Arkansas Hospitals, Summer 2015

arkansas

hospitals www.arkhospitals.org

summer 2015

Johns Hopkins’s Peter Pronovost on Transparency

Hospitals Share Data Innovations CEO Spotlight: Targeting Zero Infections, “One is Not None” BONUS PULLOUT SECTION:

HOSPITAL STATISTICS 2015 A Magazine for Arkansas healthcare Professionals Arkansas Hospitals I Summer 2015

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We’re a knowledgeable connector of people, physicians and health care places.

One way we keep physicians and patients connected is through a Personal Health Record (PHR), available for each Arkansas Blue Cross, Health Advantage and BlueAdvantage Administrators of Arkansas member. A PHR is a confidential, Web-based, electronic record that combines information provided by the patient and information available from their claims data.

A PHR can help physicians by providing valuable information in both every day and emergency situations.

To request access, contact PHR Customer Support at 501-378-3253 or personalhealthrecord@arkbluecross.com or contact your Network Development Representative.

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Summer 2015 I Arkansas Hospitals

arkansasbluecross.com

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hospitals is published by

Arkansas Hospital Association

419 Natural Resources Drive • Little Rock, AR 72205 501.224.7878 / FAX 501.224.0519 www.arkhospitals.org Elisa White, Editor-in-Chief Nancy Robertson Cook, Editor & Contributing Writer Cindy Lewis, Editorial & Layout Assistant Emily Cavallo, Art Director

Board of Directors

Doug Weeks, Little Rock / Chairman Walter Johnson, Pine Bluff / Chairman-Elect Darren Caldwell, DeWitt / Treasurer Ron Peterson, Mountain Home / At-Large Peggy Abbott, Camden Chris Barber, Jonesboro Jerry Berley, Warren David Berry, Little Rock Kristy Estrem, Berryville John Heard, McGehee Ed Lacy, Heber Springs Jim Lambert, Conway Corbet Lamkin, Camden James Magee, Piggott Dan McKay, Fort Smith Ray Montgomery, Searcy Robert Rupp, Helena

Executive Team Robert “Bo” Ryall / President and CEO W. Paul Cunningham / Executive Vice President Tina Creel / Vice President of AHA Services, Inc. Elisa M. White / Vice President and General Counsel Jodiane Tritt / Vice President of Government Relations Pam Brown / Vice President of Quality and Patient Safety Lyndsey Dumas / Vice President of Education

Distribution Arkansas Hospitals is distributed quarterly to hospital executives, managers and trustees throughout the United States; to physicians, state legislators, the congressional delegation, and other friends of the hospitals of Arkansas.

departments 4 6 6 7

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From the President Editor’s Letter Education Calendar Newsmakers and Newcomers All About Hospitals

in memoriam 8

Remembering Roger Busfield

cover story 10 Toward Transparency

quality and patient safety 15 Focus on Quality 16 A Sea of Data: Finding Key

pcipublishing.com Created by Publishing Concepts, Inc. David Brown, President • dbrown@pcipublishing.com For Advertising info contact Michelle Gilbert • 1.800.561.4686 ext.120 mgilbert@pcipublishing.com edition 91

Metrics for Improvement and Accountability 19 Data Superstars in Action 23 HAI Data: Measurement

Ensures Progress 26 Learning from Each Other

statistics 27 Bonus Pullout Section:

Hospital Statistics 2015

news 45 NewsSTAT 46 CEO Profile: Ron Peterson –

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Targeting Zero Infections All Payer Claims Database The Silver Lining to the ICD-10 Cloud AHA Services Spotlight: FairCode Associates A Golden Celebration for AAHE Arkansas Hospitals Take Key Messages to Washington

special report 62 Breaking the Bank:

The Real Cost of Hospital Uncompensated Care

legislative advocacy 67 News from the Capitol:

2015 Session Ends but Our Work Continues

Arkansas Hospitals I Summer 2015

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from the President

DATA

Tell the Story Photo courtesy of Jason Burt

This is the Data Issue of your Arkansas Hospitals magazine. Every summer, we bring you statistical information that each of you can use to tell your hospital’s story, the story of healthcare in Arkansas. These are data with a strong message. Please use this magazine to continue to share that your hospital is a vital part of your community.

In this issue, in addition to our traditional statistics section focusing on historical facts and figures, you’ll also find an informative article by the AHA’s Executive Vice President, Paul Cunningham, detailing the financial toll uncompensated care takes on your hometown hospital. Because there are many different perceptions of the definition of uncompensated care, this article helps to clarify what we mean when we say “uncompensated care” in the hospital world. Many people become confused when hearing the terms “uncompensated care,” “bad debt” and “charity care.” How do those terms relate to one another, and how are they affected by the reduction in the uninsured brought about by the Arkansas Private Option (APO)? This article will help you answer those questions.

Because data tell the story, the AHA is continually collecting and reporting data to ensure that our hospitals and our policy-makers have the best information available to make key decisions to continue to improve our ever-changing healthcare system. In addition to this magazine, we hope you’ll also be looking forward to more upcoming reports.

Both historical data and data in our upcoming reports will help the Health Reform Legislative Task Force as it deliberates the future of healthcare in Arkansas, offering insight about the benefit to our state’s health and healthcare gained from increased insurance coverage. Preliminary results 4

Summer 2015 I Arkansas Hospitals

from our latest survey show a greater than 50% reduction in uncompensated care since the APO’s inception just over a year ago. We hope to be publishing the details of this new survey soon.

We’re also looking forward to sharing the results of a study currently being completed showing the economic impact of the APO on our state as a whole, detailing economic outflow from both APO-created savings to community hospitals and the positive ripples reinvested dollars are creating across the state in all sectors, not just in healthcare.

More data we’re sharing with the Legislative Task Force members: the impact of Medicaid undercompensated care, specifically the dollars hospitals lose when Medicaid pays less than the cost of care. To illustrate this, we are once again working with the accounting firm BKD, LLP, which is updating our prior report on the losses incurred by hospitals when Medicaid pays so little of the true cost of patient care.

Most of our legislators don’t have backgrounds in hospital finances, nor do we expect them to. That’s why our sharing of this information is so important. Not only does it show the gains against uncompensated care made possible by providing additional insurance coverage for our citizens, it also shows what scheduled Medicare reductions over the next 10 years will mean to our hospitals and communities. It shows the financial havoc under-reimbursed care for

Medicaid patients can have on our community hospitals.

And the data also provide a clear signal: if we strip away all of the political ideologies and simply look at the data itself, there is no denying that health insurance coverage for more than 200,000 Arkansans has resulted in better health and healthcare in our state, reduced financial stress upon our hospitals and other healthcare providers, and – most importantly – helped our friends and neighbors. And this results in an extremely positive economic outcome for Arkansas.

Finally, I’d be remiss if I didn’t mention the recent passing of an AHA luminary. Roger Busfield was the second of only five presidents in the AHA’s 86-year history. Roger loved working with our hospitals and relished working for them every day. So much of what Roger did for our hospitals was based on early data, telling the hospital story. We are proud to build upon the foundation established during Roger’s tenure. We hope you’ll take the data presented in this magazine, as well as the soon-to-be released reports from the AHA, and use these facts to tell your hospital’s story, today, tomorrow and into the future.

Bo Ryall

President and CEO Arkansas Hospital Association

Can Laboratory Testing Improve Patient Care and Lower Costs?

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editor’s letter

Painting

by Numbers When I think of numbers, I always think of my fifth grade math teacher… who also happens to be my mother. Mom, who spent more than 35 years as a classroom teacher, taught all of her students, including me, more than basic calculations. She knew that people need a narrative to make sense of numbers – to create useful information from data.

A born storyteller and passionate educator, my mother made numbers come alive in her classroom. No one left her class thinking, “I’ll never use math after I get out of school.”

In the data rich environment of healthcare, we often find ourselves information poor. It is up to us to connect the dots so our data tell a meaningful story that is relevant to our patients and communities. This issue of Arkansas Hospitals offers a variety of articles to help

you gain insight and information from the plethora of healthcare data available today.

We also bring you our annual compilation of Arkansas healthcare statistics in a special pull-out section.

For the first time, that compilation includes a report detailing the impact of expanded coverage under the Arkansas Private Option. We thank AHA Executive Vice President, Paul Cunningham, for compiling this information and making it available for your use.

We hope the information contained in these pages will help you better consider, utilize and present healthcare data for the good of your patients. And if you need any help with the numbers, we will call in the expert. Now retired, she is an enthusiastic hospital volunteer who spends most days in her hospital’s gift shop. Mom would love to help.

Elisa White, Editor-In-Chief

Arkansas Hospital Association

Education Calendar July 23, Little Rock ICD-10 Series: Course IV – Musculoskeletal, Skin and Subcutaneous, Arkansas Hospital Association August 5, Little Rock ICD-10 Series: Course V – OB, Newborn, Congenital, Arkansas Hospital Association August 19, Little Rock A Day with the Lawyers, Arkansas Hospital Association

August 19-21, Nashville, TN Mid-South Critical Access Hospital Conference, Omni Nashville Downtown

September 10, Little Rock ICD-10 Series: Course VII – Signs and Symptoms, Injury and Poisonings, External Causes, Factors Influencing Health Status, Arkansas Hospital Association

August 26-28, Hot Springs Healthcare Financial Management Association (HFMA) Arkansas Chapter 2015 Summer Conference, Embassy Suites

September 24, Little Rock Healthcare Financial Management Association (HFMA) Arkansas Chapter Revenue Cycle Seminar, Arkansas Hospital Association

August 27, Little Rock ICD-10 Series: Course VI – Digestive, Genitourinary, Arkansas Hospital Association

October 7-9, Little Rock AHA Annual Meeting and Trade Show, Little Rock Marriott and Statehouse Convention Center

Program information is available at www.arkhospitals.org/events.

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arkansas

Newsmakers and Newcomers ◼ JAMIE CARTER, FACHE

has been named vice president/ administrator of Baptist Health Medical Center – Conway, a new 96-bed facility scheduled to open in early 2016. Carter previously was president of Crittenden Regional Hospital in West Memphis, before accepting a position in 2011 as COO with Methodist University Hospital in Memphis. In 2011, he was named the recipient of the A. Allen Weintraub Memorial Award, the AHA’s most prestigious award.

◼ JAY QUEBEDEAUX has been

named CEO at Mena Regional Health System, succeeding TIM BOWEN, who accepted a similar position in Oklahoma in December. Prior to joining the Mena facility, Quebedeaux worked with Allegiance Health Management

facilities in Louisiana. He was CEO of North Metro Medical Center in Jacksonville before moving to Louisiana in 2012. ◼ BRIAN BARNETT, FACHE,

assistant vice chancellor, regional programs for UAMS in Little Rock, has been appointed the American College of Healthcare Executives (ACHE) Regent for Arkansas.

Barnett, who succeeds CHRIS BARBER, FACHE of Jonesboro as Regent, served as president of the Arkansas Health Executives Forum (ACHE Arkansas Chapter) from 2012 through 2014.

◼ Becker’s Hospital Review recently

named EDWARD ANDERSON, CFO of Johnson Regional Medical Center, to its list of “150 Hospital and Health System CFOs to Know.”

Anderson has served as CFO of Johnson Regional Medical Center since 1999. ◼ Two Little Rock healthcare

executives have been elected to the Arkansas Foundation for Medical Care’s (AFMC) board of directors.

ROXANE TOWNSEND, MD, FACHE, vice chancellor for clinical programs and medical center chief executive officer at UAMS Medical Center, and JENNIFER STYRON-RIPA, chief financial officer and senior vice president of finance and treasury for Arkansas Heart Hospital, have been elected to terms expiring in 2018. RAYMOND W. MONTGOMERY, III, FACHE, president of Unity Health in Searcy, represents the Arkansas Hospital Association on the AFMC board.

all about hospitals

◼ SILOAM SPRINGS

REGIONAL HOSPITAL has been named one of the top 100 hospitals in the nation in its size category for 2014-15, ranking 52 out of 1,088 hospitals with 100 beds or fewer. Hospitals were judged by the SafeCare Group in three categories: efficiency, patient safety and quality.

◼ BAXTER REGIONAL

MEDICAL CENTER, Mountain Home, was recently named the recipient of the Arkansas Affiliate – Susan G. Komen’s highest award.

The Hickingbotham Award for Service went to BRMC and its mobile mammography unit, which annually

provides mammography services to more than 2700 underserved patients across northeast Arkansas.

Accompanying the award is a grant for $82,240 to help the mammography unit program. ◼ OTHER AHA MEMBER

FACILITIES receiving Susan G. Komen funding for their breast care programs in Arkansas include St. Bernards Healthcare, Jonesboro; CHI St. Vincent Health System, Little Rock; CARTI, Little Rock; Arkansas Hospice, North Little Rock; White River Health System, Batesville; Baptist Health Foundation, Little Rock; CrossRidge Community Hospital, Wynne; UAMS, Little Rock;

Ozark Health Medical Center, Clinton; and CHI St. Vincent, Hot Springs. ◼ NATIONAL PARK MEDICAL

CENTER is expanding. Under construction is a 67,000 square foot project that will include a heart and vascular center and additional space for what will be a newly-configured emergency department. The $25-27 million expansion is set for completion in the second quarter of 2016.

◼ NORTHWEST HEALTH

SYSTEM has started construction on a new neonatal intensive care unit for its Northwest Medical Center – Bentonville campus. The new unit is set to open this fall.

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In Memoriam

Remembering Roger Busfield

By Paul Cunningham, Executive Vice President, Arkansas Hospital Association

In the wide, wide world of sports, great teams are remembered as much for who they were as for their accomplishments. In most cases, that identity can be traced back to the guy who was in charge. Looking back just across my lifetime, I might fail at reciting the starting lineups of all the great New York Yankees teams that dominated Major League Baseball throughout the 1950s, but even as a kid I knew Casey Stengel was the manager who led them to ten World Series appearances between 1949 and 1960. The Yankees were his team.

On May 4, Roger Busfield, a former president and CEO of the Arkansas Hospital Association (AHA), died peacefully at his home in Georgetown, Texas.

Roger wasn’t the AHA’s first CEO – that distinction goes to his predecessor, Graham Nixon, a former state senator who was brought on board in 1958 – but he might well be thought of as the first president of the AHA in modern times.

For 21 years, from 1973-1994, Roger Busfield was the head coach, the manager who got credit for a multitude of AHA successes during that span and took the blame for a few failures, too.

It was under Roger’s watch that the AHA moved from small, cramped quarters in the Prospect Building on North University Avenue to its current headquarters building in west Little Rock – and did it debt free. AHA’s advocacy program became a force to be reckoned with at the State Capitol; fledgling AHA education and data departments took flight; more effective ways to communicate the hospital story were employed; and AHA’s wholly-owned subsidiary, AHA Services, Inc., was formed.

However, Roger’s most important legacy might be the team he assembled.

Even with Casey Stengel, the Yankees of the 1950s wouldn’t have been quite so successful if not for Mickey Mantle and Whitey Ford. Roger’s team was every bit as key to his and the AHA’s successes. Two of them would go on to become future AHA presidents, while three others would be long-time executive staff members.

Combined, Roger and the group he brought together would amass around 170 years of service to Arkansas’s hospital 8

Summer 2015 I Arkansas Hospitals

Four AHA Presidents: (from left) Roger Busfield, Jim Teeter, Phil Matthews and Robert “Bo” Ryall.

community over their careers and do it in a way characterized by innovation, integrity and the highest of ethics. That team set a tone which has attracted a second generation of AHA leadership executives and position players who continue working for the state’s hospitals in the same fashion today.

Roger knew how important it was to keep close relationships with other groups that hospitals had to interact with. That was true whether it was Blue Cross, the Arkansas Department of Health, the Medicaid program or CMS. He put a high priority on traveling to Dallas periodically to meet with officials at CMS’s Dallas Regional Office to discuss issues and to ensure that those ties remained strong. It’s something we continue to do today.

Despite his retirement in 1994 as president of the AHA, Roger continued his involvement as “President Emeritus,” returning each year for our annual meeting to see his many dear friends.

Roger was a gentle soul, with a loud laugh and a passion for life. Friends and political foes alike considered him to be a

force to be reckoned with but always an honorable man.

Shortly after learning of Roger’s death, I heard a story about Konrad Adenauer, another “head coach” whose name was prominently in the news in the 1950s.

Adenauer was the first post-war Chancellor of West Germany. From 1949 to 1963, he led his country from the ruins of World War II to become a productive and prosperous nation, laying the groundwork for the now united Germany’s rise to the rank of a world power. On a much smaller scale, it reminded me of Roger.

When Roger Busfield came to Arkansas from the Michigan Hospital Association in 1973, the AHA certainly wasn’t on the brink of ruin, but it was, by all accounts, pretty basic in what it did. By the time he retired in 1994, he had put down the foundation for an organization with a reputation as knowledgeable, professional, honest and effective, and one that had earned the respect and admiration from its members, the public, the media, government officials and other advocacy groups, both within the state and outside. We will all miss him.

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Arkansas Hospitals I Summer 2015

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Cover Story

Toward Transparency

Strategy session

The Case for Enhancing Public Reporting Standards

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by Peter Pronovost, MD and Matt Austin, MD, Johns Hopkins Medicine At Johns Hopkins Hospital in Baltimore, Maryland, we have worked diligently over the last 10 years to reduce the rate of central line associated bloodstream infections (CLABSI) in our ICUs. So it was both encouraging and frustrating when in 2014, Johns Hopkins Hospital was congratulated by one state agency and criticized by another agency for its performance within the same time period on CLABSIs in the ICU — congratulated when the CLABSIs were measured using the Centers for Disease Control and Prevention (CDC) definitions, and criticized when CLABSIs were measured using administrative or billing data.

How could two different agencies from the same state reach such different conclusions about a hospital’s performance on an important measure of patient safety? You may have run into this dilemma yourself. As staff at Johns Hopkins Hospital dug more deeply into the data, we found only a 13% agreement rate between the two data sources in positively identifying cases with an infection. For those who work in hospital quality, the lack of agreement between clinical and administrative data sources is not surprising, but it is an obstacle to reconciling your hospital’s quality improvement efforts.

Current Landscape of Public Reports

Over the last decade, we have seen tremendous growth in public reporting on the performance of healthcare providers. With the U.S. healthcare system plagued by variations in quality and costs, and more than 30% of healthcare expenditures (nearly $1 trillion annually) spent on care that does not add value to patients, the monitoring and public reporting of provider performance is a key strategy to remedy these problems.

We should expect continued growth in the number of public reports with the expansion of value-based purchasing programs and associated transparency efforts in the Medicare program (e.g., the physician value-based payment modifier), the further development of State Health Exchanges and the growth of accountable care organizations, each with its own public reporting requirements.

This increase in the number of public reports and growth in the number of organizations measuring performance have brought into focus the wide range of methodologies used for public reporting. While growth in reporting is laudable and beneficial, we currently assume the data that make up the reports, and the public reports themselves, are valid and reliable for informing patient decision-making and for guiding healthcare provider improvement efforts.

However, there is concern that the performance measures used in

We believe an oversight model could help ensure the scientific integrity and transparency of performance measurement and public reports. public reports and the public reports themselves are not up to the task. The validity and reliability of most measures used in public reports is often unknown or poor. Concern about measure validity appears to be particularly acute for measures constructed from administrative or billing data, where the validity and reliability of the measure compared to medical record review is often unknown.

While most of the administrative data systems in healthcare were primarily designed for provider reimbursement, public report sponsors have often used these data to construct measures of the quality and efficiency of healthcare services, as they are a relatively easy and inexpensive data source to use.

The process of constructing a public report is complex and involves collecting data, calculating performance measures from the data and constructing the performance report.

Sponsors of these reports approach report creation very differently in terms of variable definitions, attribution decisions and data sources. The “Wild West” approach that has characterized the public reporting of provider performance to date has created a public reporting landscape that is highly variable, lacking both standardization and transparency at all three steps of the report-generating process.

It’s no wonder, given the unsynchronized approach to public reporting, that public trust in performance reporting is lower than we’d like to see.

The Lack of Transparency and Standardization in Public Reports: A Problem for All So why should we care about a lack of standardization and transparency

in public reports? First, the lack of standardization in reports is a likely barrier to patients effectively using public reports for their own decision making, as they have no assurances about the integrity of the report and reports often conflict with each other.

For healthcare purchasers, the variability in public reports creates an obstacle for them to create meaningful incentives to recognize and reward high quality providers and to encourage performance improvement. For providers, the lack of standardization challenges them to decide upon which of the multitude of performance measures and reports to focus, which measures to believe and which measures should guide internal improvement efforts.

For all stakeholder groups, the lack of transparency in public reports, including the transparency of the underlying data and properties of the measures used (i.e., the validity and reliability of performance measures), requires everyone to simply trust that report sponsors have included data and measures that are both valid and reliable.

To address these concerns, we believe an oversight model could help ensure the scientific integrity and transparency of performance measurement and public reports.

While our goal has been to make things clear for the public; in reality, we have accomplished the opposite.

A Possible Oversight Model

The variation in methodological rigor and the lack of standards in existing public reports suggest need for an oversight model to help ensure their scientific integrity and enhance their usefulness. continued on page 12 Arkansas Hospitals I Summer 2015

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Figure 1. Triad Needed to Support Oversight Model for Public Reporting of Quality and Safety Data

Independent Body to Set Standards and Principles

CertiďŹ ed Professionals to Audit Compliance We have written about the need for public reporting of quality data to mirror the structures used to publicly report financial data.1,2 The reporting of financial data includes a triad of: (1) an independent body to set standards

External Entity to Enforce Standards and Principles and principles; (2) trained and certified professionals to review and audit compliance with those standards and principles; and (3) an external entity to enforce the standards and principles. We believe a similar triad in healthcare would

help ensure the scientific integrity and transparency of public reports (Figure 1).

The first part of the triad is setting standards and principles for reporting.

In financial reporting, the Securities and Exchange Commission (SEC) has designated the Financial Accounting Standards Board (FASB), a private, non-profit organization, to establish generally accepted accounting principles (GAAP) within the United States. These principles govern the preparation of corporate financial reports. This is done in the public’s interest.

In our proposed model, an entity similar to FASB would set standards and/ or principles for reporting on healthcare quality data. We believe the work of the National Quality Forum (NQF) in endorsing performance measures serves as a strong model for the setting of standards and principles for healthcare quality data and measures.

The work could extend beyond setting standards or principles by also

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requiring disclosures in public reports, including disclosing the “performance of performance measures” that are used and/or reported publicly. A uniform language of reporting must be adopted; otherwise confusion will continue to reign.

It goes without saying that a structured funding source to help support this ongoing work also must be identified.

