Rhode Island Hospital Volume Trends

Coordinated

Health Planning

Council

Ju ly 19, 2012

RHODE ISLAND

HOSPITAL VOLUME

TRENDS

AG E N DA

(1) Demand: Inpatient & Outpatient

(2) Supply: Inpatient & Outpatient

(3) Impact of Supply and Demand Trends

7/19/2012 Rhode Island Coordinated Health Planning Council 2

This presentation uses information from several

data sources to test the strength and direction of

regional, statewide, and service area trends.

Kaiser S ta te Hea l th Facts v i a the Amer ica Hosp i ta l Assoc iat ion

Reg iona l data for pat ient days , admiss ions , l engths o f s tay, ER v i s i t s , and

outpat ient v i s i t s

Booz & Company Ana lys i s v i a L i fespan Hosp i ta l Corporat ion , BCBSRI

Se lec t Rhode I s l and s ta tewide data 2000 -2010 , ana lys i s o f fu ture t rends

Hosp i ta l D ischarge Database

Ser v ice l i ne and s ta tewide data 2007-2011

Hosp i ta l Assoc iat ion o f Rhode I s l and

Sta f f ing , occupancy, and bed data

Data Sources


Rhode Island’s hospital care supply may

be greater than its current and future

hospital care needs.

Rhode Island’s population is falling

Hospital inpatient volume is falling Hospital outpatient volume is rising

Hospital IP volume per person is falling Hospital OP volume per person is rising

Hospital occupancy is falling Number of freestanding OP sites is rising

Hospital beds per person are rising

Staffing ratios are above the US average


Rhode Island’s

population

increased less than

one third of one

percent, or by 2,981

people, between

2000 and 2011

In contrast, total US

population

increased by 10.5%

during the same

time.

This lack of growth

affects future

healthcare demand

and infrastructure

needs. Data Sources: 2000 and 2010: US Census Actuals by State; Annual Estimate of the Resident Population by Selected Age Groups and

Counties in RI April 1, 2000 to July 1, 2011. Release date: May, 2012 | Slide prepared by Booz & Company and provided by Lifespan

Hospital Corporation and Blue Cross Blue Shield of Rhode Island

1,048,319

1,071,504

1,051,300

282,162,400

311,591,900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rhode Island and United States Population | 2000-2011

US Population

+7.4%, 2003-2011

RI Population

-1.9%, 2003-2011

Rhode Island’s population is

declining from its 2003 peak


Regional,

Statewide,

and

Service Line

Analyses

VO L U M E ( D E M A N D )

H O S P I TA L

I N PAT I E N T & O U T PAT I E N T


Rhode Island inpatient admissions per resident

are both declining and higher than benchmarks

Rhode Island

Massachusetts

Vermont

120

114

127

117 118

126

105 114

83 79

40

50

60

70

80

90

100

110

120

130

140

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Ad

mis

sio

ns

per

1,0

00

Admissions per 1,000 People

FY00 through FY10

Admissions

US: -5 .0%

RI: -7.9%

MA: +6.8%

CT: +8.6%

VT: -4 .8%

PERCENT

CHANGE,

FY00-FY11

Connecticut United States

Source: Kaiser State Health Facts via the American Hospital Association Annual Survey


Source: Kaiser State Health Facts via the American Hospital Association Annual Survey

Rhode Island

Massachusetts Connecticut

United States

Vermont

Patient Days

US: -10.1%

RI: -1.0%

MA: -5 .8%

CT: +3.2%

VT: -29.9%

PERCENT

CHANGE,

FY00-FY11 682

613

596 590

674

635 620

640

696

488

400

450

500

550

600

650

700

750


Days

per

1,0

00 R

esi

den

ts

Days per 1,000 People | FY00 through FY10

Rhode Island inpatient days per resident are both

declining and higher than benchmarks


Statewide inpatient volume is falling Total inpatient days and discharges peaked in 2007

118,7

51

119,9

34

122,5

19

123,1

56

126,4

26

127,8

41

128,5

71

130,3

36

129,4

55

127,0

21

125,5

19

123,4

39

613,343

630,197

643,470 643,125

655,518

677,741 679,264 680,033

675,434

647,977

633,841

621,303

110,000

115,000

120,000

125,000

130,000

135,000

570,000

600,000

630,000

660,000

690,000

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

Dis

ch

arg

es

Pati

en

t D

ays

Total Patient Days and Discharges, All Rhode Island Hospitals

FY00 through FY11

Discharges

Patient Days

Between 2007 and 2011,

• Discharges fell 5.3%

• Inpatient days fell 8.7%

Data Sources: 2000-2011 Hospital Discharge Database, Rhode Island Department of Health

Slide elements prepared by Booz & Company for Lifespan Hospital Corporation and Blue Cross Blue Shield of Rhode Island


The average length of

stay (ALOS) declined in

all three states shown at

the left. ALOS may fall

for several reasons,

including rising hospitals

efficiency and reduced

patients acuity.

