1. Originally presented March 2012

2. AGENDA
 Speaker Background
 Relevant Legislation
 “New Buyers”
 Solution Selling – Executive Sales
 Applying “Solution Selling” to Hospice
 Organizational Implications

3. SPEAKER BACKGROUND
 Over 20 years in home care
 35 years of experience in planning and marketing
 MBA from the Sloan School of Massachusetts Institute
of Technology
 President, Healthcare Market Resources, a market
intelligence providing customized market research to
home health agencies and hospices, including
MD/facility referral trends

4. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 Medicare Re-admission Penalties
 Three DRG sets subject to potential penalties in FY2013, based
on FY2012 results
 Acute Myocardial Infarction(AMI)
 Pneumonia
 Chronic Heart Failure
 Additional DRG sets in 2015
 Chronic Obstructive Pulmonary Disease(COPD)
 Coronary Artery Bypass Graft(CABG)
 Percutaneous coronary intervention(PTCA)
 Vascular Procedures
 Hospitals judged by all hospital re-admissions in thirty(30)day
period following discharge, regardless of hospital

5. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 Medicare Re-admission Penalties
 Worst-case Scenario
 1% of ALL Medicare re-imbursement in 2013
 2% of ALL Medicare re-imbursement in 2014
 3% of ALL Medicare re-imbursement in 2015
 Penalties based on prior year results

6. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 Bundled Payments
 Reimbursement of providers based on the basis of expected costs for
clinically-defined episodes of care
 Medicare proposed 4 models only 2 involved post-discharge services
 Model 2 (inpatient stay plus post-discharge services): Hospitals and
physicians receive fee-for-service rates that are retrospectively reconciled
with a target price. CMS requires a 3% minimum discount to Medicare for
30 to 89 days after discharge and a 2% discount for an episode that is 90
days or longer.
 Model 3 (post-discharge services only): Hospitals and physicians receive
fee-for-service rates that are retrospectively reconciled with a target price.
The applicant proposes the discount amount to Medicare.
 Requests to participate has been oversubscribed versus expectations.
 Additional opportunities to submit proposals may be forthcoming

7. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 PPACA gave the Sec’y of HHS the ability to create
Accountable Care Organizations(ACO’s)
 ACO’s are
 Local organizations
 Bring together physicians and hospitals, usually
 Better manage the costs and quality for at least 5K lives

8. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 Accountable Care Organizations
 Payment and delivery healthcare reform model
 Seeks to tie provider reimbursements to
 Quality metrics
 Reduction in total cost of care
 Managed care for an assigned population
 Usually led by a hospital-physician coalition
 32 Pioneer ACO’s started operation in Jan 2012
 Many participants shied away from participating because
of upfront costs
 Medicare will now subsidize this investment in exchange for
smaller returns

9. PATIENT PROTECTION &
AFFORDABLE CARE ACT
 Medicare Advantage Plans
 Saw a 15% reduction in per-member per month fees and
mandated medical loss ratio
 Hospice Concurrent Care Demonstration
 Instructed HHS Sec’y to create a concurrent care hospice
demonstration project
 Include up to 15 hospices, both urban and rural
 Allow patients to receive hospice care while also being
treated with other Medicare services

10. HEALTHCARE REFORM
 Key Concepts
 Value-Based Purchasing
 “Tearing Down the Silos”
 Outcomes-Based Reporting
 Post-Acute Integration

11. “OLD” SALES PROCESS
SIMPLE
Sales Referral

12. “NEW” SALES PROCESS COMPLEX
Complex “Buying” Team
Sales Referral

13. SIMPLE VS. COMPLEX SALE
 Numerous individuals to sell each with different
agendas
 Gaining access to decision participants or committee
can be difficult
 Fewer chances to sell; buyers collectively
control/influence more business than an individual
 Communicating, getting feedback
 and implementing decision can be more time
consuming; need to work thru various layers of the
organization

14. DIFFERENCES
SIMPLE COMPLEX
Relationship Focused Solution focused
Target Users Target Business People
Product/Service Education Product Usage
Ask for the Business Ask for the Next Step
Single Decision-maker Multiple Decision-makers
Spontaneous Access Scheduled Gated Access
Single Agenda Different Agendas & Motivations
Can make decision @ sales call Longer time frame for the decision
Implement decision with the next Work thru organization to implement
patient

15. 4 D’s OF THE SALES PROCESS
 Discover
 Diagnose
 Design
 Deliver

16. PRINCIPLES FOR “SOLUTION”
SELLING Sound Alikes
 Delegated to
 Diagnose before Prescription
 Gain Trust & Appear Competent
 Can’t Sell Non-Buyers
 No Goal No Prospect
 Bad News Early is Good
 Self-Discovery is the Best
 Only the Buyer Can call It a Solution
 Equal then Different
 Emotional Decisions are justified by Value & Logic
 Don’t Close before the Buyer is Ready

17. “COMPLEX” SALES MISTAKES
 Dancing with only the one that brought you to the
dance
 Gain access to the other parties as early in the process as
possible
 Assuming the “buying” team has clearly defined needs
 Survey members to see if you can define the problem
and solutions in their terms
 Don’t forget the “little” folk and make friends with the
Gatekeeper

18. QUESTIONS TO ASK
 Does your customer have a well-defined
decision/buying process?
 Is the approval process different from the “buying”
process?
 To what extent does your customer understand the
problem?
 To what degree do they understand your solution?
 What are the risks involved in implementing your
solution and how can you mitigate them?

