Patient Migration Trends Impacting Hospitals, Physicians, Communities, and the State Medical Facilities Plan Christopher G. Ullrich, MD, FACR, OLLP Chairman, North Carolina State Health Coordinating Council March 4, 2020 NCDHHS, Division of Health Service Regulation | March 4, 2020 1
This presentation is a general overview meant to provide members of the SHCC with basic information. Any data errors present are unintentional. Nothing said during this presentation should be construed as either an endorsement or a criticism of the providers mentioned. I want to express my personal appreciation to Amy Craddock and Tom Dickson who supplied data and helped me refine today’s presentation. NCDHHS, Division of Health Service Regulation | March 4, 2020 2
Medical Care is a Highly Constrained “Economic Ecosystem” • Medicare, Medicaid, & TRICARE use annual government price fixing formulas. • Medicare Physician payments are calculated at 50% of the cost of service; No operating margin component! • For physician specialists, NC Medicaid is 72-78% of NC Medicare. • Most physician private insurance contracts are indexed to the Medicare Resource Based Relative Value Scale (RBRVS) • Hospital integration, physician alignment, insurance-related narrow networks, benefit managers, steerage, out of network issues, episodes of care and bundled payments, ACOs, CINs, provider at-risk contracts, etc. create economic constraints for patients, physicians, and hospitals. NCDHHS, Division of Health Service Regulation | March 4, 2020 3
Hospitals within Health Systems Today, many hospitals have joined integrated networks to gain economies of scale, contracting and information technology expertise , and to more effectively leverage network offerings. 86% 77% 80% 77% 66% 65% 65% 62% 59% 60% 57% 40% US NC SC 2011 2014 2008 2011 2014 2011 2014 2008 2008 Sources: American Hospital Association, 2016 Hospitals Statistics Book NCDHHS, Division of Health Service Regulation | March 4, 2020 4
North Carolina Has 100 Counties • 15 have 2 full service hospitals / systems. One county has 3 systems. • 66 have 1 full service hospital. • 18 have no hospital. • 19 critical access hospitals (4 recent insolvencies). • Large integrated hospital and university systems with employed physicians are very common. • Large private practice or corporate single-specialty and multi-service line corporations with employed physicians are growing. NCDHHS, Division of Health Service Regulation | March 4, 2020 5
Out-Migration of General Acute Care Inpatient Admissions: 2007, 2008, 2015- 2018 50 44 44 43 43 45 41 40 34 Number of Counties 35 30 26 26 26 24 25 23 22 21 20 15 14 14 14 14 15 10 5 0 > = 50% 30% - 49.99% < 30% % Out-Migration 2007 (N=81) 2008 (N=83) 2015(N=81) 2016 (N=81) 2017 (N=81) 2018 (N=81) NCDHHS, Division of Health Service Regulation | March 4, 2020 6
Out-Migration of Inpatient Surgical Cases: 2007, 2015-2018 60 54 52 51 51 48 50 Number of Counties 40 30 23 20 14 13 13 11 10 10 10 10 9 10 0 > = 50% 30% - 49.99% < 30% % Out-Migration 2007 (N=80) 2015 (N=75) 2016 (N=75) 2017 (N=75) 2018 (N=74) NCDHHS, Division of Health Service Regulation | March 4, 2020 7
Out-Migration of Ambulatory Surgical Cases: 2007, 2015-2018 60 51 50 50 50 47 41 Number of Counties 40 30 23 19 18 20 16 15 14 14 14 14 13 10 0 > = 50% 30% - 49.99% < 30% % Out-Migration 2007 (N=82) 2015 (N=80) 2016 (N=79) 2017 (N=79) 2018 (N=79) NCDHHS, Division of Health Service Regulation | March 4, 2020 8
Out-of-County Migration of Fixed MRI Patients: 2015-2018 35 31 30 24 24 25 23 23 23 Number of Counties 19 19 20 18 18 16 14 15 10 5 0 > = 50% 30% - 49.99% < 30% % Out-Migration 2015 (N=60) 2016 (N=65) 2017 (N=63) 2018 (N=65) NCDHHS, Division of Health Service Regulation | March 4, 2020 9
Why are patients migrating out of county? There is surprisingly little reliable hard data. Commonly discussed reasons include: 1. Access to specialized care and perceptions of quality and service 2. Integrated health systems 3. Various restrictive insurance networks 4. Most are not migrating for lower cost care 5. Etc… NCDHHS, Division of Health Service Regulation | March 4, 2020 10
Total Hospitals in North Carolina, 2018 106 “Top 5” “Big 15” “Other 91” The top 15 hospitals, Within the top 15, the top 5 ranked by ADC, in urban are the Academic Medical Mostly smaller and rural and suburban counties in Center Teaching Hospitals hospitals in North Carolina North Carolina Source: 2019 License Renewal Applications NCDHHS, Division of Health Service Regulation | March 4, 2020 11
Big15 Hospitals in North Carolina, 2018 2018 Average Big 15 Hospitals % Occupancy Daily Census Carolinas Medical Center 858 84.9 Duke University Medical Center 801 85.3 UNC Medical Center 673 83.1 North Carolina Baptist Hospital 637 79.3 Vidant Medical Center 619 73.0 Novant Health Forsyth 594 68.6 Mission Hospital 530 74.9 New Hanover Regional Medical Center 494 76.3 Cone Health 460 59.2 Cape Fear Valley Medical Center 454 86.5 WakeMed 438 69.9 Novant Health Presbyterian 348 61.3 Source: UNC Rex Hospital 314 71.5 2019 License Atrium Health Cabarrus 290 64.8 Renewal Applica- First Health Moore Regional Hospital 244 72.3 tions NCDHHS, Division of Health Service Regulation | March 4, 2020 12
Trends Impacting the SMFP • 67 NC counties have 1 hospital; 19 Critical Access Hospitals are currently operational; 18 NC counties do not have an operational hospital now. • Medical care is a highly constrained economic ecosystem (market). • Integrated hospital systems and physician groups are a megatrend. • Patients are choosing to receive their care in more centralized facilities. The “Big 15” are providing more care. Many of the “Other 91” struggle. The “Top 5” are NC’s Academic Medical Centers. NCDHHS, Division of Health Service Regulation | March 4, 2020 13
Trends Impacting the SMFP • SHCC policies need to avoid damaging the “Other 91” if patient access is to be maintained in many of our NC counties. Our most specialized hospitals also need adequate facility capacity to meet patient’s site of care choices and needs. • For many reasons, the 20th century health care delivery model is no longer sustainable. Patient and physician preferences, as well as changing government and insurance payment levels, models, and policies increasingly require a transition to a 21st century health care delivery paradigm. NCDHHS, Division of Health Service Regulation | March 4, 2020 14
Patient Migration Trends Impacting Hospitals, Physicians, Communities, and the State Medical Facilities Plan Christopher G. Ullrich, MD, FACR, OLLP Chairman, North Carolina State Health Coordinating Council March 4, 2020 NCDHHS, Division of Health Service Regulation | March 4, 2020 15
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