Larry BaronnerPennsylvania Office of

Rural Health

Health Care inRural Pennsylvania:

An Overview

What is Rural?

Most define “rural” by default

In general: areas outside of populations of 50,000 or more

OMB Definition: Metropolitan/ Micropolitan/Non-metropolitan

Census Definition: Urbanized Area/ Urbanized Cluster

Federal Office of Rural Health Policy Definition: Rural-Urban Commuting Areas

Center for Rural Pennsylvania: Rural/Urban

Who Is Rural?

Nationally – 20 percent of the population lives in areas that are designated as rural

Pennsylvania – 23 percent of the population lives in rural areas

Rural Pennsylvaniaat A Glance

One of the most rural states in the nation

2.8 million rural residents 42 of 67 counties designated as

rural (CRP)

Rural-Urban Commuting Areas (RUCAs)

For Pennsylvania

LegendDark Yellow Code 4 (Large Town)Medium Orange Code 5 (High Commuting to Large Town)Light Orange Code 6 (Low Commuting to Large Town)Dark Yellow Code 7 (Small Town)Medium Yellow Code 8 (High Commuting to Small Town)Light Yellow Code 9 (Low Commuting to Large Town)Green Code 10 (Rural Areas)

Source: Community Information Resource Center, Rural Policy Research Institute

Health Status in Rural Pennsylvania

Fewer residents exercise regularly, 1/3 are overweight, and 60 percent are at risk for sedentary lifestyles

High risk occupations: farming, mining, and forestry/fisheries

Chronic diseases: diabetes, hypertension, obesity; behavioral health issues; dental health concerns

Source: Behavior Risk Factor Surveillance Survey

Generally,Rural Residents…

…enter care later than do their urban counterparts;

…enter care with more serious and persistent issues;

…require more extensive and expensive care;

…have more transportation challenges; …have less options to pay for services

and medications (public insurance; employer-sponsored health care); and

…have less choice among providers.

Accessing Healthcare Services in

Rural Pennsylvania

The Primary Issue forRural Health Care Is…

ACCESS…

… to healthcare services … to payment mechanisms … and to transportation

Provider Distribution

Nationally – Only 9 percent of physicians practice in rural areas

Pennsylvania – 2/3 of primary care physicians practice in the four most populated counties

Access to specialists, dentists, etc.

Health care is one of the top employers in any county

Health care employs almost 12 percent of the rural workforce

Annual revenues of $73 million in average rural county

Each health care dollar “rolls over” 1.5 times in the local economy

Concern of keeping these dollars local

Source: Pennsylvania Rural Health Association

• Certified by CMS to receive cost-based reimbursement from Medicare

• Intention to improve financial performance• Reduce hospital closures

• Certified under different set of Conditions of Participation

• More flexible than acute care hospitals• Located in a rural area

• Over 35 miles from another hospital• 15 miles in mountainous terrain or secondary

roads• Necessary Provider designation (January 1 ,

2006 sunset)

What is a Critical Access Hospital

Critical Access Hospitals InPennsylvania, July 2014

Source: Pennsylvania Office of Rural Health

National Map of CAHs

What are the requirements for CAHs

• Maintain an annual average length of stay of 96 hours for acute patients– Swing bed services – no length of stay limit

• Maximum of 25 acute care inpatient beds (can also be used for swing bed services)

• Must provide 24-hour emergency services with medical staff on-site or on-call (30 min)

• Must have agreements with an acute care hospital related to patient referral and transfer, communication, emergency and non-emergency patient transportation

• Must have arrangements with respect to quality assurance (i.e. QIO)

Promoting Healthy Communities Through Hospital-based Population Health StrategiesUSING THE COMMUNITY HEALTH NEEDS ASSESSMENT PROCESS

Hospitals – No longer responsible for just their patients!

Recent policy and regulatory changes are demanding a new accountability driven by;

• Internal Revenue Service’s 2007 revisions to Form 990, Schedule H establishing a mandatory community benefit reporting framework for 501©3 hospitals and

• The 2010 Affordable Care Act’s requirement that tax exempt hospitals conduct triennial Community Health Needs Assessments (CHNAs) with input from public health experts and other community stakeholders.

Public Health Accreditation Boards (PHAB) seeking accreditation are to participate in or conduct a collaborative process resulting in a comprehensive community health assessment.

