CREATING A PHYSICIAN-DRIVEN HEALTHCARE FUTURE How … · CREATING A PHYSICIAN-DRIVEN HEALTHCARE...

CREATING A PHYSICIAN-DRIVENHEALTHCARE FUTURE

How Physicians, Hospitals, Patients, and Payers Can All Benefit From Well-Designed Payment Reform

Harold D. MillerPresident and CEO

Center for Healthcare Quality and Payment Reform

www.CHQPR.org

I Have Nothing to Disclose

3© 2009-2015 Center for Healthcare Quality and Payment Reform www.CHQPR.org

A Short Quiz


A Short Quiz

QUESTION #1:Which U.S. industry

has not given its key employees a raise in a decade,

and has told employees every year that their pay

may be cut by 25%regardless of how well

they’ve performed?


A Short Quiz

QUESTION #1:Which U.S. industry

has not given its key employees a raise in a decade,

and has told employees every year that their pay

may be cut by 25%regardless of how well

they’ve performed?

ANSWER:Health Care


Medicare SGR Is Now Gone, But

Physician Pay Has Been Flat

PhysicianPractice Costs

PhysicianPaymentIncreases

If SGR CutHad Been

Made

23% EffectiveReduction


A Short Quiz

QUESTION #2:In which U.S. industry

can one set of employeesonly get a raise if other

employees take a pay cut,even when the business is

performing well?


A Short Quiz

QUESTION #2:In which U.S. industry

can one set of employeesonly get a raise if other

employees take a pay cut,even when the business is

performing well?

ANSWER:Health Care


Even Without the SGR, Physician

Pay Must Be “Budget-Neutral”

PCP

Payments

Specialty

Payments

PCP

Payments

Specialty

Payments

Physician Payment Budget Neutrality


A Short Quiz

QUESTION #3:In which U.S. industries does government policyfavor large businessesover small businesses?


A Short Quiz

QUESTION #3:In which U.S. industries does government policyfavor large businessesover small businesses?

ANSWER:Health Care


Unlike Physicians, Hospitals

Have Received Pay Increases

Physicians

Hospitals

Inflation


A Short Quiz

QUESTION #4:In which U.S. industries

are businessesonly able to sell

their products and servicesthrough an intermediary who demands large discounts andincreases prices by 18-25%?


A Short Quiz

QUESTION #4:In which U.S. industries

are businessesonly able to sell

their products and servicesthrough an intermediary who demands large discounts andincreases prices by 18-25%?

ANSWER:Health Care


We Spend As Much on Health

Insurance Admin/Profit as on Drugs

Admin: $110 billion

Drugs: $117 billion


A Lot of a Physician’s Pay Goes To

Costs of Dealing with Health Plans

Admin: $110 billion

Drugs: $117 billion

Admin: $30 billion



A Short Quiz

QUESTION #5:Who is to blame forthe way physicians

are paid andmicromanaged?


A Short Quiz

QUESTION #5:Who is to blame forthe way physicians

are paid andmicromanaged?

ANSWER:Physicians


The Blame Rests With Physicians

• Physicians haven’t defined solutions to control healthcare costs without rationing

• Physicians have allowed themselves to be seen as the causes of higher spending

• Physicians haven’t defined payment models that will support lower-cost, higher-quality care and maintain financial viability for physician practices

• Physicians aren’t organized to manage and deliver high-value population health care to purchasers and patients


Three Paths to the Future:

Which Door Will Doctors Choose?

