critical access hospital (cah · 2018-04-16 · 1 critical access hospital (cah) financial analysis...
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CriticalAccessHospital(CAH)FinancialAnalysis2016,NDCAHACOExperiences,PlansandPossibilities
StatewideCAHQualityNetworkMeetingApril18,2018
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SupportfortheFinancialAnalysis
� The CAH Financial Reporting project is supported by funding from the North Dakota Medicare Rural Hospital Flexibility Program, administered by the Center for Rural Health at the UND School of Medicine and Health Sciences. Funding is provided through the Federal Office of Rural Health Policy by the U.S. Department of Health and Human Services.
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NorthDakotaCAHFinancialAnalysis
�Agenda
� CAHFinancialsforAll36NorthDakotaCAHs� Eastern/WesternNDCAHFinancialAnalysis� 27OriginalNDCAHsReportingfor10Years� AccountableCareOrganizations(ACO)
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NDCAHFinancialAnalysis
All36NorthDakotaCAHs
Calendar2016
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NorthDakotaCAHFinancialAnalysis�DefinitionofTermsUsed
� OperatingRevenue� Revenuegeneratedfromhealthcarerelatedservicesprovided
� ContractualDeductions� Thedifferencebetweenwhatischargedforservicesandwhatisallowed/paid
� BadDebt/CharityCare� Uncompensatedcareprovidedbyfacilities
� Expenses� Expensesincurred
� OperatingMargin� Operatingrevenuelesscontractualdeductionsandexpense
� Non-operatingRevenue� Revenuerealizedfromnonoperationalsourcessuchasdonations,foundation,
investments,governmentsubsidies,etc.� NetMargin
� NetMarginrealizedfromallsourcesofrevenueandexpense
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NorthDakotaCAHFinancialAnalysis�Calendar2016Observations
� 10th yearoftheCAHFinancialAnalysis� 36CAHshavereportedfinancialssince2010� 772LicensedCAHHospitalbeds� 32of36FacilitiesOwn/OperateaClinic� 32FacilitiesWhoOwn/OperateClinics,Operate53Clinics� 42ofthe53ClinicsAreRuralHealthClinics(RHCs)� 13of36FacilitiesOwn/OperateaNursingHome(585beds)� 6FacilitiesOperateBasicCare(132beds)� 8FacilitiesOperateAssistedLiving(136apartments)� 8FacilitiesOwnandOperatetheLocalAmbulance� 2FacilitiesOwn/OperateHomeCare(someprovideRHCvisitingnurse)
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NDCAHAcute/SwingBedOccupancy(PatientCensus)Survey
� SnapshotataPointinTime� August2016andPriorYears� LicensedBeds&Occupancyfor36Facilities
2000 2006 2013 2016CAHLicensedBeds 1,439 1,045 766 772AcutePatients 345 171 112 80SkilledSwingBedPatients 249 223 71 64NonSkilledSwingBed 95 121
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NorthDakotaCAHFinancialAnalysis
�2016Observations(continued)� CAHshad104,261ERVisits� CAHsreported367,565ClinicVisits
� HospitalandClinicRevenue 36CAHs Orig.27� $304,993,808Medicarerevenue (39%) (46%)� $218,106,179BCBSrevenue (28%) (23%)� $117,902,582Otherrevenue (15%) (11%)� $65,534,194Medicaidrevenue (8%) (9%)� $46,839,671SelfPayrevenue (6%) (7%)� $27,481,023 MedicaidExpansion (4%) (3%)� $780,857,457TOTAL $780,857,457$247,414,013
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39%
8%
4%
28%
6%
