Disclosures. Objectives What we should do for the hospital What the hospital should do for us How we meet in the middle 9/30/2013.

Transcription

1 Austin Hill MD MPH Peter Althausen MD MBA Timothy J. Bray M.D. RENO ORTHOPAEDIC CLINIC Disclosures None Objectives What we should do for the hospital What the hospital should do for us How we meet in the middle 1

2 Cost Containment Why is it our fight? We have a moral, ethical, and professional responsibility to contain costs without sacrificing quality Failure to do so will jeopardize our participation in strategic planning and future decision making Physicians and Extenders are end users of healthcare resources and have the ability to make meaningful changes Before you start Make a plan Get accurate hospital data prior to starting (If you don t know the costs, you can t contain them) Put a mechanism in place to prospectively track your financial impact from the beginning Track, organize, and prepare your financial results in a format that administrators understand Incremental work = Incremental Reimbursement Just because we should spend time on cost containment programs does not mean our time is insignificant or free Additional time and responsibility means more time away from family You should be compensated financially or with resources that improve your lifestyle for time and energy spent saving the hospital $ 2

3 Cost Containment Programs Geriatric Fracture Program (GFP)/Osteoporosis Treatment and Prevention Program Implant Pricing Control Generic Implants Bone Graft and Orthobiologic utilization protocol Improved OR Efficiency VALUE ADDED SERVICES GERIATRIC FRACTURE PROGRAM OWN THE BONE COMMUNITY OUTREACH EDUCATION PUBLIC RELATIONS EXPANSION SERVICES COST CONTAINMENT MATRIX PRICING GENERIC IMPLANT PROGRAMS OPERATING ROOOM EFFICIENCY BIOLOGIC UTILIZATION PROTOLS GATEKEEPERS Geriatric Fracture Program Goals: Improve Quality of Care Decrease Costs Prevention of Future Fractures Provide tremendous public health benefit to the community Successful programs operating across US, Canada, UK 3

4 Geriatric Fracture Program Benchmarks Hip Fractures Move patient out of ER in < 4 hours OR within 24 hours Length of stay ~ 4 days Compliance with SCIP measures Initiation of bone health assessment and treatment Fall assessment and prevention Geriatric Fracture Program Decreasing Length of Stay: Case Coordination initiated for discharge planning in ER Admission to Geriatric Hospitalist if possible Remove barriers to OR make patient NPO, prompt initiation of pre op evaluation (labs, CXR, EKG), eliminate unnecessary diagnostics and consultants Delirium Prevention minimize mood altering meds, spinal anesthesia? Prevention of medical complications Time to the OR independent predictor of morbidity and mortality [1] Simunovic N, Devereaux PJ, Sprague S, et al. Effect of early surgery after hip fracture on mortality and complications: systematic review and meta analysis. CMAJ. 2010;182(15): [2] Orosz GM, Magaziner J, Hannan EL, et al. Association of timing of surgery for hip fracture and patient outcomes. JAMA. 2004; 291(14): [3] Al Ani AN, Samuelsson B, Tidermark J, et al. Early operation on patients with a hip fracture improved the ability to return to independent living: a prospective study of 850 patient. J Bone Joint Surg Am. 2008;90(7):

5 BENEFITS GFP 33% COST SAVINGS/YEAR Kates SL, et al. The value of an organized fracture program for the elderly: Early results. J Orthop Trauma. 2011; 25: Achieved with an integrated care plan, physician extenders, site champion Other key components reasonable implant costs, professional and community education, public relations Implant Pricing Control Matrix pricing Allows all implant companies to participate Decreases use of high end, high cost implants (without proven improvements in patient outcomes) Makes it easier for purchasing department to project and contain costs Generic Implants Multiple companies currently on the market Screw and Plate systems, Suture Anchors, Arthroplasty, Drill Bits Implant Pricing Matrix Multiple tiers All inclusive pricing Hemiarthroplasty, Arthroplasty, IM Nails Fair Play, Preserving Physician Choice 5

6 Generic Implants Reduced cost, equivalent quality May encourage name brand implant companies to increase production of value line implants Waddell JP, et al. Generic total hip arthroplasty. CORR. 1995;311: Kauk JR, et al. Clinical and economic impact of generic implant usage for the treatment of femoral neck fractures. Poster presented at: OTA Annual Meeting; October 4 6, 2012; Minneapolis, MN. Anatomy of a $1200 Screw Net Margin 40.8% ($489.60) Sales and Marketing 43.3% ($519.60) R&D Manufactering 8.1% 4.4% ($52.80) ($97.20) Overhead 3.4% ($40.80) Sales and Marketing 6

