Solving for x - a solution to the healthcare conundrum?
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This document discusses moving healthcare payment models from fee-for-service to value-based systems. It argues that fee-for-service incentivizes volume over quality and has led to rising costs. Value-based models where providers accept risk could better align incentives with the "Triple Aim" of improving outcomes, reducing costs, and improving experience. This involves measuring quality comprehensively, focusing more on wellness and managing populations' clinical and financial risks. Pharmaceutical companies may also take on more risk through accountable treatment organizations managing medication therapy. The goal is true measurement of quality to solve for value in healthcare.
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Solving for x - a solution to the healthcare conundrum?
- 1. solving for x a solution to the healthcare conundrum? wayne pan, md Gottfried Wilhelm Leibniz
- 2. disclaimer This presentation is intended for discussion purposes only and does not replace independent professional judgment. Statements of fact and opinions expressed are those of the presenter individually, and are not the opinion or position of any of the current or former companies associated with the presenter. The accuracy, completeness or reliability of the information provided herein is solely the responsibility of the presenter.
- 3. background“The Return of Rip Van Winkle” John Quidor (1849)
- 6. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 7. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 8. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 9. Source: Kaiser Family Foundation analysis of data from OECD (2016), “OECD Health Data: Health expenditure and financing: Health expenditure indicators”, OECD Health Statistics (database) (Accessed on December 19, 2016)
- 10. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 11. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 12. Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group
- 14. how did we get here?here
- 15. Paul B. Batalden, MD Founding Chairman of the Board and Senior Fellow Institute for Healthcare Improvement (IHI) EVERY SYSTEM IS PERFECTLYTO GET THE RESULTS IT GETS DESIGNED
- 16. as a result of FFS
- 17. providers figured out a way to maximize reimbursement
- 20. provider #1 provider #2 provider #3 provider #4 provider #5 provider #6 same payment regardless of quality fee-for-service reimbursement modelquality
- 24. payers had a difficult time controlling costs total healthcare spend per capita spendingpercapitaUS$at2000PPPrates 7000 5250 3500 1750 1970 1980 1990 2000 2010 0
- 25. and ensuring that highqualityofcarewas actually being delivered colorectal cancer screening modality trends in adults ages 50-75, United States, 2000-2008 any exam colonoscopy home FOBT sigmoidoscopy 2000 2003 2005 2008 percentage 10 20 30 0 40 50 60
- 26. and ensuring that highqualityofcarewas actually being delivered colorectal cancer screening modality trends in adults ages 50-75, United States, 2000-2008 any exam colonoscopy home FOBT sigmoidoscopy 2000 2003 2005 2008 percentage 10 20 30 0 40 50 60
- 27. utilization management, high deductibles/co-pays, narrow benefits, narrow networks
- 28. MarketWatch Taking Stock Of Pay-For-Performance: A Candid Assessment From The Front Lines Data from the nation’s largest P4P program show some positive changes but no breakthrough improvements in the quality of care. by Cheryl L. Damberg, Kristiana Raube, Stephanie S. Teleki, and Erin dela Cruz ABSTRACT: Pay-for-performance (P4P) has been widely adopted, but it remains unclear how providers are responding and whether results are meeting expectations. Physician or- ganizations involved in the California Integrated Healthcare Association’s (IHA) P4P pro- gram reported having increased physician-level performance feedback and accountability, speeded up information technology adoption, and sharpened their organizational focus and support for improvement in response to P4P; however, after three years of investment, these changes had not translated into breakthrough quality improvements. Continued mon- itoring is required to determine whether early investments made by physician organizations provide a basis for greater improvements in the future. [Health Affairs 28, no. 2 (2009): 517–525; 10.1377/hlthaff.28.2.517] P ay-for-performance is being de- ployed at all levels of the U.S. health system to stimulate improvements in health care, little is known about what behav- ior changes have occurred as a result of P4P and whether the changes made by providers pay for performance bonus programs barely scratched the surface with respect to either improving quality or reducing costs
- 29. so whydoesn’t this work?
