Modern Healthcare: ACOs for Real- Does it make sense for your organization?

ACOs for Real: Does itmake sense for yourorganization?Betsy Block Dave MarchandDirector of Accountable Care CTOSolution Strategies Healthcare & Life Sciences Services

CMS timeline for reform 2010 2011 2012 2013 2014 2015 HIPAA 5010 ICD 10 Penalty for non PQRI PQRI (eRx) PQRS submission of PQRI Penalty for ARRA Meaningful Use non compliance Reduced No Matching Hospital Acquired Conditions Payment for Payment HAC Accountable Care Organizations Penalties for High Rates of Readmissions Inpatient Value Based Purchasing Program Bundled Payment Pilot Source: Kaiser Family Foundation Health Reform Source 11.10.20102 Services

Accountable Care Organizations:What are theyUnder section 3022 of theAffordable Care Act, Medicareproviders and suppliersparticipating in AccountableCare Organizations (ACOs)can continue to receivetraditional FFS payments andare eligible for additionalpayments based on meetingspecified quality and savingsrequirements. 3 3 Services

What Constitutes an ACO?Who belongs to an ACO?An ACO consists of a collection of providers in a given geographythat can include primary care physicians, hospitals, specialists,home care, etc.What are they Responsible for?100% of the healthcare and costs for a defined group of patientsWhat Functions do they Perform?• Coordination of all care activities between the providers in an ACO• Measurement and improvement of outcomes and costs• Financial management and distribution of cost savings across ACO Services

Early Success in Clinical Integration• Advocate Physician Partners, Chicago• 3400 physicians, 8 hospitals, 280,000 Capitated lives, 137 performance measures Incentive Funds Performance Year Distributed 2005 $12.4 million 2006 $16.7 million 2007 $25.0 million 2008 $28.2 million 2009 $32 million* * Estimated from 2010 Value Report, Advocate Physician Partners5 Services

PGP Demonstration Organizational Characteristics of PGP Participants Part of Owns or Organizational Number of Includes Not For Participants Region Integrated Delivery Owned an Structure Physicians AMC? Profit? System? HMO? Faculty/Dartmouth-Hitchcock Northeast Comm. Group 907    Clinic PracticeBillings Clinic West Group Practice 232  Geisinger Clinic Northeast Group Practice 833   Middlesex Health Northeast Network Model 293   SystemMarshfield Clinic Midwest Group Practice 1,039  Forsyth Medical Group South Group Practice 250   Park Nicollet Clinic Midwest Group Practice 648   St. John’s Clinic Midwest Group Practice 522   The Everett Clinic West Group Practice 250University Of Michigan Faculty Midwest 1,291    Faculty Group Practice Practice Source: CMS; Commonwealth Fund; WSJ, “Healthcare Overhaul Increases Rewards for Efficiency,” 11/2010 6 Services

The “secret sauce” of ACOs • Clinical Integration is a physician and provider led effort • Internally motivated to monitor themselves and deliver better quality and higher value – not something that is forced on them from the outside • The “secret sauce” is the empowerment of the physicians • Financial incentives are important but not the only motivating factor in a successful ACO • Need to foster an entrepreneurial attitude and a desire to seek out novel solutions and accept the challenge to explore and learn how to make this work7 Services

CMS ACO Development Timeline Data Governance Infrastructure Profiling Analyzing 7/1/2011 1/1/2012• Legal organization • Claims Data • Recruit members • Pull Reports• Measures • Quality Data • Establish connectivity • Verify Data• Incentives • Reporting • Train on use of • Care management:• Participants and TINs • Population ID reporting tools mechanism for care• Application • Ancillary Data • Benchmarks coordination• Beneficiary • Disease Registries • Risk Management: ID representative high risk individuals • Pt Satisfaction and develop care• Senior medical (CAHPS) plans director • Summary of care• Executive under documents governing body • Beneficiary access to• Marketing materials med record must be authorized • Available to public• PSA determination of using CMS format ACO8 Services

Proposed CMS ACO guidelinesACOs can choose between 2 options: Track 1 – Shared savings for Year 1 and 2, Year 3 is shared savings and shared losses (if any) over certain threshold – Savings and Losses are capped – Bonus for including a FQHC or RHC – 50% shared savings up to 7.5% of benchmark Track 2 – Shared savings and shared loss (if any) all 3 years – Savings and losses are capped – Bonus for including a FQHC or RHC – 60% shared savings up to 10% of benchmark 9 Services

