2014 HCE Annual Conference Moving Forward: Embracing Change and Innovation California Endowment November 20, 2014
Dec 17, 2015
2014 HCE Annual ConferenceMoving Forward:
Embracing Change and Innovation
California Endowment November 20, 2014
Learning From ExperienceStrategize Like a Consultant
Strategic Planning and Case Study
HealthCare Executives of Southern CaliforniaLa Canada, CaliforniaNovember 20, 2014
THE CAMDEN GROUP | 11/20/2014 4
Year founded: 1970 Number of clients: More
than 2,000 nationwide Ranked in Top 20 largest
consulting firms serving the U.S. by Modern Healthcare
Office locations: Los Angeles, California Costa Mesa, California Chicago, Illinois Rochester, New York Boston, Massachusetts
The Camden Group Overview
Case Study
THE CAMDEN GROUP | 11/20/2014 6
County-owned and -managed medical center with limited services
ABC Medical Center (“ABC”) clinics: specialty focused, 1 primary care, all provider based
7 Health Department (“HD”) clinics; all primary care with some specialty services
Safety net provider (high Medi-Cal, little managed care) 2 other hospitals (“Competitor A and Competitor B”) in the area Constrained emergency department (“ED”) capacity Organized labor presence Slow decision making Strong current cash position, uncertain future Needed strategic planning assistance to position them for
success
ABC Medical Center – Background
THE CAMDEN GROUP | 11/20/2014 7
Strategic Planning Approach
Step 1Engagement Kick-Off Meeting
Step 2Situation Assessment (Internal and External
Analyses)
Step 3Conduct Interviews
Step 4Summarize and Present Findings
Step 5Conduct Planning Retreat
Step 6Prepare and Review Draft Strategic Plan
Step 7Finalize Strategic Plan
Meetings/Site Visits
Weeks 2-5
Weeks 4-5 On-site Interviews
Weeks 6-7
Week 8
Weeks 9-10
Weeks 11-12
Conference Call
Steering Committee
On-site
Steering Committee
Steering Committee and Board
Week 1
Timeframe
Internal Situation Assessment
THE CAMDEN GROUP | 11/20/2014 9
Trended UtilizationNatividad Medical Center
Acute Care Utilization Statistics
Fiscal Year 2010 to Annualized 2013 (1)
Indicator/Service 2010 2011 2012
Annualized
2013 (1)
2010 to 2013
Percent Change
Licensed beds
General Acute (2) 150 150 150 150 0.0%
Acute Psychiatric 22 22 22 22 0.0%
Total 172 172 172 172 0.0%
Total Staffed Acute Care Beds 118 118 118 118 0.0%
Volume Indicators (excluding newborn nursery)
Discharges 7,781 7,911 8,401 8,450 8.6%
Patient Days 33,786 33,779 34,289 34,130 1.0%
ALOS 4.3 4.3 4.1 4.0 -7.0%
ADC 92.6 92.5 93.6 93.5 1.0%
Occupancy Rate (3) 53.8% 53.8% 54.4% 54.4% 1.0%
Outpatient Visits
Emergency Room
Visits 45,096 44,836 45,564 47,021 4.3%
Stations (2) 20 20 19 19 -5.0%
Visits/Station 2,255 2,242 2,398 2,475 9.8%
Clinics 30,252 31,087 33,364 30,305 0.2%
Surgeries 2,579 2,613 2,795 2,921 13.3%
Deliveries (5) 2,724 2,735 2,812 N/A 3.2%
Medicare Case Mix Index 1.210 1.213 1.234 DNA 2.0% (4)
Note: Fiscal year represents July - June
N/A indicates Not Applicable
DNA indicates Data Not Available
(1) Annualized based on f ive months of actual data
(2) Represents calendar year information gathered from OSHPD ALIRTS Annual Utilization Reports; 2012 and 2013 stations have 19 ED beds;
14 of w hich are acute (11 general acute and 3 psych) and the remaining 5 are Rapid Medical Evaluation ("RME")
2010 and 2011 stations had 20 ED beds; assumed 15 of w hich are acute (12 general acute and 3 psych) and the remaining 5 are RME
(3) Calculated as ADC/Total Licensed Acute Care Beds
(4) Represents the percent change betw een FY 2010 - FY 2012
(5) Represents CY 2009 - CY 2011 data
Fiscal Year
Source: Natividad Medical Center Audited Financial Statements, Statistical Report as of November 30, 2012 and OSHPD ALIRTS Annual Utilization Reports
THE CAMDEN GROUP | 11/20/2014 10
ABC is exposed to financial risk with expected declining government reimbursement and the sun-setting of disproportionate share hospital (“DSH”) and other supplemental funding.
