A Look Under the Hood: 5 Critical Questions You Should be Asking about ACOs


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  • Survey audience on where they are with ACOs: Have they heard a presentation before? Is their organization planning one? Have they embarked on a strategy?For Real: perspective about the “heart” of the program and what makes it successful – based on refection after experience and study
  • Overview
  • Source: Section 3022 of the Affordable Care ActSo where did this idea come from? Why do we think it will be successful?
  • Overview
  • Picture and quote of Mark TwainPrivate payor ACOs are on the riseAnthem and SSCIPABCBS California and CHWAdvocate Health and BCBS IllinoisQuiet takeover: insurers buying physicians and hospitals:Cigna Care TodayUnitedHealthHumana purchased ConcentraWellpoint purchased CareMore Health Group
  • ACO-like initiatives are popping up all over the country. Is University of Kentucky participating in any of these?
  • ACOs are a pivot point: the legal organization that provides a healthcare organization the ability to accept payments, pay out incentives and take risk.
  • Don Berwick, MD Administrator of CMS…because of improvements in care
  • Overview
  • Better management of the sickest population and of those with chronic conditions can result better health for individuals, populations, and a slower growth in costFirst source: National Institute for Healthcare Management, July 2011Second source: AHRQ research, July 2011
  • Advocate model is different from all employed models of Kaiser and Geisinger – put together smaller groups of hospital and their medical staff. The clinical integration model is physician and provider led. These groups of physicians
  • Advocate model is different from all employed models of Kaiser and Geisinger – put together smaller groups of hospital and their medical staff. The clinical integration model is physician and provider led. These groups of physicians
  • Managing all the “point solutions” plus making them both mobile and secure as well as adding incremental innovation (such as the social media examples) can be costly do to the integration costs. By creating a cloud-based platform, Dell can pre-integrate certain technologies which will both drive down costs while creating a platform to add incremental innovation.
  • A Look Under the Hood: 5 Critical Questions You Should be Asking about ACOs

    1. 1. a look under the hoodfive critical questions you should beasking about ACOs
    2. 2. 1. what is an ACO?2. are ACOs DOA?3. is there really money to be made?4. are there any successful ACOs?5. what IT costs are there
    3. 3. let’s getstarted
    4. 4. what is anACO?
    5. 5. Medicare providers andsuppliers participating inAccountable CareOrganizations (ACOs) cancontinue to receive traditionalFFS payments and are eligiblefor additional payments basedon meeting specified qualityand savings requirements.
    6. 6. are ACOsDOA?
    7. 7. Are ACOs DOA? “ACOs are about fundamental changes,” said former CMS administrator Mark McClellan. “The main emphasis is to get away from fee for service payment structures. Despite the difficulties in launching them, they are not going away.” The reports of my death have been CMS has receivedgreatly exaggerated. considerable pushback from providers of its proposed rule-making.
    8. 8. Payment Reform Activity
    9. 9. CMS reform timeline2010 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 11/10/2010
    10. 10. ACO building blocks • Operational • Payer Efficiency Strategies – Workflow – Contracting – Patient rates throughput – Risk sharing – Order sets & cost – Payer management alignment • Physician • Population Health Alignment Management – Clinical integration – Care registries – Governance, – Quality structure, & improvement culture – Patient – Incentive engagement structure
    11. 11. is there reallymoney to bemade?
    12. 12. show me the money!
    13. 13. the opportunity for savings comes fromreal-world statistics Almost 50% of U.S.healthcare spending isfor the care of only 5% of the population Nearly 50% of U.S. healthcare spending— $1.13 trillion—is for the treatment of chronic conditions
    14. 14. are there anysuccessful ACOs?
