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11/1/2016
1
Specialty Hot Topic
Session: Anesthesia
Genie G. Blough, MBA, FACMPE, Principal, G. Blough Associates, LLC
Shena J. Scott, MBA, FACMPE, Executive Administrator, Brevard Physician Associates, PLLC
Genie G. Blough and Shena J. Scott do not have a financial conflict to report at this time.
LEARNING OBJECTIVES
Understand the changes on the horizon for anesthesia and how to prepare your practice for success;
Recognize how to update your compensation system for payments based upon quality of care;
Demonstrate ways to adapt how your practice delivers anesthesia care by interacting with your peers.
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THE CHANGING WORLD
OF ANESTHESIA:
PREPARING FOR 2020
AND BEYOND
WHO WE ARE
GENIE G. BLOUGH, MBA,
FACMPE
PRINCIPAL, G. BLOUGH &
ASSOCIATES, LLC
17 YEARS, ANESTHESIA
PRACTICE MANAGER
13 YEARS CONSULTING,
ADVISING ANESTHESIA
PRACTICES NATIONWIDE
SHENA J. SCOTT, MBA,
FACMPE
EXECUTIVE ADMINISTRATOR,
BREVARD PHYSICIAN
ASSOCIATES, PLLC
22 YEARS, ANESTHESIA
PRACTICE MANAGER
LAST 3 YEARS, MANAGING
MULTI-SPECIALTY (ANESTHESIA,
EMERGENCY MEDICINE AND
RADIOLOGY) GROUP
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TELL US ABOUT YOU
Practice demographics
Do you work with CRNAs, CAAs or both?
Do you employ the mid levels?
How many facilities do you cover?
How many hospital systems?
Is your physician comp system equal share,
points based or other?
Are you a seasoned anesthesia administrator
or new to the specialty?
TYPICAL GROUP IN 2010
10-15 anesthesiologists
Physicians owned practice
All docs served on board
Governed by consensus
Compensation system was typically equal share
Maybe employed or worked with hospital employed CRNAs (depends on geographic location)
Believed that clinical excellence was enough
Hospital paid stipends to support inefficiencies and/or poor payer mix
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2011: THE CHANGING WORLD
With new payment models emerging and an
emphasis on quality reporting, groups need tools,
management and infrastructure that smaller groups
often cannot afford.
More mega groups form, providing anesthesiologists
tools they need for future success and offering
hospitals opportunity to reduce or eliminate stipends.
They buy up practices, bringing a business approach
to the hospital C-suite, partnering with them to
reduce cost and improve processes.
WHAT IS THE IMPACT?
Expectations for anesthesia groups have changed.
Smart anesthesia groups work hand in hand with hospitals
not only to provide good clinical care but to help them
improve their processes, operations and bottom line.
Groups are working diligently to improve internal practice
efficiencies to reduce or eliminate the need for stipend.
They can demonstrate the quality of their care and that
their patients and surgical customers are satisfied.
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WHAT ARE THE OPTIONS?
Can align with:
one of several anesthesia mega groups
other anesthesia practices to make a greater local presence and share specialty specific resources
other specialists within hospital system to create a greater footprint and expand services provided
If you are large enough, you can stand alone.
Whatever you choose, you will need to make changes!
The price of doing the same old thing is far higher than the price of change.
Bill Clinton
STATUS QUO: NOT AN OPTION!
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DEVELOPING YOUR
ROAD MAP FOR
SUCCESS
WHAT CHANGES ARE NEEDED?
The most cost efficient staffing model possible.
A robust quality reporting program.
A patient satisfaction tool that relates specifically to the anesthesia experience.
A governance model that supports the way the group needs to function for success.
A physician compensation system that rewards behaviors required for success.
A revenue cycle management tool that allows you to understand costs to prepare you for bundled payments.
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EXTERNAL CHANGES
Coordination with facility administrators to
improve throughput and efficiency.
Alignment with facility administrators to reduce
cost and improve outcomes.
Demonstrate your value to the entire
perioperative process, not just the ORs.
