The ABCs of Healthcare IT for 2014

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential

January 2014

Buzzwords for 2014

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© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 2

2014 .. The year of

ACO Accountable Care Organization500 as of year end 2013, projected to double in one yearMedicare added 123 new ACOs (MSSP) in January 2014

A

According to a baseline study of early Accountable Care Organizations (ACOs), ACO patients had 5.8% lower total costs of care than non-ACO patients ($7,694 vs. $8,164).

Source: The Commonwealth Fund, January 2014


2014… The year of

Bundled Payment BAcute Acute/Post Post Acute

Payment Retrospective Retrospective Retrospective ProspectiveParticipants 3 44 14 37

Organizations 32 192 165 75

Episode All acute patients, all DRGs

Selected DRGs, hospital plus post-acute period

Selected DRGs, post-acute period only

Selected DRGs, hospital plus readmissions

Services included in the bundle

All Part A services paid as part of the MS-DRG payment

All non-hospice Part A and B services during the initial inpatient stay, post-acute period and readmissions

All non-hospice Part A and B services during the post-acute period and readmits.

All Part non-hospice A and B services (including the hospital and physician) during initial inpatient stay

48 Bundled Payment GroupingsMajor joint upper extremity

483 Major joint and limb reattachment procedure of upper extremity with complication or comorbidity or major complication or comorbidity


2014… The year of

C Consumer Transparency

These common-sense best practices bring consistency, clarity, and transparency to patient financial communications.

These common-sense best practices bring consistency, clarity, and transparency to patient financial communications.

Bill posted on Internet $55,000 for appendix operation


2014… The year of

High Deductible Plan D

We have definitely been hearing from members that they are seeing an increase in bad debt and even in charity care for people with high-deductible health plans," Caroline Steinberg, vice president for trends analysis at the American Hospital Association, told KHN. "A lot of these folks tend to not understand the structure of their benefits until they get to the hospital, and they're not covered as thoroughly as they thought."The rate of workers in high-deductible plans has more than doubled since 2009 to 19 percent, KHN says, citing figures from the Kaiser Family Foundation.

Additional buzzwords: Retail, reference pricing

Source: Kaiser Family


2014… The year of

Expenditure

The number of people employed in healthcare dropped by 6,000 in December, the first time total healthcare employment declined since July 2003, CNN Money.

E

2000 2002 2004 2006 2008 2010 201210%11%12%13%14%15%16%17%18%

17.2%

Health Expenditure as % of GDP

2012 2011 2010 20092.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

3.7% 3.6%3.8% 3.8%

Healthcare Spending Growth


2014… The year of

Frequent Conditions AHRQ

FPrincipal CCS diagnosis Number of stays in

thousandsStays per 10,000

population

All stays 38,591 1,239

Liveborn (newborn infant) 3,818 123Pneumonia (except that caused by tuberculosis and sexually transmitted diseases)

1,114 36

Septicemia (except in labor) 1,094 35Congestive heart failure, nonhypertensive 970 31Osteoarthritis 964 31Mood disorders 896 29Cardiac dysrhythmias 795 26Chronic obstructive pulmonary disease and bronchiectasis 729 23Complication of device, implant, or graft 699 22Spondylosis, intervertebral disc disorders, other back problems 667 21

Table 1. Number of hospital stays and stays per 10,000 population by the most frequent principal diagnoses, 2011

Abbreviation: CCS, Clinical Classifications SoftwareSource: Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project (HCUP), Nationwide Inpatient Sample (NIS), 2011

Frequencies


2014… The year of

SGR Sustainable Growth Rate

Congress has 3 months to consider 2 very similar bipartisan bills in the House and Senate that would repeal Medicare's sustainable growth rate (SGR) formula for physician pay. Both measures would shift compensation from fee-for-service to pay-for-performance and consolidate 3 Medicare incentive programs, including meaningful use of electronic health records, into a single program.

