NACCDO State of the Industry - Hubble

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NACCDO 2014

State of the Industry 2013 - 2014Current Challenges to the Case for Support of Hospitals and Health Systems

Michael [email protected]

PhilanthropyLeadership Council

1

mailto:[email protected]

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Taking the Donor Perspective

Three Lenses for Evaluating the Philanthropic Environment in Health Care

Source: Philanthropy Leadership Council interviews and analysis.

Donor-Centric Lenses

The Economy and Perception of Personal

Economic Security

Personal Motives and Perception of Value

and Impact

Hospital Performance and Perception of Need

in Health Care

Am I in the financial position to donate?

Is the organization a worthy cause?

Will my gift make a difference?

“MY CHECKBOOK” “THEIR STORY” “OUR IMPACT”

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Charities Feeling Bullish About 2013

Source: Flandez R, “70% of Charities Forecast Rise in Donations in 2013,” Chronicle of Philanthropy, April 8, 2013, available at: www.philanthropy.com, accessed June 6, 2013; Philanthropy Leadership Council interviews and analysis.

Lens #1: “My Checkbook”

Anticipated Direction of Change in Charitable Receipts

2013 compared with 2012

Rising Consumer Confidence

“Overall consumer confidence in the economy rose last year and that created a more positive environment for charities to go out in and build relationships [with donors].”

Andrew Watt, PresidentAssociation of Fundraising Professionals

”2%

7%

20%

12%

59% Increase by 1% to 15%

Increase by more than 15%

Stay the same

Decrease by 1% to 15%

Decrease by more than 15%

n=1,167

http://www.philanthropy.com/

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Giving Tends to Follow the Economy

Source: Giving USA Foundation™, “GIVING USA 2013,” Lilly Family School of Philanthropy, Indiana University, 2013; Philanthropy Leadership Council interviews and analysis.

2011–2012 Giving Trends

1) Health organizations include: Health care institutions and services; mental health and crisis intervention; diseases, disorders, and medical disciplines; and medical research.

Total Charitable Giving and S&P 500 Index

1972-2012 (in billions of inflation-adjusted dollars)

8.9%Giving to health care organizations as a percent of total

1.5% Total increase in charitable giving

Increase in giving to health organizations12.8%

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Economic Security


and Impact


in Health Care






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Other Headwinds Challenging Our Case for Support

Health Care Issues at the Forefront


Lens #2: “Their Story”

Increasing Transparency into Hospital Finances1

2

3

Politics of the Affordable Care Act

The Health System “Identity Crisis”

Top Three Case Vulnerabilities

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That’s One Way to Sell Magazines

“Exposé” Shines Spotlight on Hospital Pricing

Issue #1: Increasing Transparency into Hospital Finances

“When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational—no rhyme or reason—about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.”

Steven BrillTime Magazine

March 2013

”

Cited Examples of Hospital Pricing

BITTER PILLWHY MEDICAL BILLS

ARE KILLING USBY STEVEN BRILL

$77Box of sterile gauze pads

$1.50Single pill of

acetaminophen

$18One diabetes

test strip

Source: Brill S, “Bitter Pill: Why Medical Bills Are Killing Us,” Time, March 4, 2013; Advisory Board interviews and analysis. The TIME logo is the registered trademark of Time, Inc.

http://www.time.com/time/magazine/article/0,9171,2136864,00.html

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The PR Bombardment Continues

Health Care Costs Making National Headlines

Source: Clune S and Kane J, “Why Does Health Care Cost So Much in the United States?” PBS Newshour, November 25, 2011; Doyle J, “Hospital CEOs See Double-Digit Pay Hikes,” St. Louis Post-Dispatch, June 2, 2013; Evans M, “Use of CEO Compensation Comparisons Draws Heightened Scrutiny,” Modern Healthcare, May 11, 2013; Kavilanz P, “6 Reasons Health Care Costs Keep Going Up,” CNN Money, July 12, 2012; Kliff S, “Here’s Why Hospitals Set High Prices,” Washington Post, May 19, 2013; “Why Health Care Costs Are So High,” New York Times, June 3, 2013; Philanthropy Leadership Council interviews and analysis.

