Getting Fit for the Future: Community Hospitals in a Time of Transition
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Getting Fit for the Future:Community Hospitals in a Time of Transition
Casey JohnsonSenior Corporate Strategy Associate
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• Long history and deep experience with community health
• Well-established relationships with patients and providers
• Smaller size makes it easier to adapt to change and standardize processes
• Experience in looking across the continuum of care
• Experience running lean
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Community hospitals by the numbers
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percent of the hospitals
vulnerable to closure in 2016 are
critical access hospitals
68% 99,000healthcare
jobs in rural communities would be lost
if the 673 vulnerable
hospitals were to shut down in
2016http://www.beckershospitalreview.com/finance/673-rural-hospitals-vulnerable-to-closure-5-things-to-know.html
of the hospitals vulnerable to
closure in 2016 are located in states that have not expanded Medicaid
63%
Other types of hospitals facing closures
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2010 2011 2012 2013 20140
5
10
15
20
25
30
3529
1417
14
911
16
22
3028
36 7
1214
Hospitals opened and closed, including rural, by year
Newly opened hospitals Closed hospitalsClosed rural hospitals
Num
ber
of H
ospi
tals
Note: Counts of closed hospitals include the rural hospital closures.
Historically, small hospitals have faced many other pressures before
1983DRG
1997BBA
2010ACA
Balanced Budget Act:• Length of stay 96 hours• Optional payment
method at 115% of fee schedule
• Participation of rural areas of metropolitan counties
Affordable Care Act:• Medicaid expansion
Rural Emergency Acute Care Hospital
Act:• To create a sustainable
future for rural health care
Diagnostic-related Group:
• Classification system to identify "products" patients received
• Rewards volume versus actual costs
2015Senate Bill
1648
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Medicaid Expansion 2014
19 states are not expanding Medicaid 26 states (including Washington, D.C.) are expanding Medicaid)
6 states are expanding Medicaid, but using an alternative to traditional expansion
Average patient trends show the benefits of Medicaid expansion
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1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
8.6% 8.8% 9.1% 9.2% 9.2% 9.4% 9.4% 9.0% 8.9% 9.0% 9.3% 9.0% 9.4% 9.3% 9.5% 9.6%
15.2%15.7%15.7%15.1%15.7%16.2%16.2%15.2%
17.1%19.4%
20.8%20.1%
20.9%21.5%21.6% 21.2%
7.1% 7.1% 7.1% 6.5% 6.8% 6.9% 7.0% 6.3% 6.3% 5.4% 5.4% 5.1% 4.8% 4.7% 4.7% 4.7%4.3% 4.4% 4.4% 4.1% 4.3% 4.1% 4.2% 3.8% 3.0% 2.4% 2.3% 2.4% 2.1% 1.9% 2.0% 2.0%
Proportion of PCP Visits From Medicaid and Uninsured Adults (18-64) for Medicaid Expansion States and Non-
Expansion States, 2012-2015*
Medicaid Visits in Non-Expansion States Medicaid Visits in Expansion StatesUninsured Visits in Non-Expansion States Uninsured Visits in Expansion States
Sample: Over 3.4 million visits to practices active on the athenahealth network before 2011.* States grouped by 2014 expansion status
2012 2013 2014 2015
Rural hospitals have seeing declining patient admissions
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Sources:2006 – 2013: http://www.northcarolinahealthnews.org/2015/07/24/commentary-why-rural-hospitals-are-closing/2014: http://www.medpac.gov/documents/reports/chapter-3-hospital-inpatient-and-outpatient-services-(march-2016-report).pdf?sfvrsn=0
2006 2007 2008 2009 2010 2011 2012 2013 20140
1020304050607080 67 67 67 66 65 65 64 63 64
48 48 48 47 45 45 43 42 37
64 64 64 63 62 62 61 60 60
Hospital occupancy rates, 2006-2013
Urban Rural All hospitals
Fiscal year
Occu
panc
y ra
te (p
erce
nt)
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Source: http://www.tha.com/blog/Default.aspx?pid=17
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
-25.0%
Total Hospital Medicare Margins by Year
20032004
20052006
20072008
20092010
20112012
20132014
20152016
20172018
2019
The hospital business model is under assault and it needs new operating platforms
Predictive Trend
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Financial pressure such as expenses consistently exceeding revenues
Consolidation processes
Federal funding terminated due to patient safety concerns
How to Build a Thriving Community Hospital
Prioritize High
Return Projects
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Improve Clinician Loyalty & Alignment
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4 Strategies for a StrongCommunity Hospital
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Get Control Over
Financials
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Build Patient Loyalty
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Get control over your financials
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6% DENIAL MANAGEMENT TEAM
ENTER CLAIM
NETWORK KNOWLEDGE WORK
CHECK ELIGIBILITY
✔ 94% FIRST PASS
RULES ENGINE
REPORTING, TRACKERS,
ALERTS, APPEALS
PAYMENT POSTING
US BANK ACCOUNT
OUTREACHCAMPAIGNS
$
AUTHORIZATIONMANAGEMENT
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Build patient loyalty
Portal adoption a potential competitive differentiator
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Portal adopters 13 percentage points more likely to return for second visit
18 Month Retention RatesNon-Portal Adopters
67%Portal Adopters
80%
Portal Adopters More Loyal
1 “More than Forty Percent of U.S. Consumers Willing to Switch Physicians to Gain Online Access to Electronic Medical Records, According to Accenture Survey,” Accenture, September 16, 2013.
Retaining your patients pays off
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A B C D E F$0
$500
$1,000
$1,500
$2,000
$2,500
$101 $143 $95 $119 $131 $99
$814 $903 $863$704
$1,358
$2,026
Retained Patients Drive Considerable Downstream Revenue
Revenue Impact for Six Illustrative PracticesPatient Not Retained Patient Retained
3 Ye
ar R
even
ue*
Source: athenaResearch
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Improve clinician loyalty and alignment
Estimates of the proportion of primary care visits that might be attended by PAs or NPs range between 50%-75%
Hospital-based physician
Office-based physician
Mid-level provider
Support staff Patient
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Bring the principle of comparative advantage to the health care supply chain
Estimates of the proportion of primary care visits that might be attended by PAs or NPs range between 50%-75%
Hospital-based physician
Office-based physician
Mid-level provider
Support staff Patient
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Bring the principle of comparative advantage to the health care supply chain
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QUALITY MANAGEMENT ENGINE
PROVIDER VISIBILITY
SMART
WORKFLOW
NETWORK KNOWLEDGE WORK
195,000 ELECTRONIC INTERFACES
DOCUMENT MANAGEMENT
PATIENT ENGAGEMENT
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Prioritize high-return projects
Prioritize high-return projects
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✔
✔
✔
✔
Medicare and annual wellness visit campaigns
Hot spotting and intervention of the uncompensated care pool
Management of re-admits
Pursuing new grant opportunities
Don’t go it alone.
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that makes health care work as it should.
Software
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Network-EnabledService The Cloud
Perfo
rman
ce &
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y
Connection to Outcomes HIGH
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GH
+KNOWLEDGE WORK
RESULTSNETWORK
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Patient Engageme
nt
Care Coordination
Revenue Cycle &
Financial Manageme
ntElectronic
Health Records
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Focus anddeliver
on resultsAligned
incentives
At-risk service
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A partnership focused on results
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Get paid more, faster, with less work
An EHR that won’t slow you down
Deliver better clinical control, quality & care
Keep current patients and capture new ones
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Thank You
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