G

Averted20% decrease in Jan


2014… The year of

HAC H

FY 2014 Final Inpatient PPS Rule

Creates HAC Reduction Program with two Domain measurements that overlaps in its entirety with existing HAC program and VBP


2014… The year of

ICD-10IOutlook grim for docs' ICD-10 readiness

October 1, 2014Physician practices are still behind schedule in terms of preparation for ICD-10, yet generally are optimistic about readiness for its implementation, according to a recent survey conducted by medical claims clearinghouse Navicure.Seventy-four percent of survey respondents said they still haven't started implementing their ICD-10s. What can be taken as a bit of good news is that 76 percent of respondents to a series of KPMG surveys indicated they have completed an impact assessment, widely considered the first key step en route to ICD-10.

http://links.mkt1985.com/ctt?kn=126&ms=ODEzNTYzMAS2&r=MTg5NDA2MTA0NjcS1&b=0&j=MTk2NTc0MTUxS0&mt=1&rt=0


2014… The year of

Joint accountability with physicians

JACO Governance

Two-thirds of primary care and one-third of specialists currently depend on an exclusive relationship with a hospital for some or all of their incomes. Many of these are employed. But private health insurers and large medical groups are options for physicians seeking cover, and the terms of their deals dis-intermediate traditional hospital referral relationships. Source: Deloitte


2014… The year of

Risk K Potential for revenue losses to competitors or penalties

from regulators is increasing


2014… The year of

Lean L

Pharmacy Workflow ProjectBusiness Impact: Reduced the number of trips to the hospital pharmacy due

to inventory shortage by 8 trips per month Reduced the surcharges paid to the trucking company Reduced the pharmacy headcount by two full time

equivalents (FTE)


2014… The year of

MSPB Medicare Spend Per Beneficiary

MA measure in the new Efficiency Domain A claims-based measure that include risk-adjusted and price-standardized payments for all Part A and Part B services provided from 3 days prior to a hospital admission (index admission) through 30 days after the hospital discharge

Measure under VBP starting 2015

M & A Merger and AcquisitionsDeals Hospitals

2010 72 1252011 90 1562012 100 247


2014… The year of

Net Income – includes investments Operating Income- on operationsMedian in 2012 3.15%, California Median 3%

N2013 2014 2015 2016 2017 2018

-3%

-2%

-1%

0%

1%

2%

3%

Operating Income Projections

Projection with no interventions.


2014… The year of

Outpatient- Growth Area Up 2.9% from 2011 OJP Morgan- Revenue growth: in the expansion of outpatient care and in clinical integration leading to value-based care.


2014… The year of

PQRS PQ

The Physician Quality Reporting System (PQRS) has been using incentive payments, and will begin to use payment adjustments in 2015, to encourage eligible health care professionals (EPs) to report on specific quality measures. EPs who do not participate in 2013 and receive a payment adjustment will be paid 1.5% less than the than the Medicare PFS amount for services provided in 2015. Increases to 2% in 2016.

2013 P2014 F2014Measures 258 296 284

Measures Removed N/A 46 45

Also Population Health


2014… The year of

Readmit rate 2015 R

20131%

20142%

20153%

Readmission• 2013- 1% $280M for

2,213 hospitals- Average fine .42%

• 2014- 2% $227M for 2,225 hospitals- Average fine .38%

• Overall readmit rate for Medicare 18.4%(down from 19%)

Adds hip/knee and COPD to programIn FY 15

RAC AuditReference pricingRetail


2014… The year of

Supply ChainRepresent 14% of expenses in California hospitals- second largest category of expenses

S


2014… The year of

Two midnight rule

Starting Oct 2013, CMS introduced the two midnight rule. The final rule for the 2014 Inpatient Prospective Payment System stated an appropriate inpatient admission is when the patient stays in the hospital for at least two midnights.

T


2014… The year

Utilization U

Inpatient grew at -1.5% over 2011And Outpatient grew 2.9%. Inpatient Surgeries declined -2.2%.

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2014… The year ofMedicare Value Based PurchasingAdding 2 new outcome measures for 2015: PSI, CLABSIAdding new efficiency: Medicare Spending per Beneficiary

V

20131%`

20141.25%

20151.5%


2014… The year of

W

W

Workflow

2012 study by former Centers for Medicare and Medicaid Services (CMS) administrator Donald M. Berwick and RAND Corporation analyst Andrew D. Hackbarth estimated waste consumed $476 billion to $992 billion, or 18 percent to 37 percent of healthcare spending.

Waste


2014… The year of

Extra Yellow ZebraYear of the Horse

X YZ


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The ABCs of Healthcare IT for 2014