“Here’s Why Hospitals Set High Prices”Washington Post, 05/19/13“Use of CEO Compensation

Comparisons Draws Heightened Scrutiny”Modern Healthcare, 05/11/13

“Why Health Care Costs Are So High”New York Times, 06/03/13

“Why Does Health Care Cost So Much in the United States?”PBS Newshour, 11/25/11

“6 Reasons Health Care Costs Keep Going Up”CNN Money, 07/12/12

“Hospital CEOs See Double-Digit Pay Hikes”St. Louis Post-Dispatch, 06/02/13

http://www.pbs.org/newshour/rundown/2011/11/why-does-healthcare-cost-so-much.html

http://www.stltoday.com/business/local/hospital-ceos-see-double-digit-pay-hikes/article_431263e2-81c9-5367-b0bd-f48885169adb.html





http://www.modernhealthcare.com/article/20130511/MAGAZINE/305119956









http://money.cnn.com/2012/07/12/news/economy/health-care-costs/index.htm







http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/19/heres-why-hospitals-set-high-prices/





http://www.nytimes.com/2013/06/04/opinion/why-health-care-costs-are-so-high.html?pagewanted=all&_r=0

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COPD

Simpl

e Pne

umon

ia

Maj

or Jo

int R

epla

cem

ent

Minimum Maximum

1

2

CMS Fans the Flames on Hospital Pricing

New Database Profiles Charges for Most Frequent Discharges

Source: CMS, Medicare Provider Charge Data, May 2013, available at: www.cms.gov; Young J and Kirkham C, “Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences,” Huffington Post, May 8, 2013; Advisory Board interviews and analysis.

1) Chronic obstructive pulmonary disease.2) Simple Pneumonia and Pleurisy with complications and comorbidities.

“Our purpose for posting this information is to shine a much stronger light on these practices. What drives some hospitals to have significantly higher charges than their geographic peers? I don't think anyone here has come up with a good economic argument.”

Jonathan BlumDeputy Administrator, CMS

”Key Database Features

100 Most frequent discharges

163K Individual charges

3,337 Hospitals

Hospital Charge Variation

Chicago Hospital Referral Regionn=27

$5.8K

$28.3K

$12.7K

$39.4K $36.1K

$74.4K

http://www.cms.gov/

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Charges a Far Cry from Paid Prices

Most Pay Less than Fifty Cents on the Dollar

Source: 2012 Almanac of Hospital Financial and Operating Indicators , Optuminsight Inc, 2011; CDC, “National Hospital Discharge Survey,” 2010, available at: www.cdc.gov/nchs; Melnick GA and Fonkych K, “Hospital Pricing and the Uninsured: Do the Uninsured Pay Higher Prices?” Health Affairs, 2008, 27: w116-22; AHA, “Uncompensated Care Cost Fact Sheet,” January 2013, available at: http://www.aha.org; Advisory Board interviews and analysis.

The Rest of the Story

Hospital Revenue Received as Percentage of Charges

All Payers, 2010Discounts for Uninsured Patients

35.2%

43.6%

51.8% 5% Self-pay percent ofU.S. discharges, 2010

(28%)Median difference in collected price between uninsured, commercially-insured patients

$39.3B Uncompensated care provided by U.S. hospitals, 2010

http://www.cdc.gov/nchs

http://www.aha.org/

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Cross-Subsidy Economics on the Brink of Failure

Source: Advisory Board interviews and analysis.

1) Projected results for health care industry if hospitals do nothing to alter current course, based on the Health Care Advisory Board’s Margin Improvement Intensive that projects margin performance based on key financial and operational metrics from 158 hospitals.

Margin Improvement Analysis Results1

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%

Four Forces Eroding Future Margins

0-5% Decline

• Shifting payer mix: most demand growth over the next decade comes from publicly insured patients

• Continuing cost pressure: projected annualized commercial price growth half of historical norms

• Decelerating growth in reimbursement rates: commercial cost shifting stretched to the limit

• Deteriorating case mix: medical demand from aging population threatens to crowd out profitable procedures

!

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Responding to “Sticker Shock”

Source: Philanthropy Leadership Council interviews and insights.

