N.Y. gains fed­eral ap­proval to move for­ward on re­vamp of care de­liv­ery sys­tem

Modern Healthcare - - REGIONAL NEWS - —Irina Ivanova, Crain’s New York Business

After 18 months of ne­go­ti­a­tions with the fed­eral gov­ern­ment, New York state has re­ceived per­mis­sion from reg­u­la­tors to im­ple­ment a vast re­vamp­ing of its health­care de­liv­ery sys­tem in a bid to lower Med­i­caid costs.

Now the state is at the start­ing point of a com­plex over­haul ef­fort that will in­volve hos­pi­tals, in­sur­ers, physi­cians and pa­tients. Among its stated goals: cut­ting un­nec­es­sary hos­pi­tal ad­mis­sions for Med­i­caid pa­tients by 25% after five years.

The New York hos­pi­tal in­dus­try es­ti­mates that once the re­form process is fully im­ple­mented, there will be a 5% over­all drop in hos­pi­tal ad­mis­sions. With lower de­mand for in­pa­tient care, the state’s hos­pi­tals in­evitably must down­size.

The state is hop­ing that hos­pi­tals will col­lab­o­rate with each other in de­cid­ing which in­sti­tu­tions must slim down—a very dif­fer­ent tac­tic than pre­vi­ous state-led ef­forts that forced providers to close, merge or down­size. Few play­ers in the state’s health­care sys­tem, how­ever, are ea­ger to put them­selves on the chop­ping block.

To en­tice the health­care in­dus­try to par­tic­i­pate in the re­form process, for­mally known as the De­liv­ery Sys­tem Re­form In­cen­tive Pay­ment pro­gram, or DSRIP, New York has ex­tended a very large car­rot: $6.4 bil­lion in fed­eral Med­i­caid money will be made avail­able to those providers that meet com­plex per­for­mance tar­gets.

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