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ED Call Panel Solutions Martin B. Buser, MPH, FACHE

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Presentation on theme: "ED Call Panel Solutions Martin B. Buser, MPH, FACHE"— Presentation transcript:

0 To join conference call Martin B. Buser, MPH, FACHE
Dial-in: Participant code: The ED Call Pay Crisis: Strategies for Fair, Equitable, and Sustainable Solutions Presented by: Martin B. Buser, MPH, FACHE Roger A. Heroux, Ph.D. Michael E. Hogue, M.D. June 4, 2009

1 ED Call Panel Solutions Martin B. Buser, MPH, FACHE
To join conference call Dial-in: Participant code: HMR, LLC ED Call Panel Solutions Martin B. Buser, MPH, FACHE Roger A. Heroux, Ph.D.

2 Overview of Today’s Objectives
Define the problem with ED call panels Understand the process to approach the issues with ED call panel solutions Findings from interviews Findings from research Feasibility analysis and business plan Possible recommendations for a fair and equitable solution Call Pay Security Solution The future To join conference call Dial-in: Participant code:

3 Stipend impact for on your bottom line
Year One: Three panels (GS, Ortho and NS) at $500/day $547,500 Year Two: Six panels at $500/day $1,095,000 Year Three: Fourteen panels at $500/day $2,555,000 Year Four: Specialties Separate General Surgery, Orthopedics and Neurosurgery at $1,500 Cardiology, Urology, Pulm, Vascular Surgery, OB, G-I, IM/FP, ENT, Plastics at $800 Peds, Ophthalmology, Neurology and Cardiac Surgery at $500 $5,000,500 And escalating!! To join conference call Dial-in: Participant code:

4 The Driving Forces Behind the On-Call Crisis

5 Emergency Department (ED) Requirements
Ethically and by law... Full panel of specialty physicians Distinct from the emergency physicians who provide the first level of care in ED’s

6 Definition: Unassigned patients
“Patients who require on-site consultation or admission to the hospital and do not have a a prior relationship with a physician on the Medical Staff to assume their care” Independent of patient funding Cannot make payments to physicians to care for their own patients

7 Background Past: Voluntary community service Cost shifting possible
Referrals built practices How fast can I get on the panel?

8 Scope of the Problem National issue You’re not alone!
Problem growing daily Specialty-driven Increased adversarial relationships between medical staff and hospital No easy solution Expensive to solve

9 Definition: ED On-Call Panel for Unassigned Patients
Significant volume For a 40,000 visit ED, it will represent over 2,000 inpatients per year Unassigned population: 35-50% of the ED hospital admissions 12-20% of the total hospital admissions are ED unassigned admissions If a trauma hospital- adds more volume and dynamics

10 Designing for the Future
The best solutions allow for better clinical integration and partnerships between the hospital and medical staff Long term – learning how to work together with common goals and aligned incentives within a shared budget Must be more efficient and effective

11 Multi-Step Process Learn what the issues are Learn what the burden is
Learn what the market is Develop a forum for discussion Develop an acceptable solution that is fair, equitable and financially sustainable Manage the implementation well

12 The Needs of the Medical Staff

13 ED Call Panel/Medical Staff Analysis: Interviews
What have we learned?

14 Interviewing What are the issues and dynamics? How deep do they go?
Who is leading the cause? What are their real issues? Income? Competency? Manpower? Greed? Irritations with the hospital systems? What can you do something about and what is impossible? How urgent is it?

15 What we find from the Interviews
Special Rules to Get Off Call No Longer Able to Cost Shift for Unfunded Patients Desire to be Paid for Availability Lifestyle Issues ED Call Affecting Recruitment and Retention Potential

16 Research: What do we learn? Data is objective and revealing!

17 The Research Process: Opens the “Black Box”
Each study period unassigned chart audited for CPTs and ICD-9 professional codes Code all care provided throughout the hospitalization Unassigned volumes and payer mix identified by specialty Expected rate of reimbursement by specialty Service line analysis (average length of stay (ALOS) by diagnostic related group (DRG), $/DRG/Specialty, etc.) Financial scenarios

18 Get the Right Data – Find Out What’s Happening at your Hospital
Sample Hospital Reports

19 Analyze: Number of Panels Staffing by Panel Required Panels
ED Call Burden By Specialty Quantify the volume by specialty RVUs by Specialty Current Payment System Expected Payment to Specialties

20 Hospital Statistics Overview (FY2008)

21 ED Unassigned Annualized Patient Categorization Breakdown
Note: Patients may be seen in multiple locations, however this report shows the primary location of service for each specific patient. The ED unassigned admission volume is estimated based on an annualization of patients identified by hospital staff.

