View from the Top – View from the Top – Healthcare and Medical Healthcare and Medical

Professional Liability Professional Liability IssuesIssues

Singin’ The PL BluesSingin’ The PL Blues

MODERATOR:

• James Fasone, RPLU, ARM, Senior Vice President, Alliant Healthcare

PANELISTS:

• James D. Hinton, CPA, Vice President, HCA, Inc.

• William J. McDonough, MBA, RPLU, President & CEO, MMIC Group

• Jeff A. Nelson, MHA, Partner, Tatum LLC

• Andrew Shapiro, JD, Senior Vice President, Healthpro, CNA

AgendaAgenda

• What Healthcare Reform may mean to Professional Liability Carriers

• How the economy impacts the provision of healthcare services

• How the quality of care issues impact providers

• Is healthcare reform REALLY on the horizon?

• Q&A

What Healthcare Reform What Healthcare Reform May Mean to PL CarriersMay Mean to PL Carriers

• The Latest from Washington

• Our Customers Expectations are Low

• Our Main Concerns: Capacity Stress and Reimbursement Pressure

• Potential Warning Signs

Employed Physician Issues Employed Physician Issues in the Hospitalin the Hospital

• Pay for Performance — One Hospital’s Response

• Hospital Physician Strategies

P4P InitiativesP4P Initiatives

• CMS, Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Inpatient Quality indicators

• CMS, Consumer Assessment of Healthcare Providers and Systems Hospitals survey (HCAHPS)

• CMS, Hospital Outpatient Quality Data Reporting Program (HOP QDRP)

• Managed Care Initiatives

RHQDAPU BackgroundRHQDAPU Background

• CMS initiated the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) effective with patients discharged 7-1-03

• The program applies to hospital inpatients

• Failure to meet the program requirements and to submit data results in the hospital’s loss of the Inpatient Annual Payment Update (APU) Current APU is 2% of Medicare reimbursement for

inpatient care This represents approximately $85 Million for HCA

RHQDAPU Current MeasuresRHQDAPU Current MeasuresFY 2009 Measures (30)

Abstraction Based

• AMI: 8 Measures

• HF: 4 Measures

• PN: 6 Measures

• SCIP: 8 Measures

Claims Based

• Mortality: 3 Measures

• Readmission: 1 Measures

FY 2010 Measures (44)

Abstraction Based

• AMI: 8 Measures

• HF: 4 Measures

• PN: 6 Measures

• SCIP: 8 Measures

Claims Based

• Mortality: 3 Measures

• Readmission: 3 Measures

Agency for Healthcare Research & Quality (AHRQ)

• Patient Safety & Quality: 9 Measures

Nursing Sensitive

• Nursing Sensitive: 1 Measure

Patient Experience

• HCAHPS

Structural

• Participation in a CV Database

AMI = Acute Myocardial InfarctionHF = Heart FailurePN = PneumoniaSCIP = Surgical Care Improvement Program

RHQDAPU Current MeasuresRHQDAPU Current MeasuresProposed FY 2011 Measures (46)

Abstraction Based

• AMI: 7 Measures

• HF: 4 Measures

• PN: 6 Measures

• SCIP: 10 Measures

Claims Based

• Mortality: 3 Measures

• Readmission: 3 Measures

Agency for Healthcare Research & Quality (AHRQ)

• Patient Safety & Quality: 8 Measures

Nursing Sensitive

• Nursing Sensitive: 1 Measure

Patient Experience

• HCAHPS

Structural

• Participation in a CV Database

• Participation in a Stroke Database

• Participation in a Nursing Sensitive Care Database

AMI = Acute Myocardial InfarctionHF = Heart FailurePN = PneumoniaSCIP = Surgical Care Improvement Program

CMS HQA Market PerformanceCMS HQA Market Performance

• Hospitals are scored on their performance as compared to the CMS National Benchmarks: Red < CMS 75th Percentile Yellow > CMS 75th Percentile but < CMS 90th

Percentile Green > CMS 90th Percentile

• Hospital are scored on their performance against competing hospitals in their markets

CMS/HQA Executive Summary ReportComposite Score By Measure Set

Internal Data External Data

Current Quarter Most Recent 12 Months (Source: CMS Hospital Compare)

1Q2009 2Q2008 - 1Q2009 1Q2008 - 4Q2008

Facility AMI HF PN SCIP AMI HF PN SCIP AMI HF PN SCIP

Hospital A 100.00% 96.53% 97.18% 97.18% 97.50% 94.76% 96.11% 96.60% 96.76% 95.09% 96.69% 95.61%

Hospital B 100.00% 96.88% 97.30% 98.40% 97.92% 94.49% 97.42% 97.64% 97.06% 93.66% 97.43% 96.74%

Hospital C 100.00% 96.53% 97.18% 97.18% 97.50% 94.76% 96.11% 96.60% 96.76% 95.09% 96.69% 95.61%

Hospital D 100.00% 96.88% 97.30% 98.40% 97.92% 94.49% 97.42% 97.64% 97.06% 93.66% 97.43% 96.74%

Market A 100.00% 96.65% 97.23% 97.44% 97.60% 94.69% 96.57% 96.90% 96.82% 94.77% 96.94% 95.97%

Division A 99.56% 97.64% 98.00% 97.59% 98.70% 95.81% 96.93% 96.30% 98.61% 95.12% 96.97% 95.51%