STAFFING MODEL
If you are still the “typical group from 2010” relying
upon stipends for survival, you are at significant risk to
be replaced by a national company.
Groups MUST be operating at maximum efficiency/
minimal stipends in order to secure position.
Likely this means incorporating extenders or moving
to higher ratios.
Might also consider “day docs” or non-owner tracks
to reduce physician costs.
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IMPROVING EFFICIENCY
Anesthesiologists today must be actively involved in
managing the ORs to improve throughput.
Daily “huddles” with nurse managers to ensure that
ORs are optimally utilized.
Weekly or monthly meetings to identify gaps, review
block schedules and suggest changes where
appropriate.
Reporting for hospital contracts – anesthesia delays
must be documented and explained.
Must understand hospital costs as well as your own.
Primary hospital cost drivers are:
Length of stay
Post-acute care
Complications
Readmissions
Blood transfusions
PERIOPERATIVE SURGICAL HOME!
REDUCING COST AND
IMPROVING OUTCOMES
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PERIOPERATIVE SURGICAL HOME
An effective PSH can help with all of this – HOW?
PSE clinic to see patients ahead and reduce risk
of complication and infection
Improve coordination with ER to fast-track
fracture patients
Intraoperative management of fluids and blood
products
Effective post-operative pain management
system to help patients ambulate faster, leave
hospital sooner and go home (instead of SNF)!
WHY DOES THIS MATTER?
Proactive anesthesia groups that are demonstrating their value now by assisting the hospital in reducing its costs and improving outcomes are positioning themselves for success in a bundled payment world where payment may likely go to the hospital.
As early as 2017, cost will play a role in reimbursement for anesthesiologists. “Cost” is not just anesthesia cost but the cost of the entire surgical event. Thus anesthesiologists who help hospitals reduce cost are not only helping them but also themselves.
Creating opportunities to differentiate physicians from extenders.
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WHAT ABOUT QUALITY REPORTING?
You MUST be able to report your quality and compare it to national benchmarks.
PQRS evolved to Qualified Clinical Data Registry (QCDR).
OPPE and FPPE – quality reporting tools to manage practice priorities.
Peer review still important.
The biggest piece of the payment pie for anesthesiologists under MIPS will be quality.
PATIENT SATISFACTION
Hospitals care a lot about patient satisfaction (HCAHPS).
HCHAPS questions are generic, not anesthesia specific.
Many hospitals also rely on Press Ganeys, which typically have a very low “n.”
Smart groups conduct their own surveys so that they have this information for use in hospital negotiations and to improve provider behavior.
This can be done at individual group level or there are national vendors, who can also provides benchmarking data and report the patient satisfaction measure for QCDR.
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GOVERNANCE
Many of these new initiatives require a substantial investment of physician administrative time to succeed.
This tends to fall on a small subset and has to be facilitated within schedule and/or compensated.
Initiatives like PSH may also require a smaller subset of individuals to be able to make recommendations, or even commit, on behalf of the entire group.
Open dialogue and communication is key, but so is trusting the leadership.
ALIGNING YOUR
COMPENSATION SYSTEM
FOR FUTURE SUCCESS
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COMPENSATION SYSTEMS
Realigning compensation system to position for future success is critical.
Work is no longer equal share, nor is it solely based upon what is “produced” in the ORs (which most points systems reward).
There is a lot more administrative work to be done.
”Face time” with hospital administration and serving on committees provides “seat at the table.”
Payment will no longer be about volume, it will be about quality and outcomes. This will need to be rewarded as well.
ADMINISTRATIVE COMPENSATION
Compensating meeting time is simple.
Decide which meetings are important to group
vision, determine an average hourly rate and pay
for time spent.
Many docs argue that this should be at a lesser
rate than time spent on clinical duties but these
visible roles are critical to group’s future success.
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LEADERSHIP COMPENSATION
Rewarding leadership roles and administrative
duties is also relatively simple. Can be done as a
monthly or annual stipend, or on an hourly basis.
CAUTION: If opting for hourly basis, also need to
consider reviewing what is necessary and actually
accomplished, not just time spent.
What about ”the headache factor” of leadership
roles?
