© 2010 Center for Healthcare Quality and Payment Reform ...

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© 2010 Center for Healthcare Quality and Payment Reform ...

  1. 1. The Interplay of Quality, Cost, and Technology in Fully Integrated Systems Kent Bottles, MD [email_address] .com ; www. kentbottles .com Practical Strategies for Developing & Operating Your Accountable Care Organization Minneapolis, Minnesota September 13, 2010
  2. 2. <ul><li>HEALTH CARE PLANS </li></ul><ul><li>Insurance Companies </li></ul><ul><li>HMOs </li></ul><ul><li>PPOs; Etc. </li></ul><ul><li>CONSUMERS </li></ul><ul><li>Children </li></ul><ul><li>Families </li></ul><ul><li>Elderly </li></ul><ul><li>Insured </li></ul><ul><li>Uninsured </li></ul><ul><li>PAYERS </li></ul><ul><li>Employers </li></ul><ul><li>Government </li></ul><ul><li>Individuals </li></ul><ul><li>REGULATORS </li></ul><ul><li>FDA </li></ul><ul><li>JCAH </li></ul><ul><li>Federal & state gov’ts </li></ul><ul><li>PROVIDERS </li></ul><ul><li>Hospitals </li></ul><ul><li>Outpatient </li></ul><ul><li>Physician practices </li></ul><ul><li>Nursing & residential </li></ul><ul><li>SUPPLIERS </li></ul><ul><li>Pharmaceuticals </li></ul><ul><li>Medical device co’s </li></ul><ul><li>Medical suppliers </li></ul><ul><li>HEALTH DRIVERS </li></ul><ul><li>Behavioral Choices (40%) </li></ul><ul><li>Genetics (30%) </li></ul><ul><li>Social Circumstances (15%) </li></ul><ul><li>Medical Care Quality (10%) </li></ul><ul><li>Environmental Conditions (5%) </li></ul><ul><li>HEALTH OUTCOMES </li></ul><ul><li>Life expectancy </li></ul><ul><li>Illness incidence </li></ul><ul><li>System cost & quality </li></ul><ul><li>Access & coverage </li></ul><ul><li>Quality of life </li></ul>THE CORE PROCESS THE HEALTH CARE “SYSTEM”
  3. 3. Money Talks ( Orszag Profile) Ryan Lizza, The New Yorker, May 4, 2009 “ He became obsessed with the findings of a research team at Dartmouth showing some regions…spend far more money on health care than others but that patients in those high-spending areas don’t have better outcomes than those in regions that spend less money”
  4. 4. Money Talks (Orszag Profile) Ryan Lizza, The New Yorker, May 4, 2009 “ If spending more on health care has no correlation with making people healthier, then there must be enormous savings that a smart government, by determining precisely which medical procedures are worth financing and which are not, could wring out of the system.”
  5. 5. Money Talks (Orszag Profile) Ryan Lizza, The New Yorker, May 4, 2009 “ At the core of both the stimulus bill and the Obama budget is Orszag’s belief that a government empowered with research on the most effective medical treatments can, using the proper incentives, persuade doctors to become more efficient health-care providers, thus saving billions of dollars.”
  6. 6. Obama Interview D. Leonhardt, After the Great Recession, NY Times Magazine, May 3, 2009 “ There’s always going to be an asymmetry of information between patient and provider. And part of what I think government can do effectively is to be an honest broker in assessing and evaluating treatment options. And certainly that’s true when it come to Medicare and Medicaid, where taxpayers are footing the bill.”
  7. 7. Obama Interview D. Leonhardt, After the Great Recession, NY Times Magazine, May 3, 2009 “ If it turns out that doctors in Florida are spending 25% more on treating their patients as doctors in Minnesota, and the doctors in Minnesota are getting outcomes that are just as good -- then us going down to Florida and pointing out that this is how folks in Minnesota are doing it…--I think that conversation will ultimately yield some significant savings and some significant benefits.”
