Sustaining a financially vibrant Healthcare Organization

1. Sustaining a financially vibrant Healthcare Organization By: Chandler Ewing, CPA, FACHE Date: June 5, 2013

2. Sustaining a financially vibrant Healthcare Organization Healthcare Background – 12 years • Academic • Community • Specialty

3. Sustaining a financially vibrant Healthcare Organization • How do hospitals maintain their financial viability in the face of the revolution and evolution of payment for hospital care and health care? • Good question???? • If you know the answer = BIG $$$$$ • Where are you in the “GAP” in the transition of the payment model?

4. Sustaining a financially vibrant Healthcare Organization Talking points • Background (AHA white papers) • Hospitals and Cares Systems of the Future • Metrics for the Second Curve of Health Care • Metrics overview • Where you are in the “GAP”? • What can you do right now?

5. In 2011 AHA published, Hospitals and Cares Systems of the Future Move from First Curve to Second Curve Recommendations Four groups Sustaining a financially vibrant Healthcare Organization

6. Sustaining a financially vibrant Healthcare Organization • First Curve to the Second Curve

7. Sustaining a financially vibrant Healthcare Organization • Recommendations – four groups 1 3 2 4

8. In 2013 AHA published, Metrics for the Second Curve of Health Care Identifies metrics for the 10 “must do” strategies “Tool box” for assessing the GAP to the Second Curve Sustaining a financially vibrant Healthcare Organization

9. Second curve evaluation metrics “Tool Box” 4 out of the 10 “must do” strategies are considered “imperative”, these strategies are: • Aligning hospitals, physicians and other clinical providers across the Continuum of Care • Utilizing evidence-based practices to improve quality and patient safety • Improving efficiency through productivity and financial management • Developing integrated information systems

10. Second curve evaluation metrics “Tool Box” 1. Aligning hospitals, physicians and other clinical providers across the Continuum of Care • Percentage of aligned and engaged physicians • Aligned across all dimensions (structural/cultural) • Engaged/collaborate/participate in strategic initiatives • Engagement survey data - analyzed w/ improvement actions implemented • Recruiting/contracting include an assessment of cultural fit • Percentage of clinical provider contracts containing performance and efficiency incentives aligned with ACO-type incentives • Reimbursement risk associated with new payment models • Participating in an ACO/PCMH model across a significant population, utilizing a value-based incentives • Payment contracts, payment and compensation models are linked to performance results

11. Second curve evaluation metrics “Tool Box” 1. Aligning hospitals, physicians and other clinical providers across the Continuum of Care (cont.) • Availability of non-acute services • Full spectrum of health care services available to patients in continuum • Distribution of shared savings/performance bonuses/gains to aligned physicians and clinicians • All clinicians' performance is measured and they receive benchmark data on performance against peers • Most clinicians share financial risk and rewards linked to performance, and may have received distributions of shared savings or performance bonuses

12. Second curve evaluation metrics “Tool Box” 1. Aligning hospitals, physicians and other clinical providers across the Continuum of Care(cont.) • Number of covered lives accountable for population health (ACO/patient-centered medical homes) • Active participation in a population health management initiative for a defined population • Able to measure the attributable population for health management initiatives and a sizable population is enrolled • Percentage of clinicians in leadership • Active clinical representation at leadership or governance level (30% or above) • Physicians and nurse executives are leading development of strategic transformation initiatives

13. Second curve evaluation metrics “Tool Box” 2. Utilizing evidence-based practices to improve quality and patient safety • Effective measurement and management of care transitions • Fully implement clinical integration strategy across the entire continuum of care • Fully implement use of multidisciplinary teams, case managers, health coaches and nurse care coordinators for chronic disease cases and follow up care after transitions • Measurement of all care transition data elements. Data is used to implement and evaluate interventions that improve transitions

14. Second curve evaluation metrics “Tool Box” 2. Utilizing evidence-based practices to improve quality and patient safety (cont.) • Management of utilization variation • Regular measurement and analysis of utilization variances, steps employed to address variation and intervention effectiveness analyzed on a regular basis • Providing completely transparent, physician-specific reports on utilization variation • Regular use of evidence-based care pathways and/or standardized clinical protocols

15. Second curve evaluation metrics “Tool Box” 2. Utilizing evidence-based practices to improve quality and patient safety (cont.) • Reducing preventable admissions, readmissions, ED visits, complications and mortality • Regular tracking and reporting on all relevant patient safety and quality measures • Data commonly used to improve patient safety and quality, with positive results observed • Active patient engagement in design and improvement • Regular use of patient-engagement strategies such as shared decision-making aids, shift-change reports at the bedside, patient and family advisory councils and health and wellness programs • Regular measurement or reporting on patient and family engagement, with positive results

16. Second curve evaluation metrics “Tool Box” 3. Improving efficiency through productivity and financial management • Expense-per-episode of care • Tracking expense per episode data across every care setting and a broad range of episodes to understand the true cost of care for each episode of care • Shared savings, financial gains or risk-bearing arrangements from performance-based contracts • Measuring, managing, modeling and predicting risk using a broad set of historical data across multiple data sources (clinical and cost metrics, acute and non-acute settings) • Implementing a financial risk-bearing arrangement for a specific population (either as a payer or in partnership with a payer)