CMS Math: Estimates per ACO, based on100 ACOs Year 1 Year 2 Year 3 Total 3 yearsBonus $8,000,000PayoutCost $1,755,251 $1,265,897 $1,265,897 $4,287,075Bonus left $3,712,925 • Source: CMS -1345-P Proposed Rule Medicare Shared Savings Program: Accountable Care 3. 31.2011 p.35010 Services

Infrastructure Cost Estimates For ACO Prototype (ACO includes 200 beds, 80 PCPS, 150 SPC)* Categories of Costs Start Up Ongoing Network Development and Management $2,275,000 $2,900,000 Care Coordination, Quality Improvement and Utilization Management $405,000 $1,515,000 Clinical Information Systems $2,350,000 $1,500,000 Data Analytics $285,000 $385,000 Total $5,315,000 $6,300,000 11 Services* White Paper - THE WORK AHEAD: Activities and Costs to Develop an Accountable Care Organization, AHA

Do we really need to do this? As a small community hospital, you may wonder if you have to form an ACO or CI program There are a number of reasons you should: – Commercial payers moving to ACO model too – Competition for community primary care physicians is on the rise – Integrated delivery networks are forming – Clinical integration principles are very successful in smaller hospitals 12 12 Services

TechnologyInfrastructureneeded by ACOs Healthcare

Healthcare Information Landscape is rapidlychanging ARRA/HITECH ICD-10/5010 CONSOLIDATION HC REFORM CONSUMERISM14 Healthcare

More Information is becoming DIGITAL Diet & Medical Exercise Images Medications Genomics Results Proteomics Histories & Encounters Digital Procedures Pathology Smart Medical Devices15 Healthcare

Data must be Shared, Aggregated, andAnalyzed Health Information needs Physicians to be EXCHANGED within Communities Hospitals Health Plans Public Long Health Term Agencies Care Standardized Analytics & Informatics solutions drive improvements in QUALITY & Pharmacies Consumers EFFICIENCY Laboratories Other Medical Intermediaries16 Healthcare

Proposed Initial Quality Measures byDomain At Risk Populations Heart Failure 7 At Risk Populations COPD 3 Patient / Care Care Giver7 7 Experience Coordination At Risk Populations Frail Elderly 3 Care Coordination / Patient Safety Information2 5 Systems At Risk Populations 10 Diabetes Preventative Care Coordination / At Risk Populations 48 Health Transitions Coronary Artery 6 Disease At Risk Populations Hypertension 2 Healthcare

Data + Analytics will drive Quality andEfficiency Individual/Patient • Care Gap Management • Preventative Health • Outreach/Education Community • Identified Data Analysis • Care Coordination • Financial Analysis Population • Disease Management • Care Improvement18 Healthcare

Where does the Data come From? Quality • Targets for quality and care Measures management standards • Medical records Manual or Automated EMR/PM/HIS • Clinical outcomes • Patient billing/Charge Master • Labs, Rx HIE • Encounters • Histories • Historical patient data Payers • “outside” treatment information • Reimbursement rules • Surveillance data Other • Adverse drug events • Genomics/Imaging19 Healthcare

Dell’s Health Strategy – “In the Cloud”Simplifies use with interoperability that creates a true “healthcare system” Hospitals Physicians Payers Life Science Other Healthcare Cloud Platform Data Management Interoperability Mobility Security Healthcare Solutions Electronic Revenue Image Payers Reporting Analytics Medical Cycle Portals Archiving Solutions & Alerting Records Services20 Healthcare

Patient Outreach Future PossibilitiesMedication Reminder Example d JaneDoh Reminder to take 2 -100mg SOMA tablets (sent at 8pm local time) Alerting Example Generic Alert #AllergyAlert #HighPollenCount Plano, TX 5-12-2011 Patient Specific Alerts d JaneDoh #HighPollenCount 5/12/11 take <med_name>Pollen or Patient List d JohnDoh #HighPollenCount 5/12/11 wear mask outsidePollution 21 Healthcare

Wrap Up • Whether the current rules for an ACO survive as is or are modified, the concept of clinical integration and shared cost savings will survive • The infrastructure needed for an ACO consisting of separate provider entities in a community is the same infrastructure needed for a single provider entity, such as a health system, to improve quality and efficiency • The key to improving quality and efficiency is consistent ways to gather the data, compare the results, and look for patterns of improvement • A cloud based infrastructure enables a standard set of interoperability and analytics tools to be utilized across ACO’s resulting in further efficiencies and sharing of best practices and innovation • Change is Inevitable22 Healthcare

Thank YouBetsy Block Dave Marchand(317) 225-6244 (972) 577-5595Betsy_Block@dell.com Dave_Marchand@dell.com23

Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Modern Healthcare: ACOs for Real- Does it make sense for your organization? Presentation Transcript