15%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Medicare Medicaid Medicaid Expansion BCBS Self Pay Other
North Dakota Critical Access Hospitals2016 Hospital/Clinic Patient Revenue By Payer
Medicare Medicaid Medicaid Expansion BCBS Self Pay Other
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NorthDakota2016CAHFinancialAnalysis
� 36CAHObservations
� Description 2013 2014 2015 2016� CAHswithPositiveOperatingMargin 13 8 19 18� MeanOperatingMargin -3.5% -4.5% 0.1% 0.2%� MedianOperatingMargin -2.3% -5.1% -1.5% .03%
� CAHswithPositiveNetMargin 18 17 24 25� MeanNetMargin 0.6% 2.1% 2.7% 3.8%� MedianNetMargin 0.2% -0.3% 3.1% 2.6%
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NorthDakotaCriticalAccessHospitalsStatementofOperations,Comparing2010to2016
36Facilities 36Facilities Variance%2010Total 2016Total 2010- 2016
OperatingRevenue* $537,401,689 $871,543,563 +62.2%ContractualDeductions -$156,390,822 -$267,966,998 +71.5%BadDebt/CharityExpense - $15,981,219 - $32,517,690 +103.9%NetRevenue $365,029,648 $571,058,874 +56.4%*(Otheroperatingrevenuegrew123%) $13,007,817 $29,661,790
Expenses $368,653,823 $570,889,393 +54.9%OperatingMargin -$3,624,175 169,481 -104.7%OperatingMarginMean% -0.7% 0.03%OperatingMarginMedian% - 1.4% 0.2%
NonOperatingRev. - $2,639,921 $21,639,817 +919.7%NETIncome/Loss - $6,264,096 $21,809,298 +448.2%NetMarginMean% -1.2% 3.8%NetMarginMedian% -0.7% 2.6%
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NorthDakotaCriticalAccessHospitalsStatementofOperations,Comparing2014to2016
36Facilities 36Facilities Variance%2014Total 2016Total 2014- 2016
OperatingRevenue* $708,815,428 $871,543,563 +22.0%ContractualDeductions -$188,777,096 -$267,966,998 +42.2%BadDebt/CharityExpense - $37,740,043 - $32,517,690 - 13.8%NetRevenue $483,298,288 $571,058,874 +18.2%*(Otheroperatingrevenuegrew61%) $18,538,618 $29,661,790
Expenses $505,107,418 $570,889,393 +13.0%OperatingMargin -$21,809,130 $169,481 100.8%OperatingMarginMean% -4.5% 0.03%OperatingMarginMedian% - 5.1% 0.2%
NonOperatingRev. $31,768,771 $21,639,817 -31.9%NETIncome/Loss $9,959,642 $21,809,298 +119.0%NetMarginMean% 2.1% 3.8%NetMarginMedian% -0.3% 2.6%
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-28% -28%
-20%
-13% -12%
-7% -5% -5% -4% -4% -4% -4% -3% -3% -2% -1% -1%
0% 0% 1% 1% 1% 2% 2% 3% 4% 5% 5% 5% 5% 6% 7%
8% 9% 10%
24%
0.25% 0.03%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Ope
rati
ng M
argi
n
West of HWY 83 East of HWY 83 Median (0.25%) Mean (.03%)
NorthDakotaCriticalAccessHospitals2016OperatingMargins
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15
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Ope
rati
ng M
argi
nNorth Dakota Critical Access Hospitals
2014, 2015, 2016 Operating Margins
2014 Operating Margins 2015 Operating Margins 2016 Operating Margins
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-22%
-17%
-10%
-6% -5% -5% -4% -2% -2% -1%
0% 1% 1% 1% 1% 2% 2% 3% 3% 3% 3% 5% 5% 5% 6% 7% 7% 8% 8% 9% 9% 9%
17%
24%
31%
46%
2.6% 3.8%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Net
Mar
gin
West of HWY 83 East of HWY 83 Median (2.6%) Mean (3.8%)
NorthDakotaCriticalAccessHospitals2016NetMargins
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-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Net
