Arkansas Hospitals, Summer 2016

arkansas

hospitals www.arkhospitals.org

SUMMER 2016

Unlocking the Power of Data Charting Hospitals’ Futures The Business Case for Quality BONUS PULLOUT SECTION:

HOSPITAL STATISTICS 2016 A MAGAZINE FOR ARKANSAS HEALTHCARE PROFESSIONALS ARKANSAS HOSPITALS I Summer 2016 1

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 2016 I ARKANSAS HOSPITALS

arkansasbluecross.com

MPI 2003 11/13

10 16 46 68

arkansas

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 and Contributing Writer Cindy Lewis, Editorial and Layout Assistant

BOARD OF DIRECTORS

Darren Caldwell, Newport / Chairman Peggy Abbott, Camden / Treasurer Ron Peterson, Mountain Home / At-Large Chris Barber, Jonesboro Dorothy Berley, Warren John Heard, McGehee Ed Lacy, Heber Springs Jim Lambert, Little Rock Corbet Lamkin, Camden Vincent Leist, Harrison James Magee, Piggott Dan McKay, Fort Smith Jason Miller, North Little Rock Ray Montgomery, Searcy Robert Rupp, El Dorado Doug Weeks, Little Rock Debra Wright, Nashville

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 7 7 9

edition 95

Hospital Statistics 2016

43 Our Team, Serving Yours

news 45 NewsSTAT 46 Saving Lives: The Faces of

cover story 10 Shaping the Hospital of the Future

15 Focus on Quality 16 The Business Case for

62

Quality Improvement 20 Meaningful Use Update for Eligible Hospitals and Critical Access Hospitals

Control to Improve Quality, Safety and Patient Satisfaction

50 54 59

quality and patient safety

22 Leveraging Statistical Process 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

25 Bonus Pullout Section:

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

the coach’s playbook pcipublishing.com

statistics

Arkansas’s Private Option CEO Profile: Sharif Omar, Northwest Health System Clinical Staffing Shortages Combating Breaches: Cybersecurity in Today’s Hospitals AHA Services Presents: Making Sure Caregivers Are Always There

the compliance counselor 65 Ready or Not, Here They Come!

legislative advocacy 68 The Connections between

Government and Hospitals

ARKANSAS HOSPITALS I Summer 2016 3

from the PRESIDENT

DATA

TELLS THE STORY

Photo courtesy of Cunningham Photography

The Arkansas Hospital Association’s (AHA) data arm gathers and provides to our members the latest data and data-driven reporting from federal and state resources, as well as policy analysis to assist in your organization’s forward planning.

One such resource is DataGen, a member benefit we provide at no additional charge. It allows us to provide facility-level data reports in the area of Medicare analytics, enabling our hospitals to assess the impact of Medicare changes using each hospital’s own historic cost report, claims and quality data.

Another is our Medicaid policy results tracking, through which we estimate state-determined Medicaid policy changes’ financial impact on each of our member hospitals.

Medicaid payment and utilization data provided by members and the state is analyzed by the AHA and our contractors, providing hospitalspecific metrics for informed conversations with governmental leaders.

Because of their membership in the AHA, our members are privy to national resources through the American Hospital Association, as well. Valuable data regarding research and trends, hospital statistics and business intelligence are available 4

Summer 2016 I ARKANSAS HOSPITALS

In health care, as in all fields, data guides our every move. Whether it’s quality improvement data leading us to better care processes, electronic health records (EHR) tracking patient data, workflow management tools advising administrative decisions, or market analysis aiding strategic development, data runs it all.

through easily navigated online tools.

We work with the American Hospital Association on behalf of our members to develop individualized facility reports showing the impact of actual or proposed legislation, e.g. Medicare reimbursement cuts.

Information isn’t always just delivered through 1s and 0s on the digital side. It’s also in the form of thoughts, words and deeds regarding policy — its details, projecting outcomes of enacted legislation on hospitals, and watchdog reporting across the health care spectrum.

Many states have been watching (and emulating) Arkansas’s Medicaid expansion efforts through Private Option legislation. This year, data guided our legislative efforts on your behalf as we worked with Governor Asa Hutchinson and Arkansas legislators to refine Medicaid delivery systems. As the Private Option evolved to Arkansas Works, proposed changes in policy were researched and decoded to figure out just how each measure would affect local hospitals.

The AHA studied the governor’s proposal and challenged its managed care components. The negative impact of managed care on our hospitals was explained through hard numerical data and narratives

from the local level, and it was not included in the Arkansas Works legislation.

I’d like to thank the AHA’s executive vice president, Paul Cunningham, for his expert guidance of our research and data efforts.

Paul’s skills have long been a valued component of the AHA team’s work on our members’ behalf. The annual statistics guide, a part of this edition of Arkansas Hospitals, is but one of the many resources his efforts provide to our members on a regular basis.

You’d be surprised at the enormous volume of data your AHA team processes, evaluates and utilizes on our members’ behalf each day. Data drives hospitals’ decision making and their process delivery.

We hope this Data edition of the magazine is of particular use to you in your work with your own hospital teams and stakeholders through the coming year.

Bo Ryall

President and CEO Arkansas Hospital Association

Can Laboratory Testing Improve Patient Care and Lower Costs?

Yes. Let us show you how.

AEL is a medically-led, communitybased laboratory with personal service A partner for hospitals to reduce the cost of referrals and in-house testing by using the most modern technology.

To learn more about AEL and its innovative technology to assist in utilization management call Pam O’Brien at 901.405.8200.

ARKANSAS HOSPITALS I Summer 2016 5

EDITOR’S letter

Changing the World

The amount of data permeating every health care discussion, decision and procedure in today’s world can be daunting. Still, as overwhelming as the volume of data can be, we know health care data holds answers to questions yet to be asked. One way of dealing with the data explosion is to remember what we’re really all about. Stanford MD, PhD Atul Butte said it well: “Hiding within these mounds of data is knowledge that could change the life of a patient, or change the world.”

The summer edition of Arkansas Hospitals traditionally contains a compendium of statistical information and data designed to help in discussions surrounding the health care delivery system relating directly to your hometown or community. The complexity of health care today – from community needs assessments to services offered, health care coverage to reimbursements – bears discussion, and the pullout guide in the center of this issue should help.

But also at issue are the nuts and bolts of where we are and where we want to go as a field. What will health care look like in the future? How do we best position our organizations for both agility and duration?

What does the data tell us about staffing needs as time passes? We’ve expanded this edition to include articles addressing these challenges and others in which data is the heart and driving force.

As intimidating as data’s immensity

can seem, good use of data can improve not only a patient’s experience, but also communication and knowledge within our organizations. It can help us improve efficiencies and attain the agility needed to respond to both opportunities and deep challenges.

I’ll admit that numbers were always less interesting to me than language. I have come to understand, though, that numbers have a language of their own, and they offer fundamental truths to those of us associated with health care. Indeed, services key to our members revolve around data and its use.

The AHA’s Quality Department and Data Services arm utilize and interpret hospital data to help our members in their quest for excellence, both in patient services and operational distinction.

Our Advocacy team relies upon data to bring the clearest picture to legislators, elected officials and community leaders

when helping shape health care policy that works most effectively for the health of Arkansas patients.

Our Education Department follows trends and cutting edge needs in health care training, interpreting the data to offer the latest in educational opportunities for member managerial and operational leadership teams.

And our health care solutions arm, AHA Services, offers the assistance of health care businesses that utilize data, offer data, interpret data and dispense data to help on both the medical and the operational sides of every health care member organization.

We hope this issue of Arkansas Hospitals is a help in your daily work, as you continue improving the health of our state while charting your own hospital’s future.

Elisa White, Editor-In-Chief

Join Us for the 14th Annual

Mid-South Critical Access Hospital Conference August 17-19, 2016 Omni Nashville Hotel Nashville, Tennessee For info: www.arkhospitals.org

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Summer 2016 I ARKANSAS HOSPITALS

NEWSMAKERS and NEWCOMERS ◼ CHRIS L. RAYMER, RN, former COO and chief nursing officer at Mississippi County Hospital System (MCHS), is the system’s new CEO, succeeding Ralph Beaty, who retired June 30. MCHS oversees operations of Great River Medical Center in Blytheville and SMC Regional Medical Center in Osceola. ◼ MARGIE SCOTT, MD, has been named director of the Central Arkansas Veterans Healthcare System in Little Rock, succeeding Michael Winn, following his retirement. Scott most recently served as acting chief medical officer for a VA network including hospitals in Arkansas, Louisiana, Mississippi and Texas.

◼ BRYAN MATTHEWS has been named director of the Veterans Health Care System of the Ozarks in Fayetteville. He also will oversee health care delivery in community-based outpatient clinics in northwest Arkansas, Missouri and Oklahoma. ◼ BRIAN THOMAS, senior vice president/COO at Jefferson Regional Medical Center (JRMC) in Pine Bluff, has been named interim CEO for the facility while a search is conducted for a successor to Walter Johnson, who resigned in March. ◼ PETER SAVOY, III, has been named administrator for both the Eureka Springs Hospital and

ARKANSAS

River Valley Medical Center, Dardanelle. Savoy has served in numerous administrative positions since 1975, as well as maintaining a private law practice specializing in health care and municipal law. He succeeds Chris Bariola, who has moved to a similar position at Baptist Memorial Rehabilitation Hospital in Germantown, Tennessee. ◼ MIKE McCOY has been named CEO of Chambers Memorial Hospital in Danville. McCoy was previously associated with Saint Mary’s Regional Medical Center, Russellville, serving in various administrative roles, including CEO and CFO, since 1984.

all about HOSPITALS ◼ UNITY HEALTH is the first

health care organization in Arkansas to join the Mayo Clinic Care Network. Under an agreement, Unity Health will have access to online resources from the Mayo Clinic and the ability to submit electronic requests to Mayo specialists.

Unity Health joins about three dozen health systems nationwide that have partnered with the Mayo Clinic. Its hospitals are Unity Health-White County Medical Center in Searcy and Unity Health-Harris Hospital in Newport.

◼ MERCY HOSPITAL

NORTHWEST ARKANSAS in Rogers will invest $247

million on capital projects and equipment over the next five years, according to CEO Eric Pianalto. Expansion plans include a new patient tower that will add more than 100 beds to the hospital, along with new clinics in Benton and north Washington counties. Other specialty care areas benefiting from the capital investment include the heart and vascular center and women’s and children’s services. ◼ CHI ST. VINCENT

MORRILTON was recently presented a $60,000 check from its hospital auxiliary for the purchase of a new canopy for the front entrance of the hospital. Past auxiliary support

has helped provide not only new equipment, but also thousands of hours of volunteering in many patient-care areas. ◼ FIVE ARKANSAS

HOSPITALS, Arkansas Children’s Hospital, Ashley County Medical Center, Mercy Hospital Northwest Arkansas, UAMS and Willow Creek Women’s Hospital, have been granted certification by the National Safe Sleep Hospital Certification Program, created

by Cribs for Kids®. The program awards recognition to hospitals that demonstrate a commitment to community leadership for best practices and education in infant sleep safety.

ARKANSAS HOSPITALS I Summer 2016 7

Welch, Couch & Company, PA is a full service accounting firm offering a wide range of services to the healthcare industry.

• Financial Statement and Employee Benefit Plan Audits • Medicare and Medicaid Cost Report Preparation • Reimbursement and Compliance Issue Consulting • Critical Access Hospital Consulting • Revenue Cycle Analysis • Feasibility Studies • IRS Form 990 Preparation • Strategic Planning for Acquisitions, Sales, Mergers and Expansions

At Welch, Couch & Company, PA, we have made a commitment to providing professional services to the healthcare industry. Our experienced professionals work closely with clients and their staff to ensure they are receiving the level of service you should expect out of your CPA firm.

Batesville, Arkansas Bill Couch, CPA, FHFMA 870.793.5231 www.welchcouch.com

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Summer 2016 I ARKANSAS HOSPITALS

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• • • •

ww

Arkansas Hospital Association

CALENDAR

July 14, Little Rock Arkansas Hospital Auxiliary Association (AHAA) Board Meeting Arkansas Hospital Association

September 8, Little Rock Arkansas Hospital Auxiliary Association (AHAA) Board Meeting Arkansas Hospital Association

July 22, Little Rock Arkansas Social Workers in Health Care (ASWHC) Summer Conference AHA Classroom

September 8, Little Rock ICD-10 Coding Changes for 2016 Arkansas Hospital Association

July 28, Little Rock Arkansas Society for Directors of Volunteer Services (ASDVS) Summer Conference AHA Classroom July 29, Little Rock Arkansas Organization for Nurse Executives (ArONE) Summer Conference Hilton Garden Inn West Little Rock August 4-5, Little Rock careLearning User Group Forum AHA Classroom August 11-12, Heber Springs AHA Board Retreat Red Apple Inn August 17-19, Nashville, Tennessee 14th Annual Mid-South Critical Access Hospital Meeting Omni Nashville Hotel August 25, Little Rock Basic/Intermediate Medical Terminology AHA Classroom September 7, Little Rock Cybersecurity Workshop Hilton Garden Inn West Little Rock

October 14, Little Rock Society for Arkansas Healthcare Purchasing and Materials Management (SAHPMM) Fall Conference AHA Classroom

September 9, Little Rock AHA Board Meeting AHA Boardroom

Medical Terminology: Basic/ Intermediate and Advanced with Anatomy and Physiology

September 15, Little Rock Care Transitions: Care Across the Continuum Hilton Garden Inn West Little Rock

August 25 and October 26, respectively

September 15-16, Little Rock Certified Professional in Healthcare Quality (CPHQ) Course AHA Classroom

These two courses are a must for health information management (HIM) professionals, and they are designed to aid those who work with ICD-10 coding systems. Taught by Karen Scott, an AHIMA-approved ICD-10 trainer and the AHA’s ICD-10 guru, each course is offered individually.

For more information, contact the AHA’s education team at 501.224.7878.

October 5-7, Little Rock Arkansas Hospital Association 86th Annual Meeting and Trade Show Little Rock Marriott and Statehouse Convention Center

October 20, Little Rock Arkansas Association for Medical Staff Services (ArkAMSS) Credentialing 101 AHA Classroom

October 5-7, Little Rock Arkansas Hospital Auxiliary Association (AHAA) 58th Annual Meeting and Trade Show Embassy Suites

October 21, Little Rock Arkansas Association for Medical Staff Services (ArkAMSS) Fall Conference AHA Classroom

October 13-14, Petit Jean Mountain Arkansas Healthcare Human Resources Association (AHHRA) Fall Conference Winthrop Rockefeller Institute

October 26, Little Rock Advanced Medical Terminology & Anatomy and Physiology AHA Classroom ARKANSAS HOSPITALS I Summer 2016 9

COVER STORY

Shaping the Hospital of the Future

STRATEGY SESSION

Charting Your Own Course

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Summer 2016 I ARKANSAS HOSPITALS

By Paul H. Keckley, PhD Exclusive to the Arkansas Hospital Association The origin of hospitals dates back 2,500 years to the facilities built by the ancient Greeks to serve their god of health, Asclepius, and to the third century B.C. Roman basilicas that housed healers who practiced their trade.

From these beginnings, facilities devoted to identifying and treating diseases by healers migrated to Europe and then to North America where our first hospital, Pennsylvania Hospital, opened its doors in 1751.

Second Gen hospitals developed accountable care organizations, public report cards and an array of outpatient services to compete. “Bending the cost curve” became job one and avoidance of penalties for poor clinical performance and avoidable errors an intense focus.

From these roots, the role of a hospital as a gathering place for health professionals focused on diagnosing and treating disease is unchanged. But how health is defined, how disease is diagnosed and treated, and how healing professionals engage with patients and with peers has changed dramatically. As a result, First and Second Gen(eration) hospitals have much in common. Third Gen hospitals in the U.S., however, are unlikely to resemble their predecessors.

First Gen Hospitals (circa 1947-2000)

Thanks to legislation (Hill Burton Act, 1947) that funded hospital construction in every community and the introduction of Medicare and Medicaid programs (1965), 7,200 hospitals were built in the United States. These First Gen hospitals were the anchors in their health care communities. They afforded employment to many, served as magnets for physicians and anchored the community’s economy.

The science of healing was advancing as techniques for surgery improved and medication therapy became a mainstay.

Hospital administrators focused on recruiting relationships, community support and appropriating capital for a widening array of inpatient services.

As resource-based relative value scale (RBRVS) payments evolved and as investor-owned hospitals became prominent, competition for admissions became the prime determinant of success.

First Gen hospitals enjoyed the “Field of Dreams” era for hospitals in the U.S. – when we built them, they came.

Specialization took front seat to preventive and primary care. Four beds per thousand was the norm. But the costs associated became problematic to employers

and insurers who launched HMOs and capitated models to constrain runaway spending. By 2000, the shortcomings of capitation had run their course.

Competitive pressures shrank the First Gen hospitals’ ranks to 6,200 including 1,200 owned by private investors.

Second Gen Hospitals (circa 2000-2015)

First Gen hospitals transitioned to Second Gen because the economics of running a hospital changed. Explosive growth in clinical innovation coupled with vexing medical inflation prompted Medicare, employers and insurers to clamp down on hospitals. They criticized lack of transparency, variable quality and safety, and cost shifting as intrinsic flaws.

Federal legislation is largely responsible for the tepid conditions faced by Second Gen hospitals as they navigated through the first post-Y2K decade: • The Medicare Modernization Act (2006) introduced managed care in Medicare and a new spotlight on prescription drugs; • The American Recovery and Reconstruction Act (2009) funded Medicaid expansion and forced meaningful use of electronic health records; and • The Patient Protection and Affordable Care Act (2010) altered incentives for hospitals from volume to value.

Quickly, hospital executives pivoted to efficiency and growth. Affiliations and consolidation accelerated as multihospital system operators played larger roles. Outsourcing and group purchasing arrangements became more sophisticated and the aggregation of physicians into clinically integrated networks became imperative.

Second Gen hospitals developed accountable care organizations, public report cards and an array of outpatient services to compete. “Bending the cost curve” became job one and avoidance of penalties for poor clinical performance and avoidable errors an intense focus. In the U.S. today, 5,627 hospitals, including 4,926 community hospitals, have survived. But what’s next?