Payer Mix
Natividad Medical Center Natividad Medical Center
Acute Care Payer Mix Trends Acute Care Utilization Statistics
Fiscal Year 2009 to 2012 FY 2010 - 2012
Payer Category 2009 2010 2011 2012
2009 to 2012
Percent Change
Medi-Cal 26.6% 23.4% 21.9% 21.1% -5.5%
Medi-Cal Managed Care 23.5% 27.1% 29.0% 30.4% 6.9%
Medicare 18.0% 17.3% 17.4% 17.2% -0.8%
Managed Care 16.8% 17.3% 17.3% 16.5% -0.3%
MIA 4.6% 4.9% 5.3% 5.2% 0.6%
Self-Pay 7.2% 8.4% 7.6% 7.7% 0.5%
Short Doyle 3.3% 1.6% 1.6% 1.9% -1.4%Total 100.0% 100.0% 100.0% 100.0%
Source: Natividad Medical Center
Notes: Fiscal year represents July - June
Fiscal Year
MIA represents a Medically Indigent Adult
Short Doyle health plan is for mental health coverage for Medi-Cal eligible individuals.
THE CAMDEN GROUP | 11/20/2014 11
ABC Historical Financial Performance
Natividad Medical CenterFinancial Performance
Fiscal Year 2009 to 2012
2009 (1) 2010 (2) 2011 (2) 2012 (2)
Operating EBITDA(1) (In $000s) $14,911 $25,358 $39,270 $18,726
Operating income (In $000s) $4,161 $14,482 $27,816 $5,854
Excess of revenues over expenses (In $000s) $7,892 $13,792 $32,330 $4,989
LiquidityCash and unrestricted investments (In $000s) $52,409 $45,625 $62,503 $70,673Days cash on hand 136.8 113.2 144.4 156.3Unrestricted cash to debt 69.8% 62.5% 72.7% 88.4%
ProfitabilityOperating margin 2.8% 8.6% 14.4% 3.2%Profit margin 5.1% 8.2% 16.3% 2.8%Operating EBITDA Margin 9.9% 15.0% 20.3% 10.4%
Capital structure and cash flowDebt to capitalization 48.5% 62.4% 50.6% 54.0%
Clients/Natividad_Medical_Center/Strategic_Plan_2013/Client Data/[Financial_Capacity Natividad - RQ 1-24-13.xlsx]Historical_Trends
(1) OSHPD audited financial statements(2) Audited f inancial statements(3) Operating EBITDA calculated by adding the follow ing items to operating income: depreciation and amortization; interest
Fiscal Year
THE CAMDEN GROUP | 11/20/2014 12
ABC has generated positive operating income over the past 4 years; however, there has been a significant decrease in fiscal year 2012, caused in part by lower provider fees and contracted rates.
With pending changes in Medi-Cal and DSH, operating income is likely to further erode.
Debt service coverage concerns could arise if margins are below annual debt requirements.
ABC Historical Financial Performance
THE CAMDEN GROUP | 11/20/2014 13
Improving quality scores (utilizing core measures) in the areas of heart failure, immunization, perinatal care (baby), pneumonia, surgical care improvement process, and stroke is critical in helping ABC become a “provider of choice” for patients and help to attract physicians.
Quality Summary – Perfect Care Scores (Core Measures)Natividad Medical Center
Perfect Care ScoresCalendar Year 2010 to 2012
Quality Metric 2010 2011 2012
Calendar Year 2012 Truven
Health Analytics
Benchmark (1)
Perfect Care - Acute Myocardial Infarction ("AMI") 100.0% 89.5% 95.8% 94.5%Total Number of Respondents 19 28 17
Perfect Care - Heart Failure ("HF") 74.6% 70.6% 62.9% 91.6%Total Number of Respondents 82 82 72
Perfect Care - Immunization (2) DNA DNA 66.2% 87.1%Total Number of Respondents DNA DNA 344
Perfect Care - Perinatal Care ("PC") Baby (2) 38.7% 40.2% 44.8% 52.0%Total Number of Respondents 397 519 392
Perfect Care - Perinatal Care ("PC") Mom (2) 78.1% 82.9% 85.6% 77.4%Total Number of Respondents 150 235 132
Perfect Care - Pneumonia ("PN") 68.0% 80.9% 80.6% 94.4%Total Number of Respondents 141 130 72
Perfect Care - Surgical Care Improvement Process ("SCIP") 78.5% 74.5% 70.7% 89.5%Total Number of Respondents 170 213 130
Perfect Care - Stroke ("STK") (2) DNA 38.3% 29.2% 73.5%Total Number of Respondents DNA 30 21
Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/[Natividad_Additional_Analysis.xlsx]Perfect Care Scores
Notes: DNA represents Data Not Available
Sources: Natividad Medical Center
(1) This score is a compiled score based on hospitals w ho utilize Truven Health Analytics (formerly Thompson Reuters) for their Core Measure Service, and elect to include the core measures as part of their reporting.(2) Detail comparisons to local competitors not available on Hospital Compare
Calendary Year
Green highlights represent metrics that are greater than or equal to the Truven Health Analytics Benchmark
Yellow highlights represent metrics that are w ithin one percentage point below the Truven Health Analytics Benchmark
Red highlights represent metrics that are more than one percentage point below the Truven Health Analytics Benchmark
THE CAMDEN GROUP | 11/20/2014 14