Talking Points for Donor Conversations

Emphasize that philanthropy has essential role to play in ensuring that hospitals can continue to serve their communities, especially as pressure increases on operating margins; know your institution’s operating margin

Be equipped to discuss the “community benefit” the institution provides, whether that is charity care for low-income patients, free wellness services and diagnostic screenings, or something else; know how much charity care and community benefit your institution provides each year

Explain that hospitals and health systems are facing more financial pressures than they ever have; be prepared to talk about cuts to Medicare, Medicaid payments and that the population is becoming more expensive to care for

If your operating margin is particularly healthy, reinforce the concept that, as not-for-profit institutions, hospitals reinvest profits into providing services rather than pay them out to shareholders; position philanthropic opportunities as sound financial investments

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2

3




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Not the Smoothest of Starts

Federal Exchange Slow to Answer the Bell

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Some State Exchanges Faring Better

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Enrollment Slow, But Most Websites Working

Source: Kaiser Family Foundation, “State Decisions for Creating Health Insurance Exchanges, as of May 28, 2013,” available at: www.kff.org; CNBC, “One Washington gets Obamacare Right,” available at: http://www.cnbc.com/id/101096445, Kentucky Governor’s Office, “2.6 Million Page Views on Kynect for Affordable Health Insurance,” available at: http://migration.kentucky.gov/newsroom/governor/20131005kynect.htm; Health Care Advisory Board interviews and analysis.

State Decisions on Exchange Participation

16 States, District of Columbia Running Own Exchanges

27

17

7

State-Based ExchangeFederal

Exchange

Partnership Exchange

State Exchange Enrollment Within First Week of Launch

>40,000 Completed applications in New York

16,311 Completed applications in California

326 Completed applications in Maryland

12,955 Completed applications in Kentucky

http://www.kff.org/

http://www.cnbc.com/id/101096445

http://www.cnbc.com/id/101096445

http://migration.kentucky.gov/newsroom/governor/20131005kynect.htm

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Post-Subsidy Premiums Within Reach for Many

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But Penalties Still Smaller than Cost of Coverage

Observation #1: Affordable Premiums

Year Annual Penalty

2014 $95 or 1% of income

2015 $325 or 2% of income

2016 $695 or 2.5% of income

Penalties for Non-compliance

Annual Penalty

Income: $30,000

2014 2015 2016

$300

$600

$750

Source: Kaiser Family Foundation, “Kaiser Health Tracking Poll,” March 2013, available at: kff.org; PwC, “Health Insurance Exchanges: Long on Options, Short on Time,” October 2012, available at: www.pwc.com; Health Care Advisory Board interviews and analysis.

Weighted Average Monthly Premiums for Adult Individual Aged 27

For Second Cheapest Silver Plan, by State, 2014, Pre and Post subsidy1 for Income of $30,000

Tennessee Florida Mississippi Alaska

$154

$255 $286

$344

$154

$214 $214 $214

Before Subsidy After Subsidy

http://www.pwc.com/

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Trading Price for Volume on the Public Exchanges

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Reimbursement Information Still Anecdotal , but Rates Not Generous

Source: Mathews AW and Kamp J, “Another Big Step in Reshaping HealthCare,” Wall Street Journal, February 28, 2013, available at: www.online.wsj.com;; Health Care Advisory Board interviews and analysis.

Observation #2: Low Reimbursement

1) Pseudonym.

Anticipated Provider Reimbursement Rates for Exchange Plans

Catholic Health Initiatives

Modest discounts from commercial rates

Tenet Healthcare Up to 10% below commercial rates

Meriwether Hospital1

5% below commercial rates

WellPoint Inc.Between Medicare

and Medicaid rates

Meyers Health1

10% above Medicare rates

Millern Medical Center1

20% below commercial rates

http://www.online.wsj.com/

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Lower Prices through Narrower Networks

18

Source: Covered California, “Health Plans & Rates for 2014: Making the Individual Market in California Affordable, May 23, 2013, available at: www.coveredca.com; Kliff S, “California Obamacare premiums: No ‘rate shock’ here,” Washington Post, May 23, 2013, available at: www.washingtonpost.com; Terhune C, “Insurers limit doctors, hospitals in state-run exchange plans,” LA Times, May 24, 2013, available at: www.articles.latimes.com; Health Care Advisory Board interviews and analysis.

Observation #3: Narrow Networks

1) Silver plan premiums for 40-year old individual, before subsidy; actual rates represent HMO plans in Northern Los Angeles.

