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GE Healthcare Camden Group Insights Blog

10 Do’s and Don’ts for a Smart Transaction as a Healthcare Provider

Posted by Matthew Smith on Dec 15, 2016 11:22:35 AM

By Brian Hackman, MBA, MSIS, ASA, Manager, GE Healthcare Camden Group 

10-dos-and-donts.pngMany, if not most, healthcare organizations have been involved in a transaction with another business entity within the past several years, whether with a physician practice, outpatient center, hospital, or health system.2014 and 2015 saw record numbers of healthcare M&A transactions, and the desire and pace of healthcare organizations to complete deals will likely remain strong even in light of the recent presidential election results.

Now more than ever, it’s important to reemphasize the fundamentals of a successful transaction. Below is a list of ten “do’s” and “don’ts” for a smart transaction as a healthcare provider. In the current environment, it is imperative that healthcare organizations properly prepare and execute a prudent transaction process. Otherwise, a lot of time, money, and attention can be diverted from managing core business operations.

Do

  1. Identify a strategic vision for the transaction. A strategic vision lays the groundwork for the transaction. Be able to articulate and defend the vision of the transaction and the environmental factors and business rationale leading to it. Draft a post-transaction governance, transaction, and organizational structure and outline any preliminary terms and conditions. Finally, confirm the transaction is consistent with your strategic plan. Two questions to contemplate: (1) Does the transaction better position the organization for a value-based environment and (2) does the transaction add a competency or resource necessary to succeed?
  1. Seek an independent, third party to perform a business valuation and anti-trust assessment. Transactions in the healthcare industry involve a number of legal, regulatory, and tax considerations. By engaging with an independent third party, you gain a greater level of assurance that the purchase price is fair. It also limits your exposure to potential compliance and regulatory issues (i.e., Stark Law, Anti-Kickback Statute), and provides proper documentation if ever audited by a governing body, such as the Centers for Medicare and Medicaid Services, the Internal Revenue Service, or the Federal Trade Commission. Outside counsel to inform potential anti-trust or other regulatory risks is also crucial.  A market assessment to determine the potential market impact, as well as potential consumer benefits of the transaction should be performed to assure that all parties are informed of the opportunities, requirements of the transaction, as well as potential risks.
  1. Complete thorough due diligence. The purpose of the due diligence phase of a transaction is to gain a greater understanding of your target company. Use this process to research and evaluate any potential issues, liabilities, or concerns. An analysis of the target company typically includes, but is not limited to, a review of its operations, such as revenue, expenses, volume/productivity, and coding and documentation; its finances, including the cash flow and strength of the target’s balance sheet; and any legal considerations, including pending litigation that could impact future profitability. In addition, pay keen attention to the cultural fit between the two organizations. If the cultures are too divergent, or the cultural integration is back-burnered until after the transaction, it is unlikely that a deal will work out. Depending on the findings of the due diligence, it may be necessary to renegotiate the proposed structure of the transaction. Don’t be afraid to walk away from the transaction if the risk profile of the target company exceeds the risk tolerance of your organization.
  1. Develop internal financial projections. Based on the information provided during the due diligence process, develop financial projections for the target company or combined entity. It is likely these internal financial projections will differ from those generated during the business valuation, as the projections will incorporate contract rates from your organization and any prospective synergies to be gained from the transaction, which the business valuation may not include. Depending on the type of transaction, a business plan of efficiencies (“BPOE”) can be a useful guideline to articulate where and how operational and structural efficiencies will be created. Use these financial projections to understand the impact of the transaction on your current financials and cash flow. These are also good ways to measure future performance versus targets. Calculate the return on investment to ensure it is consistent with your organization’s goals..
  1. Understand the impact of the transaction on your balance sheet. Take into account and plan for how the transaction will affect your balance sheet. Will the transaction be financed with cash, debt, or a combination of both, and what are the advantages and disadvantages of each? How will the purchase price be allocated on the balance sheet? Be sure to understand how or whether the transaction will impact any debt covenants or key balance sheet ratios, which can influence your credit rating.  

Don’t

  1. Be bewitched by the shiny rock. At some point, an opportunity may arise to pursue a transaction with a top organization in your market. At first glance, the concept of joining forces may be compelling. However, in this situation, it is particularly critical to follow the steps outlined above and evaluate the financial and operational merits with clarity and objectivity. Ensure it isn’t too good to be true and really is in the best interest of the organizations and their patients.
  1. Buy into overly optimistic integration synergies. Rosy projections can make any potential transaction seem like a no-brainer. Run various scenarios (e.g., expected, best case, and worst case) to test the primary assumptions or question the main drivers of the projections for reasonableness. It is advisable to hash out and understand the operational and financial risks during the due diligence process rather than after the transaction closes.
  1. Assume the integration process will be 100 percent seamless. While the transaction process can be long and time consuming, don’t assume that once the transaction closes, the hard work is over. In fact, the hard work is just beginning. The integration of two organizations can involve numerous operational and cultural hurdles, including blending corporate cultures, information technology systems, human resource systems, operating mechanisms, etc. Successful integration requires thorough pre-transaction planning and consistent ongoing communication. Consider employing change acceleration processes to facilitate the integration process.
  1. Lose focus on what you do well. Most organizations typically have a small number of core strengths. Acquiring business lines outside of this portfolio of expertise can sometimes dilute management’s ability to run each efficiently. In such situations, a higher level of due diligence may be required to ensure you have the internal capability to manage that business line. If not, consider bringing in outside expertise through a management services agreement or hire the required talent from outside. Alternatively, consider other types of transactions, such as joint ventures or joint operating agreements, where the day-to-day management can be handled by partners who specialize in that particular space.
  1. Engage in this process alone. Outside third party expertise can help ensure a higher probability of success. Form a team of advisors to create a sounding board for your thoughts and ideas. Legal, financial, and operational support can not only mitigate potential compliance and regulatory risks, but also assist in validating the rationale for the transaction to the various stakeholders in the respective organizations. Post-transaction, advisors can help navigate the inevitable challenges that will arise during the integration process.

