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 SolutionsPresented by:Martin B. Buser, MPH, FACHERoger 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 callDial-in:Participant code:HMR, LLCED Call Panel SolutionsMartin B. Buser, MPH, FACHERoger A. Heroux, Ph.D.
2 Overview of Today’s Objectives Define the problem with ED call panelsUnderstand the process to approach the issues with ED call panel solutionsFindings from interviewsFindings from researchFeasibility analysis and business planPossible recommendations for a fair and equitable solutionCall Pay Security SolutionThe futureTo join conference callDial-in:Participant code:
3 Stipend impact for on your bottom line Year One: Three panels (GS, Ortho and NS) at $500/day$547,500Year Two: Six panels at $500/day$1,095,000Year Three: Fourteen panels at $500/day$2,555,000Year Four: Specialties SeparateGeneral Surgery, Orthopedics and Neurosurgery at $1,500Cardiology, Urology, Pulm, Vascular Surgery, OB, G-I,IM/FP, ENT, Plastics at $800Peds, Ophthalmology, Neurology and Cardiac Surgery at $500$5,000,500And escalating!!To join conference callDial-in:Participant code:
5 Emergency Department (ED) Requirements Ethically and by law...Full panel of specialty physiciansDistinct 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 fundingCannot make payments to physicians to care for their own patients
7 Background Past: Voluntary community service Cost shifting possible Referrals built practicesHow fast can I get on the panel?
8 Scope of the Problem National issue You’re not alone! Problem growing dailySpecialty-drivenIncreased adversarial relationships between medical staff and hospitalNo easy solutionExpensive to solve
9 Definition: ED On-Call Panel for Unassigned Patients Significant volumeFor a 40,000 visit ED, it will represent over 2,000 inpatients per yearUnassigned population:35-50% of the ED hospital admissions12-20% of the total hospital admissions are ED unassigned admissionsIf 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 staffLong term – learning how to work together with common goals and aligned incentives within a shared budgetMust be more efficient and effective
11 Multi-Step Process Learn what the issues are Learn what the burden is Learn what the market isDevelop a forum for discussionDevelop an acceptable solution that is fair, equitable and financially sustainableManage the implementation well
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 CallNo Longer Able to Cost Shift for Unfunded PatientsDesire to be Paid for AvailabilityLifestyle IssuesED 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 codesCode all care provided throughout the hospitalizationUnassigned volumes and payer mix identified by specialtyExpected rate of reimbursement by specialtyService 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 SpecialtyQuantify the volume by specialtyRVUs by SpecialtyCurrent Payment SystemExpected Payment to Specialties
21 ED Unassigned Annualized Patient Categorization Breakdown Note: Patients may be seen in multiple locations, however this report shows the primary locationof service for each specific patient. The ED unassigned admission volume is estimatedbased 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 annualizationof patients identified by hospital staff.
23 ED Unassigned Financial Class Group - Mix of Patients ED Referrals from Outlying CommunitiesED 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 onestimates made by financial class based on historical trends. Actual results may varydepending on actual billing experience.
