DISCUSSION DRAFT
12-10-13

2013 ECG Webinars
State of the Musculoskeletal Service Line:
What’s New in 2013

December 10, 2...
DISCUSSION DRAFT
12-10-13

Our Speakers

Mr. Todd W. Godfrey
Senior Manager

Ms. Krista L. Fakoory
Manager

tgodfrey@ecgmc...
DISCUSSION DRAFT
12-10-13

Agenda
I.
II.
III.
IV.

Industry Trends
New Methods of Payment
Hospital/Physician Alignment
Clo...
DISCUSSION DRAFT
12-10-13

I. Industry Trends
Strong Volume Growth Expected

MSK services are projected to experience sign...
DISCUSSION DRAFT
12-10-13

I. Industry Trends
Volumes Expected to Shift From Inpatient to Outpatient

Growth in outpatient...
I. Industry Trends
Hospital and Physician Reimbursement on the Decline

DISCUSSION DRAFT
12-10-13

Continued downward pres...
DISCUSSION DRAFT
12-10-13

I. Industry Trends
Physician Compensation
As compensation levels off, physicians will
increasin...
I. Industry Trends
Private Practice Independence

DISCUSSION DRAFT
12-10-13

Employment rates of orthopedic surgeons, whil...
I. Industry Trends
National Trends in Orthopedic Services

DISCUSSION DRAFT
12-10-13

Health systems need to understand th...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Emphasis on Value
Ushered in by PPACA, new reimbursement structures ...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Value-Based Purchasing

Central to value-based purchasing (VBP) is a...
II. New Methods of Payment
Value-Based Purchasing (continued)

DISCUSSION DRAFT
12-10-13

In particular, MSK programs will...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Bundled Payments

While bundled payment arrangements are not yet wid...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Bundled Payments – Demand Matching1

Organizations are adopting the ...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Bundled Payments

Bundled payments are an opportunity for physicians...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Narrow Networks

Commercial payors and employers are exploring narro...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Other Risk-Based Contracts

Payors are also looking to providers to ...
DISCUSSION DRAFT
12-10-13

II. New Methods of Payment
Other Risk-Based Contracts (continued)

To succeed under these risk-...
III. Hospital/Physician Alignment
Driving Forces for Physician Alignment

DISCUSSION DRAFT
12-10-13

In addition to the ne...
DISCUSSION DRAFT
12-10-13

III. Hospital/Physician Alignment
Range of Alignment Models

A variety of alignment options exi...
III. Hospital/Physician Alignment
ASC JV – Opportunities and Challenges

DISCUSSION DRAFT
12-10-13

Although the lower-cos...
DISCUSSION DRAFT
12-10-13

III. Hospital/Physician Alignment
Comanagement Agreement
Comanagement agreements provide organi...
DISCUSSION DRAFT
12-10-13

III. Hospital/Physician Alignment
Comanagement Agreement – Incentive Compensation

Incentive co...
DISCUSSION DRAFT
12-10-13

III. Hospital/Physician Alignment
Employment Model

Overview of Common Physician Employment Str...
DISCUSSION DRAFT
12-10-13

IV. Closing Remarks
Key Takeaways

1. Not unlike many other service lines, contradictory market...
DISCUSSION DRAFT
12-10-13

ECG Webinars

To submit a question for Mr. Godfrey
or Ms. Fakoory, type it into the
Question an...
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State of the Musculoskeletal Service Line: What's New in 2013 and Beyond?

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Long a bastion of growth and profitability, the orthopedic service line has historically served as a reliable source of surgical volumes and attractive per case economics for hospitals and health systems.

However, the rate of profitable volume growth is progressively challenged by several recent trends, including soaring implant costs, wavering reimbursement, and intensifying competition, which includes the migration of care to ambulatory centers.

In addition, in the wake of the Patient Protection and Affordable Care Act (PPACA) of 2010, hospitals will increasingly be held accountable for delivering high-quality, low-cost orthopedic care. In this rapidly changing environment, the orthopedic service line will require careful management to ensure its continued success.

This presentation explores the most important business and structural challenges to musculoskeletal healthcare delivery, covering topics such as the impact of healthcare reform; physician alignment tactics; and strategies for organization, staffing, and structure.

Speaker Biographies:
Ms. Krista L. Fakoory, Manager
Ms. Fakoory has been providing healthcare management consulting services since 2006. Her background includes strategic and service line business planning, hospital/physician alignment, provider compensation planning, and merger and acquisition assistance. She has particular expertise in developing comprehensive orthopedic programs, strategic planning for physician-owned ambulatory surgery centers, and designing alignment models between health systems and independent orthopedic surgeons.

