Post-Acute Care & Beyond


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How innovative care delivery models and technologies are breaking the cycle of unnecessary hospital admissions.

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Post-Acute Care & Beyond

  1. 1. Post-Acute Care & Beyond How i n novat iv e c a r e del ivery model s an d t ec hn o lo g ies a r e breakin g th e cycl e of un n ec essa ry h o s p ita l adm iss ion s Q4 / 2012 Industry Perpsective UNCOMMON CLARITY 1
  2. 2. Founded in 1997, TripleTree provides independent, research-driven advisory services on mergers and acquisitions, recapitalizations, divestitures and raising growth capital for innovative companies in healthcare. We are continuously engaged with decision makers across the sector including best-in-class companies balancing competitive realities with shareholder objectives, global companies seeking growth platforms, and financial sponsors assessing innovation investments or first mover opportunities. 2 TRIPLE-TREE.COM
  3. 3. Q4 Table of Contents INDUSTRY PERSPECTIVE 05 / MAJOR TRENDS AND MARKET FORCES 20 / SKILLED NURSING / REHABILITATION 6 / A PERFECT STORM IS LOOMING 22 / HOME HEALTH 13 / UNDERSTANDING READMISSIONS 24 / DME / HME / INFUSION 16 / A CALL TO ACTION 25 / HOSPICE 17 / PAYERS 29 / TREATMENT IN PLACE – The Most 17 / PROVIDERS 18 / CONSUMERS Impactful Mode Of Care For Reducing And Reduce Unnecessary Inpatient Utilization Unnecessary Admissions 19 / POST-ACUTE CARE – Solutions To Organize Care, Engage Consumers / Patients / Members, 31 / SUPPORTING TECHNOLOGY PROVIDERS 34 / INTEGRATED CARE & CARE COORDINATION 39 / LOOKING AHEAD
  4. 4. EXECUTIVE SUMMARY • One in every ten hospital admissions could have been avoided with 6% coming from avoiding chronic condition- Health reform is still taking shape as 30 million additional related admissions and 4% from preventable acute Americans enter the U.S. healthcare system. Beyond conditions. 2 improving access, a paramount objective of the “Patient Protection and Affordable Care Act” (PPACA) is to create integrated care and payment models that demand higher • Nearly one-fifth of Medicare beneficiaries in traditional feefor-service (FFS) are re-admitted to a hospital within 20 days of their original discharge. 3 degrees of accountability and drive improved health outcomes. It is increasingly clear that a tremendous opportunity exists Today, care delivery in the U.S. is highly fragmented and for innovative solutions that strengthen the seams between plagued with little coordination and communication across healthcare settings and promote a more holistic, integrated the healthcare system. Physicians are encouraged to narrow care system. Delivery models and supporting technologies that their focus and are trained to become experts in very specific can help patients navigate our rapidly transforming healthcare medical disciplines, and many healthcare strategists argue system and eliminate waste in a $63.5 4 billion post-acute that delivery models with greater focus and more repetitions care marketplace are not only integral to the sustainability of (commonly referred to as “focused factories”) improve the U.S. healthcare system, but will also garner significant outcomes. While this “practice makes perfect” model has interest from both the strategic acquirer and financial sponsor shown signs of success within each silo, it undermines the communities. importance and value of care coordination between them. Unnecessary hospital admissions account for more than $26 This report will analyze the market dynamics and trends that are driving demand for improved post-acute care coordination. billion 1 in excess cost, burdening the healthcare system today, a number that is poised to escalate as more Americans access developing post-acute care delivery strategies to break the our disjointed care delivery system. 4 It will also explore forward-thinking companies that are cycle of unnecessary patient admissions and re-admissions. TRIPLE-TREE.COM
  5. 5. Major Trends and Market Forces There is no need to read the 2,200 pages of the healthcare reform The post-acute care market, as shown in Figure 1 (next page), legislation to conclude that one of the primary aims of PPACA is represents a significant share of the care continuum and is an to manage the chronically ill, high cost patients responsible for a area of particular focus within the reform legislation. The care vast majority of healthcare spending in the United States. Today’s delivered following a patient’s discharge from the hospital, is highly specialist-based, hospital-centric delivery system requires little fragmented and uncoordinated and typically crosses multiple sites, accountability for cost and quality and provides limited incentives including skilled nursing, rehabilitation, home health and hospice. for care coordination services. Without holistic, integrated care Fragmentation and poor communication are causing over $26 billion coordination models, patients repeatedly bounce between multiple in unnecessary hospital admissions – a top priority for policy makers, sites of care (hospital, emergency room, home, etc.) leaving them with payers and providers. hefty medical bills and suboptimal care plans designed to promote a full recovery. MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 5
  6. 6. Figure 1: Fragmented Post-Acute Care Delivery System (Representative Constituents) Hospital Skilled Nursing / Rehabilitation Home Health Hospice A Perfect Storm is Looming Medicaid: Insurance coverage expansion is the centerpiece of the Historically, post-acute care has been primarily viewed as an “add- healthcare reform law. What is less commonly known is the fact on” to our nation’s healthcare system. However, healthcare cost that over 75 percent of the 30 million Americans expected to gain and outcomes data have reversed this trend as a growing number insurance in 2014 will be covered under state-administered Medicaid of patients are requiring continued and coordinated care to achieve programs. According to CMS, PPACA will result in 23 million new a full recovery. This is especially true as an explosion of high-risk Medicaid enrollees in 2014 as the new healthcare reform law expands individuals with multiple chronic illnesses is poised to occur in our coverage to all adults under age 65 with incomes below 133% of the disjointed healthcare system in 2014. According to CMS, PPACA Federal Poverty Level. This expansion is problematic in many ways. will expand access to coverage to over 30 million Americans across Compared to the low-income privately-insured population, Medicaid the Medicaid and individual markets. While the volume of entrants is beneficiaries are more likely to be in fair or poor health. As illustrated certainly notable, the risk profile (i.e. utilization rate, lack of adherence, in Figure 3, 33 percent of non-disabled, childless adults are in fair health status, etc.) and the impact that these newly insured individuals or poor health compared to 12 percent of those individuals covered will have on our healthcare system cannot be overstated. A perfect by private insurance. Similarly, roughly 44 percent of non-disabled storm is looming, creating a pressing demand for new services that Medicaid enrollees have two or more chronic conditions compared promote coordinated, cost effective and high quality care. to 28 percent of the privately insured. These comparisons highlight many of the common behavior patterns we see across the Medicaid population: 6 TRIPLE-TREE.COM
  7. 7. Figure 2: A Perfect Storm is Looming Hospital • • Skilled Nursing / Rehabilitation Hospice Limited to no engagement with a primary care physician High utilization of certain services, such as pharmacy, inpatient hospital and emergency room services. Medicaid enrollees access care through the emergency room at twice the rate of the uninsured and privately covered populations[5] • Home Health . . . An explosion of highrisk individuals with multiple chronic illnesses is posed to occur in our disjointed healthcare system in 2014. Poor adherence to treatment plans MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 7