The second part of the triad is having trained and certified professionals review and audit compliance with those standards and principles. In financial reporting, an audit is conducted to provide an opinion on whether financial statements are stated in accordance with the specified criteria. Auditors provide an opinion on whether financial statements are fairly stated in accordance with accounting standards. The auditor gathers evidence to determine whether the statements contain material errors or other misstatements. The financial world has created certified public accountants (CPAs) who are specially trained in conducting the audits and providing guidance on financial statements. The public generally accepts as fact the findings of CPAs in this capacity, allowing a level of comfort and trust with financial data as presented.

Healthcare quality reporting could benefit from an external review as well.

To support this work, we may need to create CPA-like persons certified to have the requisite skills to offer public attestation on healthcare quality data.

Currently, the skills and training of staff collecting and reporting healthcare provider performance data vary widely, with few having any formal training in basic epidemiology, data analytics and/ or measurement science.

Finally, the third part of the triad is an external entity to enforce the standards and principles. In the financial reporting world, the SEC plays the role of enforcer, enforcing the accounting standards and principles and investigating possible cases of accounting fraud. While other models may exist, we believe for healthcare quality data, a government agency is the most likely candidate for the role of standards enforcer. continued on page 14

How-tos:

The Johns Hopkins Medicine Strategy With the implementation of an oversight model for public reporting, individual hospitals will need to develop local structures that will help support this work. At Johns Hopkins Medicine, we are working to ensure the quality committee of the Board of Directors operates with the same rigor, discipline and data as the finance committee.

That commitment has led to a number of efforts.

1. Governance Structure

We created a governance structure in which the safety and quality of care – anywhere it is delivered under the Hopkins name – reports up to a single board committee, just as every dollar spent and received is aggregated into a single financial statement.

2. Quality Management Infrastructure

We created a quality management infrastructure so that we have shared leadership accountability. With this, we ensure we can name the accountable leader for all performance measures from board to bedside: board, CEO, quality leader, department director, division or unit director and clinician.

3. Review of Performance

We implemented a robust review of performance on quality and safety metrics modeled after our review of financial performance. The 8th workday after the end of the month, each local hospital reviews its quality and safety dashboard.

On the 9th workday, all the leaders from JHM review the data.

And on the 10th workday, the data are presented to executive leadership of JHM and then presented to the board. We organize our board reports into four categories: Safety, which represents internal risks and is grouped into risky providers, risky units and risky systems; Performance on Externally Reported Measures; Patient Experience; and Value, defined as quality over costs.

4. Accountability Plan

We defined an explicit accountability plan in which longer periods missing a performance goal lead to greater oversight.

If a hospital misses a performance goal for one reporting period, the local leader reviews performance and produces an improvement plan. If a hospital misses a goal for two months, it is presented to our JHM executive committee. If a hospital misses the goal for three months, the Armstrong Institute performs an audit to identify why the goal has not been met and develops an improvement plan.

5. Internal Audit

We partnered with our internal audit department to conduct an audit of our quality and safety data and processes, and we plan to have follow-up audits as we move forward.

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The model of setting standards by an independent body, auditing by trained and certified professionals, and enforcing the standards by an oversight agency could significantly advance public reporting of provider performance with greater standardization and transparency in the collection of the underlying data, the calculation of performance measures and the construction of public reports.

Such a model would offer a consistent definition of performance on which to report and would change the conversation from debating the accuracy of the measures to discussing how well measures perform, identifying gaps in performance, and noting the costs and benefits of producing better measures.

Moving Forward

Healthcare could significantly advance the public reporting of provider performance with greater standardization and transparency. This would apply in the collection of the underlying data, the calculation of performance measures and the construction of public reports, and it would help ensure that

public reports are conveying accurate information to all stakeholders.

To achieve this goal, healthcare needs to develop a model for constructing reports used in the public domain, similar to the standards the SEC has established for reporting financial performance.

Such a model would offer providers a consistent definition of performance on which to report and would offer healthcare consumers, purchasers and payers a single “book of truth” for evaluating provider performance.

The ideas outlined within this article are intended to serve as a starting point for further conversation. We recognize that much more needs to be considered and broader conversations across all stakeholder groups are required.

Substantial dialogue is needed to better understand the concerns and challenges the proposed model would present for each group. While no one model can address all the concerns of all groups, the principles of transparency and inclusiveness will be extremely important to promote buy-in of a final model.

In summary, our current course of performance measurement will produce much of the same unless we develop a

Dr. Peter Pronovost is a world-renowned patient safety champion and a practicing critical care physician. His scientific work leveraging checklists to reduce catheterrelated bloodstream infections has saved thousands of lives and earned him high-profile accolades, including being named one of the 100 most influential people in the world by Time Magazine and receiving a coveted MacArthur Foundation “genius grant” in 2008. Elected to the Institute of Medicine in 2011, Dr. Pronovost is an advisor to the World Health Organization’s World Alliance for Patient Safety and regularly addresses the U.S. Congress on patient safety issues. He is senior vice president of patient safety and quality and director of the Armstrong Institute for Patient Safety and Quality at Johns Hopkins Medicine.

uniform model to which all subscribe.

Hospitals have been actively engaged in quality improvement, and it is time we have credible ways to share that success story. It’s vital that we, in healthcare, continue to tell the patient story but also collect, report and present documentable evidence regarding our performance and its measurement.

We’re in a world of change in healthcare, and at times it is overwhelming. Having standards for how we collect and measure performance data will ease our angst. It’s easier to create clear and accurate reports if we’re using a common language and approach. Better reporting comes when we can adopt standard approaches of collecting data, calculating performance measures from the data and constructing the performance report.

Let’s begin the conversation!

References: 1 CBerenson RA, Pronovost PJ, Krumholz HM. Achieving the potential of health care performance measures. http://www.rwjf.org/content/dam/farm/reports/ reports/2013/rwjf406195. Published May 2013.

Accessed February 8, 2014.

2 Mathews SC, Pronovost PJ, Herzlinger RE. Focus on quality: an opportunity to execute health care reform. Am J Med Qual. 2011;26(3):239-240.

Dr. Matt Austin is an assistant professor of anesthesiology and critical care medicine at the Johns Hopkins University School of Medicine and a faculty member at the Armstrong Institute for Patient Safety and Quality. His research focuses on healthcare performance measures. Dr. Austin provides strategic guidance to The Leapfrog Group on performance measures for the annual Leapfrog Hospital Survey and the new Hospital Safety Score. He also serves as the principal investigator on a number of grants focusing on the use of performance measures in U.S. hospitals. Within Johns Hopkins Medicine, Dr. Austin guides development of internal and external safety and quality dashboards that help employees understand how their units, departments or hospitals are performing and is co-leading efforts to identify possible disparities in the quality and safety of care delivered to various subgroups of patients.

Visit The Armstrong Institute’s blog, Voices for Safer Care, at https://armstronginstitute.blogs.hopkinsmedicine.org/.

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Implementing a pre-operative infection prevention “bundle” was associated with a significant reduction in serious S. aureus surgical site infections, according to an AHRQ-funded study published in the June 2 Journal of the American Medical Association.

The study, led by Loreen A. Herwaldt, M.D., of the University of Iowa Carver College of Medicine, included 42,534 cardiac operations and hip and knee replacements performed in 20 Hospital Corporation of America-affiliated hospitals in nine U.S. states. The bundle included screening for S. aureus, decolonizing patients who were positive for these bacteria and administering perioperative antibiotics according to an evidence-based protocol. The study can be found at http://jama.jamanetwork. com/article.aspx?doi=10.1001/ jama.2015.5387.

AHRQ, through a contract with the Johns Hopkins Medicine Armstrong Institute for Patient Safety and Quality in Baltimore, is seeking hospitals to collaborate on a project to improve outcomes for patients on mechanical ventilation. The project focuses on safely shortening the duration of ventilation to prevent both short-term harms, such as ventilator-associated pneumonia, and long-term effects such as physical disabilities, lingering cognitive dysfunction and psychiatric issues.

Orientation for the final project session begins in late July 2015. There is no fee to participate. Detailed information is available at http://www.hopkinsmedicine. org/armstrong_institute/improvement_ projects/mvp/index.html.

Quality and Patient Safety

Focus on Quality The highest total healthcare expense in 2012 for children age 17 and under was for mental health, with $13.9 billion spent on treatment of mental disorders. (Source: Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey Statistical Brief #472: Top Five Most Costly Conditions among Children, Ages 0-17, 2012 Estimates for the U.S. Civilian Noninstitutionalized Population).

The Joint Commission (TJC) has a new educational monograph designed to assist hospitals in implementing their respiratory protection programs.

Implementing Hospital Respiratory Protection Programs: Strategies from the Field was developed by TJC in collaboration with the Centers for Disease Control and Prevention (CDC), the National Institute for Occupational Safety and Health (NIOSH) and the National Personal Protective Technology Laboratory (NPPTL). It features examples, strategies, new resources and a variety of implementation approaches that were solicited from the field and vetted through an eightmember technical expert panel. One of a cluster of research activities spearheaded by NIOSH/NPPTL around respiratory protection programs, the resource is intended to be a companion document to other CDC/ NIOSH/NPPTL respiratory protection publications and resources. The monograph is available at http://www.jointcommission.org/health_ services_research.aspx under Research Resources.

The Agency for Healthcare Research and Quality has launched a YouTube channel featuring videos on evidence-based training programs to improve hospital care through effective communications and teamwork. The channel includes nearly 50 videos on the Comprehensive Unit-based Safety Program toolkit, a protocol to reduce healthcare-acquired infections in intensive care units, and 50 videos on TeamSTEPPS, a protocol to lower the risk of adverse events through better communication and teamwork. Both training programs can be customized to the individual needs of hospitals, units and clinicians. The AHRQ-produced patient safety videos can be seen at https://www.youtube.com/user/ahrqpatientsafety.

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Quality and Patient Safety

A Sea of Data

care advancement

Finding Key Metrics for Improvement and Accountability

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By Kay Kendall, CEO, BaldrigeCoach About a year ago, I discovered a brilliant quote from Richard Saul Wurman, the co-founder of the TED (Technology, Entertainment and Design) conference. He observed, “Everyone spoke of an information overload, but what there was, in fact, was a non-information overload.� Nowhere is this more apparent than the healthcare industry. From the smallest longterm care facility to the largest healthcare system, we see piles and piles of data, spreadsheets spilling over desktops and reports generated faster than they can be digested.

Too often what we see in our healthcare clients’ organizations is the equivalent of metric wallpaper.

The data are so pervasive that people have become inured to it. What should be calling out for attention and action is lost amid the noise of the noninformation overload.

Of course, the intense regulatory environment adds to the mania. If this sounds like your world, how do you start to bring order to the chaos? This is an important effort to undertake, not only because it impacts your effectiveness as a senior leader but because it impacts your entire organization. In the cacophony of data, where do your people focus their energies?

Moving From Metrics Mania to Focus and Alignment

I worked for 15 years in the aerospace industry, another highly regulated environment. The corporation where I worked liked to boast about its metric-driven culture. However, in the mid-’90s, even the corporate and sector leaders realized that we had gotten out of control with the number of metrics required and the frequency of the reporting that had been mandated. I was selected to be on the cross-functional task force to bring focus and clarity to the vital few metrics we would use to manage the business going forward. The crossfunctionality of the task force was important to ensure that we established a balanced view of the needs of the various disciplines along with those of our customers and stakeholders.

We began by taking an inventory of all of the reported metrics. The number was staggering. That also told us that there were hidden costs for collecting and reporting all of these metrics. Many of them did not produce actionable information.

We also were dismayed by the huge imbalance we discovered, where financial and operational metrics overwhelmed the number that were reflective of our customers’ requirements and expectations.

When people have the information and tools to do their jobs in the right way, can measure their own performance and are supported in problem solving and process improvement, they can be held accountable and deliver excellent results.

Principles for Reporting Metrics

By the end of our task, we had developed nine principles for reporting metrics. I have used them in other organizations I led and facilitated their use with our clients.

1. The metric must have a clear operational definition. The sources of the data must be identified along with the formula and any exclusions permitted in the calculation.

2. Each metric must then be assigned an owner who approves the operational definition and authorizes the metric’s collection and review.

3. The data must be collected by or validated by someone close to the process. This drives ownership and accountability.

4. The process for reviewing the metric must be identified – who, in what forum and at what frequency.

5. The reviewer of a reported metric must define his/her role in providing feedback, assisting in root cause analyses, developing corrective actions, etc.

6. The metric must be monitored regularly to detect adverse trends or out-of-control conditions. If these are observed, corrective actions must be identified and implemented.

7. We must understand the behavior(s) that the metric will drive – including both the intended and unintended consequences of its use.

8. The benefit of any metric must be greater than the cost to generate it.

9. We must be proud to show our customers the metrics we use to manage our organization because

their requirements and expectations are reflected in that set.

With the increasing role of automation, some might argue that the cost of collection and reporting is negligible. However, that ignores the cost of the review and the lost productivity in trying to differentiate the important few from the trivial many. It also fails to factor in the cost of missed opportunities that go undetected, tallying up waste, rework and other inefficiencies.

Creating Line-of-Sight Throughout the Organization

We did encounter resistance to the elimination of some metrics, but these nine principles were ultimately adopted. What we saw as a result was greater focus in the organization around the most important objectives.

A key contributing factor was the use of visualization to create a clear line-ofsight from the corporate-level objectives and measures all the way down to the individual work units. We developed a common format that we called a Goal Tree. It is essentially a tree diagram turned on its side.

The Goal Tree also provides answers to some key questions. For the senior leaders, moving from left to right, they are able to answer, “How are we going to achieve these objectives?” “Who am I holding accountable for the results?”

For the individuals in the workplace, moving from right to left, they are able to answer: “Why am I doing this work?”, “Why does it matter?” and “What’s my contribution to the bigger picture?” continued on page 18 Arkansas Hospitals I Summer 2015

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Ac*ons

Tac*cs Skin Care

Risk Assessment

Goal Tree – Limited Example on Pa4ent Safety

Goals

Nutri*on

Reduce Pressure Ulcers

Top-­‐level Objec*ve

Surface Reposi*oning Use of Cushions

Maximize Pa*ent Safety

Hand Hygiene Inser*on Asep*c Technique Reduce CLABSI Maintenance

Using Dashboards

Underneath the Goal Tree we use a simplified dashboard of related measures (KPIs or Key Performance Indicators) that a particular work unit can influence. Some highlevel objectives can be found on every dashboard; these include, for instance, customer satisfaction and engagement. Others – such as supply chain metrics for the procurement department, for example – will appear on only a few dashboards where the work units have specific responsibilities.

What also helps improve performance is ensuring that everyone in a work unit can understand and explain the dashboards. While we see the use of dashboards as relatively common across healthcare organizations, we frequently find that the front-line employees don’t understand the data. They don’t know which metrics require them to take action or adopt different behaviors.

They don’t see how the reported results reflect their contribution to the organization or what they are usually most passionate about – high-quality patient care.

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Leading Indicators

Another important factor in using data to improve performance and drive accountability is identifying leading indicators, those metrics that are proven to be predictive of the desired outcome measure. These in-process measures are key to the workforce accepting accountability. They are the measures related to the proactive behaviors the employees can take to produce excellent results. For example, a top-level objective around patient safety may use the PSI 90 (Patient Safety Indicators) Composite, comprised of pressure ulcer, iatrogenic pneumothorax, central venous catheter-related blood stream infection, postoperative hip fracture, postoperative pulmonary embolism, postoperative sepsis, postoperative wound dehiscence and accidental puncture or laceration.

Each of these patient safety outcomes has evidence-based practices for prevention, and measures of compliance to or use of these practices serve as the leading – or predictive – indicators of the outcome measure.

Elegant Simplicity

Our experience has shown us that most of the analysis of an adverse

Bundle Supplies for Ready Access Hand Hygiene and Asep*c Technique

trend or an out-of-control process does not require extensive use of statistics or complicated methodologies.

Most problems in processes can be addressed with the basic quality tools to which many of us were exposed early in our careers. Tools such as Pareto diagrams, run charts and root cause analyses can be readily mastered by most of our workforce.

The use of these tools empowers people at the process level to manage and improve their processes with the results to prove it. When people have the information and tools to do their jobs in the right way, can measure their own performance and are supported in problem solving and process improvement, they can be held accountable and deliver excellent results.

Kay Kendall, CEO and Principal of BaldrigeCoach, assists organizations on their journeys to performance excellence. As a LeanSixSigma Master Black Belt, she has a strong interest in transforming data into information. You may contact her at Kay@Baldrige-Coach.com.

Quality and Patient Safety

Data Superstars in Action:

How 3 Hospitals Use Data to Improve Quality

By Nancy Robertson Cook Working with data to improve quality and performance crosses the spectrum of Arkansas hospitals, small to large, critical access to rural to urban. Yet every hospital team finds unique ways to use the data befitting each particular location and culture.

We’re highlighting three hospitals/ systems here to show what can be done with data. Maybe your hospital has tried these techniques; maybe they’ll be something you’d like to try. But the commonality is use of data to improve quality. Here are three superstars.

Mena Regional Health System (Rural)

“Like all hospital teams, we’ve been collecting data for a long time,” says Amy Phelps, Director of Quality Services at Mena Regional Health System. “And like most, we have worked hard to avoid duplication of effort in collecting and interpreting our data across the many projects and mandated reporting mechanisms in play.”

What sets Mena apart is its approach to data abstraction.

“We used to do abstraction according to the prescribed methods, usually abstracting a quarter at a time, so we were always abstracting 1-3 months in arrears,” she says. “We have started abstracting immediately, while our patients are still in the hospital. This has put us on a fast-track to improving the patient experience and our own performance concurrently.”

Mena has seen significant gains from ongoing chart abstraction. “We are like a family here,” Amy says. “Many of our frontline team members have worked together for years. There is trust and the ability to point out challenges without fear of stepping on toes. When our nurses saw charting issues, they brought them

to me. We discovered, for example, a failure to sync medication delivery with patient discharge. In making the decision to abstract as we go, we have eliminated issues like this that might pop up. Ongoing abstraction also allows us to keep current on our data collection for core measures and Medicaid (as well as the many harm reduction areas addressed by the Hospital Engagement Network) and to focus on getting our patients their best, most timely treatment and interventions while they’re here. This has made all the difference in our ability to fix issues very quickly.”

Real time data collection, concurrent chart review and abstraction, and the chance to review pop-up issues immediately with all team members are continued on page 20 Arkansas Hospitals I Summer 2015

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key to Mena’s impressive harm reduction and patient-centered use of their data.

Concurrent abstraction is now systemwide at Mena and is hardwired into daily schedules. When the practice was originated, weekly, then monthly meetings to go over the findings were important.

Now that concurrent abstraction has been in place for some time, meetings are held quarterly. But any time an issue comes to light, team members gather to rectify it immediately.

“We celebrate small milestones instead of waiting for quarterly reports,” Amy says. “Hershey bars are our reward of choice. In fact, some months, I feel like I’m dealing in Hershey bars,” she laughs.

The Mena family is making real inroads in infection reductions. Phelps attributes this to the ongoing abstraction process.

“We also know that core measures data will impact Value-Based Purchasing (VBP) scores,” she says. “So our concurrent abstraction not only helps our patients, it helps our hospital’s bottom line and the ability to continue to have a positive impact on our community well into the future.”

CHI St. Vincent Hot Springs (Urban)

“Quality is measured in so many ways,” says Christi Whatley, Vice President of Quality for the CHI St. Vincent System. “If you’d ask any group of healthcare workers what hospital quality means, you’d get as many answers as there are people in the room.”

So how does a system as large as CHI St. Vincent bring its clinical and quality staff across many hospital settings to one way of measuring, one way of using quality data to improve outcomes? “We live our mission,” Whatley says.

The CHI St. Vincent mission speaks to its healing ministry, supported by education and research. It also states that CHI St. Vincent is dedicated to creating healthier communities through its values-driven intention to develop creative responses to emerging healthcare challenges.

That’s where Whatley and her quality team members come in. “We look at every aspect of quality improvement and how our various processes (clinical care, our

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HAI Prevention Bundle Compliance Involvement of the front-line staff is crucial to the success of any effort, and this is particularly true of the compliance with preventing HAIs. With this in mind, CHI St. Vincent Hot Springs followed the steps outlined below: • Review of current practices and identification of opportunities for improvement based on evidence-based practice toolkits; • Retraining of staff when necessary; • Education of the staff on what is “best for the patient;” • Involvement of the entire healthcare team (physicians, nurses, techs, pharmacists, etc.); • Creation of a dashboard report that is shared with all staff; and • Continual monitoring of units for compliance by Clinical Outcomes Coordinators with immediate feedback to staff and managers.

physical setting and protocols) affect it,” she says. “Data collected for the many national project reports help us determine where to focus. We break every protocol down into categories, looking at safety, outcomes and process of care. When creating a process to be followed across clinical settings, we make it easy to do things right and hard to do things wrong.”

Whatley came to the St. Vincent system when her hospital, Mercy Hot Springs, was purchased by CHI St. Vincent. Mercy Hot Springs was a shining example of using data as a key to process improvement during the first three-year Hospital Engagement Network (HEN) trial sponsored by the Centers for Medicare & Medicaid Services (CMS).

“In the HEN, we focused on preventing various hospital-acquired conditions (HACs) and hospital-associated infections such as CAUTI (catheter-associated urinary tract infection), CLABSI (central line-associated blood stream infection), VTE (venous thromboembolism), VAP (ventilator-associated pneumonia), hospital-associated pressure ulcers and others, as well as on lowering our 30-day readmissions. What made Hot Springs shine was our data-driven decision making. Across the spectrum of projects – HEN, NDNQI, Joint Commission, CMS, AFMC – we practice process improvement led by our data. We are

translating the process improvement approach and culture in practice at Hot Springs across CHI St. Vincent.”

CHI St. Vincent leaders know that effective process improvement requires a quality solution and a change management strategy to ensure the acceptance of the solution by key stakeholders. “Priority one is engaging physicians and other key stakeholders and getting their buyin, through presentation of the data,” Whatley says. “Data provides the burning platform for getting key stakeholders engaged. Physician order sets drive the process of care; therefore, we ensure that order sets are aligned with evidencebased practice. Order sets developed by physician-led clinical teams are hardwired into our electronic health records system.

That means we have physician leadership driving change.”

In today’s world of sharing best practices across the nation, especially through the HEN, there are examples of order sets that can be customized for any size hospital or system. “We have found that with fewer barriers to sharing, we can all optimize our performance improvement.”

A second key to success for CHI St. Vincent is to have teams who are also well-versed in evidence-based practice bundles. “This ensures that our process of care meets the highest standard of

care,” she says. “Our clinical outcomes coordinators provide constant surveillance to ensure we are following evidence-based practice and thereby avoiding negative outcomes.” Concurrent with patient stays, they review order sets and staff processes, providing feedback to care teams on a daily basis. This helps refine processes for even better outcomes. “Our clinical outcomes coordinators are rarely at their desks,” she explains. “They work as a team with our nursing staff and engaged physicians, looking at our processes and bundle elements for any areas that can be improved. The nurses are critical to the success of our processes, because they are the ones who deliver exceptional care.”

