Reflecting on 2023 to Guide our Path Forward

As 2023 draws to a close, we’d like to revisit episodes that explored relevant issues we’ve seen throughout the past year. Host Daniel J. Marino revisits these profound discussions and how they impact the future trajectory of health systems, hospitals and the provider community. Featuring esteemed guests in their respective fields, Dan and his guests look back on important elements impacting strategic growth of hospitals, financial performance of medical groups and successes in risk-based contracting.

• Nillie Djassemi, CFO of Houston Physician Hospital, provides insights on how leaders can navigate hospital financial pressures by emphasizing operational efficiency, physician partnerships, employee engagement and strategic management of supply cost and payer contracts.
• Healthcare consultant and industry thought-leader Jeff Peters discusses the evolving landscape of medical groups, valuing the importance of organizational culture, physician empowerment and expanding access in response to improving medical group performance.
• Managed care expert Cliff Frank reflects on the recent shift to risk-based contracts, emphasizing the challenge of managing contracted population risk, the growing demand for health equity, and key takeaways to succeed within Medicare Advantage.

LISTEN TO THE EPISODE:

 

Transcript:

Daniel J. Marino: 

Welcome to value based care insights I'm your host Daniel Moreno. Every year at this time we take a look back at the most popular episodes as identified by you our listeners, or maybe those episodes that addressed the relevant issues that we saw in this past year. Well we have three episodes that we want to highlight this year and we're gonna play snippets of those episodes during today's program.

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In 2023 hospitals continued to be under financial pressures and some of those pressures resulted with reimbursements some were some challenges with supply costs and wage inflation as well as just some of the strategic positioning. Well one of the programs that we had I really enjoyed the conversation it was with the CFO of Houston physician hospital Nellie Djassemi. Nellie discussed not only those challenges with reimbursement and supply cost, but also discussed what their organization is doing with improving the culture and really engaging their employees which really made a difference in 2022 and in 2023. let's give it a listen. 

So newly given those above challenges that I mentioned and some of the things that are identified in the and all National Hospital last report what are you seeing as some of the major issues affecting Houston physicians hospital financial performance? 

Nillie Djassemi:

I think the two major drivers for this hospital is the reimbursement pressures from the payers. We are in the last like 18 to 24 months we've had to go into renegotiations with the with the few payers and it's we got beat up and we got we got knockout actually on one of them you just got knocked out. And the other one is supply costs which is not I mean we're seeing that everywhere every hospital dealing with that and so we're doing some things that are help helping us offset those increases in supply cost that we can talk about later.  

Daniel J. Marino: 

Well in in as you know you know revenue is one side of the equation but your expenses and how you structure those are the other and if your expenses are going up you know you can't just automatically increase your revenues your revenues are fixed and tied into the to the payers.

Nillie Djassemi:

That's correct. yes and so we we've definitely started increasing the revenue and and not through rate but through volume and the volume growth is is helping us help offset the rate impact 

Daniel J. Marino:

Have you focused more on surgeries or is there an ambulatory component either through the ASC or maybe through some of your therapies that are figuring into your volume expansion?

Nillie Djassemi:

Yeah so we've definitely brought in different types of surgeons. So we've opened up a that opened up but we've definitely expanded our robotics services through the GYN and general surgeries. And so we bought a davinci last year and oh great yeah so just because you know I mean that that's definitely it's for GYN and general surgeons that's definitely something they want and we haven't really focused on that those service lines before so we invested in one. Again that was in play probably three years ago when we made that decision and it just took a long time to get that here because of all the supply chain issues. So we actually weren't able to launch it till mid last year and it was supposed to be launched much sooner than that. So those were things that we had already we knew that we had to prior to the reimbursement pressures coming down the pipeline. 

Daniel J. Marino:

Right so you needed to do something in terms of volume yeah you know I guess the supply chain challenges that you had a couple years ago essentially worked in your favor right because now you're able to get that and add additional surgeries based on some of the robotics to to support it. Which you know I think that's that's certainly key. How about some of the turnover and and the staffing challenges? Are you seeing a lot of turnover is it stabilizing are you are you know particularly in the nursing arena are are you able to recruit or or are you still see the same challenge in your organization? 

