Chesapeake Regional Healthcare College Bowl Case Study 2016

...where history meets innovation ...

Presented By: Sumrite Prashar, Rebecca Stevenson, Paige Bathersfield, Yolanda Jenkins (Alternate)

Mission: ...will improve the health and well-being of the communities served.

Vision: ...will be the preferred integrated healthcare delivery system, coordinating the provision of a full range of safe, high-quality, affordable and personalized health care services.

Values:

❖  Service: We put service first for our patients, their families and all who work here.

❖  Dignity: We treat each other with dignity and value the ideas and perspectives each individual brings.

❖  Excellence: We advance health through the continuous pursuit of evidence-based, coordinated care.

❖  Justice: We are open, honest and trustworthy. We live our values.

❖  Innovation: We will embrace new ideas and thinking to improve what we do.

Chesapeake Regional Healthcare

❖  Strong Commitment to community

❖  Market leader (24%)

❖  Independent/stand-alone (1-6 in VA)

❖  Strong Physician communication

❖  Short-term financial stability

❖  Quality of care issue

❖  Waiting times

❖  Steady Erosion of Inpatient/Out Patients Services

❖  Under Distribution of Specialities

❖  Worse than Average Under National Revenue

❖  Increased Competition

❖  Long-term financial stability

❖  Virginia not expanding medicaid

❖  Merge

❖  Status on COPN

Strength: S

❖  Interoperability

❖  5-year population increase

❖  Bayview Physician Group

❖  Expand Delivery of Care

❖  Vertical Integration of Care

Opportunities:

O

W Weaknesses:

T Threat:

Situational Analysis:

BASED ON OUR SWOT ANALYSIS THERE ARE THREE KEY STRATEGIC ISSUES IN WHICH C.R.H. SHOULD ADDRESS TO REMAIN AN

INDEPENDENT STAND ALONE HOSPITAL:

❖ LONG TERM FINANCIAL STABILITY

■  QUALITY PERFORMANCE TRANSPARENCY

■  MAINTAINING COST CUTS AND INCREASE REVENUE

■  EXPAND DELIVERY OF CARE

Our Outlook is Stable Only If We Plan for Tomorrow, Today...

Maintaining Cost Cutting Measures, Optimizing the Revenue Cycle

Quality Redesign

Quality Improvement, Culture Change, Hospital Physician Alignment

Invest in Real Estate

Access to Community Health, Support Capital Spending

How do we address these issues? Our Strategy: The Three R’s

CRMC Where History Meets Innovation

Operational Restructuring

●  In 2013 One-Third (31 of 88) of Virginia’s acute care hospitals operated in the red. ●  Nearly half (17 of 37) of Virginia’s rural hospitals had negative operating margins that year.

●  In 2015 and 2016 Virginia hospitals will face nearly $1 billion in combined cuts to Medicaid and

Medicare payments for care already provided.

VIRGINIA’S HOSPITALS

Financial Performance Where We Are:

❖  A2 Bond Rating ❖  Strong balance sheet ❖  Low debt position- strong liquidity and debt

coverage ratios ❖  Improvement in operating performance that

exceeded budget ❖  Increased expenses related to information

technology system installation(EPIC) in FY 2014.

❖  Operates in High Competitive Market ➢  23.5%Market Share

➢  Operating w/ 279 days of Cash on Hand

❖  284% cash-to-direct debt ($68.4 million of total direct debt outstanding

What Do We Need To Be Doing? ❖  Focus on financial flexibility and

stability by emphasis on strategic capital projects and transformation initiatives.

