Elsevier

Human Pathology

Volume 43, Issue 5, May 2012, Pages 629-631
Human Pathology

Current topic
Pathology service line: a model for accountable care organizations at an academic medical center

https://doi.org/10.1016/j.humpath.2011.12.017Get rights and content

Summary

Accountable care is designed to manage the health of patients using a capitated cost model rather than fee for service. Pay for performance is an attempt to use quality and not service reduction as the way to decrease costs. Pathologists will have to demonstrate value to the system. This value will include (1) working with clinical colleagues to optimize testing protocols, (2) reducing unnecessary testing in both clinical and anatomic pathology, (3) guiding treatment by helping to personalize therapy, (4) designing laboratory information technology solutions that will promote and facilitate accurate, complete data mining, and (5) administering efficient cost-effective laboratories. The pathology service line was established to improve the efficiency of delivering pathology services and to provide more effective support of medical center programs. We have used this model effectively at the Montefiore Medical Center for the past 14 years.

Section snippets

Birth of the service line

In 1993, with the advent of a new chair, the Department of Pathology and the Department of Laboratory Medicine at Albert Einstein College of Medicine were merged with the Department of Pathology and independent clinical laboratories at the Montefiore Medical Center to form a unified Department of Pathology across the 2 independent institutions. At Einstein, the department functioned as a typical medical school basic science department with extramurally funded investigators, a graduate program

Montefiore today

In 2011, Montefiore, the university hospital for Albert Einstein College of Medicine, operates as an accountable care organization (ACO) dedicated to providing outstanding patient care largely to the people living in the Bronx and southern Westchester County (population greater than 2.5 million). A full-service, integrated delivery system, Montefiore is a 1491-bed medical center that includes 4 hospitals—the Henry and Lucy Moses Division, the Jack D. Weiler Division, the North Division, and The

Operating structure today

The pathology service line reports to the executive vice president (EVP) for operations at the Montefiore Medical Center. Service line meetings are held quarterly; they are run by the EVP for operations and include pathology and hospital leadership. A pathology operations committee consisting of the vice chair of pathology and a vice president, clinical services, meets monthly to review operational and financial issues. The vice chair reports to the chair of pathology and the vice president

Pathology operations committee

Although the vice chair of pathology and a vice president, clinical services, constitute the committee, the monthly meetings include the departmental business administrator, the departmental accountant, and the chair of pathology. Service line finances are reviewed including performance and projections with special attention to resolving problems at early stages. Both new program development in the service line and strategic planning for pathology support of multidisciplinary institutional

Development of a financial model

In 1997, pathology clinical services (anatomic and laboratory) were run as a cost center. There was little outreach business, and professional collections were poor. Because costs and the number of inpatient and outpatient tests were known, a fee schedule was constructed for inpatient tests, and an estimated collections rate was determined for outpatient tests. Together, this revenue was meant to match 1997 expenses. Thus, if the first-year (1998) service line performance was identical to 1997

Performance

The model has proven to be a success in all respects. Net revenue, although modest, has now reached $8 million. However, net revenue is a small piece of the story. The number of full-time faculty has almost doubled during the life of the service line. The fee schedule for tests performed on the inpatient service has decreased slightly since 1997, and charges for tests performed for medical center–reimbursed outpatient services have never been increased. The size and costs to the service line of

An accountable care revolution

Although already an accountable care organization long before the term became popular, Montefiore continues to expand the number of patients under full risk management. Because Medicaid and Medicare account for more than 80% of patient revenue, the integrated health care delivery system is essentially single payer. No change is anticipated in the structure of the service line. Montefiore's care management organization administers the at-risk patient population. Laboratory services are

Conclusion

In essence, accountable care is another national experiment aimed at moving from fee-for-service medicine to prepaid (and fixed cost) medical care. Instead of having insurance companies manage cost, health care organizations will have to manage health. If successful, there will be a pool of money to split between the health care organizations and the government. Pay for performance is an attempt to use quality and not service reduction as the way to decrease costs. If successful, care will

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