Hackman.jpgMr. Hackman is a manager with GE Healthcare Camden Group and specializes in healthcare finance. His focus includes fair market valuations and strategic planning for both nonprofit and for-profit healthcare organizations. He also has experience in reimbursement analysis, service line planning, and financial forecasting. He may be reached at brian.hackman@ge.com.

 

 

 

Topics: Hospital mergers and acquisitions, Mergers and Acquisitions, Brian Hackman, M&A

Two New Hospital Command Center Articles Highlight Increased Efficiencies in Patient Flow and Facility Operations

Posted by Matthew Smith on Dec 7, 2016 12:22:01 PM

Command Center.jpgTwo recently published articles showcase the new Judy Reitz Capacity Command Center at the Johns Hopkins Hospital in Baltimore. Designed and built by GE Healthcare Partners, the Command Center takes a page out of the aerospace and aviation industries by combining the latest in systems engineering, predictive analytics, and problem-solving to better manage patient flow in and through the hospital and other operations.

A story featuring the implementation of the Johns Hopkins Wall of Analytics appeared recently in the Innovations column (print edition) of Modern Healthcare. Command Centers Help Manage Flow highlights how command centers bring together patient-flow decision makers and equip them with data and analytics to help them prepare for surges and avoid delays in care.

To read this article on the Modern Healthcare website, please click the button below. Current Modern Healthcare nonsubscribers may register for free. Upon registration, viewers will have access to 12 free articles every 30 days.

Command Centers, Wall of Analytics,

Likewise, Command Center Leads to More Efficient Facility Operationswas recently published by Health Facilities Management. This article delves into some key areas of operational improvement and highlights results already realized, including:

  • Patient transfers. There has been a 60 percent improvement in the ability to accept patients with complex medical conditions from other hospitals around the region and country.
 
  • Ambulance pickup times. Johns Hopkins’ critical care team is now dispatched 63 minutes sooner to pick up patients from outside hospitals.
 
  • Emergency department flows. A patient is assigned a bed 30 percent faster after a decision is made to admit the person from the ED. Patients are transferred 26 percent faster after they are assigned a bed.
 
  • Operating room transfers. Delays from the operating room after a procedure have been reduced by 70 percent.
 
  • Patient discharges. Twenty-one percent more patients are now discharged before noon compared with that of last year.

To read this article in its entirety, please click the button below to be taken immediately to the Health Facilitites Management website:

Command Center, Capacity Management, Operations


To request more information or to contact the GE Healthcare team about Capacity Command Centers, please click the button below:

Capacity Command Centers

Topics: Command Center, Capacity Command Center, Facilities Operations, Patient Flow

Infographic: 10 Things to Know About MACRA

Posted by Matthew Smith on Dec 2, 2016 1:57:48 PM

MACRA_Image.pngOur colleagues at Athena Health created the infographic, below, to help providers and medical practice professionals understand the complex MACRA mandate and resulting payment adjustments. 

Why settle for a neutral or small positive adjustment in 2019? Why not GO BIG with MIPS in 2017? Earn an exceptional performance-positive adjustment on top of the possible payment adjustment of up to 4%.

CMS is funding a pool of $500 million for exceptional performers who achieve a final score of 70 points or higher. With a final score between 70 and 100, (subject to the application of a scaling factor by CMS), eligible clinicians would receive a payment increase above 4% in 2019.

In addition to the positive adjustment, Going BIG would promote your clinicians’ social reputation (Physician Compare) and accelerate the shift towards value--including future participation in Advanced Alternative Payment Models.

Are you ready to Go Big and be an exceptional performer in 2017?

  • Have you successfully reported PQRS in previous years and on track in 2016?
  • Have you successfully attested to the EHR Incentive Program (Meaningful Use)?
  • On your Quality and Resource Use Report (QRUR), do you compare favorably?
  • Are you ready to move toward value-based care?

If you answered yes to these questions, you're already on your way. 

Let GE Healthcare Camden Group help you reach your MACRA potential and maximize your MIPS payments. To get started, simply click on the button below and one of our MACRA experts will contact you.

MACRA


MACRA Infographic.jpg

Topics: Infographic, Healthcare Infographics, MACRA, MIPS

Is Your Medical Group Performing at Peak Efficiency?

Posted by Matthew Smith on Nov 30, 2016 11:40:05 AM

Is-Becoming-a-Physician-Right-for-You.jpgHaving a high-performing medical group affiliated with your system is more important than ever. Physicians are vital not only to the success in the medical group, but across the continuum of care. However, running a medical group is getting more and more challenging. Reimbursement increases are not keeping up with rising costs, government regulations are increasing, payment models are shifting from volume to value, physicians are harder to recruit and retain, there is increased competition from new providers such as retail, concierge, and tele-providers, and patient expectations for access and service are at an all-time high. 