Group A 99.32% 97.88% 98.12% 97.04% 99.16% 97.11% 97.29% 96.16% 99.01% 96.38% 97.23% 95.27%

Company 99.10% 96.83% 97.68% 97.37% 98.66% 96.16% 96.70% 96.02% 98.25% 95.25% 96.61% 94.81%

Market Competitor Hospital A 96.18% 91.79% 96.01% 92.64%

Market Competitor Hospital B 97.67% 92.46% 93.28% 94.03%

Market Competitor Hospital C 98.18% 87.96% 81.96% 96.38%

Market Competitor Hospital D 95.05% 81.63% 74.54% 93.49%

Market Competitor Hospital E 95.94% 75.00% 79.02% 80.92%

MARKET Excluding Company Hospitals Hospitals 98.06% 87.21% 93.28% 94.16%

* Composite scores are comprised of the measures being publicly reported by CMS on the Hospital Compare web site during the time period specified in the "External Data" section of this report. For a detailed list of the measures please see the Measure Set Key section on the last page of this report. P lease note CMS does make frequent changes to the measures reported.

** Composite Score = (Sum of the numerators of each measure in the measure set) / (Sum of the denominators of each measure in the measure set)

HCAHPSHCAHPS

• Pronounced “H-caps”• First national, standardized, publicly reported survey

of patients perspectives of hospital care CMS first reported results in March 2008

• Goals of survey Produce data that allow objective and meaningful

comparisons of hospitals on topics important to consumers

Public reporting creates incentives to improve quality Public reporting enhance accountability and transparency

HCAHPSHCAHPS

• Eight Composites Communication with Nurses (Q1 to Q3) Communication with Doctors (Q5 to Q7) Responsiveness of hospital staff (Q4 & Q11) Pain management (Q13 & Q14) Communication about medicines (Q16 & Q17) Cleanliness of hospital environment (Q8) Quietness of hospital environment (Q9) Discharge information (Q19 & Q20)

• Overall rating of hospital (Q21)

• Recommend this hospital (Q22)

• 27 Question Survey:

• 1-22: “core questions”

• Rolls up to eight composite areas and two overall ratings

• 23-27: demographic

• Seize opportunity to mitigate risk and achieve better outcomes for patients

• Claim victory in eliminating adverse events that lead to patient harm

• Financial success in healthcare is directly related to quality of clinical care

• Operational, financial and improvement agendas are aligned

Quality is the Best Business Case

Our Time is NOW!

Employed Physician StrategiesEmployed Physician Strategies

• Use of hospitalists

Response to hospital call issues

Integration with patient safety programs

• More specialists

Only 50% are primary care in 2009

• New contracts have performance/efficiency requirements

HCA Employed PhysiciansHCA Employed Physicians

One of the few things physicians One of the few things physicians can count on is changecan count on is change

OverviewOverview

• Consolidation will continue to occur

• 90% of MN Physicians are in groups of 3 or more

• Competition is rapidly changing – Out of 33,000 physicians in our territory 12,000 are in SIRs

Changes in Physician PracticesChanges in Physician Practices

• Shift toward cash services

• Medical Home and other like models geared toward disease management

• Higher numbers of sicker patients

• The push toward ElectronicHealth Records

Electronic Health RecordsElectronic Health Records

• Less than 20% of physicians currently use EHRs

• Medicare and Medicaid will provide incentives to assist physicians who demonstrate meaningful use of EHRs through HITECH Act

• Beginning in 2015 Medicare penalties will apply to physicians who do not use EHRs

Benefits of Electronic Health RecordsBenefits of Electronic Health Records

• Enhanced Patient Care – e-prescribing, results follow-up, automated chart review

• Improved Efficiency – reduced dictation, virtual access to medical records, index-based reports

• Increased Profitability – More timely documentation, reduce coding errors, reduce or eliminate dictation, reduce number of refused charges

Risks of EHRsRisks of EHRs

• Defining the Legal Health Records

• Maintaining Integrity of the Record

• Locking Records

• Using Templates

New Technology on the HorizonNew Technology on the Horizon

• Pulse oximeter

• Improved fetal monitoring

• Improved placental pathology

• Treatment for pancreatic cancer

Art of Becoming Insanely GreatArt of Becoming Insanely Great(Transforming Health Systems and (Transforming Health Systems and

Their Quality of Care Measures)Their Quality of Care Measures)

Remarkable healthcare people…Remarkable healthcare people…

With leadership, resources With leadership, resources and patient centered heartsand patient centered hearts

50% of acute hospitals are distressed

60% the MDs and partners are in trouble60% the MDs and partners are in trouble

Universal challengesUniversal challenges

“Houston, we have a problem.”

Public spotlight on Public spotlight on quality, risks and quality, risks and costs is growingcosts is growing

System leadership System leadership is the answer.is the answer.

The Need: Make Competitors IrrelevantThe Need: Make Competitors Irrelevant

Use of Improvement MethodologiesUse of Improvement MethodologiesJust what the doctor orderedJust what the doctor ordered

Generate Compelling ResultsGenerate Compelling Results

QuestionsQuestions&&

AnswersAnswers

Many thanks to …Many thanks to …

• James Fasone

• James Hinton

• William McDonough

• Jeff Nelson

• Andrew Shapiro