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Session 6B - MHS Vision

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  • Note: Not all sites are visible on the graphic. Sites beyond the axis spread can be show by expanding the values for % change or PMPM.
  • Note: Not all sites are visible on the graphic. Sites beyond the axis spread can be show by expanding the values for % change or PMPM.
  • Transcript

    • 1. Managing the Total Cost of HealthServices for a Defined Population(Per Capita Cost)Changing the way we think about thedrivers of health care costsChanging our system of incentives 8-1
    • 2. The old mindset • Think like a health care provider in a fee for service environment – what do you do to stay in business? • Keep your hospital full • Keep your specialists busy • Favor Emergency Room (more tests, more procedures, more admissions) • Limit access to primary care • Wait for people to get very ill 8-2
    • 3. The old mindset. What can thegovernment (or an employer) do tocut healthcare costs?• In a fee for service environment you: • Try to eliminate benefits (rationing care) • Try to reduce payment for providers (or increase their productivity) • Eliminate programs that do not generate revenue (wellness, prevention, case management) • Shift costs to patients (co-pays, deductibles, annual premiums) 8-3
    • 4. What did this accomplish? • Created a high cost, low value health non-system with everyone out for themselves • Pitted providers against patients (and employers) • Promoted supply driven demand (MRI, etc) • Disincentivized prevention, wellness, and primary care (from the provider perspective) • Increased the number of uninsured and denied care for patients with chronic illnesses • Drove up costs at 2-3% greater than GDP for the last 40 years WHAT A MESS !! 8-4
    • 5. The New Mindset –The magic of pre-payment • Think like a health plan manager that has been pre-paid for all of the services for a defined population for the coming year. What do you do to stay in business? - Enhance primary care to avoid: - Unnecessary hospitalizations for ambulatory sensitive chronic illness and empty your hospitals - Emergency room utilization - Unnecessary referrals to specialists • Focus on wellness and prevention particularly for patients at risk for chronic illness • Reduce waste in the system • Use system engineering to create error free processes • Focus on handoffs and transitions where bad things happen 8-5
    • 6. To change behavior,you need to change what you reward • Old scheme: • Reward volume – visits, relative value units (RVUs), relative weighted products (RWPs) • “Winning” formula (to make a profit): Maximize output, maximize revenue • Increase IP, OR, ICU, surgical procedures • Increase ER utilization • More tests, more radiological procedures • More specialist referrals 8-6
    • 7. To change behavior,you need to change what you reward • New scheme: • Reward value: outcomes / cost over time • Outcomes = Readiness plus Population Health plus Experience of Care • Cost over time = Per member per month (PMPM) total costs • Winning formula: Maximize value by putting quality first and reducing per capita costs • Focus on comprehensive primary care • Reduce waste – follow evidence based guidelines • Keep your IP, OR, ICU and other high cost venues busy with “real” work and if you can not, then close them • Enhance prevention and wellness with a focus on high risk patients 8-7