Mar
gin
North Dakota Critical Access Hospitals2014, 2015, 2016 Net Margins
2014 Net Margins 2015 Net Margins 2016 Net Margins
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111,727,623 107,759,922 105,751,786 106,519,680 108,782,065 124,492,288 138,285,881
275,106,239312,236,770
357,270,585 367,847,739 380,498,287
432,437,633470,209,745
58,665,595
70,204,748
77,427,522102,374,667
110,907,110
113,997,022
137,715,148
78,894,415
86,319,651
84,008,509
79,383,74689,933,228
90,949,548
95,671,000
2010 2011 2012 2013 2014 2015 2016
REVE
NUE
NORTHDAKOTA36CRITICALACCESSHOSPITALSOPERATINGREVENUE
Inpatient Outpatient Clinic Other
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3.44%
4.73%
5.62% 5.79% 6.03% 5.42%
4.19%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
2010 2011 2012 2013 2014 2015 2016
BadDe
btPercentage
NorthDakota36CriticalAccessHospitalsBadDebtExpense%Inpatient,Outpatient,Clinic,SwingBedRevenue
NDCAHFinancialAnalysisComparison
EastofHighway83&
WestofHighway83
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NorthDakotaCriticalAccessHospitalsStatementofOperationsAnalysis
24CAHs 12CAHSEastof83 Westof832016Total 2016Total
OperatingRevenue $438,887,567 $432,655,995ContractualDeductions -$120,889,412 -$147,077,587BadDebt/CharityCare -$11,765,587 -$20,752,103NetOperatingRevenue $306,232,569 $264,826,306
Expenses $297,363,112 $273,526,282OperatingMargin $8,869,457 - $8,699,976OperatingMarginMean% 2.9% -3.3%OperatingMarginMedian% 0.9% -3.9%
NonOperatingRev. $14,445,840 $7,193,977NETIncome/Loss $23,315,297 - $1,506,000NetMargin%Mean 7.6% -0.6%NetMargin%Median 3.8% 1.2%
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NorthDakotaCriticalAccessHospitalsStatementofOperationsAnalysis
Westof83 Westof832014 2016 2014-2016Total Total Variance%
OperatingRevenue $336,128,051 $432,655,995 +28.7%ContractualDeductions -$94,438,111 -$147,077,589 +56.4%BadDebt/CharityExpense -$25,507,865 -$20,752,103 -18.6%NetRevenue $216,182,076 $264,826,306 +22.5%
Expenses $229,229,085 $273,526,282 +19.3%OperatingMargin -$13,047,010 -$8,699,976 +33.3%OperatingMarginMean% -6.0% -3.3%OperatingMarginMedian% -6.9% -3.9%
NonOperatingRev. $14,237,473 $7,193,197 -49.5%NETIncome/Loss $1,190,463 -1,506,000 -226.5%NetMargin%Mean 0.6% -0.6%NetMargin%Median 2.9% 1.2%
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-27.7 -27.6
-19.6
-11.7
-5.0 -4.1 -3.6 -2.4
2.2 2.5
5.1
8.6
-3.9 -3.3
-30.0
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Per
cent
ages
West of HWY 83 Median (-3.9%) Mean (-3.3%)
ND Critical Access HospitalsOperating Margin Calendar Year 2016
The CAHs West of Highway 83
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47,711,857 51,417,318 49,777,532 53,313,73469,244,663 79,296,683
134,091,182157,309,299 165,220,966
176,238,738
204,791,453
227,608,31243,236,513
47,262,25665,940,086
70,647,753
74,316,302
83,260,426
26,431,524
24,212,751
23,932,947
27,774,366
26,072,513
28,005,655
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
450,000,000
2011 2012 2013 2014 2015 2016
Revenue
NorthDakotaCriticalAccessHospitalsWestofHwy83Revenue
Inpatient Outpatient Clinic Other
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25