Third Gen Hospitals (2015 forward)

Third Gen hospitals are significantly different from their ancestors. Unlike First Gen and Second Gen hospitals that defined their opportunities and challenges through the lens of third party reimbursements and federal regulation, Third Gen hospitals think outside the box. Their responses are framed around emerging opportunities in a consistently expanding health care market.

While regulatory compliance remains a constant, it is redefinition of this market that defines their strategies. They calculate their efforts around six realities: • Changing Demand for Health Services – 10,000 elderly age into Medicare daily. Shortages in primary care services are driving alternative venues like retail clinics and televisits. Millennials and employers are demanding programs for wellbeing along with specialized services for those who are sick. They want a coordinated blend of alternative and traditional medicine, physical and mental health, technologies that equip them to participate actively in their care and instant information about the costs they’ll shoulder in every transaction with their hospitals and caregivers. Third Gen hospitals embrace an expanding definition of health that goes well beyond sick care services for patients. And they don’t see Medicare as a financially unattractive market; • Explosive Clinical Innovation – Medical science is expanding exponentially. More than 80 randomized control trials are published daily, and precision medicine has a firm footing in cancer treatment.

For Third Gen hospitals, personalized health delivered through team-based models is central to their operating model. The results of these efforts – total costs of care, user experiences, outcomes and avoidable errors – are the continued on page 12

ARKANSAS HOSPITALS I Summer 2016 11

basis for competing against other Third Gen players in their region. Armed with cost and outcome data that’s readily accessible, and powerful tools for selfcare navigation, payers and consumers will find “what works best” for their health care far beyond their local communities; • Tighter Access to Capital – Third Gen hospitals need capital to expand their services across a wider array of retail, community and digital services closer to homes, schools and workplaces.

announcements by Aetna and Anthem about their partnerships with reputable health systems like Texas Health Resources, Inova and others reflect the convergence of financing and delivery of care in our system of care. Consumers and employers trust providers more than insurers, but have issues with both. Incentives to manage both cost and quality are firmly embedded in the Affordable Care Act’s momentum toward alternative payment programs, and they’re unlikely to change. What will

integrated networks around them.

Physicians were in the C-suite, but in roles limited to clinical impact – credentialing, care planning, quality and safety surveillance, and so on. Third Gen hospitals will be led by teams of clinicians with acumen in both finance and delivery. And the roles of health coaches, nutritionists, dentists, mental health practitioners, pharmacists and nurse professionals will also be more directly involved in business and clinical decisions; and

Figure 1

Key Ques(on: A Hospital, or a Par(cipant in a System of Health?

Planning and Strategy

Inpa(ent & Post Acute Services

Professional Services

Retail & Community Health

MSO Network Services Medical Management Real Estate Member Services

Total Popula:on Health Management at Full Risk

Finance Marke:ng & Communica:ons Analy:cs & Decision Support Risk & Compliance

Insurance

Advocacy Leadership & Governance

Key Business Units

But the capital markets are wary: bond ratings for the acute sector have plummeted, and private investment in health care is betting on other sectors that disrupt the status quo. Third Gen hospitals that operate with scale and scope advantages will be creditworthy; the rest will be starved for capital. And deployment to inpatient programs will be balanced against investments in household services, clinical enterprise developments and retail services; • Health Insurance Integration – Recent 12

Summer 2016 I ARKANSAS HOSPITALS

Key Opera0onal Func0ons

change are the activities of Third Gen hospitals to sponsor plans targeting Medicare, Medicaid, employers and individuals. In some markets, Third Gen hospitals will go it alone; in others they’ll partner with private insurers. And in all, they’ll invest heavily in technologyenabled care management to drive enrollment in their direction; • Expansion of Clinical Leadership – First and Second Gen hospitals appropriately focused considerable effort in recruiting physicians and building clinically

• Operating a Retail Business – For Third Gen hospitals, a sixth force is perhaps the most daunting – operating the enterprise in a retail model. As employers force employees into high deductible plans or exit coverage arrangements altogether, health care spending by Millennials and Boomers will become central to Third Gen hospital finances. Most will integrate alternative health, over-thecounter products and personalized diagnostics into their clinical

operations. All will re-deploy capital from bricks and clicks (integration of both an offline and online presence).

All will leverage digital health in every program and service so as to connect consumers to their health care organization of choice. And at the core of the organization’s culture is recognition that patients want to be treated as individuals who have choices and want to be actively involved in their care. Branding will matter more than ever.

Distinctions Matter

The distinctions between the three generations are significant (see Figure 2 below). The determination of how best to make the transition to future-thinking a necessary discussion for hospital boards, senior managers and physician leadership in every hospital, regardless of size, ownership and internal political pressures should be happening now.

For Third Gen hospitals, the imperatives for change are marketdriven. Unlike Second Gen hospitals that necessarily focused on federal regulatory changes, Third Gen hospitals must focus more attention to market forces. New capabilities are required in the Third Gen C-suite, as are new relationships forged with partners who bring capital and competencies not historically central to the operation of the hospital.

The key question for Second Gen hospitals is this: how can we successfully transition to become a fully-integrated system of health? Some might elect to maintain Second Gen status and take

their chances. Others may choose to play a role in a Third Gen system of health.

As reflected in Figure 1, managing total population health requires rethinking of how an enterprise is structured, how optimal scale and scope is achieved, and what roles each participant plays.

Shaping the Future: Charting a Course

The key questions Second Gen hospital leaders must answer are: • Can we survive as a Second Gen organization? What are the risks and advantages? How does our cost, quality and reputation performance compare to systems outside the community?

• How fast will conditions in our region shift demand and opportunities from Second Gen to Third Gen? • How will competing systems of health evolve, and what are they?

• Do we have the capital and operating expertise to be a system of health on our own, or should we play a key role in another?

• Is owning and operating a health plan advantageous? Do market conditions warrant sponsorship of a plan, or is partnering a better option?

• How should opportunities in outsourcing, affiliations and third party capital be approached?

• And given these challenges and opportunities, is our board prepared to make appropriate decisions objectively about its use of capital, management, physician relationships, affiliations, etc.? Is the board ready?

Answers will vary depending on market circumstances and the starting points for Second Gen hospitals. For rural and critical access hospitals, opportunities abound in primary care and preventive health, emergency services, geriatrics, alternative health and more.

For tertiary hospitals, concentration of specialized programs in high through-put, high outcome, high efficiency centers of excellence is likely. For community hospitals, it’s likely retail health and care coordination will take center stage. All have a role to play. All must necessarily make changes that to some might be uncomfortable. All play a vital role, and none is inconsequential.

Final Thought

The ancients in Greece and Rome set the stage for what is undeniably a cornerstone in our society – hospitals that serve as hubs of activity for healers.

That will not change, but how and where it’s done will change.

For Third Gen hospitals, the forces for change are market-driven. Unlike First and Second Gen hospitals that navigated around regulatory changes, Third Gen hospitals adapt to markets. They are not paralyzed by regulatory constraints and shared risk arrangements, nor are they timid about deploying capital outside traditional hospital services. They see the scale and scope of their operations well beyond third-party reimbursement.

Third Gen hospitals are systems of health that serve regions. They define health. They treat the sick and the well.

They’re the future.

Figure 2 First Gen “Community Hospital”

Second Gen “Medical Center”

Third Gen “Systems of Health”

Era

1947-2000

2000-2015

2015-

Focus

Inpatient Services for the sick and injured patients

Inpatient and Outpatient Services for the sick and injured patients

Health and Well-being Services for individuals, employers and populations across the full range of their states of health

Scope

Acute

Acute + Physician Services

Primary and Preventive, Acute, PostAcute + Physician Services + Health Insurance + Homes, Workplaces, Retail Clinics + Digital

Scale

Local

Local Operations with System Affiliations

Regional/National with Multiple Strategic Partnerships

Paul H. Keckley, PhD, is managing editor of The Keckley Report, and provides independent health care research and policy analysis. He is a regular contributor to Hospitals and Health Networks and H&HN Online. Reach him at: pkeckley@ paulkeckley.com. Visit his website at www.paulkeckley.com.

ARKANSAS HOSPITALS I Summer 2016 13

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Summer 2016 I ARKANSAS HOSPITALS

Across the United States, nonprofit hospitals are conducting community health needs assessments that serve as springboards for the launch of community health improvement efforts. Engaging patients and community members throughout the process is important, but what are the most productive ways of doing so? Released by the Association for Community Health Improvement and the Health Research & Educational Trust (HRET) with support from the Patient-Centered Outcomes Research Institute, the new Hospitals in Pursuit of Excellence (HPOE) guide Engaging Patients and Communities in the Community Needs Assessment Process presents models to help hospitals in this effort. Download the guide at www.hpoe.org.

Since 2010, the National Patient Safety Foundation’s Lucian Leape Institute’s work has focused on examination of five areas key to transforming safety of care in the United States: transparency, patient/consumer engagement, restoration of joy and meaning in work and workforce safety, care integration and medical education reform. A new compendium, Transforming Health Care, brings together the executive summaries, recommendations, and action checklists from a series of five reports in these areas. Health care leaders can use the presented recommendations to help assess where their organizations stand in the journey to safer care and what steps they can take to make greater progress. Find this tool at www.npsf.org.

QUALITY AND PATIENT SAFETY

FOCUS ON QUALITY With opioid awareness at the fore, the American Hospital Association and the Centers for Disease Control and Prevention (CDC) have produced a new patient education resource about prescription opioids. Developed with input from CDC experts and hospital clinical and behavioral health leaders, the two-page document outlines evidence-based information about the risks and side effects of opioids. It is designed to help facilitate discussions between health care providers and patients about these risks, as well as alternatives to opioids. Download this tool at www.aha.org.

Hospital Engagement Network (HEN) teams across Arkansas are hard at work on HEN 2.0, a collaboration between the American Hospital Association’s HRET and the Arkansas Hospital Association for improving patient safety and quality of care and reducing hospital readmissions. One readmissions reduction tool provided by the Agency for Healthcare Research and Quality is Project RED: Re-Engineered Discharge. The Project RED training program, newly updated, will help hospitals develop new processes, determine metrics for evaluating impact and learn how to implement Project RED. Find it at www.ahrq.gov.

ARKANSAS HOSPITALS I Summer 2016 15

QUALITY AND PATIENT SAFETY

The Business Case for Quality Improvement

CARE ADVANCEMENT

A CFO’s Perspective on Going Lean for Better Care

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Summer 2016 I ARKANSAS HOSPITALS

By Stuart Hill, Unity Health Vice President/Treasurer and Allen McGuirt, Unity Health Lean Coordinator Many hospitals struggle with the dichotomy of quality and finance. We try to mesh these two, seemingly exclusive, health care elements in a way that brings value to the patient perspective, directly and indirectly interweaving quality of care with the bottom line. The dichotomies exist in all departments – clinical and business, nursing and accounting. At Unity Health, we make the case that to pursue improved quality leads to a stronger bottom line. Correspondingly, pursuing an improved financial performance leads to a better patient experience.

It’s all about value from the patient perspective.

Patients who believe they receive value at our hospital will want to come back, should they again need hospitalization. They will tell their family members and friends about a positive care experience. Positive care equals perceived value. Patients who perceive value in their health care experience spread the word, building trust for the health care organization throughout the community. This, in turn, opens the door for more referrals and more customers perceiving true value in their health care experience.

Quality and finance are not mutually exclusive. They are truly synergistic elements that interact and combine, producing a total effect greater than the sum of the two individual parts.

The challenge is for clinicians to continually question traditional thinking and for accountants to understand the clinical perspective, with the outcome being patients who receive and perceive true value for their health care dollar.

Our organization began a Lean journey two years ago, culminating with the development of a Lean Department.

Lean process is all about creating the most value for the customer in the most efficient way. The use of Lean in health care has totally changed our way of thinking. Whether the ultimate “customer� we are serving in any given project is the patient or the members of a hospital work group, Lean can help us address quality and process improvement. (For a brief overview of Lean, please see the sidebar on page 18.)

Utilizing Lean tools has not only helped tear down walls of misunderstanding and traditional thinking at Unity Health, but it also has improved efficiency, lowered costs, opened lines of communication and enhanced job satisfaction.

A couple of nuts and bolts examples can be used in your own organization, or might spur ideas for other process enhancements.

Inventory Management

Our materials director, a Lean Captain, led a project in the patient medical supplies area. Analysis of collected data showed excessive and wasted steps in our inventory process. A root cause analysis led the team to a solution involving previously under-utilized computer system

The challenge is for clinicians to continually question traditional thinking and for accountants to understand the clinical perspective, with the outcome being patients who receive and perceive true value for their health care dollar. reports. These reports could be pulled down to show medical supply clerks exactly what had been used from each stockroom over the previous 24 hours. This allowed them make a single trip to the stockroom, and to pick and pack only the exact items needed.

Our outdated process had required them to visit each stockroom, count each item, and calculate the required replacement quantity. All of these steps were eliminated. Using the computer system reports forced correct charging of items, because an item was only restocked if the transaction flowed through the computer system.

This new process resulted in a $50,000 annual reduction in lost charges/

expired products and efficient availability of patient care supplies, which led to better service for the patient. It also reduced annual travel and counting time of the medical supply clerks by 2,123 hours, which allowed the materials department to expand its services. The result: greater customer satisfaction and improved quality controls.

Discharge Protocol

A team of representatives from home health, hospital nursing, case management, long term acute care (LTAC), rehab services, local nursing homes and our Chief Medical Officer spent almost a full week executing a rapid improvement continued on page 18

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ARKANSAS HOSPITALS I Summer 2016 17

(kaizen) event focused on reducing readmissions for pneumonia patients.

After extensive observation, data collection and analysis, the team identified key steps in the care process that lacked standardization and yielded unacceptable results. The team created and documented a care path to use with pneumonia patients during their hospitalization, a screening tool to help identify patients who would be at high risk for readmission, a standardized discharge protocol including communication between nursing and home health staff, an exacerbation protocol for use with home health patients, and standardized processes for delivery of, and patient education regarding, durable medical equipment (DME). These standardized processes were designed to ensure that inpatient pneumonia protocols are followed, patients are well enough to be discharged, education is provided for high risk patients, and DME delivers equipment to the patient within 24 hours of discharge.

The processes also provide a roadmap for hand-off from hospital nurses to home health and/or the nursing home, and assure that representatives from home health are in the patients’ homes within 24 hours. This ensures that home health nurses have the

ability to deal with a patient’s exacerbation without any delay.

These standard processes made during the kaizen event developed consistency in the care of pneumonia patients that resulted in better quality of care. They have also created better outcomes for the hospital, i.e. decreasing cumulative pneumonia readmission rates from 15% in FY 2014 to 13.8% YTD 2016 (Q2), which resulted in avoidance of $173,000 in Medicare penalties.

Similar improvements were made in the treatment of congestive heart failure patients; their readmissions dropped from 17.4% to 12.8% during the same time periods by using similar standardized processes. Associates are able to use their time more productively and efficiently due to standardized work and reduced re-work.

The resulting timely and efficient delivery of care is a satisfier for patients, associates and other health care partners in our community.

Any System, Any Size

Lean processes can be implemented in any size organization and prove to be beneficial. As a smaller hospital system, we continue to make valuable

improvements using Lean. On the other end of the spectrum, the Mayo Clinic system incorporated Lean processes many years ago. In the article, “The Business Case for Health-Care Quality Improvement,” the authors give the following examples: • A physician-led multidisciplinary team undertook [projects] that yielded a $2.3 million net savings. The 6-month Lean production work in the Mayo Clinic Cardiovascular Health Clinic resulted in seven improvements: 1) physician fill rates increased from 70% to 92%, 2) cancellations and no-shows decreased from 30% to 10%, 3) high financial yield patients increased from 150 to 200/month, 4) wait time for access to appointments fell 91% from 33 to 3 days, 5) face time with care providers increased from 240 to 285 minutes, 6) process steps were reduced from 16 to 6, and 7) adequate material available to proceed with patient care increased from 5% to 65%. The devoted resources yielded a 5:1 return on investment.

• Mayo Clinic had a low frequency of defects in its very high volume specimen-labeling practice. A crossfunctional team achieved reduction in

What is Lean?

Essentially, Lean’s core principle is to maximize customer value while minimizing waste. Lean methods are particularly applicable to the health care field and our Triple Aim of improving the patient experience and the health of populations while reducing per capita costs.

Maximize Customer Value While Minimizing Waste Many associate Lean solely with manufacturing, but Lean principles can be applied to every business – including health care — and every process within every business.

The fundamentals of Lean: 1) Define value from the perspective of the customer or patient; 2) Identify all steps in the process that lead to the product or service the customer values (the value stream);

18

Summer 2016 I ARKANSAS HOSPITALS

3) Eliminate or reduce, in a systematic way, steps in the value stream that don’t create value for the customer (waste); 4) Find ways to make your valuecreating steps occur in tight sequence (smooth process flow); and 5) Continuously and systematically make incremental process changes in order to improve efficiency and quality, achieving a culture of continuous improvement (kaizen).

Kaizen = Culture of Continuous Improvement In addition to kaizen, the Lean philosophy also requires: • Respect for the organization’s workforce; • Respect for each person’s role in adding value to the

customer (or patient); and • Respect for each person’s voice in process evaluation and change.

Focusing only on continuous improvement without embracing the underlying need for group loyalty and consensus in decision making is a recipe for failure in Lean implementation.

Foundation of Respect

Successful implementation of Lean philosophy will transform your business culture. Employees at every level of your organization must/will be empowered to continuously examine processes, make suggestions for process improvement, and be rewarded for doing so. Management buy-in and involvement? Obviously, they’re essential, as well.

-Elisa M. White

mislabeled or unlabeled specimens that resulted in less re-work and considerable staff savings. The team’s findings and implementation of process improvements also reduced undetected errors, leading to less exposure to legal fees and settlements. An $867,000 investment in label printers for inpatient and outpatient rooms was made. The largest direct savings occurred in full time equivalent (FTE) labor expense, including four FTEs that were previously performing relabeling and partial FTEs for lab assistants and cytologists dealing with errors. This conservatively rolled up to annual savings of $288,000. The impact of avoided patient harm on Mayo Clinic’s brand is not quantifiable.

Admittedly, not all quality improvements can be financially quantified, and many are just not measured. In the article, “To Make Hospital Quality a Priority, Take a Page from Finance,” Johns Hopkins’s Peter Pronovost indicates we should apply the same rigor to quality measures that we apply to finance.