❖  Maintain a long term financial stability

❖  Financial transformation starts with quality improvement and transparency

Chesapeake Regional’s Quality Redesign

NOW…

❖  40 % of our patients are Medicare Patients ❖  Increase Senior (65+) population over 5 yrs ❖  .98 cents/dollar reimburse for every medicare

patient ❖  Loss reimbursement in HRRP, HVBP and

HCAHPS due to poor Quality Metrics ❖  Underperforming and Under-Serving our

Population Health

We get reimbursements from our Hospital Consumer Assessment of Healthcare Providers and Systems(HCAHPS), Medicare’s Readmissions Reduction, and Hospital Value-Purchasing Program

69% 71% 69%

70% 79%

63%

Chesapeake Regional’s Quality Redesign

PROBLEM... We cannot address these issues until we get on board with Quality Redesign GOAL: Establish CRH as the Primary Provider for Virginia’s Population Health Through Quality Measures, Provide Systematic Integration throughout all inpatient and outpatient facilities, Improve Patient Satisfaction in all areas of care to create a culture of excellence in patient experience and be recognized for performing How: BE TRANSPARENT by utilizing benchmarks will expose internal weaknesses that can cripple our stand alone status

❖  Establish Balanced ScoreCard and Benchmarks using Six IOM ( Safe, Effective, Efficient, Timely, Patient Centered Care and Equitable)

❖  Make available/Display to staff and patients ❖  Through performing internal audits quarterly ❖  Employee (physician & staff) & patient Satisfaction needs to be measured-surveys

Implement: Initiate a 3- year Plan for Improvement

Quality Redesign Strategy Quality Improvement:

Example: ❖  Improve quality in all five areas: Acute

myocardial infarction (AMI), Heart failure (HF), Pneumonia (PN), and Hip and Knee, COPD

❖  Chesapeake Hospital Value-Based Purchasing (HVBP) – Efficiency Scores ➢  Rewards acute care hospitals with

incentive payments ➢  Measured by hospital performance/

improvement against self/others

CHESAPEAKE REGIONAL HEALTHCARE

SPACE FOR CHART

HVBP PATIENT EXPERIENCE DOMINATE SCORE

Chesapeake Regional Healthcare

SCORE NOW

1 YEAR Projected

2 YEAR Projected

3 YEAR Projected

Communication with Nurses Dimension Score

0 2 4 6

Communication about Medicines Dimension Score

2 4 6 8

Cleanliness and Quietness of Hospital Dimension Score

2 4 6 8

Communication with Doctor Dimension Score

2 4 6 8

Overall Rating of Hospital Improvement

0 2 4 6

Consistency Score 18 20 22 24

Our goal is to increase our score by 2 points over 3yrs

Chesapeake Regional Hospital Example Balance Scorecard

●  Achieve scores on HCAHPS better than the national average.

●  Activity engage staff, patient,families, & all supporting personnel in the drive for excellence service

●  Implement training program for the staff to emphasize the importance of patient satisfaction and address the deficiencies currently shown in the HCAHPS

●  Achieve scores on HCAHPS better than Virginia average by 5% or more

●  Streamline our delivery care towards a patient centered care focus

●  Align with physicians and payers through an ACO’s/Medical Groups

●  Align physician rewards /recognition with participation in quality/patient initiatives

●  Change Culture and a create Physician and Nurse Champions

●  Ensure new hires are properly trained in patient service

❖  2-year

❖  1-year-

●  By in from Physicians and Nurses

●  Address Culture, Learning Organization-open to feedback

●  Improve scores on HCAHPS to be inline or better than Virginia

●  Implementation of collaborative care improvement

●  Education patient on medication and coordinating follow-up care

●  Re-engineering hospital discharges/ED Visits

Quality Redesign Strategy 3-Year Plan Initiative Improve the Continuum of Care

❖  3-year

❖  1-year

Increasing Revenue & Decreasing Costs

Increasing Patient Volume & Social Media

●  41% of healthcare consumers said social media would affect their choice of a specific doctor, hospital, or medical facility. Source: Demi & Cooper Advertising and DC Interactive Group

●  Earning positive reviews and controlling negative reviews is invaluable to our brand ●  While we have a presence on Facebook, CRH has virtually no presence on review sites such as

Google Reviews and Yelp

Missed opportunity to show patient we care about their experience

Missed opportunity to thank patient for review

Increasing Patient Volume & Social Media

●  Great tool to see what people are openly saying about CRH and our competitors

●  Untapped strategy within our Primary

Service Area

Optimizing Revenue Cycle: Key Trends

It is estimated that 1-3% of Net Revenue Loss is due to third-party claim discrepancies