Nillie Djassemi:

It's the it's I can't say it's a huge issue our turnover rates are are much lower than what I see around the market but it's still a problem. Right because every time someone leaves the cost of bringing them back it's still much more plus the training cost and everything right. I wanna say our people are are our nurses and our non clinical staff are happier here. Our turnover rate is is lower but yeah we still have the challenges of course we do because the nurses and especially on you know on our on the inpatient and the surgery world the history our nurses are right yes they definitely they all talk they know the market. So yes we've had a deal with increases and looking at the market rate we're doing market analysis every six months now we used to never have to do that right so HR has processes that where they actually have to look at market rates market now every six months that's just didn't I mean Dan you know that's crazy yeah but you have to because we don't want to be caught off guard if you know if our CST's are coming to us and like hey someone down the streets paying me X dollar more an hour we don't want to be caught off guard. We wanna be able to have that knowledge in our back pocket to be able to give them now that's actually not true or yes that's this is what we can do. And it it's very difficult it's very very difficult. But we that's the process that we put in place to help for us to be knowledgeable

Daniel J. Marino:

Well you have to be right I mean getting that insight that's the only way to be competitive. And to be yeah totally transparent to our our listeners I've had the the wonderful opportunity to work with Houston physician hospitals for a number of years and nearly a year your leadership team has built a great culture out there. I felt time and time again and I spoke about this with many folks across the country you have to be competitive on rates, but in order to really manage a lot of the turnover challenges, the financial challenges related to our workforce, you have to create a strong culture. You have to create the culture that makes people wanna work there. And as you've said and I agree with you I think people are happy working in in your organization and we see that a lot of times with smaller community hospitals are we specialty hospitals.

Nillie Djassemi:

Right. yeah we definitely I think I've told you this damn before I came to HPH. you know I I came from a more corporate healthcare background and so that employee engagement here is something I've never experienced anywhere else. And I'm not just saying that because I've worked here. But we put in a lot of effort to have that high employee engagement and it's it's it takes resources and it takes a lot of time. But it does pay off because our turnover rates were so much lower. We still have to deal with it the pressure, the externally pressures of inflation with salery rates.I really think that is a huge piece of the puzzle, that we put so much in employee engagement. When I first started here our CEO, I would be like wait, we're spending how much T-shirts? you know. We give out you know we're known for our T-shirts here.

Daniel J. Marino:

It's a little things, they make a difference.

Nillie Djassemi:

It really is. we every month we every in my department we spent one there's one thing we focus on every month and in the department ,and for example last month we focused on integrity. And each person had a banner and it was what does give me what your integrity motto is for you for you as a as a person. And so everyone and again and that it wasn't all across the hospital but for all my departments they did their individual ones but across the hospital what we did was every department made their own banner and then we were able to hang it up and in our cafeteria area and everyone could see what everyone's motto was in terms of integrity that's one of our mission statements that we believe in. And so it's just we really do focus on that and this month we have something else that doing but yeah.

Daniel J. Marino:

And the culture piece is, I mean it's huge.

Nillie Djassemi:

Yeah.

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Daniel J. Marino:

In 2023 medical groups were also impacted quite a bit and as we reflect back on what it transpired with a lot of our medical groups many continued to look to their hospital partners for employment others decided to align with these four profit organizations like optimum continued to employ many of the independent medical groups and providers in 2023 as well as many groups decided to align with private equity. Well in this episode I was joined by Jeff Peters. Jeff is a national expert on the physician provider space, Medical Group strategy, and we discussed three areas that really impacted medical groups this past year. Access being one of them, physician well-being, and different areas that are affecting strategic growth. Let's listen in. 

So just when you reflect back on where some of these independent medical groups are these different hospitals and through your career close to 40 some years you've been doing this you've worked with over 500 organizations across the country. How have you seen these challenges evolve over the years?  

Jeff Peters:

Yeah so I really thought about the fact that when I first created and employed physician group at Ingles hospital, which is now part of the University of Chicago health system. And the financials are coming out to the board you know the board is just overwhelmingly perplexed as to how we could possibly run physician practices that are losing $30,000 per physician, per primary care. And now when you see the losses over $100,000 I'm sort of thinking what were they worried about? that was great. I mean really? you're beating me up over this? you have data on own practices and you know it's very clear what the problem is. There's more demand for physicians and advanced providers than there are supply. So you have to pay more to attract and retain physicians. And you also have to pay more for their support staff.

Daniel J. Marino:

Yeah, for their support staff. yeah yeah I believe I I think the you know when when I as well as with you I I talked to many leaders all the time across the country access is the number one issue that they struggle with. Wage inflation, if it's not number one it's a close #2 and retaining the staff is really key. And as well as then physician well-being. So so let's talk a little bit about access though you know if you've got limited number of providers you've got more demand than you do with supply, what are you seeing on some of these strategies how are organizations how how are they dealing with some of this?

