The Trenton Times published the following article on February 7, 2013. To read the full article, click here.

New program has Mercer County hospitals sharing fees with doctors to contain costs

By Mike Davis/The Times 
on February 07, 2013 at 7:15 AM

A new program from the New Jersey Hospital Association hopes to change that, pushing both groups to focus on improving patient care in ways that cut the cost of health care.

The NJHA announced last week that its “gainsharing” pilot project is expanding to 33 hospitals statewide, including Capital Health’s medical centers in Hopewell and Trenton, Robert Wood Johnson University Hospital-Hamilton and University Medical Center of Princeton at Plainsboro.

Under the program, an initiative of the federal Affordable Care Act, hospitals and doctors share a single, bundled payment from the federal government for every Medicare-eligible patient admitted, which hospital leaders hope will encourage all parties to reduce readmissions, duplicate care and complications.

Currently, the federal government reimburses hospitals a fixed fee in exchange for treating a Medicare participant, while physicians are reimbursed on a day-to-day basis, said Joyce Schwarz, vice president of quality at Robert Wood Johnson University Hospital Hamilton.

Schwarz said physicians will look at redesigning the way they handle urinary tract infections and catheters, blood clots, patient falls, and readmitted patients when the program goes into effect on April 1. Doctors will have an incentive not to allow duplication of costly procedures or to extend stays beyond that which is necessary.

“It helps build a bond between the hospital and the medical staff by aligning us financially,” she said. “Up until this point in Medicare, we had not had any financial incentive. The hospital gets paid a rate no matter how long the patient is here, and the doctor gets paid on a day-to-day basis. This helps us work together towards the same goal.”

Anthony Cimino, CEO of RWJ-Hamilton, said the hospital is already a part of a similar program instituted by Horizon Blue Cross/Blue Shield for its insured patients.

“What’s important about this is, when you look at the structure of health care in large models, about 50 percent of the patients are Medicare participants,” Cimino said. “To align physicians and hospitals, it will quite frankly drive a benefit for the patients, for the institution and for the physicians, in terms of cost avoidance. And it ultimately means a great deal for the federal government, in terms of Medicare support.”

Sean Hopkins, NJHA senior vice president of health economics, said the gainsharing philosophy could lead to new ways to provide healthcare without dramatic changes.

“For example, hospitals and physicians might set a new timetable for physician rounds,”
Hopkins said in a news release. “By simply moving patient rounds to the morning and ensuring that physicians discharge patients early in the day, hospital expenses are reduced and patients are allowed to continue recovering in the comfort of their homes.”

“It may seem like a minor change, but multiply it across New Jersey — and perhaps ultimately across the nation — and it could have a huge impact,” Hopkins said.

A spokesman for the University Medical Center of Princeton at Plainsboro echoed the belief that patients will feel the primary benefit.

“We will be creating a system in which the hospital, our physicians and other providers with whom we collaborate will be rewarded for better coordinating each patient’s care,” spokesman Andy Williams said. “The goal is to improve the overall quality of care but also to reduce costs by eliminating unnecessary services through collaboration and coordination among care providers.”

Capital Health will also institute the program at its two campuses. A spokeswoman could not be reached for comment.

Cimino said gainsharing was a benefit of federal healthcare reform, which could control soaring health care costs.

“Driving us into this alignment between physicians and hospitals and aligning those incentives is a great benefit to the general population,” he said.

Contact Mike Davis at (609) 989-5708 or mdavis@njtimes.com.