  8. 8. Federal Healthcare Reform <ul><li>The Patient Protection and Affordable Care Act </li></ul><ul><li>The Patient Health Care and Education Affordability Reconciliation Act of 2010 </li></ul><ul><li>March, 2010 </li></ul><ul><li>32 million Americans are now covered </li></ul><ul><li>Reduce costs via payment reductions and wellness & prevention focus </li></ul><ul><li>Rewards for value-based care </li></ul>
  9. 9. Themes of Federal Reform <ul><li>Payment reform </li></ul><ul><li>Cost Control </li></ul><ul><li>Access </li></ul><ul><li>Payment reductions </li></ul><ul><li>Information </li></ul>
  10. 10. Payment Reform <ul><li>Health care delivery reform </li></ul><ul><ul><li>Center for Medicare and Medicaid Innovation </li></ul></ul><ul><ul><li>Comparative effectiveness research panels </li></ul></ul><ul><ul><li>Multidisciplinary care teams </li></ul></ul><ul><ul><li>Electronic Health Records </li></ul></ul><ul><li>Organization of Health Care Reform </li></ul><ul><ul><li>ACOs </li></ul></ul><ul><ul><li>Medical homes </li></ul></ul><ul><ul><li>Baskets of care </li></ul></ul><ul><ul><li>Health information exchange </li></ul></ul><ul><li>Payment Structure Reform </li></ul><ul><ul><li>Bundled payments </li></ul></ul><ul><ul><li>Across the board payment reductions </li></ul></ul><ul><ul><li>Value based reimbursements </li></ul></ul>
  11. 11. What Is an ACO? <ul><li>MedPAC: providers responsible for the health care of a population of Medicare beneficiaries </li></ul><ul><li>Dartmouth: providers who receive new forms of payment designed for accountability for costs </li></ul><ul><li>Shortell & Casalino (Accountable Care System): implement processes for improving quality and controlling costs of care and be held accountable </li></ul><ul><li>Pittsburgh Regional Health Initiative (Accountable Care Network): transitional stage for small providers </li></ul><ul><li>CBO (Bonus Eligible Organization): manage and coordinate care for patients </li></ul>
  12. 12. Medicare Shared Savings Program <ul><li>By Jan. 1, 2012 HHS Secretary will establish </li></ul><ul><li>Program requires participants to be part of ACO </li></ul><ul><li>Rules to be written by Fall 2010 </li></ul><ul><li>Goals </li></ul><ul><ul><li>Provider accountability for all patient care </li></ul></ul><ul><ul><li>Coordination of Medicare Part A & B items & services </li></ul></ul><ul><ul><li>Encourage infrastructure investment </li></ul></ul><ul><ul><li>Redesign care processes for quality & efficiency </li></ul></ul><ul><ul><li>Achieved savings to be shared with eligible ACOs </li></ul></ul>
  13. 13. Medicare Shared Savings Program Possible Participants <ul><li>Hospitals </li></ul><ul><li>Physicians </li></ul><ul><li>Nurse Practitioners </li></ul><ul><li>PAs </li></ul><ul><li>Social Workers </li></ul><ul><li>Dietitians </li></ul><ul><li>Specialists </li></ul><ul><li>SNF/Home Health </li></ul><ul><li>Rehabilitation/Long term care facilities </li></ul>
  14. 14. Medicare Shared Savings Program ACO Requirements <ul><li>Accountable for quality, cost, and care </li></ul><ul><li>Legal structure to receive incentives </li></ul><ul><li>Enough PCPs to care for minimum of 5000 patients </li></ul><ul><li>Promote EBM and Patient engagement </li></ul><ul><li>Patient-centered </li></ul><ul><li>Leadership and management structure </li></ul><ul><li>Report on quality and performance data </li></ul><ul><li>Three year agreement </li></ul>
  15. 15. Medicare Shared Savings Program Payment Structure <ul><li>Medicare Fee-for-Service plus Shared Savings </li></ul><ul><li>Per beneficiary cost benchmark established every year by CMS </li></ul><ul><li>Risk adjusted </li></ul><ul><li>Participants must meet both cost and quality performance goals to be eligible for shared savings </li></ul>