    • 8. What is PMPM? • The accumulated monthly medical costs associated with enrollees • Inpatient, Outpatient, Pharmacy, Ancillary • Wherever DHP care is received • Direct Care, Purchased Care, TRICARE Mail Order Pharmacy • Divide total cost by number of enrollees • Adjusted for age/gender/beneficiary category • Reflects differences in underlying demographics • e.g. 23 year old Active Duty Male vs 49 year old retired female 8-8
    • 9. MTF Production Unit Cost TFL Prime Standard TFL44 RWPs 87 RWPs 17 RWPs MEPRS “A”$1,324K / 148 RWPs = $8,946/RWP 8-9
    • 10. DACH Enrollee Inpatient Care NNM WRAMC Purchased Care C MTF Production Unit Cost: $12K/RWP Utilization: 134 RWPs MTF Production Unit Cost: $10K/RWP Total Cost: $1,608K Claims Cost: $970K Utilization: 62 RWPs Dewitt ACH Total Cost: $620K Total IP Cost for Enrollee Care $620K $1,608K MTF Production $970K Unit Cost: $9K/RWP $783K Utilization: 87 RWPs 8-10 $3,981K Total Cost: $783K
    • 11. PMPM Calculation ExampleSample MTFEnrollees 79,286Equivalent Lives 83,932 Direct Care $ Purchased Care $ Total $ PMPMInpatient $ 4,200,754 $ 1,278,419 $ 5,479,173 65Outpatient $ 13,159,945 $ 2,757,346 $ 15,917,291 190Pharmacy $ 2,153,232 $ 798,808 $ 2,952,040 35Total $ 19,513,931 $ 4,834,574 $ 24,348,504 290 8-11
    • 12. Additional Breakdown ofPMPM/PMPYOutpatient PMPM is $190, Outpatient PMPY is ?$190*12=$2,280 PMPY out of total PMPY of $3480How much is Primary Care (without lab and rad)?$240 PMPYWhat are the other contributors to outpatient PMPY?Specialty Care $1200ER $200 (without lab and rad)APV $200Laboratory $200Radiology $400 8-12
    • 13. What should you do if we change to fullpre-payment with rewards for outcomes? • Annual payment for each enrollee • Bonus for: • IMR Rate • Well Being of Covered Population • Population Health – Reduced Health Risk, Improved Quality of Life • Experience of Care (Quality, Access, Safety, Equity) Let’s explore how you win this game! We will look at outcomes measures in following sections, let’s look at the management of PMPM first (the denominator in the value equation) 8-13
    • 14. High Level Drivers of Per Capita Costs PMPM Inpatient Outpatient Pharmacy Ancillary (Institutional) (Professional) Cost Discharge Cost RVU Cost Scripts Cost Tests per per per per per per per per RWP Beneficiary RVU person Script person test person per year per per per year year year 8-14
    • 15. Drivers of Inpatient PMPM Expenses High Level Measure Direct Care Inpatient PMPM First Level Driver Discharge per Cost per RWP Beneficiary per year Second Level Personnel Hours per Occupied BedDay Discharges OBDs per Driver Admission (OBD) PMPY (ALOS) Avoid Increase Reduce MTF Action Reduce Salary unnecessary OBDs unnecessary Expenses by admissions (ADPL) by bed days - IP Optimizing -Outpt improving Utilization Staffing Management access, etc Management (Disease Mgmt) Goal: Reduce rate of hospitalization for enrollees, but increase average daily patient load by filling your hospital with other people’s patients. 8-15
    • 16. Lead and Lag Indicators for IP PMPM? • Lead Indicators – Drivers of desired performance – Average Daily Census - – Average Daily Staffing (non-physician)- – Unnecessary bed days - – Unnecessary admissions/ readmissions – – Standard and other MTF Prime admissions – – Prime Admissions to Network - • Lag Indicator – Performance Outcome • Inpatient PMPM • Cost/RWP • Enrollee discharges PMPM Critical Decision Making for Medical Executives: Keys to Improving Healthcare Delivery 8-16