  8. 8. Figure 3: Health Status of the Privately Insured Versus the Medicaid Population The Congressional Budget Office (CBO) estimates that PPACA’s Medicaid expansion will cost the federal government $434 billion that an additional 10 million individuals will receive coverage either over the next decade, accounting for more than 40 percent of the through insurance exchanges or directly from a private insurer. healthcare law’s total expenditures. In addition to increasing the Many of the provisions in the healthcare reform law, however, will federal deficit, the expansion will have a significant impact of drive increased adverse selection, thereby creating a risk pool state budgets, healthcare provider budgets, and patients’ ability to that cannot be overlooked. The following are a few of the most access care. 8 Individual: As a result of the individual mandate, CMS estimates impactful provisions: TRIPLE-TREE.COM
  9. 9. Community Rating. Prevents insurers from varying premiums Medicare: In 2011, the first wave of baby boomers turned 65; by on the basis of a policyholder’s age, gender, or health status. 2030, it is projected that there will be 72 million elderly Americans This provision will increase the cost of health insurance for the aging into Medicare – more than double the number from 2000. This healthy individual and reduce the costs for sicker individual. • startling demographic change has tremendous implications for our society, ranging from the availability and utilization of our healthcare Guaranteed Issue. Forces insurers to cover everyone with resources and economic costs to the fundamental principals that pre-exiting conditions and therefore drives up premiums. If shape our lives. As we develop new strategies for care in the post- an individual can buy insurance after getting sick, that person acute care market, it makes sense to focus first on the segment has every incentive to drop out of the system until he or she is of the population that accounts for the vast majority of overall actually ill. • healthcare spending. It is well known that chronic conditions drive a wildly disproportionate share of costs across all demographics, with Mandatory Benefits. Forces plans to cover certain services (e.g. more than 84 percent of our total healthcare dollars consumed by maternity care and substance abuse treatment). In other words, persons with one or more chronic diseases. This becomes even more it is a a good deal for a pregnant female or a couple planning to pronounced in the Medicare population, with more than 99 percent have a child. Otherwise it’s another reason to drop coverage. • of all Medicare expenditures associated with members who have one or more chronic conditions. As a result, any successful effort to Tax Penalties. The magnitude of the penalty (roughly $100) for moderate the cost of healthcare is highly dependent on effectively not purchasing insurance will not compel healthy individuals to managing chronic and/or multiple conditions in this segment of the purchase insurance. • population. Clearly, the incentives to purchase insurance are in favor of the highrisk individuals. MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 9
  10. 10. Dual Eligibles While the explosion in Medicaid and Medicare eligibles will have Duals are among the sickest and poorest individuals covered under a meaningful effect on the healthcare system, no segment of the Medicaid or Medicare and therefore account for a disproportionate population captures this phenomenon better than the dual eligible percentage of healthcare costs. As illustrated in Figure 4, average population. It is so important that our team at TripleTree is in the per capita Medicare spending for dual-eligible beneficiaries is more midst of concluding a research report on dual eligibles. than twice that of non-dual-eligible beneficiaries, which is reflective of this population’s greater health needs and utilization of services Approximately nine million individuals are currently covered by compared to other Medicare and Medicaid beneficiaries. both the Medicaid and Medicare programs. These individuals are commonly referred to in the health policy arena as dual eligibles or “duals”. While this population represents just 15% of the total fee-for-service (FFS) coverage setting, where many individuals Medicaid population, duals account for over 39% of total Medicaid receive excellent care, but where there is no means of (or spending. Similarly, they represent 21% of Medicare enrollees, but accountability for) ensuring that duals’ considerable health needs are 36% for total Medicare expenditures. With state budgets under being addressed in a high quality and cost-effective manner. Today, increasing pressure from the economic downturn and continued coordinated care programs currently serve a modest proportion of the sputtering of the U.S. economy, politicians and policy makers are nation’s dual eligibles with just one million duals receiving Medicaid intensifying their focus on developing solutions to address the benefits through a managed care program in 2009. However, both growing spend burden of this demographic. Specifically, states are states and managed care organizations are clearly signaling that dual looking to control costs by moving their dual eligible populations to eligibles are top priority, and therefore we should expect to see these managed care contracts, shifting the responsibility to health plans constituents make aggressive moves to serve this population. Thirty- and exploring managed care approaches via care coordination seven states and the District of Columbia have submitted letters of models. As a result, Medicaid and multi-line insurance carriers are interest to CMS to coordinate care for dual eligibles, and the Center for jockeying for a position to win contracts that in aggregate represents Medicare and Medicaid has chosen 15 states to design new approaches more than a $300 billion market opportunity. 10 These expenditures have predominantly occurred in the traditional to coordinate care for this population. TRIPLE-TREE.COM
  11. 11. Managed care organizations are also making bold strides to position organizations are looking to leverage their footprint in the Medicare themselves as constituents in the dual eligible market. UnitedHealth’s market to capture more shares of the Managed Medicaid / Dual acquisition of XLHealth is an example of how managed care Eligible market. Figure 4: The Cost of the Dual Eligible Population Differences in spending and service use rate between dual-eligible beneficiaries and non-dual eligibles Differences in spending and service use rate between dual-eligible beneficiaries and non-dual eligibles Average Medicare Payments AVERAGE MEDICARE PAYMENTSfor all Beneficiaries FOR ALL BENEFICIARIES ($ In Actuals) Service Average Medicare Payments for all Beneficiaries Benificiaries Inpatient Hospital Physician Inpatient Hospital Outpatient Hospital Physician Home Health Outpatient Hospital Skilled Nursing Facility Home Health Hospice Skilled Nursing Facility Prescirbed Medication Hospice Prescirbed Medication Total Medicare Payments Total Dual Hospitalizations Variance Dual-Eligible Non-Dual-Eligible Benificiaries Service Dual-Eligible $ 5,369 $ $ Non-Dual-Eligible $ 2,751 2,884 5,369 $ 1,647 2,884 752 1,647 1,160 752 403 1,160 4,262 403 4,262 16,477 Variance $ $ 16,477 $ Total Medicare Payments Source: MedPAC, CMS Source: MedPAC, CMS - need to confirm 60% / 40% split Total Dual Hospitalizations 2,618 2,294 2,751 886 2,294 379 886 484 379 153 484 852 153 $ Total Dual Hospitalizations 590 $ 2,618 761 590 373 761 676 373 250 676 3410 250 852 7,799 Poten&ally   Avoidable   Admissions   Poten&ally   40%   Avoidable   3410 $ 8,678 7,799 Non-­‐ Avoidable   Admissions   Non-­‐ 60%   Avoidable   Admissions   60%   Admissions   40%   $ 8,678 Source: MedPAC, CMS - need to confirm 60% / 40% split MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 11