COMPENSATING FOR QUALITY
Paying for quality is a lot more complicated and has
potential to be divisive.
What if someone fails to report enough measures and
falls out on QCDR. This will impact this person’s
payment by 2% in 2018. Should this be their penalty?
What about anesthetists? They count too! How do
you motivate them? Is a proactive carrot better than
a stick?
What if subset of group causes group to fail under
VBM?
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MACRA
2019 payments based upon 2017 performance
2019 = +/- 4%
2022 = +/- 9% (18% swing!)
Scoring
Quality = 50%
Advancing Care Information (MU) = 25% (if not applicable,
quality = 75%)
Resource use (cost) = 10%
Clinical improvement activities = 15%
ADDRESSING QUALITY IN COMPENSATION
Establish group goals for quality
QCDR reporting?
OPPE?
Goals in hospital contracts (may incorporate
efficiency as well as quality)?
Other criteria group considers important?
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PUTTING IT ALL TOGETHER
Measure and provide feedback
Determine structure and amount for
compensation reward
Flat bonus amount for meeting certain
established criteria (pass/fail approach)?
Proportionate increase or reduction in bonus or
pay?
Establish an “at risk” pool to be divided among
top performers?
SAMPLE PROPORTIONAL SYSTEM
Establish levels of success/thresholds
Excellent = 98% compliance (+20%)
Very good = 95% compliance (+10%)
Good = 90% compliance (0%)
Poor = 85% compliance (-10%)
Unacceptable = <85% (-20%)
Apply to “equal share” or “multiplier”
Determine baseline distribution or multiplier (without quality adjustment)
Apply quality adjustment factor
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PROPORTIONAL ADJUSTMENT EXAMPLE
POINT
SYSTEM
EQUAL SHARE
BASE LEVEL MULTIPLIER
=1.8
POINTS =
30,000
POINTS =
25,000
BONUS =
$50,000
EXCELLENT 2.16 $64,800 $54,000 $60,000
VERY GOOD 1.98 $59,400 $49,500 $55,000
GOOD 1.8 $54,000 $45,000 $50,000
POOR 1.62 $48,600 $40,500 $45,000
UNACCEPTABLE 1.44 $43,200 $36,000 $40,000
SAMPLE “AT RISK” POOL
Practice sets aside $150K from bonus pool as “risk
pool” for best performers
50 doctors each sacrifice $3,000
Individual performance is ranked
Excellent – 10 points
Very good – 5 points
Points added up and pool distributed
25 people achieve “excellent”
15 people achieve “very good”
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DIVIDING THE PIE
Total points earned = 325
25 “excellent”*10 points each=250
15 “very good”*5 points each = 75
Value of point = $461.54
People who score “excellent” get $4,615.40
additional bonus each
People who score “very good” get $2,307.70
each
CHANGING COMPENSATION MODELS
People need to understand the “why”
At least initially should tie to the impact on the group
(e.g. if payments could swing 15%, put 15% in risk pool)
Over time, pool can be made bigger to incentivize
desired behavior
Individual impact (under best and worst case
scenarios) needs to be estimated
System needs to be fair, well publicized, open to
dialogue and amendment
If possible, do a “dry run.”
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PREPARING FOR
BUNDLED PAYMENTS
BUNDLED PAYMENTS
Bundled payment – a single, negotiated payment
to cover a group of treatment services: anesthetic
for surgical procedure, lines, pre-op, post-op
through discharge or 90 days post
Where to begin and how to move from fee-for-
service to a bundle?
Know your costs (and revenues) for procedures
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KNOW YOUR DATA
Have an ability to arrange and manipulate
your data to determine both cost and revenue
details through Excel or similar software
By specialty, by surgeon, by CPT Code, by
location, weighted by payer type, etc.
IT IS ALL ABOUT THE DATA – from billing
operations, practice operations (financial
reports), and external benchmarks
UNDERSTANDING COSTS
What do you know about your costs? Do you know the physician hourly rate in your practice for providing services? For CRNAs/CAAs?
Can you calculate a “median hourly cost” for your providers (assuming every hour worked is revenue-producing)?