Shorter hospital stays

may reduce occupancy

and lower total hospital

demand.

Rhode Island’s ALOS,

however, is the highest

of the three states and

declined slower than

Connecticut over the

ten year period. Based

on regional trends,

further declines in are

expected.

Average Length of Stay (ALOS) is Falling

Across the Region

5.16

5.01

5.09

4.96

5.07

4.72

4.9

4.8

4.40

4.50

4.60

4.70

4.80

4.90

5.00

5.10

5.20

5.30

5.40


Average Length of Stay

FY00 through FY10

Data excludes Psychiatric, Rehabilitation, and Veteran’s hospitals as well as normal newborns

Data Sources: Market Data from Thompson Reuters (MA, CT, RI 2000-2006), Rhode Island Hospital Discharge Database (2007-2010); Kaiser State Health Facts (US)


Rhode Island

Massachusetts

Connecticut % Change FY00 – FY10

Rhode Island -3.0%

Massachusetts -2.6%

Connecticut -6.9%

United States (FY00-FY09) -2.0%

United States


Patient Days:

Gross: -8 .7%

Per 1,000: -9.7%

Discharges:

Gross: -5 .3%

Per 1,000: -5.8%

PERCENT

CHANGE,

FY07-FY11 133

132

130

127

125

686

672

656

637

619

120

122

124

126

128

130

132

134

580

600

620

640

660

680

700

2007 2008 2009 2010 2011

Dis

char

ges

per

1,0

00 R

esi

dents

Pat

ient

Day

s Per

1,0

00 R

esi

dents

Patient Days and Discharges Per 1,000 Rhode Island Residents

FY07 through FY11

Discharges per 1,000

Patient Days per 1,000

Inpatient Volume per Resident is

Falling Faster than Total Volume



In 2011, RI hospitals saw 75,658

fewer patient days than in 2007


Note: Due to differences in coding practices, several services areas were included in the 2007 data set only. The largest of these was “cardiology” at 26,599 days. Because

cardiology cases were likely classified as “Medicine” in later years, this analysis groups the categories together.

(75,658)

(26,126)

(12,457) (10,848) (9,550) (9,333) (7,993)

(2,404)

3,053

Change in Patient Days by Service Area

FY07-FY11

TO

TA

L

Medic

ine /

Car

dio

Total Change

Surger y -26k

Orthopedics -12k

Psych iatr y -11k

Med/Cardio +3k

Percent Change

Rehab -56%

Uro logy -48%

Orthopedics -25%

Med/Cardio +13%

CHANGE IN

PATIENT DAYS,

FY07-FY11

“Other” includes: Abortion, ENT,

Gynecology, Newborn, OB not delivered,

Ophthalmology, Oral Surgery, and

Pediatrics 7/19/2012 Rhode Island Coordinated Health Planning Council 12

Hospital outpatient volume per person is

rising

Source: Kaiser State Health Facts via the American Hospital Association

Rhode Island

Massachusetts

Connecticut United States

Vermont

Outpatient

Visits

US: +14.0%

RI: +25.7%

MA: +26.3%

CT: +16.7%

VT: +162.8%

PERCENT

CHANGE,

FY07-FY11

1,848

2,106

2,627

3,317

2,311

5,356

1,981

2,491

-

1,000

2,000

3,000

4,000

5,000

6,000


OP Visits per 1,000 People | FY00 through FY10

7/19/2012 Rhode Island Coordinated Health Planning Council

13

Hospital outpatient volume per person is

rising


Rhode Island

Massachusetts

Connecticut

United States

Vermont

ER Visits

US: +12.3%

RI: +12.2%

MA: 12.6%

CT: +19.6%

VT: +45.7%

PERCENT

CHANGE,

FY07-FY11

366

411 419

470

427

481

388

464

387

564

300

350

400

450

500

550

600


ER Visits per 1,000 People | FY00 through FY10

7/19/2012 Rhode Island Coordinated Health Planning Council

14

Regional,

Statewide, and

Service Line Analyses


S U P P LY

I N PAT I E N T & O U T PAT I E N T

While inpatient demand per resident

decreased, staffed beds per 1,000 increased


Rhode Island Massachusetts

Connecticut

United States

Vermont

3.0

2.6 2.6

2.3

2.7

2.1

2.3

2.4

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1


Staffed Beds per 1,000 People

FY00 through FY10

Staffed Beds

per 1,000

US: -13.3%

RI: +4.3%

MA: -7 .7%

CT: -0 .0%

VT: -22.2%

PERCENT

CHANGE,

FY00-FY11


RI, New England have higher staffing ratios

than the national average

Rhode Island’s ratio of

nursing full time

equivalents (FTEs) to

beds, across all hospitals,

is higher than the

national rate and lower

than other regional states

The average hourly wage

for nurses in Rhode

Island is $35.12, higher

than the national rate

and about equal to the

regional average.