Medical Staff ProfileNatividad Medical Center
Medical Staff Profile (1)
Calendar Year 2012
Physicians Physicians Age 60 +
Specialty
Total Physicians
on Staff
Number of Discharging Physicians
With Ten or More
DischargesAverage
Age
Number of Total
Discharges (2)Percent of
Total
Number of Discharging Physicians
Number of Total
DischargesPercent of Specialty
Primary Care
Family Medicine 32 31 28 43.7 3,092 44.1% - - 0.0%
Internal Medicine 5 5 5 48.4 664 9.5% 1 76 11.4%
Pediatrics 5 4 2 50.4 224 3.2% 1 1 0.4%
Subtotal(3) 42 40 35 3,980 56.8% 2 77 1.9%
Medical
Allergy and Immunology - - - - - 0.0% - - 0.0%
Cardiology 10 1 - 61.8 2 0.0% 1 2 100.0%
Dermatology 2 - - 36.0 - 0.0% - - 0.0%
Endocrinology - - - - - 0.0% - - 0.0%
Gastroenterology 6 1 - 47.3 1 0.0% - - 0.0%
Hematology and Oncology 4 - - 50.0 - 0.0% - - 0.0%
Infectious Disease 1 - - 51.0 - 0.0% - - 0.0%
Neonatology 2 2 2 58.0 79 1.1% 1 39 49.4%
Nephrology 5 - - 52.4 - 0.0% - - 0.0%
Neurology 3 - - 53.7 - 0.0% - - 0.0%
Physical Medicine and Rehab 1 1 1 49.0 255 3.6% - - 0.0%
Psychiatry 5 4 4 57.8 682 9.7% 2 56 8.2%
Pulmonary Disease 6 6 2 41.8 70 1.0% - - 0.0%
Radiation Oncology 1 - - 54.0 - 0.0% - - 0.0%
Rheumatology - - - - - 0.0% - - 0.0%
Subtotal 46 15 9 1,089 15.5% 4 97 8.9%
Source: Natividad Medical CenterIndicates that more than 25.0 percent of specialty is admitted by a physician over age 60, the Hospital has three or few er discharging physicians on active or provisional staff, or the average
age of physicians on staff is over 60.
Notes: Excludes normal new borns; Excludes physicians w ith hospital-based specialties; Medical staff roster represents active and provisional physicians as of January 2013
(1) Includes physicians w ith active or provisional status only.
(2) Represents CY 2012 discharges(3) Number of primary care discharging physicians overstates NMC Primary Care FTEs. Select physicians primarily practice at Clinica de Salud and share call time w ith NMC. In addition, faculty for the Family Practice residency spend time teaching and doi
THE CAMDEN GROUP | 11/20/2014 15
Medical Staff ProfileNatividad Medical Center
Medical Staff Profile (1)
Calendar Year 2012
Physicians Physicians Age 60 +
Total Physicians
on Staff
Number of Discharging Physicians
With Ten or More
DischargesAverage
Age
Number of Total
Discharges (2)Percent of
Total
Number of Discharging Physicians
Number of Total
DischargesPercent of Specialty
Surgical
General Surgery 5 3 3 54.2 379 5.4% 1 44 11.6%
Neurosurgery - - - - - 0.0% - - 0.0%
Obstetrics & Gynecology 11 10 9 53.5 1,405 20.1% 3 673 47.9%
Oral & Maxillofacial Surgery - - - - - 0.0% - - 0.0%
Orthopedics 14 11 5 53.8 96 1.4% 2 3 3.1%
Otolaryngology 5 4 1 44.2 22 0.3% - - 0.0%
Ophthalmology 2 1 - 54.0 1 0.0% 1 1 100.0%
Plastic Surgery 2 2 - 44.0 9 0.1% - - 0.0%
Thoracic Surgery 1 1 1 64.0 14 0.2% 1 14 100.0%
Urology 2 2 - 40.5 9 0.1% - - 0.0%
Subtotal 42 34 19 1,935 27.6% 8 735 38.0%
Other Specialties (3) 6 - - 50.2 - 0.0% - - 0.0%
Total 136 89 63 49.6 7,004 100.0% 14 909 13.0%
Source: Natividad Medical CenterIndicates that more than 25.0 percent of specialty is admitted by a physician over age 60, the Hospital has three or few er discharging physicians on active or provisional staff, or the average
age of physicians on staff is over 60.
Notes: Excludes normal new borns; Excludes physicians w ith hospital-based specialties; Medical staff roster represents active and provisional physicians as of January 2013
(1) Includes physicians w ith active or provisional status only.
(2) Represents CY 2012 discharges.
(3) Other Specialty includes Podiatry, Pain Management, and Pediatric Dentistry.
THE CAMDEN GROUP | 11/20/2014 16
ABC’s vulnerability in cardiology and thoracic surgery is high due to 3 or less discharging physicians in these specialties and that all of the discharges are from physicians age 60 years or older; total volumes are low.
ABC is also vulnerable in the following 7 additional specialties (due to 3 or fewer discharging physicians): Gastroenterology Neonatology Physical Medicine/Rehabilitation General Surgery Ophthalmology Plastic Surgery Urology
Medical Staff Profile
External Situation Assessment
THE CAMDEN GROUP | 11/20/2014 18
Health Professional Shortage Area Portions of the county designated as a health professional
shortage area represent potential target areas for ABC to collaborate with federally qualified health centers (“FQHCs”)/rural health centers (“RHCs”) to establish patient entry and referral relationships.