Patients are now responsible for 30% to 35% of their medical bills

Medicare patients typically pay 20% of their medical bills Fifty-two percent of patients report they would pay from $200 to $500 or more by credit or debit

card when they visit a physician, if an estimate was provided at the point of care

Thirty-seven percent of people do not pay due to lack of financing options

●  Complete and Accurate Medical Documentation

●  Complete and Accurate Coding

●  Complete and Accurate Records of Services Provided

❖  1-year-

●  Complete and Accurate Patient Demographic Information

●  Complete and Accurate Payor Information

●  All front desk staff thoroughly understand their role in capturing revenue

●  Financial options are made clear at each point of service

Front- End

Middle

Back-End

●  Optimal Billing

●  Innovative Underpayment Tracking

●  Denial Management

●  100% Collections

Revenue Cycle

Strategy to Maximize Revenue Collection

Extend Revenue Cycle Management outsourcing contract with MediRevv

to include more than Self Pay Management

Implement Internal Front Desk Point of Service Training

Evaluate Training Effectiveness

Measure Increase in Cash Collections in the next year

Projected Impact

Reduced Bad Debt

Approximately $3 - 9 Million Increase in Cash Collections (1- 3% of Net Patient Revenue)

3 mo

1 yr

Patient Registration

POS Payment

Insurance Plans/FA

Cash Collection

Expenditures Benchmarked Against Peers

Strategies To Maintain Cost Cutting Initiatives

●  Ensure optimal staff ratios by utilizing

Information Technology and Multiple Regression Model

●  Implement a Predictive Inventory Management

Program across the entire system

Decrease Emergency Room Overuse

ED Overuse- Federal Law Requires Hospitals to Treat All

Patients

❖  ED overuse is the 4th largest category of waste ❖  % of adults visiting the ER depts didn’t change

significantly after the ACA went into effect. ➢  ER visits increased causing increased wait times,

and patient dissatisfaction. ■  National ED wait time: 338 minutes ■  CRMC wait time: 318 minutes

❖  A large portion of ED visits fall into the category of

avoidable use resulting from patients seeking non-urgent care or ED care for conditions that could have been treated and/or prevented by prior primary care.

❖  CRMC ED volume is considered very high at 60,000+

patients annually.

Revenues (Cash In)

Expenses (Cash Out)

Operating Income Chesapeake Community Urgent

Care ...A ministry for the community

Revenue Drivers That Directly

Affect UCC ●  SiteLoca+onandCapacity●  ProductsandServicesOffered●  FeeSchedule●  NumberofPhysicians/

Providers●  Hours/DaysofOpera+on●  PayerMix●  Pa+entMix●  Seasonal

UCC Fees (# pt * Av Charge)

Pt Refunds

Contractual Allowance

Bad Debt Exp.

UCC Rev + Other Income = Net Rev

●  Salaries, Wages, & Benefits

●  Billing & Management Fees

●  Rent and Maintenance

●  Medical & Office Supplies

●  Administrative Overhead

●  Professional Services

●  Depreciation

/ Non-Operating

Income and Expenses

Net Income

Chesapeake Regional Healthcare ED

Projected Increase for CRH ED Use

60,000+

79,500

94,500+

Chesapeake Community Urgent Care ❖  Opening range is between $800,000 to $1

million if you are starting from nothing.

➢  That should cover startup costs as well as three months of operating expenses until you start receiving reimbursements from payers.

➢  $1 million or less, can typically be secured at a local bank.

Potential Impact on Chesapeake Regional

❖ Wait times will decrease

❖ Patient Satisfaction Increase

❖ ER can be cleared up with all the non-urgent patients triaged to the urgent care.

