Presentation Transcript

1. Hospital / Physician Integration

   Jeffrey Hatcher, MD, FACOG Phil Ellis, MBA, FHFMA June 10, 2014
2. Phil Ellis, MBA, FHFMA CIPROMS, Inc. CFO & Senior Vice President Board of Directors, IN HFMA President-Elect & Board of Directors: HBMA Certified Electronic Records Specialist (Rutgers University) pellis@ciproms.com 1.317.870.0480
3. Hospital/ Physician Integration This is a very broad topic We need some background, or “set up” We need to consider some things at the 30,000’ level We need to consider some things at the 3’ level Multiple issues to discuss And then put them back together so that they make sense Or at least a little bit more than they do now!
4. Agenda Why integration is occurring What are the driving forces What are some issues facing hospitals What are some issues facing physicians Where is common ground What are the benefits of an integrated system What are the challenges of an integrated system What can we expect in the next 3 to 5 years
5. Hospital/ Physician Integration This is not from an accountant or economist’s perspective This is not from a legal perspective This is not from a political perspective This is about: Why it is happening What are the relevant issues What are the benefits / challenges From a business and provider perspective
6. Why Integration is Occurring Quick exercise: Can we analyze a situation without bias? Even if you are a current stakeholder? Can we shed our hospital or physician title? Consider 2 questions: Who is impacted the most by our healthcare financial “situation”
7. Why Integration is Occurring Concerned parties to the issue of rising costs of healthcare; pre 2000 Employers Insurance companies Providers Concerned parties to the issue of rising costs of healthcare; post 2005: Employers Insurance companies Providers The General Public !
8. Why Integration is Occurring “Here’s another fine mess you’ve got us into….”
9. Who is Impacted the Most? The General Public You, me, our families Access to care is a necessity Not a career Not an investment The Payers: Must meet financial objectives Or they leave the markets The Golden Rule(of healthcare)
10. Who is Impacted the Most ? The others provide services: Hospitals Physicians Industry support IT Services; Revenue Cycle, Accounting, Collections, etc. Provider employees They DO NOT make the expectations of the General Public. They respond to them
11. And Why is the General Public so Upset? Spending on healthcare is growing faster than national income. “A billion here, a billion there, pretty soon you’re talking about real money!” Sen. Everett McKinley Dirksen (Rep. Illinois) Let’s look at it another way: 1960: Healthcare was 5% of GDP 2012: Healthcare was 17.2% of GDP 2025: Estimate…. 20%
12. Driving Forces: The Process Itself Patient/ Consumer frustration Primary Care physician refers me to orthopedic surgeon Orthopedic surgeon admits to hospital Insurance claims from: Primary Care Orthopedic Surgeon Anesthesiologist Hospital Then balance billing from each
13. Driving Forces (cont.) Made sense to us….. But it DOES NOT to the General Public Kaiser Permanente CEO George Halvorson: “We have over 9,000 billing codes for individual healthcare procedures, services, and separate units of care. There is also not one single billing code for a cure. Providers have a huge economic incentive to do a lot of procedures. They have no economic incentive to actually make us better. The economic incentive score is 9,000 to zero –process vs. results”
14. Driving Forces: Demographics Demographics: Retirees: 75 million Baby Boomers 3 million will retire each year for the next 20 years (Hospitals & Health Networks 1/14/14) And will spend 50% of their income on healthcare….out of pocket by 2025 (“The Unsustainable Cost of Healthcare” 2009)
15. Driving Forces: Payment Reform Evolving Payment Models Quality based Requires inputs from all providers Bundled Billing One payment for all providers Independent or not CMS and Commercial plans Patient Centered Medical Home Accountable Care Organizations
16. The Golden Rule He Who Has the Gold…Makes the Rules. And who is “He/She”? Public and Private payers “pay for quality not quantity”
17. Driving Forces: Payment Reform Key point: Previous combatants in the financial arena: Insurance Payors Employers Providers Consumers represented a small % of payments Post reform combatants in the financial arena: Insurance Payors Employers Providers Consumers represent a large % of payments
18. Driving Forces: Rising Deductibles
19. Driving Forces: Payment Reform Politicians did not drive payment reform alone. Angry voters drove politicians to payment reform
20. Driving Forces: Rising Out of Pocket Costs Average cost of Healthcare Premium rose 62% from 2003-2011 (2012 Bill Fay, debt.com) Average cost of employee share (patient) rose 74% (2003-2011) (2012 Bill Fay, debt.com) Cost of Out of Pocket = 20% of family income in 35 states (2012: commonwealthfund)
21. Driving Forces: Payment Reform And they are not happy !
22. Driving Forces: Regulatory Requirements Security Rule: Technical Safeguards: (and the associated costs) Access Control Audit Controls: Hardware/ software to mechanisms to record and examine access of e-PHI Integrity Controls: to ensure that e-PHI is not improperly altered or destroyed. Transmission Security: Technical measures to protect against unauthorized transfer of e-PHI
23. Driving Forces: Regulatory Requirements Technical (cont.) Policy for password usage “Secured” passwords that is Overheard in the cafeteria: “We saved the hospital money on user licenses by sharing passwords!”
24. Driving Forces: Regulatory Requirements ICD-10… Well, maybe PQRS Value Based Payment Modifier RAC, MPIC, & other audits EHR & Patient Portals, Meaningful Use etc. etc. etc. etc.etc.