    • 17. Drivers of Outpatient PMPM Expenses –Focus on Specialty Care High Level Outpatient Measure (Professional) PMPM First Level RVU per Driver Cost per RVU enrollee per year RVU/ Support staff Second Level Provider/ labor hours per RVUs PMPM by Driver encounter Disease Month Increase Triage, Disease Increase RVU/ Management, Case MTF Encounters/ Optimize Encounter Management, Utilization Action Month Staffing Management Goal: In primary care, reduce need for specialty referral through case management, in specialty care, maximize ROFR recapture to keep clinics 8-17 busy
    • 18. Lead and Lag Indicators for Outpatient PMPMRemember: Primary Care and Specialty Care havedifferent strategies.• Lead Indicators – Drivers of Desired Performance • Enrollment • RVUs per Month per FTE Specialty Provider- • RVUs per Month per FTE (non-provider)- • RVUs/Encounter - • ER Visits PMPM - (indirect measure of medical management)• Lag Indicator – Performance Outcome • Outpatient PMPM • Cost/RVU • RVU/enrollee/year • Primary Care Performed Elsewhere 8-18 Critical Decision Making for Medical Executives: Keys to Improving Healthcare Delivery SEP 2007 7-18
    • 19. Lead and Lag Indicators forPharmacy PMPM• Lead Indicators – Drivers of Desired Performance • Home Delivery • Use of Generics• Lag Indicator – Performance Outcome • Retail Pharmacy Use • Pharmacy PMPM • Total MTF Pharmacy Expense Goal: Increase home delivery, encourage therapeutic substitution, but, be careful not to manage pharmacy in a vaccuum. It could have unintended consequences! 8-19
    • 20. What does the data tell us? 8-20
    • 21. Medical Cost Per Equivalent Life 400 350 300 250 200 150 100 2005 FQ1 FQ4 2006 FQ1 FQ4 FQ3 FQ4 FQ3 FQ4 FQ2 FQ3 FQ2 2007 FQ1 2008 FQ1 FQ3 FQ2 FQ3 FQ2 FQ2 2009 FQ1 FQ4 2010 FQ1 Army Navy Air Force MCSC MHS Prior Current FY05 FY06 FY07 FY08 FY09 FY09 FY09 FY09 FY09 FY10 FY10 FY08 FY09 FY10 Qtr Qtr YTD YTD YTD YTD Q1 Q2 Q3 Q4 YTD Q1 YTD YTD YTD YTD % % % Army 221 241 249 280 301 312 316 324 314 348 348 10.7% 12.0% 15.8% Navy 219 231 249 276 301 309 303 304 304 317 317 8.9% 10.1% 6.4% Air Force 211 227 236 255 267 279 276 275 274 296 296 5.8% 7.9% 12.6% MCSC: Network/PCM 189 202 214 226 230 244 235 235 236 231 231 5.4% 4.7% 1.2% MHS Total 209 224 234 255 268 279 276 277 275 287 287 7.3% 8.1% 8.1% Goal 6.1% 5.0% 6.1%Data Source: M2 (SIDR/SADR/HCSR-I/HCSR-NI,PDTS); EASIV; Enrollees are adjusted for Age/Gender/BencatCurrent as of Jul 10, with measure reported through Dec 09. (Portions of value are projected due to missing expense data from MTFs.) Average Annual % Increase (FY06/09): Army: 11.9% Navy: 10.6% AF: 8-21 8.0% MCSC: 6.0%
    • 22. Direct Care Enrollee DifferenceFrom MCSC Enrollee 70% 60% 50% 40% 30% 20% 10% 0% 2005 FQ2 FQ3 FQ4 2006 FQ2 FQ3 FQ4 2007 FQ2 FQ3 FQ4 2008 FQ2 FQ3 FQ4 2009 FQ2 FQ3 FQ4 2010 FQ1 FQ1 FQ1 FQ1 FQ1 FQ1 Army Navy Air Force Direct Care Enrollees used to cost 10%-20% more than MCSC enrollees. They now cost 30-50% more. 8-22
    • 23. Direct Care Enrollee Differencecompared to MCSC Enrollees Active Duty Non-Active Duty80% 70%70% 60%60% 50%50% 40%40% 30%30% 20%20% 10%10%0% 0% 2009 FQ1 2005 FQ1 FQ2 FQ3 FQ4 2006 FQ1 FQ2 FQ3 FQ4 2007 FQ1 FQ2 FQ3 FQ4 2008 FQ1 FQ2 FQ3 FQ4 FQ4 2010 FQ1 FQ2 FQ3 2005 FQ1 FQ2 FQ3 FQ4 FQ2 FQ4 2007 FQ1 FQ3 2008 FQ1 FQ4 FQ2 FQ4 2010 FQ1 2006 FQ1 FQ3 FQ2 FQ4 FQ2 FQ3 2009 FQ1 FQ3 Army Navy Air Force Army Navy Air Force Difference for AD Enrollees growing at a much faster rate than that for Non-Active Duty . 8-23
