Presented by William H.Thompson, Esq.

1. HEALTH CARE REFORM
Now What Do We Do?
Indiana Cancer Consortium
May 19, 2011
William H. Thompson, Esq.
Hall, Render, Killian, Heath & Lyman, P.C.
One American Square, Suite 2000
Indianapolis, Indiana 46282
Phone: (317) 977-1424
FAX: (317) 633-4878
E-mail: bthompson@hallrender.com

2. PRESENTATION OUTLINE
I. High Level Review of Affordable Care Act
II. The New Proposition: Value Not Volume
III. New Models of Care
– ACOs
– Medical Homes
– Others
2

3. PATIENT PROTECTION
AND
AFFORDABLE CARE ACT
3

4. JOURNEY TO HEALTH CARE REFORM
• A long process since early 2009 (some say since 1912)
• Patient Protection and Affordable Care Act (March 23,
2010)
– 906 pages
• Health Care Education Reconciliation Act of 2010
– 150 pages
• When read together, they constitute the single largest
overhaul of our nation's health care system
• And this isn't counting the thousands of pages in
regulations just around the corner
4

5. AFFORDABLE CARE ACT AT 30,000 FEET
• Gross cost at approx. $940 billion over 10 years; reducing budget deficit by
$124 billion over 10 years
• Central Budget Office projects that the bill will reduce the number of
uninsured by 31 million by 2019 w/23 million nonelderly Americans
remaining uninsured  94% of the nonelderly population
• In a nutshell:
– It requires most U.S. citizens and legal residents to have health insurance
– It creates state-based Health Benefit Exchanges through which individuals can
purchase coverage, with premium and cost-sharing credits available to
individuals/families with income between 133-400% of the federal poverty level
(about $18,000 for a family of three)
– It creates separate Exchanges through which small businesses can purchase coverage
– It requires employers to pay penalties for employees who receive tax credits for
health insurance through an Exchange, with exceptions for small employers
– It imposes new regulations on health plans in the Exchanges and in the individual and
small group markets
– It expands Medicaid to 133% of the federal poverty level
5

6. But that's what the news has
reported, it also provides:
• While most of the press and public focus on
reform has been on increasing access and how to
pay for it, much of the reform law is about
payment and delivery system reform in order to
drive down cost through better quality and
greater cost-efficiency:
– Hospital Payment Updates: reduces Medicare
payment updates by $112 billion over 10 years; and
– Significant focus on payment reform activities, e.g.,
bundled payment and similar reimbursement reform
programs
6

7. NEW MODELS OF CARE
7

8. PRETTY MUCH GIVENS
• Reimbursement will be increasingly tied to quality and
outcomes
• Cost reduction pressures will increase
• Restrictions on physician self-referral will continue
• Data will be king
• Little or no new money under the Physician Fee Schedule
• Shortage of physicians as boomers age
• Bond rating agencies are increasingly focused on how
hospitals pursue physician strategies
• Hospitals will still need doctors and doctors will still need
hospitals
8

9. THE NEW PROPOSITION
Less About Volume, More About
VALUE
Quality
Cost Effectiveness
Patient Experience
= Value
9

10. Changing Care to Create Value . . .Changing
Payment to Recognize Return for New Value
Value-driven
coordinated
care
Care Delivery
Today X
Volume-driven
fragmented
care
Discounted Episode Shared savings Partial Global
fee-for-service payment models capitation payment
Payment
10

11. KEY ELEMENTS OF A REFORMED SYSTEM
• Reform will be driven by reimbursement policy
• Patient-centric, not provider-centric
• Coordinated care, particularly within specific disease
states
• Shift away from fragmented, volume-based
payments (i.e., "bundled" or "global" payments)
• Aligned incentives among care-givers around quality,
cost reduction and efficiency
• Heavy reliance of HIT
11

12. OLD VERSUS NEW MODELS OF DELIVERY
OLD NEW
• PHOs • Patient Centered Medical Homes
• IPAs • Accountable Care Organizations
• Independent Practices • Co-Management of Service Lines
• Ancillary Joint Ventures • Centers of Excellence
• Medical Staff Organization • Employer-Based Clinics
• Clinical Departments • Clinical Integration
• Open Employment Offers • Medical Foundations
• Lip Service to Physician • Clinical Service Lines
Leadership • Refined Employment Models
• Real Physician Leadership
12

13. ELEMENTS OF NEW MODELS
(Center for Medicare and Medicaid Innovation)
• Facilitate alignment among care-givers around
quality, cost, efficiency and patient satisfaction
• Care is coordinated within disease states; clinical
integration
– Evidence-based medicine driven by payment reform
• Driven by physician leadership / control
• Structure to intake and then allocate reimbursement
• Supported by HIT
• Flexible / Adaptable
13

