nursing executive center transforming healthcare through nursing implications for practice and...

Nursing Executive Center

Transforming Healthcare Through NursingImplications for Practice and Education2015

Nursing Executive Center

Practice Manager

Jennifer Stewart

Pascale Chehade

Design Consultant

Steven Berkow

Executive Director

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Transforming Healthcare Through NursingImplications for Practice and Education2015

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Road Map

Implications for Nursing Practice and Education

Care Delivery Transformation

Our New Market Reality

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What Business Are We In?Businesses Displaced by Focusing on the Means Rather than the Ends

Study in Brief: What Business Are We in? • Explores how Eastman Kodak Company’s camera and film business was

displaced by alternate mediums that fulfilled customers’ desires for images

• Draws parallels to the challenges that provider organizations face in shifting activities from delivering health services to a broader spectrum of tactics for health

Providing Health, Not Health Care

“…It's always better to define a business by what consumers want than by what a company can produce…whereas doctors and hospitals focus on producing health care, what people really want is health. Health care is just a means to that end—and an increasingly expensive one.”

Source: Asch D., "What Business Are We In? The Emergence of Health as the Business of Health Care,” NEJM, 367,2012: 888-889; Nursing Executive Center interviews and analysis.

”

197690% market share of commercial film business

1990sDigital cameras enter mainstream market

2012Kodak files for bankruptcy

Timeline for Eastman Kodak Business

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Staying Afloat Through Cross-Subsidization

Source: American Hospital Association, “Trendwatch Chartbook 2014,” available at: www.aha.org; Health Care Advisory Board interviews and analysis.

Our Existing Business Model

Hospital Payment-to-Cost Ratio, Private Payer, 2012

149%Hospital Payment-to-Cost

Ratio, Medicare, 2012

86%

• Above-cost pricing

• Robust fee-for-service volume growth

• Steady price growth

• Only one component of our total business

Commercial Insurance Public Payers

Below CostAbove Cost

Traditional Hospital Cross-Subsidy

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http://www.aha.org/

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Source: American Hospital Association Chartbook, available at: http: www.aha.org/aha/research-and-trends/chartbook/index.html, accessed on April 29, 2011; Advisory Board Company interviews and analysis.

Payer Cross-Subsidy Eroding

Projected Discharges by Payer, 2021 Annualized Commercial Price Growth

52%

20%

27%

Medicare

Medicaid

Commercial

Inpatient Contribution Income

Weighted Per-Case Average

Surgery

Medicine

$6,110

$2,927

Projected

Historical

3.5%

6.5%6-7%

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Medicare Payment Cuts Becoming the Norm

Source: CBO, “Letter to the Honorable John Boehner Providing an Estimate for H.R.6079, The Repeal of Obamacare Act,” July 24, 2012; CBO, “Estimated Impact of Automatic Budget Enforcement Procedures Specified in the Budget Control Act,” September 12, 2011; CBO, “Bipartisan Budget Act of 2013,” December 11, 2013, all www.cbo.gov; Health Care Advisory Board interviews and analysis.

1) Includes hospital, skilled nursing facility, hospice, and home health services; excludes physician services.

2) Disproportionate Share Hospital.

Public-Payer Reimbursement Still in the Crosshairs

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

($4B)($14B)

($21B) ($25B)($32B)

($42B)

($53B)

($64B)

($75B)

($86B)

ACA’s Medicare Fee-for-Service Payment Cuts

Reductions to Annual Payment Rate Increases1

$260BHospital payment

rate cuts, 2013-2022

Office of the Actuary, CMS

“Notwithstanding recent favorable developments… Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation.”

Not the End of the Story

$56B $151BReduced Medicare and Medicaid DSH2 payments, 2013-2022

Reduced Medicare payments due to sequestration and 2013 budget bill

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But Every Silver Lining Has Its Cloud

Coverage Expansion and the Rise of Individualized Insurance

Source: Gallup, “In U.S., Uninsured Rate Holds at 13.4%,” http://www.gallup.com/poll/178100/uninsured-rate-holds.aspx; Department of Health and Human Services, “Impact of Insurance Expansion on Hospital Uncompensated Care Costs in 2014,” http://aspe.hhs.gov/health/reports/2014/UncompensatedCare/ib_UncompensatedCare.pdf; Health Care Advisory Board interviews and analysis.

ACA (and Recovery) Making a Dent in Uninsurance

18.0%(highest on record)

13.4%(lowest on record)

2013 Q3 2014 Q3

Percentage of U.S. Adults Without Health Insurance

Employer-sponsored coverage grows

Medicaid expansion begins

Insurance exchanges launch

$5.7BReduction in uncompensated care, 2014

A Bargain Still Unbalanced

$14BACA-related reductions in Medicare fee-for-service payment, 2014

vs.

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Not Currently Participating

28 States + DC Have Opted for Expansion

Medicaid Expansion

Source: Kaiser Family Foundation, “Current Status of State Medicaid Expansion Decisions,” January 27, 2015, available at: http://kff.org/health-reform/slide/current-status-of-the-medicaid-expansion-decision/; CMS, “Medicaid and CHIP: October 2014 Monthly Applications, Eligibility Determinations and Enrollment Report,” December 18, 2014; HHS, “Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period,” May 1, 2014; PricewaterhouseCoopers, “Medicaid 2.0: Health System Haves and Have Nots,” Health Care Advisory Board interviews and analysis.

1) Children’s Health Insurance Program.2) Estimate does not include CT or ME.

Medicaid Expansion Contentious—and Consequential

Increase in Medicaid, CHIP1 enrollment,July-Sept. 2013-Oct. 20142

9.6MAdvisory Board estimate of impact of Medicaid expansion on typical hospital’s 10-year operating margin projection

2.4%

State Participation in Medicaid Expansion

ParticipatingExpansion by Waiver

As of February 2015

6.7%Average Medicaid enrollment increase across non-expansion states

PricewaterhouseCoopers

“For-profit health systems…report far better financial returns through the first half of the year than expected, owed in large part to expanded Medicaid”

Financial Impact

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Challenge to Subsidies Making Its Way Through the Courts

Another Year, Another Lawsuit

2.7M

0.7M4.7M

Does the language of the ACA allow subsidies in states that do not set up their own exchanges?

