Yes, this is cool and is very important because it's healthcare related, business oriented, quality improvement, and will improve your life

1. Dave Janiec, Director of Payment Strategy
Chris Vannello, Director of Quality
Rothman Institute, Philadelphia, PA

2. 1. Understand how the industry’s current fee-
for-service model presents a challenge in
the transition to value-based care.
2. Steps that can be taken to prepare for
participation in a value arrangement.
3. Understand how to gauge success in
alternative payment models and how to
effectively communicate actionable
information to providers.
Learning Objectives

3. 170 Physicians
45 PA’s & NP’s
Ancillary
Services
65 Researchers
& Staff
•Joints
•Spine
•Hand
•Shoulder & Elbow
•Foot & Ankle
•Sports Medicine
•Ortho-Oncology
•Trauma
•Pain Management
4 Pro Teams
6 Colleges
43 High Schools
Providers Clinical
Research
Department
X-Ray; MRI;
PT/OT;
Orthotics,
Nutrition
Sports Team
Coverage
Services
Rothman Private Practice Overview

4. What is an Episode of Care?
Episodes of Care
All clinically related services a
patient receives in the course of
treatment for a specific
condition.

5. Patient
Encounter
Initial:
Op vs Non-Op
Patient
Encounter
Operative
Patient
Encounter
Post-Operative
Acute/Urgent
MSK POPULATION HEALTH CONTINUUM
Episode of Care

6. • Demand Matching
• Risk Assessment/Stratification
• Navigation System & Process
• Care Coordination Network
• Collect and Analyze Data
Bundled Program Management

7. Bundled
Service
ASC
Specialty
Hospital
Comm.
Hospital
Univ.
Hospital
PT
Home
Health
Rehab
Facility
Low High
Low High
Cost Structure
Rehab Requirements
Cost Structure
Acuity Level
Low High
Operative Facilities Post-Op Care (Rehab)
*Demand Matching – Selecting the appropriate implant (facility) based on five demand
categories: age, weight, expected activity, general health, bone stock. (Lahey Clinic – 1995)
Pre-OP
Low High
Navigating the Episode of Care

8. Auto-Scores Risk
Result, Pertinent
Positives Displayed
RISK:
Patient answers
Yes/No Questions
43 Medical & 15
Social Questions
• Do you have:
• Diabetes?
• Seizures?
• Sleep Apnea?
• Do you live alone?
• Do you require assist
with daily activities?
Risk Assessment

9. Ortho-Navigator
Navigation Features: Dashboard
• Through EMR portal,
patient fills out health
history form
• Certain responses are
used to auto-calculate
Risk Assessment Score:
• Clinical Risk Assessment
• Social Risk Assessment
• Data feeds nightly from
EMR to Navigation
system
• Navigator work lists auto-
populate with surgical
encounters booked for
their surgeon
• Each surgeon is mapped
to a navigator
• 5-10 surgeons per
navigator

10. Ortho-Navigator
Navigation Features: Dashboard
Filter
& Sort
Canned reports
- Audit Logs
- Inactive episodes
- Episodes w/o Risk Data
Some tasks are automatically scheduled
based on date of surgery

11. Virtual Narrow
Network –
Each Market
Care Coordination
Agreement
“Value” Providers
Quality Care Alliance Partners
Care Coordination

12. Skilled
Nursing
Facilities
Urgent
Care
Centers
Inpatient
Rehab
Facilities
Home
Health
Agencies
(Nursing, Rehab)
Physical
Therapy
80 QCAP Provider Agreements already in place
Quality Care Alliance Partners

13. QI Committees
Guidelines
& Protocols
Active w/Hospital
QI Committees
Transparency
Monitor
Data/Performance
Improvement
Research
Data