A tip: “While you’re working out your processes, getting order sets hardwired, going through change…it’s good to have daily or weekly meetings so issues can be brought to the table immediately,” she says. “Once you have your system in place, monthly face-to-face meetings seem to work best.”

Hospital pharmacists continue to be a big part of the process team, as well.

“They play a critical role, particularly in preventing adverse drug events (ADEs).

We have been working on processes concerning Warfarin. Our pharmacists help us establish protocols with, and to be followed by, our physicians and nursing teams.”

Following the data can also point you to where you need positions added.

“We were working on perinatal care measures toward exclusive breastfeeding among new mothers,” Whatley says.

“We identified the need for a full-time lactation consultant. With our entire perinatal team working together and new processes in place, I’m happy to report that we have increased our percentage of mothers breastfeeding exclusively by more than 50%.”

Success in process improvement can be achieved by any hospital of any size, using the model that focuses on both a quality solution and acceptance by key stakeholders now in place at CHI St. Vincent. “The key is that you are doing the work together – physicians, nursing team, clinical outcomes coordinators, pharmacists, others – and with a common purpose.

Bringing data in from the outset paints the picture that can define needed change and lead to great outcomes.”

Anticoagulation Safety A multidisciplinary team was developed to address anticoagulation safety in compliance with National Patient Safety Goal 3E. Processes that were implemented at CHI St. Vincent Hot Springs include: • Initial INR prior to Warfarin administration; • Daily monitoring and maintenance of INRs for patients on Warfarin therapy; • Annual nursing anticoagulation education; and • Performance evaluation – reported to Medication Safety Committee and Pharmacy & Therapeutics Committee – of: o ADRs – monitor all adverse drug events but specifically drill down on events occurring with anticoagulation therapy and discuss in Medication Safety meeting; o INR monitoring – track the number of patients in which an initial INR is not available and has to be ordered prior to administering Warfarin; o Vitamin K administrations – evaluate daily for reversal of anticoagulation; and o Pharmacists monitor labs of patients receiving anticoagulation therapy via VigiLanz software.

CrossRidge Community Hospital (Critical Access)

Pat Hamilton, Quality Director at CrossRidge Community Hospital in Wynne, really “gets” data. She sees opportunities in every data point.

“We, in quality, feel like we’re data rich but information poor some days,” she says. “I firmly believe in data as a method to improve our processes.

There’s a continuum: data – information – knowledge – decision-making – prioritizing – process improvement.

Process and outcomes are important, but you can’t get there unless you can prioritize the use of the data you have.

With data, you have to laser in, not use general data. Ask, ‘Do you have the data to support the process AND a need for improvement?’”

Like other quality officers, Hamilton says you start with buy-in. “When you commit to use of data, you must commit to being transparent with all of it, the good, the bad and the ugly. And you must share the data with everyone: your front line, administration, the quality improvement committee of the medical staff and the board of directors. Use your data to focus on specific areas. Prioritize your actions to meet distinct opportunities.”

An example: At CrossRidge, every patient entering the ER with chest pain is considered to be a cardiac patient until proven otherwise. Baseline data collected in 2011 showed that around 70% of patients were receiving appropriate cardiac care (immediately given an aspirin, triaged within five minutes, EKG performed within 10 minutes). “Through sharing data, raising awareness, education and going to the front line staff with our findings, we have continued to ratchet that percentage up.

To date in 2015, we now stand at 98%100% receiving appropriate care upon admittance to the ER. That figure has stood for some time.”

Working with STEMI patients (those with ST-elevated myocardial infarction), the end goal is to get a patient to a cath lab and get the vessel opened. “We can’t do that here at CrossRidge,” Hamilton says, “but we can get the patient transported to our sister hospital, St. continued on page 22 Arkansas Hospitals I Summer 2015

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Bernards, in Jonesboro. Our process has been improved so that now we get the patient ready for transfer to St. Bernards in 30 minutes or less.”

You can improve any process, Hamilton says, if you set behavior or outcomes as a data point and track it.

“We collect data toward process improvement in non-clinical areas as well as our clinical departments,” she says. For example, the admissions process is not only important to the patient’s progression through hospitalization, it’s important to the successful billing and collection process on down the line. Errors in admissions lead to errors in care and errors in billing. At CrossRidge, they have tracked data in all departments, including accounting, admissions and medical records to help set standards within the department. Data on the clinical side is used to help create processes or practice bundles. Data on the non-clinical side is used to set standards and create easy-to-follow processes.

“My big thing is for those entering the quality area not to be overwhelmed by data,” Hamilton says. “Don’t fear data.

It’s our ally!”

Hamilton says she’s notorious for benchmarking. “I hear about a new process from the AHA (Arkansas Hospital Association) or AFMC (Arkansas Foundation for Medical Care) and I ask, ‘Are we doing this? Do we have a problem?’ Then I set up a way to measure, 22

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and we collect data to see if a problem exists.” That’s the beauty of sharing ideas across the quality spectrum, she says.

Another hospital’s work can result in your finding and correcting a problem, or proving that you do not have a challenge in that area. And your processes can help others. It’s a win-win.

A lot of projects begin with the question, “Could we have an issue?” The Joint Commission’s Sentinel Events are a good starting point, she says. “You look at your risk and look at your data with the intent of finding opportunities to improve.”

She insists that the size of your hospital doesn’t mean risk isn’t there.

“The thing to do is to perform a Failure Mode Effect Analysis (FMEA), monitor your results and implement process improvements. You have to address what the data tells you.”

CrossRidge hadn’t had a CAUTI for some time, but Hamilton didn’t stop with that knowledge. “I wanted to look at our Foley (catheter) days and see how we ranked with the rest of the nation,” she says. “The data showed we had more Foley days than the national average. So we addressed that and began to get our Foleys out quicker.”

Physicians, nurses, everyone needs data to convince them that change is necessary, Hamilton says. “We are constantly driven by data because we are constantly looking for opportunities to improve performance. We improve, then we must hold the gains we’ve

made. Documenting performance improvement helps us know when we’ve reached our goal, tells us we’re maintaining that performance, and also helps us check in three, six or 12 months later with a spot check to be certain we’re holding our gains.”

As a part of the AHA’s Hospital Engagement Network (HEN) project, reduction of adverse drug events was a priority. “We began to hear that hospitals might have an undetected issue with low blood sugars in their diabetic patients,” she says. “So we collected data to determine any trends or patterns for hypoglycemic events. We discovered that we did have low blood sugars occurring in the mornings. It turns out that the night shift had been delivering the morning insulin at 6:45 a.m. FOREVER. Breakfast trays weren’t delivered until 7:45. Two months of data collection highlighted the blood sugars of 50 or less and prompted us to make a process change. Now, with the approval of our medical staff, the morning shift delivers insulin close to the time breakfast is served. The change in longtime duties might have been a problem had we not had data to back it up. No one wants our patients to have ill effects. When you share the data, you get buy-in.”

Hamilton concludes by saying, “I think looking for opportunities to improve performance comes with experience.

Plus, you have to love data. I wouldn’t dream of going to our medical staff or administration without data that proves change is worthy of our focus.

Collect the data, prioritize its use and implement process improvements. Buyin is automatic when you show how our patients will benefit.”

Highlighted in this article were quality teams from these hospitals. We thank them for their innovation and their enthusiasm to share best practices: • Mena Regional Health System; Amy Phelps, Director of Quality Services • CHI St. Vincent System and CHI St. Vincent Hot Springs; Christi Whatley, VP of Quality Services • CrossRidge Community Hospital; Pat Hamilton, Quality Director

Quality and Patient Safety

Healthcare-Associated Infection Data: Measurement Ensures Progress

By Mandy Palmer, RN, CPHQ, CPPS, Arkansas Foundation for Medical Care, and Kelley Garner, MPH, MLS (ASCP)CM, Arkansas Department of Health Though significant progress has been made in reducing the number of healthcare-associated infections (HAIs) acquired by patients in the United States, HAIs continue to have a major impact on both quality and costs of the U.S. healthcare system. Recent data from the Centers for Disease Control and Prevention estimate that one out of every 25 patients will develop an HAI. These infections are one of the leading causes of preventable death in the United States, causing an estimated 75,000 deaths annually.1 HAIs contribute to prolonged lengths of stay in the hospital, leading to increased costs. In years past, development of an HAI was considered to be a cost of doing business. This mindset has changed with the national focus on improving patient safety and quality of care. We now know that HAIs are largely preventable through implementation of evidence-based practices. When driven by strong hospital leadership support and an accepted facility-wide culture of patient safety, reductions are significant.

Robust data collection, analysis and sharing of results are all necessary for a quality improvement program to be successful. HAI data can be intrinsically difficult to analyze because patients are receiving care for other medical conditions, many of which increase their risk for infection.

Individual chart review allows descriptive HAI evaluation for an individual patient. However, systematic, large-scale data collection (hospital-wide, health system-wide, statewide or nationwide) increases the available data and enables identification of faults with processes.

Adopting systematic data practices can have a tremendous impact on reducing the risk of patients developing an HAI.

National Healthcare Safety Network (NHSN)

HAI reduction and prevention of harm is a national priority. Multiple federal

agencies are collaborating to maximize the usefulness and completeness of HAI data. The Centers for Disease Control and Prevention’s (CDC) National Healthcare Safety Network (NHSN) has emerged as the surveillance system of choice to monitor HAIs. More than 14,000 healthcare facilities have enrolled in NHSN and are sharing data for a variety of HAIs, including indwelling-device-associated infections, surgical-site infections and laboratory-identified infections related to antibiotic resistance.2 In 2011, the Centers for Medicare & Medicaid Services (CMS) added NHSNreported HAI measures to the Inpatient Quality Reporting Program.* CMS has subsequently expanded these requirements to include additional quality reporting programs, infection types and healthcare worker influenza vaccination status.

The newest requirement, initiated in January 2015, expands reporting of deviceassociated infections from critical care areas alone to inclusion of medical and surgical wards. Hospitals that fail to report the required HAI data by an established deadline, as outlined in the various CMS quality reporting programs, could jeopardize their Medicare annual payment updates.

Additionally, CMS is not only requiring hospitals to report HAI data but is also including these measures in other incentive and penalty programs like the Hospital Value Based Purchasing (VBP) program and the Healthcare Acquired

Conditions (HAC) penalty program. As part of the Inpatient Quality Reporting Program, CMS externally validates these data to ensure accuracy. Due to the potentially massive financial implications, CMS recently increased the weight of the HAI data to 66.7% of a hospital’s total validation score.

Tools to Help with Surveillance

Ever-expanding reporting requirements remind us of just how complicated it can be to perform broad-based HAI surveillance. Hospitals are unique, patient populations are unique, and communities and resources are unique.

Infection preventionists (IPs) work diligently to stay current with CDC’s NHSN HAI definitions and protocols.

Accurate interpretation and reporting of infections is an important component of data surveillance. Timeliness is vital.

IPs also establish facility protocols and data-mining resources to collect numerator and denominator data across the HAI spectrum.

The CDC has accomplished interpretation of broad-based HAI surveillance by using a metric in NHSN called a Standardized Infection Ratio (SIR). The SIR is calculated by dividing the number of infections identified by the number of infections predicted using statistical models. And these continued on page 24

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crewsfs.com 24

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Member

statistical models use variables provided by each facility.

The SIR balances comparability and flexibility of hospital types by having standardized surveillance definitions to categorize identified infections (numerator) and using statistical models to predict the number of infections (denominator). The number of predicted infections is adjusted to account for those facilities that care for more patients, provide higher levels of care for sicker patients, utilize different laboratory techniques, etc.

A SIR greater than one means your facility is doing worse than the national baseline; a SIR equal to one means your facility is doing the same as the national baseline; a SIR below one means your facility is doing better than the national baseline.

The SIR is the metric CMS is using to measure performance in the VBP and HAC programs. The CDC will be updating the data used to generate national baseline rates throughout 2015. The new rates will provide hospitals with a better way to compare their facility to the current environment of infection prevention and quality improvement.

Since the establishment of current baselines, hospitals have made significant improvements and are working much harder to reduce HAIs. It is possible that after the rates are updated, a hospital’s SIR could increase even though it is still reporting the same number of infections.

The CDC has also developed a new report within NHSN that allows hospital staff to analyze their data by the number of excessive infections.

The Targeted Assessment for Prevention (TAP) report ranks locations throughout the hospital by the number of infections that need to be prevented to achieve a designated SIR. Currently, the default SIR is the Health and Human Services HAI prevention target for each measure.

These new reports will allow hospital staff to prioritize prevention efforts by location, with the ultimate goal of lowering the facility’s overall SIR. NHSN will be adding the ability for a hospital to set its own prevention

targets for the TAP report in the coming months. For example, hospitals could calculate the number of infections that need to be prevented to meet VBP standards.

Building on Progress

To ensure the best patient outcomes for all Arkansans and full reimbursement from the various CMS Quality Reporting Programs, we recommend that hospitals: • Maintain leadership support that embodies quality and infection prevention as everyone’s job; • Devote adequate resources to infection prevention for patient safety and quality improvement activities; • Support training on NHSN definitions for an adequate number of infection preventionists and give at least two employees access to the NHSN system; and • Verify monthly NHSN data submission, analysis and sharing at all levels (frontline staff, medical staff, hospital leadership, hospital board) and use this information to guide quality improvement activities.

HAIs are emerging as a significant indicator of patient safety and are a growing target for quality improvement activities.

Please contact your facility’s NHSN administrator or IP to review your data and find out how your hospital compares.

There are many resources available to reduce HAIs. The Arkansas Department of Health and the Arkansas Foundation for Medical Care, as well as the quality team at the Arkansas Hospital Association, would be happy to share those with you.

*Please note that submission of HAI data to NHSN for the Hospital Inpatient Quality Reporting (IQR) program discussed in this article is a requirement for Acute Inpatient Prospective Payment Systems (PPS) hospitals. At this time, HAI data submission to NHSN is only voluntary for Critical Access Hospitals (CAHs).

Mandy Palmer is a quality specialist with the Arkansas Foundation for Medical Care (mpalmer@afmc.org). Kelley Garner is the HAI Program Coordinator and Epidemiologist with the Arkansas Department of Health (Kelley.Garner@arkansas.gov).

References 1 Magill SS, Edward JR, Bamberg W, et al. Multistate Point-Prevalence Survey of Health Care-Associated Infections. N Engl J Med 2014; 370:1198-208.

2 Centers for Disease Control and Prevention. NHSN Enrollment Update. NHSN E-News. 2015;10(1). Available at: http:// www.cdc.gov/nhsn/PDFs/Newsletters/NHSN-NL-March_2015.pdf. Accessed: May 11, 2015.

ATTENTION MEDICAID ELIGIBLE PROFESSIONALS

Don’t

AFMC is now offering

miss out!

no-cost assistance

to Medicaid eligible professionals* in Arkansas to achieve and sustain Meaningful Use.

2016 is the FINAL YEAR to begin participation in the Medicaid incentive program and earn the maximum incentive payment of $63,750! *MDs and DOs, dentists, nurse practitioners and certified nurse midwives, physician assistants and other specialists as established by guidelines from the Centers for Medicare & Medicaid Services (CMS).

For more information about this program and our services, visit afmc.org/healthit or call 501-212-8616.

THIS MATERIAL WAS PREPARED BY AFMC HEALTHIT, A DIVISION OF THE ARKANSAS FOUNDATION FOR MEDICAL CARE (AFMC), PURSUANT TO A CONTRACT WITH THE ARKANSAS DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL SERVICES. THE CONTENTS PRESENTED DO NOT NECESSARILY REFLECT ARKANSAS DHS POLICY. THE ARKANSAS DEPARTMENT OF HUMAN SERVICES IS IN COMPLIANCE WITH TITLES VI AND VII OF THE CIVIL RIGHTS ACT. MP2-AHIT.DMO.AD,6/15

Arkansas Hospitals I Summer 2015

25

Quality and Patient Safety

Learning from Each Other June 4 marked the day Arkansas’s 10 hospitals participating in the national On the CUSP: Stop CAUTI/ICU project presented their results and best practices to quality teams from across the state.

The workshop, “Stop CAUTI: Lessons Learned from Our ICU Teams,” was sponsored by the Arkansas Hospital Association’s ARbestHealth Quality Team and held at the Embassy Suites in Little Rock. Approximately 20 hospitals and 58 professionals were in attendance to learn how to apply the best practices and spread them throughout the hospital.

Speakers included Donna Givens and Dr. Hugh Burnett, clinical leads, Baptist Health Little Rock; Dr. J. Ryan Bariola,

UAMS; Angel Amick, Arkansas Heart Hospital; John May, Baptist Health – Little Rock; Kristin Williams, Mercy Fort Smith; and Pamela Brown and Nancy Godsey, Arkansas Hospital Association.

Statewide results of the ICU-specific project were shared. Presentation topics included the use of data to drive improvement, how culture affects results, overcoming barriers, integration using the ICU case review form and supporting work at the front lines.

Now serving Little Rock hospitals!

Look for our new Little Rock center coming soon to the corner of Markham & Shackleford.

arkbi.org 1-877-340-8777 26

Summer 2015 I Arkansas Hospitals

STATISTICS

Powerful Healthcare Data to Help Connect the Dots “Numbers have an important story to tell. They rely on you to give them a clear and convincing voice.”

~ Stephen Few, author, Signal: Understanding What Matters in a World of Noise

Each year, we present your Statistical Resource in the summer edition of Arkansas Hospitals magazine. This pull-out guide is your main source for comparative statistics that detail how Arkansas hospitals compare to other providers nationwide.

It helps you connect the dots between national data, state data and even local data. It’s also full of Arkansas-specific information that can fuel your communications with healthcare stakeholders in your community, as well as at the Statehouse and our nation’s Capitol.

Utilize its many charts and explanatory graphics to help explain what’s happening with American healthcare, how lower-than-cost reimbursements affect our state’s hospitals and how our hospitals not only serve as a vital economic foundation to Arkansas, but also serve as the main economic drivers in many of our communities.

As a special bonus this year, we are able to provide preliminary statistics on how the Arkansas Private Option is working…how many formerly uninsured citizens have been able to buy healthcare insurance and live healthier lives due to the APO, and how serving these now-insured citizens is positively affecting your hometown hospital. Many hospitals are able to continue serving local citizens only because the APO offsets a portion of federally-mandated Medicare reimbursement cuts.

Telling your hospital’s story, sometimes repeatedly, is the only way you can help people understand what today’s complex reimbursement system is doing to our hospitals’ ability to function well. This information will help you help others “connect the dots,” leading to a clear understanding of today’s healthcare terrain.

Arkansas Hospitals I Summer 2015

27

statistics

Distribution of Arkansas Licensed Hospitals

33 924 10 709 14 2,122 5 1,218 2 702 8 4,141

0 5 3 0 1 0

0 354 341 0 321 0

2 4 1 0 0 0

41 267 120 0 0 0

2 2 1 1 0 1

70 137 110 280 0 551

6 1 0 0 0 0

178 55 0 0 0 0

43 22 19 6 3 9

46 6,828 15 2,077 11 911 72 9,816

1 7 1 9

60 635 321 1,016

4 3 0 7

266 162 0 428

1 4 2 7

280 244 624 1,148

4 3 0 7

134 99 0 233

Licensed BEDS

All Hospitals Number

LTAC Hospitals Number

Licensed BEDS

Specialty Hospitals** Number

Licensed BEDS

Rehabilitation Hospitals Number

Licensed BEDS

Psychiatric Hospitals Number

Licensed BEDS

0-49* 50-99 100-199 200-299 300-399 400 +

Licensed BEDS

BED SIZE

Commumity Hospitals Number

By Type, Size & Control, 2015

1,213 1,522 2,693 1,498 1,023 4,692

Hospital Control Not-for-Profit Investor-owned Governmental Total

Source: Arkansas Hospital Association

*Includes 29 Critical Access Hospitals

56 7,568 32 3,217 14 1,856 102 12,641

** Includes Pediatric, Cardiac, Women’s, Surgical and VA Facilities

A Snapshot of Arkansas Hospital Association Members (2015): Number of Arkansas-licensed AHA Member Hospitals: General Med-Surg 42 Psychiatric

Urban (22) Long Term Care Rural (20) Rehabilitation Critical Access 28 Special Focus* Number of Arkansas-based non-hospital AHA-member organizations2 Arkansas-based AHA-member organizations Number of AHA member organizations per Congressional District

9 4 4 6

1st District 23 3rd District

2nd District 27 4th District Number of out-of-state border city AHA-member hospitals1 Total AHA member organizations Other Arkansas-licensed hospitals (non-AHA members)

21 25

General Med-Surg (1) Critical Access (1) Rehabilitation hospitals (3) Total Arkansas licensed hospitals Source: American Hospital Association, AHA Statistics 2015 *Cardiac, Pediatric, Surgical, Women’s, VA (2)

28

Summer 2015 I Arkansas Hospitals

93

+3 96

+2 98 +9

Special Purpose (1) Long Term Care Hospitals (3)

102 CHRISTUS St. Michael Health System (Texarkana), Regional One Health (Memphis) CARTI, 19th Medical Group (LRAFB), Arkansas Hospice

1 2

Arkansas Hospitals: Numbers Tell the Story 102

Hospitals of all types are located in cities, towns and communities throughout Arkansas. That group is composed of 72 general acute care community hospitals (including 29 Critical Access Hospitals); 7 long term acute care hospitals; 9 psychiatric hospitals; 7 rehabilitation hospitals; 2 hospitals that provide specialized surgical procedures; 2 Veterans Affairs hospitals; as well as a pediatric hospital, a cardiac hospital and a women’s hospital.

98

Hospitals and other healthcare organizations belong to the Arkansas Hospital Association. They include 93 Arkansas hospitals, 2 out-of-state, border city hospitals (Memphis and Texarkana), an outpatient cancer treatment facility, an inpatient hospice facility and a U.S. Air Force facility.

41

Arkansas counties are served by a single hospital. That includes 19 counties served by a single Critical Access Hospital.

43

Arkansas community hospitals have fewer than 100 beds, with 29 of them designated by the federal government as Critical Access Hospitals, having no more than 25 acute care beds.

22

Of Arkansas’s counties – almost 30% of all counties in the state – do not have a local hospital (however, 2 hospitals are located in Bowie County, Texas, which borders Miller County, Arkansas). Those counties without a hospital are: Sharp Pike Madison Montgomery Calhoun Lafayette Woodruff Nevada Poinsett Marion Crittenden Lee Newton Prairie Miller Cleveland Lincoln Perry Searcy Monroe Grant Lonoke

5 50%

Arkansas community hospitals have closed their doors since January 2004.

Of AHA member hospitals are charitable, not-for-profit organizations, while 36% of the hospitals are owned and operated by private, for-profit companies, and 14% are public hospitals owned and operated a city, county, state or federal government.

