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St. Rose Hospital. 2013 HCE College Bowl Case Study. Kevin Cao, La Ronda Jones, Wenbin Zhang. Alecto’s Vision for the Future of St. Rose Hospital . As the CEO’s of Alecto Healthcare Services, we must address the following issues in managing St. Rose Hospital Financial hardship - PowerPoint PPT Presentation
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St. Rose Hospital
2013 HCE College Bowl Case Study
Kevin Cao, La Ronda Jones, Wenbin Zhang
As the CEO’s of Alecto Healthcare Services, we must address the following issues in managing St. Rose Hospital
◦Financial hardship
◦Addressing provisions of the Patient Protection and Affordable Care Act
Alecto’s Vision for the Future of St. Rose Hospital
Current Ratio per Alecto Audit
2007 2008 2009 2010 2011 20120
0.5
1
1.5
2
2.5
0.931.07
2.21
1.69
0.81
0.36
Current Ratio
Alecto Audit Net Income
2007
2008
2009
2010
2011
2012
($25,000)($20,000)($15,000)($10,000)($5,000)
$0 $5,000
$10,000
($2,361)
($3,049)
$5,850
($390)
($23,371)
($7,074)
Net Income Alecto Audit Present
*Numbers in Thousands* See calculation in Appendix
Net Income Without InterventionProjected
($25,000)
($20,000)
($15,000)
($10,000)
($5,000)
$0
$5,000
$10,000
($2,361)
($3,049)
$5,850
($390)
($23,371)
($7,074)
($14,143)($16,736)
($19,330)($21,923)
Net Income Alecto Audit Projected
*Numbers in Thousands
* See calculation in Appendix
Healthcare Exchange
Medicaid Expansion
Potential Growth Opportunities
Due to Healthcare Reform
Initiative 1
• Revamping Financial Outputs
Initiative 2
• Patient Inreach Program
Two Step Initiative for Hospital Survivability
Initiative 1Revamping Financial Outputs
In order to reduce costs we must restructure our expenditures to remain financially viable for the future
◦Reducing Community Benefit Service Expenses
◦Addressing the suspended SNF Unit Beds
◦Administrative Services Budget Cut
Strategies for Cost Containment
The Skilled Nursing Facility was closed and the beds were put in suspense as a reaction to the financial losses incurred
We recommend the continued suspense and closure of the Skilled Nursing Beds due to reduced SNF reimbursement rates from CMS
Skilled Nursing Facility Beds
Skilled Nursing Facility Beds
There are over 10 Long Term Care facilities located in the Health Service
Area of SRH
Currently, this program costs the hospital over $290,000 each year in volunteer hours
◦While we recognize the significance of this program, cuts across the board are required for financial survivability
Integrated Nurse Leadership Program (INLP)
Integrated Nurse Leadership Program 25% Reduction
20072008200920102011$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Integrated Nurse Leadership Pro-gramINLP reduced 25%Total Community Benefit ServicesTotal with 25% reduction
$61,000 Decrease in Expenses
The Tattoo Removal Program involves 30 participants
With a goal of adding 5 additional participants every year, the hospital will incur an additional $76,500 in expenses over 5 years
We recommend that the program continue with a maximum of 30 participants for an interim period to reduce the amount of excess costs
Tattoo Removal Day
Tattoo Removal Day Data
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$35,700 $40,800
$45,900 $51,000
$56,100
Tattoo Removal Day Projected with 5 additional participants a yearTattoo Removal Day Projected with 30 partici-pants
$25,000Increase in expenses
*See calculation in Appendix
Our management team will keep administrative costs down to 6.5% of our total expenses from the previous year