Pronovost explains that hospital finance departments can track “virtually every dollar that comes in and goes out. These data can be segmented, sifted and filtered into well-established reports, showing us how our clinics, departments and entire hospitals are performing.”

But usually, he says, quality and safety lack a parallel infrastructure. “To truly elevate the importance of ending preventable harm and improving patient outcomes, we need to bring the same discipline, rigor and infrastructure to [quality improvement] work as our financial counterparts. We need to select meaningful measures that cascade through the entire organization, with clear understandings of who is accountable for meeting goals on them. Just as financial specialists understand the goals for the area where they work, local teams need patient safety specialists who know what is expected of them and have the skills and resources needed to get the job done.”

We all measure the required quality components, but can we drill into how each unit performs? We believe Lean helps us do this and is helping us make a financial case for quality improvement.

Unity Health still has a long way to go, but we have achieved significant improvements in processes we measure.

Our challenge is to, as Pronovost indicates,

uniformly establish the same rigor for all key patient safety and quality measures.

Consider a patient’s point of view: would you prefer to be discharged two days earlier, be subject to less prodding and fewer procedures, and be discharged with a great outcome? Sure you would! You would receive the most value in the most efficient manner. It would also cost you less in copays and subject you to fewer risk opportunities. Evaluation of processes ensures that the patient has a great quality experience and the hospital reduces expenditures related to the encounter.

Both parties win.

Unity Health–White County Medical Center has achieved a Leapfrog “A” rating for the last three reporting periods while maintaining a Standard and Poors “A/ Stable” rating. Quality and finance can, and do, coexist. Remember, quality and finance synergistically join when you examine your processes objectively. So whether your project motivation is quality or finance, when you effectively evaluate and create standardized protocols and efficiencies with patient safety and care in mind, both quality and the bottom line typically improve.

REFERENCES: Stephen J. Swenson, MD, MMM; James A. Dilling, BSIE, CMPE; Patrick M. McCarty, BS; Jeffrey W. Bolton, MBA; and Charles M. Harper, Jr. MD, The Business Case for Health-Care Quality Improvement (Lippincott Williams & Wilkins: Journal Patient Safety, Vol. 9, 2013), 44. ii Peter Pronovost, Director of the Armstrong Institute, as well as Senior Vice President for Patient Safety and Quality, at Johns Hopkins Medicine, To Make Hospital Quality a Priority, Take a Page from Finance (Armstrong Institute Blog, April 7, 2015). i

Stuart Hill is vice president and treasurer of Unity Health, and has been with Unity Health-White County Medical Center for nearly 28 years. A firm believer in the practice of Lean and the importance of a Lean culture, Hill earned his bachelor’s degree in Business Administration, Accounting from the University of Memphis and his master’s degree in Business Administration and Management from Arkansas State University.

ARKANSAS HOSPITALS I Summer 2016 19

QUALITY AND PATIENT SAFETY

Meaningful Use Update for Eligible Hospitals and Critical Access Hospitals

By Eldrina Easterly and David Easley, Arkansas Foundation for Medical Care The Centers for Medicare & Medicaid Services’ (CMS) release of the Modified Stage 3 Meaningful Use (MU) final rule in October 2015 brought with it many changes. Chief among those changes are alterations to the electronic health records (EHR) incentive programs and final rule modifications to MU (2015 through 2017) for eligible professionals (EPs), eligible hospitals (EHs) and critical access hospitals (CAHs).

Changes included reducing the number of MU objectives, eliminating menu objectives and consolidating public health reporting objectives.

In 2016, all providers must attest to objectives and measures using EHR technology certified to the 2014 or 2015 edition, or a combination of the two.

Modifications were made to the reporting periods for all EPs, EHs and CAHs participating in the EHR incentive program. The EHR reporting period is now 12 months and must be completed for calendar year January 1 to December 31, 2016.

• For all returning participants, the EHR reporting period will be a full calendar year, beginning January 1, 2016; • For EPs, EHs and CAHs that have not successfully demonstrated MU in a prior year, or those wanting to attest early to Stage 3 MU in 2017, the reporting period will be any continuous 90-day period.

While 2016 is the final year for Medicare MU incentive payments, hospitals and outpatient providers must continue to demonstrate MU or face escalating Medicare penalties.

Outpatient providers who have not begun to participate in any EHR incentive program, but have significant Medicaid volume, may register for the Medicaid EHR incentive program until December 31, 2016.

The Modified Stage 2 MU objectives announced in late 2015 will apply through 2017. The new Stage 3 20

Summer 2016 I ARKANSAS HOSPITALS

requirements will be mandatory beginning in 2018.

Many hospitals and eligible professionals find two objectives particularly challenging: • Health information exchange requires hospitals to create and electronically transmit a care summary for any patient they transfer or refer to another setting or care provider. CMS continues to exert pressure on vendors that do not facilitate electronic sharing of health information; • Patient electronic access (portals) requires that health information be electronically accessible and viewable by discharged patients.

Clinical quality measure (CQM) submissions for hospitals have not changed. EHs must submit 16 of 29 CQMs either electronically or with the annual MU attestation. Hospitals should select CQMs that are appropriate for their use, and reflect at least three of six national quality strategy domains.

There were no modifications to the MU objective to protect patient health information. Hospitals must continuously evaluate the risks of protected health information (PHI) being accessed inappropriately.

A HIPAA security risk analysis should be performed annually. It should be a comprehensive, ongoing awareness and assessment of risks, including the appropriate and practical application of technology, processes and policies to protect PHI.

Access to PHI by mobile devices presents a unique risk. More hospitals are adopting the two-factor user identification routinely used by financial institutions.

For the 2016 EHR reporting period, all returning participants must attest by February 28, 2017.

New participants who successfully demonstrate MU in 2016 and satisfy all other program requirements will avoid the payment adjustment in fiscal year (FY) 2017 if the EH or CAH successfully attests by October 1, 2016.

New participants will avoid the payment adjustment in FY 2018 if the EH successfully attests by February 28, 2017.

Returning participants who successfully demonstrate MU for 2016 and satisfy all other program requirements will avoid the payment adjustment in FY 2018 if the EH or CAH successfully attests by February 28, 2017.

Most Arkansas hospitals use the CMS attestation system to attest for Medicare MU. They will attest for Medicaid MU on the Arkansas Medicaid MAPIR system, which uses information from the CMS attestation.

Dually eligible hospitals can attest on MAPIR for up to four years for the Medicaid incentive program. After their fourth year, they only have to attest on the CMS Medicare attestation system.

Proper documentation for attestation information includes keeping reports, screenshots and other evidence to

support attestation numbers and “yes/no” answers. Documentation should be maintained for six years.

Hospitals are subject to Medicare audits by Figliozzi & Co. and desk audits by Arkansas Medicaid.

It is always useful to step back and think about why we’re undertaking MU. While several Arkansas hospitals are either switching vendors or evaluating the financial viability of continuing MU, most hospitals have achieved the Modified Stage 2 requirements.

There’s no question that MU has stimulated the adoption of electronic infrastructure that’s crucial to improving the health care system.

MU also supports the Triple Aim of improving the patient’s experience, improving population health and reducing per capita health care costs.

The American Hospital Association’s (AHA) fact sheet “Getting Meaningful Use Right” has recommendations for improving MU requirements. It’s available at www. aha.org.

Eldrina Easterly is the outreach manager, and David Easley is the division supervisor, of AFMC’s Health IT Division.

FINANCING IS THE FIRST STEP.

On the Horizon Meaningful Use is a key component of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requirements.

While MACRA is directed at physicians, it will certainly have an impact on hospital partner physicians and financial arrangements.

Hospitals may also play a role in advanced payment models. See the American Hospital Association’s issue brief “Physician Payment Reform – What is the MACRA?” available at www. aha.org.

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THE COACH’S PLAYBOOK

Leveraging Statistical Process Control to Improve Quality, Safety and Patient Satisfaction in Health Care

By Kay Kendall As CEO and Principal of BaldrigeCoach, Kay Kendall coaches organizations on their paths to performance excellence using the Malcolm Baldrige National Quality Award criteria as a framework. In each edition of Arkansas Hospitals, Kay offers readers quality improvement tips from her coaching playbook.

One of the most misunderstood and underutilized data analysis and display techniques is statistical process control (SPC). I believe a large part of this underuse has to do with the tool’s origins. SPC was developed by Walter A. Shewhart at Bell Laboratories in the early 1920s. Initial applications included the use of control charts at the Army’s Picatinny Arsenal in the manufacturing of munitions in 1934.

W. Edwards Deming, one of Shewhart’s students, saw the value of SPC, promoted its use in manufacturing, and in the period following World War II, introduced the methods to the Japanese who rapidly embraced it. Since that time, SPC has been widely adopted by the American manufacturing sector.

22

Summer 2016 I ARKANSAS HOSPITALS

I know that some of you must be thinking that you picked up the wrong magazine or that the wrong article was somehow published. How is SPC relevant to health care? Actually, it is in many ways, and I hope to pique your curiosity about it with the rest of my column.

In his seminal book Understanding Variation: The Key to Managing Chaos , Dr. Donald Wheeler observed, “Managers and workers, educators and students, accountants and businessmen, financial analysts and bankers, doctors and nurses, and especially lawyers and journalists all have one thing in common.

They come out of their educational experience knowing how to add, subtract, multiply and divide, yet they have no understanding of how to digest numbers to extract the knowledge that may be locked up inside the data.”

He goes on to call this deficiency “numerical illiteracy,” where many highly educated individuals are not taught, even in advanced courses in mathematics, how to understand large sets and volumes of data.

If there is any environment currently that must deal with large sets and large volumes of data, it surely is health care. Yet, I see very limited use of SPC in this sector. However, when it is used in health care, I’m often amazed at how powerful this relatively simple methodology is.

For example, we have a client who owns and operates multiple homes for developmentally disabled adults.

He has taught each of the home’s managers to use SPC charts to record residents’ behaviors. When they detect that a resident’s pattern of behavior is getting “out of control” statistically, it is frequently a signal that another problem is happening.

Because many of these residents are not able to verbalize what is going on with them, the use of SPC has enabled the homes’ managers

UCL = 92.05

LCL = 80.39

and other caregivers to correlate a statistically out-of-control condition with an underlying health condition that needs to be addressed, such as a UTI or hemorrhoids.

Many people fail to understand that the control limits shown on an SPC chart are statistically derived. They are not goals set by the organization, nor are they thresholds of acceptable performance. The control limits come from the source data themselves, so no manipulation is possible to make the data look “better.”

Another key concept in SPC is understanding the differences between special cause and common cause. Common cause is the expected variation that is inherent in a process that is in control

(operating as expected under normal circumstances). Special cause variation is the result of something that is external to the process that can be identified and addressed. Taking action to inappropriately address common cause variation is what Dr. Deming called “tampering,” and it has been shown repeatedly to cause more harm than good.

In an interview for our soon-to-bereleased book, Leading the Malcolm Baldrige Way: How World-Class Leaders Align Their Organizations to Deliver Exceptional Results, Dr. Glenn Crotty talks about how the use of SPC fundamentally changed the way leaders of Charleston Area Medical Center (a 2015 Baldrige Award recipient) leveraged data to engage

employees and drive improvement.

“Early on in our improvement journey, we started to demand that our data be displayed using control limits,” Crotty says. “It took a while to convince the organization we needed to display it this way. But now we know when not to tamper with something. We still have variation, but we have greatly reduced it. [SPC] also helps us maintain the gains when we make improvements.”

Mark Graban, author of the third edition of Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement , shares several examples of how the use of SPC charts and understanding special and common cause variation enables leaders to focus on real versus perceived improvement. In the charts at left, it would appear that the organization has begun to show a beneficial trend in patient satisfaction – hurrah! Call for celebration!

However, if control limits are applied, it shows that what we are seeing is simply normal, or common cause, variation. Our focus on patient satisfaction has not yet resulted in a statistically significant – or sustainable – improvement.

Some of the reluctance by the health care sector to use SPC also stems from the perceived difficulty in both producing the charts as well as interpreting the results, yet inexpensive, user-friendly Excelbased software is available that can easily create control charts from clinical and operational data.

Software specifically geared toward statistical analyses, such as MiniTab, even has built-in rules that will flag any conditions that warrant further analysis.

In recent years, medical professionals have focused more and more on evidence-based practices to improve care and minimize harm. SPC is an evidence-based practice that has been proven to reduce variation, which leads to reduced defects (errors) and improved productivity – two results critical to the challenging health care environment we face. Isn’t it time to add SPC to your organization’s approach to performance improvement?

ARKANSAS HOSPITALS I Summer 2016 23

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HOSPITAL STATISTICS 2016 “Data really powers everything we do.“ – Jeff Weiner, CEO of LinkedIn Data equals understanding. Without data to power our hospitals, through electronic health records, coding, sourcing, quality measurement, patient satisfaction surveys, accounting, scheduling, communication, engineering, medication fulfillment and a thousand other areas of our daily work, those of us who work in the hospital field would get nowhere and understand very little.

The 2016 pullout Statistical Resource tool is your main source for the data you need in comparing your facility’s profile to those of other hospitals in our state, finding out how Arkansas’s comparative financial indicators rank in relation to other states — and the nation as a whole — and how Arkansas’s top 30 DRGs relate to hospital billings and discharges.

Why is such information necessary?

When discussing the needs of your local organization with those who have a hand in financial allocations for hospitals, you need the latest data to help tell your story. AHA’s executive vice president, Paul Cunningham, shares with our hospitals this annual guide to aid in communicating today’s complex health care network. Because it’s true, data really powers everything we do.

ARKANSAS HOSPITALS I Summer 2016 25

STATISTICS

Arkansas Hospitals: Numbers Tell the Story 104

95 100 41

Arkansas hospitals are members of the Arkansas Hospital Association.

Total hospitals and other health care organizations belong to the Arkansas Hospital Association.

They include the 95 Arkansas hospitals shown above; two 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.

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

44

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

22

Arkansas counties – almost 30% of all counties in the state – do not have a local hospital (however, two hospitals are located in Bowie County, Texas, which borders Miller County, Arkansas). Those counties are: Calhoun Lafayette Madison Monroe Pike Sharp Cleveland Lee Marion Nevada Poinsett Woodruff Crittenden Lincoln Miller Newton Prairie Grant Lonoke Montgomery Perry Searcy

5 57%

26

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; 10 psychiatric hospitals; 7 rehabilitation hospitals; 3 hospitals that focus on specialized surgical procedures; 2 Veterans Affairs hospitals; as well as a pediatric hospital, a cardiac hospital and a women’s hospital.

Arkansas community hospitals have closed their doors since January 2004.

Of AHA member hospitals are charitable, not-for-profit organizations, while 30% of the hospitals are owned and operated by private, for-profit companies, and 13% are public hospitals owned and operated by a city, county, state or federal government.

14,860

Arkansans sought inpatient or outpatient care from Arkansas’s hospitals each day in 2014 for illnesses, injuries and other conditions requiring medical attention.

35,407

Newborns were delivered in Arkansas hospitals in 2014. The Arkansas Medicaid program covered almost 65% of them.

48,378

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

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

$385 Million

Is the estimated overall annual economic impact in 2014 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.

$10.3 Billion

The estimated overall annual economic impact in 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.

Summer 2016 I ARKANSAS HOSPITALS

A Snapshot of Arkansas Hospital Association Members (2016) Number of Arkansas-licensed AHA Member Hospitals: General Med-Surg 46 Psychiatric Urban (26) Long Term Care Rural (20) Rehabilitation Critical Access 28 Veterans Affairs Hospitals Number of Arkansas-based non-hospital AHA-member organizations1 Arkansas-based AHA-member organizations Number of out-of-state border city AHA-member hospitals2 Total AHA member organizations

10 5 4 2

95

+3 98 +2 100

1 CARTI, 19th Medical Group (LRAFB), Arkansas Hospice Source: American Hospital Association, AHA Statistics 2016 2 CHRISTUS St. Michael Health System (Texarkana), Regional One Health (Memphis)

Arkansas Hospital Association

Member Organizations by Type General Med-Surg Hospitals (46) Arkansas Children’s Hospital Arkansas Heart Hospital Arkansas Methodist Medical Center Baptist Health Medical Center-Conway Baptist Health Medical Center-Hot Spring County Baptist Health Medical Center-LR Baptist Health Medical Center-NLR Baptist Health Medical Center-Stuttgart Baxter Regional Medical Center Chambers Memorial Hospital CHI St. Vincent Hot Springs CHI St. Vincent Infirmary CHI St. Vincent North Conway Regional Health System Drew Memorial Hospital Five Rivers Medical Center Forrest City Medical Center Great River Medical Center Helena Regional Medical Center Jefferson Regional Medical Center Johnson Regional Medical Center Levi Hospital Magnolia Regional Medical Center Medical Center of South Arkansas Mena Regional Health System Mercy Health System NW Arkansas Mercy Hospital Fort Smith National Park Medical Center NEA Medical Center North Arkansas Regional Medical Center North Metro Medical Center Northwest Medical Center, Bentonville Northwest Medical Center, Springdale Ouachita County Medical Center Saint May’s Regional Medical Center Saline Memorial Hospital Siloam Springs Memorial Hospital Sparks Health System

Sparks Medical Center-Van Buren St. Bernards Medical Center UAMS Medical Center Unity Health-Harris Medical Center Unity Health-White County Medical Ctr Washington Regional Medical System White River Health System Willow Creek Women’s Hospital Inpatient Psych Hospitals (10) Arkansas State Hospital Methodist Behavioral Hospital Pinnacle Pointe Hospital OakRidge Behavioral Center Rivendell Behavioral Health Services Riverview Behavioral Health Springwoods Behavioral Health The BridgeWay Valley Behavioral Health System Vantage Point of NWA Inpatient Rehab Hospitals (4) Baptist Health Rehabilitation Institute Conway Regional Rehabilitation Hospital HEALTHSOUTH Rehabilitation Hospital St. Vincent Rehabilitation Hospital Critical Access Hospitals (28) Ashley County Medical Center Baptist Health Medical Ctr.-Arkadelphia Baptist Health Medical Ctr.-Heber Springs Bradley County Medical Center CHI St. Vincent Morrilton Chicot Memorial Medical Center Community Medical Center of Izard County CrossRidge Community Hospital Dallas County Medical Center Delta Memorial Hospital DeWitt Hospital

Eureka Springs Hospital Fulton County Hospital Howard Memorial Hospital Lawrence Memorial Hospital Little River Memorial Hospital McGehee Hospital Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron Ozark Health Medical Center Ozarks Community Hospital Piggott Community Hospital River Valley Medical Center SMC Regional Medical Center Stone County Medical Center Veterans Affairs Hospitals (2) Central Arkansas Veterans Healthcare System Veterans Healthcare System of the Ozarks Long Term Care Hospitals (5) Advanced Care Hospital of White County Baptist Health Extended Care Hospital CHRISTUS Dubuis Hospital of Fort Smith CHRISTUS Dubuis Hospital of Hot Springs Cornerstone Hospital of Little Rock Out-of-State Border, City Hospitals (2) CHRISTUS St. Michael Health System (Texarkana, TX) Regional Medical Center (Memphis, TN) Non-Hospital Facilities (3) 19th Medical Group, LRAFB Arkansas Hospice CARTI

ARKANSAS HOSPITALS I Summer 2016 27

STATISTICS

Arkadelphia Ashdown Barling Batesville Benton Benton Bentonville Berryville Blytheville Booneville Calico Rock

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

PNP County Corporate PNP Corporate PNP Corporate PNP County PNP PNP

Medical-Surgical Medical-Surgical Psychiatric Medical-Surgical Psychiatric 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

25 25 75 198 77 167 128 25 99 25 25

Camden

Ouachita County Medical Center

PNP

Medical-Surgical

Rural/SCH

98

Clarksville

Johnson Regional Medical Center

PNP

Medical-Surgical

Rural/MDH 80

Clinton Conway Conway Conway Crossett Danville Dardanelle DeWitt Dumas El Dorado Eureka Springs Fayetteville Fayetteville Fayetteville Fayetteville Fayetteville Fordyce Forrest City Fort Smith Fort Smith Fort Smith

Ozark Health Medical Center Baptist Health Medical Center-Conway Conway Regional Health System Conway Regional Rehabilitation Hospital Ashley County Medical Center John Ed Chambers Memorial Hospital River Valley Medical Center DeWitt Hospital Delta Memorial Hospital Medical Center of South Arkansas Eureka Springs Hospital HEALTHSOUTH Rehabilitation Hospital Springwoods Behavioral Health Washington Regional Medical System 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

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

Medical-Surgical Medical-Surgical Medical-Surgical Rehabilitation Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Rehabilitation Psychiatric Medical-Surgical Veterans Admin.