The Question:

Supreme Court Stepping In

Halbig v. Burwell

D.C. Circuit panel strikes down subsidies on federal exchanges

King v. Burwell

Fourth Circuit rules subsidies legal on Virginia’s federally-run exchange

Potential Impact

Unsubsidized

Subsidized on State-Run Exchanges

Subsidized on Federally-Run Exchanges

Over half of all enrollees collecting potentially unallowable subsidiesSupreme Court agreed to hear King

v. Burwell in November 2014; final ruling expected by June 2015

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No More A’s for Effort

Source: The Advisory Board Company, “Mortality Rates Are Only One of Many VBP Changes to Come,” December 4, 2013, www.advisory.com; CMS, “Request for Information on Specialty Practitioner Payment Model Opportunities,” February 2014, available at www.innovation.coms.gov; Health Care Advisory Board interviews and analysis.

1) Includes Value-Based Purchasing Program, Hospital Readmissions Reduction Program, and Hospital-Acquired Conditions Program.

Increasing Competition for Medicare Dollars

FY 2013 FY 2014 FY 2015 FY 2016

30%

30%

30%

25%

70%

45%

20%10%

25%

30%

40%

20% 25%

Clinical Process

Patient Experience

Outcomes of Care

Efficiency

Medicare Value-Based Purchasing Program Performance Criteria

6%

Other Mandatory Risk Programs

Hospital-Acquired Condition Penalties

Readmission Penalties

No Trivial Thing

Weight in Total Performance Score

Medicare revenue at risk from mandatory pay-for-performance programs1, FY 2017

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Many Facilities Receiving Multiple PenaltiesFew Escaping Penalties Altogether, Almost Half Facing Two or More

Source: CMS, Advisory Board Analysis.

VBPPenalty152 (5%)

HACPenalty112 (3%)

ReadmissionsPenalty 1,071 (32%)

43 (1%)

961 (29%)

318 (9%)

288 (9%)Hospitals receiving

multiple P4P penalties

48%

Hospitals Receiving FY 2015 P4P Penalties1

1) Based on Readmissions and VBP proxy adjustment factors from FY 2015 IPPS Final Rule, proxy HAC adjustments from FY 2015 IPPS Proposed Rule.

NoPenalties423 (13%)

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Overview of Risk-Based Payment Models

1) Center for Medicare and Medicaid Innovation.

Key AttributesBundled Payments

Shared Savings Programs

(ACOs)Capitation

Definition

Purchaser disburses single payment to cover certain combination of hospital, physician, post-acute, or other services performed during an inpatient stay or across an episode of care; providers propose discounts, can gainshare on any money saved

Network of providers collectively accountable for the total cost and quality of care for a population of patients; ACOs are reimbursed through total cost payment structures, such as the shared savings model or capitation

Provider receives a flat per-member, per-month payment for providing all necessary care for a defined population

Purpose

Incent multiple types of providers to coordinate care, reduce expenses associated with care episodes

Reward providers for reducing total cost of care for patients through prevention, disease management, coordination

Reward providers for reducing total cost of care for patients through prevention, disease management, coordination

Source: Health Care Advisory Board interviews and analysis.

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12 Tools for Translating Market Forces into Frontline Terms

The Market Force Course

Source: Nursing Executive Center, The Market Force Course, 2014.

Customizable Presentations

Plug-and-Play Videos

Interactive Exercises

Nurse Manager “Cheat sheets”

PowerPoint slides and scripting for leaders to brief staff on tough messages

Short, easy-to-digest videos for frontline staff on current market forces

Games for frontline staff and managers aimed at conveying budget constraints

One-page primers on market forces impacting organizational strategy

Sample Toolkit Resources

Ready-to-Use Posters

Visuals that distill complex concepts into concrete actions for frontline staff

To access The Market Force Course, visit advisory.com/nec/publications.

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Operational Economics on the Brink of Failure


Margin Improvement Analysis Results

Five-Year Margin Projections Ten-Year Margin Projections

Greater than 10% Decline

5-10% Decline

Improvement

3%

13%

84%

Improvement

0-5% Decline

5-10% Decline

Greater than 10% Decline

15%

36% 36%

13%

HCAB Service in Brief: The Margin Improvement Intensive

0-5% Decline

• Combines customized scenarios for key financial and operational metrics with a facilitated onsite session and an institution-specific action plan to help hospitals and health systems improve margin performance

• Available to all Health Care Advisory Board members at no extra cost

• Visit www.advisory.com/MedicareBreakeven to participate

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How Much Avoidable Cost Is There in Health Care?

Source: Institute of Medicine, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America”, 2012; Nursing Executive Center analysis.

$ 7 5 0

0

0 0 00 00000

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A Clear Mandate for Meaningful Change?

Source: Best Care at Lower Cost: The Path to Continuously Learning Health Care in America . Washington, DC: The National Academies Press, 2012; Kelley, Robert, “Where Can $700 Billion in Waste Be Cut Annually from the U.S. Healthcare System?” Thomson Reuters, 2009; Delaune J., Everett W., “Waste and Inefficiency in the U.S. Health Care System,” New England Healthcare Institute, 2008; Nursing Executive Center interviews and analysis.

Areas of OpportunityAvoidable

Costs

Unnecessary Care $210 B

Administrative Inefficiencies $190 B

Inefficiently Delivered Services $130 B

Missed Prevention Opportunities

$55 B

Fraud and Abuse $75 B

High Prices $105 B

Select Studies Analyzing Opportunities

for Reducing Health Care Costs

Estimated Magnitude of Avoidable Cost Opportunities

30Cents of every health care

dollar an unnecessary expense

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Source: Truven Health Analytics, “Avoidable Emergency Department Usage Analysis,” 2013, http://img.en25.com/Web/TruvenHealthAnalytics/EMP_12260_0113_AvoidableERAdmissionsRB_WEB_2868.pdf; Robert Wood Johnson Foundation, Reform in Action: Reducing Avoidable Hospital Readmissions,” 2013, http://www.rwjf.org/en/about-rwjf/newsroom/features-and-articles/reform-in-action--reducing-avoidable-readmissions.html?cid=xtw_qualequal; CMS's 2012 Inpatient Standard Analytical File (SAF); Nursing Executive Center interviews and analysis.

