1. Leading the Change Solutions for Today’s Healthcare Challenges
Melinda S. Hancock, FHFMA, CPA
Partner, Dixon Hughes Goodman LLP and Chair-Elect, HFMA
Women in Healthcare: Lead #likeagirl
November 14, 2014

2. "If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” – John Quincy Adams

3. Presentation Overview
Organizational Performance
Cost Reductions
Business Analytics
Payment Reform & Value-Based Purchasing
Population Health & the Care Continuum
Capital Access
Revenue Cycle
Leadership … What does it really mean?

4. Cost Reduction
The need for rigorous cost management is clear. Accelerated by unsustainable growth in national healthcare costs, the emerging value-based business model and healthcare reform will push hospitals and health systems to improve quality, access, and outcomes, while reducing expenses.
From hfm, March 2012, Kaufman Hall 4

5. AMA’s Cost Reduction Strategies
The American Medical Association identified four broad strategies to contain healthcare costs and get the most for our dollars:
Reduce the burden of preventable disease
Make healthcare delivery more efficient
Reduce nonclinical health system costs that do not contribute to patient care
Promote value-based decision making at all levels.
Source: “Getting the most for our health care dollars”, AMA.

6. Cost of
Chronic
Care
Source: 6

7. Are We Efficient? U.S. Ranks Last7 7

8. 8

9. Deloitte’s “Radical Cost Reduction”
Basic Premise: “By many estimates the reduction must reach 20%-30% of total cost structure by 2015 to be able to confront a lean, health-reformed environment.” Why? Reductions from government payers, pressures from lower commercial rates, pricing transparency, narrow networks… all equate to shrinking revenue base.
Source:

10. Operational vs. Strategic Approach
1. Bottom up
2. Looks to drive
incremental change
3. Derives value from making organization better than peers
1. Top down
2. Changes underlying delivery and profit model
3. Derives value from making the organization different
Operational
Strategic
Source:

11. Capital needs and related shortfalls Medicare breakeven analysis
How Much Is Enough?
Capital needs and related shortfalls
Medicare breakeven analysis
Current and desired bond rating
Market dynamics
Current negotiations and at-risk contracts
The impact of transparency and benefit design

12. Tool For Readiness Assessment
Source: A Guide to Strategic Cost Transformation in Hospitals and Health Systems, March 2012

13. How to Approach Cost Management
Understand readiness
Define goals based on capital shortfall
Use benchmarks to identify sources of savings
Drill down on staffing methods
Focus on key drivers of staffing & productivity problems
Supplement with other data analytics
Streamline overhead functions
Ensure targets are integrated with plans & budgets
Bob Herman, June 14, 2012

14. Business Analytics
“We developed the concepts in this work from the data we gathered, building a framework from the ground up. We followed an iterative approach, generating ideas inspired by the data, testing those ideas against the evidence, watching them bend and buckle under the weight of evidence, replacing them with new ideas, revising, testing, revising yet again, until all the concepts squared the evidence.”
From Great by Choice, Jim Collins 2011 14

15. Business Analytics Needs in an Era of Change
Source: Building Value-Driving Capabilities: Business Intelligence. An HFMA Value Project report 15

16. Untapped Potential of Business Analytics in Health Care
Analytics are available but few are measuring…and even fewer are managing to the metrics.
44%
Not measuring
Costs of adverse events
Margin impact of readmissions
Cost of waste in care processes
36%
Measuring
Managing
20%
Source: HFMA Value Project, June 2011 16

17. How to Apply Data Mining to Everyday Clinical Practice
Content System
Standardizes knowledge work
Systematically applies evidence-based best practices to care delivery
Deployment System
Drives change through new organizational structures, especially teams
Requires true organizational change to drive adoption of best practices throughout an organization
Enterprise Data Warehouse (Analytic System)
Aggregates clinical, patient satisfaction, and other data
Enables analysts to identify patterns that can inform decisions

18. Harnessing Data to Improve Physician Performance
Source: “Moving Toward Population Health.” Leadership . Spring Available at hfma.org/leadership.

