The ED Call Pay Crisis: Strategies for Fair, Equitable, and Sustainable Solutions Presented by: Martin B. Buser, MPH, FA

1. To join conference call Dial-in: 1-866-809-9263 Participant code: 610-285-8791 The ED Call Pay Crisis:Strategies for Fair, Equitable, and Sustainable Solutions Presented by: Martin B. Buser, MPH, FACHE Roger A. Heroux, Ph.D. Michael E. Hogue, M.D.June 4, 2009

2. To join conference call Dial-in: 1-866-809-9263 Participant code: 610-285-8791 • HMR, LLC • ED Call Panel Solutions • Martin B. Buser, MPH, FACHE • Roger A. Heroux, Ph.D.

3. Overview of Today’s Objectives • Define the problem with ED call panels • Understand the process to approach the issues with ED call panel solutions • Findings from interviews • Findings from research • Feasibility analysis and business plan • Possible recommendations for a fair and equitable solution • Call Pay Security Solution • The future To join conference call Dial-in: 1-866-809-9263 Participant code: 610-285-8791

4. Stipend impact for on your bottom line • Year One: Three panels (GS, Ortho and NS) at $500/day $547,500 • Year Two: Six panels at $500/day $1,095,000 • Year Three: Fourteen panels at $500/day $2,555,000 • Year Four: Specialties Separate General Surgery, Orthopedics and Neurosurgery at $1,500 Cardiology, Urology, Pulm, Vascular Surgery, OB, G-I, IM/FP, ENT, Plastics at $800 Peds, Ophthalmology, Neurology and Cardiac Surgery at $500 $5,000,500 • And escalating!! To join conference call Dial-in: 1-866-809-9263 Participant code: 610-285-8791

5. The Driving Forces Behind the On-Call Crisis

6. Emergency Department (ED) Requirements • Ethically and by law... • Full panel of specialty physicians • Distinct from the emergency physicians who provide the first level of care in ED’s

7. Definition: Unassigned patients • “Patients who require on-site consultation or admission to the hospital and do not have a a prior relationship with a physician on the Medical Staff to assume their care” • Independent of patient funding • Cannot make payments to physicians to care for their own patients

8. Background • Past: • Voluntary community service • Cost shifting possible • Referrals built practices • How fast can I get on the panel?

9. Scope of the Problem • National issue • You’re not alone! • Problem growing daily • Specialty-driven • Increased adversarial relationships between medical staff and hospital • No easy solution • Expensive to solve

10. Definition: ED On-Call Panel for Unassigned Patients • Significant volume • For a 40,000 visit ED, it will represent over 2,000 inpatients per year • Unassigned population: • 35-50% of the ED hospital admissions • 12-20% of the total hospital admissions are ED unassigned admissions • If a trauma hospital- adds more volume and dynamics

11. Designing for the Future • The best solutions allow for better clinical integration and partnerships between the hospital and medical staff • Long term – learning how to work together with common goals and aligned incentives within a shared budget • Must be more efficient and effective

12. Multi-Step Process • Learn what the issues are • Learn what the burden is • Learn what the market is • Develop a forum for discussion • Develop an acceptable solution that is fair, equitable and financially sustainable • Manage the implementation well

13. The Needs of the Medical Staff

14. ED Call Panel/Medical Staff Analysis: Interviews • What have we learned?

15. Interviewing • What are the issues and dynamics? • How deep do they go? • Who is leading the cause? • What are their real issues? • Income? • Competency? • Manpower? • Greed? • Irritations with the hospital systems? • What can you do something about and what is impossible? • How urgent is it?

16. What we find from the Interviews • Special Rules to Get Off Call • No Longer Able to Cost Shift for Unfunded Patients • Desire to be Paid for Availability • Lifestyle Issues • ED Call Affecting Recruitment and Retention Potential

17. Research: • What do we learn? • Data is objective and revealing!

18. The Research Process: Opens the “Black Box” • Each study period unassigned chart audited for CPTs and ICD-9 professional codes • Code all care provided throughout the hospitalization • Unassigned volumes and payer mix identified by specialty • Expected rate of reimbursement by specialty • Service line analysis (average length of stay (ALOS) by diagnostic related group (DRG), $/DRG/Specialty, etc.) • Financial scenarios

19. Get the Right Data – Find Out What’sHappening at your Hospital Sample HospitalReports

20. Analyze: • Number of Panels • Staffing by Panel • Required Panels • ED Call Burden By Specialty • Quantify the volume by specialty • RVUs by Specialty • Current Payment System • Expected Payment to Specialties

21. Hospital Statistics Overview (FY2008)

22. ED Unassigned Annualized Patient Categorization Breakdown Note: Patients may be seen in multiple locations, however this report shows the primary location of service for each specific patient. The ED unassigned admission volume is estimated based on an annualization of patients identified by hospital staff.

23. ED Unassigned Overall Averages Note: The ED unassigned admission volume is estimated based on an annualization of patients identified by hospital staff.

24. ED Patients from the Primary Service Area Only ED Referrals from Outlying Communities ED Unassigned Financial Class Group - Mix of Patients

25. Estimated Current ED Unassigned Annualized Professional Fee Practice Value for All Specialties Note: The estimated collection rate and current estimated practice value is calculated on estimates made by financial class based on historical trends. Actual results may vary depending on actual billing experience.