22 ED Unassigned Overall Averages
Note: The ED unassigned admission volume is estimated based on an annualization of patients identified by hospital staff.

23 ED Unassigned Financial Class Group - Mix of Patients
ED Referrals from Outlying Communities ED Patients from the Primary Service Area Only

24 Estimated Current ED Unassigned Annualized Professional Fee Practice Value for All Specialties
Note: The estimated collection rate and current estimated practice value is calculated on estimates made by financial class based on historical trends. Actual results may vary depending on actual billing experience.

25 Monthly Average ED Unassigned Specialty Cases and RVUs Delivered

26 Monthly Average ED Unassigned Specialty Cases

27 Solution Strategies and Model Programs

28 Should Physicians Be Paid for ED Call?
Yes Should be Fair, Equitable for the Medical Staff Panel Members Should be Financially Sustainable for the Hospital

29 Sample Hospital Report – Develop a Business Plan
Get the facts! Build a business plan for expected shortfall if payment guarantees are provided Understand economic value of ED call to each specialty

30 ED On-Call Panel Options:
Remove irritants of call Close the ED Develop an IM hospitalist program Develop Surgical Specialty hospitalist programs Maintain bylaws mandatory on-call w/o pay Regionalize care by specialty among local hospitals Require a minimum number of call days before payment

31 ED On-Call Panel Options (cont’d):
Recruit more specialists Pay stipends Pay base stipend plus activation fee Hire physician assistant first responders Guarantee pay for work performed All patients Uninsured patients only Uninsured patients outside of the immediate service area Develop Co Management Agreements Compensate for selected OP Follow Up items Hybrid compensation model Compensate with Tax Advantaged dollars

32 Options: Remove Irritants of Call
Make ED more efficient Track throughput Reduce constant ED calls Open surgery for ED follow-up cases Assist with $ for selected ED referrals Cover unfunded patients Allow easy re-admission of difficult patients Manage discharge planning effectively

33 Options: Hospitalists
Dedicated inpatient physicians Internal medicine/family practice 55%-60% of ED unassigned admissions are medicine-related Control utilization Control referrals Allows time to explore options Must be properly staffed and designed to be extremely effective

Hospitalist Physician On-site Hospitalist Support Team (Case Manager, Care Coordinator/Clerical) On-site Medical Director Supportive Infrastructure Benchmarking for Best Practices Acute Patient Care

35 Options: Specialty Hospitalist Programs
Growing quickly as an option If paying stipends, it may be more economical to hire full time surgical specialists and achieve dedicated service Must develop a business plan to understand the costs and risks

36 Hospitalist Services Go Beyond IM!
Internal Medicine/FP IM/Peds Peds OB Ortho/Traumatology General Surgeons Intensivists for the Critical Care Patients

37 Options: Pay Stipends Fixed costs
Difficult to determine proper payment Stipends tend to go to the most vocal Never stops escalating What is the relative value of on-call time?

38 Options: Pay Stipends Should there be tiers?
Everyone on call panel should receive the same base rate Vary the activation fee based upon frequency, severity and FMV analysis How do you determine the amounts? With facts

39 One Sample Hospital Report Option: Base Fee Plus Activation Fee
Ortho, Neuro, OB and General Surgery $200 Base Fee + $XXX Activation Fee Pulmonology, Vascular, Cardiology, Neurology and Plastic Surgery $200 Base Fee + $YYY Activation Fee G-I, Opth, Peds, Psych, Urology, and ENT $200 Base Fee + $ZZZ Activation Fee

40 Option: NP/PA First Responder
First Line of Response Covers ED Consults for Trauma, Neurosurgery, Cardiovascular and Orthopedic Surgery Coordinates all care with the on-call specialist Responsible from admission to discharge Assign 4 Surgical NP FTE’s to cover 24/7 Net Cost is Staffing Costs less Professional Fees collected.