Jeff Peters:

Well I think the first thing is that you've got to assemble teams to manage a group of patients. It's not only physicians, it's advanced practice providers, and in in more quaternary tertiary practices nurses. And you need to allow the advanced practice provider to see the patients that they're qualified to see, and you need to reserve the physician's time for the more complex patients. So the idea that we're always going to see a physician, it's just not going to happen. I mean recently I had a annual skin exam, I called my dermatologist, I was scheduled with an advanced practice provider. I thought she did a fabulous job. yeah she was thorough and personable and identified things. So we've gotta be creative in terms of our workforce and we've gotta save physicians time. When I go to my ENT with a sinus infection, there's a medical assistant who's assisting him with the scope and just getting everything ready. And he has a scribe. He's dictating as he's seeing me what's going on and he's able to really make efficient use of his time so we've gotta be creative with their time.

Daniel J. Marino:

And really innovative right? these what you just described on these innovative care models around team based care, around helping the physicians succeed, and innovation in the care models, I fully agree with you, that's how we're gonna help to kind of work through some of these access challenges. I think without doing that the traditional model is not sustainable.

Jeff Peters:

No. And physicians like the team model a lot of the work that the team is doing is work that physicians don't like to do. The charting and the things like this, I mean you hear physicians complaining about the fact at the end of the day they're spending one or two hours on the EMR. getting caught up with their documentation to save them an hour or two a day. Phenomenal. And the other thing is just handling the telephone and the patient calls that come in, and the emails that go to the physician. We've got to be creative and identifying what work can we take away from the physicians that gives our patients the care that they need and deserve, yet doesn't burden our high cost providers.

Daniel J. Marino:

I absolutely agree. I think is worth thinking about the future strategy of medical groups whether you're independent or employed. These innovations that you spoke about this way of of of kind of making the physicians more efficient spot on. I absolutely see that as a necessity of performance. But let's talk a little bit about growth though. You know obviously everybody's concerned about growth, and especially if your expenses are increasing, you can't necessarily cut services you cut can't cut staff. I think we're probably as lean as we've ever been you have to focus on increasing the patient volume. You have to focus on increasing revenue. In your opinion where what where are some of those key growth initiatives that help to kind of drive the financial performance? 

Jeff Peters:

Yeah and I think there's been models in the market for a very long time multispecialty groups are very profitable. And they tend to attract and retain providers. And single specialty groups like urology where you're able to get all the urologists in a market to come together so that they not only share practice overhead, but then it supports pathology, it supports imaging and treatment for it makes sense. So what the growth has to focus on is getting a large enough group of providers that drives ancillary revenue. You're not going to make your money on the profitability of a physician practice. Where you're going to make your money particularly for academic medical centers or hospital practices in establishing integrated ambulatory campuses. Where there's urgent aid to take care of the patients that don't have a primary care or don't want to wait at primary care, surrounded by specialists, so the urgent aid for the patient that doesn't have a physician can refer that patient to the primary care so there's an ongoing relationship. As that primary care picks up a heart murmur there's a cardiologist in the building that they can refer them to and there's a spectrum of diagnostics and treatment what we're seeing is in the University of Chicago has been masterful of this creating these integrated campuses with urgent aid, primary care, secondary care.

Daniel J. Marino:

Right so it's all sort of integrated and it's right there for the patient and for the physicians so you can actually have create more of a a longitudinal care model getting the results that you need.

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Daniel J. Marino:

In 2023 our industry saw a continued influence in Medicare Advantage. Medicare Advantage continued to grow and as all of us know if you're continuing to look at a lot of the news and the direction Medicare Advantage, into 2024 is going to be one of those topics that we're going to see continued growth, as well as Medicare Advantage though risk based arrangements also impacted our physicians our medical groups our hospitals our health systems and so forth. In June of last year I was joined by my colleague, Cliff Frank, and we had a great discussion on the rapidly changing Medicare Advantage products as well as some of the risk based arrangements. Cliff always provides great insights along with a little bit of entertaining conversation. Let's listen into this episode.  

So Cliff how this makes sense of this. What are you seeing in terms of some of these changes there's been a lot going on just in in the last month and a half or so. 

