state of rural healthcare in us · no adjustment for changes in case mix index (cmi) overall...
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State of Rural Healthcare In US
According to the American Hospital Association (AHA): There are 5564 registered
hospital in US 4862 are considered
community hospitals 1829 are rural hospitals
Aging Population in Rural Geographies
According to the US Census Bureau, adults in rural areas are older than those living in non-rural areas, with a median age of 51, compared to age 45 in non-rural areas
Hospitalization rates and lengths of stay increase with age among adults, peaking for those over 65
This creates increased demand for healthcare in rural areas
As a result, the majority of rural providers serve a greater proportion of patients over the age of 65 than two-thirds of all U.S. acute care hospitals
State of Rural Healthcare In US
80 rural hospitals have closed since 2010
Across the US 673 rural hospitals are vulnerable to closure
Although nearly all rural hospitals are feeling the squeeze, facilities in states that have not expanded Medicaid are under more financial pressure
63% of hospitals vulnerable to closure are in states that have not expanded Medicaid.
According to a report from iVantage Health Analytics, a firm that compiles a hospital strength index based on data about financial stability, patients and quality indicators:
CLOSED 2012
State of Rural Healthcare In US Rural America includes
approximately 57 million people, about 18% of the population and 84% of the geographic area of the USA
There are 1,855 rural hospitals that support nearly 2 million jobs
Every dollar spent by a rural hospital produces another $2.29 of economic activity
A typical critical access hospital employs 141 community members
Rural hospitals handle more than 21.5 million emergency visits
State of Rural Healthcare In USAccording to the iVantageStudy: Across the U.S., 673
rural hospitals are vulnerable to closure
Of the 673 hospitals, 355 are in markets with great health disparities
If the 673 vulnerable hospitals were to close, 99,000 healthcare jobs in rural communities across the nation would be lost
Closure of the at-risk hospitals would result in an estimated $277 billion loss to the gross domestic product
State of Rural Healthcare In USDiabetes
Rural hospitals serve communities with greater rates of diabetes
Diabetes is the seventh-leading cause of death in the nation
The American Diabetes Association estimates the total cost of diabetes has risen 41 percent from $174 billion in 2007 to $245 billion in 2012
Particularly prevalent in rural America, rural hospitals are on the frontline in providing diabetic screening and care for populations which may not have access to primary or specialty care
State of Rural Healthcare In USOpioid Epidemic
• According to the CDC, the death rate from opioid-related overdoses is 45 percent higher in nonmetropolitan counties
• Distances in rural geographies mean longer wait times for critical interventions and antidotes like Naloxone
• Rural communities are isolated from treatment facilities and addiction counseling
• Nationwide, only 11 percent of patients seeking addiction treatment receive care
Maryland Hospitals Maryland hospitals are protected with the “all
payer waiver with CMS GRMC was first hospital in US with global
budget revenue reimbursement - 1987 GBR created by the Maryland Health Services
Cost Review Commission (HSCRC) to give hospitals a financial incentive to change the way they manage their resources
With the ultimate goal of slowing down cost increases while preserving the quality of care
Maryland already regulated charges in all the state’s acute care hospitals, but GBR takes it a step farther
Maryland Hospitals focus:Value, not Volume
• HSCRC sets rates annually based on patient mix and services Revenue becomes predictable
• Revenue is adjusted population, service levels or shifting services to other settings
• Focus is shifted from volume to improving care and managing health at the community level
• Hospitals are financially motivated to control lengths of stay, reduce unnecessary testing, prevent inappropriate admissions, and generally operate in a more efficient manner
• Hospitals are incentivized to reduce readmissions, a motivator for careful patient education and post-discharge follow-up
Hospital ReimbursementMaryland vs. Rest of Nation
12
0%
50%
100%
150%
200%
250%
300%
Maryland Nation
Cost Mark-up
1.2 to 1
2.5 to 1
Charge to Cost Ratio (Illus.)
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Medicare/Mcaid Comm. SelfPay Avg.
Cost Payments
Nation
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Medicare/Mcaid Comm. SelfPay Avg.
Cost Payments
Maryland
The Statewide UCC pool fund
The Statewide UCC % is built into allhospitals’ rates; the UCC Pool acts as asettlement methodology to account forhospitals that experience more or less UCCthan the State
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Statewide UCC
Included in all
hospital rates
Low UCC FundingHospital pays into UCC Pool
High UCC FundingHospital receives
payments from UCC Pool
Hospital ReimbursementMaryland vs. Rest of Nation
HSCRC’s Mandate Ensure Equity / Fairness / Stability
Maximize Access to Care
Contain Hospital Costs
Reduce the Total Cost of Care perMedicare Beneficiary
Provide Accountability
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CMS Demonstration ModelEffective January 1, 2014
5 Year Pilot Project - 2014 Annual all-payer, per capita, total hospital cost growth
limited to 3.58% Maryland’s Medicare per beneficiary total hospital cost
growth rate must be below the national Medicare per beneficiary average, resulting in $330m of Medicare savings over five years Maryland’s Medicare per beneficiary total cost growth rate
cannot exceed the national average by more than 1 percentage point, and must be “break even” with the national average by year 4.