Expanding the analysis to

all staff yields a similar

pattern: RI is in the

middle of the region, and

all of New England is well

above the national rate. Source: Hospital Association of Rhode Island via Medicare Occupational Mix dataset, FY10


2.47

1.54

2.97

2.44

2.83

$35.12

$31.82

$39.34

$35.31

$30.23

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Rhode Island United States Massachusetts Connecticut Vermont

Nu

rsin

g A

vera

ge H

ou

rly W

age

Nu

rsin

g F

TE

s p

er

Sta

ffed

Bed

Nursing FTE per Staffed Bed and Nursing Average Hourly Wages, FY10

Nurse FTEs per Bed

Average Hourly Wages (Nurses)

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

Nu

mb

er

of

Facilit

ies

Number of Licensed Non-Hospital Outpatient Providers in Rhode Island Monthly, July 2008 - June 2012

2008 2009 2010 2011 2012

July 08: 2,194

June 12: 2,309

The number of non-hospital outpatient sites

is rising along with hospital outpatient volume


Non-hospital outpatient providers include organized ambulatory care, ambulatory surgical centers,

freestanding emergency care centers, kidney disease treatment centers, federally qualified health centers,

clinical labs, drawing stations, and radiation health facilities

Along with the shift

from inpatient sites

of care to

outpatient sites of

care, the number of

non-hospital

outpatient sites of

care have also

grown.

Non-hospital

outpatient centers

perform similar

services to hospital

outpatient units but

at a lower cost

since these

freestanding

centers do not have

the overhead of a

full-service acute

hospital.

Between July 2008 and

June 2012, the number of

non-hospital outpatient

providers rose by 5.2% or

115 providers.

Source: Rhode Island Department of Health Provider Licensure Data

Occupancy

Regional

Analysis

Future Impact

DEMAND & SUPPLY I M PA C T O F T R E N D S


Unlike other states and the nation, Rhode Island’s

inpatient demand per person is fal l ing while staffed

beds per person is ris ing | FY00-FY10


682

613 3.0

2.6

2.4

2.6

2.8

3.0

3.2

480

530

580

630

680

United States

596

590 2.3

2.4

2.1

2.2

2.3

2.4

2.5

480

530

580

630

680

Rhode Island

674

635

2.6

2.4

2.3

2.4

2.5

2.6

2.7

480

530

580

630

680

Massachusetts

620 640

2.3 2.3

2

2.1

2.2

2.3

2.4

480

530

580

630

680

Connecticut 696

488

2.7

2.1

1.9

2.1

2.3

2.5

2.7

2.9

480

530

580

630

680

Vermont

Inpatient Days per 1,000

Beds per 1,000

% Change FY00 – FY10 Patient Days per 1,000 Beds per 1,000

Rhode Island -1.0% 4.3%

United States -10.1% -13.3%

Massachusetts -5.8% -7.7%

Connecticut 3.2% 0.0%

Vermont -29.9% -22.2%


Beds per 1,000


Beds per 1,000


Beds per 1,000


Beds per 1,000

Rhode Island Coordinated Health Planning Council 20

79%

78%

71%

67%

66%

61%

60%

51%

49%

45%

44%

67%

83%

78%

74%

71%

69%

70%

65%

59%

51%

47%

45%

70%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Rhode Island Hospital

Kent Hospital

Miriam Hospital

Landmark Medical Center

Women and Infants Hospital

South County Hospital

St. Joseph's Health Services of RI

Roger Williams Medical Center

Newport Hospital

Memorial Hospital

Westerly Hospital

Statewide Total

Occupancy Rates, FY11 and FY12 Average Daily Census / Average Staffed Beds

2011

2012

Oct. 2011-April 2012

Data Source: Hospital Association of Rhode Island

In FY12, the statewide

occupancy rate was

67%, down from 70% in

FY11. Only one of

Rhode Island’s hospitals

met or exceeded the

industry standard for a

“full occupancy” hospital

(80% and 85%*.)

The occupancy rate is

the ratio of the average

daily census to total

staffed beds. Hospitals

with lower occupancy

rates may have lower

net income as they must

cover the overhead

costs of a staffed bed

without receiving

patient reimbursement.

