Getting Fit for the Future: Community Hospitals in a Time of Transition
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Community hospitals face many challenges including declining patient volumes, rising expenses, and Medicaid expansion in some states but not others. To thrive, community hospitals should focus on four key strategies: 1) Get control over their financials by improving billing and collections; 2) Build patient loyalty through patient engagement portals and retention efforts; 3) Improve clinician loyalty and alignment by utilizing physician extenders appropriately; and 4) Prioritize high-return projects like wellness visits and reducing readmissions. Partnerships with companies providing integrated technology and services solutions can help smaller hospitals address these challenges and build a sustainable future.
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Getting Fit for the Future: Community Hospitals in a Time of Transition
- 1. This event is live as of XYZ Getting Fit for the Future: Community Hospitals in a Time of Transition Casey Johnson Senior Corporate Strategy Associate
- 2. 2 • Long history and deep experience with community health • Well-established relationships with patients and providers • Smaller size makes it easier to adapt to change and standardize processes • Experience in looking across the continuum of care • Experience running lean
- 3. 3
- 4. Community hospitals by the numbers 4 percent of the hospitals vulnerable to closure in 2016 are critical access hospitals 68% 99,000 healthcare jobs in rural communities would be lost if the 673 vulnerable hospitals were to shut down in 2016 http://www.beckershospitalreview.com/finance/673- rural-hospitals-vulnerable-to-closure-5-things-to- know.html of the hospitals vulnerable to closure in 2016 are located in states that have not expanded Medicaid 63%
- 5. Other types of hospitals facing closures 5 29 14 17 14 9 11 16 22 30 28 3 6 7 12 14 0 5 10 15 20 25 30 35 2010 2011 2012 2013 2014 NumberofHospitals Hospitals opened and closed, including rural, by year Newly opened hospitals Closed hospitals Closed rural hospitals Note: Counts of closed hospitals include the rural hospital closures.
- 6. Historically, small hospitals have faced many other pressures before 1983 DRG 1997 BBA 2010 ACA Balanced Budget Act: • Length of stay 96 hours • Optional payment method at 115% of fee schedule • Participation of rural areas of metropolitan counties Affordable Care Act: • Medicaid expansion Rural Emergency Acute Care Hospital Act: • To create a sustainable future for rural health care Diagnostic-related Group: • Classification system to identify "products" patients received • Rewards volume versus actual costs 2015 Senate Bill 1648
- 7. Medicaid Expansion 2014 7 19 states are not expanding Medicaid 26 states (including Washington, D.C.) are expanding Medicaid) 6 states are expanding Medicaid, but using an alternative to traditional expansion
- 8. Average patient trends show the benefits of Medicaid expansion 8 8.6% 8.8% 9.1% 9.2% 9.2% 9.4% 9.4% 9.0% 8.9% 9.0% 9.3% 9.0% 9.4% 9.3% 9.5% 9.6% 15.2% 15.7% 15.7% 15.1% 15.7% 16.2% 16.2% 15.2% 17.1% 19.4% 20.8% 20.1% 20.9% 21.5% 21.6% 21.2% 7.1% 7.1% 7.1% 6.5% 6.8% 6.9% 7.0% 6.3% 6.3% 5.4% 5.4% 5.1% 4.8% 4.7% 4.7% 4.7%4.3% 4.4% 4.4% 4.1% 4.3% 4.1% 4.2% 3.8% 3.0% 2.4% 2.3% 2.4% 2.1% 1.9% 2.0% 2.0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Proportion of PCP Visits From Medicaid and Uninsured Adults (18-64) for Medicaid Expansion States and Non-Expansion States, 2012-2015* Medicaid Visits in Non-Expansion States Medicaid Visits in Expansion States Uninsured Visits in Non-Expansion States Uninsured Visits in Expansion States Sample: Over 3.4 million visits to practices active on the athenahealth network before 2011. * States grouped by 2014 expansion status 2012 2013 2014 2015