Maryland will reduce its 30-day Medicare readmission rate to the national average in five years
Annual Potentially Preventable Complication (PPC) reduction of 6.89%, for a cumulative 5 year reduction of 30%
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Global Budget Revenue (GBR) Inpatient and outpatient revenue is constrained by the
GBR System◦ GBR provides hospitals with a “global” revenue base
that is 100% fixed Approved revenue amount in a given year is fixed cap No adjustment for changes in volume or service mix No adjustment for changes in Case Mix Index (CMI) Overall incentive to reduce service utilization and
encourage improvements in population health If hospitals are successful in reducing utilization, AND,
associated variable costs, profitability should increase Changes to hospital’s rate order are made annually
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Rate Order Revenue Center: Hospitals
have different revenue centers depending on the services they provide
Service Unit: The service unit is the same for all hospitals (i.e. every hospital charges for Operating Room services by the minute)
Unit Rates: Unit rates (prices) vary by hospital ◦ These rates must be
charged to all payers -no contract negotiations
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Service UnitRevenue Center Unit Rates
Med./Surg. Acute Patient Days $1,169.6980Obstetric Acute Patient Days $892.5342Med./Surg. I.C.U. Patient Days $2,344.1673New Born Nursery Patient Days $733.7898Admissions Admission $189.3488Emergency Services MD RVU'S $49.6919Clinic Services RVU'S $43.2071Operating Room Minutes $27.3030Laboratory MD RVU'S $1.3387Radiology-Diagnostic HSCRC RVU'S $32.1426Physical Therapy MD RVU'S $7.7004Observation RVU'S $83.3950
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Rate Center
+5 %
+10 %
- 5 %
- 10 %
Rate Center Corridors
Total GBR charged at the end of each 6 month incrementMust be with 0.5% of the Total Budget
Updates to Rate Orders
Hospitals generally receive an updated rate order once per year - effective July 1
Unit rates are updated for:◦ Inflation (Update Factor)◦ Change in Markup (Payer Mix and UCC)◦ Population◦ Infrastructure Investments◦ Price Variances and Penalties◦ NSP I and NSP II◦ Assessments and Fees◦ Quality Measures (MHAC, QBR)◦ Other Adjustments (RRR, Market Share)
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Maryland’s System Spurs Innovation:GRMC’s Well Patient Program
GRMC developed an innovative approach to Care Coordination called the Well-patient Program
Patients are identified as high utilizers of hospital care via data analytics (CRISP) integrated to hospital IT system (Care Alerts)
Patients Enrolled into Well-patient Program:◦ Assigned Nurse Navigator◦ Social Worker◦ Psychiatrist or psychologist◦ PCP’s partner to manage chronic conditions
Hospital Services Supporting Wellness: Cardiopulmonary Rehabilitation Obesity Management and Education Smoking Cessation Classes Chronic Kidney Disease (CKD) Clinic CHF Clinic Health Education and literacy programs Community Health Workers Home Health Telemedicine
Maryland’s System Spurs Innovation:GRMC’s Well Patient Program
Maryland’s system allowed GRMC to be the first hospital in the US to implement a Global Budget - 1987
RESULTS:According to CRISP data,GRMC has an extremely low cost per Medicare beneficiary
Below state average Below national average
9.278.31 7.92
12.3211.52 11.27
0
2
4
6
8
10
12
14
CY 15 CY 16 Jan-April CY 16 Jan-Jun
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Potentially Avoidable Utilization Revenue PAU Rate for CY15 and CY16 Compared to the State PAU Rate
GRMC PAURate
IMPROVEMENT
GRMC Surgical Site Infection Rate(Drives Readmission Rates and indicator for quality and safety)
0.26% 0.22% 0.16%0
0.10.20.30.40.50.60.70.80.9
11.11.21.31.41.51.61.71.81.9
2
2014 2015 2016
Perc
ent
GRMC Self Directed Goal was for SSI to be < 0.6%
IMPROVEMENT
One of the drivers of GRMC’s low readmission rate is surgical site infection rate
— Very Low in 2014, still made improvement in 2015— CDC January 2015 SSI event Module- reports NHSN data for 2006-2008— (16,147 SSI’s following 849,659 operative procedure) showed an overall
SSI rate of 1.9%
Garrett
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9.1%
9.3%
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10.1
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10.5
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10.7
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11.0
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11.3
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11.4
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12.5
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12.7
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14.3
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GRMC 5.9%
Garrett Regional Medical CenterHSCRC reported Risk Adjusted 30 Day Inpatient All Payer
Readmission Rate Comparative for All Maryland Hospitals for Jan-April 2016
Statewide Average 11.4%
POSITIVE
92.11
93.95
96.316
97.23
98.2697.19 96.83
97.71 97.8497.98
8990919293949596979899
Final Jan-Sep 2014
Final Sep-Dec 2014
Final Jan-Jun 2015
Final Jan-Dec 2015
Prelim Jan-Jun 2016
Su
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al R
ate
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Time Frame
Garrett Regional Medical CenterRisk Adjusted Survival Rate Trend Mortality Rate
Rapid ImprovementGRMC State
IMPROVEMENT
Source: CRISP Data Report
0.42
0.47
0.54 0.55
0.82
0.810.78
0.81 0.8
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Jan- JunePrelim CY14
Jan- JuneCY14n= 43
Jan- SeptCY14n= 56
Jan- DecCY14n=71
Jan-MarCY15 Final
n= 5
Jan-JuneCY15 Final
n= 11
Jan- SeptCY15 Final
n= 25
Jan- DecCY15 Final
n=25
Jan-FebCY16n=4
Garrett Regional Medical CenterMaryland Hospital Acquired Conditions
(MHAC) Scores
GRMC Maryland Hospital Acquired Conditions…
Impr
ovem
ent
2015 3rd best performance in Maryland!
According to Senator Ben Cardin“GRMC is the role model for rural healthcare in the US today”
According to GRMC CEO: “It’s Because of the Maryland System”