14,975

Arkansans sought inpatient or outpatient care from Arkansas’s hospitals each day in 2013 for illnesses, injuries and other conditions requiring medical attention.

36,313

Newborns were delivered in Arkansas hospitals in 2013. The Arkansas Medicaid program covered almost 65% of them.

43,825

Arkansans are employed in full- and part-time capacities by hospitals across the state, which have a combined annual payroll of $2.5 billion that helps to support about 7.7% of all non-farm jobs in the state through direct and indirect purchases of goods and services.

32,700

Other jobs in local communities across Arkansas are supported through hospital employees’ personal purchases of groceries, clothing, cars, appliances, housing and many other goods and services.

$385 Million

Was spent by Arkansas hospitals in 2013 providing uncompensated care for patients who could not afford to pay for the cost of their services.

$10.3 Billion

Is the estimated overall annual economic impact in 2013 that Arkansas hospitals provided for the state, based on direct spending on goods and services, their impact on other businesses throughout the economy, jobs, and employees’ spending.

Arkansas Hospitals I Summer 2015

29

statistics

30

Summer 2015 I Arkansas Hospitals

Additional DPUs/Services Offered

Helena Hot Springs Hot Springs Hot Springs Hot Springs Jacksonville Johnson Jonesboro

Licensed BEDS

Heber Springs

Medicare Pmt. Status

Fayetteville Fayetteville Fayetteville Fayetteville Fayetteville Fordyce Forrest City Fort Smith Fort Smith Fort Smith Gravette Harrison

Type of Hospital

Fayetteville

Baptist Health Medical Center - Arkadelphia Little River Memorial Hospital Valley Behavioral Health System White River Medical Center Rivendell Behavioral Health Services Saline Memorial Hospital Northwest Medical Center - Bentonville Mercy Hospital Berryville Great River Medical Center Mercy Hospital Booneville Community Medical Center of Izard County Ouachita County Medical Center Johnson Regional Medical Center Ozark Health Medical Center Conway Regional Medical Center Conway Regional Rehabilitation Hospital Ashley County Medical Center Chambers Memorial Hospital River Valley Medical Center DeWitt Hospital Delta Memorial Hospital Medical Center of South Arkansas Eureka Springs Hospital HEALTHSOUTH Rehab. Hospital of Fayetteville Physicians' Specialty Hospital Springwoods Behavioral Health Washington Regional Medical Center Veterans Healthcare System of the Ozarks Vantage Point of NWA Dallas County Medical Center Forrest City Medical Center CHRISTUS Dubuis Hospital of Fort Smith Sparks Regional Medical Center Mercy Hospital Fort Smith Ozarks Community Hospital North Arkansas Regional Medical Center Baptist Health Medical Center - Heber Springs Helena Regional Medical Center CHRISTUS Dubuis Hospital of Hot Springs Levi Hospital National Park Medical Center CHI St. Vincent Hot Springs North Metro Medical Center Willow Creek Women's Hospital NEA Baptist Memorial Hospital

Control

Arkadelphia Ashdown Barling Batesville Benton Benton Bentonville Berryville Blytheville Booneville Calico Rock Camden Clarksville Clinton Conway Conway Crossett Danville Dardanelle DeWitt Dumas El Dorado Eureka Springs

Hospital

City

AHA Member Organizations

PNP County Corporate PNP Corporate PNP Corporate PNP County PNP PNP PNP PNP PNP PNP PNP PNP PNP Corporate PNP PNP Corporate Corporate

Medical-Surgical Medical-Surgical Psychiatric Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Rehabilitation Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical

CAH CAH IP Psych RRC/SCH IP Psych Urban Urban CAH Rural CAH CAH Rural/SCH Rural/MDH CAH Urban IRF CAH Rural CAH CAH CAH RRC/SCH CAH

25 25 75 235 77 167 177 25 168 25 25 98 80 25 154 26 33 41 35 25 25 166 15

SB/HH SB/HH/IMF

Corporate

Rehabilitation

IRF

60

Corporate Corporate PNP Federal Corporate County Corporate PNP Corporate PNP Corporate PNP

Medical-Surgical Psychiatric Medical-Surgical Veterans Admin.

Psychiatric Medical-Surgical Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical

Urban IP Psych Urban IP Psych CAH Rural/SCH LTCH Urban Urban CAH RRC/SCH

21 80 366 73 114 25 118 25 492 336 25 174

PNP

Medical-Surgical

CAH

25

SB/HH

Corporate PNP PNP Corporate PNP Corporate Corporate PNP

Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Med-Surg (OB) Medical-Surgical

Rural LTCH Urban RRC Urban Urban Urban RRC

155 27 50 166 282 73 64 181

SB/Rehab/HH

SNF/Psych/Rehab Psych/Rehab/HH HH HH/SB SB/HH SB/HH SB/SNF/Psych/Rehab/HH SB/SNF/Psych/Rehab/HH SB/HH\IMF Psych/Rehab/HH SB/Psych/HH SB/HH SB/Psych/HH SB/HH/IMF HH/SB Rehab SB/HH

HH Psych SB/HH Psych/HH HH SNF/Rehab/HH HH/Psych/DPU

Psych/Rehab Rehab Psych/Rehab/HH Psych/Rehab/HH

Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Magnolia Malvern Maumelle McGehee Memphis, TN Mena Monticello Morrilton Mountain Home Mountain View Nashville Newport North Little Rock North Little Rock North Little Rock Osceola Ozark Paragould Paris Piggott Pine Bluff Pocahontas Rogers Russellville Salem Searcy Searcy Sherwood Sherwood Siloam Springs Springdale Stuttgart Texarkana Texarkana, TX Van Buren Waldron Walnut Ridge Warren Wynne

Medical-Surgical RRC Medical-Surgical CAH Med-Surg (Ped) Children's Med-Surg Arkansas Heart Hospital Corporate Urban (Cardiac) Arkansas State Hospital State Psychiatric IP Psych Baptist Health Extended Care Hospital PNP Long Term Care LTCH Baptist Health Medical Center - Little Rock PNP Medical-Surgical Urban Baptist Health Rehabilitation Institute PNP Rehabilitation IRF CARTI PNP OP Cancer Center Central Arkansas Veterans Healthcare System Federal Veterans Affairs Pinnacle Pointe Hospital Corporate Psychiatric IP Psych CHI St. Vincent Infirmary Medical Center PNP Medical-Surgical Urban UAMS Medical Center State Medical-Surgical Urban Magnolia Regional Medical Center City Medical-Surgical Rural/SCH Baptist Health Medical Center - Hot Spring PNP Medical-Surgical Rural/MDH Cty Methodist Behavioral Hospital PNP Psychiatric IP Psych McGehee Hospital PNP Medical-Surgical CAH Regional Medical Center at Memphis PNP Medical-Surgical Urban (TN) Mena Regional Health System City Medical-Surgical Rural/SCH Drew Memorial Hospital County Medical-Surgical Rural/SCH CHI St. Vincent Morrilton PNP Medical-Surgical CAH Baxter Regional Medical Center PNP Medical-Surgical RRC/SCH Stone County Medical Center PNP Medical-Surgical CAH Howard Memorial Hospital PNP Medical-Surgical CAH Unity Health - Harris Medical Center PNP Medical-Surgical Rural Arkansas Hospice PNP Inpatient Hospice Baptist Health Medical Center - NLR PNP Medical-Surgical Urban The BridgeWay Corporate Psychiatric IP Psych SMC Regional Medical Center County Medical-Surgical CAH Mercy Hospital Ozark PNP Medical-Surgical CAH Arkansas Methodist Medical Center PNP Medical-Surgical RRC Mercy Hospital Paris PNP Medical-Surgical CAH Piggott Community Hospital City Medical-Surgical CAH Jefferson Regional Medical Center PNP Medical-Surgical Urban/SCH Five Rivers Medical Center PNP Medical-Surgical Rural/SCH Mercy Hospital Northwest Arkansas PNP Medical-Surgical Urban Saint Mary's Regional Medical Center Corporate Medical-Surgical RRC Fulton County Hospital County Medical-Surgical CAH Advanced Care Hospital of White County PNP Long Term Care LTCH Unity Health - White County Medical Center PNP Medical-Surgical RRC/SCH CHI St. Vincent North PNP Medical-Surgical Urban St. Vincent Rehabilitation Hospital Corporate Rehabilitation IRF Siloam Springs Regional Hospital Corporate Medical-Surgical Urban Northwest Medical Center - Springdale Corporate Medical-Surgical Urban Baptist Health Medical Center - Stuttgart PNP Medical-Surgical Rural/MDH Riverview Behavioral Health Corporate Psychiatric IP Psych CHRISTUS St. Michael Health System PNP Medical-Surgical Urban (TX) Sparks Medical Center - Van Buren Corporate Medical-Surgical Urban Mercy Hospital Waldron PNP Medical-Surgical CAH Lawrence Memorial Hospital County Medical-Surgical CAH Bradley County Medical Center PNP Medical-Surgical CAH CrossRidge Community Hospital PNP Medical-Surgical CAH

Additional DPUs/Services Offered

Medicare Pmt. Status

Type of Hospital

PNP PNP PNP

Licensed BEDS

St. Bernards Medical Center Chicot Memorial Medical Center Arkansas Children's Hospital

Control

Hospital

City Jonesboro Lake Village Little Rock

438 25 280

Psych/HH SB/HH Rehab

112 321 55 843 120 0 551 124 615 430 49 72 60 25 631 65 49 25 268 25 20 133 40 225 103 25 25 129 16 25 471 50 208 170 25 27 438 69 60 73 414 49 62 312 103 24 25 33 25

SNF/Psych/HH Psych/Rehab Outpt. Psych Psych/HH SB/HH Psych/HH SB/HH SB/Psych/Rehab SB/HH SB/HH Psych/Rehab/HH SB SB/HH SB/Psych Rehab/HH SB/Psych SB SB/Rehab/HH SB SB/HH SNF/Psych/Rehab/HH Psych/HH Psych/HH Psych/Rehab SB Psych/Rehab/HH SB Psych/Rehab/HH SB

SB SB/IMF+G38 SB/Psych/HH SB/HH

PNP=Private Non-Profit; CAH=Critical Access Hospital; RRC=Rural Referral Center; SCH=Sole Community Hospital MDH=Medicare Dependent Hospital; SB=Swing Beds; DPU=Distinct Part Unit; HH=Home Health

Arkansas Hospitals I Summer 2015

31

statistics

September 21, 2014 June 11, 2014 January 28, 2011 September 28, 2010

Little Rock, AR

September 22, 2014

Level II (4) Baptist Health Medical Center CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Washington Regional Medical Center

Little Rock, AR Hot Springs, AR Little Rock, AR

December 20, 2010 October 10, 2011 May 3, 2011

Fayetteville, AR

March 27, 2012

North Little Rock, AR Mountain Home, AR Lake Village, AR

May 12, 2011

Texarkana, TX

March 1, 2011

Conway, AR Pine Bluff, AR Clarksville, AR El Dorado, AR Fort Smith, AR

September 21, 2011 August 20, 2014 January 9, 2012 March 8, 2013 March 6, 2012

Rogers, AR

February 22, 2012

Harrison, AR

March 1, 2013

Bentonville, AR

February 24, 2012

Springdale, AR

July 10, 2013

Russellville, AR

August 3, 2011

Benton, AR Jonesboro, AR

January 11, 2012 August 15, 2012

Searcy, AR

October 24, 2011

Texarkana, TX Batesville, AR

January 6, 2012 January 24, 2012

Level III (19) Baptist Health Medical Center – NLR Baxter Regional Medical Center Chicot Memorial Medical Center CHRISTUS Saint Michael Health System Conway Regional Medical Center Jefferson Regional Medical Center Johnson Regional Medical Center Medical Center of South Arkansas Mercy Hospital Fort Smith Mercy Hospital Northwest Arkansas North Arkansas Regional Medical Center Northwest Medical Center – Bentonville Northwest Medical Center – Springdale Saint Mary’s Regional Medical Center Saline Memorial Hospital St. Bernards Medical Center Unity Health – White County Medical Center Wadley Regional Medical Center White River Medical Center Level IV (41) Arkansas Methodist Medical Center Ashley County Medical Center Baptist Health Medical Center – Arkadelphia

December 5, 2011 March 2, 2012

Designation Date

Little Rock, AR Memphis, TN Springfield, MO Memphis, TN

City/State

Level I (5) Arkansas Children's Hospital Le Bonheur Children’s Hospital Mercy Hospital Springfield Regional Medical Center University of Arkansas for Medical Sciences (UAMS)

Heber Springs, AR

December 13, 2011

Malvern, AR

November 2, 2011

Stuttgart, AR

December 14, 2012

Jonesboro, AR Danville, AR Morrilton, AR North Little Rock, AR

May 25, 2011 May 20, 2011 September 21, 2011 September 14, 2011

Calico Rock, AR

January 10, 2012 September 24, 2012 March 1, 2012 March 13, 2013

Siloam Springs Regional Hospital

Wynne, AR Fordyce, AR DeWitt, AR Eureka Springs, AR Pocahontas, AR Forrest City, AR Salem, AR Blytheville, AR Helena, AR Nashville, AR Walnut Ridge, AR Ashdown, AR Magnolia, AR McGehee, AR Mena, AR Berryville, AR Booneville, AR Ozark, AR Paris, AR Waldron, AR Jacksonville, AR Camden, AR Clinton, AR Piggott, AR Dardanelle, AR Siloam Springs, AR

South Mississippi County Regional Medical Center

Osceola, AR

January 7, 2013

Hospital Name

Designation Date

City/State

Hospital Name

Designated Trauma Centers

Baptist Health Medical Center – Heber Springs Baptist Health Medical Center – Hot Spring County Baptist Health Medical Center – Stuttgart NEA Baptist Memorial Hospital Chambers Memorial Hospital CHI St. Vincent Morrilton CHI St. Vincent North Little Rock Community Medical Center of Izard County CrossRidge Community Hospital Dallas County Medical Center DeWitt Hospital Eureka Springs Hospital Five Rivers Medical Center Forrest City Medical Center Fulton County Hospital Great River Medical Center Helena Regional Medical Center Howard Memorial Hospital Lawrence Memorial Hospital Little River Memorial Hospital Magnolia Regional Medical Center McGehee Hospital Mena Regional Health System Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron North Metro Medical Center Ouachita County Medical Center Ozark Health Medical Center Piggott Community Hospital River Valley Medical Center

March 28, 2012 May 25, 2011 January 20, 2012 May 25, 2011 January 8, 2013 March 5, 2013 May 25, 2011 December 16, 2011 May 25, 2011 December 14, 2011 October 25, 2012 January 27, 2012 October 12, 2011 November 27, 2012 January 5, 2012 May 25, 2011 March 8, 2012 January 22, 2013 November 16, 2011 June 24, 2011 November 10, 2011 March 14, 2012 March 25, 2013

Paragould, AR

May 30, 2012

Stone County Medical Center

Mountain View, AR

August 4, 2011

Crossett, AR

February 22, 2013

Van Buren, AR

March 28, 2012

Arkadelphia, AR

May 25, 2011

Sparks Medical Center – Van Buren Unity Health – Harris Hospital

Newport, AR

March 28, 2013

Source: Arkansas Department of Health (Last updated January 30, 2015)

32

Summer 2015 I Arkansas Hospitals

Arkansas Ashley Baxter Benton Boone Bradley Calhoun Carroll Chicot Clark Clay Cleburne Cleveland Columbia Conway Craighead Crawford Crittenden Cross Dallas Desha Drew Faulkner Franklin Fulton Garland Grant Greene Hempstead Hot Spring Howard Independence Izard Jackson Jefferson Johnson Lafayette Lawrence Lee Lincoln Little River Logan Lonoke Madison Marion Miller Mississippi Monroe Montgomery Nevada

●

●

●

●

● ●

● ● ● ● ● ● ●

●

●

● ●

●

●

Multiple Hospitals (12)

Single Non-CAH Hospital (22)

Single Critical Access Hospital (19)

No Hospital (22)

Multiple Hospitals (12) ●

●

● ●

●

● ●

●

●

● ●

●

●

● ● ● ● ●

●

Single Non-CAH Hospital (22)

Single Critical Access Hospital (19)

No Hospital (22)

Distribution of Arkansas Community Hospitals by County

● Newton ● Ouachita ● Perry ● Phillips ● Pike ● Poinsett ● Polk ● Pope ● Prairie ● Pulaski ● Randolph ● Saline ● Scott ● Searcy ● Sebastian DISTRIBUTION OF ● Sevier ARKANSAS COMMUNITY ● Sharp ● BY COUNTY St. Francis HOSPITALS ● Stone ● Union DISTRIBUTION OF ● Van Buren ARKANSAS COMMUNITY ● Washington HOSPITALS

BY COUNTY ● White ● Woodruff ● Yell

● ● ● ● ● ● ● ●

●

arkh

●

●

ARKANSAS COUNTIES WITH NO HOSPITAL arkhospitals.org

ARKANSAS COUNTIES WITH arkhospitals.org A SINGLE CRITICAL ACCESS HOSPITAL

●

ARKANSAS COUNTIES WITH NO HOSPITAL

ARKANSAS COUNTIES WITH SINGLE NON-CAH HOSPITAL

ARKANSAS COUNTIES WITH A SINGLE CRITICAL ACCESS HOSPITAL

ARKANSAS COUNTIES WITH MULTIPLE HOSPITALS

ARKANSAS COUNTIES WITH SINGLE NON-CAH HOSPITAL

Arkansas Hospitals I Summer 2015

ARKANSAS COUNTIES WITH MULTIPLE HOSPITALS

33

statistics

Arkansas Investor-Owned, Operated or Managed Hospitals, 2015

Arkansas Heart Hospital, Little Rock Arkansas Surgical Hospital, North Little Rock# Cornerstone Hospital of Little Rock DeQueen Regional Medical Center, Inc.# Eureka Springs Hospital, Eureka Springs Forrest City Medical Center, Forrest City HealthSouth Rehab. Hospital of Fayetteville* HealthSouth Rehab. Hospital of Fort Smith# HealthSouth Rehab. Hospital of Jonesboro# Helena Regional Medical Center, Helena Medical Center of South Arkansas, El Dorado National Park Medical Center, Hot Springs North Metro Medical Center, Jacksonville Northwest Medical Center – Bentonville Northwest Medical Center – Springdale Ozarks Community Hospital, Gravette Physicians’ Specialty Hospital, Fayetteville Pinnacle Point Hospital, Little Rock, Benton Regency Hospital, Springdale Rivendell Behavioral Health Services, Benton River Valley Medical Center, Dardanelle Riverview Behavioral Health, Texarkana Saint Mary’s Regional Medical Center, Russellville Select Specialty Hospital – Fort Smith# Siloam Springs Regional Hospital Sparks Health System, Fort Smith Sparks Medical Center – Van Buren Springwoods Behavioral Health, Fayetteville The BridgeWay, North Little Rock Valley Behavioral Health System, Barling Vantage Point of NWA, Fayetteville Willow Creek Women’s Hospital, Johnson #

34

Universal Health Services

Select Medical Corporation

Regency Hospital Company

Physicians’ Specialty Hospital, LLC

OCH Health System

JCE Healthcare Group

HealthSouth Corporation

● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Not an AHA-member hospital *Partnership with Washington Regional Medical System

Summer 2015 I Arkansas Hospitals

Community Health Systems, Inc.

Capella Healthcare

Arkansas Surgical Hospital, LLC

ARK-MED, LLC

Allegiance Health Management

Acadia Healthcare

Corporate Owner/Manager

●

Members and Affiliates of Non-Profit, Multi-Hospital Systems, 2015

Advanced Care Hospital of White County, Searcy Baptist Health Extended Care Hospital, Little Rock Baptist Health Medical Center – Arkadelphia Baptist Health Medical Center – Heber Springs Baptist Health Medical Center – Hot Spring County Baptist Health Medical Center – Little Rock Baptist Health Medical Center – North Little Rock Baptist Health Medical Center – Stuttgart Baptist Health Rehabilitation Institute, Little Rock CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Medical Center, Little Rock CHI St. Vincent Morrilton CHI St. Vincent North, Sherwood CHRISTUS Dubuis Hospital of Fort Smith# CHRISTUS Dubuis Hospital of Hot Springs Conway Regional Medical Center Conway Regional Rehabilitation Hospital CrossRidge Community Hospital, Wynne Lawrence Memorial Hospital, Walnut Ridge Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Fort Smith Mercy Hospital Northwest Arkansas Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron NEA Baptist Memorial Hospital, Jonesboro St. Bernards Medical Center, Jonesboro St. Vincent Rehabilitation Hospital, Sherwood* Stone County Medical Center, Mountain View Unity Health – Harris Medical Center, Newport Unity Health – White County Medical Center, Searcy Wadley Regional Medical Center, Hope# White River Medical Center, Batesville #

White River Health System

Unity Health

Wadley Health System

Sisters of Mercy Health System

Olivetan Benedictine Sisters

CHRISTUS Dubuis Health System

Conway Regional Health System

Catholic Health Initiatives

Baptist Memorial Healthcare Corp.

