Creating a Value-Based Medical Group

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John Lutz presents on the features of high-performing medical practices and key components to optimal efficiency under value-based reimbursement.

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  • The purpose of this slide is to level set the group around what they see and define as their real future state. Our current sense is that a large part of the initial phases of the engagement is to assist in developing a common definition of what “high performing medical group” means to FPN collectively.
  • Group practices must perform as efficient and effective teams, functioning as the complex, high volume, low margin businesses they are. “Ideal practice solution” in the middle. “High Performing Medical Group”
  • Group practices must perform as efficient and effective teams, functioning as the complex, high volume, low margin businesses they are. “Ideal practice solution” in the middle. “High Performing Medical Group”
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  • Creating a Value-Based Medical Group

    1. 1. Creating a Value-Based Medical Group 2013 MGMA Annual Conference October 7, 2013 John A. Lutz, FACMPE, Managing Director, Huron Healthcare
    2. 2. Agenda I. Learning Objectives II. Why Create a Value-Based Medical Group? III. Key Components for Success IV. Examples V. Necessary Competencies VI. Patient Centered Medical Homes/Practices VII. Challenges and Opportunities – Next Steps VIII. Q & A © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 2
    3. 3. Learning Objectives  Understand the strong practice framework necessary for enabling improved efficiency, care effectiveness, and profitability.  Identify key operational drivers and opportunities for enhanced capacity and productivity.  Implement the operational changes that improve profitability and support long-term medical group practice goals. © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 3
    4. 4. QUESTION: As you think about the future, what about your group practice keeps you awake at night? A. Uncertainty B. Independence C. Stability D. Income Preservation E. Staffing, reduced hours, work/life balance F. All of the above
    5. 5. Why Create a Value-Based Medical Group? A Dynamic Environment
    6. 6. A Dynamic Environment  Accountable Care Act: • Focus on population health and covered lives • Value-based payment models continue to grow  Federal and commercial reimbursement reductions and changes: • Reduced payment per procedure • Continuous SGR threat • Bundled payment initiatives • The reality of transitioning payment from procedure to value (e.g., bundles) © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 6
    7. 7. A Dynamic Environment  Physician groups must take a proactive approach to improving operational efficiency to be optimally positioned to thrive  Physician succession and supply/demand deficits  Physician compliance with evidence-based guidelines for chronic diseases and acute conditions  Research and technology advances  Patient and referring physician satisfaction  It’s the right thing for our patients! © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 7
    8. 8. Key Components for Creating a Successful Value-Based, High Performing Medical Group
    9. 9. What Defines a High Performing Medical Group? Characteristics Definition: 1) Providing ready access to the right mix of primary and specialty care providers; and 2) Supporting clinical staff in the right place and within welldefined clinical quality, revenue, and expense parameters.  Physician leadership in medical care and shared responsibility for non-clinical activities.  Uses defined policies and processes for quality measurement and improvement activities across sites of care and between patient visits.  Shared financial and regulatory responsibility and accountability for successfully managing the cost of health care, improving the patient care experience, and improving the health of its respective populations.  Uses a team-based approach that supports collaboration and communication among the patient, physician, and licensed or certified medical professionals across medical specialties and health care settings.  Use of interoperable information technology and comparative analytics.  A high performing medical group is able to meet the clinical demands of its target patient market and its partner institution(s) by: Use of compensation structures that provide incentives to physicians and licensed Advanced Practice Professionals (APPs) to leverage physician time, improve outcomes and manage expense. Source: American Medical Group Association © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 9