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

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

154 26 33 41 25 25 25 166 22 60 80 366 73 92 25 118 25 492 354

Gravette

Ozarks Community Hospital

Corporate

Medical-Surgical

CAH

25

Harrison Heber Springs Helena Hot Springs Hot Springs Hot Springs Hot Springs Jacksonville

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 Hospital Hot Springs North Metro Medical Center

PNP PNP Corporate PNP PNP Corporate PNP Corporate

RRC/SCH CAH Rural LTCH Urban RRC Urban Urban

174 25 155 27 81 166 282 78

Johnson

Willow Creek Women's Hospital

Corporate

Urban

64

Jonesboro Jonesboro Lake Village Little Rock Little Rock

NEA Baptist Memorial Hospital St. Bernards Medical Center Chicot Memorial Medical Center 19th Medical Group Arkansas Children's Hospital

PNP PNP PNP DoD PNP

Medical-Surgical Medical-Surgical Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Med-Surg (OB/ Gyn) Medical-Surgical Medical-Surgical Medical-Surgical Infirmary Med-Surg (Ped)

Urban RRC CAH

216 438 25 0 359

28

Summer 2016 I ARKANSAS HOSPITALS

Children's

ADDITIONAL DPUS/SERVICES OFFERED

LICENSED BEDS

MEDICARE PMT. STATUS

TYPE OF HOSPITAL

CONTROL

HOSPITAL

CITY

AHA Member Organizations

25

SB/HH SB/HH/IMF 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/IMF HH/SB Rehab SB/HH HH Psych SB/HH Psych/HH HH SNF/Rehab/HH SB/OP Geripsych/ Wound Clinic HH/Psych/DPU SB/HH SB/Rehab/HH Psych/Rehab Rehab Psych/Rehab/HH

Rehab Psych/HH SB/HH Rehab

State PNP PNP PNP

Little Rock

CARTI

PNP

North Little Rock Osceola Ozark Paragould Paris Piggott

Central Arkansas Veterans Healthcare System Cornerstone Hospital of Little Rock Pinnacle Pointe Behavioral Health System CHI St. Vincent Infirmary UAMS Medical Center Magnolia Regional Medical Center Baptist Health Medical Center-Hot Spring County Methodist Behavioral Hospital McGehee Hospital Regional One Health Mena Regional Health System Drew Memorial Hospital CHI St. Vincent Morrilton Baxter Regional Medical Center Stone County Medical Center Howard Memorial Hospital Unity Health-Harris Medical Center Arkansas Hospice Baptist Health Medical Center-North Little Rock The BridgeWay SMC Regional Medical Center Mercy Hospital Ozark Arkansas Methodist Medical Center Mercy Hospital Paris Piggott Community Hospital

Pine Bluff Pocahontas Rogers Russellville Salem Searcy Searcy Sherwood Sherwood Siloam Springs Springdale Stuttgart Texarkana Texarkana, TX Van Buren Waldron Walnut Ridge Warren West Memphis Wynne

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

Urban

112

IP Psych LTCH Urban IRF

345 55 827 120

ADDITIONAL DPUS/SERVICES OFFERED

Arkansas State Hospital Baptist Health Extended Care Hospital Baptist Health Medical Center-Little Rock Baptist Health Rehabilitation Institute

LICENSED BEDS

Little Rock Little Rock Little Rock Little Rock

Med-Surg (Cardiac) Psychiatric Long Term Care Medical-Surgical Rehabilitation OP Cancer Center

MEDICARE PMT. STATUS

Corporate

TYPE OF HOSPITAL

HOSPITAL Arkansas Heart Hospital

CONTROL

CITY Little Rock

SNF/Psych/HH

0

Federal

Veterans Affairs

635

Corporate Corporate PNP State City

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

LTCH IP Psych Urban Urban Rural/SCH

PNP

Medical-Surgical

Rural/MDH 72

PNP PNP PNP City County PNP PNP PNP PNP Corporate PNP

Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Inpatient Hospice

IP Psych CAH Urban (TN) Rural/SCH Rural/SCH CAH RRC/SCH CAH CAH Rural

60 25 620 65 49 25 268 25 20 133 40

PNP

Medical-Surgical

Urban

220

Rehab/HH

Corporate County PNP PNP PNP City

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

127 25 25 129 16 25

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

Jefferson Regional Medical Center

PNP

Medical-Surgical

471

SNF/Psych/Rehab/HH

Five Rivers Medical Center Mercy Hospital Northwest Arkansas Saint Mary's Regional Medical Center Fulton County Hospital Advanced Care Hospital of White County Unity Health-White County Medical Center CHI St. Vincent North St. Vincent Rehabilitation Hospital Siloam Springs Memorial Hospital Northwest Medical Center-Springdale Baptist Health Medical Center-Stuttgart Riverview Behavioral Health CHRISTUS St. Michael Health System Sparks Medical Center-Van Buren Mercy Hospital Waldron Lawrence Memorial Hospital Bradley County Medical Center OakRidge Behavioral Center CrossRidge Community Hospital

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

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

IP Psych CAH CAH RRC CAH CAH Urban/ SCH Rural/SCH Urban RRC CAH LTCH RRC/SCH Urban IRF Urban Urban Rural/MDH IP Psych Urban (TX) Urban CAH CAH CAH IP Psych CAH

50 220 170 25 27 438 69 93 73 222 49 62 312 103 24 25 33 52 25

Psych/HH Psych/HH Psych/Rehab SB

40 124 615 450 49

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

Psych/Rehab/HH 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 2016 29

STATISTICS

September 21, 2014 March 2, 2015 June 11, 2014 January 28, 2011 September 28, 2010

Little Rock, AR

September 22, 2014

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

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

Springfield, MO

March 1, 2015

Fayetteville, AR

March 27, 2012

North Little Rock, AR Mountain Home, AR

May 12, 2011

Texarkana, TX

March 1, 2011

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

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

Paragould, AR Crossett, AR

May 30, 2012 February 22, 2013

LEVEL II (5) Baptist Health Medical Center CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Mercy Hospital-Springfield Pediatric Trauma Center Washington Regional Medical Center LEVEL III (18) Baptist Health Medical Center-NLR Baxter Regional 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 CenterBentonville Northwest Medical CenterSpringdale 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 (36) Arkansas Methodist Medical Center Ashley County Medical Center

30

Summer 2016 I ARKANSAS HOSPITALS

December 5, 2011

Baptist Health Medical CenterHeber Springs Baptist Health Medical Center-Hot Spring County Baptist Health Medical CenterStuttgart NEA Baptist Memorial Hospital CHI St. Vincent North Little Rock Chicot Memorial Medical Center Community Medical Center of Izard County CrossRidge Community Hospital Dallas County Medical Center 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 John Ed Chambers 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 Piggott Community Hospital River Valley Medical Center Siloam Springs Regional Hospital South Mississippi County Regional Medical Center Stone County Medical Center Sparks Medical CenterVan Buren Unity Health-Harris Hospital

DESIGNATION DATE

DESIGNATION DATE

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

CITY/STATE

CITY/STATE

LEVEL I (6) Arkansas Children's Hospital CoxHealth Le Bonheur Children’s Hospital Mercy Hospital Springfield Regional Medical Center University of Arkansas for Medical Sciences (UAMS)

HOSPITAL NAME

HOSPITAL NAME

Designated Trauma Centers

Heber Springs, AR

November 18, 2015

Malvern, AR

September 2, 2015

Stuttgart, AR

December 14, 2012

Jonesboro, AR North Little Rock, AR Lake Village, AR

April 15, 2015

Calico Rock, AR

October 9, 2015

Wynne, AR

August 11, 2015 January 13, 2015

September 24, 2012

Fordyce, AR Eureka Springs, AR Pocahontas, AR Forrest City, AR Salem, AR Blytheville, AR

January 26, 2016 February 3, 2016 April 14, 2015 December 1, 2015 April 27, 2015 January 8, 2013

Helena, AR

March 5, 2013

Nashville, AR

April 14, 2015

Danville, AR

April 23, 2015

Magnolia, AR

October 27, 2015

McGehee, AR Mena, AR Berryville, AR Booneville, AR Ozark, AR Paris, AR Waldron, AR Jacksonville, AR Camden, AR Piggott, AR Dardanelle, AR Siloam Springs, AR

October 25, 2012 January 21, 2016 August 6, 2015 November 27, 2012 November 6, 2015 April 22, 2015 January 22, 2016 January 22, 2013 October 28, 2015 October 27, 2015 February 11, 2016 March 25, 2013

Osceola, AR

January 7, 2013

Mountain View, AR

June 2, 2015

Van Buren, AR

March 28, 2012

Newport, AR

March 28, 2013

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

●

●

●

●

● ●

● ● ● ● ● ● ●

●

●

● ●

●

●

Newton Ouachita Perry Phillips Pike Poinsett Polk Pope Prairie Pulaski Randolph Saline Scott Searcy Sebastian Sevier Sharp St. Francis Stone Union Van Buren Washington White Woodruff Yell

●

●

● ●

● ●

●

●

●

● ●

●

●

●

● ●

●

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

● ● ●

● ●

● ● ● ● ● ● ● ●

● ●

●

●

ARKANSAS HOSPITALS I Summer 2016 31

STATISTICS

AHA Investor-Owned, Operated or Managed Hospitals, 2016

Universal Health Services

●

Cornerstone Hospital of Little Rock ●

Eureka Springs Hospital

●

Forrest City Medical Center ●

HEALTHSOUTH Rehabilitation Hospital

●

Helena Regional Medical Center ●

Medical Center of South Arkansas ●

National Park Medical Center ●

North Metro Medical Center Northwest Medical Center–Bentonville

●

Northwest Medical Center–Springdale

● ●

Ozarks Community Hospital Pinnacle Pointe Hospital

●

Rivendell Behavioral Health

● ●

River Valley Medical Center Riverview Behavioral Health

●

Saint Mary’s Regional Medical Center

●

Saline Memorial Hospital

●

Siloam Springs Regional Hospital

●

Sparks Regional Medical Center

●

Sparks Medical Center–Van Buren

● ●

Springwoods Behavioral Health ●

St. Vincent Rehabilitation Hosptial

●

The BridgeWay Valley Behavioral Health System

●

Vantage Point of NWA

●

Willow Creek Women’s Hospital

32

Quorum Health

OCH Health System

HealthSouth Corporation

Cornerstone Healthcare Group

Community Health Systems, Inc.

Capella Healthcare

Allegiance Health Management

Acadia Healthcare

CORPORATE OWNER/MANAGER

Summer 2016 I ARKANSAS HOSPITALS

●

AHA Affiliates of Non-Profit, Multi-Hospital Systems, 2016

Advanced Care Hospital of White County 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–North Little Rock Baptist Health Medical Center–Stuttgart Baptist Health Rehabilitation Institute CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Medical Center CHI St. Vincent Morrilton CHI St. Vincent North CHRISTUS Dubuis Hospital of Fort Smith CHRISTUS Dubuis Hospital of Hot Springs CHRISTUS St. Michael Health System CrossRidge Community Hospital Lawrence Memorial Hospital 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 St. Bernards Medical Center St. Vincent Rehabilitation Hospital Stone County Medical Center Unity Health–Harris Medical Center Unity Health–White County Medical Center White River Medical Center

White River Health System

Unity Health

St Bernards Health System

Mercy Health System

CHRISTUS Dubuis Health System

Conway Regional Health System

Catholic Health Initiatives

Baptist Memorial Healthcare Corp.

Baptist Health

NOT-FOR-PROFIT SYSTEM

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

ARKANSAS HOSPITALS I Summer 2016 33

34

Summer 2016 I ARKANSAS HOSPITALS $9,024,612,103 $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% 7.5% 66.8% 42.2% 39.8 677.6 131.7 2,889

$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

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%

73.2% 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

73.8%

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

2010

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

2009

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

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

2008

Source: American Hospital Association, Hospital Statistics , 2016

BEDS AVAILABLE ADMISSIONS PATIENT DAYS AVG. LENGTH OF STAY NON-EMERGENCY OP VISITS OUTPATIENT VISITS NON-EMERGENCY AS A % 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 NONOPERATING 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 % TOTAL PATIENT REVENUE ADMISSIONS PER BED PATIENT DAYS PER 1,000 POPULATION ADMISSIONS PER 1,000 POPULATION POPULATION (000's)

INDICATOR

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

Financial And Utilization Indicators, 2008-2014

Arkansas Community Hospital

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

2013

37.1 596.1 116.2 2,966

49.0%

72.2%

7.9%

$5,903,068,665 $308,493,708 $98,329,834 $6,309,892,207 $2,564,132,565 $5,976,998,987 -1.25% 5.28% $6,113.73 $1,701.68 $1,722.99 $739.16 42.9%

$13,621,709,973

3,468,973 52.2% 92,169 172,975 265,144 65.24% 45,226 4.76 $10,809,965,954 $10,398,394,815 $21,208,360,769 $1,086,675,739 $596,906,392 $15,305,292,104

73.4%

9,284 344,635 1,768,146 5.13 3,727,703 5,078,901

2014

-4.41% -14.47% -11.81% 3.89%

21.68%

10.67%

4.15%

47.45% 17.97% 16.68% 25.92% 7.92%

22.79% 82.17% 210.44% 25.98% 31.06% 21.44%

71.17%

4.08% -7.30% -10.24% 26.66% 10.82% 14.29% 3.43% -0.63% 31.02% 86.75% 53.47% 56.57% 66.16% 69.84%

-0.59%

-4.15% -8.38% -11.15% -3.02% 1.53% 2.13%

% CHANGE 2008 -2014

Arkansas Publicly Owned/ Operated Hospitals HOSPITAL Arkansas State Hospital Dallas County Medical Center Drew Memorial Hospital Fulton County Hospital Lawrence Memorial Hospital Great River Medical Center Little River Memorial Hospital SMC Regional Medical Center

GOVERNMENT ENTITY State of Arkansas Dallas County Drew County Fulton County Lawrence County Mississippi County Little River County Mississippi County

HOSPITAL Magnolia Regional Medical Center

GOVERNMENT ENTITY City of Magnolia

Mena Regional Health System

City of Mena

Piggott Community Hospital

City of Piggott State of Arkansas

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

Drew Memorial Hospital

Yes

0.25%

2015

$670,000

Five Rivers Medical Center

Yes

1.00%

2007

$750,000

Fulton County Hospital

Yes

0.50%

2007

$288,000

Johnson Regional Medical Center

No

Lawrence Memorial Hospital

Yes

Little River Memorial Hospital

Yes

Magnolia Hospital (A)

Yes

Magnolia Hospital (B)

Yes

RATE

TAX

MILLAGE

Arkansas Hospitals Receiving Local Tax Support, 2016

1977

$65,000

1.00%

.3 mill

2014

$1,560,000

1.125%

2007

$2,600,000

0.25%

2004

$540,000

Mercy Hospital Booneville

Yes

1.00%

2003

$360,000

Mercy Hospital Ozark

Yes

1.00%

2001

$350,000

Mercy Hospital Paris

Yes

1.00%

NA

McGehee Hospital

Yes

1.00%

1999

Mississippi County Hospital System

Yes

0.50%

Ouachita County Medical Center ***

Yes

Piggott Community Hospital

Yes

CHI St. Vincent Morrilton

Yes

0.25%

Yes

2015/1952

$2,732,000

1.00%

2015

$2,400,000

1.00%

2010

$360,000

2008

$1,000,000

Yes

1 mill

NA $600,000

.25 mill

*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 mil on a bond issue that was used to build the new building; plus $1.1 mil received from a sales and use tax; plus $264,000 from a 1/2 millage property tax. *** 50% for maintenance, 50% for bond debt retirement.