14. Physician Metrics Reporting

15. Physician Metrics Reporting

16. Readmission Rates 2016
1.81%
(163)
0.56%
(50)
Overall
Readmission
Rate 2.37%
(213/8986)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Readmission
Rate
2016 TJA 30 & 90 Day Readmission Rate
Joint Team
31-90
0-30
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Bilateral Readmission Rate
3.28%
(25/762)
2.27%
(5/220)
2.37%
(208/8766)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Readmission Rate:
BMI > 40
Readmission Rate:
BMI ≤ 40
Readmission
Rate
2016 TJA Readmission Rates
by BMI range

17. Readmission by Primary Reason 2016

18. Physician Readmission Rates 2016

19. Hospital Readmission Rates 2016

20. 2.38%
Readmission by Risk Level 2016
Overall Risk Level = 2.38%

21. 2.43%
(218/8986)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
2016 TJA Complication Rate
Joint Team
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Complication &
BMI>40 (%)
Complication &
BMI<40 (%)
1.36%
(3/220)
2.45%
(215/8766)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Bilateral TJA Complication Rate
3.54%
(27/762)
Complication Rates (2016)

22. Complication by Reason
Top 20 Reasons (2016)

23. Complication by Risk Level 2016
2.43%
Overall Risk Level = 2.43%

24. 0.08%
(7)
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
2016 TJA 90 Day Morality Rate
Joint Team
0.68%
(61)
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
2016 TJA 90 Day Reoperative Rate
Joint Team
Mortality & Reoperation Rates 2016

25. Primary TJA 2016
BMI > 40

26. 62.7%
27.0%
10.3% 13.0%
28.8%
58.8%
Risk Assessment
PRIMARY TJA - SOCIAL
RISK
PRIMARY TJA - MEDICAL
RISK

27. Discharge Disposition

28. • Patient Satisfaction
• New Patients
• Post-Op
• Functional Outcomes
• Clinical Outcomes
Think Tank Benchmarking

29. Patient Reported Outcomes - HOOS

30. Patent Reported Outcomes - KOOS

31. • Do what is right for the patient
• Engage physicians to drive
programs
• Success naturally follows
Rothman Institute Philosophy

32. THE RULES ARE CHANGING…
Healthcare Reform

33. INTERNATIONAL COMPARISON OF HEALTHCARE SPENDING 1980-2011
Source: www.tandigmhealth.com
Healthcare
Cost Structure
Key Challenges In US Healthcare System

34. Unsustainable Cost Lack of Coordination
Variation in Quality
20%
OF GDP BY 2021
$700B
WASTE ACROSS US SYSTEM
2X
COST PER CAPITA VERSUS OECD
NATIONS
45%
CARE INCONSISTENT WITH
RECOMMENDED GUIDELINES
$210B
UNNECESSARY SERVICES
3X
VARIATION IN HOSPITAL DAYS IN
LAST 6 MONTHS OF LIFE
19.6%
MEDICARE HOSPITAL
READMISSIONS
$45B
ANNUAL COSTS FOR AVOIDABLE
COMPLICATIONS
$91B
REDUNDANT ADMINISTRATIVE
PRACTICES
Source: Sam Nussbaum, MD, “Advancing Health Care
Quality, Access, and Affordability Through Innovation”
Key Challenges in US Healthcare System

35. PPACA
(“Affordable Care Act”)
• Passed Mar 2010
• 2409 Pages
* Medicare Access & CHIP Reauthorization Act of 2015
** Comprehensive Care for Joint Replacement
Legislation Impacting Healthcare 2010-2016
ACO
(Accountable Care Organization)
• Released Oct 2011
• 695 Pages
BPCI
(Bundled Payment for Care
Improvement)
• Released Aug 2011
• 45 Pages
MACRA*
• April 2015
• SGR/“Doc Fix”
• MIPS
• AAPM
CJR**
• Released Jan 2016
• Mandatory Program
• 67 MSAs
• BPCI Model 2 similar
What’s Next?
• Repeal & Replace
• Modification of ACA

