Clinical Funds Flow Transition Overview Manager s Meeting
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1 Clinical Funds Flw Transitin Overview Manager s Meeting September 23,
2 Agenda 1. What is the clinical funds flw at UCSF? 2. Hw did we arrive at the new clinical funds flw? 3. What des it mean fr all f us? 4. Questins? 2
3 The traditinal health care payment mdel reimburses fr physician and hspital services separately Prfessinal Fees (Physician Services) Fees paid by insurers r patients fr physician and ther prvider (e.g., nurse practitiner) services rendered t patients Examples include: An ffice visit with a Cardilgist A Cardilgist reading a CT scan A Surgen perfrming an peratin Prfessinal fees typically cver expenses related t physician practice, such as: Physician cmpensatin Physician malpractice expenses Rent fr utpatient practices Supprt staff fr utpatient practices Supplies fr utpatient practices Prfessinal billing fees Other practice expenses Facility Fees (Hspital Services) Fees paid by insurers r patients fr the use f facility and/r equipment within a hspital setting Examples include: Inpatient rm charges A fee fr use f an perating rm A fee fr use f an EKG machine Facility fees typically cver expenses related t a patient s inpatient stay, ancillary services, and ther hspital-based services, such as: Nursing staff Technicians Other hspital staff Equipment purchase and maintenance Drugs, supplies and instruments Building maintenance Other hspital expenses 3
4 The traditinal payment mdel psed challenges fr the UCSF clinical enterprise, creating the need fr a funds flw between the Medical Center and SOM The csts f practice increased faster than prfessinal fee revenue making many clinics financially unsustainable Medical center supprt (strategic supprt) fr many physician practices became necessary t sustain r grw prgrams Over time, the number and cmplexity f strategic supprt agreements became unwieldy, difficult t adequately cmmunicate, and increasingly expensive With tw separate payment mechanisms (prfessinal fees and strategic supprt), the alignment fr cntinued grwth was nt present Patients experience highly varied prcesses frm ne clinic t the next 4
5 Having been in place fr many years, the pre-7/14 clinical funds flw n lnger adequately enabled the UCSF clinical enterprise t grw and thrive The Old Clinical Funds Flw Prfessinal revenue came in and was used t pay fr clinical expenses assciated with physician practices Prfessinal + Net Prfessinal Revenue 6 Cancer Center JV (Nn-MD Clinic Operating Expense) + Net Clinical Revenue 1 PSA Payment 1 + Net Clinical Revenue (Medical Grup Expenses) + Net Distributable Clinical Incme Clinical Net Distributable Clinical Incme + Nn UCSF Clinical Revenues + Distributin frm Dept. Reserves + Departmental Clinical Revenues Departments managed all practice, departmental and clinical faculty expenses independently Departmental clinical incme was supplemented by hundreds f individual agreements between the Health System and Departments Cancer Prfit Sharing Payments Technical + Net (Nn-Prfessinal) Incme + DGME Revenue (Ttal Operating Expenses) 2 (Purchased Services Payments) + Medical Center Bttm Line 3 Strategic Supprt Payments 4 Educatinal Payments 5 Nn-Cancer JV & Prfit Sharing 6 Cancer Center Prfit Sharing Purchased Services Payments Strategic Supprt Payments Educatinal Payments Nn-Cancer JV / Prfit Sharing Payments 2 + Purchased Services Payments 3 + Strategic Supprt Payments 4 + GME Payments 5 + Jint Venture Payments + Ttal Med Center Supprt Payments (Clinical Physician Salary Expense) (Clinical Departmental Expenses) (Dean s Tax) Departmental Clinical Bttm Line Nn-Clinical + Academic Revenues + Other Revenues (Academic MD & Dept. Expense) Departmental Bttm Line The Issues Cmplex Grwth- Inhibiting Nn- Transparent Access- Limiting Financially Unsustainable 5
