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© 2011 The Advisory Board Company Ambulatory Facility Strategy in the Reform Era FACILITY PLANNING FORUM Michael Hubble Senior Director The Advisory Board Company
© 2011 The Advisory Board Company I II III IV Road Map for Discussion 2 Playing by Different Rules Rethinking Ambulatory Facility Strategy Rethinking Ambulatory Facility Design Migrating to a Patient-Centered Model
© 2011 The Advisory Board Company 3 Health Systems Placing Big Bets on Ambulatory Expansion Hospital Outpatient Strategy circa 2007 Source: Bank of America, Health Care Facilities, Equities Research, July 2007: Advisory Board interviews and analysis. Planned Hospital Expansions Within Next Two Years n=199 Principal Drivers of Outpatient Investment Neither Inpatient Outpatient Both 80% of hospitals were planning outpatient expansion Capturing profitable outpatient business in new markets Blunting competition from physician-owned facilities Building a platform for a future inpatient facility Creating new feeders for the inpatient enterprise
© 2011 The Advisory Board Company 4 From Health Care Reform to Payment Reform Hard to Believe It Was Just 2 Years Ago… Source: Health Care Advisory Board interviews and analysis. Major Reform Milestones Patient Protection and Affordable Care Act (PPACA) passes House of Representatives HHS releases Meaningful Use regulations CMS releases proposed rule for Medicare Shared Savings Program HHS releases Medicare Value- Based Purchasing Program final rule VA Attorney General files first lawsuit against individual mandate President Obama repeals 1099 reporting requirement from PPACA CMS issues provisions to Hospital Readmissions Reduction Program
© 2011 The Advisory Board Company 5 Massachusetts Universal Coverage Initiative Virtually Eliminating the Uninsured Health Insurance Reform Massachusetts Coverage Expansion Cumulative Increase in Insured Massachusetts Residents Thousands Implemented July 1, 2006; reduced uninsured rate to 2.6% Individual and employer mandates established Individual penalty initially set at $219 with monthly incremental increases Employer penalty at $295 annually per employee Individual and small group markets merged, managed through online exchange New publicly managed insurance options created Charity care funds reallocated from disproportionate share payments to coverage subsidies 87% of coverage expansion achieved by January 2008, one year after exchange became available Source: Division of Health Care Finance and Policy, Health Care Indicators in Massachusetts, November 2009; Health Care Advisory Board interviews and analysis.
© 2011 The Advisory Board Company 6 Preventive Care Utilization Has Increased… Utilization of Specific Services, Massachusetts Adults Based on Self-Reported Data, n = 13,150 Preventive Care Took Any Drug Specialist Visit Percent Change in Utilization 9.6% Preventive Care 4.1% Took Any Drug 5.5% Specialist Visit ED Visit (0.5%) ED Visit Source: Long S and Stockley K, Sustaining Health Reform in a Recession: An Update on Massachusetts as of Fall 2009, Health Affairs, June : ; Health Care Advisory Board interviews and analysis.
© 2011 The Advisory Board Company 7 Building Accountability through Experiments in Payment Toward Accountable Care Payment Reform Source: Health Care Advisory Board interviews and analysis. Degree of Shared Risk Care Continuum Pay-for- Performance Hospital-Physician Bundling Episodic Bundling Capitation/Shared-Savings Models
© 2011 The Advisory Board Company 8 Medicare Shared Savings Program Holding Providers Accountable Biggest News of the Year? Shared Savings Payment Cycle 2 Billing Providers bill normally, receive standard fee-for- service payments 1 Assignment Patients assigned to ACO based on terms of contract 3 Comparison Total cost of care for assigned population compared to risk- adjusted target expenditures 4 Bonus If total expenses less than target, portion of savings returned to ACO 5 Distribution ACO responsible for dividing bonus payments among stakeholders Program in Brief: Medicare Shared Savings Program Program begins January 1, 2012; contracts to last minimum of three years Physician groups and hospitals eligible to participate, but primary care physicians must be included in any ACO group Participating ACOs must serve at least 5,000 Medicare beneficiaries Bonus potential to depend on Medicare cost savings, quality metrics Two options available: one with no downside risk until year three, the second with downside risk in all three years Proposed rule available for comment until end of May; final rule due later this year Source: Health Care Advisory Board interviews and analysis.