Monthly Health Insurance Premiums

Cedars-Sinai Medical Center not participating in any exchange plan networks

UCLA Health System participating in only one exchange plan network

Prominent Health Systems Largely on the Sidelines

36% 80%13Blue Shield of

California network physicians in payer’s

exchange plans

California physicians, hospitals participating

in at least one exchange plan

Insurers offering plans on Covered

California exchange

5MIndividuals expected

to be eligible for Covered California

exchange, 2014

$450

$222 $254 $294

Actual Premiums

Select California Exchange Plans, 20141

http://www.coveredca.com/

http://www.washingtonpost.com/

http://www.articles.latimes.com/

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Employer-Sponsored Coverage at a Crossroads

Employers Choosing Between Abdication, Activation

“Activation”“Abdication”

Self-Funded Benefits

No Health Benefits

Pros:

• Full control over networks

• Exemption from minimum benefits requirements

Cons:

• Greater exposure to unexpected expenditures

• Complex network negotiations

Defined Contribution/Private Exchange

Pros:

• Health benefits still part of compensation package

• Predictable, controllable cost growth

Cons:

• Fundamental disruption in benefit design

• Employees may under-insure

Pros:

• Total escape from cycle of rising premium costs

Cons:

• Fine for violating employer mandate

• Loss of important labor market differentiator

Spectrum of Options for Controlling Health Benefits Expense

Source: Health Care Advisory Board interviews and analysis.

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Employers Already Scaling Back Coverage

Erosion of Employer-Sponsored Coverage Well Underway

Sources: Sonier J, et al., “State-Level Trends in Employer-Sponsored Health Insurance,” Robert Wood Johnson Foundation, April 2013, available at: www.rwjf.org; Collins R, et al., “Insuring the Future,” The Commonwealth Fund, April 2013, available at: www.commonwealthfund.org; Towers Watson, “Reshaping Health Care,” 2013, available at: www.towerswatson.com; Health Care Advisory Board interviews and analysis.

Individuals Covered by ESI1

23%Employers planning

to offer CDHP2 as only plan option, 2014

25%Insured non-elderly adults with deductibles $1,000

or higher, 2012

Non-elderly Population

2000 2011

69.7%

59.5%

11.5M fewer individuals

Contribution to Insurance Premiums

1) Employer-sponsored insurance.2) Consumer-directed health plan.

Coverage for Family of Four

$5,866

$2,137

$11,429

$4,316

2002 2012

Employer

2002 2012

Worker

95% growth

102% growth

http://www.rwjf.org/

http://www.commonwealthfund.org/

http://www.towerswatson.com/

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Some Employers Dodging Their Mandate

Despite Delay, Employers Finding Ways to Avoid Insurance Requirement

Source: Reynolds J and Merin J, “Business Leaders Give 2013 Outlook Mixed Reviews,” International Franchise Association, January 2013, available at: www.franchise.org; Mercer, “Health Reform Poses Biggest Challenges to Companies with the Most Part-Time and Low-Paid Employees,” August 8, 2012, available at: www.mercer.com; “Regal Entertainment Group Cuts Employee Hours, Explicitly Blames Obamacare in Memo: Report,” The Huffington Post, April 17, 2013, available at: www.huffingtonpost.com; Health Care Advisory Board interviews and analysis.

1) Full-time equivalents.2) n=72 franchisees, all industries.3) n=1,203 employers.

Case in Brief: Regal Entertainment Group

• In March 2013, reduced number of work shifts for non-salaried employees to ensure part-time status

• First public company to institute policy

31%Franchisees that plan to cut jobs to stay under 50-employee threshold2

32%Retail and hospitality companies that plan to “change workforce strategy” to avoid penalties3

Strategies to Avoid ACA Penalties

Cut jobs to remain under 50 FTEs1

Convert full-time employees to part-time status

Hire all new employees at part-time status

Split into smaller companies with fewer than 50 FTEs

Memo to Managers

To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law's definition of a full time employee. To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget…

http://www.franchise.org/

http://www.mercer.com/

http://www.huffingtonpost.com/

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New Path for Employer Cost Shifting

Private Health Insurance Exchanges Open for Business

Source: Towers Watson, “18th Annual Towers Watson Employer Survey on Purchasing Value in Health Care,” 2013, available at: www.towerswatson.com; Wall JK, “Mercer Courts Employers with Private Exchange,” Indianapolis Business Journal, April 22, 2013, available at: www.ibj.com; Health Care Advisory Board interviews and analysis.

Responding to Market Demands

“The high-caliber carrier participation in Mercer’s private benefits exchange matches the increasing interest displayed by our clients and prospects.”

Julio A. Portalatin President and CEO, Mercer

”

15%Employers considering

private exchange model for 2014

Private Health Insurance Exchanges

• Over 100,000 employees enrolled in Aon Hewitt’s private health insurance exchange in fall 2012

• Benefits offered by nine national, regional carriers

• Launching private health insurance exchange in nine states

• Expect to serve employers covering approximately 30,000 individuals

• Offering suite of exchange offerings to employers

• Will include coverage from 10 major insurers

http://www.towerswatson.com/

http://www.ibj.com/

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Igniting a Race to the Bottom

Exchange Shoppers Trading Premiums for Deductibles

Source: Mathews AW, “To Save, Workers Take On Health-Cost Risk,” Wall Street Journal, March 17th, 2013, available at: www.wsj.com; Health Care Advisory Board interviews and analysis.

