Uploaded byVirginia Rural Health Association
Cindy
The document discusses the need for active strategic planning to address changing industry trends in healthcare delivery. It outlines political, economic, and regulatory factors impacting hospitals and emphasizes the importance of monitoring performance, making tough decisions around services, physician relationships, and costs. Recommendations include understanding community needs, assessing service line sustainability, and addressing losses.
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Cindy
- 1. Addressing Industry Trends through Active Strategic Planning Cindy Wise Vice President Business Development Virginia Rural Health Association Meeting
- 2. Why Active StrategicPlanning
- 4. Why Active StrategicPlanning
- 5. Why Active StrategicPlanning MORAL: To be sitting and doing nothing, you must be sitting very, very high up
- 6. Road Map What are the issues that are directing how health care is delivered in your community? What organizational disciplines are required for a hospital to successfully plan and execute its mission? What should we monitor? What tough decisions lie ahead?
- 7. The New Politicaland Economic Climate and the Implications for Hospitals
- 8. The New PoliticalClimate – Designing New Delivery and Payment Models Aggressive movement to EMR + EHR Stimulus Funding Available “Meaningful Use” Value-Based Purchasing: Episode based reimbursement (Bundling) ● One payment for the total health care “episode” ● Shared/allocated by all providers Pay For Performance initiatives “Never Events” (Hospital-acquired conditions) Chronic Care Management Medical Homes
- 9. The New PoliticalClimate – Moving targets and new regulations Impact of insurance requirements Know your community 340B Program – CAH’s may apply immediately Medicare inpatient hospital payment adjustment volume Extended for 1 year Criteria threshold up to 1600 Medicare discharges
- 10. The New PoliticalClimate – Moving targets and new regulations Extended Medicare flex grants for 1 more year Payment adjustment for home health – thru Jan, 2017 3% add on Medicaid expanded to 133% of federal poverty level What’s the impact in your community? Medicaid and Medicare phased in matching hospital payment - 2014
- 11. The New EconomicClimate – Uncertain Patient Volumes Percent of Hospitals Reporting a Moderate to Significant Decrease in Patients Served, 2009 Calendar Year to Date versus Same Period Last Year Moderate Decrease Significant Decrease Elective Procedures* 41% 18% Inpatient 38% 17% Admissions *Elective refers to procedures that are scheduled in advance as opposed to performed on an emergency basis. Source: AHA. March 2009. Rapid Response Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals.
- 12. The New EconomicClimate – Further Erosion of Net Patient Revenue No Margin, No Mission American Hospitals‟ Operating Margins Have Fallen in 2009 CY to Date vs. 2008 Moderate Decrease Significant Decrease Operating Margin 29% 28% Total Margin 26% 39% Source: The Economic Crisis, The Toll on the Patients and Communities Hospitals Serve, American Hospital Association, April 27, 2009
- 13. The New EconomicClimate – Constrained Capital Funds Pulse Survey: Respondents expect substantial capital spending cuts if credit constraints continue IT decision 77% system expenditures Hold on all new projects Medical 79% technology Substantial cutback expenditures in expenditures Some cutback in New 72% expenditures construction expenditures 0% 20% 40% 60% 80% 100%
- 14. The New EconomicClimate – Changed Expense Management Fundamentals Percent of Hospitals Making Changes in Response to Economic Concerns since September 2008 Made Changes to Address 90% Economic Challenges* Cut Administrative 80% Expenses Reduced Staff 48% Reduced Services 22% Considering Merger 9% Divested Assets 8% Other 39% *Percent of hospitals making at least one of above changes to weather the economic storm. Source: AHA. March 2009. Rapid Response Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals.
- 15. The New EconomicClimate – Dynamic Hospital-Physician Relationship Percent of Hospitals Reporting an Increase in the Degree to which Physicians are Seeking Financial Support from Hospitals Since Economic Conditions Began to Deteriorate in September 2008 Overall 65% Physicians Seeking Increased Pay for On-call or other Services 79% Percent of Provided to Hospital Above Citing Physicians Seeking Hospital Type of 71% Employment Support Sought Physicians Seeking to Sell Their Practice 37% Physicians Seeking to Partner on 22% Equipment Purchases Other 14% Source: AHA. March 2009. Rapid Response Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals.
