Analyzing the US Healthcare Reform & How it is Affecting Healthcare


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Analyzing the US Healthcare Reform & How it is Affecting Healthcare

  1. 1. GREG STOCK, CEO THIBODAUX REGIONAL MEDICAL CENTER MAY 11, 2011 Analyzing the US Healthcare Reform & How it is Affecting Healthcare
  2. 3. Pushed Out by Rising Insurance Costs Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2008 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2008. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 2000-2008; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 2000-2008 (April to April). Growth In Healthcare Insurance Costs Are Now Making Affordability Difficult for Individuals and Small Businesses
  3. 4. Patient Protection and Affordable Care Act - March 23, 2010
  4. 5. National and State Healthcare Legislation <ul><li>National Legislation: </li></ul><ul><ul><li>Patient Protection and Affordable Care Act (PPAC) </li></ul></ul><ul><ul><li>Passed & signed into law in March, 2010 </li></ul></ul><ul><ul><li>Approximately 2,700 pages long </li></ul></ul><ul><ul><li>Most significant changes to American Healthcare since 1983 </li></ul></ul><ul><li>Cost: </li></ul><ul><ul><li>$940 billion over ten years. </li></ul></ul><ul><li>Deficit: </li></ul><ul><ul><li>Would reduce the deficit by $130 billion over the first ten years. Would reduce the deficit by $1.2 trillion dollars in the second ten years. </li></ul></ul><ul><li>Coverage: </li></ul><ul><ul><li>Would expand coverage to 32 million Americans who are currently uninsured </li></ul></ul>
  5. 6. Medicare & Medicaid Payment Cuts <ul><li>Paying for Reform </li></ul><ul><li>Nationally, hospital payments will be cut $155 billion over 10 year period beginning in 2010 to help pay for expanding coverage to 32 million. </li></ul>
  6. 7. Louisiana  Medicaid Inpatient Hospital Payments Compared to Medical Care Inflation 1997 2.6% MCD rate increase 2001 $25 million appropriated for 2.5% MCD rate increase 2006 $38 million appropriated for 3.8% MCD rate increase 2007 $33 million appropriated for 4.75% MCD rate increase 2009 3.5% mid-year reduction in Feb & 6.3% IP / 5.65% OP reduction in Aug (approximate $90 million total impact to hospitals including outlier reductions) 2010 5% mid-year reduction in Feb (approximately $50 million impact to hospitals) & 4.6% estimated reduction passed in recent state budget ( estimated impact of $46 million at present pending additional data) Medical Care CPI projected for 2009 and 2010 using average of the three previous years; Medicaid Enrollment Increases for 1995 and 1996 based on average of three subsequent years; Medicaid Enrollment Increases for 2009 and 2010 based on average of three previous years
  7. 8. State of Louisiana Burdens Under National Health Reform <ul><li>At 133% of Federal Poverty Level, nearly 42% of all Louisiana residents would qualify for Medicaid! </li></ul><ul><li>260,000 residents could be added to Medicaid rolls. </li></ul><ul><li>This alone could cost the state an additional $614 million in state dollars. </li></ul>
  8. 9. Nursing Home Quality Initiative CMS Updates Hospitals on HCAHPS New Multi-Million Dollar Initiative to Reward Doctors and Hospitals for Higher Quality Care
  9. 11. HCAHPS - % of time patient chose &quot;Always&quot;
  10. 12. Quality is Becoming THE Strategic Initiative <ul><ul><li>Focus on payment for quality & efforts to reduce costs </li></ul></ul><ul><ul><li>New payment & delivery models to improve quality & efficiency </li></ul></ul><ul><ul><ul><li>Value-Based Purchasing </li></ul></ul></ul><ul><ul><ul><li>Bundled Payments (includes pre-op, inpatient hospital, all physician services, & post-acute care services) </li></ul></ul></ul><ul><ul><ul><li>Comparative Effectiveness </li></ul></ul></ul><ul><ul><ul><li>Accountable Care Organizations </li></ul></ul></ul>
