Strategic Planning Clinical Programs

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Strategic Planning Clinical Programs

• School of Medicine Retreat January 30, 2003

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Mission Statement
"We promote the health of our patients and our
community and advance the frontiers of clinical
medicine"
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Context- Key Financial Accomplishments of FY 2002

• Further stabilization of Stanford Hospital's
  operating margin, ie first positive operating
  margin since merger
• Improvement in practice's clinical revenues (91m
  to 108m) and profits (16.8m)
• Assessment, with SHC, of capital needs of SHC and
  of our practice
• plans for raising 250m in bond market to
  achieve it
• Consensus-building in funds flow methodologies
  regarding payments from Hospital to School for
  services rendered

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Context
Clinical Practice Revenue
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Context
Direct Research Expenditures
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Context
Clinical Departments Revenues
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Ambulatory Growth

• Ambulatory services are growing and becoming an
  increasing fraction of SHC's revenue streams, now
  accounting for 40 of SHC charges and 55 of
  faculty charges
• 57 of faculty collections were derived from
  outpatient svcs in FY'02
• The increasing importance of ambulatory services
  revenue means that both the faculty and SHC are
  increasingly dependent on its growth for economic
  viability, as well as for a secure referral base
• Neither can afford to concede wholly the profit
  derived from outpatient services to the other
  entity

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Exclusion of LSS (Pediatric based) data for
FY2000 and FY2001 Exclusion of Capitation
reimbursement for all fiscal years.
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Key Issues in Ambulatory Services

• Funds flow in ambulatory services must incent
  growth
• Revenues from newer infused therapies and
  diagnostics need to be shared between SHC and the
  faculty to encourage development
• Attribution of expense to ambulatory services,
  but not to inpatient services, means largely
  ambulatory services are being neglected as sites
  for growth
• Newer treatment options for common chronic
  diseases (immune modulators, etc) tend to be
  outpatient modalities
• With the recruitment of a new VP for Ambulatory
  Services, along with service and operational
  issues, funds flow issues must be addressed

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Patient Base
A Strategic Imperative Defining and controlling
our access to the patient base around us

• Kaiser controls 40 of the patient base around
  us and is seeking to do its own
  tertiary/quaternary care
• Sutter/PAMF accounts for 23 of SHC discharges
  now and is seeking to consolidate the large
  majority of the remaining non-Kaiser patients
  into their system
• Stanford needs access to patients who will
  benefit from our care and help us advance medical
  knowledge

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Patient Base
Potential Strategies for Maintaining Patient
Access

• Create a full service health system
• Partner with full service systems
• Be the quality and value leader
• superior skill sets, knowledge bases, but also
  excellent service
• cost basis that is attractive to full service
  systems and their constituencies

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Unresolved Issues in Potential Satellite
Facilities

• Should a satellite facility be ambulatory,
  inpatient, "short stay", specialty-specific?
• If we had a partner, multiple issues would arise
• Business model is complex in governance and
  calculations
• Medical group representation also is complex
• Current reality is that partnering with Sutter
  remains uncertain, and we need to have an
  independent strategy

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Quality and Value Leadership

• Stanford still enjoys public stature as a quality
  leader
• PacifiCare quality index just released placed us
  at 95th of 200 California hospitals, and the
  highest among academic hospitals
• UCSF scored at 78th, UCLA at 58th in 60 metrics
  related to common practices
• UC Davis scored only at 44th
• Patient satisfaction scores in ambulatory
  services have recently been below historical
  norms
• Third party payers are now introducing "tiering",
  a designation made by insurers to establish
  different payments to centers, based on "quality
  and cost"
• Aetna and Blue Cross propose us as first tier
  designees, but Healthnet seeks to place us in
  second tier

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Applied Research

• Current models
• BMTx Unit
• Oncology Clinic
• Stroke Service
• Device Development Center
• Imaging Services

• Potential models
• Stanford Cancer Institute
• Stanford Neurosciences Institute
• Stanford Cardiovascular Medicine Institute

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Newer Initiatives- Clinical Centers

• Multidisciplinary clinical centers of excellence
  are increasingly the norm across the US because
  patients want them
• Centers will have multidisciplinary governance,
  administrative infrastructure, and may be nested
  in Institutes, which can serve as the focused
  research sites from which translational
  initiatives might arise
• Centers are planned in cardiovascular,
  neurological, cancer and transplantation services
• Centers can help us engage the public and its
  philanthropy, enlarge our reputation as industry
  leaders, and be the platform for development of
  novel strategies, ie be the "critical mass" that
  smaller subunits will never achieve

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Institutes Scope
Stanford Institutes of Medicine
Research
Patient Care
Institute for Cancer/Stem Cell Biology and
Medicine
Future Institute
Future Institute
Future Institute
Future Institute
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Institute Organization
Institute for Cancer/Stem Cell Biology and
Medicine
Research Center
Clinical Cancer Center
Clinical Informatics
ACCESS/SPTRC
GCRC
Breast Cancer Center
Prostate Cancer Center
Basic Research
Clinical Research
Head Neck Cancer Center
Institute-Based Associates
Leukemia Center
????? Cancer Center
Department-Based Affiliates
Radiation Therapy
Surgical Oncology
Translational Research Core Facilities
Bone Marrow Transplantation
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Faculty Practice Organization

• Fundamental issues in FPO
• Does it represent and is it composed of faculty
  at large or chairs?
• Is it an organization embedded in the Hospital or
  to the School?
• Is it a "group practice" with a strong central
  authority or a confederation of departments?
• What should it govern and control?

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Practice Organization

• Dean and CEO agreed in 8/02 upon structure that
  recognized a confederation of depts as the
  fundamental organizational model
• Council of Clinical Chairs provides forum for
  input and deliberation about issues surrounding
  professional practice
• Dean, CEO, Clinical Chairs, COO, CFO and Sr Deans
  for Clinical Affairs and Finance and
  Administration
• Meets biweekly, chaired by Sr Dean for Clinical
  Affairs and COO
• Smaller Joint Clinical Planning Committee creates
  proposals, organizes initiatives and supervises
  strategic planning
• Dean, CEO, COO, CFO, Sr Deans for Clinical
  Affairs and Finance and Administration
• Meets at least weekly or more frequently when
  needed

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Current Organizational Chart

Dean and CEO
CEO
Council of Clinical Chairs
Joint Clinical Planning Committee
Dean SAD Clin Affairs SAD FA
CEO COO CFO
Professional Contracts
Professional Billing (PFS)
Ambulatory Services
QA / Compliance
Adult/Children's Services Carve-out Splits
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Goals for 2003

• Refine and begin to implement strategy for
  securing our patient base, by creating off-site
  ambulatory services, if possible with a
  partnership with a full service health care
  system
• Refine and enlarge the initiative for institute
  and center development, as platform for clinical
  growth and translation
• Develop further the practice's organizational
  structure and funds flow to align finances and
  mission-based goals

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Key Challenges

• Availability of timely, accurate data relating to
  financial performance across the hospital and the
  faculty practice
• Volume, expense and profitability of clinical
  units
• PL, expenses and performance should be
  transparent
• Development of a faculty culture that seeks to
  enlarge the enterprise's resources, rather than
  seeking advantage in re-negotiating different
  splits of it
• Centers and institutes will require re-shuffling
  of some authorities, accountabilities and funds
  flows

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Key Challenges

• Advocacy for and recognition of the value of
  providers of clinical care and education
• enable us to recruit and retain physicians in the
  "physician-educator line"
• Better communication between UTL and MCL lines
  for translational initiatives