Critical Access Hospital (CAH) ND Critical Access Hospital Board Boot Camp April 13, 2018

Transcription

1 Critical Access Hospital (CAH) Financial Analysis 2016, ND CAH ACO Experiences, Plans and Possibilities ND Critical Access Hospital Board Boot Camp April 13, Support for the Financial Analysis The CAH Financial Reporting project is supported by funding from the North Dakota Medicare Rural Hospital Flexibility Program, administered by the Center for Rural Health at the UND School of Medicine and Health Sciences. Funding is provided through the Federal Office of Rural Health Policy by the U.S. Department of Health and Human Services. 2 1

2 North Dakota CAH Financial Analysis Agenda CAH Financials for All 36 North Dakota CAHs Eastern/Western ND CAH Financial Analysis 27 Original ND CAHs Reporting for 10 Years Accountable Care Organizations (ACO) 3 ND CAH Financial Analysis All 36 North Dakota CAHs Calendar

3 North Dakota CAH Financial Analysis Definition of Terms Used Operating Revenue Revenue generated from healthcare related services provided Contractual Deductions The difference between what is charged for services and what is allowed/paid Bad Debt/Charity Care Uncompensated care provided by facilities Expenses Expenses incurred Operating Margin Operating revenue less contractual deductions and expense Non-operating Revenue Revenue realized from non operational sources such as donations, foundation, investments, government subsidies, etc. Net Margin Net Margin realized from all sources of revenue and expense 6 3

4 North Dakota CAH Financial Analysis Calendar 2016 Observations 10 th year of the CAH Financial Analysis 36 CAHs have reported financials since Licensed CAH Hospital beds 32 of 36 Facilities Own/Operate a Clinic 32 Facilities Who Own/Operate Clinics, Operate 53 Clinics 42 of the 53 Clinics Are Rural Health Clinics (RHCs) 13 of 36 Facilities Own/Operate a Nursing Home (585 beds) 6 Facilities Operate Basic Care (132 beds) 8 Facilities Operate Assisted Living (136 apartments) 8 Facilities Own and Operate the Local Ambulance 2 Facilities Own/Operate Home Care (some provide RHC visiting nurse) 7 ND CAH Acute/Swing Bed Occupancy (Patient Census) Survey Snapshot at a Point in Time August 2016 and Prior Years Licensed Beds & Occupancy for 36 Facilities CAH Licensed Beds 1,439 1, Acute Patients Skilled Swing Bed Patients Non Skilled Swing Bed

5 North Dakota CAH Financial Analysis 2016 Observations (continued) CAHs had 104,261 ER Visits CAHs reported 367,565 Clinic Visits Hospital and Clinic Revenue 36 CAHs Orig. 27 $304,993,808 Medicare revenue (39%) (46%) $218,106,179 BCBS revenue (28%) (23%) $117,902,582 Other revenue (15%) (11%) $ 65,534,194 Medicaid revenue (8%) (9%) $ 46,839,671 Self Pay revenue (6%) (7%) $ 27,481,023 Medicaid Expansion (4%) (3%) $780,857,457 TOTAL $780,857,457 $247,414,013 9 North Dakota Critical Access Hospitals 2016 Hospital/Clinic Patient Revenue By Payer 45% 40% 35% 30% 25% 20% 39% 15% 28% 10% 15% 5% 0% 8% 6% 4% Medicare Medicaid Medicaid Expansion BCBS Self Pay Other Medicare Medicaid Medicaid Expansion BCBS Self Pay Other 10 5

6 North Dakota 2016 CAH Financial Analysis 36 CAH Observations Description CAHs with Positive Operating Margin Mean Operating Margin -3.5% -4.5% 0.1% 0.2% Median Operating Margin -2.3% -5.1% -1.5%.03% CAHs with Positive Net Margin Mean Net Margin 0.6% 2.1% 2.7% 3.8% Median Net Margin 0.2% -0.3% 3.1% 2.6% 11 North Dakota Critical Access Hospitals Statement of Operations, Comparing 2010 to Facilities 36 Facilities Variance % 2010 Total 2016 Total Operating Revenue * $537,401,689 $871,543, % Contractual Deductions -$156,390,822 -$267,966, % Bad Debt/Charity Expense - $15,981,219 - $32,517, % Net Revenue $365,029,648 $571,058, % *(Other operating revenue grew 123%) $13,007,817 $29,661,790 Expenses $368,653,823 $570,889, % Operating Margin -$3,624, , % Operating Margin Mean% -0.7% 0.03% Operating Margin Median% - 1.4% 0.2% Non Operating Rev. - $ 2,639,921 $21,639, % NET Income/Loss - $ 6,264,096 $21,809, % Net Margin Mean % -1.2% 3.8% Net Margin Median % -0.7% 2.6% 12 6