Source: Self-reported information provided to the Arkansas Hospital Association, 2016

ARKANSAS HOSPITALS I Summer 2016 35

STATISTICS

District of Columbia

MARGIN ON PATIENT CARE SERVICES

AVERAGE PAYMENT PER HOSPITAL STAY

AVERAGE OPERATING COST PER HOSPITAL STAY

AVERAGE CHARGE PER HOSPITAL STAY

RANK

Comparative Financial Indicators $19,831

Alaska

Utah

16.67%

19,120

Alaska

12.31%

California Colorado New York Washington Minnesota New Hampshire Idaho

16,704 16,597 15,989 15,808 15,611 15,330 15,269

Indiana South Carolina Nebraska Colorado Idaho Virginia Florida

8.53% 8.29% 7.21% 6.65% 5.96% 5.75% 5.55%

14,805

Utah

15,251

Nevada

5.46%

14,708 14,360 14,343 14,298 13,892 13,556 13,415 13,378 13,369 13,324 13,200 13,131 13,089 13,071 13,039 12,835 12,772 12,766 12,747 12,709 12,470 12,394 12,309 11,909 11,672 11,630 11,532 11,427 11,321 11,274 11,201 11,190 11,064 10,726 10,319 10,284

Delaware Nebraska Massachusetts South Dakota Hawaii Indiana Oregon Connecticut Maine Wisconsin Pennsylvania Ohio Wyoming U.S. Montana North Dakota Vermont New Jersey Texas Maryland Rhode Island Illinois South Carolina Virginia Missouri Arizona WSC Region Kansas New Mexico Michigan Georgia North Carolina Nevada Oklahoma Florida Iowa

15,205 14,087 14,063 13,993 13,953 13,936 13,919 13,659 13,598 13,421 13,351 13,300 13,261 13,205 13,203 13,155 13,084 13,007 12,758 12,695 12,516 12,448 12,214 12,124 11,953 11,933 11,820 11,816 11,780 11,741 11,593 11,496 11,346 10,792 10,757 10,634

West Virginia

10,218

Tennessee

10,392

Florida Tennessee Mississippi Kentucky Arkansas Alabama

10,160 10,051 10,051 9,958 8,840 8,155

West Virginia Louisiana Mississippi Kentucky Arkansas Alabama

10,297 10,048 10,009 9,955 8,730 8,393

1

California

$66,555

2

Colorado

61,565

Alaska

18,290

District of Columbia

3 4 5 6 7 8 9

New Jersey District of Columbia Alaska Nevada Pennsylvania Texas Florida

61,364 59,091 58,653 55,614 52,946 51,636 48,884

17,180 16,853 15,867 15,671 15,498 15,493 15,222

10

Washington

48,337

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

Arizona *WSC Region **U.S. New York South Carolina Utah Illinois Ohio New Hampshire Connecticut Indiana Georgia Virginia Tennessee Kansas New Mexico Oklahoma Minnesota Hawaii Idaho Missouri Mississippi Nebraska Rhode Island Louisiana South Dakota Massachusetts Alabama North Carolina Kentucky Wisconsin Delaware Michigan Arkansas Oregon Maine

47,434 46,271 45,078 44,895 44,046 43,970 43,099 42,744 42,526 42,489 41,511 41,013 40,443 40,437 39,824 39,209 38,938 38,807 38,250 38,187 37,882 37,872 36,701 36,580 36,538 36,512 36,483 36,066 35,822 35,471 34,188 33,857 32,256 31,366 30,557 30,069

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

45

Vermont

29,906

46 47 48 49 50 51

North Dakota Iowa Wyoming Montana West Virginia Maryland

29,194 28,630 27,427 27,121 26,698 19,413

$20,858

Wisconsin Oklahoma New Mexico Georgia New Hampshire Arizona Tennessee Delaware Alabama Montana Texas North Carolina WSC Region Ohio Kansas Washington West Virginia Connecticut Minnesota South Dakota U.S. Illinois Vermont Pennsylvania Kentucky Mississippi Maryland Wyoming California Arkansas Michigan New Jersey North Dakota Louisiana Oregon Missouri District of Columbia Iowa Maine Rhode Island New York Hawaii 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, 2016

36

Summer 2016 I ARKANSAS HOSPITALS

4.87% 4.38% 3.90% 3.47% 3.43% 3.36% 3.28% 3.27% 2.83% 2.79% 2.26% 1.93% 1.60% 1.59% 1.21% 0.86% 0.76% 0.75% 0.73% 0.72% 0.56% 0.43% 0.34% 0.20% -0.02% -0.42% -0.60% -0.88% -0.89% -1.25% -1.44% -1.48% -1.62% -2.35% -2.73% -2.98% -3.72% -4.05% -5.47% -7.18% -7.45% -9.09% -12.83%

MEAN DAILY RATE

MEAN STAY PER DISCHARGE

MEAN CHARGES PER DISCHARGE

TOTAL CHARGES

DIAGNOSIS-RELATED GROUP

# DISCHARGES

BILLINGS

Top 30 DRGs 795 - NORMAL NEWBORN 775 - VAGINAL DELIVERY W/O COMPLICATING DIAGNOSES 945 - REHABILITATION W CC/MCC 470 - MAJ JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 871 - SEPTICEMIA W/O MV 96+ HOURS W MCC 392 - ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 766 - CESAREAN SECTION W/O CC/MCC

22,704 21,318 11,893

79,069,737.13 240,668,942.26 351,054,494.78

3,482.63 11,289.47 29,517.74

1.71 1.89 12.43

2,036.63 5,973.26 2,374.72

9,903

401,139,282.95

40,506.84

2.68

15,114.49

8,981 7,354 7,134

361,184,562.52 116,907,683.65 112,432,132.15

40,216.52 15,897.16 15,760.04

6.78 3.16 2.42

5,931.64 5,030.75 6,512.41

794 - NEONATE W OTHER SIGNIFICANT PROBLEMS 194 - SIMPLE PNEUMONIA & PLEURISY W CC

6,753 5,010

36,837,939.92 92,156,469.45

5,455.05 18,394.50

2.26 4.08

2,413.74 4,508.46

603 - CELLULITIS W/O MCC

4,813

76,419,221.15

15,877.67

3.9

4,071.20

690 - KIDNEY & URINARY TRACT INFECTIONS W/O MCC 292 - HEART FAILURE & SHOCK W CC 881 - DEPRESSIVE NEUROSES 641 - MISC DISORDERS OF NUTRI,METABOLISM,FLUIDS/ELECTROLYTES W/O MCC 765 - CESAREAN SECTION W CC/MCC 189 - PULMONARY EDEMA & RESPIRATORY FAILURE 291 - HEART FAILURE & SHOCK W MCC

4,652 4,283 4,274

66,256,354.93 82,925,485.60 47,523,084.22

14,242.55 19,361.54 11,119.11

3.4 4.22 7.07

4,188.99 4,588.04 1,572.72

4,240

60,368,413.37

14,237.83

3.08

4,622.67

4,044 3,877 3,622

72,419,951.58 143,871,464.86 118,289,404.03

17,908.00 37,108.97 32,658.59

3.12 6.7 5.92

5,739.74 5,538.65 5,516.65

190 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 897 - ALCOHOL/DRUG ABUSE/DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 195 - SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 193 - SIMPLE PNEUMONIA & PLEURISY W MCC 683 - RENAL FAILURE W CC 872 - SEPTICEMIA W/O MV 96+ HOURS W/O MCC 287 - CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W/O MCC 247 - PERC CARDIOVASC PROC W DRUG-ELUTING STENT W/O MCC 774 - VAGINAL DELIVERY W COMPLICATING DIAGNOSES 378 - G.I. HEMORRHAGE W CC

3,471

75,854,218.99

21,853.71

4.5

4,856.38

3,465

34,148,752.83

9,855.34

4.07

2,421.46

3,460 3,451 3,417 3,387 3,364 3,288 3,174 3,092

43,671,737.49 106,279,713.32 67,126,960.13 71,627,495.97 105,260,196.82 233,942,519.35 44,125,878.59 66,093,511.28

12,621.89 30,796.79 19,645.00 21,147.77 31,290.19 71,150.40 13,902.29 21,375.65

3.17 5.77 4.27 4.63 2.51 2.4 2.63 3.69

3,981.67 5,337.40 4,600.70 4,567.55 12,466.21 29,646.00 5,286.04 5,792.86

2,810 2,648 198,575

38,632,975.13 48,545,451.41 3,753,819,074.05

13,748.39 18,332.87 18,903.78

3.26 3.73 4.86

4,217.30 4,914.98 3,889.67

192 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 191 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC ALL 30 DRG's

Source: Arkansas Department of Health, Hospital Discharge Program, 2014 data (most recent available)

47.9 27.23 16.41 3.25 1.24 3.97 100

AVG. CHARGES PER DAY

33,899 28,215 21,235 22,122 27,039 27,789 28,682

AVG. LENGTH OF STAY DAYS

% TOTAL CHARGES

5,420,761,378 3,081,855,633 1,856,981,120 367,928,695 140,604,107 449,873,935 11,318,004,867

STAY

AVERAGE CHARGES PER STAY

40.52 27.68 22.16 4.21 1.32 4.1 100

TOTAL CHARGES

159,911 109,228 87,449 16,632 5,200 16,189 394,609

% 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

5.94 4.41 4.59 6.61 5.63 4.56 5.18

5,710.90 6,402.74 4,625.04 3,346.05 4,833.25 6,098.83 5,548.04

Source: Arkansas Department of Health, Hospital Discharge Program, 2014 data (most recent available)

ARKANSAS HOSPITALS I Summer 2016 37

38

Summer 2016 I ARKANSAS HOSPITALS $39,885,424,908

28,916,804,408

10,968,620,500 11,224,972,279 5,978,267 ($256,351,779) ($42.88) -2.34% $694,606,495 $438,254,716 3.76% $260,144,885

$698,399,601 5.86%

15,305,292,104

5,903,068,665 5,976,998,987 3,468,973 ($73,930,322) ($21.31) -1.25% $308,493,708 $234,563,386 3.78% $98,329,834

$332,893,220 5.28%

Louisiana

$21,208,360,769

Source: American Hospital Association, Hospital Statistics, 2016

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 out-ofpocket 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:

Arkansas

5.29%

$401,900,801

$109,916,744

$291,984,057 3.90%

$322,055,646

-0.42%

($6.25)

($30,071,589)

4,814,000

7,188,316,628

7,158,245,039

19,927,771,753

$27,086,016,792

Mississippi

Arkansas and Surrounding States, 2014

6.11%

$1,259,681,692

$665,919,682

$593,762,010 2.97%

$1,154,601,122

-2.98%

($68.49)

($560,839,112)

8,188,458

19,367,868,494

18,807,029,382

40,798,547,659

$59,605,577,041

Missouri

10.07%

$882,964,910

$199,331,969

$683,632,941 7.98%

$322,344,777

4.38%

$85.67

$361,288,164

4,217,044

7,888,228,952

8,249,517,116

21,514,817,782

$29,764,334,898

Oklahoma

7.82%

$1,316,129,005

$216,619,646

$1,099,509,359 6.61%

$573,071,357

3.28%

$65.97

$526,438,002

7,979,872

15,522,404,054

16,048,842,056

46,399,193,325

$62,448,035,381

Tennessee

12.72%

$8,049,434,040

$1,544,118,773

$6,505,315,267 10.54%

$5,230,136,699

2.26%

$54.54

$1,275,178,568

23,378,583

55,219,961,093

56,495,139,661

172,156,449,946

$228,651,589,607

Texas

8.32%

$73,405,747,845

$17,720,027,270

$55,685,720,575 6.44%

$51,117,414,348

0.56%

$13.71

$4,568,306,227

333,111,172

808,869,209,436

813,437,515,663

1,963,288,605,002

$2,776,726,120,665

United States

Community Hospital Summary Financial Data

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% 6.40%

INDICATOR 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Number Self-Pay/No Charge Patients Admitted 27,638 27,963 30,296 30,121 30,199 28,142 28,676 27,241 29,240 16,632

Self-Pay/No Charge as % of All Patients Admitted 6.44% 6.50% 7.08% 7.08% 7.23% 6.82% 6.99% 6.70% 7.46% 4.21%

Total Uncovered Charges ($ Millions) $419 $439 $485 $518 $593 $583 $618 $610 $694 $368

Total Uncovered Costs ($ Millions)* $158 $162 $174 $185 $201 $188 $199 $196 $216 $126

ARKANSAS HOSPITALS I Summer 2016 39

Source: American Hospital Association, 2016

215,624,514 241,277,442 256,348,729 264,201,622 277,061,018 286,470,773 291,213,495 318,338,089 325,177,434 338,062,266 350,860,547 377,833,164 385,300,949 382,642,395 75.23%

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 15,305,292,104 269.25%

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 1,683,582,111 190.76%

TOTAL UNCOLLECTED AMOUNTS DUE 140,217,960 193,429,493 206,995,046 239,575,478 293,504,471 309,914,742 326,126,835 359,231,835 376,548,005 430,034,656 487,626,273 517,122,215 586,854,937 596,906,372 325.70%

BAD DEBT

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 INCREASE

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% 22.73%

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 1,086,675,739 147.64%

CHARITY CARE

YEAR

GROSS REVENUES (BILLED CHARGES) 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 5,976,998,987 83.91%

NET REVENUES ($$ COLLECTED) 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 21,516,854,477 185.03%

OTHER OPERATING REVENUE UNCOMPENSATED CARE CHARGES

103,461,117 134,677,549 127,642,206 134,780,857 153,253,789 154,744,439 162,165,731 169,341,834 193,995,665 221,189,649 220,871,438 256,162,838 269,134,329 308,493,708 198.17%

GROSS + OTHER REVENUE UNCOMPENSATED CARE 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 5,903,068,665 78.86%

TOTAL OPERATING COSTS

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 21,208,360,769 184.85%

COST-TOCHARGE RATIO

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 INCREASE

YEAR

Uncompensated Care Costs, 2001-2014

Arkansas Hospitals Impact of Self-Pay (Uninsured) Inpatients On Arkansas Hospitals, 2005-2014

Source: Arkansas Department of Health, Hospital Discharge Data Program 2014 *Notes: Estimated based on statewide cost-to-charge ratio (latest available cost used 2013) *Self-Pay/No Charge colunm includes Medically Indigent/Free discharges

STATISTICS

AHA Member Organizations by

19th Medical Group LRAFB Advanced Care Hospital of White County Arkansas Children’s Hospital Arkansas Heart Hospital Arkansas Hospice Arkansas Methodist Medical Center Arkansas State 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 Rehabilitation Institute Baxter Regional Medical Center Bradley County Medical Center CARTI 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 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 Helena Regional Medical Center Howard Memorial Hospital Jefferson Regional Medical Center Johnson Regional Medical Center

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Summer 2016 I ARKANSAS HOSPITALS

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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 OakRidge Behavioral Center Piggott Community Hospital Pinnacle Pointe Hospital Rivendell Behavioral Health Services River Valley Medical Center Riverview Behavioral Health Saint Mary’s Regional Medical Center Saline Memorial Hospital Siloam Springs Regional Hospital SMC Regional Medical Center St. Bernards Medical Center St. Vincent Rehabilitation Hospital Stone County Medical Center Sparks Regional Medical Center 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 Washington Regional Medical System White River Health System Willow Creek Women’s Hospital

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Congressman Bruce Westerman

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4th Congressional District

Congressman Steve Womack

3rd Congressional District

Congressman French Hill

2nd Congressional District

Congressman Rick Crawford

Congressman Bruce Westerman

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1st Congressional District

4th Congressional District

Congressman Steve Womack

3rd Congressional District

Congressman French Hill

2nd Congressional District

Congressman Rick Crawford

1st Congressional District

Congressional District

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ARKANSAS HOSPITALS I Summer 2016 41

Thank You,

Emily Cavallo for your creativity and design expertise.

The pages of Arkansas Hospitals will miss your magic touch.

Congratulations on the birth of your daughter!

Nonsmokers who are exposed to secondhand smoke at work increase their risk of developing lung cancer by 20-30%.

-Arkansas Hospital Association

ar Arkansas

tobacco control coalition

To learn more about the AR Tobacco Control Coalition and the state of tobacco control in Arkansas,

call

THERE's no MASKING THE DANGERS OF SECONDHAND SMOKE. Nonsmokers who are exposed to secondhand smoke at work increase their risk of developing lung cancer, asthma and COPD. Talk to your patients today.

501-353-4249 or email us at

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STAMP OUT SMOKING 1-800-QUIT-NOW

CONTACT

Michelle Gilbert mgilbert@pcipublishing.com

1-800-561-4686 ext. 120

ATTENTION MEDICAID ELIGIBLE PROFESSIONALS

Don’t miss out!

AFMC is now offering no-cost assistance to Medicaid eligible professionals in Arkansas to achieve and sustain meaningful use.

2016 is the final year to begin participation to earn incentive payments of up to $63,750.

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,3/16

42

Summer 2016 I ARKANSAS HOSPITALS

STAFF SPOTLIGHT

Our Team, Serving Yours AHA Executive Vice President, Paul Cunningham The amount of data generated in the health care field has grown exponentially in the last few years.

With it, the time and expertise needed to sift through, analyze and understand this data has also expanded. What’s needed is a data guru to help hospitals interpret the mountains of data, combing through to find the keys to becoming more effective and productive as organizations.

Within an individual health care organization today, that is as likely to be someone who can decipher and translate volumes of quality and patient satisfaction data (which is more closely tied to reimbursements from public and private payer groups than ever before) as it is a financial whiz who can consolidate departmental financial and utilization data into operational budgets. Both must be able to turn volumes of data into useable information that can be used by executive teams and board members alike for policy purposes.

In an advocacy organization like the Arkansas Hospital Association (AHA) which is tasked with safeguarding hospitals’ operational effectiveness in advancing the health and well-being of their communities, that person comes in the form of a policy analyst who can collect and sort through reams of data from internal and external sources in order to provide association members with datadriven reports and an interpretation of the latest trends and forecasts.

Enter AHA’s own Mr. Data, Paul Cunningham. “My role with data and policy analysis is to provide member hospitals with information that can

set them up to make better-informed decisions and projections on the business side of what they do,” Cunningham says.

On another level, less “out front” but also extremely important, Cunningham researches and interprets data to assist his colleagues on the AHA staff as health care policy changes and proposed new legislation are being crafted. “I’ve been with the AHA for 36 years, so I am admittedly biased,” he says, “but I believe the AHA is among the best at successfully and effectively representing its members. That’s because of the team members we’ve been blessed with over the years.

Because everyone needs information to do their jobs, I’ve been lucky to work one-on-one with each of them on given projects.”