6 A Funds Flw Cmmittee cmprised f UCSF clinical enterprise leaders was frmed in 2012 and charged with the clinical funds flw redesign Cmmittee Membership Jsh Adler, MD Rn Arensn, MD Nancy Ascher, MD Linda Giudice, MD Jay Harris Mike Hindery Ken Jnes (c-chair) Talmadge King, MD Stephen McLed, MD David Mrgan Mike Panin Andrea Ratti Dave Rein Barrie Strickland Tad Vail, MD (c-chair) Key Cmmittee Milestnes Identify Gals fr New Funds Flw Design New Funds Flw Structure Hand-ff Transitin Oversight 6
7 The Funds Flw Cmmittee s first initiative was t define features imprtant t the success f the UCSF Health System Identify Gals fr New Funds Flw Design New Funds Flw Structure Hand-ff Transitin Oversight Gal Clinical Grwth Financial Sustainability Academic Missin Efficiency The redesign was initiated t ensure the new clinical funds flw wuld: Incentivize prfitable clinical grwth Enable clinical prgrams that are meeting prductivity and expense standards t be financially sustainable Sustain academic health center status by funding academic missin in an explicit manner, recgnizing this is UCSF s differentiatr and cntributes t prfitable clinical grwth Drive efficiency in an era f scarce resurces Patient Access Cmpetitive Cmpensatin Lng-Term Viability Imprve patient access Enable cmpetitive cmpensatin fr cmpetitive prductin Stand test f time given health care ecnmics tday and ging frward 7
8 The new clinical funds flw (in place since 7/1/14) was designed t address Health System gals and desired funds flw principles The New Clinical Funds Flw The Health System cllects prfessinal and technical revenue fr clinical services at UCSF Health Systemis respnsible fr all patient care expenses (including practice, clinical departmental, and Faculty prductivity expenses) Departments are respnsible fr Faculty salaries and any remaining clinical departmental expenses Practice decisins will be made cllabratively between the Health System and the Departments Limited individual agreements between the Health System and Departments remain The Design UCSF Health System + REVENUE - Prfessinal revenue - Technical revenue - DGME revenue -EXPENSE - IP/IP Operating Expenses - Billing expenses / fees - Malpractice expenses - Deans Tax - Medical Grup fees -PAYMENT FOR CLINICAL WORK HEALTH SYSTEM BOTTOM LINE UCSF Schl f Medicine Department Mre Simple Mre Transparent Grwth- Prmting Access- Enabling Mre Flexible All Missin Supprting Financially Sustainable 8
9 A new funds flw, cmprised f fur payment tiers frm the Health System t the clinical Departments fr faculty clinical wrk, was develped based n thse gals Identify Gals fr New Funds Flw Design New Funds Flw Structure Hand-ff Transitin Oversight 4 Reserved fr clinical services fr which physician staffing is a requirement fr patient safety, regulatry mandates r gd patient care, and fr which the wrvu mdel is nt apprpriate Clinical Funds Flw Tiers 1 Base Payment wrvu-based Payment Incentives fr Grwth 2 Margin Sharing A natinally-validated system t measure physician wrk by time spent n a service and the effrt invlved. A mechanism by which Departments will share in actual Health System margin abve budget t incentivize clinical grwth and expense management. 3 Incentive Payment An inventive payment fr faculty wh are at least 20% clinical. These individuals will be eligible t participate in the Health System IAP prgram currently being used fr Medical Center staff. Clinical practice standards (access, quality, satisfactin) 9
10 Once the new clinical funds flw structure was apprved, a new versight cmmittee and several wrkgrups were frmed t lead and manage the transitin Identify Gals fr New Funds Flw Design New Funds Flw Structure Hand-ff Transitin Oversight Funds Flw Cmmittee Transitin Oversight Cmmittee New funds flw apprved by Mark and Sam n August 21, 2013 Mechanics f new funds flw and FY12 impact were reviewed with departments in August FY13 impact was reviewed with departments in September 2013 Numerus utstanding issues and cncerns were wrked thrugh with departments starting in August Jsh Adler, MD Chair Phillip Mre, MD Rn Arensn, MD Dave Mrgan Nancy Ascher, MD Anja Paardekper Peter Carrll, MD Barrie Strickland Maye Chrisman Tad Vail, MD Kevin Grumbach, MD Bruce Wintrub, MD Ken Jnes Staff t Cmmittee Anya Greenberg Andrea Ratti With multiple wrkgrups supprting different transitin elements. 10