7 North Dakota Critical Access Hospitals Statement of Operations, Comparing 2014 to Facilities 36 Facilities Variance % 2014 Total 2016 Total Operating Revenue * $708,815,428 $871,543, % Contractual Deductions -$188,777,096 -$267,966, % Bad Debt/Charity Expense - $37,740,043 - $32,517, % Net Revenue $483,298,288 $571,058, % *(Other operating revenue grew 61%) $18,538,618 $29,661,790 Expenses $505,107,418 $570,889, % Operating Margin -$21,809,130 $169, % Operating Margin Mean % -4.5% 0.03% Operating Margin Median % - 5.1% 0.2% Non Operating Rev. $31,768,771 $21,639, % NET Income/Loss $ 9,959,642 $21,809, % Net Margin Mean % 2.1% 3.8% Net Margin Median % -0.3% 2.6% 13 North Dakota Critical Access Hospitals 2016 Operating Margins 30% 24% 20% Operating Margin 10% 0% -10% -12% -13% -7% -5% -5% -4% -4% -4% -4% -3% -3% -2% -1% -1% 0% 0% 1% 1% 1% 2% 2% 3% 4% 5% 5% 5% 5% 6% 7% 8% 9% 10% 0.25% 0.03% -20% -20% -30% -28% -28% -40% West of HWY 83 East of HWY 83 Median (0.25%) Mean (.03%) 14 7

8 30.0% North Dakota Critical Access Hospitals 2014, 2015, 2016 Operating Margins 20.0% 10.0% Operating Margin 0.0% -10.0% % -30.0% -40.0% 2014 Operating Margins 2015 Operating Margins 2016 Operating Margins 15 50% North Dakota Critical Access Hospitals 2016 Net Margins 46% 40% 30% 24% 31% 20% 17% Net Margin 10% 0% 8% 8% 9% 9% 9% 6% 7% 7% 5% 5% 5% 0% 1% 1% 1% 1% 2% 2% 3% 3% 3% 3% 2.6% 3.8% -10% -10% -1% -2% -2% -6% -5% -5%-4% -20% -17% -22% -30% West of HWY 83 East of HWY 83 Median (2.6%) Mean (3.8%) 16 8

9 50.0% North Dakota Critical Access Hospitals 2014, 2015, 2016 Net Margins 40.0% 30.0% 20.0% Net Margin 10.0% 0.0% % -20.0% -30.0% 2014 Net Margins 2015 Net Margins 2016 Net Margins 17 NORTH DAKOTA 36 CRITICAL ACCESS HOSPITALS OPERATING REVENUE Inpatient Outpatient Clinic Other 95,671,000 90,949, ,715,148 84,008,509 79,383,746 89,933, ,997,022 REVENUE 78,894,415 86,319,651 70,204,748 77,427, ,374, ,907,110 58,665, ,209, ,437, ,106, ,236, ,270, ,847, ,498, ,727, ,759, ,751, ,519, ,782, ,492, ,285,

10 North Dakota 36 Critical Access Hospitals Bad Debt Expense % Inpatient, Outpatient, Clinic, Swing Bed Revenue 7.00% 6.00% 5.00% Bad Debt Percentage 4.00% 3.00% 2.00% 3.44% 4.73% 5.62% 5.79% 6.03% 5.42% 4.19% 1.00% 0.00% ND CAH Financial Analysis Comparison East of Highway 83 & West of Highway