If you have recently found yourself asking the following questions, rest assured that we have the right answers:

How do we improve the financial performance of our medical group operations? 

  • We found $19 million in bottom line improvement for a 600-physician medical group.

How do we improve patient access and efficiency? 

  • By redesigning work flows in a large primary care and urgent care network, we reduced the time physicians spent on administrative tasks and rework by more than one hour per physician per day.

Can we make our recruitment process smoother, so physicians achieve maximum effectiveness faster?

  • We redesigned a health system’s physician recruitment and onboarding strategy, saving over $1,000,000 in non-productive physician wages during the first year and an additional revenue gain of $780,000 from reduced timeframes between start-date and enrollment date.

How do we get our employed physicians energized around the success of our medical group? 

  • We created a new governance and management model for a hospital-employed group that actively engaged physicians in the strategy and operations of the medical group and designed a physician leadership development program to help support new physician leaders

Can we align our physicians’ incentives with those of our organization? 

  • We facilitated the development of new physician and mid-level compensation plans that support performance under new payment models by incentivizing quality outcomes, access to care, efficiency, and patient loyalty.

Is it possible to facilitate the collaboration our physicians seek, while positioning them for greater market success?

  • We recently merged seven cardiology groups into one new medical group, including legal structure, governance, management, compensation, and operations. 

GE Healthcare Camden Group has been helping improve the performance of medical groups since 1970. Our consultants include experienced practice administrators, physicians, nurses, revenue cycle managers, care coordinators, EMR experts, change management experts, and Lean trained performance improvement specialists.

We would welcome an opportunity to speak with you regarding your physician enterprise and how we might be able to help you answer your specific questions. 

To contact our physician services experts, please click the button below and complete the short form. Our team will follow up with you at our first availability.

Medical Group, Efficiency

Topics: Aligned Incentives, Employed Physicians, Medical Group, Physician Services., Medical Group Efficiency

Webinar Reminder: Building an Analytics-Based Value Model to Validate Transformation Investments

Posted by Matthew Smith on Nov 29, 2016 2:10:38 PM

shutterstock_392113519.jpgPlease join GE Healthcare Camden Group for a complimentary, 60-minute webinarBuilding an Analytics-Based Value Model to Validate Transformation Investments, on Thursday, December 8, 2016, at 12:00 P.M., ET.

Date:

Thursday, December 8th, 12:00 P.M., Eastern

Background:

Healthcare organizations are struggling to understand the impact of their investments in population health initiatives. To help measure performance risk and evaluate return on investment ("ROI"), organizations are building and implementing analytics-based value models as decision-making tools. Creating these value models allows healthcare organizations to quantify risks and evaluate viability. It also allows organizations to measure and track ROI in digital health technology and resources associated with various programs aimed at managing the health of the populations they serve.

GE Healthcare Camden Group's team of analysts, data scientists, and actuaries builds comprehensive analytics-based value models for organization leaders (CFO, CMO, CIO, Population Health Leaders) wanting to evaluate their ROI from investments in care management programs, look to better manage utilization, and predict outcomes.

Overview:

In this complimentary webinar, members of the GE Healthcare Camden Group team will deliver an overview of the analytics-based value model and how high-performing healthcare organizations are leveraging these to guide strategic decision making and prioritize investments in value-based care initiatives.  

Topics to be Addressed:

Held in a round-table format with GE Healthcare Camden Group senior leaders representing the roles of an organization's CFO, CMO, and CIO, the webinar will address the following questions facing today's leaders:
  • Where should organizations invest resources in order to drive the most value from their care management programs?
  • What is the impact on their programs to both acute and ambulatory utilization?
  • Which programs are driving the greatest value and how are these measured?
  • What “value levers” are important in order to drive the best outcomes?
  • What is the expected outcomes from managing certain medical conditions and/or population risk cohorts?
  • What is the typical ROI of their care management programs and population health initiatives?
  • How can this information be used to support risk-based contracting with payers and other providers?

GE Healthcare Camden Group Presenters:

Marino_Dan.jpgDaniel Marino, MBA, MHA, Executive Vice President Mr. Marino is an executive vice president with GE Healthcare Camden Group with more than 25 years of experience in the healthcare field. Mr. Marino specializes in shaping strategic initiatives for healthcare organizations and senior healthcare leaders in key areas such as population health management, clinical integration, physician alignment, and health information technology. With a comprehensive background in all aspects of practice management and hospital/physician alignment, Mr. Marino is a nationally acknowledged innovator in the development of Accountable Care Organizations and clinical integration programs.

chopra2-110511-edited-239718-edited.jpgShaillee J. Chopra, PMP, Senior Manager Ms. Chopra is a senior manager with GE Healthcare Camden Group and specializes in developing and managing innovative technology portfolios for value-based and clinically integrated healthcare networks. She is highly experienced in leading information technology and consumer experience strategy development, as well as transformations to enable clinical integration, accountable care, and population health management strategies for organizations invested in innovation and transformation of care delivery models.