25 Monthly Average ED Unassigned Specialty Cases and RVUs Delivered
28 Should Physicians Be Paid for ED Call? YesShould be Fair, Equitable for the Medical Staff Panel MembersShould 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 providedUnderstand economic value of ED call to each specialty
30 ED On-Call Panel Options: Remove irritants of callClose the EDDevelop an IM hospitalist programDevelop Surgical Specialty hospitalist programsMaintain bylaws mandatory on-call w/o payRegionalize care by specialty among local hospitalsRequire a minimum number of call days before payment
31 ED On-Call Panel Options (cont’d): Recruit more specialistsPay stipendsPay base stipend plus activation feeHire physician assistant first respondersGuarantee pay for work performedAll patientsUninsured patients onlyUninsured patients outside of the immediate service areaDevelop Co Management AgreementsCompensate for selected OP Follow Up itemsHybrid compensation modelCompensate with Tax Advantaged dollars
32 Options: Remove Irritants of Call Make ED more efficientTrack throughputReduce constant ED callsOpen surgery for ED follow-up casesAssist with $ for selected ED referralsCover unfunded patientsAllow easy re-admission of difficult patientsManage discharge planning effectively
33 Options: Hospitalists Dedicated inpatient physiciansInternal medicine/family practice55%-60% of ED unassigned admissions are medicine-relatedControl utilizationControl referralsAllows time to explore optionsMust be properly staffed and designed to be extremely effective
34 HOSPITALIST DIRECTED PATIENT CARE Hospitalist PhysicianOn-site Hospitalist Support Team (Case Manager, Care Coordinator/Clerical)On-site Medical DirectorSupportiveInfrastructureBenchmarking for Best PracticesAcute Patient Care
35 Options: Specialty Hospitalist Programs Growing quickly as an optionIf paying stipends, it may be more economical to hire full time surgical specialists and achieve dedicated serviceMust develop a business plan to understand the costs and risks
36 Hospitalist Services Go Beyond IM! Internal Medicine/FPIM/PedsPedsOBOrtho/TraumatologyGeneral SurgeonsIntensivists for the Critical Care Patients
37 Options: Pay Stipends Fixed costs Difficult to determine proper paymentStipends tend to go to the most vocalNever stops escalatingWhat 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 rateVary the activation fee based upon frequency, severity and FMV analysisHow 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 FeePulmonology, Vascular, Cardiology, Neurology and Plastic Surgery $200 Base Fee + $YYY Activation FeeG-I, Opth, Peds, Psych, Urology, and ENT $200 Base Fee + $ZZZ Activation Fee
40 Option: NP/PA First Responder First Line of ResponseCovers ED Consults for Trauma, Neurosurgery, Cardiovascular and Orthopedic SurgeryCoordinates all care with the on-call specialistResponsible from admission to dischargeAssign 4 Surgical NP FTE’s to cover 24/7Net Cost is Staffing Costs less Professional Fees collected.
41 Option: Pay for Productivity Emergency on-call medical groupA separate professional corporationContracts with existing medical staff members
43 Sample Hospital Report Pro Forma Summary - Yearly Cost Estimates With Various Scenarios Note: Excludes those specialties with existing coverage agreements or exclusivefranchises
44 Option: Compensate with Tax Advantaged Dollars Integrated Healthcare StrategiesMichael E. Hogue, M.D.Call Pay Security Solution
45 Call Pay ProgramIntegrated 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 opportunityGenerate immediate and long term savingsControl future escalation in call pay amountFlexibility in implementationProvide a competitive differentiationEncourage long-term retention
46 Call Pay Dilemma – Systems Cost of call is becoming a significant burden on hospital operating marginsCurrent structure unsustainable as costs are escalating yearly at unacceptable ratesHospital systems face increasing call pay requests—slowly becoming the industry standardIncreasing strain on emergency departments—increasing number of uninsured patients
47 Call Dilemma – Physicians Perception that “On-Call” problem for physicians is unreimbursed careIn reality, “On-Call” is a time issueHistorical attempts have been to solve this with monetary paymentPayment is made/taxed/spent—money is gone and the time issue is unchangedCurrent 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 schedulesCall time limits physicians’ opportunity to maximize incomeReduces clinic timeReduces elective casesIncreases exposure to uninsured patients and corresponding legal riskPrivate practice physicians have difficult time sheltering money for retirementQualified plans inadequate to meet the needs of highly compensated physicians – increased exposure to market risk