❖ ED overuse costs will decrease

Year Summary of Activity

Quality Improvement: Set Benchmarks, Increase our ratio and scores by 10% Operational Restructuring: Effectively train front desk staff in point of service copay and deductible collection and expand Revenue Cycle Management (RCM) contract with MediRevv Expansion: Start strategic and logistical planning of opening an UCC

Quality Improvement: Increase our ration and rating scores 20% Operational Restructuring: Collect 100% of Accountables Receivables and maintain cost cutting initiatives Expansion: Secure funding for UCC by obtaining a loan of $1 million

Quality Improvement: Increase our ratio and scores by 30% Operational Restructuring: Return Revenue Cycle Management (RCM) in house Expansion: Start UCC construction/rental retail property funded by loan

Strategic Action Plan Focus by Year

References

http://www.beckershospitalreview.com/lists/25-things-to-know-about-urgent-care.html http://archive.ahrq.gov/data/safetynet/needleman.htm http://www.hhnmag.com/articles/5005-the-great-migration https://www.ahd.com/free_profile/490120/Chesapeake_Regional_Medical_Center/Chesapeake/Virginia/ https://www.google.com/maps/dir/Chesapeake+Regional+Healthcare,+North+Battlefield+Boulevard,+Chesapeake,+VA/Sentara+Norfolk+General

+Hospital,+600+Gresham+Dr,+Norfolk,+VA+23507/@36.8010197,-76.3559037,12z/data=!3m1!4b1!4m13!4m12!1m5!1m1!1s0x89babb6646f815ab:0x9feb836f7e417112!2m2!1d-76.246286!2d36.746035!1m5!1m1!1s0x89ba98683da05807:0x6f567b83f6481cd!2m2!1d-76.3035819!2d36.8621034

http://www.vdh.state.va.us/HealthStats/documents/2010/pdfs/VDHS13.pdf

http://www.vdh.state.va.us/OEMS/Files_page/Trends/Trauma_Demographics.pdf http://www.vhi.org/hguide_communityhospitals.asp

http://vaperforms.virginia.gov/Trends/indicatorTrends.php https://www.ahd.com/free_profile/490120/Chesapeake_Regional_Medical_Center/Chesapeake/Virginia/

http://www.vhi.org/hguide_introduction.asp http://www.vhi.org/hguide_communityhospitals.asp

http://www.vhi.org/cardiac_compare_result.asp

http://www.vhi.org/hospital_detail_print.asp?Fac_Numb=8033 http://www.vhi.org/General%20Info%C2%A0Chesapeake%20Regional%20Medical%20Center.html?fr=&?=h8033/

https://www.moodys.com/research/Moodys-affirms-Chesapeake-Regional-Medical-Center-VAs-A2-outlook-stable--PR_280994#

References Continued

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-11.html http://www.ache.org/pubs/hap_companion/chapters.cfm?chap=333

http://pilotonline.com/business/chesapeake-hospital-authority-remains-in-black/article_ee6b3680-2a12-5fcf-b49b-1715b823e7f1.html

http://www.beckershospitalreview.com/hospital-physician-relationships/7-things-hospitals-should-know-about-professional-services-agreements.html

http://www.beckershospitalreview.com/hospital-physician-relationships/6-secrets-for-better-hospital-physician-relationships.html

http://vaperforms.virginia.gov/Trends/indicatorTrends.php

https://www.multicare.org/care-connect/epic/

http://www.beckershospitalreview.com/lists/10-things-to-know-about-epic.html

http://www.healthcareitnews.com/directory/epic

http://www.jsonline.com/business/epic-systems-soars-with-transition-to-electronic-health-records-b99642837z1-366328781.html

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-11.html http://www.ache.org/pubs/hap_companion/chapters.cfm?chap=333

http://pilotonline.com/business/chesapeake-hospital-authority-remains-in-black/article_ee6b3680-2a12-5fcf-b49b-1715b823e7f1.html

http://www.beckershospitalreview.com/hospital-physician-relationships/7-things-hospitals-should-know-about-professional-services-agreements.html

http://www.beckershospitalreview.com/hospital-physician-relationships/6-secrets-for-better-hospital-physician-relationships.html

http://vaperforms.virginia.gov/Trends/indicatorTrends.php

https://www.multicare.org/care-connect/epic/

http://www.beckershospitalreview.com/lists/10-things-to-know-about-epic.html

http://www.healthcareitnews.com/directory/epic

http://www.jsonline.com/business/epic-systems-soars-with-transition-to-electronic-health-records-

b99642837z1-366328781.html

Chesapeake Regional Healthcare Appendices

...where history meets innovation ...