1) Based on Truven Health Analytics analysis of 6,135,002 ED visits in 2010; “Avoidable” includes all ED visits except those for which medical care was required within 12 hours in the ED setting.

2) CMS, 2012.

Huge Opportunity for Improvement

Percentage of ED Visits that are Avoidable in the US1

71%

Estimated number of preventable trips to US

hospitals each year

4.4M

30-day all-cause readmission rate2

18%

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Unnecessarily CrowdedMany Medical Admissions Preventable

Ambulatory-Sensitive1

Inpatient Admissions

Source: MedPAR FY2009; Nursing Executive Center interviews and analysis.

1) Inpatient admissions associated with Agency for Healthcare Research and Quality (AHRQ) Preventable Quality Indicator conditions.

94.6%

5.4%

30 Most Ambulatory-Sensitive DRGs

Overall

$5,623

$8,510

Medicare Revenue per Case

Surgical Medical

An Ounce of Prevention…

CFO

“It’s a lot easier to prevent people from needing a service than it is to eliminate the service once you offer it.”

17%Percent of Medicare discharges considered sensitive to better ambulatory care

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Health System Strategy, c. 2003

“Extractive Growth”

Health System Strategy, 2013-2023

“Value-Based Growth”

Grow by being bigger: Leverage market dominance to secure prime pricing, network status

Grow by being better: Leverage cost, quality, service advantage to attract key decision makers

• Discharges• Service line share• Fee-for-service revenue

• Pricing growth• Occupancy rate• Process quality

• Share of lives• Geographic reach• Risk-based revenue

• Share of wallet• Outcomes quality• Total cost of care

• Inpatient capacity• Outpatient imaging

centers

• Clinical technology• Ambulatory

surgery centers

• Primary care capacity• Care management staff

and systems

• IT analytics• Post-acute care

network

Toward an Economics of Value

Adapting to New Rules of Competition

Source: Advisory Board interviews and analysis.

Description

Performance Metrics

Critical Infrastructure

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Disaggregating Health Care Reform

Source: Nursing Executive Center analysis.

Coverage Expansion

Financing

Delivery System Reform

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Economics Aligning with Mission

Source: Nursing Executive Center interviews and analysis.

Evolving Market Demand

Managing Chronic Care for High-Risk

Patients

Building Long-Term Patient Relationships

for Ongoing, Coordinated Care

Improving Overall Health

and Wellness of the Population

Centering Hospital Care on the Patient

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Establishing the Medical PerimeterExtensive Ambulatory Care Network Addresses Medical Demand


Medical Management Investments

Health Information Exchanges

Electronic Medical Records

Medical Home Infrastructure

Primary Care Access

Population Health

Analytics

Patient Activation

Post-Acute Alignment

Disease Management

Programs

The New Reality

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If We Were Building from Scratch…Governing Principles of the Transformed Care Enterprise

Aligned Across the Continuum

Outcomes-Driven System

• Dashboard aligned to key cost, quality goals for improving population health

• Information available across the continuum to track utilization

• Multidisciplinary team works together to maintain unified care plan across patient needs

• Data transparency, sharing to ensure streamlined patient care

• Care management appropriately matched to individual patient, population need

• Oriented toward patient-centered goals that will drive clinical metric improvement

• Click to add iconDo not use Microsoft generic icons





• Team available to patient for access, education, decision support

• Accessible when, where patient needs care

Accessible Primary Care Personalized Management

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Key Factor Driving The Change Today:The Rise of The Retail Triple-Threat

Purchase

Spend

LifestyleIntegration

Unleashing the consumer… a force incumbent health systems are ill prepared to cope with!

Retail consumer behavior at the

point of…Confronted with choices and spending our own money, we make very different purchasing decisions

High deductibles and narrow networks make us price sensitive with a high demand for value

Health and healthcare must fit into our lives and be convenient; we will reward those who can deliver and retailers are lining up for the opportunity

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Aggregate Numbers in Line With Expectations; Enrollee Mix Older

Source: HHS, “Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period,” May 1, 2014; Cheney K and Haberkorn J, “Obama: 8 Million Enrolled Under ACA,” Politico, April 17, 2014, www.politico.com; Cheney K and Norman B, “Insurers See Brighter Obamacare Skies,” Politico, April 15, 2014, www.politico.com; Health Care Advisory Board interviews and analysis.

1) Numbers do not add precisely due to rounding.

One Year In, Insurance Exchanges Generally on Track

October to December

January to February

March Total

2.2M

2.1M

3.8M 8.0M

Initial Public Exchange Enrollment1

2013-2014

7.0M(Original CBO

Projection)

91%Of enrollees still enrolled as of September 2014

25M Projected exchange enrollment by 2018

Enrollees aged 18-34

28%

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Fewer Glitches, Greater Awareness Driving Increased Enrollment

Early Year Two Enrollment Outpacing First Round

106K Enrollment during first month

A Solid Start for Both Federal, State Exchanges

11K Enrollment during first four days

First Round Enrollment Second Round Enrollment

462K Enrollment during first week

11K Enrollment during first fifteen days

FEDERAL EXCHANGE

CALIFORNIA EXCHANGE

MARYLAND EXCHANGE 16K Enrollment during

first two months 16K Enrollment during first week

COLORADO EXCHANGE 204 Enrollment during

first week 6K Enrollment during first week

Source: CNBC, ‘'Solid' Obamacare start: More than 1M apply in first week,” http://www.cnbc.com/id/102218144; Baltimore Sun, “Md. health exchange enrolls 16,700 in first week,” http://www.baltimoresun.com/health/bs-hs-exchange-week-one-20141121-story.html; Colorado Public Radio, “Colorado health exchange: Enrollment rate outpacing last year,” http://www.cpr.org/news/story/colorado-health-exchange-enrollment-rate-outpacing-last-year#.dpuf; Los Angeles Times, “California enrolls 11,357 in first 4 days of Obamacare open enrollment,” http://www.latimes.com/business/healthcare/la-fi-obamacare-enrollment-california-20141120-story.html; Health Care Advisory Board interviews and analysis.

