Marilyn MHA 3-22-12 the real final by huangyuarong

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									         HFMA 2012 Insurance &
         Reimbursement Update
             March 22, 2012




Marilyn Litka-Klein
Vice President, Health Finance
Michigan Health & Hospital Association
                                         1
                                         1
       Agenda

• Reimbursement Update
  – Medicare
  – Medicaid
• General Finance
• Retro




                         2
3
              Federal Reform – Delivery System

•Hospital marketbasket reduced FY 2010 for ten years ($7 billion in
 Michigan)
•Value-based purchasing
    •FY 2013: devotes 1% of total hospital payments devoted to
    hospital performance; grows to 2% for 2017 and beyond; budget
    neutral
•Bundled payment
    •FY 2013: national, voluntary, 5-year pilot program focused on 10
    conditions
•Accountable Care Organizations
    •FY 2012: allows hospitals, in cooperation with physicians, to form
    ACOs; resulting savings may be shared with providers
•Rehospitalization
    •FY 2013: financial penalties for rehospitalizations above
    “expected” norm for 30-day window (CAHs excluded)
                                                                    4
             What’s at Stake Under VBP?

• Program is self-funded by hospital “contribution”
• Contribution based on Medicare FFS payment*
   – 1.0% reduction in FY 2013
   – Reduction increased by 0.25% each year
   – 2.0% reduction for FY 2017 and beyond
• VBP performance determines P4P amount
• Budget-neutral
   – Redistributive
   – Best performers win, others break even or lose
   – VBP payments are netted against contributions


 * Payment reductions exclude IME, DSH low-volume hospitals and outliers
                                                                           5
                                                                        6

              VBP National Performance Standards – FFY
              2013
   National Benchmarks
    – Highest achievement levels
    – Average performance score for the top 10% of all
      hospitals
   National Thresholds
    – Minimum achievement levels
    – Median performance score for all hospitals
   Established from baseline period data
   Vary by measure:
       Measure                                  Benchmark   Threshold
       AMI-7a - Fibrinolytic Therapy Received
                                                  92%         65%
       Within 30 Minutes of Hospital Arrival
       SCIP-Inf-1 - Prophylactic Antibiotic
       Received Within One Hour Prior to          100%        97%
       Surgical Incision
                                                                                     7


                     VBP Domains

                                   FFY 2013 Program           FFY 2014 Program

                                 Measure         Domain     Measure         Domain
Domain
                                  Count          Weight      Count          Weight

Process of Care                      12           70%           13           45%

HCAHPS                               1                          1
                               (using 8 HCAHPS    30%     (using 8 HCAHPS    30%
(Patient Experience of Care)
                                 dimensions)                dimensions)

Outcomes                            N/A           N/A           3            25%
(Mortality, HACs, AHRQ)

Efficiency                          N/A           N/A          N/A           N/A

Other TBD                           N/A           N/A          N/A           N/A

Totals                               13          100%           17          100%
                                 (2 domains)                (3 domains)
           Recent Medicare Reports & Information

• Outpatient final rule, effective 1/1/12
   • Detail impact by category of payment, soon
• Medicare Revenue Forecast Analysis (2012 – 2021)
   – Lower annual rate updates than projected marketbasket
   – Payment reductions resulting from policies for
     readmissions that exceed a calculated threshold
   – Hospital-acquired conditions and quality-based payment
     changes through a value-based purchasing program




                                                              8
         Anticipated Efficiency Measure – FFY
         2015

• Medicare Spending per Beneficiary
  – ACA requires use of efficiency measures in FFY 2014
    or thereafter
  – Must include total Part A and Part B spending per
    beneficiary
    Must include Medicare spending per beneficiary
  – Must include Medicare spending per beneficiary
    adjusted for age, sex, race, severity, and other factors
    as determined by the Secretary
  – CMS is also considering measures of hospital internal
    efficiency
                                                           9
                                                                        10


         Anticipated Efficiency Measure


Three (3) Days Prior:                                    One
 Pre-op                                              Episode
lab work

Dr.                     Inpatient   Thirty (30) Days
                                    Post:
Visit                     Stay
                                     Dr.        Dr.             Dr.
                                     visit      visit           visit


                                             Rehab

                                                        ED
                                                        Visit
            Concerns with Proposed Efficiency
            Measure

