the top trends that matter in 2014

March 19, 2014Top Trends That Matter in 2014

1981 1986 1991 1996 2001 2006 2011100

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Inpatient Days

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March 19, 2014

Top Trends That Matter in 2014

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Medicare $ At Risk Inpatient Days

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2014 .. The year of A

According to a baseline study of early Accountable Care Organizations (ACOs), ACO patients had 5.8% lower total costs of care than non-ACO patients ($7,694 vs. $8,164).

Source: The Commonwealth Fund, January 2014

Medicare ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve.

MidWest East South East West0

10

20

30

40

50

60

70

80

90

100

90 8769

38

Geographic Location of Medicare ACOs

Source: Medicare Fact Sheet, 2013

ACO Accountable Care Organization500 as of year end 2013, projected to double in a yearMedicare added 123 new ACOs (MSSPs) in January 2014

020406080

100120140

12190

66 44 30

Composition of Medicare ACOs

Source: Medicare Fact Sheet, 2013

http://www.healthcatalyst.com/



2014 … The year ofAnalyticsAnalytics is the discovery and communication of meaningful patterns in data per Wikipedia.

A




2014… The year of

Acute Acute/Post Post Acute

Payment Retrospective Retrospective Retrospective ProspectiveParticipants 3 44 14 37

Organizations 32 192 165 75

Episode All acute patients, all DRGsSelected DRGs, hospital plus post-acute period

Selected DRGs, post-acute period only

Selected DRGs, hospital plus readmissions

Services included in the bundle

All Part A services paid as part of the MS-DRG payment

All non-hospice Part A and B services during the initial inpatient stay, post-acute period and readmissions

All non-hospice Part A and B services during the post-acute period and readmits.

All Part non-hospice A and B services (including the hospital and physician) during initial inpatient stay and readmissions

48 Bundled Payment GroupingsMajor joint upper extremity

483 Major joint and limb reattachment procedure of upper extremity with complication or comorbidity or major complication or comorbidity

B Bundled Payment




2014… The year ofThese common-sense best practices bring consistency, clarity, and transparency to patient financial communications.

Bill posted on Internet $55,000 for appendix operation

C Consumer Transparency

HFMA’s common-sense best practices bring consistency, clarity, and transparency to patient financial communications.




2014… The year of

We have definitely been hearing from members that they are seeing an increase in bad debt and even in charity care for people with high-deductible health plans," Caroline Steinberg, vice president for trends analysis at the American Hospital Association, told KHN. "A lot of these folks tend to not understand the structure of their benefits until they get to the hospital, and they're not covered as thoroughly as they thought.“

Source: Kaiser Family

D High Deductible Plan

The rate of workers in high-deductible plans has more than doubled since 2009 to 19 percent, KHN says, citing figures from the Kaiser Family Foundation.




2014… The year of

2000 2002 2004 2006 2008 2010 201210%

11%

12%

13%

14%

15%

16%

17%

18%

17.2%

Health Expenditure as % of GDP

2009 2010 2011 20120.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

3.8% 3.8% 3.6% 3.7%

Health Care Spending Growth

ExpenditureE

The number of people employed in healthcare dropped by 6,000 in December, the first time total healthcare employment declined since July 2003, CNN Money.




2014… The year of

Frequent Conditions AHRQ

Principal CCS diagnosis Number of stays in thousands

Stays per 10,000

population

All stays 38,591 1,239

Liveborn (newborn infant) 3,818 123Pneumonia (except that caused by tuberculosis and sexually transmitted diseases)

1,114 36

Septicemia (except in labor) 1,094 35Congestive heart failure, nonhypertensive 970 31Osteoarthritis 964 31Mood disorders 896 29Cardiac dysrhythmias 795 26Chronic obstructive pulmonary disease and bronchiectasis 729 23Complication of device, implant, or graft 699 22Spondylosis, intervertebral disc disorders, other back problems 667 21

Table 1. Number of hospital stays and stays per 10,000 population by the most frequent principal diagnoses, 2011

Abbreviation: CCS, Clinical Classifications SoftwareSource: Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project (HCUP), Nationwide Inpatient Sample (NIS), 2011

FrequenciesF




2014… The year of

Congress has 3 months to consider 2 very similar bipartisan bills in the House and Senate that would repeal Medicare's sustainable growth rate (SGR) formula for physician pay. Both measures would shift compensation from fee-for-service to pay-for-performance and consolidate 3 Medicare incentive programs, including meaningful use of electronic health records, into a single program.

Delayed20% decrease in Jan

SGR – Sustainable Growth RateG




2014… The year of

FY 2014 Final Inpatient PPS Rule

Creates HAC Reduction Program with two Domain measurements that overlaps in its entirety with existing HAC program and VBP.

HAC – Hospital Acquired ConditionsH




2014… The year of

Outlook grim for docs' ICD-10 readinessOctober 1, 2014

ICD-10I

Physician practices are still behind schedule in terms of preparation for ICD-10, yet generally are optimistic about readiness for its implementation, according to a recent survey conducted by medical claims clearinghouse Navicure.

Seventy-four percent of survey respondents said they still haven't started implementing their ICD-10s. What can be taken as a bit of good news is that 76 percent of respondents to a series of KPMG surveys indicated they have completed an impact assessment, widely considered the first key step en route to ICD-10.

October 2014


http://links.mkt1985.com/ctt?kn=126&ms=ODEzNTYzMAS2&r=MTg5NDA2MTA0NjcS1&b=0&j=MTk2NTc0MTUxS0&mt=1&rt=0



2014… The year of

Two-thirds of primary care and one-third of specialists currently depend on an exclusive relationship with a hospital for some or all of their incomes. Many of these are employed. But private health insurers and large medical groups are options for physicians seeking cover, and the terms of their deals dis-intermediate traditional hospital referral relationships.