THE CAMDEN GROUP | 11/20/2014 19
County PopulationNatividad Medical Center
Monterey County vs. the State of California - Population by Age Cohort
Calendar Year 2013 and 2018
Estimated 2013 Projected 2018
Age Cohort (Years) CAGR(1) NumberPercent of
Total NumberPercent of
Total
Monterey County
0 - 14 1.3% 95,936 22.4% 102,342 22.7% 6.7%
15 - 44 0.5% 185,007 43.1% 189,380 42.0% 2.4%
45 - 64 0.7% 99,393 23.2% 103,045 22.8% 3.7%
65 + 3.1% 48,508 11.3% 56,622 12.5% 16.7%Total 1.0% 428,844 100.0% 451,389 100.0% 5.3%
Women 15 - 44 0.5% 85,853 20.0% 87,940 19.5% 2.4%
Median Age 0.4% 33.5 34.2 2.1%
California
0 - 14 0.6% 7,723,833 20.2% 7,967,126 20.0% 3.1%
15 - 44 0.1% 16,168,924 42.3% 16,261,445 40.8% 0.6%
45 - 64 1.0% 9,666,754 25.3% 10,158,608 25.5% 5.1%
65 + 3.3% 4,640,320 12.1% 5,449,584 13.7% 17.4%Total 0.8% 38,199,831 100.0% 39,836,763 100.0% 4.3%
Women 15 - 44 0.0% 7,901,632 20.7% 7,918,572 19.9% 0.2%
Median Age 0.6% 35.8 36.9 3.1%
Source: Claritas, Inc.
(1) CAGR is the compound annual grow th rate, or the percent change in each year
https://sharepoint.thecamdengroup.com/Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/Claritas/[Natividad_Pop_by_Age_and_Sex.xlsx]Pop Table
Percent Change2013 to
2018
THE CAMDEN GROUP | 11/20/2014 20
Given the slow annual rate of population growth, in order to build volume ABC will need to capture market share from its competitors.
There is little growth in women ages 15 to 44, which implies little growth in OB and NICU future services.
The largest population cohort (ages 14 to 55) has a low use of hospital services.
The population cohort that is typically the heaviest users of hospital services (ages 65 +) is small in size.
County Population
THE CAMDEN GROUP | 11/20/2014 21
Ethnic ProfileNatividad Medical Center
Monterey County vs. the State of California - Ethnic Profile
Calendar Year 2013 and 2018
Projected 2013 Projected 2018
Ethnicity CAGR(1) NumberPercent of
Total NumberPercent of
Total
Monterey CountyHispanics 2.1% 246,580 57.5% 273,595 60.6%
Non-HispanicsWhite -0.7% 133,469 31.1% 129,032 28.6%Black -1.9% 10,786 2.5% 9,823 2.2%American Indian/Alaskan/Aleutian -2.4% 1,284 0.3% 1,137 0.3%Asian/Hawaiian/Pacific Islander 0.8% 26,374 6.2% 27,406 6.1%Other 0.1% 10,351 2.4% 10,396 2.3%
Non-Hispanics -0.5% 182,264 42.5% 177,794 39.4%
Total 1.0% 428,844 100.0% 451,389 100.0%
CaliforniaHispanics 1.7% 14,848,498 38.9% 16,188,844 40.6%
Non-HispanicsWhite -0.4% 14,724,160 38.5% 14,448,357 36.3%Black 0.0% 2,156,173 5.6% 2,151,524 5.4%American Indian/Alaskan/Aleutian -1.5% 156,074 0.4% 145,031 0.4%Asian/Hawaiian/Pacific Islander 2.0% 5,237,011 13.7% 5,789,519 14.5%Other 0.7% 1,077,915 2.8% 1,113,488 2.8%
Non-Hispanics 0.3% 23,351,333 61.1% 23,647,919 59.4%
Total 0.8% 38,199,831 100.0% 39,836,763 100.0%
https://sharepoint.thecamdengroup.com/Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/Claritas/[Natividad_Ethnicity_Profile.xlsx]Ethnicity Table
Source: Claritas, Inc.
(1) CAGR is the compound annual grow th rate, or the percent change in each year
THE CAMDEN GROUP | 11/20/2014 22
ABC has already responded to an increasingly high concentration of diverse populations and has developed programs to meet the language and cultural needs of its patient population i.e., the interpreter program.
As ABC conducts future physician recruitment it should continue to focus on meeting language and cultural needs of its patient population.