- 16. Barriers to CollaborationToday Top Physician Concerns… Personal income Malpractice costs Work load “Hassle factor” of today’s medicine …Compared to major goals and concerns of hospitals: Quality – evidence based and standardized care Access – developing new markets/physician practices Costs –improve cost effective care and management of chronic care Margin – to support the mission and recapitalize the institution Access to capital 16
- 17. Best Practices in HospitalLeadership During Times of Uncertainty
- 18. Top Performing Hospitals… Understand the underlying economics of all initiatives Develop and adhere to implementation plans Establish clear lines of accountability Develop realistic budgets, manage to them and respond to under-performance Involve key physicians in planning, decision-making and capital prioritization Establish metrics and monitors to manage and evaluate performance Proactively assess and adjust to healthcare policy changes (RAC, Value-Based Purchasing, Never Events, Bundling)
- 19. Elements of HospitalStrategic Planning Include… “Organic” Growth • Service Area Definition and Providers • Growth and Demographics • Multicultural Populations Physician Opportunity Competitive Opportunity • Volume by Physician • MD Location and Coverage • Market Share Trends • Revenue by MD and Service Line • Competitor Share Analysis • MD Needs • SWOT • Splitter Detail Geographic Opportunity Payer Opportunity • Market Position by Zip Code • Market Position by Payor • Yield by Zip Code • Market Position by Patient Age • Marketing Focus and Clustering • Yield by Payor • Satellite Potential • Medicare Advantage Profile • Development Opportunities Service Line Opportunity • Service Line Growth Trends • Market Share Trends by Service Line • Margin Impact • Yield by Service Line and DRG
- 20. Know your hospital‟sstrengths and weaknesses… It is increasingly Primary Service Area – Inpatient Market Share impossible for General Medicine 32% community hospitals to provide “full Neurology 30% service” care Cardiac Services 29% Core Service lines General Surgery 25% should be profitable, Vascular Services 24% or at minimum, break-even Obstetrics 23% Low volume service Orthopedics 21% lines consume Oncology/Hematology 20% resources that can be used to further ENT 19% strengthen core Thoracic Surgery 16% services 0% 5% 10% 15% 20% 25% 30% 35% Look for strategic partnerships
- 21. Understanding the Needsof Your Community (“…the market never lies…”) US Hwy 119 Wyoming Things to Know WEST VIRGINIA Why patients come Pikeville Methodist Hospital Pike KENTUCKY VIRGINIA Welch Community Hospital to your hospital US Hwy 52 Why patients go to US Hwy 460 24620 other hospitals in McDowell your market 24850 24603 Why patients go US Hwy 23 24614 Buchanan 24634 outside your market Buchanan General Hospital 24657 for health care 24256 24631 24622 How your key Jenkins Community Hospital 24627 US Hwy 460 service lines 24656 Dickenson Community Hospital 24220 compare to your 24646 24639 Tazewell competitors Dickenson Clinch Valley Medical Center Physician referral US Hwy 23 24239 US Hwy 19 patterns Wise
- 22. Medicare Data 2008 2007 2006 Admits % Admits % Admits % Hospital 734 53.70% 755 54% 930 56.90% Competitor 1 147 10.70% 151 10.80% 179 10.90% Competitor 2 139 10.20% 128 9.10% 162 9.90% Competitor 3 131 9.60% 110 7.90% 125 7.60%
