Trends 2006:Trends 2006:Top Trends Every Healthcare Top Trends Every Healthcare

Executive Executive Should KnowShould Know

Maureen M. SwanMaureen M. Swan

The MedTrend GroupThe MedTrend Group

Minneapolis, MNMinneapolis, MN

What Will The Future Bring?What Will The Future Bring?

Even the experts have a hard time predicting the Even the experts have a hard time predicting the futurefuture• ““Who the hell wants to hear actors talk?”Who the hell wants to hear actors talk?”

• Harry Warner of Warner BrothersHarry Warner of Warner Brothers

• ““That little black box will never amount to anything.”That little black box will never amount to anything.”• Louie B Meyer, MGMLouie B Meyer, MGM

• ““Everything that can be invented has been invented.”Everything that can be invented has been invented.”• US Patent Worker, early 1900’sUS Patent Worker, early 1900’s

• ““The only reason someone would buy a PC is to hook it The only reason someone would buy a PC is to hook it up to a mainframe.”up to a mainframe.”

• IBM Executive, 1985IBM Executive, 1985

#1: Return to Rising #1: Return to Rising Premiums/ Rising Healthcare Premiums/ Rising Healthcare

CostsCosts

Return to Rising PremiumsReturn to Rising Premiums

-5%

0%

5%

10%

15%

20%

Source: William M. Mercer, 2006

13-20%

Annual Change in Average Health Benefit Cost

RECORDLOWS

Why the Rise in Healthcare Costs?Why the Rise in Healthcare Costs?

22%

18% 18%

15% 15%

7%5%

0%

5%

10%

15%

20%

25%

Drugs,Devices,MedTech

RisingProvider

Expenses

CPI Mandatesand

Regulation

IncConsumerDemand

Litigation/Risk Mgmt

Other

PriceWaterhouseCoopers Study, April 2002

What made up the 13.7% increase in premiums between 2001 -2002?

How long can workers afford it?How long can workers afford it?

0.80%

3.00%3.80%

4.80%

8.30%

11%

12.70%

11.20%

9.20%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Overall Inflation

Worker Earnings

Health InsurancePremiums

Source: Kaiser Family Foundation & HRET, 2003

3.4%

1.6%

Growing gap in worker earnings increases to healthcare premiumIncreases….more workers strike.

What Healthcare Costs in America 2005What Healthcare Costs in America 2005

Annual family premiums $10,880Annual family premiums $10,880• More than the gross earnings for a full More than the gross earnings for a full

time minimum wage earnertime minimum wage earner Average worker paid $2715, or 26% Average worker paid $2715, or 26%

of the premium costsof the premium costs

Source: The 2005 Employer Health Benefits Survey,September 2005

Brutal FactsBrutal Facts 46.2% of all personal bankruptcies are due to 46.2% of all personal bankruptcies are due to

medical costs of an illnessmedical costs of an illness Current cost increases would cause healthcare Current cost increases would cause healthcare

costs to double every five yearscosts to double every five years We have the most expensive system in the worldWe have the most expensive system in the world

• US residents paid $5267 per person for health care, 53% US residents paid $5267 per person for health care, 53% more than any other industrialized countrymore than any other industrialized country

With average resultsWith average results And Americans are getting fatter and less healthy And Americans are getting fatter and less healthy

by the week…by the week…• 72% of Americans are overweight72% of Americans are overweight• Growing number of obese/ overweight kidsGrowing number of obese/ overweight kids

Sources: Health Affairs, July/August 2005.

How long can companies afford it?How long can companies afford it?

