The Current State of the Journey to ... - Global Health Carewell-being improvement” • Evolent...

Joe Damore, FACHEVice President

The Current State of the Journey to Accountable Care and Population Health Management: Aligning Payor Arrangements with New Delivery Models

October 31, 2012

2 PROPRIETARY & CONFIDENTIAL – © 2012 PREMIER INC.

Introduction/purpose

Public policy update

Market trends

Premier’s experience and lessons learned

Care transformation

Payment models

Summary/questions

Today’s agenda

Public policy update


Health reform’s hidden agenda

1966 1972 1978 1984 1990 1996 2002 2008 2014 2020 2026 2032 2038 2044 20500

5

10

15

20

25Actual Projection

2.5 Percentage Points

1 Percentage Point

Zero

Differential of:

Percent of GDP

Total Federal Spending for Medicare and Medicaid Under Assumptions About the Health Cost Growth Differential

Tax rates 2050:10% 26%25% 66%35% 92%


What drives our debt? Government spending as share of economy

Source: CBO


““Things do not get Things do not get better by being left better by being left alonealone””

–

Winston Churchill


Projected Medicare enrollment

Source: 2012 Annual Report of the Boards of Trustees for the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds


Mandate upheld as a tax/penalty

State opt out means less uniform, more state-by-state coverage expansion

Hospitals in states that opt-out could be harmed by DSH cuts

No turning back on payment reforms

Probable delay in overall coverage expansion

Expect more litigation around ACA

Next pivot point is the election

Healthcare politics: SCOTUS implications


Presidential election: too close to call, now!


Endgame: Electoral College Ds lock or lead: 19 states/247 votes; Rs: 24 states/206 votes

270 Votes needed to win


Oct 1

Beginning of fiscal year

Important dates on the legislative calendar

OCTOBER

NOVEMBER

Nov 6

Election dayNov 7-

Dec 31

“Lame duck”

session range

Late Nov –

early Dec Retiring or defeated members have to be out of their offices

DECEMBER

Dec 31

Expiration of Bush tax cuts, unemployment benefits & “doc fix”

JANUARY

Jan 2

Sequestration occurs



Track one-push

Legislative “push/pull” to accountable care

Cuts to Medicare FFS SystemReadmissions penalty

HACs penalty

Partnership for Patients

Value-based purchasing

Meaningful use penalties

Private payors and Medicaid

Bundled payment: 2016?

Track two-pull

Disrupt existing system

Medicare Shared Savings Program (MSSP)

Pioneer

State/Federal duals demo

Medical home demo; new Innovation Center Primary Care Initiative

Reducing readmissions from nursing homes demo

Bundled payment demos

Market trends


How the market is responding

Provider consolidation•

Presence Health; Dignity Health; Ascension; for-profits

Payer consolidation and information technology acquisitions

•

Consolidation: CIGNA acquired HealthSpring, WellPoint acquiring

Amerigroup, Aetna acquiring Coventry•

IT Acquisitions: Aetna acquired Medicity & UnitedHealth Group acquired Axolotl

Physician groups creating ACOsPrivate payer, federal and state payment reforms

•

Hawaii Medical Service Association model•

Blue Cross Blue Shield of Massachusetts -

Alternative Quality Contract

•

CMS -

Bundled Payment, VBP, etc.


New collaborations and partnerships•

Banner Health, Aurora, and Heartland partners with Aetna on accountable care collaboration

•

Texas Health Resources partners with Healthways on “proactive well-being improvement”

•

Evolent Health partners with MedStar on population and health plan management solutions

Changes in employer and employee coverage practices•

18% increase in HSA products in 2011; greater focus on fitness and prevention

How the market is responding (cont’d)


Consumer directed health plans


Enhanced care management and technology advances will continue to reduce inpatient volume

Increase in physician-hospital integration and alignment

Economic pressure driving cost reduction (scale) and new revenue sources (retail health, technology etc.) in integrated delivery systems

Health reform driving health plans to technology investments and consolidation (including partnerships with delivery systems)

Major market trends


Blending of integrated delivery systems/health plans/technology firms/medical groups

Consolidation/aggregation of health systems

Continued growth in both commercial and government shared savings arrangements

Major market trends (cont’d)


Number of public and private ACOs is growing

Source: Center for Accountable Care Intelligence, “Growth and Dispersion of Accountable Care Organizations: June 2012 Update (06/2012)

