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ISOC CEO Meeting INSTITUTIONAL OVERVIEWS & CASE STUDIES Campbell Clinic George Hernandez Chief Executive Officer OCTOBER 2011 (revised 10/04/11)

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Presentation on theme: "ISOC CEO Meeting INSTITUTIONAL OVERVIEWS & CASE STUDIES Campbell Clinic George Hernandez Chief Executive Officer OCTOBER 2011 (revised 10/04/11)"— Presentation transcript:

1 ISOC CEO Meeting INSTITUTIONAL OVERVIEWS & CASE STUDIES Campbell Clinic George Hernandez Chief Executive Officer OCTOBER 2011 (revised 10/04/11)

2 Medical Malpractice and Risk Management Campbell Clinic MEDICAL MALPRACTICE Medical malpractice for Campbell Clinic Physicians (individually) and Campbell Clinic and Campbell Surgery Center (corporate policy) Professional liability insurance purchased from State Volunteer Mutual Insurance Company (SVMIC) Limits $5 million per occurrence / $7 million aggregate $250,000 deductible (i.e. self insured first $250,000) $750,000 aggregate (3 deductibles) per year $750,000 funded from deductible premium cost savings over several years Annual premium ~ $20,000 per MD

3 Medical Malpractice and Risk Management Campbell Clinic EDUCATION Annual attendance by all physicians at risk management seminar Annual education of all employees of risk management issues SELF ASSESSMENT M.O.R.E. Program (Medical Office Risk Evaluation) Annual survey Questionnaire and comprehensive site visit Premium reduction ~ 10% SVMIC HIGH RISK PHYSICIANS Ineffective communicators Poor documenters Those who do not adhere to standard of care Those who operate without tracking systems

4 Medical Malpractice and Risk Management Campbell Clinic ADVERSE EVENTS Be accessible to patient and family Be supportive and express sympathy Frank and prompt discussion of events with patient/family Help direct timely information gathering Avoid finger pointing Follow up Notify insurance company

5 Medical Malpractice and Risk Management Campbell Clinic CLAIMS MANAGEMENT Early reporting potential events or claims Extensive proactive pre-claim investigation to determine exposure Aggressive and top tier defense counsel Decision to settle case remains with clinic (or physician)

6 Medical Malpractice and Risk Management Campbell Clinic NATIONAL DATA (25 Year History ) Closed Claims (% of $$$ Paid Claims) 22% Obstetrics/Gynecology 11% General Surgery 7% Orthopaedic Surgery 3% Neurosurgery 3% Cardio-Thoracic Surgery Average Paid Claim Neurosurgery$326,000 Obstetrics/Gynecology$290,000 Cardio-Thoracic Surgery$227,000 General Surgery$193,000 Orthopaedic Surgery$178,000

7 Medical Malpractice and Risk Management Campbell Clinic SVMIC DATA (25 Year History ) Closed Claims (% of $ Claims) 14% Obstetrics/Gynecology 7% General Surgery 5% Orthopaedic Surgery 3% Neurosurgery 2% Cardio-Thoracic Surgery Average Paid Claim Neurosurgery$294,000 Obstetrics/Gynecology$266,000 Cardio-Thoracic Surgery$222,000 General Surgery$176,000 Orthopaedic Surgery$152,000 Average 15% Less Than National Average

8 Medical Malpractice and Risk Management Campbell Clinic MEDICAL MALPRACTICE Claims Experience – 20 Year History 84 claims filed 13 claims with loss payment 12 claims with payment < deductible 1 claims with payment > deductible $76,000 average loss payment 50% less than SVMIC average for orthopaedics 58% less than national average for orthopaedics ~ $10 million premiums (~ $15 million future 4%) ~ 2% payout ratio by SVMIC

9 Medical Malpractice and Risk Management Campbell Clinic CAPTIVE Insurance co which insures and is controlled by owners/insureds Tax advantages (deduct 100% premium, premium > losses) Long term investment/return on investment potential Mitigate financial exposure with excess insurance Cost savings over traditional liability insurance e.g. SVMIC paid claims ~ 2% of paid in premium for Campbell Increased control over claims management Campbell at exploratory stages 1.Group captive with 60 orthopaedic surgery practices 2.Join existing captive 3.Start own captive

10 Alignment, Standardization and Clinical Pathways Campbell Clinic NATIONAL TRENDS IN US MD Owned PracticesHospital Owned Practices %22% %30% %38% %50% %55% %68%

11 Alignment, Standardization and Clinical Pathways Campbell Clinic HOSPITAL ALIGNMENT (Memphis Tennessee) 2 major healthcare systems, each with multiple hospitals Both aggressively acquiring local physician practices Typically - 5 year employment agreement - asset acquisition, with or without real estate Others - VA Medical Center - government owned/operated - exclusively for veterans Others - Regional Medical Center - trauma center - academic medical center

12 Alignment, Standardization and Clinical Pathways Campbell Clinic CAMPBELL CLINIC STRATEGY Remain aligned with all major health systems and institutions Listening to the hospitals pitch to buy practice Questions & Concerns: - Can we be owned by two competing systems that each control ~ 35% of market? - Will we be able/permitted to practice in both health systems? - Does either hospital system have sufficient capacity to accommodate our total volumes?