1) Preferred provider organization.2) Health maintenance organization.

Case in Brief: Sears, Darden Restaurants

• For 2013 open enrollment, self-insured large employers redesigned benefits to reduce health spend through defined contribution model

• Employers offered employees lump sum credit to choose coverage in Aon Hewitt’s online marketplace

2013

2012

47%

70%

14%

18%

39%

12%

PPO HMO

High-Deductible Plan1 2

42%Employees on Aon Hewitt health

insurance exchanges selecting plans less rich than the previous year

Results of Open Enrollment Process

http://www.wsj.com/

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The Future of Employer-Sponsored Insurance?

Private Exchanges Poised For Rapid Growth

2014 2015 2016 2017 2018

1M

9M

19M

30M

40M

Projected Private Exchange Enrollment

27%Percentage of consumers receiving

employer-sponsored coverage today projected to receive benefits through

private exchanges in 2018

Factors Influencing Move to Private Exchange Models

Logistical difficulty of benefit renegotiations

Internal politics of benefit changes

Attractiveness of other options

Source: Accenture, “One-in-Four Consumers Will Receive Employer Health Benefits Through Insurance Exchanges in Five Years, Accenture Research Shows,” available at: http://newsroom.accenture.com/news/one-in-four-consumers-will-receive-employer-health-benefits-through-insurance-exchanges-in-five-years-accenture-research-shows.htm, Health Care Advisory Board interviews and analysis.

http://newsroom.accenture.com/news/one-in-four-consumers-will-receive-employer-health-benefits-through-insurance-exchanges-in-five-years-accenture-research-shows.htm



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Reexamining the ACA “Grand Bargain”

Source: 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; CBO, “Effects of the Affordable Care Act on Health Insurance Coverage—February 2013 Baseline,” February 5, 2013, available at: www.cbo.gov; Advisory Board interviews and analysis.

1) Non-elderly population.2) Disproportionate Share Hospital.

ACA Hospital Payment Cuts

2013-2023

2013 2014 2015 2016 2017 2018

2M

14M

20M

26M27M 27M

Projected Cumulative Increase in Newly Insured Population1

Provider “Get”: Higher Revenue

• Medicaid expansion• Insurance exchanges • Employer mandate

Provider “Give”: Lower Payment

• Medicare rate cuts• DSH cuts

$260B

$316B

$56B

2DSH2 Payment Cuts

http://www.cbo.gov/

http://www.cbo.gov/

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Divided Public Opinion of Health Care ReformOpponents Taking Stronger Stance

Source: Ramlet M and Dropp K, “Memo on the Poll Findings – Public Opinion on the Affordable Care Act,” June 12, 2013, available at: www.themorningconsult.com, accessed June 14, 2013; Philanthropy Leadership Council interviews and insights.

Do You Approve or Disapprove of the Affordable Care Act?

8%

20%

23%

41%

Strongly approve

Somewhat approve

Somewhat disapprove

Strongly disapprove 5%

15%

23%

11%

33%

How Do You Think the Affordable Care Act Will Affect You and Your Family?

June 2013

n=1,000

June 2013

n=1,000

http://www.themorningconsult.com/

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Common Sentiments from Million-Dollar Health Care Donors

Many Donors Interested, but Uncertain

Source: Philanthropy Leadership Council interviews and insights.1) Pseudonym.

“Health care has become too political, and I’ll be on the sidelines until things are sorted out.”

“I defy anyone to make sense of the current medical care situation.”

“It’s hard to plan when you don’t know what the future is.”

“We don’t know what’s going to happen. The hospital president went to a meeting [about health care reform], and he came out more confused than before. Nobody has their finger on the pulse.”

Typi

cal S

essio

n

Health

Car

e Ref

orm

Ses

sion

50

220

Attendance at Biannual Donor Educational Sessions at Odair Health System1

”

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Coverage Expansion Reducing Perception of NeedLess Charity Care Provided, Less Charity Required

Source: CBO, “Effects of the Affordable Care Act on Health Insurance Coverage—February 2013 Baseline,” February 5, 2013, available at: www.cbo.gov; Philanthropy Leadership Council interviews and analysis.1) Non-elderly population.

