Enterprise Risk Management Promoting a Discipline of Speaking Up - - PDF document

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Mass/Rhode Island HFMA

Accounting & Regulatory Update Meeting October 17, 2014

Enterprise Risk Management

Promoting a Discipline of Speaking Up

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

ERM Objectives

• To ensure ongoing assessment of significant risks confronting the

Organization and implementation of a standardized means for mitigating, reporting and overseeing these risks,

• To bridge organizational ‘silos’ to bring forth the most pressing current and

emerging risks facing the organization, and

• To provide ongoing oversight to drive accountability for addressing and

mitigating these risks.

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

ERM Oversight Committee Members

Name Title Kate Bolland VP, Deputy General Counsel Robert Cournoyer Senior Director, Internal Audit, UMass Memorial Health Care David Fairchild, MD SVP Office of Clinical Integration, UMass Memorial Health Care Robert Feldman VP Finance, Corporate Controller, UMass Memorial Health Care Robert Feldmann VP Finance, Corporate Controller, UMass Memorial Health Care Ellen Felkel-Brennan

• Sr. Director, Quality/Regulatory Affairs, UMass Memorial Medical Center

Barbara Fisher SVP, Operations, UMass Memorial Medical Center Deb Gard Director, Risk Management, Marlborough Hospital Kathyrn Green Senior Director, Radiology, UMass Memorial Medical Center Carlos Iitsuka SVP Business Planning and Strategy, UMass Memorial Health Center Phil Kahn Interim Chief Information Officer, UMass Memorial Health Care Mary McDonald Chief Quality Officer, HA/Clinton Hospital Jose Ramirez Interim Chief Human Resources Officer, UMass Memorial Health Care John Randolph VP, Chief Compliance Officer, UMass Memorial Health Care Cathy Rossi VP Managed Care Contracting, Umass Memorial Health Care Dana Swenson SVP, Facilities, UMass Memorial Health Care Diane Thompson SVP/CNO, UMass Memorial Health Care Steve Tosi, MD President, UMass Memorial Medical Group Deborah Weymouth CEO Health Alliance Deb Hurwitz

• Sr. Associate, Office of Program Development, Commonwealth Medicine

Jennie Johnston Project Coordinator, Office of Program Development, Commonwealth Medicine

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Stages of Risk Management Capability Maturity Stakeholder Value

Integrated Risk Intelligent Top Down Fragmented Initial

• Ad hoc/chaotic
• Depends primarily on

individual heroics, capabilities, and verbal wisdom

• Independent risk

management activities

• Limited focus on the

linkage between risks

• Limited alignment of

risk to strategies

• Disparate monitoring &

reporting functions

• Common framework,

program statement, policy

• Routine risk

assessments

• Communication of top

strategic risks to the Board

• Executive/Steering

Committee

• Knowledge sharing

across risk functions

• Awareness activities
• Formal risk consulting
• Dedicated team
• Coordinated risk

management activities across silos

• Risk appetite is fully

defined

• Enterprise-wide risk

monitoring, measuring, and reporting

• Technology

implementation

• Contingency plans and

escalation procedures

• Risk management

training

• Risk discussion is

embedded in strategic planning, capital allocation, product development, etc.

• Early warning risk

indicators used

• Linkage to

performance measures and incentives

• Risk

modeling/scenarios

• Industry benchmarking

used regularly

Representative Attributes Describing Each Maturity Level Initial Fragmented Top Down Integrated Risk Intelligent

Risk Intelligence Maturity Model:

UMass Memorial Progress Towards Enhanced Capabilities

1. How capable is the organization today to manage its risk profile? 2. How capable does it need to be? 3. How can it get to its desired state? By when? 4. How can we leverage existing risk management practices?

2010 2011 2012 2013/2014 UMMHC Progress

Spring 2014 Fall 2010

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Common ERM Oversight Committee Meeting Agenda

1. Risk Mitigation Plan status – System Level High Risks

• Integration with System Priorities/Related Plans

2. Emerging Risks 3. Member Entity ERM Update 4. ERM Oversight/Reporting:

• Member Entities: Management/Board
• Corporate: Management/Board

5. Annual “Risk Refresher” 6. Status of annual goals

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

• An anonymous web-based survey was facilitated in April 2014 to solicit feedback on the most significant

and impactful risks facing the organization.

• Survey content also included participant feedback on the progress of system strategic priorities and
• rganizational oversight and accountability
• The survey was distributed to 586 stakeholders across UMass Memorial Health Care and its entities.

Participants included executive management, Trustees physicians and physician leaders and management across clinical and non-clinical areas.