• Does proposal satisfy ACA mandate for a measure of
  “spending per beneficiary?”
• Holds hospitals accountable for all providers’ practice
  patterns
• Should consider future IOM report and proposal for
  Medicare bundling demonstrations
• Methodology cannot be replicated
   – No-one can check/audit CMS’ calculations
   – Industry does not have access to the data
• CMS’ methodology may not adequately adjust for patient
  severity

                                                            11
            ACA Readmission Payment Policy

• Effective October 1, 2012
• Three condition areas to start:
   – Heart failure, heart attack, pneumonia care
• Expansion by October 2014:
   – COPD, CABG, PTCA, other vascular procedures
• May eventually apply to all-payer, all-conditions, all-
  cause readmissions
• Observed-to-expected ratios based on statistical
  analysis and national benchmarks
• Payment penalties for O/E ratios greater than 1

                                                            12
         The Medicare Standard Analytic Files
         (SAFs)

• All Medicare Part A and Part B claims for
  beneficiaries residing in the Hospital Referral
  Cluster (HRC)
• Separate data files for inpatient (includes acute
  and post-acute inpatient), hospital outpatient,
  physicians, SNFs, Home Health, and DME
• Unique beneficiary keys (encrypted)
• Millions of records
• Over 1,000 data fields per record

                                                      13
            Building Episodes

• Load data file and create links and indexes
• Identify all claims, across files, with the same
  beneficiary
• Determine episode timeframe
• Determine and apply exclusions – patient and
  claim level
• Identify readmissions
• Flag episode components
• Sum payment fields within and across files
    Expect to devote significant programming and computing resources   14
Hospitals Need to Turn This:




                               15
                                                                                     Into This:
          Episode                                                                                                                                                 Admit/
                                                                                     Episode Total                                                   Provider
Episode   DRG            Episode ID                Patient Demographics                                      File Type       Provider/Service Type              Treatment   LOS
                                                                                       Payment                                                       Location
  DRG     Description                                                                                                                                              Date
                                      Age         Sex      County          State

  65      Chronic Obstructive Pulmonary Disease
                        1004158871    64      Female        Suffolk       New York     $10,340       Initial Admit           PPS                     330078      4/1/2009    2
                                                                                                     Physician Inpatient     Radiology                           4/2/2009
                                                                                                     Physician Inpatient     General Medicine                    4/3/2009
                                                                                                     DME Non-Inpatient                                          4/13/2009
                                                                                                     FQHC                                                       4/14/2009
                                                                                                     Physician Non-Inpatient General Medicine                   4/17/2009
                                                                                                     Physician Non-Inpatient Cardiology                         4/23/2009
                                                                                                     Physician Non-Inpatient Cardiology                         4/23/2009
                                                                                                     Physician Non-Inpatient Radiology                          4/23/2009
                                                                                                     Physician Non-Inpatient Radiology                          4/23/2009
                                                                                                     Physician Non-Inpatient General Medicine                   4/23/2009
                                                                                                     Physician Non-Inpatient Medical Supplies                   4/23/2009
                                                                                                     Readmission             PPS                     330023     4/23/2009    1
                                                                                                     Physician Inpatient     Cardiology                         4/24/2009
                                                                                                     FQHC                                                       4/27/2009
                                                                                                     FQHC                                                        5/4/2009
                                                                                                     Physician Non-Inpatient Cardiology                          5/6/2009
                                                                                                     DME Non-Inpatient                                          5/13/2009
                                                                                                     Physician Non-Inpatient General Medicine                   5/15/2009
                                                                                                     Physician Non-Inpatient Cardiology                         5/21/2009
                                                                                                     DME Non-Inpatient                                          5/29/2009
                                                                                                     Physician Non-Inpatient General Medicine                    6/3/2009
                                                                                                     Physician Non-Inpatient General Medicine                    6/3/2009
                                                                                                     DME Non-Inpatient                                          6/11/2009
                                                                                                     DME Non-Inpatient                                          6/11/2009
                                                                                                     DME Non-Inpatient                                          6/13/2009
                                                                                                     Physician Non-Inpatient Endocrinology                      6/28/2009
                                                                                                     Physician Non-Inpatient Emergency medicine                 6/28/2009
                                                                                                     Physician Non-Inpatient Radiology                          6/28/2009
                                                                                                     Hospital OPD                                               6/28/2009

