Transcript Midwest Diagnostic Pathology, SC

2012 Practice Revenue Review
2013 Practice Revenue Forecast
Year –on-year Revenue Review
Industry News
Presented November 27, 2013 by: Jennifer Taylor, CPC Healthcare Business
Consultants, Inc.
2012 Practice Review
 IL Medicaid – With substantially the same patient volume as in 2011, Medicaid
payments are trending to end the year approximately $150,000 behind 2011. Considering
the fiscal condition of the state of Illinois, the deficit was expected to be much higher at
this time.
 Aetna – The anatomic pathology portion of the Aetna settlement ended in December
2011. As expected Aetna AP payments will end the year down approximately $180,000.
 United Healthcare – Advocate PHO did not successfully negotiate for CP compensation
to the group. The contract remains the same with no CP reimbursement.
 Additional payor mix changes, primarily a shift of patient lives to United Healthcare is
expected to decrease overall commercial payments at the end of the year by
approximately $100,000.
 Though October, overall volumes are consistent with 2011.
 Total collections for 2012 are expected to be down by approximately $430,000.
2
2013 Forecast
 Medicare – Current 2013 pathology fee schedule reflects an increase for work expense of
approximately 2%. The fee schedule also then reflects a 26% SGR decrease. Should the
decrease be implemented (in years past the decrease has been averted by congress), the
total cost to the group for Medicare and commercial contracts based on current Medicare
would be approximately $900,000 for 2013.
 Advocate Physician Partners – Lutheran General, IMMC and ACL outreach work
affiliated with these two sites is now covered on a fee-for-service basis as opposed to the
former capitated arrangement. Estimated additional reimbursement for 2013 is
approximately $100,000.
 Volumes – Overall volumes are expected to remain consistent with 2012.
 Net revenue expectation for 2013 – Pending a reversal of the Medicare cut and
continued timely payment by IL Medicaid, expect 2013 revenue to remain consistent with
2012.
3
Other Industry News
1. Healthcare Reform – The BCBSIL/Advocate ACO agreement could impact CP volumes moving
forward as utilization patterns are scrutinized. At the end of 2012 there has been no realizable
difference.
2. IL HB5085 – The new law became effective July 1, 2011 affecting plans that have renewed on or
after July 1, 2011. 90% of plans will not renew until January 1, 2012. Due to extensive managed
care contracting through Advocate PHO, there has been no impact on MDP.
3. Accountable Care Act (ObamaCare) – Reform Timeline
Effective
-Extend adult coverage to age 26
-Health plans must cover prev. serv. @ 100%
-Restriction of coverage limits and pre-existing
-Plans have to justify premium increases
-Minimum Medical Loss Ratio for insurers
-Uniform Summary of Benefits to consumers
-Health Insurance Exchange (coverage for uninsured)
2010
2010
2010
2011
2011
2012
2014
4. House Bill H.R. 6118 passed on September 19th granting CMS much-needed discretion so that
clinical laboratories will not have their CLIA certificates revoked for the unintentional referral
of proficiency testing samples to other laboratories for confirmatory testing. President Obama
is expected to sign the bill into law.
5
MDP Governance
 Revised By-Laws
 Corporate Compliance Plan & HIPAA Manual
 Dr. Nabil Girgis- Compliance & Privacy Officer
 Employee Manual
 Group Disability Plan Changes
 Increased maximum benefit to $15000/month
 20% increase in annual premium
 Added “Specialty Disability Definition”
 Premium is taxable to employee
 Benefit will be tax free
6
BroMenn Medical Center &
Sherman Hospital
 BroMenn Pathologists resist joining MDP
 MDP offered BroMenn pathologists to be sub-
contractors
 Sherman Hospital and Advocate signed a LOI
 Due diligence until June or July of 2013
 ACL visit to Sherman on Wednesday
7
Billing Changes
8
Personnel Changes
 Rahel (Becky) John – New dermatopathologist
 Michael Pins – Chairman at LGH
 Nabil Girgis – Corporate Compliance Officer
9
Patient Safety Strategic Plan
First, Do No Harm
‘Why a Safety Strategic Plan?’ by the
Numbers
 181 Death and Residual Harm (DRH) events 2010 & 2011
o 27 deaths
o 71 events with severe residual harm
o 60 events with moderate residual harm
