1. Day 1

2. Full Practice Authority: Changing NP Practice in the U.S.

4. The NP as Market Disrupter

5. The NP Entrepreneur as Market Disrupter
Moderator: Sandra Berkowitz, RN, JD
Panelists:
Sara Larch, MSHA, FACMPE, Deloitte Consulting
Tara Koslov, JD, Office of Policy Planning, Federal Trade Commission
Barak Richman, JD, PhD, Fuqua School of Business at Duke University

6. Market Disruption Objectives
Understand what is driving change in health care, especially in primary care access
See NP FPA struggle in broader regulatory & economic markets context
Classic competition battle: Is history on your side?
Identify business models available to NPs and the skillsets needed to survive
Develop confidence in the business case for NPs as independent practitioners

7. Today’s Disruption Topics
Introduction to NP as Market Disrupter
Introduction of panelists
An industry in need of, and due for, change, especially in primary care access
Why does the FTC care? What has history taught us that NPs will find relevant?
Supply and demand in the primary care market

8. Market Disruption Defined
What causes market disruption?
Existing “Undesirable” market niche not worth the market leader’s effort but is lab for disrupter
New technology that reduces cost
Customer satisfaction “good enough” given cost/convenience benefits
Outcomes “good enough”— improvement as penetration increases, demonstrated by data
Southwest Airlines example

9. The NP Entrepreneur as Market Disrupter
What makes a NP a potential market disrupter?
“Safety net” population’s niche
Consumer access—location and hours
Is the hard-wired Nursing model the “new technology”?
Goals of engagement, patient autonomy and health literacy vs. medical model culture of transaction and “cure”
20-30% less overall healthcare cost with same or better outcomes than physician PCP peers
NPs have the #s (fastest growing healthcare provider category) and the #s (lower healthcare costs) to be the new generation of PCPs
What makes the NP an actual market disrupter?
(Stick around—that’s why you’re here!)

10. Health Care is in Need of, and Due for, Disruption
Costs are reaching unsustainable level, mostly driven by price increases
Care is delivered in the highest-cost settings; alternative delivery models ripe for lower-cost settings
Care is provided by the highest-cost providers; little quality is lost for most services with lower-cost providers
Quality (health improvements) can be achieved in multiple settings
Can be achieved through telemedicine, community channels, local organizations, etc.
Can be achieved using multiple inputs, including nonmedical services: navigators, counseling, behavioral interventions, etc.

11. Why Does the FTC Care About NPs?
We promote competition and protect consumers, utilizing a range of tools
Health care competition has long been a significant part of our mission and work
Deep engagement in NP scope of practice issues as part of our competition advocacy program
Significant experience with the procompetitive effects of market disruption, more broadly
If NPs help to disrupt the status quo,
health care markets can function better.

12. FTC Perspective: Key Features of the Health Care Marketplace
Industry participants at all levels are rethinking how to deliver and pay for health care services
Shift from volume to value is key to achieving “triple aim” goals
Increased coordination and collaboration are viewed as essential to effective reform

13. Competition Is Important!
Competition benefits consumers – especially in industries undergoing rapid evolution and restructuring
Promotes innovation
Expands supply
Improves quality and efficiency (“value”)
May help to control costs
Prevents harmful accumulation/exercise of market power
Competition is good for health care delivery,
just as it is for other industries and services.

14. APRN Scope of Practice Advocacy
Remains a core focus of the FTC’s competition advocacy efforts
March 2014 APRN Policy Paper
Subsequent advocacy comments
NPs should envision themselves as key
marketplace competitors, capable of driving positive change. That’s certainly how the FTC thinks of them.

15. What Is Competition Advocacy?
Provide a framework for thinking about public policy issues from a competition perspective
What is the likely competitive impact?
How will this affect consumers?
Any legitimate justifications to restrict competition?
Are there less restrictive alternatives?
Protect consumers and fulfill other important public policy goals, BUT
Do not unnecessarily restrict legitimate business activities, especially those that may promote competition

16. FTC Scope of Practice Advocacy: Main Themes
All health care professionals should be allowed to practice to the top of their license, consistent with their training and knowledge
Unnecessary supervision requirements, in particular, allow one group of health care professionals to restrict market access by a competing group
Negative effects on access, cost, innovation
“Safety” justifications may be pretextual

17. The Value of Collaboration
Common argument: “FTC scope of practice advocacy demonstrates that the FTC is against team-based care”
Another common argument: “Antitrust law prohibits collaboration among health care providers and frustrates the goals of health care reform”
Both arguments are fallacies

18. Takeaway Lessons
Competition among health care providers is good for health care consumers
NPs should compete vigorously in the health care marketplace
Requires removal of unnecessary scope of practice restrictions, among other barriers
It’s entirely possible to compete AND collaborate
Market disruption often fosters new forms of competition
Innovative business models
New ways of delivering services

19. New Models for Nurse Practitioners
Pace of change is speeding up
What new ambulatory care models are emerging?
Do we have enough providers of care for our patients?
How are medical groups evolving?
Where/How do you want to practice?
Where is your break even?