    • 24. Major Diagnostic Category Changes for AD between FY06/09 Tl RVU/100 Eq Lv - DC 06/09 Tl RVU/100 Eq Lv - MCSC 06/09 Total RVU per 100 Eq Lv 06/09Description 2006 2009 % Change 2006 2009 % Change 2006 2009 % Change deltaDiseases and Disorders of the Nervous System 56.44 75.57 34% 47.34 44.23 -7% 103.8 119.8 15% 16.01Diseases and Disorders of the Eye 192.26 193.01 0% 11.00 11.34 3% 203.3 204.4 1% 1.09Diseases and Disorders of the Ear, Nose, Mouth, and Throat 103.03 144.84 41% 34.78 85.21 145% 137.8 230.1 67% 92.23Diseases and Disorders of the Respiratory System 32.37 41.57 28% 11.20 16.04 43% 43.6 57.6 32% 14.04Diseases and Disorders of the Circulatory System 47.64 49.22 3% 33.86 36.47 8% 81.5 85.7 5% 4.19Diseases and Disorders of the Digestive System 89.64 91.26 2% 30.29 38.34 27% 119.9 129.6 8% 9.68Diseases and Disorders of the Hepatobiliary System and Pancreas 4.13 4.22 2% 2.93 4.06 39% 7.1 8.3 17% 1.23Diseases and Disorders of the Musculoskeletal System and Connective Tissue 349.52 473.43 35% 187.99 260.53 39% 537.5 734.0 37% 196.45Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast 132.70 124.22 -6% 29.44 39.29 33% 162.1 163.5 1% 1.36Endocrine, Nutritional and Metabolic Diseases and Disorders 22.23 26.19 18% 4.51 6.72 49% 26.7 32.9 23% 6.17Diseases and Disorders of the Kidney and Urinary Tract 17.48 20.31 16% 9.11 13.01 43% 26.6 33.3 25% 6.72Diseases and Disorders of the Male Reproductive System 8.54 19.54 129% 9.57 11.10 16% 18.1 30.6 69% 12.53Diseases and Disorders of the Female Reproductive System 30.02 33.43 11% 11.20 13.11 17% 41.2 46.5 13% 5.33Pregnancy, Childbirth, and the Puerperium 21.06 32.67 55% 25.87 26.45 2% 46.9 59.1 26% 12.19Newborns and Other Neonates with Conditions Originating in Perinatal Period 0.23 0.47 101% 0.06 0.06 -13% 0.3 0.5 77% 0.23Diseases and Disorders of the Blood, Blood Forming Organs, Immunological Disorders .24 4 5.17 22% 2.90 4.15 43% 7.1 9.3 31% 2.20Myeloproliferative Diseases and Disorders, Poorly Differentiated Neoplasm 8.59 10.33 20% 4.91 7.75 58% 13.5 18.1 34% 4.58Infectious and Parasitic Diseases, Systemic or Unspecified Sites 16.15 12.98 -20% 1.65 2.52 53% 17.8 15.5 -13% (2.30)Mental Diseases and Disorders 132.33 252.65 91% 25.36 49.06 93% 157.7 301.7 91% 144.02Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental Disorders 46.16 63.81 38% 2.14 7.37 245% 48.3 71.2 47% 22.89Injuries, Poisonings and Toxic Effects of Drugs 22.76 10.24 -55% 7.13 9.87 38% 29.9 20.1 -33% (9.78)Burns 0.77 1.86 142% 0.53 0.92 73% 1.3 2.8 114% 1.48Factors Influencing Health Status and Other Contacts with Health Services 873.22 1,033.76 18% 14.05 19.12 36% 887.3 1,052.9 19% 165.61Human Immunodeficiency Virus Infections 1.61 1.91 18% 0.03 0.03 -2% 1.6 1.9 18% 0.30Total 2,213.11 2,722.68 23% 507.87 706.75 39% 2,721.0 3,429.4 26% 708.45 2.0 more RVUs per person per year in MDC 08 – Ortho 1.5 MDC 19 – Mental Health 1.7 MDC 23 – Factors Influencing Health 5.2 more RVUs per person per year or 74% of total increase for ambulatory 8-24
    • 25. All Enrollee AD MDC-23 Health StatusV705 Break outV705 Diagnosis Code Detail - In descending order by Change in RVUs 2006 2009 FY06/09 RVU ChangeMDC Adj BenGrp Diag Desc RVU/100 Vst/100 RVU/100 Vst/100 Delta Pct 23 AD V705 2 PERIODIC HEALTH ASSESSMENTS (PHA) 49.42 27.48 113.21 59.60 63.79 129.1% V705 D PRE-DEPLOYMENT ASSESSMENT 0.00 0.00 39.77 22.07 39.77 N/A V705 E INITIAL POST-DEPLOYMENT ASSESSMENT 0.00 0.00 14.56 13.68 14.56 N/A V705 F POST DEPLOYMENT HEALTH REASSESSMENT (PDHRA 0.01 0.00 12.13 10.67 12.13 N/A V705 7 DUTY STATUS DETERMINATION ENCOUNTER 8.21 4.21 15.65 8.57 7.44 90.6% V705 3 