11 North Dakota Critical Access Hospitals Statement of Operations Analysis 24 CAHs 12 CAHS East of 83 West of Total 2016 Total Operating Revenue $438,887,567 $432,655,995 Contractual Deductions -$120,889,412 -$147,077,587 Bad Debt/Charity Care -$11,765,587 -$20,752,103 Net Operating Revenue $306,232,569 $264,826,306 Expenses $297,363,112 $273,526,282 Operating Margin $8,869,457 - $8,699,976 Operating Margin Mean % 2.9% -3.3% Operating Margin Median % 0.9% -3.9% Non Operating Rev. $14,445,840 $7,193,977 NET Income/Loss $23,315,297 - $1,506,000 Net Margin % Mean 7.6% -0.6% Net Margin % Median 3.8% 1.2% 21 North Dakota Critical Access Hospitals Statement of Operations Analysis West of 83 West of Total Total Variance % Operating Revenue $336,128,051 $432,655, % Contractual Deductions -$94,438,111 -$147,077, % Bad Debt/Charity Expense -$25,507,865 -$20,752, % Net Revenue $216,182,076 $264,826, % Expenses $229,229,085 $273,526, % Operating Margin -$13,047,010 -$8,699, % Operating Margin Mean % -6.0% -3.3% Operating Margin Median % -6.9% -3.9% Non Operating Rev. $14,237,473 $7,193, % NET Income/Loss $1,190,463-1,506, % Net Margin % Mean 0.6% -0.6% Net Margin % Median 2.9% 1.2% 22 11

12 15.0 ND Critical Access Hospitals Operating Margin Calendar Year 2016 The CAHs West of Highway Percentages West of HWY 83 Median (-3.9%) Mean (-3.3%) 23 North Dakota Critical Access Hospitals West of Hwy 83 Revenue 450,000, ,000,000 28,005, ,000,000 26,072,513 83,260, ,000,000 23,932,947 27,774,366 74,316,302 Revenue 250,000, ,000,000 26,431,524 43,236,513 24,212,751 47,262,256 65,940,086 70,647, ,608, ,791, ,000, ,000, ,091, ,309, ,220, ,238,738 50,000,000 47,711,857 51,417,318 49,777,532 53,313,734 69,244,663 79,296, Inpatient Outpatient Clinic Other 24 12

13 North Dakota Critical Access Hospitals Bad Debt Percentage of Revenue, East Vs West of Hwy Bad Debt Percentage of Hospital Inp, Outpt, Swingbed, Clinic Revenue % 7.14% 4.02% 7.70% 3.85% 8.27% 5.22% 5.22% 3.11% 3.11% East West Original CAHs in the Analysis Calendar

14 ND Critical Access Hospitals Operating Margin Calendar Year Original Facilities 15% 10% 5% 0% 8% 9% 4% 5% 5% 6% 7% 2% 2% 1% 1% 1% Percentages -5% -10% -4% -4% -4% -3% -3% -2% -1% -1% -7% -6% -1.3% -2.9% -15% -12% -13% -20% -20% -25% -28% -28% -30% West of HWY 83 East of HWY 83 Median (-1.3%) Mean (-2.9%) 28 14

15 ND CAH Original 27 Facilities Statement of Operations Analysis 27 Facilities 27 Facilities Total Total Variance % Operating Revenue $194,605,635 $326,227, % Bad Debt/Charity Care - $ 3,522,554 -$9,980, % Other Deductions -$35,571,417 -$46,086, % Net Patient Revenue $155,511,664 $270,161, % (Other operating revenue grew 520%) Expenses $161,465,871 $278,009, % Operating Margin - $5,954,207 - $ 7,848,777-31% Operating Margin Mean % -3.8% -2.9% Operating Margin Median % -3.0% -1.3% Non Operating Rev. $4,112,571 $ 9,994, % NET Income/Loss -$ 249,444 $ 2,095,749 Net Margin % Mean -0.2% 0.8% Net Margin % Median -1.7% 1.7% Original North Dakota Critical Access Hospitals Revenue 300,000,000 Revenue 250,000, ,000, ,000,000 56,662,419 57,816,522 23,112,679 61,940,518 65,747,351 23,450,801 23,215,516 73,110,951 32,360,823 72,721,678 36,290,658 70,252,628 37,929,952 77,671,504 40,344,028 78,132,424 44,654,891 80,699,556 48,730,168 20,417, ,000,000 82,825,552 93,034, ,634, ,004, ,324, ,930, ,929, ,277, ,274, ,969,771 50,000,000 31,578,867 33,974,027 32,852,204 30,692,375 28,343,736 26,532,438 26,527,212 24,961,299 26,055,987 24,029, Inpatient Outpatient Clinic Other 30 15