““Healthcare costs are killing us.”Healthcare costs are killing us.”• General Motors Chair, May 2005General Motors Chair, May 2005• $1525/ car in healthcare costs- more than the cost for $1525/ car in healthcare costs- more than the cost for

the steelthe steel #1 concern of benefit managers:#1 concern of benefit managers:

• Controlling health care costs (Deloitte, 1/05)Controlling health care costs (Deloitte, 1/05) Primary reason for labor strikes = healthcare Primary reason for labor strikes = healthcare

benefitsbenefits 79% of business owners say they are concerned 79% of business owners say they are concerned

about their employees’ ability to shoulder the about their employees’ ability to shoulder the projected increases in health costs.projected increases in health costs.

Source: Robert Wood Johnson Foundation, September,2005; Wall Street Journal, May 2005.

Rising Number of UninsuredRising Number of Uninsured

39.7 39.7 40.6 41.7 43.4 44 46

61.4

15.6%

16.5%

15.4%15.2%15.3%

16.1%

1993 1994 1995 1996 1997 2004 2005 2009

# Uninsured % Uninsured

Source: US Department of Commerce, Economics and Statistics Administration, Source: US Department of Commerce, Economics and Statistics Administration, Bureau of the Census, 1998; National Coalition on Healthcare, 2002, Bureau of the Census, 1998; National Coalition on Healthcare, 2002, Commonwealth Fund, 2005; The Commonwealth Fund, 2005.Commonwealth Fund, 2005; The Commonwealth Fund, 2005.

Mil

lio

ns

of

Ind

ivid

ual

sM

illi

on

s o

f In

div

idu

als

Percen

tage

Percen

tage

2009 Estimate: 48M; 61M if recession

Estimate*

At least 16M estimated to beunderinsured in 2003

Lack of CoverageLack of Coverage +6 Million additional uninsured adults +6 Million additional uninsured adults

2000 - 20042000 - 2004 35% of U.S. adults ages 19-64 had either 35% of U.S. adults ages 19-64 had either

no insurance, sporadic coverage or no insurance, sporadic coverage or insurance that exposed them to insurance that exposed them to catastrophic costs during 2003catastrophic costs during 2003

19% of working adults ages 18-64 had no 19% of working adults ages 18-64 had no insurance in 2004insurance in 2004

The percentage with employer based The percentage with employer based insurance fell from 69% in 2000 to now insurance fell from 69% in 2000 to now 59.8% in 2005.59.8% in 2005.

Source: The Commonwealth Fund, 2005; The Center on BudgetAnd Policy Priorities, September 2005.

Implications for HospitalsImplications for Hospitals

You might have more uninsured or You might have more uninsured or underinsured over the coming yearsunderinsured over the coming years

Your own healthcare benefits costs Your own healthcare benefits costs will risewill rise

Growing concerns among your Growing concerns among your customer patients regarding costs – customer patients regarding costs – and possibly willingness to look for and possibly willingness to look for less expensive alternativesless expensive alternatives

Healthcare’s “Perfect Storm”Healthcare’s “Perfect Storm”

Aging, demanding, increasingly Aging, demanding, increasingly unhealthy consumers unhealthy consumers

Exploding, expensive medical Exploding, expensive medical technologies that the consumer technologies that the consumer wantswants

Financial model that shields the Financial model that shields the consumer from the true costsconsumer from the true costs

SUSTAINABILITY??

Consumer’s View TodayConsumer’s View Today

Cost of a doctor visit:Cost of a doctor visit: $10 - $15$10 - $15 Cost of a prescription:Cost of a prescription: $5 - $15$5 - $15 Cost of a hospitalization:Cost of a hospitalization: $100$100

Is this sustainable over the next ten years?

