Financial Solutions for a Changing Healthcare System

Weathering the Storm…
Financial Solutions for a
Changing Healthcare System
May 8, 2014
William J. Simione, III
Principal
Simione Healthcare Consultants, LLC
CRITICAL SUCCESS FACTORS FOR
HOMECARE AND HOSPICE
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UNCERTAINTY
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UNCERTAINTY
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REGULATORY CHANGES
AND SCRUTINY
STATE AND FEDERAL AUDITS
FACE TO FACE
ICD 10
MEDICARE CUTS
SEQUESTRATION
HOMECARE REBASING
HOSPICE PAYMENT REFINEMENT
HOSPICE REBASING
HOSPICE SITE OF CARE
PRODUCTIVITY ADJUSTMENT
AFFORDABLE CARE ACT
ACCOUNTABLE CARE
ORGANIZATIONS
COLLABORATION BETWEEN
POST ACUTE PLAYERS
HOSPITALS & PAYORS
PREVENT
REHOSPITALIZATIONS
POPULATION HEALTH
MANAGEMENT
RISK BASED PAYMENT
BUNDLING
DEMONSTRATE VALUE - $
ACA’s Employer Mandate
• Effect on Caregivers
hours
• Higher Cost
• Automation /
Technology
Companion Exemption
• Increased Rates
• Access & Availability
• Additional Caregivers
Market
• Affordable Care Act
• Population Health Management
• 1 and 5 being 65 + Older by
2030
Pricing Pressure
• ACA Employer Mandate
• Registries and
Independents
FUTURE
• Affordable Care Act
Accountable Care Organizations
Rebasing of Homecare Rates
• 14% cuts over Four Years
Productivity Adjustment starting in 2015
Refinement of the Hospice Medicare Payment
System (Possibly in 2015)
• Tiered Shape Payment System?
• Rebasing of Routine Homecare Rate?
• Site of Care Adjustment?
Risk Based Payment/Bundling
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MEDICARE REIMBURSEMENT
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MANAGED CARE
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IMPACT ON REIMBURSEMENT
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Reduce Costs & Improve Quality
Best Practices
Benchmarking
Compliance
Demonstrate Value
Market Alignment
Hospital Systems
Physician Groups
Payers
Mergers/Affiliations
Program Development
Care Transition Programs
Wellness Clinics
Telemedicine
Diversification
Home Health
Palliative Care
Hospice
Private Duty
Align Providers
Development of Regional &
System Governance:
The Organized System of Care
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G L O B A L C O N T R A C T I N G P L AT F O R M
Health Accountable Care, L.C.
VA L U E - B A S E D C O N T R A C T S
Focus: Population Health Management
Bundled
Payments
Employer
Direct
Commercial
Health SelfInsured Plan
Another
Medicaid
ORGANIZED SYSTEM OF CARE
Collaboration between physicians, providers and administrative leaders who have a shared
commitment for the quality, cost and patient experience across the entire care continuum
Clinics
FQHCs
Home Care
Hospice
and
Palliative
Hospitals
Long Term
Care
Mental
Health
Public
Health
Skilled
Nursing
Facilities
VA L U E - B A S E D C A R E C A PA B I L I T Y S E T S
Advanced IT
Tools
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Care
Coordination
Chronic
Disease
Management
Community
Provider
Collaboration
Financial
Reporting
Population
Management/
Risk
Stratification
Quality
Outcomes
Monitoring &
Reporting
Value-Based
Contracting
Shifting from Volume to Value:
Affordable Care Act Incentives to Improve
Quality Care
Create and
Demonstrate
Value
Strategic Focus
on
Population Health
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Shifting from Volume to Value:
Affordable Care Act Incentives to Improve Quality
Care
Population Health Challenges
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SHIFTING FROM VOLUME TO VALUE: AFFORDABLE
CARE ACT INCENTIVES TO IMPROVE QUALITY CARE
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CURRENT STATE:
A YEAR IN THE LIFE OF A PATIENT
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Hospital
Admissions
6
6
Social
Workers
Meds
2
37
Home
Care
Agencies
Nurses
5
Physical
Therapists
Clinic
Visits
16
Physicians
2
19
4
Occupational
Therapists
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Community
Referrals
6
Weeks
SNF
Care
5
Months
of Home
Care
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Source: Johns Hopkins, RWJ 2010 (G Anderson)
Nursing
Homes
STRATEGIC PLANNING
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DO NOT WAVE THE WHITE FLAG
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BE CREATIVE
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TEAM WORK
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SET YOUR GOALS
SET YOUR GOALS
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SELF ASSESSMENT OF YOUR
HOMECARE AND HOSPICE AGENCY
WHEN LOOKING INTO THE FUTURE
SELF ASSESSMENT OF YOUR AGENCY
• STEPS THAT SHOULD BE TAKEN IN ASSESSING
YOUR AGENCY:
1. LOOK INTO THE FUTURE (5 YEARS) ON BOTH A
FEDERAL AND STATE LEVEL
2. DETERMINE THE IMPACT BOTH OPERATIONALLY
AND FINANCIALLY ON THE AGENCY
3. ASSESS YOUR POSITION IN THE MARKET PLACE
COMPETITION
REFERRAL SOURCES
MARKET SHARE
4. DEVELOP A BUSINESS PLAN TO ACHIEVE BEST
PRACTICES AND POSITION THE AGENCY FOR THE
FUTURE
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ASSESSMENT OF YOUR AGENCY
• STEPS THAT SHOULD BE TAKEN IN ASSESSING
THEIR AGENCY:
5. INCLUDE BOARD OF DIRECTORS OR INVESTORS IN
THE PLANNING PROCESS
6. DETERMINE SHORT TERM VS. LONG TERM
OBJECTIVES (PRIORITIZE)
7. DETERMINE AMOUNT AND SOURCE OF CAPITAL
REQUIRED TO MEET YOUR OBJECTIVES
8. CALCULATE RETURN ON INVESTMENT
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SELF ASSESSMENT OF YOUR AGENCY
• YOU MAY NEED TO MAKE SOME HARD
DECISIONS
• THINK OUT OF THE BOX AND BE OPEN MINDED
• NO IDEA IS A BAD IDEA EACH ONE SHOULD BE
TAKEN INTO CONSIDERATION
• LOOK AT ALL PAYERS NOT JUST MEDICARE
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STEP BACK AND GET STRATEGIC
• “WHAT TO DO WHEN YOUR COMPANY
IS TOO BIG TO BE
SMALL BUT TOO SMALL TO BE BIG?”