  12. 12. United’s Purchase of XL Health In February 2012, UnitedHealth Group purchased XL Health, a Baltimore-based Medicare Advantage plan that focuses primarily on Special Needs Plans (SNPs), including members with chronic illnesses and dual-eligibles. XL Health serves over 113,000 Medicare Advantage members and is one of a few Medicare Advantage plans that successfully serves the chronic disease population. The XL Health acquisition solidifies United Healthcare’s (UHC) lead in managing the dual-eligible population, the largest reserve of untapped revenue for the managed care industry, and an end-market where managed care can prove a superior ability to improve lives, lower medical expenses and earn a profit by coordinating the care and payment of care for frail elderly, disabled and other duals. Figure 5: Intensified Focus on the Dual Eligible Opportunity Buyer Target UnitedHealth Group XL Health Inspiris Humana Senior Brige MetCare Cigna HealthSpring WellPoint CareMore TA Associates Senior Whole Health Oak Investment Partners Independent Living Systems Univita All-Med Services 12 TRIPLE-TREE.COM
  13. 13. Understanding Readmissions Primary Causes of Readmissions Each year, nearly nine million people – 24,000 per day – are discharged from shortterm acute care hospitals and require some form of post-acute care. The most • Communication. An inadequate relay of information by hospital discharge planners to patients, caregivers, and postacute care providers, to ensure the patient understands to the treatment plan • Compliance. Poor patient compliance with care instructions, medication therapy, etc. primarily as a result of the patient receiving little or no information on how to achieve a successful recovery • Follow-up. Inadequate follow-up care from post-acute and long-term care providers or failure by the patient to schedule a follow-up appointment with their physician • Support. Family members or caregivers common settings include but are not limited to sub-acute and post-acute nursing facilities, the patient’s home, primary and specialty care offices, rehabilitation facilities, home health, hospice, long-term care facilities and other institutional, ambulatory and ancillary care providers. Patients receiving post-acute care typically see multiple physicians in as many settings, often creating a confusing and a hard-to-follow regimen of medications and treatments. For the patient, their caregivers and family members, it is not surprising that communication problems and other errors proliferate as patients transition between settings. Adverse events often occur during care transitions and are concentrated among individuals with complex and chronic conditions. Accordingly, a failure to communicate critical information related to a patient’s medical care, support services, safety, medications, and other matters can compound the situation. These adverse events result in a substantial number of unnecessary hospital admissions. According to Medpac, among Medicare patients: • rehospitalized in 90 days. are often uninformed or unable to provide the necessary care and support for transitioning the patient from the hospital to the home 20 percent are rehospitalized within 30 days, and more than one-third are • More than 76 percent of these rehospitalizations are said to be avoidable and cost our healthcare system more than $26 billion per year. MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 13
  14. 14. Figure 6: Care Trends Post Discharge The causes of unnecessary hospital admissions are complex, multifaceted and interrelated. The most common variables include severity poorly understood. What is clearer, however, is that despite the fact of illness, communication with patients and families, medication that the problems of high readmissions rates and poor coordination errors and compliance, and coordination with community clinicians, have been known for many years, little to no improvement has been caregivers and family members. Each of these factors can play a 14 role, but the relative importance is difficult to measure and therefore made in our healthcare system in our very recent history. TRIPLE-TREE.COM
  15. 15. Figure 7: Change in 30-Day Readmission Rates Following Discharge Condition % Readmissions % Change Company Profile 2004 2009 Medical 15.9% 16.1% 1.2% CHF 20.9% 21.2% 1.4% AMI 19.4% 18.5% -4.6% Created by Select Medical and Pneumonia 15.1% 15.3% 1.7% Universal American and backed Hip Fracture 14.3% 14.5% 1.4% by Welsh Carson, NaviHealth Surgical 12.7% 12.7% 0.0% Source: The Dartmouth Institute for Health Policy & Clinical Practice partners with health plans, health systems and post-acute providers to manage the entire continuum of post-acute care. In February As illustrated in the Figure 7, the rate of readmissions increased from 2004 to 2009 2012, NaviHealth purchased for five of the six causes of hospitalizations studied. Only readmission rates for acute SeniorMetrix, which utilizes a myocardial infractions (heart attack) improved only slightly, decreasing from 19.4% to decision-support technology to 18.5% - a positive development, but not enough for a healthcare system that needs to project therapy regimens, most do more. So what does this tell us? appropriate care settings and timing of expected outcomes. In a new world of ACOs, bundled payments, value based purchasing, STAR ratings and consumerism, the opportunities for new service models and technology providers to improve the cost and quality of care in the post-acute care market through more holistic and integrated care delivery models is tremendous. MAJOR TRENDS AND MARKET FORCES // INDUSTRY PERSPECTIVE Q4 / 2012 15
  16. 16. A CALL TO ACTION The post-acute care market is estimated to be a $63.5 billion market[6]. Aside from its sheer size, there are a number of factors that are contributing to the increased attention the post-acute care market is receiving. Figure 8 provides a brief overview of the key factors driving a focus on the post-acute care market for payers, providers and consumers. Figure 8: A Call to Action for Payers, Hospitals / Health Systems, and Consumers 16 TRIPLE-TREE.COM
  17. 17. Payers Company Profile Several of the factors listed in Figure 8 are impacting the ways in which health plans view post-acute care. HEDIS measures, Star Ratings and ACOs have payers Recapitalized by Summit Partners in increasingly accountable for their performance across several important dimensions September 2011, Carecentrix, Inc. of care and service. With more plan members (many of whom are among the is a provider of home health benefits sickest) accessing the post-acute care market for the range of reasons mentioned management services that recently heretofore, improving the post-discharge coordination of care, patient experience launched a Care Transitions program and outcomes is a priority. Payers, both public and private, are aggressively seeking designed to reduce avoidable hospital lower cost alternatives to hospital admissions / readmissions and improved care admissions and other adverse medical coordination across the continuum of care to eliminate waste. events. Carecentrix’s HomeSTAR (“Successful Transition and Recovery”) Providers program was designed to help In a post reform world of value-based purchasing and bundled payments, providers health plans and providers decrease are held more accountable, primarily through financial penalties, for the care avoidable hospital readmissions and they provide. In October 2012, Medicare started penalizing hospitals with high other adverse medical events while readmissions rates – defined as patients being readmitted within one month of improving patient satisfaction in discharge – by reducing reimbursement by as much as one percent. The maximum their care. Through this program, penalty increases to two percent the following year and three percent in 2014. Carecentrix identifies members at risk These penalties are one of the Affordable Care Act’s efforts to reward hospitals for for an adverse event, stratifies the the quality of care they deliver instead of the quantity of services. With hospitals risk, and mitigates the risk by enrolling facing penalties, theoretically they will take ownership of following-up with them into structured care plans discharged patients. According to the Kaiser Family Foundation, Medicare evaluated delivered face-to-face in the home. readmissions rates at 3,367 of the nation’s hospitals and imposed penalties on 2,200 in October 2012 with 278 hospitals receiving the maximum penalty of one percent.[7] A CALL TO ACTION // INDUSTRY PERSPECTIVE Q4 / 2012 17
