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Partnering for Success —Part 1: Laying the Groundwork
3:30 – 5:00 pm
Geoff Kaufmann, FACHEAmerican Red Cross
Partnering for SuccessLaying the Groundwork
Geoff Kaufmann- FACHECEO, NCBS- American Red Cross
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Outline of This Presentation
1. Reform Affects in Rural Markets
2. The Building Blocks of a Successful Future Rural Healthcare System
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3. Health — Future Vision — Microsoft
4. Reality Check in California
5. Necessary Next Steps in Successful Collaboration
Healthcare in Rural Markets
Let’s start with a systems overview
What does “Reform” do for/to us?
What are the challenges for rural hospitals d id ?and providers?
Systems Overview
What the New Healthcare System Will Look Like
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Total National Health Expenditures (NHE), 2009–2020 Current Projection and Alternative Scenarios
NHE in trillions
Cumulative reduction in NHE through 2020: $3 trillion
Note: GDP = Gross Domestic Product. Data: Estimates by The Lewin Group for The Commonwealth Fund.Source: Commonwealth Fund Commission on a High Performance Health System, The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way (New York: The Commonwealth Fund, Feb. 2009).
Health Care Costs Concentrated in Sick Few — Sickest 10 Percent Account for 64 Percent of Expenses
Distribution of health expenditures for the U.S. population,by magnitude of expenditure, 2003 Expenditure
threshold (2003 dollars)1%
5%10%
24% $36,280
Source: The Commonwealth Fund. Data from S. H. Zuvekas and J. W. Cohen, “Prescription Drugs and the Changing Concentration of Health Care Expenditures,” Health Affairs, Jan./Feb. 2007 26(1):249–57.
49%
64%50%
97%
$12,046
$6,992
$715
Variation in Per Capita Medicare Spending by Hospital Referral Region, 2000
Source: The Commonwealth Fund, from Eliot Fisher, presentation at Academy Health Annual Research Meeting, June 2006.
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Total Health System Model
Consumer BehaviorTools – Dx & Rx
Facilities
Medical Technology
Health Care Workers
Information Technology
Past Experience –Personal, networks
Information Market/Clinical
Financial resources & goals
Professional - Patient
Illness BurdenKnowledge
Financing Sources & Structure
Primary EducationIndividuals
Employers
GovernmentContinuing Education
Genetics of the Individual
Environment:- Air, food, water
-Economic
- Cultural
Research
Lowest Cost Site
Hospital ICU
Inpatient Hospital
R ti O t ti t C
$$$$
Intensive Ambulatory Care (Surgery)
Routine Outpatient Care
Home Care
Long Term Care
Supportive Communities
Prevention and Wellness
$
Reform’s Impact on Stakeholders
Providers ? Government ?
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Insurance Companies
Gain 30 million new customers
Cease most underwriting practices
Participate in state-based insurance exchanges
No change with large employers
Agree to standardization
Benefits
Payment systems
Overhead less than 20%, 15%
Become more retail-and consumer-oriented
Government
Federal
Enforce Insurance mandate
Implement new Medicare payment policies
Implement Insurance Exchange (State’s or Fed’s)
Continue to fund HIT, Comparative Effectiveness Research
Implement Medicare pilots (value purchasing, etc.)
Raise taxes
Implement fraud prevention
States
Expand Medicaid eligibility
Operate Exchanges
Direct Providers of Care
Reduced uncompensated care
Bundled payments – value purchasing
Incentives to form largerggroups and structures
Increased transparency and reporting
Reduction in growth of hospital payments
Incentives to purchase HIT
Higher payment for primary care
Changes in payment due to geographic variation (?)