 

DiLoreto.pngDavid DiLoreto, M.D., MBA Dr. DiLoreto, senior vice president at GE Healthcare Camden Group, is a physician-executive who is highly experienced in executive management, strategy and operations of healthcare delivery systems, and managed care companies. He has deep management expertise in community-based and academic health systems, large group medical practices, hospitals, and managed care organizations. His areas of specialty include clinical transformation, population health, business process improvement, leadership development, medical informatics, and data management and analytics.

GreenB1.pngRobert Green, MBA, FACHE, CHFP Mr. Green is a senior vice president and the practice lead for the Financial Operations and Transactions practice. He has more than 26 years of healthcare experience with 13 years of healthcare consulting experience and 13 years of provider-based financial, operational, and strategic experience among health systems, hospitals, medical groups, management services organizations, and physician hospital organizations.

 

To Register:

To register, simply click the button below, complete a short registration form, and press the "Cick to Register!" button. You will receive a confirming email. A second email will be sent the week of December 5th with webinar login/call-in instructions.

Please note: This webinar is intended for providers, provider organizations, and industry partners. Because of the proprietarty nature of the information shared during this webinar, independent consultants and consulting agencies will not be provided access to programming. GE Healthcare Camden Group reserves to the right to limit attendance at this event. 

Value Model, Webinar, Digital Health Analytics

Questions?

Please contact Matthew Smith at msmith@ge.com

Topics: Webinar, Daniel J. Marino, Shaillee Chopra, Digital Health Services and Data Analytics, Value Model, David DiLoreto, Robert Green

5 Steps to Achieve System Integration

Posted by Matthew Smith on Nov 17, 2016 4:03:24 PM

By Brandon Klar, MHSA, Senior Manager, GE Healthcare Camden Group

integration.pngAn effective integration plan not only aligns operations and maximizes the collective system resources, it also serves as a roadmap and a vehicle to cultural integration. Recognizing the need to balance both quantitative and qualitative inputs in the identification of the ideal strategies for each unique system integration plan, leadership should follow a proven5-step methodology to create a plan that is realistic, achieveable, and sustainable for the system.

To position the system integration planning process for success, an effective governance structure and Integration Management Office (“IMO”) should be established to guide and facilitate integration initiatives.  Capitalizing on the organizational knowledge and expertise from operational, clinical, and medical staff leaders throughout the system, the governance structure should be positioned to make critical system decisions and be nimble to adjust planning efforts in an uncertain world. With the support of an unbiased IMO to facilitate and manage integration initiatives throughout the system, communication surrounding planning and implementation should be frequent and broad band.


system_integration.png


Step 1: Vision for System Integration   

The vision and design of an integration plan should reflect the system’s core strategic goals and objectives, and be grounded in the unified mission of the integrated healthcare delivery system. Balancing meaningful integration initiatives that are designed to enhance value with the system’s tolerance to culturally accept and adapt to change, leaders should establish clear guiding principles to harness decision making.

The integration vision and associated guiding principles will become the foundation for departmental and service line integration efforts. When organizational or personal bias arises, the guiding principles will focus leadership and their teams on the system as a whole, break down both organizational and departmental silos, and position teams to be innovative and progressive as they plan to drive quality and control costs throughout the system’s administrative, support, and clinical services.

Steps 2: Efficiency Opportunity Assessment

Opportunity to improve operational efficiency, enhance quality, maximize existing resources, and control varies within each system. Factors including the geographic distribution of care sites, the scope and scale of operations, and community needs will all impact integration opportunities. To effectively identify integration opportunities, individual functional area work teams should be established to assess current performance both quantitatively and qualitatively. With the help of the IMO, these work teams will assess historical and projected data, utilize industry benchmarks, and gather team operational insight to catalog operational variation.

Capitalizing upon industry experience and their own internal analyses, the work teams will identify a range of integration opportunities available to the system. These opportunities should be organized by the IMO and shared with the integration governance team to ensure the opportunities have been properly vetted and do not conflict with the mission or vision of the system.


System_Integration_Table.png


Step 3: Operational Efficiency Plan Development

Once a preliminary listing of integration opportunities has been identified, the work teams will commence building operational efficiency plans to drive system integration. Utilizing a blend of proven horizontal and vertical integrations strategies, the work teams should build tactical plans with clearly defined action items, potential barriers, necessary resources, financial impact, implementation timeframes, and interdependencies with other departmental plans. 

Recognizing that individual departmental and service plans may conflict, the governance committee and IMO will serve as a central repository for draft plans and must identify integration plan interdependencies as well as potential strategic and political complications with implementation. Once plans have been reviewed and refined, the IMO will develop a master system integration plan for approval and adoption.

Step 4: Implementation and Communication

As the system begins implementation, broad and frequent communication to both internal and external stakeholder is essential. Communication of the overall integration plan at a system level and open dialogue regarding departmental plans with their respective teams will provide the best chance for the plans to be accepted and adopted by the workforce and the community.

Implementation of the integration plan should commence upon final approval of the plan or when permitted by regulatory agencies. With the governance committee and IMO team coordinating initiatives system-wide, both positive and negative feedback should be monitored closely. With the proper mechanisms in place, work teams can modify their plans as needed to ensure the successful achievement of the system’s integration goals.