- 9. Rural hospitals have seeing declining patient admissions 9 Sources: 2006 – 2013: http://www.northcarolinahealthnews.org/2015/07/24/commentary-why-rural-hospitals-are-closing/ 2014: http://www.medpac.gov/documents/reports/chapter-3-hospital-inpatient-and-outpatient-services-(march-2016-report).pdf?sfvrsn=0 67 67 67 66 65 65 64 63 64 48 48 48 47 45 45 43 42 37 64 64 64 63 62 62 61 60 60 0 10 20 30 40 50 60 70 80 2006 2007 2008 2009 2010 2011 2012 2013 2014 Occupancyrate(percent) Fiscal year Hospital occupancy rates, 2006-2013 Urban Rural All hospitals
- 10. 10 Source: http://www.tha.com/blog/Default.aspx?pid=17 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% Total Hospital Medicare Margins by Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 The hospital business model is under assault and it needs new operating platforms Predictive Trend
- 11. 11 Financial pressure such as expenses consistently exceeding revenues Consolidation processes Federal funding terminated due to patient safety concerns
- 12. How to Build a Thriving Community Hospital
- 13. Prioritize High Return Projects 4 Improve Clinician Loyalty & Alignment 3 4 Strategies for a Strong Community Hospital 13 Get Control Over Financials 1 Build Patient Loyalty 2
- 14. Get control over your financials
- 15. 15 6% DENIAL MANAGEMENT TEAM ENTER CLAIM NETWORK KNOWLEDGE WORK CHECK ELIGIBILITY ✔ 94% FIRST PASS RULES ENGINE REPORTING, TRACKERS, ALERTS, APPEALS PAYMENT POSTING US BANK ACCOUNT OUTREACH CAMPAIGNS $ AUTHORIZATION MANAGEMENT
- 17. Portal adoption a potential competitive differentiator 17 Portal adopters 13 percentage points more likely to return for second visit 18 Month Retention Rates Non-Portal Adopters 67% Portal Adopters 80% Portal Adopters More Loyal 1 “More than Forty Percent of U.S. Consumers Willing to Switch Physicians to Gain Online Access to Electronic Medical Records, According to Accenture Survey,” Accenture, September 16, 2013.
- 18. Retaining your patients pays off 18 $101 $143 $95 $119 $131 $99 $814 $903 $863 $704 $1,358 $2,026 $0 $500 $1,000 $1,500 $2,000 $2,500 A B C D E F 3YearRevenue* Retained Patients Drive Considerable Downstream Revenue Revenue Impact for Six Illustrative Practices Patient Not Retained Patient Retained Source: athenaResearch
- 19. 19 Improve clinician loyalty and alignment
- 20. Estimates of the proportion of primary care visits that might be attended by PAs or NPs range between 50%-75% Hospital-based physician Office-based physician Mid-level provider Support staff Patient 21 Bring the principle of comparative advantage to the health care supply chain
- 21. Estimates of the proportion of primary care visits that might be attended by PAs or NPs range between 50%-75% Hospital-based physician Office-based physician Mid-level provider Support staff Patient 22 Bring the principle of comparative advantage to the health care supply chain
- 22. 23 QUALITY MANAGEMENT ENGINE PROVIDER VISIBILITY SMART WORKFLOW NETWORK KNOWLEDGE WORK 195,000 ELECTRONIC INTERFACES DOCUMENT MANAGEMENT PATIENT ENGAGEMENT
- 24. Prioritize high-return projects 25 ✔ ✔ ✔ ✔ Medicare and annual wellness visit campaigns Hot spotting and intervention of the uncompensated care pool Management of re-admits Pursuing new grant opportunities
- 25. Don’t go it alone. 26
- 26. 27 OUR VISION: Build the health information backbone that makes health care work as it should.