36. Patients (Demand)
• >40M more insured (ACA)
• MC beneficiaries 44M ↑ to
79M in 2030 (AARP)
Concerns
• Access
• Quality
• Service
Key Challenges in US Healthcare System
Physician (Supply)
• 38% > 50 years old (AMA)
• 33% retire next 10 yrs
(AAMC)
• Younger physicians working
fewer hours
• Shortage of 150,000
physicians by 2030 (AAMC)
• Limited residency slots

37. Integrated
Health
Systems
Hospital-
Based
Physicians
Urgent Care
and
Minute Clinics
Employer
Direct
Contracting
Healthcare Trends

38. • Fee-for-Service
• Per Diem/Case Rate
• Volume Driven
Paid for activity
Current Payment Structure

39. What is an Episode of Care?
Episodes of Care
All clinically related services a
patient receives in the course of
treatment for a specific
condition.

40. Value = Quality/Cost
The Value Equation

41. Employer Direct
Contracting
Retrospective Bundle:
Demand Matching
BPCI Model 2:
Focus is post-acute
Retrospective Bundle:
Demand Matching
Prospective Bundle:
Facility Based
Retrospective Bundle:
Demand Matching
Payer Partners

42. • Hip Replacement
• Knee Replacement
• Knee Arthroscopy
• Low Back Pain
• Lumbar Laminectomy
• Osteoporosis
• Shoulder Replacement
Rothman Contracted Bundles

43. EOC Shared Savings Update
By Payer and Episode 2015-2017

44. “Value” as defined by consumers
is associated with four attributes:
• Accessibility
• Service
• Effectiveness
• Cost
Value
Patient Perspective
Keckly, The Meaning of "Value" in Healthcare, 2015
Stremikis, Harvard Business Review, 2013

45. • Control pathway
• Coordinate effort
• Develop efficiencies
• Engage patient
• Maintain reimbursement
Value
Provider Perspective

46. • Triple Aim
• Patient Satisfaction
• Population Health
• Cost Reduction
Value
Government/Payer Perspective

47. • Patient
• Patients understand when focus is them
• One payment reduces confusion
• Physicians
• Returned to center of care
• Coordinated care, proper risk assessment
• Payers
• Minimize risk
• Higher quality network
Benefits of Bundling

48. Opportunities
Participation Strategies
Episode of Care / Bundled Payment

49. • Most Common
• Current Fee-for-service billing
methodology
• Comparative net savings
against historic performance
• CMS – 48 DRGs - defined
episodes exist today
Bundling (Retrospective)

50. • Less Common
• Up front payment for episode
• Includes all services
• Replaces fee-for-service look
back
• May include physician, facility,
anesthesia, post-acute, etc.
• More risk transferred to provider
Bundling (Prospective)

51. Payer
• CMS
• Commercial
• Employer
Risk Partners
• Payer
• Hospital
• Surgeon
• Post-acute
Services
• Non-operative
• Pre-surgical
• Post-operative
Duration
• Surgical event
• Post-discharge
0/30/60/90
Bundle Considerations

52. • Price Determination
• Retrospective vs. prospective
• Guided by historic performance (own/market)
• Inclusions/exclusions
• Earning Savings
• Net reimbursement < than target (retrospective)
• Actual cost < negotiated rate (prospective)
Pricing the Bundle

53. Ensure
Sufficient Volume
Common Conditions
Health Plan Steerage
Include
Appropriateness
Criteria
Thoughtful Program
Development
Learning Tool
Manage
Risk
Risk- Adjusted
Payments
Reinsurance
Simplify Bundle
Definition
Systems Fractured
Keep It Simple
Bundled Payment: Lessons Learned

54. COMMERCIAL MARKET DATA
Average
EOC
Payment
$36,366
Percentile
*Truven Commercial Market Data, 2014. Navigant Consulting
$32,836
$20,836
$14,642
25th, 50th, 75th, 90th Percentiles: Surgical Facilities*
Joint Replacement

55. Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 364 20,398
$ 14,242
$ 6,156
$
KNEE 531 20,443
$ 13,784
$ 6,659
$
Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 14 26,679
$ 14,166
$ 12,513
$ HIP 364 20,398
$ 14,242
$ 6,156
$
KNEE 31 24,612
$ 14,024
$ 10,588
$ KNEE 531 20,443
$ 13,784
$ 6,659
$
Utilization Details by Joint* Utilization Details by Joint*
IRF SNF HHA PT IRF SNF HHA PT
Utilization % 7% 50% 43% 64% Utilization % 3% 24% 41% 54%
Average Cost 18,677
$ 12,988
$ 4,336
$ 1,750
$ Average Cost 15,410
$ 9,312
$ 3,266
$ 922
$
Utilization Count 1 7 6 9 Utilization Count 12 86 149 196
Total Cost 18,677
$ 90,919
$ 26,015
$ 15,748
$ Total Cost 184,922
$ 800,834
$ 486,672
$ 180,741
$
Per Diem/Visit 13 26 25 23 Per Diem/Visit 11 19 19 12
IRF SNF HHA PT IRF SNF HHA PT
Utilization % 0% 65% 45% 90% Utilization % 2% 23% 35% 65%
Average Cost -
$ 8,437
$ 3,129
$ 1,267
$ Average Cost 12,814
$ 8,657
$ 3,149
$ 1,415
$
Utilization Count - 20 14 28 Utilization Count 10 123 188 346
Total Cost -
$ 168,740
$ 43,799
$ 35,479
$ Total Cost 128,138
$ 1,064,760
$ 592,079
$ 489,543
$
Per Diem/Visit - 17 18 17 Per Diem/Visit 9 17 18 19
KNEE KNEE
------------ ---------------, MD Program Average for Bundle Eligible Surgeons
HIP HIP
Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 14 26,679
$ 14,166
$ 12,513
$
KNEE 31 24,612
$ 14,024
$ 10,588
$
CMS Episode Cost Analytics
Average Cost Data
By Surgeon compared to Practice

56. Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 19 14,954
$ 13,484
$ 1,470
$ HIP 364 20,398
$ 14,242
$ 6,156
$
KNEE 61 17,171
$ 13,765
$ 3,406
$ KNEE 531 20,443
$ 13,784
$ 6,659
$
Utilization Details by Joint* Utilization Details by Joint*
IRF SNF HHA PT IRF SNF HHA PT
Utilization % 0% 0% 5% 32% Utilization % 3% 24% 41% 54%
Average Cost -
$ -
$ 5,479
$ 749
$ Average Cost 15,410
$ 9,312
$ 3,266
$ 922
$
Utilization Count - - 1 6 Utilization Count 12 86 149 196
Total Cost -
$ -
$ 5,479
$ 4,496
$ Total Cost 184,922
$ 800,834
$ 486,672
$ 180,741
$
Per Diem/Visit - - 31 10 Per Diem/Visit 11 19 19 12
IRF SNF HHA PT IRF SNF HHA PT
Utilization % 0% 5% 3% 62% Utilization % 2% 23% 35% 65%
Average Cost -
$ 5,510
$ 3,166
$ 1,402
$ Average Cost 12,814
$ 8,657
$ 3,149
$ 1,415
$
Utilization Count - 3 2 38 Utilization Count 10 123 188 346
Total Cost -
$ 16,529
$ 6,332
$ 53,264
$ Total Cost 128,138
$ 1,064,760
$ 592,079
$ 489,543
$
Per Diem/Visit - 11 18 19 Per Diem/Visit 9 17 18 19
Financial Best Practice – Lowest Average Episode Cost Program Average for Bundle Eligible Surgeons
HIP HIP
KNEE KNEE
Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 364 20,398
$ 14,242
$ 6,156
$
KNEE 531 20,443
$ 13,784
$ 6,659
$
Joint Episodes Avg. Epi Cost Avg. IP Cost Avg. PAC Cost
HIP 19 14,954
$ 13,484
$ 1,470
$
KNEE 61 17,171
$ 13,765
$ 3,406
$
CMS Episode Cost Analytics
Average Cost Data
Best Financial Performance compared to Practice