19. Value Based Purchasing
Payment Reform &
Value Based Purchasing
Payment reform is changing health care, bringing with it the need for new competencies for success. Healthcare leaders need innovative strategies to integrate with physicians,
manage risk, reduce cost and price bundled services, and enhance quality while lowering cost. Business as usual is not an option.
Healthcare Payment Reform – Accelerating Success, HFMA 19

20. Goals of Payment Reform
Source:

21. Estimated Gains from ACA: $64B
Amounts in Billions

22. How CMS Views The Programs
Source: Health Care Advisory Board, 2012

23. The Continuum of Risk
Source:
Source: Hancock, M., Hannah, B. “Determining Your Organization’s Risk Capability”, hfm, May 2014.

24. The Mandatory Programs under ACA
VBP
RRP
HAC
Payment Type
Bonus/Penalty
Penalty
All or None Penalty
% of Medicare Inpatient $s 1%
1.25%
1.5%
1.75% 2% 2% 3% 1%
Description of Metrics
Addition of domains through 2015 with dynamic metrics every year
Three core diagnoses with additional 2 in 2015 and more to be added in later years
Two domains: Safety and Infections with infections weighted higher and additional infections added

25. Maximizing & Protecting

26. VBP Shifting of Domain Weights
Patient Experience
Core Measures
Outcomes
Efficiency (MSPB) 26

27. New NQS Based Domains for FY 2017
Clinical Care - Process = 5%
HCAHPS = 25%
Clinical Care - Outcomes = 25%
Safety = 20%
MSPB = 25%

28. Readmission Reduction Program
3 Performance periods in play at a time
3% penalty of Medicare Reimbursement at risk each program year
Measured Populations 30 days from DISCHARGE
AMI, HF, PN, COPD, THA & TKA
CABG is added in FY 2017 which is in play now
Performance Periods: 3 Year Rolling Program
FY’15: July 1, 2010 – June 30, 2013 – 3%
FY’16: July 1, 2011 – June 30, 2014 – 3%
FY’17: July 1, 2012 – June 30, 2015 – 3%
FY’18: July 1, 2013 – June 30, 2016 – 3%
FY’19: July 1, 2014 – June 30, 2017 – 3%
Currently participating
in 3 performance
periods simultaneously 28

29. Hospital Acquired Conditions: FY 2017
First Domain: PSIs
Second Domain: CDC
Pressure Ulcer Rate
CLABSI
Foreign Object Left in Body
CAUTI
Iatrogenic Pneumothorax Rate
SSI Following Colon Surgery (FY 2016)
Postoperative Physiologic and Metabolic Derangement Rate
SSI Following Abdominal Hysterectomy (FY 2016)
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017)
Accidental Puncture and Laceration Rate
Clostridium Difficile (FY 2017)

30. Where Are the First Cohort of Bundles?
Source: Centers for Medicare and Medicaid Services; Health Care Advisory Board interviews and analysis.

31. Early Results of BPCI Cohort 2
Tremendous increase in the number of applications in the most recent open enrollment in April 2014: Nearly Triple!
Models 2,3,4 were open for enrollment
Currently in the Phase 1 period which is the non risk, decision making period. Phase 2 is when the Episode Initiator starts to accept risk

32. Where Are the MSSPs?
As of January 2014, there are 23 Pioneer ACOs and 351 Shared Savings ACOs.
Source: The Advisory Board

33. Geographical Dispersion of MSSPs
Represents Assigned Patient Population for Cohorts
Source: MLN Webinar 4/8/14

34. 2012 MSSP Cohort: 114 Participants
Early Results
Pioneer ACOs: 32 Participants
All participants met quality goals
25 of the 32 reduced readmission rates
>1/3 reduced costs, over $87M
2 providers lost money, $4M
13 providers or 40% getting distributions
2012 MSSP Cohort: 114 Participants
54 (47%) reduced spending with 29 (25%) sharing in savings
$126M in distribution to the 29 providers
60 were not able to reduce spending: 2 of which were 2-sided model
109 reported quality measures satisfactorily: 2 of the 5 who did not were eligible for $

