Judy Pins, RN, MBA

The New Era of Healthcare Part 1

Objectives

Discuss the major transitions occurring in payment models.

Describe the 4 major issues impacting a health systems profitability.

Describe why Surgical Services is so critical as part of the healthcare reform agenda.

Discuss what OR Directors need to accomplish under healthcare reform.

So…how do we drive down cost and improve quality?

15

Medicare Rolls in Line to Increase Dramatically

2011 US Population Distribution By Age

Source: U.S. Census Bureau, available at: http://www.census.gov, accessed on September 13, 2011; Kaiser Family

Foundation, available at: http://www.kff.org/medicare/h08_7821.cfm,

accessed on September 13, 2011; Health Care Advisory Board interviews and analysis.

~10,000/dayNewly eligible Medicare

beneficiaries

23%Percentage of

population covered by Medicare in 2030

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

75 M baby boomers

16

Wages, Benefits, Utilization All on the Rise

Nursing Shortage

Source: American Hospital Association Chartbook, available at: http://www.aha.org/aha/research-and-trends/chartbook/index.html; Labor Notes, available at: labornotes.org, accessed on May 1, 2011; Health Care Advisory Board interviews and analysis.

Persistent Labor Cost Concerns

Union Pressure

2000 2005 2010 2015 2020

111219

406

704

1,017

33%Proportion of contract

negotiations involving explicit strike threats, 2009-2010

Projected Shortage of RN FTEs, in Thousands

Staffing ratios mandated by unions, law

Wages must rise to compete for scarce labor

Health benefit packages difficult to pare back

18

Shopping Carefully for High-Cost Acute Care Services

Walmart Steering Employees to Preferred Providers for Surgical Care

Case in Brief: Walmart Centers of Excellence

• Walmart entered into bundled payment agreements with six health systems covering heart, spine, and transplant surgeries

• Program launched in January 2013; includes 1.1 million covered lives• Providers selected based on convenience, quality, and potential for cost savings

Walmart Centers of Excellence Partners

• Cleveland Clinic• Geisinger Medical Center• Mayo Clinic• Mercy Hospital Springfield• Scott & White Memorial Hospital• Virginia Mason Medical Center

Source: “Walmart Expands Health Benefits to Cover Heart and Spine Surgeries at No Cost to Associates,” Walmart News, October 12, 2012, available at:

http://news.walmart.com; Health Care Advisory Board interviews and analysis.

OR Director’s Focus

Partnering with surgeons, anesthesiologist, and administration to standardize care.Standardizing supplies ( is there clinical evidence to support carrying 5-6 brands for

implants? )

Standardizing processes and protocols

Reducing waits

Demonstrating superior outcomes at a lower cost

Set aggressive targets for efficiency

Can it be done with less labor?