Healthcare financial management : journal of the Healthcare Financial Management Association
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As a way of gaining further control over the cost of healthcare delivery, more managed care organizations are seeking to negotiate capitated contracts for emergency department services. In many instances, these contracts do not include disincentives that would discourage primary care physicians from sending patients who require nonurgent care to emergency departments for treatment. ⋯ Prior to negotiating the terms of capitated contracts for emergency services, managers should analyze carefully how patients use emergency department resources. By negotiating with managed care organizations to include volume stop-loss provisions and other financial disincentives to curb overutilization by physicians, financial managers can help protect their organizations from the costs of overutilization.
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Health maintenance organizations (HMOs) have become very active in managing workers' compensation medical expense benefits. A survey of 316 HMOs shows that this activity takes the form of various network models and a range of services--such as utilization review and case management--that may not be linked to a provider network. Of the HMOs surveyed, 78 reported that, by using managed care services and provider discounts, they were able to save from 20 percent to 30 percent on occupational health claim costs.
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Healthcare executives whose organizations seek major capital financing through bond offerings typically focus their attention on obtaining the lowest possible bond placement fees for the services of underwriters, legal counsel, accounting firms, and other advisors. However, far greater savings can be achieved by employing a strategic approach to securing low bond interest rates.
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Appropriate physician compensation is essential if affiliations between physicians and healthcare organizations are to be successful. A physician's compensation should be based on market-specific data about compensation for his or her specialty, as well as on data about each physician's productivity. Healthcare organizations also must have a process for adjusting compensation based on performance and market changes and a process for ensuring equity between newly hired physicians and currently employed physicians. A systematic, data-driven approach to establishing physician compensation can help build a foundation for successful physician recruiting and relations.
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Traditionally, cost effectiveness has been overlooked in emergency departments because of a mandate to provide emergency care in every community regardless of expense. However, in the current era of managed care, reduced reimbursement, and cost controls, emergency departments are being examined more carefully to determine whether their costs can be contained or even whether they can become profit centers. Detailed billing, cost accounting, enhanced communication among emergency departments within a community, and linking of suburban and inner-city emergency departments are several means by which emergency departments can control costs and raise revenues.