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Consumers
Negatives
Short-term insurance rate increases
Insurance mandate
Higher taxes for some
A i i Access issues to primary care
Positives
Improved access to health insurance
Lowering of health care inflation
Elimination in Medicare donut hole
Improved information about system and provider performance
Eliminates job lock for entrepreneurs
Timing
Currently in place High-risk pool with federal subsidies Tax credits to small employers No lifetime limits on insurance Dependent coverage to age 26
2011 20132011 – 2013 System changes phased in
2014 Individual mandate and employer fine for no insurance Insurance exchanges become active with subsidies Medicaid expanded to 133% of FPL and becomes non categorical
2015 – 2020 Cadillac taxes on high cost health plans Donut hole closed
Current Issues
Individual and employer mandate to have health insurance (State Attorney Generals)
State’s ability to control healthState s ability to control health insurance rate increases
Temporary high risk pools
No pre-existing conditions for children
Payment to firms for early retirement coverage
Continuing health care inflation
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Changes Possible
Insurance mandate methods
Open enrollment
Part D penalties
Standard benefits Standard benefits
State Medicaid funding increases
Comparative effectiveness research
Independent payment advisory board
Malpractice reform
State waivers (e.g., public option in Vermont)
Unlikely to change
Health insurance exchanges
Quality
Workforce improvements
Primary care Primary care
Fraud prevention
Prevention and wellness
Chronic disease management
ACOs, bundled payments, medical home
Total repeal: due to provider/health plan resistance
“Americans always do
what is right, but only
after trying everything
else.”Winston Churchill
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Opportunities for Collaboration in Reform
Insurance — new enrollees in exchanges and Medicaid
Revenue and cost sharing, bundled payments
Government — access to exchanges, HIT and other grants
Providers — form larger groups for contracting risk, g g p gincluding MD groups, other hospitals and post-acute providers
Community — promote better health through partnerships with schools, associations and health clubs
We will address these opportunities later as well
The Top Rural Healthcare Reform Issues
Self-employed and small business economy
Larger dependence on governmental insurance
Financially-stressed care systems
Provider shortages
Aging and less mobile population
The Top Rural Healthcare Reform Issues
A sicker and more at-risk citizenry
Little preventive or wellness resources
Lack of mental health services
Slower adoption of technology
Fragmented emergency medical services
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The Pluses of Reform for Rurals
Coverage expansion through state insurance exchanges
Expansion of Medicaid
Increases in rural clinic funding
Telehealth and EMR support
Training grants for providers
Higher payments for primary care
Challenges for Rural Hospitals and Providers
First and foremost Rural Hospitals are anchors for the health-related services in their communities
Structural and financial backbone for MDs, clinics, post-acute and LTC servicespost-acute and LTC services
They are also critical components of the region’s economic and social fabric
Large employer, highly skilled jobs
Adds to the attractiveness of a community to settle, locate a business or retire
In other words … no one wants you to fail!
Challenges for Rural Hospitals and Providers
They shoulder more problems than their urban counterparts
Burdened with uninsured, lower incomes, older and less healthy populations, more chronic disease, outmigration of youth, longer travel to care, patients delay seeking care, few economies of scale
Provide more ambulatory care, home care and LTC- these services all have lower margins than inpatient care
More vulnerable to national and state policy changes as 60% or more of revenues come from governmental payers — there are no places to shift costs to other payers
Likely to see increased demand as Medicaid enrollees increase under reform — poor payer and staff shortages to care for this new volume
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Rural Hospital Assistance
Sole Community Hospital (N=395)
Medicare-Dependent Hospital (N=195)
Rural Referral Center (N=125)
C i i l A i l ( 1 32 ) Critical Access Hospital (N=1,325)
All programs focused on gaining more reimbursement
Insufficient Access to Capital
Most CAHs are over 40 years old
Limited ability to adopt HIT to address quality, safety and efficiency
A significant percentage are partnering with A significant percentage are partnering with other similar providers (Networks like CCAHN, or other similar networks) or with urban hospitals to get capital for improvements
Limited Supply of Providers
Primary care also provided by mid-levels
Specialty shortages across the board
More scholarships and loan repayment for primary care in HPSAsprimary care in HPSAs
Money for community-based ambulatory patient centers — need to operate a primary care residency program
How can rural markets access these residency programs? Not easily!
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ACOs in Rural Markets?
Insufficient numbers of patients to qualify
Insufficient staff capacity, data analytics, balance sheet, and access to capital to manage b dl d tbundled payments
Lots of random variation make differences in quality and cost hard to manage
Think ACO-like!
What You Should All Be Asking Your Elected Officials
What avenues exist for rural care innovation and care delivery?