                                                                                                                                                                            16
                                  Identify DRGs of Interest
                                         Total Payments vs Coefficient of Variation by Core DRG
                 $4,500,000



                 $4,000,000



                 $3,500,000



                 $3,000,000
                                                                          “Sweet Spot”
Total Payments




                 $2,500,000



                 $2,000,000



                 $1,500,000



                 $1,000,000



                  $500,000



                         $-
                              0     20       40     60     80            100           120   140   160   180   200
                                                                Coefficient of Variation


                                                                                                                     17
          Revised SSI Ratios Available

• Used in Medicare DSH payment calculation.
• Revised FY 2006 -2009 ratios available on CMS
  website:
  http://www.cms.gov/AcuteInpatientPPS/05_dsh.asp.
• Includes dual eligible exhausted and Medicare
  advantage patient days in the Medicare fraction.




                                                     18
          Michigan MAC Transition

• Transition from fiscal intermediary National Government
  Services (NGS) for Pt A and Wisconsin Physician
  Services (WPS) as Pt B carrier.
• Late January 2012 - Award protest by unsuccessful
  bidders – GAO decision confirming WPS as MAC.
• No further information has been released regarding the
  transition.
• MAC will perform Medicare FFS claims processing,
  enrollment, education, provider audits.


                                                           19
            Medicare Reports & Information

•   Proposed Rules (IPPS, OPPS, SNF, IRF, IPF, HHA)
•   Final Rules (IPPS, OPPS, SNF, IRF, IPF, HHA)
•   Hospital Acquired Condition (HAC) Reports
•   Quarterly Value Based Purchasing (VBP)
    –   Quality Indicators
    –   QI Trends
    –   30-day mortality rates (updated annually by CMS)
    –   30-day readmission rates (updated annually by CMS)
    –   HCAHPS
• Recovery Audit Contractor (RAC) Reports
    – 1-day stays
    – Transfers to SNF
                                                             20
                       Projected Impact - FY 2012 Medicare
                       Rules

                          IPPS    OPPS   Rehab   Psych   LTCH     HH    SNF     Projected
                          Final   Prop   Final   Final   Final   Prop   Final    TOTAL
Net Rate Update

Marketbasket Update       134      42     5.4      5      4.2    2.7              193

ACA Productivity Adj      -45     -18     -2      -0.4   -1.6    -1.1              -68

Other ACA Mandated Adj    -4.5    -1.5    -0.2           -0.2                      -6

Coding Adj                -92                                    -5.5              -98

Cancer Hospital/BN Adj             -11                                             -11



Updated Wage Index/508    -119    -33     -1.8    -0.9   -1.7    -1.1             -158
Expiration
Other                      55     16.5    0.7     0.4     0                        72

Statewide                 -73      -5     2.1     4.1     0.7     -5     ?         -76


   (in millions)                                                                        21
             Michigan Medicare Inpatient Margin

                       INPATIENT
      1997                                    2009
20%




10%




0%

                                                     22
          Michigan Medicare Outpatient Margin

                   OUTPATIENT
       1997                               2009
10%




 0%




-10%




-20%
                                                23
         Proposed Rule - Reporting of Medicare
         Overpayments

• Mid-February, CMS released a proposed rule
  regarding self-identified overpayments.
• Report and return overpayments within 60 days
  after the date the overpayment was identified or
  date any corresponding cost report is due.




                                                 24
        Reporting of Overpayments – Cont.

• CMS examples:
  – Duplicate payments by FI
  – Payment for non-covered services
  – Payments exceeding the allowable amount for a
    covered service
  – Payer primary responsibility




                                                    25
         Issues Identified to Date

• Would errors by claims processors be attributed
  to hospitals?
• Cost report reopening extended from 3 years to
  10 years to correspond with proposed time
  frame for returning overpayments.
• MHA reviewing proposed rule and will provide
  draft comments prior to 4/16 deadline.