- 23. Strategic Initiative Prioritization Ease Of Implementation Sell Home Health to a Local Provider Reorganize The Revenue Establish a Cycle Hospitalist Program Close a Strategic Service Line Organizational Impact Top performing hospitals know the cost and the value of every strategic initiative Decisions are made only after fully understanding how the organization will be impacted (clinically, operationally, and financially)
- 24. Strategic Considerations for Hospital Leadership and Trustees
- 25. Assess the Sustainabilityof Services Offered Identify the services you should keep and grow, and the services you should reduce or close. BHS BSH Peer Peer BHS BSH Peer Peer APR Business Line APR Business Line Cases Rank Cases Rank Cases Rank Cases Rank 30 PSYCHIATRY 553 1 9,352 10 13 CARDIAC-SURG 6 22 4,127 21 02 CARDIOLOGY-MED 519 2 28,592 2 16 SURGICAL ONCOLOGY 6 23 1,358 27 11 PULMONARY-MED 401 3 21,847 4 26 OBSTETRICS-MED 5 24 21,901 3 01 GENERAL-MED 219 4 8,534 11 37 GYNECOLOGY-MED 5 25 513 31 05 GASTROENTEROLOGY-MED 205 5 16,522 7 14 GYNECOLOGY-SURG 4 26 5,975 15 09 NEUROLOGY 170 6 11,942 8 19 OTORHINOLARYN-SURG 3 27 1,030 29 07 INFECTIOUS DISEASES 162 7 6,875 13 21 THORACIC-SURG 3 28 990 30 04 ENDOCRINOLOGY-MED 152 8 5,463 18 29 DENTAL-MED 3 29 185 35 12 GENERAL-SURG 150 9 17,324 6 15 NEUROSURGERY 2 30 1,167 28 43 HIV-MED 113 10 340 32 33 OPTHALMOLOGY-MED 2 31 185 36 03 DERMATOLOGY-MED 108 11 5,334 19 46 MULTIPLE TRAUMA-SURG 1 32 331 33 35 ORTHOPEDICS-MED 98 12 5,465 17 27 BURNS-MED 1 33 45 39 36 UROLOGY-MED 86 13 6,121 14 24 NEONATOLOGY NA 31,092 1 08 NEPHROLOGY 73 14 3,284 22 38 OBSTETRICS-SURG NA 11,809 9 18 ORTHOPEDICS-SURG 65 15 21,651 5 31 REHABILITATION NA 5,913 16 06 HEMATOLOGY-MED 55 16 2,593 24 45 MULTIPLE TRAUMA-MED NA 237 34 28 CHEMICAL DEPENDENCY 38 17 2,891 23 39 HEMATOLOGY-SURG NA 118 37 22 UROLOGY-SURG 37 18 2,263 25 17 OPTHALMOLOGY-SURG NA 47 38 10 ONCOLOGY-MED 30 19 4,740 20 40 BURNS-SURG NA 21 40 23 VASCULAR-SURG 23 20 8,326 12 41 UNGROUPABLE NA 10 41 34 OTORHINOLARYN-MED 14 21 1,695 26 TOTAL, ALL SERVICE LINES 3,271 191,154
- 26. Continually Monitor ServiceLine Performance • Physician Integration • Resource • Market Share Utilization • Affiliations • Labor Efficiency • Bundled Payments • Supply Chain • Patient Access • Professional Fees • Post Acute • Purchased Efficiency Services Strategic • Outcomes • Patient Flow • Resource Utilization Technology • Post Acute • Facility Needs • Patient Access Clinical Rev Cycle • Coding / Documentation • Charge Capture • Electronic Health Record • Bundled Payments • Clinical Technology • Patient Access • Automation • Managed Care Rates • Meaningful Use