Presented By: Sumrite Prashar, Rebecca Stevenson, Paige Bathersfield, Yolanda Jenkins (Alternate)

Independent by Choice

Appendix 1

2015 INDUSTRY REPORT: VIRGINIA HOSPITALS AND NURSING FACILITIES EASTERN VIRGINIA HOSPITAL EXCERPTS

Data found on http://www.vhi.org/pdf/2015%20ir%20Press%20Release%20Hosp%20Eastern.pdf

Appendix 2

Appendix 3

Revenues (Cash In)

Expenses (Cash Out)

Operating Income Chesapeake Community Urgent

Care ...A ministry for the community

Revenue Drivers That Directly

Affect UCC ●  SiteLoca+onandCapacity●  ProductsandServicesOffered●  FeeSchedule●  NumberofPhysicians/

Providers●  Hours/DaysofOpera+on●  PayerMix●  Pa+entMix●  Seasonal

UCC Fees (# pt * Av Charge)

Pt Refunds

Contractual Allowance

Bad Debt Exp.

UCC Rev + Other Income = Net Rev

●  Salaries, Wages, & Benefits

●  Billing & Management Fees

●  Rent and Maintenance

●  Medical & Office Supplies

●  Administrative Overhead

●  Professional Services

●  Depreciation

/ Non-Operating

Income and Expenses

Net Income

Obtain Virginia’s Certificate of Public Need (COPN)

Requires owners and sponsors of identified medical care facility projects to secure a COPN from the State Health Commissioner prior to initiating projects.

No certificate of public need may be issued unless the Commissioner has determined that a public need for the project, or portion thereof, exists and has been demonstrated.

The criteria include:

the relationship of the project to the long term health care state plan

the need for enhanced facilities to serve the population of an area

the extent to which the project is accessible to all residents in the proposed area and the immediate economic impact and financial feasibility of the project

How to Open an Urgent Care

appendix

Urgent Care Accreditation

Urgent Care Centers are accredited in the same way that community health centers and other ambulatory care providers are, and there are no unique set of standards governing their accreditation.

There are two separate voluntary accreditation processes, one run by the American Academy of Urgent Care Medicine, and the other by the Urgent Care Association of America.

appendix

Appendix

Appendix

Chesapeake’s HVBP PATIENT EXPERIENCE DOMINATE SCORE

In this national survey that asks patients about their experiences during a recent hospital stay.

Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS )

appendix

Chesapeake Hospital Value-Based Purchasing (HVBP) – Efficiency Scores

The Hospital VBP Program rewards acute care hospitals with incentive payments for the quality of care they give to people with Medicare. Measured: How well a hospital perform compared to all hospitals, or how much they improve their own performance compared to their performance during a prior baseline period. Hospital VBP Program and their performance ratios and scores for the Efficiency Medicare Spending per Beneficiary (MSPB) measure.

July 2011-Jun 2015 Readmissions Reduction Program(HRRP) Report

five areas:

Acute myocardial infarction (AMI),

Heart failure (HF)

Pneumonia (PN),

Hip and Knee,

COPD

Cutting Costs

The average total operating cost per adjusted admission was $10,333.60 in 2014

This puts CRMC in 4th quartile with regard to efficiency

Operating Cost per adjusted admission is $2,934.31 higher than competitor Sentara Leigh Hospital

Goal: To decrease operating cost per adjusted admission by $1600 in the next two years putting us in the 50th percentile

Projected Savings: $1600 x 15,293= $24,468,800

Third year goal: Reduce cost by another $800 putting us in the top 25% of hospitals.

Strategies

Restructure our staffing ratios per patient

Flex scheduling

Freezing Pay Raises

Cross train of nurses

Breakdown of Cost Drivers

Operating Costs

Labor

Supplies

Variation

●  60% of Cost ●  Higher than optimal

labor cost per adjusted admission

●  Lack of system wide formula with regard to labor, supplies and maintenance

●  Higher than optimal cost per adjusted admission