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HFMA Dixie Institute 2014

HFMA Dixie Institute 2014. Improving the Performance of Hospital Owned Physician Practices. February 27, 2014. Speaker Introduction. Mr . Frank Panzarella FACHE, CMPE, Vice President.

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HFMA Dixie Institute 2014

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  1. HFMA Dixie Institute 2014 Improving the Performance of Hospital Owned Physician Practices February 27, 2014

  2. Speaker Introduction • Mr. Frank Panzarella FACHE, CMPE, Vice President • Mr. Halverson has more than 15 years of experience in healthcare strategic and business planning and financial management. • He possesses extensive knowledge of strategic, operational, and financial best practices among large physician groups and in the context of their integration within health systems. • Mr. Halverson specializes in economic alignment between physicians and hospitals involving acquisition, group development, compensation planning, and operations improvement. • He leads ECG’s Dallas office. • Frank Panzarella is Vice President of Operations for the Bassett Medical Group (BMG). • Since 2008, Mr. Panzarella has been the executive leader for BMG’s professional staff of 435 providers and 900 employees. • He is co-chair of the BMG’s governing body, which directs operational and strategic initiatives. • Prior to Bassett, Mr. Panzarella spent 6 years in progressively responsible positions at Partners Healthcare System. He completed a MHSA at the University of Michigan. Mr. Joshua D. Halverson, Principal 0100.014\301090(pptx)-E2

  3. Agenda I. Setting the Stage II. High-Functioning Physician Organizations III. Performance Improvement Toolbox IV. Case Study – Bassett Healthcare Network 0100.014\301090(pptx)-E2

  4. I. Setting the Stage 0100.014\301090(pptx)-E2

  5. I. Setting the StageAnatomy of a Crisis The healthcare system in the United States is on the trajectory of insolvency. • Budgetary constraints of federal and state programs are compressing reimbursement to providers. • Consolidation of commercial payors and their resulting market power contribute to minimal revenue growth. • As a result, operating margins of integrated healthcare systems across the country are under pressure. • The sustainability of the current configuration of physician organizations without structural change is being questioned. The nation is looking to healthcare organizations to innovate and improve care delivery through better coordination and more efficient use of resources. 0100.014\301090(pptx)-E2

  6. I. Setting the StageIncreased Physician Employment As professional service reimbursement flattens or falls and uncertainty over reform continues, physicians are increasingly becoming employed by hospitals and health systems. Growing Trend • Newly trained physicians see health systems as a “safe haven” from uncertainty. • Health systems see primary care as a necessary investment to lock in future business. • Smaller multispecialty groups are dissolving as select specialties pursue hospital employment to improve compensation levels. Percentage of U.S. Physician Practices Owned by Physicians and Hospitals, 2003 to 20111 1 Source: Medical Group Management Association (MGMA)Physician Compensation and Production Surveys, 2003 to 2011 reports based on 2002 to 2010 data. “More than half of practicing U.S. physicians are now employed by hospitals or integrated delivery systems, a trend fueled by the intended creation of accountable care organizations and the prospect of more risk-based payment approaches.” – The New England Journal of Medicine, May 2011. 0100.014\301090(pptx)-E2

  7. I. Setting the StagePhases of Physician Employment Employed physician networks tend to migrate through the four phases shown below. The phase that your organization is in will shape your planning efforts. Four Phases of Physician Network Evolution High Phase 4 – Value- Based Network Phase 3 – Service Expansion Care Delivery Focus Phase 2 – Growth Phase 1 – Recruitment Low Meet Community Need Secure Market Share Expand Clinical Expertise Objective Manage Population Low Network Maturity High 0100.014\301090(pptx)-E2

  8. I. Setting the StageImplications of Physician Employment Hospitals need to have clear and realistic expectations of how practices will change after employing physicians. • Practice Revenue • Physicians’ payor mix is likely to be less favorable than pre-acquisition as independent physicians refer Medicare, Medicaid, and uninsured patients to employed physicians. • A loss in physician productivity is common. • The level of physician engagement in the business may decline. Practice Expenses • Salaries and benefits typically, though not always, increase. • Infrastructure requirements are significant and will be higher than in the private practice setting. 0100.014\301090(pptx)-E2