Can you also get an effective cost per working time unit?
Have you identified your minimum conversion factor to cover your costs?
Have you calculated the average revenue produced for knee/hip replacement and the associated cost to provide that service? Have you stratified the orthopedic surgeons providing those services?
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CALCULATING PROVIDER COSTS
Median compensation (per provider type)
Benefits and professional liability
Overhead
Hours worked per year = hours per week * number of weeks worked
Projected Hourly Rate = (Compensation + benefits + professional liability costs + overhead)/hours worked per year
(Adjusted for time not working – waiting for cases to start – lost time for inefficient ORs)
EXAMPLE – PROVIDER HOURLY RATE
Median anesthesiologist compensation (2015 MGMA Comp Survey) = $426,047
Benefits per provider = $35,000 retirement benefits + $16,834 health insurance (family coverage)
Operational expense including liability premiums per provider:
Compensation to Collections Ratio = 80.6%
Total compensation and benefits = $477,881
Total practice income/provider = $477,881/80.6% = $592,904
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”Hours worked” =
Median weeks per year = 44
Hours worked per week = 50 to 55
(anecdotal data)
Range of hours worked = 2,200 to 2,420
per year
Hourly rate range =
Hourly rate = $592,904/total hours worked
Hourly rate range $592,904/2,200 hours =
$270 (high) to $592,904/2,420 hours = $245
(low)
Assumption: Every hour is revenue-producing
COST PER HOUR WORKED
If median hourly cost = $270/hour
Consider the OR inefficiencies and the amount of time waiting as well as night call (hours not involved in cases)
Can you calculate total hours generating revenue in a year?
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Calculate the total time units; include median times spent on all non-time based procedures (by CPT code)
Divide into total cost to get an effective cost per working time unit – a cost based CF
Note: if working in care team, determining costs becomes more complex
NEEDED FOR BUNDLED PAYMENTS
Who are your patients?
Demographics
How sick are they?
What is your current experience and volume?
Variability among surgeons for procedure?
Are you providing pre-op clinic services?
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What are the other procedures that will require anesthesia services in conjunction with the primary service?
What are the complications and how often to they occur?
Who are the payors?
Can you get the data you need?
MOST COMMON BUNDLED
PROCEDURES
Total Hips = 285,000 per year
Total Knees = 600,000 per year
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TOP DOWN – TOTAL KNEE/HIP
How many cases in your data set?
From your billing data produce a report showing average time and revenues for these procedures
Produce a weighted average revenue per procedure (total knee and total hip)
Identify by CPT code all of the other services performed in conjunction
Calculate the payments of the other procedures reported
Identify the complications that might require anesthesia participation with joint replacement
Calculate your frequency and compare with national data
Calculate the total anesthesia payment in a 90 day global period
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Calculate the case rate for total joints using your cost
Analyze by payor
Consider payments of other procedures reported with joint replacement
Don’t forget to account for anticipated
complications during the global period
PREPARE NOW FOR BUNDLED PAYMENTS
Calculate provider hourly costs
Begin to collect your data for the most common bundled payments
Billing operations may already generate a report that shows revenue by CPT code by surgeon
Outline your experience during the global periods understanding the percentage of surgeries requiring additional anesthesia services
Begin to include this information in reporting to physicians
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IN CONCLUSION
Can the “typical group of 2010” evolve to the “successful group of 2020” and still retain independence?
YES! It will require dedicated physicians and forward thinking administrators to help evolve from the status quo to the future state.
We hope we have provided some thought provoking ideas and practical take away tools to guide your group through the transition.
Let Genie and Shenaknow what you thought!
Fill out the speaker evaluation
emailed to you at the end of
each day or immediately
through the MGMA16
mobile app.
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THANK YOU!
Genie G. Blough, MBA,
FACMPE
Principal
G. Blough Associates, LLC
Mobile, AL
251-666-3394
Shena J. Scott, MBA,
FACMPE
Executive Administrator
Brevard Physician
Associates, PLLC
Melbourne, FL
321-837-3828
QUESTIONS AND
INTERACTIVE SESSION