17. Second curve evaluation metrics “Tool Box” 3. Improving efficiency through productivity and financial management (cont.) • Targeted cost-reduction and risk-management goals • Implemented targeted cost-reduction or risk management goals for the organization • Instituted process re-engineering and/or continuous quality-improvement initiatives broadly across the organization and demonstrated measurable results • Management to Medicare payment levels • Projected financial impact of managing of future Medicare payment levels for the entire organization, cost cuts to successfully manage at the payment level for all patients

18. Second curve evaluation metrics “Tool Box” 4. Developing integrated information systems • Integrated data warehouse • Fully integrated and interoperable data warehouse, incorporating multiple data types for all care settings (clinical, financial, demographic, patient experience, participating and non-participating providers) • Real-time information exchange • Full participation in a health information exchange and utilizing the data for quality improvement, population health interventions and results measurement

19. Second curve evaluation metrics “Tool Box” 4. Developing integrated information systems (cont.) • Lag time between analysis and availability of results • Real time availability for all data and reports through an easy-to-use interface, based on user needs • Advanced data-mining capabilities with the ability to provide real-time insights to support clinical and business decision across the population • Advanced capabilities for prospective and predictive modeling to support clinical and business decision across the population • Ability to measure and demonstrate value and results, based on comprehensive data across the care continuum (both acute and non acute care)

20. Second curve evaluation metrics “Tool Box” 4. Developing integrated information systems (cont.) • Understanding of population disease patterns • Robust data warehouse, including disease registries and population disease patterns to identify high-risk patients and determine intervention opportunities • Thorough population data warehouse that measures the impact of population health interventions • Use of electronic health information across the continuum of care and community • Fully integrated data warehouse with advanced data mining capabilities that provides real-time information in order to identify effective health interventions and the impact on the population

21. Second curve evaluation metrics “Tool Box” Application – Where are you in the “GAP”? • Academic • Community • Specialty

22. Second curve evaluation metrics “Tool Box” “GAP” Analysis: LTAC – Select Specialty Hospital (SSH) Jackson • Primary services • Pulmonary (Vent weaning) • Medical • Rehab • Wound healing • 53 beds (ICU/Medsurg) • Hospitalist 24/7

23. Second curve evaluation metrics “GAP” Analysis LTAC – SSH Jackson 1. Aligning hospitals, physicians and other clinical providers across the Continuum of Care • Percentage of aligned and engaged physicians - ALL • Percentage of clinical provider contracts containing performance and efficiency incentives aligned with ACO-type incentives - TBD • Availability of non-acute services – FULL SPECTRUM • Distribution of shared savings/performance bonuses/gains to aligned physicians and other clinicians - TBD • Number of covered lives accountable for population health (ACO/patient-centered medical homes) - TBD • Percentage of clinicians in leadership - ACTIVE

24. Second curve evaluation metrics “GAP” Analysis LTAC – SSH Jackson 2. Utilizing evidence-based practices to improve quality and patient safety • Effective measurement and management of care transitions – MODERATE • Management of utilization variation – COMPLETE/LIMITED • Reducing preventable admissions, readmissions, ED visits, complications and mortality - REGULAR • Active patient engagement in design and improvement – IN DEPTH ANALYSIS/ VARIOUS

25. Second curve evaluation metrics “GAP” Analysis LTAC – SSH Jackson, MS 3. Improving efficiency through productivity and financial management • Expense-per-episode of care – SELECTED • Shared savings, financial/risk-bearing arrangements from performance-based contracts - TBD • Targeted cost-reduction and risk-management goals - INITIATED • Management to Medicare payment levels – PROJECTED WITH LIMITED SCOPE

26. Second curve evaluation metrics “GAP” Analysis LTAC – SSH Jackson, MS 4. Developing integrated information systems • Integrated data warehouse – LIMITED • Lag time between analysis and availability of results - LIMITED • Understanding of population disease patterns - THOROUGH • Use of electronic health information across the continuum of care and community - TBD • Real-time information exchange - TBD

27. Results of “GAP” Analysis LTAC – SSH Jackson • Aligning hospitals, physicians and other clinical providers across the Continuum of Care • Continue to grow partnerships • Educate referring physicians • Assist referring hospitals in the reduction of unpaid days/avoidable costs

28. Results of “GAP” Analysis LTAC – SSH Jackson 1. Aligning hospitals, physicians and other clinical providers across the Continuum of Care (cont.)

29. Results of “GAP” Analysis LTAC – SSH Jackson 2. Utilizing evidence-based practices to improve quality and patient safety Physician to physician hand off in care transition Sharing quality data and practice standards with referring providers Working with referring administrators to assist re-admission reductions 29

30. Results of “GAP” Analysis LTAC – SSH Jackson 3. Improving efficiency through productivity and financial management Improve through put from referring providers Identify LTAC appropriate patients quicker at the referring provider Enter into purchase service agreements with referring providers 30

31. Results of “GAP” Analysis LTAC – SSH Jackson 4. Developing integrated information systems Work with referring providers for access to computer system Work with referring providers to understand LTAC appropriate population disease patterns 31

32. Sustaining a financially vibrant Healthcare Organization • Recap • Background • Hospitals and Cares Systems of the Future • Metrics for the Second Curve of Health Care • Metrics overview • Where you are in the “GAP”? • What can you do right now?

33. Sustaining a financially vibrant Healthcare Organization Questions? 33