Mr. Todd W. Godfrey, Senior Manager
With nearly 15 years of healthcare experience, Mr. Godfrey has a focused background in musculoskeletal services. He regularly advises clients on performance-based incentives between surgeon and health systems as organizations position their musculoskeletal service line to assume risk and manage populations.

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State of the Musculoskeletal Service Line: What's New in 2013 and Beyond?

  1. 1. DISCUSSION DRAFT 12-10-13 2013 ECG Webinars State of the Musculoskeletal Service Line: What’s New in 2013 December 10, 2013 Mr. Todd W. Godfrey, Senior Manager Ms. Krista L. Fakoory, Manager
  2. 2. DISCUSSION DRAFT 12-10-13 Our Speakers Mr. Todd W. Godfrey Senior Manager Ms. Krista L. Fakoory Manager tgodfrey@ecgmc.com kfakoory@ecgmc.com 703-522-8450 858-436-3220 78590225426(pptx)-E2 1
  3. 3. DISCUSSION DRAFT 12-10-13 Agenda I. II. III. IV. Industry Trends New Methods of Payment Hospital/Physician Alignment Closing Remarks 78590225426(pptx)-E2 2
  4. 4. DISCUSSION DRAFT 12-10-13 I. Industry Trends Strong Volume Growth Expected MSK services are projected to experience significant growth over the next 10 years. 10-Year Outpatient Growth Rates 10-Year Inpatient Growth Rates Orthopedics/Spine Cancer Neuroscience 12% Cancer 30% Cardiovascular 6% Obstetrics 31% General Medicine/Surgery 17% 29% Neuroscience 2% Pediatrics -3% Orthopedics/Spine General Medicine/Surgery -6% Pediatrics -17% Obstetrics 28% Cardiovascular -20% -10% 0% 10% 20% 24% 14% 12% 0% 5% 10% 15% 20% 25% 30% 35% Source: Sg2, Health Care Intelligence, Orthopedic Forecast 2012. Key Drivers • Aging Population – The over-45 population segment is expected to grow by 58% between 2000 and 2030. • Obesity Epidemic – Obese adults have twice the rate of hip and knee arthritis as adults with a healthy body weight (32% versus 16%). • Insurance Coverage Expansion – Implementation of the PPACA will result in coverage for 33.8 million more Americans, which is expected to drive demand for MSK services. 78590225426(pptx)-E2 3
  5. 5. DISCUSSION DRAFT 12-10-13 I. Industry Trends Volumes Expected to Shift From Inpatient to Outpatient Growth in outpatient orthopedic surgery is expected to outpace inpatient surgical growth due to shifting reimbursement and technological advancements. Key Drivers • Reimbursement Changes − – ASC reimbursement policy changes, such as the growth in Medicare allowed charges per beneficiary, have increased flexibility for the type and complexity of orthopedic services provided in ASCs. – Medicare and commercial payors are driving new orthopedic volume from hospitals to ASCs by exploring reimbursement for total joint replacements (TJRs) for knees and some total hip replacements in the ASC setting. • Technological Advances − Advancements in minimally invasive techniques and the improvement of short-acting general anesthetics have reduced operative and recovery time, driving procedures from the inpatient to ambulatory setting. • Low-Cost Alternative − ASCs are increasingly seen by payors as a vehicle to drive down costs due to their lower overhead and operating expenses. Ensuring that patients are cared for in the most efficient manner means that more care will be shifted to less-intensive and -expensive outpatient care sites. 78590225426(pptx)-E2 4
  6. 6. I. Industry Trends Hospital and Physician Reimbursement on the Decline DISCUSSION DRAFT 12-10-13 Continued downward pressure on reimbursement is driving health systems to focus on lowering costs and exploring value-based payment opportunities. Average Medicare Payment Rates – Change From Prior Year 10% Professional Fees – Top 25 CPT Codes 4.9% Facility Fees – All Orthopedic MS-DRGs 10% 1.8% 2011 0% 3.3% 2012 5.5% 0.4% 0% -5.4% -10% -10% -12.5% -12.0% -20% -20% 2011 2012 2013 Cumulative Change 2013 Cumulative Change • Since 2010, the average Medicare payment across the 25 most common orthopedic CPT codes has declined by more than 12%. • Facility payments have increased slightly over the same period; however, the rate of increase has slowed substantially in recent years. • In addition to the broader payment trends, provider organizations are now subject to an additional 2% reduction in Medicare reimbursement as a result of the sequestration cuts that went into effect April 1, 2013. 78590225426(pptx)-E2 5
