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Accountable Care Organizations - IT Infrastructure

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This report describes the role Accountable Care Organizations (ACOs) are playing in the new health economy and addresses both the business factors that shape the operations of an ACO as well as the …

This report describes the role Accountable Care Organizations (ACOs) are playing in the new health economy and addresses both the business factors that shape the operations of an ACO as well as the core technology capabilities that are required. More: http://www.pwc.com/us/en/health-industries/health-services/aco-accountable-care-organizations.jhtml

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  • 1. Building the IT Infrastructure for Accountable Care www.pwc.com April 11, 2014
  • 2. PwC Learning Objectives At the end of this presentation, the participants will: • Understand the Accountable Care Organization (ACO) construct, within the context of health care market forces • Appreciate the key business factors and decisions which shape the operations of an ACO • Recognize the core technology capabilities required for successful ACO management 2
  • 3. PwC A bit about us 3 Stacey Empson Principal Experienced healthcare executive with more than 20 years of leadership and business consulting experience in health information technology, law, and transformation. Stacey helps health systems, hospitals, physicians, payers, and integrated networks identify and execute strategic business solutions. Previous Roles: • Managing Director of healthcare services for a global IT services company • CEO of an entrepreneurial healthcare management consulting firm • Healthcare Partner at a Fortune 100 company Sarah Kramer PwC Director Experienced healthcare executive with nearly two decades successfully leading substantial technology and business transformation programs at several large integrated academic and community health care systems in the US, Canada, Asia and Africa. Previous Roles: • CIO for several large health systems • Interim CIO for the Aga Kahn University and Health System in Pakistan and East Africa • Led large Epic installation at a nationally recognized academic health system in southern California Stacey Empson PwC Partner
  • 4. PwC Agenda 1. ACOs within the new health economy 2. Business drivers/considerations for successful ACO operations 3. Technology as the backbone, enabler and differentiator 4. Summary/Key Takeaways 4
  • 5. PwC 1. ACOs within the new health economy 5
  • 6. PwC The old model: Funds flow Healthcare was primarily financed by employers and government, who funneled most of the money through health insurance plans. Consumers paid relatively little out of pocket and were generally unaware of the cost of services they received Employers Government Health insurers Physicians Hospitals Pharma Life Sciences Medical devices More services = More money Consumers 6
  • 7. PwC A new health economy: Altered funds flow Consumers Employers Government Health insurers Physicians Hospitals Pharma Life Sciences Med. devices Customers Risk-bearing entities, e.g. ACOs Alternative health, wellness, prevention Employers and government are contracting more directly with care providers. New regulations put providers at financial risk for the quality of care they deliver. Consumers will pay for a larger portion of the care through deductibles and copays, and will be more aware of the costs. They will want better value for their healthcare dollars, a greater decision-making role, and a wider variety of treatment alternatives. 7
  • 8. PwC Other industries have undergone similar changes to those anticipated in Health 8 Travel Banking Retail –1980s (Industry Centric) Present (Consumer Centric) Bank Teller • Banker’s hours • Branch only ATMs, Mobile Banking • Available 24/7 • Location agnostic Travel Agency • Limited Hours • Limited Locations • Annual Updates Standardized Marketing and Inventory • National campaigns • Sunday Circulars Online Booking • On-demand booking • Location agnostic • Real time pricing Customized • Website, location specific • Data-driven targeted promotions
  • 9. PwC Just like other industries have evolved to be more consumer centric, the future of healthcare is headed toward personalized care 9 Present Physician office, Hospitals, Pharmacy Future Personalization • Set hours & locations • Standardized treatment plans • Queue for care • Individualized services, treatments, and drug protocols 1980s Physician office, Hospitals, Pharmacy • Set hours & locations • Standardized treatment plans • Queue for care
  • 10. PwC This new health economy will require some different areas of focus for traditional health providers… • Exploit new technologies e.g., predictive, biometic, genomic • Convert volumes of data into meaningful insights & useful information • Shift from volume to value/quality incentives • More efficiency, lower costs • Commercialize core competencies • Improve outcomes through research and scientific discovery • Pursue new relationships and partnerships • Build a full continuum of care including prevention, virtual and wellness • Understand, attract and retain new markets Consumer Innovation Smart Analytics Operational Agility 10
