Transcript Dramatic Change

Dramatic Change
It’s Already Started
It is Pervasive
The Status Quo is no longer an option
CFMA
Choices in our future
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CFMA
Who will we affiliate with?
What if we are not courted?
How best can we prepare to remain independent,
but also desirable for being courted?
• Understanding of what has started and where we are
heading.
• A decision by the Medical Staff:
1. Commit NOW to the future & embrace change, OR
2. Watch your hospital decline and not have future choices
The Purpose of This
Presentation
CFMA
• Gas Prices
• 1969: $.35/gal
• 1981: $1.35/gal
• The Creation of the Rust Belt States
• Severe Declines in the Steel & Auto Industries
• A Great Migration to the South & West
• The Newness & Growth of Houston & San Antonio vs.
the Challenges of Detroit & Pittsburgh (doing much
better than Detroit)
• Even more for the smaller cities around them
Dramatic Change
Happens
CFMA
• The Wal-Mart Effect
• Downtown businesses close or stagnate
• Wages go down
• Benefits, especially health insurance, tumbles
Dramatic Change
Happens
CFMA
• The Scope of the Change is pervasive
• The Pace of Change is picking up
• 75% employed physicians by 2014
• Lack of preparation starting now may be fatal
• The Medical Staff must be involved
Dramatic Change in
healthcare?
CFMA
The Emphasis is changing:
• From private practice to system affiliation
• From FFS to Bundled Payment, ACOs, Capitation
• From Sickness Care to Wellness and Prevention
• From IP & Office Care to Emails, Nurse Call Lines &
Personal Monitoring
• From “Keep Me Alive at any cost” to “Does it make
sense to prolong this life?”
• From “individual physician directed care” to Best
Practices based on data / collective practice wisdom
The Scope of Change is
Pervasive
CFMA
• Multiple Forces are Pushing Change
• The current system of FFS is not sustainable
• Govt. / Employers / Families cannot sustain the growth in price
• Increased Bad Debt is not sustainable to providers
• The Greatest Push is coming from providers
• Physicians uniting into large multi-specialty practices
• Then often aligning with Health Systems
• These Aligned Health Systems are now putting the systems in
place for a different future
• The Affordable Care Act is a catalyst supporting this change
• Insurers are either leading or participating
The Pace of Change in
Health Care
CFMA
• As new payment models are introduced and take hold the pace
of change will quicken.
• Because doctors do not practice differently for different payers.
• Those who have systems in place will be in the drivers seat.
• The new benefit offerings will be much more attractive to
businesses and consumers.
• Think of the differences between cars of the 1960s and those
today
• Rust, constant maintenance, low gas mileage vs.
• Durability, low maintenance and a wealth of added conveniences
The Pace of Change will
accelerate
CFMA
1.
2.
3.
4.
5.
Hospital / Medical Staff Alignment
Expansion of Health Systems by Mergers & Acquisitions
Electronic Medical Records
Area wide connectivity
Joint Preparation for a new future by Health Systems with Aligned
Physicians is well underway
An Active Embracing by Aligned Physicians of All Necessary Changes
6.
• Clinical Documentation Improvement (for $s, Quality & to demonstrate how
good you are)
• Electronic Medical Records
• Medical Management Excellence
• All Quality Initiatives
• Customer Satisfaction
The Foundation Stones are
laid & being built upon
CFMA
• In the Past:
• Medical Staffs used their brains to figure out a way to beat the
changes.
• Now:
• Health Systems and Medical Staffs are working aggressively
together for a new future: aligned intelligence!
• The New Competition:
• Aligned Systems vs. The Old Way
Something Very Important
has changed
CFMA
• There is a giant pincer movement occurring
• One Pincer: Medicare & Insurers are using carrots and
sticks to attack all areas of “waste”
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Insurer profitability limited
Inadequate clinical documentation
Short stay admissions or Observation
Re-admissions
Hospital Acquired Conditions
Quality / Value Based Purchasing
Meaningful Use
Why the Status Quo is no
longer an option
CFMA
• The Other Pincer
• The rapid development by Aligned Health Systems of a
dramatic new product line
• Improved Quality: reduced Healthcare Acquired Conditions &
a strong buy-in to Best Practices
• Focus on Wellness
• Active efforts to keep enrollees healthy
• Systems to reduce re-admissions
• Keep patients out of the hospital
• Focus on Clinical Efficiency & Clinical Effectiveness
• A goal of high customer satisfaction
Why the Status Quo is no
longer an option
CFMA
• So the first pincer is going to squeeze both
reimbursement and volume
• And the second pincer will begin to steal your patients
away with a dramatically improved model
• The status quo will lead to both declining payments per
service and to decreased volumes.