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Source: HHS, “Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period,” May 1, 2014; Health Care Advisory Board interviews and analysis.

1) Data from federally-facilitated exchanges only.

Individuals Gravitating Toward Leaner Plans

20%65%

9% 5%2%

Bronze

Level 1: Choice of Metal Tier

GoldPlatinum

Catastrophic

Silver

People Choosing Cheaper Premiums and Higher Deductibles

Factors Influencing Metal Level

Deductible

Copays

Out-of-Pocket Maximum

Non-Essential Services Covered

Network Composition

Level 2: Plan Choice Within Metal Tier

43%

21%

36%Any Other Plan

Lowest-Cost Plan

Second-Lowest-Cost Plan

All Metal Levels1

Scope of Non-Essential Benefits

Negotiated Payment Rates to Providers

Utilization Patterns, Trends

Premium Levers Beyond Benefit Design

Negotiated Rates

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Aggressive Cost Sharing Troublesome for Provider Strategy

Source: Breakaway Policy Strategies, “Eight Million and Counting: A Deeper Look at Premiums, Cost Sharing and Benefit Design in the New Health Insurance Marketplaces,” May 2014; eHealth, “Health Insurance Price Index Report for Open Enrollment and Q1 2014,” May 2014; Health Care Advisory Board interviews and analysis.

High Deductibles Accelerating Consumerism

$6,000+

$3,000-$5,999

Individual Deductibles Offered On Public Exchanges2014

Median

16%

16%

39%

30%

$1,000-$2,999

<$1,000

Individual Deductibles Chosen on eHealth Individual Marketplace

$2,500 $6,250Maximum

High out-of-pocket costs discourage appropriate utilization

Challenges for Providers

Large patient obligations lead to more bad debt, charity care

Price-sensitive patients more likely to seek lower-cost options

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Convenience Consistently a Top Consumer Priority

Source: The Advisory Board Company, 2014 Primary Care Consumer Choice Survey, Marketing and Planning Leadership Council; Health Care Advisory Board interviews and analysis.

Incr

ea

sin

g C

on

sum

er P

refe

ren

ce

Emailing provider with symptoms

How Convenient Is Convenient?

Consumers Want Virtual, 24/7 Access

Clinic location near work

Clinic located near errands

Clinic located near the home

Cost

Service

Access, Convenience

Convenience Outranking Service and Cost

Top Preferences for On-Demand Care

6 OF TOP 10 FEATURES

RELATED TO ACCESS,

CONVENIENCE

#1 out of 56“Walking in without appointment and being seen within 30 minutes”

#5 out of 56“The clinic is open 24 hours, 7 days a week”

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Cost-Conscious Behavior Affecting Pillars of Profitability

Source: KFF, “2012 Employer Health Benefits Survey,” available at: www.kff.org; New Choice Health, “New Choice Health Medical Cost Comparison,” available at: www.newchoicehealth.com; Healthcare Blue Book, “Healthcare Pricing,” available at: www.healthcarebluebook.com; Kliff S, “How much does an MRI cost? In D.C., anywhere from $400 to $1,861,” Washington Post, March 13, 2013, available at: www.washingtonpost.com; Health Care Advisory Board interviews and analysis.

1) High-deductible health plan.2) $2,086; based on KFF report of average HDHP

deductible.3) $733; based on KFF report of average PPO deductible.

Price Sensitivity at the Point of Care

Consumers Paying More Out-of-Pocket

Fall within HDHP deductible2

$150 $275 $400$900 $1K

$2K

$6K

$9K

$18K $730

$900

$1,269

$2,183

$411

• Price-sensitive shoppers will be acutely aware of price variation

• MRI prices range from $400 to $2,183

MRI Price Variation Across Washington, DC

Fall within PPO deductible3

35

http://www.kff.org/

http://www.newchoicehealth.com/

http://www.healthcarebluebook.com/

http://www.washingtonpost.com/

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Meet Our New Competitors

Walgreens Aims to Become the Premier Health Destination

Source: Japsen B, “How Flu Shorts Became Big Sales Booster for Walgreen, CVS,” Forbes, February 8, 2013, available at: www.forbes.com; “Take Care Clinics at Select Walgreens Expand Service Offerings,” Reuters, May 31, 2012, available at: www.reuters.com; Murphy T, “Drugstore Clinics Expand Care into Chronic Illness,” The Salt Lake Tribune, April 4, 2013, available at: www.sltrib.com, Walgreens, “Company Overview,” available at: www.walgreens.com; Health Care Advisory Board interviews and analysis.

Retail Clinics

2009: Launches flu vaccine campaign

Simple Acute Services

Vaccinations and Physicals

Chronic Disease Monitoring

Chronic Disease Diagnosis and Management

2013: Launches three ACOs; begins diagnosing and managing chronic disease

Case in Brief: Walgreen Co.

• Largest drug retail chain in the United States, with 372 Take Care Clinics

• In April 2013, became first retail clinic to offer diagnosis and treatment of chronic diseases

2007: Acquires Take Care Health Systems

2012: Offers three new chronic disease tests

Not Just a Drugstore

“Our vision is to become ‘My Walgreens’ for everyone in America by transforming the traditional drugstore into a health and daily living destination...”

Walgreen Co. Overview

”

36

http://www.forbes.com/

http://www.reuters.com/

http://www.sltrib.com/

http://www.walgreens.com/

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Saving Money—For Its Associates and Customers

Source: Canales MW, “Wal-Mart Opening Clinic in Cove,” Killeen Daily Herald, April 18, 2014, www.kdhnews.com; Health Care Advisory Board interviews and analysis.

Walmart Enters Full Primary Care

The Largest “Activated Employer” Yet

“As the largest private employer in the U.S., we are committed to finding ways to drive down health care costs for our 1.3 million U.S. associates and the 140 million customers who shop our stores each week.”