© 2011 The Advisory Board Company 9 Reform Accelerates Trend of Practice Acquisition by Hospitals Shifting from Competitors to Collaborators Source: Harris G, More Doctors Giving Up Private Practices, New York Times, March 25, 2010; Health Care Advisory Board 2008 Survey on Physician Employment; Advisory Board interviews and analysis Physician Practice OwnershipPercentage of Active Physicians Employed by Hospital
© 2011 The Advisory Board Company 10 Robust Ambulatory Network Central to ACO Ambition Source: Advisory Board interviews and analysis. ACO Medical Management Investments Remote Monitoring Electronic Medical Records Medical Home Infrastructure Primary Care Access Population Health Analytics Patient Activation Post-Acute Alignment Disease Management Programs
© 2011 The Advisory Board Company 11 The New Imperatives for Ambulatory Facility Strategy Expand the Front End of the Delivery System Imperative #2 Reinforce the Disease Management Enterprise Imperative #1 Rationalize Procedural and Imaging Capacity Imperative #3 Developing low-cost, accessible primary care settings Linking patients and providers via virtual clinics Shifting emergency care out to satellite facilities Experimenting with freestanding observation units Consolidating imaging sites to maximize asset utilization Parsing out the nice-to have versus must-have imaging modalities Preparing ASCs for the next wave of outmigration Creating a short-stay surgical facility Installing the bricks-and- mortar infrastructure for medical homes Developing outpatient one-stop shops for the chronically ill Bringing the care continuum to the patients home Engineering smart homes for the elderly
© 2011 The Advisory Board Company I II III IV Road Map for Discussion 12 Playing by Different Rules Rethinking Ambulatory Facility Strategy Rethinking Ambulatory Facility Design Migrating to a Patient-Centered Model
© 2011 The Advisory Board Company 13 Strategic Imperative #1 – Expanding Access to Primary Care Source: Advisory Board interviews and analysis. Note: Image courtesy of Kaiser Permanente. Kaiser Permanente Micro-Clinic Small family practice offering 80% of services available at typical primary care office ~1,800 SF core model; optional add-on pharmacy, lab, basic imaging, and consult room expand clinic up to 5,000 SF total Kaiser Permanente Micro-Clinic Core Model Kaiser Permanente Embracing New PCP Practice Model Micro-Clinics – Coming to a Storefront Near You 2-3 providers (mix of MDs, NPs or PAs) plus receptionist No imaging, pharmacy, lab, consult (optional add-ons) 4 exam rooms, waiting room, clean utility room On-Site Providers Clinic Space Limited Ancillary Services
© 2011 The Advisory Board Company 14 Assessing Prospects for Evolving Urgent-Emergent Care Models Source: Advisory Board research and analysis. Routine Primary CareEmergent Care Continuum of Urgent-Emergent Care Models
© 2011 The Advisory Board Company 15 Strategic Imperative #2 – Rationalizing Procedural Capacity Source: MedPAC Data Book, June 2010; Ambulatory Surgery Centers: Annual Survey Shows Growth Continues to Slow, Deutsche Bank, February 4, Allowing Demand to Catch Up with Supply Total Number of Medicare-Certified ASCs Once Dominant Surgery Centers Looking More Vulnerable Fewer Ambulatory Surgery Centers Coming On Line [W]e would expect little upside to organic growth expectations. Rather, we believe that consolidation via M&A will be an ever-increasing avenue for growth, and new capacity growth will have to be curtailed to allow supply/demand to become more balanced. Deutsche Bank February % 8.6% % 7.3% 5.7% 6.0% 4.4% 2.1% New Centers Existing Centers Net percent growth from previous year
© 2011 The Advisory Board Company 16 Source: Center for the Health Professions, The Special Care Center – A Joint Venture to Address Chronic Disease, available at Address_Chronic_Disease.pdfAddress_Chronic_Disease.pdf, accessed March 28, Case in Brief: AtlantiCare Regional Medical Center Nonprofit health system located in Atlantic City, New Jersey Special Care Centers (SCC) are patient-centered medical homes focused on chronic diseases SCC is a partnership between a local union and AtlantiCare Co-Locating Services at AtlantiCares Special Care Centers Building a Medical Home for Chronic Patients Patient Profile Chronic illness such as diabetes, heart disease, obesity, or asthma Employees of union partnering with AtlantiCare or hospital staff 1,200 patients Plans to expand to uninsured population Services Provided Health coach manages patients care PCPs serve as program leaders On-site specialists include cardiology and psychiatry Co-located with retail pharmacy, lab, radiology, and after hours primary care Strategic Imperative #3 – Reinforce the Disease Management Enterprise