TODAY

FUTURE #1

FUTURE #2

FUTURE #3


Door #1: “Value-Based Purchasing”

(i.e., Pay for Performance)

TODAY

PAYER-DESIGNED

PAY FOR PERFORMANCE


The Dominant Approach to

“Payment Reform” Today is P4P

QUALITYMEASURES

• Mammograms• Colon Cancer Screening

• HbA1c Control• LDL

P4P Bonus

FFS


P4P Hasn’t Worked Terribly Well

QUALITYMEASURES



P4P Bonus

FFS

• A small bonus may not be enough to pay for the added costs of improving quality

• A small bonus may not be enough to offset loss of fee-for-service revenuefrom healthier patients or lower utilization

• A small bonus may not be enough to offset the costs of collecting and reporting the quality data


More Measure Burden Each Year,

With the Same Small Bonuses

QUALITYMEASURES


• Flu Vaccine• Tobacco Counseling

• Hypertension Control

• HbA1c Control• LDL• Eye Exams• Aspirin Use

P4P Bonus

P4P Bonus

FFS FFS

QUALITYMEASURES




Bonuses Turn to Penalties With

No Way to Support Better Care

P4P Bonus

P4P Bonus

QUALITYMEASURES


• Flu Vaccine• BMI Screens• Tobacco Counseling

• Fall Risk Assessment



P4P Penalty

FFS FFS FFS

QUALITYMEASURES


• Flu Vaccine• Tobacco Counseling



QUALITYMEASURES




The End of Collaboration?

• In the CMS Value-Based Payment Modifier, bonuses are only

paid to physicians who have above average quality if penalties

are assessed on other physicians with below average quality

• To maintain budget neutrality, the size of bonuses depends on

the size of penalties

• Under this system, why would high-performing physicians

want to help under-performing physicians to improve?


Over-Emphasis on Narrow Quality

Measures Can Harm Patients

Hypoglycemia

1 Yr Mortality: 19.9%

30 Day Readmits: 16.3%

Hyperglycemia

1 Yr Mortality: 17.1%

30 Day Readmits: 15.3%

Source: National Trends in US Hospital Admissions for Hyperglycemia and HypoglycemiaAmong Medicare Beneficiaries, 1999 to 2011 JAMA Internal Medicine May 17, 2014


Providers May Be Penalized for

Having Patients With Higher Needs

JAMA Intern Med. Published online September 14, 2015. doi:10.1001/jamainternmed.2015.4660


Current Regulations Are Increasing

P4P Penalties Over Time

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%

+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


MACRA (SGR Repeal) Slowed,

Simplified, and Balanced This

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%

+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%

+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


But MIPS is P4P on Steroids

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%

+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%

+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

MIPS

“Merit-Based

Incentive

Payment

System”

Quality

Resource Use

“Clinical Practice Improvement Activities”

EHR “Meaningful Use”

50% ->

30%10% ->

30%

25%

15%


Door #2: Alternative Payment

Models

TODAY

PAYER-DESIGNED

PAY FOR PERFORMANCE

ALTERNATIVE PAYMENT

MODELS


MACRA Incentives to Participate

in Alternative Payment Models

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%

+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%

+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

FFS+

PQRS+

MU+

VBM

$

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%

+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

25%APM

+5%

FFS+

25%APM

+5%

FFS+

50%APM

+5%

FFS+

75%APM

+5%

FFS+

75%APM

+5%

FFS+

50%APM

+5%


CMS “Alternative Payment Models”

Announced To DateTYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE

Health Systems,Multi-Specialty Groups,

PHOs, and IPAs

Accountable Care Organizations

(MSSP & Pioneer)

FFS+

Shared Savings on Attributed Total Spending

Primary Care ComprehensivePrimary Care Initiative

FFS +

PMPM $ for Attributed Patients+

Shared Savings onAttributed Total Spending

(for State or Region)

Specialty Care Oncology Care Model

FFS+



(for 6-month window)

Hospitals and Post-Acute Care

Comprehensive Carefor Joint Replacement

FFS+

Bonuses/Penalties on Attributed Total Spending


CMS “Alternative Payment Models”

Don’t Change FFS StructureTYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE


PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS+





FFS+






FFS+

Hospital Bonuses/Penalties for Attributed Total Spending


Some Provide Additional

Upfront Resources to Providers…TYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE


PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS+





FFS+






FFS+

Hospital Bonuses/Penalties forAttributed Total Spending


…Most Only Give Providers More $

If They Reduce $ Somewhere ElseTYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE


PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS+





FFS+






FFS+



Models Hold Individual Providers

Accountable for Total Cost of CareTYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE


PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS+





FFS+






FFS+



CMS Tries to Make Each Provider

Accountable for Total Spending

Spending onAll

Servicesthe

ACO’sPatientsReceive

Healthcare

Spe

ndin

g

Paymentsto

ACOs

ACOs

Spending onAll

Servicesthe

Oncologists’PatientsReceiveDuringChemo

Treatment

Paymentsto

Oncologists

OncologyCare

Model

Spending onAll

ChronicDisease

CareandCare

Related toJoint

SurgeryAfter

Discharge

Paymentsto

Hospitals

ComprehensiveCare for

Joint Replacement

Spending onAll

Servicesthe

PCP’sPatientsReceive

Paymentsto

PCPs

ComprehensivePrimary Care

Initiative


CMS Alternative Payment Models

Are Problematic for Physicians


What’s Behind Door #3?

TODAY

PAYER-DESIGNED

PAY FOR PERFORMANCE

PAYER-DESIGNED

ALTERNATIVE PAYMENT

MODELS

FUTURE #3


Physicians Taking Charge of

Payment & Delivery Reform

TODAY

PAYER-DESIGNED

PAY FOR PERFORMANCE

PAYER-DESIGNED

ALTERNATIVE PAYMENT

MODELS

PHYSICIAN-DESIGNED

CARE DELIVERY &

PAYMENT SYSTEMS


Physicians Are Understandably

Skeptical About “Payment Reform”

Medicare and

Health Plans

Define

Payment Systems

Physicians Have

To Change Care

to Align With

Payment Systems

Patients and

Physicians

May Not

Come Out Ahead

HOW PAYMENT REFORMS ARE DESIGNED TODAY


The Right Way and Wrong Way

To Define Better Payment Models

Medicare and

Health Plans

Define

Payment Systems

Physicians Have

To Change Care

to Align With

Payment Systems

Patients and

Physicians

May Not

Come Out Ahead

Physicians

Redesign Care

and Identify

Payment Barriers

Payers Change

Payment to

Support

Redesigned Care

Patients Get

Better Care and

Physicians Stay

Financially Viable

THE RIGHT WAY TO DESIGN PAYMENT REFORMS

HOW PAYMENT REFORMS ARE DESIGNED TODAY

How Can

Well-Designed

Alternative Payment Models

Help Physicians Financially?


Most of the Money in Healthcare

Doesn’t Go to Physicians

Physicians:16%


Medicare Payment Silos Pit

Physicians Against Each Other

PCPPayment

Specialist

Payment

PCPPayment

Specialist

PaymentPhysician

Payment

(Part B)


All Physicians Could Earn More By

Lowering Other Healthcare Costs

PCP

Payment

Specialist

Payment

PCP

Payment

DrugCosts

Hospital &

Post-Acute

Care Costs

Specialist

PaymentPhysician

Payment

(Part B)

Total

Healthcare

Costs

(Parts A,

B, and D)

DrugCosts

(Part D)

Hospital &

Post-Acute

Care Costs

(Part A)


Commonly Discussed


• APMs for Proceduralists (e.g., surgeons)

– Bundled payments

– Warrantied payments

– Episode payments


Commonly Discussed






• APMs for Condition Specialists (PCPs, oncologists)

– Medical Homes

– Chronic Disease Management Payments


Is There a Good Alternative

Payment Model for Diagnosis??





• APMs for Condition Specialists (PCPs, oncologists)

– Medical Homes

– Chronic Disease Management Payments

• APMs for Diagnosticians

– Fee for service + Adherence to AUC?

– Other??

The Starting Point in

Designing a Good APM:

What is the Opportunity

to Improve Care and

Reduce Spending?