Labeed DiabPresident of Health and Wellness, Wal-Mart

Visit fee for Walmart associates

$4

Visit fee for Walmart customers

$40

Walmart Care Clinic Model

Walmart associate or customer visits Care Clinic

Care Clinic staffed by two NPs from QuadMed, an employer onsite clinic provider

NP provides primary care services, refers to external specialists and hospitals

37

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Retail Clinics Expected to Continue Growing

1) As of Oct. 2014.Source: Accenture, "Retail medical clinics: From Foe to Friend?," 2013; Ritchie J, "After a stall, Kroger could add clinics," Cincinnati Business Courier, July 5, 2013; Robeznieks A, "Retail clinics at tipping point," Modern Healthcare, May 4, 2013; Health Care Advisory Board interviews and analysis.

2000-20151

Estimated Total Number of Retail Clinics in the US

2000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

202

868

1135 1172 12201355 1418

1743

2243

2868Growth trajectory depends on preferred payer relations, PCP capacity, and health system partnerships

Retailer

Operational Retail Clinics1 900+ 400+ 135 14 75+

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2739

Differentiating Effective Population Health


Keep patient healthy, loyal to the system

Avoid unnecessary higher-acuity, higher-cost spending

Trade high-cost services for low-cost management

High- Risk

Patients

Rising-Risk Patients

Low-Risk Patients

60-80% of patients; any minor conditions are easily managed

15-35% of patients; may have conditions not under control

5% of patients; usually with complex disease(s), comorbidities

Managing Three Distinct Patient Populations

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2740

Chronic Disease Growth Outpacing Population Population Growth

Source: Milken Institute, available at: http://www.milkeninstitute.org/ pdf/chronic_disease_report.pdf, accessed April 27, 2011; Nursing Executive Center interviews and analysis.

Projected Increase in Chronic Disease Cases

2003-2023

Stroke

Pulm

onar

y Con

ditio

ns

Hyper

tens

ion

Heart

Diseas

e

Diabe

tes

Men

tal D

isord

ers

Cance

r

29% 31%

39% 41%

53% 54%

62%

19%: Projected population growth, 2003-2023

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2741

Plenty of Room for Improvement in Managing Care

Source: Milliman; Nursing Executive Center interviews and analysis.

Difference Between “Loosely-Managed” and “Well-Managed” PMPM1 Spending

2011

Series1

$449.79

Loosely Managed

WellManaged

MedicareCommercial

Series1

$131.84

Loosely Managed

WellManaged

Medicaid

Series1

$100.48

Loosely Managed

WellManaged

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27


Building a System that Never Discharges the Patient

Evolution of Patient Care Perspective

Perfecting Individual Transitions Achieving Care Continuity

SNF

Home

Rehab

PCP

Home Health

Retail Clinic

Acute Care

ED

42

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27

Finding the 80/20

Key Root Causes of Patients Receiving Fragmented, Episodic Care

Patients receive fragmented, episodic care

Clinicians don’t have time

Patients face economic

roadblocks

Clinicians’ incentives focus on

site-specific care

Patients don’t know how

Patients lack motivation

Clinicians don’t have necessary

patient information

Clinicians have a siloed, setting-

specific perspective

Clinicians only feel accountable for their

immediate setting

Clinicians don’t know how

Clinicians not equipped to provide

continuous care

Patients and families don’t manage their

care effectively


To access Achieving Top-of-License Nursing Practice, visit advisory.com/nec/publications.

43

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2744

Investing in Nursing with Good Reason

Source: MEDPAR 2001, 2005, 2010; Needleman J, et al., “Nurse-Staffing Levels and the Quality of Care in Hospitals,” New England Journal of Medicine, 346 (2002): 1715-1722; Aiken L, et al., “Educational Levels of Hospital Nurses and Surgical Patient Mortality,” JAMA, 290 (2003): 1617-1623; Kane RL, et al., “The Association of Registered Nurse Staffing Levels and Patient Outcomes: Systematic Review and Meta-Analysis,” Medical Care 45 (2007): 1195-1204; McHugh M, et al., “Hospitals with Higher Nurse Staffing Had Lower Odds of Readmissions Penalties than Hospitals with Lower Staffing,” Health Affairs, 32(2013): 1740-1747; Nursing Executive Center analysis.

1) Case Mix Index (CMI) in short-stay hospitals participating in Medicare’s Inpatient Prospective Payment System; excludes Medicare Advantage patients.

2001 2005 2010

1.44

1.50

1.60

Average Medicare Case Mix1

Mounting Evidence Linking Nursing to Patient Outcomes

Patient Complexity Increasing

Representative Studies on the Impact of Nurse Staffing

Primary Author

Top-Level Findings

Needleman et al., 2002

An increase in the number of RN hours per day from the 25th to the 75th percentile was associated with better outcomes for medical and surgical patients

Aiken et al., 2003

An increase in the proportion of RNs with a Bachelor’s or Master’s degree across the entire institution was associated with better outcomes in mortality and failure to rescue

Kane et al., 2007

A review of the literature finds consistent associations between increased RN staffing and lower odds of hospital-related mortality and adverse patient events

McHugh et al., 2013

Hospitals with higher nurse staffing had 25% lower odds of incurring Medicare readmissions penalties than similar hospitals with lower nurse staffing

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An Alarming Dichotomy

Source: American Hospital Association, “Trendwatch Chartbook 2013: Trends Affecting Hospitals and Health Systems,” available at: http://www.aha.org/research/reports/tw/chartbook/index.shtml, accessed on December 2, 2013; CBO, “Letter to the Honorable John Boehner Providing an Estimate for H.R.6079, The Repeal of Obamacare Act,” July 24, 2012, available at: www.cbo.gov, accessed on December 2, 2013; Bureau of Labor Statistics, “Employer Costs for Employee Compensation Historical Listing March 2004 – June 2013,” available at: ftp://ftp.bls.gov/pub/special.requests/ocwc/ect/ececqrtn.pdf, accessed on November 12, 2013; Nursing Executive Center analysis.

1) Reductions to annual payment rate increases; includes hospital, skilled nursing facility, hospice, and home health services; excludes physician services.

2) Does not include capital.