  9. I. Setting the StageInvestment Per Physician Increases Notwithstanding these trends, hospitals/health systems are experiencing increasing losses in physician organizations. Integrated Health System Investment/(Loss) PerPhysician 2009 2012 2010 2011 Source: ECG 2013 surveys. 0100.014\301090(pptx)-E2

  10. II. High-Functioning Physician Organizations 0100.014\301090(pptx)-E2

  11. II. High-Functioning Physician OrganizationsOrganization Models Federated Model Integrated Model Pract. A Common Governance Pract. G Pract. B Pract. G Pract. A Limited Common Governance and Shared Services Pract. G Pract.A Shared Governance and Services Pract. F Pract. C Pract. F Pract. B Pract. F Pract. B Pract. E Pract. C Pract. D Pract. E Pract. C Pract. E Pract. D Pract. D Centrally Controlled Policies and Finances Organizations with aligned/employed physicians are seeking to reorganize themselves in order to establish high-functioning “systems of care” thatcreate value by demonstrably improving quality outcomes and reducing costs. Multispecialty Model Limited Central Governance and Management Strong Central Governance and Management Common Governance, Management, and Finances The market appears to recognize that high-functioning, integrated multispecialty group practices are most likely to be successful in a value-based reimbursement system. 0100.014\301090(pptx)-E2

  12. II. High-Functioning Physician OrganizationsMechanisms for Group Integration Physician group integration is achieved through the following elements: Physician Leadership/Governance Clinical Integration Practice Management Integrated Physician Network Performance Monitoring (Data-Driven) Revenue Cycle Performance Patient Access and Scheduling IT(e.g., EMR) Compensation Plan 0100.014\301090(pptx)-E2

  13. II. High-Functioning Physician OrganizationsViewing Physicians as Strategic Assets In any type of relationship, the things people argue over often are not the real issue. Underlying Causes of Conflict Excessive focus on what they want to gain out of the relationship instead of what they can contribute to it. Naive and unrealistic expectations about how the relationship should work. Failure to discuss needs and expectations in advance. Not knowing how to be a couple. Lack of preparedness to be a good partner in a mutually beneficial relationship. 0100.014\301090(pptx)-E2

  14. II. High-Functioning Physician OrganizationsViewing Physicians as Strategic Assets Clear decision-making processes and shared governance can improve the “relationship” between physicians and hospitals. LimitedGovernance Ad Hoc Committee Standing Committee Governance Council 0100.014\301090(pptx)-E2

  15. II. High-Functioning Physician OrganizationsPhysician Compensation Because physician compensation is by far the largest expenditure, special attention should be paid to align compensation with organizational goals. The elements listed below represent an example physician compensation philosophy. 0100.014\301090(pptx)-E2

  16. III. Performance Improvement Toolbox 0100.014\301090(pptx)-E2

  17. III. Performance Improvement ToolboxOverview Many organizations are turning to Lean and Six Sigma as tools to address cost and quality simultaneously. They are complementary and often overlapping philosophies that make the patients’ needs the top priority. Lean • Considers any activity that does not directly create value for the customer to be a target for improvement or elimination. • Often known for the principle of “waste reduction.” • Valued as a tool for cultural change as well as cost reductions. Six Sigma • Targets perfection by identifying the causes of errors and reducing process variation. • Focused on quality improvement, with cost reduction as a benefit of reaching that goal. • Establishes a threshold of acceptable performance at the “six sigma” level (i.e., 3.4 defects per million opportunities). “Americans would be better served by a more nimble health care system that is consistently reliable and that constantly, systematically, and seamlessly improves.” – Institute of Medicine, September 2012 0100.014\301090(pptx)-E2