Proceduralists Can Reduce

Complications & Improve Efficiency

Proceduralist

High Spending on

Complications &

Post-Acute Care

Low Complication

& PAC Spending

$Hospital


Procedural Episode Payments

Support Full Episode Coordination

Proceduralist

$Hospital

ProceduralEpisode High Spending on

Complications &

Post-Acute Care

Low Complication

& PAC Spending


Specialists Managing a Condition

Avoid Unnecessary Procedures

Proceduralist

$

Condition

Specialist

Medical

Management

$

Hospital

ProceduralEpisode High Spending on

Complications &

Post-Acute Care

Low Complication

& PAC Spending


Condition-Based Payment Supports

Good Management of the Condition

Proceduralist

$

Condition

Specialist

Medical

Management

$

Hospital

ProceduralEpisode

Condition-Based

PaymentHigh Spending on

Complications &

Post-Acute Care

Low Complication

& PAC Spending


The Diagnostician Ensures the

Right Condition is Being Treated

Proceduralist

$

Condition

Specialist

Medical

Management

$

Diagnostician

Correct

Condition

Correct

Treatment

$

Hospital

ProceduralEpisode

Condition-Based

PaymentHigh Spending on

Complications &

Post-Acute Care

Low Complication

& PAC Spending


Population-Based Payment Needed

to Support Good Diagnosis + Tx

Proceduralist

High Spending on

Complications

Post-Acute Care

Low Complications

Post-Acute Care

$

Condition

Specialist

Medical

Management

$

Diagnostician

Correct

Condition

Correct

Treatment

$

Hospital

ProceduralEpisode

Condition-Based

Payment

Population-Based

Payment

What Are the

Opportunities

for

Diagnosticians

in Cardiology

to Reduce Spending?


There Are Many Unnecessary

Stress Tests for Chest Pain, But…

PCPUnnecessary

Stress Tests


…Bigger Problem is Cascade of

Avoidable Spending for Chest Pain

PCPUnnecessary

Stress Tests

False PositiveResults

UnnecessaryAngiograms

UnnecessaryStents


Savings Opportunity Is Not

Just Fewer Stress Tests..

PCPUnnecessary

Stress Tests



UnnecessaryStents

AppropriateStress Tests

S

A

V

I

N

G

S


Savings Comes From the Entire

“Episode” of Testing & Treatment

PCPUnnecessary

Stress Tests



UnnecessaryStents


AppropriateAngiograms

AppropriateStents

S

A

V

I

N

G

S

S

A

V

I

N

G

S

S

A

V

I

N

G

S


Nuclear Cardiologist Can Add

Value By Advising Not to Do a Test

PCP

AUCGuidance

fromNuclear

Cardiologist

UnnecessaryStress Tests



UnnecessaryStents



AppropriateStents

S

A

V

I

N

G

S

S

A

V

I

N

G

S

S

A

V

I

N

G

S


Nuclear Cardiologist Helps Ensure

Patient Gets the Right CV Care

PCP

AUCGuidance

from Nuclear

Cardiologist




UnnecessaryStents



AppropriateStents

S

A

V

I

N

G

S

S

A

V

I

N

G

S

S

A

V

I

N

G

S

Medical Management by

Cardiology Team


A Simplified Example:

Reducing Avoidable MPIsCURRENT

$/Patient # Pts Total $

Cardiologist

MPIs $80 500 $40,000

Hospital OPPS

MPIs $1,140 500 $570,000

Total Pmt/Cost 500 $610,000

Stress Testingfor Patients

• PCP practice orders nuclear stress tests for 500 patients

• Stress tests are performedin a hospital outpatientdepartment

• 15% of proceduresmay be inappropriate orunnecessary due to lackof patient risk factors orsymptoms

• (Billing for stress test codenot shown for simplicity andsince non-nuclear stresstest may be used instead)


Typical Health Plan Approach:

Prior Auth/Utilization ControlsCURRENT FUTURE

$/Patient # Pts Total $ $/Patient # Pts Total $ Chg

Cardiologist

MPIs $80 500 $40,000 $80 425 $34,000 -15%

Hospital OPPS

MPIs $1,140 500 $570,000 $1,140 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $518,500 -15%