$36.21

$48.02

Total RN Compensation per Hour Worked

Care Team EconomicsHealth System Economics

Percentage of Hospital Costs2 Comprising Wages and Benefits

2013 2014 2015 2016 2017

($4B)

($14B)($21B)

($25B)($32B)

Affordable Care Act’s Medicare Fee-for-Service Payment Cuts1

Expenses per Adjusted Admission

$6,980

$10,533

20112001

59%

2012

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2746

Population Health Efforts Shaping Volume Outlook

Utilization Patterns Difficult to Predict

2012 2017 2022

40.8M

42.6M

39.6M

40.5M

41.9M

39.5M

40M

No Additional Population Health Management

Typical Management

Aggressive Management

Inpatient Volume Under Different Population Health Assumptions

Quite a Difference

7.6%Total inpatient volume

growth, 2012-2022, with no additional population health

management effort

1.1%Total inpatient volume

growth, 2012-2022, with aggressive population health

management efforts


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2747Designing the Care Team

for Accountable Care


Inefficient, Interprofessional Care Team

Nurses and other caregivers collaborate to provide care, but nurses do not practice at top of license

Efficient, Siloed Care Team

Nurses practice to the full extent of their training and skills but within professional silo

Efficient, Interprofessional Care Team

Interprofessional care team collaborates efficiently and effectively, providing high-quality, low-cost care

Two Dimensions of Care Team Design

Inefficient, Siloed Care Team

Nurses do not practice to the full extent of their training and skills; caregivers work in professional silos

Nursing Team Efficiency

Interprofessional Team Integration

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2748A Unique Moment in Time to Build a

Different Kind of Care Team

Source: US Department of Health and Human Services, Health Resources and Services Administration, The Registered Nurse Population: Findings from the 2008 National Sample Survey of Registered Nurses, 2010, available at: http://bhpr.hrsa.gov/healthworkforce/rnsurveys/rnsurveyfinal.pdf, accessed on April 25, 2013; US Department of Health and Human Services, Health Resources and Services Administration, The U.S. Nursing Workforce: Trends in Supply and Education, 2013, available at: http://bhpr.hrsa.gov/healthworkforce/reports/nursingworkforce, accessed on May 7, 2013; Nursing Executive Center interviews and analysis.

Opportunities to Redefine the Care Team

Instill a new care team philosophy in new hires

Age Distribution of Practicing Registered Nurses in the US

20-29 30-39 40-49 50-59 60-69 70+

9.4%

20.0%

25.8%29.2%

12.7%

2.9%

2008

~1,000,000Number of RNs reaching retirement

age in the next 10-15 years

Fill vacant positions with a different skill set

Use attrition (rather than cuts) to eliminate positions

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2749

A Nurse Isn’t a Nurse Isn’t a Nurse

Source: Aiken L, et al., “Educational Levels of Hospital Nurses and Surgical Patient Mortality,” JAMA, 290 (2003): 1617-1623; Nursing Executive Center analysis.

1) Percentage of hospital staff nurses with BSN degree.

Patient Mortality

Failure to Rescue

20% BSN 40% BSN 60% BSN

21.119.2 17.5

20% BSN 40% BSN 60% BSN

83.1

76.2

Estimated Rate of Adverse Outcomes per 1,000 Patients by Hospital-Wide Level of Nurse Education1

90.4

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2750

Three Paths for Building the High-Value Care Team


Align Interprofessional Goals and Work

2Change the

Nursing Skill Mix

1

1. Achieve Top-of-License Nursing Practice

2. Right-Size the Proportion of RNs in the Skill Mix

3. Trade a Nursing Position for an Expert RN Role to Improve Unit Performance

4. Give All Care Team Members the Same Set of Goals

5. Transfer Work to Specialized Team Members

6. Gather Physicians and Staff at the Bedside at the Same Time

7. Keep Teams as Consistent as Possible

Uncoordinated Interprofessional Care

Overreliance on Bedside RNs

Root Cause of Inefficiency

Path to Higher Value

Deploy the Minimum Core Team and Selectively

Scale Up Support

3

8. Select Your Patient Population of Focus

9. Identify Patients Needing Additional Support

10. Define the Core and Expanded Care Teams

11. Layer Additional Support onto the Core Team

12. Regularly Reassess Patient Need for Support

A “One-Size-Fits-All” Care Team

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2751

2

3

1

Road Map

Implications For Nursing Practice and Education



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2752

Nursing at the Heart of Transformative Change

Future of Nursing: Leading Change, Advancing Health

Working on the front lines of patient care, nurses can play a vital role in helping realize the objectives set forth in the 2010 Affordable Care Act, legislation that represents the broadest health care overhaul since the 1965 creation of the Medicare and Medicaid programs. Institute of Medicine

Source: Institute of Medicine, “The Future of Nursing: Leading Change, Advancing Health,” available at: http://www.iom.edu/Reports/2010/The-Future-of-Nursing-Leading-Change-Advancing-Health, accessed November 11, 2011; Nursing Executive Center analysis.

”

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2753

Then and Now….Single-needs patient an endangered species

Mr. Jones; 1975 Mr. Jones; 2015

AMI AMI, HF, diabetes, obese

PCP PCP, cardiologist, endocrinologist, hospitalist, geriatric NP

2 meds 15 meds

Lives at home Lives in assisted living

Wife is caregiver Multiple family members, no one designated

LOS: 10 days LOS: 2.5 days

One admission in 1973 Third admission in 2013

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2754

Imperatives for Nursing and Nursing Practice

Top of License Practice Inter-Professional Collaboration

Enhancing the Patient Experience Frontline Accountability

• Value-based care

• Activity ‘completion’ not enough

• Ownership of outcomes the key

• Care team as core in all settings

• Roles clearly defined, supported, aligned with patient needs

• Beyond satisfaction

• Processes and systems patient-’centered’

• Patient as partner

• Non-valued added work eliminated

• Core responsibilities clear

• Professional practice model as foundation

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2755

The Future of Nursing: Leading Change, Advancing Health

Endorsing “Top-of-License” Nursing Practice

Source: Institute of Medicine, “The Future of Nursing: Leading Change, Advancing Health,” available at http://www.iom.edu/Reports/2010/The-Future-of-Nursing-Leading-Change-Advancing-Health, accessed November 11, 2011; Fairman J, et al., “Broadening the Scope of Nursing Practice,” New England Journal of Medicine, 364 (2011):193-196; Nursing Executive Center analysis.