Consequences to the IndustryConsequences to the Industry

Employers try new benefit modelsEmployers try new benefit models Reimbursements get squeezed Reimbursements get squeezed

further – growing concerns for further – growing concerns for providersproviders

Not enough beds: mini-construction Not enough beds: mini-construction boom in urban areasboom in urban areas

Not enough staff: workforce shortageNot enough staff: workforce shortage Discontented doctorsDiscontented doctors Aggressive new competitors Aggressive new competitors

#2: The Consumer Revolution#2: The Consumer Revolution

#2: The Consumer Revolution#2: The Consumer Revolution

Waning consumer confidence in the Waning consumer confidence in the systemsystem

Waning Consumer ConfidenceWaning Consumer Confidence

80

75

80

80

Think there is something seriously wrong with the system

Have heard some disturbing stories about medical care and mistakes that hurt or even killed people

Feel that quality healthcare is almost unaffordable for the average person

Feel that quality care is often compromised to save money

%

%

%

%

Percentage of Americans who:

Source: National Coalition on Health Care, 1997 Survey

Today’s Consumers Are Better Educated and Today’s Consumers Are Better Educated and Have More MoneyHave More Money

0%

10%

20%

30%

40%

50%

60%

1965

1995

2005

Americans Over 25 Who HaveAttended College

18%

48% 58%*

Source: Institute for the Future, 1998: U.S. Bureau of the Census, 1996.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1970 1990 2005

28%28%

39% 45%

U.S. Households with $50KIncomes (in constant 1995 dollars)

Consumers See Themselves asConsumers See Themselves as“In Charge” of Health Care “In Charge” of Health Care

DecisionsDecisions

InsurerInsurer 3.303.30

SelfSelf 1.881.88

DoctorDoctor 1.741.74

EmployerEmployer 1.201.20

GovernmentGovernment1.081.08

HospitalHospital 0.600.60

Influencing Healthcare DecisionsInfluencing Healthcare Decisions

SelfSelf 5.445.44DoctorDoctor 2.442.44InsurerInsurer 0.720.72HospitalHospital 0.620.62GovernmentGovernment0.480.48EmployerEmployer 0.300.30

Source:VHA, 1997Source:VHA, 1997

Who InfluencesWho InfluencesToday?Today?

Who ShouldWho ShouldInfluence?Influence?

Baby Boomers Driving DemandBaby Boomers Driving DemandApproximate Age Distribution of Baby Boomers

Small leading edge begin to increase

utilization

35 years old

25 45

Source: U.S. Census Bureau, HCAB 2002

19901990

45 years old

35 55

Nearly half now needing greater

health care attention

20002000

The Age of TransparencyThe Age of Transparency

““Consumer reports”Consumer reports” INFORMATION to drive my decision INFORMATION to drive my decision

making…making…• QualitycountsQualitycounts• HealthgradesHealthgrades• LeapfrogLeapfrog• U.S. News…U.S. News…

And soon – real pricing informationAnd soon – real pricing information

Insert their healthgrades dataInsert their healthgrades data

Healthcare Report Cards…Very Healthcare Report Cards…Very Early in Adoption CurveEarly in Adoption Curve

26% of consumers say they have seen data 26% of consumers say they have seen data on hospital quality. Only 1% acted on that on hospital quality. Only 1% acted on that informationinformation

22% say they have seen information on 22% say they have seen information on health plan quality. Less than 1% said they health plan quality. Less than 1% said they made a change based on the data.made a change based on the data.

10% have viewed quality information on 10% have viewed quality information on physicians. Less than 1% used that physicians. Less than 1% used that information to make a change.information to make a change.

Source: Strategic Health Perspectives, Harris Interactive Poll;2003.

Ratings Changing DecisionsRatings Changing Decisions

57%

30%

0%

10%

20%

30%

40%

50%

60%

Would Change Hospital Would Change Doctor

Source: Solucient, 2003

Do They Influence Behaviors Do They Influence Behaviors ??

If your hospital or physician received low ratings…

Industry Responds: OpportunitiesIndustry Responds: Opportunities

Open access, same day schedulingOpen access, same day scheduling Extended clinic hoursExtended clinic hours Clinical centers of excellenceClinical centers of excellence Healing environmentsHealing environments Integrated alternative and traditional Integrated alternative and traditional

carecare Boutique practicesBoutique practices

Consumers are driving product development- ARE YOU LISTENING TO THE CUSTOMERS IN YOUR MARKET?

