The Future of Healthcare: Accountability and Transparency for Outcomes and Costs

Excel for New LeadersCurt Steinhart, MD – OU Medical System

Dale W. Bratzler, DO, MPH – OU Physicians

OBJECTIVES

• Give examples of what is “Right Here, Right Now”

• Show relevance to stakeholders– Physicians– Leaders– Administrators

• Place current and near-term imperatives in the context of the “Four Actions Framework”

Why was health reform inevitable?

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18US (17.1%)FR (11.6%)SWE (11.5%)GER (11.2%)NETH (11.1%)SWIZ (11.1%)DEN (11.1%)NZ (11.0%)CAN (10.7%)JAP (10.2%)NOR (9.4%)AUS (9.4%)*UK (8.8%)

Notes: GDP refers to gross domestic product. Dutch and Swiss data are for current spending only, and exclude spending on capital formation of health care providers.Source: OECD Health Data 2015.

Exhibit 1. Health Care Spending as a Percentage of GDP, 1980–2013

Percent

* 2012.

http://www.iom.edu/Reports/2011/~/media/Files/widget/VSRT/healthcare-waste.swf

Background

JAMA. 2013;310(18):1947-1963.

Where do we spend our healthcare dollar?

Hospitals and other care facilities, along with professional services are the primary target of most efforts to reign in healthcare spending.

http://www.iom.edu/Reports/2011/~/media/Files/widget/VSRT/healthcare-waste.swf

Rising “Consumerism” around Health Care

• Consumer groups increasingly demanding data about the quality and costs of care (“transparency”)– Rising co-pays and deductibles– Costs for insurance growing much faster

than incomes– Increased lay reports about quality issues in

healthcare• Legislators responded

Growing Recognition………

• US has the best “sick care” (not chronic care) system in the world– High tech– Complex care– Heavily hospital- and specialty-based– Very costly

But………• Our population is not healthy

JAMA. 2013;310(18):1947-1963.

How are those paying the bills responding?

Many Quality and Payment Provisions in the ACA

• Required by law….– Public quality reporting:

• Hospitals, dialysis units, nursing homes, home health agencies, physician practices, cancer centers…..

– Value-based payment• Reward high quality care – penalize poor quality care

– Hold providers accountable for overall costs of care (“efficiency”)

Healthcare quality is in the public domain for most

settings of care!

Move to “Value”

Value = Quality (and Service)/Costs

Goal: We want the highest quality of care (and service) at the lowest costs.

Incremental FFS payments

for value

Bundled payments for acute episode

Bundled payments for chronic care/

disease carve-outs

Accountability for Population

Health

Current State: Payments for

Reporting

Range of Models in Existence or Development

Increasing assumed risk by provider

Increasing coordination/integration required

From…. ..get paid more for doing more

To…. ..profiting by keeping your population of patients healthy, delivering high-quality care, and doing so at less cost

Physician Practices

Physician Quality Reporting System (PQRS)Impact on Physician Payment

PQRS Incentives

Year Successful Not Successful

2009 2.0% --

2010 2.0% --

2011 1.0% --

2012 0.5% --

2013 0.5% --

2014 0.5% --

2015 No Incentive -1.5%

2016 + No Incentive -2.0%

http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/

Physician Medicare Value Modifier

Quality and Resource Use Report (QRUR)

The Medicare Report Card!

Quality and Resource Use Report (QRUR)

Nine percent (9%) of a physician’s Medicare payment in 2017 is tied to performance on PQRS

measures, meaningful use, and the physician value modifier for care provided in 2015.

Payment reform is very bipartisan….. ..and not limited to Medicare or Medicaid

http://www.gpo.gov/fdsys/pkg/BILLS-114hr2enr/pdf/BILLS-114hr2enr.pdf

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)Is payment reform bipartisan??

Facts about MACRA:

Bill sponsor in the House was a Republican (a physician) from Texas

The Senate vote was 92 to 8!

The House vote was 392 to 37!

TITLE I—SGR Repeal and Medicare Provider Payment Modernization

• Creates incentives to use alternate payment models (APMs)– ACOs– Medical Homes– Bundled payment arrangements– Other (being developed)

• Financial incentives to participate in APMs as well as exclusion from the MIPS assessment

http://www.gpo.gov/fdsys/pkg/BILLS-114hr2enr/pdf/BILLS-114hr2enr.pdf

TITLE I—SGR Repeal and Medicare Provider Payment Modernization

Eligible Professional

Alternate Payment Mechanisms• “Substantial portion” of revenues*

from “approved” alternate payment models

5% bonus each year from 2019-2024

0.75% increase per year beginning in 2026

Merit-based Incentive Payment System†• Providers receive a score of 0-100• Each year, CMS will establish a

threshold score based on the median or mean composite performance scores of all providers

Providers scoring below the threshold will be subject to payment reductions (capped at 4% in 2018, 5% in 2019, 7% in 2020, and 9% in 2021 to 2023).

Providers scoring above the threshold will receive bonus payments (up to three times the annual penalty cap).

*25% of Medicare payments 2019-2020 50% of Medicare payments 2021-2022

75% of Medicare payments 2023 and beyond

†Scores will be posted to Physician Compare website

It’s not just Medicare

• Humana• UnitedHealthcare• BlueCross• Medicaid• Others (including some employers)

Most of the third-party payers have some incentive programs for quality metrics, or have begun focusing on cost and quality.

What are they measuring for quality?

• Most are focused on primary care services in the office setting– Common conditions (diabetes, hypertension,

COPD, ischemic vascular and coronary disease)– Preventive services

• Vaccinations• Screening examinations – particularly cancer screening

– At risk behaviors – smoking, obesity• Some specialty-specific quality metrics

(particularly specialty-specific registries)

What are they measuring for quality?

They are also measuring costs of care and “efficiency”……and they are holding us accountable for the

“episode of care.”

Hospital Stay

Medicare Part A costs

30 days post-discharge3 d

Admission Discharge

All Medicare Part A and Part Charges

An “episode” of care

Medicare Spending per Beneficiary

Cost Efficiency Measure

http://www.optuminsight.com/transparency/etg-links/episode-treatment-groups/

Aetna’s model for cost efficiency

http://managedcaremag.com/archives/1202/1202.narrow_networks.html

http://www.bizjournals.com/seattle/blog/health-care-inc/2013/10/seattle-childrens-suit-raises.html?page=all

What about hospitals?

• A long list of quality and cost metrics now impact hospital payment!– Publicly reported on Hospital Compare

website– Used to adjust hospital payments!

Examples of hospital metrics

• Hospital-acquired infections and complications

• Hospital-acquired conditions• Avoidable hospital readmissions• Avoidable hospital admissions• Hospital mortality rates for common

conditions• Patient satisfaction

Going forward…. ..most assuredly there will be…

• …greater accountability for costs and quality

• …greater transparency for all providers of care

• …market pressure to improve efficiency

………….and the pace is speeding up dramatically!

Sylvia M. Burwell, January 26, 2015

Hip and knee replacements are some of the most common surgeries that Medicare beneficiaries receive. In 2013, there were more than 400,000 inpatient primary procedures in Medicare, costing more than $7 billion for hospitalization alone.

http://innovation.cms.gov/initiatives/ccjr/

FOUR ACTIONS FRAMEWORK

dale-bratzler@ouhsc.edu

curt.steinhart@hcahealthcare.com