35. How to Manage to the Tipping Point
Revenue
Time
How do local market conditions impact timing considerations?
Can market-changing events create an urgent paradigm shift?
What is my step-change business model risk?
Do I have the financial tools to adequately analyze relevant states?
Source: DHG Healthcare

36. The Changing Healthcare Landscape
Source: Leavitt Partners, LLC

37. What Is Accountable Care?
Improve the individual experience of care
Improve population health
Reduce the cost of health care for populations
Outcomes
Oversee the provision of clinical care
Coordinate the provision of care across the continuum of health services
Invest in and learn to use appropriate IT to manage population health
Processes
Bear financial risk for the measured health of a population
Align incentives to encourage the production of high-quality health outcomes
Structure
Source: Leavitt Partners, LLC

38. Partnering for Success Under Value-Based Payment
Who
Collaborated
Aetna
Consultants in Medical Oncology and Hematology, a 9-physician practice in Southeastern Pennsylvania
What They Did
Collaborated on a patient-centered medical home model for oncology
Used a common medical home approach: management fee plus shared savings
Results They Achieved
71% fewer ED visits and 51% fewer hospitalizations for chemotherapy patients in 2012, compared to national benchmarks
Source: “Partnering Around Value-Based Payment,” Leadership, Summer 2014, available at hfma.org/leadership 38

39. Population Health The Care Continuum
Improving the heath of populations is one of three dimensions that make up the Institute of Healthcare Improvement’s
Triple Aim. 39

40. Advancing Population Health Management
Best Health, Best Care, Best Experience
Care Delivery Models
Care Coordination
Patient Engagement
Information Technology and Analytics
Alignment of Incentives
Source: Sharp Healthcare, San Diego, CA

41. Care Management Programs
Hospital Care Management
Complex Case Management
Disease Management
End-of-Life Care Management
Skilled Nursing Care Management
Out-of-Network Care Management
Source: Sharp Healthcare, San Diego, CA 41

42. Transitions Program Pre Transitions* During Transitions p
Hospitalizations, n 71 33
Hospitalizations per patient, mean (SD)
.46
(.84)
.21
(.55)
< 0.01
Hospitalization rate
32%
17%
(26)
ED visits, n
157 67
ED visits per patient, mean (SD)
1.01
(1.3)
.43
(.78)
ED visit rate
57%
(88)
31%
Total Cost of Care, (SD)
$73,025
($109,708)
$46,588
($81,616)
*Transitions LOS is unique for each patient: pre-Transitions LOS = During-Transitions LOS
Source: Sharp Healthcare, San Diego, CA

43. Complex Case Management
Health & Wellness
Who Is Eligible?
Disease Management
Education and support customized to the patient’s level of health, allowing them to self-manage their chronic medical condition, promote wellness and prevent complications.
Disease Managers/Coordinators
Diabetes
Asthma
CAD
Obesity/Sleep Apnea
Heart Failure
COPD
Pharmacy
Focus on medication therapy management and improved patient adherence.
Lipid Clinic
Refill Clinic
Medication Reconciliation
Chronic Care Nurses
Provide patient support in the Primary Care Offices. The RN supports and reinforces the treatment plan prescribed by the physician.
5 or more chronic medical conditions
4 or more ER visits in the last 12 months
4 or more hospital admissions in the last 12 months
Complex Case Management
Promotion of knowledge, healthy attitudes, and
practices to help our patients achieve their personal best health.
Healthier Living-Chronic Disease Self Management
Weight Management
Dietician Consultation
Heart Failure
Healthy Hearts
Asthma
Stress Management
Strength Training
Smoking Cessation
Coordination and assessment of care and services for members who have experienced a critical event or diagnosis that requires the extensive use of resources and system navigation in order to facilitate appropriate delivery of care & services.
Source: Sharp Rees-Stealy, Sharp Healthcare, San Diego, CA 43

