Transcript Adjusting to the Market: The Business Behind Hospitalist Medicine

Show Me the Money! Adjusting to the Market:
The Business Behind Hospitalist Medicine
Francisco Alvarez, MD, FAAP
Priti Bhansali, MD, FAAP
Suzanne Swanson-Mendez, MD, FAAP
Stephanie Todd, MD, FAAP
1
Disclosure
We have no relevant financial relationships with
the manufacturer(s) of any commercial product(s)
and/or provider(s) of commercial services
discussed in this presentation.
2
Learning Objectives
1.
Review the terms and definitions related to hospital based care and the
various determinants of hospital care payments
2.
Recognize the differences between fee for service versus outcome
based payment models
3.
Demonstrate a hospitalist programs return on investment (ROI) within
an outcome based payment system
4.
Discuss the correlation between implementation of outcomes based
payments and various hospital metrics
3
Terms and Definitions
Terms
Accountable Care Organizations
Definitions
Relative value assigned to a diagnosis-related
group of patients in a medical care environment
Diagnosis Related Group
Pays a set amount for each enrolled person
whether or not that person seeks care
Case Mix Index
Rewards quality of care through payment
incentives and transparency
Fee for Service
Reduces spending below level that payer
expected, the provider is rewarded with a portion
of the savings
Capitation
Reimbursement "on the basis of expected
costs for clinically-defined episodes of care”
Value Based Purchasing
Groups of doctors, hospitals, and health care
providers coming together for coordinated care
Bundled Payments
Services are paid for as itemized in the
hospital’s invoice
Shared Savings
A patient classification system adopted on
the basis of diagnosis consisting of distinct
groupings
Target percentage of payments in ‘FFS linked to quality’ and
‘alternative payment models’ by 2016 and 2018
Alternative payment models
FFS linked to quality
All Medicare FFS
2011
2014
2016
2018
30%
50%
85%
90%
0%
~20%
~70%
>80%
Historical Performance
Source: Centers for Medicare and Medicaid Services
Goals
Source: https://www.healthcatalyst.com/hospital-transitioning-fee-for-service-value-based-reimbursements
How Much Are You Paid and Why?
Case Mix Index
• Based on INPATIENTS ONLY
• How sick are your patients?
• Affects Medicaid and Medicare reimbursement rates
Payer Mix
• Hospital “stock portfolio”
• Diversify
• Market and attract the highest “stocks”
Inpatient vs. Observation/Outpatient
• Payment Differences
• Patient Cost Differences
– Observation/Outpatient Status: home/maintenance medications and post-acute care not
covered (Medicare)
• Observation Status Disincentives and Incentives
– Disincentives
» Lower payment with same care cost/resources
– Incentives
» Does not count towards 30-day readmission rates
How Are You Paid ?
(Current and Future)
Payment Models
①
Fee for Service
②
Capitation
③
Pay for Performance
④
Bundled Payments/Episode of Care
⑤
Shared Savings (ACO’s)
Fee for Service
A payment model where services are paid for as itemized in the hospital’s
invoice.
Capitation
A payment arrangement for health care service providers such as physicians or
nurse practitioners. It pays a physician or group of physicians a set amount for
each enrolled person assigned to them, per period of time, whether or not that
person seeks care.
Pay for Performance
Also known as "P4P“ is a payment model that rewards physicians, hospitals,
medical groups, and other healthcare providers for meeting certain performance
measures for quality and efficiency. It penalizes caregivers for poor outcomes,
medical errors, or increased costs.
Bundled Payments/Episode of Care
The reimbursement of health care providers (such as hospitals and physicians)
"on the basis of expected costs for clinically-defined episodes of care”
Shared Savings
Program where a healthcare system or provider reduces total healthcare
spending for its patients below the level that the payer (e.g., Medicare or a
private health insurance plan) would have otherwise expected, the provider is
rewarded with a portion of the savings.
Payment Models-Group Discussion
Diagnosis: Asthma
GOAL: Maximize Revenue!
[3 Patients Each]
•
Fee for Service
– Paid: $20 per intervention or encounter
– Cost: $10 per intervention
•
Capitation
– Paid: $300 for all patients
– Cost: $10 per intervention
– 3 Asthma Patients: 1 Severe, 1 Moderate, 1 Mild
•
Pay for Performance/Value Based Purchasing
– Paid: $80 per patient
– Get $20 extra if achieve all 3 metrics
– Metrics: 30 Day Readmission Rate < 3%, > 90% Asthma Action Plan, Patient Satisfaction > 80%ile
– Cost: $10 per intervention
Payment Models-Group Discussion
Diagnosis: Asthma
GOAL: Maximize Revenue!
