First West Benefit Solutions

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First West Benefit Solutions

• Understanding Health Care Delivery Cost Equation
• Scott Barlow

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Central Utah Clinic
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• Largest Independent group in Utah with 94
  physicians. Formed in 1969.
• Cardiology Internal Medicine
• Orthopedics Hematology/Oncology Gastroenterology
  Infectious Disease Nephrology Dermatology
• Neurology Endocrinology
• Colorectal Surgery Radiation Oncology
• Radiology Plastic Surgery
• Otolaryngology Urology
• Critical Care Pulmonology

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Central Utah Clinic

• Operate Fifteen physical locations in Provo,
  Price and Salt Lake.
• Provide outreach services to Ten satellite
  offices to rural communities throughout Central
  and Eastern Utah.
• Services include, Imaging, Laboratory, Physical
  Therapy, Radiation Oncology, Sleep Centers,
  Cardiac Catheterization, Wellness, Ambulatory
  Surgery Centers, Clinical Research and Pharmacy
  services.
• Central Utah Clinic has been recognized for its
  leadership in implementing state-of-the-art
  information technology including fully-functional
  EHR and PACS systems.

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Key Issues Facing Physicians

• Shrinking reimbursement/rising costs
• Liability insurance crisis
• Patient expectations
• Changing health insurance market
• E-healthcare revolution
• New tensions with hospitals
• Medical staff recruiting, leadership,
  capacity, lead time and planning.

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Shrinking Reimbursement/Costs

• Medicare SGR

Sources Medical Group Management Association
(MGMA), Centers for Medicare and Medicaid
Services (CMS), the American Medical Association
(AMA), and Medicare Payment Advisory Commission
(MedPAC). Estimates for 2005-2010 operating costs
and 2006-2010 MEI are 5-year average gains.
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• Conversion Factor
• 1999 Medicare Conversion Factor 34.7315
• 2000 Medicare Conversion Factor 36.6137
• 2001 Medicare Conversion Factor 38.2581
• 2002 Medicare Conversion Factor 36.1992
• 2003 Medicare Conversion Factor 36.7856
• 2004 Medicare Conversion Factor 37.3374
• 2005 Medicare Conversion Factor 37.8975
• 2006 Medicare Conversion Factor 37.8975
• 2007 Medicare Conversion Factor 37.8975
• 2008 Proposed Medicare Conversion Factor
  34.1350
• 2009 Proposed Medicare Conversion Factor
  32.4283
• If Congress does not act, physicians will be paid
  at a rate lower than 1999 while their cost have
  increased by 42.5 since that time.

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Shrinking Reimbursement/Costs

• Ranks of uninsured up to 47 million
• fueled by rising health insurance costs
• Shift to patient responsibility
• Emergence of pay for performance
• Lack of claim standardization edits, denials,
  contracting clarity
• Labor shortages.

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Liability Reform

• Avg. premium increase from 2003-2004 was 37.2
• on top of an avg. 39.6 increase from
  2002-2003
• One group had increase of 400
• Increasing rates of retirement, relocation,
  limitations on high risk services
• Source MGMA Web Survey of 770 groups, March,
  2004

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Patient/Public Expectations

• Transparency price, outcomes
• Coverage knowledge
• Access Retail clinics, one stop shop
• Services Boutique, Wellness Coach
• Information transfer
• Direct marketing brand name drugs
• Fountain of Youth

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Changing Health Insurance Market

• Coverage for the uninsured
• Outcomes based payment P4P, PQRI, MCMP, ICD-10
  
• measurement?
• -- Payer consistency?
• Quality based reporting direction (Aetna,
  United)
• Cost shifting to employees

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Changing Health Insurance Market
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Clinical Data Exchange

• Paper Kills Transforming Health and Healthcare
  with Information Technology
• Newt Gingrich
• Physicians control 80 of spending decisions.
• 2004, 910 Million visits, average of 3 for each
  American.
• Majority of health care is in the ambulatory
  setting.

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E-healthcare Revolution

• Medical information not limited to a site.
• Patient access and privacy
• Cost of systems verses benefits
• Real time information exchange
• Meaningful quality data
• Shift in practice assets/ownership
• Priorities and willingness to share data

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E-healthcare Revolution

• M

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Tension with Hospitals

• New ventures pulling profitable service lines
  away from hospitals
• Specialty hospitals
• Ambulatory Surgical Centers
• Ancillary services imaging, PT, Cardio Caths
• Hospitals limiting / revoking privileges
• Hospitals limiting contracting options of plans.
  
• Joint ventures, IT activities create win / win
  opportunities

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Medical Staff

• Recruiting
• Utah difficulties
• Plan participation?
• Low unemployment
• Retention/aging medical staff
• Capacity
• Community needs, lead time.
• Field of Dreams
• Demographic changes
• Needs across the country

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MD Workforce Changes

• Age Male Female
• Over 61 years old 88 12
• 42 to 60 years old 74 26
• 27 to 41 years old 58 42
• Under 26 years old 46 54
• Source AMA Membership Data, May 2006

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• Never doubt that a small group of
• thoughtful, committed citizens can
• change the world. Indeed, it is the
• only thing that ever has.
• - Margaret Mead

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• Scott Barlow
• CEO
• 801-429-8034
• sbarlow_at_centralutahclinic.com