20. The healthcare environment is changing rapidly: How are health care decision makers reacting?
The intersection of pressures at the local and national level are forcing healthcare executives to look for new and innovative ways to ensure success for their organization, specifically as it relates to their clinically integrated network and ambulatory services.
Regulatory Changes: MACRA
“MACRA is a transformative law that builds a new, fast-speed highway to take the health care system away from the fee-for-service system and toward new risk-bearing, coordinated care models”
-Deloitte Center for Health Solutions: May 2016 Health care current
Rethinking Performance
The rise of value based contracting (VBC) arrangements means organizations must address their approach to ambulatory services needed to drive desired performance – current models are often not translating into clinical and financial success
Changing Market Dynamics
Increasing value demands (e.g., convenience and access) coupled with health care organization consolidation require high performing networks of aligned physicians / providers with high quality and continuity of care necessary to meet these demands

21. What new models are emerging from the traditional approaches?
With inpatient admissions dropping, an optimized ambulatory market footprint aligned with a high performing clinically integrated network is no longer just a market share play. It significantly impacts the quality, cost, and continuity of care that are paramount to value based arrangements. New models are emerging from these traditional approaches.

22. Data: MSA Physician Need Based on Forecasted Population (in 5 years)
Supply and Demand: Zip code and county can matter, but what are your patients looking for?
Data: MSA Physician Need Based on Forecasted Population (in 5 years)
What are your patients looking for?
Examples:
The ‘walking sick” = access (“I cannot take a day off of work”)
Medicare beneficiaries = “God” and also “take time with me”
Patients with transportation challenges: “please take care of everything while I’m here for me and my children”
Under 30 = most flexible
Patients with chronic disease = “spend time with me”
By County
&
Illustrative
*Based on Truven MarketDiscovery ratios for XXX Metropolitan Statistical Area (MSA)
Surplus
Gap

23. Traditional Models continue to Evolve: Where do you want to practice?
Moving from a group of groups to an integrated group provides opportunities along the way. Creating an umbrella governance structure can facilitate decision-making and create more alignment among the providers. Shared services can improve efficiency and reduce the cost per visit. Each of these four models can be stand alone, affiliated or employed by a larger health care organization (health system, payor, for profit entity, etc.)
Independent
Federated
Clinically Integrated
Group Practice In
Group
Group 2
Group or
Shared
Service
Group 1
Group 3
Models can be:
Stand alone
Affiliated
Employed
Group of groups
Decision making focused at individual group or provider level
Little or no shared services
Umbrella governance structure
Group structures remain
Can be organized by entity, geography, etc.
Some common or shared business infrastructure to improve efficiency and patient experience
Integrated group with primary care & specialty care subgroups
Group decision making for clinical care delivery & program development
Decision making focused at group level with appropriate investments at primary care or specialty care subgroup level
Shared services expanded
One integrated group with one tax ID
Goals and priorities aligned internally or with healthcare organization or partner
Integrated Governance and Common Vision

24. How do you want to practice?
Income Opportunity
At least four provider models exist today with physicians and/or nurse practitioners. All of these models can be successful depending on the type of healthcare organization and the patient population being served (e.g., primary care, chronic disease management, the ‘walking sick’ and others). Patients are driving new models to achieve desired access to primary care.
(A) Physician Only
(B) Physicians with
NP as Staff
(C) NPs & Physicians as Providers
(D) NPs Only
Models can be:
Stand alone
Affiliated
Employed
Practice can be:
Small, NP owned
Part of an integrated health system or payor
Part of a for profit entity In
Physician = Providers of Care
Physician = Providers of Care MD NP
NPs = Providers of Care
Physician Owners
Group 3
Nursing/Clinical Staff
Non-clinical Staff
Nurse Practitioner(s)
Nursing/Clinical Staff
Non-clinical Staff
Nursing/Clinical Staff
Non-clinical Staff
Nursing/Clinical Staff
Non-clinical Staff
Medical and/or Nursing model of care
NP has own patient panel, separate from the physicians
Primary care patient panels determined by patient choice, provider availability, or patient diagnosis
Medical model of care
Primary care patient panels determined by patient choice, provider availability, or patient diagnosis
Medical model of care
Nurse practitioner is part of care team
May be billed as an independent provider or incident to a physician
Nursing model of care
Primary care patient panels determined by patient choice, provider availability, or patient diagnosis