4.29% 4.02% 3.85% 3.11% 3.11%
7.14% 7.70%
8.27%
5.22% 5.22%
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
2012 2013 2014 2015 2016
BadDe
btPercentageofHospitalIn
p,Outpt,S
wingbed,C
linicRe
venue
NorthDakotaCriticalAccessHospitalsBadDebtPercentageofRevenue,EastVsWestofHwy83
East West
27OriginalCAHsintheAnalysis
Calendar2016
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14
28
-28% -28%
-20%
-13% -12%
-7% -6%
-4% -4% -4% -3% -3% -2% -1% -1%
1% 1% 1% 2% 2% 4% 5% 5% 6% 7%
8% 9%
-1.3% -2.9%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Percentages
WestofHWY83 EastofHWY83Median(-1.3%) Mean(-2.9%)
NDCriticalAccessHospitalsOperatingMarginCalendarYear2016
27OriginalFacilities
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NDCAHOriginal27FacilitiesStatementofOperationsAnalysis
27Facilities 27Facilities2007 2016 2007-2016Total Total Variance%
OperatingRevenue $194,605,635 $326,227,846 +67%BadDebt/CharityCare - $3,522,554 -$9,980,619 +183%OtherDeductions -$35,571,417 -$46,086,061 +31%NetPatientRevenue $155,511,664 $270,161,166 +73%(Otheroperatingrevenuegrew520%)
Expenses $161,465,871 $278,009,944 +72%OperatingMargin - $5,954,207 - $7,848,777 -31%OperatingMarginMean% -3.8% -2.9%OperatingMarginMedian% -3.0% -1.3%
NonOperatingRev. $4,112,571 $9,994,426 +141%NETIncome/Loss -$249,444 $2,095,749NetMargin%Mean -0.2% 0.8%NetMargin%Median -1.7% 1.7%
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31,578,867 33,974,027 32,852,204 30,692,375 28,343,736 26,532,438 26,527,212 24,961,299 26,055,987 24,029,481
82,825,55293,034,353 101,634,537 107,004,892 114,324,183 124,930,643 128,929,049 135,277,828
147,274,462 153,969,771
20,417,754
23,112,67923,450,801 23,215,516
32,360,82336,290,658 37,929,952
40,344,028
44,654,89148,730,168
56,662,419
57,816,52261,940,518 65,747,351
73,110,95172,721,678 70,252,628
77,671,504
78,132,42480,699,556
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenue
27OriginalNorthDakotaCriticalAccessHospitals
Revenue
Inpatient Outpatient Clinic Other
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NorthDakotaCAHFinancialAnalysis� Observations
� Ofthe27Reportinginall10years� 5HadOperatingLossesall10years� 8HadOperatingLossesin9of10Years
� Ofthe27Reportinginall10YearsFacilitiesWithPositive OperatingMargin� 2007 - 6� 2008 - 5� 2009 - 8� 2010 - 7� 2011 - 11� 2012 - 6� 2013 - 9� 2014 - 6� 2015 - 14� 2016 - 12
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CAHFinancialsThoughts…� InpatientutilizationatthesmallerCAHscontinuestodecline� OutpatientandClinicRevenuecontinuestoexperiencegrowthinCAHs� MedicaidExpansionaccountedfor$27millionor4%ofpatientrevenue� Baddebt/charitycareexpensehascontinuedtostabilizeanddecline
� Decreased14%or$5millionfrom2015to2016� The340bprogramaccountedfor$7.5millionin(otheroperating)revenue
� HalfofCAHsparticipatedin340bprogram� CAHsincurred$16millionincontractnursingexpensein2016
� $3millionmorethanin2015� Operatingmarginscontinuedtoimprove� 18facilitieshadapositiveoperatingmarginin2016
� 10ofthoseutilizedthe340bprogram� Netmarginscontinuedapositivetrend� VolumetovaluetransitionandMIPSwillimpactusinthefuture
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AccountableCareOrganization(ACO)???