19. SELLING TO A COMMITTEE
 Know the history of the committee
 More Important to know who decided who will be on
the committee than knowing who to target
 Whoever invited you to the meeting is your de facto
champion
 Find out the attitudes and real agenda beforehand
 Pre-survey and ask what concerns are the committee
likely to have

20. PRESENTATION TRAPS
 Too much focus on the vendor; discuss the client and
their issues
 Lecture style usually means limited retention; engage
in a dialogue
 Will your presentation be the same as your
competitor’s except for the name will be changed?
Strive to be memorable and different
 Overcoming objections is an inherently negative
process; acknowledge concerns and their validity

21. CUSTOMER ROLES IN “COMPLEX”
SALES PROCESS
 Final Call – Authority
 Interested Parties
 Economic
 User/Functionality
 Integrator
 Power Broker
 Gatekeeper

22. CURRENT JOB DESCRIPTION
 Relationships/face-to-face contact-referral sources
 Budgetary responsibility-limited
 New program development-recommends
 Education/Background-Associate Deg/LPN
 Key Skills-Excellent Verbal communications
 Measurement – Sales Calls & Referrals

23. EXECUTIVE SALES JOB
DESCRIPTION
 Relationships/face-to-face contact – Executive/C-level
 Budgetary responsibility-Account P&L
 New program development-Conceives & Develops
 Education/Background-Business Bachelors Degree
 Key Skills – Independent thinker; able to manage
process & account relationship
 Measurement – Account Penetration

24. “NEW BUYERS”
 Hospital Administration
 Accountable Care Organization(ACO) Management
 Medicare Managed Care(MCO) Management
THESE ARE ECONOMIC BUYERS

25. REASONS NOT TO “BUY” HOSPICE
 Don’t have time to explain
 Not sure if patient is hospice appropriate
 Don’t want to deal with emotionality
 Palliative care is sufficient
 Need to fill my clinical trial
 Don’t want to miss teaching opportunity for
residents/medical students

26. INFLUENCES ON THE “BUY”
HOSPICE
 Don’t have time to explain
 Not sure if patient is hospice appropriate
 Don’t want to deal with emotionality
 Palliative care is sufficient
 Need to fill my clinical trial
 Don’t want to miss teaching opportunity for
residents/medical students

27. HOSPITAL MORTALITY REPORTING
 In 2008, Medicare began public reporting of 30-day
risk adjusted mortality rates for patients admitted to a
hospital for 3 conditions:
 Heart attack(AMI)
 Heart failure(CHF)
 Simple pneumonia
 Will interested parties judge the hospital by publicly
reported data?

28. HOSPITAL MORTALITY
 Research if institution has issue
 Hospital Compare
 State Dept of Health and Hospital Association
 Commercial firms
 Identify patients
 Expiring at rates greater than norm
 LOS longer than norms
 Probe key hospital officials to determine if problem is
internalized—Chief Nursing Officer, Chief Medical Officer,
Chief Operating Officer
 Calculate benefit in earlier discharge to hospice in terms of
lower mortality rate and shorter LOS

30. HOSPITAL RE-ADMISSIONS
 Research if institution has issue
 Hospital Compare
 Commercial firms
 Identify patients
 Chronic Heart Failure
 Secondary Penalty DRG’s -COPD
 Probe key hospital officials to determine if problem is
internalized—Chief Nursing Officer, Chief Financial
Officer, Chief Operating Officer
 Calculate benefit in eliminating re-admissions

31. HOSPITAL RE-ADMISSIONS
 Objection
 It’s worth it to my institution to have the “excess”
admissions and pay the penalty
 Response
 That may be true in the short term, but the size of
penalties will rise over time
 This is an issue that cannot be solved overnight and it
takes time to change institutional behavior
 Expect other payors to follow Medicare’s lead and
institute similar penalties.