  18. 18. While the reimbursement risk associated with this program may seem insignificant, many providers operate under single digit margins, making even a 1% reduction in Company Profile Medicare reimbursement meaningful. For example, if a hospital’s total inpatient operating payments for FY 2012 were $25 million, that hospital will have $250,000 at risk for reimbursement reduction in this program. With the maximum penalty increasing 1% per year until FY 2015, the penalty and dollars at risk will undoubtedly heighten providers’ focus on their readmission rates. Consumers Established consumer engagement platforms are increasingly exploring additional capabilities to address market demand for payer / provider / consumer collaboration as healthcare With consumers increasingly on the hook for the cost of care, individuals are no reform drives convergence. longer standing on the sidelines and are instead demanding more transparency, MEDSEEK is a provider of information and a greater role in managing their own health. With that comes an online strategic engagement ever-increasing financial and administrative challenge, and as our healthcare system and analytics solutions. The is inundated with an aging population and new Medicaid members, demands from company’s software platform helps the post-acute care market will include tools to help them navigate their journey healthcare organizations attract post discharge. and retain patients and improves patient experience and care Hospitals, health systems, managed care organizations, and post-acute providers through enhanced patient-doctor are all keenly aware of and engaged in discovering innovative delivery and payment communication and information models, technologies and services to transform the post-acute care market. Success accessibility. however, will require trust, collaboration, cooperation and aligned incentives between providers, payers, consumers and policy makers. 18 TRIPLE-TREE.COM
  19. 19. POST-ACUTE CARE Solutions To Organize Care, Engage Consumers / Patients / Members, And Reduce Unnecessary Inpatient Utilization A number of solutions are solely Figure 9: The Post-Acute Care Market Landscape focused on care coordination services and technologies, but a comprehensive review of the market place should include various providers across the post-acute care continuum. While skilled nursing, rehabilitation and home health providers may not have dedicated programs to improve care coordination per se, they do play a very important role in the post discharge care experience for patients. The integrated care delivery / care coordination providers and supporting technology providers identified in Figure 9 support the post-acute care providers and patient as they transition from setting to setting. POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 19
  20. 20. Skilled Nursing / Rehabilitation The $200 billion skilled nursing and rehabilitation market is in CMS’ initiative in addition to the Hospital Readmissions Reduction the midst of a transformation, and in a new world of ACOs and Program is forcing skilled nursing care facilities to reevaluate their readmission penalties, these providers will play a significant role in current delivery models. As hospitals face Medicare reimbursement helping hospitals reduce readmissions and providing patients with reductions for unnecessary readmissions, they will seek to partner coordinated and professional care in a sub-acute environment. with facilities that actively play a role in reducing those readmissions. There are many programs currently being developed to focus on In March 2012, the Medicare-Medicaid Coordination Office and the this issue, but one that seems to have gained acceptance in the Center for Medicare and Medicaid Innovation announced the Initiative marketplace is the INTERACT II (Interventions to Reduce Acute to Reduce Avoidable Hospitalization among Nursing Facility Residents. Care Transfers Version II) program, designed to improve the early Through this initiative, CMS is partnering with seven organizations identification, assessment, documentation, and communication about to implement strategies to reduce avoidable hospitalization for dual changes in the status of residents in skilled nursing facilities. This eligibles who are typically long-stay residents at nursing facilities. program includes specific tools around communication, advanced Each participant in the initiative is required to partner with a care planning, quality improvement, and care paths that were refined minimum of 15 dual eligible certified nursing facilities in the same and tested in a six-month collaborative improvement project with 25 state where the intervention will be implemented. The goal of the nursing homes in three states. initiative is to: In addition to implementing INTERACT II, Life Care Centers of America (LCCA), one of the nation’s largest skilled nursing providers, is • Reduce the number of and frequency of avoidable hospital making some waves in the industry through its success in reducing admissions and readmissions; rehospitalizations. Beginning in 2010, LLCA began placing a full-time • Improve beneficiary health outcomes; • Provide better transition of care for beneficiaries between an earth shattering idea, the impact was certainly noteworthy - in just inpatient hospital and nursing facilities; and • Promote better care at lower costs while preserving access to beneficiary care and providers 20 TRIPLE-TREE.COM doctor in some of its facilities. While this move does not seem to be one year, LCCA reduced re-hospitalization at its facilities with a fulltime physician to 15% from 40%. In addition to a dramatically reduced
  21. 21. readmissions rate among those participating facilities, LLCA also • outstanding experience; experienced reduce staff turnover and improved clinical outcomes. • Genesis Healthcare is another example of a skilled nursing provider Enhanced Guest Services team and training to ensure an Expanded dining services in multiple locations, including cafes, dining rooms and room service. leading the initiative to reduce hospital readmissions. Genesis, a leading provider of short-term post-acute, rehabilitation and skilled Although reducing rehospitalizations may negatively impact skilled nursing care services, launched a new discharge product called nursing facilities revenue in the short-term (e.g. fewer Part A SNF PowerBack Rehabilitation aimed to reduce post-discharge setbacks days), long-term care providers are increasingly pursuing this and transition patients back to their homes as quickly as medically goal anyway, believing that higher quality care will enhance possible, rather than a nursing home that lumps all patients together, referrals in the long-run. LLCA is certainly experiencing regardless of specific needs or acuity level. increased referrals as a result of its recent successes and we anticipate other innovators like Genesis and Extendicare to see Genesis’s Brightwood campus is the first of its kind to offer the referral gains in the near future as well. innovated model of care (PowerBack) which features: • Expanded clinical capabilities to include cardiac, orthopedic and pulmonary specialized care; • Two full-time physicians and three full-time nurse practitioners on campus; • State-of-the art therapy technologies; • Therapy pool; • A 4,000 square foot therapy gym open 12 hours a day; • Added care planning and daily schedules to be directed by the patient; POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 21