 2011 peer review cases resulting in an OFI: 593 (8 hospitals)
 DRH Safety Calendar Record: 42 days
 AHRQ Culture of Safety Survey
o 2009: 62nd percentile
o 2011:
12
61st percentile
Goal: Eliminate all serious patient harm by
December 31, 2020
Target: Achieve an 80% reduction in
the serious safety event rate by June 30,
2017
13
Four Key Strategies
14
S1
We are First & Foremost a Safe Clinical Enterprise:
S2
Leadership = Ownership:
S3
Patient Safety Starts with Me:
S4
Nothing About Me Without Me:
Position Patient Safety as the Foundation for All Care
Lead to Patient Safety
Enable the Front Line to Address Safety Issues
Engage Patients and Families in Patient Safety
First, Do No Harm
S1
We are First & Foremost a Safe Clinical Enterprise:
Position Patient Safety as the Foundation for Care
A. Fully align Advocate Experience and Patient Safety
B. Develop an ongoing, internal marketing and
communications campaign for patient safety, grounded
in the tagline ‘First, Do No Harm’
C. Align the role and structure of site patient safety
committees to a system wide safety council
D. Increase the transparency of communication regarding
patient safety events within the system
S2
Leadership = Ownership
Lead to Patient Safety
A. Teach leaders at all levels how to lead to safety
B. Implement tools to promote leading to safety, including
Daily Briefs and Executive Safety Rounds
C. Hardwire use of the Just Culture tools to ensure leader
accountability for addressing poorly designed
processes that lead to error
D. Proactively design safety into IT and Supply Chain
processes
E. Effective resource innovative adult learning, including
the development of a system simulation program
F. Implement robust safety metrics to include potential for
national benchmarking
S3
Patient Safety Starts with Me:
Enable the Front Line to Address Safety
Issues
A. Promote the ‘voice’ of associates and physicians in
patient safety through CUSP and Safety Coach programs
B. Create a feedback loop to the front line for reporting of
safety events that reinforces the outcomes of reporting
C. Educate associates and physicians on the science of
safety
D. Improve the reliability of handoffs among the care team
E. Care for the caregiver when safety events occur
F. Minimize variation in care through standard work
G. Implement internal safety metrics for use by front line
S4
Nothing About Me Without Me:
Engage Patients and Families in Patient Safety
A. Promote the ‘voice’ of the patient and family at all sites
B. Enhance the disclosure process to ensure timely,
honest information delivered by trained physicians and
associates
C. Establish a mechanism for patients and families to
report safety events
D. Educate patients and families on their role in patient
safety
Implementing the Safety Strategic Plan
Establish the
Foundation
2012
Safe Care Delivery: Enable the Front
Line
2013
Leading to Patient Safety
16
2014
ACL & aLabs
17
Capital Overview
Hospitals
Ambulatory
Central Labs
IT
Other
Totals
New Testing
Equipment
$ 159,554
$ 183,287
$ 141,243
-
-
$ 484,084
Replacement
Equipment
$ 227,320
$ 120,000
$ 311,628
-
-
$ 658,948
-
$ 985,046
$950,000
$ 936,000
-
$ 2,871,046
$ 3,240
-
-
$ 366,974
$ 55,941
$ 426,155
$ 229,830
$ 365,025
$ 215,217
-
$ 9,450
$ 819,522
$ 619,944
$ 1,653,358
$ 1,618,088
$ 1,302,974
$ 65,391
$ 5,259,755
Strategic/Tactic
al
IT Hardware
Interfaces
Sub Total
Additional Forecasted Capital for 2012
$2.0M – $3.0M
2012 Total Capital
$7.2M - $8.2M
2013 Forecast
$8.0M $10.0M
Business Operations
System Affiliate Integrations
 Aurora Advanced laboratory integration ongoing August through November
2012
 Advocate BroMenn integration plans and phases defined
Supply Chain Progress
 Annual baseline spend on 33 projects - $52.0M
 Projected annual savings -$7.3M
 Projected FY 12 savings - $1.7M
 Projected FY 13 savings - $6.7M
Business Operations
 Primary Reference Lab Conversion plan for 2013
 Current ARUP spend $7.5M - Savings $1.7M = 23%
 Implementation February - May 2013
 LOI currently being drafted with signing goal of mid-November
 Operations and IT have started planning for conversion
 Vitamin D Internalization
 Current spend $ 2.35M - Expected Savings $ 1.8M = 77%
 Implementation target December 19, 2012
 Go live moved back 3 weeks due to contract delays
 Amikacin/Methotrexate (Therapeutic Drug Levels) Internalization