He goes on to say, “We understand the value of working together to accomplish goals and fulfill our mission, and data is a big

part of that on many fronts. Together, we utilize the data and other information in countless ways to help our members.”

A fan of classic rock music, Cunningham notes, “At the AHA, data and information are behind everything we do; they’re akin to the drummer’s backbeat – the strong accent on one of the normally unaccented beats in a bar of music.

That data backbeat helped pave the way for some of our most satisfying successes having tremendous positive effects on Arkansas hospital reimbursements, most notably the Medicaid Assessment approved in 2009, and the Health Care Independence Act (Arkansas Private Option) in 2013.” In both cases, supplying the data was important, he says, but there is always more to it.

“Communicating is more than half of the process,” Cunningham says.

“You always hear there’s power in information, but supplying only the data won’t always tell the story. Clear communication of the data’s meaning can help paint the picture of where we, as a field, have been, where we’re going and how we’re going to get there. That’s true whether you’re trying to convince your own members or state officials about the potential impact of rules, regulations and other policy decisions.”

Star Trek: The Next Generation’s Mr. Data is known for his senses of wisdom and curiosity. The AHA’s Mr. Data, Paul Cunningham, shares these traits and, through his expertise with data and analytics, quietly assists AHA members and staff as we scale the mountains of data available today in the health care field.

ARKANSAS HOSPITALS I Summer 2016 43

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NEWS Arkansas Business urges hospitals to nominate a deserving health care hero!

Nominations are accepted in the following categories: Health Care Administrator, Health Care Professional of the Year, Hospital of the Year (small and large), Innovation Hero, Nurse of the Year, Physician of the Year, Women’s Health and Wellness Hero, Workplace Wellness Hero and Lifetime Achievement Award Winner.

Nominate by July 22 at www. arkansasbusiness.com/ healthcare.

The American Hospital Association offers new cybersecurity resources including webinars, podcasts and toolkits.

Links include tools to help with risk and gap analysis, materials specifically for hospital CEOs and trustees on cybersecurity leadership roles, and details about how to participate in ongoing information sharing opportunities for the health care sector. Access them all at www. aha.org/cybersecurity.

NEWS STAT A new Georgetown University Health Policy Institute study shows Medicaid expansion is having positive effects on safety net hospitals and clinics beyond major reductions in uncompensated care. Executives at safety net providers in Medicaid expansion states report opening new clinics, buying new equipment and hiring new staff – all of which allow them to begin filling gaps in the health system. By contrast, health executives in non-expansion states say they continue to face substantial financial pressures. Other reported positives: significant drops in the number of uninsured residents, budget savings for hospitals and community health clinics, active improvement of care delivered (non-expansion states are more likely to report “status quo” in their systems), and improvement of programs and efforts aimed at increasing access to specialty care. Find the study at ccf.georgetown.edu.

The new HPOE guide, Triple Aim Strategies to Improve Behavioral Health Care, describes strategies, action steps and examples for hospitals, health systems and community stakeholders working together to develop a well-coordinated, accessible, affordable and accountable system for delivering behavioral health care. Case studies in the guide provide examples of how hospital and health systems, working with community partners, can improve the quality of and access to behavioral health care, while bending the cost curve and improving community health. Download the guide at www.hpoe.org.

ARKANSAS HOSPITALS I Summer 2016 45

NEWS

Saving Lives

COMMUNITY CONNECTIONS

The Faces of Arkansas’s Private Option

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By Nancy Robertson Cook The Private Option, Arkansas’s unique answer to Medicaid Expansion, made national headlines when it was enacted by our legislature in 2013. A model in federal-state partnering, the Private Option began the work of reducing the number of Arkansas’s uninsured and significantly bringing down uncompensated care costs for our hospitals and health care organizations.

At the same time, it strengthened the state’s insurance marketplace (which came into being under the Affordable Care Act [ACA]), by assuring a ready enrollment pool from the outset. Most importantly, however, it impacts our fellow Arkansans and their health in positive ways.

Whether you receive coverage through this legislation or simply follow its evolution over the coming years, Medicaid Expansion matters to every Arkansan.

The Private Option, as enacted, sunsets at the end of 2016. This year’s General Assembly, working with Governor Asa Hutchinson, has approved its successor, dubbed Arkansas Works. The new program promises to continue the federal-state partnership in covering many of the state’s formerly uninsured and under-insured, and will continue to reduce the number of Arkansans formerly insured only through Medicaid.

Too often, the ACA (sometimes called Obamacare) has become a political football with its positive results buried in partisan rhetoric. The real life stories of those newly insured under the Private Option can become lost in the back-andforth of politics-as-usual.

Here, we present three stories of Arkansans whose lives were, literally, saved by the Arkansas Private Option.

It’s important to remember that the now more than 305,000 who are insured through the Private Option will continue to have annual affordable insurance coverage choices through the state’s insurance marketplace, as Arkansas Works replaces today’s groundbreaking legislation.

Something was Just “Off” Health care coverage for the uninsured is something close to Rachondra Hill’s heart. In 2013, while interning for Little Rock’s Harmony Health Clinic, she got the chance to be on the ground floor of signing eligible Arkansans up for affordable coverage.

The clinic was one of many entities allocated federal funds by the Arkansas Insurance Department, funds set aside specifically to educate and enroll eligible Arkansans in marketplace health insurance plans, previously unavailable due to their cost and availability.

Rachondra says she was excited to be a part of this effort. “Arkansas did a great job with outreach and enrollment and was ahead of the game in having a plan in place for Medicaid Expansion,” she says. “I am so proud that Arkansas was ahead of the game, considering that we’ve been at the bottom in so many areas for so long, areas like poverty, chronic illness and disease.”

After Harmony Health Clinic was approved for outreach funding, she was asked to work full-time as a supervisor, directing the clinic’s health care enrollment program. Rachondra took the clinic’s enrollment program outreach across the state in order to reach as many Arkansans as she could. She says it was important to enroll as many as possible of her fellow citizens who could benefit from Arkansas’s Medicaid Expansion plan, known as the Private Option.

“I signed up family members, friends and anyone who was eligible for it,” she smiles. She went to churches, civic organizations and health fairs across Arkansas to get the word out.

And being a full-time student, single mother and low-income worker without insurance, she enrolled herself, as well.

Being without health care insurance “was a bad situation to be in,” she says.

She was grateful to be able to enroll in coverage for the first time.

When she enrolled, Rachondra says she considered herself blessed not to have any major health issues. But soon after receiving her prized insurance card, she began to feel like something was “off” with her health.

She saw an ear, nose and throat specialist at the University of Arkansas for Medical Sciences, who found that her thyroid was enlarged. An ultrasound showed a number of troubling nodules.

Surgery to remove her thyroid was performed, and shortly thereafter the doctor discovered thyroid cancer.

Rachondra underwent another surgery, followed by radiation therapy.

Now cancer free, Rachondra’s life has taken a dramatic turn. She now serves as assistant executive director of Harmony Health Clinic.

“I am so grateful for the Private Option,” she says. “I do not know what I would have done without it!”

Rachondra says she knows she benefited directly from Arkansas’s Medicaid Expansion efforts, and every day sees Harmony Health Clinic patients who are now able to get their medications and go to the doctor because they, too, have medical coverage.

“I no longer feel the stress of having to choose between a visit to the doctor or buying groceries,” she says. And she is grateful for learning about the Private Option before she, herself, greatly needed health care coverage.

“Today, I enjoy the freedom of seeing my primary care doctor and benefiting from the services offered,” she says. “Having access to health care is one of the great freedoms America provides.”

A Pre-Existing Condition

Travel to a small rice farm in Carlisle, and you will find Medicaid reform advocate Mary Frances Perkins. Mary Frances wasn’t always an advocate for Medicaid Expansion, she says. “I began hearing about the marketplace like most people, through the news, and so much of it was negative.” She says she also didn’t worry much about health insurance, until she became gravely ill.

In 2012, Mary Frances was diagnosed with a form of Parkinson’s Disease. Following the diagnosis, she aggressively sought insurance from multiple companies. Denied every time because of her pre-existing condition, she and her husband saw their journey toward gaining health insurance was going to be a long and expensive one.

It became a challenge simply to pinpoint the type of Parkinson’s she had.

Without insurance, physicians’ fees and the cost of the many tests necessary cost thousands of dollars in cash. continued on page 48

ARKANSAS HOSPITALS I Summer 2016 47

Eventually, she could no longer walk.

Stymied physicians suggested she go to the Mayo Clinic to find answers, but she says a cash payment of $5,000 was necessary before being seen. It was daunting.

To pay for medical care, the couple took a loan out on their farm. Mary Frances says she and her husband spent “almost every dime of our savings on health care services, and we had to decide if we even had enough to go to the doctor for follow up appointments.”

At the time she began to explore the Private Option in Arkansas, one of her medications alone ran $628 a month.

With her history in seeking health care coverage, she was skeptical about signing up for the insurance, but says she thought, “Boy, if I can get this, it would be a Godsend.”

She came to Little Rock on the first day of enrollment in the fall of 2013, attending a registration event at the Clinton Presidential Library; she was one of the first people through the door. She successfully enrolled, and her coverage began January 1, 2014. Immediately, she became an advocate for covering the uninsured.

Through her health care coverage, Mary Frances Perkins saves more than $900 on prescriptions monthly; she now pays about $55 a month. The coverage has allowed her to live her life normally.

To Arkansans wondering if they should sign up for coverage through the marketplace, Mary Frances doesn’t hesitate to offer an enthusiastic recommendation. She believes Arkansans have needed health care reform for a long time, and says this is a great thing for our state and our citizens.

The Perkins family finds comfort knowing that people in rural areas, especially farm families like theirs, can now afford health care insurance, even in the wake of a difficult diagnosis.

The Snap Decision

Tamara Williams loves helping people.

In 2013, she was called to interview for a job through In Affordable Housing, Inc. The position would allow her to help sign

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uninsured, low-income Arkansans up for health care coverage. She says she jumped at the opportunity.

“If I cannot help people in what I am doing, then it’s not the job for me,” Tamara says.

She traveled the state registering eligible Arkansans for the new health care coverage. She says she loved meeting folks and going places in Arkansas where she had never been.

“I never thought I would be good at public speaking,” she says, “but while advocating for health care I found my voice.” She spoke with communities and church groups about the benefits of

Arkansas’s Medicaid Expansion. Through this job, she learned new skills, but the biggest lesson she learned would save her life.

Tamara was so busy signing others up for health care coverage that she, herself, did not sign up until the end of January 2014, four months after the initial enrollment period began.

A couple of months after signing up, her job took her to a health care expo at the University of Arkansas for Medical Sciences. One of her co-workers mentioned there was a MammoVan on site. Interested, Williams decided to check it out. On the spot, she decided to have her very first mammogram, confident because she was now covered through the Private Option.

Seven days later, she received a call informing her that her mammogram showed a lump in one of her breasts.

She scheduled a doctor’s appointment, and underwent another mammogram, followed by an ultrasound

and biopsy. It was breast cancer. A lumpectomy and chemotherapy followed.

She says that luckily, the cancer was caught early.

Tamara says obtaining health care coverage saved her life. “God did not want me to find that lump until I had insurance,” she says. “I would have freaked out and not known what to do if I did not have health care coverage when I was diagnosed.”

Obtaining health care coverage through the Private Option allowed Tamara to pay for the surgery, treatments and medications she needed to fight and win her battle against breast cancer. She says having affordable coverage for someone with an income level like hers provides the quality of care she needs and also peace of mind.

As a health care advocate and Medicaid Expansion beneficiary, Tamara counsels those who question enrolling, “Do you want to feel better or keep feeling bad? The Private Option saved my life.”

As those who craft health care policy, deliver health care or are the recipients of health care in Arkansas, each of us has a stake in the future of Medicaid Expansion. Whether you receive coverage through this legislation or simply follow its evolution over the coming years, Medicaid Expansion matters to every Arkansan. Because of the Private Option more than 305,000 newly eligible adults now have coverage.

Hospitals receive these patients as covered individuals, rather than as self-pay patients whose care once was severely undercompensated. Early results show that Arkansans’ health is improving – good news for a state which has traditionally been one of the least healthy in the nation.

But the best news happens quietly, every day in every county of the state.

Here, adults once living precariously without health care coverage, one diagnosis away from financial disaster, now have the coverage that urges preventive medical care and gives the peace of mind that their policies will help them get through, no matter the health challenges that lie ahead. For many, this is enough.

For some, they are quick to tell all who will listen, “The Private Option saved my life!”

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NEWS

Sharif Omar, Northwest Health System “Today’s Health Care Requires a New Mindset”

By Nancy Robertson Cook Louisiana native Sharif Omar’s career in hospital administration has taken him (over the course of 15 years) from the Deep South to Pennsylvania and back again to his current position as leader of Arkansas’s Northwest Health System. Comprised of three major hospitals – Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale and Northwest Medical Center-Willow Creek Women’s Hospital (Johnson) – the system has recently added a fourth component, Fayetteville’s 20-bed Physicians’ Specialty Hospital.

“Like all of us in health care, our system is experiencing challenges in this rapidly changing environment,” Omar says. “The move from treating patients in the inpatient setting to a focus on outpatient services, wellness and disease prevention requires a new mindset, a new skill set for all medical professionals and the rebuilding of teams that are quick to adapt. We’re

positioning our system to provide needed services in the rapidly growing area of northwest Arkansas, and at the same time we’re building these new mindsets among our 2,000-staff and 400-physician network.”

A new venture for Northwest Health is its Clinically Integrated Network (CIN) arrangement with the Sparks system.

Designated as the Northwest-Sparks

Quality Alliance, the network is a physician-led, formal program between private practice physicians, employed physicians and hospitals. “Our purpose is to collaborate on improving quality and efficiency of care for patients in our specific market,” Omar says. “We work on delivering value, rather than volume.”

He says the overall goal for entering into a CIN is to enhance the value

CEO PROFILE: Sharif Omar

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•

WHAT WOULD YOU DO IF YOU WEREN’T IN HEALTH CARE LEADERSHIP? If I had no responsibilities or expectations, I would own a scuba diving shop on a beach in the Caribbean and live more of a laid back life.

•

WHAT MAKES YOU LAUGH? That’s easy! My kids! Playing with them relieves stress and makes me laugh every day. I never knew how opinionated a four-year-old could be!

•

WHAT’S THE BEST ADVICE YOU EVER RECEIVED? It came from the woman who hired me into my first job in health care. She urged me to constantly be aware not to put my expectations of myself onto others.

This changes my approach to every conversation. We all come from different mindsets, and it’s important to recognize the importance of each.

•

WHAT’S ON YOUR ITUNES PLAYLIST? I listen to sports radio more than anything!

of services provided to patients.

Goals are met on two fronts. “By being organized in achieving quality improvement initiatives, the CIN is also well positioned to achieve success with improved patient outcomes and efficiencies of care,” he says. “And by providing valuable services to patients, the CIN positions itself as a valued partner to payer organizations, the referral network and the surrounding communities.”

The Northwest-Sparks Quality Alliance was launched last March and seeks to change the landscape of health care in the northwesterly part of the state. “It’s a way for us to deliver a clinically integrated network which is more convenient for our patients, assuring them access to quality care across the communities of northwest Arkansas. We feel blessed to be in an environment that’s growing so rapidly and to be able to advance the level of services we can provide to the patients we serve.”

Omar credits his team building success to “being trained by nurses early on.” After earning his undergraduate degree from Louisiana State University, he earned his master’s degree in health administration from Tulane. “During my second year in the program, I was going to school full time and working at my first job in health care administration through the Tulane Hospital System,” he says. “That role was as operations manager at Tulane Hospital for Children, a position I held for four years, and the place where nurses taught me how to speak the patients’ language as well as the nurses’ language. It’s also where I developed my great love for kids and for the rewarding work of being involved with helping them get better.”

His next role as associate vice president for Tulane University Hospital and Clinic brought him into the national spotlight. It was 2005. Two months into the new job, Hurricane Katrina struck. He played a key role in medical response during that crisis, participating in the evacuation of the hospital and “living there, with patients and caregivers, for a week during the height of the storm and its aftermath.” continued on page 53

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Rebuilding the hospital to quickly get it back up and running again was his next focus, overseeing construction, essentially starting over again as New Orleans rebuilt. “It was a different type of experience,” he says, “one that I never could have expected.”

A promotion to COO of Southwest Medical Center followed, bringing him back to his hometown of Lafayette. “My wife and I were newly married, and wanted to explore the country, so our next move was to a completely new environment,” he smiles. “We went from Lafayette to Pottstown, Pennsylvania. That was a 180 degree change for us, weather-wise.” Ask him about the record-breaking snowfalls that occurred during their time in the Northeast, and he’ll share stories that boggle the mind.

But after memories of record snows are gone, the residents of Pottstown will long remember his three years as CEO of Pottstown Memorial Medical Center (PMMC) as a time when quality of care was enriched, new services for breast health, urgent care, ambulance service and psychiatry (among others) were introduced, and hospital awards and achievements grew.

During his tenure, PMMC was recognized as a Top Performer on Quality Measures by The Joint Commission and earned three consecutive American College of Surgeons Commission on Cancer achievement awards.

“As our children came along,” – the Omars have a four-year-old daughter, a two-year-old son and are expecting a new baby boy due in September – “we were ready to leave the cold north and move closer to family,” he says. “And I was honored to join the physicians, employees and volunteers of Northwest Health System in their daily work of caring for the northwest Arkansas community.” He accepted the role as Northwest Health System’s CEO in 2014.

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NEWS

Clinical Staffing Shortages:

Health Care’s Future Depends upon Tomorrow’s Workforce

By Veronika Riley, Director, Workforce Center, American Hospital Association and Damareus Barbour, Specialist, Workforce Center, American Hospital Association

When it comes to the issue of America’s health care workforce, the question being asked is, “Do we have enough providers to respond to growing needs for care?” Today’s complex and evolving health care landscape comes with an inherent uncertainty about future supply and demand.

The nation’s requirement for health care services – and the professionals who provide them – continues its alarming rise. Shortages of health care professionals at all levels are on the increase due to the needs of an aging population, growing numbers of patients with chronic disease, mounting retirements of health care providers 54

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and faculty, and the ability for more people to access health care as a result of the Affordable Care Act and Medicaid expansion.