    10. 10. Financial Characteristics Key Financial Metric 2012 Median Performance 2013 Median Performance Median total medical revenue per FTE $538,803 $569,935 Median total operating cost per FTE $387,586 $413,334 $32,895 $34,108 Median total physician compensation/benefits per FTE $299,853 $322,274 Median total financial support per FTE $150,903 $82,683 Average practice overhead is ~35% of net patient revenue Internal Huron Benchmarks Internal Huron Benchmarks Total provider compensation is ~50% of net patient revenue Internal Huron Benchmarks Internal Huron Benchmarks Median total non-physician (comp/benefits) per FTE Source: MGMA Physician Compensation and Production Survey: 2012 Report Based on 2011 Data & 2013 Report Based on 2012 Data (with appropriate MGMA resource).Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. www.mgma.com. Notes: While hospital ownership is a growing component (~50% in 2012), independent groups still report higher median performance characteristics. Median compensation variances substantially by specialty. FTE = Full-Time Equivalent Physician © 2013 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. 10
    11. 11. Direction: What is your strategic plan? We (the group) must know (and agree on) what we want, the direction, and how to achieve it (together) in order for us to accomplish it (by objective measurement) and be successful (defined up front) in the future (time period). © 2013 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. 11
    12. 12. Creating Success: FIVE KEY COMPONENTS HIGH PERFORMING MEDICAL GROUP CLINICAL INTEGRATION FINANCIAL STABILITY OPERATIONAL EFFICIENCY CLINICAL EFFECTIVENESS There are five key components that must be optimized in order for a group to be high-performing, value-based, and successful under evolving payment models. ACCESS & CAPACITY MANAGEMENT © 2013 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. 12
    13. 13. Clinical Integration:  Right care, right time, right place, most appropriate cost. CLINICAL CLINICAL INTEGRATION INTEGRATION  “Triple Aim” commitment  Governance and leadership  IT  Medical management  Payer contracting  Compliance  Provider network  Financial strength  Defined population © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 13
    14. 14. Operational Efficiency:  Optimizing provider & staff productivity  Management control processes  Open scheduling  Ready patient access  Trained & proficient staff OPERATIONAL EFFICIENCY  Maximum technology utilization - EHR  Measurement – actual to benchmarks  Care coordination – PCMH  Referral management © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 14
    15. 15. Access & Capacity Management:  Patient access to physicians, staff, & facilities  Succession planning  Strategic partnerships  Appropriate contracted services  Revenue growth potential  Market share  Care coordination ACCESS & CAPACITY MANAGEMENT © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential.  Referral management 15
    16. 16. Financial Stability:  Realistic goals  Revenue & expense controls FINANCIAL STABILITY  Effective revenue cycle  Actual to budget performance  Variance analysis & benchmarking  Progressive physician compensation  Downstream revenue management  Payer contracting audits  Shared rewards for success © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 16
    17. 17. Clinical Effectiveness: CLINICAL EFFECTIVENESS © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential.  Quality management  Patient centered – Outcomes focused (PCMH)  Interdisciplinary care coordination  Performance dashboard  Care variation management  Member retention & growth  Downstream services contribution  Governance & leadership  Continuous improvement 17
    18. 18. QUESTIONS: Does your group practice have a strategic plan? Does your group practice currently utilize these five key components?
    19. 19. Necessary Competencies
    20. 20. Necessary Competencies for Value-Based Groups  Realistic goals  Physician commitment  Administrative leadership  Staff proficiency  Information technology  Aligned incentives  Expense management  Care management (From episodic to longitudinal care models)  Aligned “partnerships” © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 20
    21. 21. Clinical Effectiveness IMPROVEMENT AREAS Ensures patients access the right care setting at the right time to improve outcomes and maximize the use of valuable resources. Patient Access Clinical practice redesign that improves the reliability, quality, and safety of patient care by integrating medical, nursing, and ancillary practice while decreasing process variation. Care Variation Management © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. Case Management Proactive management of patients across the continuum, driving quality and cost effective care. Strong case management reduces avoidable admissions and minimizes delays in clinical settings (e.g. PCMH). Interdisciplinary Care Coordination Increases communication with the care team, ensures continuity of care, provides seamless transitions for your patients. 21
