Transcript HFMA Update: Thriving Amid Reform

HFMA Update: Thriving Amid
Reform
Joseph J. Fifer, FHFMA, CPA
President and CEO
HFMA
HFMA Michigan Spring Conference
May 23, 2013
Presentation Overview
• Forces in the market
• How the industry is responding
• HFMA’s role
2
Forces in the market…
The Affordable Care Act
Payment changes
Price transparency
3
The Affordable Care Act
While uncertainty still remains, the ACA is likely to create:
• Challenges to Medicare
volume
• The need to reduce
expenses
• The need to improve
operational efficiency
4
Payment changes
• A continued emphasis on
value
• Changes to physician
payment models
• Reduced payments to
providers
5
Price transparency
6
How the industry is responding…
• Integration of hospitals, physicians, and
payers
• Providers seeking scale
• Removing barriers to transparency
• The shift toward value
7
Integration of hospitals, physicians,
and payers
Physicians
Hospitals
Payers
8
Provider scale
An idea whose time has come…
9
Objections do exist
Critics fear monopolies…
10
“Like buying a car”
11
Barriers to transparency
• “Too hard”
• Need cooperation from payers
• Too much of a hit to price based
reimbursement
• Payers on percent of charge
12
Some ARE responding…
• 2012 MAP Winner Cape Cod Healthcare in
Hyannis, Mass.—Transparency equals innovation
and improved revenue cycle results
• Alegent Health in Omaha, Nebraska—Web
based tools make transparency possible
• MAP Winner Carolinas Healthcare System in
Charlotte, North Carolina—Extensive training
focusing on setting payment expectations with
patients
13
Steps to transparency
• Defined pricing
• Written estimates (with
caveats)
• Published rates
• Collaborate with insurers
• Get innovative with payment
• Engage and educate
14
The shift toward value
Cost
Results
Quality
Value
Gap
Time
15
Projected Federal Healthcare spending as %
of GDP: still rising
Source: Congressional Budget Office. The 2012 Long-Term Budget Outlook. June 2012.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/06-05-Long-Term_Budget_Outlook_2.pdf
16
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Insurance affordability: still dropping
Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums,
Inflation, and Workers’ Earnings, 1999-2012
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012. Bureau of Labor Statistics,
Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2012; Bureau of Labor Statistics,
Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2012 (April to April).
http://facts.kff.org/chart.aspx?ch=2834
Outcomes: still lagging
18
Mortality Amenable to Healthcare
Source: http://www.commonwealthfund.org/Publications/Inthe-Literature/2012/Aug/Variations-Amenable-Mortality.aspx
19
Frustration Is Widespread
The negative impact of the Value
Gap is felt on all levels of the
healthcare industry.
20
• “Somebody has to do something,
and it’s going to be— and it has to
be—you.”
Former Senator and Senate
Majority Leader
Bill Frist, MD
Speaking at
ANI: The HFMA National Institute
Cost containment is vital
• Emphasis on primary and preventative care
• Standardization of care
• Patient participation in high-value
healthcare decisions
22
Understanding the purchaser
Providers must seek to understand the unique needs of
the communities they serve
23
Providers Expect Jump in Use of
Value-Based Payment
Percentage who anticipate 5% or more of payment from
commercial carriers will be based on value-based mechanisms
Today
3-5 Years
0
20
40
60
Source: HFMA Value Metrics Survey, December 2011
80
100
24
Understanding New Payment Models
in the Context of Stakeholder Risk
LOW PROVIDER
INCENTIVE TO LOWER
THE NUMBER OF
EPISODES OF CARE
Fee for
Service
Per Diem
HIGH PROVIDER
INCENTIVE TO LOWER
THE NUMBER OF
EPISODES OF CARE
Episode
of Care
(Individual
Provider)
Episode
of Care
(Multiple
Providers)
Capitation:
ConditionSpecific
Capitation:
Full
Providers
Lowest financial risk
Highest financial risk
Payers
Highest financial risk
Lowest financial risk
Consumers
Risk of overtreatment
Risk of undertreatment
Employers
Risk of high costs
from inefficiency
Risk of high costs
from undertreatment
Source: HFMA, Healthcare Payment Reform: From Principles to Action (2008), www.hfma.org/paymentreform
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Providers are not seeking a reputation
based on value—yet
26
Many Providers Anticipate Drive for
Value Will Have a Positive Impact
27
A delicate balancing act…
28
HFMA’s role…
29
Tools for transparency and more
• Resources for members—Patient Friendly Billing
• ANI and MAP
• Big announcements in the days ahead
WHERE TO LOOK
 hfma.org/patientfriendlybilling
 ww.hfmaconference.org
 www.Mapevent.org
30
Guidance for your organization’s
value journey
• Blueprint for action for
value-oriented providers
• Business models for value
• State of the industry & future trends
WHERE TO LOOK
 www.hfma.org/valueproject
 View and download reports, tools, & case studies
 Use web-based tools
 Conferences, including ANI: HFMA National Institute 2013
31
Keeping up with ACA implementation
• Assessing the impact
• Monitoring developments
• Preparing for reform
WHERE TO LOOK
 www.hfma.org/reform
 Daily and weekly online news
 hfm magazine
 ANI: HFMA National Institute 2013
32
Moving your revenue cycle performance
MAP Awards
application deadline
Feb. 28, 2013
WHERE TO LOOK
 www.hfma.org/map
 Revenue Cycle Strategist newsletter
 hfm magazine
33
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Physician practice management MAP keys
• Primary Physician Practice
Operating Margin Ratio
• Total Specialty Physician
Compensation as a % of Net Revenue
• Specialty Physician Practice
Operating Margin Ratio
• % of Patient Schedule Occupied
• Net Income/Loss per Primary
FTE Physician
• Net Income/Loss per Specialty
FTE Physician
• Professional Services Denial %
• Point-of-Service Collection Rate
• Total Charge Lag Days
• Practice Net Days in A/R
• Aged A/R by Payer Group as a % of
Outstanding Total A/R
• Practice Cash Collection %
• Aged A/R as a % of Outstanding A/R
• Total Primary Physician
Compensation as a % of Net Revenue
35
Building affinity with physicians and
payers
36
Speaking out
37
How you can help HFMA:
Member-Get-A-Member
• Current members are our strongest recruitment
link to new members
• Sponsors are eligible for incentives
– HFMA apparel items
– Prepaid gift cards
– Cash prizes
– Charitable donations
38
“You have the knowledge,
passion, and creativity that it
takes. Who better to lead this
effort?”
Ralph E. Lawson, FHFMA, CPA
2012-13 Chair, HFMA
Executive Vice President and CFO
Baptist Health South Florida, Inc.