Baptist Health

Not-for-Profit System

●

● ● ● ● ● ● ● ●

● ● ● ●

● ●

● ●

● ●

● ●

● ● ● ● ● ● ●

●

●

● ●

●

●

Not an AHA-member hospital *A joint venture between CHI St. Vincent and HealthSouth

Arkansas Hospitals I Summer 2015

35

36

Summer 2015 I Arkansas Hospitals $7,958,120,928 $4,807,606,026 $169,341,834 $31,674,701 $5,008,622,561 $1,956,438,729 $4,921,858,438 -2.38% 1.73% $4,146.18 $1,442.45 $1,476.73 $587.00 39.8% 7.6% 65.2% 40.3% 38.8 697.0 131.8 2,855

7.5% 64.2% 39.5% 38.6 679.1 130.4 2,811

3,332,945 56.3% 102,681 136,565 239,246 57.08% 43,727 4.79 $8,250,771,568 $5,568,220,057 $13,818,991,625 $694,032,836 $359,231,835 $9,011,385,599

3,153,839 55.0% 116,019 147,222 263,241 55.93% 42,540 4.92 $7,750,748,662 $5,054,791,861 $12,805,540,523 $628,063,918 $326,126,835 $8,220,632,392 $4,584,908,131 $162,135,731 $56,666,788 $4,803,710,650 $1,825,435,512 $4,585,732,810 -0.02% 4.54% $4,060.30 $1,453.75 $1,454.02 $578.80 39.8%

73.8%

75.3%

$7,266,441,639

9,686 376,158 1,989,969 5.29 3,671,422 4,972,752

2008

9,502 366,452 1,908,909 5.21 3,942,397 5,236,516

2007

Source: American Hospital Association, Hospital Statistics , 2015

BEDS AVAILABLE ADMISSIONS PATIENT DAYS AVG. LENGTH OF STAY NON-EMERGENCY OP VISITS OUTPATIENT VISITS NON-EMERGENCY AS % OF TOTAL OP VISITS ADJUSTED PATIENT DAYS OCCUPANCY RATE INPATIENT SURGERIES OUTPATIENT SURGERIES TOTAL SURGERIES OUTPATIENT AS % OF TOTAL SURGERIES TOTAL FTE EMPLOYEES FTEs PER ADJUSTED OCCUPIED BED GROSS REVENUE, INPATIENT GROSS REVENUE, OUTPATIENT GROSS PATIENT REVENUE BAD DEBTS CHARITY TOTAL DEDUCTIONS MEDICARE, MEDICAID & OTHER PAYER WRITEOFFS NET PATIENT REVENUE OTHER OPERATING REVENUE NON-OPERATING REVENUE TOTAL NET REVENUE PAYROLL EXPENSE TOTAL EXPENSE PATIENT REVENUE MARGIN TOTAL MARGIN CHARGE PER ADJUSTED INPATIENT DAY RECEIPTS PER ADJUSTED INPATIENT DAY EXPENSE PER ADJUSTED INPATIENT DAY PAYROLL PER ADJUSTED INPATIENT DAY PAYROLL AS % OF TOTAL EXPENSE BAD DEBT AND CHARITY AS % OF TOTAL CHARGE TOTAL DEDUCTIONS AS % OF TOTAL CHARGE OUTPT. REVENUE AS % OF TOTAL PATIENT REVENUE ADMISSIONS PER BED PATIENT DAYS PER 1,000 POPULATION ADMISSIONS PER 1,000 POPULATION POPULATION (000's)

INDICATOR

39.8 677.6 131.7 2,889

42.2%

66.8%

7.5%

$5,056,912,363 $193,955,665 $73,678,302 $5,324,546,330 $2,051,043,227 $5,161,176,256 -2.06% 3.07% $4,495.50 $1,493.52 $1,524.31 $605.76 39.7%

$9,024,612,103

3,385,902 56.1% 101,681 143,094 244,775 58.46% 43,933 4.74 $8,800,185,973 $6,421,124,915 $15,221,310,888 $763,238,417 $376,548,005 $10,164,398,525

73.2%

9,565 380,478 1,957,556 5.14 3,692,949 5,047,981

2009

39.2 656.0 127.3 2,910

43.5%

67.5%

7.8%

$5,288,563,017 $221,189,649 $69,605,801 $5,579,358,467 $2,086,427,649 $5,246,234,974 0.80% 5.97% $4,825.67 $1,566.09 $1,553.56 $617.85 39.8%

$9,741,216,956

3,376,921 55.3% 104,912 155,784 260,696 59.76% 44,300 4.79 $9,211,448,957 $7,084,460,315 $16,295,909,272 $836,094,643 $430,034,656 $11,007,346,255

72.6%

9,451 370,401 1,908,843 5.15 3,645,562 5,022,211

2010

Financial And Utilization Indicators, 2007-2013

Arkansas Community Hospital

38.6 640.9 123.7 2,938

44.9%

69.6%

8.0%

$5,280,968,970 $220,871,438 $52,395,249 $5,554,235,657 $2,207,878,125 $5,236,539,234 0.84% 5.72% $5,091.68 $1,546.43 $1,533.42 $646.53 42.2%

$10,711,710,340

3,414,948 54.7% 102,964 160,223 263,187 60.88% 44,681 4.78 $9,587,181,461 $7,800,635,792 $17,387,817,253 $907,511,670 $487,626,273 $12,106,848,283

71.1%

9,425 363,516 1,882,912 5.18 3,419,087 4,810,624

2011

37.5 625.8 119.6 2,949

46.5%

68.8%

7.8%

$5,819,244,204 $256,162,838 $85,908,563 $6,161,315,605 $2,457,349,493 $5,759,240,612 1.03% 6.53% $5,405.59 $1,687.63 $1,670.22 $712.65 42.7%

$11,358,593,139

3,448,184 53.7% 101,156 174,095 275,251 63.25% 44,912 4.75 $9,975,710,168 $8,663,764,850 $18,639,475,018 $944,515,460 $517,122,215 $12,820,230,814

73.0%

9,417 352,752 1,845,443 5.23 3,743,252 5,125,435

2012

37.3 614.1 119.1 2,959

47.8%

71.0%

7.9%

$5,770,659,253 $269,134,329 $87,213,991 $6,127,007,573 $2,526,671,404 $5,917,263,241 -2.54% 3.42% $5,772.82 $1,673.54 $1,716.05 $732.75 42.7%

$12,557,096,273

3,448,184 52.7% 95,834 174,981 270,815 64.61% 42,795 4.53 $10,391,798,234 $9,513,953,822 $19,905,752,056 $991,141,593 $586,854,937 $14,135,092,803

71.9%

9,452 352,362 1,817,099 5.16 3,674,902 5,113,519

-2.87% -7.85% -8.24% 4.91%

17.75%

7.14%

5.24%

33.13% 16.09% 14.87% 23.13% 7.19%

26.92% 57.99% 51.60% 28.26% 34.62% 25.59%

56.32%

9.33% -2.45% -12.81% 18.25% 4.56% 13.09% 5.58% -3.44% 28.71% 71.40% 45.56% 50.39% 58.56% 55.95%

-2.99%

-0.89% -3.74% -3.32% 0.43% -5.05% -2.12%

% Change 2007 2013 -2013

Arkansas Publicly Owned/ Operated Hospitals Hospital Magnolia Regional Medical Center Mena Regional Health System Piggott Community Hospital Dallas County Medical Center Drew Memorial Hospital Fulton County Hospital Great River Medical Center Lawrence Memorial Hospital

Government Entity City of Magnolia City of Mena City of Piggott Dallas County Drew County Fulton County Mississippi County Lawrence County

Government Entity Little River County Mississippi County State of Arkansas State of Arkansas

Hospital Little River Memorial Hospital SMC Regional Medical Center Arkansas State Hospital UAMS Medical Center Central Arkansas Veterans Healthcare System Veterans Healthcare System of the Ozarks

United States United States

Annual Amount Estimate

Year Approved

Rate

Ashley County Medical Center

Yes

0.25%

2009

$600,000

Baptist Health Medical Center – Hot Spring County

Yes

0.5%

2009

$1,200,000

Baptist Health Medical Center – Stuttgart

Yes

1.00%

2014

$2,200,000

Bradley County Medical Center

Yes

1.00%

Yes

.4 mill

2009

$1,200,000

Chicot Memorial Hospital**

Yes

1.00%

Yes

.5 mill

2003

$1,100,000

CrossRidge Community Hospital

Yes

1.00%

2000

$2,100,000

Dallas County Medical Center

Yes

1.00%

2005

$840,000

Delta Memorial Hospital*

Yes

2.00%

2004

$360,000

DeWitt Hospital

Yes

1.50%

2003

$850,000

Five Rivers Medical Center

Yes

1.00%

2007

$700,000

Fulton County Hospital

Yes

0.50%

2007

$288,000

Johnson Regional Medical Center

No

1977

$65,000

Lawrence Memorial Hospital

Yes

1.00%

2014

$1,560,000

Magnolia Hospital (A)

Yes

1.125%

2007

$2,600,000

0.25%

2004

$540,000

Magnolia Hospital (B)

Yes

Rate

Tax

Millage

Arkansas Hospitals Receiving Local Tax Support, 2015

.3 mill

Mercy Hospital Booneville

Yes

1.00%

2003

$360,000

Mercy Hospital Ozark

Yes

1.00%

2001

$350,000

McGehee Hospital

Yes

1.00%

1999

$600,000

Mississippi County Hospital System

Yes

0.50%

2015/1952

$2,732,000

Ouachita County Medical Center

Yes

Piggott Community Hospital

Yes

1.00%

CHI St. Vincent Morrilton

Yes

0.25%

Yes

1 mill

2015 Yes

.25 mill

2010

$360,000

2008

$1,000,000

*A 2% sales tax was approved in 2004/2005 to build the hospital building. Due to refinancing, a portion of that 2% now goes to support other city buildings. Another refinancing in 2013 allowed some savings to be allocated to maintenance and equipment for the hospital for a 5-year period. That is expected to generate about $360,000 annually. **Annually receives approximately $1.1 million on a bond issue that was used to build the new building, plus $1.1 million received from a sales and use tax, plus $264,000 from a 1/2 millage property tax.

Source: Self-reported information provided to the Arkansas Hospital Association

Arkansas Hospitals I Summer 2015

37

statistics

62,996 59,567 56,807 54,180 53,466 52,837 51,345 49,585 48,081 47,158 45,578 43,875 42,940 42,226 40,656 40,214 40,104 39,277 38,895 38,777 38,094 37,956 37,897 37,864 37,246 37,201 36,539 36,325 36,053 35,805 35,796 35,188 34,366 34,047 33,711 33,586 33,481 33,421 33,224 31,714 31,494 31,441 30,557 30,344 29,638 29,629 29,492 27,157 26,965 25,748 25,718 24,873 16,965

District of Columbia California New York Washington Alaska Colorado Minnesota Massachusetts Oregon New Hampshire Hawaii Delaware Rhode Island South Carolina Maine Connecticut South Dakota Idaho North Dakota Vermont Pennsylvania New Jersey Ohio U.S.** Montana Indiana Utah Nebraska Wyoming Texas Wisconsin Maryland Missouri Kansas Illinois Michigan WSC Region* Virginia New Mexico Georgia North Carolina Arizona Nevada Iowa Florida Mississippi West Virginia Tennessee Louisiana Oklahoma Kentucky Arkansas Alabama

Margin on Patient Care Services

California New Jersey Colorado Nevada District of Columbia South Carolina Pennsylvania Alaska Texas Florida Washington Arizona WSC Region* U.S.** Connecticut New York Ohio New Hampshire Illinois Tennessee Georgia Virginia Indiana Utah Kansas New Mexico Mississippi Hawaii Minnesota Missouri Rhode Island Oklahoma Alabama Louisiana North Carolina Nebraska South Dakota Idaho Massachusetts Wisconsin Delaware Kentucky Oregon Michigan North Dakota Vermont Arkansas Maine Iowa Montana Wyoming West Virginia Maryland

Average Payment Per Hospital Stay

Average Charge Per Hospital Stay

1 2 3 4 5 6 7  8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Average Operating Cost Per Hospital Stay

rank

Comparative Financial Indicators 18,503 16,606 16,050 15,540 15,533 15,075 14,965 14,665 14,298 14,054 14,044 13,941 13,540 13,532 13,471 13,462 13,332 13,244 13,097 13,061 12,990 12,794 12,744 12,739 12,646 12,379 12,347 12,239 12,229 12,134 12,132 12,061 12,004 11,577 11,506 11,500 11,277 11,145 11,125 11,052 11,031 11,017 10,913 10,708 10,151 9,947 9,945 9,917 9,914 9,787 9,372 8,767 8,082

District of Columbia Alaska California Colorado Washington Minnesota New Hampshire New York Delaware South Carolina Utah Oregon Idaho Hawaii South Dakota Connecticut Vermont Nebraska Massachusetts Pennsylvania Indiana Maine North Dakota Wisconsin U.S.** Ohio Wyoming Montana New Jersey Rhode Island Texas Maryland New Mexico Virginia Kansas Missouri Illinois Nevada Michigan North Carolina WSC Region* Arizona Georgia Florida Tennessee Iowa Oklahoma Mississippi West Virginia Louisiana Kentucky Arkansas Alabama

18,253 17,681 16,601 16,004 15,289 15,103 14,742 14,730 14,479 14,457 14,140 13,919 13,802 13,653 13,372 13,302 13,225 13,220 13,009 12,983 12,900 12,776 12,768 12,750 12,696 12,686 12,624 12,480 12,392 12,165 12,142 11,866 11,860 11,771 11,672 11,632 11,424 11,338 11,265 11,260 11,243 11,176 11,159 10,531 10,337 10,293 9,983 9,980 9,757 9,651 9,477 8,550 8,435

Utah Alaska Nebraska South Carolina New Mexico Colorado Virginia Wisconsin New Hampshire Alabama Tennessee Idaho Indiana Nevada Delaware Florida Wyoming North Carolina Oklahoma Arizona Vermont Kentucky Georgia Minnesota Kansas Mississippi South Dakota Texas California Pennsylvania WSC Region* U.S.** Ohio Illinois Connecticut Montana District of Columbia Maryland Washington West Virginia Michigan Arkansas North Dakota Louisiana Oregon Hawaii Missouri New Jersey Iowa Maine New York Rhode Island Massachusetts

*Average for the West South Central (WSC) Region, CMS Region VI, which includes Arkansas, Louisiana, New Mexico, Oklahoma and Texas **Average for the entire United States (U.S.) Source: American Hospital Association, Hospital Statistics, 2015

38

Summer 2015 I Arkansas Hospitals

12.68% 12.15% 7.42% 6.40% 6.20% 5.80% 5.32% 4.85% 4.66% 4.18% 4.06% 4.04% 4.04% 3.75% 3.71% 3.60% 3.13% 2.03% 1.96% 1.42% 1.24% 1.11% 0.96% 0.92% 0.81% 0.33% 0.30% 0.07% -0.03% -0.06% -0.31% -0.34% -0.46% -0.71% -1.21% -1.34% -1.37% -1.64% -1.64% -1.92% -2.08% -2.54% -2.57% -2.73% -2.73% -2.86% -3.20% -3.25% -4.03% -5.44% -8.96% -11.30% -12.73%

5.6 4.9 4.3 4.0 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3.2 3.2 3.1 3.1 3.1 3.1 3.0 2.9 2.9 2.7 2.7 2.7 2.6 2.6 2.6 2.5 2.5 2.5 2.5 2.5 2.4 2.3 2.3 2.2 2.2 2.2 2.2 2.1 2.1 2.1 2.1 2.1 2.0 2.0 2.0 2.0 1.9 1.8 1.8 1.8 1.7 1.7

District of Columbia West Virginia Alabama Kentucky North Dakota Missouri Pennsylvania Mississippi Tennessee Ohio Florida Louisiana South Dakota Arkansas New York Massachusetts Michigan Delaware New Jersey Illinois Connecticut Oklahoma Nebraska Indiana U.S.** Maryland Rhode Island Iowa Maine Minnesota North Carolina WSC Region* Kansas Wisconsin Arizona Texas Georgia Virginia Montana Nevada New Hampshire Washington Oregon South Carolina California New Mexico Utah Hawaii Alaska Idaho Colorado Vermont Wyoming

Outpatient Visits

District of Columbia South Dakota Mississippi North Dakota West Virginia Montana Nebraska Kansas Louisiana Wyoming Arkansas Kentucky Iowa Alabama Missouri Tennessee Pennsylvania Oklahoma Ohio New York Minnesota Florida South Carolina Indiana Maine WSC Region* Michigan U.S.** Georgia Illinois Massachusetts New Jersey Texas North Carolina Wisconsin Delaware Virginia Connecticut Rhode Island New Hampshire Alaska Maryland Idaho Nevada Arizona Hawaii Colorado Vermont California New Mexico Utah Washington Oregon

Inpatient Days

Hospital Beds

1 2 3 4 5 6 7  8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Admissions

rank

for Community Hospitals 205.3 143.1 132.7 131.7 131.0 129.2 128.2 127.1 126.1 125.8 123.1 122.3 120.6 119.1 118.7 117.6 117.1 113.1 113.0 110.8 108.8 107.0 107.0 106.8 106.3 106.0 105.9 105.7 105.4 103.7 102.7 101.7 100.1 98.6 96.5 95.4 94.8 94.4 93.9 91.0 90.4 86.1 85.8 85.5 84.9 79.8 79.1 78.6 78.4 78.3 77.3 77.3 76.5

District of Columbia South Dakota North Dakota West Virginia Mississippi New York Montana Pennsylvania Nebraska Alabama Tennessee Kentucky Missouri Florida Louisiana Kansas Iowa Wyoming Minnesota Massachusetts Ohio Arkansas Georgia South Carolina Michigan Connecticut Maine North Carolina Delaware New Jersey U.S.** Oklahoma Indiana Rhode Island Hawaii Virginia WSC Region* Maryland Illinois Alaska Texas Nevada Wisconsin Vermont New Hampshire Arizona California Colorado Washington Idaho Oregon New Mexico Utah

1,465.4 1,106.2 911.1 835.8 835.5 810.8 808.1 716.1 714.7 697.1 696.7 688.6 671.8 668.1 664.4 656.4 647.8 638.5 626.5 624.7 615.9 614.1 604.0 599.9 597.4 596.5 589.0 581.9 581.6 581.4 576.9 576.8 556.1 543.1 542.0 537.2 535.4 533.8 533.0 512.1 498.1 496.4 489.1 484.1 474.7 436.2 430.0 407.7 396.5 378.4 370.0 369.9 337.8

Maine Vermont District of Columbia New Hampshire West Virginia Montana Missouri Iowa Massachusetts Michigan North Dakota Ohio Pennsylvania Idaho Wisconsin New York Indiana South Dakota Oregon Connecticut Illinois Nebraska Kansas Kentucky Delaware Wyoming Minnesota New Mexico U.S.** Utah Louisiana Rhode Island Virginia Alaska Tennessee Washington New Jersey Arkansas Alabama Oklahoma Colorado Mississippi WSC Region* Georgia Maryland Hawaii North Carolina Texas South Carolina California Arizona Florida Nevada

5,387.2 4,915.3 3,991.2 3,814.8 3,720.2 3,707.9 3,614.2 3,433.3 3,301.7 3,291.1 3,230.3 3,220.2 2,977.3 2,964.1 2,872.9 2,865.5 2,800.1 2,678.4 2,642.7 2,579.3 2,546.9 2,546.5 2,450.0 2,393.9 2,257.5 2,167.3 2,152.4 2,150.6 2,144.5 2,130.7 2,089.6 1,940.1 1,914.5 1,860.3 1,833.8 1,787.2 1,752.3 1,728.1 1,719.5 1,717.3 1,666.7 1,656.8 1,624.1 1,603.5 1,589.1 1,534.1 1,520.1 1,517.6 1,405.3 1,403.9 1,318.8 1,227.2 941.2

*Average for the West South Central (WSC) Region, CMS Region VI, which includes Arkansas, Louisiana, New Mexico, Oklahoma and Texas **Average for the entire United States (U.S.) Source: American Hospital Association, Hospital Statistics, 2015

Arkansas Hospitals I Summer 2015

39

Basic Utilization and Financial Indicators, Arkansas Community Hospitals, 2013 Payroll Billed Charges Total Amount Collected Operating Costs

Cost of Charity Care Provided Patient Service Margin Total Operating Margin

$5,770,659,253 $5,917,263,241

$114,821,204 (-2.54%) 3.42%

CHRISTUS St. Michael Health System (Texarkana), Regional One Health (Memphis) CARTI, 19th Medical Group (LRAFB), Arkansas Hospice

1

Billings # Discharges

Top 30 DRGs Diagnosis-Related Group 795 - Normal Newborn 885 - Psychoses 775 - Vaginal Delivery w/o Complicating Diagnoses 945 - Rehabilitation w CC/MCC 470 - Maj Joint Replacement Or Reattachment Of Lower Extremity w/o MCC 766 - Cesarean Section w/o w CC/MCC 871 - Septicemia w/o MV 96+ Hours w MCC 392 - Esophagitis, Gastroent & Misc Digest Disorders w/o MCC 794 - Neonate w Other Significant Problems 194 - Simple Pneumonia & Pleurisy w CC 690 - Kidney & Urinary Tract Infections w/o MCC 603 - Cellulitis w/o Mcc 247 - Perc Cardiovasc Proc W Drug-Eluting Stent w/o MCC 287 - Circulatory Disorders Except Ami, w Card Cath w/o MCC 765 - Cesarean Section w CC/MCC 641 - Misc Disorders Of Nutri,Metabolism,Fluids/Electrolytes w/o MCC 881 - Depressive Neuroses 195 - Simple Pneumonia & Pleurisy w/o CC/MCC 292 - Heart Failure & Shock w CC 190 - Chronic Obstructive Pulmonary Disease w MCC 193 - Simple Pneumonia & Pleurisy w MCC 683 - Renal Failure w CC 189 - Pulmonary Edema & Respiratory Failure 192 - Chronic Obstructive Pulmonary Disease w/o CC/MCC 291 - Heart Failure & Shock w MCC 378 - G.I. Hemorrhage w CC 872 - Septicemia w/o MV 96+ Hours w/o MCC 897 - Alcohol/Drug Abuse/Dependence w/o Rehabilitation Therapy w/o MCC 191 - Chronic Obstructive Pulmonary Disease w CC 774 - Vaginal Delivery W Complicating Diagnoses All 30 Drg's

23,438 $76,640,132.76 22,684 332,885,323.49 19,273 198,452,812.27 11,585 336,033,494.63 10,167 406,346,911.53 8,602 131,281,382.96 7,439 258,113,609.42 7,318 108,365,854.84 6,714 35,408,880.98 5,262 99,583,264.40 4,753 68,555,261.32 4,684 69,489,366.13 4,642 259,482,238.18 4,468 123,192,102.21 4,133 79,820,174.35 4,060 51,740,420.83 3,995 45,833,059.65 3,977 48,802,408.28 3,924 69,472,314.99 3,566 76,120,187.57 3,238 94,359,048.50 3,134 60,704,006.11 3,131 87,400,357.38 3,130 41,343,913.25 3,107 88,291,384.98 2,955 62,276,292.03 2,944 57,436,208.04 2,937 30,412,193.54 2,852 50,454,921.70 2,679 32,412,370.25 194,791 3,480,709,896.57

Mean Daily Rate

2

Mean Stay per Discharge

Source: American Hospital Association, AHA Statistics 2015 *Cardiac, Pediatric, Surgical, Women’s, VA (2)

$2,526,671,404 $19,905,752,056

Mean Charges per Discharge

352,362 1,817,099 5,113,519 36,313 48,373

Total Charges

Admissions Inpatient Days Outpatient Visits Births Total Employees

$3,269.91 14,674.90 10,296.93 29,005.91 39,967.24 15,261.73 34,697.35 14,808.12 5,273.89 18,924.98 14,423.58 14,835.48 55,898.80 27,572.09 19,312.89 12,743.95 11,472.61 12,271.16 17,704.46 21,346.10 29,141.15 19,369.50 27,914.52 13,208.92 28,416.92 21,074.89 19,509.58 10,354.85 17,691.07 12,098.68 17,868.95

1.74 10.83 1.83 12.62 2.93 2.48 6.39 3.14 2.33 4.29 3.59 3.88 2.21 2.43 3.4 3.19 7.82 3.24 4.15 4.65 5.83 4.34 5.71 3.19 5.93 3.8 4.62 4.41 3.89 2.35 4.73

$1,879.26 1,355.02 5,626.74 2,298.41 13,640.70 6,153.92 5,429.95 4,715.96 2,263.47 4,411.42 4,017.71 3,823.58 25,293.57 11,346.54 5,680.26 3,994.97 1,467.09 3,787.40 4,266.13 4,590.56 4,998.48 4,463.02 4,888.71 4,140.73 4,792.06 5,546.02 4,222.85 2,348.04 4,547.83 5,148.37 3,777.79

Source: Arkansas Department of Health, Hospital Discharge Program, 2013 data (most recent available)

164,801 42.04% $5,307,423,371 100,901 25.74% $2,791,216,191 76,880 19.61% $1,456,624,894 29,575 7.54% $698,976,477 4,152 1.06% $92,482,633 15,716 4.01% $438,583,637 392,025 100.00% $10,785,307,203

2013 Data (most recent available) Source: Arkansas Hospital Discharge Data System

40

Summer 2015 I Arkansas Hospitals

$32,205 49.21% $27,663 25.88% $18,947 13.51% $23,634 6.48% $22,274 0.86% $27,907 4.07% $27,512 100.00%

5.89 4.58 4.43 5.31 5.32 4.47 5.16

Total Patient Days

Avg. Charges per Day

STAY Avg. Length of Stay Days

% Total Charges

Average Charges per Stay

Total Charges

% Discharges

# Discharges

PAYER CATEGORIES 1. Medicare 2. HMO/Comm. Ins. 3. Medicaid 4. Self Pay/No Charge 5. Other Gov. Programs 6. Other/Unknown ALL CATEGORIES

CHARGES

Inpatient Charges by Payer Category

$5,465.36 971,102 $6,044.88 461,749 $4,278.88 340,422 $4,453.38 156,954 $4,183.98 22,104 $6,240.87 70,276 $5,332.38 2,022,607

Arkansas Hospitals I Summer 2015

41

$36,710,780,246

26,304,382,131

10,406,398,115 10,689,977,269 5,856,445 ($283,579,154) ($48.42) -2.73% $683,792,470 $400,213,316 3.61%

$167,277,594

$567,490,910 5.04%

14,135,092,803

5,770,659,253 5,917,263,241 3,448,184 ($146,603,988) ($42.52) -2.54% $269,134,329 $122,530,341 2.03%

$87,213,991

$209,744,332 3.42%

Louisiana

$19,905,752,056

Arkansas

Source: American Hospital Association, Hospital Statistics , 2015

Hospitals charged this amount for the inpatient and outpatient care they provided in 2013: But, patients and payer groups didn’t pay the full amount of billed charges for various reasons. Government programs like Medicare and Medicaid, workers’ comp programs and others never pay the full hospital bill. Managed care plans and other insurers typically pay discounted amounts only and individual patients often can’t afford to pay some or any of the outof-pocket costs related to their hospital bills. For those reasons, hospitals had to forfeit this much of their billed charges: As a result, actual payments to hospitals were: At the same time, hospitals spent this much providing patient care services… … to patients needing care for this many adjusted patient days while being served.