* See

http://www.medscape.com/viewarticle/546181

_4

Staffed Beds

Statewide Occupancy Rate (67%, FY 12) is Falling,

Below National Standard for Full Occupancy (83%)


2,417

96

159

135

161

231

76

247

140

247

295

630

Nat

ional

Sta

ndar

d for

Full

Occ

upan

cy

381

2,133

165

253

211

374

0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200

Carotid

Endarterectomy

Abdominal Aortic

Repair

Brain Aneurysm

Repair

Lower Extremity

Bypass

Coronary

Angioplasty

CABG

Actual Procedure Volume vs. Volume Thresholds 2010, Leapfrog Group thresholds

Low volume compromises hospitals’ ability to

achieve minimum essential scale for key

procedures

x x

x x x

x x x x

x x

x x x x x x x x

x

x

Procedure Volume

x x x x x x x

Source: Leapfrog Group, ICD-9 Codes, RI Hospital Discharge Data, Booz & Company analysis

Slide prepared by Booz & Company for Lifespan Hospital Corporation and Blue Cross Blue Shield of Rhode Island

= Volume Threshold

= Total RI Volume (2010)

= Indiv. Hospital Vol (2010) X

Hospital volume for most procedures is

below the recommended minimum

thresholds for realizing the quality and

cost benefits of scale

Rhode Island’s inpatient volume is

declining and shifting to outpatient,

and IP hospital supply exceeds current

demand. However, other factors may

increase demand in the future.

What is the net effect of the up and down

forces on inpatient util ization in the future?


Despite some upward pressure , Booz & Company

estimates that by 2015, RI uti l ization could fal l by

another 6% to 13% beyond exist ing decl ines

Source: DOH, AHD, RI Hospital Discharge Data, US Census, Statewide Planning Program - RI Department of Administration, Health Director, Booz & Company analysis;


Upward Pressure Downward Pressure


Factor Impact on

Utilization Factor

Impact on

Utilization Measure

Impact on

Utilization

Population

Growth + Aging

0.3%

Increase

Shifts to

Outpatient

2% - 4%

Decrease Bed days

38 - 82 thousand

day decrease

Access via Health

Care Reform

0.7% - 0.8%

Increase

Decreasing

Readmissions

2% - 3%

Decrease $ Savings $85-$170 million

Worsening Health 1.1% - 2.2%

Increase Decreasing ALOS

4% - 10%

Decrease Beds

105-120 fewer

beds

Increased Imports 0.05%- 0.11%

Increase

Avoided Exports 0.02% - 0.05%

Increase

Net Impact 2 - 3%

Increase

8% - 17%

Decrease

6 - 13%

Decrease

Net Impact

Even though Rhode Island inpatient

demand (volume) is decreasing,

lengths of stay and admission rates

are still above the national average.

What happens if RI performed the same as

high-performing states?


26

Achieving util ization rates similar to top

performing states would result in a 13-33%

reduction and less bed capacity needed in RI

89

121

-26%

Top

Decile

Rhode Island

106

121

Top

Quartile

-12%

Rhode Island

4.735.23

-10%

Top

Decile

Rhode Island

5.225.230%

Top

Quartile

Rhode Island

421

633

-33%

Top

Decile

Rhode Island

553

633

-13%

Rhode Island Top

Quartile

Top Decile State

by Bed Days per

1,000 Resident:

Idaho

Top Quartile

State

by Bed Days per

1,000 Resident:

Texas

Admissions per 1,000

Residents

2009

Average Length

of Stay

2009

Bed Days per

1,000 Residents

2009

X =

Source: American Hospital Association 2009, Kaiser State Health Facts, Booz & Company analysis

Slide prepared by Booz & Company for Lifespan Hospital Corporation and Blue Cross Blue Shield of Rhode Island

Bed

Capacity

Equivalent

=

615 fewer

beds used/

needed

230 fewer

beds used/

needed

Demand in Rhode Island: Inpat ient hosp i ta l demand is decreas ing at a faster rate than

other New England states from a h igher star t ing point

Decreas ing admiss ions dr ives fa l l ing demand

Hospita l outpat ient volume is r i s ing in step with the nat ional

average

Supply in Rhode Island: Staf fed beds per person are increas ing whi le dec l in ing or

hold ing steady in other states

There are more sta f f per bed in RI than there are nat ional ly

What do the data say?


Impact of Supply and Demand Trends : Hospitals have low occupancy rates with great

variat ion

Supply per person is ris ing while demand is

decreasing, unl ike in other states and the nation

Low volume for certain procedures compromises

high qual ity outcomes

Some models indicate that excess capacity wil l only

grow in coming years

What do the data say?


The problem:

Rhode Island inpatient hospital supply exceeds

current and future inpatient hospital demand

The Challenge: Given our excess capacity, what is our ideal hospita l

landscape?

How can we best organize our primary care

in frastructure to support real igning capacity to need?

Conclusion


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