  7. 7. DISCUSSION DRAFT 12-10-13 I. Industry Trends Physician Compensation As compensation levels off, physicians will increasingly be looking for new sources of revenue. Compensation and Productivity Trends – 2008 to 2013 General Orthopedics Specialty 2008 2009 $440,049 $449,929 Work RVUs (WRVUs) 7,210 7,127 8,381 Collections Per WRVU $45.88 $46.71 Total RVUs 14,494 14,367 Total Compensation 2010 2011 2012 2013 Percentage Increase $503,317 $504,955 14.7% 8,212 8,078 7,126 -1.2% $47.92 $46.17 $41.51 $38.70 -15.6% 16,888 16,203 17,643 16,307 12.5% $453,562 $496,862 NOTE: Figures may not be exact due to rounding. Source: ECG Management Consultants, Inc., National Provider Compensation, Production, and Benefits Surveys, 2008 to 2013 reports, each based on previous-year data. • Corresponding clinical productivity trends suggest that physicians are working less than in years past. • However, with per unit reimbursement on the decline, many physicians are looking to the technical revenue generated from in-office ancillary services to bolster incomes. • Furthermore, increasing numbers of MSK providers have entered into hospital employment arrangements in which compensation is often determined in a manner that does not reflect the reimbursement environment. 78590225426(pptx)-E2 6
  8. 8. I. Industry Trends Private Practice Independence DISCUSSION DRAFT 12-10-13 Employment rates of orthopedic surgeons, while increasing over the past few years, continue to lag behind other specialties, such as cardiology and oncology. Source: Orthopedics: Service Line Strategic Outlook, The Advisory Board Company, 2011. Regardless of independence, it is evident that orthopedic practices are affected by healthcare reform and will need to develop partnerships and tighter alignment with hospitals and primary care networks. 78590225426(pptx)-E2 7
  9. 9. I. Industry Trends National Trends in Orthopedic Services DISCUSSION DRAFT 12-10-13 Health systems need to understand the factors affecting volume and design a program that positions the organization to benefit from growth opportunities. Driver Impact on Hospital Volume Description of Impact on Hospital Volume Drivers Affecting All Inpatient Volume Penetration of ACOs The establishment of ACOs and other payor/provider risk-sharing models will heighten the emphasis on primary care and drive down the use of high-cost procedures, particularly those with limited or unproven clinical benefit. Coverage Expansion The expansion of coverage will create new populations seeking care. Drivers Specific to Orthopedics Demographic Shift Demand for orthopedics will grow based on increased activity levels for younger generations, the overweight population, and a growing population age 65 or older. Use of Technology Advances in technology, along with new applications of existing technology, will continue to drive volume upwards. Decrease in Utilization The Centers for Medicare & Medicaid Services (CMS) and private insurers will focus on high-utilization procedures (e.g., spinal fusion) and direct care to nonsurgical interventions. Growth in Outpatient Surgeries Although the volume of procedures may rise, cost pressures and advances in technology will result in an increasing amount of procedures moving from the inpatient to the outpatient setting. Nonhospital Competition As outpatient volume increases and ASC reimbursement rises, ASCs will continue to compete with hospital outpatient departments for volume. 78590225426(pptx)-E2 8
  10. 10. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Emphasis on Value Ushered in by PPACA, new reimbursement structures are shifting risk from payors to providers and moving to a more value-based system. Enhanced Pay for Performance (VBP) Bundled Payments Narrow Networks Other Risk-Based Contracts (ACOs) Rationale Adherence to best practices can improve outcomes and reduce long-term utilization. Better care coordination across providers and multiple care settings can reduce expenses associated with specific episodes of care. To keep rates down, payors and employers are pressing providers for discounts and offering narrow networks that would drive volume to the provider. Better care coordination across providers can reduce unnecessary utilization, lower the cost of care, and improve outcomes. Payment Mechanism Financial bonuses, penalties, or withholds are assessed based on outcome and/or process performance. Payors disburse a single payment to cover hospital, physician, or other services performed during an inpatient stay or episode of care. The provider accepts reduced payment in exchange for designation as a network member for the population. Total expenses for a population are compared to risk-adjusted benchmarks, and a portion of any savings above the benchmark threshold is returned to providers. 78590225426(pptx)-E2 9
  11. 11. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Value-Based Purchasing Central to value-based purchasing (VBP) is an emphasis on objectively measuring and financially rewarding care coordination, efficiency, and quality of care. Initiative Implementation Year Overview Medicare Hospital VBP Program 2013 Participating hospitals will be able to earn a higher DRG payment by meeting or exceeding performance standards related to patient experience and clinical processes of care. Medicare Physician Value-Based Payment Modifier 2015 PPACA mandates that Medicare incorporate in the PFS by 2015 a budget-neutral payment modifier that provides for differential payment based upon the quality of care furnished compared to cost. Key Characteristics of VBP • Focus on quality, with cost as a balancing mechanism. • Data and performance transparency. • Focus on satisfaction among those delivering care to the patient. While most health systems have already taken significant steps toward meeting VBP standards for hospitals, meeting the standards for the next phase will require significant collaboration between physicians and health systems. 78590225426(pptx)-E2 10