                                                   26
          Medicare Advantage Plans

• As of January 2012, 29 plans in Michigan, with 415,000
  or approximately 24% of Michigan’s 1.7 million Medicare
  beneficiaries enrolled
   – Up to 19 plans in some counties
• Review MA payment rate for all plans
• CAH entitled to Medicare cost reimbursement
• Each MA plan may determine own utilization model and
  is not required to maintain electronic transactions
• Many MA have instituted “RAC-like” utilization programs
• Matrix of MA plans by county available at MHA website –
  updated quarterly, with MHA Monday Report article
   – See Feb. 6 Monday Report for latest info           27
          Other Items on Horizon

• Federal pension and health benefits $275M in
  2010, up from $176 M in 2000
   – 2/3 Pension, 1/3 Medical Benefits
• These retirement programs have $5.7 Trillion
  unfunded liability, Social Security is $6.5 Trillion




                                                         28
          Auto No Fault

• Discussions continue with governor’s office and
  insurance industry
• MHA opposes implementation of lifetime limits on total
  benefits
• MHA opposes potential move to fee screen
  reimbursement
   – worker’s comp has been discussed
• No guarantee for reduced auto insurance
  premiums

                                                           29
         Michigan Politics

• Government Budget – desire for quick adoption
  – House & Senate, and their leadership, do not always
    follow party direction
• All Mi House members up for re-election - 62 R,
  46 D
• US House 14 seats, currently 9 R, 6 D
  – MI leadership with Camp & Upton
• Supreme Court
• Why is this important?
                                                          30
         Michigan Politics – Cont.

• Insurance industry & “public” desired changes to
  no-fault
  – But no promise of lower auto insurance premiums
• Medicaid consumes too much of budget
  – But hospital tax funds majority of hospital payments
• Concern that GME residents leave state after
  training
  – Failed to recognize source of future doctors
  – Failed to recognize care provided to Michigan
    residents
                                                           31
         Legislators Responds to Constituents


• E-mail letters/analyses
• MHA is your voice in Lansing and D.C.
• But, legislators prefer to respond to constituents
• Only contact from MHA – “Is this really what my
  constituents want?”




                                                    32
        FY 2013 Budget

• Executive budget recommendations released by
  Governor Snyder Feb 9

• Recent testimony – House Appropriations
  Subcommittee

• Deliberations began this week in Senate



                                             33
        FY 2013 Medicaid Budget

• Funds current enrollment
• Additional $17 million cut to GME, increasing
  the total cut to $32 million from FY 2011
• Elimination of $29.5 million Rural/SCH pool
• Concurrent work by House & Senate




                                                  34
         Statewide DRG Rate

• Hospital workgroup provided input July 2011
• February 11 MSA provided a concept paper
  regarding the move to a statewide DRG rate with
  adjustments for teaching, outliers and wage index
• MHA and hospitals to provide additional input
• Earliest implementation Jan 1, 2013




                                                      35
         DSH Audits

• Beginning with audits of FY 2011 DSH
  payments, hospitals subject to DSH recoveries if
  DSH payments exceeded actual DSH room
• DSH concept paper reviewed would update
  state calculation with more recent CR
• Hospitals desire to review MSA date before DSH
  payments made



                                                 36
        Integrated Care – Dual Eligibles

• Michigan is one of 15 states
• Approximately 200,000 individuals
• $8 billion total, split 50/50 Medicare/Medicaid
• MDCH Draft plan released 3/5, comments due 4/4
• March 12 Monday Report article, March 19
  Advisory Bulletin
• Public forums 3/29 Detroit
• Michigan split into 3 geographic regions
• Implementation July 2013 – June 2014

                                                    37
         MDCH Draft Plan Released

• Draft plan includes two contracts which would
  coordinate beneficiary care:
  – Existing prepaid inpatient health plans (PIHPs) for
    behavioral health services.
  – Integrated care organization (ICOs) for physical
    health services.
• Michigan split into 3 geographic regions.
• Implementation July 2013 – June 2014.

                                                          38
          Draft Plan - Issues

• No guarantee of Medicare payment rates.
• Separate contracts with the PIHP & the ICO are
  proposed
   – both required to “coordinate” care, with neither
     ultimately responsible for care of the individual.
• Reporting and payments for Medicare bad debts, DSH
  and 340 (b) drug pricing unresolved.
• ICOs would negotiate innovative reimbursement
  arrangements with providers.
• No clear direction provided on utilization management,
  including inpatient versus observation status.
                                                           39
         HMOs & Observation

• Some HMOs have issued policy change that
  stays less than 24 hours for patients meeting
  inpatient criteria will be paid as observation
• Recent MHA meeting with MAHP to review this
  issue
• Future meetings with MSA




                                                   40
         Medicaid Interim Payments

• MSA evaluating the continuation of interim
  payments (MIP) based on recommendation from
  a recent Michigan auditor general report.

