Documenting GME Value to the Institution. AHME Spring Conference, May 19, 2016

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1 Documenting GME Value to the Institution AHME Spring Conference, May 19, 2016

2 Speakers Speakers: Susan Greenwood-Clark Director, Medical Education St. Mary Mercy Hospital Livonia, MI Art Boll Chief Executive Officer Germane Solutions Dayton, OH 2

3 Objectives Demonstrate the financial and intangible value of GME programs within the strategic framework of teaching sites Define/describe tools and topics needed to conduct a GME value analysis Describe GME contributions to teaching site business plans under various financial structures 3

4 Accountability of GME is Becoming Paramount GME programs are increasingly being required to demonstrate accountability and show value to the sponsoring institution, its trainees and the public Sponsoring Institution: Efficient and cost effective training of residents Develop right physician workforce to replace retiring physicians Pubic/Patients High quality of patient care and safety Continuity & management of care ACGME/CMS Implementation of competencies, milestones and entrustable professional activities Residents/Trainees: Ability to graduate and become successful as physicians GME 4

5 Accountability of GME is Becoming Paramount The GME community cannot do all the work to align these areas but there are ways that each potential sponsor can begin the process. The first is to focus on three key areas: Cost, Quality and Access Do your programs have AIMS statement that underscore meeting the regions medical needs? Does the diversity of specialty programs align with your hospital s major initiatives? Has the organization adopted specific measures to track achievement of goals that can be shared outside of the GME community (beyond board certification rates?) that support the Triple AIM? 5

6 Accountability of GME is Becoming Paramount Hospitals that are interested in pursuing GME need to understand the long term value GME can provide since all programs will require continual investment Start Up Costs/ Investment in Programs Ongoing Costs/Investment in Programs Long Term Value (Full Size of Programs) Near Term Value (Initial Operations of Programs) Initial Value (Ramp Up of Programs) It is important for potential GME development that the long term value remains higher than the ongoing costs/investments for GME to make strategic sense 6

7 Internal Metrics Beyond the typical approach of GME as a COST CENTER Consider this as a Strategic Asset What is your return on the GME Investment? Costs can be determined by understanding: Direct costs of residents, faculty, program and administration Indirect costs teaching and hospital costs and revenues for increased service intensity, new technology, case mix differences, reduced productivity of staff, cover unreimbursed care Gains include revenues But is this all??? 7

8 GME Value Analysis One way to help determine the value that GME programs bring to an organization is a conduct a multi-stage value analysis that is consistently repeated over the life of the program(s) Review Contributions Made by GME Programs Benchmark Key Characteristics of Each Program Project Value of GME (Financial and Intangible) GME Program Value Analysis Develop Annual Process to Evaluate Programs Value Tools/Topics Needed for GME Value Analysis Evaluate Effectiveness of Residents Clinical Training 8

9 Value Proposition What additional Values/Benefits gained through GME? Step 1: Ask perception of stakeholders including board members that represent community, executive leadership within and throughout the healthcare system - Is GME aligned with organizations strategic initiatives? - Do residents offset the cost of other care providers PAs? Extended providers - Do residents extend the effort of active physicians within the system? - How are the program aligned with the physician acquisition planning to meet the needs for the future? - Do the GME programs allow the hospital to meet underserved population needs more efficiently? - Is care ENHANCED through GME programs with demonstrable measures commonly reported in HCAHPS survey? - Does GME create market differentiation/competitive edge? 9

10 Tools/Topics Needed Step 2: Gather data including all cost and revenue data for the organization to assess the value of GME: Area Data Input Value Program Cost Budgeted costs related directly to the Represents a significant portion of overall program residents (e.g. salary, fringe etc.) cost Program Cost Budgeted costs related directly providing Represents a significant portion of overall program clinical training (e.g. faculty, subspecialists cost etc.) Program Cost State and federal grant funding paid to select programs Offsets a portion the overall cost of select programs Program Operations Program Operations Program Operations Program Funding Resident Scheduling Information (via New Innovations) Graduate Recruitment (via Program Director Surveys) Medicare Part A and B Billing information and RVU generation Previously filed Medicare Cost Reports Identifies each resident's training experiences and in particular time spent training/covering key units (e.g. critical care) Determine how effective programs are at recruiting graduates back to health system Assess the clinical productivity of faculty and residents Understand hospital's current Medicare GME funding and identify opportunities for increased reimbursement Program Funding Intern and Resident Information System (IRIS) filings Understand how many residents and fellows the hospital is claiming on their Medicare Cost Reports 10

11 Evaluate Effectiveness Step 3: Prepare a Service Line report of current status 11

12 Develop Annual Process for GME Evaluation Step 4: Collaborate with GME leaders to determine best measures for GME effectiveness that can be shared with others that demonstrate value. Measures should be simple, credible, important, collectible and specific 3 Value Area/Scoring Low Value Mid Value High Value Recruitment of Graduates Leverage & Coverage Program Productivity 25% 50% 3 Year Avg. Recruitment Leverage & Coverage Ratio 1% - 20% Teaching > Non-Teaching RVU 50% 75% 3 Year Avg. Recruitment Leverage & Coverage Ratio 21% - 40% Teaching > Non-Teaching RVU > 75% 3 Year Avg. Recruitment >.70 Leverage & Coverage Ratio > 40% Teaching > Non-Teaching RVU Associated 1% - 20% 21% - 40% > 40% Teaching Teaching > Non-Teaching Rev Teaching > Non-Teaching Rev Teaching > Non-Teaching Rev 3 Revenues Kerr S. On the folly of rewarding A while hoping for B: Academy of Management Journal; 18 (1995): Teaching $153,000 - $120,000 $120,000 - $108,000 > $108,000 Program Costs Cost Per Resident Cost Per Resident Cost Per Resident 12

13 Benchmark Key Characteristics Step 5: Complete a gap analysis of desired vs actual to determine action planning Programs Recuritment Coverage Clinical Value Value Productivity Internal Medicine Top 3rd Top 3rd Top 3rd General Surgery Top 3rd Top 3rd Middle 3rd OB/GYN Middle 3rd Top 3rd Bottom 3rd Interventional Cardiology Middle 3rd Middle 3rd Bottom 3rd Urology Middle 3rd Bottom 3rd Bottom 3rd Radiation Oncology Bottom 3rd Bottom 3rd Bottom 3rd 13

14 Publically Review Contributions of GME Step 6: Include this information into the GME annual report and broadcast widely GME Annual Report Annual GME Program Review Review by Departments and Administration Revise Benchmarks for Organizational Objectifies 14

15 EXISTING PROGRAM REVIEW 15

16 Existing Programs: Potential Changes Changes in GME programs should be focused on building long term sustainability by better aligning training activities with operational and strategic direction Highest Impact Potential Program Changes Optimize GME Reimbursement and Reduce Unfunded Positions Implement New Operating Models Alter Programs to Ideal GME Funding Levels Lowest Impact Improve Clinical Operations, Throughput & Revenue Cycle Standard Policies and Practices Need to Define Policies & Practices for Faculty & Residents 16

17 Financial Benefit Provided By GME Programs: Key Questions There are two key economic considerations when determining whether GME programs are appropriately sized to provide value to their hospital: Two Key Economic Questions Can a program make economic sense even if Medicare GME funding is not covering 100% of the program costs. Does the value of the residency program (and demonstrated success) of key value attributes justify the net costs: Recruiting Key Variables Ability to leverage teaching assets clinically (Part B) Incremental operating costs required to replace key resident services (Coverage). Coverage/ Service/ Patient Care Value New NAS focus on outcomes improvement and management 17

18 Existing Programs: Program Value For a large teaching organization, each GME program provides a unique set of services, costs and operational considerations. As a result, when Germane evaluates the value each programs provides, we use a multi-faceted approach that tries to balance out different important attributes so programs can be effectively compared to one another GME Program Value Assessment Criteria Recruiting of Graduates Leverage & Coverage Program Costs Program Value Associated Teaching Revenues Replacement Cost 18

19 Program Recruitment A key value that GME programs provide is a source of recruitment for physicians to maintain and/or expand a system s current service line offerings. If programs are able to recruit their own graduates, who understand the culture, systems and other key intangibles, those programs become more valuable than the programs that must recruit physicians from outside the system. Internal (Resident) Recruitment External Recruitment 3-5 years of training within the system with understanding of culture, systems, and structure Documented evaluations and recommendations from system faculty Recruitment cost are relatively low given their current placement as a resident in the system Typically unfamiliar with culture, systems and structure of the system Likely to take up to 3 years to meet expected productivity and/or revenue targets 19

20 Leverage and Coverage Value One of the important considerations in evaluating a program s value is the level of operational value each program provides. Residents often are key in providing certain services in a relatively cost effective manner. As part of our analysis, Germane evaluated how much of each program s training lent itself to providing key leverage and coverage within GHS Teaching Rotations Rotations that are either required by RRC or have been chosen due to their beneficial experience. While these programs provide tremendous educational value, their operational value is often limited by the lack of leverage and high cost of utilization (e.g. use of specialty faculty) Leverage Rotations Rotations that allow faculty to leverage multiple resident to provide care in both the inpatient and outpatient settings. Operational value of these rotations is high because if the residents are leveraged effectively, the faculty can see considerably more patients than if they were practicing alone or with a mid-level. Leverage Rotations Teaching Rotations Key Program Elements Coverage Rotations Coverage Rotations Rotations that provide coverage within the hospital in critical care units, inpatient units, and during the night (e.g. night float). Operational value of these rotations is high because residents typically provide more cost effective coverage than physicians and provide greater range of services than mid-levels 20

21 Program Replacement Costs For larger programs, will there may be positive financial impact from resizing resident program size if it doesn t effect the level of coverage/service that the program provides New Extenders FTEs 1.75 Salary $ 110,000 Sub-Total 192,500 40% 77,000 Total Cost CRNA 269,500 Although the overall service level within program is relatively high at 34%, the level of extenders needed to replace is lower because the training and coverage need changes by program year The greatest impact is for PGY-2s. Resident Cost $ 63,314 Number of Residents Reduced 6 Total Res Cost $ 379,886 Rotation Type FTEs % of Total Service Rotations % Overall Rotations % Cost/<Cost Savings> (110,386) 21