  12. 12. II. New Methods of Payment Value-Based Purchasing (continued) DISCUSSION DRAFT 12-10-13 In particular, MSK programs will need to demonstrate lower costs and higher quality to remain competitive in the market. Specific metrics to focus on include the following: • Implant Cost – Focus on product standardization to minimize the number of implant vendors. Success will be challenged by the implementation of the medical device tax. • Average Length of Stay – Ensure that the inpatient hospital course is effectively managed to ensure appropriate length of stay (e.g., provide physical therapy [PT] on same day of surgery for TJR). • Avoidable Admissions – Reduce utilization to ensure that surgical treatment is medically indicated (e.g., spinal fusions). • 30-Day Readmissions – Reduce 30-day readmission rates, which are relatively low within orthopedics. – Comorbidities (e.g., obesity, COPD) have a significant impact on patient outcomes. – Preoperative guidelines and education, medical management, and postoperative follow-up are important components in reducing readmissions. 78590225426(pptx)-E2 11
  13. 13. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Bundled Payments While bundled payment arrangements are not yet widespread, many orthopedic programs see this option as a beneficial payment mechanism that aligns with steps they are taking to better manage costs and coordinate care. Prospective Acute Care Only Bundle Anchor MS-DRG Facility Payments Surgeons and Anesthesiologists Anchor MS-DRG Professional Payments Readmission MS-DRG Facility Payments Bundled Payment for Anchor MS-DRG Other Consulting Physicians/Midlevels Acute Care Hospital Readmission MS-DRG Professional Payments (Discount Percentage) Bundled payments have been tested extensively for orthopedic surgery and have been shown to lower costs by decreasing reoperations, complications, and readmissions, as well as shortening lengths of stays. 78590225426(pptx)-E2 12
  14. 14. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Bundled Payments – Demand Matching1 Organizations are adopting the concept of demand matching for the selection of total joint implants and applying a similar logic to determine the most appropriate setting of care to maximize the effectiveness of the bundled payment. Bundled Payment Acute Care (Operative Facilities) Preop ASC Specialty Hospital Community Hospital Postoperative Care (Rehabilitation) University Hospital PT Acuity Level Low Rehab Facility Rehab Requirements High Low Cost Structure Low Home Health High Cost Structure High Low High Source: Courtesy of the Rothman Institute. 1 Demand matching – Selecting the appropriate implant (facility) based on five demand categories: age, weight, expected activity, general health, and bone stock (Lahey Clinic,1995). 78590225426(pptx)-E2 13
  15. 15. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Bundled Payments Bundled payments are an opportunity for physicians and hospitals to collaborate to improve the value of care and create a sustainable payment mechanism. Proven Benefits • • • ACE hospitals saw immediate improvement in adherence to quality measures. Bundled payments provide an opportunity to embed evidence-based best practices. Baptist Health saved $6.15 million before distribution during the first 18 months. Gain Sharing • • Physicians may have upside potential through their participation in care redesign and gain sharing. Gain sharing allows for economic alignment between hospitals and physicians. Volume • • Insurers/employers are looking for low-cost, high-quality providers for elective procedures. Due to the growth of healthcare consumerism, patients are seeking predictable out-of-pocket costs with a quality warranty. Wave of the Future • There is the possibility that bundled payments will become a Medicare mandate. • Experience can be gained implementing and tracking quality-improvement efforts. • Participation leads to greater hospital/physician collaboration ahead of an official mandate. 78590225426(pptx)-E2 14
