Judy Pins, RN, MBA The New Era of Healthcare Part 1

Objectives Discuss the major transitions occurring in payment models. Describe the 4 major issues impacting a health systems profitability. Describe why Surgical Services is so critical as part of the healthcare reform agenda. Discuss what OR Directors need to accomplish under healthcare reform.

So…how do we drive down cost and improve quality?

15 Medicare Rolls in Line to Increase Dramatically 2011 US Population Distribution By Age Source: U.S. Census Bureau, available at: accessed on September 13, 2011; Kaiser Family Foundation, available at: accessed on September 13, 2011; Health Care Advisory Board interviews and analysis. ~10,000/day Newly eligible Medicare beneficiaries 23% Percentage of population covered by Medicare in M baby boomers

16 Wages, Benefits, Utilization All on the Rise Nursing Shortage Source: American Hospital Association Chartbook, available at: trends/chartbook/index.html; Labor Notes, available at: labornotes.org, accessed on May 1, 2011; Health Care Advisory Board interviews and analysis. Persistent Labor Cost Concerns Union Pressure 33% Proportion of contract negotiations involving explicit strike threats, Projected Shortage of RN FTEs, in Thousands Staffing ratios mandated by unions, law Wages must rise to compete for scarce labor Health benefit packages difficult to pare back

Shopping Carefully for High-Cost Acute Care Services 18 Walmart Steering Employees to Preferred Providers for Surgical Care Case in Brief: Walmart Centers of Excellence Walmart entered into bundled payment agreements with six health systems covering heart, spine, and transplant surgeries Program launched in January 2013; includes 1.1 million covered lives Providers selected based on convenience, quality, and potential for cost savings Walmart Centers of Excellence Partners Cleveland Clinic Geisinger Medical Center Mayo Clinic Mercy Hospital Springfield Scott & White Memorial Hospital Virginia Mason Medical Center Source: “Walmart Expands Health Benefits to Cover Heart and Spine Surgeries at No Cost to Associates,” Walmart News, October 12, 2012, available at: Health Care Advisory Board interviews and analysis.

OR Director’s Focus Partnering with surgeons, anesthesiologist, and administration to standardize care. Standardizing supplies ( is there clinical evidence to support carrying 5-6 brands for implants? ) Standardizing processes and protocols Reducing waits Demonstrating superior outcomes at a lower cost Set aggressive targets for efficiency Can it be done with less labor?