How will rural healthcare systems compete for needed providers?
What support will be available to care for the newly enrolled Medicaid patients under the ACA
How can payment systems be created to meet rural market needs?
How can rural ACOs be created that are economically viable?
The Building Blocks of a Successful Rural Health System
The vast majority of the necessary requirements for success in a rural market are network-related and include the elements of quality HIT infrastructure and
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elements of quality, HIT infrastructure, and broad community support
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The Building Blocks of a Successful Rural Healthcare System
Community and provider collaboration Participation in rural provider networks Access to technology, both clinical and HIT Strong quality focus Strong quality focus Access to capital A strong voice in legislative bodies Broad based education for providers and
the public
Primary care providers and extenders
Partnerships with post-acute providers
Engaged payers who will reward quality
S pporti e comm nit str ct res in social
The Building Blocks of a Successful Rural Healthcare System
Supportive community structures in social and mental health
Broad based education for providers and the public
Linkages for care through HIT
Health — Future Vision
Microsoft Video
From the Industry Innovations Group
This is a view of a cyber health world where all
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This is a view of a cyber-health world where all medical knowledge and transactions are handled electronically and many of them in the cloud.
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Healthcare — Future Vision
Video Presentation — Discussion
What about this presentation struck you?
What components are realistic for rural America? Why or why not?
What structural systems need to be in place for any of this to be achievable in rural markets?
Where are the current and future gaps?
Change Exercises
If you have a watch, attach it to your opposite wrist
If you have tie-shoes, cross your hands and tie the laces
Reality Check in California
Networks like CCAHN have already accomplished so much
Many of the current initiatives are helping to improve quality, lower costs and enhance revenue
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p q y,
You are focusing on “ACO-type” reforms without the millstone of the moniker Workforce, changes in reimbursement, population
health, IT requirements
Other rural hospitals should highly consider the opportunities and benefits of joining a network
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Rural Hospital Survey Results
A survey of many of the participant hospitals here today was performed about a month ago inquiring about reform, competition, and sharing of best practices
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While not scientifically valid, the results are indicative of the diversity of opinions regarding the readiness for reform’s effects
Many rural hospitals feel somewhat at the mercy of payers and government as shapers of their futures
Survey Results
Equal numbers of respondents believe that they will be exempted from reform, must follow the rules and regulations, or are positioning themselves for success under reform
Most hospitals (62%) wish to collaborate with other local rural hospitals in their market
The remainder compete and some feel advantaged by belonging to a network
Over 80% of respondents either do not have what they consider best practices or would not be willing to share them
Many are seeking best practice knowledge
Several hospitals are willing to share in non-competitive situations
You Have Choices
Join a regional, integrated system Avera and Sanford in SD and ND
Mayo system in MN, IA and WI
Become a high tech ambulatory care centerBecome a high tech ambulatory care center
Focus on a continuum of services for the chronically ill and aged
Become a rural consortium of care services under a network or similar vehicle
From Ian Morrison, January 3, 2012 Health and Hospital Network article
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The Geographic Challenges of CA
Long and thin, mountains, valleys and other natural barriers
Demographic and industrial differences
Urban and rural disparities Urban and rural disparities
“Have and have not” areas and health care systems
Multiple languages
Others
Rural Hospital Challenges
What might be some of the pre-conditions to meaningful collaboration?
How can those pre-conditions best be created and enforced?and enforced?
If this were one year from today, how far would you have advanced the ball? Is your vision expansive enough?
What can CCAHN do to facilitate the necessary collaboration for survival and success?