OCCUPATIONAL EXAM 15.47 7.93 19.53 11.01 4.06 26.3% V705 H OTHER EXAM DEFINED POPULATION - - 3.34 1.56 3.34 N/A V705 1 AVIATION EXAM 29.37 9.80 32.31 11.54 2.94 10.0% V705 A HEALTH EXAM OF DEFINED SUBPOPULATIONS 0.59 0.32 3.34 2.20 2.75 470.5% V705 9 SEPARATION/TERMINATION/RETIREMENT EXAM 14.77 6.80 16.74 8.25 1.97 13.3% V705 8 SPECIAL PROGRAM ACCESSION ENCOUNTER 1.17 0.50 2.80 1.19 1.64 140.6% V705 C PHYSICAL READINESS TEST (PRT) EVALUATION 0.00 0.00 1.49 0.93 1.48 N/A V705 B ABBREVIATED SEPARATION/TERMINATION/RETIREMENT EXAM 1.60 0.78 2.97 1.53 1.37 86.1% V705 G GLOBAL WAR ON TERRORISM/WOUNDED WARRIORS - - 0.97 0.60 0.97 N/A V705 5 INTRA-DEPLOYMENT ENCOUNTER 2.30 1.27 0.64 0.38 (1.66) -72.1% V705 0 ARMED FORCES MEDICAL EXAM 20.10 9.76 16.59 7.88 (3.51) -17.4% V705 HEALTH EXAMINATION OF DEFINED NATURE 7.55 4.94 0.08 0.04 (7.47) -98.9% V705 4 PRE-DEPLOYMENT RELATED ENCOUNTER 59.33 30.80 23.70 13.53 (35.63) -60.1% V705 6 POST-DEPLOYMENT RELATED ENCOUNTER 90.36 41.30 45.38 21.12 (44.99) -49.8% AD Total 300.25 145.90 365.21 196.36 64.96 21.6%23 Total 300.25 145.90 365.21 196.36 64.96 21.6% Note: Only Direct Care breaks out the V705 codes into more detail. Purchased care remains as the summary V705 HEALTH EXAMINATION OF DEFINED NATURE. Pre/Post Deployment Encounters are mixed codes over the years and are highlighted. Overall there was a net increase of 4 per100 for Pre-Deployment and decrease of 18 per 100 for Post-Deployment 8-25
    • 26. Cost per Adjusted Total RVU $120 $100Cost per Adj Enhanced Total RVU $80 $60 $40 $20 $0 FQ3 FQ2 FQ3 FQ4 FQ2 FQ4 FQ2 FQ3 FQ3 FQ2 FQ4 FQ3 FQ4 FQ2 FQ4 2007 FQ1 2005 FQ1 2006 FQ1 2008 FQ1 2009 FQ1 Army Navy Air Force PSCAverage Annual % increase: Army: 5.98% Navy: 6.02% Air Force: 8.24% PSC: 0.78% 8-26
    • 27. Cost per RWP $18,000 $16,000 $14,000 $12,000Cost per RWP $10,000 $8,000 $6,000 $4,000 $2,000 $0 FQ3 FQ4 FQ3 FQ4 FQ2 FQ3 FQ4 FQ2 FQ2 FQ3 FQ4 FQ2 FQ3 FQ4 FQ2 2006 FQ1 2008 FQ1 2005 FQ1 2007 FQ1 2009 FQ1 Army Navy Air Force PSCAverage Annual % Increase: Army: 7.11% Navy: 9.26% AF: 10.26% PSC: 4.37% 8-27
    • 28. PMPM Comparison for Services Wilford HallMTF Prime Enrollee $505, 80% increase MCSC MHS Avg 236 Avg 300 50% 40% MHS Avg 28.1% 30% % Change 06/09 Industry Avg 19.9% 20% 10% MCSC Avg 16.8% 0% -10% $150 $200 $250 $300 $350 $400 PMPM 2009 8-28NOTE: Size of circle is in proportion to # of enrollees Army AF Navy
    • 29. PMPM Comparison for Services AD MTF Prime Enrollee Ft Knox $527, 96% MCSC MHS NMC SD $387, 60% Avg 276 Avg 384 60% 366th MEDGRP- 50% MTN HOME $406, 47% MHS 40% Avg 37.8% % Change 06/09 30% Industry Avg 19.9% 20% 10% MCSC Avg 16.1% 0% $250 $300 $350 $400 $450 $500 PMPM 2009 8-29NOTE: Size of circle is in proportion to # of enrollees Army AF Navy
    • 30. Summary • The gap is growing in PMPM for those enrolled to an MTF vice those enrolled to Civilian PCMs • Purchased Care unit costs growing at significantly lower rates than MTF unit costs • OPPS, in particular, has lowered PC unit costs • Growth most pronounced with Active Duty members enrolled to an MTF • Some is clearly the consequences of the war • PTSD, pre and post deployment exams • However, utilization growth warrants further study • PMPM at three sites with high PMPM increases show significant variation in root causes 8-30
    • 31. 8-31
    • 32. Exercise • Discuss options for reducing PMPM at your MTF. • Inpatient • Outpatient – Primary Care • Outpatient – Specialty Care • Ancillary • Pharmacy 8-32

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