Date post: | 26-Dec-2015 |
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Opportunity abounds: the compelling facts of the new
payment modelG Curt Meyer, FACHE, MAACVPR
VP of outpatient services Mary Free Bed rehabilitation Hospital
Restoring hope and freedom through rehabilitation
Part two....So now what?
• Do I do anything?• When do I make a move?• What do I do when I decide to do something• Who do I talk to and what information is
needed to make informed decisions
Denial
Are You Ready for Healthcare Reform?
Anger
Remorse
Emotional Stages of the Unprepared
DepressionAnxiety
Acceptance
Confusion
Where do we go
Is this possibly the bridge to nowhere?
Home Health Doing Cardiac Rehab
Crossing the Crevasse
FEE FOR SERVICE
•A business we know and love (and have thrived at) •It’s all about volume•Maximize price to commercial payers to offset losses on government business•Focus on specialists
VALUE BASED PAYMENT
Brave new worldNew business model – Focus on populations and episodes of carePrimary care becomes keyProfits from higher quality care in home settingLongitudinal payments for chronic careBundled payment for implantableJoint contracts with payersFocus on data
Clinical Integration Provides the Bridge Between FFS and Value-based Payment
6
Clinical Integration is the Bridge
The bridge from volume to value
Bundled Payment: What it Means to Us
Home
LTCAssisted Living
Nursing Home SNF
Outpatient Rehab
Health System
Payment bundling will further encourage health systems keep patients within a narrow network
Rehabilitation
LTC
Nursing Home
Home Health
Outpatient Care
Patient & Physician
Home Health Doing Cardiac Rehab
Expanded Capabilities of rehab at home
What ACOs are Doing
What is value
• Low cost per case with high clinical outcomes and independence
• High patient satisfaction• Significant discharge
status of independence
Measures of success
Do I do anything?
• Yes!!!! with or without health care reform– Outcomes have to be presented– Cost per case has to be understood And managed– Clear understanding of where cardiac and pulmonary
rehabilitation fit into the post-acute continuum must be communicated frequently
When do I make a move?
• When you know the infrastructure that you have to work with…..– Information technology inclusive of medical
record, finance and human resource costs– Ability for predictive modeling of outcomes with
fixed cost– Willingness to be at risk
What do I do When I decide to make a move?
• Communicate, communicate, communicate– Costs– Outcomes
• Clinical– Hospital readmissions over 90
days
• Functional
– Patient Discharge destination– Fit into the continuum of care
•1980’s Telemetry monitoring for higher reimbursement•1990s, 36 sessions for higher reimbursement•Early 2000, education exercise and risk management for higher reimbursement•Present day, high outcomes at low costs for better any reimbursement
In cardiac rehab we have been chasing the money for over 30 years
Basics of conversion from fee-for-service to population health management
• Analyze current charges and costs per case in the following areas:– Total charges Across all patients served in the last
fiscal year– Total costs– Salary wage and benefit costs as a percent of total
charges– Fixed costs as a percent of total charges
Conversation
Let's do the mathCurrent Volume approach
Current Outpatient cardiac rehab
Charge/visit 130.00$ Deduction from charges (46.80)$ Net revenue 83.20$
Salary CostsRN 28.00$ Exercise physiologist 20.00$ receptionist 14.00$ benefits 17.00$ Total SWB costs 79.00$ Net income before fixed costs 4.20$
Value approachValue based calculationCost/visit $ 79.00
Number of visits/case 36 Total cost/case $ 2,844.00
Value based calculationCost/visit $ 79.00
Number of visits/case 26 Total cost/case $ 2,054.00
Value based calculation
Cost/visit $ 76.00 Number of visits/case 26Total cost/case $ 1,976.00
Calculate contracting rate
• Current Range: $ 2,844.00 - 1,976.00 • No perceived margin under current cost
structure• Net income to operations only occurs through
cost reduction and reduction in utilization
New net income model under value-based purchasing
• 25,000 covered lives• Carve-out of $1976 per enrollee ( 8% of 25,000 lives)• 24,000 patient months at risk • $3,952,000 to cover population Prone to heart
disease• $164.67 allocated per member per month cost for
cardiac rehab in an ACO model (Amount allocated to pay for cardiac rehab)
Impact on Annual Budget
• Annual salary costs $288,288• Annual fixed costs $42,000• Total operating costs $330,288
• 2000 referrals per year; Potential revenue:$3,952,000
Summary take-away
• Don't focus on the numbers• Focus on the following concepts:
– Reducing total costs is the primary means of managing your business
– Understanding your total costs will better allow you to go "at risk "for a given population
– Increased volume will no longer fix poor financials, decrease costs and managed utilization will be the measure of success
Summary take-away Bundled payment model exposure for 30, 60 and 90 days
Event Onset
Day one through
threeDays three through
five 5 to 30 days 30 to 60 days 60 to 90 days
Acute MIInpatient hospitalizationDischarge homeOutpatient or postacute care follow-up Cardiac and pulmonary rehabilitation outpatient
Exposure to rehospitalization
Summary and takeaways
• Cardiac rehabilitation has a primary role of preventing re-hospitalization and managing the health status of those served.
• We should consider providing our services in a variety of settings, beyond traditional outpatient hospital settings to home health and skilled nursing
Questions or for further information