How exactly does a physician, hospital, or care center get reimbursed for the services they provide? As discussed in past blogs, hospitals are now being reimbursed based on their ability to not just treat a patient short term, but to keep that patient healthy over a period of time. So if this is the case, how do patients of all walks of life pay for these services? What if they don't have insurance or the means to cover the treatment that they need?
This is where the payer mix comes into play. This is a term that we recently learned this semester as we have been visiting many hospitals and healthcare centers all with different clientele.
Payer mix is a listing of the individuals and organizations that pay for a provider’s services, along with each payer’s percentage of revenues.
This is a really important factor to how a hospital receives their reimbursement because each type of organization covers a different percentage of the treatment cost differently. The main areas included in a payer mix are usually: Medicaid, Medicare, Private or Commercial Insurance, and No Insurance. No insurance indicates a group of individuals who have no organization helping them with their treatment costs the hospital is responsible for most of the cost. In fact, individuals with no insurance must make sure they are attending what is called a "safety net hospital" or a hospital that will administer treatment to individuals without insurance of any kind. Since Medicare and Medicaid are government organizations, they cover some percentage of the treatment cost, but not a large percentage. It is private or commercial insurance that pays the healthcare providers the most for their services.
So how does a payer mix effect a hospital? These tiny two words actually have a lot of affect on a hospital. Looking at two completely different hospitals in the chicagoland area, Northwestern and Mt. Sinai, you can see how the different individuals and the organizations that help support them affect the hospitals aesthetics as well as their functions.
Mt. Sinai is located on the west side of the city and has a very large medicare and medicaid supported clientele and therefor their payer mix leans more to that side of reimbursement. Very few individuals with commercial/private insurance find themselves walking through the doors of Mt. Sinai. In fact, the few individuals that do find themselves in Mt. Sinai aren't from the area. Instead they are usually admitted after a fatal car accident on one of the interstates that borders the community hospital. Northwestern Hospital located in downtown Chicago and has a payer mix that leans very much toward the private insurance sector. Very few individuals with Medicaid find themselves within the walls of Northwestern. This means that for every patient that they treat, Northwestern is receiving more reimbursement due to the number of patients that have private insurance. Why is this? In Chicago, much like many other cities, is comprised of neighborhoods of varying employment, economic status, and social advantages. These differences in advantages can be seen when comparing the service areas of Mt. Sinai vs. the service areas of Northwestern.
This is why when you walk up to Mt. Sinai you notice a little bit of a more dated building with a matching interiors. It is obvious that every cent they receive they are putting right back into their clients treatment processes. After talking with the staff from Mt. Sinai, they are aware of this, but are incredibly mission driven and are inspired to find ways to ensure they are there for their service community. They are aware that their hospital may not look as flashy as their downtown neighbor, but they are also aware of their mission:
"To improve the health of the individuals and communities they serve"
So in all the payer mix, doesn't just inform a hospital what kind of economic status their patients are, it really is the cornerstone on how the hospital makes a revenue. Monitoring this type of data is extremely important for hospitals that are older and looking for new resources. With all of the technology these days, hospitals have to keep up, they have to be able to pay their employees, upkeep an extremely unsustainable building type, while also keeping their communities healthy. So now that we know what a payer mix is, what is the payer mix of your local hospital?
To find out a little more about payer mixes check out this article: https://www.ache.org/pubs/PDF_Preface/Sample%20Gateway%20Chapter.pdf
Image Credit: https://qtxasset.com/styles/breakpoint_sm_default_480px_w/s3fs/2017-04/doc.jpg?lG2rUxr.tO650qbESryeXGohi7VznETO&itok=BfKA-Shy
Opmerkingen