– 310 ACOs in 45 states and the District of Columbia–

First ACOs (10 organizations) part of the PGP Demonstration project beginning in 2006 – 32 CMMI “Pioneer”

participants, program began January 2012–

Roughly 30% physician organization led– Medicare Shared Savings Program

–

04/01 –

27 ACOs selected to participate. –

Majority of organizations physician organization led–

07/01 –

89 ACOs selected to participate in second cohort–

09/06 –

Over 150 applicants for 1/1/12


Federal ACOs across the country

21

Key ‐

NJDEMD

WA

IL

WI

LA

AR

MO

IA

MN

KS

NE

SD

NDMT

WY

CO

NM

ID

UT

AZ

NV

CA

OR

MA

RICT

SC

NC

VAWV

PA

VTNH

ME

FL

GAALMS

TN

KY

MI

OHINDC

MO

NY

TX

OK

= PGP Transition Demo= ACO Pioneer= MSSP (April 01 start date)= MSSP (July 01 start date)

# expected to double in January, 2013


Integrated/accountable care 2011-2012 market developments

United HealthCare Oncology Bundled PaymentUnited HealthCare purchases OptumSeveral NFP Blue’s Plans move to care management and Shared Savings arrangements (MN, MI, Horizon, Hawaii, MA Alternative Quality Contracts, CareFirst PCMH etc.)Central Maine Healthcare/Bath Iron Works Shared Savings AgreementCigna-Piedmont Physician Group ACO agreement HealthCare Partners-Anthem ACO AgreementCalPERS ACO with CHCW/Hill Medical GroupFour Shared Savings contracts between Fairview Health System and Minnesota Health Plans


Integrated/accountable care 2011-2012 market developments (cont’d)

All 10 PGP Participants renewed to participate in the PGP II CMS ProgramUnited Health Care Group purchase of Monarch Physician GroupCigna Primary Care physician (PCMH) network development (Phoenix) Highmark purchases West Penn/Allegheny Health SystemCommunity Care of North Carolina Medicaid model expanded to other states (Alabama, etc.)Nationwide Children’s Hospital Medicaid Capitation programAetna partners with Heartland Health and Banner HealthAetna establishes Accountable Care Solutions (ACS)UPMC and The Advisory Board form Evolent


New payment models: Delivery systems and Blue Cross plans

Minnesota Blue Cross and major delivery systemsHorizon Blue Cross with AtlantiCareBCBS Michigan with Marquette General HospitalHMSA with Hawaii Pacific HealthBlue Cross of Massachusetts AQC programBlue Shield of California/CHW/Hill Medical Group (CalPers)CareFirst BCBS in Maryland building largest PCMHBCBS Illinois-Advocate ACO


January 1913

““The past 50 years The past 50 years have been marked by have been marked by advances in the science advances in the science of medicine.of medicine.

The next 50 will be The next 50 will be marked by marked by improvements in the improvements in the organization and organization and teamwork of how health teamwork of how health care is deliveredcare is delivered””..

– Charles H. Mayo

Premier’s Partnership for Care Transformation (PACT)


Partnership for Care Transformation (PACT)

Our mission is to support our members on their journey to managing, measuring and improving population health in an efficient manner by providing members:

•Structure and support for members to share knowledge, experience and best practices;•Expertise in areas that are key to successfully implementing accountable care; and,•Tools and templates to reduce duplication of effort and to reduce the time to implement accountable care principles and programs.


““I use not only all of I use not only all of the brain that I have, the brain that I have, but the brains I can but the brains I can borrow.borrow.””

–

Woodrow Wilson

The power of collaboration


The Premier ACO model

A group of providers willing and capable of accepting accountability for the total cost and quality of care for a defined population.

A group of providers willing and capable of accepting accountability for the total cost and quality of care for a defined population.

Payor Partners

Insurers

Employers

States

CMS

Core components:•People Centered Foundation•Health Home•High-Value Network•Population Health Data Mgm•ACO Leadership•Payor Partnerships


Definition of success: Improving Triple Aim™ population outcomes


Implementation Collaborative members

As of 8/30/2012

31

NJDEMD

WA

IL

WI

L A

AR

MO

MN

KS

NE

SD

NDMT

WY

NM

ID

UTNV

OR

MA

RICT

SC

NC

VAWV

PA

VTNH

ME

GAALMS

KY

MI

OHIN

DCMO

NY

TX

OK

IA

FL

TN

CA

CO

AZ

HI

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Readiness Collaborative members

