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To join conference call Dial-in: 1-866-809-9263 Participant code: 610-285-8791. The ED Call Pay Crisis: Strategies for Fair, Equitable, and Sustainable Solutions Presented by: Martin B. Buser, MPH, FACHE Roger A. Heroux, Ph.D. Michael E. Hogue, M.D. June 4, 2009. To join conference call

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slide1

To join conference call

Dial-in: 1-866-809-9263

Participant code: 610-285-8791

The ED Call Pay Crisis:Strategies for Fair, Equitable, and Sustainable Solutions

Presented by:

Martin B. Buser, MPH, FACHE

Roger A. Heroux, Ph.D.

Michael E. Hogue, M.D.June 4, 2009

slide2

To join conference call

Dial-in: 1-866-809-9263

Participant code: 610-285-8791

  • HMR, LLC
  • ED Call Panel Solutions
  • Martin B. Buser, MPH, FACHE
  • Roger A. Heroux, Ph.D.
overview of today s objectives
Overview of Today’s Objectives
  • Define the problem with ED call panels
  • Understand the process to approach the issues with ED call panel solutions
  • Findings from interviews
  • Findings from research
  • Feasibility analysis and business plan
  • Possible recommendations for a fair and equitable solution
  • Call Pay Security Solution
  • The future

To join conference call

Dial-in: 1-866-809-9263

Participant code: 610-285-8791

stipend impact for on your bottom line
Stipend impact for on your bottom line
    • Year One: Three panels (GS, Ortho and NS) at $500/day

$547,500

    • Year Two: Six panels at $500/day

$1,095,000

    • Year Three: Fourteen panels at $500/day

$2,555,000

    • Year Four: Specialties Separate

General Surgery, Orthopedics and Neurosurgery at $1,500

Cardiology, Urology, Pulm, Vascular Surgery, OB, G-I,

IM/FP, ENT, Plastics at $800

Peds, Ophthalmology, Neurology and Cardiac Surgery at $500

$5,000,500

  • And escalating!!

To join conference call

Dial-in: 1-866-809-9263

Participant code: 610-285-8791

emergency department ed requirements
Emergency Department (ED) Requirements
  • Ethically and by law...
  • Full panel of specialty physicians
  • Distinct from the emergency physicians who provide the first level of care in ED’s
definition unassigned patients
Definition: Unassigned patients
  • “Patients who require on-site consultation or admission to the hospital and do not have a a prior relationship with a physician on the Medical Staff to assume their care”
  • Independent of patient funding
  • Cannot make payments to physicians to care for their own patients
background
Background
  • Past:
    • Voluntary community service
    • Cost shifting possible
    • Referrals built practices
    • How fast can I get on the panel?
scope of the problem
Scope of the Problem
  • National issue
  • You’re not alone!
  • Problem growing daily
  • Specialty-driven
  • Increased adversarial relationships between medical staff and hospital
  • No easy solution
  • Expensive to solve
definition ed on call panel for unassigned patients
Definition: ED On-Call Panel for Unassigned Patients
  • Significant volume
    • For a 40,000 visit ED, it will represent over 2,000 inpatients per year
  • Unassigned population:
    • 35-50% of the ED hospital admissions
    • 12-20% of the total hospital admissions are ED unassigned admissions
  • If a trauma hospital- adds more volume and dynamics
designing for the future
Designing for the Future
  • The best solutions allow for better clinical integration and partnerships between the hospital and medical staff
  • Long term – learning how to work together with common goals and aligned incentives within a shared budget
  • Must be more efficient and effective
multi step process
Multi-Step Process
  • Learn what the issues are
  • Learn what the burden is
  • Learn what the market is
  • Develop a forum for discussion
  • Develop an acceptable solution that is fair, equitable and financially sustainable
  • Manage the implementation well
interviewing
Interviewing
  • What are the issues and dynamics?
  • How deep do they go?
  • Who is leading the cause?
  • What are their real issues?
    • Income?
    • Competency?
    • Manpower?
    • Greed?
    • Irritations with the hospital systems?
  • What can you do something about and what is impossible?
  • How urgent is it?
what we find from the interviews
What we find from the Interviews
  • Special Rules to Get Off Call
  • No Longer Able to Cost Shift for Unfunded Patients
  • Desire to be Paid for Availability
  • Lifestyle Issues
  • ED Call Affecting Recruitment and Retention Potential
research
Research:
  • What do we learn?
  • Data is objective and revealing!
the research process opens the black box
The Research Process: Opens the “Black Box”
  • Each study period unassigned chart audited for CPTs and ICD-9 professional codes
  • Code all care provided throughout the hospitalization
  • Unassigned volumes and payer mix identified by specialty
  • Expected rate of reimbursement by specialty
  • Service line analysis (average length of stay (ALOS) by diagnostic related group (DRG), $/DRG/Specialty, etc.)
  • Financial scenarios
analyze
Analyze:
  • Number of Panels
  • Staffing by Panel
  • Required Panels
  • ED Call Burden By Specialty
  • Quantify the volume by specialty
  • RVUs by Specialty
  • Current Payment System
  • Expected Payment to Specialties
ed unassigned annualized patient categorization breakdown
ED Unassigned Annualized Patient Categorization Breakdown

