Mark A. Smith, MD, FACS May 17, 2012

1. CAMSS Annual Meeting Mark A. Smith, MD, FACS May 17, 2012 In Light of the Changing Healthcare Environment, What Will the Organized Medical Staff Look Like?

2. or, Learning to live with Uncertainty!

3. Walter Heisenberg

4. Marcelo W. Hinojosa, MD University of California, Irvine Medical Center Morbidity & Mortality Rounds

5. Range of Today’s Discussion What do we have today? What I know (with uncertainty) for the near future? How will this impact the Organized Medical Staff?

6. What do we have today?

7. Organized Medical Staff Today • Structure today a result of two parallel lines of development • Legal • Regulatory- CMS, The Joint Commission, HFAP, DNV • Independent Governance • Responsibilities delegated from and reports to a Board

8. Organized Medical Staff Today • Primary Responsibilities • Credentialing and Privileging- Competency Determination • Peer Review for Individual quality • Secondary Responsibilities • System Quality • Core Measures • Patient Safety • Strategic Planning and Implementation • Organizational Leadership

9. Healthcare System Today • In short, a MESS! • Raises a number of Issues • Rising costs • Decreased reimbursements • Lack of access • Shortage of healthcare providers • Legal liabilities

10. Exhibit ES-1. Overall Ranking Note: * Estimate. Expenditures shown in $US PPP (purchasing power parity). Source: Calculated by The Commonwealth Fund based on 2007 International Health Policy Survey; 2008 International Health Policy Survey of Sicker Adults; 2009 International Health Policy Survey of Primary Care Physicians; Commonwealth Fund Commission on a High Performance Health System National Scorecard; and Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

11. Average spending on healthper capita ($US PPP) Total expenditures on healthas percent of GDP Exhibit 1. International Comparison of Spending on Health, 1980–2007 16% $7,290 8% $2,454 Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

12. Summary of American Healthcare System Too costly- $2.3 Trillion in 2009, 17.3% of GDP Lack of Access- 40-55 Million Uninsured

17. Age Distribution of Top 5% Health Spenders

18. Top 5 Costly Medical Conditions

19. Shortage of Physicians AAMC (American Association of Medical Colleges) in April, 2010 Total Physicians- 954,000 Primary Care- 352, 908 Need 45,000 more by 2020 Estimated total shortage 150,000 by 2025 Wall Street Journal April 12, 2010

21. Physician-Hospital Relationship Independent medical practice as a model format is dead! >90% of new physicians are employed immediately In addition to direct employment (in California, it is the foundation model), hospitals are pursuing other directed physician-hospital entities

22. So, where is healthcare going? • Market forces outside of Governmental healthcare reform • Move from volume to value (quality) based system • Curb overall costs of healthcare • Create a safe healthcare system • Government Healthcare Reform • Pre-Obama Changes • Patient Protection and Affordable Care Act- PPACA

23. Pre-Obama Changes Decreased reimbursements on a per event basis Increased fraud monitoring Acute Care Episode (ACE) pilots by CMS- bundling hospital and physician service payments for certain orthopedic and cardiovascular care- hospital controls payment distribution Increased never events- non-payment PQRI- Physician Quality Reporting Initiative

24. Patient Protection and Affordability Care Act- PPACA • Access- designed to cover 32 million of 56 million uninsured • Individual mandate- anyone not already covered needs to get insurance or pay a penalty • Expand Medicaid/Medicare coverage • Low Income above Medicaid offered subsidies

25. PPACA • Health Insurance Rules • Health Insurance Exchanges- State bourse • Guaranteed Issue- must offer same premium • Essential benefits package- eliminates copayments, deductibles for certain basics • Pre-existing conditions disappear • Must spend a certain amount on medical care improvement • Insurers must reveal more information about their pricing and have an appeals process

26. PPACA • Individual Responsibility • Purchase health insurance if not qualified for a government plan or pay penalty • Dependents can remain on parent policy until 26th birthday • Will have access to more information on both quality and pricing

27. PPACA • Business Responsibility • Large businesses (employ 50 or more) must provide health insurance or pay subsidies • Smaller businesses eligible for subsidies if purchase insurance through an exchange • Must disclose value of benefits provided • Change in tax reporting

28. PPACA • Government Responsibility • States must develop Health Insurance Exchanges or opt out with an approved equivalent plan • Create a government independent Outcomes Research Institute • Develop a National Prevention and Public Health Strategy • Increased fraud and abuse monitoring • Develop an Independent Payment Advisory Council • Develop ACO rules and implementation pathways

29. PPACA • Provider Responsibility • Participate in providing care for increased numbers of patients • Adopt EMR (Actually mandated elsewhere but continued support) • Participate in expanded PQRI • Encouraged to join ACO • More transparency in performance data

30. PPACA • Funding • Tax on high income taxpayers • Annual fee on Health insurers • Increased fee on drug and device manufacturers • Other sources to be named later

31. PPACA Final Who knows what will remain and what will be removed?

32. Physician Foundation Survey, November 2010 Healthcare Reform Act will result in: 60% will restrict access to patients 59% will spend less time with individual patients 10% see increased quality; 56% see diminished quality 67% had a negative or very negative reaction to the reform bill 40% anticipate leaving medicine within 3 yrs.

33. What I know (with uncertainty) for the near future?

34. Uncertainty

35. Uncertainty

36. Change

37. Unhappiness

38. Money will be a prime driver

39. Quality will be a prime driver

40. At the level of the individual, health care will be delivered primarily by teams.

41. At the system level, health care will be delivered by Continuity of Care (i.e. cradle to grave)

42. Knowledge grows exponentially: decision making will be based on evidence.

43. The Internet and other communication methods will drive “holistic” medicine

44. Anyone in health care should be ready to reinvent themselves and their job descriptions.

45. Organized Medical Staff Today

46. How will this impact the Organized Medical Staff?

47. Organized Medical Staff • Issues • Governance- for parallel organizations? • Less emphasis on traditional credentialing; more emphasis on competency determinations • Need to collect performance data to support the above • Rise in specialty and sub-specialty work within a hospital setting

48. Organized Medical Staff The primary independent Organized Medical Staff of today is a dinosaur New hybrid models will need to take the changes discussed into consideration

49. What changes? Reduce duplication of management services between medical staff and physician practice groups by taking on Human Resource duties Medical Staff will assume even greater responsibility for both defining and interpreting individual quality performance measures Medical Staff will have a greater responsibility for ambulatory or outpatient care physicians

50. Organized Medical Staff- Possible Models No change Eliminated- Functions absorbed by a totally new organization Becomes a more Quality oriented organization Becomes a more Human Resource oriented organization Combo- Quality + Human Resource Something else