To answer the question, “Are there enough health care professionals for future needs?” consider these statistics and projections: • An overall physician shortage of between 61,700 and 94,700 is expected by 2025, according to an April 2016 update to the Association of American Medical Colleges (AAMC) report Physician Supply and Demand Through 2025. The study “presents ranges for the projected shortages of physicians rather than specific shortage numbers to reflect future uncertainties

in health policy and patterns in care use and delivery;” • Though we are currently operating with a shortage of RNs and LPNs, the Health Resources Services Administration (HRSA) predicts that nursing supply will exceed demand by 2025; • The need for an additional 14,900 to 35,600 primary care physicians is projected by 2025, according to the AAMC report; • Psychiatrist and psychologist shortages are already being felt throughout the nation; an analysis funded by HRSA identified 77% of United States counties currently having a severe shortage of psychiatrists, particularly in underserved urban and rural communities.

It is critical to note that the limitations and assumptions of these projections, either for a surplus or shortage, do not account for how health care is changing and evolving and the impact of this change on workforce trends, needs and availability. What we do know is that shortages of providers will most likely be with us depending on geographic location and economic circumstances. One approach will be to learn to work better inside this world of ambiguity by being nimble and responsive to patient care needs as they evolve.

Despite the dire projections, our health care system must prepare itself to implement a multi-pronged approach to ensure care that is timely, effective and affordable. How will we do this? Innovative delivery models and care teams, innovative uses of technology, bold education and practice partnerships, and combating burnout and turnover will all be paramount in addressing existing and potential future shortages throughout the nation.

from a sense of job satisfaction tied to successful patient outcomes, according to a 2014 Center for Health Workforce Studies case study.

Technology and Telehealth Technology, whether via electronic health records or telemedicine, has the potential to improve quality, efficiency and access to care. Technology supports team-based care, emerging health care models, population health analytics and care coordination, making

it a common thread toward health care transformation. Big data and predictive analytics, interoperability among health information exchanges (HIE), and specialists that are able to provide care to patients over a large region have resulted in significantly improved care.

The increasing levels of access and convenience in health care afforded by telehealth lessen time constraints and burdens on providers. Telemedicine is a key tool in helping decrease the use continued on page 56

Care Delivery Innovation

The ever-shifting changes in health care are bringing about new ways to deliver care, new roles and responsibilities for clinicians, and formation of new care teams. Few projections of workforce supply and demand account for these new methods of delivering care, but instead look at how care is currently being delivered to figure out what future demand will be.

Team-based care remains front and center as an effective and value-driven approach to addressing health care needs of the community, as well as workforce needs.

• Ensuring that patient care will continue to be accessible, affordable and effective is driving Wisconsin hospitals and health systems to increasingly use team-based care. Wisconsin Hospital Association’s 2015 Health Care Workforce Report surveyed more than 300 clinical and human resources leaders and found that care coordinators, a key position for improving patient satisfaction and care quality, are the second most soughtafter new position. When properly engaged in and educated about teambased care, providers also benefited

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of our nation’s emergency departments (EDs) and acute hospitals for episodic behavioral health incidences.

• North Carolina’s Telepsychiatry Network found the recent use of telepsychiatry shows patients spend less time waiting in hospital EDs and have a lower likelihood of returning for treatment.

The more efficient use of our resources, including the health workforce, enables our nation to achieve healthy outcomes because the right care is being delivered at the right location, at the right time.

Addressing Recruitment, Retention and Retirement

The aging population is not only increasing the demand for care, but also contributing to the retirement of health care professionals and faculty. Consider the following: • In 2013, the average ages of doctorallyprepared nurse faculty holding the ranks of professor, associate professor and assistant professor were 61.6, 57.6 and 51.4 years, respectively.

For master’s degree-prepared nurse faculty, the average ages for professors, associate professors and assistant professors were 57.1, 56.8 and 51.2 years, respectively; • According to the American Nurses Association (ANA), approximately 700,000 registered nurses over age 50 will retire in the coming decade; • The Physicians Foundation 2014 Survey of America’s Physicians indicated 9.4%, or approximately 76,000 physicians, planned to retire within three years.

The 78,000 physicians who will join the workforce in the next three years barely offsets the potential number who plan to leave; • The Association of American Medical Colleges (AAMC) projects that total physician demand will increase by 17% by 2025; • U.S. nursing schools turned away approximately 69,000 qualified applicants from baccalaureate and graduate nursing programs in 2014 due to an insufficient number of faculty, clinical sites and classroom space.

Worsening faculty shortages in academic health centers are threatening the nation’s health professions education infrastructure, according to an Association of Academic Health

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Centers report. The entire nursing community is leveraging resources, especially Title VIII funding, to recruit the next generation of nurses, address the faculty shortages facing the profession, and to ensure the building of a highly trained workforce that can meet the challenges of a fast-growing and evolving health care system.

• The University of Texas at Arlington College of Nursing and Health Innovation is combatting the nursing shortage by expanding online learning programs. While maintaining academic standards, UT Arlington created online access for baccalaureate and master’s degree seekers. About two-thirds of approximately 20,000 students take classes online. The school’s dean emphasized the importance of forging stronger partnerships with national health organizations, government agencies, school districts and civic groups. Academic/practice partnerships can and do provide more opportunities for clinical sites for nursing students, which helps offset the costs of expensive simulation programs.

The Incumbent Workforce and Combating Burnout We must not lose sight of the incumbent workforce, whose impact on the pace of change in health care facilities will be critical. New models of care and the redeployment of the health

care workforce, which necessitate continuing education and re-training, can be frustrating and burdensome, particularly for those clinicians who have been working in the field for an extensive amount of time.

A key finding of the 2014 Survey of America’s Physicians indicated challenges in declining professional morale due to shifting patterns in medical practice configurations and physician workforce trends. Eightyone percent of physicians described themselves as either over-extended or at full capacity, possibly contributing to many physicians’ plans to take steps to reduce their services, such as retiring, working part-time or seeking nonclinical jobs.

Dissatisfaction among nurses contributes to costly labor disputes, turnover and risk to patients, according to a survey reported in Health Affairs.

The survey suggests that work environment and staffing levels for nurses affect both nurse burnout and job satisfaction.

All care providers must be both involved and included in the transition of health care delivery and reform. When this does not happen, issues of attrition and dissatisfaction lead to many leaving the profession altogether.

The health care workforce burnout epidemic has been referred to as a national crisis, according to some public

health professionals. The additional expectations made of providers when new initiatives such as electronic health records, new quality reporting requirements or working on new teams without adequate preparation or training can be stressful and burdensome.

Coupled with pressures to provide high-quality, compassionate care with less time and resources, a work environment that some consider unbearable is created. Fifty-four percent of surveyed physicians in the U.S. reported at least one symptom of burnout in 2014. Simply dismissing clinician burnout to an unwillingness to adapt to priorities of quality improvement and lowering costs is a tremendous disservice to those who dedicate themselves to keeping people healthy and caring for patients, families and loved ones at their most vulnerable times.

The well-being of our providers should be prioritized so that populations and communities are receiving care from individuals who promote and reflect healthy habits. A 2014 BioMed Central Medical Education study demonstrated burnout has a negative association with empathy, making it more difficult for physicians and nurses suffering from burnout to deliver compassionate care.

Therefore, if we expect caregivers to engage patients and deliver high-quality care, supporting the well-being of those charged with delivering care is essential.

In fact, a recent paper by Thomas Bodenheimer, MD and Christine Sinsky, MD speaks to the notion of needing to expand the Triple Aim to the Quadruple Aim. In addition to the need to deliver care that is timely, cost-effective and of highest quality, this team suggests the health care field should commit itself to providing an environment where caregivers, and thereby their patients, can thrive.

Hill, speaks to such a need, referring to the “old school” vs. “new school” ways of approaching workforce planning and development.

Instead of asking whether or not we will have enough physicians or pharmacists or nurses in the near or distant future, what if we asked, “Do we have the right health care providers needed to respond to the increasing demands from the aging population, retirements of providers and faculty, or shifting and evolving care delivery models?”

In reframing the conversation from numbers of providers to provider roles, we can instead focus on the health needs of the patient and community.

Who, specifically, will be needed to address the health care needs in our hospitals, health systems, communities and regions across the care continuum?

With this shift, the focus becomes working within new models of care that demand new ways and new roles to respond to patient and consumer needs. The focus also shifts the conversation to the necessary skills and competencies of the providers

who will be caring for patients in a completely redesigned health care model, instead of only “how many” will be needed. It is their skills and competencies that will prove essential in addressing chronic care and population health. In essence, how do we transform the health care workforce to achieve the Triple Aim in a transformed delivery system?

If we are to achieve the Triple Aim, if we are to address the physical and behavioral health needs of our community members, if we are to succeed in combating chronic diseases and managing the health of populations, if we are to succeed in moving completely to a value-based model of care, we have an opportunity to think boldly and unconventionally about our workforce. There is no question that, indeed, we will need a culturally competent, nimble and highly educated workforce to confront the health care needs of our nation. Can we be bold enough to reimagine who that workforce should be — what are the roles that will be needed — and not only talk about how many are required?

Considering Needs vs.

Numbers

Perhaps it is time to reframe the conversation about numbers to a focus on the patient and the consumer. Erin Fraher, PhD, MPP, Director, Program on Health and Workforce Research & Policy at the Cecil G. Sheps Center for Health Services Research at the University of North Carolina, Chapel ARKANSAS HOSPITALS I Summer 2016 57

Thank you to our hospital partners for providing high quality healthcare to Arkansans!

Arkansas Health & Wellness Solutions has earned its accreditation status from the National Committee for Quality Assurance (NCQA) for its Health Insurance Marketplace Exchange plan, Ambetter of Arkansas, for its service and clinical quality that have either met or exceeded NCQA’s rigorous requirements for consumer protection and quality improvement.

www.ambetterofarkansas.com

1-877-617-0390

58

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“Earning accreditation reflects a health plan’s ability to work with its members’ physicians to improve the quality of clinical care,” said Margaret E. O’Kane, NCQA Marketing President. “It shows that the plan is building the kinds of partnerships that are critical to delivering great care and great service.”

“NCQA Health Plan Accreditation evaluates the quality of healthcare that plans provide to their members,” said Arkansas Health & Wellness Solutions’ President and CEO John Ryan. “We are honored to receive accreditation from NCQA. To have our unrelenting commitment to the highest quality of care for our members recognized by such an esteemed organization is a powerful affirmation.”

Combating Breaches: Cybersecurity in Today’s Hospitals

NEWS

By Russell Branzell, FCHIME, CHCIO, FHIMSS, FACHE President and CEO, College of Healthcare Information Management Executives

After learning that an employee’s files were infected with the dangerous Locky ransomware virus, King’s Daughters’ Health executives decided to exercise “an abundance of caution” and shut down their computer systems last March.

A large, multi-state health system on the East Coast blocked nearly one million ransomware-ridden emails during a one-month period this spring.

And this Mother’s Day, a 130bed community hospital in Kentucky turned away 3,000-plus attempted cyberattacks on its network.

These defenses against

cyberattacks don’t always garner much attention. It’s more likely that you heard about Kansas Heart Hospital, where, after leaders agreed to pay an initial ransom to hackers, information systems were held hostage for even more money. Or Hollywood Presbyterian Hospital in Los Angeles, which reportedly paid $17,000 in bitcoin last February to end a ransomware attack. And lest we forget, the massive 2015 breach of Anthem Inc., which put nearly 80 million patient records at risk.

Make no mistake about it, cyber criminals have set their sights on health care, and they are coming at

our institutions at a fast and furious pace. Between January and October 2015, health care accounted for 34% of compromised records across all industries, according to IBM Security. That’s up from just 0.63% from January 2011 to December 2014.

Further, health care led all industries with 21% of cyber liability insurance claims between 2012 and 2015, according to NetDiligence’s 2015 Cyber Claims Study. Financial services followed closely at 17%; retail was next with 13% of claims.

The average large company claim continued on page 60 ARKANSAS HOSPITALS I Summer 2016 59

during that period was $4.8 million; the average claim in health care hit $1.3 million. It’s worth noting that NetDiligence says its dataset represents just 5% of the total number of cyber claims handled by all markets during this timeframe.

Why the rising interest in health care? By some estimates, personal health information is worth more than 10 times the amount of a stolen credit card number on the black market.

Criminals can use the data to commit Medicare fraud and other nefarious acts.

Another significant factor is the digitization of health care. To improve care and succeed under new payment plans, protected health information must flow seamlessly across the care continuum in a multitude of ways. The average large health system will send millions of transactions a day across its network and share information with other entities. Providers must protect this data, but also meet the needs of clinicians, not to mention Meaningful Use rules, for information exchange.

While technology, including information systems, is helping us make great strides in achieving the Triple Aim, new vulnerabilities arise as we connect virtually every device and record system to our networks.

Admittedly, health care has been a laggard industry in terms of adopting robust cybersecurity protocols.

Traditionally, the health care industry has been compliance driven, according to Symantec’s 2016 Internet Security Threat Report, which adds that the Health Information Portability and Accountability Act (HIPAA) “resulted in a focus on complying with the Privacy and Security Rules, much of which was ‘addressable’ and interpreted as not required.

Consequently, spending on security was mostly an effort to comply with respective regulations (federal, state and local), internal policies and to be able to pass an audit.”

However, hospital executives and boards must be fully engaged if their organizations are going to make the leap from focusing on compliance to security. As College of Healthcare Information Management Executives (CHIME) Board Chair Marc Probst 60

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The AHA is presenting a Health Care Cybersecurity Workshop September 7 at the Hilton Garden Inn West Little Rock.

Russell Branzell, CEO and president of the College of Healthcare Information Executives (CHIME) and the author of this article, will be the presenter. For more information, please go to the Events Calendar on the AHA website, www.arkhospitals.org.

told a congressional committee in May, “Security can’t be an afterthought.

“Given the breadth and depth of cyber threats, it’s paramount that all facets of a health care organization, from the information technology department to clinicians to the board of trustees and many in between coordinate efforts to improve the cyber hygiene of their organizations,” Probst, vice president and chief information officer at Intermountain Healthcare, Salt Lake City, Utah, testified.

There are a few steps executives can take to make cybersecurity an institutional priority: • Implement a continuous risk assessment and risk management program; • Increase knowledge of the cyber threat landscape; • Improve detection and reaction capabilities; • Implement data exfiltration controls; • Enhance user education and accountability; • Implement active vendor security management; • Address long-term challenges around medical devices; and • Create a response plan, because it is not “if” a breach happens, it’s “when.”

A couple of these aspects warrant an expanded discussion: • User education and accountability — As noted earlier, cybersecurity is everyone’s responsibility. For several years, we put our resources into encrypting data to safeguard against the stolen laptop. While we still need to stay vigilant on this front, increasingly threats are coming from outside of our organizations. Nearly 50% of health care breaches are caused by criminal cyberattacks, according to the Ponemon Institute’s sixth annual Benchmark Study on Privacy and Security of Healthcare Data. A proactive education and staff training program is the first line of defense.

While some technology solutions can weed out fraudulent emails, sophisticated phishing expeditions can sneak through. Employees need to understand the dangers of opening suspicious emails. Many CHIME members routinely conduct internal phishing exercises as part of their training programs. Employees who click on the phony emails are put through increased training. Those who continuously put a network at risk can face severe disciplinary action.

• Increasing knowledge of the cyber threat landscape — No segment of the health care ecosystem can solve this problem alone. We need to pull together and increase information

sharing in order to understand the threats that exist and to spread best practices. To that end, CHIME in late May announced the creation of the CHIME Cybersecurity Center and Program Office. Among other things, the center will encourage greater collaboration across the industry and with federal agencies.

It will also proactively look to disseminate best practices among health information technology (IT) leaders. At the federal level, CHIME and its affiliate, the Association of Executives in Healthcare Information Security, strongly endorses provisions in the recently enacted Cybersecurity Information Sharing Act, which contains some health care-specific provisions.

Among other things, the law calls on the Department of Health and Human Services to create a task force that will help the department better coordinate cybersecurity efforts.

Russell P. Branzell is CEO and president of the College of Healthcare Information Executives (CHIME) and its affiliate associations: the Association for Executives in Healthcare Information Security (AEHIS), the Association for Executives in Healthcare Information Technology (AEHIT) and the Association for Executives in Healthcare Information Applications (AEHIA).

Prior to joining CHIME as President and CEO in April 2013, Branzell served as CEO for the Colorado Health Medical Group. He has also served as vice president of information services and CIO for Poudre Valley Health System (PVHS) and president/CEO of Innovation Enterprises (PVHS’s for-profit I.S. entity). PVHS received the 2008 Malcolm Baldrige National Quality Award during Branzell’s tenure as CIO.

• Vendor security management – Your network is only as secure as the weakest link. Remember the 2014 Target breach? Hackers snuck into the network after exploiting a weakness at the retailer’s HVAC vendor. Think about all of the system upgrades your hospital gets from device manufacturers and health IT vendors. Besides segmenting devices from the rest of your network, it is important to have contractual language that sets security

we

expectations. In some cases, CHIME members have terminated contracts with vendors that don’t meet their security goals.

Protecting patients is not a task that CIOs and chief information security officers take lightly. The threats against health care providers are growing and becoming more sophisticated. It will take a concerted and collaborative effort to ensure that we stay two steps ahead of the bad guys.

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Making Sure Caregivers Are Always There

By Mary Hook, Manager, Healthcare Staffing Services

Healthcare Staffing Services is a supplemental staffing program and a preferred and endorsed partner through the Arkansas Hospital Association’s AHA Services, Inc. We help you keep clinical and non-clinical departments staffed through a simple standardized approach.

In 2002, South Carolina CEOs, CNOs, recruiters and human resource professionals joined forces on a Workforce Advisory Committee. The committee determined that a workforce solution would be beneficial in response to hospital labor shortages, hard-to-fill specialty positions, flexible staffing and the challenges associated with using temporary personnel to provide patient care.

As a result, the Healthcare 62

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Staffing Services program was formed to help link health care facilities and health care staffing firms to ensure the very best workforce to care for our citizens.

The program saw great success in improving workforce supply and quality, and other state hospital associations began to explore joining efforts to benefit hospitals across the region.

More than a decade later, Healthcare Staffing Services, a division of SCHA Solutions, is available to hospitals in the states of Arkansas, Florida, Georgia, Kentucky, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia and West Virginia.

