Roundtable: Financing the Era of Accountable Care

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Roundtable: Financing the Era of Accountable Care

Roundtable Participants

Chris Taylor, Former President, Parallon

T. Clifford Deveny, MD, SVP Physician Services and Clinical Integration, Catholic Health Initiatives

John Kerndl, CFO and SVP, Operations, LifePoint Hospitals

Lori Wooten, SVP, CFO, Hospital Operations, Capella Healthcare

Sweeping changes are underway in how providers care for, follow up with, and even collect from the patients they serve. Priorities have changed dramatically, and health systems are racing to optimize patient relationships as they evolve toward accountable care.

Modern Healthcare Custom Media hosted four healthcare executives at the Loews Vanderbilt hotel in Nashville, Tenn., for a discussion on implementing the latest care delivery strategies while facing the challenge of executing their missions profi tably. Here’s what the executives shared.

What are your organization’s 2015 priorities based on changes in the healthcare industry?

WOOTEN: Last year we saw the impact of Medicaid expansion in three of our states, and it was more positive than we anticipated. Exchange enrollment, which was slow to start last year, is a key initiative for us in 2015— maximizing coverage by helping our patients understand their enrollment options. Another key initiative for us in 2015 is to enhance evidence-based order sets.

KERNDL: For us, 2015 is all about standardization. The five hospitals that joined us last year helped us realize we need more standardized business and clinical processes. We now have more than 60 hospitals in 21 states—and instead of worrying about incorporating a change in more than 60 different ways, through standardization we will only need to make one change across the entire enterprise. This will allow us to be more nimble, scalable andsuccessfully integrate more acquisitions in the future.

Is your organization feeling the pressure to outsource?

DEVENY: Yes. We now need to be more precise with all our functions, so doing something at 80% quality is unacceptable. We’ve either got to find a partner, do it ourselves or outsource to someone who can do it at 99.9% accuracy, whether that is laundry, food service or billing. The key is building contracts that are based on outcomes, involving penalties and bonuses for vendors, so that our leaders can focus on care delivery rather than the quality of those services.

KERNDL: This year we outsourced our business functions for the first time, and we’ve seen enormous impact from just having consistent data. Our hospital-based business systems did not give us the full picture we now have on revenue cycle issues. The impact of outsourcing these functions has been purely net revenue lift.

TAYLOR: It seems that many health systems are working hard to refocus their efforts on the fulfillment of their missions. To the extent that business functions can be standardized, streamlined and structured in a way that the leadership of the hospital system doesn’t have to really worry about them, administrators can then shift time and attention to more strategic and mission-oriented goals and objectives.  

How are you addressing workforce changes in 2015?

TAYLOR: A lot of health systems have made significant investments in clinical systems— millions of dollars spent. We believe an opportunity exists for application support staff to help health systems optimize their clinical IT with an eye towards making the experience as meaningful as possible for physicians so they get the most out of their investments.

DEVENY: Making sure the right people are doing the right tasks. For example, we piloted a patientcentered medical home and found that 25 out of 45 tasks performed by a primary care physician do not actually need an MD. So we are beginning to move these tasks from physicians onto advanced-practice clinicians and other socalled physician extenders. Physician satisfaction is actually improving as a result—clinicians are able to go home at 5:30 instead of staying until 7 or 8 p.m.

KERNDL: For LifePoint, we’ve made the business decision to invest in the patient experience by creating new positions and teams in our emergency rooms and within other service lines. Our view is we can move the needle on experiences, and as a result our volumes will increase. While it is an additional expense, we fully expect a return at the same time. We also think it’s the right thing to do. 

What other investments are being made to improve the patient experience?

KERNDL: Our Chief Medical Officer recently formed what we call a patient family advisory board. This board is a roundtable of people who use our services, or their families use our services, to talk through satisfaction issues. What comes from this are ideas we wouldn’t think of otherwise. They also bring us ideas from other institutions they’ve visited.

TAYLOR: Investments in pre-access such as insurance verification, pre-registration and scheduling, if done well, can contribute greatly to the patient’s experience before they even get to the hospital. Making sure that same seamless experience follows through on the back end, after the patient has gone through the insurance process, ensures a positive engagement for patients and their families. 

What data is most valuable to you right now, and how are you drowning out the noise?

DEVENY: We’re headed into what I like to call the “data capital crisis.” Everybody wants a scorecard and they want it tomorrow—and they want 100 data points. You have only so many resources that can build those data points. So now instead of the capital review committee, we have the data review committee, which is determining which data points are the most meaningful going forward. I don’t think we’ve figured that out yet.

TAYLOR: Data as a category can be rather broad. There is financial data and there is clinical data, which leads you to different strategies to address different things. For example, decades ago our clinical technology didn’t generate a lot of data, whereas today a CT scan can provide a wealth of data on its own. And it’s feeding the intelligence of our medical community, leading us to find efficiencies in both clinical and operational areas. But data itself is not a problemsolver—you need it in a meaningful format so it tells you something. It’s all about how you can use the data to continue to improve and innovate.

How are you preparing for increased up-front, out of pocket costs for patients?

DEVENY: Centura Health in Colorado, with which we have a joint operating agreement, is changing its whole pricing strategy to match the outpatient retail providers down the street. They are getting over the move toward provider-based reimbursement and positioning themselves within value-based care. Now, Centura Health has always been one of our bolder groups, but the health system as a whole is very cognizant that the pricing agreements we’ve had are going away. And at the end of the day, you need a value proposition that the community sees.

KERNDL: Clearly, as patient out-of-pocket payments increase there’s much more interest from patients to understand their costs. We’ve learned they will make multiple phone calls to essentially get “price quotes” and find out what their costs will be. At the same time, you have payers engaging patients— pointing out to patients where they can save money. We need to be part of this education process. 

How are you becoming more nimble?

WOOTEN: With 13 hospitals, we are a smaller health system which enables us to be more nimble than larger organizations. By keeping our corporate staff lean and our overhead costs low, we are able to be much more flexible. So when disruptions come up like a one-year delay for ICD-10, we often look to our vendor partners and outside resources for help. 

DEVENY: That is the question for our health system right now—how do we become more nimble—because we’ve been a battleship, and it takes a long time to turn it. There is a change in the type of people we’re hiring into the company with skill sets around project management and being able to react quickly. They are coming outside of healthcare, from places that are used to dealing with constant change.

KERNDL: We have a committee that meets routinely to make decisions on capital commitments over $500,000. So there’s always a mechanism if an opportunity presents itself, even if it’s capital-intensive, to quickly make a decision. It’s one meeting. 

What technology investments are you making?

WOOTEN: Our next stage is getting more optimization out of our EMRs to enhance our patient care initiatives, working with our vendors to get the analytical tools we need. We will also be implementing a new cost accounting system that will supplement our workforce productivity system so we can gain better insight into the total cost of care. 

What issue is getting greater attention as your organization prepares for the long term?

DEVENY: Consumerism. We’re all building health systems to maximize revenue and meet our goals, but our next focus is on how people want their healthcare delivered. The whole concept of a client relationship management system (CRM) is foreign to healthcare, but if I buy a gallon of paint at Sherwin Williams, within two weeks I have three emails, two postcards, and they know where I live and what colors I like. They act on that information— healthcare hasn’t done that yet.

TAYLOR: I agree that the consumer aspect will continue to grow. We will see more consumer portals and assistance with navigating the health system. But another area I see health systems focusing on in the future is workforce management, and getting more detailed in their analysis of workfl ow to make their processes more effi cient— all in the vein of allowing clinicians to spend time on the most important thing, and that’s taking care of patients. 

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