Note: Patients may be seen in multiple locations, however this report shows the primary location

of service for each specific patient. The ED unassigned admission volume is estimated

based on an annualization of patients identified by hospital staff.

ed unassigned overall averages
ED Unassigned Overall Averages

Note: The ED unassigned admission volume is estimated based on an annualization

of patients identified by hospital staff.

estimated current ed unassigned annualized professional fee practice value for all specialties
Estimated Current ED Unassigned Annualized Professional Fee Practice Value for All Specialties

Note: The estimated collection rate and current estimated practice value is calculated on

estimates made by financial class based on historical trends. Actual results may vary

depending on actual billing experience.

should physicians be paid for ed call
Should Physicians Be Paid for ED Call?
  • Yes
  • Should be Fair, Equitable for the Medical Staff Panel Members
  • Should be Financially Sustainable for the Hospital
sample hospital report develop a business plan
Sample Hospital Report – Develop a Business Plan
  • Get the facts!
  • Build a business plan for expected shortfall if payment guarantees are provided
  • Understand economic value of ED call to each specialty
ed on call panel options
ED On-Call Panel Options:
  • Remove irritants of call
  • Close the ED
  • Develop an IM hospitalist program
  • Develop Surgical Specialty hospitalist programs
  • Maintain bylaws mandatory on-call w/o pay
  • Regionalize care by specialty among local hospitals
  • Require a minimum number of call days before payment
ed on call panel options cont d
ED On-Call Panel Options (cont’d):
  • Recruit more specialists
  • Pay stipends
  • Pay base stipend plus activation fee
  • Hire physician assistant first responders
  • Guarantee pay for work performed
    • All patients
    • Uninsured patients only
    • Uninsured patients outside of the immediate service area
  • Develop Co Management Agreements
  • Compensate for selected OP Follow Up items
  • Hybrid compensation model
  • Compensate with Tax Advantaged dollars
options remove irritants of call
Options: Remove Irritants of Call
  • Make ED more efficient
  • Track throughput
  • Reduce constant ED calls
  • Open surgery for ED follow-up cases
  • Assist with $ for selected ED referrals
  • Cover unfunded patients
  • Allow easy re-admission of difficult patients
  • Manage discharge planning effectively
options hospitalists
Options: Hospitalists
  • Dedicated inpatient physicians
  • Internal medicine/family practice
  • 55%-60% of ED unassigned admissions are medicine-related
  • Control utilization
  • Control referrals
  • Allows time to explore options
  • Must be properly staffed and designed to be extremely effective
slide35

Acute Patient Care

Hospitalist Physician

On-site Hospitalist Support Team(Case Manager, Care Coordinator/Clerical)

