Hospital must slash budget by $3 million

The biggest challenge for Tucson Medical Center is to cut the costs of care, President and CEO Judy Rich told Kaiser Health News.

One big reason for the belt-tightening will be the 1.3 percent Medicare cut that will go into effect in 2011. For TMC, that represents between $2 million and $3 million that Rich has to carve out of her budget. It might mean employees don't get a raise next year.

The beancounters are also looking at whether the share of RNs is too high. Right now 80 percent of direct nursing caregivers are RNs and 20 percent are a mix of patient care technicians and nursing assistants.

In another cost-cutting tactic, TMC is working with Brookings Institution and the Dartmouth Institue for Heatlh Policy and Clinical Practice to assemble something it's calling The TMC Accountable Care Organization. It has roped 90 primary care physicians into the fold. "As we bend the cost curve we will share the savings with our physicians," Rich said.

The ACO doesn't kick in until January. In theory, over time, UnitedHealthcare's managed care plan for Medicare patients will share some of the money saved due to shrinking reimbursements that result from better quality care with TMC.

Rich is convinced that hospitals already know what to do to help fix healthcare in America. As Americans age, more people won't  necessarily need new joints and more cardiac stenting from specialists if the primary care system is "much more ramped up" and keeps people healthy, she says.

To learn more:
- read the Kaiser Health News article

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