Transcript GME-strategic-options

Strategic Considerations
Thomas C. Gentile, Jr., MSA
Ron Stephen, FCOHE, FACHE
Strategic Considerations
• Part One: Review of Medicare GME Payments
• Part Two: How a hospital sees GME as a
potential strategic option
• Part Three: The strategic considerations of
implementing a GME program
Medicare GME Financing
Thomas C. Gentile, Jr. MSA
Chief Academic Officer/Vice President
Academic Affairs (Retired)
Adjunct Assistant Dean Wayne State
University School of Medicine
Strategic Considerations
• Part One:
Medicare GME Payments
Direct Graduate Medical Education Expense
(DGME) and the Per Resident Amount (PRA)
Indirect Medical Education Adjustment (IME)
OGME as a Winning Strategy for
Hospital CEO’s and Boards
Ron Stephen, FCOHE, FACHE
Hospital CEO (Retired)
Teaching Faculty
Wichita State University
Part Two:
How Does OGME Fit Into Our
Hospital’s Strategy?
(How a CEO might look at it)
GME as a Strategic Option
• How a hospital determines its strategies
• Benefits of GME to a hospital, medical
staff/physician and community
– SWOT analysis
• Measuring success: The Balanced Scorecard
• How GME helps improve the Balanced
Scorecard
Speaking the Language
• Strategy- What the organization intends to do
• Strategic Management/ Strategic PlanningThe concept and process of determining the
best strategy and implementing it
• Strategic Plan- The document that outlines the
selected strategies
What Keeps Hospital Administrators
Awake at Night
• Competition for best-reimbursed patient services
• Increased cost of physician services
– ER Coverage, Hospitalists
• Emphasis on cost containment
• Quality oversight
– Increasingly tied to reimbursement (P4P)
• Shortage of skilled workers
• Shortage of physicians, especially primary care
(Recruitment)
Strategic Management/
Strategic Planning
• Emphasizes that both internal strengths and weaknesses
and external opportunities and threats must be
considered
• Basic Premise: Resources are limited, competition is
intense, and timing must be planned
• Used in business for years
• Relatively new to healthcare organizations (25- 30 years)
• Many “old school” CEOs and Boards are still struggling
with the concept
A Hospital Determines Strategy
• Based on mission, vision, values and goals
• SWOT analysis
– Internal strengths
– Internal weaknesses
– External opportunities
– External threats
Does GME Fit with Your Mission,
Vision and Values?
• Mission- Why does your hospital exist?
– Patient care and Physician Services?
– Education?
– Research?
• Vision- What is the mental image you want to portray
when your hospital is accomplishing its mission?
• Values- What are the guiding principles that drive your
hospital?
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Moral values?
Improve the health of your community?
Provide care to those in need?
Be a resource for your physicians?
How would the potential benefits
of GME mesh with your hospital’s
strengths, weaknesses,
opportunities and threats?
(SWOT analysis)
Potential Benefits of GME to Your
Hospital and Community
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Patient Care Benefits
Medical Staff/Physician Benefits
Bottom Line Benefits
Community Benefits
Synergistic Benefits
Patient Care Benefits
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Resident physicians in-house 24X7
Increased focus on quality of care
Opportunity to expand specialty care
Potential for clinical trials and medical
research
• Better liaison with tertiary care referral
physicians and facilities
• Patients’ perception of quality of care
Medical Staff Benefits
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Grow your own medical staff
Become a magnet for quality medical staff
Develop loyal cadre of resident graduates
Increase relations with existing medical staff
through involvement as teaching faculty
• Enhanced CME opportunity for all medical
staff members
• Succession Planning Utilizing Resident
Graduates
Bottom Line Benefits
• Medicare payment for GME expenses
• Presence of residents in-house may reduce
expenses for medical staff coverage
• Reduce recruiting expenses
• Physician referral base may increase
Community Benefits
• Increased ability to serve unmet community
healthcare needs
– Clinics for the chronically underserved/ medically
indigent
• Will expand primary care physician base
• Hospital increases healthcare leadership
stature in the community
Synergistic Benefits
• Image of hospital in the community = a
teaching hospital, an educational leader
• Presence of residents 24X7 will increase the
comfort level of nurses working in your
hospital
• Increased intensity of care will help staff
morale and make the hospital more attractive
for skilled technicians
Developing a SWOT Analysis for GME
for your Hospital
• Following are some considerations for starting a GME
program
• OGME Development consultants can help you
evaluate how these considerations fit into the
analysis of
– Internal strength
– Internal weakness
– External opportunity
– External threat
• To promote the mission of the hospital
Criteria for Starting a GME Program
• Medical staff enthusiasm and willingness to
support – Physician Champions
• CEO/Board enthusiasm and willingness to
support
– Financial and administrative support to get started
• Community need for additional physicians
• Adequate patient load for residencies desired
• Adequate Medicare percentage for reasonable
payment
Applying SWOT
• Use of the SWOT analysis helps administrative
types see the “whole” picture
– Recognizing Medicare GME payments
• Most of the “criteria” can be allocated as a
strength, weakness or threat
• Most of the benefits can be listed as
opportunities
Threats and Weaknesses
• Threats are external- the hospital must
evaluate their significance
• Weaknesses are internal- Is the hospital
willing to fix them?
For the Hospital Considering GME,
Help the Leadership Drill Down
• Consider each of the “criteria” and each of the
benefits
• Allocate each as a strength, weakness,
opportunity or threat
– This may take some time
• Any weaknesses are internal (by definition) hospital and medical staff leadership should
be able to correct the weaknesses
The Point
• When a hospital and medical staff do a
thorough strategic analysis of adding a GME
program, the benefits to the hospital and
medical staff become clear
• The next question, what is the hospital’s cost
to achieve these benefits, will be addressed as
Part 3 of this briefing
A Final ConsiderationThe Effect of GME on the
Balanced Scorecard
Balanced Scorecard
• Current trends are for organizations to
evaluate their success on more than just the
financial bottom line
• Four criteria are used to measure the
implementation of their strategies
– Financial perspective
– Customer perspective
– Internal perspective
– Learning/growth perspective
Contribution of GME to the
Financial Perspective
• Most hospitals do not lose money on their
GME program
• Presence of residents in-house may reduce
expenses for medical staff coverage
• Reduce recruiting expenses
• Potential for funding for research
Contribution of GME to the
Customer Perspective
• Image of hospital in the community
• Patients’ perception of quality of care
• Presence of residents 24X7 will increase the
comfort level of nurses working in your
hospital
• Medical staff feel better about using a
“teaching” hospital
Contribution of GME to the
Internal Perspective
• Increased focus on quality of care
• Opportunity to expand specialty care
• Potential for clinical trials and medical
research
• Better liaison with tertiary care referral
physicians and facilities
• Recruitment of physicians to the community
Contribution of GME to the
Learning/Growth Perspective
• Enhanced CME opportunity for all medical
staff members
• Increased intensity of care will help staff
morale and make the hospital more attractive
for skilled technicians
• Nurses have much greater opportunity to
learn and grow with more complex patients
On a Balanced Scorecard,
Graduate Medical Education is a
significant asset to the entire
hospital