57. All Cases Cost Outliers Cases Net Cost Outliers
Case
count
Epi Cost
(avg)
Savings /
Deficit
(sum)
Savings /
Deficit (per
case)
Case
count
Case
(perc)
Epi Cost
(avg)
Savings /
Deficit (sum)
Savings /
Deficit (per
case)
Case
count
Case
(perc)
Epi Cost
(avg)
Savings /
Deficit
(sum)
Savings /
Deficit (per
case)
33 $ 21,897 $ (6,621) $ (201) 2 6% $ 73,360 $ (103,326) $ (51,663) 31 94% $ 18,577 $ 96,705 $ 3,120
* Index hospital cost, Part B cost & DME billed during IP stay.
** Outpatient costs, Part B costs & DME billed during 90 day Post-op period
*** Readmitting hospital cost only
Improved CMS Analytics
Total EOC by Surgeon, Quarter & Cost Category

58. Physician #2:
* Index hospital cost, Part B cost & DME billed during IP stay.
** Outpatient costs, Part B costs & DME billed during 90 day Post-op period
*** Readmitting hospital cost only
All Cases Cost Outliers Cases Net Cost Outliers
Case
count
Epi Cost
(avg)
Savings /
Deficit
(sum)
Savings /
Deficit (per
case)
Case
count
Case
(perc)
Epi Cost
(avg)
Savings /
Deficit (sum)
Savings /
Deficit (per
case)
Case
count
Case
(perc)
Epi Cost
(avg)
Savings /
Deficit
(sum)
Savings /
Deficit (per
case)
54 $ 17,232 $ 241,089 $ 4,465 1 2% $ 33,486 $ (11,789) $ (11,789) 53 98% $ 16,925 $ 252,878 $ 4,771
Improved CMS Analytics
Total EOC by Surgeon, Quarter & Cost Category

59. Conservative
Clinical Approach
(Protocol-Driven)
Efficient Patient
Allocation
Effective Surgical
Conversion Rates
Further Refine Operative/Non-Operative Model
PATIENTS
Non-Op Surgical
SURGERIES
INCOMING PATIENTS
MSK MANAGEMENT
“Next Level” Practice Model
Population Health Model

60. Expand Value-Based Care Models
Episode of Care
Model/ Global
Case Rates
Force Quality
Metrics/
Bonuses
Infrastructure
for PMPM/ %
Premium
Models
Take On
Business Risk
“Next Level” Practice Model
Population Health Model

61. Continued Development of Technology Platform
Analytics Predictive Modeling
Capabilities
“Next Level” Practice Model
Supporting a Population Health Model

62. POPULATION HEALTH MSK MANAGEMENT
Non-Op MSK Providers
• Sports Medicine
• Pain Mgmt (PM&R)
• Podiatry
Non-Op MSK Tx @ RI
• Injections
• Epidurals
• Physical Therapy
• Meds
• Nutrition
• Bracing/Casting/DME
Coordinates w/PCP
Operative MSK Surgeons
Subspecialists in MSK Surgery – Patient Navigation
Peri-Operative
Optimization & Navigation
Coordinates with:
• Family & Patient
• PCP
• Anesthesiology
• Any other necessary
specialists
Surgery, Hospitalization
& Navigation
Coordinates with:
• ASC’s
• Specialty Hospitals
• Comm Hospitals
• Univ Hospitals
Post-Op Recovery
& Navigation
Coordinates with:
• Family & Patient
• OPT/Part B PT
• HHA if needed
• IRF/SNF if needed
• PCP
Rothman URGENT CARE & Same-Day/Next-Day Appointments
– Supports cost effective accessibility for acute & urgent MSK issues
(Trauma requiring surgery, acute non-operative conditions, post-op concerns)
Population Health Service Activity