On-site Medical Director

Supportive

Infrastructure

Benchmarking for Best Practices

HOSPITALIST DIRECTED PATIENT CARE

options specialty hospitalist programs
Options: Specialty Hospitalist Programs
  • Growing quickly as an option
  • If paying stipends, it may be more economical to hire full time surgical specialists and achieve dedicated service
  • Must develop a business plan to understand the costs and risks
hospitalist services go beyond im
Hospitalist Services Go Beyond IM!
  • Internal Medicine/FP
  • IM/Peds
  • Peds
  • OB
  • Ortho/Traumatology
  • General Surgeons
  • Intensivists for the Critical Care Patients
options pay stipends
Options: Pay Stipends
  • Fixed costs
  • Difficult to determine proper payment
  • Stipends tend to go to the most vocal
  • Never stops escalating
  • What is the relative value of on-call time?
options pay stipends39
Options: Pay Stipends
  • Should there be tiers?
    • Everyone on call panel should receive the same base rate
    • Vary the activation fee based upon frequency, severity and FMV analysis
  • How do you determine the amounts?
    • With facts
one sample hospital report option base fee plus activation fee
One Sample Hospital ReportOption: Base Fee Plus Activation Fee
  • Ortho, Neuro, OB and General Surgery$200 Base Fee + $XXX Activation Fee
  • Pulmonology, Vascular, Cardiology, Neurology andPlastic Surgery$200 Base Fee + $YYY Activation Fee
  • G-I, Opth, Peds, Psych, Urology, and ENT$200 Base Fee + $ZZZ Activation Fee
option np pa first responder
Option: NP/PA First Responder
  • First Line of Response
  • Covers ED Consults for Trauma, Neurosurgery, Cardiovascular and Orthopedic Surgery
  • Coordinates all care with the on-call specialist
  • Responsible from admission to discharge
  • Assign 4 Surgical NP FTE’s to cover 24/7
  • Net Cost is Staffing Costs less Professional Fees collected.
option pay for productivity
Option: Pay for Productivity
  • Emergency on-call medical group
  • A separate professional corporation
  • Contracts with existing medical staff members
contractual relationships

Billing Service

Hospital

Steering & CodingCommittee

MedicalCorporation

ContractingMD

ContractingMD

ContractingMD

ContractingMD

Indicates contracts

Contractual Relationships
sample hospital report pro forma summary yearly cost estimates with various scenarios
Sample Hospital ReportPro Forma Summary - Yearly Cost Estimates With Various Scenarios

Note: Excludes those specialties with existing coverage agreements or exclusive

franchises

option compensate with tax advantaged dollars
Option: Compensate with Tax Advantaged Dollars
  • Integrated Healthcare Strategies
  • Michael E. Hogue, M.D.
  • Call Pay Security Solution
call pay program
Call Pay Program
  • Integrated Healthcare Strategies developed a call pay program designed to meet the following goals:
    • Transition from a cash payment philosophy to the development and implementation of a retirement program opportunity
    • Generate immediate and long term savings
    • Control future escalation in call pay amount
    • Flexibility in implementation
    • Provide a competitive differentiation
    • Encourage long-term retention
call pay dilemma systems
Call Pay Dilemma – Systems
  • Cost of call is becoming a significant burden on hospital operating margins
  • Current structure unsustainable as costs are escalating yearly at unacceptable rates
  • Hospital systems face increasing call pay requests—slowly becoming the industry standard
  • Increasing strain on emergency departments—increasing number of uninsured patients
call dilemma physicians
Call Dilemma – Physicians
  • Perception that “On-Call” problem for physicians is unreimbursed care
  • In reality, “On-Call” is a time issue
  • Historical attempts have been to solve this with monetary payment
  • Payment is made/taxed/spent—money is gone and the time issue is unchanged
  • Current call pay structure will never be enough to reimburse for excess time away from family
additional physician issues
Additional Physician Issues
  • Call time adds increasing burden to physician work schedules
  • Call time limits physicians’ opportunity to maximize income
    • Reduces clinic time
    • Reduces elective cases
    • Increases exposure to uninsured patients and corresponding legal risk
  • Private practice physicians have difficult time sheltering money for retirement
  • Qualified plans inadequate to meet the needs of highly compensated physicians – increased exposure to market risk
solution
Solution
  • IHStrategies’ approach to solving the call pay issue is focused on answering three key questions:
    • How do we generate immediate savings for systems?
    • Can we offset physician time issues by addressing another critical issue?
    • How do we design a plan to more adequately reward physicians for time commitment?
solution51
Solution

