Global budgeting brings financial stability, care redesign to hospitals
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Like many hospitals, Pennsylvania’s Chan Soon-Shiong Medical Center at Windber saw its service volume collapse earlier this year after a pause in elective procedures.
CEO Tom Kurtz said the decline would have wreaked havoc on its operating revenue in previous years, but it didn’t, because this year Windber joined Pennsylvania’s Rural Health Model, a global budgeting experiment. “We protected 70% of our revenue … when our operating revenue would have been 20% to 25%,” Kurtz said. “We looked like financial geniuses to our board.”
Pennsylvania’s rural hospitals get paid a lump sum at the beginning of each year to cover all inpatient and hospital-based outpatient services for all payers under the model. According to CMS’ Center for Medicare and Medicaid Innovation, policymakers hope the demonstration bolsters rural hospitals’ financial viability to ensure continued access to car