Using Care Model Transformation and Analytics
to Improve Outcomes and Monetize the Move to Value
Michael Ogden, MD Chief Transformation Officer
Cornerstone Health Care 1701 Westchester Drive, Suite 850
High Point, NC
Dr. Michael Ogden is affiliated with Cornerstone Health Enablement Strategic Solutions
(CHESS), a health enablement MSO that is a joint venture between Cornerstone Health Care, Wake Forest Baptist
Health and Labcorp.
Disclosure
Cornerstone Overview
Moving to Value
Transforming Care Delivery
Using Analytic to Support Care Transformation
Monetizing Care Transformation: Getting the Contracts Right
Cornerstone Health Care
Mission: To be your medical home
Vision: To be the model for physician-led
health care in America
Values: As a physician owned and directed company,
We are committed to ensuring that patient care is patient centered, efficient, effective, equitable,
safe, and timely.
1995 2014
42 shareholder physicians 241 physicians (shareholder & employee)
2 mid-levels 124 Advanced Practice Providers
8 specialties 36 specialties
221 employees 1878 employees
19 locations 21 Practices with extended hours
All on staff at High Point Regional Hospital
Affiliated with 15 hospitals in 8 separate health systems
29 Primary Care practices recognized by NCQA as PCMH
Level 3
Cornerstone Health Care: Then & Now
• Allergy and Immunology
• Bariatric Surgery
• Breast Surgery
• Cardiology
• Endocrinology
• Family Practice
• Gastroenterology
• General Surgery
• Hematology
• Hospitalists
• Infectious Diseases
• Internal Medicine
• Nephrology
• Neurology
• Oncology
• Ophthalmology
• Otolaryngology
• Orthopedics
• Pediatrics
• Psychiatry
• Plastic Surgery
• Podiatry
• Pulmonology
• Rheumatology
• Urology
• Vascular Surgery
Specialties
• Audiometry
• Ambulatory Endoscopy Center
• Behavioral Medicine
• Clinical Pharmacy
• Imaging
• Infusion Services
• Laboratory Services
• Pain Management
• Physical Therapy
• Sleep Lab
Ancillary Services
North Carolina
Archdale
Asheboro
Advance
Claremont
Conover
Elkin
Granite Falls
Greensboro
Hickory
High Point
Jamestown
Jefferson
Jonesville
Kernersville
Lexington
Reidsville
Summerfield
Taylorsville
Thomasville
Trinity
Winston Salem
“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.”
William Pollard.
The Burning Platform
2) We need to: increase quality lower cost increase patient satisfaction
3) Address decreasing physician income and satisfaction
1) Healthcare costs are bankrupting America
An Unsustainable Future
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
2010 2012 2014 2016 2018 2020 2022 2024 2026
Expected future trend (6.5% growth)
Sustainable trend (affordability followed by 4.5% growth)
Ind
ust
ry s
pe
nd
($
T)
$2.6T (18% of GDP)
Time
Waste reduction
A period of growth below GDP growth will be necessary to reach affordability (30%
reduction in costs as a percent of GDP)
Trend reduction
After affordability is achieved, long-term growth must be at the same level of GDP growth
to ensure sustainability
$4.3T (21% of GDP)
$2.8T (14% of GDP)
$7.1T (24% of GDP)
$4.0T (14% of GDP)
Sources: National Health Expenditure data, Bureau of Economic Analysis, Oliver Wyman analysis
The funding gap is widening, creating a need for rapid transformation in the market
Achieving the Triple Aim
There will be continued downward pressure on
health care providers to control costs while
improving quality of care provided.