Ethnic Profile
THE CAMDEN GROUP | 11/20/2014 23
Health StatusNatividad Medical Center
Health Status Indicators - Monterey County versus the State of CaliforniaAverages for 2008 to 2010
Health Status Indicator Year of DataState of
California
Monterey County vs the
State of California
Mortality (per 100,000 population) Deaths Death Rate (1) Death Rate (1)
All Cancers 2008 - 2010 Average 520 129.9 151.7 Better
Diabetes Mellitus 2008 - 2010 Average 64 16.0 19.5 Better
Alzheimer's Disease 2008 - 2010 Average 65 15.8 28.2 Better
Coronary Heart Disease 2008 - 2010 Average 386 93.4 121.6 Better
Unintentional Injuries 2008 - 2010 Average 118 28.5 27.1 Worse
Stroke 2008 - 2010 Average 141 34.5 37.4 Better
Morbidity (per 100,000 population) CasesCrude Case
RateCrude Case
Rate
AIDS Incidence (Age 13 And Over) 2008 - 2010 Average 15 4.4 9.4 Better
Tuberculosis Incidence 2008 - 2010 Average 20 4.7 6.5 Better
Chlamydia Incidence 2008 - 2010 Average 1,370 318.4 389.6 Better
Gonorrhea Incidence 2008 - 2010 Average 103 24.0 65.8 Better
Infant Mortality (per 1,000 live births) Infant DeathsCrude Death
RateCrude Death
Rate
Infant Mortality: All Races 2007 - 2009 Average 35 4.7 5.2 Better
Natality (per 100 live births) Live Births Percent Percent
Low Birthweight Infants 2008 - 2010 Average 7,088 5.8% 6.8% Better
Late or No Prenatal Care Utilization 2008 - 2010 Average 1,772 25.4% 17.1% Worse
Natality (per 1,000 female population) Live BirthsAge-Specific
Birth RateAge-Specific
Birth Rate
Births To Mothers Aged 15-19 2009 804 55.5 36.6 Worse
Census Population Percent/Ratio Percent/Ratio
Diabetes Mellitus 2010 15,506 5.1% 8.5% Better
Obesity 2010 74,491 24.5% 18.7% Worse
Population to Mental Health Provider Ratio 2010 2,778:1 1,853:1 Worse
Monterey County
Source: County Health Status Profiles, 2012, Monterey County Health Department, County Health Rankings, and Health Indicators Warehouse
(1) Death rate is age-adjusted
(2) Percent of population is age-adjusted
https://sharepoint.thecamdengroup.com/Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/[Monterey_County_Health_Status_ Indicators.xls]Table
THE CAMDEN GROUP | 11/20/2014 24
The County’s health status is worse than the state for unintentional injuries. This implies support for a trauma program in ABC’s service area.
ABC has an opportunity to: Reduce teen births and enhance prenatal care (i.e., increased
patient outreach and patient education) Enhance population health management and education as it
relates to obesity and mental health
Health Status
THE CAMDEN GROUP | 11/20/2014 25
Market Share by Service Line - 2011Natividad Medical Center
Monterey County Market Share by Service Line
Calendar Year 2011
Total Inpatient Discharges
Service Line VolumePercent of
Total Outmigration (1)
Cardiology - Diagnostic/Interventional 842 2.3% 0.0% 40.6% 45.8% 0.0% 13.5%
Cardiology - Medical 2,121 5.9% 25.4% 32.4% 31.3% 3.9% 7.0%
Cardiology - Surgery 298 0.8% 0.0% 40.6% 40.3% 0.0% 19.1%
Chemical Dependency 383 1.1% 24.3% 54.8% 8.9% 0.8% 11.2%
Endocrine 908 2.5% 17.3% 29.6% 35.4% 6.1% 11.7%
ENT 345 1.0% 14.5% 26.1% 32.5% 1.4% 25.5%
Gastroenterology 2,687 7.5% 20.2% 33.5% 31.0% 3.9% 11.4%
General Medicine 2,587 7.2% 15.4% 36.9% 31.1% 4.4% 12.2%
General Surgery 2,695 7.5% 14.1% 34.7% 33.1% 4.4% 13.7%
Gynecology 712 2.0% 13.6% 24.6% 43.7% 4.2% 13.9%
Neonatal Intensive Care 2,228 6.2% 53.4% 17.2% 14.6% 5.7% 9.1%
Neurology 1,437 4.0% 13.0% 34.1% 31.1% 3.8% 18.0%
Neurosurgery 468 1.3% 1.9% 33.1% 25.4% 0.0% 39.5%
Obstetrics & Deliveries 7,239 20.2% 42.2% 18.5% 25.6% 7.8% 6.0%
Oncology 1,194 3.3% 8.5% 30.7% 28.0% 1.7% 31.2%
Ophthalmology 53 0.1% 30.2% 18.9% 17.0% 0.0% 34.0%
Orthopedics 2,452 6.8% 8.1% 40.6% 27.2% 2.9% 21.2%
Plastic Surgery 217 0.6% 12.0% 30.4% 32.3% 2.3% 23.0%
Psychiatry 1,404 3.9% 32.8% 50.2% 1.4% 0.5% 15.0%
Pulmonary Medicine 2,661 7.4% 19.4% 34.8% 30.7% 5.9% 9.2%
Rehabilitation 514 1.4% 71.0% 0.0% 0.0% 13.4% 15.6%
Spine Surgery 544 1.5% 2.9% 48.5% 30.3% 0.0% 18.2%
Thoracic & Vascular Surgery 485 1.4% 3.5% 41.0% 32.4% 0.0% 23.1%
Transplant (2) 33 0.1% 0.0% 0.0% 0.0% 0.0% 100.0%
Ungroupable 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Urology 1,385 3.9% 17.1% 28.7% 31.5% 6.1% 16.5%
Total 35,892 100.0% 24.1% 30.6% 27.6% 4.7% 13.1%
N = 8,647 10,980 9,896 1,672 4,697
Source: OSHPD Inpatient Discharge Database, 2011. Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/[Natividad_Market_Share_and_Payer_Mix_Tables.xlsx]2011 Mkt Shr outmig
Notes: Excludes normal new borns (MS-DRG 795); Includes all types of care.