- 30. not enough moneyin bonus program to affect behavior
- 31. bonuses not paid timely
- 32. too much effortto collect “quality data”
- 34. need for risk adjustment
- 35. quality measurement dictated by payers
- 36. is it actually measuring qualityof the provider?
- 37. patients have to follow-throughon the provider’s care recommendations
- 38. patients don’t have skin in the game
- 39. quality scores generally defined by planand LOB, not at the whole practice level
- 40. even with higher quality, it doesn’t seem to reduce costs
- 41. at least in the short run
- 42. wait a minute…
- 43. what is the real purposefor measuring quality?
- 44. to move away from fee-for-servicemodel
- 46. to enable value-based purchasing
- 48. quality value-based purchasing model provider #1 provider #2 provider #3 provider #4 provider #5 provider #6
- 49. how do you measure quality? quality value-based purchasing model provider #1 provider #2 provider #3 provider #4 provider #5 provider #6
- 50. how do you measure quality? quality HEDIS / MACRA / MIPS value-based purchasing model provider #1 provider #2 provider #3 provider #4 provider #5 provider #6
- 51. USS FFS
- 52. how do you define “value”in healthcare?
- 57. adapted from IHI Triple Aim improvepopulationhealth lowerpercapitacostofcare improve healthcare experience the triple aim
- 59. so how do you set up a payment systemto drive value?
- 60. instead of the bank model that is fee-for-service
- 61. we move to a model where we’re all in the same boat
- 62. providers taking on risk
- 63. providers taking on risk
- 64. aligning providers/payers and patients and driving value
- 66. this new payment model will demand a new wayof delivering healthcare services
- 67. because our “system” of silos won’t be able to deliver value to the patient (and the ultimate payer)
- 68. welcome to accountable care
- 69. perspective
- 70. what makes this approach different?
- 71. by aligning incentives, and having providers take on risk
- 72. it removes economic barriersto changing the delivery model
- 73. it also broadens the perspective of providers to manage at the population level, instead of just at the individual level
- 74. giving providers a reason to adopt a “systems” approach will help create a more sustainabledelivery model
- 75. philosophy
- 77. we need to think value
- 78. we need to think value
- 79. what existing business modelsfocus on value?
- 80. investment banks
- 81. what if we looked at healthcare from an investmentperspective?
- 82. for investors, it’s all about allocating resourcesto grow assets
- 83. getting the highest ROI
- 84. healthcare should be no different
- 85. let’s look at the populationthat providers are managing
- 86. using a forest as a metaphor
- 87. lush forest using a forest as a metaphor
- 88. lush forest forest fire using a forest as a metaphor
- 89. lush forest forest fire burnt forest using a forest as a metaphor
- 90. wellness chronic disease palliative care using a forest as a metaphor
- 91. wellness chronic disease palliative care this is where the majority of “healthcare” resources is focused
- 92. wellness chronic disease palliative care from a system perspective, we’re not allocating enough resources to wellness and palliative care
- 93. wellness chronic disease palliative care from a system perspective, we’re not allocating enough resources to wellness and palliative care
- 94. but it’s also about managing risks
- 95. notall healthcare assets are equal
- 96. what risksshould we be managing?
- 97. patient risk + provider risk + benefit risk health expense
- 98. patientrisk
- 101. patient environment
- 102. patient social determinants Asthma Hyper- Cholesterolemia Heart Disease Chronic Kidney Disease Stroke Hypertension Sleep Health Insurance
- 103. patient risk + provider risk + benefit risk health expense
- 104. providerrisk
- 105. provider behaviors
- 107. provider environment
- 108. patient risk + provider risk + benefit risk health expense patient-provider interaction risk
- 112. patient risk + provider risk + benefit risk health expense
- 113. benefitrisk
- 115. patient risk + provider risk + benefit risk health expense patient-benefit interaction risk
- 117. patient risk + provider risk + benefit risk health expense
- 118. patient risk + provider risk + benefit risk health expense is this an actionable healthcare equation?