7 Name Brand SCREW COMPANY $397.00/ SCREW 43%=$ %=$150 NET MARGIN CHARGE/SCREW GENERIC SCREW COMPANIES $97.00= 62% reduction in implant costs Kauk J, Althausen PL, Coll D, O Mara TJ, Bray TJ. Clinical and Economic Impact of Generic Implant Usage for the Treatment of Femoral Neck Fractures. OTA Poster Presentation, Minneapolis MN Bone graft and Orthobiologic Utilization Protocol Vallier et al found a reduction in costs from $470k to $80k Eliminate DBM Limit BMP use to evidence based indications, not spur of the moment why don t we throw some BMP in there too 7

8 Improved Efficiency Critically evaluate the disposable items opened for a case: Is an esmarch really needed? Is pulsavac instead of cysto tubing (FLOW study) Trauma trained surgeons can reduce OR times and OR costs Althausen PL, Coll DJ, O Mara TJ, et al. Operating room efficiency: Benefits of an orthopaedic traumatogist at a level II trauma center. Paper presented at: OTA Annual Meeting; October 4 6, 2012; Minneapolis, MN. The Problem Hospitals need surgeons to cover trauma call and help cut costs They would like to get this service for free All administrators know the numbers while the majority of physicians don't Increase in trauma fellowship graduates affects the supply in the workforce Surgicalists can be used to marginalize local orthopaedic surgeons when the hospital no longer wants to negotiate 8

9 Obstacles to successful negotiations Perpetuated Myths Fundamental lack of understanding by one or both parties Failure to avoid outright conflict Failure of communication Bray T, Ziran B. How to negotiate with your hospital. J Orthop Trauma 26(9) September 2012 The Other Problem Widget Theory J Orthop Trauma June 2013 HYPOTHESIS CORPORATIZATION OF ORTHOPAEDICS RESULTS IN FIRING OF SENIOR EMPLOYEES NEGATIVE IMPACT ON EDUCATION, RESEARCH, COMMITMENT, PATIENT CARE, FAMILY, AND FINANCIAL SECURITY YOUNGER SURGEONS ARE CHEAPER-NO VALUE CONSIDERATION FOR EXPERIENCE. 9

10 HYPOTHESIS SENIOR ORTHOPAEDIC EMPLOYEES HAVE LIMITED BUSINESS ACUMEN DUE TO HISTORY OF HIGH VOLUME PATIENT CARE SENIOR SURGEONS HAVE HAD LIMITED OPPORTUNITIES TO MASTER COMPETITIVE BUSINESS STRATEGIES HYPOTHESIS SENIOR ORTHOPAEDIC EMPLOYEES HAVE FAILED TO DEMONSTRATE ADDED VALUE TO THEIR INSTITUTIONS WE MUST LEARN TO OBJECTIVELY PROVE VALUE Bob Probe OTA Presidential Address 2013 HOSPITAL ADMINISTRATION They need surgeons to drive the OR 2. They need physician leadership to improve operational/outcome performances 3. Educate your administrator VALUE ADDED SERVICES 10

11 Perpetuated Myths Trauma loses money for the hospital Rapid increase in trauma centers nationwide disproves this concept The system is designed to do what it is designed to do Trauma patients don t have insurance Payer mix is worse than elective practice but collection rates are closer to 30% compared to 40% for elective practices. Understanding Both Parties Needs Physician Acceptable compensation for providing services which are disruptive to an elective practice Compensation for services performed for indigent patients Appropriate resources and personnel support to provide high quality care Compensation for participation in hospital committees, operations, and cost savings programs Hospital Consistent call coverage Efficient patient flow out of ER Decreased Length of Stay Control of costly implants and materials Development of physician led quality measures Failure to avoid outright conflict It s business, not personal Recognize posturing for what it is, a negotiation tactic not a personal assault Avoid confronting hospital admin with their complete lack of clinical knowledge Keep moving forward 11

12 Failure to communicate Physicians have difficulty making their case from a business standpoint Physicians also fail to obtain objective data that quantify their positive impact on the hospital system HOW TO MAKE IT WORK! 12