    22. 22. Clinical Operations A COMPREHENSIVE APPROACH Stockamp Patient Progression® Solution Current Hallmark Discharge Process Standardized Processes Patient is identified as a pending discharge Are the discharge orders written? Does the physician utilize SCM to notify nurses of discharge? Yes Yes Discharge orders are entered into SCM Orders print out at nursing station Unit secretary periodically checks the printer for orders No Does the patient require prescriptions? A Nurse waits for physician to write orders, as day progresses MD must find beside or charge nurse to communicate the DC orders are now complete Written discharge orders are placed in chart Nurse writes the discharge instructions No • Unit Secretary distributes orders into floor nurse's boxes Floor nurses check boxes once an hour for discharge orders No Nurse pages MD to complete the orders A Nurse notifies patient that their discharge is definite • • Yes Are prescriptions written and placed in chart? How is the patient leaving? Yes Process Improvement Self Patient given discharge instructions Family No Physician or patient, if capable, notifies family Floor nurse will page physician for prescription Patient Discharges No No Does the physician respond to page? Is notification successful? Yes Physician writes prescription Yes Family arrives at hospital Patient/Family are given discharge instructions Physician verbally notifies nurse that the prescriptions have been written or leaves them in the chart ©2002-2005, Stockamp & Associates, Inc. (Stockamp) USE SUBJECT TO LICENSE FROM STOCKAMP AND PAYER, COMPLIANCE, AND OTHER REQUIREMENTS CONFIDENTIAL AND PROPRIETARY Page 1 of 1 Current Discharge Hallmark Process.vsd Last Printed: 12/06/05 9:07 PM Status Communication Optimize Technology • • Operational Transparency Collective Ownership Accountability Structure Accountable Culture Establish consistent processes that minimize artificial variability Clarify individual roles and performance expectations Improve timeliness and effectiveness of communication (e.g., tools, key medical record inputs, policies) • • • Executive Reporting • End-to-end process visibility allows staff to see beyond their unit Establish goals and trend metrics across functions and departments Integrate tools to support best practices (e.g., reporting, bed board) Institute governance structure and collaboration forums Use metrics to support decision making and monitor performance Individual accountability through performance monitoring and feedback Sustained Operational Improvement | Increased Patient & Staff Satisfaction | Recurring Financial Benefit © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 22
    23. 23. Patient-Centered Medical Home
    24. 24. Patient-Centered Medical Home (PCMH) Patients are cared for in a Medical Home by a multi-disciplinary team. A Navigator or Health Coach works with the patient to engage the patient, assess health risks, and develop a Health Plan. Self-care management is enabled through tools, processes, and benefit design. Process • Health Planning: Periodic assessment of a patient’s specific health risks and development of a customized Health Plan. The Health Plan incorporates age/sex-appropriate wellness monitoring and interventions (e.g., mammograms, immunizations). • Health Management: Monitoring the patient’s health (e.g., hospitalizations), updating the Health Plan, monitoring compliance, and initiating reminders based on triggers to ensure patients stay on track with Physician’s orders. Includes coordinating care across the continuum (e.g., referral specialists, emergency care, hospital admissions, therapeutic care, skilled nursing facilities, home care). Includes medication reconciliation. Self-care management is supported and patients are provided with tools to proactively manage their health. • Health Education: Providing patient self-management information about managing existing health conditions as well as preventative care. People • Medical Home Team: Multidisciplinary team including participants such as Health Coach, Primary Care Physician, Nurse Practitioners, Dietician, Social Worker (provides integrated behavioral health clinical services and linkage to other communitybased services), Physical Therapist, etc. • Care Manager: Supports Medical Home Team © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. Tools/Systems/Enablers • Health Risk Assessment Tool: Used to identify health risks • Patient Self-Care & Education Tools: Multiple vehicles such as 24x7 care line staffed by RNs, online/ interactive tools, social media, brochures (e.g., on Urgent Care Clinic availability), etc. • Benefit designs promoting self-care: e.g., no co-pays for office visits. • Rewards for activities: such as joining a smoking cessation program. • EMR / Personal Health Record: Medical history, medications, recent hospitalizations, emergency or urgent care visits, health maintenance. • Advance Directives • Patient registries, referral protocols, medication adherence guidelines • Community resources 24
    25. 25. Next Steps Operational Challenges & Opportunities
    26. 26. Operational Challenges & Opportunities  Identification of goals and specific needs: • Existing patients • Community served • Group owners • Employees/payers  Resource capabilities: • Physicians/APPs • Administrative leadership • Other staff members • IT • Medical management • Connectivity • Capital © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 26
    27. 27. Operational Challenges & Opportunities        Third party partnerships Measurement and evaluation capabilities Third party contracting Continuous performance improvement and strategic planning Incentives and rewards for measurable improvement “Go slow to go fast” OPC - Outcomes/Processes/Connections © 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential. 27
    28. 28. Q&A

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