Under FFS, Payer Wins,

Physicians and Hospitals LoseCURRENT FUTURE


Cardiologist

MPIs $80 500 $40,000 $80 425 $34,000 -15%

Hospital OPPS

MPIs $1,140 500 $570,000 $1,140 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $518,500 -15%


A P4P Bonus to the Cardiologist

Doesn’t Offset Loss of RevenueCURRENT FUTURE


Cardiologist

MPIs $80 500 $40,000 $84 425 $35,700 -10%

Hospital OPPS

MPIs $1,140 500 $570,000 $1,140 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $520,200 -15%

+5%


Is There a Better Way?

CURRENT FUTURE


Cardiologist

? ? ?

MPIs $80 500 $40,000 ? ? ?

Hospital OPPS ? ? ?

MPIs $1,140 500 $570,000 ? ? ?

Total Pmt/Cost 500 $610,000 ? ? ?


Pay the Cardiologist to Help PCPs

Decide What Test (If Any) to OrderCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000

Hospital OPPS

MPIs $1,140 500 $570,000


Better Payment for Symptom Evaluation• Allow PCP to get expert advice on applying appropriate use criteria


Pay the Cardiologist More to

Do the Appropriate TestsCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Hospital OPPS

MPIs $1,140 500 $570,000


Better Payment for Symptom Evaluation• Allow PCP to get expert advice on applying appropriate use criteria• Compensate nuclear cardiologist for evaluating appropriate cases

+25%


Can We Afford to Increase

Cardiologist Pay by Nearly 40%?CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

MPIs $1,140 500 $570,000


Better Payment for Symptom Evaluation• Allow PCP to get expert advice on applying appropriate use criteria• Compensate nuclear cardiologist for evaluating appropriate cases


Cardiologists Could Be Paid More

While Still Reducing Total $CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

MPIs $1,140 500 $570,000 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $539,500 -12%


Do Hospitals Have to Lose In Order

for Physicians To Win?CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

MPIs $1,140 500 $570,000 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $539,500 -12%

Payer Wins

Hospital LosesPhysicians Win


Do Hospitals Have to Lose In Order

for Physicians To Win?CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

MPIs $1,140 500 $570,000 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $539,500 -12%

What should matter to hospitals is their margin,

not their revenue (volume)


Adequacy of Hospital’s Revenues

Depends On Its CostsCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

MPIs $1,140 500 $570,000 425 $484,500 -15%

Total Pmt/Cost 500 $610,000 500 $539,500 -12%


We Need to Know the Hospital’s

Fixed and Variable CostsCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000

Variable Costs $513 45% $256,500

Margin $57 5% $28,500

Subtotal $1,140 500 $570,000



Now, if the Number of Tests

is Reduced…CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000 425



…Fixed Costs Will Remain the

Same (in the Short Run)…CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000 425



…Variable Costs Will Go Down in

Proportion to ProceduresCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500

Subtotal $1,140 500 $570,000 425



Let’s Increase the

Hospital’s MarginCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425



The Hospital Gets Less Revenue,

But a Higher MarginCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%



And The Payer

Still Saves MoneyCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost 500 $610,000 $587,950 -4%


I.e., Win-Win-Win for

Physician, Hospital, and PayerCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost 500 $610,000 $587,950 -4%

Physician Wins

Payer Wins

Hospital Wins


What Payment Model Supports

This Win-Win-Win Approach?CURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost 500 $610,000 $587,950 -4%


It’s Impractical to Renegotiate

Fees for Individual ServicesCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 $1,254 425 $532,950 -6%