Cliff Frank:

Well CMS has been taking a lot of heat from Congress and from industry observers, that they kind of gave away the store for the last 10 years. So I'm basically uncapped risk adjustment. Now they signaled with some of the ACO products, a willingness to change that and that they capped the risk score gain the get in in MSSP ACO is at 3% over multiple years whereas it's uncapped in Medicare Advantage, until 2024. With the new with the new rates they're signaling that that game is going to end. In several ways. First they're making it harder to actually get risk adjustment. a lot of that they went from I CD9 to ice I should be 10 or 10-1, I forget which but anyway, they're they killed a lot of diagnosis that adjust they were like 2000 diagnosed there's a lot particularly in diabetes those are gone. They don't they don't get you more risk. Then the second thing they did was they said oh we're gonna really start auditing a lot more closely, and it's not and the risk boards have to come in through claims not through some magical home visit that that the plan has orchestrated. So they're really kind of making all that much more difficult. At the same time CMS is signal of a rapidly growing interest in insuring and enticing health plans to tackle health equity. Aad so as if you kind of think of it as a as a kind of a teeter totter as the HealthEquity side goes up the risk score side goes down in terms of dollars so the dollars are still be there but they'll be there for different reasons in two years.

Daniel J. Marino:

Right so there's really you know two key things that going to see. I think it's thinking about how we're positioning ourselves for risk, within risk, managing risk ,identifying risk within the contracts ,you know that that's a big one. And then the health equity piece and where that comes into play. Let's start with the risk piece because I have a few questions here that I'm kind of working through in my mind. So I you know I'm kind of thinking that there's two pieces to this right? You know we spent a lot of time as providers talking about the fact that we need to capture HCC's. And that HCC's are supporting the RAF scores. And the RAF scores give us a better idea on the sickness, if you will, of our population of which then dollars are tied to that. You know and and and a lot of providers we spent a lot of time educating their their their physicians and monitoring it and and almost going back and recalculating that. Was that in particular was it wrong? I mean did we overstated? 

Cliff Frank:

Oh not at all, that's all good stuff for lots of different reasons. The first is that providers like to compare themselves against each other. So if my remember per month spend is 20% higher than you, of course the first thing I'm you know I'm I'm going to whine about it well my patients are sick population sicker. Right so so the RAF scores actually level that debate which then moves us to the next level. which is what are you doing that I'm not doing what are you not doing that I'm doing let's have a conversation about clinical path use utilization pattern. So you can't have that without some sort of severity adjustment risk adjustment population standardization. So regardless of what else happens inside CMS in the deal between the payer and the provider it's really useful information. Then further to have some indicator as to what's changing in your in in particular patient, the risk for just jumped 30%. Well there's an indicator for some case management intervention some care support, so further love and attention from the doctor, it could be you know referral to a specialist, could be any number of things. But it's an early indicator it can be an early indicator of a problem that's coming hard and fast at the member and at at the at the provider network. right so all those things still have plenty of value regardless of what else happens. And then the third is remember risk scores can go down. So she isn't saying oh will insulate you from the down as much as we catch you on the up. So you know if if you if you fall asleep on risk scores and suddenly you drop two or three points guess what you're and you've got a percent of premium deal up your revenue just went down. 

Daniel J. Marino:

Yeah, you just went down. So the performance model still has to be there right it still has to be there. You still have to manage that population around cost of care around utilization yeah and then you have to accurately identify the risk. I think the key to it though is that if the risk is going up if the postal care is going up, and and even you know based on overutilization as you mentioned some interventions around Karen here management has to come into play, and you have to show that you're taking some responsibility to manage that. I think as we start to think about it the model has to be clean, but we also have to prepare or some type of audit or some type of realization that this may be questioned right. So we've we've gotta get back to the data, the model, and the clinical performance to be able to show that hey what we're doing is is actually the right thing to be done.

Cliff Frank:

I think all that is true. There are plenty of places for CMS to come looking. And and I mean it starts with RPM, CCM, telehealth, I mean lots of new areas that are have been exposed already to some pretty significant fraud. So they're looking, and then you have their relationship with the plans which now cut through to the provider. Because it's the provider providing the claims information so they're going to want to see the documentation that supports that.  So if you're just submitting diagnosis with no documentation good luck.

Daniel J. Marino:

I'm going to thank all of our listeners for tuning in without your support your interest your feedback our program our episodes would never be as successful as it is. For anyone wanting to share their opinions or their comments or even suggestions for additional topics please feel free to reach out, I'd love to hear from you. My e-mail is d.marino@luminahp.com. As we close 2023 we're looking into 2024 with some wonderful topics and some real fascinating guests. We're looking forward to bringing that to you in the new year. Until then, I want to wish all of you a very happy holiday season and a very healthy and prosperous 2024 and as always until the next insight I am Daniel Marino bringing you 30 minutes of value to your day, take care.

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners