Amedisys says companies can prosper under proposed PPS
By MEREDITH BONNER
HHBR Editor
While the road to success has not recently been easy for Amedisys (Baton Rouge, LA), President/CEO William Borne says he thinks the company is beginning to see the light at the end of it.
Amedisys, he said, has seen problems since the implementation of the interim payment system (IPS), but he said the future with the proposed prospective payment system (PPS) looks bright, especially with the recent delay of the 15% across-the-board cut. Borne added that the industry as a whole, despite popular belief, has a good chance to prosper under PPS.
"We are looking to get certain outcomes in certain periods of time," Borne said, adding that if a company can get the desired outcome under the rate, it can make a profit. Borne said that Amedisys will take advantage of new technology that it didn’t make sense to use under the old system. He also said to take care of certain processes and to be able to deliver results, the company will focus on its disease state management, which he said is the only way to get the outcomes the company is looking for.
Amedisys, which has seen losses in the past few quarters, will be able to see profits under PPS, said Borne. The upswing was reflected in its recently reported 3Q99 results when it recorded a profit of $1.98 per share. The proposed reimbursement rate is 15% over what Amedisys currently collects, which will result in improvement in its financial position, Borne said.
Another strategy Amedisys will take aside from profit, Borne said, is focusing solely on its home care operations.
"We have divested ourselves of everything we were associated with," he said. "We were seven product lines when IPS was implemented, and when we looked long term, we decided home care was the way to go."
Amedisys sold its DME operations, and Borne said its infusion business is just about sold. He added that the company is in the process of getting rid of its surgery centers, staffing business, and management business and has become a pure player. "This is important because it limits our competition and increases our referrals," he said.
Borne said that healthcare in general, has been vertical during the period of IPS. But it is going more horizontal now, he said, all breaking down into different business lines.
Amedisys has three main focuses in its home care services, including congestive heart failure, diabetes, and wound care management. Borne said the company will become "a large regional player that will mostly be in niche-type markets." He said that for the industry as a whole, the players that focus on one segment will prosper the most under the proposed system.
"It’s a matter of discipline and sacrifice," he said. "(Companies) will have to do things the right way for right reason. Pure players will do well.
"The recent changes will create some major players," he added. "We will see a lot of consolidation, but not a lot of consolidators. And from my understanding, that was the government’s intent because it’s easier to standardize and regulate."
The biggest challenge for the industry when PPS is implemented, Borne said, will include providers changing their mind set. Providers will have to take an industry that has done things a certain way for 20 years and convert the mind set to clinical pathways and outcome-driven care from high-utilization-reimbursed care, Borne said.
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