◦This will help us keep our total expenses down from year to year in an effort to implement new programs that will positively affect patient care
Administrative Services Budget Cut
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
12,498,858
$20,521,142
Admin Ser-vices Ex-pense at 6.5% of to-tal ExpensesAdmin Ser-vices Ex-pense without In-tervention
An $8 Million reduction in
Administrative Expenses
Administrative Services Data
*See calculation in Appendix*Source: OSHPD HAFD
Initiative 2 Patient Inreach Service
Implementation
Patient Inreach Service
Target Population 2
Receive Staff Training
Patient Education, Enrollment and
Retention
Target Population 1
Increased Patient VolumeIncreased Service Quality and
Patient ValueIncreased Revenue
Patient Inreach Service Target Group I, Uninsured
Population• Approved Staff to
Training/Interpreter Services
• Patient Assessment
• Patient Enrollment Assistance
Benefit Enrollment Program
Covered California supports consumers benefit training through a Benefit Assister Training program
Employees selected for training
◦ Inpatient Services will utilize Discharge Planners and Social Workers for enrollment
◦ Outpatient Clinic Services will utilize the business office staff for enrollment
◦ All St. Rose Certified Interpreters
Benefit Enrollment ProgramTraining
Educate
Enroll
Retain
With a total of 22, 289 uninsured patients in Hayward 32.5% are not proficient in English
At no additional cost St. Rose Hospital can enroll current employees who are interpreters in the program for training which will be vital for our non-English speaking patient population
*Source:US Census Bureau, American Community Survey, 2008
Benefit Enrollment ProgramInterpreter Services
Utilizing our EHR for the enrollment process
Capturing enrollment opportunities 24 hours around the clock
This flowchart will explain in detail the patient discharge process for the benefit enrollment program and patient follow up to decrease Medicare 30 day readmissions
Benefit Enrollment ProgramPatient Enrollment
Continue with discharge process
Physician
orders Dischar
ge
Proceed with
discharge collect
insurance
Patient goes home
Notification to Staff
Visits patient in ED or
follow-ups within 72
hoursEducate patient about
Covered California
Educate about
benefits of the selected
program
Patient is then matched and enrolled
Assist patient
with submission
Determine
Eligibility
YESNO
Patient Follow Up Call Post-Discharge
St. Rose Hospital Payer Mix
*Other include self-pay, workers* compensation, other government, and other payersSource: OSHPD Financial Disclosure Report, FY 2011 (based on inpatient discharges)
Medicare Traditional 35.1
Medicare Managed Care; 4
Third Party Managed Care, 13.2Third Party Traditional; 1.1
Medi-Cal Managed 14.1
Medi-Cal Traditional 24.8
Indigent; 5.9 Other; 1.8
Target Group
21 Million uninsured in 18-34 age group
Projected decrease of the 42% of uninsured currently existing between the ages of 18-65 due to Covered California enrollment
Benefit Program Target Group
Alameda County Uninsured by Age Group
18-24 25-39 40-640
5
10
15
20
2522.5
11.6 10.6 Percentage of Uninsured in Alameda County in 2010 for Age Group
Age Group
Perc
enta
ge o
f Uni
nsur
ed Target
Population
*Source: County of Alameda
Patient Inreach Service Target Group II, Medi-Cal Population
Streamline Eligibility and Enrollment Process for Potential Medi-Cal Patients
It requires that states make DSH payments to hospitals treating large numbers of low-income patients because:
◦Low-income patients are more likely to be uninsured or Medicaid enrollees.