Physician Issues

Hospital Issue

Time away from clinic

Time out of OR

Time away from family

Increased malpractice exposure

Negative impact on practice

COST OF RETIREMENT SAVING

Need physicians’ time to cover call

slide52

The Call Pay Security Solution

Is a personal retirement program that combines a specially-designed indexed universal life insurance contract with a unique tax replacement strategy to provide a global solution to the challenges of developing long-term retirement income.

the call pay security solution
The Call Pay Security Solution
  • Designed to function like a Roth IRA with a twist
  • The Basics
    • Contributions made after tax
    • Account grows tax deferred
    • Distributions are tax free
  • The Twist
    • No income limits for participation
    • No limit on contributions
    • Replaces income earning potential on lost taxes with a tax replacement loan

“Dollar for Dollar, A Roth IRA may just be the best savings plan in America.”

- Money Magazine, October 2008

the call pay security solution54
The Call Pay Security Solution
  • Provided on an after-tax basis
  • Outside of IRS deferred compensation scrutiny
  • Immediately vested - fully portable
  • Provides a tax replacement loan to participant
    • Participant grossed-up annually for taxes by outside lender
    • Gross-up funded by a third party
    • Gross-up not reportable on 990
    • Organization pays annual financing cost on the tax gross-up
  • Utilizes a highly tax-efficient indexed universal life insurance product
    • Only vehicle that offers tax deferred earnings and tax-free distributions
    • Guaranteed issue ($1million - $2million)
  • Minimum annual guaranteed return
  • Tax free distributions reduces exposure to increasing tax rates
  • Assets protected from malpractice claims (in most states)
call pay comparison
Call Pay Comparison

CURRENT

PROPOSED

System

System

Outside

Lender

$25,000

+

Interest

$35,000

$6,000

Physician

Physician

  • 1099 of $35,000
  • Taxes @ 40% 14,000
  • Net of $21,000
  • 1099 of $25,000
  • Taxes @ 40% $10,000
  • Net Contribution $15,000
  • Gross Up Loan $6,000
  • Net Investment $21,000
the call pay security solution56
The Call Pay Security Solution

How It Works

(2) Tax cost replenishment loan

(3) Earnings

(1) Participants’ after-tax contribution

  • Expenses
  • Cost of insurance
  • Administrative fees

INDEXED

CONTRACT

  • At Retirement
  • Tax-free retirement income
  • Ultimately – tax-free insurance death benefit
cost comparison of call pay options

Impact to System if Call Pay ispaid in cash annually

Impact to System using CPSS scenario

Total Annual Cost

to System

Cost Comparison of Call Pay Options

Current annual call pay obligation of $35,000, reduced to $25,000 in CPSS program

Total estimated savings of 32.6% over the 20-year period

  • ASSUMPTIONS:
  • Annual increase in call pay (if paid in cash): 3.0%
  • Tax rate: 40%
  • Loan interest rate: 5.75%
  • Carrier: Penn Mutual
the call pay security solution58
The Call Pay Security Solution

Retirement Funding Comparison – 45 Years Old

The Call Pay Security Solution delivers a 38% increase in annual after-tax

retirement income versus cash in a 25-year income stream

  • ASSUMPTIONS
  • Tax rate of 40.0%
  • Investment yield of 7% gross during accumulation phase for cash option
  • Investment yield of 5.5% gross during distribution phase for cash option
  • Investment yield of 7% for CPSS
  • Annual call pay increase of 3%
  • Income stream begins at age 71
s p 500 index versus indexed universal life iul
S&P 500 Index versus Indexed Universal Life (IUL)