So, the revenue excess (loss) was: In other words, hospitals made (or lost) this much on each of the equivalent days of care they provided to inpatients and outpatients: Yielding a “patient service” margin of: In addition, hospitals also received revenues from other operating sources, such as cafeteria and gift shop sales, adding this much to their revenues: Which raised total operating income to: As a result, the “operating margin” rose to: Hospitals also collected other types of revenue from sources including contributions, tax appropriations, investments and the rental of office space. Those amounted to: That resulted in total funds available to reinvest in new equipment, update facilities, expand programs and repay debt equalling: For a return on investment totaling: 6.12%

$462,553,881

$122,250,060

4.57%

$340,303,821

$316,465,170

0.33%

$5.08

$23,838,651

4,694,605

7,101,439,812

7,125,278,463

18,961,333,700

$26,086,612,163

Mississippi

Arkansas and Surrounding States, 2013

6.20%

$1,239,371,055

$665,919,652

2.97%

$573,451,403

$1,154,601,122

-3.20%

($71.64)

($581,149,719)

8,111,698

18,734,464,777

18,153,315,058

37,726,886,672

$55,880,201,730

Missouri

8.21%

$687,171,817

$244,751,865

5.44%

$442,419,952

$288,772,295

1.96%

$36.32

$153,647,657

4,230,678

7,684,078,335

7,837,725,992

19,789,608,584

$27,627,334,576

Oklahoma

8.68%

$1,426,631,698

$159,509,587

7.79%

$1,267,122,111

$631,573,575

4.06%

$76.04

$635,548,536

8,357,910

15,002,528,839

15,638,077,375

43,023,032,783

$58,661,110,158

Tennessee

10.64%

$6,340,573,963

$937,753,455

9.21%

$5,402,820,508

$5,363,702,261

0.07%

$1.71

$39,118,247

22,928,194

53,271,177,348

53,310,295,595

157,784,347,806

$211,094,643,401

Texas

7.92%

$67,263,179,709

$19,765,262,658

5.73%

$47,497,917,051

$50,139,467,030

-0.34%

($7.93)

($2,641,549,979)

333,111,172

782,035,349,979

779,393,800,000

1,812,842,700,000

$2,592,236,500,000

United States

Community Hospital Summary Financial Data

42

Summer 2015 I Arkansas Hospitals 215,624,514 241,277,442 256,348,729 264,201,622 277,061,018 286,470,773 291,213,495 318,338,089 325,177,434 338,062,266 350,860,547 377,833,164 385,300,949 75.23%

6.63% 6.68% 6.49% 6.58% 6.56% 6.46% 6.35% 6.47% 6.30% 6.44% 6.57% 6.56% 6.51%

2005

2006

2007

2008

2009

2010

2011

2012

29,364 27,638 27,963 30,296 30,121 30,199 28,142 28,676 27,241 29,240

Self-Pay/No Charge as % of All Patients Admitted 6.82% 6.44% 6.50% 7.08% 7.08% 7.23% 6.82% 6.99% 6.70% 7.46%

Total Uncovered Charges ($ Millions) $398 $419 $439 $485 $518 $593 $583 $618 $610 $694

Total Uncovered Costs ($ Millions)* $154 $158 $162 $174 $185 $201 $188 $199 $196 $223

2013

2004

Number Self-Pay/No Charge Patients Admitted

Source: American Hospital Association, 2015

579,030,572 675,012,181 738,156,875 804,795,844 859,696,968 906,757,075 954,190,753 1,053,264,671 1,139,786,422 1,266,129,299 1,394,837,942 1,461,637,675 1,577,996,530 152.43%

Total Uncollected Amounts Due 140,217,960 193,429,493 206,995,046 239,575,478 293,504,471 309,914,742 326,126,835 359,231,835 376,548,005 430,034,656 487,626,273 517,122,215 586,854,937 268.80%

Bad Debt

4,144,999,443 4,920,059,934 5,790,602,643 6,360,783,014 6,945,017,078 7,572,665,742 8,220,632,392 9,011,385,599 10,164,398,525 11,007,346,255 12,106,848,283 12,820,230,814 14,135,092,803 209.29%

37.24% 35.74% 34.73% 32.83% 32.23% 31.59% 30.52% 30.22% 28.53% 26.70% 25.15% 25.85% 24.42%

Percent of Total Costs

438,812,612 481,582,688 531,161,829 565,220,366 566,192,497 596,842,333 628,063,918 694,032,836 763,238,417 836,094,643 907,211,670 944,515,460 991,141,593 115.24%

Charity Care

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Increase

Gross Revenues (Billed Charges) Uncompensated Care Charges

Year

Net Revenues ($$ Collected) 3,249,943,830 3,612,279,530 3,947,107,676 4,015,475,758 4,225,289,800 4,437,596,804 4,585,732,810 4,921,858,438 5,161,176,256 5,246,234,974 5,336,539,234 5,759,240,612 5,917,263,241 77.21%

Other Operating Revenue 7,548,914,012 8,758,624,454 9,836,225,536 10,509,970,296 11,353,870,262 12,157,021,305 12,967,706,254 13,988,333,459 15,415,306,553 16,517,098,921 17,608,688,691 18,625,637,856 20,174,886,385 146.73%

Gross + Other Revenue Uncompensated Care Costs

103,461,117 134,677,549 127,642,206 134,780,857 153,253,789 154,744,439 162,165,731 169,341,834 193,995,665 221,189,649 220,871,438 256,162,838 269,134,329 147.59%

Total Operating Costs

3,300,453,542 3,703,886,971 3,917,980,687 4,014,406,025 4,255,599,395 4,429,611,124 4,584,908,131 4,807,626,026 5,056,912,363 5,288,563,017 5,280,968,970 5,819,244,204 5,770,659,253 76.32%

Cost-toCharge Ratio

7,445,452,895 8,623,946,905 9,708,583,330 10,375,189,439 11,200,616,473 12,002,276,866 12,805,540,523 13,818,991,625 15,221,310,888 16,295,909,272 17,387,817,253 18,369,475,018 19,905,752,056 146.72%

Indicator

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Increase

Year

Uncompensated Care Costs, 2001-2013

Arkansas Hospitals

statistics

Impact of Self-Pay (Uninsured) Inpatients On Arkansas Hospitals, 2002-2013

Source: Arkansas Department of Health, Hospital Discharge Data Program, 2013 *Estimate based on overall statewide cost-to-charge ratio using most recent data available

Arkansas Private Option

Benefit to Arkansas Hospitals through June 30, 2014 With the assistance of the Arkansas Chapter of the Healthcare Financial Management Association (HFMA), the Arkansas Hospital Association conducted a survey of Arkansas hospitals to determine the financial impact of the private option for the first six months of its implementation. Responding hospitals represent nearly 80% of all Arkansas hospital patient service by revenue and admissions.

Significant Reductions in Uninsured Volumes: Admissions – Down 46.5%

ER Visits – Down 35.5%

Outpatient Visits – Down 36.0%

Change, %

2013

(in milions)

2014

The following is a summary of the financial impact for services to low income patients:

Change

The Arkansas Private Option (APO) has provided significant benefits to hospitals in the state at a crucial time. The losses responding hospitals incurred caring for low income Arkansans have decreased by $69 million, offsetting continued Medicare reimbursement cuts.

Costs3

Payments1 APO2

58.0

–

58.0

–

Uninsured

21.4

22.0

(0.6)

-2.9%

Total Payments1

79.4

22.0

57.4

260.9%

APO2

57.5

–

57.5

–

Uninsured

75.3

144.6

(69.3)

-48.0%

Total Cost

132.8

144.6

(11.8)

-8.2%

Total Cost1

($53.4)

($122.6)

$69.2

-56.4%

Payments include an estimate of expected payments not yet received as of the survey date for services rendered prior to July 1, 2014.

2 80% of Arkansas Insurance Exchange patients were estimated to be attributable to APO based on enrollment data provided by the Arkansas Department of Human Services.

3 Based on individual hospital cost-to-charge ratios.

1

Arkansas Hospitals I Summer 2015

43

statistics

Arkansas Hospitals by

Advanced Care Hospital of White County Arkansas Children’s Hospital Arkansas Heart Hospital Arkansas Methodist Medical Center Arkansas State Hospital Arkansas Surgical Hospital# Ashley County Medical Center Baptist Health Extended Care Hospital Baptist Health Medical Center – Arkadelphia Baptist Health Medical Center – Heber Springs Baptist Health Medical Center – Hot Spring County Baptist Health Medical Center – Little Rock Baptist Health Medical Center – NLR Baptist Health Medical Center – Stuttgart Baptist Health Rehabilitation Institute Baxter Regional Medical Center Bradley County Medical Center Central Arkansas Veterans Healthcare System Chambers Memorial Hospital CHI St. Vincent Hot Springs CHI St. Vincent Infirmary CHI St. Vincent Morrilton CHI St. Vincent North Chicot Memorial Medical Center CHRISTUS Dubuis Hospital of Fort Smith CHRISTUS Dubuis Hospital of Hot Springs Community Medical Center of Izard County Conway Regional Health System Conway Regional Rehabilitation Hospital Cornerstone Hospital of Little Rock# CrossRidge Community Hospital Dallas County Medical Center Delta Memorial Hospital DeQueen Regional Medical Center# DeWitt Hospital Drew Memorial Hospital Eureka Springs Hospital Five Rivers Medical Center Forrest City Medical Center Fulton County Hospital Great River Medical Center HEALTHSouth Rehabilitation Hospital of Fayetteville HEALTHSouth Rehabilitation Hospital of Fort Smith# HEALTHSouth Rehabilitation Hospital of Jonesboro# Helena Regional Medical Center Howard Memorial Hospital Jefferson Regional Medical Center Johnson Regional Medical Center

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Lawrence Memorial Hospital Levi Hospital Little River Memorial Hospital Magnolia Regional Medical Center Medical Center of South Arkansas McGehee Hospital Mena Regional Health System Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Fort Smith Mercy Hospital Northwest Arkansas Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron Methodist Behavioral Hospital National Park Medical Center NEA Baptist Memorial Hospital North Arkansas Regional Medical Center North Metro Medical Center Northwest Medical Center Bentonville Northwest Medical Center Springdale Ouachita County Medical Center Ozarks Community Hospital Ozark Health Medical Center Piggott Community Hospital Pinnacle Pointe Behavioral Healthcare System Physicians’ Specialty Hospital Regency Hospital – Northwest Arkansas# Rivendell Behavioral Health Services River Valley Medical Center Riverview Behavioral Health Saint Mary’s Regional Medical Center Saline Memorial Hospital Select Specialty Hospital – Fort Smith# Siloam Springs Regional Hospital SMC Regional Medical Center St. Bernards Medical Center St. Vincent Rehabilitation Hospital Stone County Medical Center Southeast Rehabilitation Hospital# Sparks Health System Sparks Medical Center – Van Buren Springwoods Behavioral Health Hospital The BridgeWay UAMS Medical Center Unity Health – Harris Medical Center Unity Health – White County Medical Center Valley Behavioral Health System Vantage Point of NWA Veterans Health Care System of the Ozarks Wadley Regional Med. Center at Hope# Washington Regional Medical System White River Health System Willow Creek Women’s Hospital # = Not an AHA Member Hospital

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3rd Congressional District

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2nd Congressional District

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News Hospitals continued to see a high rate of CEO turnover in 2014, with 4,501 hospitals reporting a rate of 18 percent, according to a report recently released by the American College of Healthcare Executives. Although lower than the 20 percent CEO turnover rate reported in 2013, last year’s rate is among the highest reported in the last 15 years.

On June 2, the U.S. Department of Health and Human Services (HHS) announced health insurance coverage statistics for the first quarter of 2015.

As of March 31, approximately 10.2 million consumers had “effectuated” coverage through Health Insurance Marketplaces, which means those individuals had paid for marketplace coverage and had an active policy in the applicable month.

According to HHS, this total includes 52,784 Arkansans with incomes above 138% of the federal poverty level who purchased insurance through the federally facilitated marketplace.

Arkansas ranked 6th among the 10 states with the highest rate of consumers who received financial assistance through advanced premium tax credits, with more than 91% receiving a tax credit to lower their share of monthly premium costs. The average tax credit received by Arkansas enrollees was $284 per month, which is $12 higher than the national average.

News STAT Medicare claims processing systems are ready to accept ICD-10 claims on October 1, based on results from the second ICD-10 end-to-end testing week, the Centers for Medicare & Medicaid Services announced in early June. About 875 healthcare providers and billing companies submitted more than 23,000 test claims. “Overall, participants in the April end-to-end testing week were able to successfully submit ICD-10 test claims and have them processed through Medicare billing systems,” the agency said. “The acceptance rate for April was higher than January, with an increase in test claims submitted and a decrease in the percentage of errors related to diagnosis codes.” A final end-to-end testing week will be held July 20-24.

Testers who participated in the January and April tests are automatically eligible to participate. Healthcare providers and others must begin including ICD-10 diagnosis and procedure codes on Medicare and other healthcare claims October 1. For more on the transition to ICD-10, visit www.aha.org or www.cms.gov.

The American Hospital Association participated in a White House forum in June on ways to improve responsible antibiotic use, where more than 150 stakeholders committed to help thwart the public health and national security threat posed by antibiotic-resistant bacteria. The AHA and six national partners last year released a toolkit to help hospitals and health systems develop and enhance their antimicrobial stewardship programs. Get the toolkit at http:// www.ahaphysicianforum.org/resources/appropriate-use/antimicrobial/index. shtml. Arkansas has shown its commitment to the cause through its ongoing Antimicrobial Stewardship Collaborative, jointly led by the Arkansas Hospital Association, Arkansas Association of Health-System Pharmacists and the Arkansas Department of Health. For more information about the collaborative, contact Pam Brown, Arkansas Hospital Association Vice President of Quality and Patient Safety.

Arkansas Hospitals I Summer 2015

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News

Ron Peterson: Targeting Zero Infections “One Is Not None”

By Nancy Robertson Cook “When I entered healthcare, I never thought I’d be in the business of eliminating harm,” says Ron Peterson, CEO of Baxter Regional Medical Center in Mountain Home. “Like most people in healthcare, I chose the field because I wanted to make a positive difference in people’s lives every day. It turns out that eliminating harm is one of the best ways to make that positive difference.”

We talk a lot these days about quality improvement in the healthcare field.

Baxter Regional’s quality improvement teams, under Peterson’s leadership, have become nationally recognized for their successes in improving patient safety and quality through process change.

“Human errors most often aren’t really human,” he says. “They’re actually process or system breakdowns.

So to improve quality, we need to identify these broken systems. I firmly believe that healthcare processes give us what we design them to give us. If they aren’t working, we need to design new ones to get the exact results we want. And that means designing systems that eliminate harm.”

Because educating for results has been the approach to quality improvement for so long, the idea that educating alone won’t help improve a broken process is important. In fact, Peterson says, it’s one of the toughest barriers to staff acceptance.

“Getting medical and clinical staff buy-in for process change begins with showing, through data, exactly what our harm score is. We all tend to believe we don’t cause harm in the hospital setting. We have to show why we’re doing root cause analyses, and how the data will help us improve.”

He suggests encouraging hospital staff to look at the numbers in a new way. “Like me, our medical and clinical staff members never guessed we’re in a business that harms…thus sharing the data is step one. Then, we must declare that the mindset ‘we’re under the national average, so we’re OK’ does not fly.”

Combining this new look at data with patient stories is powerful. “We’re a small 46

Summer 2015 I Arkansas Hospitals

community. Offering clear insight into harm rates and what they mean to our friends, neighbors, co-workers, fellow church members, local business people and relatives – anyone who is a patient here – makes all the difference. When hard data and patient stories speak, improvement becomes a top priority. National statistical rankings move from numbers to faces we know; commitment is quick.”

Peterson adds that consistency of message and commitment to improving over the long term are vital. “You have to build that fire of desire and offer undeniable reasons to improve.”

At Baxter Regional, a new mantra has taken hold. “One is Not None.” One CAUTI, one CLABSI, any instance of harm – the target moves from beating national averages to targeting zero.

He offers an example: CatheterAcquired Urinary Tract Infections (CAUTIs).

“We were fortunate to be in the AHA’s Hospital Engagement Network, where we focused on improvement in our CAUTI rates (as well as ten additional areas). In 2013, we had 37 CAUTIs. We were doing fine, if you looked at the national averages.

But when ‘One is Not None’ is your credo, we had to look at those 37 CAUTIs and change our system to target zero CAUTIs.” “We combed our catheter days to get the data. And we looked at our system for catheter removal. It was clear we needed to get those catheters out quicker.”

To do this, Baxter developed a nursedriven protocol that allows nursing staff to remove catheters without a specific physician order. They follow the protocol developed by a team that included physicians and nurses.

“This allows more timely removal of catheters. It’s the proven key to reducing CAUTIs. Days, hours, minutes matter. Our numbers back this up. In one year’s time we went from 37 CAUTIs to 4. We’re still working to reduce this to zero. One is Not None.”

State and Regional Leadership

Peterson serves on the Arkansas Hospital Association Board of Directors.

During his tenure on the board, he has served on the Trauma System Committee and the American Hospital Association’s Regional Policy Board. He is currently on the AHA board’s Medicaid Committee.

“It has been a particular joy to serve on the AHA board while we’ve been working on the challenge of Medicaid reform and looking at the expansion of Medicaid through the Arkansas Private Option (APO). The APO gives people access. It allows healthcare professionals to care for people before they’re sick. The APO development and implementation processes have been both challenging and riveting.”

Healthcare: The Career

Each career step has given Peterson insight that affects his leadership at Baxter.

It’s ironic that his first step in choosing healthcare administration as a career came through avoiding a course in statistics. “I went to Concordia College, a small college in Minnesota. Statistics, as a course, was a known challenge.

On top of that, we had a professor of statistics who was thought to be difficult. continued on page 48

• MY LIFE PHILOSOPHY Greet each day with love in your heart. I was put on this Earth for a purpose; I want to fulfill my purpose and make a positive difference every day.

• SOMETHING ABOUT ME THAT WOULD SURPRISE YOU I love to barefoot water ski! I have since I was a 15 or 16 year old.

• SUPERPOWER I’D LIKE TO HAVE I would love to wave my magic wand and heal people.

CEO Profile: Ron Peterson

Baxter Regional Medical Center

• WHAT MAKES ME LAUGH A good joke, people with good senses of humor, and people who can take a practical joke. (I’ve been known to pull a practical joke, but only if I know the recipient is game.)

• HOW I DE-STRESS Exercise.

• MY FAVORITE FOOD I’ll try anything, but I have intentionally been eating healthy foods for the past three years. When I started, it blew my family away. I remember visiting my Mom and she asked, “When did YOU start eating tomatoes?”

Arkansas Hospitals I Summer 2015

47

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Summer 2015 I Arkansas Hospitals

Healthcare Administration, at that time, was among the career paths that didn’t require the statistics course; it also matched with the values I wanted in a career choice.”

As his college career progressed, Peterson ended up taking the dreaded statistics course and appreciating its exacting professor.

“He taught us the meaning of the saying, ‘Figures never lie, but liars sure can figure.’ We learned to look carefully at the presentation of data to be certain it’s understood in its entirety, not just in the often out-ofcontext manner the presenter may use to sell his case. ‘Let’s check the use of the figures,’ he taught. I’m glad I got into healthcare trying to avoid his class and that I ended up taking it and learning skills critical to knowing how to operate a healthcare system.”

His “second” reason for choosing healthcare speaks to the man. “I knew I wanted a career where I could help people,” Peterson says. “I liked the idea of turning hurt into hope.”

Growing up in Minnesota where -100 degree wind chills were winter norms, Peterson vowed during his senior collegiate year to one day move to the warmth and sunshine of Florida.

But it didn’t happen immediately.