26. Monthly Average ED Unassigned Specialty Cases and RVUs Delivered

27. Monthly Average ED Unassigned Specialty Cases

28. Solution Strategies andModel Programs

29. Should Physicians Be Paid for ED Call? • Yes • Should be Fair, Equitable for the Medical Staff Panel Members • Should be Financially Sustainable for the Hospital

30. Sample Hospital Report – Develop a Business Plan • Get the facts! • Build a business plan for expected shortfall if payment guarantees are provided • Understand economic value of ED call to each specialty

31. ED On-Call Panel Options: • Remove irritants of call • Close the ED • Develop an IM hospitalist program • Develop Surgical Specialty hospitalist programs • Maintain bylaws mandatory on-call w/o pay • Regionalize care by specialty among local hospitals • Require a minimum number of call days before payment

32. ED On-Call Panel Options (cont’d): • Recruit more specialists • Pay stipends • Pay base stipend plus activation fee • Hire physician assistant first responders • Guarantee pay for work performed • All patients • Uninsured patients only • Uninsured patients outside of the immediate service area • Develop Co Management Agreements • Compensate for selected OP Follow Up items • Hybrid compensation model • Compensate with Tax Advantaged dollars

33. Options: Remove Irritants of Call • Make ED more efficient • Track throughput • Reduce constant ED calls • Open surgery for ED follow-up cases • Assist with $ for selected ED referrals • Cover unfunded patients • Allow easy re-admission of difficult patients • Manage discharge planning effectively

34. Options: Hospitalists • Dedicated inpatient physicians • Internal medicine/family practice • 55%-60% of ED unassigned admissions are medicine-related • Control utilization • Control referrals • Allows time to explore options • Must be properly staffed and designed to be extremely effective

35. Acute Patient Care Hospitalist Physician On-site Hospitalist Support Team(Case Manager, Care Coordinator/Clerical) On-site Medical Director Supportive Infrastructure Benchmarking for Best Practices HOSPITALIST DIRECTED PATIENT CARE

36. Options: Specialty Hospitalist Programs • Growing quickly as an option • If paying stipends, it may be more economical to hire full time surgical specialists and achieve dedicated service • Must develop a business plan to understand the costs and risks

37. Hospitalist Services Go Beyond IM! • Internal Medicine/FP • IM/Peds • Peds • OB • Ortho/Traumatology • General Surgeons • Intensivists for the Critical Care Patients

38. Options: Pay Stipends • Fixed costs • Difficult to determine proper payment • Stipends tend to go to the most vocal • Never stops escalating • What is the relative value of on-call time?

39. Options: Pay Stipends • Should there be tiers? • Everyone on call panel should receive the same base rate • Vary the activation fee based upon frequency, severity and FMV analysis • How do you determine the amounts? • With facts

40. One Sample Hospital ReportOption: Base Fee Plus Activation Fee • Ortho, Neuro, OB and General Surgery$200 Base Fee + $XXX Activation Fee • Pulmonology, Vascular, Cardiology, Neurology andPlastic Surgery$200 Base Fee + $YYY Activation Fee • G-I, Opth, Peds, Psych, Urology, and ENT$200 Base Fee + $ZZZ Activation Fee

41. Option: NP/PA First Responder • First Line of Response • Covers ED Consults for Trauma, Neurosurgery, Cardiovascular and Orthopedic Surgery • Coordinates all care with the on-call specialist • Responsible from admission to discharge • Assign 4 Surgical NP FTE’s to cover 24/7 • Net Cost is Staffing Costs less Professional Fees collected.

42. Option: Pay for Productivity • Emergency on-call medical group • A separate professional corporation • Contracts with existing medical staff members

43. Billing Service Hospital Steering & CodingCommittee MedicalCorporation ContractingMD ContractingMD ContractingMD ContractingMD Indicates contracts Contractual Relationships

44. Sample Hospital ReportPro Forma Summary - Yearly Cost Estimates With Various Scenarios Note: Excludes those specialties with existing coverage agreements or exclusive franchises

45. Option: Compensate with Tax Advantaged Dollars • Integrated Healthcare Strategies • Michael E. Hogue, M.D. • Call Pay Security Solution

46. Call Pay Program • Integrated Healthcare Strategies developed a call pay program designed to meet the following goals: • Transition from a cash payment philosophy to the development and implementation of a retirement program opportunity • Generate immediate and long term savings • Control future escalation in call pay amount • Flexibility in implementation • Provide a competitive differentiation • Encourage long-term retention

47. Call Pay Dilemma – Systems • Cost of call is becoming a significant burden on hospital operating margins • Current structure unsustainable as costs are escalating yearly at unacceptable rates • Hospital systems face increasing call pay requests—slowly becoming the industry standard • Increasing strain on emergency departments—increasing number of uninsured patients

48. Call Dilemma – Physicians • Perception that “On-Call” problem for physicians is unreimbursed care • In reality, “On-Call” is a time issue • Historical attempts have been to solve this with monetary payment • Payment is made/taxed/spent—money is gone and the time issue is unchanged • Current call pay structure will never be enough to reimburse for excess time away from family

49. Additional Physician Issues • Call time adds increasing burden to physician work schedules • Call time limits physicians’ opportunity to maximize income • Reduces clinic time • Reduces elective cases • Increases exposure to uninsured patients and corresponding legal risk • Private practice physicians have difficult time sheltering money for retirement • Qualified plans inadequate to meet the needs of highly compensated physicians – increased exposure to market risk

50. Solution • IHStrategies’ approach to solving the call pay issue is focused on answering three key questions: • How do we generate immediate savings for systems? • Can we offset physician time issues by addressing another critical issue? • How do we design a plan to more adequately reward physicians for time commitment?