“NO MAN’S LAND”, BOOK BY
DOUG TATUM
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NAVIGATING A COMPANY THROUGH
“NO MAN’S LAND”
• FOUR RULES - FOUR “M’s”
1. MARKET (ALIGNMENT VS. MISALIGNMENT)
AGENCY LOSING TOUCH WITH ITS
CUSTOMERS
2. MANAGEMENT
OUTGROWING YOUR MANAGEMENT STAFF
3. MODEL
OUTGROWING YOUR MODEL
4. MONEY
OUTGROWING YOUR MONEY
5. THE 5TH M IS MOMENTUM - APPEARANCE OF
FORWARD MOTION EXISTS
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INGREDIENTS FOR SUCCESS
INGREDIENTS FOR SUCCESS
• STRATEGIC INITIATIVES FOR SURVIVAL :
Cost Efficient Home Health and Hospice Programs
– It is anticipated that Operating costs will need to be
reduced by up to 10 to 20 percent in most
organizations in the next 3 to 5 years.
Develop Key Performance Indicators that drive
Best Practices.
Demonstrate and Measure Value that Homecare and
Hospice bring to the Health System and or Payers.
Capture data necessary to quantify value added and to
effectively manage the Agency.
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INGREDIENTS FOR SUCCESS
• STRATEGIC INITIATIVES FOR SURVIVAL :
Access to Capital to invest in technology, expansion
of services and growth.
Strong Quality Measures and Outcomes.
Smart Growth - Increase Volume that produces a
positive Gross Profit Margin and contributes to
Overhead.
Grow Market Share through Strategic Alliances or
Acquisitions.
Measuring Return on Investment from new services
and programs.
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INGREDIENTS FOR SUCCESS
• STRATEGIC INITIATIVES FOR SURVIVAL :
Willingness to enter into risk sharing arrangements.
You must know your costs.
Evaluate Infrastructure and service delivery systems to
reduce costs.
Generate or Maintain profits from Medicare.
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THE FUTURE
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INGREDIENTS FOR SUCCESS
• The Key Attributes for Home Care and Hospice
are the ability to increase overall quality, to
streamline access, demonstrate efficiency and
effectiveness and the willingness to collaborate
during the formative stages.
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CELEBRATE WHEN REACH YOUR GOAL
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THEN COUNT YOUR MONEY
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The future depends on what we do in the
present.
Mahatma Gandhi
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NEXT STEPS
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THE JUMP TO 2014 AND BEYOND
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QUESTIONS YOU NEED TO ASK YOURSELF
1. Am I as a provider going to be Inside Looking out
or Outside Looking in?
2. Will I be part of the team and be a player in the
Post Acute Care Continuum?
3. What are my options:
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Stay Independent
Preferred Provider
Affiliate with the system
Niche Provider
Independent outside Contractor
QUESTIONS YOU NEED TO ASK YOURSELF
4. What are the Risks Either Way?:
Do nothing and watch my revenue/census drop
and cannot support overhead. Need to downsize.
Become part of the system but are not paid
appropriately for the value you bring. And therefore
have negative margins in a bundled/risk based
system. Need to quantify that value.
5. Can I partner with other Providers?
6. What are the ACO’s and Payers looking for?
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QUESTIONS YOU NEED TO ASK YOURSELF
7. What do I need to do as an Agency to
demonstrate that I bring value?
8. Do I have the resources and business plan to
succeed?
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QUESTIONS
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SIMIONE.COM
Simione™ Healthcare Consultants provides solutions for your core home
care and hospice challenges – organizational, financial, sales & marketing,
technology, and mergers & acquisitions. Over 1000 organizations use our
practical insight and tools to reduce costs, mitigate risk and improve
efficiencies to steward the way they conduct business.
William J. Simione, III
Principal
4130 Whitney Avenue
Hamden, CT 06518
203.287.9288
800.949.0388
wsimione3rd@simione.com
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