Healthcare Finance. Michael Nowicki, MHA, EdD, FACHE, FHFMA. Professor of Health Administration

Transcription

1 Healthcare Finance Michael Nowicki, MHA, EdD, FACHE, FHFMA Professor of Health Administration

2 Speaker Bio Since 1986, Michael Nowicki has taught at Texas State University where he is now Professor of Health Administration. Dr. Nowicki teaches healthcare accounting, financial management, and economics in both the graduate and undergraduate programs in healthcare administration. Dr Nowicki has received numerous university and professional association awards for his teaching, service, and research. Prior to joining Texas State, Dr. Nowicki held administrative positions in the hospital division of Humana, Valley Medical Center of Fresno, Hutzel Hospital in the Detroit Medical Center, Georgetown Medical Center, and Lubbock Medical Center. In addition to his teaching responsibilities, Dr. Nowicki has provided training support to such organizations as Spectrum Health, Ascension Health, Indiana Health, Indiana Army National Guard, Cardinal Health, Kaiser-Permanente, University Hospitals in Cleveland, HCA, Mercy Hospitals of Northern Ohio, and the Baylor Healthcare System, as well as numerous law firms litigating malpractice cases. At the 2006 site visit by Commission on Accreditation of Health Management Education, Dr. Nowicki s research was singled out as a strength of the Texas State program. This comment was based not only on his textbooks, but also on his numerous publications and presentations for organizations such as the American College of Healthcare Executives, the Healthcare Financial Management Association, the Association of University Programs in Health Administration, Voluntary Hospitals of America, the American Hospital Association, the Texas Hospital Association, the Texas Public Health Association, the Texas Medical Association, and the Texas Organization of Rural and Community Hospitals. Dr. Nowicki s first textbook, Introduction to the Financial Management of Healthcare Organizations, was published by Health Administration Press in its sixth edition in Dr. Nowicki s second textbook, HFMA s Introduction to Hospital Accounting was published by Health Administration Press in its fifth edition in Dr. Nowicki holds a bachelors degree in political science from Texas Tech University, a masters degree in health administration from The George Washington University, and a doctorate in educational policy studies and research from the University of Kentucky. He is board certified in healthcare financial management and a Fellow in the Healthcare Financial Management Association where he has served as President of the South Texas Chapter, Regional Executive for five-state Region 9, National Board Member, Chairman of the Chapter Services Council, Chairman of the Forums Council, and Chairman of the Board of Examiners. He is also board certified in healthcare management and a Fellow in the American College of Healthcare Executives and currently serves as the Regent for Central and South Texas. He can be contacted at nowicki@txstate.edu. 2

3 Government Debt Projected Debt Govt Debt Public Debt

4 Total Debt as Percentage of GDP

5 Components of GDP by Percentage Exports Business Investment Government Spending Personal Consumption 5

6 Federal Budget Education 2% Infrastructure 3% Interest on Debt 6% Benefits for Federal Employees & Vets 7% Medical Research 2% Safety Net Programs 13% Non-Security International 1% Social Security 20% All Other 5% Medicare, Medicaid, CHIP 21% Defense 20% Revenue 46% PIT 35% PT 10% CIT 9% Misc. 6

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8 Federal Budget Surpluses/Deficits (200) (400) (600) (800) (1,000) (1,200) (1,400) (1,600) Surpluses (2) (55) (222) (226) (317) (538) (568) (494) (435) (342) (455) (1,413) (1,294) (1,299) (1,200) (680) (483) 8

9 Federal Budget Projections (200) (400) (600) (800) (1,000) (1,200) (1,400) (1,600) Surpluses (469) (536) (576) (627) (722) (804) (878) (998) (1,005) (1,003) 9

10 Percentage of Population 65+ and Percentage of Health Expenditures 10

11 Funding Public Programs--Hypothetical Over to to to 49 Hyp. (%) 30 to to 19 Under

12 Funding Public Programs--Actual 90 to to to to 49 Actual (%) 30 to to 19 Under

13 Generations by Size Veterans (born before 1946) represent 11 percent of the population. Boomers (born between 1946 and 1964) represent 25 percent of population. Generation X, or Busters, (born between 1965 and 1981) represent 15 percent of the population. Generation Y, or Millennials, (born between 1982 and 1995) represent 27 percent of the population. Generation Z, or Net Generation, (born between 1996 and 2010) represent 22 percent of the population. 13

14 Percentage of Population by Cohort Veterans Baby Boomers Percentage Gen X Millennials Net Gen

15 Total Health Spending * 2015* Spending , , , , , , , , , , , ,

16 Health Spending as Percent of GDP Spending

17 Health Expenditures by Service Percentage 32.2 Hospital Professional LTC Home Care Other Care 9.4 Drugs ME & Supplies 5.1 Govt Admin Net Insurance Public Health Investment 17

18 Health Expenditures by Source Percentage Private HI Medicare Out-of-Pocket Medicaid, Fed Medicaid, State Other HI Other TP and PH Investment 18

19 Current Fiscal Policy is Unsustainable The status quo is not an option We face large and growing structural deficits largely due to known demographic trends and rising healthcare costs. GAO s simulations show that balancing the budget in 2040 would require actions as large as Cutting total federal government spending by as much as 60% or Raising federal taxes to 2.5 times today s level. Faster economic growth can help, but it cannot solve the problem To eliminate the deficits using economic growth only, average annual growth would need to be in the double digit range for the next 75 years (for comparison, during the 1990 s, the economy grew at an annual average of 3.2%) Comptroller General David M. Walker, Saving Our Future Requires Tough Choices Today, December 1, 2005, 19

20 Alternatives Private Sector Consolidation of both providers and payers*. Transition to direct contracting Quasi-Public Sector Federal laws addressing access, cost, and quality Public Sector National Health Insurance/National Health Service *See Becker s Hospital Review Anthem to buy Cigna then there were three: 7 key points, July 23,

21 Direct Contracting Direct Contracting--The practice of large employers contracting directly with integrated delivery systems. I D S I D S Insurance Employer 21

22 Direct Contracting Direct Contracting--The practice of large employers contracting directly with integrated delivery systems. I D S I D S Employer 22

23 Direct Contracting in Transition Contract with Health Plan Partner with Health Plan Go it alone FFS P4P Shared Savings Full Capitation Private Label Provider- Sponsored with outsourced Provider- Sponsored Lower Risk/Reward Tradeoffs Higher Wagner, K. (2015). Shifting Gears: The Move Toward Value-Based Payment. Healthcare Executive, May/June:

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25 The Affordable Care Act of 2010 Access 16.4 million insured through the Marketplaces, Medicaid expansion, and young adults staying on parents policies. Uninsured rates drops from 18 percent in 2013 to 11.9 percent in Quality Readmit rates Hospital-acquired infections Cost Net cost for 10 years is about $1.2 trillion. $113 billion in reduced payments to hospitals. Reduced payment to physician start in As errors are reduced under APMs, costs should come down. 25

26 Medicare Access and CHIPS Reauthorization Act of 2015 On April 16, 2015, President Obama signed the Medicare Access and CHIPS Reauthorization Act. Repeals SGR Physicians under Part B receive a.5 percent increase each year for 5 years. After 5 years, annual physician increases (or decreases) in payment will be based on 1) quality, 2) efficiency, 3) meaningful use criteria, and 4) clinical practice improvement, in a budget-neutral environment. Starting in 2019, physician increases will also be affected by their participation in an Advanced Payment Model (APM) 26