  11. 13. Affordable Care Act Value Based Purchasing Rule <ul><li>Dollars at Risk for Quality: </li></ul><ul><ul><li>6% of base DRG payments by 2017 </li></ul></ul><ul><ul><li>HAI’s 1%; Readmissions 1-3%; Value-Based Purchasing 1-2% </li></ul></ul><ul><li>Weighted scoring system: </li></ul><ul><ul><li>70% Clinical domain  17 process measures currently in place </li></ul></ul><ul><ul><li>30% patient experience domain  HCAHP’s </li></ul></ul><ul><li>Beginning FY13 Hospitals Scored on: </li></ul><ul><ul><li>Achievement </li></ul></ul><ul><ul><li>Improvement </li></ul></ul><ul><ul><li>Total Performance </li></ul></ul>
  12. 14. Example: Hospital Readmissions <ul><li>Preventable situations </li></ul><ul><li>$25 billion in wasteful spending annually </li></ul><ul><li>Driven by: </li></ul><ul><ul><li>Poor discharge planning </li></ul></ul><ul><ul><li>Inadequate follow up </li></ul></ul><ul><ul><li>Insufficient health information technology </li></ul></ul><ul><li>Current rate: </li></ul><ul><ul><li>1 in every 5 Medicare patients readmitted within 30 days </li></ul></ul><ul><li>Solution: </li></ul><ul><ul><li>Get it right the first time through best practices and consistency </li></ul></ul>
  13. 15. Opportunity vs. Danger
  14. 16. Recognizing Opportunity as a means to achieve Excellence <ul><ul><li>One Goal: Better overall healthcare outcomes at lower costs </li></ul></ul><ul><ul><li>Culture of Performance Improvement </li></ul></ul><ul><ul><li>Business Model Change </li></ul></ul><ul><ul><li>Strategic Initiatives for Excellent Clinical Outcomes </li></ul></ul><ul><ul><li>Physician Integration </li></ul></ul>
  15. 17. Culture of Performance Improvement <ul><li>Six Sigma/Lean /DIGs – </li></ul><ul><li>A Proven Systematic Structures Approach </li></ul><ul><li>Resources Allocated: </li></ul><ul><li>2 MBBs, 20 Green Belts, 113 Lean Leaders, 42 DIG Facilitators </li></ul><ul><li>Focus: </li></ul><ul><ul><li>Quality  Core Measures, HAIs </li></ul></ul><ul><ul><li>Patient Safety  Bedside Medication Verification </li></ul></ul><ul><ul><li>Cardiology Outcomes  Consultant Engagement </li></ul></ul><ul><ul><li>Service Lines  Imaging, OR, Cancer Care </li></ul></ul><ul><ul><li>Finance  Contract Compliance, Supply Cost Reduction </li></ul></ul>
  16. 18. Risk-adjusted Mortality Ratios Coronary Artery Bypass Surgery Valve Replacement Surgery Coronary Interventional Procedures Acute Myocardial Infarction Congestive Heart Failure
  17. 19. Business Model Change
  18. 20. Strategic Initiatives for Improving Clinical Outcomes <ul><li>“ War on Infections” </li></ul><ul><li>Targeting the elimination of Hospital Acquired Infections </li></ul><ul><li>60% reduction in CAUTIs </li></ul><ul><li>40% overall reduction in HAIs </li></ul>
  19. 21. Strategic Initiatives for Improving Clinical Outcomes <ul><li>“ Call to Action”  A plan to survive & thrive in an uncertain environment to remain a leading healthcare provider by Creating a Culture of Lean Thinking </li></ul><ul><ul><li>86 additional Lean Facilitators </li></ul></ul><ul><ul><li>21 Lean Projects in 6 months </li></ul></ul><ul><ul><li>Benefits: </li></ul></ul><ul><ul><ul><li>Human Development – “Growing Our Own” </li></ul></ul></ul><ul><ul><ul><li>Improved Clinical Quality </li></ul></ul></ul><ul><ul><ul><li>Resource Management </li></ul></ul></ul><ul><ul><ul><li>Maximized Efficiency </li></ul></ul></ul>
  20. 22. Physician Integration <ul><li>Uniting for an Excellent Total Healthcare Experience </li></ul><ul><li>How to achieve the goals of integration? </li></ul><ul><ul><li>Strategic Planning / Goal Setting </li></ul></ul><ul><ul><li>Market Analysis </li></ul></ul><ul><ul><li>MD Leaders </li></ul></ul><ul><ul><li>Data Sharing </li></ul></ul><ul><ul><li>Compensation </li></ul></ul><ul><ul><li>Cultural Blending </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Performance Improvement </li></ul></ul>
  21. 23. Achieving True Healthcare Reform
  22. 24. Health & Wellness Leader <ul><li>Health & Wellness of the Community </li></ul><ul><li>State-of-the-Art </li></ul><ul><li>Center </li></ul><ul><li>“ Synergy Created” </li></ul>
  23. 25. National Recognition Award Winning Care