Current spend with Quest/ARUP/Dynacare/Internal - $ 255,354
New projected spend $ 95k Net Savings $160k
Implementation target November-December 1st 2012
 Siemens Coagulation D-Dimer, pT and pTT (Testing for bleeding/clotting disorders)


Current Spend $1.25 M– Savings 220k = 20%
Renegotiated favorable pricing back to January 1 2012
Business Operations
Multifaceted plan to transform ACL Anatomic Pathology includes Voice Recognition, stable environment,
Digital Imaging and Specimen Collection, Management, Routing & Tracking.

Voice Recognition (Voicebrook)

Contract with ACL (Change from August report due to contract complexity).

Project Kick Off – November 2012 (Change from August report due to barcode/patient ID delay).

Full Implementation May 2013

$1.1M Annual Savings

CoPath Upgrade

Received contract back from Sunquest on 10/30/2012.

Phase 1 forecasted kick off - February 2013

Phase 2 completed by end of 2013

Imaging Solution and AP Specimen Collection

Q3 2013 – Q2 2014
Business Operations

Community Based Testing (Local testing at local laboratories)

Phase 1 – Platform, Process, People

Talent Optimization Committee – In progress.

Test menu preparation for repatriation – Complete

Steering Committee with PMO support driving decisions and progress – In Progress

Inpatient Repatriation – Move inpatient volumes during the week of November 12.

RRL Assessments - Complete ( 22 of them )

Phase 2 – Pilots

Site training

Facility redesign

Develop and implement standard work

Hartford – Kick Off on 10/16/ 2012 - Completion – 12/15/2012

Condell – Kick Off on 10/22/2012 - Completion - February 2013

Phase 3 – Repatriation of Outreach Volumes (Decentralization of Core)

Present pilot and assessment data to JMT and LOC – January 2013

Develop CBT roll out strategy based on opportunity assessment - January 2013

Implement repatriation of core lab work/decentralize core lab testing

Opportunity

2013 - $2.3M
Tests moving to RLL’s
 IRON
 IRON PANEL
 FERRITIN
 TSH
 TSH Reflex
 FREE T3
 FREE T4
 Lipid Panel with Reflex
23
BD Organizational
Changes
Findings
Change
The BD department was not structured, measured or incented to
enable growth with independents (non-employed/affiliated
physicians.)
Separate our client retention and new growth focus into two
segments across entire ACL footprint
- New Sales – Kevin Anders, Director of Sales
- Client Retention and Relations- Diane Wanamaker , Director
Immediate focus on shared outreach and independent growth (APP)
Result
Laser focus on world class service to all independents, APP and AMG
physicians.
BD Behavioral Change
Findings
The BD department not properly incented to target independent
physicians and grow outreach.
Commitment to grow independent physician market through a
new compensation plan to change behavior commencing Jan 1/13
Change
Result
7/21/2015
- Awards and incents new business development
- Individual monthly quota and performance expectations
- Bonus incentives included for exceeding quota’s
Single focus on our competitive advantage, better service, attention
and value-add selling to physicians. Reps will do what is necessary to
win the business.
Technology Change
Findings
Inability to meet the interface needs of the physician and EMR
integration.
Partnered with Halfpenny (aLabs) that bring best practices, IT
support, programming and interface expertise.
Change
-With new Testdirect portal that went live in August, BD is able to
offer clients timely bidirectional interfaces.
- 1st EMR Interface- 6 week completion time. Go Live October 1st.
Result
7/21/2015
Reps now have a suite of IT offerings, and are beginning to meet the
needs of customers. Drive growth, improve client satisfaction and
patient care.
IL Strategic Growth
Advocate Physician Partners (APP)
ACL has only 47% penetration with the APP physicians.
Findings
Focus on driving conversion of APP Doctors (Synapse
accounts)
Potential upside of $25M
Change
Result
7/21/2015
Territories realigned and all APP doctors identified for reps by zip
code and specialty to target as new opportunities
In 2013 we will begin to see greater penetration and winning of doctors
offices. Drive growth, improve client satisfaction and patient care.
TESTdirect® Conversion as of 11/7/2012
Converted, 66
Scheduled Installs, 25
Converted
Scheduled Installs
# to Convert
# to Convert, 500