1. INNOVATIONS IN
HEALTHCARE
GLENN E. PEARSON, FACHE
GEORGIA HOSPITAL
ASSOCIATION
EXECUTIVE VICE PRESIDENT
MARCH 27, 2014
Update on Georgia’s Hospitals

2. Outline
 About GHA
 Hospitals’ Positive Economic Impact
 The Payment Situation
 Medicare
 Medicaid
 The Uninsured
 Supplemental Payments
 The Need to Shift Costs
 What’s Coming Under Affordable Care Act
 The Impact of the Financial Climate
 The Regulatory Climate
 Quality and Patient Safety
 Healthcare Personnel Supply
 Electronic Communications
 Opportunities

3. About GHA

4. About GHA
 Founded in 1929
 Represents Georgia’s 170 acute-care hospitals
 Promotes the health and welfare of Georgia’s citizens
by supporting hospitals in their missions to provide
the most cost-effective and highest quality of care
possible through:
 Representation at the Georgia General Assembly and U.S.
Congress
 Assistance with regulatory compliance
 Educational programs
 Quality initiatives
 Data services
 Programs and services to assist hospital operations

5. Hospitals’ Positive
Economic Impact

7. The Payment Situation

8. Medicare
12%
Medicaid
14%
Employer/
Private Insurance
52% Uninsured
19%
Other Public
3%
Georgia
Health Insurance
Coverage Status
SOURCE: 2011-2012 State Health Facts
www.kff.org
Medicare
36%
Medicaid
14%
Employer/
Private
Insurance
40%
Uninsured
5%
Other
3%
Georgia
Sources of Hospital
Net Patient Revenue
SOURCE: 2012 AHA Annual Hospital Survey
Health Insurance Coverage

9. Medicare

10. -6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
MedicareMargin(%)
Georgia Hospitals
Medicare Operating Margins
2000 - 2011

11. -$171
-$302
-$475
-$540
-$645 -$636
-$737
-$789
-$842
-$791
-4%
-6%
-9%
-10%
-12%
-12%
-13%
-14%
-14%
-13%
$(1,000.0)
$(750.0)
$(500.0)
$(250.0)
$-
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
RevenueReductions(inmillions)
%ReductionoverBaseline Losses in Medicare Revenue
Due to Federal Budget Reductions
2013 - 2022
Medicare Revenue Reduction % Reduction Over Baseline

12. Medicaid

13. FY 2012 Georgia Medicaid Cost Coverage
Hospital Service Type Payment
Arrangement
Percent of Cost Covered by
Payment
Inpatient Services FFS 92%
CMO 85%
Outpatient Services FFS 80%
CMO 81%
TOTAL 87%

14. The Uninsured

15. The Uninsured
 1 in 5 Georgians (19% or 1,859,00) is uninsured
 Georgia ranks fifth highest in the nation in the
number of uninsured
 1 in 8 children in Georgia (12% or 320,000) is
uninsured

16. Supplemental Payments

17. Medicaid
Disproportionate Share
Federal Funding
ACA Reductions (in millions)
Year National Allotment Georgia DSH Allotment
2013 $11,544 $282
Year
Annual ACA Reduction
(National)
Annual ACA Reduction
(Est. Georgia)
2014 ($500) ($11)
2015 ($600) ($13)
2016 ($600) ($13)
2017 ($1,800) ($40)
2018 ($5,000) ($111)
2019 ($5,600) ($124)
2020 ($4,000) ($89)

18. The Need to Shift Costs

20. What’s Coming Under the
Affordable Care Act

21. 10%
20%
30%
40%
90%
80%
70%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Platinum Gold Silver Bronze
PercentofHealthCareCostsPaid
Health Insurance Marketplace Plan Type
Health Insurance Marketplace
Cost Sharing based on Plan Type
Paid by the Consumer Paid by the Insurer

22. The Impact of the
Financial Climate

23. Georgia Hospitals with Negative Margins
2011
Number Percentage
Patient Care Margin
All Hospitals 89 51%
Rural Hospitals 43 66%
Total Margin
All Hospitals 67 38%
Rural Hospitals 36 55%