- 27. Software ASP Cloud- based software Network- Enabled Service The Cloud Performance&visibility Connection to Outcomes HIGH HIGH
- 29. 30 Patient Engagement Care Coordination Revenue Cycle & Financial Management Electronic Health Records athenaOne CLOUD-BASED SERVICES Affordable alternative to legacy systems Focus and deliver on results Aligned incentives At-risk service commitments
- 30. A partnership focused on results 31 Get paid more, faster, with less work An EHR that won’t slow you down Deliver better clinical control, quality & care Keep current patients and capture new ones
- 31. 32
- 32. Thank You
Editor's Notes
- Welcome and introduction
- "Community Hospitals”, those with fewer than 50 beds, account for 35% of all US hospitals (2,157 Community Hospitals of total 6,252 Hospitals in 2015) and Critical Access Hospitals (CAHs) account for 50% of all community hospitals. Besides the numbers, these hospitals fulfill several important functions for the communities they serve and stand to have many key advantages in their respective markets. But even with many potential great advantages community hospitals have over larger health systems, these hospitals may not be taking advantage of them.
- In fact, many of these community hospitals, who are vital cornerstones in the communities they serve, are closing or struggling to stay open. The data speaks for itself. Image source: http://www.northcarolinahealthnews.org/wp-content/uploads/2015/06/Yadkin_sign-e1433471715443.jpg http://www.northcarolinahealthnews.org/2015/07/24/commentary-why-rural-hospitals-are-closing/
- More than 71 rural hospitals have closed since 2010 and another 673 rural hospitals across the nation are vulnerable to closure, which puts over 99.000 jobs at stake. From 2014 to 2015, the number of Community Hospitals declined by over 1% (-23 hospitals) while the overall US hospital population rose by 1.3% (+78 net total US hospitals). Community hospitals aren’t alone in experiencing pressure, there have been slightly more hospital closures than hospital openings over the past four years. source
- Among those that closed in 2014, 14 were in urban counties and 14 were in rural counties. All nine openings were urban. The hospitals that closed in 2014 were smaller than average and had low occupancy, poor profitability, and most were located in states that did not expand their Medicaid program in recent years. So while hospital closures are not limited to the community and rural hospital sphere, smaller hospitals have historically gotten the short end of the stick more consistently than any other health system.
- As you can see here, CMS and the government have been tinkering with the way hospitals are regulated and run since the early 1980s and this has not always been in the favor of community hospitals, despite any best intentions for cost and payment innovation. Beginning with a decision from Congress in 1983 that changed the way Medicare paid hospitals. Instead of paying whatever hospitals claimed in taking care of Medicare patients, the agency began paying what it judged was reasonable for a particular illness. Larger health systems found they could live with this but for very small hospitals, most of which were rural, this didn’t work well. Medicare patients were a huge percent of their business. There weren’t enough patients to cover financial losses on cases that were more expensive. And there weren’t enough privately insured patients to cover Medicare (and Medicaid) underpayment. To help with the problems the DRG legislature created for community hospitals, the BBA legislation of 1997 was created. It stipulated that if a hospital with up to 25 beds in a rural area would accept some limitations on how long a patient could stay (a practical way to require them to transfer complicated cases), Medicare would pay them what the hospital reported it cost to take care of Medicare patients. This act also enabled community hospitals to apply for Critical Access Hospital status. With the arrival of the Affordable Care Act there was a scheduled “phase-out” of these special status payment programs. The thinking was that as more people got either private insurance or were enrolled in Medicaid, those special payments would no longer be necessary. Congress failed to anticipate the Supreme Court’s judgment giving states the option to refuse to expand Medicaid to cover most poor people. Since the ACA, new legislature has been proposed in June of 2015. The Rural Emergency Acute Care Hospital Act would let rural hospitals with fewer than than 50 beds, including critical access hospitals, be re-designated as “rural emergency hospitals.” Such hospitals could maintain traditional hospital functions but they could stop providing acute inpatient care. Medicare would pay the hospital 110 percent of its costs of emergency room and ambulance services. The bill would let small rural hospitals save money by getting out of the inpatient-care business. They would be generously reimbursed for their emergency care, including “observing” patients. From all this you can see that it’s more than just money troubles squeezing at community hospitals, it’s a historical precedent of blanket regulation that doesn’t take into account the pressures that comes from testing out new legislature.