◦Uncompensated Care◦Low Medicaid Payment Rate
Medicaid Statue
*Mitchell 2012
2006 2007 2008 2009 2010 2011 2012$0.0
$500,000.0$1,000,000.0$1,500,000.0$2,000,000.0$2,500,000.0$3,000,000.0$3,500,000.0$4,000,000.0$4,500,000.0
0
5000
10000
15000
20000
25000
DSH Funds Received Adjusted Medi-Cal Patient Days
DSH Funds Received by SRH
*Source: OSHPD HAFD
Total Medicaid DSH Allotments
*Mitchell 2012
( Middle Class Tax Relief and Job Creation Act of 2012 )
Num
bers
in B
illion
s
Californians under Age 65 Newly Eligible for
Medi-Cal with Expansion
2014 2016 2019660,000.0670,000.0680,000.0690,000.0700,000.0710,000.0720,000.0730,000.0740,000.0750,000.0
*Lucia & etc. 2013
Lack of awareness of Medi-Cal Lack of awareness of eligibility standards Dislike of the program Belief that they are insured Paperwork is too difficult
Being Eligible Does Not Mean Being Enrolled
*Lucia & etc. 2013
Predicted Increase in Medi-Cal Enrollment of Newly Eligible
Californians
2014 2016 20190.0100,000.0200,000.0300,000.0400,000.0500,000.0600,000.0700,000.0800,000.0900,000.0
1,000,000.0
*Lucia & etc. 2013
2014 2016 2019 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
10,000
Predicted Increase in Medi-Cal Enrollment of Newly Eligible SRH Service Area Population
*See calculation in Appendix
2014 2016 2019$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Predicted SRH Potential Increase in
Medi-Cal Net Patient Revenue
*See calculation in Appendix
Revenue from newly enrolled Medi-Cal Patients
2011
2012
2013
2014
2015
2016
$110,000,000
$120,000,000
$130,000,000
$140,000,000
$150,000,000
$160,000,000
$170,000,000
$180,000,000
Net Patient Revenue with newly Enrolled MediCal PatientsNet Patient Revenue
*Source: OSHPD HAFD
Initiative 1
• Revamping Financial Outputs
Initiative 2
• Patient Inreach Program
Two Step Initiative for Hospital Survivability
Our findings indicate that the current state of St. Rose is undesirable
Without intervention the hospital would not be financially viable for the future
Our recommendation is for a two step initiative that places the hospital in a better position
Conclusion
Alameda County. (2013). Preparing for 2014 ACA implementation. Retrieved fromhttp://achealthcare.org/wp-content/uploads/2013/03/Eligibility-Enrollment-Maps-Presentation-2.11.13.pdf
California Health Benefit Exchange. (2013). Covered California. Retrieved from http://www.coveredca.com/about_us.html
California State Office of Statewide Health Planning & Development. (2007-2011). Healthcare Information Division. Retrieved from http://www.oshpd.ca.gov/HID/DataFlow/HospMain.html
Eden Youth & Family Center. (2012). New Start Tattoo Removal Program. Eden Youth & Family Center. Retrieved from http://www.eyfconline.org/programs/new-start-tattoo- removal-program/
Flex Monitoring Team. (2012). Why Do Some Critical Access Hospitals Close Their Skilled Nursing Facility Services While Others Retain Them? Flex Monitoring Team. Retrieved from http://flexmonitoring.org/documents/Briefing%20Paper32-CAH-SNF
Lucia, L. Jacobs, K. Watson, G. Dietz, M. Roby, D. H. (2013). Medi-Cal Expansion under the Affordable Care Act: Significant Increase in Coverage with Minimal Cost to the State. UC Berkeley Center for Labor Research and Education. UCLA Center for Health Policy Research. Retrieved from http://laborcenter.berkeley.edu/healthcare/medi-cal_expansion.shtml
References
Medical Development Specialist, LLC. (2012) Effect of Alecto Healthcare Services Hayward LLC’s Management and Acquisition of Rose Hospital in the Availability or Accessibility of Healthcare Services. Retrieved from http://oag.ca.gov/sites/all/files/agweb/pdfs/charities/pdf/srh_health_impact.pdf
Mitchell, A. (2012). Medicaid Disproportionate Share Hospital Payments. Congressional Research Service. Retrieved from https://www.fas.org/sgp/crs/misc/R42865.pdf
Moore Foundation. (2013). Betty Irene Moore Nursing Initiative. Gordan and Betty Moore Foundation. Retrieved from http://www.moore.org/nursing.aspx