Step 5: Plan Monitoring and Refinement

Concurrently with plan implementation, the IMO should establish an integration dashboard to monitor progress and barriers to implementation. The dashboard will serve as a tracking tool for the governance committee and system executive leadership, in addition to a communication mechanism to the system to illustrate progress and success.

It is also during this step that the governance committee will identify barriers to implementation. As all healthcare systems operate in an evolving market these changes are to be expected. It will be up to the governance committee and the work teams to adjust their plans to overcome the impediments and stay on course.

This is Part 2 in our 4-part System Integration blog Series. Parts 1 and 2 may be found here and here. Part 4 will examine common challenges experienced during a system integration process and solutions to overcome those challenges.

For more details surrounding health system integration planning, please download our PDF via the button, below:

Health System Integration


B_Klar.jpgMr. Klar is a senior manager with GE Healthcare Camden Group with over 12 years of experience in healthcare management. Mr. Klar specializes in strategic and business planning advisory services, including service line planning, master facility planning, and transaction work (e.g., mergers, acquisitions, affiliations, joint ventures). He has extensive experience in the creation of strategic partnerships, the facilitation of inaugural health system strategic plan development, as well as the creation and implementation of business plans of operational efficiency, system-wide integration plans, and clinical programmatic alignment plans. He may be reached at brandon.klar@ge.com.

Topics: BPOE, Hospital mergers and acquisitions, Brandon Klar, Mergers and Acquisitions, Health System Integration

New Webinar: Building an Analytics-Based Value Model to Validate Transformation Investments

Posted by Matthew Smith on Nov 16, 2016 1:16:09 PM

shutterstock_392113519.jpgPlease join GE Healthcare Camden Group for a complimentary, 60-minute webinarBuilding an Analytics-Based Value Model to Validate Transformation Investments, on Thursday, December 8, 2016, at 12:00 P.M., ET.

Date:

Thursday, December 8th, 12:00 P.M., Eastern

Background:

Healthcare organizations are struggling to understand the impact of their investments in population health initiatives. To help measure performance risk and evaluate return on investment ("ROI"), organizations are building and implementing analytics-based value models as decision-making tools. Creating these value models allows healthcare organizations to quantify risks and evaluate viability. It also allows organizations to measure and track ROI in digital health technology and resources associated with various programs aimed at managing the health of the populations they serve.

GE Healthcare Camden Group's team of analysts, data scientists, and actuaries builds comprehensive analytics-based value models for organization leaders (CFO, CMO, CIO, Population Health Leaders) wanting to evaluate their ROI from investments in care management programs, look to better manage utilization, and predict outcomes.

Overview:

In this complimentary webinar, members of the GE Healthcare Camden Group team will deliver an overview of the analytics-based value model and how high-performing healthcare organizations are leveraging these to guide strategic decision making and prioritize investments in value-based care initiatives.  

Topics to be Addressed:

Held in a round-table format with GE Healthcare Camden Group senior leaders representing the roles of an organization's CFO, CMO, and CIO, the webinar will address the following questions facing today's leaders:
  • Where should organizations invest resources in order to drive the most value from their care management programs?
  • What is the impact on their programs to both acute and ambulatory utilization?
  • Which programs are driving the greatest value and how are these measured?
  • What “value levers” are important in order to drive the best outcomes?
  • What is the expected outcomes from managing certain medical conditions and/or population risk cohorts?
  • What is the typical ROI of their care management programs and population health initiatives?
  • How can this information be used to support risk-based contracting with payers and other providers?

GE Healthcare Camden Group Presenters:

Marino_Dan.jpgDaniel Marino, MBA, MHA, Executive Vice President Mr. Marino is an executive vice president with GE Healthcare Camden Group with more than 25 years of experience in the healthcare field. Mr. Marino specializes in shaping strategic initiatives for healthcare organizations and senior healthcare leaders in key areas such as population health management, clinical integration, physician alignment, and health information technology. With a comprehensive background in all aspects of practice management and hospital/physician alignment, Mr. Marino is a nationally acknowledged innovator in the development of Accountable Care Organizations and clinical integration programs.

chopra2-110511-edited-239718-edited.jpgShaillee J. Chopra, PMP, Senior Manager Ms. Chopra is a senior manager with GE Healthcare Camden Group and specializes in developing and managing innovative technology portfolios for value-based and clinically integrated healthcare networks. She is highly experienced in leading information technology and consumer experience strategy development, as well as transformations to enable clinical integration, accountable care, and population health management strategies for organizations invested in innovation and transformation of care delivery models.

 

DiLoreto.pngDavid DiLoreto, M.D., MBA Dr. DiLoreto, senior vice president at GE Healthcare Camden Group, is a physician-executive who is highly experienced in executive management, strategy and operations of healthcare delivery systems, and managed care companies. He has deep management expertise in community-based and academic health systems, large group medical practices, hospitals, and managed care organizations. His areas of specialty include clinical transformation, population health, business process improvement, leadership development, medical informatics, and data management and analytics.

GreenB1.pngRobert Green, MBA, FACHE, CHFP Mr. Green is a senior vice president and the practice lead for the Financial Operations and Transactions practice. He has more than 26 years of healthcare experience with 13 years of healthcare consulting experience and 13 years of provider-based financial, operational, and strategic experience among health systems, hospitals, medical groups, management services organizations, and physician hospital organizations.