Indicates market share leader
(1) Includes all hospitals not located w ithin Monterey County. Each of these individual Hospitals have less than 2.5 percent market share.
(2) UCSF Medical Center leads the market w ith 63.6 percent of the transplant service line.
Natividad Medical Center
Community Hospital Monterey Peninsula
Salinas Valley
Memorial Hospital
George L. Mee
Memorial Hospital
ABC Competitor A
Competitor B
Competitor C
THE CAMDEN GROUP | 11/20/2014 26
Medi-Cal Market Share by Service Line - 2011 Natividad Medical Center
Monterey County Medi- Cal Market Share by Service Line
Calendar Year 2011
Total Inpatient Discharges
Service Line VolumePercent of
Total Outmigration (1)
Cardiology - Diagnostic/Interventional 50 0.5% 0.0% 20.0% 54.0% 0.0% 26.0%
Cardiology - Medical 230 2.2% 55.2% 8.7% 21.7% 0.4% 13.9%
Cardiology - Surgery 33 0.3% 0.0% 15.2% 45.5% 0.0% 39.4%
Chemical Dependency 41 0.4% 43.9% 46.3% 9.8% 0.0% 0.0%
Endocrine 179 1.8% 27.9% 14.0% 35.2% 2.8% 20.1%
ENT 137 1.3% 26.3% 8.8% 30.7% 1.5% 32.8%
Gastroenterology 499 4.9% 41.1% 17.4% 24.6% 1.0% 15.8%
General Medicine 421 4.1% 36.8% 16.4% 28.5% 1.9% 16.4%
General Surgery 539 5.3% 31.2% 18.9% 28.2% 4.1% 17.6%
Gynecology 123 1.2% 38.2% 8.1% 40.7% 3.3% 9.8%
Neonatal Intensive Care 1,476 14.4% 73.6% 4.7% 10.2% 4.5% 6.9%
Neurology 218 2.1% 32.6% 14.2% 23.4% 0.5% 29.4%
Neurosurgery 58 0.6% 8.6% 17.2% 6.9% 0.0% 67.2%
Obstetrics & Deliveries 4,400 43.0% 63.2% 5.1% 19.9% 7.2% 4.6%
Oncology 252 2.5% 14.3% 10.3% 22.2% 0.8% 52.4%
Ophthalmology 25 0.2% 36.0% 4.0% 12.0% 0.0% 48.0%
Orthopedics 214 2.1% 34.1% 17.8% 18.2% 1.9% 28.0%
Plastic Surgery 35 0.3% 28.6% 17.1% 40.0% 0.0% 14.3%
Psychiatry 267 2.6% 50.6% 31.1% 0.0% 0.0% 18.4%
Pulmonary Medicine 649 6.3% 41.0% 19.6% 26.3% 1.2% 11.9%
Rehabilitation 79 0.8% 84.8% 0.0% 0.0% 1.3% 13.9%
Spine Surgery 30 0.3% 36.7% 20.0% 0.0% 0.0% 43.3%
Thoracic & Vascular Surgery 44 0.4% 11.4% 15.9% 25.0% 0.0% 47.7%
Transplant(2) 3 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%
Ungroupable 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Urology 224 2.2% 42.4% 11.2% 25.9% 1.3% 19.2%
Total 10,226 100.0% 53.4% 9.9% 20.3% 4.4% 12.0%
N = 5,458 1,011 2,079 450 1,228
Source: OSHPD Inpatient Discharge Database, 2011 Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/[Natividad_Market_Share_and_Payer_Mix_Tables.xlsx]2011 MediCal MS
Notes: Excludes normal new borns (MS-DRG 795); Includes all types of care.
Indicates market share leader
(1) Includes all hospitals not located w ithin Monterey County. Each of these individual Hospitals have less than 2.5 percent market share.
(2) UCSF Medical Center leads the market w ith 100.0 percent of the transplant service line.
Natividad Medical Center
Community Hospital Monterey Peninsula
Salinas Valley
Memorial Hospital
George L. Mee
Memorial Hospital
Competitor A
Competitor B
Competitor C
ABC Medical Center
THE CAMDEN GROUP | 11/20/2014 27
In order to grow its Medi-Cal market share, ABC must differentiate itself from Competitor B and it must resolve access barriers present in its clinics.
As the safety net hospital, ABC leads the market in 14 service lines for Medi-Cal payers.