OSHPD Hospital Annual Financial Data Pivot Table 2007-2011. Retrieved from http://www.oshpd.ca.gov/HID/Products/Hospitals/AnnFinanData/PivotProfles/default.Asp
Preliminary Medi-Cal Enrollment by Zip Code Pivot Table. Retrieved from http://www.dhcs.ca.gov/dataandstats/statistics/Pages/Medi- Cal%20Enrollment%20by%20Zip%20Code.aspx
References (Continued)
United States Department of Health and Human Services. (2012). Initial Guidance to State on Exchanges. Retrieved from http://www.healthcare.gov/law/resources/regulations/guidance- to-states-on-exchanges.html
U.S. Department of Commerce United States Census Bureau. (2008) Retrieved by http://www.census.gov/acs/www/data_documentation/2008_release/
References (Continued)
APPENDIX
Alecto Audit Net IncomeNet Income Audit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net Operating Revenue $118,445 $128,931 $142,322 $147,013 $160,444 $136,070 $157,606 $162,959 $168,312 $173,665
Operating Expense $117,898 $128,501 $141,234 $146,565 $180,413 $143,275 $171,776 $180,003 $188,231 $196,458
Net from Operations $547 $430 $1,088 $448 ($19,969) ($7,205) ($14,170) ($14,129) ($16,548) ($18,966)
Net Non Operating Rev. $115 $61 $1,787 $188 ($84) $131 $171 $115 $59 $3
Extraordinary Items ($3,023) ($3,540) $2,975 ($1,026) ($3,318) $0 ($144) $193 $529 $866
Net Income ($2,361) ($3,049) $5,850 ($390) ($23,371) ($7,074) ($13,855) ($14,207) ($17,018) ($19,829)
Integrated Nurse Leadership Program
Integrated Nurse Leadership Program $80,000 $280,000 $280,000 $290,000 $290,000
Total Community Benefit Services without INLP $170,910 $224,935 $215,495 $253,160 $267,070
INLP reduced 25% $60,000 $210,000 $210,000 $217,500 $217,500
Total with 25% reduction $230,910 $434,935 $425,495 $470,660 $484,570
INLP Reduced 50% $40,000 $140,000 $140,000 $145,000 $145,000
Total with 50% reduction $210,910 $364,935 $355,495 $398,160 $412,070
Tattoo Removal Day
Tattoo Removal Day Projected with 5 additional participants a year $30,600 $30,600 $30,600 $30,600 $30,600 $35,700 $40,800 $40,800 $40,800 $40,800
Tattoo Removal Day Projected with 30 participants $30,600 $30,600 $30,600 $30,600 $30,600 $30,600 $30,600 $30,600 $30,600 $30,600
Administrative Services Cut
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Admin Services Expense without Intervention
$8,132,366
$9,538,877
$12,133,070
$12,296,979
$13,472,203
$15,146,032
$16,489,809
$17,833,587
$19,177,365
$20,521,142
Admin Services Expense at 6.5% of total Expenses
8,132,366
9,538,877
12,133,070
12,296,979
13,472,203
9,794,306 10,305,092 11,036,347 11,767,603 12,498,858
Total Expenses102,241,
023115,181,
914125,041,
938130,801,
560150,681,6
28158,539,
869169,789,95
5181,040,04
1192,290,12
6203,540,21
2
Admin Svcs % of tot. Expenses With Intervention @6.5% 7.95% 8.28% 9.70% 9.40% 8.94% 6.50% 6.50% 6.50% 6.50% 6.50%
In 2011, SRH service area has 74,981Medi-Cal beneficiaries(page 37). In 2011, there are 7,790,828 total Medi-Cal beneficiaries in CA (Preliminary
Medi-Cal Enrollment by Zip Code Pivot Table). The ratio is 74981/7790828 = 0.96% Thus, the increase of new eligible enrollment in SRH service area will be: 0.96% x California number of increase For example: In 2014, there will be 0.96% x 480,000 = 4608 newly eligible enrollment in
SRH service area under base scenario.
Calculation of SRH new Eligible Enrollment
In 2011, SRH Net Patient Revenue from Medi-Cal was $47,434,200 (OSHPD HAFD Pivot Table 2011)
In 2011, SRH service area had 74,981Medi-Cal beneficiaries (page 37). The ratio is 47434200/74981 = 632.62 dollars/ beneficiary The potential increase in Medi-Cal net patient revenue is: 632.62 dollars/ beneficiary x number of newly enrolledFor example: the number for 2014 under base scenario will be: 632.62 dollars/ beneficiaries x 4608 = $2,915,113
Calculation of SRH potential increase in
Medi-Cal net patient revenue after 2014