11 A small team that was invlved in the funds flw transitin nw makes up the funds flw peratins team Funds Flw Operatins Team Jsh Adler, MD Chair Danielle Blanc Michael Chen Anya Greenberg Dave Mrgan Marci Pierce Andrea Ratti Dave Rein 11
12 While there have been and will cntinue t be changes fllwing the transitin, sme aspects f the practice peratins remain the same Changes That Have Already Taken Place Medical Grup staff (including MGBS, prfessinal fee cntracting, and Finance & Operatins) nw reprt t Health System management. Any individuals wh transitin payrll frm campus t the Health system (frmally the Medical Center) will be eligible t participate in the Incentive Award Prgram (IAP). A new (expeditius) practice supprt staff replacement and add prcess based n budget perfrmance and prductivity is nw in place. Onging Changes Health System leadership will assume a greater rle in versight and management f utpatient practices. Patient facing ambulatry practice prcedures will becme mre unifrm (hurs, telephne, pre-visit planning ) The ultimate gal is fr all individuals wh spend the majrity f their time supprting the clinical enterprise t be under a single rganizatinal structure What Hasn t Changed as a Result f the New Clinical Funds Flw The new clinical funds flw des nt change the physician/practice staff wrking relatinship. Faculty will cntinue t prvide input n practice management thrugh their individual practice administratrs. There will nt be any cnslidatin r layffs as a direct result f the new clinical funds flw. There were n changes t the relatinship with r supprt prvided by the Health System t the Schls f Nursing, Pharmacy and Dentistry as a result f the new clinical funds flw. 12
13 If successful, the new clinical funds flw is pised t transfrm the UCSF Health System int an integrated delivery system and take us t the next level Prfessinal Clinical Net Distributable Clinical + Net Prfessinal Revenue 1 + Net Clinical Revenue Incme 6 Cancer Center JV (Nn-MD Clinic Operating Expense) + Net Clinical Revenue 1 PSA Payment (Medical Grup Expenses) + Net Distributable Clinical Incme + Nn UCSF Clinical Revenues + Distributin frm Dept. Reserves + Departmental Clinical Revenues UCSF Health System Purchased Services Payments 2 + Purchased Services Payments Cancer Prfit Sharing Payments Technical + Net (Nn-Prfessinal) Incme + DGME Revenue (Ttal Operating Expenses) 2 (Purchased Services Payments) + Medical Center Bttm Line Strategic Supprt Payments Educatinal Payments Nn-Cancer JV / Prfit Sharing Payments Strategic Supprt Payments + GME Payments + Jint Venture Payments + Ttal Med Center Supprt Payments (Clinical Physician Salary Expense) (Clinical Departmental + REVENUE - Prfessinal revenue - Technical revenue - DGME revenue -EXPENSE - IP/IP Operating Expenses - Deans Tax - Billing expenses / fees - Medical Grup fees Expenses) - Malpractice expenses (Dean s Tax) Departmental Clinical Bttm 3 4 Strategic Supprt Payments Educatinal Payments Line Nn-Clinical + Academic Revenues -PAYMENT FOR CLINICAL WORK UCSF Schl f Medicine Department 5 Nn-Cancer JV & Prfit Sharing + Other Revenues 6 Cancer Center Prfit Sharing (Academic MD & Dept. Expense) Departmental Bttm Line HEALTH SYSTEM BOTTOM LINE What des success under the new funds flw lk like? 1. Enhanced patient access 2. Imprved patient experience 3. Increased clinical vlume 4. Reduced cmplexity, increased transparency 5. Imprved recruitment and retentin f clinical faculty 13
14 Questins? Fr mre infrmatin: Visit 14
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