Coordinating Care to Improve Quality and Affordability
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- Hilary Murphy
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1 Coordinating Care to Improve Quality and Affordability Well before passage of federal policies to encourage and incentivize coordinated care, our not-for-proft network set out to build a truly integrated system that could one day serve as a national model for quality and effciency. Northern California-based Sutter Health cares for more than 3 million patients through a not-for-proft network of physicians, hospitals, home health providers and other services.
2 Coordinating Care to Improve Quality and Affordability Nationally Recognized for Quality and Effciency Sutter Health physician organizations and hospitals consistently rank among the nation s top performers and receive third-party recognition for outstanding care quality and effciency. Recent examples from the last 12 months include: US News & World Report recognized four Sutter Health hospitals as among the best in California. The Human Rights Campaign Foundation designated 21 of Sutter affliates as a Leader in LGBTQ Healthcare Equality. The American Heart Association/American Stroke Association gave fve Sutter hospitals their Stroke Gold-Plus Award for consistently achieving their metrics for the highest-level stroke care. MedShare honored Sutter Health with a Global Humanitarian Award for outstanding leadership in supporting at-risk communities. Healthcare Information and Management Systems Society awarded Sutter Health its highest honor for having a near paperless environment with technology that supports optimized patient care. Only 6.7 percent of U.S. hospitals have achieved this designation. A full list of recognitions appears on sutterhealth.org. Early Model of Value-Based Care Government and private payers are moving to a value-based reimbursement system requiring effciency and high quality. As early as 2006, the Dartmouth Institute for Health Policy and Clinical Practice recognized Sutter Health as a value-based model. Compared to the Mayo Clinic, Intermountain Healthcare (IHC), and Sutter Health systems, all Los Angeles hospitals are high cost To put this in concrete terms, if one uses the average per (patient) resource inputs of Sutter, the Mayo Clinic and IHC as a composite benchmark for effciency in managing severe chronic illness, Los Angeles hospitals used 81 percent more hospital beds than needed; 106 percent more ICU beds; 110 percent more FTE physicians; and required 75 percent more registered nurses under proposed federal standards. That amounts to a lot of wasted effort and unnecessary care. Source: Tracking the Care of Patients with Severe Chronic Illnesses, the Dartmouth Atlas for Healthcare 2008 Lowest Charge Per Discharge in Northern CA Sutter Health doctors and hospitals partner to reduce variation and adopt best practices. On average, total charges for an in-patient stay in a Sutter hospital are lower than what other Northern California hospitals charge and comparable to the Southern California median. AVERAGE CHARGE PER DISCHARGE FOR ACUTE CARE CASES Non Sutter Average Median Sutter Average $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Source: 2016 Northern CA OSHPD CMI adjusted average charge per discharge for acute care cases in Northern California Cohort Group
3 Committed to Holding The Line on Price Increases Sutter Health has held average overall rate increases to health plans to less than 3 percent annually since 2012, despite our expenses for labor, facilities and technology increasing by an average of 6 percent each year. During this same time, some insurance companies increased their rates to consumers by as much as 20 percent in a single year. SUTTER HEALTH S HISTORICAL COMMERCIAL PRICING INCREASES COMPARED TO THE MEDICAL CONSUMER PRICE INDEX 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 6.2% Sutter* 6.1% 4.8% 3.9% Medical 3.5% 3.6% 3.3% CPI** 2.7% 2.9% 3.1% 2.6% 3.0% 2.1% 1.2% 1.6% 0.6% * Projected price increases for the top six commercial payers for hospitals and medical foundations. ** The medical consumer price index from the Bureau of Labor Statistics in January of each year. Cares for Most Medi-Cal Patients in Northern CA With passage of the Affordable Care Act, more low-income patients than ever before have health insurance and are covered by Medi-Cal. Sutter Health compassionately cares for more low-income Medi-Cal patients in Northern California than any other health care system. In 2017 alone, this commitment required a $334 million investment because the state of California does not reimburse the full costs of providing care. ANNUAL MEDI-CAL DISCHARGES PER HOSPITAL SYSTEM SYSTEM MEDI-CAL DISCHARGES % OF TOTAL MEDI-CAL DISCHARGES SUTTER HEALTH 49,423 17% DIGNITY 41,711 14% UNIVERSITY OF CALIFORNIA 24,997 9% KAISER 17,968 6% TENET 10,750 4% Source: 2016 OSPHD Patient Discharge Data
4 Operates in Nation s Top 12 Wage Markets Sutter Health has made signifcant progress controlling costs despite the fact the top twelve highest wage markets in the U.S are located in Northern California. System labor costs represent more than 60 percent of our organization s total operating expenses and contribute to a disparity in price between Northern and Southern California hospitals. TOP TWELVE 2017 HOSPITAL WAGE INDEX METROPOLITAN AREAS (COMPARED TO LOS ANGELES, CA, NYC, NY AND BOSTON, MA) 1.9 HOSPITAL WAGE INDEX (U.S. AVERAGE IS 1.00) SAN DIEGO BOSTON, MA LOS ANGELES NYC, NY Source: CMS 2017 hospital wage index SAN JOAQUIN SHASTA NAPA SONOMA SACRAMENTO ALAMEDA/CONTRA COSTA MONTEREY (HWI). The HWI refects the cost of wages and benefts for employees and contract employees in that hospital market. SOLANO SF & SAN MATEO SANTA CLARA/SAN BENITO MARIN SANTA CRUZ
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