Becker's Hospital Review

20 CFO / FINANCE Kaiser's annual revenue grows to $79B By Ayla Ellison O akland, Calif.-based Kaiser Permanen- te reported higher revenue and oper- ating income for its nonprofit hospital and health plan units in 2018, but the system's net income declined year over year. Kaiser saw operating revenue increase to $79.7 billion in 2018. That's up 9.6 percent from oper- ating revenue of $72.7 billion in 2017. The boost was partly attributable to the sys- tem's health plan unit. Kaiser saw health plan membership increase 3.5 percent year over year to 12.2 million members in 2018. "While the healthcare industry experienced considerable changes in 2018, we contin- ued making great progress on delivering high-quality, affordable and accessible care and coverage to more people," Chairman and CEO Bernard J. Tyson said in a press release. "Our solid membership growth and financial performance were consistent with our plan." After factoring in expenses, Kaiser reported operating income of $1.9 billion, up from $1.7 billion in the year prior. Kaiser's net income dropped 36 percent year over year to $2.5 billion in 2018. The decline was largely attributable to volatility in the investment markets. n A new bundled payment trio: Cleveland Clinic, Kroger, Anthem target heart surgery costs By Morgan Haefner E mployees of grocery chain Kroger can access cardiac surgery care at Cleveland Clinic through a partnership with Anthem, the organizations said Feb. 5. Five things to know: 1. In partnership with Anthem Blue Cross and Blue Shield in Ohio and its affiliated health plans, the Cleveland Clinic Cardiac Concierge Pro- gram will provide Kroger associates and their families access to com- plex heart surgery at the Cleveland Clinic Heart & Vascular Institute. 2. Debuted Jan. 1, the Cleveland Clinic Cardiac Concierge Program intends to curb heart surgery costs and improve outcomes by using bundled payments. Under the program, a single payment will cover a patient's treatment over a period of time. 3. Kroger also will pay 100 percent of travel expenses to Cleveland Clin- ic for eligible plan members and a companion. Anthem will arrange the travel through a medical tourism facilitator called Healthbase. 4. The program is part of Cleveland Clinic's Center of Excellence Pro- gram for cardiac surgery and represents the first time Cleveland Clin- ic has partnered directly with an insurer. Plan members' care will be managed by an Anthem coordinator who will be the point of contact for patients, from pre-surgical appointments to at-home recovery. 5. Anthem will also allow Kroger employees and dependents to ac- cess a free second opinion for cardiac surgery at Cleveland Clinic, which has been ranked by U.S. News & World Report as the No. 1 heart center in the nation for nearly a quarter of a century. n Hospitals, not physicians, driving up healthcare costs for privately insured, study shows By Kelly Gooch H ospital prices are a bigger driver of healthcare spending growth for the privately insured than physician pric- es, a study published in Health Affairs found. For the study, researchers examined Health Care Cost Institute data that included claims for privately insured people with health plans from Aetna, Humana and UnitedHealthcare. ey used this data — as well as American Hospital Association data and data on insur- ance coverage from the HealthLeaders-Inter- Study database — to look at growth in hos- pital and physician prices using negotiated prices paid by insurers. Researchers examined claims for inpatient care, outpatient care and four high-volume services: cesarean section, vaginal deliv- ery, hospital-based outpatient colonoscopy and knee replacement. e study found that hospital prices grew much faster than physician prices from 2007 to 2014. Hospital prices for inpatient care climbed 42 percent compared to 18 percent for physician prices. Additionally, hospital prices for hospital-based outpatient care rose 25 percent compared to 6 percent for physician prices, according to the study. Researchers attributed the majority of the growth in payments for inpatient and hos- pital-based outpatient care to growth in hospital prices, rather than physician prices. "Our work suggests that efforts to reduce healthcare spending should be primarily fo- cused on addressing growth in hospital rath- er than physician prices," the study authors concluded. "Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, ad- ministered pricing, the use of reference pric- ing, and incentivizing referring physicians to make more cost-efficient referrals." n

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