High Quality
Low Cost
VALUE
• Improve quality of care • Lower cost of care • Provide a great patient experience
• Fee-for-service: • subject to reductions in fees • external efforts to control utilization • scrutiny of care
• Pay for Value: •Favorable reimbursement will go to providers who are able to demonstrate value through high quality care at the lowest cost
• Improving Physician Satisfaction • Devising Care Models that bring the joy back to practicing medicine
The Fourth Part of the Triple Aim
The Holy Grail
A healthcare system that is
• Higher quality
• Lower cost
• Patient centered
• Physician friendly
A Leap of Faith
A Leap of Faith
Changing The Way We Deliver Care
Clinical Psychology
Radiology
Urology
Pharmacist
Surgery
ENT
Pathology
Social Work
Radiation Oncology
Medical Oncology
Pulmonology
Support Groups
Chaplain
Dietician
Research
Patient
Clinical Psychology
Radiology
Urology
Pharmacist
Surgery
ENT
Pathology
Social Work
Radiation Oncology
Medical Oncology
Support Groups
Chaplain
Dietician
Research
Patient
Navigators
Pulmonology
A Disciplined Process to Identify Opportunity and Quantify Savings
1
2
3
• Stratification of population into similar categories • High cost areas reveal several market specific opportunities
to reduce waste and curb increasing cost trends
• Opportunities bundled into a unified program called a ‘care model’ aimed at transforming care
• Market specific recommendation developed on staging of care models
• Savings estimates developed by site of service and population segment for each care model
• Savings assumptions applied to clinical spend matrix to identify the magnitude of savings per market
Identify Opportunity
Develop Care Model
Quantify Impact
Population Risk Stratification
At Risk BAND 3
Stable BAND 4
Healthy BAND 5
Advanced Illness BAND 1
Multiple Chronic Conditions
BAND 2
% of Population
% of Cost Annual Cost
3% 29% $54,444
7% 23% $14,232
10% 19% $7,728
30% 22%
$3,168
50% 7% $660 Source: CareFirst Book of Business 2010, CareFirst Health Care Analytics
Segment and Focus the Effort Where it Is Needed
Re-allocate Resources
Patient
Patient Centered Resources
Patient Care Advocates • Education: Certified Medical Assistant • Training: Specially trained in customer
service and disease processes • Function: Performs outreach to engage
patients in care and close gaps in care
Patient Centered Resources
Health Navigators • Education: Registered Nurse • Training: Concentration in specialty or case
management • Function: To be the eyes and ears of the
physician between office visits
Patient Centered Resources
Patient Engagement Coordinator • Education: Certified Medical Assistant • Training: Enhanced CMA training • Function: Performs outreach to engage
patients in care and close gaps in care
Patient Centered Resources
Encounter Specialist • Education: Certified Medical Assistant • Training: Proprietary education program
developed by Cornerstone Medical Director
• Function: Scribe on steroids
Patient Centered Resources
Pharmacist • Education: PharmD • Training: Clinical Pharmacy • Function: Comprehensive medication
management
Patient Centered Resources
Licensed Clinical Social Worker • Education: Clinical Social Work • Training: Emphasis on behavioral health • Function: Social work tasks and basic
therapy (IMPACT Model)
Patient Centered Resources
Dietician • Education: Licensed Dietician/ Nutritionist • Training: Emphasis on diabetes • Function: Facilitate appropriate dietary
recommendations
Patient Centered Resources
Health Coach in partnership with Rite Aid
• Education: varies • Training: Defined program in health coaching • Function: Health coaching for diabetes,
hypertension, weight management, and smoking cessation
Patient Centered Resources
Patient
Roadmap to a Transformed Delivery Model
2012
2013
2014
Jan: Care Model Redesign Efforts
Begin
July: Heart Function
Clinic Opens