Competitor B leads the Medi-Cal market share in: Interventional Cardiology Cardiac Surgery Endocrine ENT Gynecology Plastic Surgery Thoracic and Vascular Surgery
Medi-Cal Market Share by Service Line - 2011
THE CAMDEN GROUP | 11/20/2014 28
Market Share by Payer Mix – 2011Natividad Medical Center
Monterey County Market Share by Payer Mix
Calendar Year 2011
Total Inpatient Discharges Medicare Medi-Cal Private Coverage
Hospital VolumePercent of
TotalManaged
Care FFS TotalManaged
Care FFS Total HMO PPO FFS Total
Natividad Medical Center 8,647 24.1% 0.0% 9.6% 9.4% 42.9% 66.1% 53.4% 0.4% 10.7% 8.2% 8.3% 29.4%
Community Hospital Monterey Peninsula 10,980 30.6% 30.4% 44.1% 43.9% 12.6% 6.6% 9.9% 43.6% 28.3% 24.1% 30.7% 42.5%
Salinas Valley Memorial Hospital 9,896 27.6% 44.6% 34.7% 34.8% 29.9% 8.8% 20.3% 0.4% 41.6% 44.5% 33.8% 11.3%
George L. Mee Memorial Hospital 1,672 4.7% 0.0% 3.3% 3.2% 0.4% 9.2% 4.4% 31.9% 0.0% 9.9% 7.7% 2.7%
Subtotal 31,195 86.9% 75.0% 91.7% 91.4% 85.7% 90.7% 88.0% 76.3% 80.5% 86.7% 80.5% 85.9%
Outmigration (2) 4,697 13.1% 25.0% 8.3% 8.6% 14.3% 9.3% 12.0% 23.7% 19.5% 13.3% 19.5% 14.1%
Total 35,892 100.0% 0.6% 32.6% 33.2% 15.6% 12.9% 28.5% 5.2% 17.3% 3.6% 26.1% 12.2%
N = 224 11,693 11,917 5,596 4,630 10,226 1,855 6,208 1,305 9,368 4,381
Source: OSHPD Inpatient Discharge Database, 2011. Clients/Natividad_Medical_Center/Strategic_Plan_2013/Planning/[Natividad_Market_Share_and_Payer_Mix_Tables.xlsx]2011 Pyr Mix outmig
Notes: Excludes normal new borns (MS-DRG 795); Includes all types of care.
Indicates market share leader
(1) Includes county indigent, other indigent, other government, other payers, w orkers compensation, and self-pay.
(2) Includes all hospitals not located w ithin Monterey County. Each of these individual Hospital has less than 2.5 percent market share.
All Other
Payers (1)
ABC Medical CenterCompetitor ACompetitor BCompetitor C
Interview Themes
THE CAMDEN GROUP | 11/20/2014 30
Strengths, Weaknesses, Opportunities, and Threats
Academic medical center affiliated family medicine residency program
Only certified level III NICU, high-risk obstetrics Strong acute rehab and inpatient psych programs Directly employs physicians Overall younger medical staff Effective hospitalist program in place Meaningful Use Stage 1 completion in 2013 Facility is seismically compliant and campus has physical
space to expand Several sources of government funding Strong cash position
Strengths
THE CAMDEN GROUP | 11/20/2014 31
Strengths, Weaknesses, Opportunities, and Threats
Lower costs per discharge due to low case mix index Low time to triage in the ED
Weaknesses Governance structure inhibits timely decision making and
execution (impedes retention of quality managers, improvement of quality processes, and realization of operational efficiencies)
County policies as they relate to ABC are cumbersome and slow
Limited access points (limited hours of operation in HD clinics, lack of geographic distribution, lack of affiliations with FQHCs, RHCs, and lack of health plan contracts)
Constrained ED capacity
Strengths (Cont’d)
THE CAMDEN GROUP | 11/20/2014 32
Weaknesses (Cont’d)
Strengths, Weaknesses, Opportunities, and Threats
Delayed admission from ED Relatively low quality and patient satisfaction
Physicians and the community have a negative perception of ABC Lack of risk management experience No use of new care models Lack of pay-for-performance (“P4P”) incentives Continuum of care gaps (acute and post acute) Significantly underfunded capital expenditures
Opportunities Form strategic partnerships/affiliations and restructure to
enhance clinical services, physician recruitment, improve quality, facilitate rapid information technology (“IT”) initiative implementation, and enable faster decision-making
THE CAMDEN GROUP | 11/20/2014 33
Opportunities (Cont’d)
Strengths, Weaknesses, Opportunities, and Threats
Establish a physician organization (i.e. independent practice association [“IPA”] ) to facilitate recruitment, care management, and alignment with ABC
Participate in contracted risk health plans through the IPA to facilitate alignment across the continuum of care
Offer a narrow network health plan/benefits for county and non county employees
Add a trauma program Expand HD clinic hours of operation Expand ED capacity Evaluate ABC inpatient capacity Affiliate with FQHCs and RHCs to expand geographic
reach/access
THE CAMDEN GROUP | 11/20/2014 34
Threats
Strengths, Weaknesses, Opportunities, and Threats
Financial risk with declining reimbursement (Medicare, Medi-Cal, disproportionate share hospital payments, provider fee supplement)
Financial impact of refinancing the existing debt (additional costs, higher interest rates)
Covered California will increase the ED use (currently above functional capacity)
Continued low quality and patient satisfaction scores will reduce reimbursement
As managed care products enter the market, likely loss of profitability
THE CAMDEN GROUP | 11/20/2014 35
Critical Issues to be Addressed in the Strategic Plan
Key Findings/Gaps
Existing governance structure and leadership inhibits timely decision making and execution
Constrained ED capacity (operating above functional capacity) Limited access points Lack of clinical management expertise Lack of IT infrastructure to support integrated care and
movement towards population management Fragmented continuum of care Lack of sustainable financial performance Backlog of capital needs (equipment, facility, and IT);
approximately $25 million to $30 million Lack of physician alignment with physicians at other entities
Mission and Vision
THE CAMDEN GROUP | 11/20/2014 37
Mission and Vision
To continually monitor and improve the health of the people, including the vulnerable, in the County through coordinated, affordable, high quality healthcare.