Healthcare Staffing Services holds one central agreement with almost 100 national vendors to save our participants from the

administrative burden of negotiating multiple contracts. Through an extensive application process, vendors are evaluated using specific criteria to ensure their ability to bring quality and value to the program.

Our vendor-neutral approach brings increased market competition in the areas of billing rates, contract terms, performance standards and qualified candidates. Regular on-site compliance reviews are conducted with vendors to review contract terms and compliance with The Joint Commission, CMS and state regulatory requirements.

Because we work with many staffing vendors, our program offers an increased candidate pool of credentialed health care professionals. This creates more opportunities to identify and select

staff that complement your health care organization. The program was created by hospital personnel, and is administered by your hospital association, so it will always keep hospital and patient needs as a main priority.

We have seen an increase in supplemental staffing over the past four years. Recent studies show that, between 2012 and 2022, five million health care jobs will be created. National data also suggest that workforce shortages are back, while hospital censuses continue to increase.

At Healthcare Staffing Solutions, we monitor healthcare staffing trends to ensure we are able to meet the current needs of all our program participants.

Our goal is to continue to raise the staffing industry standard in health care by placing experienced caregivers at the bedside to provide quality patient care. We understand hospitals, and our services can be customized to meet your individual needs — all at no cost to you!

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“JRMC partnered with Healthcare Staffing Services via our affiliation with the Arkansas Hospital Association and AHA Services, Inc. The staff at Healthcare Staffing Services has been very courteous, prompt and attentive to our needs. They have eliminated the burden and inconvenience of having to negotiate with multiple recruitment companies for our supplemental staffing needs. We have not looked back since signing the participation agreement. We value our relationship with Healthcare Staffing Services and look forward to working with them and their alliance of companies for years to come.”

- Daryl Scott, Assistant Vice President, Human Resources, Jefferson Regional Medical ARKANSAS HOSPITALS I Summer 2016 63

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THE COMPLIANCE COUNSELOR

Ready or Not, Here They Come!

Government Auditors in Your Hospital

By Kathy Roberts, MS, CHC Kathy Roberts is The Compliance Counselor. She has more than 40 years’ experience in health care and was the Corporate Compliance Officer at Baptist Health until her recent retirement. In each edition of Arkansas Hospitals, Kathy offers readers guidance for staying in compliance with governmental regulations.

Regardless of your organization’s size, you will at some time find yourself under government scrutiny.

These days, myriad areas regarding the effectiveness of your compliance program are assessed (and potentially challenged). Whether it’s…

• the Recovery Audit Contractor (RAC) determining the medical necessity of your short stays or the accuracy of your coding; • the Medicare Administrative Contractor (MAC) assessing your compliance with their Local Coverage Determinations (LCD); • the Office of Inspector General (OIG) completing a compliance audit; • Medicaid reviewing documentation to ensure your emergency visits are meeting their criteria for “urgent” care; • the Arkansas Department of Health investigating a potential Emergency Medical Treatment and Labor Act (EMTALA) violation; • the Supplemental Medical Review Contractor (SMERC) evaluating the medical necessity of power mobility devices, hyperbaric oxygen treatments or inpatient rehabilitation services; • the Payment Error Rate Measurement (PERM) auditors focusing on eligibility requirements for Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries; • the Zone Program Integrity

Contractor (ZPIC) assessing appropriateness of use of home health, hospice and durable medical equipment services; or • the Office for Civil Rights (OCR) investigating a privacy complaint, … your organization needs to be on top of current compliance law and practice.

What can you do to be prepared for these audits and reviews? Through a quarterly series of columns, The Compliance Counselor will help you explore the requirements, challenges and strategies for developing and maintaining an effective compliance program using the OIG guidance as a framework.

Through OIG’s voluntary compliance program guidance, as well as its formal directives issued in most Corporate Integrity Agreements, its focus has been on ensuring that your compliance program meets the seven Compliance Program Elements listed in 63 Federal Register 8987, February 23, 1998.

Supplemental guidance was also provided in 70 Federal Register 4858, January 31, 2005.

The compliance program elements are as follows: 1) Development and distribution of written standards of conduct, as well as written policies and procedures that promote the hospital’s commitment to compliance (e.g., by including continued on page 66 ARKANSAS HOSPITALS I Summer 2016 65

adherence to compliance as an element in evaluating managers and employees) and that address specific areas of potential fraud, such as claims development and submission processes, code gaming, and financial relationships with physicians and other health care professionals; 2) Designation of a chief compliance officer and other appropriate bodies, (e.g., a corporate compliance committee) charged with the responsibility of operating and monitoring the compliance program, which reports directly to the CEO and the governing body; 3) Development and implementation of regular, effective education and training programs for all affected employees; 4) Maintenance of a process, such as a hotline, to receive complaints, and the adoption of procedures to maintain the anonymity of complainants and to protect whistleblowers from retaliation; 5) Development of a system to respond to allegations of improper/illegal activities and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or federal health care program requirements; 6) Use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas; and 7) Investigation and remediation of identified system problems and the development of policies addressing the non-employment or retention of sanctioned individuals.

What are the requirements for satisfying Element 1, Standards of Conduct/Policies and Procedures?

Each hospital should have a written document (code of ethical conduct) detailing expectations related to compliance with federal and state standards, as well as the organization’s mission, goals and ethical conduct requirements. This document should articulate that these expectations apply to all governing 66

Summer 2016 I ARKANSAS HOSPITALS

Because issues are constantly identified through OIG audits and enforcement actions, it is important that a hospital have a process for keeping current on OIG activities, including the review of the Annual Plan. In addition, a process for annually reviewing policies to determine the need for revision and/or updates is recommended. body members, officers, managers, employees, physicians and other appropriate agents and independent contractors and reflect a commitment to compliance by the hospital’s senior management. The document should be distributed or made readily available to all employees and should be written at appropriate reading levels.

If a hospital has an employee handbook, it should be regularly updated as applicable regulations, statutes or requirements change. In addition, adherence to these standards of conduct and compliance with hospital policies, as well as federal and state requirements, should be included as an element within each employee’s performance evaluation.

With regard to written policies and procedures, it is expected that every compliance program develop and distribute written policies that identify specific areas of risk to the hospital.

There should be consideration given to the regulatory requirements and associated exposure for every department of the hospital. These policies should be developed under the direction of the compliance officer and compliance committee. Training on these policies should be provided to the appropriate departments.

In its guidance, OIG further recommends that policies focus on areas of special concern identified through its audits. The specific risk areas listed include: • billing for items or services not actually rendered;

• providing medically unnecessary services; • upcoding; • DRG creep; • outpatient services rendered in connection with inpatient stays; • teaching physician and resident requirements; • duplicate billing; • false cost reports; • unbundling; • patients’ freedom of choice; • credit balances; • hospital incentives that violate the anti-kickback statute; • joint ventures; • financial relationships with physicians; • Stark physician self-referral law; and • patient dumping.

Because issues are constantly identified through OIG audits and enforcement actions, it is important that a hospital have a process for keeping current on OIG activities, including the review of the Annual Plan. In addition, a process for annually reviewing policies to determine the need for revision and/or updates is recommended.

In the next issue of Arkansas Hospitals magazine, we will focus on Elements 2 and 3: Designation of a Compliance Officer and Compliance Committee and Development of Education and Training Programs.

Just remember, when it comes to government auditors, it’s not, “Are they coming,” it’s, “ARE THEY HERE YET?”

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LEGISLATIVE ADVOCACY

The Connections between Government and Hospitals

By Jodiane Tritt, Vice President of Government Relations, Arkansas Hospital Association Knowing how governmental entities and Arkansas hospitals connect, through both law and community associations, is important in today’s evolving world of health care. Hospitals, federal, state and local governments, communities and business partners all operate with the same goal in mind – providing the best health care possible for our nation’s, and Arkansas’s, patients.

Those who care about their local hospitals, perhaps as patients, perhaps as administrators, perhaps as community leaders, require a clear grasp of how government impacts hospitals because for their voices to be heard, an understanding of the interrelationships in play is vital.

Hospitals operate inside a vast and complex framework of laws and regulations. Together, federal, state and local entities define the majority of health care’s operational parameters. Though the multitude of laws and regulations continues to grow, hospital CEOs, boards of trustees and other critical administrators are doing all they can to simultaneously work with governmental 68

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leaders within the prescribed governmental framework, and improve the logistics and quality of patient care.

In the current health care environment, hospitals are leading the redesign of care and embracing alternative payment models that promote better, more efficient, coordinated and seamless care for patients. They’re improving quality and patient safety to reduce readmissions, complications and health disparities; they are taking responsibility for the health outcomes of designated groups within communities. Today’s hospitals are daily fostering innovation and adopting new technologies to improve care, while implementing proven, evidence-based

guidelines and protocols that reduce variation and ensure that patients get only the care that is most beneficial. In light of remarkable advances, hospitals take the lead in promoting better strategies for the management of advanced illnesses.

Arkansas patients are the recipients of this leadership and can best tell the hospital story. That is why patient and hospital advocates are so important to the legislative process…and why it’s important to know how hospitals and government at all levels work together, who is involved, and how best to access health care decision makers.

Policy and financial decisions made at the federal level most certainly impact

state decisions. Those in Arkansas government take what is passed down from Washington, D.C. and “Arkansasize” it, where possible, to best serve our citizens. The creation of the Arkansas Private Option and its successor, the Arkansas Works program, are dramatic examples of Natural State innovation and our elected officials showing creativity in finding solutions to circumstances introduced through federal action.

The Arkansas Health Care Independence Act, known as the Arkansas Private Option, resulted from new rules that became effective with passage of The Patient Protection and Affordable Care Act (ACA), signed into federal law March 23, 2010. On June 28, 2012, the United States Supreme Court rendered its decision on the law that enabled each state to determine whether and how to take advantage of incentives to provide affordable health care to citizens who previously had inadequate or nonexistent access to it.

On April 17, 2013, the Arkansas Private Option came into being. It ends – by state statute – December 31, 2016. The Arkansas Works program, the new iteration of the Private Option, was created during the Second Extraordinary Session of 2016 and became law April 8, 2016 – more than six years after the ACA became law.

Federal law, acted upon by the U.S.

Supreme Court, sent mandates to the states. Arkansas’s creative solution to providing health care coverage and availability to a large percentage of the uninsured population was a response to that federal law, and became a model for the nation. Through refinement and compromise, it has now been re-thought and extended by way of Arkansas Works, and every hospital in the state daily feels its impact in a major way. The interrelatedness of our hospitals and our governmental entities is again, front and center.

The Arkansas Hospital Association staff and many other national, state and local entities have written volumes on the good the Arkansas Private Option has done for Arkansas’s hospitals and, most importantly, its citizens.

This illustrates the policy partnerships that must work together for Arkansas’s health care system and hospitals to thrive.

Right now, the 2016 presidential elections loom and we will soon see decisions made at the federal level that will impact both state policy and financial decisions. Those decisions will, in turn, impact our hospitals, physicians and other health care providers, as well as each of us as patients.

2016’s federal health care hot button issues include pharmacy pricing, particularly 340B drug pricing and generic average manufacturing pricing, telemedicine, rural payment extensions,

critical access hospital policies, DRGs, the NOTICE Act and a physician-owned hospital moratorium, among others.

At the state level, we’re following discussions around the continuation of expanded coverage and the implementation of Arkansas Works; the restructuring of payment methodology; patient care and behavioral health pricing for the developmentally delayed and disabled; population health care and public health; and a restructuring of the Department of Human Services, as well as a myriad of other state regulations.

All of these things are interrelated, and all are important to Arkansas hospitals. As you seek to understand the interrelatedness of health care decisions made at the federal, state and local levels, please call on us at the Arkansas Hospital Association for answers to daunting policy questions. We’re also a resource for connecting you and your advocacy voice to those decision makers who need to hear your thoughts.

It’s always important to follow what’s happening with our government, at all levels. 2016 promises to continue blazing new health care trails from the nation’s capital, our state Capitol, and in the halls of local government. We need to know what’s being enacted, and why; let’s keep a close eye on what’s happening around us. The stability of our hospitals depends upon it!

Recap of the 2016 Arkansas Legislative Sessions Second Extraordinary Session of 2016 The Second Extraordinary Session of 2016 began April 6, 2016. While the Legislative Task Force on Healthcare Reform had considered whether to include proposals to save more than $1 billion over five years in the traditional Medicaid program by specially restructuring payments for behavioral health, developmentally delayed and disabled patients, neither the Managed Care proposal nor the DiamondCare proposal (Administrative Services Organization model) were

in the governor’s call for the special session. In an unexpectedly uneventful session, the Arkansas Works legislation was introduced and approved within two days – resulting in Act 2 on April 8, 2016, which creates the Arkansas Works program.

Arkansas Works is designed to maintain insurance coverage for those individuals who previously were eligible for the expiring Arkansas Private Option – namely, adults ages 19-64 at or below 138% of the federal poverty level. While Arkansas will continue to use premium assistance to purchase qualified health plans offered through the insurance marketplace

for non-medically frail adults, the Arkansas Works program also has added provisions to encourage employerbased insurance, incentivize work and work opportunities, promote personal responsibility and enhance program integrity.

While the AHA is strongly supportive of maintaining coverage for Arkansans who fit the criteria through the Arkansas Works program, there is one concern about the implementation that may negatively impact hospitals. Currently, eligible patients have the ability to be covered for what is labeled a “90continued on page 70

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day retroactive eligibility” period. The Arkansas Works waiver proposals, currently out for public comment, would modify § 1902(a)(34) of the Section 1115 Waiver that permits this eligibility category. Instead, coverage would not be available to eligible applicants “any time prior to the first day of the month in which the individual applies.”

The AHA has added public comments to the record that explicitly express concern for deleting this coverage. In fact, the letter of comment states that the 90-day retroactive eligibility has been used in lieu of “presumptive eligibility,” a federal requirement in 42 CFR 435.1110 that the Arkansas Department of Human Services, Division of Medical Services, has been unable to implement. The AHA’s letter requests that, at a minimum, a 60-day period of retroactive coverage be allowed if presumptive eligibility cannot be implemented.

Fiscal Session The Fiscal Session began April 13, 2016. While the Arkansas Works legislation passed easily, the appropriation of funding for the Department of Human Services, Division of Medical Services, did not. The passage of the substantive legislation required only a 51% vote during the Special Session, but the appropriation requirement had a 75% hurdle during the Fiscal Session.

A group of ten senators – Cecile Bledsoe, Alan Clark, Linda CollinsSmith, Scott Flippo, Bart Hester, Missy Irvin, Blake Johnson, Bryan King, Terry Rice and Gary Stubblefield – halted the appropriation for the entire Medicaid budget because it included within it the appropriation for Arkansas Works.

Governor Asa Hutchinson took on the task of providing a political way for these senators opposing appropriation funding for Arkansas Works to vote for the overall Medical Services appropriation.

Namely, a line item specifically ending the Arkansas Works program was amended into the bill with the explicit understanding that the governor would use his line item veto authority to remove the amendment so that the Medical Services budget – including the appropriation for Arkansas Works – would become law.

On April 20, SB 121 passed the Joint Budget Committee with the amendment to end the program. The measure passed the full floor of the Senate April 21, 2016, with 27 in favor (only Senators Hester and Blake Johnson took advantage of the ability to vote “yes”), one not voting, two opposed, and five voting “present” (which counts as a “no”); and the full House passed the measure April 21, 2016, with 76 in favor, 13 opposed, and 11 voting “present.”

That same day, the governor made good on his promise to use his line-item veto

power. SB 121 became Act 3 May 3, 2016.

The Fiscal Session ended Monday, May 9, 2016.

Third Extraordinary Session of 2016 The Third Extraordinary Session of 2016 began Thursday, May 19, 2016, and adjourned sine die Monday, May 23, 2016. The cornerstone achievement of this session was the passage of HB 1009, sponsored by Representative Andy Davis, which allows the state’s surplus, investment returns, and other funds to raise nearly $50 million for highways in the coming fiscal year. That amount will be matched with federal funds to allow Arkansas to utilize $200 million annually for highways. The bill became Act 1 on May 23, 2016.

During the session, Senator Jim Hendren and Representative Clarke Tucker took the opportunity to introduce SB 2, which reinstated, unequivocally, the original implementation and sunset dates from the Arkansas Works legislation that passed during the Second Extraordinary Session of 2016. Because of the appropriations fights over the Division of Medical Services’ budget and the use of the governor’s line item veto, these legislators wanted to ensure that the Arkansas Works program was appropriately created and appropriated.

SB 2 became Act 13 May 24, 2016.

Our Advertisers, Our Friends Administrative Consultant Services, LLC ....55 Ambetter............................................ 58 American Esoteric Laboratories ............ 5 AHA Services, Inc. ............................. 64 Arkansas Blood Institute .................... 24 Arkansas Blue Cross Blue Shield .......... 2 Arkansas Farm Bureau ....................... 63 Arkansas Relay .................................. 67 Arkansas Tobacco Control Coalition .... 42 Arthur J. Gallagher & Co..................... 51

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AFMC .............................. 8, 42, 52 & 71 Baldwin & Shell Construction ............. 49 BancorpSouth .................................... 44 BKD, LLP ......................................................63 Crews & Associates ........................... 21 Harding University .............................. 53 JTS Financial ..................................... 44 Nabholz Construction Services ........... 72 Polk Stanley Wilcox ........................... 51 Radiology Associates, PA. .................. 53

Southeast Imaging ............................. 14 Southern Paramedic Services ............. 24 Strategic Companies .......................... 49 Taggart Architects ............................. 57 The Right Solutions Healthcare ........... 19 Turpentine Creek Wildlife Refuge ........ 64 UAMS ..........................................................61 Welch, Couch & Company, PA .............. 8 Wieland ............................................. 17

{AN APPLE BLOSSOM’S FIRST BLOOM}

YOU LOSE A LOT WHEN YOU LOSE YOUR SIGHT. PREVENT DIABETIC BLINDNESS. Diabetic retinopathy blinds 12,000 to 24,000 people each year.

Don’t let your patients be among them. Test for diabetes in high-risk patients, and make sure all your patients with diabetes get annual dilated eye exams.

For free tools that can help you educate your patients, go to afmc.org/tools or call 1-877-375-5700.

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. AP2-AHA.AD,6/16

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Arkansas Hospital Association 419 Natural Resources Drive Little Rock, AR 72205

Presorted Standard

U.S. Postage Paid Little Rock, AR Permit No. 2437

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