14. ACCOUNTABLE CARE
ORGANIZATIONS
14

15. ACCOUNTABLE CARE ORGANIZATIONS
(PHOs all over again?)
An organization of hospitals,
physicians, and other providers that
accepts responsibility for the quality
and cost of care delivered to a
defined population of patients.
15

16. TRIPLE AIM
1. Better Care for Individuals
– Safety – Timeliness
– Effectiveness – Efficiency
– Patient-Centeredness – Equity
2. Better Health for Population
– Nutrition – Economic Disparities
– Physical Activity – Preventive Services
– Substance Abuse + Annual Physicals
+ Flu Shots
3. Lower Growth in Expenditures
– Eliminate Waste and Inefficiencies
16

17. WHY AN ACO STRATEGY ?
New Beginning or Back to the Future ?
"ACOs do not represent a significant paradigm shift in
U.S. Health Care; rather, they are a compilation of
integration tactics that have been tried at different
times and in different systems. Their success,
therefore, will depend on how well providers, payers
and patients navigate the challenges that limited the
effectiveness of previous integration and accountability
efforts."
Source: Deloitte Center for Health Solutions, Accountable Care
Organizations: A New Model for Sustainable Innovation.
17

18. WHY AN ACO STRATEGY ?
PPACA Provisions
• Statutory requirements for Medicare Shared Savings
Program:
– Formal legal structure that permits the receipt and
distribution of payments
– Shared governance
– PCPs with 5,000 Medicare beneficiaries
– Report quality and cost measures
– Coordinate care
– Patient-centered approach and evidence-based
medicine
– 3-year agreement
18

19. WHY AN ACO STRATEGY ?
PPACA Provisions
• PPACA authorizes Secretary to utilize specified payment
models other than SSP
– Bundled payments
– Partial capitation where ACO at financial risk for some, but
not all, of Part A and Part B services (such as all physician
services provided to a set population over a set time)
– Secretary may substitute any payment model that the
Secretary determines will improve quality and efficiency
• Secretary may waive certain federal laws
• Demonstration and Pilot Programs
19

20. WHY AN ACO STRATEGY ?
PHO / ACO COMPARISON
The ACO is dedicated to the principle of improved value for the patient. Thus,
the organization must encompass the desire by the participants to create a
system of care based on optimizing health care value over production.
PHO ACO
Insurance Risk Performance Risk
Panel of Patients Population of Patients
Scrum for Share of Revenue Rational Allocation of Revenue
Charge-Based Value-Based
Managed Care Leverage Care Coordination
Pay for Quantity (Covered Lives) Pay for Quality
Episode-of-Care-Focused Patient-Centric
Split Control and Governance Physician Leadership
Do More Do Less
Intervention Prevention
Clinical Integration to Achieve Antitrust Clinical Integration to Achieve Efficiencies and
Compliance Quality Improvement
Source: MWE Newsletter, April 14, 2010, Health Care Reform: ACOs and Developments in Coordinated
20 Care Delivery, Shared Savings and Bundled Payments.

21. WHY AN ACO STRATEGY ?
The Vision for ACO Performance
21 Source: SG2: On the Road to ACO

22. PATIENT-CENTERED
MEDICAL HOMES
22

23. Patient-Centered Medical Homes
• "Joint Principles" of the Patient-Centered Medical Home
– Personal physician who coordinates all care for patients and leads the
team
– Physician-directed medical practice acting as a coordinated team of
professionals who work collectively to care for patients
– Whole person orientation – personal physician responsible for
providing or arranging for comprehensive care
– Coordinated/Integrated Care that incorporates all components of
health care delivery
– Quality and safety assured by care planning, evidence-based medicine,
IT, active patient participation, QI
– Enhanced access – open scheduling, expanded hours
– Payment – recognize value-added
*Source: American Academy of Family Physicians, American Academy of Pediatrics,
American College of Physicians, and American Osteopathic Association
23

24. PATIENT-CENTERED MEDICAL HOME
Continuous Support Patient
Care
Access to Self Management
Coordination
Primary Care
Connect to Responsible for all
Community /
Social Support
Patient Health Care Needs
Use of Nurse Use of Evidence- Technology
Practitioners Based Guidelines Connects Services
24