• MSA will convene a smaller workgroup to obtain
  input and will complete its review by September.




                                                 41
         Bridges / Eligibility Issues

• MHA Feb. 28 letter to Steve Fitton focused on:
  – Delays in Medicaid eligibility resulting in
    significant increases in hospital A/R
  – Resumption of Bridges Workgroup Meetings
  – Ability of hospital contractors to have outstation
    DHS workers
• Meeting at MDCH & MDHS early April



                                                         42
        Bridges Issues - Cont.

• Directors of MDCH and MDHS meeting
  with MHA leadership in early April.

• Please email me if your hospital is
  experiencing significant delays in Medicaid
  eligibility due to Bridges issues.



                                            43
                                       Michigan Hospital Margins
                                              (2001-2010)
8%                                                                      7.2%


6%                                        4.9%       5.2%
                                                               4.9%

                                                                                                               4.9%
4%

         2.2%                   2.4%                                       3.4%
                        1.8%                        3.0%                                       1.9%           2.8%
2%                                        2.8%
                                                               2.4%                 1.9%
                   1.6%         1.7%
      1.4%                                                                        0.8%
0%                                                                                                  -0.3%


-2%                                                    -1.6%              -1.5%
                                          -1.8%                                                              -1.6%
                                                                -2.6%                         -2.6%
                -3.0%                                                                -2.8%
-4%   -3.3%                    -3.2%
       2001         2002       2003      2004       2005       2006       2007      2008     2009           2010

                                   Patient Margin           Operating Margin         Total Margin



  Source: 2010 American Hospital Association Annual Survey of Hospitals                                      44
6.0%
                                      Michigan and National                                                           5.5%


5.0%                               Operating Margin (2001-2010)
                                                                                        4.3%                4.4%
                                                                         4.0%
4.0%                     3.7%                                  3.7%
                                                 3.6%                             3.4%
                                   3.3%                                                           3.3%
                                                        3.0%
3.0%       2.7%                           2.8%                                                                     2.8%
                                                                      2.4%
                                                                                               1.9%      1.9%
2.0%              1.6%          1.7%
       1.4%

1.0%


0.0%
         2001       2002         2003       2004          2005         2006         2007        2008      2009      2010


                                                        Michigan             National




       Source: 2010 American Hospital Association Annual Survey of Hospitals                                          45
46
                  Health Plans by Enrollment


            Five Largest Plans by Enrollment in Michigan
Health Plan                          Enrollment             Market Share (%)
BCBSM                                 4,500,000                      59
Priority Health                        500,000                       7
Health Alliance Plan of MI             480,000                       6
AETNA Health Inc.                      340,000                       4
Health Plan of Michigan                210,000                       3


Source: AIS’s Directory of Health Plans: 2010
Methodology: Market share = % of total medical enrollment reported in MI




                                                                               47
                     Medicare
                                                           Enrollment
                 Fee-for-service                            1,670,000
                 29 Medicare Advantage Plans in Michigan      408,000
                 (showing 10 largest below)
                 BCBSM                                        190,000
                 Priority Health                               57,000
                 Blue Care Network                             43,000
                 Humana                                        40,000
                 Health Alliance Plan                          39,000
                 Health Plus of MI                             15,000
                 United Healthcare                              8,000
                 Molina Healthcare                              7,500
                 Alliance                                       3,800
                 Paramount Care of MI                           1,500
                                                                        48
*Enrollment as of Nov. 2011
                     Medicaid
                                        Enrollment
                 Fee-for-service           714,000
                 Health Plan of MI         283,000
                 United Healthcare         239,000
                 Molina Healthcare         209,000
                 McLaren Health Plan        76,000
                 Midwest Health Plan        73,000
                 Health Plus of MI          68,000
                 Priority Health            64,000
                 Total Health Care          52,000
                 OmniCare Health Plan       47,000
                 CareSource MI              34,000
                 UP Health Plan             29,000
                 BlueCaid of MI             19,000
                 PHP of Mid-Michigan        18,000   49
*Enrollment as of Sept. 2011
              MHA Keystone Center Michigan
              Collaboratives
                  Collaborative                  Participating Hospitals