Focused on Population Health status Public health issues facing the community

CHNA Challenges for Hospitals Lack of resources Lack of capacity “Population Health” new concept for hospitalsOverlapping interestsTrust issuesPrioritization of community health improvement effortsBringing together diverse organizations that have differing

needs, resources, cultures and missions can be challenging

Purpose of the CHNA Process (for hospitals)Identification of; unmet acute care needsPopulation health issuesLocal service gapsPriority health concerns for service planning and developmentDevelopment of ACA-mandated implementation plansPreparation of proposals for submission to charitable, foundation, and governmental funding opportunities

Benefits of Collaborative CHNAs

Bring together the following; Hospitals and hospital systems; Public Health Departments School systems Charitable organizations Social service agencies Faith-based groups Governmental organizations Employers

Economies of scale in collecting and analyzing necessary primary and secondary data

Build trust and rapport among the participants leading to collaborative strategies

Additional Partners and Their Role Pennsylvania Department of Health Bureau of Health Planning (PA DOH -

BHP) Pennsylvania Office of Rural Health (PORH) and the Flex Program Hospital and Healthsystem Association of Pennsylvania (HAP)

These partners can; Serve as conveners Provide educational services Provide technical assistance Provide or secure third-party funding to support the process

PORH Strategy to Assist Pennsylvania Rural HospitalsTHE HEALTHY COMMUNITIES INSTITUTE

HCI Counties

Why do clients use the HCI Systems?

•  Planning/Decision Support Tool

•  Standards Tool: Federal IRS 990, Health Care Reform, MAPP, Healthy People 2020, CHIP, SHIP

•  Communications Tool

•  Evaluation Tool

•  Quality Improvement Tool

•  Partnership-building/Alignment Tool: inter- and intraorganizationally

Increase appropriate utilization

Reduce readmission rates

Contain or reduce costs of care Improve access to care

Reduce mortality rate

Improve continuum of care

• 100 – 200 indicators • Constantly updates

• Data Visualization

Local Community Data

• Database >2000 Promising Practices

• Programs & Policies • Evidence-based

Implementation Strategies

• Form working groups

• Set local goals

• Manage objectives

Collaboration Centers

• HP 2020 trackers • Local Priority trackers • Comparative and

longitudinal evaluation

Evaluation &Tracking

Continuous Health Improvement: Effectively Moving from Data to Action

HCI System: 4 Pillars

Fulton County Medical Center

214 Peach Orchard Road, McConnellsburg, PA 17233 www.fcmcpa.org (717) 485-3155

Overview History of FCMC CHNA’s FCMC website

◦ WHERE TO access CHNA through the COMMUNITY RESOURCES tab◦ WHERE TO access COMMUNITY DASHBOARD.◦ Example of an INDICATOR - Children who are Obese: Grades K-6 ◦ Indicators, promising practices and funding

Why Healthy Communities Institute Community Planning Whose job is it? Forum – How do we tackle this?

2013-2015 Health Needs Assessment

- 6 Priorities1. Alcohol Tobacco and Other Drug Use (ATOD)

2. Diet, Obesity & Inactivity

3. Heart Disease

4. Diabetes

5. Children, Youth, and Families

6. Quality of Life for People over 65

214 Peach Orchard Road, McConnellsburg, PA 17233 www.fcmcpa.org (717) 485-3155

FCMC Website Priority areas highlighted

Dashboard specific to CHNA

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The Challenge: Crossing the Shaky Bridge

2012 201520142013 2016

Fee for Service

Payment System

Population Based

Payment System

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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• In the past 24 months, the healthcare field has experienced considerable changes with an increased number of rural-urban affiliations, physicians transitioning to hospital employment models, flattening volumes, CEO turnover, etc.

• Federal healthcare reform passed in March 2010 with sweeping changes to healthcare systems, payment models, and insurance benefits/programs

• Many of the more substantive changes will be implemented over the next two years

• State Medicaid programs are moving toward managed care models or reduced fee for service payments to balance State budgets

• Commercial insurers are steering patients to lower cost options

• Thus, providers face new financial uncertainty and challenges and will be required to adapt to the changing market

The Healthcare Environment Has Changed!

INTRODUCTION

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Fee-For-Service Financial ModelAssumptions

• Utilization• Inpatient and Outpatient• Impact of ACA• Impact of Blue Cross steerage initiatives

• Revenue• Third party price increases• Cost based Medicare revenue• DSH payments (Zeroed out in 2014)• Bad debt % of patient service revenue (75% reduction in 2014)• Impact of ACA• Meaningful use incentive payments• Other operating revenue• Non-operating gains and

• Expenses• Salaries, wages and benefits• Productivity• Supplies and other

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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• Subset of most recent challenges

• Payment systems transitioning from volume based to value based• Increased emphasis as quality as payment and market differentiator• Reduced payments that are “Real this time”

•New environmental challenges are the TRIPLE AIM!!!•Market Competition on economic driver of healthcare: PATIENT VALUE

We Have Moved into a New Environment!