- 27. Address Service LineLosses Quickly and Concisely APR Business Line Total Total Variable Variable Fixed Fixed BHS Cost/Case Cost/Case Total Cost Cost/Case Cost/Case Variable Cost Cost/Case Cost/Case Fixed Cost Cases for Hospital for Peer Opportunity for Hospital for Peer Opportunity for Hospital for Peer Opportunity 12 GENERAL-SURG 150 27,421 13,582 2,075,886 13,089 6,969 917,928 14,333 6,613 1,157,958 02 CARDIOLOGY-MED 519 9,048 5,957 1,604,015 4,523 2,764 913,218 4,525 3,194 690,798 11 PULMONARY-MED 401 10,510 8,024 997,019 5,351 3,940 565,980 5,159 4,084 431,039 30 PSYCHIATRY 553 7,300 5,284 1,114,939 3,512 2,489 565,213 3,789 2,795 549,726 07 INFECTIOUS DISEASES 162 17,784 11,059 1,089,526 8,931 5,577 543,364 8,853 5,482 546,163 05 GASTROENTEROLOGY-MED 205 11,055 6,066 1,022,753 5,470 2,939 518,953 5,585 3,127 503,800 09 NEUROLOGY 170 10,219 6,978 551,032 5,073 3,248 310,368 5,146 3,730 240,664 21 THORACIC-SURG 3 198,213 19,899 534,942 97,917 10,210 263,121 100,296 9,689 271,821 01 GENERAL-MED 219 8,381 6,535 404,209 4,201 3,220 214,750 4,180 3,315 189,459 36 UROLOGY-MED 86 10,587 6,002 394,389 5,237 2,874 203,154 5,351 3,127 191,235 04 ENDOCRINOLOGY-MED 152 7,913 5,603 351,100 3,968 2,692 194,058 3,945 2,911 157,042 43 HIV-MED 113 15,856 13,815 230,667 8,085 6,543 174,329 7,771 7,273 56,337 22 UROLOGY-SURG 37 19,467 9,199 379,898 9,110 4,538 169,162 10,357 4,661 210,736 18 ORTHOPEDICS-SURG 65 24,313 16,047 537,260 10,943 8,357 168,063 13,370 7,690 369,197 35 ORTHOPEDICS-MED 98 9,115 6,684 238,200 4,432 3,169 123,781 4,683 3,515 114,419 03 DERMATOLOGY-MED 108 7,580 6,095 160,440 3,748 3,024 78,157 3,833 3,071 82,283 08 NEPHROLOGY 73 10,475 8,579 138,402 5,268 4,278 72,238 5,207 4,301 66,164 23 VASCULAR-SURG 23 23,740 14,325 216,558 11,091 7,998 71,153 12,649 6,327 145,405 28 CHEMICAL DEPENDENCY 38 8,298 5,102 121,438 4,181 2,526 62,894 4,117 2,576 58,544 10 ONCOLOGY-MED 30 14,644 10,485 124,784 7,253 5,280 59,172 7,392 5,204 65,612 16 SURGICAL ONCOLOGY 6 25,322 12,151 79,025 12,314 6,030 37,700 13,009 6,121 41,324 34 OTORHINOLARYN-MED 14 8,107 4,273 53,677 4,019 1,954 28,910 4,088 2,319 24,767 19 OTORHINOLARYN-SURG 3 59,563 50,171 28,175 30,078 25,577 13,502 29,486 24,595 14,673 14 GYNECOLOGY-SURG 4 13,263 6,016 28,988 5,937 2,972 11,861 7,326 3,044 17,127 06 HEMATOLOGY-MED 55 9,016 8,000 55,903 4,569 4,400 9,298 4,447 3,600 46,605 Total Cost Opportunity 12,539,590 6,274,685 6,264,904
- 28. Medicare Data: 21 admits x $3020 = $63,420 from ‟07-‟08 2008 2007 2006 Admits % Admits % Admits % Hospital 734 53.70% 755 54% 930 56.90% Competitor 1 147 10.70% 151 10.80% 179 10.90% Competitor 2 139 10.20% 128 9.10% 162 9.90% Competitor 3 131 9.60% 110 7.90% 125 7.60%
- 29. Medicare Data: 196 admits x $3020 = $591,920 from ‟06 – „08 2008 2007 2006 Admits % Admits % Admits % Hospital 734 53.70% 755 54% 930 56.90% Competitor 1 147 10.70% 151 10.80% 179 10.90% Competitor 2 139 10.20% 128 9.10% 162 9.90% Competitor 3 131 9.60% 110 7.90% 125 7.60%
- 30. In Summary…Go Forthand Become a Top Performing Hospital! Understand the underlying economics of all initiatives Develop and adhere to implementation plans Establish clear lines of accountability Develop realistic budgets, manage to them and respond to under-performance Involve key physicians in planning, decision-making and capital prioritization Establish metrics and monitors to manage and evaluate performance Proactively assess and adjust to healthcare policy changes (RAC, Value-Based Purchasing, Never Events, Bundling)
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- 34. Management Philosophy MORAL: Always let your boss have the first say
- 35. Contact Information Cindy Wise Vice President Business Development QHR 502-550-3212