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Opportunity abounds: the compelling facts of the new payment model

Opportunity abounds: the compelling facts of the new payment model. G Curt Meyer, FACHE, MAACVPR VP of outpatient services Mary Free Bed rehabilitation Hospital. Restoring hope and freedom through rehabilitation. Part two....So now what?. Do I do anything? When do I make a move?

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Opportunity abounds: the compelling facts of the new payment model

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  1. Opportunity abounds: the compelling facts of the new payment model G Curt Meyer, FACHE, MAACVPR VP of outpatient services Mary Free Bed rehabilitation Hospital

  2. Restoring hope and freedom through rehabilitation

  3. Part two....So now what? • Do I do anything? • When do I make a move? • What do I do when I decide to do something • Who do I talk to and what information is needed to make informed decisions

  4. Are You Ready for Healthcare Reform? Emotional Stages of the Unprepared Denial Anger Remorse Acceptance Confusion Depression Anxiety

  5. Where do we go Home Health Doing Cardiac Rehab Is this possibly the bridge to nowhere?

  6. Clinical Integration Provides the Bridge Between FFS and Value-based Payment Crossing the Crevasse Clinical Integration is the Bridge FEE FOR SERVICE • A business we know and love (and have thrived at) • It’s all about volume • Maximize price to commercial payers to offset losses on government business • Focus on specialists VALUE BASED PAYMENT • Brave new world • New business model – Focus on populations and episodes of care • Primary care becomes key • Profits from higher quality care in home setting • Longitudinal payments for chronic care • Bundled payment for implantable • Joint contracts with payers • Focus on data

  7. The bridge from volume to value

  8. Bundled Payment: What it Means to Us Health System Patient & Physician Nursing Home SNF Rehabilitation LTC Nursing Home Home Health Outpatient Care LTC Assisted Living Home Outpatient Rehab Payment bundling will further encourage health systems keep patients within a narrow network

  9. Home Health Doing Cardiac Rehab

  10. Expanded Capabilities of rehab at home

  11. What ACOs are Doing

  12. What is value • Low cost per case with high clinical outcomes and independence • High patient satisfaction • Significant discharge status of independence

  13. Measures of success

  14. Do I do anything? • Yes!!!! with or without health care reform • Outcomes have to be presented • Cost per case has to be understood And managed • Clear understanding of where cardiac and pulmonary rehabilitation fit into the post-acute continuum must be communicated frequently

  15. When do I make a move? • When you know the infrastructure that you have to work with….. • Information technology inclusive of medical record, finance and human resource costs • Ability for predictive modeling of outcomes with fixed cost • Willingness to be at risk

  16. What do I do When I decide to make a move? • Communicate, communicate, communicate • Costs • Outcomes • Clinical • Hospital readmissions over 90 days • Functional • Patient Discharge destination • Fit into the continuum of care

  17. In cardiac rehab we have been chasing the money for over 30 years • 1980’s Telemetry monitoring for higher reimbursement • 1990s, 36 sessions for higher reimbursement • Early 2000, education exercise and risk management for higher reimbursement • Present day, high outcomes at low costs for better any reimbursement

  18. Basics of conversion from fee-for-service to population health management • Analyze current charges and costs per case in the following areas: • Total charges Across all patients served in the last fiscal year • Total costs • Salary wage and benefit costs as a percent of total charges • Fixed costs as a percent of total charges

  19. Conversation

  20. Let's do the mathCurrent Volume approach

  21. Value approach

  22. Calculate contracting rate • Current Range: $ 2,844.00 - 1,976.00 • No perceived margin under current cost structure • Net income to operations only occurs through cost reduction and reduction in utilization

  23. New net income model under value-based purchasing • 25,000 covered lives • Carve-out of $1976 per enrollee ( 8% of 25,000 lives) • 24,000 patient months at risk • $3,952,000 to cover population Prone to heart disease • $164.67 allocated per member per month cost for cardiac rehab in an ACO model (Amount allocated to pay for cardiac rehab)

  24. Impact on Annual Budget • Annual salary costs $288,288 • Annual fixed costs $42,000 • Total operating costs $330,288 • 2000 referrals per year; Potential revenue:$3,952,000

  25. Summary take-away • Don't focus on the numbers • Focus on the following concepts: • Reducing total costs is the primary means of managing your business • Understanding your total costs will better allow you to go "at risk "for a given population • Increased volume will no longer fix poor financials, decrease costs and managed utilization will be the measure of success

  26. Summary take-away

  27. Summary and takeaways • Cardiac rehabilitation has a primary role of preventing re-hospitalization and managing the health status of those served. • We should consider providing our services in a variety of settings, beyond traditional outpatient hospital settings to home health and skilled nursing

  28. Questions or for further information

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