View from the Top – Healthcare and Medical Professional Liability Issues

Singin’ The PL Blues MODERATOR: James Fasone, RPLU, ARM, Senior Vice President, Alliant Healthcare PANELISTS: James D. Hinton, CPA, Vice President, HCA, Inc. William J. McDonough, MBA, RPLU, President & CEO, MMIC Group Jeff A. Nelson, MHA, Partner, Tatum LLC Andrew Shapiro, JD, Senior Vice President, Healthpro, CNA

Agenda What Healthcare Reform may mean to Professional Liability Carriers How the economy impacts the provision of healthcare services How the quality of care issues impact providers Is healthcare reform REALLY on the horizon? Q&A

What Healthcare Reform May Mean to PL Carriers The Latest from Washington Our Customers Expectations are Low Our Main Concerns: Capacity Stress and Reimbursement Pressure Potential Warning Signs

Employed Physician Issues in the Hospital Pay for Performance — One Hospital’s Response Hospital Physician Strategies

P4P Initiatives CMS, Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU)  Inpatient Quality indicators CMS, Consumer Assessment of Healthcare Providers and Systems Hospitals survey (HCAHPS) CMS, Hospital Outpatient Quality Data Reporting Program (HOP QDRP) Managed Care Initiatives

RHQDAPU Background CMS initiated the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) effective with patients discharged The program applies to hospital inpatients Failure to meet the program requirements and to submit data results in the hospital’s loss of the Inpatient Annual Payment Update (APU)  Current APU is 2% of Medicare reimbursement for inpatient care  This represents approximately $85 Million for HCA

RHQDAPU Current Measures FY 2009 Measures (30) Abstraction Based AMI:8 Measures HF:4 Measures PN:6 Measures SCIP:8 Measures Claims Based Mortality: 3 Measures Readmission: 1 Measures FY 2010 Measures (44) Abstraction Based AMI:8 Measures HF:4 Measures PN:6 Measures SCIP:8 Measures Claims Based Mortality: 3 Measures Readmission: 3 Measures Agency for Healthcare Research & Quality (AHRQ) Patient Safety & Quality: 9 Measures Nursing Sensitive Nursing Sensitive: 1 Measure Patient Experience HCAHPS Structural Participation in a CV Database AMI = Acute Myocardial Infarction HF = Heart Failure PN = Pneumonia SCIP = Surgical Care Improvement Program

RHQDAPU Current Measures Proposed FY 2011 Measures (46) Abstraction Based AMI:7 Measures HF:4 Measures PN:6 Measures SCIP:10 Measures Claims Based Mortality: 3 Measures Readmission: 3 Measures Agency for Healthcare Research & Quality (AHRQ) Patient Safety & Quality: 8 Measures Nursing Sensitive Nursing Sensitive: 1 Measure Patient Experience HCAHPS Structural Participation in a CV Database Participation in a Stroke Database Participation in a Nursing Sensitive Care Database AMI = Acute Myocardial Infarction HF = Heart Failure PN = Pneumonia SCIP = Surgical Care Improvement Program

CMS HQA Market Performance Hospitals are scored on their performance as compared to the CMS National Benchmarks:  Red < CMS 75 th Percentile  Yellow > CMS 75 th Percentile but < CMS 90 th Percentile  Green > CMS 90 th Percentile Hospital are scored on their performance against competing hospitals in their markets

HCAHPS Pronounced “H-caps” First national, standardized, publicly reported survey of patients perspectives of hospital care  CMS first reported results in March 2008 Goals of survey  Produce data that allow objective and meaningful comparisons of hospitals on topics important to consumers  Public reporting creates incentives to improve quality  Public reporting enhance accountability and transparency

HCAHPS Eight Composites  Communication with Nurses (Q1 to Q3)  Communication with Doctors (Q5 to Q7)  Responsiveness of hospital staff (Q4 & Q11)  Pain management (Q13 & Q14)  Communication about medicines (Q16 & Q17)  Cleanliness of hospital environment (Q8)  Quietness of hospital environment (Q9)  Discharge information (Q19 & Q20) Overall rating of hospital (Q21) Recommend this hospital (Q22) 27 Question Survey: 1-22: “core questions” Rolls up to eight composite areas and two overall ratings 23-27: demographic

Seize opportunity to mitigate risk and achieve better outcomes for patients Claim victory in eliminating adverse events that lead to patient harm Financial success in healthcare is directly related to quality of clinical care Operational, financial and improvement agendas are aligned Quality is the Best Business Case Our Time is NOW!

Employed Physician Strategies Use of hospitalists  Response to hospital call issues  Integration with patient safety programs More specialists  Only 50% are primary care in 2009 New contracts have performance/efficiency requirements

HCA Employed Physicians

One of the few things physicians can count on is change

Overview Consolidation will continue to occur 90% of MN Physicians are in groups of 3 or more Competition is rapidly changing – Out of 33,000 physicians in our territory 12,000 are in SIRs

Changes in Physician Practices Shift toward cash services Medical Home and other like models geared toward disease management Higher numbers of sicker patients The push toward Electronic Health Records

Electronic Health Records Less than 20% of physicians currently use EHRs Medicare and Medicaid will provide incentives to assist physicians who demonstrate meaningful use of EHRs through HITECH Act Beginning in 2015 Medicare penalties will apply to physicians who do not use EHRs

Benefits of Electronic Health Records Enhanced Patient Care – e-prescribing, results follow-up, automated chart review Improved Efficiency – reduced dictation, virtual access to medical records, index-based reports Increased Profitability – More timely documentation, reduce coding errors, reduce or eliminate dictation, reduce number of refused charges

Risks of EHRs Defining the Legal Health Records Maintaining Integrity of the Record Locking Records Using Templates

New Technology on the Horizon Pulse oximeter Improved fetal monitoring Improved placental pathology Treatment for pancreatic cancer

Art of Becoming Insanely Great (Transforming Health Systems and Their Quality of Care Measures)

Remarkable healthcare people…

With leadership, resources and patient centered hearts

50% of acute hospitals are distressed

60% the MDs and partners are in trouble

Universal challenges “Houston, we have a problem.”

Public spotlight on quality, risks and costs is growing System leadership is the answer.

The Need: Make Competitors Irrelevant

Use of Improvement Methodologies Just what the doctor ordered

Generate Compelling Results

Questions & Answers

Many thanks to … James Fasone James Hinton William McDonough Jeff Nelson Andrew Shapiro