Graduating from Concordia, his first job was at St. Mary’s Hospital in Rhinelander, Wisconsin under the tutelage of administrator Jerry Cambron, who became one of two life mentors. “Jerry said he would pay me so little that I would be forced to get my master’s degree… and he did,” Peterson grins. He attended Cambron’s alma mater: Xavier University in Cincinnati, Ohio. His one-year administrative residency took him to Lee Memorial Hospital in Fort Myers, Florida, fulfilling his earlier vow and leading him to his second mentor, Jim Nathan, who (30 years later) still serves as the Lee Memorial CEO. “Jim gave me my love for notfor-profits,” Peterson says. His first post-master’s move was to Hospital Corporation of America (HCA), where he served as a strategic

planning specialist, writing policy, for a year and a half. “Writing policy was great, but I wanted to implement it,” Peterson says. When offered a position at St. Joseph’s Hospital in Wichita, Kansas by mentor and now Kansan Jerry Cambron, he gladly made the move.

“I wanted to be in operations. It was great to be involved first with strategic planning and marketing, then overseeing ancillary services.”

After his tenure at St. Joseph’s, he accepted a leadership opportunity at Incarnate Word Hospital, St. Louis, a smaller, inner-city hospital with a 90% Medicare clientele. His work there gave him a good perspective on the total operation of a hospital and working through the intricacies of Medicare.

“Over time, we wanted to be closer to my wife’s family in Nashville,” he says. He feels blessed to have been offered a hospital leadership role in Madisonville, Kentucky, two hours from Music City. He was Vice President at Hopkins County Regional Medical Center for five years, and CEO for ten. “This is where I discovered there are ways we could provide urban medicine in a rural setting. Everyone deserves top-notch healthcare, no matter where they live. I am committed to offering rural residents the same level of care their city neighbors take for granted.”

And then, eight years ago, his move to Baxter Regional – a unique blend of his former healthcare cultures. “We love Mountain Home,” he says. “The community is very giving. People live here because they choose to live here.

That’s a huge positive, because among those choosing to live here are the finest medical and clinical professionals (physicians, nurses, support staff). They could be practicing anywhere in the world but choose to be here.”

Mountain Home is a retirement destination. One bonus is the more than 600 volunteers who give 95,000+ hours of service to the hospital each year, an incredible

gift. “Our volunteers run Bargain Box thrift stores in two locations and have provided a million dollar endowment for the hospital,” he says. “Our donors and retired volunteers help drive where we’re going in care.”

And there are other reasons Peterson and his family love Mountain Home.

“Where else can you be 10 minutes from the lake, and at the same time, enjoy

a challenging career in a sophisticated medical setting?”

Meeting Today’s Healthcare Challenges

The challenges all in the hospital world face today illustrate how healthcare has changed since Ron first chose it as a career. “We face changes continued on page 50

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Arkansas Hospitals I Summer 2015

49

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Summer 2015 I Arkansas Hospitals

LITTLE ROCK St. Vincent Infirmary Medical Center SHERWOOD St. Vincent Medical Center North BENTON Saline Memorial Hospital CAMDEN Ouachita County Medical Center CONWAY Conway Regional Medical Center Conway Regional Outpatient Imaging Center Conway Regional Women’s Center CLINTON Ozark Health Medical Center EUREKA SPRINGS Eureka Springs Hospital FAYETTEVILLE Physicians Surgical Hospital JOHNSON Willow Creek Women’s Hospital Northwest Breast Imaging Center at WIllow Creek MORRILTON St. Vincent Morrilton SEARCY Searcy Breast Center White County Medical Center SILOAM SPRINGS Siloam Springs Regional Hospital SPRINGDALE Northwest Medical Center WARREN Bradley County Medical Center

in the payment environment, a shift of risk from insurer to provider. This affects all providers equally, no matter the setting (urban or rural).”

“At the same time, we face another major shift – that of healthcare switching from the business of healing the sick and injured to serving people at all states of their wellbeing. We now try to prevent people from becoming sick or injured and see them across the spectrum of wellness. We want them to have access to the best at all points of health.”

And so everyone employed by the hospital, from its physicians and maintenance workers to its dietary, housekeeping and nursing staffs, gets on board for harm reduction and quality improvement.

It’s that great diversity in the hospital workforce, all aimed at better serving the patient, that daily piques Peterson’s interest.

“I remember one day when a cardiologist was in my office enthusiastically describing the newest equipment to open clogged arteries, thereby improving care and patient safety. As he left, one of our plumbers came in to discuss some problem-solving utilizing the newest techniques for clearing clogged pipes. I had to smile… different jobs, same process… all aimed at improving care and comfort for our patients and our co-workers!”

The man who chose healthcare to avoid statistics now gratefully immerses himself in data. “Data drives change, and change for the better daily helps us lower the causes of harm in our hospital.

Coupled with the wonderful people we have on staff – and the volunteers who bring so much to our hospital – we have the blueprint and manpower for harm reduction and quality improvement. It’s ingrained in all of us now. One is Not None.

This lets us make a difference in people’s lives every day. And that’s what healthcare is all about.”

News

All Payer Claims Database:

The Future of Healthcare Transparency in Arkansas

By Joe Thompson, MD, Director, Arkansas Center for Health Improvement As the nation grapples with the need to improve quality and control costs in our healthcare system, Arkansas has emerged as an innovative leader in both payment reform and expanded access to care. Public and private payers have joined forces in the implementation of a value-based payment system that is showing real promise for improved patient care and cost control and is gaining national attention. Further, a recent Gallup report shows Arkansas as number one in the nation for reducing the percentage of uninsured citizens.

We have not, however, been leading on the important issue of health system transparency. In 2013, Catalyst for Payment Reform and the Health Care Incentives Improvement Institute worked together to release a report card evaluating each state’s transparency laws. In this first report card, Arkansas was given a “D” grade for having only one statute in place concerning price transparency.

The newest report card, released in March 2014, expanded its scope to look at state regulations and public accessibility of quality information.

Unfortunately, Arkansas received an “F” in the nationwide comparison.

Things are changing, however, in our state. Last year, the Arkansas Insurance Department’s Health Insurance Rate Review Division obtained funding and awarded the Arkansas Center for Health Improvement (ACHI) a contract to build an All-Payer Claims Database (APCD) to promote price transparency. ACHI’s work under this contract includes stakeholder engagement, database design and build, establishment of data submission guides and the development of a sustainability plan.

As our healthcare system is transformed to better meet consumer needs, demand is growing for greater transparency so the effectiveness of these efforts can be appropriately assessed. In addition, patients are increasingly asked to make wiser choices. Individuals have greater

Over the next year, ACHI will be working to transform claims data into usable information so consumers, policymakers and healthcare organizations can drive value in the healthcare system.

Information about the APCD can be found at www.arkansasapcd.net. exposure to costs at point of service through deductibles, coinsurance and copayments. Yet the information they need to evaluate quality and cost is often unavailable.

The APCD is a vehicle for providing consumers with the information they need to make informed decisions.

Importantly, it will also support policyrelevant research activities and the development of community health needs assessments, as well as help to inform the legislative task force now seeking to reform Arkansas’s Medicaid program.

Legislation passed this year created the Arkansas Healthcare Transparency Initiative, which accelerates the state’s ability to secure a broader set of data through greater health insurance plan participation. Through this initiative, Arkansas joins 14 other states in mandating the submission

of claims data to fuel the utility of the APCD for consumer information, policy analysis, research, program design and evaluation, and population health initiatives. Use of data through the initiative will be guided by rules developed by the Arkansas Insurance Department later this year.

Over the next year, ACHI will be working to transform claims data into usable information so consumers, policymakers and healthcare organizations can drive value in the healthcare system. Information about the APCD can be found at www. arkansasapcd.net. We invite you to visit this site to track our progress toward the development of a robust tool designed to promote greater transparency and maximize Arkansas’s nation-leading initiatives to improve health and healthcare for all Arkansans.

Arkansas Hospitals I Summer 2015

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News

The Silver Lining to the ICD-10 Cloud: Valuable Quality Improvement Data

By Karen Scott, MEd, RHIA, CCS-P, CPC, FAHIMA As we inch closer to the long awaited date of October 1, 2015, it appears that the transition to ICD-10 could actually happen this year. Most providers, hospitals and payers have been gearing up to be as ready as possible to start using the required code set. There are still many myths and misconceptions about ICD-10 and how it will be used in the coding and billing process; however, there is much to be gained through the transition to better and more accurate coding systems.

As an initial matter, it is important to understand that there actually are two very different systems we will begin using this fall. ICD-10-CM is the U.S. clinical modification of the World Health Organization (WHO) update for the International Classification of Diseases (ICD) system and only replaces ICD-9-CM diagnosis coding. Because there is not a procedure section in the ICD-10-CM code book, a separate system had to be created to capture inpatient procedure coding. This new system, ICD-10-PCS, 52

Summer 2015 I Arkansas Hospitals

is very different than any system we are currently using and collects more of the data concerning inpatient procedures.

It will only take the place of the current ICD-9-CM procedure system. It does not replace the CPT system, which is used to code outpatient and physician procedures. CPT is still going to be used to drive payment for those procedures.

The challenge to using this system is in the documentation necessary to accurately code inpatient procedures. We will only use ICD-10-PCS procedures for

inpatient services. The level of detail that is required for ICD-10-PCS is generally not going to be found in outpatient documentation. This new system is designed to work more accurately with computerized patient records and will allow more accurate reimbursement in the future due to its level of specificity.

More about ICD-10-CM

With every major modification of the ICD system, the U.S. has modified it to better fit the specific conditions more

prevalent in this country, as well as used it to provide greater specificity required for billing, research and other uses. The ICD-9-CM modifications were first used in the U.S. during the 1970s and no longer reflect today’s clinical knowledge base or technology utilized to diagnose and treat conditions.

The system, however, is a clinical classification system, created by physicians and other clinicians, not a system devised in a dark room full of government suits gleefully trying to find ways to withhold payment from healthcare providers.

One example of that clinical change is seen in the myocardial infarction (MI) (heart attack) codes.

In the previous edition of this system (ICD-9-CM), an acute MI was considered to be acute for up to eight weeks following the initial episode. That made sense back in the 1970’s. The only real treatment was open heart bypass surgery, which took many weeks of recovery.

Patients stayed in the hospital for a long time.

Over the years, with new technology and greater understanding of the need to get the patient started in cardiac rehab sooner, the advent of cardiac cath labs that can treat blockages much quicker and with less invasive techniques shortened the “acute” time considerably.

So when the updates were made, physicians decided that based on today’s standard of practice, the acute time period should actually be the first four weeks. This cut in half the original time used in the ICD-9-CM code description. From a clinical perspective, this much more accurately reflects current practice of medicine.

Tapping ICD-10’s Value

On the inpatient side, hospitals are paid primarily according to the time, effort, length of stay and resources needed to care for the patients with given diagnoses and/ or procedures. If we are going to be accurately reimbursed for continued on page 54

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Arkansas Hospitals I Summer 2015

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to the degree of specificity already provided for in the chart documentation.

If a different patient came in with a greenstick fracture, one that is partially bent and partially broken, this condition was coded exactly the same as the comminuted fracture, which is one that is splintered and/or crushed. These two types of fractures may require very different levels of treatment and may have very different outcomes, but due to the limitations of the coding system, there was no way to differentiate between the two injuries and the treatment provided.

By using the more specific codes available in ICD-10-CM, we are able to better describe the specific problem, and therefore, to justify the treatment needed to care for the patient.

Looking at the Whole Patient

those services, having more accurate and descriptive codes to show what is wrong with the patient and what we did to make them better will help in the long run to create more accurate payment methodologies and groupings such as the modified DRG system used by Medicare and other payers.

Most of the future payment methodologies involve review of patient outcomes and quality of care provided to our patients at the appropriate level of care. ICD-10-CM provides more options, with many more specific codes to further describe and divide patients more accurately based on their details provided in the medical record.

16,000 to 68,000 Codes

There has been much discussion regarding the number of codes in the new system. We are going from a system with approximately 16,000 codes to

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Summer 2015 I Arkansas Hospitals

one that includes approximately 68,000 codes. But the long-standing coding principle still applies; we code to the highest level of specificity provided for in the chart documentation.

There are still nonspecific and “less” specific codes available for use if the level of documentation does not support the more specific codes. Actually, a great number of the new codes are there simply because we can now account for laterality (left vs. right) on paired body parts that we could not show using the old coding system. Coders actually had to “dumb down” the good documentation to fit into the less specific code choices in the previous system.

For example, if a patient came into the Emergency Department with a comminuted fracture of the shaft of the femur, we could only code that as a closed fracture of the femur shaft. We had no way to show the type of fracture

Under the ICD-10 system, there are also new codes that give us more information about the whole patient.

We use codes to paint a picture of the whole patient and their conditions, not just the main reason they are here for treatment today. If a patient comes in with congestive heart failure (CHF) and hypertensive heart and kidney disease, and the documentation shows that the patient is not taking the right amount of medication for his CHF due to his forgetfulness due to aging, all we can really show with the currently-available codes are the medical conditions. Using the new system, we are able to show a code for an entirely new term in ICD-10CM, underdosing. We can use this code to show that the patient is not taking the amount of medication needed to keep his conditions under control.

We can use another additional code to show that he is not taking the required amount of medicines due to age-related dementia. So when those who are measuring outcomes wonder why our patient has been in the hospital five times this year for the same condition, the fact that we now can tell this part of his story helps explain the circumstances surrounding his care.

Value to Your Hospital

With any changes – even those that are needed and welcome – there is

going to be an adjustment period.

We know that productivity is not going to be at the same level during the transition to ICD-10.

I urge all facilities to prepare now by reviewing tools and current processes to address identified issues and ways to improve, so that they can cut down on that temporary productivity decline. Facilities should be actively reviewing documentation improvement opportunities to address areas where lack of appropriate documentation can cause further delays.

But with all this, the possibilities of better data collected can mean more accurate portrayal of the patient’s overall condition, justification of procedures and treatment performed and greater detail of expected outcomes. Over time, this transition will provide useful data that cannot be captured with our current coding system.

By paying attention to their coding data, hospitals can make use of the wealth of better information specific to patients, their conditions and treatments in order to make improvements in quality, performance and population health.

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She has been an educator for many years, including teaching in the HIM Programs at the University of Tennessee Health Science Center and Arkansas Tech University. She has worked as an HIM director in an acute care hospital setting, training director for a national transcription company and reimbursement specialist for a regional physician’s group.

An AHIMA-approved ICD-10 trainer, Karen teaches seminars throughout the country and has written several chapters for HIM and coding textbooks.

Arkansas Hospitals I Summer 2015

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News

Spotlight: Improving Quality and Saving Millions with FairCode DocuVoice, LLC, has been an endorsed company with AHA Services, Inc. for a number of years, but you may not know that one of its strongest partnerships is with a physician-based coding audit company that has been yielding millions for participating hospitals. The company is FairCode Associates, LLC, a nationally-based Inc. 5000 company that has been providing services since 2001, entering the Arkansas market in 2012.

FairCode’s model is to train physicians in the basic inpatient coding rules, then have them review the coding on inpatient charts after the coder has assigned the DRG, but before the claim has been submitted. “Coders are experts in coding, and we don’t claim to be that,” stated company President Tracey Goessel, M.D., formerly of the surgical faculty at Johns Hopkins Hospital. “But we do know medicine, and if you add the doctor’s expertise to that of the coder, you tend to get to the most accurate DRG.” “Coders very rarely over-code the case,” Goessel commented, “although, if this happens, FairCode will have the hospital move the DRG to one that is more accurate, albeit less valuable.”

“The truth is always right,” she said.

“But far, far more often, the attending physician is under-documenting, and the coder cannot get to a DRG that reflects the true acuity of the patient experience. Our doctors will get queries to the attending physicians that actually get answered. Our query response rate is typically over 95%.”

FairCode provides a pull list of appropriate DRGs for review by their physicians that is derived from reviewing over one million prior cases. This assures maximum efficiency and return on investment.

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Summer 2015 I Arkansas Hospitals

Graphic 1 shows the cumulative return on investment at the Arkansas pilot hospital since FairCode audits began 9/4/2012 (blue line represents increased reimbursement and the red line represents the cost of FairCode review services).

Table 1 above represents the last (12) months at this same facility.

Greater than 4:1 ROI in Pilot Project

A North Arkansas facility was the pilot hospital for the program in Arkansas and began audits in September 2012. The facility has netted $1.69 million dollars, increasing their billings on reviewed cases by $2.17 million and paying $476,000 for the reviews – a 4.6:1 return on their investment. (And, for those who are

compliance minded, these figures include $220,000 in over-codes that were corrected.) The results have been strong, to put it mildly.

“Of note is that these are ‘hard dollars’ in additional revenue – not soft savings,” commented FairCode COO Lisa Boyce. “Our software captures the facility’s base compensation rate for a case mix index of 1.0. When we say you have made a million dollars, you can take that to the bank.”

Table 2 above shows actual results from Arkansas hospitals. Please note the Return on Investment for each hospital.

Additional Arkansas Hospitals

Since the original pilot program began, FairCode has been implemented at six additional hospitals in the state of Arkansas. Table 2 above represents the actual results from these hospitals over the past 12 months.

“The program is ‘plug-and-play,’ – virtually turn-key,” says Terry Blount of DocuVoice. “It doesn’t require a major IT project or software interface.”

Coders and attending physicians need to confirm or deny the FairCode

physician’s recommendations. The cooperation of the hospital staff and the efficiency of the reviewing physicians is constantly tracked and recorded in real time.

The results are not only seen in financial terms but are also improving quality reports, as well. “Physicians always argue that their patients are sicker,” stated Goessel. “We provide them the means of documenting this in a compliant way. As a result, severity of illness and risk of mortality measures go up, and the expected

ARKAN SAS HOSPITALS Navigating the Vision, Delivering the Care.

versus actual mortality rates improve.

Some clients hire us for the quality measures alone. The fact that we pay for ourselves many times over is simply a side benefit.” Length of stay reports also improve. Higher weighted DRGs come with longer expected lengths of stay.

“The major concern hospitals bring to us before contracting with FairCode is that they are concerned about a lag in submission of their claims, resulting in decreased cash flow,” Boyce says.

“They quickly learn that this is not an issue. We review the charts on the day they are coded, or the morning after. We recommend changes on ~15% of them, only half of which require a physician query. So 93% go through without any delay, and because physicians are more likely to respond to a query from a peer, the query response rate is high and the lag time is short.”

For further information, contact Bob Stewart, vice president at DocuVoice LLC, by phone at 615.275.7213 or email at bob@docuvoice.com.

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The complete program will be available online and mailed August 1.

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News

A Golden Celebration:

AAHE Observes its 50th Annual Meeting

By Anna Sroczynski, Arkansas Association of Healthcare Engineers Liaison, Arkansas Hospital Association The 50th Annual Anything is special, but for an association commemorating its 50th Annual Meeting, the Golden Anniversary is particularly sweet. The Arkansas Association of Healthcare Engineers (AAHE) is an affiliated group of the Arkansas Hospital Association, dedicated to the advancement of scientific knowledge in the profession of healthcare engineering, and this year, it’s celebrating!

AAHE held its first meeting back in the 1960s, and has grown to be known by its national counterpart, the American Society for Healthcare Engineering (ASHE), as one of the leading chapters in the nation.

What makes an outstanding chapter? Outstanding members! And the desire by those members to make a positive difference in their field, both on the state and national stages. In 1982, ASHE began awarding Chapter Recognition Awards for chapter education, membership and levels of membership. Beginning in 1982 and every year since, AAHE has earned awards of recognition from ASHE. When in 1992 ASHE began honoring its most outstanding chapters with Bronze, Silver and Gold recognition based on achievements in chapter education, advocacy and production of communication tools such as a newsletter or yearbook, AAHE was again at the fore. The Arkansas chapter earned a Gold award in the inaugural year – one of only three chapters in the nation to earn this honor. AAHE continued earning Gold awards annually through 2006.

In 2007, another level, the Platinum award for overall excellence, was created. AAHE earned one of only four Platinum awards given that year and has done the work needed to earn Platinum status every year since.

But it isn’t just the awards that tell the story of chapter members’ 58

Summer 2015 I Arkansas Hospitals

dedication to excellence and to education through association.

AAHE has become a powerhouse of leadership, with six of its members being elected to the position of national ASHE president.

AAHE members have also hosted the ASHE National Meeting (in 1983, at Hot Springs, with one of AAHE’s own installed as ASHE president), and achieved national recognition through ASHE’s conferring of Senior (16) and Fellow (13) status upon chapter members. Two AAHE chapter members have received the ASHE national award for distinguished members, the Crystal Eagle.

A firm belief in education led the group to establish scholarships, for engineering students, and in 1979 to establish the Arkansas Hospital Engineers Scholarship Trust. In the past year alone, $22,500 was awarded in engineering scholarships with seven deserving students being selected to receive assistance with their educations. The Arkansas chapter also has initiated an internship program, which places engineering students

in internship positions in hospitals – one of the first ASHE state chapters to fund and implement such a program.

AAHE has grown from seven founding members to nearly 300 members in 2015.

“Our 50th meeting was intended to celebrate the past leadership, and recognize that even a small state population base can excel when there has been a longterm commitment and dedication to providing knowledge and resources to the healthcare engineering environment,” says Wesley Trussell, CHFM, immediate past president of the organization and assistant vice president of facilities and support services at Jefferson Regional Medical Center. “The focus for AAHE’s foreseeable future is to continue to provide value to the healthcare arena in terms of productivity, building efficiencies, and leveraging the onslaught of new technologies to provide higher quality, lower costs, safer environments, and ultimately achieving the best for our hospitals and patients.”

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Arkansas Hospitals I Summer 2015 59

News

Arkansas Hospitals Take Key Messages to Washington Bringing Arkansas hometown hospital leaders into the same room for discussion with our senators, their aides and House aides was job one May 3-6, as a cadre of Arkansas hospital leadership team members traveled to Washington, D.C. for the annual membership meeting of the American Hospital Association.

Administrators, board members, C-suite executives and others made up the 17-member delegation from Arkansas. In daily plenary and breakout sessions, those attending received cutting edge information regarding today’s healthcare landscape from the country’s foremost political, policy,

opinion and healthcare leaders.

Face-to-face meetings with Senators John Boozman and Tom Cotton and aides to elected officials from both houses gave our congressional delegation the chance to hear directly from Arkansas healthcare leaders who detailed how Washington policy affects our hospitals at home.

Photos by David White 60

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Special Report

Breaking the Bank

62

Dollars and Sense

By Paul Cunningham, Executive Vice President, Arkansas Hospital Association

The Real Cost of Hospital Uncompensated Care

Since 2000, Arkansas hospitals have provided about $4 billion in uncompensated patient care.

Summer 2015 I Arkansas Hospitals

Arkansas hospitals have a long tradition of providing healthcare services to patients regardless of their ability to pay. Historically, they have been committed to absorbing as many costs as possible for patients who are unable to pay for the healthcare services they receive, and the trend is ever increasing.