  18. III. Performance Improvement ToolboxSix Sigma Process (DMAIC) Define Improvement Process • Determine scope, goals, and key stakeholders. • Estimate timeline, budget, and resources. Measure • Map the current state through interviews and observation. • Define key process metrics (CTQs). • Assess data accuracy. Analyze • Identify waste. • Locate internal and external sources of variability. • Ascertain causes of redundancy and errors. • Prioritize potential changes based on impact and risk. Improve • Implement process changes. • Review outcome and CTQ performance in order to understand the impact of changes. • Repeat “Analyze” and “Improve” phases until desired outcomes are achieved. Control • Establish ongoing accountability and measurements. • Monitor performance to ensure the sustainability of improvements. Many organizations struggle with the “Control” phase, which requires sustained focus on gains that have been made through an improvement effort. 0100.014\301090(pptx)-E2

  19. III.Performance Improvement Toolbox Lean Daily Management To achieve improvement goals, providers and staff must have visibility into daily variability and be held accountable for performance so they can react in real time. Step 2 – Visually Track Performance in Comparison to the Goal Step 3 – Understand Reasons for Deviations Step 1 – Measure Performance Month X X Goal X X Performance X X X X X Date Step 4 – Make an Action Plan for Improvement Many providers are interested in this approach because of real-time feedback and improvements. 0100.014\301090(pptx)-E2

  20. III. Performance Improvement ToolboxValue Stream Mapping A value stream map (VSM)is a tool used to assess work flow, identify waste, and plan for the reduction/elimination of the waste within a given time frame. All process steps are identified from start to finish. Patient Patient • VSM provides a common language that helps stakeholders visualize the future vision. • Identifies value-added and non-value-added time for the patient. • Identifies deviations between the actual process and the intended process. • This tool is useful as part of a process-mapping exercise. Value Stream Scheduling Registration Patient Assessment Patient Treatment Checkout Timeline Value-Added Non-Value-Added (wait time) To improve a process, you should focus on establishing flow, eliminating waste, and adding value to the patient. 0100.014\301090(pptx)-E2

  21. III. Performance Improvement ToolboxRapid Improvement Events A rapid improvement event (RIE) is a 3- to 5-day event that brings together a team of stakeholders with the objective of improving a specific process. The goals of the event are to identify improvement opportunities, develop solutions, and implement them quickly. • May be integrated into existing projects. • Can obtain leadership buy-in with quick results. • Can be condensed if resources are needed on clinical duties. • Are an efficient use of client resources. RIEs can provide immediate benefits, but the organization must develop an action plan and arrange for ongoing monitoring in order to ensure sustainment. 0100.014\301090(pptx)-E2

  22. III. Performance Improvement ToolboxStandard Work “Standard work” is the best known way of doing something. It is one of the most powerful Lean tools and forms the baseline for continuous improvement. Elements of Standard Work • Takt Time – The rate at which a process must be completed in order to meet customer demand. • Work Sequence – The order in which tasks are performed. • Standard Inventory – The number of units1required to keep the process operating smoothly. Inconsistent Process Inconsistent Results Staff doing whatever they can to get results (aka workarounds). Desired Results Consistent Process 1 Units may be patients, instrument trays, charts, lab tests, etc. Staff using standard work to get results. Standard work is a continuous effort and relies on feedback from staff and providers. 0100.014\301090(pptx)-E2

  23. III. Performance Improvement ToolboxControl Charts Control charts provide a visual method for distinguishing between normal process variability and special-cause process variability. Traditional Scorecard Control Charts Conclusions Upper Limit YTD Month Average Performance is above target, but appears to be deteriorating. Collections Rate Lower Limit Improvement efforts do not appear to be having any effect. Visits Per Day This month’s performance was an anomaly and requires investigation. Patient Satisfaction Time Control charts supplement management dashboards by providing statistical and trending insights. 0100.014\301090(pptx)-E2

  24. III. Performance Improvement ToolboxSustainment Without providing the tools to monitor and meet best practices, it is unreasonable to expect sustained improvement over time. Sustained Improvement Habits Best Practices Standards • Many organizations forget to allocate time for the sustainment phase of the project. • Lean daily management is one of the most common accountability tools in healthcare. • EMR reporting tools may need to be leveraged to support performance improvement efforts. Performance Time Strong Sustainment Weak/No Sustainment 0100.014\301090(pptx)-E2

  25. IV. Case Study – Bassett Healthcare Network 0100.014\301090(pptx)-E2

  26. IV. Case Study – Bassett Healthcare NetworkOverview and Mission Overview • Bassett Healthcare Network is an integrated healthcare system that provides care and services to people living in an eight-county region covering 5,600 square miles in upstate New York. • The organization includes: • Six corporately affiliated hospitals. • Skilled nursing facilities. • Community and school-based health centers. • Home health. • DME companies. • Medical school. • Health partners in related fields. Mission – “Who we are…" Bassett Medical Center is an academic medical center that exists to advance the healthcare of rural populations through: • Providing excellence in the continuum of care. • Educating physicians and other health care professionals. • Pursuing health research. 0100.014\301090(pptx)-E2

  27. IV. Case Study – Bassett Healthcare NetworkLocation Growth 2013 1984 0100.014\301090(pptx)-E2

  28. IV. Case Study – Bassett Healthcare NetworkPhysician Growth Similar to other organizations across the country, Bassett has significantly increased its number of employed physicians. 0100.014\301090(pptx)-E2

  29. IV. Case Study – Bassett Healthcare NetworkInitiatives Strategies in Play • Insurance partnership • NEWCO IPA Expansion of network • Value-based insurance: ACO, ACQA, MA, EXG • Medicaid Health Home • Bassett Health Plan • PCMH, the Care Team Model, and Care Coordination • Business Intelligence Effective Operations • ECG – Medical Group Efficiency and Performance • Inpatient Efficiency, Capacity, and Flow • External Benchmark and Regional Peer Comparisons • Systematic Cost Reductions • Health Plan Management • Targeted Program Reviews • Unity (Epic) Optimization 0100.014\301090(pptx)-E2

  30. IV. Case Study – Bassett Healthcare NetworkInitiatives Growth (Traditional/Insurance-based) • Primary Care providers • Primary Care sites • Rome, Utica • IPA with other physicians • Insurance products • The Manor Finance – Difficult Transition from FFS to Capitation • Volume • Capital • Reserves • Transitional funding 0100.014\301090(pptx)-E2

  31. IV. Case Study – Bassett Healthcare NetworkProcess Mapping 0100.014\301090(pptx)-E2

  32. IV. Case Study – Bassett Healthcare NetworkMajor Findings There were three major areas of opportunity to create a more productive clinic environment. Optimization of Clinical Time: • Maximize the productivity of existing provider time in the clinic through the implementation of: • More effective master schedules. • Efficient and effective scheduling processes. • A reduction in lost capacity due to no-shows and last-minute cancellations. Staffing for Throughput: • Identify the ideal staffing model for each clinic, with redefined responsibilities for each support role. • Then develop a training and transition plan to maximize the use of existing staff and ensure they are working to the top of their license. Access and Patient Satisfaction: • Capture return and follow-up visits before the patient leaves the clinic space in order to improve patient service and reduce the need for duplicative work. 0100.014\301090(pptx)-E2

  33. IV. Case Study – Bassett Healthcare NetworkLoad Balancing While there is time available for more patients in existing schedules, volumes may not be possible if they are added to the busiest days in clinic. Orthopedics Clinic Middle Surgery Clinic NOTES: In both figures, the lines indicate the maximum/minimum values; the bars represent the 25th and 75th percentiles. Standard practice in an orthopedic clinic is three exam rooms per physician in the clinic, plus one additional room if that physician is supervising an APC. 0100.014\301090(pptx)-E2