13 Alignment, Standardization and Clinical Pathways Campbell Clinic CAMPBELL CLINIC STRATEGY Questions & Concerns (continued): - Can we survive if we are only part of one system? - Is there sufficient business to sustain clinics ~ 15% annual revenue growth rate? 2000 $44 Million (MD) + $0 Million (ASC) 2010$122 Million (MD) + $40 Million (ASC)

14 Alignment, Standardization and Clinical Pathways Campbell Clinic CAMPBELL CLINIC STRATEGY How much control will we retain? Governance Compensation Personnel, employee salaries and benefits Scope of services Capital expenditures and access to capital After initial 5 year contract? Renewal … On what terms? Cancel … How do we re-acquire assets? How do we re-acquire contracts? Start business back from ground floor? Many unknowns at present – unable to develop or entertain employment model proposal

15 Alignment, Standardization and Clinical Pathways Campbell Clinic INTERIM (TRIAL) ALIGNMENT 1) Hospitalist orthopaedic surgery services - Staff orthopedic surgeons in hospital 24 / 7 / Replace existing contract between hospital and third party physician staffing company - Handle 100% of orthopaedic surgery services; emergency, consultations, other - Compensation by hospital for coverage - Clinic bills and collects for professional services - Quality indicators and measures

16 Alignment, Standardization and Clinical Pathways Campbell Clinic 2) Co-management of orthopedic service line - share in management of inpatient orthopedic services - potential for economic incentives for efficiency, cost reductions, quality indicators - low cost of entry no capital investment no bricks and mortar investment - low risk paid hourly rate for time devoted to project paid proportion of efficiency savings paid for achieving measurable quality standards

17 Alignment, Standardization and Clinical Pathways Campbell Clinic 2) Co-management of orthopedic service line (continued) - upside potential – likely, but limited implants turn around times length of stay - after several years and most economic potentials realized, then value of agreement diminished? - will there remain financial rewards for continued quality improvements?

18 Alignment, Standardization and Clinical Pathways Campbell Clinic LONGER TERM POTENTIAL Orthopaedic Specialty Hospital Physician (Clinic) owned Single Specialty Hospital currently prohibited by law requires Certificate of Need (permission from governmental agency certifying need for the additional capacity) Jointly owned by existing healthcare system and Campbell Clinic requires Certificate of Need

19 Operational Efficiency Campbell Clinic PERFORMANCE METRICS STRONG (ASHEVILLE ORTHOPAEDIC FORUM) Campbell = Lower 25th Percentile MD $$$ Productivity Per MD Campbell = Lower 25th Percentile Office Visits Per MD Campbell = Lower 25th Percentile Surgical Procedures Per MD Campbell = Upper 75th Percentile Non Patient Care Revenues Campbell = Lower 25th Percentile Operating Expenses Campbell = Lower 25th Percentile Staffing Levels Per MD Campbell = Upper 75th Percentile Compensation

20 Operational Efficiency Campbell Clinic REFOCUS ON PATIENT EXPERIENCE Believe that clinical excellence and clinical quality second to none Referral sources validate this assumption What do patients think? - Anecdotal data vs objective metrics - Patient Experience Specialist – New Full Time Position - Objective: Measure and improve patient experience - Criteria: Excellent/Outstanding Good FairPoor

21 Operational Efficiency Campbell Clinic REFOCUS ON PATIENT EXPERIENCE (continued) Showing improvement – by measuring and reporting, employees are aware and intuitively pay more attention Direct linkage employee year end bonus ($$$) to patient experience results Estimates range from 6 to 10 times more costly to attract new patient than to retain existing one One dissatisfied patient will complain to average of 20 other people One on one follow up to all dis/undersatisfied patients to rectify/remedy where we fell short; goals to 1) regain their trust 2) continue as patient and 3) transform to advocate

22 Operational Efficiency Campbell Clinic REFOCUS ON PATIENT EXPERIENCE (continued) Disney Institute Training Engaged Disney Institute to help develop Culture of Excellence Top down and bottom up initiative Focus on 3 primary factors Setting Cast (Employees/Physicians) Processes

23 Operational Efficiency Campbell Clinic REFOCUS ON PATIENT EXPERIENCE (continued) Disney Institute Training Empower all levels of organization to identify opportunities to improve patient experience Empower all levels of organization (Council) to develop recommended programs or solutions to improve patient experience Physician leadership and all physician participation essential Physician oversight via Quality Improvement Committee responsibility

24 Operational Efficiency Campbell Clinic QUALITY IMPROVEMENT PROGRAM Believe that clinical excellence and clinical quality second to none Referral sources validate this assumption What do customers/constituent groups think? - Anecdotal data vs objective metrics - Quality Analyst – New Full Time Position - Objective = measure and improve quality indicators Develop clinically relevant criteria Establish metrics to measure

25 Operational Efficiency Campbell Clinic QUALITY IMPROVEMENT PROGRAM (continued) Currently subject to external metrics developed/derived/used by others - Primarily economically driven based on retrospective cost analysis - Publish select metrics to public/patients (1 Star vs 2 Star vs 3 Star) Objectives: - Validate/challenge/revise external metrics used by others - Publish validated metrics - Improve performance where metrics show room for improvement - Develop comprehensive quality metrics - Improve public profile - Improve negotiating position with payers

26 Operational Efficiency Campbell Clinic QUALITY IMPROVEMENT PROGRAM (continued) CHALLENGES - Creation/adoption/selection of consistent quality standards for major orthopaedic procedures - Partner with other orthopaedic groups to design the quality metrics for use nationally/internationally - Design efficient and effective systems for data acquisition and analysis and reporting - Create benchmarks for quality and functional outcomes


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