Keystone: ICU - 2003                                       77

Keystone: Hospital-Associated Infection - 2007            120

Keystone: Surgery - 2007                                  104

Keystone: Obstetrics - 2009                                60

Keystone: Gift of Life - 2004                              76

Keystone: Emergency Department - 2010                      66

MI STA*AR (Rehospitalization Project) - 2009               27


 50
     The World is Watching




51
                              Keystone ICU Outcomes
                  CLABSI Rate Per 1,000 Central Line Days
     3.50
     3.00
     2.50
Axis Title




     2.00
     1.50
     1.00
     0.50
     0.00




                                                                   VAP Rate Per 1,000 Ventilator Days
                                                            6.00

                                                            5.00

                                                            4.00

                                                            3.00

                                                            2.00

                                                            1.00

                                                            0.00


             52
             Keystone: Obstetrics

• Interventions
     – Pitocin protocol
     – 39 week induction
     – Second stage labor management
     – CUSP




53
                                               OB Pilot Results
            % Elective Inductions < 39 wks                                                                                            •% Elective Cesarean Births < 39 wks
                                                                                                                                                    n =5,131
25          n = 20,574                                                                               25
                                                                                                                    23.8

20         20.57                                                                                     20
                                                                                                                             17.6                        17.9

15                                                                                                   15                                       14.9
                                                13.15                                                                                                                             11.9
                                                        10.91                                        10                                                           9.7      10.2
10                 9.41                 9.56                                                                                         8.9                                                 8.6
                                                                   8.56
                                                                                            7.26                                                                                                     6.8
                          6.25   6.45                                                                                                                                                                      5.9
                                                                            5.75                      5
 5
                                                                                     4.1
                                                                                                      0
 0
                                                                                                             Jan          Feb March April May                  June     July August Sept       Oct     Nov
     Jan     Feb March April May          June       July August Sept          Oct        Nov
       •Change of 14.99% to 5.68% (Jan/Feb to Oct/Nov)                                                                    •Change of 20.07% to 6.35% (Jan/Feb to Oct/Nov)
         Significant (p = .008) Percent change -62.1%                                                                       Significant (p = .003) Percent change -69.23%

                                                                                    Apgar Scores <7 at 5 min
                                 1.4
                                 1.2           1.2
                                   1                                               0.99
                                                           0.94
                                 0.8                                 0.82                   0.84                                           0.82
                                                                                                                    0.7                                 0.67
                                 0.6                                                                  0.62
                                 0.4                                                                                          0.42                                0.37
                                 0.2
                                   0
                                         Jan         Feb      March         April         May      June      July         August     Sept         Oct          Nov
                                                                  Change of 1.07% to 0.51% (170 of 26, 758 babies)
       54                                                          Percent change -51.4% (Jan/Feb to Oct/Nov)
                                                                                         •
             Urinary Tract Infection Prevention

     One simple intervention, no special equipment, fewer
     patients at risk …

         Hospital        Number of Patients   Estimated Savings
                          no longer at Risk

     Dickinson County           90                 $90,866
     Healthcare System


     Marquette General          173               $174,199
      Health System




55
Future Role of MHA




           “Convener Role”
                        56
                  State Hospital Association Role
                              Hospitals
                          Governing Boards / Staff
                          Patients & Communities


     Clinicians                                      Legislators/Government

                                 Quality


                              State Hospital
                               Association:
                               Facilitation /
                              Collaboration


                             Patient Safety

57
     Employers                                              Payers/Insurers
Unity Bond Slide




                   58
         Sell your message

• Great excel analysis, but not flexible for
  alternatives
• Capture info for memo/PowerPoint
   – Reduce rework, add value for financial analyst in
     original “design” phase
• Only one chance to make good impression
  “noise” on page, too technical, use white space



                                                     59
         Networking – What it Means to You

• Counterparts at other hospital associations
• Competitive nationally for Medicare
• Learn, improve from sharing good/bad
• Same benefits of HFMA – but it takes a personal
  connection