Imperative: Top of License Practice

Institute of Medicine

“Nurses should practice to the full extent of their education and training.”

”

Broadening the Scope of Nursing Practice

Julie A. Fairman, PhD, RNJohn W. Rowe, MD

Susan Hasmiller, PhD, RN, FAAN Donna Shahala, PhD

“All health care professionals should support an expanded, standardized scope of practice for nurses as a way to improve health care in the United States.”

”

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2756

Defining “Top-of-License” Practice by Patient NeedsEstablishing Consensus on Core Responsibilities


Core Nursing Responsibilities Across Settings


Assess Clinical and Psychosocial Patient Needs

1

Establish Patient Goals and Track Progress

2

Provide Patient-Centered, Outcomes-Focused Care

3

Educate and Engage Patients and Their Families

4

Manage Key Components of the Clinical Record

5

Coordinate Care with Interprofessional Caregivers

6

Facilitate Safe Patient Transitions

to the Next Care Setting

7

Assess and Incorporate New Technologies and

Evidence-Based Practice

8

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2757

An All-Too-Common Reality


Real Nurses’ Stories from the Front Line


Primary Care Office

Emergency Department

Inpatient Skilled Nursing Facility

Home Health

• 10 minutes looking for patient’s suicide risk in the EMR

• Hunted down catheter because no one else available and care time-sensitive

• Wheeled patient to radiology so wouldn’t miss scheduled ultrasound

• Transported resident to dining room and stayed for the entire meal to assist him with feeding

• Drove 20 miles to agency office to document care in the electronic record

• Stuck waiting for

physician’s order to administer pain medication

• Physician kept referring to the medical assistants as “nurses”

• Called hospital charge nurse to decipher hand-written discharge instructions

• Made four calls to physician to have patient’s medication adjusted

• 20 minutes cleaning up large spill to prevent an avoidable fall

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2758

Opportunity Lies in Underleveraged Hours

Source: Storfjell J, Omoike O, and Ohlson S, “The Balancing Act: Patient Care Time Versus Cost,” JONA 38 (2008): 244-249; Nursing Executive Center analysis.


1) Based on three-year study of nursing activities on 14 med/surg units in three hospitals.2) Assessing, teaching, providing hands-on care, providing psychosocial support, coordinating care, and documenting care.3) Waiting, disruptions, delays, work-arounds, and rework.

Current Distribution of Med/Surg Nursing Time1

36%64%

$756,724RN wages spent on non-value-added time per med/surg unit

“Most attention has been focused on increasing nursing staffing levels rather than on increasing patient care time.”

Judith Lloyd Storfjell, PhD, RNOsei Omoike, MS, MBA, RN

Susan Ohlson, MSA, RNC

”“Non-Value-Added” Time3

“Value-Added” Time2

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2759

Impeding Effective Patient CareStaff Often Feeling Unsupported by Interprofessional Colleagues

Source: Advisory Board Survey Solutions Data Cohort, 2012.

Imperative: Interprofessional Collaboration

Staff Strongly Agreeing with the Following Statements:

RNs APRNs PCAs Pharmacists Physical Therapists

Social Workers

29%

33%31%

24%

35%

39%

17%

22% 23%

17% 18%

28%

“I receive the necessary support from employees in other units/departments to help me succeed in my work.”

“I receive the necessary support from employees in my unit/department to help me succeed in my work.”

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2760

Poor Collaboration Leading to Poor Patient Outcomes

Source: Baggs J, et al., “Association Between Nurse-Physician Collaboration and Patient Outcomes in Three Intensive Care Units,” Critical Care Medicine, 27 (1999):1991-1998; Nursing Executive Center analysis.


Association Between Nurse-Physician Collaboration and Negative Patient Outcomes in the ICU

Negative Outcome to Predicted Mortality Unit

Collaboration Score, 1 (Poor) to 7 (High)

Medical ICU Surgical ICU Med-Surg ICU

3.5

2.5

1.0

0.470.77

0.860000000000001

The lower the nurse-physician collaboration score, the higher the risk of a negative patient outcome

Medical ICU Surgical ICU Med/Surg ICU

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2761

Estimating the Costs InnInefficientollabortaionEstimating the Cost of Inefficient CoCollabommunicationInefficient collaboration and communication….

Source: Agarwal R, et al., “Quantifying the Economic Impact of Communication Inefficiencies in U.S. Hospitals,” Journal of Healthcare Management, 55 (2010): 265-281; Nursing Executive Center analysis.


Annual Economic Burden of Communication Inefficiencies

Average 500-Bed Hospital

$0.3 M

$1.8 M $2.5 M

Cost of Wasted Physician Time

Cost of Wasted Nurse Time

Cost of Increased LOS

$4.6M Total annual costs attributed to inefficient communication for average 500-bed hospital

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2762

Renewed Emphasis on Interprofessional Education

Source: Institute of Medicine, “Educating for the Health Team,” National Academy of Sciences, October 1972, available at http://www.ipe.umn.edu/prod/groups/ahc/@pub/@ahc/@cipe/documents/asset/ahc_asset_350123.pdf, accessed November 12, 2012; Interprofessional Education Collaborative, “Core Competencies for Interprofessional Collaborative Practice: Report of an Expert Panel,” 2011, available at http://www.aacn.nche.edu/education-resources/IPECReport.pdf, accessed November 12, 2012; Nursing Executive Center interviews and analysis.


Factors Reinforcing the Need for Improved Interprofessional

Collaboration

New payment models rewarding effective primary care and population management

Impending health care workforce shortages

Aging population with multiple chronic conditions

1972 Institute of Medicine Report

“Educating for the Health Team”

“We face, in the next decade, a national challenge to redeploy the functions of health professions in new ways, extending the roles of some, perhaps eliminating others, but more closely meshing the functions of each than ever before.”

Educating for the Health Team

Institute of Medicine1972

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2763

Is This All We Aspire to Do?

Source: HCAHPS, available at: http://www.hcahpsonline.org/home.aspx, accessed November 11, 2011; Nursing Executive Center interviews and analysis.