16 North Dakota CAH Financial Analysis Observations Of the 27 Reporting in all 10 years 5 Had Operating Losses all 10 years 8 Had Operating Losses in 9 of 10 Years Of the 27 Reporting in all 10 Years Facilities With Positive Operating Margin CAH Financials Thoughts Inpatient utilization at the smaller CAHs continues to decline Outpatient and Clinic Revenue continues to experience growth in CAHs Medicaid Expansion accounted for $27 million or 4% of patient revenue Bad debt/charity care expense has continued to stabilize and decline Decreased 14% or $5 million from 2015 to 2016 The 340b program accounted for $7.5 million in (other operating) revenue Half of CAHs participated in 340b program CAHs incurred $16 million in contract nursing expense in 2016 $3 million more than in 2015 Operating margins continued to improve 18 facilities had a positive operating margin in of those utilized the 340b program Net margins continued a positive trend Volume to value transition and MIPS will impact us in the future 32 16

17 Accountable Care Organization (ACO)??? 33 Projected Change in Medicare Enrollment 17

18 Projected Medicare Spending Medicare Spending in Billions $1,100 $1,000 $900 $800 $700 $600 $586 $597 $615 $671 $695 $722 $794 $849 $911 $1,018 $1,064 $ Medicare Part A Trust Fund Balance % of Annual Expenditures In billions: 100% 80% 60% 40% 20% 0%

19 Medicare Spending 37 Accountable Care Organization ACO Guidelines Established in the Affordable Care Act (ACA) CMS Initiative to Shift from Volume to Value Based Payment Accountable Care Organization (ACO) A group of health care providers who come together to coordinate the quality and cost of care provided to patients attributed to the ACO Types of ACOs Pioneer ACO, Next Generation, Medicare/Medicaid ACO, Medicare Shared Savings (MSSP) MSSP Models One-Sided (Share in Savings) Two-Sided (Share in Savings and Losses) Both models incorporate quality metrics Patient experience, care coordination, population health 38 19

20 39 Accountable Care Organization Separate Organization Legal structure and governance Can Include Hospitals, Clinics, Physicians Attribution of at least 5,000 lives How is it done Annual Wellness Visit Care Coordination Transitions of Care Advanced Care Planning Data, Data Data Quadruple AIM Improve Health Outcomes Improve how we Deliver Care Reduce Cost Improve Satisfaction 40 20

21 Clinical Quality Measures o Examples of Quality Outcomes Ø Potentially Preventable ER visits Ø Potentially Preventable Admissions Ø Patient Satisfaction Surveys Ø Claims Data Ø Health Outcomes ü ü ü ü ü At risk population Chronic disease management Preventative health screens and services Immunizations throughout the lifespan Wellness promotion for all Data Analytics o Data Analytics Medicare Claims Data Ø Cost by type of service provided Ø Acute, ER, Nursing Home, Hospice, Clinic Ø Cost by provider organization Ø Local Provider, Tertiary, Nursing Home, Etc. Ø Encounters by provider Ø Physician Primary Care, Specialist Ø Encounter data by Diagnosis 21

22 North Dakota Medicare ACO High Sierras Northern Plains ACO Submitted applications in 2015 Started January 1, 2016 North Dakota and California providers grouped to meet attribution One sided risk Medicare Shared Savings (MSSP) Received CMS AIM Funding ACO Investment Model (AIM) Prepaid Shared Savings Encouraged rural participation in the ACO model Board of Directors that manage the ACO ACO Champions that lead the ACO work 43 High Sierras Northern Plains ACO North Dakota Participants First Care Health Center Park River Heart of America Medical Center Rugby McKenzie County Healthcare Systems Watford City Sakakawea Medical Center/CCCHC Beulah/Hazen Southwest Healthcare Services Bowman California Participants Barton Health, Mammoth Hospital, Ridgecrest Regional Hospital, Truckee Tahoe Medical Group Arizona Participants Gila Health Resources 44 22

23 Example of ACO info 45 CMS Shift from Volume to Value 46 23

24 47 24

25 What does the future hold Federal deficit will continue to be a challenge Medicare Trust Fund will be of continued concern CMS is continuing the shift from volume to value Future CMS value based initiatives may not be called ACO s, but the transition to value will continue Patients will expect more quality and outcome based results Commercial insurers are also transitioning to value based payment BCBS Blue Alliance Many states have Medicaid managed care 2019 CMS ACO applications due in summer of Thanks for Listening! Questions? Darrold Bertsch Sakakawea Medical Center Coal Country Community Health Center dbertsch@smcnd.org Cell