49 SolutionIHStrategies’ 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 ORTime away from familyIncreased malpractice exposureNegative impact on practiceCOST OF RETIREMENT SAVINGNeed 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 twistThe BasicsContributions made after taxAccount grows tax deferredDistributions are tax freeThe TwistNo income limits for participationNo limit on contributionsReplaces 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 basisOutside of IRS deferred compensation scrutinyImmediately vested - fully portableProvides a tax replacement loan to participantParticipant grossed-up annually for taxes by outside lenderGross-up funded by a third partyGross-up not reportable on 990Organization pays annual financing cost on the tax gross-upUtilizes a highly tax-efficient indexed universal life insurance productOnly vehicle that offers tax deferred earnings and tax-free distributionsGuaranteed issue ($1million - $2million)Minimum annual guaranteed returnTax free distributions reduces exposure to increasing tax ratesAssets protected from malpractice claims (in most states)
54 Call Pay Comparison CURRENT PROPOSED System System Outside Lender $25,000+Interest$35,000$6,000PhysicianPhysician1099 of $35,00040% 14,000Net of $21,0001099 of $25,00040% $10,000Net Contribution $15,000Gross Up Loan $6,000Net Investment $21,000
55 The Call Pay Security Solution How It Works(2) Tax cost replenishment loan(1) Participants’ after-tax contribution(3) EarningsExpensesCost of insuranceAdministrative feesINDEXEDCONTRACTAt RetirementTax-free retirement incomeUltimately – 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 programImpact to System using CPSS scenarioImpact to System if Call Pay is paid in cash annuallyTotal Annual Costto SystemTotal estimated savings of 32.6% over the 20-year periodASSUMPTIONS: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 OldThe Call Pay Security Solution delivers a 38% increase in annual after-taxretirement income versus cash in a 25-year income streamASSUMPTIONSTax rate of 40.0%Investment yield of 7% gross during accumulation phase for cash optionInvestment yield of 5.5% gross during distribution phase for cash optionInvestment yield of 7% for CPSSAnnual call pay increase of 3%Income stream begins at age 715757
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/facilityEliminates the need for continuing negotiations for call payProvides 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 programImmediately vested and portableNot subject to corporate insolvency or risks of forfeitureSecure investment vehicleAsset protectionMinimum guaranteed returnIndex based, no asset management
63 The Forum for Negotiations “The power is in the process” Interview to learn perceptions of the medical staffResearch the ED unassigned dataEngage the leadership of the medical staffEstablish a small steering committeeSolutions only for the entire medical staffGet sign-off from the medical executive committeeImplement with precisionKeep steering committee involvedMeasure, monitor and manage
64 Common Solutions ED Unassigned and Unfunded Only ED Unassigned PatientsBase Stipend plus FFS GuaranteeIM Specialty Hospitalist ProgramAdditional Specialty Hospitalist ProgramsActivation FeeTiered StipendsCoverage AgreementsFracture Clinic for Orthopedic follow upCompensation 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 hospitalistsIntensivistsOBPediatricsOrthopaedic surgeonsGeneral trauma surgeons
66 About Integrated Healthcare Strategies A Human Resources consulting firm exclusively serving healthcare organizationsOrganizations we work with:Secular, religious, government-based and not-for-profit organizationsClients include hundreds of:HospitalsAcademic medical centersHealth networksNursing homes
67 About Integrated Healthcare Strategies, cont. 5 integrated specialty practices:Executive Total CompensationMSA Executive SearchPhysician ServicesMSA HR CapitalGovernance and Leadership ServicesFrom these 5 practices, we’re able to assist clients in the areas ofPhysician 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 1958Offices: Minneapolis, MN and Kansas City, MOWebsite:
68 About Hospitalist Management Resources, LLC Independent consulting companyWe consult with Hospitalist Programs, Intensivist Programs and ED Call Panel SolutionsWe do not staff or operate programsMore than 350 consultations in 11 yearsDevelop new programs and enhance existing programs into Fourth Generation ProgramsBusiness plans, ROI strategies and clinical and financial benchmarks to validate ProgramsHelp hospitals evaluate and create ED Call Panel Solutions
69 About Hospitalist Management Resources, LLC, cont. Founded April 1999Founders: Martin Buser and Roger Heroux, Ph.D.Each bring 25+ years Healthcare experienceOffices: San Diego, CA and Colorado Springs, COWebsite:Colorado Springs (719)San Diego (858)