Total Pmt/Cost 500 $610,000 $587,950 -4%


Pay Based on the Patient’s

Condition, Not on the ProcedureCURRENT FUTURE


Cardiologist

AUC Advice

MPIs $80 500 $40,000

Subtotal $40,000

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000

Total Pmt/Cost $1,220 500 $610,000

500 Patients with Chest Pain


Plan to Offer Care of the Condition

at a Lower Cost Per PatientCURRENT FUTURE


Cardiologist

AUC Advice

MPIs $80 500 $40,000

Subtotal $40,000

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000

Total Pmt/Cost $1,220 500 $610,000 $1,176 500 -4%


Use the Payment as a Budget to

Redesign Care…CURRENT FUTURE


Cardiologist

AUC Advice

MPIs $80 500 $40,000

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost $1,220 500 $610,000 $1,176 500 $587,950 -4%


…And Let the Physicians & Hospital

Decide How They Should Be PaidCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost $1,220 500 $610,000 $1,176 500 $587,950 -4%


A Condition-Based Payment Puts

Physicians in ControlCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $100 425 $42,500

Subtotal $40,000 $55,000 +38%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Total Pmt/Cost $1,220 500 $610,000 $1,176 500 $587,950 -4%


Savings Isn’t Just from Avoiding

the Test, But Downstream Costs

PCP

AUCGuidance

fromNuclear

Cardiologist




UnnecessaryStents



AppropriateStents

S

A

V

I

N

G

S

S

A

V

I

N

G

S

S

A

V

I

N

G

S


If Unnecessary PCIs Had Resulted

from the Unnecessary MPIs…CURRENT FUTURE


Cardiologist

AUC Advice

MPIs $80 500 $40,000

Subtotal $40,000

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000

Avoidable PCI $7,600 4 $30,400

Total Pmt/Cost $1,220 500 $640,400


…Reducing MPIs Would Create

Additional Savings on PCIs…CURRENT FUTURE


Cardiologist

AUC Advice

MPIs $80 500 $40,000

Subtotal $40,000

Hospital OPPS

Fixed Costs $570 50% $285,000


Margin $57 5% $28,500

Subtotal $1,140 500 $570,000 425

Avoidable PCI $7,600 4 $30,400 $7,600 0 $0 X

Total Pmt/Cost $1,220 500 $640,400


…Bundling Procedures in Payment

Allows Doctors & Payers to BenefitCURRENT FUTURE


Cardiologist

AUC Advice $25 500 $12,500

MPIs $80 500 $40,000 $130 425 $55,250

Subtotal $40,000 $67,750 69%

Hospital OPPS

Fixed Costs $570 50% $285,000 $285,500 0%

Variable Costs $513 45% $256,500 $218,025 -15%

Margin $57 5% $28,500 $29,925 +5%

Subtotal $1,140 500 $570,000 425 $532,950 -6%

Avoidable PCI $7,600 4 $30,400 $7,600 0 $0 X

Total Pmt/Cost $1,220 500 $640,400 $600,700 -6%


Physicians Need to Design

the Details of a Payment Model• Risk stratification of payment

– Which types of patients will need testing at a higher rate?(Cardiology is already ahead of most specialties with ACC AUC)

• Including all diagnostic options, not just one test– Nuclear testing may not be necessary, but some test may be required

• Including costs for interventional and medical cardiology– Nuclear cardiology should be part of a team approach to manage total

costs for patients, not competing for physician fees

• Including payment and decision support for PCPs– Paying for the cardiologist to respond to calls doesn’t solve the problem

if the PCPs don’t have time to make the calls

– Need to embed decision support tools in the practice, so cardiology consults can focus on the true gray areas

• Adjusting payments over time– Phasing out unnecessary fixed costs– Increasing or decreasing payments as technology changes


ACC & CHQPR Have Developed

an APM For Stable Angina


How Does All This Fit Into ACOs?