• 320 responses were received, representing a 55% response rate. Survey participation demographics by

entity and role are summarized as follows:

April 2014 “Risk Refresher” Overview

112 35% 74 23% 60 19% 32 10% 24 8% 16 5% 1 0% 1 0% 0%

Participation by Entity

UMass Memorial Medical Group UMass Memorial Health Care (System) UMass Memorial Medical Center HealthAlliance Hospitals Marlborough Hospital Clinton Hospital Community Healthlink UMass Memorial Health Ventures (Includes UMass Memorial Labs, CMMIC) 142 44% 122 38% 28 9% 19 6% 6 2% 3 1%

Participation by Role

Management Physician Trustee Executive Leadership (CEO, Executive or Senior Vice President) Other Direct Caregiver Support Services

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NOTE: The Physician role comprises of Department Chairs, Chiefs of Service, UMMG and Non-UMMG Physicians. The Management role comprises of Vice President, Senior Director / Director and Manager

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Risk Prioritization Guide

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Additional Criteria/Considerations for High Priority Risks

Patient Care/Quality

• Wide-spread adverse impact on patient satisfaction
• Inability to attract patients
• Risk of significant adverse event

Legal/Regulatory

• Major federal or state scrutiny
• Investigations with risk of substantial fines, penalties and adverse public relations

Financial

• Impact on revenues/expenses/net income
• Serious threat to future growth

Reputation

• Adverse National media attention

Operations

• Significant interruptions of business operations for 2 or more key service lines

Employees

• Unplanned loss of several key and senior employees or physicians
• Risk of serious injury to employees

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Proposed System Level High Risks

• Strategy/Deployment
• Physician Relationships
• Financial resources
• Health Information Technology
• Labor Strategy
• Workforce Culture
• Patient Experience
• Population Health Management
• High Costs

PowerPoint templates

Appendix

Industry Risk Scan Supporting Materials

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

Trends to Watch in 2014

• Exchanges will provide mixed results to providers.
• New care models will continue to develop.
• Consolidation among providers will continue, and the big will get bigger.
• Physician shortage begins to take effect, and alignment becomes a top priority.
• Marketing and creating a strong brand for organizations becomes increasingly

important.

• The demand for transparency will increase sharply.
• Large employers will look to form partnerships with providers.
• The deployment of new technology will continue.
• Hospitals and systems will continue to expand their continuum of care within their

market.

• Labor relations will continue to be a challenge.

Source: January 2014 issue of Trustee magazine

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

2014 Outlook on Health Care Providers

Interview with Mitch Morris, M.D., Vice Chairman and U.S. Health Care Provider Leader, Deloitte Consulting LLP

What is the biggest challenge facing the provider sector in the coming year?

• Implementation of the Affordable Care Act (ACA) and all of its legislative- and market-driven implications.
• One of biggest ACA implications is managing costs.
• Providers will be under pressure due to lowered reimbursement rates and increased patient volume
• Strategically, providers are increasing scale by engaging in horizontal integration (hospital-hospital acquisitions)
• Increased vertical integration as hospitals are becoming true health systems via acquisitions
• Some providers are even forming alliances with health plans or creating their own plan
• Providers also looking at their current cost structure and deciding whether to provide certain functions internally or
• utsource
• Providers are looking at clinical efficiency and effectiveness to reduce cost and prepare for required quality reporting

What trends might disrupt “business as usual” in 2014?

• “Business as usual” for health care providers has been disrupted for a few years
• How quickly health insurance exchanges take off and what types of plans people choose
• How many people will be added to Medicaid rolls
• Hospitals may be facing a significant increase in volume from new patients, most of whom will have a relatively low

level of reimbursement. What are some steps organizations can take to foster innovation and/or growth?

• From the perspective of scientific and medical innovation, the industry is constantly reinventing itself
• Many developments cross life sciences and care delivery
• Medical advancements are taking place at the intersection of information technology and medical technology
• Change will be rapid and, in some areas, disruptive to established care models
• The use of IT and big data to gain insights is an active industry trend
• The adoption of new physician incentive models to support the health care industry’s transformation from a focus on

volume to value

Source: http://www.deloitte.com/view/en_US/us/Industries/industry-outlook/af230f13b6b8b310VgnVCM1000003256f70aRCRD.htm

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DRAFT: FOR DISCUSSION PURPOSES ONLY

CONFIDENTIAL – For UMMHC Internal Use Only

The Changing Healthcare World: Trends to Watch in 2014

Chronic Care, Everywhere. Providers are moving quickly to implement accountable care organizations (ACOs). As providers work to improve their way to shared savings payments, look for a more intensive focus on the biggest health care consumers: those with multiple chronic conditions. Health Care at Home. Marketing firm BCC Research predicts that the market for remote monitoring and telemedicine applications will double from $11.6 billion in 2011 to about $27.3 billion in 2016. Much of the interest is being fueled by the people expected to become insured through the ACA, a surge of new consumers that our system simply can’t treat in person. On-the-Job Health. The trend of companies offering incentives for healthy behaviors and penalties for non-compliance is being driven by two forces, both spurred by the ACA: the ability for employers to increase the dollar value of wellness incentives from 20 to 30 percent of total coverage, and increased private insurance costs. Changes in the Exchanges. Insurance exchanges aren’t just for the public markets - a growing number of employers are considering comparable, private exchanges for their employees. War of the Words. Mid-term elections will have politicians out in full force trying to re-prosecute the case on health reform, and there will be opportunities for health policy changes this year.. Data Liberation. The big buzz in health care is Big Data. From electronic health records to clinical measures and decision support tools, providers are inundated with new technologies that enable them to automate processes and capture new types of clinical data.. Partners R Us. Unusual partnerships across health care designed to deliver care in new ways. In 2014, look for the trend to include community-based groups, including social service agencies, area gyms, and other non-health care service providers.

Source: http://healthaffairs.org/blog/2014/02/10/the-changing-health-care-world-trends-to-watch-in-2014/