COST: $44

Implications for HospitalsImplications for Hospitals

Being there isn’t enoughBeing there isn’t enough Customers are increasingly Customers are increasingly

“shopping” for healthcare“shopping” for healthcare Customers will leave town (or your Customers will leave town (or your

market area) for caremarket area) for care You have to market to the consumers You have to market to the consumers

in your market – why should they use in your market – why should they use your hospital?your hospital?

#3: The Age of Digital Health#3: The Age of Digital Health

Internet Creating New Industries, Internet Creating New Industries, Companies and ProductsCompanies and Products

0 0.12 0.278

20

4454

78

175

0

20

40

60

80

100

120

140

160

180

200

1992 1993 1994 1995 1996 1997 1998 2001 2004

Internet Growth(millions of adult users)

Source: American Internet User Survey, FIND/SVP

Consumer Healthcare Information Consumer Healthcare Information ResourcesResources

2%

0%

2%

4%

9%

15%

53%

3%

3%

4%

6%

12%

24%

39%

0% 10% 20% 30% 40% 50% 60%

Work

Hospital

Insurance

Library

Friends/ Relatives

Internet

Doctor

2001

1999

Source: Rynne Marketing Group, 2001

Internet UseInternet Use

Consumers trust the internet more Consumers trust the internet more than other media sourcesthan other media sources

65% of consumers use the internet 65% of consumers use the internet to research important health topics to research important health topics before and after they visit a doctorbefore and after they visit a doctor

Internet shopping –Internet shopping –• Medical tourismMedical tourism• National market for complex/ life National market for complex/ life

threatening proceduresthreatening procedures

Medicineonline.comMedicineonline.com

Yourdiagnosis.comYourdiagnosis.com

The e-providerThe e-provider

E-enabled doctorsE-enabled doctors• 20% of office visits could be eliminated20% of office visits could be eliminated• MDs may spend 1/3 of time on the net by 2010MDs may spend 1/3 of time on the net by 2010

86% of doctors will be using e-prescribing 86% of doctors will be using e-prescribing (Forrester Research, 2005)(Forrester Research, 2005)

Only 17% of doctor offices have electronic Only 17% of doctor offices have electronic medical records (CDC, 2/05)medical records (CDC, 2/05)

90% of online adults want the following 90% of online adults want the following capabilities with their physician:capabilities with their physician:• Ask questions without a visitAsk questions without a visit• Fix appointmentsFix appointments• Receive medical test resultsReceive medical test results

Source: Cyber Dialog, Inc. 2001, Market Drivers: Strategy BriefingOn e-Healthcare, 2003; CDC, 2005.

#3: The Age of Digital Health#3: The Age of Digital Health

Increasing “pipes” (broadband and fiber optics) -- Increasing “pipes” (broadband and fiber optics) -- integrated video, voice, imaging, dataintegrated video, voice, imaging, data• Radiology, tele-healthRadiology, tele-health• Clinical information databases and artificial/ Clinical information databases and artificial/

expert systems applied to medicineexpert systems applied to medicine Markets no longer local or regionalMarkets no longer local or regional

ImplicationsImplications

Having a value added web strategy Having a value added web strategy mattersmatters• Lock in the desktop of your customersLock in the desktop of your customers

Electronic Medical Records are a Electronic Medical Records are a requirement to stay competitiverequirement to stay competitive• Data reportingData reporting• Quality improvementsQuality improvements

(Rural) Stay on top of technologies that (Rural) Stay on top of technologies that you can keep local or that allow you to you can keep local or that allow you to connect to tertiary providersconnect to tertiary providers

#4: The Medical Technology #4: The Medical Technology RevolutionRevolution

Technology Trajectory:Technology Trajectory:

SmallerSmallerEasier to UseEasier to Use

FasterFasterCheaperCheaper

Earlier in the Disease CycleEarlier in the Disease CycleLess InvasiveLess Invasive