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


Each Patient Should Choose &

Use a Primary Care Practice…

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice


MEDICARE, MEDICAID

HEALTH PLAN

…Which Takes Accountability for

What PCPs Can Control/Influence

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice

AccountableMedical

Home Accountability for:• Avoidable ER Visits

•Avoidable Hospitalizations

•Unnecessary Tests

•Unnecessary Referrals


MEDICARE, MEDICAID

HEALTH PLAN

…With a Medical Neighborhood

to Consult With on Complex Cases

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice

AccountableMedical

Home

Endocrinology,

Cardiology,

Urogynecology

AccountableMedicalNeighborhood

Accountability for:


•Unnecessary Referrals

•Co-Managed Outcomes


MEDICARE, MEDICAID

HEALTH PLAN

..And Specialists Accountable for

the Conditions They Manage

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice

Orthopedic

Group

OB/GYN

Group

Cardiology

GroupHeart Episode/Condition Pmt

Back Episode/Condition Pmt

PregnancyCondition Pmt

AccountableMedical

Home


Accountability for:


•Unnecessary Procedures

•Infections, Complications

Endocrinology,

Cardiology,

Urogynecology


MEDICARE, MEDICAID

HEALTH PLAN

That’s Building the ACO

from the Bottom Up

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice

Orthopedic

Group

Cardiology



AccountableMedical

Home


ACO

Accountable PaymentModels

OB/GYN

GroupPregnancyCondition Pmt

Endocrinology,

Cardiology,

Urogynecology


MEDICARE, MEDICAID

HEALTH PLANShared SavingsPayment

Primary

Care

ACO

Orthopedics OB/GYNCardiology

Most ACOs Today

Aren’t Truly Reinventing Care

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Fee-for-ServicePayment

Expensive IT Systems

Psych.,

Neuro

Nurse Care Managers

Share ofShared SavingsPayment??


MEDICARE, MEDICAID

HEALTH PLAN

A True ACO Can Take a Global

Payment And Make It Work

Heart

Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care

Practice

ACO

Orthopedic

Group

Cardiology



AccountableMedical

Home

Risk-AdjustedGlobal Payment


OB/GYN

GroupPregnancyCondition Pmt

Endocrinology,

Cardiology,

Urogynecology


You Don’t Need a Big Health

System to Manage Global Payment

• Independent PCPs & Specialists Managing Global Payments

– Northwest Physicians Network (NPN) in Tacoma, WA is an IPA with 109 PCPs

and 345 specialists in 165 practices (average size: 2.4 MDs/practice).

NPN accepts full or partial risk capitation contracts, operates its own Medicare

Advantage plan, and does third party administration for self-insured

businesses. www.npnwa.net

– North Texas Specialty Physicians, a 600 physician multi-specialty IPA in Fort

Worth, set up its own Medicare Advantage PPO plan and uses revenues from

the health plan and capitation contracts to pay its PCPs 250% of Medicare

rates and provides high quality, coordinated care to patients. www.ntsp.com

• Joint Contracting by MDs & Hospitals for Global Payments– The Mount Auburn Cambridge IPA (MACIPA) and Mount Auburn Hospital

jointly contract with three major Boston-area health plans for full-risk capitation.

The IPA is independent of the hospital; they coordinate care with each other

without any formal legal structure. www.macipa.com

http://www.npnwa.net/

http://www.phpmcs.com/

http://www.macipa.com/


Three Paths to the Future: Which

Will Nuclear Cardiologists Choose?

TODAY

PAYER-DESIGNED

PAY FOR PERFORMANCE

PAYER-DESIGNED

ALTERNATIVE PAYMENT

MODELS

PHYSICIAN-DESIGNED

CARE DELIVERY &

PAYMENT SYSTEMS


If You Want Door #3,

What Should You Do?



What Should You Do?

1. Continue listening to PowerPoint presentations at ASNC 2015, go back home, continue business as usual, and hope somebody else figures this out



What Should You Do?


2. Plan to retire before 2019



What Should You Do?


2. Plan to retire before 2019

3. Tell ASNC leadership that physician-driven payment reform is a top priority and you want to help


Learn More About Win-Win-Win

Payment and Delivery Reform

www.PaymentReform.org

http://www.paymentreform.org/

For More Information:

Harold D. MillerPresident and CEO

Center for Healthcare Quality and Payment Reform

[email protected]

(412) 803-3650

www.CHQPR.org

www.PaymentReform.org

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