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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Changing Payment System Incentives

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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Micro-economic Environment – Physicians Perspective Current State Phase 1 Phase 2 Phase 3 Future State

PCPs • Loss leaders • Employed to

maintain primary care base in their communities

• Independent PCPs • Relatively low

compensation • Emphasis on high

volume episodic care

• System aligned (employed and independent)

• Increasing compensation

• Revenue centers • System employed

and integrated • Relatively high

compensation • Emphasis on care

management and chronic disease management

• Operating at top of license, leveraging non-physician practitioners and team members

Specialists • Profit centers • Emphasis on high

volume of high dollar procedures

• Caught between volume emphasis and system cost emphasis

• Declining compensation

• Regional consolidation with lower volumes

• Increasing employment by systems

• Cost centers • Increase value

through care management models that drive down costs

• Quality must be demonstrated

• Make (employ) or buy (purchase externally) decision based on cost

Physician Perspectives

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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Implementation Framework – What Is It?

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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• Partner with Medical Staff to improve quality • Restructure physician compensation agreements to build quality measures

into incentive based contracts• Modify Medical Staff bylaws tying incentives around quality and outcomes into

them• Ensure most appropriate methods are used to capture HCAHPS survey data

• Consider transitioning from paper survey to phone call survey to ensure that method has increased statistical validity

• Electronic Health Record (EHR) to be used as backbone of quality improvement initiative

• Meaningful Use – Should not be the end rather the means to improving performance

• Increase Board members understanding of quality as a market differentiator• Move from reporting to Board to engaging them (i.e. placing board member

on Hospital Based Quality Council)• Quality = Performance Excellence

Initiative I – Operating Efficiencies, Patient Safety and Quality

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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• Understand that revenue streams of the future will be tied to primary care physicians, which often comprise a majority of the rural and small hospital healthcare delivery network

• Thus small and rural hospitals, through alignment with PCPs, will have extraordinary value relative to costs

• Physician Relationships• Hospital align with employed and independent providers to enable

interdependence with medical staff and support clinical integration efforts• Contract (e.g., employ, management agreements)• Functional (share medical records, joint development of evidence based

protocols)• Governance (Board, executive leadership, planning committees, etc.)

Initiative II – Primary Care Alignment

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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• Develop system integration strategy

• Evaluate wide range of affiliation options ranging from network relationships, to interdependence models, to full asset ownership models• Interdependence models through alignment on contractual,

functional, and governance levels, may be option for rural hospitals that want to remain “independent”

• Explore / Seek to establish interdependent relationships among small and rural hospitals understanding their unique value relative to future revenue streams

• Identify the number of providers needed in the service area based on population and the impact of an integrated regional healthcare system

• Conduct focused analysis of procedures leaving the market

• Understand real value to hospitals• Under F-F-S• Under PBPS (Cost of out of network claims)

Initiative III – Rationalize Service Network

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

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Initiative IV – Population Based Payment System

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

• A narrow rural/urban provider network focused on patient value

• Aggregates multiple rural/CAH populations for critical mass

• Restricted to payers willing to commit to population health and payment

• On CCO’s terms

• NOT for existing fee-for-service or cost contracts

• Legal entity with corporate powers

• Governance structure for setting strategy, policy, accountability

• Actively secures and manages risk/reward-based payer contracts

• Supports PCP-focused quality & care coordination across the network

• Retains local hospital independence, but with contractual accountability

• Houses care management infrastructure

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Where Are ACOs Forming?

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

Source: healthaffairs.org

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ACOs in Washington

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

Source: Leavitt Partners Center for Accountable Care Intelligence

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ACOs in Pennsylvania: Examples

MARKET OVERVIEW TRANSITION FRAMEWORK STRATEGIES

Source: ipagroup.org

Pennsylvania Office of Rural Health202 Beecher-Dock House

University Park, PA 16802Telephone: (814) 863-8214

Fax: (814) 865-4688porh@psu.eduwww.porh.psu

Larry Baronner, Critical AccessHospital Coordinator (ldb10@psu.edu)

Lisa Davis, Director (lad3@psu.edu)