24. -1.48%
-0.66%
0.36%
0.91%
0.06%
0.23% 0.23%
1.03%
1.21%
0.91%
2.49%
1.92%
2.94%
3.20%
2.61%
2.09%
1.41%
2.56%
3.03%
2.71%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Margin
Year
Trends in Hospital Margins
Patient Care Margin Total Margin

25. The Regulatory Climate

26. Quality, Patient Safety and Regulatory Oversight
Financial:
IRS – Internal Revenue Service
MAC – Medicare Administrative Contractor
PERM - Payment Error Rate Measurement
PRRB – Payment Reimbursement Review Board
SEC – Securities & Exchange Commission
Oversight:
NRC – Nuclear Regulatory Commission
EPA – Environmental Protection Agency
FCC – Federal Commerce Commission
FTC – Federal Trade Commission
CMS - Centers for Medicare and Medicaid Services
HFR – Georgia Healthcare Facility Regulation
DCH - GA Department of Community Health
Legal:
CON – Certificate of Need
DEA – U.S. Drug Enforcement Agency
DOJ – U.S. Dept. of Justice
FBI – Federal Bureau of Investigation
Quality:
DNV - DNV Healthcare
HEN - Hospital Engagement Network
QIO – Quality Improvement
Organization
TJC – The Joint Commission
Medical:
CDC - Centers for Disease
Control
HRSA – U.S. Health Resources
& Service Administration
UNOS – United Network for
Organ Sharing
USPTO – U.S. Patent and Trade
Office
SOS – Georgia Secretary of State
Licensing Boards
FDA – Food & Drug
Administration
ONC - Office of the National
Coordinator for Health
Information Technology
Personnel:
OCR – Office of Civil Rights
NISOH – National Institute
for Occupational Safety &
Health
NLRB - National Labor
Relations Board
OFCCP - Office of Federal
Contract Compliance
Programs
OSHA – Occupational Safety
& Health Administration
DOL – U.S. Dept. of Labor
YOUR
HOSPITAL
Program Integrity:
CERT - Comprehensive Error Rate Testing
MFCU – Medicaid Fraud Control Unit
MIC – Medicaid Integrity Contractor
MIP – Medicare Integrity Program
OIG – CMS Office of Inspector General
RAC – Recovery Audit Contractor
SMRC - Supplemental Medical Review
Contractor
SUR – Medicaid Surveillance & Utilization
Review
ZPIC – Zoned Program Integrity Contractor
Transportation:
DOT – U.S. Dept.
of Transportation
FAA – Federal
Aviation
Administration

27. Quality and Patient Safety
 GHA established the Partnership for Health and
Accountability (PHA) in 1999 to provide education
and data-driven tools for facilitate quality
improvement
 PHA works with hospitals to eliminate preventable
healthcare-associated infections
 In 2011, GHA became one of only 26 organizations
designated as a Hospital Engagement Network to
improve patient safety

28. Healthcare Personnel Supply
Physicians
 Georgia ranks #41 in number of active physicians per
capita
 Georgia has 21% fewer physicians per capita than the
national average
 2 million Georgians live in primary care personnel
shortage areas
Nurses
 By 2020, Georgia will need an additional 4.550 nurses
 The number of new nurse graduates is not projected to
be adequate to meet this demand

29. Electronic Communications
 Electronic Medical Records have the potential to
improve care quality and reduce costs
 Clinicians have the information needed at the point of care
 Duplicate tests can be reduced
 GHA is a founding member of the Georgia Health
Information Network (GaHIN), a statewide group
connecting various local electronic communications
networks
 The first transactions through GaHIN have already
occurred, and many large providers are queuing up
to join

30. Opportunities
 Care delivery is being transformed
 Greater coordination of care
 Greater alignment of incentives
 Both clinical and patient care management technology
 Population health management is the key to the
future
 We are experiencing unprecedented financial
stresses
 Services to improve care delivery and efficiency are critical