In the span between 2001 and 2015, Arkansas hospitals provided approximately $4 billion in uncompensated services to patients.

Hospitals’ uncompensated care costs climbed from about $215 million to $385 million, a 75% increase during that time, and the prospects of “bending” that cost curve were nonexistent.

Then came the Arkansas Private Option (APO) plan for expanding healthcare insurance to low-income Arkansans. In 2014, the first year of APO operations, hospitals recorded dramatic drops in their levels of patients without insurance and the accompanying uncompensated care.

Yet, there is some talk of abandoning the program and putting uncompensated care back on its previous track.

Some say the APO program is too costly, but that opinion fails to recognize that a combination of community benefit policies, charity care, bad debt and underfunded care – resulting from Medicare, Medicaid and other government program payment shortfalls – results in hundreds of millions of dollars in costs that are borne by everyone. So, it’s important to understand what these unpaid costs and their impacts are across our state.

What is Uncompensated Care?

Uncompensated Care is the portion of total hospital patient care costs for which no payment is received from the patient or an insurer. Basically, it is the sum of the cost of bad debt and charity care.

Charity Care is the dollar value of care provided, without charge, by hospitals to patients who are unable to pay their medical bills. It represents expenses for which hospitals know at the beginning they will not be reimbursed. The level of charity care provided in any given hospital depends on a variety of factors, including the hospital’s mission, financial condition and geographic location.

A patient’s ability to pay typically is determined by a hospital’s charity care or financial assistance policy, which considers factors such as individual and family income, assets, employment status or availability of alternate funding sources. Charity care determinations are usually made prior to admission; however, they occasionally may be made later to allow for emergencies or a lack of information about the patient’s financial status at the time of admission.

Bad Debt is incurred when a hospital cannot obtain reimbursement for care that has been provided because a patient who may or may not be insured is either unable or unwilling to pay their bills. Unlike charity care, bad debt involves situations where the patient either did not request or did not qualify for financial assistance.

Bad debt is often generated by medically indigent and/or uninsured patients, making the distinctions between the two categories arbitrary at best.

Therefore, it is reasonable to consider bad debt as a component of hospitals’ total cost of care to medically indigent and uninsured patients.

For patients having no insurance, the amount of bad debt can include all or part of the bill. On average, out-of-pocket payments received from uninsured patients ultimately cover less than 20% of the cost of care they received. The remainder is bad debt.

Additionally, bad debt expenses for insured patients are trending up with the growth in health insurance policies containing higher patient co-pay and deductible amounts which patients often can’t pay.

Hospitals are seeing more cases where patients, although insured, must cover the initial $4,000-$5,000 of a bill before insurance kicks in.

Between 2013 and 2015, the number of Blue Cross enrollees with these high deductible health plans increased from 57,575 to 76,525. We believe this upward trend will continue.

In many ways, this is like caring for an uninsured patient because a sizeable portion of the out-of-pocket amount is never paid. Even after insurance begins picking up some of the bill, patients are responsible for 20%-30% co-pays, which often go either totally or partially unpaid.

Ultimately, the unpaid amounts are written off as a bad debt expense.

Undercompensated Care is not a part of uncompensated care, but it has a direct bearing on the stress that uncompensated care puts on a hospital. It is associated with governmental programs such as Medicare, Medicaid, Veterans Administration, workers’ compensation, Ryan White funding, etc. These programs have historically paid well below the cost continued on page 64 Arkansas Hospitals I Summer 2015

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Summary – Arkansas Uncompensated/ Charity Care Compared to Net Patient Service Revenue

2012 (Oct 01, 2011 Sep 30, 2012)

2013 (Oct 01, 2012 Sep 30, 2013)

Net Patient Service Revenue

$6,272,135,238

$6,105,735,287

Charity Care Costs (line 23 ÷ A)

2.6%

2.8%

Non-Medicare Bad Debt Costs (line 29 ÷ A)

3.0%

2.7%

Non-Medicare Uncompensated Care Costs (line 30 [ lines 23 + 30 ] ÷ A)

5.6%

5.5%

$351,239,573

$335,815,440

Total Uncompensated Care Costs

Source: Worksheet S-10 of the Medicare cost report. Net patient service revenues are from Worksheet G line 3.

of providing care, which makes it even more important for hospitals to care for patients with resources to pay the cost of care they receive.

For example, Medicare is intended to pay hospitals enough to cover the cost of care, but in most cases it doesn’t.

American Hospital Association data show that hospitals across the United States received payment, on average, of only 88 cents for every dollar spent caring for Medicare patients in 2013. For Arkansas hospitals, while Medicare margins vary from hospital to hospital, on average Medicare paid hospitals marginally less than costs statewide in 2012, which is the most recent data available.

This situation will only get worse in the future. The chart on the previous page shows Arkansas hospitals received more than $439 million less from Medicare due to a series of cuts resulting from the Affordable Care Act of 2010, the Budget Control Act of 2011, the Middle Class Tax Relief Act of 2012, American Taxpayer Relief Act of 2012 and a series of regulatory cuts put in place by CMS. As Medicare pays less, undercompensated care grows.

Medicaid rates don’t come close to covering the costs of hospital care. A study conducted by BKD LLP found that in 2011, Arkansas Medicaid rates covered 53% of inpatient costs and 36% of outpatient costs. If not for the state’s Medicaid assessment, hospitals would have lost $208 million serving Medicaid patients that year. The assessment helps decrease the loss, but it does not eliminate it.

As Medicare, Medicaid and others pay less, undercompensated care grows, 64

Summer 2015 I Arkansas Hospitals

and the level of uncompensated care becomes a more critical factor for a hospital’s financial health and viability.

In 2013, 42% of patients cared for in Arkansas hospitals were covered

by Medicare, 20% were covered by Medicaid, 7.5% were uninsured self-pay patients and 1.1% were covered by other governmental programs. Translation: Payments collected for roughly 71% of all patients failed to cover the cost of care.

The remaining 29% of patients, those traditionally insured or who pay the cost of their care, pay significantly more to help cover the costs for the 71% whose care is underpaid.

How is Uncompensated Care Calculated?

Uncompensated care is sometimes expressed in terms of hospital charges, but charge data can be misleading, particularly when comparisons are being made among types of hospitals or hospitals with very different payer mixes.

For this reason, the most reliable measure of hospitals’ uncompensated care is expressed in terms of costs. Therefore, when the Arkansas Hospital Association (AHA) refers to uncompensated care, we always use hospital costs as the measure.

Each year, the AHA collects aggregate information on selected utilization and financial indicators for Arkansas hospitals, including the level of uncompensated care (patient services provided for which no payment is received). Until recently, the prime data source for these numbers has been individual hospital responses to the American Hospital Association’s Annual Survey of Hospitals, which is the

nation’s most comprehensive source of hospital financial data.

The American Hospital Association’s methodology for calculating uncompensated care is to add total debt and charity care-related charges (as reported in the American Hospital Association’s Annual Survey), then multiply this sum by the cost-to-charge ratio (CCR), which is the ratio of total expenses (less bad debt expense) to gross patient and other operating revenue.

However, the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare and Medicaid programs, in recent years has begun collecting uncompensated care information on the Medicare Cost Report, which many consider a more reliable source. More importantly, CMS officially recognizes these numbers. The CCR, which has been used in the American Hospital Association methodology for more than 15 years, is still used to allocate uncompensated care costs on Worksheet S-10 of the Medicare Cost Report now employed by CMS. CMS first required the reporting of uncompensated care on the new Worksheet S-10 beginning with cost reports submitted on or after May 1, 2010.

Many hospitals are still gaining experience with reporting on the S-10 because most S-10 lines are not used for payment purposes, so there are industry concerns about the comparability and completeness of the data collected on the form.

Based on the former way of calculating, Arkansas hospitals lost about $385 million on uncompensated care in 2013. CMS’s method puts the total at $336 million, about 12% less. However, CMS’s numbers include only acute care hospitals.

Consequences of Uncompensated and Undercompensated Care

Based on all payer sources, Arkansas hospitals are paid less than the cost of care for about 71% of their patients, including those covered by Medicare, Medicaid and those without any type of coverage. The remainder of those costs – uncompensated and undercompensated care – must be covered in some manner just to break even. They are either absorbed by hospitals, which ultimately

results in a decrease in healthcare services and access to care, or shifted to private insurers. This “cost shifting” practice is one of the forces driving the cost escalation of health insurance premiums.

The “cost shift” affects all Arkansans, not just those without insurance coverage, in the form of higher rates. When hospitals raise their rates, the increase is most noticeable to self-paying patients, but private insurers inevitably follow suit and pass the cost on to employers and other policyholders in the form of higher insurance premiums.

Businesses must then decide whether to reduce employee benefits or ask employees to pay a greater share of insurance premiums.

As long as hospitals can pass on the costs of uncompensated care, funding it remains possible. However, as more uninsured patients come to hospitals seeking care and as more insurance companies and other payers seek to limit reimbursement, hospitals are finding it increasingly difficult to generate the revenue to cover uncompensated care costs, especially in a state where 71% of patient care costs are covered by a range of payments that either barely cover the cost of care or fall far short of that mark.

With the current payer mix among the state’s hospitals, to simply break even on patient care services, commercial insurance companies would need to pay hospitals amounts covering 138% of costs. If those commercial insurance payments cover only 130% of costs, hospital margins drop to -1.9%, and they sink below -4% if insurance payments fall to a level covering just 120% of costs.

In today’s world, insurers want to keep hospital payments as low as possible, putting hospitals at increased financial risk with every uninsured patient seen. That’s why we place so much importance on what new solution will follow the Arkansas Private Option, which has been very successful in replacing uninsured patients with patients whose payers cover their cost of care.

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THIS SUMMER, STAY ACTIVE AND STAY

safe

W

hether it’s boating, ATV riding, cycling or swimming, the risk for injury is always there. Sadly, injuries are completely preventable. Many people just don’t think or don’t know about safety.

It takes all of us to prevent injuries.

The Arkansas Foundation for Medical Care (AFMC) has free tools you can use to teach your patients about injury prevention. Visit afmc.org/tools to download these tools and find more information. This summer, help your patients safely enjoy all the fun Arkansas has to offer.

THIS MATERIAL WAS PREPARED BY THE ARKANSAS FOUNDATION FOR MEDICAL CARE INC. (AFMC) UNDER CONTRACT WITH THE ARKANSAS DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL SERVICES. THE CONTENTS PRESENTED DO NOT NECESSARILY REFLECT ARKANSAS DHS POLICY. THE ARKANSAS DEPARTMENT OF HUMAN SERVICES IS IN COMPLIANCE WITH TITLES VI AND VII OF THE CIVIL RIGHTS ACT. MP2-AHA.IP.AD,4/15

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Legislative Advocacy

News from the Capitol:

2015 Session Ends, but Our Work Continues

By Jodiane Tritt, Vice President of Government Relations, Arkansas Hospital Association Every legislative session has a different feel to it than all previous sessions. That certainly is true when the session begins with a brand new governor, new leadership in the Senate and House of Representatives, and many new members of both chambers. Nonetheless, preparation for any session at the AHA begins long before the first gavel falls.

The AHA Board of Directors appoints a Council on Government Relations (CGR) each fall before the odd-numbered sessions. The CGR then recommends a list of legislative priorities for the AHA Board of Directors to adopt.

It was no surprise that reauthorization of the Arkansas Private Option (APO) was at the top of the list for this year’s session. In addition, the CGR recommended to support legislation that would allow reimbursement for work done by community paramedics, to work toward meaningful tort reform and to work with stakeholders on measures that improve patient care and the healthcare system overall.

The AHA Board of Directors took the CGR’s recommendations, and the staff prepared for battle.

The Reauthorization of the Arkansas Private Option

On January 22, 2015, Governor Asa Hutchinson announced that, as part of his healthcare plan, he recommended that the Arkansas legislature keep the APO intact until the end of 2016.

At that time, in its present form, the APO terminates. In the meantime, the governor recommended that the legislature form a special group, the Arkansas Health Reform Legislative Task Force, to study and make recommendations on: • How best to provide healthcare coverage for the current group of

Private Option enrollees, and • How to reform the Arkansas Medicaid Program to meet not only today’s needs, but also those of the future.

The Arkansas Health Reform Legislative Task Force was created by Act 46 of 2015 and consists of 17 total members – 16 legislators, 8 who have publicly stated they were in support of the APO and 8 who have publicly stated they were against the APO, and the Surgeon General of Arkansas, who serves as an ex-officio member.

The first few meetings of the Task Force were largely organizational in nature. The Task Force selected a consultant, The Stephen Group, which touts itself as a business and

governmental consulting firm, focusing on assisting business and governments in healthcare and social services intelligence, public sector growth strategies and innovation. The Stephen Group must assist the Task Force in developing its final report, which is due on or before December 31, 2015, for recommended strategies to achieve the governor’s goals of providing healthcare coverage for the current group of APO enrollees and reforming the Arkansas Medicaid Program.

While most of the goals and explicit considerations outlined in Act 46 that the Task Force must consider when making recommendations are good, continued on page 68 Arkansas Hospitals I Summer 2015

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there is at least one that is of great concern for Arkansas hospitals, which is the requirement to consider: “innovative measures and options such as capitated payment models, including without limitation managed care programs for specific high-need populations, such as people with serious mental illness or elders with frailty.”

On May 1, 2015, the Arkansas Department of Human Services placed, for comment, a draft of the proposed Request for Information (RFI) on Managed Care for Special Needs Populations. The AHA submitted specific comments on the proposed RFI by the May 8, 2015, deadline. The AHA was clear in its submission that there is a sharp distinction between coordinated care and “managed” care and that the AHA is vehemently opposed to moving patients from the current Medicaid program or the Arkansas Private Option into a managed care program.

The AHA’s comment letter also addressed concerns that managed care has historically ignored the overall needs of the patient, has resulted in “cost savings” that are due to reducing care for patients, and could have a dramatic adverse impact on programs and funding mechanisms that have been created to offset at least some of the losses experienced by low Medicaid payments to providers.

On May 15, 2015, the Arkansas Department of Human Services officially released the RFI, and managed care companies had until June 15, 2015 to respond. Those responses likely will be made available to the consultant and the Task Force members and used as a potential solution for Medicaid reforms.

Clearly, while AHA is grateful that the legislature reauthorized the appropriation for the Arkansas Private Option early in the session, the focus of our work to protect hospitals and patients and continue to achieve the goals of the APO has shifted, at least for now, to the Task Force.

On April 20, 2015, AHA President and CEO, Bo Ryall, testified before the Task Force on the definition and impact of uncompensated care across hospitals.

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Paul Taylor, CEO of Ozarks Community Hospital in Gravette, Arkansas, also presented and provided a compelling distinction between hospital viability in Arkansas – with the APO – and Missouri – without any type of expanded, affordable coverage for citizens.

Mr. Taylor presented clear evidence that not only is coverage beneficial for patients and hospitals, but it also is crucial for economic development.

Mr. Taylor testified that his system’s hospital in Missouri has been reduced in size from 45 beds to 3 beds and has lost 60 employees, while the Gravette hospital in Arkansas has expanded its workforce by nearly 60 and is actively recruiting more physicians.

The members of the Task Force want and need to hear from you about the impact the APO is having on each of Arkansas’s hospitals. Many out-ofstate experts have been asked, and will continue to be asked, about innovative reform ideas for the overall Medicaid system and for replacement ideas for the APO. But Arkansas’s hospital employees, healthcare providers and patients are in-state experts and need to be heard, too.

The Task Force meetings are open to the public, and the meeting dates are published on the Arkansas General Assembly website at http://www.arkleg. state.ar.us/assembly/2015/2015S1/ Pages/Home.aspx.

The Top Ten List from the 90th General Assembly

In addition to the reauthorization of the APO, the legislature and the governor did plenty of other work, too.

Of the 2,105 filed bills and resolutions from the session, 1,288 became new acts. The AHA staff reviewed each bill filed and followed the plethora of bills that affected hospitals and the healthcare system. With the retirement of David Letterman, it seems appropriate to provide a Top Ten List of bills passed that are important to the day-to-day business of our hospitals.

Number 10: Act 1233 All-Payer Claims Database Senator David Sanders sponsored legislation to provide for the

establishment and governance of an all-payer claims database that will be governed by the Arkansas Insurance Department (AID). The AID will be advised by an oversight board, which includes representatives from the healthcare provider community, and must begin holding meetings no later than July 1, 2015. The AID will create regulations for collection, validation, analysis and reporting of health data.

Number 9: Act 1208 Combating Prescription Drug Abuse Senator Missy Irvin sponsored legislation to improve the Prescription Drug Monitoring Program by adding various requirements for individual, licensed prescribers. In addition, this legislation requires hospitals to adopt guidelines for opioid prescribing in Emergency Departments to address at least (1) treatment of chronic nonmalignant pain and acute pain; (2) limits on amounts or duration of opioid prescriptions; and (3) situations where opioid prescriptions should be discouraged or prohibited. The act affirmatively states that the guidelines will not establish a standard of care.

Number 8: Act 1168 Sexual Assault Kit Inventory Representative Justin Gonzales sponsored legislation to address the possible backlog of untested Sexual Assault Evidence Collection Kits that are stored at local law enforcement agencies and hospitals. The State Crime Laboratory must create separate inventory forms for healthcare facilities and law enforcement agencies to assure that kits are appropriately accounted for and handled in the most appropriate manner.

Number 7: Act 1013 The Lay Caregiver Act Senator Gary Stubblefield sponsored this legislation at the request of the American Association of Retired Persons (AARP). While hospitals already follow complex regulations for discharge planning under laws, regulations and Medicare Conditions of Participation, AARP requested that this law be passed to ensure that inpatients

are allowed an opportunity to designate a caregiver before being discharged to home. If a patient designates a caregiver, the hospital must prepare the caregiver to provide aftercare to the patient by having a consultation to allow the caregiver to ask questions and by providing education “consistent with current accepted practices” and based upon the caregiver’s learning needs. The hospital is not liable for the caregiver’s acts or omissions.

Number 6: Act 895 The Criminal Justice Reform Act Senator Jeremy Hutchinson sponsored the governor’s signature Prison Reform Initiative that is a 41-page, $64 million criminal justice reform plan. The act includes a provision stating that for a medical service or treatment provided to local correctional facilities for the benefit of an inmate, healthcare providers cannot charge more than the “prevailing cost paid by [Medicaid] for a particular medical service or treatment established by the [Medicaid] fee schedules for a particular medical service, treatment, or medical code.”

Number 5: Act 887 Telemedicine Senator Cecile Bledsoe and Representative Deborah Ferguson sponsored legislation that will require many insurance plans to cover telemedicine.

The act requires the distant-site provider to have a “professional relationship,” which includes crosscoverage and on-call arrangements; referrals by providers who have ongoing relationships and have agreed to supervise care; and/or other circumstances approved by the State Medical Board. In addition, the act includes reimbursement protections for physicians and allows the State Medical Board to promulgate rules to further the practice of telemedicine.

Number 4: Act 685 Community Paramedics Representative Scott Baltz sponsored legislation to allow paramedics to perform and get paid for non-urgent services, including coordination of continued on page 70

How to Share Your Hospital’s and Patients’ Stories This is a time in Arkansas when offering direct information about the impact of the Arkansas Private Option (APO), both on your hospital’s bottom line and in the life of your patients, is vital.

The Healthcare Reform Legislative Task Force is in the process of gathering information toward creation of the best plan for “what comes next” upon sunset of the APO. You can help Task Force members better understand the direct impact of the APO by telling your hospital’s and your patients’ stories. It’s a way of personalizing the effects of the APO on Arkansans and Arkansas’s hospitals. The APO has had results on people’s lives and doesn’t just live in jargon, calculations and figures.

Please consider using these guidelines. Your story is important. Your sharing it with the Legislative Task Force could be the key to helping members understand what the APO means to Arkansas healthcare.

What to relay to your policymakers (regarding hospitals): 1. That hospitals keep patients at the heart of all they do; 2. That hospitals are good for our economy – be specific about how many employees work for your hospital; 3. The number of citizens in your county who are enrolled in the APO; and 4. That the APO relieves some of the pressure brought about from federal payment reductions.

What patients affected by the APO should relay to policy-makers: 1. That the APO has had a significant impact on their health and wellbeing; 2. How the APO has impacted their family life; 3. How the APO eases their healthcare burden; 4. Whether they are seeking preventive care they could not access before the APO; 5. Whether the APO is allowing them to better managing chronic conditions; 6. Their age, current job(s), years working (names are optional, but useful); and 7. Why they were not insured before.

In all communications, make sure you are: Specific, Brief, Direct, Honest, Constructive, Timely and Complimentary Telling the story of what the APO means to your community, hospital and patients is very meaningful. Your voice is important.

The names and contact information for Health Reform Legislative Task Force members are available on the AHA website, www. arkhospitals.org, under the Hot Topics tab.

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community services, chronic disease monitoring and education, health assessments, hospital discharge followup care, laboratory specimen collection and medication compliance. The care must be provided to appropriate patients, and it must not conflict with home health or hospice services.

Number 3: Act 535 Human Tissue Disposal Representative Kim Hammer sponsored legislation requiring the Arkansas Department of Health to adopt rules to ensure that human tissue in healthcare facilities is disposed of by (1) releasing the tissue to the patient or authorized person; (2) incineration; (3) burial; or (4) cremation. Hospitals already comply with these practices. The law requires that all healthcare facilities have policies to implement these requirements, so hospitals will want to review their policies to ensure that they are up-to-date.

Number 2: Act 529 Hydrocodone Prescriptions Representative Stephen Magie sponsored legislation requiring the State Nursing Board and Medical Board to enact rules allowing Advanced Practice Nurses (APNs) and Physician Assistants (PAs) to prescribe hydrocodone combination products that were reclassified from Schedule III to Schedule II in October 2014. The APNs who prescribe these drugs must be expressly authorized to do so by the terms of their collaborative practice agreements.

Number 1: Act 411 Drug Diversion Reporting Representative Justin Boyd sponsored legislation to require any entity that employs or contracts with healthcare professionals to report those professionals to the appropriate state licensing or certifying body if the entity terminates the professional’s employment, contract or clinical

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privileges (or allows resignation in lieu of termination) because of drug diversion, misuse or abuse. The entity must report employees who are not licensed or certified healthcare professionals to local law enforcement if the employee is disciplined or terminated because of his or her diversion of controlled substances.

On behalf of the entire AHA staff, it was a sincere pleasure representing the interests of Arkansas’s hospitals and patients this legislative session.

While the session has come and gone, the work is far from over.

Please continue to educate Arkansas’s policymakers, including the Health Reform Legislative Task Force, on the value of hospitals. If you are not already receiving legislative updates, please join VoterVOICE at this link: https:// www.votervoice.net/ARHA/Home.

And as always, feel free to contact any member of the AHA staff for more information about the legislative session or the regulatory process.

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