  16. 16. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Narrow Networks Commercial payors and employers are exploring narrow networks in which patients are directed to Centers of Excellence (COEs) or defined physician networks through payor contracts or employee benefit design. CalPERS/Blue Shield Blue Distinction Center Model • Established for knee and hip replacement surgeries; requires orthopedic surgeons to submit an application to be included in the collaborative effort. – Applicants must demonstrate quality improvement outcomes in order to be accepted as a “distinction center” for total joint surgeries. – Members will be directed to qualified centers. Two Large Fortune 500 Firms Launched a Strategy on January 1, 2012 • Redesigned each self-funded plan’s employee benefits to encourage use of narrow network providers. • Benefits are reduced for out-of-network provider utilization for elective services (e.g., co-pays double). • Participating hospital system negotiated volume guarantees defined by total market spend in exchange for discounted rates. – Higher volume of patients offsets the discounted rates, yielding improvements in margin. – Unmet volume, or market spend, triggers an 8% rate increase or 12% at the start of the next annual period. Aligning financial and qualitative goals creates cost-effective initiatives to incentivize both payors and providers. 78590225426(pptx)-E2 15
  17. 17. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Other Risk-Based Contracts Payors are also looking to providers to be accountable for the quality, cost, and the overall care of beneficiaries, and are piloting contracting structures (e.g., ACOs) to align payment with the assumption of new risk. Disease Management Premium Dollars Clinical Informatics Infrastructure and Maintenance 78590225426(pptx)-E2 Funds Flow and Distribution Risk Sharing Network Development Clinical and Geographic Scope Clinical Standards/ Protocols Clinical Transformation Quality and Performance Standards Organization/ Governance Clinical Innovation Premium Pricing Benefit and Product Design Payor Contract Restructuring Utilization Management Performance Reporting 16 A comprehensive care delivery network, coupled with population health management capabilities, enables organizations to align reimbursement mechanisms with population health management strategies.
  18. 18. DISCUSSION DRAFT 12-10-13 II. New Methods of Payment Other Risk-Based Contracts (continued) To succeed under these risk-based contracts, the delivery model must evolve from isolated episodes of care delivered by independent physicians to a more collaborative approach with greater accountability. Outcomes Post-Acute Treatment Operative Treatment Nonoperative Care • Pain management. • Osteoporosis management. Preventive Care • Wellness/ integrative medicine. • • • • Physiatry. Rheumatology. • • • • • • • • • Home health protocols. • Skilled nursing protocols. Joint replacement. • Rehabilitation protocols. Spine. Satisfaction Trauma/fracture. Sports medicine. Foot and ankle. Podiatry. Cost Hand and upper extremity. Pediatric orthopedics. Neurology. PT. • Weight loss. Orthopedic programs will require close alignment to preferred, post-acute providers to ensure their patients are treated in accordance with the clinical pathways and protocols. 78590225426(pptx)-E2 17
  19. 19. III. Hospital/Physician Alignment Driving Forces for Physician Alignment DISCUSSION DRAFT 12-10-13 In addition to the new payment models, several economic and environmental factors are driving an increase in partnerships between orthopedic surgeons and hospitals. • March of Time – Younger physicians are invariably more likely to pursue health system employment; therefore, the number of employed orthopedic surgeons will increase. • Practice Economics – Many physicians anticipate that professional revenue will continue to flatten and that costs will continue to rise. • Lack of Capital – Capital needs (such as for EHRs) will increase; hospitals and large systems can more easily access necessary capital. • Call Coverage – Orthopedic call coverage is expensive from a hospital’s standpoint. From a hospital administrator’s perspective, it is often cheaper to employ. • Joint Replacement – For physicians who specialize in joint replacement and therefore spend most of their time in hospitals, some level of alignment is likely. • Uncertainty of Reform – Looming payment reform, such as bundled payments for specific conditions or episodes of care, as well as new clinical models, will likely result in lower reimbursements. • Importance of Demonstrating Quality – The need to demonstrate clinical quality across the continuum of care requires a tighter affiliation between hospitals and physicians. 78590225426(pptx)-E2 18
  20. 20. DISCUSSION DRAFT 12-10-13 III. Hospital/Physician Alignment Range of Alignment Models A variety of alignment options exist that allow for varying degrees of financial and operational integration between physicians and the hospital. Medical Directorship Loosely Integrated Leadership Council ASC Joint Venture (JV) Comanagement Arrangement PSA and MSA Degree of Physician/ Hospital Integration We will focus on the ASC JV, comanagement arrangement, and employment models today. 78590225426(pptx)-E2 19 Employment Tightly Integrated