Nov: Personalized Primary
Care Program Pilot
August: Personalized
Cancer Program
May: Cornerstone LifeCare Program
Jan: Cornerstone Care Outreach Clinic
Personalized Primary Care rollout
A Year in the Life of Patient #1
Red indicates CHF related incidents
Blue indicates non-CHF related incidents
A year+ in the life of HFC patient #1
Team: Dedicated team of 3 physicians
Embedded behavioral health provider Embedded pharmacy services
Health Navigator Nurse Practitioner
Nutritionist
Cornerstone Heart Function Clinic
Patients Enrolled:
Potential Savings:
(703,713)
237
Ed % Chg -31%
Hosp % Chg -40%
Clinical Impact:
Team: 5 hematologist/oncologists
Tumor lines: breast, lung Director of Psychosocial Oncology (PhD
psychologist with specialty training in oncology) Tumor line specific Health Navigators
Nutritionist Pharmacist
Chaplain Embedded Internist for primary care needs
Cornerstone Cancer Services
Patients Enrolled:
Potential Savings:
Lung Cancer
80 Breast Cancer
98
Clinical Impact:
Pending Case Study Pending Case Study
Medical Director of Care Outreach Focus: underserved patients
Embedded services:
Initial focus on Dual Eligible patients
Cornerstone Care Outreach
Patients Enrolled:
Clinical Impact:
•LCSW •Consultant psychologist (IMPACT Model) •Pharmacist
Team:
Potential Savings:
106
ED% chg -15%
Hosp% chg -64%
(209,499)
Top 20% of patients
Health Navigation
Care Coordination and Outreach (PCAs)
Health Coaching (Rite Aid)
Personalized Primary Care Program
Patients Enrolled:
Readmissions:
Team:
Potential Savings:
PPCP B
400 PPCP A
256
ED% chg A -27%
ED% chg B -34%
Hosp% chg A -45%
Hosp% Chg B -31%
A (299,651) B (393,536)
Top 1-3% of patients
Health Navigation
Embedded Pharmacist
Licensed Clinical Social Work
Extended Office Visit times
Home visits
Personalized Life Care Program
Patients Enrolled:
Readmissions:
Team:
Potential Savings:
49
ED% chg -14%
Hosp% chg -69%
(739,364)
Big Data versus Actionable Information
Data at the Point of Contact
Data to Drive Quality Improvement
Data to Close Gaps in Care
Data on Patient Risk
Profiling Data
Provider Cost and Quality Data
The Healthcare Delivery System Model is Changing
Volume Based
• FFS/DRGs
• No payment for readmits, never events, etc.
• Departmental
• Volume
• Efficiency (on a procedure level)
• Visits
• Surgery / Procedures
• Outpatient ancillary
• Capacity
• Revenue-producing assets
• Patient referrals
Reimbursement
Organizational model
Value drivers
Profit pools
Investments
Value Based
• Outcomes & Quality based
• Global payments
• Populations
• Conditions
• Focused factories
• Quality and low variability
• Efficiency (on a population level)
• Wellness and prevention
• Population management
• Chronic condition management
• Health IT
• Clinical integration
• Commercialization
Sources of Revenue in Pay-for-Value
Risk
Shared Savings- upside gainshare
Management Fees, PMPM
Quality, P4P
Patient Satisfaction payments
Fee for Service
Value-Based Payment Modifier Expands to Include Groups of 10+ EPs1
Source: CMS, “CY 2014 Physician Fee Schedule Final Rule” available at: www.federalregister.gov, accessed December 16, 2013; Advisory Board interviews and analysis.
Eligible Professionals.
Affordable Care Act.
3) Group Practice Reporting Option.
2015
2016
2017
PQRS Non-Participants
10+ EPs
PQRS Participant, 10 – 99 EPs
PQRS Participant, 100+ EPs
Upside 0% 0 to 2X 0 to 2X
Downside (2%) 0% 0 to (2%)
VBPM program expands to all providers
VBPM2 Implementation Timeline Financial Impact of 2016 VBPM
Bonuses and Penalties Based on Data Collected in 2014
Program in Brief: Value-Based Payment Modifier
• Pay-for-performance program established by ACA2
• Modifies Medicare revenue based on PQRS participation, performance on quality measures
• To avoid automatic penalties, groups must either participate in PQRS through the GPRO3, or have 50% of their eligible providers successfully report as individuals.
