti Health case managers to ensure care is appropriately coordinated. All 25 of your hospitalists need to be in agreement before taking on any form of a risk-based contract.
A. Identify what you perceive to be the key facts of the case. (20 points)
B. Identify and describe key stakeholders or areas needing consideration. (20 points)
C. Describe some reasons why you might recommend accepting the contract. (20 points)
D. Describe some reasons why you might recommend rejecting the contract. (20 points)
E. Identify your recommendation and explain why. (20 points)