  34. IV. Case Study – Bassett Healthcare NetworkStandard Work To increase appointment availability, session durations could be established. A 4-hour expectation could be standardized while maintaining independent decision making for the provider in relation to start/stop times. Status Quo 4-Hour Standard 7 a.m. Provider 1 8 a.m. Provider 2 Provider 1 Provider 1 9 a.m. Provider 1 Provider 3 10 a.m. 11 a.m. 12 p.m. Provider 1 1 p.m. Provider 1 Provider 3 Provider 2 Provider 1 Provider 1 2 p.m. 3 p.m. 4 p.m. 5 p.m. 6 p.m. 0100.014\301090(pptx)-E2

  35. IV. Case Study – Bassett Healthcare NetworkProcess Redesign Current State Future State • Team-Based Care • MA Assignment • RN Scope of Practice • Appropriate Staff Levels RN Triage and Clinical Support • Team-Based Care • MA Assignment • RN Scope of Practice • Appropriate Staff Levels Nursing Pool • Team-Based Care • MA Assignment • RN Scope of Practice • Appropriate Staff Levels • Utilization of Whomever Is Available • Limited Clinic Prep • Limited Clinic Discharge • High Staff Dissatisfaction • Provider-Centric vs. Patient-Centric 0100.014\301090(pptx)-E2

  36. IV. Case Study – Bassett Healthcare NetworkOpportunities for Error Unnecessary complexity in scheduling creates opportunities for error, difficulty finding appropriate slots, and challenges for planning staff schedules. Opportunity – Visit Type Utilization • In many specialties, there are visit types with extremely low utilization. • In general surgery, 95% of all cases are scheduled into the top five visit types. Opportunity – Unclear Visit Types Opportunity – Undefined Providers • Without clear appointment types, it is difficult to ensure accuracy in central scheduling. • Without clear schedules, clinic managers find it difficult to plan ahead. 0100.014\301090(pptx)-E2

  37. IV. Case Study – Bassett Healthcare NetworkLost Capacity Approximately 28% of existing appointment times were underutilized due to scheduling inefficiencies and no-show rates. • The ability for schedulers to maximize available provider time varies by clinic. • All the clinics have some loss of capacity due to same-day no-show rates, with most clinics in the 8% to 10% range. • Some clinics may have inherent inefficiencies due to their physical space, such as the GI physicians needing to travel between buildings throughout the day. Existing Clinic Slot Utilization NOTE: Assumed 46 weeks per year. Calculations include only physicians who were or are currently employed. Improving the scheduling process could increase volumes without needing to change provider time in the clinics or physician behavior. 0100.014\301090(pptx)-E2

  38. IV. Case Study – Bassett Healthcare NetworkProjected Impact Based on benchmarks and existing resources, it was estimated physicians can increase productivity in patient volumes without opening new clinic sessions or changing provider clinical practices.  Key Assumptions • Staffing schedules are able to be adjusted as needed. • Scheduled visit durations are accurate to reality. • Scheduled visit durations and visit type mix remain consistent. 0100.014\301090(pptx)-E2

  39. IV. Case Study – Bassett Healthcare NetworkRapid Improvement Bassett utilized Lean management tools to improve operations. One-Week Rapid Improvement Event 0100.014\301090(pptx)-E2

  40. IV. Case Study – Bassett Healthcare NetworkPerformance Dashboard Projected Exam Room Needs Provider Time Utilization Projected Staffing Needs Performance 0100.014\301090(pptx)-E2

  41. IV. Case Study – Bassett Healthcare NetworkOutcomes Across-the-board changes have yet to be implemented; however, pilots of key enhancements have demonstrated significant results. Balanced Scorecard Domains Expected Outcomes Quality Access Patient and Staff Satisfaction Cost 0100.014\301090(pptx)-E2

  42. Q uestions & D iscussion Mr. Joshua D. Halverson 972-663-0100 jhalverson@ecgmc.com Mr. Frank Panzarella frank.panzarella@bassett.org 0100.014\301090(pptx)-E2

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