A Threat to Giving?

“If everybody would truly be able to receive treatment under ObamaCare, it probably would at that point impact what we may be giving. People will already be covered, and we’re probably going to be taxed a lot more to get to that point anyway.”

Million-dollar health care donor”

Projected Cumulative Increase in Newly Insured Individuals1

2013 2014 2015 2016 2017 2018

2M

14M

20M

26M27M 27M

http://www.cbo.gov/

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Key to Emphasize Local Impact

Most Large Gifts to Health Care Organizations Stay Local

Source: “The Million Dollar Gift Next Door,” Indiana University Lilly Family School of Philanthropy, April 17, 2013; Philanthropy Leadership Council interviews and analysis.1) Geographic regions include Northeast, Midwest, South, and West.

60%

7%

33%

Within the donor’s state or geographic region1

Outside the donor’s geographic region1

Unidentified

Geographic Distribution of $1M+ Gifts

2000–2011

n=20,941 gifts

http://www.philanthropy.iupui.edu/news/article/the-million-dollar-gift-next-door

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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; Advisory Board interviews and analysis.

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197690% market share of commercial film business

1990sDigital cameras enter mainstream market

2012Kodak files for bankruptcy

Timeline for Eastman Kodak Business

Researchers featured in New England Journal of Medicine

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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

• Expand market share• Strengthen service lines• Exert pricing leverage

• Solidify referrals• Secure physicians• Increase utilization

• Expand covered lives• Compete on outcomes• Minimize total cost

• Assemble network• Offer convenience• Expand access

• 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


Description

Key Success Factors

Performance Metrics

Critical Infrastructure

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Carving a New Growth Path

Competing Under Distinct, but Not Mutually Exclusive, Identities


Best-in-Class Acute Care Destination

Consumer-Oriented Ambulatory Network

Full Service Population Health Manager

Integrated Finance and Delivery System

• Assumes full risk by offering health plan to subscribers

• Unifies care financing and delivery into single coordinated care enterprise

• Maintains extensive network of outpatient care sites

• Offers convenient primary care, diagnostic, procedural services at competitive prices

• Assumes delegated risk from payers and/or employers

• Prioritizes care management, coordination to limit avoidable demand

• Consistently delivers efficient, effective acute care episodes

• Ensures reliable coordination, communication, data sharing across the care continuum

Four Emerging Provider Identities

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Fundraising’s Role in Carving a New Growth Path

What Can You Make the Case For?


• Outpatient clinics

• Primary care offices

• Post-acute care facilities

• Outpatient lab, imaging centers

• EMR, meaningful use

• Employee utilization liaisons

• Inpatient care coordinators

Investment Priorities

• Outpatient clinics

• Outpatient care managers

• Clinical patient guides

• Disease management

• Palliative care

• Non-urgent care navigators

• Transition partners


• Telemonitoring services

• Home health initiatives

• Primary care offices

• Outpatient lab, imaging centers

• Wellness centers


Best-in-Class Acute Care Destination

Consumer-Oriented Ambulatory Network

Full Service Population Health Manager

Integrated Finance and Delivery System

• IT systems

• Cash/unrestricted funds

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Focusing on What We Can Control


Lens #3: “Our Impact”

“You feel like it’s just not fundraising

as it is solving a problem.”

Underlying Values Desire for Impact

“I do believe that we need to give; those of us that have, we need to help.”

“Charitable giving for us is really from following what the Lord has taught us… where much is given, much is expected.”

“Blaming the government and taxes is just an excuse for not acting.”

“We can afford it, and I’m a great believer in giving while I’m living.”

“We want to give all our money away while we’re still young enough to appreciate the impact … it’s such a joy to see how lives are changed.”

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Revisiting the Conversation About Impact


Donor Comprehension Barriers

Reframed Donor Perspective

A Bridge Too Far

Priorities focused outside hospital sphere

Institutional Priority

Non-traditional but current priorities of broader health system

IntangibleConcept lacks physical manifestation

Concrete Initiative

Easily articulated explanation

Far Removed

Impact several steps away from meaningful donor experience

Direct Impact

Affecting lives of people throughout community

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Elevating Philanthropy’s Strategic Value

Translate Our Relevance and Impact to Key Stakeholders


Providing 360° Value

Clinicians

Donors

Executives

Foundation

NACCDO State of the Industry - Hubble

Presentations & Public Speaking

Transcript of NACCDO State of the Industry - Hubble