25. Financial success requires knowing your breakeven point?
Salary & Bonus Potential
Financial success requires knowing your breakeven point?
Definitions:
Fixed costs include Rent, Staff, Utilities, Malpractice, IT, Insurance, Furniture, Equipment
Variable costs include Admin & Medical supplies, Drugs
A: Fixed Cost + Step Fixed Costs.
B: Total Costs (Variable + Fixed) at Y patients per day.
C: Revenue at 0 patients seen
D: Revenue at Y patients per day

26. Takeaway Lessons Geography may matter
Your practice must serve the needs of the patient population
NPs should know their break even point – regardless of organizational model
Do you know how many patients you need to see to cover your salary? To cover your practice expenses and get to a profitable bottom line? To create a bonus for you?
Market evolution will create new business and revenue opportunities
Patients want more primary care access
Healthcare organizations are seeking lower cost per visit models

27. Additional Slides

28. Healthcare Macro Trends and the Opportunity
Healthcare trends and current healthcare reform efforts are accelerating the evolution of the marketplace and creating opportunities for non-physician providers (NPPs) to play an integral role
Increasing Cost of Healthcare
Focus on cost containment
Focus on Outcomes
Health outcomes based care delivery
Shortage of Physicians
Medical societies have projected shortages.
Changing Demographics
Growing demand for services
Technology evolution for new clinical data platforms
Health Information Technology
Industry Macro Trends
Movement to less specialized practitioners; need for greater primary care, community health, and continued care skills
Shift in site of care; movement from inpatient care and rise of new care sites (retail clinics, health centers, telemedicine channels)
Alignment of incentives; use of payment systems to enable outcomes-based care with a focus on “more via less”
Technology enabled care models; Increased coordination and transparency around care choices via use of health technology
Opportunities for Non-Physician Healthcare Providers
Impact
Non-physician healthcare providers can provide low-cost, accessible care with a strong focus on patient engagement within the evolving market

29. Nurse Practitioners: Fastest growing
Growth in NPs
NPs and PAs per 100,000
# of NPs (1000s)
Growth in PAs
Considerations
Nurse practitioner is the fastest growing profession, and supply is projected to grow over 35% from 180K in 2011 to 244,000 in 2025
Employment of physician assistants expected to increase 30% from 2010 to 2020 nationally
# of PAs (1000s)
Kaiser Family Foundation, State Health Facts

30. Adding NPs can be cost effective for a medical group or health system
Over a period of two years, one NP costs $273,443 less than a physician but is able to bring in $918,038 in net revenue. It isn’t news that physician salaries are higher than NP’s. Do you know how many patients you need to see to cover your salary? To cover your practice expenses and get to a profitable bottom line? To create a bonus for you?
Direct Cost of MD vs. NP
Net Revenue of NP
Salary & Benefits MD NP
Year 1
Salary and Benefits
$200,000
$100,000
Taxes
$15,300
$7,650
Fringe Benefits
$50,000
$25,000
Education Allowance
$6,000
$5,000
Insurance for Family
$8,220
Malpractice
$1,700
$900
Cell Phone
$840
Relocation
Year 2
$207,000
$103,500
$15,835
$8,017
$51,750
$25,875
Salary & Benefit Exp.
$579,405
$305,962
Difference over 2 years
$273,443
Reimbursement
Calculation
MD Annual Reimbursement
$800,000
NP volume/visit adjustment
X 90%
Revenue at MD Reimbursement
$720,000
NP reimbursement adjustment
X 85%
Revenue at NP Reimbursement
$612,000
Contract period
X 2 years
Contract period reimbursement
$1,224,000
Salary & Benefit Expense (2 years)
($305,962)
NP Net Revenue over 2 years
$918,038
+ Quality/Cost $
TBD
- Practice Expenses
Net Profit/Loss
If profit, bonus potential
Assumptions
NP volume/visit adjusted to 90% of encounters, as NP is likely to see fewer patients than physician.
Fringe benefits estimated at approximately 25% of salary and included holidays, vacation, etc.
Advanced Practice Recruiters: A CEO’s Cost Benefit Case Study of Utilizing NPs and PAs