  22. 22. Home Health As illustrated by the cost and length of stay statistics publish by In recent years, the home health industry has been battered by a MedPac in Figure 10, home health represents a very compelling care challenging reimbursement environment and increased regulatory delivery option for payers, providers and most importantly, patients scrutiny into the Medicare reimbursement practices at many of post discharge. The key question is how home health providers in the industry’s largest players. In the longer-term however, we the older world of fee-for-service payment models and generally view the home health industry as an attractive market for growth limited collaboration with hospitals are now redefining their value and consolidation as ACO tailwinds intensify and the appropriate proposition and developing new models of care to meet cost and incentives are implemented to reduce overall healthcare costs. quality requirements under healthcare reform. Figure 10: Home Health Versus Other Post-Acute Care Options Hospital LTAC IRF SNF Hospice Home Health Avg. Cost of Stay $10,043 $38,582 $17,582 $10,833 $11,217 $5,706 Avg. Length of Stay 5 days 27 days 13 days 27 days 86 days 120 days Avg. per Diem Cost $1,853 $1,450 $1,304 $400 $130 $48 Source: US Census Bureau and MedPac March 2012 Report 22 TRIPLE-TREE.COM
  23. 23. Amedisys, one of the largest publicly-traded home health and hospice Amedisys’s Comprehensive Continuous Chronic Care Management in providers, is one company taking a leading position in demonstrating the Home or C4M, combines existing home care infrastructure with the value proposition that home healthcare providers can provide in technology and clinical capabilities to provide intensive continuous a new world of accountability. Designed to deliver care to the most home-based health care. complex, chronic and costly patients in the comfort of their homes, Figure 11: Amedisys C4M READMISSION RATES External Benchmarks Amedisys Benchmarks < 30 days: 4.7% - 6.2% < 30 days: 1.48% - 1.60% 31-60 days: 8.1% - 10.7% 31-60 days: 1.17% - 1.76% 61-90 days: 6.5% - 12.8% 61-90 days: 0.62% - 1.32% 91+ days: 8.2% - 14.1% 91+ days: 0.70% - 0.90% 1. Department of Health and Human Services-Offices of Inspector General 2000, 2002, 2004, 2005 2. 2002 NHS Trust Plan and Report 3. 2004 Institute for Healthcare Improvement 4. Healthcare Cost Containment Council 2005 1. Post episodic DM call center results 2. 14,313 patients tracked over a 6 month period POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 23
  24. 24. As the value that home health can provide to our healthcare system DME / HME / Infusion is demonstrated by innovators like Amedisys, TripleTree anticipates The $27 billion durable medical equipment (DME) industry is at an significant private equity investment and consolidation in the years important inflection point. While margins are being squeezed as a to come. Growth, via acquisition, is very common in the home health result of CMS’s Competitive Bidding Program, DME companies are industry as the market remains highly fragmented with over 11,500 also being confronted with new opportunities to play a greater role home health agencies in the U.S. The four largest, publicly-traded in the post-acute care continuum. DME companies already have players (Amedisys, LHC Group, Almost Family, and Gentiva) account an established position in the home, which ideally positions them for 15% of the market. After several years of robust M&A volume, to expand their services and create a more holistic home health 2011 experienced a meaningful dip as a result of reimbursement cuts, approach. Some industry players have attempted this in the past increased audits and investigations and talks of sequestration. with little avail, as the incentives for hospitals and other providers to leverage these expanded services were limited. Today, penalties In addition to the traditional strategic buyers in the space (i.e. the for readmissions and other incentives are changing the game for the large publicly-traded home health and hospice organizations), DME industry. This influence of penalties and incentives has DME the compelling fundamentals of the home health industry are vendors relying on partner organizations for automated solutions. also attracting some out-of-the box buyers as exhibited by The Once such firm is Brightree, who offers a cloud based billing and Washington Post Company (NYSE: WPO), a diversified education and business management platform for a range of provider settings. media company, purchasing a majority stake in Celtic Healthcare, a provider of skilled home health-care and hospice services the Univita Health provides a clear example of how a once traditional northeastern and mid-Atlantic regions. DME provider is transforming itself to become a comprehensive care delivery and coordination provider in the home. Over the last three years, Univita Health has purchased segments of the home health care industry and combined them to deliver holistic services in a new, coordinated way to become a one-stop shop for managed care and employers to manage their chronically ill and elderly patients. 24 TRIPLE-TREE.COM
  25. 25. • March 2012: Acquired All-Med Services of Florida, a DME/HME Hospice home and hospital delivery company. • The hospice market has seen consistently strong growth over the January 2010: Acquired Atenda Healthcare Solutions and its affiliated companies, including Florida Home Medical Equipment. • December 2009: Acquired Enurgi, a web-based service for caregiving and family support. last several years. Since 2004, the hospice market has grown 12% per annum as a result of favorable demographic trends, strong political support, favorable reimbursement trends and increased realization of the value proposition hospice services provide. Despite an acceleration of M&A volume over the last four years, the hospice market remains By integrating these disparate services into its existing operations incredibly fragmented with the top players (Chemed (Vitas), Gentiva, and creating a broader suite of services, Univita Health is creating Amedisys, and LHC Group) owning just 15% of the market[8]. The significant value for its managed care and employer customers. remainder of the market is dominated by both non-profit and private Univita Health has inked deals with large managed care companies non-profit single state and regional players. M&A has been a common to manage their chronically ill members in the home on a capitated growth avenue for the industry’s largest players and TripleTree expects basis. By offering an integrated, single source solution for home this activity to continue as hospice continues to play a greater role care, Univita is transforming how care is delivered in the home while in integrated care delivery and coordination. Both home health and driving accountability and outcomes and reducing readmissions hospice have been targeted areas for aggressive expansion for Kindred healthcare costs. Healthcare, which purchased IntegraCare Holdings, Inc., a provider of home health, hospice and community services, from private equity firm, Flexpoint Ford, for $75 million in total consideration. In order to support a continuum of care within an ACO or bundled payment environment, Kindred is seeking opportunities to provide integrated and coordinated care throughout a post-acute episode. As illustrated by Kindred’s acquisition of IntegraCare, home health and hospice are a key component of the company’s strategy to provide high quality, patient-centered integrated care. POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 25