Out of the hospitalOut of the hospital

Pharmaceutical and device Pharmaceutical and device development acceleratesdevelopment accelerates•Faster paceFaster pace•Replacing surgeriesReplacing surgeries

Drug coated stents versus CABG (30% Drug coated stents versus CABG (30% declines+)declines+)

#4: The Medical Technology #4: The Medical Technology RevolutionRevolution

Coming at Us at a Faster PaceComing at Us at a Faster Pace

21

29

4547

51

1994 1995 1996 1997 1998

21

29

4547

51

1994 1995 1996 1997 1998

Number of New DrugsNumber of New DrugsBrought to Market in U.S.Brought to Market in U.S.

Source: Bryant-Friedland, “A Costly Prescription,” The Florida Times-Union, Source: Bryant-Friedland, “A Costly Prescription,” The Florida Times-Union, June 1, 1998; NIHCM Foundation/ American Institute of Research, 2002; Abbott Labs, HospitalJune 1, 1998; NIHCM Foundation/ American Institute of Research, 2002; Abbott Labs, HospitalOf the Future, 2003; HCAB 2003.Of the Future, 2003; HCAB 2003.

Number of FDA ApplicationsNumber of FDA ApplicationsFor New Medical DevicesFor New Medical Devices

88

202

0

50

100

150

200

250

1976-1980 1996-2000

Direct-to-Consumer Advertising Direct-to-Consumer Advertising BoomsBooms

$104M

$596M

1995 1996 1998 2001

Source: Media WatchSource: Media WatchMulti-Media Service, 1999Multi-Media Service, 1999

Pharmaceutical AdvertisingPharmaceutical Advertising

2004 Ad $ = $4.2 Billion

$1.3B$3.5B

Pharmaceutical & Biotech Pharmaceutical & Biotech Development EscalatesDevelopment Escalates

Pharmaceutical Research DollarsPharmaceutical Research Dollars

$21B

$15B

$8B

$4B$2B

1980 1985 1990 1995 1998 2005

Source: Pharmaceutical Research & Source: Pharmaceutical Research & Manufacturers of America, Wash. DC, 1998; Price WaterhouseCoopersManufacturers of America, Wash. DC, 1998; Price WaterhouseCoopers

$45B

Enormous, expensive pipelineEnormous, expensive pipeline

In development:In development:• 316 drugs for cancer316 drugs for cancer

15.3% growth in costs for cancer/transplant 15.3% growth in costs for cancer/transplant drug treatments in 2004- related to just 2 drug treatments in 2004- related to just 2 new drugsnew drugs

25.9% growth in costs for cancer overall in 25.9% growth in costs for cancer overall in 20042004

Human stem cell developmentHuman stem cell development Growth of human tissues and organsGrowth of human tissues and organs

Human genomeHuman genome Nano-technologies come to Nano-technologies come to

medicinemedicine Nano-delivered drug devicesNano-delivered drug devices Nanorobots repairing tissue without Nanorobots repairing tissue without surgerysurgery

#4: The Medical Technology #4: The Medical Technology RevolutionRevolution

Technology Innovation: Place Technology Innovation: Place DisruptionDisruption

Case Acuity

Hospital

Location of Surgery

SurgeryCenter

Doctor’s Office

Trauma Brain

Complex Oncology

Cardiac

Total Joint

Backs

Hysterectomy

Shoulder

Hernia

Hand

ArthroscopyENT

DermatologyGastroenterology

OralOphthalmology

Cosmetic

Urology

Early ASC

Later ASC

ASC with overnight stay

Source: National Surgical Hospitals, Inc.