    15. 15. Advocate Physician Partners• 3,400 physicians, 8 hospitals, 280,000 capitated lives, 137 performance measures Performance Year Incentive Funds 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 Partners
    16. 16. Marshfield Clinic• Participant in Physician Performance Group Demonstration• Theodore Praxel, MD, medical director of Marshfield’s institute for Quality “Our success year after year is the result of investment in a well developed HER and other tools to enable improvement.” Savings to CMS Bonus Earned Year 1 $12M $4.5M Year 2 $13M $5.78M Year 3 $16M $13.8M Year 4 $35M $16M Year 5 $34.5M $15.8M
    17. 17. 2009-2010 ACO: Hill Physicians, CatholicHealthcare West, & BCBS of California • Shared financial and medical data to identify possible areas to improve care and reduce cost • Reduced readmissions by 15% in one year • Shortened hospital stays by paying greater attention to follow up care • Transferred ER patients from out of network to CHW • Reduced by 13% the number of elective surgeries, particularly bariatric • First year savings of $20 million on 41,500 lives
    18. 18. • 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 work
    19. 19. what IT costs arethere?
    20. 20. • Inpatient HIS• Ambulatory EHRs• Health Information Exchange –Interoperability• Data Warehouse –Disease Registries –Analytics of claims data –Quality reporting
    21. 21. data challenges of clinical integration Health Information needs to be• Data will come from many disparate EXCHANGED within Communities sources, including physician offices with paper records Physicians• Physicians will question validity of data Hospitals Health Plans• Need to be able to access from anywhere Public Long Health Term• Need to be able to drill down and Agencies Care identify patients who make up summary report values• Speed of report time is important Pharmacies Consumers Laboratories Other Medical Standardized Analytics & Informatics Intermediaries solutions drive improvements in QUALITY & EFFICIENCY
    22. 22. data drives quality and efficiency reports Physician Performance • Quality scorecards • Patient chart view through continuum of care • Use of referrals and ancillaries Financial Performance • Total cost of care reports • Payer analytics • Areas of improvement Population Health • Chronic disease registries • Care gap management • Patient satisfaction
    23. 23. registries empower care management Data Acquisition Data Integration Diabetes and Other Medicare Chronic Diseases Intermediary Employer & Health Plans Population R Management Hospitals Data Aggregation E Acute and Chronic Hospital &Physician Office Labs P Cardiovascular Diseases M Data O National & Childhood Regional Labs P Data R Flu Immunizations Pharmacy Benefit I Engine T Managers Breast, Cervical, & I Colorectal EMRs N Preventive Care Web Based G Generic Prescribing Administrative Efficiency Data Inputs Primary Care • Data arrives from a variety of sources in a Smoking, BMI, BP Physicians variety of formats Clinical Observations Specialists & • Data is scrubbed, checked for accuracy, Ancillary Providers normalized, and risk adjusted Seamlessly View Patients Across • Compared to master directory Registries • Sorted into Disease Registries
    24. 24. Dell’s Health Strategy – “In the Cloud” ACO infrastructure basics Simplifies use with interoperability that creates a true “healthcare system”Sources Hospitals Physicians Payers Life Science OtherService Dell Healthcare Cloud PlatformAreas Data Management Interoperability Mobility/Communications Security Data Aggregation / Major HIT Vendors Patient Partners Reporting Physician/Patient Portals Outreach Dell Healthcare Solutions Electronic Revenue Image Payers Reporting Analytics Medical Cycle Portals Archiving Solutions & Alerting Records ServicesApplications
    25. 25. estimated IT expenses for ACO infrastructure Based on interviews with 4 facilities: New West, Metrohealth, Memorial Hermann, and Catholic Medical Partners. Categories of Costs Start Up Ongoing Developing Financial Management IS Systems $500,000 $80,000 Disease Registries $75,000 $10,000 EHR System $2,000,000 $1,200,000 Intra-system EHR Interoperability $200,000 $200,000 Link to HIE $150,000 $100,000 Analysis of Care Patterns $210,000 $210,000 Quality Reporting $75,000 $75,000 Total ( 200 bed hospital)* $3,210,000 $1,875,000 *Assume they already have purchased EHR $1,210,000 $675,000Source: The Work Ahead: Activities and Costs to build an ACO American Hospital Association April 2011
    26. 26. summary
    27. 27. Thank YouBetsy Block Mike MorrisDirector of Accountable Care Solutions National Practice Leader(317) 225-6244 (615) 210-1812betsy_block@dell.com mike_b_morris@dell.com