Physician Employment

Greenville Hospital System University Medical Center

National Health Policy Forum Washington, DC March 25, 2011

Michael C. Riordan President and CEO

Greenville Hospital System

1.  GHS Overview •  Greenville Hospital System and University

Medical Group 2.  Physician Employment

•  Conceptual Continuum •  Motivation

3.  Quality and Operational Efficiency •  What’s the impact?

4.  Summary 2  

Agenda

1. System Overview

Our Vision Transform health care for the benefit of the

people and communities we serve.

Our Mission Heal compassionately. Teach innovatively.

Improve constantly.

•  5 Campuses

•  1,268 beds

•  11 Specialty Hospitals •  746 bed Tertiary Care Center •  More than 120 Practice Sites (and growing)

Bird’s Eye View

Baptist Easley Hospital

5

GHS: A Critical Community Resource

Academics •  174 medical residents and

fellows in 7 residency and 5 fellowship programs

•  Half of USC medical students receive 3rd and 4th year training at GHS

•  More than 1,350 nursing students receive part of their training at GHS each year (over 2.100 nursing student encounters yearly)

•  Training for multiple allied health professions

FY ‘10 Actual

FY ‘11 Budget

Revenue* $1,346.1 $1,397.0

Expenses* $1,313.6 $1,376.0

Discharges 42,570 42,259

Patient Days

285,871 286,487

Outpatient Visits

2,107,575 2,367,661

6

Data Snapshot

*Millions

Quick Tour

Greenville Memorial Medical Campus

Greenville Memorial Medical Campus

• Greenville Memorial Hospital

• GHS Children’s Hospital

• Roger C. Peace Rehabilitation Hospital

• Marshall I. Pickens Hospital

• Cancer Center

• Medical Offices

• Institute for Advancement of Health Care

Patewood Medical Campus

-Outpatient Centers -Patewood Medical Offices -Patewood Memorial Hospital

GHS / Clemson University Translational Research Hub

Greer Medical Campus

Hospital, Medical Office Buildings, and long term care located on this site.

Cottages at Brushy Creek

One of just two such innovative skilled nursing facilities in the US offering residents a unique, home like experience. National award

for providing environments conducive to quality living.

•  Hillcrest Memorial Hospital •  Hillcrest Medical Offices

Simpsonville Medical Campus

• North Greenville Hospital - Long Term Acute Care • North Greenville Medical Offices

North Greenville Campus

Baptist Easley Hospital

50/50 Ownership

Continuing the Tour: University Medical Group

16  

Specialty Physicians Specialty # MDs

Behavioral Medicine 13 Cardiology 30 Hospitalists 37 Neurology 5

Neurosurgery 6 OB/GYN 26

Ophthalmology 1 Ortho/Sports Medicine 28

Other Medicine Specialties 37 Otolaryngology 6

Pediatrics 78 Physiatry 8

Pulmonary 16 Radiology 39 Surgery 54 TOTAL 384

Primary Care Physicians Specialty # MDs

Family Practice 45 General Internal Medicine* 40

MD360 6 OB/GYN 25 Pediatrics 43

TOTAL 159

Source: UMG Master Physician File, dated 3.1.11

543 Total MDs

NOTE: These numbers do not include 111 non-MD providers

* Includes 3 Medicine/Pediatrics physicians

Employed Physicians University Medical Group

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1994 1995 1998 2006 2007 2008 2009 2010 # of Providers 69 104 145 320 396 454 559 647

Gross Revenue $90M $200M $232M $278M $358M $503M

Gross Collection Rate 36% 43% 46% 49% 49% 48%

Net Collection Rate 63% 86% 86% 88% 89% 89% Days in AR 168 53 47 43 37 35

% of GHS Admissions 35% 68% 82% 80% 83% 84%

Note: In addition to the above, GHS has mutually exclusive relationships with 134 physicians providing hospital based services: anesthesiology, emergency medicine, neonatology, and pathology.

University Medical Group Where Are We Now?

18  

•  GHSUMC has an open medical staff – 1,300 providers •  Around 1990 began employing physicians

–  Medical Education –  Specialty programs (Trauma, specialty pediatrics, etc.) –  Referral network (Partners in Health)

•  Organized in 7 departments – Medicine, Surgery, Children's, Women's, Orthopaedics, and Community Medicine, Radiology

University Medical Group

19  

Physician Employment

20  

Physician Alignment Models

Fully Integrated Practice/Employment

Institute Member (Partial Employment)

Contract Affiliation

Joint Venture Arrangement

Mutual Project Development

Supportive participation in medical staff procedures and governance Neutral medical staff participation

Competitive position

Our Theory Physician

engagement increases as

relationships / connections

become stronger.

21  

Conceptual Continuum

22  

Affiliated

Engaged Physician Leaders Partner

Integrated Aligned

Employed

“Soft” “Hard”

Conceptual Continuum

23  

Affiliated

Engaged Physician Leaders Aligned

Integrated Partner

Employed

“Soft” “Hard”

GHS Model

What is motivating physician practice acquisition at GHS

and why are physicians interested?

24  

There exists the opportunity for physician groups to become part of something bigger

than they can be alone.

GHS Strategic Direction Physician Integration

25  

Desired state is to get physicians to see the hospital as nothing more and nothing less than another part of their practice.

-- Spence Taylor, MD Chair, GHS Department of Surgery

The physicians and the hospital must recognize and share interdependent well-being.