Imperative: The Patient Experience

Summary of Eight HCAHPS Domains

1. Communication with nurses

2. Communication with doctors

3. Responsiveness of hospital staff

4. Pain management

5. Communication about medicines

6. Discharge information

7. Hospital environment (quiet, noise)

8. Overall hospital rating

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2764

Broadening Our Ambition


• Ongoing Emotional Support• Family Involvement and

Care Team Integration• Avoidable Disruptions

Minimized• Compassionate,

Empathetic Caregivers

• Clear, Actionable Patient Education

• Up-to-Date andThorough Information

• Physical and Emotional Needs Anticipated

Patient Experience

• Communication• Quiet at Night• Information About

Medications• Discharge Information• Cleanliness• Responsiveness• Pain Management

HCAHPS

Source: HCAHPS, available at: http://www.hcahpsonline.org/home.aspx, accessed November 11, 2011; Nursing Executive Center interviews and analysis.

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Still Ample Room for Growth


Percentage of Physicians and Patients Agreeing With the Following Statements

About Compassionate Care

n=800 patients, 510 physicians

Source: Health Affairs, “An Agenda For Improving Compassionate Care: A Survey Shows About Half Of Patients Say Such Care Is Missing,” available at: http://content.healthaffairs.org/content/30/9/1772.full, accessed November 10, 2011.

76% 78%85%

54%

Physicians Patients

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2766

Advancing Multiple Aims

Imperative: Patient Experience

Source: Boulding W, et al., “Relationship Between Patient Satisfaction With Inpatient Care and Hospital Readmission Within 30 Days,” American Journal of Managed Care, 2011, 17:41-48; Glickman S, et al., “Patient Satisfaction and Its Relationship With Clinical Quality and Inpatient Mortality in Acute Myocardial Infarction,” Circulation: Cardiovascular Quality and Outcomes, 2010; 3:188-195; Bertakis K, et al., “Patient-Centered Care is Associated with Decreased Health Care Utilization,” Journal of the American Board of Family Medicine, 2011, 24:229-239; Nursing Executive Center interviews and analysis.

Representative Studies About the Relationship Between Patient Experience and Outcomes

Journal of the American Board of Family Medicine

Patient-Centered Care is Associated With Decreased Health Care Utilization

American Journal of Managed Care

Relationship Between Patient Satisfaction With Inpatient Care and Hospital Readmission Within 30 Days

Circulation: Cardiovascular Quality and Outcomes

Patient Satisfaction and Its Relationship With Clinical Quality and Inpatient Mortality in Acute Myocardial Infarction

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2767

Growing Number of Metrics Linked to Reimbursement

Imperative: Accountability

Source: Centers for Medicare & Medicaid Services; Nursing Executive Center interviews and analysis.

HCAHPS Survey Measures During this hospital stay, how often did nurses treat you with

courtesy and respect?” During this hospital stay, how often did nurses

listen carefully to you? During this hospital stay, how often did nurses explain things in a

way you could understand? During this hospital stay, after you pressed the call button, how

often did you get help as soon as you wanted it? During this hospital stay, how often were your room and bathroom

kept clean? During this hospital stay, how often was the area around your room

quiet at night? During this hospital stay, did you need help from nurses or other

hospital staff in getting to the bathroom or in using a bedpan? How often did you get help in getting to the bathroom or in using a

bedpan as soon as you wanted? During this hospital stay, how often was your pain well controlled? During this hospital stay, how often did the hospital staff do

everything they could to help you with your pain? Before giving you any new medicine, how often did hospital staff tell

you what the medicine was for? Before giving you any new medicine, how often did hospital staff

describe possible side effects in a way you could understand? During this hospital stay, did doctors, nurses or other hospital staff

talk with you about whether you would have the help you needed when you left the hospital?

During this hospital stay, did you get information in writing about what symptoms or health problems to look out for after you left the hospital?

Core Process MeasuresAcute Myocardial Infarction Aspirin prescribed at discharge Fibrinolytic agent received within 30 minutes of hospital arrival Time of receipt of primary percutaneous coronary intervention Statin prescribed at dischargeHeart Failure Discharge instructions Evaluation of left ventricular systolic function Angiotensin converting enzyme inhibitorPneumonia Blood culture performed in the ED prior to first antibiotic received Appropriate initial antibiotic selectionSurgical Care Improvement Project Prophylactic antibiotic received within 1 hour prior to surgical

incision Prophylactic antibiotic selection for surgical patients Prophylactic antibiotic discontinued within 24 hours after surgery

end time Cardiac surgery patients with controlled 6AM postoperative serum

glucose Postoperative urinary catheter remoaval on post operative day 1 or 2 Surgery patients on a Beta Blocker prior to arrival who received a

Beta Blocker during the perioperative period Surgery patients with recommended VTE prophylaxis ordered Surgery patients who received appropriate VTE prophylaxis within

24 hours pre/post surgery

Patient Safety and Quality MeasuresMortality Measures Acute Myocardial Infarction 30-day mortality rate Heart Failure 30-day mortality rate Pneumonia 30-day mortality rateReadmission Measures Acute Myocardial Infarction 30-day risk standardized readmission

measure Heart Failure 30-day risk standardized readmission measure Pneumonia 30-day risk standardized readmission measure Healthcare-Associated Infections Central line associated bloodstream infection Surgical site infection Catheter-associated urinary tract infectionHospital-Acquired Condition Measures Foreign object retained after surgery Air embolism Blood incompatibility Pressure ulcer stages III & IV Falls and trauma Vascular catheter-associated infection Catheter-associated urinary tract infection Manifestation of poor glycemic controlPrevention: Global Immunization Measures Immunization for influenza Immunization for pneumonia

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Frontline Accountability Foundational to Success

Imperative: Accountability

Practice Strategy Hierarchy

PeakPerformance

Frontline Accountability for Organizational Goals

Innovation Standardization


Protocol adherence clearly important…

…Ownership of protocol/standard of practice outcomes supported by critical thinking essential

Critical thinking essential to addressing

needs

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Strategies for Nursing to Influence, Shape, Own, and Lead…..

What Lies Ahead?

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Holistic Care Transformation …An Opportunity to Design the Future Together

Population Health Management

Care Transitions

Care Model

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