webinar: thriving in the new healthcare environment: 3 key strategies

Thriving in the New Healthcare Environment:

Three Key Strategies

David Bernd, CEO, Sentara Healthcare

David Feinberg, MD, MBA, President, UCLA Health System

Jeff Jones, Managing Director, Huron Healthcare

Brought to you by Modern Healthcare

June 17, 2014

David Bernd CEO Sentara Healthcare

Today’s Presenters

2

Jeff Jones Managing Director Huron Healthcare

Modern Healthcare Webinar |

David Feinberg, MD, MBA President UCLA Health System

© 2014 Huron Consulting Group. All rights reserved. Proprietary and confidential.

NEW HEALTHCARE IMPERATIVES:

STRATEGIES FOR CHANGE


JEFF JONES, MANAGING DIRECTOR, HURON HEALTHCARE

3 Modern Healthcare Webinar |

Unprecedented Market Pressures

Reimbursement compression

– Organizations face the imperative of operating on/thriving on rates that are

at or near Medicare/Medicaid levels

Volume compression

– Reliance on volume growth no longer feasible. Many organizations forecast flat volume levels

Increased portion of revenue at risk

Major IT and capital costs for managing across the continuum


Market Demands 20% to 40% Performance Improvement



Audience Question: Clinical Quality

Where do you see the greatest opportunity

for improving clinical quality?

1. Reducing unnecessary care variation

2. Patient-centered medical homes

3. System-wide quality standards

4. Partnerships with community organizations



DRIVING CLINICAL QUALITY


DR. DAVID FEINBERG, PRESIDENT, UCLA HEALTH SYSTEM


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The Patient Experience

• Our overarching focus is on the patient experience

• Safety, quality, and cost are all components of the patient experience

• It’s the type of care I would want for my mom if she were sick

• Access, safety, quality, comfort, cost effective, timely, and seamless

• Achieving this comes from listening to patients and taking really good care of them

UCLA’s ValU Initiative

• The ValU Initiative focuses on the quality and cost components of the patient experience

• UCLA sees 45,000 inpatients a year and treats over 2 million throughout the UCLA Health System

• ValU is a way of improving the patient experience by redesigning clinical service practices

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Primary Care Redesign

• We began with primary care innovation

• Primary care redesign includes multiple service lines

• We then moved to specific service lines

• We prioritize service redesign by looking at four criteria

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Prioritizing Service Lines – Four Criteria

• Are patients engaged in their care?

• Is there strong physician leadership and engagement?

• Is the service line important to UCLA’s long-term growth strategy?

• Is the service line meeting financial benchmarks?

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Service Line Redesign

• Requires a partnership including:

• Patients, Performance Excellence team, physician leaders, nurse leaders, administrators

• Reduce medically unnecessary clinical practice variation

• Daily interdisciplinary meetings for care coordination

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Potential Barriers

• Physician resistance to change

• Departmental or silo model

• Lack of robust cost accounting or financial data

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Beginning of Our Journey

• We are early in this journey

• Learning from models outside the organization

• A year from now we will have data and trends showing where we have succeeded and what we need to refocus on

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Audience Question: Operational Excellence

What is the most significant obstacle to

achieving operational excellence in your

organization?

1. Competing priorities

2. Tools and technology

3. Physician/provider buy-in

4. Siloed departments

5. Lack of a clear strategy



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Operational Excellence

David L. Bernd Chief Executive Officer

June 17, 2014

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Sentara Healthcare • Mission: We improve health everyday

• 126-year not-for-profit mission

• 12 hospitals; 2,727 beds; 3,799 physicians on staff

• 11 long term care/assisted living centers

• Extended stay hospital

• 4 Medical Groups (900+ Providers)

• 440,000 - member health plan

• Sentara College of Health Sciences

• $4.3B total operating revenues

• $5.9B total assets

• 27,000+ members of the team

• AA/Aa2 bond ratings

Virginia

North Carolina

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Sentara Strategic Plan Always Improving

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Operational Excellence 1. Strategy of Integration; Execution of Strategy

2. Uniform Goals Across System

3. Transparency of Performance – External Benchmarks

4. Balanced Scorecard: Quality, Safety, Customer Satisfaction, Members of Team Engagement; Financial (both revenue & cost)

5. Keep operations and finances well disciplined – gives you time to strategize, plan and execute

Quality Developed and implemented 3 System Cardiac Score Cards: Strategic Operational Reputation Achieved 90% yellow or green on Operational Score Card Systemized CCEC Policies and procedures (Compliance 360) Outcomes report analysis Nurse Stress Testing Telemetry Pilot LOS(AMI, Arrhythmia, Intervention) Identified opportunities for improvement and developed process to improve LOS

Strategic Imperative I

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I. Be the Leader in Value as measured by quality, satisfaction, and cost for Heart Services

Cardiac Operational Scorecard (90% yellow or green)

Length of Stay Opportunities

Example of System-Wide Cardiac Strategy Execution

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Patient Satisfaction Initiatives Discharge Planning •Begins on admission •Whiteboard utilization •Multidisciplinary rounds daily

Quiet at Night •Posters •Complimentary ear plugs and sleeping masks •Preferences on whiteboard

Education about Medication •Detailed, consistent education to all patients and family •Tiger Videos Create “Best Practice” Forum •Cardiac nursing leadership participation •Share tactics, initiatives, etc.


