1. Maintaining Their Mission in Difficult Times: Key Strategies of Safety Net Hospitals Sharon K. Long University of Minnesota AcademyHealth Annual Research Meeting Seattle, WA June 13, 2011
2. Importance of Safety Net (SN) Hospitals Critical role in the health care system now Core provider of care for Medicaid, uninsured and underinsured populations Central role in medical education Provide services not available at other hospitals Role will continue under health reform Expect 23 million to remain uninsured under health reform Medicaid enrollment expected to increase by 16 million 2
3. Case Studies of Five SN Hospitals Bellevue Hospital Center Denver Health Parkland Health & Hospital System San Francisco General Hospital Virginia Commonwealth University Medical Center 3
4. Impact of the Recession on SN Hospitals - I Changes in demand for care Increase in ED and outpatient care Changes in population seeking care More uninsured and Medicaid, including “first timers” Changes in care needs of patients Increase in ED patients with primary care needs Increase in acuity level of ED patients, including patients with ambulatory care sensitive conditions Increase in patients with mental health needs 4
5. Impact of the Recession onSN Hospitals - II Mixed picture on revenues Negative: More uninsured/self-pay Cuts to Medicaid reimbursements for some Lower state/local funding for some Lower GME funding for some Some positive offsets: Enhanced federal match through ARRA Additional Medicaid funds for some, including increases in DSH, supplemental payments or waivers Increased state/local funding for some 5
6. Key Strategies by SN Hospitals in Response to the Recession Increase revenues Reduce costs Improve efficiency 6
7. Increase Revenues Maximize revenue from current patients Maximize enrollment in public programs Improve coding for care that is delivered Improve billing and collections Establish new revenue sources: “grow the pie” New “niche” services (e.g., CCH) New patient base (e.g., commercial patients) New market areas (e.g., new clinics in suburbs) 7
8. Reduce Costs Eliminate waste and duplication Prevent overutilization Take advantage of economies of scale e.g., joint purchasing, outsourcing Refine staffing mix e.g., leverage physician time with PA and NP; leverage RN time with LPN 8
9. Improve Efficiency On-going system review and redesign Cost-efficiency: “Do more with less” e.g., improve triage in ED, patient scheduling Care-efficiency: “Do better with less” e.g., nurse lines, telemedicine, co-locating clinics Quality-efficiency: “Do better with more” e.g., high-tech beds to reduce bedsores; clinical management review/feedback 9
10. Factors that Supported SuccessfulResponses to the Recession by SN Hospitals Strong leadership Long-term vision, including support for innovation Shared sense of mission & alignment of incentives Management and staff Physicians and hospitals Integrated health care system Whether by ownership or collaboration Strong HIT system & effective use of HIT 10
11. Concerns in Preparing for Health Reform What will happen to revenues? Medicaid & Medicare reimbursements; Medicaid DSH and other supplemental payments; GME How many people will remain uninsured and underinsured? Will there be sufficient staff to care for the influx of newly-insured patients? Challenge of uncertainty—need to start now to be ready for 2014 11
12. Getting Ready for Health Reform Build on current systems to develop ACOs Expand relationships with community providers Expand current medical home models Build on strategies to attract/retain insured populations Strong interest in global payments Supports ROI for primary care, urgent care, investment in quality 12
13. Acknowledgments Research conducted in conjunction with the Kaiser Family Foundation Co-authors: Terri Coughlin, Urban Institute Sharon Long, University of Minnesota Jennifer Tolbert, Kaiser Family Foundation Edward Sheen, Stanford University Thank you: Case study participants at the safety net hospitals included in the study and stakeholders in their communities 13