© 2011 The Advisory Board Company I II III IV Road Map for Discussion 17 Playing by Different Rules Rethinking Ambulatory Facility Strategy Rethinking Ambulatory Facility Design Migrating to a Patient-Centered Model
© 2011 The Advisory Board Company 18 Three Goals of Ambulatory Facility Design Improving Clinic Design from Front to Back Source: Advisory Board interviews and analysis. 2 Optimize Clinic Design Encourage staff/clinician communication through shared workspaces Remove physician offices to encourage collaboration Build the appropriate number of exam rooms per provider 1 Streamline Front End Operations Improve patient arrival and registration process Utilize technology to speed patient visit Streamline patient rooming system 3 Design the Exam Room of the Future Build the right size exam room Facilitate high quality care delivery through room layout Ensure patient and caregiver involvement in care process
© 2011 The Advisory Board Company 19 Source: Advisory Board interviews and analysis. 1Beyond registration counter, without framing structure 2In front of registration counter, showcased in prominent structure University of Wisconsin Hospitals and Clinics, West Clinic Hospital-based outpatient clinic located in Madison, WI Installed 2 kiosks in 2007; timing aligned with migration to Epic Original location led patients to encounter registration staff first, new location is front and center, eliminating lines for registration counter Kiosk Utilization Rates Strategic Placement and Human Support Keys to Success Kiosks Streamlining Patient Check-In 1 2 Registration Staff Spaces
© 2011 The Advisory Board Company Patient checks in at central registration Receptionist enters patient arrival and room assignment in tracking system, care team notified Patient receives color-coded card with room number (or pager if no room available) Patient directed by color-coded signs to neighborhood, then exam room 20 Source: Advisory Board interviews and analysis. Park Nicollet Clinic – Chanhassen 56,000 SF multispecialty clinic located in Chanhassen, MN Opened new facility in 2005 designed around patient self-rooming, easy wayfinding, care neighborhoods, and patient locator system Self-Rooming Patient Flow Map Self-Rooming Process Streamlines Front-End Operations Patient, Room Thyself #12 Clinician promptly meets patient in exam room Check-InNotify TeamCoded CardEasy WayfindingRoom Arrival
© 2011 The Advisory Board Company 21 Source: BWBR Architects; Advisory Board interviews and analysis. Note: Image courtesy of BWBR Architects. Chanhassen Clinic First Floor Plan Self-Rooming Significantly Downsizing Waiting Rooms Minimized waiting room square footage Waiting Area Seats per Exam Room
© 2011 The Advisory Board Company 22 Three Goals of Ambulatory Facility Design Improving Clinic Design from Front to Back 1 Streamline Front End Operations 3 Design the Exam Room of the Future Build the right size exam room Facilitate high quality care delivery through room layout Ensure patient and caregiver involvement in care process Improve patient arrival and registration process Utilize technology to speed patient visit Streamline patient rooming system Encourage staff/clinician communication through shared workspaces Remove physician offices to encourage collaboration Build the appropriate number of exam rooms per provider 2 Optimize Clinic Design
© 2011 The Advisory Board Company 23 Caregivers at the Core Source: The Neenan Group, Advisory Board interviews and analysis.www.neenan.com Case in Brief: St. Johns Clinic, Rolla Integrated physician arm of Mercy St. Johns Health System, located in Missouri Clinic has more than 180,000 visits per year 550 physicians, 70 offices, 40 locations Opened redesigned clinic in 2009 with goals of improving patient experience and efficiency and achieving a team-based care model A Collaborative Work Environment at St. Johns Clinic Facilitating Team-Based Care Five to seven physicians per module Upstaffed from one to two nurses per physician Nurses have taken over many physician tasks, including taking patient histories and care coordination LPNs and MAs trained to advanced competencies and work with all physicians The Care Team Module
© 2011 The Advisory Board Company 24 Workstations Co-Located in Central Bullpen Caregivers Working Side-By-Side Source: Anshen+Allen, a part of Stantec; St. Johns Clinic, Rolla; Advisory Board interviews and analysis. Image courtesy of Anshen+Allen, a part of Stantec.Image courtesy of St. Johns Clinic, Rolla.