Vision
To be a healthcare delivery system that collaborates with other providers to offer accessible, high quality and high value healthcare services in a financially stable manner.
Mission
Goals and Sample Strategies
THE CAMDEN GROUP | 11/20/2014 39
Goal: Increase Patient Access
Sample Strategies
Priority Strategy Timing
In Process Evaluate and expand ED capacity (i.e., triage processes) Expand ED facility Add extended hour primary care center
Ongoing - June 30, 2015Ongoing - June 30, 2014
In Process Add the County’s only trauma program* Ongoing - December 31, 2013
1B Create a narrow network and contract with health plans for large employers (e.g., agriculture, hospitality)* Explore feasibility of a risk bearing health plan
through a Knox-Keene license
June 1, 2013 - December 31, 2013
1D Affiliate or collaborate with FQHCs to expand geographic reach and referral base*
July 1, 2013 (signed LOI) - June 30, 2014 (signed affiliation agreement)
1F Increase the PCP base via physician recruitment and/or affiliation with another entity: Physician organization*, participation in county-wide
IPA, and/or creation of a separate IPA Implement P4P incentives through health plan
contracts and self funded employers*
July 1, 2013 - June 30, 2016
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 40
Goal: Increase Physician Integration and Alignment
Sample Strategies
Priority Strategy Timing
In Process Integrate leadership of ABC and the Clinics; explore and evaluate the formation of a physician hospital organization*
Ongoing - December 31, 2013
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 41
Goal: Move Towards Population Health Management
Sample Strategies
Priority Strategy Timing
In Process Acquire the IT infrastructure (CPOE, HIE, meaningful use, EDW, web-based portals, care management tools, claims processing, etc.) to support medical management
Ongoing - June 30, 2015
In Process Continue to utilize patient centered medical home (“PCMH”) for population health management in HD clinics Negotiate enhanced/additional payment for PCMH
services
Ongoing - December 31, 2013
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 42
Goals: Attain Financial Stability/Separate from the County
Sample Strategies
Priority Strategy Timing
1A Form affiliations/partnerships/relationships with provider networks: Consolidate shared services to reduce costs Enhance clinical services across the continuum to
increase quality and market share capture Lower cost of capital (debt) Diversify payer mix through expanded PCP base and
health plan contracts Consider the universe of opportunities based on
the Hospital’s needs (i.e., local providers, AMCs, and health systems)
June 1, 2013 - March 31, 2014
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 43
Goal: Fund Capital Needs
Sample Strategies
Priority Strategy Timing
1A Form partnerships/relationships with provider networks: Use increased savings to fund capital expenditures
June 1, 2013 - March 31, 2014
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 44
Sample Strategies
Goal: Improve Quality and Increase Patient SatisfactionPriority Strategy Timing
In Process Implement process changes to improve quality core measure and patient satisfaction scores Target top quartile (in 3 years) Target top decile (in 5 years) Target HCAPHS performance metrics/scores Implement the quality improvement plan (core
measures) Use IT tools to improve quality Follow care protocols Benchmark performance Change own culture to improve the quality of care
Ongoing - June 30, 2015
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 45
Goal: Improve Staff Recruitment/Retention
Sample Strategies
Priority Strategy Timing
In Process Ensure employee compensation and benefits are competitive (via new policies) Incentive programs to meet specific metrics that ABC
is measured on*
Ongoing - December 31, 2013
2A Exceed the “standard of care” criteria as a philosophy and culture Optimize rewards and payment for employee
credentials Enhance employee training to specific metrics Review and revise job descriptions (including
standard of care/practice) for health system positions
October 1, 2013 - September 30, 2014
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
THE CAMDEN GROUP | 11/20/2014 46
Goal: Improve Patient Centered Care
Sample Strategies
Priority Strategy Timing
In Process Implement a PCMH in addition to HD Clinics Follow NCQA criteria and guidelines Seek enhanced payment
Ongoing - December 31, 2013
1B Contract with health plans, self funded employers, and the County (employees, dependents, and retirees) to offer a tiered benefit plan that includes cost savings incentives*
June 1, 2013 - December 31, 2014
* Execution work plan currently in development 1A-H High 2A-F Medium 3A-C Low
2014 HCE Annual ConferenceMoving Forward:
Embracing Change and Innovation
California Endowment November 20, 2014