The EMR Puzzle – Putting the Pieces Together

March 10, 2015

Confidential2

What is Driving Organizations to Adopt or Replace EMR Technology

Healthcare reform― Preparation for bundled payments

― Utilization constraints

― Value-based reimbursement

― Rehospitalization and Length of Stay Rates The IMPACT Act ICD-10 HIEs

Patient/resident quality Operational efficiency Analytics and reporting Revenue enhancement

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PAC Largest Increases in Medicare Spending

Confidential4

PAC Reform Trends

• Aging population/demographic trends • Growing Medicare enrollment • Expanded Medicaid and insurance coverage • Rise in prevalence of chronic diseases

• Reduced reimbursement from Government and private payers

• Cuts from sequester / deficit reduction • Lengths‐of- stay continue to fall

• More concerted effort by ACOs and MCOs to manage PAC utilization

• SNFs and Home and Community Based Care Needs to Evolve into a Platform for Population Management

• Increasing need for Home Care capabilities supporting episodic payment

• Many entities developing “care management” and “population health” capabilities such as MCOs, ACOs, and independent “care management” organizations

• Episodic care and “bundled” payment methodologies require capabilities to coordinate patient care across care settings into the home

Expanding Role forSNFs and HomeHealth

FFS PricingPressures willContinue

Demand for PAC Services Strong

Care ManagementAcross a Post-AcuteEpisode of Care

ManagedCare

ManagedCare

FeeForService(FFS)

FeeForService

Hospitals

HealthSystems

Other PACProviders

CurrentApproximate

Payor Mix

PotentialFuture

Payor Mix

Preparing for Significant Policy and Market Trends

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Preparing for the Future - Today

PAC Providers will be forced to bear the brunt of additional costs in the following ways:

― Increased regulatory overhead – will need to demonstrate & quantify quality outcomes

― Better technology infrastructure – configurable, scalable, business processes

― Providers will need to improve efficiency while managing more complex cases Acuity levels will increase for SNFs’ & HHC as CMS shortens the LOS for acute care providers and moves

to one Adjusted Case Mix irrespective of location of services in Post Acute Care – Managing the care continuum will be critical to preserving margins

New care models: Physician and Care Management is now required vs. Medical Director model of past Reporting requirements will increase

― Analytics that graphically summarize key clinical outcomes & operating metrics daily will be essential to optimize margins and reduce administrative burden

Mitigating readmissions will directly impact margins

― CMS proposing up to a 3% reduction in reimbursement for SNF’s with high levels of hospital readmissions starting in 2017

PAC providers will play an increasingly important role in reducing system wide healthcare costs

Confidential6

What to Consider When Selecting an EMR

Service Lines Business Structure Flexibility Ease of Use Interoperability

― Referral Partners

― HIE’s Reporting/Analytics Support for Healthcare Reform and Regulatory Changes Physician Engagement Deployment Model Implementation/Training Research Vendors

― KLAS

― Talk to Peers Budget Internal Communication/Planning is Key

Interactive Panel DiscussionMarch 10, 2015