  26. 26. Post-Acute Providers (e.g. Hospice): A Foundational Element of Accountable Care It is no secret that the ACO movement will have a profound impact on The most likely ACO / post-acute provider strategies that will emerge provider approaches towards care coordination, provider-to-provider in the evolving ACO environment will resemble the following: collaboration, and patient engagement. An important component in the formation and success of ACOs will be the introduction of • ACO / Provider Partnership to Provide Services to Entire value-based reimbursement where providers will be placed at “risk”, Population – similar to an exclusive or preferred partnership in making them responsible for overspending and rewarding them which an ACO contracts with a provider (or multiple providers) to across certain quality measures. In this new payment environment, provide post-acute services to the entire member base. it will be imperative for ACOs to create an integrated system of care • ACO / Provider Partnership to Address Specific Concerns or coordination among providers and partners that includes initiatives to Cost Drivers – An ACO contracts with provider to provide specific aggressively monitor member patient health and drive care outside of post-acute services to address key concerns and / or cost drivers inpatient settings. In doing so, the primary focus will be: (i.e., readmissions, drug adherence, and emergency department utilization). • Avoiding high-cost care episodes resulting from poor risk identification and member health monitoring. • Delivering routine care and preventive services in low-cost, efficient settings. • ACO / Provider Partnership to Treat Specific Members – An ACO contracts with a provider to provide targeted post-acute services to a specific subset of members. For example, an ACO many contract with a home health provider to provide standard care / monitoring services to members with diabetes. While post-acute providers are unlikely to serve as an organizing partner of an ACO, they provide a tremendous value-add to ACOs The playbook for ACOs is relatively the same regardless of the partnership by enabling chronic care management, extending care coordination arrangement; all scenarios involve a heavy emphasis on providing the efforts, and facilitating the provision of care in lower-cost settings necessary preventive and follow-up care in lower cost settings in order to (through home health or hospice services). control costs as well as to minimize the impact high-cost care episodes. 26 TRIPLE-TREE.COM
  27. 27. A recent example of how these emerging ACO / post-acute provider services account for 10 percent of the nation’s $2.6 trillion healthcare relationships might unfold is through CMS’ Pioneer ACO Program, budget. Furthermore, for those aged 65 and older, the last 12 months an initiative designed to test the impact of different payment of life account for 27 percent of total costs. Given the potential arrangements on organizations operating as ACOs or similar spending burden that these types of conditions create and the arrangements in controlling Medicare spending. Michigan Pioneer resultant pressures that would be placed on an ACO, it is no secret ACO (Michigan ACO) is a partnership between the Detroit Medical that the post-acute space will be a critical focus area for ACOs and Center (DMC) and its physicians and was selected to introduce similar risk-bearing entities. a specialized case manager pilot program identifying terminally ill patients that require customized care at home. To operate the As the ACO movement continues to take shape and build momentum program, the Michigan ACO signed a three-year contract with over the next few years, it is likely that subsequent ACO / post-acute Hospice of Michigan, where through its HOMe subsidiary, terminally provider partnerships will emerge as these providers address a ill patients are provided with comprehensive home medical services. critical (and costly) part of the care continuum. The goal of this pilot program is to reduce unnecessary costs associated with end-stage illness (HOMe also has contracts with several other leading Michigan payers, including Blue Care Network, Priority Health and United Healthcare, to provide similar services). The Michigan ACO example highlights the growing payer / ACO acceptance of the vital role that post-acute providers play in controlling healthcare costs (as well as their willingness to form partnerships in order to distribute these services effectively). In the case of the Michigan ACO, where efforts were directed towards controlling end-of-life spending through hospice care, the program is especially significant given that studies have shown that end-of life- POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 27
  28. 28. Figure 12: Case Study Snapshot – Michigan Pioneer ACO Michigan Pioneer ACO Detroit Medical Center Hospice of Michigan 28 TRIPLE-TREE.COM
  29. 29. Treatment in Place – The Most Impactful Model of Care for Reducing Unnecessary Admissions and adhere to a plan of care for each individual patient, (ii) monthly Both Evercare, a business unit within UnitedHealth Group’s Optum escalation to the NP upon identification of a change in condition platform, and Bluestone Physicians Services are examples of with the patient, and (iv) implementation of a care plan that avoids innovative care delivery models that are having a significant impact the unnecessary hospital admission by treating the patient in their on reducing cost and significantly improving the quality of care for home. The value proposition that this model (and Bluestone Physician our systems most frail and expensive patients. The construct of these Services’) delivers to each constituent is tremendous: NP visits with daily monitoring by the NP and SNF staff, (iii) models are similar and therefore accomplish a common goal – deliver holistic and integrated care to the patient in their home to improve • Members. Better health outcomes and reduced hospital admissions; clinical quality and reduce unnecessary utilization, resulting in fewer more benefits and services than FFS Medicare, including ER visits, acute admits and re-admits. coordinated care focused on individual needs of the enrollee; • Facilities. Increased revenue through more skilled nursing days Evercare in the facility, rather than admitting the member to the hospital; Evercare deploys a patient-centered approach to providing primary members receive better care; improved clinical and health care to the systems sickest and most costly members. Through outcomes; increased member and family satisfaction; partnerships among individual patients, their healthcare providers, • Providers. Comparable reimbursement as Medicare; improved clinical outcomes and additional support for patient through the NP; and the patient’s family, Evercare cares for seniors, individuals with long-term or advanced illness, and members with complex needs. • CMS / States. Lower costs of care. Evercare’s roots can be traced to the nursing facility environment where the nurse practitioner (NP) is the central component of this For more than 20 years, Evercare has achieved strong results, model and provides routine and more intensive primary care while including improved medication adherence and utilization working in collaboration with nursing home staff and primary care management, decreased hospital admissions by 50%, and industry physicians. The primary objectives of the model are (i) to establish leading member and family satisfaction ratings. POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 29
  30. 30. Bluestone Physician Services Through an interdisciplinary team of physicians, nurse practitioners Bluestone’s care model has transformed how care is delivered to and physicians assistants, Bluestone Physician Services (Bluestone) the assisted living and group home populations in the Twin Cities provides on-site primary care services to complex, frail and special area of Minnesota. The company has contracted with several local needs patients in assisted living, memory care and group home health plans to serve over 3,000 patients in more than 130 assisted communities. The company’s delivery model is supported by a living communities. Today, Bluestone is sharing its model with robust communications portal and EHR that allows the nursing staff, other geriatric care providers and developing even more enhanced homecare and hospice nurses, and family members to reach the care care coordination strategies to further drive change across our team (as opposed to dialing 911) when a change in condition occurs healthcare system. and deliver high quality, coordinated care. Bluestone’s care plans are customized with the family for each patient to assure appropriate end-of-life care, further reducing costs and improving care quality. Each patient visit includes the review of current medical concerns and medications, as well as preventative care, foot care, skin care, chronic disease management and arrangement of specialty care when needed. This type of ongoing preventative care has proven to not only reduce the need for emergency care and trips to the hospital, but also significantly improve overall health. 30 TRIPLE-TREE.COM These two models exemplify what healthcare reform is all about – improved quality, improved outcomes and greater affordability.