© 2011 The Advisory Board Company 25 Source: Advisory Board interviews and analysis. Encouraging Collaboration via Shared Work Spaces at St. Johns Abolishing the Private Physician Office Behind Closed Doors Physicians isolated in individual offices Used for dictation, charting, meetings, private phone calls Typically 150 SF Out in the Open Replaced private physician offices with shared lounges consisting of 4 work stations, book shelves, and TV; provide touchdown spaces in clinic hallways Accommodate physicians needs for privacy through use of consult rooms, do not enter signs on lounge Reduced clinic footprint by 4,000 square feet through elimination of private physician offices Private Physician OfficeShared Staff LoungeTouchdown Space
© 2011 The Advisory Board Company 26 Source: Advisory Board interviews and analysis. Case in Brief: Massachusetts General Hospital Ambulatory Practice of the Future primary care clinic opened in 2010 in new facility adjacent to main hospital Care model relies on collaboration among multi-disciplinary care teams Clinic is approximately 7,000 SF with 15 exam rooms A 5 to 1 Exam Room Ratio at Mass General Expanded Care Team Enables Clinic to Run More Rooms Pushing toward the New Standard Five exam rooms per care team Nurse practitioners share patient panel with physicians MA escorts patient to room and initiates visit; nurse and case manager provide support Nurse Practitioner Physician Nurse Medical Assistant Case Manager
© 2011 The Advisory Board Company 5 to 1 27 Leveraging the Care Team to Improve Efficiency A Sum Greater Than Its Parts Source: Advisory Board interviews and analysis. 1 to to 1 Time Exam Room to Physician Ratio Consolidation of practices Rise in patient visits due to aging population and increase in chronic conditions Primary care physician shortage Transition to team-based approach to care All clinicians working at top of license Select physician tasks off- loaded to LPNs and MAs A Bygone EraTodays StandardA Worthy Goal
© 2011 The Advisory Board Company 28 Three Goals of Ambulatory Facility Design Improving Clinic Design from Front to Back 1 Streamline Front End Operations Improve patient arrival and registration process Utilize technology to speed patient visit Streamline patient rooming system 3 Design the Exam Room of the Future Build the right size exam room Facilitate high quality care delivery through room layout Ensure patient and caregiver involvement in care process Encourage staff/clinician communication through shared workspaces Remove physician offices to encourage collaboration Build the appropriate number of exam rooms per provider 2 Optimize Clinic Design
© 2011 The Advisory Board Company 29 Team-Based, Patient-Centered Care Creating a Tight Fit Exam Rooms Bursting at the Seams Rightsizing the Exam Room Source: Advisory Board interviews and analysis. More People… PCPNP/PA RN LPN/MA Health Coach Nutritionist Social Worker Family Members …and More Stuff Printer to enable in-room checkout Wide monitor for patient education and information sharing Large table for inclusive, side-by-side interaction Mobile diagnostics to reduce patient shuffling Special equipment carts ECHO, EKG, phlebotomy, casting and splinting, etc. Scale to reduce patient movement and enhance privacy Clinicians and CaregiversIT and Clinical Equipment
© 2011 The Advisory Board Company Square Feet Ideal for Universal Exam Room Finding the Sweet Spot Source: Advisory Board interviews and analysis. Exam Room Size Assessment <90 SF An Anachronism Inflexible; limited wiggle room to accommodate extra care team member, caregiver, mobile equipment and side-by-side consult 100 SF A Tight Fit Currently sufficient for most visits but limited flexibility to accommodate team-based care, electronic information sharing 110 – 120 SF The Sweet Spot Comfortably accommodates three distinct zones for provider, patient and family, as well as clinical and IT equipment 150+ SF Unnecessary for Most Financially challenging for most practices, used primarily for consult-intensive specialties such as oncology
© 2011 The Advisory Board Company 31 Distinct Zones Facilitate Patient-Centric Encounter Optimal Exam Room Layout Source: SmithGroup; HKS Architects; Advisory Board research and analysis. Patient-Centric Exam Room Zones Supply/Hand Washing Zone Separate area for clinical supply storage Computer/Charting Zone Large monitor(s) mounted on desk/wall enables equal information sharing Table shape/size facilitates exam triangle Moveable seating to accommodate patient and caregiver Optional in-room printer Exam Zone Room must be large enough to allow space around the exam table Family Zone Ample seating to accommodate caregiver(s) Separate from supply zone to avoid interference with clinician workflow Image courtesy of HKS Architects Image courtesy of SmithGroup