22 Program Productivity & Associated Teaching Revenues One of the important considerations when evaluating GME programs is to assess whether teaching generates increased clinical production and increased revenues. In many cases, teaching can produce higher revenues than non-teaching services because of the potential leverage provided by residents and the increased case mix of teaching patients. Teaching Visits Non- Teaching Visits Traditional Advantages Better leverage Higher case mix Improved productivity 22

23 Teaching Program Cost The cost of operating each GME program is one of the most prominent determinations of each program s value. Germane classifies costs when assessing programs into three areas: Administrative GME Costs, Clinical Training Costs, and Direct Resident Costs Clinical Training Cost Ex. Cost of clinics, specialty training Direct Resident Costs Ex. Cost of resident salaries/fringe Admin. GME Costs Ex. Cost of PD, APD and Core Faculty Academic Operations Budgets Resident and Program Director Salaries Distribution of GME Costs at system Departmental Budgets Clinical Training Costs Some Program Administrative Costs 23

24 PROGRAM SUMMARY - SAMPLE 24

25 Existing Program Evaluation Programs were evaluated by looking at four key areas: - Leverage and Coverage - Recruitment - Clinical Productivity - Reimbursement 25

26 Recommendations: Family Medicine Example Recommendation Reduce FM training slots and establish joint Rural Track Programs with outlying hospitals to backfill reduced slots by adding funded rural track residency positions. Start two new FM residency programs at System Hospitals. GMMH RURAL 2015/16 Filled 21 0 Right Sizing -9 0 New Rural Track 6 6 End Total 18 6 Reduces FM program to a minimum program size for FM (12 residents) Build a minimum of two rural track programs with six residents in each program, resulting in six funded positions at the main hospital and two rural training sites of six residents spending approximately half of their time at rural sites (3 residents in each site) Expands GME footprint and helps promote resident exposure into hospitals that need to recruit more primary care physicians New rural track slots will be funded by Medicare at both sites and Medicaid GME and STP Improve clinical productivity at the existing continuity site 26

27 Benchmarking: Family Medicine Example Resident template needs to be actively managed to improve second and third year visits per session 27

28 Benchmarking: Family Medicine Example There are opportunities to improve the clinical productivity of FM residents 28

29 Clinical Productivity: Family Medicine Example The proposed productivity improvement should offset the reduction of slots from rightsizing Current Net Loss New Total Residents Sessions/Resident Visits/Resident Visits , (1,435) ,089 Total 11,700 Productivity Improvement Reduction of 3 residents in main program will created a reduction of 1,435 annual visits. Recommended 1.65 more visits per session increases clinical volume and productivity by 35.9% for the remaining residents after the right sizing Net Change 1,654 visits $251,408 ($152/visit Part B and UB combined impact) There is a significant financial opportunity that could be realized by adjusting the continuity clinic templates which would impact resident productivity 29

30 FM Leverage and Coverage Value Summary Example Coverage (One I/P rotation identified) Required Elective 7 Residents per year 21 total residents Outbound 30

31 Coverage & Replacement: Family Medicine Example Based on the current level of coverage there will be no replacement service required Current Schedule PGY 3 Level Loaded PGY 3 Ward Days Total Total Existing Pgy3 Rightsized Pgy3 Ideal Current Blocks Covered/resident Coverage Ability Deficit of 2 blocks will be made up with inbound rotations from new rural track programs No PGY 2 served as senior residents additional Coverage Blocks potential coverage resource Resident 1 1 Resident 2 4 Resident 3 3 Resident 4 3 Resident 5 3 Resident

32 SUMMARY - PROPOSED CHANGES 32

33 Proposed Changes: Summary Example Work Area Optimize GME Reimbursement and Reduce Unfunded Positions Implement New Operating Models Recommendation Rightsize programs Create new rural track programs Develop new way of training incorporating population health & team based training Develop new programs in outlying hospitals Benefits Reduction of unfunded positions New funded positions Begin to train the physicians you need for the future Improve Clinical Operations, Throughput & Revenue Cycle Standard Policies and Practices Change scheduling templates for more consistency and throughput Increase leverage Provide regular operational/financial data to residents & faculty Complete analysis of faculty productivity Improved efficiency and throughput Additional clinical revenue Begin to train faculty & residents on utilizing data to manage 33

34 Proposed Changes: Rightsizing Summary Example Program Slots Current Filled FM Main Program Change (from slots) Proposed Rationale (9) 12 Reduce to minimum size FM- Rural New funded positions in areas where FM needed Gen Surg (3) 31 Reduce 3 of 4 preliminary not retaining them Peds (9) 24 Match community demand IM/PEDS (9) 12 Match community demand IM (10) 30 Implement 4+1 More efficient training model TOTAL (28) (34) Impact Reduce unfunded positions New funded positions Begin to train physicians needed No significant operation changes 34

35 Summary Speakers will be available for further discussion throughout the week as well as Friday morning Ask the Experts breakfast 35

36 36

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