  31. 31. Supporting Technology Providers Company Profile Supporting technology providers can play a pivotal role in care coordination post discharge. When a patient leaves a hospital they and their caregivers require all, but Homecare Homebase is a healthcare software company serving the technology needs of the home health and hospice industries. The company offers a comprehensive integrated webbased software solution to improve the clinical, operational and financial success of home health and hospice agencies. Homecare Homebase’s software connects nurses and workers in the field to central offices, capturing billing, patient and care information, eliminating paper-based administrative tasks and ensuring compliance with Medicare standards. It can be used on a variety of different platforms, including smartphones. The web-based software can be updated immediately in response to new regulations without users having to upgrade to a different version. not limited to the following: (i) information about their treatment plan, (ii) education about their medications and other equipment, (iii) reminders about medications and follow-up appointments, and (iv) proper transition of patient information and medical records between hospital physicians and ambulatory-care physicians. The common thread amongst all of these requirements is communication and patient / caregiver engagement. From both a research and advisory perspective, TripleTree is well versed in the dynamics surrounding the explosion of interest in healthcare consumerism. Shifting retail-based models and engaging the consumer are some of the motivations behind market consolidation and ‘net new’ approaches between and amongst providers, payers and consumers. While ACOs, value-based purchasing, and other incentives / penalties for increased accountability are taking hold, so too have the strategies of consumer engagement platforms to address the growing market demands for payer / provider collaboration and improved care coordination. Figure 13 highlights some of the most notable investments, product launches and acquisitions in the consumer engagement space that illustrate the need and opportunity for consumer engagement solutions to drive improve outcomes at a lower cost. POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 31
  32. 32. Figure 13: Consumer Engagement Activity Continues to Accelerate January 2012 April 2012 •  RedBrick Health launches mobile platform for consumer health and wellness engagement •  Liazon Corporation raises $18 million from various investors, including Bessemer Ventures, Bain Capital, and Beacon Bioventures •  change:healthcare announces $10 million equity raise June 2012 February 2012 •  Altegra Health acquires patient communications company Warm Health • partners with Accenture for the implementation of a statewide California Health Exchange •  Aon Hewitt invests $40 million on internal development of exchange platform •  Through Q2 2012, HCSC has invested $100 million in replatforming MEDecision with enhanced patient engagement solutions Q1 2012 Q3 2012 Q2 2012 2011 •  Eliza recapitalized by Parthenon •  Xerox partners with Medco Health Solutions on new communications system •  Varolii raises $8 million from various investors •  Aetna acquires PayFlex •  Optum Health acquires Connextions March 2012 •  Precision Health Media raises venture funding and expands leadership team May 2012 Today August 2012 •  Castlight announces $100 million raise •  SolutionReach announces growth equity investment from Summit Partners •  MEDSEEK announces buyout with Silver Lake Sumeru and Essex Woodlands •  Healthline launches Consumer Engagement Platform •  Change Healthcare announces new leadership after partnership and capital raise from BCBS •  Connecture raises $20 million in a recapitalization lead by Great Point Partners •  Towers Watson acquires Extend Health for nearly 7x revenue CO N F I D E N T I A L Property of TripleTree, LLC. Not For Distribution. 32 TRIPLE-TREE.COM 8
  33. 33. Multi-model consumer engagement has become a top priority across payer, provider Company Profile and PBM with the realization that the healthcare industry is amidst a transition from a business-to-business (B2B) to a business-to-consumer (B2C) model. Technologies Founded in 1999, Curaspan Health Group, Inc. is connecting providers hospitals, post-acute care providers, payers and transportation companies via secure electronic patient-transition networks to improve outcomes as patients transition between sites and levels of care. With a customer base of over 400 hospitals and 4,000 postacute care providers, the company’s SaaS-based Synchronized Patient Management Solution is catching the eye of our nation’s largest providers and payers by enabling these parties to communicate and securely share real-time, clinical information, access patient data in any setting and use that and services to communicate at the right time, with the right message, through the desired mode, have proven to drive increased actions individuals must take to obtain the greatest benefit from the healthcare services available to them. Amongst a myriad of evolving technology solutions, Phytel is taking a leading role in providing innovative solutions that automate care coordination and health management programs to improve outcomes and reduce cost in the post-acute market. Phytel has a deep product suite of automated patient engagement, population reporting, care coordination, discharge follow-up and patient self-management tools. In particular, Phytel Transition provides a comprehensive toolkit that closes provider communication loops and empowers patients and their providers to improve outcomes by: (i) identifying high-risk patients, (ii) communicating post-discharge instructions and educating the consumer, and (iii) gauging the patient experience. A wide range of technologies have the potential to support post-acute care transitions. The following table provides an overview of these technologies, their applications and their potential outcomes. data to drive better clinical outcomes. POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 33
  34. 34. Figure 14: The Potential Impact of Supporting Technologies TECHNOLOGY APPLICATIONS • Patient Education • Medication adherence & reconciliation • Remote patient monitoring • Personal health information • Social support • Remote training an supervision EXAMPLE TECHNOLOGIES • Automated patient communication • Medication reminders and dispenser • Medication list software • In-home diagnostic devices • Problem detection algorithms • Videoconferencing • Social networks POTENTIAL OUTCOMES • Reduced hospitalizations • Increased patient satisfaction • Reduced costs • Improved health • Increased quality of life Integrated Care & Care Coordination Providers – Emerging Care Delivery Models profiled below are a few of the industry players that have developed Despite the fact that the need for care coordination services has models that are poised to have a significant impact on care been apparent for some time, the industry is still in its infancy coordination and costs within our healthcare system. or currently provide solutions to support emerging care delivery with regards to design and implementing programs that show measureable results. One only needs to consider Medicare spending and its unsustainable path, which will only worsen as the quality became ever more apparent when Humana announced baby boomers continue to age. Drastic changes are underway for on November 5th its agreement to purchase Metropolitan Health the Medicare program to ensure its long-term sustainability and Networks (MHN), a provider of coordinated and accountable to care while Medicare Advantage is a part of the solution, government to over 87,500 MA, Medicaid and other customers. Over 80% of policy will impact the profitability of commercial insurers. How MHN’s revenues were generated through contracts with Humana these insurers manage care across a variety of post-discharge to manage the care of its members in Florida on a capitated- settings is a massive lever for cost management. The companies 34 The trend of vertical integration and aligning physician pay to basis, whereby MHN assumes the risk for all of its patients’ cost. TRIPLE-TREE.COM
  35. 35. Figure 15: MHN’s Utilization Results Medicare Population Metropolitan Health Networks Results Admission / 1,000 335 317 Down 5% Hospital Days / 1,000 1,968 1,412 Down 28% Average Length of Stay 6.2 4.23 Down 32% Acute Readmissions 21% 9% Down 12 ppt Generic Dispensing Rate 60% 84% Down 24 ppt Utilization Metric Source: Metropolitan Health Network Q2 2012 Investor Presentation Through the company’s newly formed subsidiary, Symphony Health practices, has achieved proven results (Figure 15) of high quality Partners, Inc., MHN has struck a graduating risk arrangement with care, lower costs and improve patient satisfaction and providers Humana to manage the provision of healthcare services to nearly across the U.S. one million Humana Medicare Advantage members in Cincinnati, Northern Kentucky, and Indianapolis service areas. After the first The purchase of MHN is Humana’s latest foray into providing medical two years of the contract, during which Symphony will receive a services, as the insurer seeks more levers to control rising costs base administrative fee, the arrangement shifts to a limited risk basis in Medicare. We expect further vertical integration as medical cost beginning in 2014, followed by full-risk in 2015. MHN’s provider- management has become a critical focus for this country, given centric model is becoming increasingly popular, as it helps lower skyrocketing healthcare costs and ballooning deficits. Regardless, costs and increase quality by giving physicians additional financial MHN’s patient-centric approach to care coordination has driven results incentives to keep patients out of the hospital. The company’s model that should be the envy of payers and providers across the U.S. of care, which includes a physician network of 33 owned primary care practices and 450 contracted independent primary care POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 35