© 2011 The Advisory Board Company 32 Exam Room Alternatives Source: Southcentral Foundation; NBBJ; Advisory Board interviews and analysis. Note: Floorplan courtesy of SouthCentral Foundation and NBBJ. Southcentral Foundation Talking Rooms Talking Rooms as Multi-Purpose, Flexible Spaces Exam room dimensions and location enable ability to flex space into exam room Talking Room Functions Less clinical setting for visits that do not require exam table Side-by-side consults that promote greater family participation Private clinician-clinician interactions Patient-clinician phone calls Accommodate waiting families Southcentral Foundation, Anchorage Native Primary Care Center 75,000 SF outpatient facility of Alaska-native owned, nonprofit health system Designed to be responsive to unique needs and values of the native community Reflects effort to shift care to where it is most appropriately performed, reduce patient anxiety and include extended family in care plans
© 2011 The Advisory Board Company 33 Source: Boulder Associates Architects; Advisory Board interviews and analysis. 14,790 patients seen in 862 group visits, individual visit slots equivalent of 3,625. Note: Floor plan courtesy of Boulder Associates Architects. Case in Brief: Clinica Campesina Piloted group visits in 2001 after diabetes patients no-showing for one-on-one visits but continuing enrollment in health education class; currently 1,000 group visits annually Visit efficiency maximized through team-based care; PCP present for only 50-75% of group visit slot Consolidated Patient Encounters Maximize Provider Productivity Group Visits Enhancing Capacity, Gaining Popularity Clinica Campesina Thornton Clinic Floor Plan Single Group Visit Multiple Individual Visits 32% Increase in provider productivity during group visit activity in % Patients electing to continue group visits
© 2011 The Advisory Board Company 34 Source: Chen C, et al, The Kaiser Permanente Electronic Health Record: Transforming and Streamlining Modalities Of Care, Health Affairs, 28:2, March/April 2009; Advisory Board interviews and analysis. Case in Brief: Kaiser Permanente Hawaii In 2004, Implemented KP HealthConnect EHR and patient portal system in outpatient setting By 2007, scheduled phone visits increased more than eightfold; secure online patient-provider messaging by nearly sixfold; office visits decreased by 26% Care quality and patient satisfaction levels remained consistent and Phone Contact on the Rise Virtual Visits Potentially Decreasing Room Demand 26% Decrease in office visits Distribution of Ambulatory Care Encounters Kaiser Permanente Hawaii Members Office Visits ~100% Phone Visits 4% 8% Increase in interactions with doctor
© 2011 The Advisory Board Company I II III IV Road Map for Discussion 35 Playing by Different Rules Rethinking Ambulatory Facility Strategy Rethinking Ambulatory Facility Design Migrating to a Patient-Centered Model
© 2011 The Advisory Board Company 36 Average Square Footage by Facility Age Health Care REIT Ambulatory Facilities Source: Health Care REIT. n = 38 Industry Migrating to Larger Ambulatory Boxes n = 29n = 64n = 26
© 2011 The Advisory Board Company 37 Hospital and Physician Concerns Dominated Previous Eras Putting the Patient at the Center of Facility Strategy Source: Advisory Board research and analysis. Hospital-Centric Era Physician-Centric Era Patient-Centric Era Distribution of Ambulatory Services Concentrated Dispersed OP surgery, diagnostics delivered in the hospital MOB space clustered around inpatient facilities Technological innovation, shifting incentives push care to freestanding centers Physician ownership of facilities fuels outmigration to the suburbs Rising demand for primary care fueling increase of small-scale sites Re-aggregating OP care to achieve economies of scale, promote collaboration, and offer one-stop shopping
© 2011 The Advisory Board Company 38 Expanding the Portfolio at Both Ends of the Spectrum Source: Advisory Board interviews and analysis. 1 Pseudonymed 7-hospital system in the Northeast. Outpatient Facility Prototypes at Cassavetes Health 1 Nurse in a Box Barebones PCP Office MOB Plus Comprehensive Multispecialty Center Hospital Without Beds Services Offered Ave. Size Ave. Cost Mid-level practitioner Low-acuity urgent care Flu shots School physicals 2-5 PCPs providing comprehensive primary care Basic Lab Basic imaging 5-10 PCPs and specialists Basic Lab Basic imaging Limited Rehab PCPs and specialists Full-scale Lab Advanced imaging Rehab Urgent care ASC 30+ PCPs and specialists Advanced imaging Rehab Urgent care ASC Oncology services Freestanding ED Observation unit Wellness Under 2,000 SFUnder 10,000 SF10, ,000 SF15, ,000 SF50, ,000 SF $350K - $375KUnder $2.5M$15M - $18M$22M - $25M$45M - $70M
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