44. Complex Case Management Health & Wellness (Ongoing)
What Do Patients Receive?
Disease Management
(Ongoing)
Evidence based targeted educational mailings
Personalized Face to Face and Telephonic Assessments with collaborative Goal Setting
Regular telephone consultations and follow-up with a registered nurse
Provision of self-management tools and support
Referral, care coordination and communication with Healthcare providers
Pharmacy (Ongoing)
Physician/Patient support
Medication Therapy Management
Personalized Telephonic Assessments
Resource Care Coordination
Chronic Care Nursing (30-90 days)
Personalized Face to Face Assessments with collaborative Goal Setting
Regular office and telephone consultations and follow-up with a registered nurse
Provision of self-management tools, education and support
Attend Senior post Hospital discharge and post Emergency Department follow-up visits 44
Complex Case Management
(3-6 months)
Evidence based targeted education
Personalized Telephonic Assessments with plan of care and collaborative Goal Setting
Frequent telephone consultations and follow-up with a registered nurse
Provision of authorization and coordination of services
Referral, care coordination and communication with healthcare providers
Health & Wellness (Ongoing)
Group Classes
1 on 1 Evaluation
Telephonic/Web Education .
Source: Sharp Rees-Stealy, Sharp Healthcare, San Diego, CA

45. Capital Access
In an era of healthcare reform, with declining payment, concerns about reducing costs, and exploration of new organizational structures to improve accountability for population health, uncertainty abounds among healthcare providers. Considerable investment and reinvestments are critical to the profitability and survival of hospitals and health systems today.
Bond Financing in Volatile Times, HFMA,
March 3, 2014, Gould & Blanda 45

46. Healthcare Issuance Down in 2013
Source: John Hanley, Managing Director, Head of Healthcare, Ziegler, “Is Capital Available?” Presentation at HFMA’s Capital Conference, April 10, 2014.

47. Source: Martin Arrick, Managing Director, Standard & Poor’s Not-for-Profit Health Group. “U.S. Not-for-Profit Health Care Sector Outlook.” Presentation at HFMA Capital Conference, April 10, 2014.

48. Revenue Cycle
The revenue cycle presents unique opportunities for bottom-line improvement. As payment continues to decline, hospitals should take a renewed interest in improving their financial performance through the revenue cycle.
HFMA 48

49. Revenue Cycle The New Norm - Basic Expectations
Efficient – Low cost work flows…..
Exception based processing
Automation through EDI
Patient Self Service Options
Accurate – Get it right the first time!
Right Insurance, Right Authorization
Right Patient Responsibility at Time of Service
Mandate Real Time Concurrent Review, Open EMR
Timely – Introduce expectations early in cycle
Patient and payers timely payment expectations

50. Revenue Cycle… More Than Efficiency – It’s an Experience!
Revenue Cycle Leaders Should Consider the “Service Differentiation”…..
Employee Satisfaction
Why will the “best and the brightest” want to work for you?
Efficiency
How is your Revenue Cycle team creating intuitively accurate processes?
How does the Revenue Cycle team create patient loyalty?
Patient Satisfaction

51. Embrace the Insurance Exchanges
Assist with Securing Coverage
Certified Enrollment Counselors
Patient Advocates

52. It’s a “New Era” in Revenue Cycle
Price Transparency, New Payment Methodologies and Patient Liabilities
Cost Based Chargemasters
Self Pay Initiatives
Bundled Payments

53. Leveraging Technology
Work from Home
Expanding EDI
Patient Self Service
Payer Interfaces with Hospital Systems
Front end solutions to guide patients through the Exchange and Medicaid options
“Priceline” Price Quotes
Game Industry Productivity Monitoring Tools
Patient Preference Lists
Facetime Chat with a Customer Service Rep