32

As of 7/31/12

NJDEMD

WA

IL

WI

LA

AR

MO

IA

MN

KS

NE

SD

NDMT

WY

CO

NM

ID

UT

AZ

NV

CA

ORMA

RICT

SC

NC

VAW V

PA

VTNH

ME

FL

GAALMS

TN

KY

MI

OHINDC

MO

NY

TX

OK

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https://www.brgeneral.org/home

http://www.tanner.org/


Seven Integrated/Accountable Care market segments


Member gaps and top priorities Based upon ~ 100 Accountable Care assessments

Broad and robust primary care networkPhysician alignmentHealth Home (Patient Centered Medical Home)Clinical integration modelCare managementEMR/HIT and informatics Payor alignment with care managementLeadership, culture and transformation

Payor Partners

► Insurers

► CMS

►

Employers


Collaborative learnings thus far

Managing populations, not just patients, requires fundamental change within most healthcare systemsFundamental transformation will be clinical, with financial/payment, HIT, and legal changes to support clinical changePhysician leadership and professional management is pivotal Significant

culture shifts will need to occur within organizationsCare models to define evidence-based standards of care delivery and coordination across the continuum of care are critical building blocks to an ACOExecutive leadership within C-Suite and Board are vitalKeys to success include a primary care foundation, plus PCMH and comprehensive informatics across the continuumVariability of models is a given…flexibility and innovation is market drivenShared learning collaborative is both a motivator and supportive structurePrivate payor readiness to alter reimbursement and share data to support ACO model varies widelyUnknowns are plentiful…public and private sector have a lot to learn to effectively transform health care


Lessons Learned: Payor partnerships

Which population segments are we going to target?What role should the payor play (care management, etc.)?What criteria should we use to evaluate potential payor partners?What are the important areas in contracting with a payor?

•

Transparency•

Timely and comprehensive data•

Shared savings•

Care management role

Care transformation and payment models


Create the vision for Population Health Management

Payor PartnersPeople Centered Foundation

Health Home

Payor Partnerships

IntegratedLeadership

Population Health Data Management

Clinical Integration


Foundational Philosophy: Triple Aim™

The bridge from FFS to accountable care

What are the underpinning

building blocks?

CurrentFFS

System

AccountableCare

Measurement


Integration and new payment models Where to engage?

Pay for Performance

MSSPBundled Payment Initiative

Shared Savings

Pioneer ACO (CMMI)

Capitation

Movement to integrated care and new payment models

Value Based Purchasing

Partnership for Patients


Ten Percent of Hospital Medicare revenue at risk by 2017

Value Based Purchasing

Readmissions and hospital acquired conditions penalties

Inpatient Quality reporting participation incentive program

Meaningful Use incentive payments

Source: AHA


Shared Savings model

-3 -2 -1 0 1 2 3

Expe

ndin

g

Year

Projected Spending

Actual Spending

Shared Savings

Target Spending

ACO Launched

Source: Lewis, Julie. “What Could be Next for Health Reform? The Debate In Washington” Presentation. The Dartmouth Institute for Health Policy & Clinical Practice.

2009-07-02.


How are delivery systems addressing the new financial realities?

Operational cost (production) reductionsFocused factory modelAddressing appropriateness of careNew revenue opportunities (e.g. provider-sponsored health plan, retail pharmacy, chronic disease management, etc.)Greater focus on health/wellness/prevention/chronic disease managementReducing redundancies by integrating services (physician services)Health plan partnerships (new payment models)Post-acute care partnerships


Chronic disease management across the continuum in the six major disease areas (asthma, diabetes, CHF, COPD, hypertension, and chronic depression)Patient Centered Medical Home (Health Home)Managing High Risk PopulationsPalliative/end of life careAppropriate utilization of expensive diagnosticsPharmaceutical use/costs (e.g., use of generics)Replacement of more expensive location of care with less expensive location (e.g., family practice office vs. ER).

Areas of per capita cost reduction


Transformational funding

Care management

Shared savings

Key components of new payor contracts


Increase market share/growth

Reduce costs/improve processes/rationalize capacity

Grow new revenue areas (retail health, urgent care, hospital in the home, etc.)

Develop new payor agreements (infrastructure funding, care management, and shared savings)

Financial strategies for success during the healthcare transformation


Common barriers to success

Leadership commitmentCultural changeSize / market presence Financial resourcesPhysician relationsLack of primary care networkInformation technology


Where is reform really going?

““The pub crawl to capitation.The pub crawl to capitation.””

www.premierinc.com

[email protected]

THANK YOU

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The Current State of the Journey to ... - Global Health Carewell-being improvement” • Evolent...

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