Time
VBPM applied to groups of 10 or more providers
VBPM applied to groups of 100 or more providers
2014 PQRS data collected for 2016 VBPM
Moving to True Pay-for-Performance
Transitioning from Carrots to Sticks
Financial Penalties for Nonparticipation Continue to Increase
CMS Physician Quality Incentives and Penalties
Available to participating providers
(1.0%)
(2.0%)
Groups must meet size requirements to face VBPM penalties
Penalties
52 Source: CMS, “CY 2014 Physician Fee Schedule Final Rule” available at: www.federalregister.gov, accessed December 16, 2013; Advisory Board interviews and analysis.
(1.5%) (2.0%)
0.5% 0.5%
2012 2013 2014 2015 2016
PQRS, VBPM penalties in 2015-6 tied to reporting in 2013-4, respectively
Incentives
0.5%
Levied by the PQRS program
Levied by the VBPM program1
Penalties for PQRS Non-Participation
1) Applies to groups of 100 or more eligible providers in 2015, groups of10 or more eligible providers in 2016.
Risk-Based Contracting on the Upswing
Source: 2011 and 2013 Accountable Payment Surveys, Financial Leadership Council interviews and analysis.
2011 question asked as, “Have commercial insurers in your market introduced new P4P initiatives in the last 24 months?”; 2013 question asked as, “Does your organization currently have any pay-for-performance contracts, besides Medicare’s mandatory VBP and readmissions penalties.”
Percentage of Providers with Risk-Based Contracts in Place
56%
Pay-for-Performance1
16%
Bundled Payment
83% 17%
Total Cost of Care
55% 28% 35%
2011 Survey
2013 Survey
With Risk-Based Contracts Without Risk-Based Contracts
65% 72% 45%
44% 84%
The number of providers with total cost of care and with bundled payment contracts has doubled in two years.
Getting from Here to There Lingering Uncertainty About The Transition
Source: Financial Leadership Council interviews and analysis.
Decline of capitation
Backlash against HMOs
Past Future
<1-3% of payments value-
oriented
Present
~10% of payments value-oriented
~70% of payments value-
oriented
Recent Proliferation of Risk-Based Contracting Models
Ava
ilab
ility
of
Ris
k O
pti
on
s
Introduction of CMS risk programs
• MSSP
• Bundled Payments
More prevalent global payment contracts
Proposed “Medicare networks”
• Similar to ACOs
• Potential for partial capitation
• Stronger quality incentives
Reemergence of capitation
• Alternative Quality Contract
Rise of public payer managed care
• Medicare Advantage
• Medicaid Managed Care
Time
Value Based Model Transition Over Time
Projected Ambulatory Provider Model Evolution % of physicians in value-based operating model
Sources: AHD Acute Data; SK&A, NEJM; RWJ Foundation; HIMMS; Commonwealth Fund; Oliver Wyman Analysis
Medicare programs are only the tip of the iceberg; the commercial market is moving to value as well.
0%
20%
40%
60%
80%
100%
2010 2015 2020
Fee for service
Value based models (e.g., episode based care, population care)
Docs (%) ~10% ~40% ~65%
Docs (#) ~45k ~230k ~360k
Future Compensation Gains will Be Dependent on Gainshare
100% 98% 98% 90%
Fee For Service FFS + P4P Gainshare Risk
100% 2%
7% 25%
Summary • The healthcare marketplace is moving to value.
• Transforming healthcare delivery requires a team approach and innovative ways of solving current problems.
• Performance based analytics are needed to drive clinical improvement.
• Value based contracts need to be implemented with care model transformation to capture shared savings.
• CHESS represents a 21st century MSO designed to monetize the move to value.
“From now on we will live in a world where
man has walked on the moon.
It’s not a miracle. We just decided to go.”
Jim Lovell, Apollo 13