S&P 34 year annualized return 6.59%

IUL 34 Year annualized return 8.60%

the call pay security solution contract details
The Call Pay Security Solution – Contract Details
  • The probability of earning different index return levels during the last 20 years of monthly S&P 500 price returns assuming the 14% annual cap and 2% floor (12/07)
summary of system benefit
Summary Of System Benefit
  • The Call Pay Security Solution provides systems with the following benefits:
    • Provides immediate savings of approximately 26%
    • Provides long term reduction in cost of approximately 33%
    • Individualizes call pay negotiations by specialty/section/facility
    • Eliminates the need for continuing negotiations for call pay
    • Provides a highly flexible plan that can be customized to the organization’s needs
summary of physician benefit
Summary Of Physician Benefit
  • The Call Pay Security Solution provides physicians with the following benefits:
    • Tax-leveraged wealth accumulation program
    • Immediately vested and portable
    • Not subject to corporate insolvency or risks of forfeiture
    • Secure investment vehicle
      • Asset protection
      • Minimum guaranteed return
      • Index based, no asset management
the forum for negotiations the power is in the process
The Forum for Negotiations“The power is in the process”
  • Interview to learn perceptions of the medical staff
  • Research the ED unassigned data
  • Engage the leadership of the medical staff
  • Establish a small steering committee
  • Solutions only for the entire medical staff
  • Get sign-off from the medical executive committee
  • Implement with precision
  • Keep steering committee involved
  • Measure, monitor and manage
common solutions
Common Solutions
  • ED Unassigned and Unfunded Only
  • ED Unassigned Patients
  • Base Stipend plus FFS Guarantee
  • IM Specialty Hospitalist Program
  • Additional Specialty Hospitalist Programs
  • Activation Fee
  • Tiered Stipends
  • Coverage Agreements
  • Fracture Clinic for Orthopedic follow up
  • Compensation with Tax Advantaged Dollars
the future
The Future?
  • More specialties will be hospital-based
  • Estimate that 75% of hospital census will be managed by some form of hospitalists including:
    • Internal medicine hospitalists
    • Intensivists
    • OB
    • Pediatrics
    • Orthopaedic surgeons
    • General trauma surgeons
about integrated healthcare strategies
About Integrated Healthcare Strategies
  • A Human Resources consulting firm exclusively serving healthcare organizations
  • Organizations we work with:
    • Secular, religious, government-based and not-for-profit organizations
  • Clients include hundreds of:
    • Hospitals
    • Academic medical centers
    • Health networks
    • Nursing homes
about integrated healthcare strategies cont
About Integrated Healthcare Strategies, cont.
  • 5 integrated specialty practices:
    • Executive Total Compensation
    • MSA Executive Search
    • Physician Services
    • MSA HR Capital
    • Governance and Leadership Services
  • From these 5 practices, we’re able to assist clients in the areas of
    • Physician strategy and compensation, employee compensation, executive compensation, human capital solutions, labor relations, leadership transition planning, executive search, employee surveys, performance management and board governance solutions.
  • Founded in 1958
  • Offices: Minneapolis, MN and Kansas City, MO
  • Website: www.IHStrategies.com
about hospitalist management resources llc
About Hospitalist Management Resources, LLC
  • Independent consulting company
    • We consult with Hospitalist Programs, Intensivist Programs and ED Call Panel Solutions
    • We do not staff or operate programs
  • More than 350 consultations in 11 years
  • Develop new programs and enhance existing programs into Fourth Generation Programs
    • Business plans, ROI strategies and clinical and financial benchmarks to validate Programs
  • Help hospitals evaluate and create ED Call Panel Solutions
about hospitalist management resources llc cont
About Hospitalist Management Resources, LLC, cont.
  • Founded April 1999
  • Founders: Martin Buser and Roger Heroux, Ph.D.
  • Each bring 25+ years Healthcare experience
  • Offices: San Diego, CA and Colorado Springs, CO
  • Website: www.HMRLLC.com
  • [email protected] Colorado Springs (719) 331-7119
  • [email protected] San Diego (858) 344-1060
contact us
Contact Us

Martin B. Buser, MPH, FACHE

[email protected]

1-858-344-1060

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