  • 11. PwC Illinois area ACO dynamics 11
  • 12. PwC 2. Business drivers and considerations for successful ACO operations
  • 13. PwC What is an Accountable Care Organization (ACO)? 13 An ACO is a network of providers and/or organizations that are accountable for the health of a discrete group of Medicare beneficiaries Local network of primary care physicians Hospitals Specialists Potentially other providers that accept joint responsibility for the quality and cost of care for a defined population of patients
  • 14. PwC ACOs pursuing IHI’s "Triple Aim" www.ihi.org/offerings/Initiatives/TripleAim The Institute for Healthcare Improvement (IHI) believes that new designs can and must be developed to simultaneously accomplish three critical objectives, or what IHI calls the “Triple Aim”. The "Triple Aim" is simultaneous pursuit of: 1. Enhancing the patient experience of care (including quality, access, and reliability); 2. Improving the health of the population; and 3. Reducing, or at least control, the per capita cost of care. PwC finds that the objectives of the "Triple Aim" are pursuits successful ACO's should incorporate into their strategy, culture and operations. 14 IHI’s “Triple Aim” Per Capita Cost
  • 15. PwC ACO Core Competencies 15 Critical Success Factors Leadership Governance Integrated Clinical, Financial and Operational Management InfrastructureandIT Team, culture, innovation Strategy design and execution Incorporate clinical measures, manage compliance, align evidence-based clinical practices and financial incentives Competency Risk Management Manage population financial risk Workforce Optimize productivity
  • 16. PwC PwC’s “ACO Maturity Continuum” – the goal is to start from where you are, and move through to level 4. Gains can be made along the continuum 16 Proposed ACO meets basic requirements to perform as an ACO and can effectively coordinate patient care. Proposed ACO has demonstrated improved outcomes for chronic conditions and has characteristics needed to exceed basic ACO performance. Proposed ACO has demonstrated reductions in costs and has piloted service lines and / or populations for capitated-based payments. ACO has implemented population health and wellness programs and has the ability to predictively model population health / healthcare costs and accept capitated- based payments for patient populations. Level 1 – Care Coordination / Transitions of Care Level 2 – Demonstrated Quality Improvement / Excellence (Chronic Disease Management) Level 3 – Demonstrated Cost Improvement & Ability to Take Risk Level 4 – Population Management (Predictive Modeling & Population Health) Level Capability
  • 17. PwC 3. Technology as the backbone, enabler and differentiator
  • 18. PwC The evolving mission of technology Across today’s increasingly competitive healthcare landscape, the bar has been raised for today’s technology leaders. This is even more important for entities seeking to offer both provider and payer capabilities in a crowded and competitive market. 18 Support Technology continues to play a critical role in supporting and enabling an organization’s business strategy. Advance Technology resources and investments are also expected to advance the organization– developing flexible capabilities to increase effectiveness, enabling the group to grow. Differentiate There is an increasing expectation that technology leaders will drive innovation – adopting new technologies to differentiate the organization. Differentiate Advance Efficiency Support Innovation
  • 19. PwC Assessment Methodology – IHI’s "Triple Aim" www.ihi.org/offerings/Initiatives/TripleAim Technology: • Integration • Analytics • Collaborative patient/customer engagement tools IHI’s “Triple Aim” Per Capita Cost 19
  • 20. PwC Enterprise EHR: Ticket to entry Certified, integrated, enterprise-wide EHR (MU Stage 2) • “ERP” of the clinical enterprise • Patient-centricity is the core of all information requirements Now is the time to explore full optimization of functionality that often lies dormant: • Reporting • Access • Transitions of Care • MPI, Facility, Provider, User data accuracy and linkage • Decision support 20
  • 21. PwC Integration: shared EHR and/or HIE 21 • Text goes here Accountable Care Organization ACO professionals in group practice arrangements Other Medicare providers and suppliers as determined by the Secretary (e.g. PBM) Hospitals and their ACO employed professionals Networks of individual practices of ACO professionals - e.g., an IPA Partnerships or JVs between hospitals and ACO professionals Fully implemented EHR across the care continuum is a base requirement Connectivity can be achieved through HIE, and/or expanding single instance of EHR across continuum
  • 22. PwC Breakdowns in care delivery often occur at the transition between care settings 22 Successful delivery of an ACO model requires coordination of care across the healthcare continuum
  • 23. PwC Data Analytics: Better understanding of current patients, providers, outcome, cost to predict and manage proactively 23