Provider DisruptionProvider Disruption

Sub-specialists

Specialists

Primary Care Doctors

PAs- RNs

Med Techs

Consumers

More care will be able to be providedat lower levels in the pyramid

ImplicationsImplications What is done by the primary doctor/ nurse might What is done by the primary doctor/ nurse might

get “disrupted” to lower settingsget “disrupted” to lower settings• Pregnancy testingPregnancy testing• Blood glucose monitoringBlood glucose monitoring

But what is done at the high end can move closer But what is done at the high end can move closer to the physician and mid-level provider over timeto the physician and mid-level provider over time• Oncology careOncology care• RadiologyRadiology• Etc.Etc.

What new care can you do locally?What new care can you do locally? Where do you want to compete in the pyramid?Where do you want to compete in the pyramid?

““Perfect Storm”: Consequences to Perfect Storm”: Consequences to the Industrythe Industry

Employers try new benefit modelsEmployers try new benefit models Reimbursements get squeezed further – Reimbursements get squeezed further –

growing concerns for providersgrowing concerns for providers Not enough doctorsNot enough doctors Discontented doctorsDiscontented doctors Not enough staff- growing workforce Not enough staff- growing workforce

shortageshortage The rural/ urban differenceThe rural/ urban difference

Employers Experiment with Employers Experiment with Benefit ModelsBenefit Models

(The million dollar question)(The million dollar question)

Rising Costs: Shift to EmployeesRising Costs: Shift to Employees

Source: Fourth Annual Survey on Purchasing Value in Health Care.Source: Fourth Annual Survey on Purchasing Value in Health Care.Washington business Group & Watson Wyatt, March 1999Washington business Group & Watson Wyatt, March 1999

2005: 78% will shift cost to employees

What are Consumer Directed Health What are Consumer Directed Health Plans? Plans?

A health plan designed to get the A health plan designed to get the consumer to care about costs consumer to care about costs at at more than just the point of picking more than just the point of picking their health plantheir health plan

Some fixed $ from employerSome fixed $ from employer Employee picks from multiple plan optionsEmployee picks from multiple plan options Employee pays or pockets the differenceEmployee pays or pockets the difference Plan design and tools create incentive for employee to care Plan design and tools create incentive for employee to care

about cost of provision of careabout cost of provision of care Based on the notion that consumers are RATIONALBased on the notion that consumers are RATIONAL

OUR DEFINITION...

Is this REAL?Is this REAL? McKinsey ConsultingMcKinsey Consulting

• This is the most significant change in This is the most significant change in healthcare since the introduction of the healthcare since the introduction of the HMOHMO

Tipping point = Jan 2006Tipping point = Jan 2006 HSA’s: adding 50,000+ per monthHSA’s: adding 50,000+ per month As of April 2005, 22% of employers now As of April 2005, 22% of employers now

offer a CDP; but only 2.6% offer it with a offer a CDP; but only 2.6% offer it with a HSAHSA

50% of those not offering a CDP/HSA plan 50% of those not offering a CDP/HSA plan to in the futureto in the future

HSA’s:HSA’s:Getting to the “Tipping Point”Getting to the “Tipping Point”

Perc

en

tage o

f M

em

bers

in a

n M

SA

/ H

SA

Pla

n

1994 2004 2014 2024

Following the standard “S” curve adoption rate

10%

50%

90%

•5%.1%

•10%

2006

•90%

•50%

12 Year Period

12 Year Period

Impact of CDHPsImpact of CDHPs Definity Health data suggests that Definity Health data suggests that

defined contribution results in a 8-10% defined contribution results in a 8-10% reduction in utilization rates under the reduction in utilization rates under the deductible ($1500-2000)deductible ($1500-2000)

Members appear to use more genericsMembers appear to use more generics Premium cost increases at 3.4% Premium cost increases at 3.4%

versus 9.6% for other plans in 2005.versus 9.6% for other plans in 2005. REDUCED PHYSICIAN AND INPATIENT REDUCED PHYSICIAN AND INPATIENT

DEMAND…Net result to future DEMAND…Net result to future demand????demand????

Future Model?Future Model?