- Mounting pressures are felt especially in states without Medicare expansion, as there is a higher likelihood hospitals are feeling pressure or closing their doors entirely. Based solely on the state you’re in, this other added layer of uncertainty of Medicaid payments. Even back in 2014, these pressures were felt. All the states in green here are ones that did not expand Medicaid. The ruby colored ones are where they chose to expand Medicaid but used a non-traditional expansion. The rest in purple are the states that chose to expand Medicaid. Layered on top you can see the states where community hospitals closed in 2014. It is probably not a coincidence that most closures have occurred in states that have not expanded their Medicaid programs or done so in an alternative way.
- Through data collected on athenaNet we have seen an increase in Medicaid visits and a decrease in uninsured patient visits in states with Medicaid expansion. We have also seen an increase of a much smaller margin in Medicaid visits and a decrease in uninsured patient visits in states without Medicaid expansion. The rapid increase in the proportion of primary care visits made by Medicaid-covered patients in the states that chose to expand Medicaid coverage we have found is a direct result of the Affordable Care Act. Yet, even with more patients enrolled in Medicaid, community hospitals may still not receive the benefits of CMS payments because…
- …even with the governmental changes the number of patients being admitted is declining. The number of acutely ill patients admitted to the nation’s 1,340 critical access hospitals is less than half of what it was in 1997. This number falls further each year, regardless of shifting regulations. In fact, of the hospitals that closed in 2014, most had low occupancy rates and poor margins. The average occupancy rate of these 28 now closed hospitals was 25 percent, and their average total all-payer margin in the most recent year available was –5.6 percent. Harder to stay open if beds aren’t filled.
- To support that, you can see here that the total Medicaid margins have also declined steadily and have been predicted to continue this downward trend in the coming years. Hospitals, on average, are paid a little less than 95 cents for every dollar they spend taking care of a Medicaid patient.
- So, in sum, what are the main reasons why these rural, community, and CAHs have closed down in recent years? Through all our research we found the three main reasons were financial, through mergers, and federal funding cuts.
- With all that in mind, where do you go from here and how do you build a thriving community hospital?
- What you have to know first that it is possible to remain independent—and thrive—as a community hospital. By leveraging all that is already to the community, rural, and CAH’s advantage, your institution can position itself to be at the center of a care system that provides essential, sought-after services. To ensure the viability of your community hospital well into the future, we have identified four key steps for you to take.
- First, get control over your financials. You know that a good balance sheet and bottom line are critical—including a tight control over costs. But often you don’t have easy access to the right financial information at the right time, making it difficult to see where action is needed. To get better control over your health system’s financials, consolidate the hospital and outpatient revenue cycles on to one system. This will provide transparency across your facility into revenue and performance. With ongoing visibility into performance, you can make adjustments where needed and plan intelligently for the future.
- Here’s how our model of Software/Knowledge/Work ensures you are paid. 1 – we check eligibility so patients are cleared for care 2 – we provide automated outreach campaigns to bring patients into the office like “X, flu shots, etc” 3 – after care has been provided, you enter the claim 4 – claim is run through our patented rules engine (40M rule permutations) 5 – rules engine checks for errors and kicks it back to your staff if something needs to be fixed. 94.3% of claims are resolved on the first pass. 6 – for the 6% remaining, our denial management team works to identify the problem. If athena can fix it, we do, and we create a new rule so it never happens again. Or in some cases, we identify the problem and provide it to your staff to resolve. 7 – Our teams then take on the work of processing all of your checks and electronic payments, and post them to a US Bank Account we set up for you. 8 – through the visibility created by posting the payments for you, you can easily run reports. You have access to Payment Mismatch trackers, and athena will help you with appeals when needed. Start with outreach, then eligibility
- Next, focus on building up patient loyalty. Community hospitals already have strong brand recognition in their communities. Some patients have been getting care from the same facilities—and sometimes the same providers—across generations. But, particularly now, community hospitals should not take brand awareness for granted. Patients today have more options, and expect greater control over their care, than ever before.