• Until now the Status Quo has been sustainable
• But it will not be in the future
Why the Status Quo is no
longer an option
CFMA
• There is an awareness on both sides (Republicans/Democrats) that
there is a lot of waste in the system.
• 25-30% of costs are administrative
• Only 3-5% in most other developed countries
• In other countries all insurers are non-profit for basic coverage
• 25-50% estimate of unnecessary services provided (defensive
medicine)
• Excessive costs and services near the end of life
• Waste from Healthcare Acquired Conditions
• Waste from delayed treatment (lack of insurance, etc.)
• All are being systematically attacked like never before
• November’s election results won’t change these actions, but it
may reduce expanded coverage (and increase bad debt).
As we debate the future of
the Affordable Care Act
CFMA
• Unaligned Incentives: Competition between Insurers,
Health Systems, Physicians and Physician Practice
Management Companies
• Lack of necessary systems to manage
• Electronic Medical Records
• Quality Data
• Executive Management Data Systems
• Too Rapid Change and Growth
Why did Capitation fail in
the 1990s?
CFMA
• The perceived need for change is the driving force and not
greed.
• No one is jumping straight into capitation.
• Stepping stones to smooth the learning curve
• The systems are being put in place first:
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Hospital / Medical Staff Alignment
EMRs
Area wide networking
Much improved Executive Data Systems
Population based planning (Weak, but being developed)
• This is a strong & planned evolution (failure is not an
option / but the expectation is to learn & grow).
What’s different this time
around?
CFMA
• In Michigan all the Major Health Systems are Active
• Therefore, all the larger cities
• But also all the affiliated sites throughout the State
• And
• The Major Health Systems are rapidly acquiring the
independent community hospitals
• From 60 independent community hospitals to 30 during the
last 2-4 years. Most MI hospitals in systems.
It is starting in the large
health systems
CFMA
• In Western Pennsylvania things are different
• A battle between UPMC and Highmark with mergers and
acquisitions
• Smaller mergers occurring: Conemaugh, other hospitals
merging together
• Some hospitals closing
While the Health System Pincer may be delayed in PA, the
Reduced Payments & Reduced Volumes Pincer will happen
regardless of geography: forcing closures or acquisitions.
It is starting in the large
health systems
CFMA
• 25% of PA hospitals leaving 15-40% of appropriate DRG
reimbursement on the table.
• Sometimes 50% of Admissions are designated Observation Status.
• Utilization Review often lacks strong systems & staff
• The result is that some Western PA hospitals are being taken
advantage of by the payers
• Other Utilization Management programs are weak:
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LOS / resource use
Attention to Re-admissions
Attention to Healthcare Acquired Conditions & Core Indicators
Lack of timely data and data analysis
Western Pennsylvania
is different
CFMA
Why?
1. Lack of strong pressure by Fiscal Intermediaries, PRO,
and Payers for the last 30 years.
2. The fear of losing medical staff has led to a tremendous
favoring of the medical staff in decisions.
3. Employee unions. At least in some sites.
Western Pennsylvania Hospitals are now experiencing the
effects of living in the status quo for decades: high OBS
rates and un-even playing field with payers.
Western Pennsylvania
is different
CFMA
• The Window of Opportunity is Closing
• Payment and Volume reductions are kicking in and will impact
your hospital’s viability soon.
• Changes don’t happen overnight: they take time and effort.
• Small hospitals do not have extra resources, $s and staff, to fall
back on
• The number of changes needed are beginning to pile up.
• Active Medical Staff support is essential.
• Cannot be done without Medical Staff support
• Resistance only heightens the resources required.
It’s Time to Get Serious
CFMA
• To make your hospital and medical staff an attractive site
for the future of healthcare.
• Will they ask you to dance?
• Do you fit into the future or will you be by-passed?
• What are the key items that would make or break you as an
attractive partner in the future?
What is the intermediate
goal?
CFMA
1. Hospital and Medical Staffs need to align in action now.
• There is so much to be done, you need to get started.
2. Figure out if & how you are going to formally
(organizationally) align in the future.
3. Make your hospital and your practice attractive to the players
who are creating the future.
