HFMA
March 10, 2011
“Toward a Business Strategy in Era of Health
Care Reform”
Howard Gold, Senior Vice President, Managed Care &
Business Development
North Shore-LIJ Health System
Key NS-LIJ Health System Statistics
• Economic Impact
• Facilities
 $6.0 billion in yearly revenue
 38,000 workforce - the largest employer on
Long Island and the ninth largest in New
York City
 7,500 physicians; Over 1,800 faculty
 9,500 nurses
 1,230 medical residents:
Over 90 residency programs
800 medical school rotations
 1,150 nursing students
 Research Institute with $45 million in grants
800 scientists, investigators and staff
 13 owned/sponsored hospitals (4,344 beds*)
3 Tertiary
8 Community
1 Children’s
1 Psychiatric
 1 affiliate hospital; 1 clinical affiliate hospital
 2 owned long-term care facilities (376 beds*)
 16 affiliated long-term care facilities
 Centers of Innovation
 Centers of Progressive Care
2009 Operating Statistics
 560,000 emergency visits
 21,500 babies delivered
 567,100 home health visits
 248,600 hospital discharges
 67,108 ambulance transports
 110,700 ambulatory surgeries
 30.3% service area market share**  13.5% NY metro region market share
2
NS-LIJ Health System Hospitals
Manhattan
Suffolk
Children’s Hospital
of NS-LIJ
Staten
Island
Queens
Nassau
Brooklyn
3
Framing Statements
Three business models have been used to control costs and
rationalize health care delivery… two haven’t worked…third is
just emerging:
1.
Rate and Capital Regulation: State Government command and
control model – 1980s – DEREGULATED linkage of Medicaid rate
setting to commercial insurance.
2.
Managed Care Rationing: 1990s – 2000s FAILED: Focus on
3.
Marketplace in the Age of Reform: 2010-2020 UNCERTAINTY
per unit price, denials and utilization controls lead to the “indemnity”
style networks and overutilization. No behavioral changes by payers,
providers or consumers. Exponential increases in price and total
expense.
Marketplace in Age of Reform:
Emerging Drivers
•
•
•
•
•
Not all stakeholders will survive
Federal government control will increase and so will taxes
Downward cost pressure from all sectors
More coverage and greater demand for services
Payers and consumers will demand value, efficiency, wellness, and
evidence of quality.
• Greater consolidation among providers and purchasing groups. More
community physicians look for ways to align with large Health
Systems and multiple specialty physician super-groups.
• New emphasis on linking clinical performance with payments.
• Consumer choice of high value providers and insurance products at
lower cost may replace consumer choice of open access and all
inclusive networks.
Becoming a High Value Provider presents
significant challenges to large and diverse
Health Systems and National Payers
• Service and resource variations exist among facilities and physicians.
• Evidence-based medicine is in its infancy.
• Few standardized protocols and methods have been accepted to
measure and monitor physician and hospital practice patterns.
• Non-alignment of clinical and financial interests between and among
hospitals, physicians and payers.
• Requires infrastructure to access and share information.
• Provider reimbursement is not based on wellness, consumer health,
quality or service excellence.
• Difficult to achieve real value without coordination of services across
the life continuum and assured easy access for populations and
individual patients.
Becoming a High Value Provider …Cont’d
• Federal and State statutes and regulations disallow providers across the
continuum and payers from working together in this way except in very
specific instances:
–
–
–
–
Ownership
Employment
Risk Contracting
Clinical Integration
• Must establish mechanism to legally, politically and organizationally
pay System hospitals, affiliates, employed and voluntary physicians for
doing better.
• Share clinical benchmarks and pay providers for improving performance
and coordinating referrals data; before, during and after hospitalization.
The Road we are Traveling
NSLIJ Strategies to Integrate the
Continuum of Care
1.
Transforming the Healthcare Delivery Model: Measuring Clinical
Practice
•
•
•
•
•
2.
Patient Safety
Mortality and Morbidity
Standardization and Reliability/Consistency
Efficiency and Coordination of Care
Appropriate intervention across the continuum: disease prevention, health
promotion, and chronic condition management.
Transforming the Compensation Model: Clinical and Financial
Integration
•
•
•
•
•
IPA and sub-networks
Aligning hospitals, physicians, consumer/patient and payer incentives
Risk/Reward, P4P and package pricing contracts
Partnering with payers for aligned products
Managing care
Clinical Integration,“ACO” and High Value
Provider
Clinical Advisory
Group
•Consumers
•Employers
Clinical Integration
/ ACO
Compensation
Models
•Unions
•NSLIJ Hospitals,
Affiliates and IPA
Membership
•Quality Outcomes
•FFS
•Patient Satisfaction
•Shared Risk
• Smaller
manageable subnetworks
•Evidence-Based
Medicine
•Global/Bundled Payments
•Align Financial
and Clinical
Incentives Among
Members
•Monitoring and
Benchmarking
Service Delivery
•Payers
•Efficient Utilization
•Customized Disease
and Health
Management Reports
•More Affordable Care
•Population Health
•Disease Management
•Global Budgets
•Single Source Funding
•Capitation/Sub-Capitation
•P4P
•Retail Customers
•Government
NSLIJ Employee Health Benefits:
3 Prong Experiment in Clinical and
Financial Integration
1.
Measure and manage efficiency, effectiveness and quality
2.
Redesign benefit and product offerings.
3.
Focus on workforce health and wellness.