  • 24. PwC Patient Engagement: We are seeing a renewed focus on patient engagement and population health in both payers and providers 24 Source: PwC Research Non-linear, but time based member health journey Healthy Newly Diagnosed Caregiver Sick Engagement needs change with the patient’s health journey • Technology will need to adapt and support the continuum
  • 25. PwC Patient Experience: Delivering a world class patient experience leads to knock-on effects that percolate across your health system…. 25 Knock-on Effects Observations Impact on your Business Reduction in Readmission Rates • Better patient experience associated with lower 30-day risk-standardized hospital readmission rates1 • Limit the financial burden of readmissions as CMS initiates and commercial payers pick up on value based purchasing Amplifying Effects on Customer Loyalty • 72% of consumers indicate that provider reputation and personal experience are the top drivers of provider choice2 • 9 out of 10 consumers are willing to recommend a provider after a good experience2 • Attract and retain your target patient and payer mix by employing targeted marketing and word of mouth based on your patient experience Ready for the “Rising Tide” • Hospitals measured by the CMS VBP program have shown improvements in nearly all patient experience and process off care dimensions year over year3 • The budget neutral VBP has increased competition amongst hospitals; get on board or be left behind Source: (1) “Relationship Between Patient Satisfaction With Inpatient Care and Hospital Readmission Within 30 Days”, William Boulding et. Al., American Journal of Managed Care, January 2011, (2) PwC Experience Radar 2012, (3) CMS data
  • 26. PwC Building on technology investments enable movement up the PwC “ACO Maturity Continuum” 26 Tools to connect HIE; e-Referral Tools to improve: Decision support, alerts, disease registries, patient portals Tools to engage; tools to understand: Patient/customer engagement; service line oriented population management Tools to predict: Sophisticated data analytic capacity; predictive modelling; actuarial analysis; ability to accept capitation based payments Level 1 – Care Coordination / Transitions of Care Level 2 – Demonstrated Quality Improvement / Excellence (Chronic Disease Management) Level 3 – Demonstrated Cost Improvement & Ability to Take Risk Level 4 – Population Management (Predictive Modeling & Population Health) Level Tech Capability
  • 27. PwC Overarching Technology: Example Technology Assessment: ORGANIZATION’s technological readiness for population health is distant even though the organization has achieved MU accreditation 3.0 2.8 2.8 2.8 2.5 2.3 2.0 2.0 2.0 1.9 1.8 1.4 1.4 1.0 1.0 1.0 1.0 0.4 0.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 MU Stage 2 Clinical Quality Measures MU Stage 1 Eligible Professional Core Objectives MU Stage 2 Eligible Professional Menu Objectives EHR/ EMR -- Non-Clinical Data Capture EHR/ EMR -- Electronic Prescribing Data Warehousing EHR/ EMR -- Clinical Data Capture EHR/ EMR -- Clinical Data Share Physician Portal Security (HIPAA) Related to ACO Security Exchange EHR/ EMR -- Care Coordination & Management Patient Portal Basic Reporting EHR/ EMR -- Clinical Intelligence Telehealth / E-Mobility Health Information Exchange (HIE) Administrative Function (at the ACO Level) Business Intelligence Health Insurance Exchange (HIX) Technology Rating by Criteria • ORGANIZATION’s primary needs are access to “timely, actionable information” and analytics capabilities for population health management – Access to external data (clinical, utilization, cost, quality) is very limited – Population-level data is required to identify and target high-risk disease states and patients • Internally, additional work is required to streamline the use of health information technology and to align technology with clinicians’ workflows – “The EHR makes everything we do more time consuming. The system does not sufficiently flag if there are any gaps. All of the information gets buried.” Physician 27
  • 28. PwC 4. Summary/Key Takeaways
  • 29. PwC ACO Lessons Learned • Technology/change/spend fatigue post MU achievement • Optimize current technology assets vs. introduce new technologies • IT operations needs to mature, including thoughtful and aligned enterprise governance • Build AND buy strategies required to quickly advance analytic capability 29
  • 30. PwC In Conclusion Technology is a key enabler to ensure successful transition to a mature ACO • EHR is the price of entry • Integration across the continuum • Sophisticated and predictive data analytics to manage outcomes and cost, and reduce risk • Patient/customer engagement is the new reality • No matter where you start on PwC’s “ACO Maturity Continuum,” achieving true population management is the goal 30
  • 31. Questions?
  • 32. Contact Information This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2014 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. Stacey Empson stacey.empson@us.pwc.com 312-933-6961 Sarah Kramer sarah.kramer@us.pwc.com 310-200-9619