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ProjectedChangeinMedicareEnrollment
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ProjectedMedicareSpending2013- 2023
$586 $597 $615
$671$695
$722
$794
$849
$911
$1,018$1,064
$500
$600
$700
$800
$900
$1,000
$1,100
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Medicare Spending in Billions
0%
20%
40%
60%
80%
100%
2012 2017 2022 2027
MedicarePartATrustFundBalance%ofAnnualExpendituresInbillions:
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MedicareSpending
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AccountableCareOrganization� ACO Guidelines Established in the Affordable Care Act (ACA)� CMS Initiative to Shift from Volume to Value Based Payment� Accountable Care Organization (ACO)
� “A group of health care providers who come together to coordinate the quality and cost of care provided to patients attributed to the ACO”
� Types of ACOs
� Pioneer ACO, Next Generation, Medicare/Medicaid ACO, Medicare Shared Savings (MSSP)
� MSSP Models� One-Sided (Share in Savings)� Two-Sided (Share in Savings and Losses)� Both models incorporate quality metrics
� Patient experience, care coordination, population health
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AccountableCareOrganization� Separate Organization – Legal structure and governance� Can Include Hospitals, Clinics, Physicians� Attribution of at least 5,000 lives� How is it done
� Annual Wellness Visit� Care Coordination� Transitions of Care� Advanced Care Planning� Data, Data Data
� Quadruple AIM� Improve Health Outcomes� Improve how we Deliver Care� Reduce Cost� Improve Satisfaction
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ClinicalQualityMeasureso ExamplesofQualityOutcomes
Ø PotentiallyPreventableERvisitsØ PotentiallyPreventableAdmissionsØ PatientSatisfactionSurveysØ ClaimsDataØ HealthOutcomes
ü Atriskpopulationü Chronicdiseasemanagementü Preventativehealthscreensandservicesü Immunizationsthroughoutthelifespanü Wellnesspromotionforall…
DataAnalyticso DataAnalytics– MedicareClaimsData
Ø CostbytypeofserviceprovidedØ Acute,ER,NursingHome,Hospice,Clinic
Ø CostbyproviderorganizationØ LocalProvider,Tertiary,NursingHome,Etc.
Ø EncountersbyproviderØ Physician– PrimaryCare,Specialist
Ø EncounterdatabyDiagnosis
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NorthDakotaMedicareACOHighSierrasNorthernPlainsACO� Submittedapplicationsin2015� StartedJanuary1,2016� NorthDakotaandCaliforniaprovidersgroupedtomeetattribution� OnesidedriskMedicareSharedSavings(MSSP)� ReceivedCMSAIMFunding
� ACOInvestmentModel(AIM)� PrepaidSharedSavings� EncouragedruralparticipationintheACOmodel
� BoardofDirectorsthatmanagetheACO� ACOChampionsthatleadtheACOwork
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HighSierrasNorthernPlainsACO
� NorthDakotaParticipants� FirstCareHealthCenter ParkRiver� HeartofAmericaMedicalCenter Rugby� McKenzieCountyHealthcareSystems WatfordCity� SakakaweaMedicalCenter/CCCHC Beulah/Hazen� SouthwestHealthcareServices Bowman
� CaliforniaParticipants� BartonHealth,MammothHospital,RidgecrestRegionalHospital,Truckee
TahoeMedicalGroup
� ArizonaParticipants� GilaHealthResources
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ExampleofACOinfo
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CMSShiftfromVolumetoValue
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Whatdoesthefuturehold� Federaldeficitwillcontinuetobeachallenge� MedicareTrustFundwillbeofcontinuedconcern� CMSiscontinuingtheshiftfromvolumetovalue� FutureCMSvaluebasedinitiativesmaynotbecalledACO’s,butthe
transitiontovaluewillcontinue� Patientswillexpectmorequalityandoutcomebasedresults� Commercialinsurersarealsotransitioningtovaluebasedpayment
� BCBSBlueAlliance� ManystateshaveMedicaidmanagedcare� 2019CMSACOapplicationsdueinsummerof2018
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ThanksforListening!
Questions?
Darrold BertschSakakawea Medical CenterCoal Country Community Health [email protected] 701-880-1440
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