13 RULE NUMBER 1 SPEAK THEIR LANGUAGE ACO 13

14 FY Orthopaedic Trauma Prospectus Overview Average wrvus $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Average wrvus Scientific Papers Published in Peer Review Journals Althausen, Bray, O'Mara - J of Orthop Trauma 2012 Althausen, Bray, O'Mara - J Shoulder Elbow Surg 2012 Althausen, Bray, O'Mara - J of Orthop Trauma 2011 Althausen, Bray, O'Mara - J of Orthop Trauma 2010 Althausen - J of Orthop Trauma 2013 Althausen - J of Orthop Trauma 2012 Althausen - J of Orthop Trauma 2012 Althausen - J of Orthop Trauma 2011 Bray - J of Orthop Trauma 2012 Bray - J of Orthop Trauma 2011 Bray - J of Orthop Trauma 2011 Bray - J of Orthop Trauma 2010 New IRB Applications (2012) - 4 Presentations at National Meetings ( ) - 8 Instructor at Educational Course ( ) 88 days/year Students Rotating on Service ( ) - 60 Fellows Graduated ( ) - 2 Implant and Orthobiologic Cost Containment Total Cost Bone Graft & Bioloics Used Total Nail Costs Total Hemiarthroplasty Cost $ FY Orthopaedic Trauma Prospectus Overview Geriatric Fracture Program Fiscal Year Hip Fx LOS Hip fx admissions Cost per day LOS Annual Savings days $ days $ 414, days $ 437,000 Cumulative Savings * $ 851,000 * Kates et al JOT FY Orthopaedic Trauma Prospectus Overview Total positive financial impact $15,493,544 5% 67% Hip Fracture Service Savings (14) Total Cost Bone Graft (23) Total Nail Costs (24) 5% Total Hemiarthroplasty Cost (19) Contribution Margin (4) Hip Fracture Service Savings (14) Total Cost Bone Graft (23) Total Nail Costs (24) Total Hemiarthroplasty Cost (19) Contribution Margin (4) Initial Cost $1,925,452 $763,897 $333, $414,000 $327,327 $378,146 $165,000 $5,180, $437,000 $327,327 $378,146 $165,000 $5,180,000 Total $851,000 $3,196,251 $756,293 $330,000 $10,360,000 Total positive financial impact $15,493,544 14

15 YOUR ADMINISTRATOR YOUR ORTHOPAEDIC TRAUMA SERVICE COST US MONEY YEAR AFTER YEAR STRATEGIC PLAN Trauma is a money loser RULE NUMBER 2 CONTRIBUTION MARGIN HOW MUCH MONEY DOES THE HOSPITAL MAKE OFF OF YOUR SERVICE? MUST KNOW! 15

16 FINANCIAL CONTRIBUTION OF ORTHOPAEDIC TRAUMA TO YOUR INSTITUTION REVENUE MULTIPLIER: VALLIER- $7.81/hospital for every $1.00/collected by surgeon REVENUE-DIRECT COSTS: Ziran= $145/work RVU, university programs ADMISSIONS/TOTAL REVENUE= Patient volume multiplier Reno, $4,225/patient SUBSIDIES? Peter L. Althausen, MD, MBA Daniel Coll, BS, PA C Michael Cvitash, BMS, PA C Timothy J. O Mara, MD Timothy J. Bray, MD Reno Orthopaedic Clinic Renown Regional Medical Center Trauma System Reno, Nevada Total Charges Total Charges Trauma Activation Fees Xray CT $ 77.7 Million $ 7.4 Million $ 2.4 Million $ 12.6 Million MRI $.6 Million Laboratory Fees $ 3.4 Million 16

17 Direct Profit Hospital Net Profit $ 5,176,456 Excludes professional fees for physicians No Graduate Medical Education $ No external grants or subsidies ARTICULATE THE GOALS OF YOUR PROGRAMS EXCELLENT, TIMELY,EFFICIENT ORTHOPAEDIC TRAUMA CARE; ACUTE AND CHRONIC COST EFFECTIVE SHOULD BRING VALUE TO INSTITUTION SUPPORT MISSION OF AAOS/OTA 17

18 VALUE OF SENIOR LEADERSHIP LEADERSHIP, AMBASSADORSHIP, SURGICAL SKILL, MANAGEMENT PARTNER, ETC. YOU SHOULD BE PAID FOR YOUR AVAILABILITY+EXPERTISE! $250- $300/HR What You Need Control of the call schedule Ability to implement programs that benefit the hospital, patients, and physicians Dedicated OR staff, rad techs, nursing staff Appropriate OR equipment Reimbursement for duties performed outside of standard clinical responsibilities Mid level provider support How you get it Demonstrate improved efficiency Cost containment programs Quality measures Participation in hospital bureaucracy 18

19 Participation in Hospital Committees Be visible and available Exert positive influence within the hospital system Serve as a conduit for consultations to your elective partners Thank You 19