  16. 16. Medicare Shared Savings Program Quality Reporting <ul><li>Defined by HHS Secretary </li></ul><ul><li>Guidance from Physician Group Practice Demo, Meaningful Use Criteria, Physician Quality Reporting Initiative </li></ul><ul><li>Metrics </li></ul><ul><ul><li>Clinical processes and outcomes </li></ul></ul><ul><ul><li>Patient and provider experience </li></ul></ul><ul><ul><li>Utilization rates </li></ul></ul><ul><ul><li>Care transitions across continuum of care </li></ul></ul><ul><ul><li>Quality measures phased in and raised over time </li></ul></ul>
  17. 17. Reducing Costs Without Rationing Is Also Quality Improvement! Preventable Condition Continued Health Healthy Consumer No Hospitalization Acute Care Episode Efficient Successful Outcome Complications, Infections, Readmissions High-Cost Successful Outcome
  18. 18. How Primary Care Can Provide Value <ul><li>Improved access to care </li></ul><ul><li>Improved prevention and early diagnosis </li></ul><ul><li>Reduce unnecessary testing, referrals, meds </li></ul><ul><li>Use lower cost treatment options </li></ul><ul><li>Reduce preventable ER visits </li></ul><ul><li>Reduce preventable hospitalizations </li></ul>
  19. 19. Competencies for Primary Care to Be Successful as ACO <ul><li>Timely information about their patients </li></ul><ul><li>Technology & skills for population management and coordination of care </li></ul><ul><li>Resources for patient ed and self management </li></ul><ul><li>Culture of teamwork and accountability among staff </li></ul><ul><li>Coordinated relationships with specialists </li></ul><ul><li>Ability to measure and report on quality of care </li></ul><ul><li>Infrastructure and skills for management of financial risk </li></ul><ul><li>Leadership commitment to improving value </li></ul>
  20. 20. How Hospitals/Specialists Can Provide Value <ul><li>Improve efficiency of patient care </li></ul><ul><li>Use lower cost treatment options </li></ul><ul><li>Reduce adverse events </li></ul><ul><li>Reduce preventable readmissions </li></ul>
  21. 21. Reducing Costs Without Rationing Is Also Quality Improvement! Preventable Condition Continued Health Healthy Consumer No Hospitalization Acute Care Episode Efficient Successful Outcome Complications, Infections, Readmissions High-Cost Successful Outcome
  22. 22. Dramatic Reductions in Rate of Hospitalizations Are Possible <ul><li>Examples: </li></ul><ul><li>40% reduction in hospital admissions, 41% reduction in ER visits for exacerbations of Chronic Obstructive Pulmonary Disease (COPD) using in-home & phone patient education by nurses or respiratory therapists </li></ul><ul><li>66% reduction in hospitalizations for Congestive Heart Failure patients using home-based telemonitoring </li></ul><ul><li>27% reduction in hospital admissions, 21% reduction in ER visits for Chronic Obstructive Pulmonary Disease (COPD) through self-management education </li></ul>
  23. 23. Alternative Methods of Payment <ul><li>Fee for service </li></ul><ul><li>FFS and shared savings </li></ul><ul><li>Episode payment </li></ul><ul><li>Partial comprehensive payment and P4P </li></ul><ul><li>Comprehensive (Global payment) </li></ul><ul><li>Capitation </li></ul>
  24. 24. “ Episode Payments” to Reward Value Within Episodes Preventable Condition Continued Health Healthy Consumer No Hospitalization Acute Care Episode Efficient Successful Outcome Complications, Infections, Readmissions High-Cost Successful Outcome Episode Payment (“Baskets of Care”) $ A Single Payment For All Care Needed From All Providers in the Episode, With a Warranty For Complications