Source: Deloitte

2009 2010 2011 2012 2013 -

200

400

600

800

1,000

1,200

1,400

311 362 423 536 592

263 304

363

439 482

67 90

99

122 133

Physician Growth in Healthcare System

Specialist PCP Extenders

Joint accountability with physicians J




2014… The year of

Potential for revenue losses to competitors, penalties from regulators, new contract methodologies is increasing. See shift below in FFS(Fee for service).

82%

12%5% 1%

2010

59%

5%12%

23% 1%

2012

24%

5%

15%

55%

1%

2014 Budget

FFSPartial RiskFull RiskPopulation MgtBundled Payment

Risk K




2014… The year of

Pharmacy Workflow Project Business Impact:

– Reduced the number of trips to the hospital pharmacy due to inventory shortage by 8 trips per month

– Reduced the surcharges paid to the trucking company– Reduced the pharmacy headcount by two full time equivalents (FTE)

Lean L




2014… The year of

A measure in the new Efficiency Domain A claims-based measure that include risk-adjusted and price-standardized payments for all Part A and Part B services provided from 3 days prior to a hospital admission (index admission) through 30 days after the hospital discharge

Measure under VBP starting 2015

M & A Merger and AcquisitionsDeals Hospitals

2010 72 1252011 90 1562012 100 247

MSPB – Medicare Spend Per Beneficiary M




2014… The year of

Operating Income- on operationsMedian in 2012 3.15%, California Median 3%

2013 2014 2015 2016 2017 2018

-3%

-2%

-1%

0%

1%

2%

3%

Operating Income Projections

Projection with no interventions.

2009 2010 2011 2012 2013$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Operating Income (In thousands)

Net income and operating income N




2014… The year of

JP Morgan – Revenue growth: in the expansion of outpatient care and in clinical integration leading to value-based care.

2009 2010 2011 2012 2013440,000

460,000

480,000

500,000

520,000

540,000

560,000

580,000

600,000

0%

1%

2%

3%

4%

5%

6%

7%Outpatient Visits(In thousands)

2009 2010 2011 2012 20130%

10%20%30%40%50%60%70%80%90%

100%

50% 50% 49% 47% 45%

28% 28% 29% 30% 31%

19% 19% 19% 20% 21%

Revenue Diversification

Hospital Outpatient Physician Other

Outpatient- Growth Area Up 2.9% from 2011O




2014… The year of

Outpatient

Home

Physician

Hospice Cemetery

Skilled Nursing FacilityInpatient

Home HealthCare

Population-Centric Management

Population HealthP




2014… The year of

The Physician Quality Reporting System (PQRS) has been using incentive payments, and will begin to use payment adjustments in 2015, to encourage eligible health care professionals (EPs) to report on specific quality measures. EPs who do not participate in 2013 and receive a payment adjustment will be paid 1.5% less than the than the Medicare PFS amount for services provided in 2015. Increases to 2% in 2016.

2013 P2014 F2014Measures 258 296

284Measures Removed N/A 46

45

PQRSQ




2014… The year of

20131%

20142%

20153%

Readmission• 2013- 1% $280M for

2,213 hospitals- Average fine .42%

• 2014- 2% $227M for 2,225 hospitals- Average fine .38%

• Overall readmit rate for Medicare 18.4%(down from 19%)

Adds hip/knee and COPD to program In FY 15

RAC AuditReference pricingRetail

Readmit rate 2015R




2014… The year of

Represent 14% of expenses in California hospitals- second largest category of expenses. What are best practices?

2011 Supply Per Adjusted Discharge

Small Medium LargeMajor

Teaching All $ 961 $ 1,176 $ 1,434 $ 2,076 $ 1,354 CMI adjustedSource: HFMA

Supply ChainS




2014… The year ofTwo midnight ruleT

Starting Oct 2013, CMS introduced the two midnight rule. The final rule for the 2014 Inpatient Prospective Payment System stated an appropriate inpatient admission is when the patient stays in the hospital for at least two midnights.




2014… The year of

Inpatient grew at -1.5% over 2011And Outpatient grew 2.9%. Inpatient Surgeries declined -2.2%.

1981 1986 1991 1996 2001 2006 2011100120140160180200220240260280

US Inpatient Days

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US Inpatient DaysU

2009 2010 2011 2012 2013210,000

215,000

220,000

225,000

230,000

235,000

240,000

-6%

-4%

-2%

0%

2%

4%

6%

Mid West System Discharges

Dis

char

ges




2014… The year of

Adding 2 new outcome measures for 2015: PSI, CLABSIAdding new efficiency: Medicare Spending per Beneficiary

20131%`

20141.25%

20151.5%

FY 2013 FY 2014 FY 2015 FY 2016 FY 20170%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

70%

45%

20%10% 10%

30%

30%

30%

25% 25%

25%

30%

40% 40%

0.2 0.25 0.25

Clinical Process Patient Experience Outcome Measures Efficiency Measures

Metric Weighting

Value Based PurchasingV




2014… The year of

W

Workflow

2012 study by former Centers for Medicare and Medicaid Services (CMS) administrator Donald M. Berwick and RAND Corporation analyst Andrew D. Hackbarth estimated waste consumed $476 billion to $992 billion, or 18 percent to 37 percent of healthcare spending.

WasteW




2014… The year of

Extra Yellow ZebraYear of the Horse

X YZ




Now what?Learning culture

Focus and measurement

Get ready

Remember the value equation

Value= Quality / Cost




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the top trends that matter in 2014

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