 

To Register:

To register, simply click the button below, complete a short registration form, and press the "Cick to Register!" button. You will receive a confirming email. A second email will be sent the week of December 5th with webinar login/call-in instructions.

Please note: This webinar is intended for providers, provider organizations, and industry partners. Because of the proprietarty nature of the information shared during this webinar, independent consultants and consulting agencies will not be provided access to programming. GE Healthcare Camden Group reserves to the right to limit attendance at this event. 

Value Model, Webinar, Digital Health Analytics

Questions?

Please contact Matthew Smith at msmith@ge.com

Topics: Webinar, Daniel J. Marino, Shaillee Chopra, Digital Health Services and Data Analytics, Value Model, David DiLoreto, Robert Green

A View into a World without the Affordable Care Act

Posted by Matthew Smith on Nov 11, 2016 7:45:10 AM

By James Smith, MBA, FACHE, Executive Vice President, and David DiLoreto, M.D., MBA, Senior Vice President, GE Healthcare Camden Group

shutterstock_171296930.jpgHealthcare changes are on the way….AGAIN. Just as providers, health plans, and consumers thought they had begun to understand the “new” rules and had developed and activated the strategies required for success in an outcomes-based world; we find ourselves facing changes once again. With a new presidency launching in January, it appears certain that The Affordable Care Act (“ACA”) (also known as “Obamacare”) will be modified, repealed, and/or replaced.

With myriad questions floating around the television networks and on social media, it’s important to not get too far out over our skis before decisions are made. But we can address some of the larger questions Americans are asking. First, let’s assume the ACA is completely repealed--and ask and propose answers to 10 of the burning questions that are top of mind.

1. What are the big changes? 

A new administration may want the mandates, taxes, and regulations to go away, and individuals to be able to go to insurers and shop based on highly transparent information about providers, physicians, networks, and health plans on quality of care, service levels, and cost. Transparency, costs, and access will become the focus both for individual and group insurance premiums and healthcare provider charges. Balancing the budget will take precedence over access to insurance and healthcare services.

2. What goes away? 

The health insurance industry and providers would be released (immediately or within a short, prescribed time period) from numerous regulations, taxes, and rules connected with the ACA. The healthcare exchanges would be dismantled, or be continued as a non-subsidized option for States to administer at their discretion. Loss of minimum medical loss ratios (“MLR”) and rate oversight could lead to even larger premium increases as insurers would seek to return to profitability from the losses in their exchange business and stranded development costs.

3. What would be the most striking game changer of the economic impacts? 

According to a report with estimates from Kaiser Health Foundation, 20 million-plus people could lose their federal subsidies and tax credits that allowed them to purchase insurance, or lose eligibility as the rules change from ACA’s expansion of Medicaid eligibility. States would instead likely be provided block grants by the federal government, ending the federal-state funding partnership. The loss of the public subsidies for private insurance and reduction in Medicaid eligibility will likely increase bad debt, slow or stop cash flow, which will stretch reserves and change decision options for providers.  

4. What is NOT likely to change?

Payment reform within Medicare designed to reduce costs and promote quality (i.e. the shift from fee-for-service to fee-for-value) is not likely to change significantly. MACRA and other regulatory changes shifting the payment models have been largely bi-partisan supported, so are not likely to be significantly impacted. What would be uncertain is the continuation of initiatives sponsored by CMMI, the CMS Innovation Center, which was funded by the ACA. CMMI has launched bundled payments, and many other pilots such as CPC+ to foster faster movement to value-based care.

5. What does this do to providers? 

It could mean credit downgrades for many since recent capital investments in new service lines were made based upon volumes and service mix far different than what may occur. More high-deductible plans with low or underfunded HSAs and a return to more uninsured could lead to sicker patients, more intensive care, and hospitalizations and service line requirements and capacity needs different than planned for under ACA. The market may see a greater use of narrow networks or high-performing networks by health plans to reduce plan cost. Picture the payer mix (lower Medicaid and higher uninsured) and volumes (generally lower) you may have had in 2013, but with payers (including Medicare) putting dollars at risk for efficiency and quality.

6. Will we see more consolidation of providers and physicians? 

Yes, on both counts. The mere uncertainty of the environment if funding for the uninsured remains in flux could exacerbate a trend toward consolidation. Providers must seek every avenue of cost reductions and access to cash as they make new investment decisions in capital, equipment, buildings, service mix, management talent, and other resources. Just as today, efficiency will be the priority, but even more so. Layoffs to reduce staffing costs and strategic focus on services to increase market share and use of resources will be one of the few ways for providers to react.

7. Where would people go? 

As we have seen in the past, emergency departments will be the first site of care for many without insurance. Continued focus of providers on enabling access points to the most clinically appropriate and lowest cost site of care will continue to be a priority so consumers have viable alternatives to manage their healthcare needs with convenience.

8. What will insurers do? 

As insurers lose members, they too will react by attempting to grow market share and cut costs. Consequently, insurers would have to reallocate costs throughout their company—forcing layoffs, consolidations, and ultimately bankruptcy for those who cannot change fast enough. This cascade could accelerate consolidation with greater concentration of both health plans and providers as they respond to a necessity to grow even larger and to do it faster to absorb decreasing membership across a set of fixed costs. Remember too, that insurers will remain heavily regulated as the regulatory controls flow back to the state insurance and health departments. They may be able to return to state rules which allow experience rating and denial of coverage. The possibility of easing the sale of health plan products across state lines, a concept that candidate Trump proposed, could make managing health plan payment models and policies from the provider perspective even more complex than before--but it could provide more competition for health plans with sizable market share in certain states. Health plans may have a greater ability to increase premiums and to do these things with less oversight. Many have invested in new products, and there would no longer be controls over benefits, nor would there be limits on administrative costs and caps on profits which, in turn, could send premiums as well as out-of-pocket expenses even higher.