                                                60
RETRO Section




                61
         MHA Information Evolution

• MHA Monday Report mailed to CEO
• MHA Electronic copy to CEO, available to staff
  with “authorization”
• MHA MR available to members with electronic
  contact
• Electronic delivery of analysis to; CEO, CFO,
  Reimbursement Director, CMO, Quality,
  Utilization, Government Relations

                                                   62
                     Rising Costs


 Employee contributions at $1,274, up from
  $1,186 in 2000 and $1,055 in 1996
 CALPERS institutes $5/$15/$30 co-pymts for
  generic/approved/other Rx



  Source:NYT 52501

                                          63
             Health Insurance Premiums

• Employees at small firms with deductibles > $1,000
   – 2011 50%, 2006 16%
• At large firms
   – 2011 22%, 2006            6%


• Premiums paid by workers have risen 131% from 2001
  to 2011 for family plans



  Source: Kaiser Family Foundation
                                                       64
          Survey 9/27/11 Release
            Options

• Hospitals are the largest employers in Michigan
   – Any efforts to improve health will have ripple effect to families
     and eventually other industries

• Consider impact of food services on employees, patients
  and visitors




                                                                         65
                Operating Room: Operational
                Improvements

       • Most efficient ORs start on time 76%
       • Average OR starts on time – 27%
       • Improving start time can:
           – Improve revenue
           – Reduce cost
           – Improve patient satisfaction
           – Improve physician satisfaction

Source: HFMA Executive Roundtable               66
         Health Care Expenses

• University of Michigan employees initiatives
  – Focus on Diabetes - free or low-cost drugs and
    testing to 2,000 participants
  – Focus on Medicine – use of generics and pill splitting
     • Target adults with 9 or more current Rx




                                                         67
             The Young & Uninsured

• From 2000-2003, the number of uninsured Americans under 65
  increased by 5.1 million to 45 million
• About 60% of uninsured adults from 2000-2003 were between the
  ages of 19 and 34.
• By not paying into the insurance pool, this group is depriving the
  system of much needed funds.
• From 2000-2003, the number of 19-34 year olds with employer-
  sponsored health coverage fell by 6 million, the sharpest decline
  among non-elderly adults.
• Some reasons for the lack of benefits in this group:
    – More adults are self-employed or working at smaller firms
    – More adults are opting for temporary or part time work.


• Source: Star Tribune, 3/13/05
                                                                       68
          Uninsured

• Solidly middle-class people are the fastest growing
  categories
• One-third of uninsured, 17 million, have family incomes
  of $40,000 or more
• Two-thirds have at least one full-time worker




                                                            69
          Uninsured Real Estate

• 50 year old real estate agent, earning $60,000 annually
• Current cancer survivor – individual coverage $27,000
  annually, $5,000 annual deductible
• 28% of 1.3 million realtors are uninsured




                                                            70
Vital Signs




              71
Monthly Benefit Amount




                         72
         The Big 3

• GM, Ford, Chrysler
  – Shrinking workforce, increased health care coverage
    is threatening their financial viability and market
    competitiveness
• Medicare, Medicaid and Blue Cross
  – Inadequate reimbursement rates, coupled with rising
    health care needs threaten the financial viability of
    hospitals



                                                            73
       The Big 3 - Cont


• Improve eating habits, increased activity
  levels, adding water to diet for all individuals
  will improve health status of nation and
  reduce pressures on payors, employers and
  providers




                                                     74
What Can You Do?




                   75
         Apple

• Ownership of IPod, Iphone, Ipad (and how many
  different versions)
• What are they? Phone manufacture?
  – Tablet innovator? Music sales? Booksellers
• Devices for others to make money
• Generate jobs in U.S.
  – But criticism for their outsourcing
• $100 B cash, $33 B after tax profit
                                                 76
               8 Categories of Waste

• Overproduction
• Waiting
• Excess motion
• Transport
• Over processing
• Unnecessary inventory
• Defects/errors/re-works
• Under utilized people
Source: HFMA
                                       77
QUESTIONS?




Marilyn Litka-Klein | Vice President, Health Finance
Michigan Health & Hospital Association
Capitol Advocacy Center
110 West Michigan Avenue, Ste. 1200 | Lansing, MI 48933
mklein@mha.org
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517-703-8603

								
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