54. HFMA Resources
My goal each year is to introduce promising young professionals and colleagues to HFMA and help integrate them within the organization. The HFMA network enhances their careers, strengthens our chapter, and allows us to follow their success. My chapter leaders did it for me, and I want to pass it on. It's a win- win!
Debbie Teesdale
Executive Director of Corporate Development
Paragon Hospital Services, LLC 54

55. Improve the Billing and Payment Experience for Patients
hfma.org/dollars 55

56. Discover Revenue Cycle Strategies That Work
Strategies used by MAP award winners and other high- performing organizations
Innovative practices designed to drive revenue cycle performance
Nov. 2-4, Las Vegas
hfma.org/mapevent

57. Take Advantage of Other Educational & Career Development Opportunities
Certification
ANI: HFMA National Institute
Virtual Conferences
Seminars
Webinars
eLearning
HFMA onsite programs

58. Stay Up to Date with Online Resources
hfma.org
Daily and weekly online news
Social media
Facebook
LinkedIn
Twitter
HFMA Forums

59. Add HFMA Publications to Your Reading List
hfm magazine
The #1 publication for healthcare CFOs
Leadership publication
Reaches all levels of the C-suite
Newsletters
Revenue Cycle Strategist
Healthcare Cost Containment
Strategic Financial Planning .

60. Earn CPEs by Reading Newsletter Articles

61. What does it really mean?
Leadership…
What does it really mean?
“Leadership has nothing to do with titles; it has everything to do with, “Do you inspire other people? Do they want to follow you? Do they want to be with you?”
-Tom Atchison, author of Followership: A Practical Guide to Aligning Leaders and Followers 61

62. Collaboration Success Stories
A California healthcare system created core revenue cycle teams with representatives from 10 departments across all system hospitals.
Improvement: $9.4 M
Community banks and residents bought 38% of the $45M in bonds that a rural Nebraska critical access hospital used to fund construction of a replacement facility.
A payer funded an initiative to make a Minnesota healthcare system’s primary care clinics more efficient and patient-centered.
Physicians, nurses and other clinicians provided the ideas.
WITHIN A HEALTHCARE SYSTEM
HOSPITAL & COMMUNITY
PAYER & PROVIDER
Source: HFMA’s Leadership e-Bulletin, available at “Transforming Revenue Cycle” (Providence Health & Services CA region): Oct issue. “Funding a Capital Project” (Beatrice Community Hospital/NE) : Dec issue. “Redesigning Primary Care” (Fairview Health Services.MN): Nov issue. . 62
62 62

63. Anchor Change in Corporate Culture
“Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.”
-Peter Drucker 63
63 63

64. “The people who really succeed in this field have a vision
“The people who really succeed in this field have a vision. They have a high degree of motivation, and they are out to make things better—to do good and to change the world on whatever scale they can. They work hard, they have an end in mind, and they will acquire whatever skills and training and knowledge they need to get there. ”
Mary Stefl, professor and chair of the department of healthcare administration, Trinity University, San Antonio, Texas, and a consultant for the Healthcare Leadership Alliance Competency Model 64
64 64

65. Create Short-Term Wins
“A journey of a thousand miles begins with a single step.”
- Lao-tzu, Ancient Chinese philosopher
“Don’t be afraid to start small.”
- Marty Manning,
Advocate Physician Partners 65
65 65

66. “. . . a leader needs to k
You cannot lead without knowing the needs of your people—what drives them, what makes them do what they do of the psychology of that, then you can give them opportunities to succeed based on their own psychology of success.”
Kerry Gillespie, FHFMA, vice president, operations, Community Health System, Inc., Brentwood, TN, and a member of HFMA’s Tennessee Chapter 66 66

67. Everyone Is a Leader….
Everyone in this room is a leader. I’m asking each of you to renew your commitment to leading our industry forward, to ensuring its long term viability and quality. Together, we CAN improve health care. Together, we can and we must • Mentor young professionals as we have been mentored, • Rise above the uncertainty and frustration of today, and • Work in partnership with our colleagues throughout the industry to lead the change. Kari Cornicelli HFMA National Chair 2014/2015