  25. 25. Yes, a Health Care Provider Can Offer a Warranty <ul><li>Geisinger Health System ProvenCare SM </li></ul><ul><ul><li>A single payment for an ENTIRE 90 day period including: </li></ul></ul><ul><ul><ul><li>ALL related pre-admission care </li></ul></ul></ul><ul><ul><ul><li>ALL inpatient physician and hospital services </li></ul></ul></ul><ul><ul><ul><li>ALL related post-acute care </li></ul></ul></ul><ul><ul><ul><li>ALL care for any related complications or readmissions </li></ul></ul></ul><ul><ul><li>Types of conditions/treatments currently offered: </li></ul></ul><ul><li>Cardiac Bypass Surgery </li></ul><ul><li>Cardiac Stents </li></ul><ul><li>Cataract Surgery </li></ul><ul><li>Total Hip Replacement </li></ul><ul><li>Bariatric Surgery </li></ul><ul><li>Perinatal Care </li></ul><ul><li>Low Back Pain </li></ul><ul><li>Treatment of Chronic Kidney Disease </li></ul>
  26. 26. Comprehensive Care Payments To Avoid Episodes Preventable Condition Continued Health Healthy Consumer No Hospitalization Acute Care Episode Efficient Successful Outcome Complications, Infections, Readmissions High-Cost Successful Outcome A Single Payment For All Care Needed For A Condition $ Comprehensive Care Payment or “ Global” Payment
  27. 27. No Additional Revenue for Taking Sicker Patients Payment Levels Adjusted Based on Patient Conditions Providers Lose Money On Unusually Expensive Cases Limits on Total Risk Providers Accept for Unpredictable Events Providers Are Paid Regardless of the Quality of Care Bonuses/Penalties Based on Quality Measurement Provider Makes More Money If Patients Stay Well Provider Makes More Money If Patients Stay Well Flexibility to Deliver Highest-Value Services Flexibility to Deliver Highest-Value Services CAPITATION (WORST VERSIONS) COMPREHENSIVE CARE PAYMENT Isn’t This Capitation? No – It’s Different
  28. 28. Comprehensive Care & Episode Payment Can Be Complementary Preventable Condition Continued Health Healthy Consumer No Hospitalization Acute Care Episode Efficient Successful Outcome Complications, Infections, Readmissions High-Cost Successful Outcome $ Comp. Care/ Global Payment Episode Payment E.g., an annual payment to manage an individual’s chronic disease, including costs of hospitalizations for exacerbations E.g., the payment made when the individual has an exacerbation requiring hospitalization
  29. 29. Difficult to Address All Costs <ul><li>Primary care: prevention, early diagnosis, appropriate testing/referral, reduce ER/hospitalizations </li></ul><ul><li>Specialists: Improved outcomes and efficiency for most common diseases </li></ul><ul><li>Hospitals: Greater efficiency and improved clinical outcomes for inpatient care </li></ul><ul><li>Public health agencies and safety net clinics: Better management of complex and low-income patients </li></ul>
  30. 30. Different Organizations Exist in Different Parts of Country <ul><li>Primary care group practice </li></ul><ul><li>IPA </li></ul><ul><li>Multi-speciality group practice </li></ul><ul><li>IPA </li></ul><ul><li>Integrated Delivery System </li></ul><ul><li>PHO </li></ul><ul><li>Systems like Denver Health </li></ul>
  31. 31. From Health System Perspective: ACO = Our Hospital + PCPs PATIENT Surgery HOSPITAL ACO Primary Care Physician Medical Care Labor & Delivery Primary Care Physician Primary Care Physician PATIENT PATIENT PATIENT PATIENT PATIENT
  32. 32. Looking Through the Patient’s (& Purchaser’s) Eyes PATIENT High Cost/Low Quality Cardiac Surgery Low Cost/High Quality Orthopedic Surgery HOSPITAL #2 Low Cost/High Quality Cardiac Surgery High Cost/Low Quality Orthopedic Surgery HOSPITAL #1 Low Quality Primary Care Physician High Quality Primary Care Physician Avg. Quality Primary Care Physician REGION
  33. 33. Patients Will Want: Medical Homes + Value-Based Acute Care Choice PATIENT Primary Care Medical Home High Cost/Low Quality Cardiac Surgery Low Cost/High Quality Orthopedic Surgery HOSPITAL #2 Low Cost/High Quality Cardiac Surgery High Cost/Low Quality Orthopedic Surgery HOSPITAL #1 Med. Quality Primary Care Physician Low Quality Primary Care Physician