25. Hospital/ Physician Integration So… We’ve discussed why it is occurring We’ve discussed some of the driving forces Time for some perspective Jeffrey Hatcher, MD, FACOG
26. Relevant Issues from the Physician World Unwavering demand of payment reform Declining reimbursement Public plans (Medicare, Medicaid, VA, etc.) Health Insurance Exchanges Commercial plans Costs of collecting from Patient/consumers vs. Insurance Shifting costs from Public & Commercial payers to…. You guessed it…. The General Public (those are the ones who are upset)
27. Relevant Issues from the Physician World High Deductible Plans Not just HSA plans Soaring deductibles on traditional health insurance plans New GE employee health plan: Deductible grew from a few hundred to $7,000.00 …. Per Insured Consider the high cost of billing patients (consumers)
28. The Cost of Billing Impact of rising deductible plans Cost of billing insurance pays: eCommerce, semi-automated Cost of billing patients: Multiple statements (Forms and postage) Telephone follow up calls And the “Oh, I never got a bill” response Bottom line: It is much more costly to bill and collect from patients.
29. Relevant Issues from the Physician World Price Transparency Some practices lowering the “meaningless” Gross Charge Why: Ask the front desk staff how many calls the get for pricing. Prices too high, lose patients Prices too low, compromise revenue base We’re all trying to keep patients
30. Relevant Issues from the Hospital World The growing demand for a Holistic approach to healthcare From cradle to grave healthcare Competitive factors Market share Consumer ratings Healthgrades, etc. Attracting reputable providers How to manage physician acquired physician practices
31. Relevant Issues from the Hospital World….It’s a Different World Over There! Part A, DRG vs. Part B, CPT How to analyze practice performance Practice Efficiency Effective management is: Half management of people Half management of data You cannot measure what you cannot quantify
32. The Physician Practice What are the most critical data elements to monitor in a medical practice? System Protocols Financial Productivity Work flows
33. Practice Management: Protocols Financial How are charges captured? Office charges Hospital charges How are daily charge totals recorded? How are daily payment totals recorded? How is that information delivered to the billing department? These are things where hospitals must understand On their own Or through supporting vendors
34. Practice Data & Practice Management Financial (continued) How are payments received (and what is the security process?) CBO? Office street address PO Box Bank Lockbox Credit Cards How are payments made in the office processed and recorded What is the appeals process for payments made which are inconsistent with contractual terms?
35. Practice Data & Practice Management Review of Financial performance Who reviews trends? Declining deposits What about charges in previous months? Were charges confirmed to export files to e-claims? Does the AR reveal anything unusual? Increased managed care write-offs? Was there a reimbursement change or a policy change?
36. Practice Data & Practice Management Review of financial performance Any change in the Avg. Gross Charge per BPE? Any change in the Avg. Payment per BPE? Look at billing personnel costs & productivity What is the relationship to number of BPEs to hours worked? Paying overtime for billing? Are all deposits posted? Is there any mail not processed?
37. Practice Data & Practice Management “Must haves” from Practice Management systems Financial: Gross Charges (from practice “charge master”) Collections Adjustments (managed care discounts) Write offs (bad debt) Gross charges by payer Collections by payer Gross Collection percent (by payer contract) Account receivable by responsible party
38. Practice Data & Practice Management “Must haves” from Practice Management systems Financial: Days in AR By DOS By DOR RVU report Liquidation report Write off analysis Denial reporting Billing at Gross vs. Allowable (and impact on AR Reports)
39. Practice Data & Practice Management “Must haves” from Practice Management systems Data “Billable patient encounter” The basic unit of work For provider productivity Alternative to using RVUs X number of RVUs is not the same as multiple lines of CPT codes Necessary to evaluate MD and FTE levels
40. Practice Management: Productivity Average patient volume before the practice is acquired…. Average patient volume after the practice has been acquired But why? Different EHR/ PM Different scheduling protocols Practice staff culture Different leadership team The time to address is before the acquisition ……Not after
41. Practice Management: Work Flows Variety of EHR / PM is each practice acquired? How to consolidate System conversion? Phase out of each? Do you need a business partner who speaks the language
42. Section Summary Issues to consider from the Physician perspective Issues to consider from the Hospital perspective
43. Common Ground? Successful health systems Include a reputable hospital With reputable providers Both are supported from quality business partners Accounting Technology Revenue Cycle Regulatory (compliance)
44. Common Ground At the most basic level: Patients, the General Public: Not interested in the financial, legal, economic divides Hospitals must have a strong physician relationship Physicians must have a strong hospital relationship Both provider types have a strong commitment to serve patients Both depend on payer networks to provide that care Both must be adaptive to change
45. What Are the Benefits of an Integrated System? Meets the General Public demand for logical health care delivery Integration fits payment reform Better coordination of care Better coordination of business efforts Attract highest professional business partners Cost efficiency
46. What Are the Challenges of Integration Disparate cultures Disparate systems Achieving a unified approach to: Patient care Processes Business protocols
47. What Can We Expect in the Next 3-5 Years? More integrated models like Cleveland Clinic Mayo Clinic Kaiser More Participants Walmart / Walgreen’s, CVS More Payment reform
48. Questions