$200,000 IRA $100,000 HSA

“FIDELITYHEALTH”

Means TestedMeans Tested Medicare

Employer Sponsored 401(K) and HSA

The rural/ urban differenceThe rural/ urban difference

The rural/urban differenceThe rural/urban difference

UrbanUrban• Economies of scaleEconomies of scale• Service specializationService specialization• Broad array of servicesBroad array of services• Potential for continuity of care when tertiary Potential for continuity of care when tertiary

care neededcare needed• Greater capital poolsGreater capital pools• Easy ability to recruit providers/ staffEasy ability to recruit providers/ staff• More likely to be in a system- less control over More likely to be in a system- less control over

their destiny at the hospital level their destiny at the hospital level

The rural/ urban differenceThe rural/ urban difference

Rural:Rural:• Community challengesCommunity challenges

Troubled local economiesTroubled local economies More elderly – more chronic health issues More elderly – more chronic health issues Smaller tax baseSmaller tax base

• Exacerbated workforce shortage issuesExacerbated workforce shortage issues More difficulty recruiting physiciansMore difficulty recruiting physicians More difficulty retaining local students for More difficulty retaining local students for

staff, nursing positions- wanting to leave staff, nursing positions- wanting to leave towntown

The rural/ urban differenceThe rural/ urban difference

• Financial challengesFinancial challenges Greater proportion of uninsuredGreater proportion of uninsured Higher dependence on Medicare/ Higher dependence on Medicare/

government: 50%+government: 50%+ Lower margins, lower capital pools: Lower margins, lower capital pools:

investing in new technologies more difficultinvesting in new technologies more difficult

• Size challengesSize challenges Economies of scale – smaller patient base to Economies of scale – smaller patient base to

spread costsspread costs More sensitive to policy changesMore sensitive to policy changes

Urban versus RuralUrban versus Rural

• Strength of the local communities: Strength of the local communities: hospital strength depends on hospital strength depends on community strengthcommunity strength

Every $2 of revenue generated by the health Every $2 of revenue generated by the health care industry will generate an additional care industry will generate an additional $.80 of revenue in other industries in rural $.80 of revenue in other industries in rural countiescounties

Every 2 jobs created in rural counties by Every 2 jobs created in rural counties by health care will cause the number of jobs in health care will cause the number of jobs in other sectors to increase (or decrease by other sectors to increase (or decrease by one job.one job.

Source: Rural Wisconsin Health Cooperative, 2005.

But Rural Opportunities…But Rural Opportunities… More services can stay localMore services can stay local Tele-medicine and other technologies can Tele-medicine and other technologies can

provide real time linkages to secondary provide real time linkages to secondary and tertiary care sitesand tertiary care sites

In general patients don’t want to leave In general patients don’t want to leave town and go to the “big city”– convenience town and go to the “big city”– convenience still carries strong weight as a value still carries strong weight as a value propositionproposition

““Caring” small town care mattersCaring” small town care matters Critical access designation provides a Critical access designation provides a

financial life line: from $500K - $1M+ per financial life line: from $500K - $1M+ per year for a typical hospitalyear for a typical hospital

How You Might Feel…How You Might Feel…

RWHC Eye On Health

"OK. I understand a lot is going to change. But how do I stay the same?"

Top ImplicationsTop Implications Demonstrate measurable quality and outcomesDemonstrate measurable quality and outcomes Leverage IT – namely EMR- in order to track and Leverage IT – namely EMR- in order to track and

report measurable resultsreport measurable results Become efficient to compete on value – work flow Become efficient to compete on value – work flow

and IT critical and IT critical Develop abilities to report transparent pricing Develop abilities to report transparent pricing

datadata Days of the small physician practice are Days of the small physician practice are

numberednumbered Develop consumer friendly service and web-Develop consumer friendly service and web-

based toolsbased tools Get ready for a more retail-like market Get ready for a more retail-like market