Alignment is Not Enough

26  

Desired state is to get physicians to see the hospital as nothing more and nothing less than another part of their practice.

-- Spence Taylor, MD Chair, GHS Department of Surgery

Benefits •  Creates a structure that facilitates collaboration and

mutual commitment toward desired behaviors and outcomes: –  Financial – cost savings as well as revenue –  Higher Quality –  Improved Patient Care and Satisfaction

The physicians and the hospital must recognize and share interdependent well-being.

Alignment is Not Enough

27  

Integrated Delivery Model – Philosophy

Establishing a Culture of Shared Responsibility

with Engaged Physician Leadership

It’s About Much More than Economics...

28  

•  COMMUNITY: Fulfill our responsibilities as a Safety Net Hospital – improve access to and quality of care available in our community.

•  TEACHING: To be the core faculty for LCME and ACGME accreditation processes

•  INTEGRATION: To be known within and without the organization as the GHS physicians responsible for development of their specialty area AND to lead our QUALITY, PATIENT SAFETY, AND UTILIZATION INITIATIVES

•  CONTRACTING: To offer a full slate of specialty physicians for third party contracting and grant applications

•  FUTURE HEALTH CARE CHANGES: To present a full service integrated delivery system for CMS and insurers/payors involving regionalized health care delivery and risk-sharing by providers.

Why Do We Employ Physicians?

29  

Why are Physicians Interested in Employment? •  Environment that better allows them to do the things that

led them into medicine initially •  Administrative Support = more time for patient care •  Improved / Expanded Benefits

–  Lower cost of malpractice coverage –  Additional tax deferred retirement savings

•  Affordable access to sophisticated EMR, billing systems and other large scale information systems

•  Improved managed care contracting •  Costs savings through vendor contracting •  Access to funding for capital purchases •  Opportunity to be part of something bigger (e.g.,

teaching, quality, highly integrated delivery system, etc.) 30  

Impact on Quality and Operational Efficiency

Moving from physician employment to physician

engagement

31  

Physician Engagement

•  Board of Trustees (Physician leaders are voting members of Board Committees)

•  GHS President’s Council (Executive Team includes key physician leaders)

•  Operations Council (COO, VP Medical Services, CFO, Clinical Chairs, Campus Presidents)

•  Physician Operations Council (Physician Executives, Clinical Chairs)

•  •  •  Unit Leaders – Physician/Nurse Leader Partnership

32  

Partnership/collaboration at all levels directed toward clinical and operational improvements.

University HealthSystem Consortium GHS: A Top Performer In Readmissions

©2011  University  HealthSystem  Consor>um   33  

RESULTS

University HealthSystem Consortium GHS: Core Measures Results Are Outstanding

©2011  University  HealthSystem  Consor>um   34  

AMI  Composite  

HF      Composite  

Pneumonia  Composite  

2009   99.5%   98.0%   96.2%  

2010   97.0%   96.3%   95.8%  

UHC  Median  (2010)   95.8%   89.5%   83.1%  

NaConal  Target   90%   90%   90%  

Greenville  Rank  (2010)   31/106   13/109   11/110  

RESULTS

Physician Engagement

Examples of Physician Leader Engagement •  Supply Standardization •  Length-of-Stay – Discharge Planning Process •  Improving Operational Efficiency – Targeted DRGs •  Utilization of Inpatient Radiology Services •  Orthopaedics – Inpatient Process Improvements •  Blood Conservation Initiative •  Pharmaceutical Formulary Development

35  

FY 2010 Result: $14 million in cost savings achieved.

University HealthSystem Consortium: GHS Now Top 10 In Efficiency

©2011  University  HealthSystem  Consor>um   36  

•  Adjusted cost/discharge declined in all major categories, 2009 to 2010

•  Clinical portfolio intensification a significant contributor

•  Total cost/discharge now 17% below UHC 25th percentile

•  Supply cost/discharge now 12% below UHC 25th percentile

•  Labor cost/discharge now 8% below UHC 25th percentile

RESULTS

Benefits of Physician Engagement

•  Transparent and collective focus on clinical quality through development and adoption of evidence-based care protocols

•  Collaborative/collegial opportunities to highlight unexplained physician practice variation

•  Linking a strong organization bottom line to enhanced physician support for patient care

•  Shared focus/unified goals foster relationship building and team approach among physicians, nurses, and administrators

•  Fostering physician creativity in streamlining / maximizing quality, safety, and operational efficiency 37  

Summary

38  

•  Future success for community-based academic medical centers will depend upon prioritizing patient care and competing by providing cost efficient, quality total health care.

•  Such care likely can only be provided by regionalized integrated systems of health care.

•  The key relationship is and will be that between the hospital and its highly engaged/employed physicians.

•  GHS is becoming progressively positioned for success in the coming complex and tumultuous health care environment.

Summary

39  

Summary

40  

Our Core Belief GHS cannot effectively take responsibility for improved quality and reduced costs for the

governmental and private pay populations unless all parts of the health care continuum are highly

integrated.

•  GHS is becoming progressively positioned for success in the coming complex and tumultuous health care environment…. Accountable Care Organization

•  Challenges to moving toward highly integrated models include some legal/legislative restrictions including: •  Stark Rules •  Anti-Kickback and Civil Monetary Penalty Laws •  Anti-Trust Regulations •  Tax laws for non-profits dealing with private use and private

inurement

Summary

41