Necessary Next Steps in Collaboration
The next set of slides addresses the logical steps in the evolution of California rural hospitals as they consider the development
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of rural regional care systems
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Necessary Next Steps in Successful Collaboration
Willingness to collaborate and share best practices and programs among between “competitors” including methods for saving costs and preserving quality
Payer partnerships that recognize a need for provider revenue y p p g pand reasonable margins
Community linkages that can serve as health sites and wellness partners (e.g., immunizations in schools, asthma mgt. in schools, quick clinics in major stores/locus of businesses)
Consideration of consolidation of services to generate volumes necessary to be profitable: cross- hospital service lines
Provide assistance for Medicaid enrollment to area agencies
Seek local, regional and national grants for system support and change (F-CHIP in Montana , HRSA grant to develop new delivery models)
Necessary Next Steps in Successful Collaboration
grant to develop new delivery models)
Understand and begin movement to “healthcare home” model which combines providers into teams to serve populations (study Kaiser)
Enlist the support of local legislators for bills that support new rural delivery models, provider recruitment and retention, reimbursement relief and rural “ACO” accommodation
Clinical Collaboration —The Next Frontier
This is where you will recognize your utmost potential Sharing “best practices” – start by creating a list of what
you think you all do well
Think about strategically locating “Centers of Think about strategically locating Centers of Excellence” and shared operations — taking into account geography
Develop shared protocols and order sets
Develop pre- and post-acute linkages with shared incentives for care management
Share clinical experts across the membership
Examine additional “Make vs. Buy” partnerships
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What are the Collaboration Options?
Models in Industry Elite Circle — One member selects the participants,
picks the issue and chooses the solution
Innovation Mall — One member posts a need and any b l imember can propose a solution
Innovation Community — Any member can post a need, propose solutions and decide what to do
Consortium — Members jointly select needs, decide how to conduct the process and jointly choose solutions
Characteristics of the Consortium
The knowledge domain from which to choose solutions is mostly known
The problems/issues are large and interconnected
Having a large array of experts is important and Having a large array of experts is important and they exist within the group
There is shared power
All participate to the extent they are benefitted
All are free to act on the results
Bringing It Home
There are too many conferences where you are asked to do something when you get home, then reality sets in and you do nothing — sound familiar?
Think about it … your future in rural healthcare depends on the future success of the organization that employs you
The stakes for you and your organizations are high
So here’s the deal: turn to your neighbor and tell them one thing that you are going to do to better position your organization for survival, then bring this idea to tomorrow’s session
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Here is the Hard Part
Copy me on that [email protected]
And copy [email protected]@calhospital.org
We promise to hold you accountable for this assignment and to pester you if you don’t complete it
And you thought you were going to get away without any follow-up work!
Become Comfortable with Being Uncomfortable
Keep one foot in separate canoes
Incremental approach is practical
Develop a transformative agenda for change
Organize for the long-term, but focus on the core business in the short-term
Focus on quality, outcomes and customer-centered practices
Be open to new partnerships, but improve due diligence
Measure your progress and results
Embrace the “need for speed”
Cycle times for decision-making will be shorter
Experiment and innovate with care practices
Realize that customers do not understand our metrics
Focus on results and cost reduction strategies
Examine the inclusion of other providers in the “system”
Become Comfortable with Being Uncomfortable
Examine the inclusion of other providers in the system
Communicate like crazy, both internally and externally
Do your own thing, don’t necessarily copy others
Focus on what is right for your community, not just the hospital or providers
Total National Health Expenditures (NHE), 2009–2020 Current Projection and Alternative Scenarios
NHE in trillions
Cumulative reduction in NHE through 2020: $3 trillion
Note: GDP = Gross Domestic Product. Data: Estimates by The Lewin Group for The Commonwealth Fund.Source: Commonwealth Fund Commission on a High Performance Health System, The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way (New York: The Commonwealth Fund, Feb. 2009).
Health Care Costs Concentrated in Sick Few — Sickest 10 Percent Account for 64 Percent of Expenses
Distribution of health expenditures for the U.S. population,by magnitude of expenditure, 2003 Expenditureby magnitude of expenditure, 2003 Expenditure
threshold (2003 dollars)1%
5%10%
49%
24% $36,280
$64%
50% $12,046
$6,992
97%$715
Source: The Commonwealth Fund. Data from S. H. Zuvekas and J. W. Cohen, “Prescription Drugs and the Changing Concentration of Health Care Expenditures,” Health Affairs, Jan./Feb. 2007 26(1):249–57.
Variation in Per Capita Medicare Spending by Hospital Referral Region, 2000y p g ,
Source: The Commonwealth Fund, from Eliot Fisher, presentation at Academy Health Annual Research Meeting, June 2006.
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