9. Sometimes campaign rhetoric is tempered by the political and economic realities of governing. Is there a middle ground that might be reached?

Speaker Paul Ryan released the GOP’s healthcare reform plan, “A Better Way,” in June 2016. The plan contains key initiatives that, if implemented, incrementally could increase the role of the private health insurance sector while reducing costs without wholescale withdrawal of coverage. For instance, expanding the use of consumer-directed healthcare options and removing the limits that ACA placed on HSAs, FSAs and HRAs provides more insurance options without eliminating coverage. Eliminating the taxes and fees on self-insured plans, eliminating excise taxes on medical device manufacturers as well repealing the “Cadillac” tax on high-cost plans would be consistent with campaign promises. Increasing support for portability, enabling purchasing across state lines, expanding opportunities for pooling, and advocating for meaningful medical liability reform are all contained within this plan.

10. What about Medicaid expansion? 

The most popular aspect of Obamacare was the expansion of health insurance coverage and, at least politically, it may prove hard to reverse. Over 98 million Americans are now covered by Medicaid at any point in each year. One in four dollars in the average state budget is spent on Medicaid coverage, and the total state and federal support for the program exceeds $545 billion. By 2025 the GAO projects that 108 million Americans will be covered by Medicaid, the federal share exceeding $600 billion and the combined state and federal spending in program approaching $1 trillion. Limited access to physicians and inconsistent quality remain significant obstacles to improving health outcomes for Medicaid beneficiaries. The GOP may look to expand block grants to states while relaxing the federal waiver process. This would create incentives for state governments to search for solutions to the cost and consequences of the recent expansion. Fueled by the shift toward more value-based reimbursement, considerable attention and increased scrutiny and changes in supplemental payments may be opportunities for cost reduction. As the largest payer of long-term services and support, and with continued increasing demand, states will also look to rebalance or reduce costs by shifting to home and community based services.

Changes are most definitely on their way, but as we’ve done in the past, we’ll adapt and adopt these new changes together. 2017 will be a year in which the legislative changes could be made, and in some cases Trump could use an Executive Order to defund certain provisions of the ACA. 2018 will likely be the soonest any substantive changes would be effective, given the fact that open enrollment is already underway and plans are in effect for 2017. We’ll continue to provide timely updates as we learn more in the coming weeks and months.


Jim Smith.jpgMr. Smith is an executive vice president with GE Healthcare Camden Group. He is a nationally recognized strategy and business healthcare consultant, author, and speaker. Mr. Smith has more than 30 years of experience as a leader of provider-owned, for-profit, and not-for-profit health plans, hospital, and health systems, as well as a large physician group. He has extensive experience in managed care and provider network development/operations, health system planning and development, medical group formation and operations, and direct contracting. He may be reached at jsmith@ge.com.

 

 

DiLoreto.pngDr. DiLoreto, senior vice president at GE Healthcare Camden Group, is a physician-executive who is highly experienced in executive management, strategy and operations of healthcare delivery systems, and managed care companies. He has deep management expertise in community-based and academic health systems, large group medical practices, hospitals, and managed care organizations. His areas of specialty include clinical transformation, population health, business process improvement, leadership development, medical informatics, quality improvement and patient safety, and data management and analytics. He may be reached at david.diloreto@ge.com.

Topics: ACA, Affordable Care Act, Obamacare, David DiLoreto, James Smith

Last Chance for Webinar Registration: The Academic Health Center of the Future—New Approaches to Capacity Optimization and Command Centers

Posted by Matthew Smith on Nov 9, 2016 3:43:11 PM

webinarAs a reminder, registration closes soon for tomorrow's webinar, The AHC of the Future—New Approaches to Capacity Optimization and Command Centers. The webinar is complimentary and is hosted by the Association of Academic Health Centers. Please consider attending this webinar, featuring GE Healthcare Camden Group thought leaders.

Webinar Details

Webinar Title: The AHC of the Future: New Approaches to Capacity Optimization and Command Centers

Host: Association of Academic Health Centers

Date: Thursday, November 10, 2016

Time: 1:00pm to 2:00pm (Eastern Standard Time)

About this Event

Today, academic health centers (“AHCs”) across the country are experiencing capacity challenges, including: admitted patients wait too long; patients are held in OR and/or PACU; patient bed assignment is not optimized for patient and overall flow, patient flow is not well integrated between facilities, and so on.

Not only does this result in a poor patient experience, but the challenges are further compacted by the need to lower costs under payment reform while still expecting strong volume. There is an urgent need for new approaches to capacity management as AHCs are forced to either build new capacity or function at higher levels of utilization. Capacity is a costly and ultimately scarce resource, and every effort must be made to value it accordingly. But how can you create more access for higher acuity patients in a way that is cost effective? How can you efficiently manage capacity and the care model while still leaving time for meaningful teaching/mentoring? How do you truly enable innovative transformation in organizations with deep-rooted cultural traditions?