[3 Patients Each]
•
Bundled Payments/Episode of Care
– Paid: $100 per patient
– Cost: $10 per intervention
•
Shared Savings (ACO’s)
– Paid: $50 per patient (reimbursement per area)
– Estimated total cost per patient: $100
– 3 Areas in System (Hospital, PCP, Urgent Care Center)
– 1/3 split to all from savings
– Cost: $10 per intervention
Source: Centers for Medicare and Medicaid Services
How Does This Affect You?
Medical Staff
①
Physician Provider Staffing of Current or New Services
②
Ancillary or Advanced Practice Provider Support
③
Nursing Staffing
④
Salaries (Current and Future Raises)
⑤
Administrative, Research, and Education Support
⑥
Vacation and CME Time
⑦
Educational Stipends
Hospital
①
Development of New Patient Care Programs
②
Expansion and Renovation of Hospital
③
Quality and Safety Improvements
④
IT Infrastructure and Communication Improvements
⑤
Marketing Capabilities
⑥
Retention and Recruitment of National Leaders
What Value Can I Provide?
VALUE = (QUALITY + SAFETY)
COST
Quality Measures
• Decrease use of Levalbuterol for Asthma
• Decrease use of steroids for Bronchiolitis
• Asthma Action Plan Compliance
• Press Ganey (or CHCAHPS) Scores
Safety Measures
• % Dosage Errors
• Number Contraindicated Medications Used
• Number of Falls per month
• Number of Transfers within 12 hrs of admission
Cost
• Average Length of Stay (Affects bundled payments)
• 30 Day Readmission Rate (Affects Value Based Purchasing Return)
• Hospital Utilization per DRG (Affects bundled payments)
• Medically Complex Patients Admission Rate (Affects population based
payments)
Small Group
Metrics that measure your value?
Case Diagnosis: Bronchiolitis, Pneumonia, Hyperbilirubinemia
VALUE
QUALITY:
SAFETY:
COST:
QUESTIONS?
32
Some Extra Definitions:
•
Accountable Care Organizations (ACO)- are groups of doctors, hospitals, and other health care providers who
come together voluntarily to give coordinated high quality care to their Medicare patients.
•
Centers for Medicare and Medicaid Services (CMS)- a federal agency within the United States Department of
Health and Human Services (DHHS) that administers the Medicare program and works in partnership with state
governments to administer Medicaid.
•
Diagnosis Related Group (DRG) - a patient classification system adopted on the basis of diagnosis consisting of
distinct groupings.
•
Full Time Equivalent (FTE) - as the number of total hours worked divided by the maximum number of
compensable hours in a full-time schedule
•
Children Hospital Consumer Assessment of Healthcare Providers and Systems (CHCAHPS) - a nationally
standardized survey that captures patients‘ perspectives of their hospital care.
•
Some Extra Definitions:
Value Based Purchasing - a payment methodology that rewards quality of care through payment incentives and
transparency.
•
Case Mix Index (CMI)- Case mix index is a relative value assigned to a diagnosis-related group of patients in a
medical care environment. The CMI value is used in determining the allocation of resources to care for and/or
treat the patients in the group.
•
Payer Mix - The percentage of cases that are Medicare, Medicaid, Commercial Insurance, HMO, Managed Care,
and self-pay.
•
Inpatient (CMS Definition)- Services designated as inpatient-only, surgical procedures, diagnostic tests and other
treatments are generally appropriate for inpatient hospital admission and when the physician (1) expects the
beneficiary to require a stay that crosses at least two midnights and (2) admits the beneficiary to the hospital
based upon that expectation.
•
Observation/Outpatient (CMS Definition)- Everything that does not meet Inpatient status.
Healthcare Payments Timeline
(Medicare- Provider)
1965
Medicare
Program
Established
1984
Prospective
Payment System
1992
ResourceBased Relative
Value Scale
(RVU’s)
1997
Sustainable
Growth Rate
(SGR) Formula
2006
-Physician Quality
Reporting System
(PQRS)
-Incentive
Payments
2015-17
Value Based
Payment
Modifier
Healthcare Payments Timeline
(Medicare- Hospitals)
1965
1984
2010
2012
2013
2015
Medicare
Program
Established
Prospective
Payment
System
Productivity
Improvement
Value-Based
Payments
Bundled
Payments
Hospital Acquired
Conditions Penalty