  36. 36. Independent Living Systems (ILS) provides an integrated suite of care management solutions focused on long term managed care, nutritional support services, complex care management, care transition services, and a range of other member management related services. As shown in Figure 16, these synergistic services create a patient-centered, holistic approach to long-term care that enables strong partnerships among individual patients, caregivers, payers and the care delivery system. Today, ILS serves over 2.5 million lives on behalf of its health plan clients and is gaining significant traction as its value proposition to the major healthcare constituents continues to proliferate. Figure 16: ILS’ Integrated Suite of Care Management Solutions Managed Long-Term Care Nutritional Support Services Complex Care Management Care Transition Services Holistic care and support services provided in the home of Medicare, Medicaid and Duel Eligibles Provides means and nutrition services to members to help them regain and maintain their health Patient-centric communication that facilitates access to community based services and expert care coordination for the elderly, those with special needs, and dual-eligible populations and their families A holistic approach to transition services to provide critical support, care coordination and guidance to patients post discharge to facilitate a successful recovery at home for elderly and at-risk populations “High-touch”, “low-cost” services that address daily living and innovate systems that monitor, measure and report care Post discharge meals: meals are delivered to the patients home immediately upon discharge Following a telephonic assessment, A group of highly trained nurses, social workers, and care coordinators work as a team to manage the care and services identified on a member’s individualized care plan Individualized counseling. Coach meet with patients in hospital prior to discharge, follow-up with a home visit in 72 hours and maintain contact telephonically during transition (up to 60 days) Reduces financial burden for consumers, payers and providers Chronic Care & Disease Management Meals. Nutritional plans for those with chronic diseases, To optimize the utility of the service, ILS has developed a proprietary cloud-based care management tool that integrates member data with metrics relevant to health plans’ needs Comprehensive home visit. Assessment of the patient’s needs and lifestyle through a home visit Meals for sustained health living. Ensure members have access to health meals, particularly when they are unable to shop for or prepare themselves 36 TRIPLE-TREE.COM Specialized technology. Identifies institutionalized members and manages cases through a web-based portal, which can be integrated into a health plan’s existing medical management and operational processes
  37. 37. The Power of Surveillance in Population of medications, chronic conditions and other indicators and assigns a Health Management personal health concierge to these members to lower medical expenses Managing the care of a health plan’s installed membership base requires superior surveillance capabilities to identify the individuals by facilitating effective care, increased patient satisfaction and improved quality scores (HEDIS and STAR ratings). that need the most support from the healthcare system. Establishing a plan of action and closing each patient’s unique gaps in care, improves outcomes, quality and patient satisfaction. On the backs of traditional HEDIS and Medicare Advantage risk adjustment audits and more recently the Affordable Care Act, a new category of clinical auditing solutions are emerging that cut across cost, care and quality management. One company that is at the forefront in changing how individuals are cared for in the healthcare system is Outcomes Health While the health plan marketplace must continue to invest to automate its legacy medical management competencies, the industry is most focused on innovation and collaboration. However, legacy care management / population health management platforms are woefully inadequate to address today’s and tomorrow’s market needs: • from retrospective care management towards real-time / Information Solutions (Outcomes). Outcomes is a leading provider of end-to-end solutions for healthcare data acquisition, auditing and analytics for use in payment integrity, compliance and quality prospective population management • Advantage plans to measure and influence results by closing gaps in the day-to-day actions of providers • actionable intelligence. The company extracts meaning from volumes of diverse data to pinpoint patient care needs and address discrepancies, facilitating the right care at the right time for each specific patient. Additionally, the company’s senior care services identifies high-risk Need for Payers to “Cross the Chasm” and Become More Provider Relevant – Payer-based technology vendors must help care and quality. The company’s unique surveillance technology allows it to organize disparate data to efficiently listen to data and create Need to Empower Clinicians With Actionable Data at the Point of Care – Alert-driven workflow and analytics must be woven into reporting in the healthcare industry. More specifically, the company provides a “preemptive” suite of services that allows Medicare Need to Look Forward, Not Backward – Systematic shift away obtain connectivity inside the four walls of the provider office • Need to Help Enable Providers to Take on Payer-based Activities – Providers will be taking on more payer-driven activities and will be as focused on quality measure as well as HCC-risk scoring for their MA members patients and gaps in care via risk scores, prior admissions, number POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 37
  38. 38. ZeOmega ZeOmega, a provider of web-enabled and rules-driven workflow software for integrated care management, is taking a leading role in fulfilling these industry needs. The company’s solutions enable the integration of workflows across the care management continuum, automate workflows intelligently based on client business rules and facilitate collaboration between payers, providers and members, thereby transforming traditional episodic-based care management into a proactive and collaborative population management paradigm. With an installed base across health plans, TPAs, care and disease management organizations who collectively manage over 23 million members, ZeOmega is placing actionable intelligence in the hands of payers and providers to drive better outcomes, improved efficiencies and increased collaboration among all the major constituents in the healthcare ecosystem. 38 TRIPLE-TREE.COM
  39. 39. LOOKING AHEAD As we await the influx of new enrollees in the healthcare system in Hospice, Infusion Therapy, Managed Care, and On-site Healthcare 2014, a perfect storm is looming for which the healthcare system Delivery / Urgent Care) and looks forward to helping business could be grossly unprepared. While it is unlikely that one player in owners, investors and others interested in this important arena the post-acute care market can solve the problem of unnecessary within healthcare to understand and capitalize on the opportunities hospital admissions, we do believe that increased collaboration that undoubtedly exist. between the providers, payers and consumers can make significant strides in eliminating this waste in the system. The incentives for these constituents to work together are beginning take hold and innovators across the care continuum are making investments and developing new strategies to prepare for the explosion of high-risk individuals into our currently disjointed healthcare system in 2014. For a growing number of market participants, the post-acute care market represents an outstanding opportunity for growth and value enhancement. Entering 2013, we believe there is an increased demand for products, services and solutions in this category, resulting in continued strong growth, robust M&A activity and an increased focus from the professional investment community. TripleTree is dedicated to the Healthcare Services (Acute Care, Alternative Site Delivery, Care Coordination and Collaboration, Community-Based Care Delivery, DME Distribution, Home Care, POST-ACUTE CARE // INDUSTRY PERSPECTIVE Q4 / 2012 39
  40. 40. end notes 1 Agency for Healthcare and Quality, National Healthcare Quality Report, 2011. 2 Agency for Healthcare Research and Quality, Potentially Preventable Hospitalizations for Acute Chronic Conditions, November 2010. 3 AHIP, Innovations in Reducing Preventable Hospital Admissions, Readmissions, and Emergency Room Use, June 2010. 4 MedPac, Health Care Spending and the Medicare Program, June 2012. 5 American Action Forum, Healthcare Reform and Medicaid: Patient Access, Emergency Department Use, and Financial Implications for States and Hospitals, September 2010. 6 7 8 40 Represents Medicare spending June 2012 Amedisys Investor Presentation TRIPLE-TREE.COM
  41. 41.