center for rural health - exploring global budgets …...population health • engage providers...
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ruralhealth.und.edu/research
Exploring Global Budgets and All-Payer Rate Setting Approaches: How Does it
Impact Rural Providers?
AlanaKnudson,PhDRebeccaOran,BA
Welcome to the All-Payer System World
• WhatisanAll-Payersystem?• Healthcaresysteminwhichallinsurersusethe
samefeeschedule• Privateandpublicinsurerspaythesamerate• Uninsuredpaysthesamerate
• Ratesarenegotiatedbyanindependentratecommission
• Providestransparencyofrates• Eliminatescost-shifting2
Value of an All-Payer System
• Costcontainment• Equitablefundingofuncompensatedcare• Stableandpredictablepaymentsystemfor
hospitals• AllpayersfundfairshareofGME• Linkshospitalqualitytopayment
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The Maryland Reimbursement Model
HealthServicesCostReviewCommission(HSCRC),anindependentCommissionwithsevenCommissionersappointedbytheGovernor– Setratesforallpayers,includingMedicareandMedicaid,since1977
– HospitalsmustchargeCommissionapprovedratestoallpayers– otherwiseincursignificantpenalties
Incentive to pursue a new waiver…
• Focusedoncostpercaseconstraint• Eachhospitalwasconstrainedtocase-mix/severityadjust$/case
• A“VolumeAdjustmentSystem”(VAS)limitedincentivestoincreasevolumes--- theVASwasscaledbackandeventuallyremovedin2000
• HospitalsrespondedtotightcostpercasegrowthlimitsandeliminationoftheVASbygreatlyincreasingcasevolumesandotherserviceuse
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Source:MarylandHealthServicesCostReviewCommission
Source:MarylandHealthServicesCostReviewCommission
Source:MarylandHealthServicesCostReviewCommission
Source:Maryland’sAll-PayerGlobalBudgetCapModelandItsImplicationsforProviders,May16,2016
Source:MarylandHealthServicesCostReviewCommission
Source:MarylandHealthServicesCostReviewCommission
Critical Elements for Success
• Developacaremodelthatimprovespopulationhealth
• Engageprovidersbeyondhospitals• Sustainaccesstohospitalsdespiteslowing
payments• SenateBill707:FreestandingMedicalFacilities–
CON,RatesandDefinitions• ExemptionprocessfromCONforconversionofan
underutilizedhospitaltofreestandingemergencymedicalcenter
How is the new model working based on 2014 performance?
Per-personrevenuegrowthreducedto1.47%(3.58%*)Medicaresaved$116McomparedtogrowthintherestoftheU.S.($330M*)
Complications(e.g.,infections)26%(30%*)MedicarereadmissionsmorethanU.S.,butdidnotmeetstategoals(.2%vs1.2%*)
*5-yeargoal
Source:CMSFindSuccessReducingCostGrowth,NEJM,November12,2015
GlobalBudgetMarketImplications
• Acceleratingprovidereffortstoimprovecaredelivery
• Adjustingoperations• Increasingmarketshareispathtogrowth• Collaboratingtoaddresspopulationhealth• Creatingactionable,timelydataholdskeytosuccess
• MarylandAccountabilityandReportingSystem• CRISP
15Source:Maryland’sAll-PayerGlobalBudgetCapModelandItsImplicationsforProviders,May16,2016
Maryland’s Lessons for Other States
• All-payerratesettingsupportsfull-investmentintransformation• Evolutionofsystemovertime
• Maintainingbudgetpredictabilityismotivationforrevenuecaps
• Stateandprovidergoalsincreaseconfidenceinexpectationsandimproveengagement
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Source:Maryland’sAll-PayerGlobalBudgetCapModelandItsImplicationsforProviders,May16,2016
Next Steps for Maryland…
What is Total Patient Revenue?
• Revenueconstraintsystem• Eachhospital’stotalannualrevenueisknownat
thebeginningofeachfiscalyear– Determinedusinghistoricalbaseperiod
• Provideshospitalswithafinancialincentivetomanagetheirresourcesefficientlyandeffectivelyinordertoslowtherateofincreaseinthecostofhealthcare(hospitalandoutpatientservices*)
ØProvidethehighestvalueofcarepossibletothecommunityitserves
Rural Hospital View
• PreferTPR– Ratesaresetatbeginningofyear– Fluctuationsinvolumelessnoticeable
• Verytransparent• Negotiationismorestraight-forwardbasedonformula• HavefoundHSCSCstafftohavea“caringattitude”
– Focusedonreasonablenessofchargesforpatients• Stilldealdirectlywithinsurancecompanies
– Paymentsareverytimely
Shifting from Volume to Value
Morefocusonpopulationhealth– ParticipatinginHSCRCgranttoaddresspopulationhealth
Marylandwaiverincludesqualitymetrics– Changeculture– Addedcommunitycareworkers– Nursingstaffonboardtodocument
NeedtoprovideeducationinternallyandexternallyDataiskey
– CRISP(ChesapeakeRegionalInformationSystemforourPatients)
Words of Wisdom
NeedtobeopentopossibilitiesNosystemisperfectWehavetomakehealthcaresystemmoreefficient– Needtofigureoutawaytoworktogether
Onesystemmaynotbebetterforallprovidersandpayers
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Next Steps for Rural Maryland
• SenateBill707:FreestandingMedicalFacilities– CON,RatesandDefinitions
• ExemptionprocessfromCONforconversionofanunderutilizedhospitaltofreestandingemergencymedicalcenter
• StudyReport– September2017Accesstohealthcareproviderandservices,vulnerablepopulationneeds,transportationlimitations,andeconomicimpactofclosuresorconversions
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Vermont Timeline
• 2011 EstablishedGreenMountainCareBoard• 2013 Set3%targetrateofincreasesfor
hospitalnetpatientrevenue• 2014 ImplementedSharedSavingsPrograms
inMedicaidandcommercialinsurancemarkets
• 2016 NegotiatingwithCMSforanall-payerratesettingmodel
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Commonwealth of Pennsylvania
• Proposaltoimplementamulti-payerglobalbudgetinitiativeinruralPennsylvania• Sixruralhospitalstoparticipateinpilotbyendof
2016;anadditional12toparticipateby2019withthegoalofreaching30ruralhospitalsby2020
• Keyaspects:• Focusonpopulationhealthmanagement• Roleoftelehealth• Value-basedpaymentstrategy
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“Itisimperativethatwedevelopasustainablemodelforruralhealth,notjustforruralhospitals.Ruralcommunitiesfacedifferentchallengesthanurbancounterparts,andourpoliciesshouldsupportlocalinnovationinmeetingtheseneeds.Globalhospitalbudgetingoffersthepotentialtoreformruralhealthcareinalignmentwithbetterpopulationhealth.”
– KarenMurphy,PennsylvaniaSecretaryofHealth
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Source:GlobalBudgetsforRuralHospitals,JoshuaM.Sharfstein,TheMilbankQuarterly,Volume94,Issue2,2016
AlanaKnudson,PhD,DeputyDirectorNORCWalshCenterforRuralHealthAnalysis4350EastWestHighway,Suite700Bethesda,Maryland20814301.634.9326•walshcenter.norc.org• [email protected]
GaryHart,PhD,DirectorCenterforRuralHealthUniversityofNorthDakotaSchoolofMedicine&HealthSciences,Room4909501NorthColumbiaRoad,Stop#9037GrandForks,ND58202-9037701.777.3848• ruralhealth.und.edu• [email protected]
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