25. Michigan Blue Cross PCMH Program
• Capability to report practice- and physician-level patient outcomes,
efficiency of service and patient satisfaction
• Discuss with the patient the roles and responsibilities of the doctor and
patient, and documenting this discussion
• Offer 24-hour patient access to a clinical decision-maker, with a multi-
lingual approach to care. Access may include extended office hours,
telephone access, linkage to urgent care, or a combination
• Work with each patient to set individualized health goals; and using a
team-focused systematic approach to track appointments and ensure
follow-up on needed services
• Provide effective and timely follow-up with patients on their test results
• Coordinate patients' care across the health system through a process of
active collaboration and communication between providers, caregivers and
the patient
25

26. Michigan Blue Cross PCMH Program
• Provide patients with active counseling, screening and education on
preventive care
• Coordinate referrals to specialists, and provide specialists with patient
information needed for proper care, such as lab work and test results
• Offer patients connections to community services, in coordination with the
health system, community services agencies, family, caregivers and the
patient
• Provide self-management education and support to patients with chronic
conditions
• Develop patient registries to track and monitor patients' care over the
long-term
• Provide an online patient portal system that allows for electronic
communication and provides patients with greater access to medical
information and technical tools
26

27. CLINICAL INTEGRATION
27

28. CONTINUUM OF INTEGRATION
Medical Professional Service Line Joint Employment Strategic /
Director Services Management Ventures Coordinated
•Primary Care Employment
•Departments •Coverage •CV •ASCs •Specialists
•On-Call •Ortho •Cath Labs •Quality Incentives
•Surgery •Specialty Hospitals •Referral Coordination
•Oncology •Individual / Collective
Incentives
28

29. What is Clinical Integration?
Interaction/Interdependence is Key
• Antitrust Concept
– Clinical integration in a physician/hospital
network involves creating a degree of interaction
and interdependence among the physicians and
the hospital in order to achieve cost efficiencies
and quality improvements in providing medical
services, both individually and as a group.
• Practical Application
– Align incentives around quality, efficiency, cost,
and patient safety
Ref: Statement 8, DOJ/FTC, Statements of Antitrust
29 Enforcement Policy in Health Care (1996).

30. What is Clinical Integration?
Interaction/Interdependence is Key
• Efforts to integrate clinically evidenced by:
– Establishing mechanisms to monitor and control
utilization and costs, and assure quality of care
– Selectively choosing physicians likely to further
efficiency objectives
– Significant investment of financial and human
capital in the infrastructure and capabilities
necessary to realize claimed efficiencies
Ref: Statement 8, DOJ/FTC, Statements of Antitrust
30
Enforcement Policy in Health Care (1996).

31. CLINICAL INTEGRATION MODEL
PRACTICE SUPPORT
• Guideline Adoption/Distribution
• Clinical
• Preventative Health
Tools • Credentialing
• Patient Registries • Best Practice Education Follow-Up
• Disease • Billing & Coding • Practice Support
• Preventive Health • Clinical Updates • Provider Performance Reports
• Electronic Medical Records • Pharmacy Issues • Incentive Program
• Long Range Goal • Medical Error Prevention
MEDICAL MANAGEMENT QUALITY MANAGEMENT
• Health Promotion • Baseline Monitoring (Pre-Intervention) of:
• Preventive Health Screening • Measures Selected from Adopted Guidelines
• Lifestyle Changes • Utilization Measures Relevant to Disease Management
• Utilization Management Clinical • Patient Satisfaction Monitoring & Evaluation
• Pharmacy Management • For PCP Feedback, Trend Analysis & Systems Improvements
• Care Management Integration • Provider Performance Monitoring & Evaluation
• Case/Disease/Population Management • Consistent with Clinical & Preventive Health Guidelines
• Referral Coordination • Clinical Outcomes Monitoring & Evaluation
• Telephonic Outreach • To Evaluate Effectiveness of PCP and Disease Management
• Collaborative Care Plan Development • ED/Inpatient Utilization & Functional Status Measures
• Functional Status Assessment • Quality Initiatives
• As Needed in Response to Monitoring & Evaluation Findings
INTEGRATION OBJECTIVES
• Enhance Quality of Care/Improve Patient Outcomes
• Share Best Clinical Practices
• Promote Safe Medical Practices
• Ensure Appropriate Utilization of Services
• Create Process Efficiencies
31

32. OTHER
ALIGNMENT STRATEGIES
32

33. OTHER ALIGNMENT STRATEGIES
• Professional Service Agreements
• Service Line Co-Management
• Employment
• Physician Involvement in Decision-Making
• Chief Medical Officer
• Vice President for Medical Affairs
• Physician Leadership Development
• Communication Forums
• Council of Physician Advisors
• Access to Senior Executive Team
• Expressions of Appreciation
• Imaging / Branding Support
33
1085719v1; 04-22-11