National Rural Health Resource Center Keeping Rural Health Afloat in a Sea of Change

1. 600 East Superior Street, Suite 404 I Duluth, MN 55802 I Ph. 800.997.6685 or 218.727.9390 I www.ruralcenter.org National Rural Health Resource Center Keeping Rural Health Afloat in a Sea of Change Terry Hill Executive Director August 2012

2. Purpose The National Rural Health Resource Center is a nonprofit organization dedicated to sustaining and improving health care in rural communities. As the nation’s leading technical assistance and knowledge center in rural health, The Center focuses on five core areas: • Performance Improvement • Health Information Technology • Recruitment & Retention • Community Health Assessments • Networking

3. The American Health Care System • High cost • Low quality • Inadequate access

4. American Health Outcomes • Overtreatment • Patient safety breakdowns • Pharmaceutical errors • 60 million uninsured • Economic drain • Poor public health outcomes

5. “Every system is perfectly designed to produce the outcomes it is producing” - Peter Senge

6. Form Follows Financing Current health business model is based on volume The more you do, the more money you make

7. The future American healthcare system will be based on VALUE

8. Patient Value = Quality + Service Cost

9. Value = Triple Aim • Better care • Better health • Lower cost

10. Paying for Value Continuum Measuring Reporting Pay for Performance Value-based purchasing (VBP)

11. Medicare Shared Savings Program • Accountable care organizations (ACOs) • Value Based Purchasing (VBP) Improved quality Improved patient experience Reduced costs Incentive Payments + + =

12. VBP Demonstration Projects • Prospective payment system (PPS) hospitals • Critical access hospitals (CAHs) • Home health agencies • Nursing homes • Medical clinics

13. Rural-Urban Cost Comparison • Rural cost per Medicare patient – lower • Rural inpatient – lower • Rural outpatient – higher Source: iVantage Health Analytics: Rural Relevance Under Healthcare Reform http://www.ivantagehealth.com/rural-relevance-under-healthcare-reform/

14. Rural-Urban Quality Comparison • Rural patient satisfaction – higher • Rural Hospital Compare scores– slightly lower • Rural readmissions rate – same • Rural quality reporting participation– lower Source: iVantage Health Analytics: Rural Relevance Under Healthcare Reform. 2012.http://www.ivantagehealth.com/rural-relevance-under-healthcare-reform/

15. Rural Population Health OLDER SICKER POORER

16. Factors Impacting Rural Health • Payments based on value • Quality reporting and pay for performance • Reduced payments • Regulatory changes Source: Bradley, R., Shell, E. Remaining Relevant – Rural Hospitals in a Changing Market. 2012.

17. Factors Impacting Rural Health • Workforce shortages • Increased competition – ACOs? • HIT/telehealth

18. Factors Impacting Rural Health • Governance • Community confidence • Access to capital

19. Volume to Value Strategies • Prepare for and recognize value • Engage ACOs (5 in KY) • Partner and collaborate • Use business tools and techniques

20. Volume to Value Strategies • Reach out to the community • Improve internal efficiencies • Explore affiliations • Educate Board members

21. Quality Strategies • Align leadership • Publicly report quality • Use quality scorecards • Education and resources

22. Payment Reduction Strategies • Increase revenue cycle efficiency • Review profitability of services • Increase market share • Form networks

23. Payment Reduction Strategies • Become Lean • Improve business/operational efficiency • Seek out cost savings- 340B • Access grant funding

24. Summary • Massive change is coming • Potential to harm rural safety net • Rural providers and programs must: • Recognize assets & needs • Work smarter • Innovate • Work together

25. A Collaborative Effort

26. Rural health can lead the way!

27. Terry Hill • Executive Director • National Rural Health Resource Center • 600 East Superior Street, Suite 404 • Duluth, MN 55802 • (218) 727-9390 ext. 232 • thill@ruralcenter.org