41 Option: Pay for Productivity
Emergency on-call medical group A separate professional corporation Contracts with existing medical staff members

42 Contractual Relationships
Hospital Billing Service Medical Corporation Contracting MD Indicates contracts Steering & Coding Committee

43 Sample Hospital Report Pro Forma Summary - Yearly Cost Estimates With Various Scenarios
Note: Excludes those specialties with existing coverage agreements or exclusive franchises

44 Option: Compensate with Tax Advantaged Dollars
Integrated Healthcare Strategies Michael E. Hogue, M.D. Call Pay Security Solution

45 Call Pay Program Integrated Healthcare Strategies developed a call pay program designed to meet the following goals: Transition from a cash payment philosophy to the development and implementation of a retirement program opportunity Generate immediate and long term savings Control future escalation in call pay amount Flexibility in implementation Provide a competitive differentiation Encourage long-term retention

46 Call Pay Dilemma – Systems
Cost of call is becoming a significant burden on hospital operating margins Current structure unsustainable as costs are escalating yearly at unacceptable rates Hospital systems face increasing call pay requests—slowly becoming the industry standard Increasing strain on emergency departments—increasing number of uninsured patients

47 Call Dilemma – Physicians
Perception that “On-Call” problem for physicians is unreimbursed care In reality, “On-Call” is a time issue Historical attempts have been to solve this with monetary payment Payment is made/taxed/spent—money is gone and the time issue is unchanged Current call pay structure will never be enough to reimburse for excess time away from family

48 Additional Physician Issues
Call time adds increasing burden to physician work schedules Call time limits physicians’ opportunity to maximize income Reduces clinic time Reduces elective cases Increases exposure to uninsured patients and corresponding legal risk Private practice physicians have difficult time sheltering money for retirement Qualified plans inadequate to meet the needs of highly compensated physicians – increased exposure to market risk

49 Solution IHStrategies’ approach to solving the call pay issue is focused on answering three key questions: How do we generate immediate savings for systems? Can we offset physician time issues by addressing another critical issue? How do we design a plan to more adequately reward physicians for time commitment?

50 Solution Hospital Issue Physician Issues Time away from clinic
Time out of OR Time away from family Increased malpractice exposure Negative impact on practice COST OF RETIREMENT SAVING Need physicians’ time to cover call

51 The Call Pay Security Solution
Is a personal retirement program that combines a specially-designed indexed universal life insurance contract with a unique tax replacement strategy to provide a global solution to the challenges of developing long-term retirement income.

52 The Call Pay Security Solution
Designed to function like a Roth IRA with a twist The Basics Contributions made after tax Account grows tax deferred Distributions are tax free The Twist No income limits for participation No limit on contributions Replaces income earning potential on lost taxes with a tax replacement loan “Dollar for Dollar, A Roth IRA may just be the best savings plan in America.” - Money Magazine, October 2008

53 The Call Pay Security Solution
Provided on an after-tax basis Outside of IRS deferred compensation scrutiny Immediately vested - fully portable Provides a tax replacement loan to participant Participant grossed-up annually for taxes by outside lender Gross-up funded by a third party Gross-up not reportable on 990 Organization pays annual financing cost on the tax gross-up Utilizes a highly tax-efficient indexed universal life insurance product Only vehicle that offers tax deferred earnings and tax-free distributions Guaranteed issue ($1million - $2million) Minimum annual guaranteed return Tax free distributions reduces exposure to increasing tax rates Assets protected from malpractice claims (in most states)

54 Call Pay Comparison CURRENT PROPOSED System System Outside Lender
$25,000 + Interest $35,000 $6,000 Physician Physician 1099 of $35,000 40% 14,000 Net of $21,000 1099 of $25,000 40% $10,000 Net Contribution $15,000 Gross Up Loan $6,000 Net Investment $21,000

55 The Call Pay Security Solution
How It Works (2) Tax cost replenishment loan (1) Participants’ after-tax contribution (3) Earnings Expenses Cost of insurance Administrative fees INDEXED CONTRACT At Retirement Tax-free retirement income Ultimately – tax-free insurance death benefit