- 119. so what does this all mean, on a practical level?
- 120. execution
- 122. new long-term patient-centric population management value shared savings/risk models system-level focus risk adjustment vs.Old Short-Term Provider-Centric Individual Patient Volume Pay-For-Performance Uniform Assets Perspective
- 124. new self-management data-driven standards of care value vs.Old Philosophy Contracting Data-Challenged Practice Variation Volume
- 125. Old Fee-For-Service Siloed Care Minimize Costs Reactive Quality Reporting Provider-Focused Episodic Execution
- 126. new total cost of care/risk-bearing care continuum maximize ROI/manage risks proactive quality improvement provider- & patient-focused continuous/personalized vs.Old Fee-For-Service Siloed Care Minimize Costs Reactive Quality Reporting Provider-Focused Episodic Execution
- 127. transitions
- 131. from S. Basu et al., High Levels Of Capitation Payments Needed To Shift Primary Care Toward Proactive Team and Nonvisit Care, Health Affairs 36(9):1599-1605 (2017)
- 133. how can we integrate patient responsibility into the equation fairly?
- 136. BEHAVIOR
- 137. Medical FICO score? Care Plan Compliance Provider Visit Compliance Network Adherence Lifestyle Behaviors ER Utilization
- 138. co-pays for drugs
- 139. patients
- 140. purchaserspatients
- 154. moving from maximizing the pill to maximizing total benefit To summarize, big pharma needs to rethink its role and broaden it conception of innovation to products beyond the chemical compound to adapt to the changing needs of their customers. In other words, companies should move from maximizing the pill to maximizing total benefit, in which the chemi- cal compound is one contributor. Those innovations, which we call medicines as a service, should address the true needs of patients and payers as the custom- ers and support sustainable commercial models. It should be kept in mind, however, that the attrac- tiveness of such models will differ across companies because of differences in product line-up, geographic reach, internal capabilities, and cost structure. Importantly, companies will have to have the trust of stakeholders in a given market and the ability to engage them effectively in order to deploy service- based models successfully.
- 155. accountable treatment organization (ATO) An advanced risk-sharing model could offer overall medication management for entire patient populations on a per-patient fee basis. The fee would reflect expected drug treatment cost based on patient characteristics, as well as expected cost of care for defined exacerbations, such as hospital admissions for uncontrolled hypertension. Thus, the pharmaceuti- cal company would assume financial risk and can reap rewards, if it manages drug therapy for a patient well, and lose money otherwise. This entity, which could be called an Accountable Treatment Organiza- tion (ATO) could partner directly with an ACO to agree on a formulary and treatment algorithms, and thus cut out intermediaries, such as distributors and PBMs. The attraction of this particular model is that it aligns the commercial interest of manufacturers in increasing sales with the policy goal of optimiz- ing patient care.
- 156. a biosimilar strategy? It also encourages the rational use of later- generation originator (e.g., innovator) drugs with improved tolerability and potency for patients with conditions that cannot be controlled with generics or who experience side effects because companies would be able to benefit from sales of generics (e.g., biosimilars) as well. Part of rational use could be genetic testing to identify patients whose molecular or genetic disease dependencies makes them likely to benefit from a given drug or who cannot tolerate a given drug.
- 157. true measurement of healthcare quality START HERE
- 158. ALIGNMENT
- 162. adapted from IHI Triple Aim improvepopulationhealth lowerpercapitacostofcare improve healthcare experience the triple aim
- 163. patient risk + provider risk + benefit risk health expense solve for x? ax1 bx2 cx3 y+ + =
- 165. isn’t this what we all want?
- 166. q&a&d
- 167. thankyou