In the Weeds

Homeostasis Patches • Switched from Svek Patch to

QuickClot

• Annualized savings for 2014 will be over $175,000


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Cardiac Performance Improvement Plan (PIP)

Cardiac Service Line identified $6.2m in cost

savings opportunity in 2014

Key measure success is improved operations and collaboration with SMG and Hospitals

•Efficiency (scheduling/staffing) $2.65m •Access (Rehab, EP, AIC, Clinics) $555k •Quality (improve LOS) $510k •Supply Savings (Physician scorecards, CVAC, CCAP) $2.5m •Productivity (102% is the new 100%)

Savings YTD

Cardiac OR supply savings $125k ytd, estimate $760k

Revenue Growth Ablations exceeding budget by 41 cases= $200k net rev Cardiac OP CTA exceeding budget




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Physician Resource Utilization Report Card

John Doe, M.D. AVG COST - ALL SUPPLIES Baseline Actual (SHH)

DIAG CATH $1,520 $801.98

INTERVENTION $3,000 $2,562.10

CATH W/INTERVENTION $2,800 $2,856.84

# OF CASES 700 658

FLUORO - MEDIAN MINS

DIAG CATH 7.20 5.60

INTERVENTION 9.5 10.51

CATH W/INTERVENTION 17.7 14.60

# OF CASES 540 651

MD On Time Start - First Case

% On Time 42% 64%

# On Time 50 72

# Late 70 40

TOTAL FIRST CASES 120 112

MD Gloved Time - MEDIAN MINS

DIAG CATH 42.1 33.86

INTERVENTION 45 47.17

CATH W/INTERVENTION 60.2 58.12

# OF CASES 540 659


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Sentara Strategic Plan Caring for Defined Populations

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Carnegie Mellon University, Paul Fischbeck 2009

Caring for Defined Populations = Solve This Problem

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Sentara Strategic Plan Create Growth

Organic Growth Product Re-design

Strategic Affiliations New Care Models

Innovation Unique Technologies

Innovation Sentara Hospitals

& Services

Physicians Optima Health

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Sentara Five-Year Outlook 1. Sentara will be a larger integrated health system

2. Transformation of care and shared learning across the system will allow Sentara to compete by demonstrating value through outcomes, informatics and innovations; this is made possible by enhanced system scale and integration – Health Plan, Hospitals, Physicians, Ambulatory Care and Post-Acute Care

3. Positioned well for major system consolidation as the market continues to aggregate

4. Provider and health plan diversification from a geographic position will continue to offset inherent risk issues e.g. Tricare; Anthem

5. Leverage of infrastructure over large base of services will yield efficiencies across the system

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Lessons Learned 1. Be Strategically Driven to Execute Your Strategy

2. Designated Strategic Capital– Innovate – Safe to Fail/Great to Succeed

3. Focus on Quality, Patient Safety, Satisfaction and Members of the Team – Finances Will Follow

4. Flexible Organization Structure –Change is Part of Culture

5. What Gets Measured and Reported Gets Done

6. REPEAT - Keep operations and finances well disciplined – gives you time to strategize, plan and execute

7. Merger/Affiliations – Culture Fit – we do 1 in 4 opportunities

8. Enjoy the ride – our best days are in front of us

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Get Social With Us…

TRANSITIONING REVENUE STREAMS



JEFF JONES, MANAGING DIRECTOR, HURON HEALTHCARE

Market Demands 20% to 40% Performance Improvement



Revenue Transition

Happening at different speeds in different markets

Regardless, CEOs are committed to preparing for the shift

Organizations must build capabilities needed to operate and thrive

under the value model – while remaining financially sound under the

current model

Organizations must develop a granular understanding of where current

and future top-line revenue is coming from

The type of revenue changes and the rate of change will help each

health system set priorities for healthcare transformation



Current and Forecasted Revenue Sources

What portion of your top-line revenue is from traditional

fee-for-service, and what portion is from emerging value-based models

(bundled payment, shared savings, shared risk, capitation, etc.)?

What increases or decreases in utilization are occurring across the

health system?

What shifts in utilization are occurring across the health system?

What portion of revenue is from non-patient care sources?

What changes are you forecasting for top-line revenue mix, utilization,

and non-patient care revenue?



Organizations are Following Multiple Tracks

Transformative change

– Going beyond traditional revenue and cost improvement initiatives

New patient care revenue

– Expanding market share and reach, expanding programs and services

Non-patient revenue

– Exploring cautiously



Key Takeaways

Over-reliance on revenue from inpatient care carries one set of risks,

while reliance on new, alternative revenue streams carries another

Moving from volume models is essential, but moving too quickly

weakens revenues and puts significant pressure on the organization

Improving quality, improving the patient experience, and improving the

cost structure remains the winning combination



David Bernd CEO Sentara Healthcare

Q&A With Today’s Presenters

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Jeff Jones Managing Director Huron Healthcare [email protected] 503.347.0554

Modern Healthcare Webinar |

David Feinberg, MD, MBA President UCLA Health System