• These players are not interested in acquiring doctors and/or
hospitals who cannot work together.
• They know who is working to improve documentation, quality,
clinical efficiency, reduce Healthcare Acquired Conditions, etc.
What should you be doing
now?
CFMA
1. OPTIMAL Clinical Documentation (more than just
having a program—you will want optimal
documentation performance)
• You will need full reimbursement for the transition
• The additional $s can help fund other essential efforts
• It is the first step to improving quality and clinical
efficiency
• Essential to the success of transitioning to ICD10-CM
• Essential to quality data for all types of data analysis in the
future
As an aligned team where
should you put your efforts?
CFMA
2. Strong UR programs: get your patients at the optimal
and right level of care.
• Tackle the re-admissions issue
3. Pursue clinical effectiveness.
4. Improve Core Measures and Value Based Purchasing
(rewards for high quality level)
5. EMR and Meaningful Use: Embrace it for the future
6. Prepare for area wide connectivity
As an aligned team where
should you put your efforts?
CFMA
1.
Medicare has reduced reimbursement about 8% in recent years to allow
for improved documentation & coding.
2. Just for this year the potential reductions in payment total 7-10%.
Without active change how long can your hospital survive?
• I think most Hospital Leadership will choose to pursue a future.
• Medical Staffs have to make a choice:
• If you do not actively pursue change your hospital will decline and probably
go bankrupt.
• Half-way support may only prolong the demise.
• Hospitals can make it easier on you to support change:
• Create Experts that you can readily rely on for Clinical Documentation
Improvement and Observation/Admission decision guidance.
Do you have a choice?
CFMA
• I understand that the Practice of Medicine is not what it
used to be:
• the fun is gone (but those active in creating the new system
are putting it back)
• the sense of the personal art of medicine is gone
• the bureaucratic paperwork is enormous (Sadly, it doesn’t
have to be this way. In other countries total administrative
costs are 3-5%. Very little fear of malpractice. Almost no
paperwork. These countries have excellent healthcare.)
What about individual
physicians, can they opt out?
CFMA
• Unfortunately with our polarized politics the U.S.A.
cannot get to reduced paperwork and bureaucracy.
• If individual physicians opt out, but remain in practice,
they are hurting their hospital, the rest of the medical staff
and their patients. [We are headed to a better future, but
getting there will probably be painful.]
• If they are uncertain they should seek Transition Planning
to help them better understand their options.
What about individual
physicians, can they opt out?
CFMA
Practice and Individual Options Among Senior Physicians
- One-Half of Michigan Physicians > Age 55
Must Have a Transition Plan for Each Physician and Group (If Applicable)
• Join a Bigger Group or System
• Merge
• Slow Down
• Sell
• Shut Down
• Leave
• Grow & Diversify
• Wait It Out
What is Transition
Planning?
CFMA
Identify Personal Goals and Plans for Each Physician
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Age, Health Status, Married, Dependents
Gender
Number of Years Worked
Working Conditions
Projected Practice Incomes and Payments for Services
Self-Employed vs. Employed
Retirement Income- Early Retirement ?
Availability of “Bridge Positions”
PPACA
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Provider Mandates
Business and Individual Insurance Mandates
Frustration, Burnout, Fatigue – Identify Source
Other Goals
Match to Medical Staff Plans
Identify Organization Resources to Help Physician Achieve Goals
What will Transition
Planning Provide?
CFMA
• A community-wide focus on being healthy.
• Quality will be emphasized and rewarded.
• In the National Health Service PCPs (United Kingdom) make more
than specialists. Half their income comes from incentive payments.
• We will significantly reduce Healthcare Acquired Conditions
• All providers will be much more aligned (hospitals, physicians,
nursing homes, home care, etc.)
• Patients will be more satisfied with their care & more compliant.
• Hopefully we will dramatically reduce bureaucracy & malpractice
• State of the Art medicine will become the norm
• But with the freedom to vary to the patient’s individual needs
What might a better
future look like?
CFMA
“The risk of remaining on the sidelines is that the train
will pass you by and you’ll be even further behind in
two or three years.”
Rick Lopez, MD
CMO of a physician run ACO
Atrius Health in Newton, MA
Concluding Thought
CFMA
David Raymond, MPH
President
Clinical Financial Management Associates, LLC
248 773-5006
[email protected]
Michigan’s Leader in Improving DRG Reimbursement
Presented By:
CFMA