  21. 21. III. Hospital/Physician Alignment ASC JV – Opportunities and Challenges DISCUSSION DRAFT 12-10-13 Although the lower-cost structure of ASCs is attractive in many ways, ASCs face some degree of uncertainty. ASC Opportunities ASC Challenges • High efficiency and low-cost • Downward pressure on structure, which consistently make ASCs an attractive venue for ambulatory surgery and position ASCs well for healthcare reform. • Volume growth attributable to the increasing complexity of cases that are being performed in outpatient settings. • Changing payor policies that are aligning reimbursement with this shift. 78590225426(pptx)-E2 • • • • 20 reimbursement overall. Market saturation. Disappearance of out-of-network billing. More stringent documentation requirements leading to increased denials and longer A/R cycles. Migration of surgeons to hospital employment, limiting number of physician investors and future growth of independent centers.
  22. 22. DISCUSSION DRAFT 12-10-13 III. Hospital/Physician Alignment Comanagement Agreement Comanagement agreements provide organizations with a structure to pay physicians for the management of the MSK service line. Physicians/ Physician Group Investors Initial minimal start-up capital. Service line management and oversight. Management Company Equity distributions. Fixed/variable payments. • Reimbursed for service line administrator duties. • Includes medical director fee. • Agrees to migrate to Epic. Hospital • 50% to 60% fixed. • 40% to 50% variable. Governing Board Management services. Quality Committee Operations Committee Finance Committee These arrangements work very well when the primary goal is not financial. 78590225426(pptx)-E2 21
  23. 23. DISCUSSION DRAFT 12-10-13 III. Hospital/Physician Alignment Comanagement Agreement – Incentive Compensation Incentive compensation is determined based on jointly identified goals that tie financial rewards to the achievement of various performance levels. Model Comanagement Incentive Metrics Performance Target Sources • 30-day readmission rate. • CMS. • SCIP index. Quality Percentage of Total Incentives • Industry best practice 20% standards. • OP-7 antibiotic selection. • Safe-surgery checklist compliance. Operational Excellence • On-time surgery starts. • Industry best practice • Surgery staffing – variance from target. 35% standards. • OR – block utilization. Satisfaction • Internal hospital targets. • Associate satisfaction survey. Custom and patient satisfaction surveys. 20% Jointly developed targets. 25% • Nursing patient satisfaction survey. • Physician patient satisfaction index. Access • Call to first appointment for new patients. • Referring physician satisfaction survey. • ED “transfers out” meet hospital-to-hospital transfer guidelines. • Patient referrals – 1 business day. 78590225426(pptx)-E2 22
  24. 24. DISCUSSION DRAFT 12-10-13 III. Hospital/Physician Alignment Employment Model Overview of Common Physician Employment Structures and Benefits Physicians (and staff) are employed directly by the hospital/health system. Direct Employment The medical group is incorporated as a wholly owned, nonprofit subsidiary of the hospital, and physicians (and staff) are employed by the new subsidiary company. Wholly Owned Nonprofit Subsidiary The physicians (and staff) can be employed by a for-profit company that is owned by the hospital/health system. For-Profit Subsidiary 78590225426(pptx)-E2 23 • • • • Integration. Economies of scale. Limited duplication of resources. Contracting leverage. • Greater physician autonomy. • Distinct wage and benefit scale. • Ancillary ownership and distribution (assuming • group practice exemptions are met). Medicare cost report advantages. Offsets earnings from other business lines to minimize tax implications.
  25. 25. DISCUSSION DRAFT 12-10-13 IV. Closing Remarks Key Takeaways 1. Not unlike many other service lines, contradictory market trends within MSK services have forced provider organizations to dually focus on volume and value. 2. Organizations are expanding the MSK service line to include complementary programs to ensure care is comprehensive and coordinated across the continuum. 3. Alternative payment models, such as bundled payments, are slowly emerging in MSK services, creating new partnership opportunities for health systems and physicians. 4. Leveraging these physician partnerships to reduce costs and manage patients across the continuum of care will be imperative to maintaining the viability of the MSK service line. 5. A pluralistic approach to physician alignment will likely be necessary because many MSK providers continue to remain independent and seek nonemployment alternatives. 6. Medical tourism is increasingly popular and could pose a potential threat to service line growth for high-cost organizations. 78590225426(pptx)-E2 24
  26. 26. DISCUSSION DRAFT 12-10-13 ECG Webinars To submit a question for Mr. Godfrey or Ms. Fakoory, type it into the Question and Answer pane at the right of your screen at any time. 78590225426(pptx)-E2 25

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