56 Cost Comparison of Call Pay Options
Current annual call pay obligation of $35,000, reduced to $25,000 in CPSS program Impact to System using CPSS scenario Impact to System if Call Pay is paid in cash annually Total Annual Cost to System Total estimated savings of 32.6% over the 20-year period ASSUMPTIONS: Annual increase in call pay (if paid in cash): 3.0% Tax rate: 40% Loan interest rate: 5.75% Carrier: Penn Mutual

57 The Call Pay Security Solution
Retirement Funding Comparison – 45 Years Old The Call Pay Security Solution delivers a 38% increase in annual after-tax retirement income versus cash in a 25-year income stream ASSUMPTIONS Tax rate of 40.0% Investment yield of 7% gross during accumulation phase for cash option Investment yield of 5.5% gross during distribution phase for cash option Investment yield of 7% for CPSS Annual call pay increase of 3% Income stream begins at age 71 57 57

58 S&P 500 Index versus Indexed Universal Life (IUL)
S&P 34 year annualized return 6.59% IUL 34 Year annualized return %

59 The Call Pay Security Solution – Contract Details
The probability of earning different index return levels during the last 20 years of monthly S&P 500 price returns assuming the 14% annual cap and 2% floor (12/07)

60 Summary Of System Benefit
The Call Pay Security Solution provides systems with the following benefits: Provides immediate savings of approximately 26% Provides long term reduction in cost of approximately 33% Individualizes call pay negotiations by specialty/section/facility Eliminates the need for continuing negotiations for call pay Provides a highly flexible plan that can be customized to the organization’s needs

61 Summary Of Physician Benefit
The Call Pay Security Solution provides physicians with the following benefits: Tax-leveraged wealth accumulation program Immediately vested and portable Not subject to corporate insolvency or risks of forfeiture Secure investment vehicle Asset protection Minimum guaranteed return Index based, no asset management

62 Negotiating with the Medical Staff

63 The Forum for Negotiations “The power is in the process”
Interview to learn perceptions of the medical staff Research the ED unassigned data Engage the leadership of the medical staff Establish a small steering committee Solutions only for the entire medical staff Get sign-off from the medical executive committee Implement with precision Keep steering committee involved Measure, monitor and manage

64 Common Solutions ED Unassigned and Unfunded Only
ED Unassigned Patients Base Stipend plus FFS Guarantee IM Specialty Hospitalist Program Additional Specialty Hospitalist Programs Activation Fee Tiered Stipends Coverage Agreements Fracture Clinic for Orthopedic follow up Compensation with Tax Advantaged Dollars

65 The Future? More specialties will be hospital-based
Estimate that 75% of hospital census will be managed by some form of hospitalists including: Internal medicine hospitalists Intensivists OB Pediatrics Orthopaedic surgeons General trauma surgeons

66 About Integrated Healthcare Strategies
A Human Resources consulting firm exclusively serving healthcare organizations Organizations we work with: Secular, religious, government-based and not-for-profit organizations Clients include hundreds of: Hospitals Academic medical centers Health networks Nursing homes

67 About Integrated Healthcare Strategies, cont.
5 integrated specialty practices: Executive Total Compensation MSA Executive Search Physician Services MSA HR Capital Governance and Leadership Services From these 5 practices, we’re able to assist clients in the areas of Physician strategy and compensation, employee compensation, executive compensation, human capital solutions, labor relations, leadership transition planning, executive search, employee surveys, performance management and board governance solutions. Founded in 1958 Offices: Minneapolis, MN and Kansas City, MO Website:

68 About Hospitalist Management Resources, LLC
Independent consulting company We consult with Hospitalist Programs, Intensivist Programs and ED Call Panel Solutions We do not staff or operate programs More than 350 consultations in 11 years Develop new programs and enhance existing programs into Fourth Generation Programs Business plans, ROI strategies and clinical and financial benchmarks to validate Programs Help hospitals evaluate and create ED Call Panel Solutions

69 About Hospitalist Management Resources, LLC, cont.
Founded April 1999 Founders: Martin Buser and Roger Heroux, Ph.D. Each bring 25+ years Healthcare experience Offices: San Diego, CA and Colorado Springs, CO Website: Colorado Springs (719) San Diego (858)

70 Questions?

71 Martin B. Buser, MPH, FACHE
Contact Us Michael E. Hogue, M.D. Martin B. Buser, MPH, FACHE Roger A. Heroux, Ph.D.

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