- A central component to a service-focused culture is having a robust patient communication system. Your patient communication system should emphasize your connection to patients, reduce workload for your staff, and empower patients to engage in their care. Patient portals enhance patient-provider communication and enable patients to check test results, refill prescriptions, review their medical record, and view education materials. A good patient communication system should be able to: Connect patients with Medicare Wellness reminders and post-discharge care, Improve patient access with scheduling across the health system, and Provide a high-quality, easy-to-navigate patient portal. Slick portals
- Creating a “culture of engagement” means establishing a steering team and a service vision, employing easy-to-use technology, empowering patients to become collaborators in their care, and being ready to change and adapt. Our research clearly shows that retaining more of your patients more than pays off making it all the more important to enact engagement steps such as a patient portal all the more important.
- Your third step is to improve clinician loyalty and alignment. Having a clinically integrated, physician and nurse-led culture can help your hospital remain viable in the long term by adapting to new payment models, as well as improving efficiency, profitability, and patient satisfaction.
- Providing an infrastructure that enables high-quality care. Organizations need services that are continually evolving to capture and intelligently filter data from all delivery settings. Having systems that are easy for clinicians to use. Clinicians need tools that surface information at the right point in the workflow, and without requiring them to change their frame in order to review and take action. Furthermore, clinicians—especially in rural community hospitals—often work in the hospital’s associated clinic. Having a system with a consistent user experience helps drive adoption and speed physician workflows. Tracking orders so clinicians know what patient care is actually happening. Improving patient access with effective scheduling across the community health system.
- Comparative advantage Doctors, clinicians, and nurses shouldn't be doing paperwork - you do what you're best at and tell others what to do that they're best at
- Comparative advantage Doctors, clinicians, and nurses shouldn't be doing paperwork - you do what you're best at and tell others what to do that they're best at
- To start, we have the most usable EHR in the industry according to KLAS But what really makes our EHR different than any other is Smart Delegation. It’s all about taking work off of Doctors so they can focus on care. How do we do that? To start, we have a 5-stage workflow that enables more data entry to be done outside of the exam. In addition, athena teams are managing and tagging all of your in-bound results, whether they come electronically or via fax We also enable Patients to be empowers through our best in KLAS patient portal so more of their history is documented before they even come into the office. Then, because of the cloud-based network, we can provide you visibility to see how efficient the workflow is for you and other doctors in your practice. Finally, we make sure the EHR is setting you up for future reimbursement models. Our clinical intelligence team tracks over 100 quality programs, and over 1700 clinical rules in our rules engine, to make sure you avoid penalties and bank your incentive dollars.
- Finally, prioritizing high-return projects after getting a handle on financial data, strong patient loyalty, and clinician alignment allows the community hospital to explore growth opportunities. These high-return projects often include:
- This is an untapped universe that you can’t survive with just Medicare alone. There are additional opportunities you can pursue to be more strategic and if your in-house team cannot efficiently handle these kinds of tasks, you could benefit from working with an outside partner with a proven track record because… regional ACO
- …the road is long, complicated, and rocky. Don’t go it alone. Community hospitals need a strategic partner to provide insight and services that support their transition into a coordinated provider of community-focused care. Image source: https://www.flickr.com/photos/denisdefreyne/2496959629
- This is who we are…
- But the problem with the industry is that we’ve been set up to fail Software/ASP has been the only option The cloud makes a huge difference And the idea of a cloud based service takes our solution even further
- Aside from our scale and open platform what makes use unique is our business model. Unlike other vendors, we sell results, not software. We promise clinical and financial results to health care providers and align our incentives with theirs. We then combine the work of expert service teams with the power of an always-on, up-to-date information platform to deliver on that promise. By combining cloud-based software, network knowledge, and robust services we’re able to markedly improve clinical and financial results for our clients, year over year.
- We call our service, athenaOne It’s a cloud-based service that includes revenue cycle and financial management, EHR, patient communication, and care coordination services All of these services are on ONE platform Unlike other health care technology companies, our incentives are aligned with yours. Our service is priced at a percentage of collections; when you get paid, we get paid We also have at-risk service commitments, where we pay you if we fail to live up to service agreement We’re an alternative to pricey software systems And we’re laser-focused on delivering clinical and financial results to you
- A partnership with athenahealth is a partnership focused on helping you achieve the results right for you.
- You can withstand these pressures to reach your goals, stay open, and thrive as a community hospital.
- Closing remarks and thank you