  34. 34. Brookings/Dartmouth Carilion Clinic, Roanoke, VA Pilot <ul><li>Large group, fully integrated, with little competition </li></ul><ul><li>900 providers </li></ul><ul><li>60,000 Medicare patients </li></ul><ul><li>ACO pilot starts 2010 </li></ul><ul><li>UHC, Anthem, CIGNA, South Health interested </li></ul><ul><li>Anticipate savings from reduced ancillary and ER visits, hospitalizations, and readmissions </li></ul>
  35. 35. Brookings/Dartmouth Norton Healthcare, Louisville, KY Pilot <ul><li>Medium group, not completely integrated, with moderate competition </li></ul><ul><li>398 employed providers </li></ul><ul><li>30,000 Medicare patients </li></ul><ul><li>Formed steering group </li></ul><ul><li>Internal discussions with providers, board, management </li></ul><ul><li>Active discussions with payers </li></ul><ul><li>Bi-weekly calls with Brookings, Dartmouth, Humana </li></ul>
  36. 36. Brookings/Dartmouth Tucson Medical Center, Tucson, AZ Pilot <ul><li>Small group, independent provider groups, with highly competitive provider/clinical environment </li></ul><ul><li>50 providers </li></ul><ul><li>5,000 Medicare patients </li></ul><ul><li>Collaborative ACO vs. Integrated ACO </li></ul><ul><li>Quality and Efficiency programs </li></ul><ul><li>Patient-centered medical home </li></ul><ul><li>P4P and gainsharing models </li></ul><ul><li>EHR/HIE initiatives </li></ul>
  37. 37. Implications of Federal Reform <ul><li>Fee-for-service eliminated </li></ul><ul><li>Survival will depend on health information technology </li></ul><ul><ul><li>Tracking: quality, claims </li></ul></ul><ul><ul><li>Care transitions </li></ul></ul><ul><ul><li>Data mining and exchange </li></ul></ul><ul><ul><li>Disease management </li></ul></ul><ul><li>New purchasers of services </li></ul><ul><ul><li>ACOs </li></ul></ul><ul><ul><li>Medicare </li></ul></ul><ul><ul><li>Consumers (CLASS Act) </li></ul></ul>
  38. 38. LarsonAllen Expects 7 Themes <ul><li>Providers will be asked to accept greater financial risk for outcomes </li></ul><ul><li>Operational efficiency will be critical </li></ul><ul><li>Collaboration among all providers to survive </li></ul><ul><li>Investments in technology will be needed </li></ul><ul><li>Increased quality expectations, reporting, and monitoring </li></ul><ul><li>Elevated regulatory risk </li></ul><ul><li>Increased focus on community-based services and care </li></ul>
  39. 39. The Hype Cycle: Waves of Irrational Exuberance Time Expectations Real Progress Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity Adapted from Gartner Research <ul><li>ACO Hype 2010 </li></ul>
  40. 40. Annals of Science: The Covenant Peter J. Boyer, The New Yorker, September 6, 2010 <ul><li>“ Collins concedes that the prospects of sudden, practical benefits from the genome were initially overstated by some, and may still be a decade or more away. ‘You know about the first law of technology…A technological advance of a major sort almost always is overestimated in the short run, for its consequences – and underestimated in the long run’” </li></ul><ul><li>Venter estimates the medical benefits derived from the human genome to be “close to zero” </li></ul>
  41. 41. References <ul><li>Harold Miller, How to Create Accountable Care Organizations, Center for Health Care Quality and Payment Reform </li></ul><ul><li>Fostering Accountable Health Care, Health Affairs 28, no. 2 (2009), 219-231 </li></ul><ul><li>Brookings/Dartmouth Issue Brief on ACOs </li></ul><ul><li>Nicole Otto Fallon, Shifting from Volume to Value, VCPI, August 24, 2010 </li></ul>

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