Most AHCs have exhausted the low-hanging fruit of optimizing care in one area and need to optimize for the entire system. This session, presented by University of Michigan Health System (“UMHS”) and The Johns Hopkins Hospital, in collaboration with national healthcare business advisory firm, GE Healthcare Camden Group, will focus on innovative, forward-thinking approaches two leading AHC systems have undertaken to improve patient flow and optimize capacity to achieve measurable outcomes, including designing and implementing a first-of-its-kind command center. Using both systems as case studies, the speakers will share their experiences, challenges, and successes with achieving capacity transformation without expansion, as they enable the transformation needed to thrive as an AHC of the future. 

About the Presenters

James Scheulen, PA, MBA

Jim Scheulen is the Chief Administrative Officer for Emergency Medicine and Capacity Management for Johns Hopkins Medicine. He is responsible for the operations of the 5 Johns Hopkins Health System Emergency Departments which together manage nearly 300,000 patient visits per year.  Read more...

Mary Martin, MPA

Mary Martin joined the UMHS as Associate Hospital Director - Surgical Services, University of Michigan Health System (UMHS), beginning July 28, 2014. Her areas of responsibility include the departments of Anesthesia, Orthopaedic Surgery, Otolaryngology, Physical Medicine & Rehabilitation, Speech-Language Pathology, Psychiatry, Surgery, Transplant, and Urology. Read more...

Bree Theobald

Ms. Theobald is a vice president at GE Healthcare Camden Group and has been leading healthcare organizations through transformation efforts for more than eight years with GE Healthcare Camden Group, focusing on utilizing simulation modeling and advanced analytical tools to optimize inpatient, procedural, and clinic capacity. Read more...

Jennifer Naylor

Ms. Naylor is a senior manager with GE Healthcare Camden Group specializing in the areas of capacity management, care delivery, and hospital operations. She also has experience in patient access, designing/implementing governance models, and leading transformational change as a certified change agent. Read more...

To Register

To register for this complimentary event, please click the button below to be taken directly to the webinar registration page.

AHC Webinar Command Center

Topics: Webinar, Command Center, Capacity Command Center, Association of Academic Health Centers

How to Engage Physicians in Leadership

Posted by Matthew Smith on Nov 7, 2016 4:18:57 PM

First published November 3, 2016 by Physicians Practice


doctors-300.pngCreating good governance structures and providing leadership training can increase physicians' engagement in medical groups, according to Marc Mertz, vice president of GE Healthcare Camden Group, a healthcare consultancy with offices around the country. 

Mertz teamed up with Peter Valenzuela, chief medical officer of the multispecialty Sutter Medical Group of the Redwoods, a multispecialty group of 125 providers in Santa Rosa, Calif., at this year's Medical Group Management Association (MGMA) annual conference, held at the Moscone Center in San Francisco, Calif. Together the two explained how physicians can take more important roles in running medical groups.

More and more physicians are employees rather than owners of their practices, said Mertz, and this is causing them to feel less invested in the practices' success. Mertz cited a 2006 survey by Jackson Healthcare in which 36 percent of internists and 51 percent of surgical specialists were "actively disengaged" from leadership.

"This is just a recipe of disaster," said Mertz. "We'll never be able to respond to the opportunities and the challenges of the market if you have this level not only of non-engagement but active disengagement."

Addressing the problem requires involving physicians in the vision, strategy, operation, and oversight of the practice so they develop a sense of ownership, even if they don’t have legal or financial control, Mertz said.

Where physicians legally own a practice, they may have a role in the governance through a board of directors. But as employees physicians either have no formal place in medical practice governance or may only serve on advisory boards with no real power.

Instead, physicians should take leadership positions near the top of the organization. "You can call it what you want," Mertz said. "It could be a joint operating committee of a physician leadership council. The key is the physicians are at the table with the administrators dealing with high-level issues."

The physician leadership council or committee can then delegate to subcommittees nitty-gritty decisions, such as finance and technology. These subcommittees can offer an opportunity for young physicians to get involved in some issue they feel passionate about, and this experience will help develop their leadership skills, Mertz said.

Physicians should also help make decisions throughout the medical group, Mertz said. He recommended dyad structures in which a physician is paired with an administrator.

But creating a structure for physicians to participate won't help the organization unless physicians have leadership skills, said Valenzuela.

Sutter Medical Group of the Redwoods drew up a list of leadership skills from the book "FYI: For Your Improvement — Competencies Development Guide" by Heather Barnfield and Michael M. Lombardo. The top leadership asked physicians and their administrator partners to choose the leadership skills they wanted to improve.

The administrators and physician leaders identified 10 skills to work on, and chose coursework from the Harvard ManageMentor online curriculum that focused on those skills. For example, one module coached the leaders on how to run better meetings.

It can be challenging to justify the time physicians take away from clinical care and the money spent on such training, Valenzuela said. But the group has seen a 25 percent increase in work relative value units (WRVUs), a 41 percent increase in total patient encounters, and 28 percent increase in internal referrals from 2013 to 2015, suggesting that this work has paid off.

To learn more about how you can engage physicians in leadership, please click the button below.

Engage Physicians in Leadership

Topics: Physician Engagement, Marc Mertz, Physician Leaders

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