32.  Quartiles will compress over time

33. HOSPITAL RE-ADMISSIONS
STRATEGY
 Hospitals are being measured by CMS as we speak
 Focus on CHF; worry about COPD next year
 Does the hospital have a problem? Quantify it.
 Hospice is only one of many solutions
 Explain how hospice prevents re-admissions
 Agree on how to identify terminally ill CHF patient

34. HOSPITAL RE-ADMISSIONS
STRATEGY
 Set up policies, procedures and protocols regarding
these patients.
 Offer to in-service cardiac unit physicians and nurses
on terminal criteria
 Commit to be available for initial hospice consult
within a given time frame. Must a clinician initiate the
process?
 If unsuccessful initially, commit to follow up with
patient within 2 weeks

35. KEY TO ACO’S
 All about behavior change
 Care about the patient across all settings of care
 Will make money by
 Reducing unnecessary services
 Substituting less expensive services
 The tail that directs the rest of the organization’s
referral flow

36. ACO STRATEGY
 Demonstrate cost savings for using hospice in lieu of curative
care
 Utilize Duke University Medicare End-of-Life to quantify savings
 Request names of primary care physicians, who are part of the
ACO, and specialists & determine who are under-utilizers of
hospice
 Agree to make joint sales calls with ACO representative to educate
physicians about hospice
 Request ACO support in working with their network home
health agencies in to jointly identify terminally ill Medicare
patients
 60-70% of these patients could be transferred to hospice; less than
40% are
 Request “real-time access to ACO patient management
database to monitor for terminally ill patients

37. BUNDLED PAYMENT STRATEGY
 Focus on Model 2 – Inpatient and Post Discharge Services
 Hospice’s value-eliminating costly, unnecessary
hospitalizations
 Identify specific patient populations, where hospice is
being under-utilized. Conduct literature review for
support
 Aetna lung study
 Determine if potential hospital partner has sufficient
volume to warrant interest
 Position proposal as opportunity to learn about “bundled
payments”.

38. ROBERT WOOD JOHNSON
FOUNDATION MONOGRAPH
 Promoting Excellence in End-of-Life Care
 Ireland Cancer Center & Hospice of Western Reserve
program provided palliative transition to patients
undergoing cancer treatment
 Hospitals admissions dropped 67% from 3,2 to 1.05 per patient
 Univ of Michigan & Hospice of Michigan did concurrent
cancer treatment and hospice care in a randomized study
 Medicare costs were $7,059 less in study vs. control

39. ROBERT WOOD JOHNSON
FOUNDATION MONOGRAPH
 Promoting Excellence in End-of-Life Care
 VA Greater Los Angeles offered a palliative care program
to poor prognosis lung cancer, COPD and CHF patients,
working with hospices and other home care providers
 Health care costs in the final month were $8605 less
 Mount Sinai, Franklin Health, BCBS Sc utilized existing
complex case management” system to deliver palliative
care
 In year 3 of program, savings calculated to be $33K per
managed case

40. AETNA CONCURRENT HOSPICE
CARE
 Since 2004, Aetna has been allowing terminally ill
patients with a 12 month prognosis to receive curative
care and hospice care simultaneously
 Saw a reduction in medical costs on these patients by
22% and a 70% increase in hospice admissions

41. MCO’S
 Highmark created special unit to manage chronic
terminally ill patients
 Independence Blue Cross hired disease management
firm to mine its data to develop way of identifying
terminally ill patients
 A national hospice chains has a senior executive-VP
Managed Care Sales
TERMINALLY ILL PATIENTS ARE EXPENSIVE

42. MCO’S
 Offer to assist MCO in getting their members to sign
living wills and health care proxies
 Offer to educate health coaches on the benefits of
hospice
 Discuss concurrent care pilot with MCO to allow
members to “try” hospice before committing and still
receive curative care

43. HOSPICE IN MCO’S
 Medicare Advantage plans(MCO’s) lose money on
terminally ill patients because of expensive re-
hospitalizations
 An average ICU day costs $7,000-$15,000, depending
on the level of equipment and length of stay in the
unit
 MCO generally pays hospital on a per-day basis
 Assist MCO in transferring patient to GIP bed

44. MCO SALES APPROACH
 Utilize hospice medical director to broach topic with
MCO medical director
 Provide articles on success of concurrent care to make
case
 Determine if MCO has “:complex case management”
capability and understand their scope
 Determine financially viable concurrent care services
package
 Goal is breakeven proposition pre-hospice election

45. ORGANIZATIONAL IMPLICATIONS
 Need to re-vision hospice from calling to an economic
vehicle, which improves quality of life and lowers costs
 Required resources
 Rainmaker
 Research
 “Complex” Sales Process
 Operational flexibility-No Medicare mindset

46. CONCLUSIONS
 PPACA created the “economic” buyer for hospice
 This “buyer’ will play a growing role regardless of
which direction healthcare reform takes
 It requires a different sales process to sell this “buyer”
 This “buyer” has the power to create systemic change
to encourage the increased use of hospice

47. CONTACT INFORMATION
Rich Chesney
President, Healthcare Market Resources
rchesney@healthmr.com
215.657.7373
215.657.0395(f)
www.healthmr.com