Virginia Chamber of Commerce Health Care Conference

Steve Arner

SVP / Chief Operating Officer

June 6, 2013

Carilion ClinicWho we are

(FY 2012)

• Physicians 592

• Hospitals 8

• Employees 11,300

• Admissions 50,300

• Revenue $1.3 B

Vision 2017

We are committed to a Common Purpose of Better Patient Care, Better

Community Health and Lower Cost

Affordable Care Act

2700 pages and virtually nothing about payment

reform

Challenges with Today’s Care Model

• High prevalence of chronic disease and mental illness

• Health care cost growing; burden to business• Shortage of healthcare professionals• Overuse; volume “treadmill”• Inconsistent care; fragmentation• Lack of coordination• Payment models are at odds with addressing

rising costs

OutcomesCost

Healthcare Value =

Changing the Value Proposition

Changing the Value Proposition

• Improving Outcomes and Lowering Costs– A Few High Level Focus Areas:

• Reduce Waste• Prevention• Patient Involvement• Provider, Insurer, Employer, Patient Collaboration

– Case Study: Congestive Heart Failure

Steady improvement has placed us in the top 10 percentCarilion Medical Center – Heart Failure Readmission Rate

Jul-09 July 2005 - June 2008

Jul-10 July 2006 - June 2009

Jul-11 July 2007 - June 2010

Jul-12 July 2008 - June 2011 (FY2013 Pay-

ment Period)

Jul-13 July 2009 - June 2012 (FY2014 Pay-

ment Period)

Carilion Medi-cal Center HF - RSRR

0.24 0.238 0.233 0.222 0.212

US HF - Aver-age

0.245 0.247 0.248 0.247 0.23

US Top 10% Rate

0.221 0.224 0.225 0.225 NaN

19.5%20.5%21.5%22.5%23.5%24.5%25.5%

Carilion Medical Center HF - RSRR US HF - Average US Top 10% Rate

Heart

Fail

ure

Read

mis

sio

n R

ate

CMC 30 Day Readmission Rate (All Cause) for Medicare Patients with Heart Failure Diagnosis

Risk Sharing in the Future is a Must• Partnerships between providers and

insurers and employers is critical:– Share Financial Risk– Share and Use Data for Accountability and Best

Practice

• Align quality / outcome metrics between insurers will allow focus on better care:– Carilion currently has 9 pay-for-performance agreements and

these have a total of 300 at risk measures. About 225 are unique measures.

Accountable Care

Key Facts:

ACO product with Aetna, start date 1/1/2012 (in addition to collaboration on Medicaid, Medicare Advantage, and Employee programs)

Participating in other payers’ shared savings initiatives (Anthem PC2 for example)

Key Facts:

MSSP Participant, start date 1/1/2013

Shared savings based upon achievement of quality benchmarks and cost reduction

46,400 beneficiaries

Qualitative application process; Carilion medical home strategies very helpful for questions regarding quality, care coordination, beneficiary engagement, evidence-based medicine, and reporting.

Key Facts:

Dedication of senior leadership to ACO strategy and development.

Recruitment of a Chief Strategy Officer

Development of a comprehensive enterprise data warehouse (EDW) for integration of EMR data and healthcare claims.

Creation of a Transformation Oversight Committee of senior leadership to develop care delivery strategies for key disease states (CHF, COPD, Diabetes).

Commercial StrategyMedicare Strategy Carilion Clinic Support

575 employed Carilion physicians are Doctors Connected ACO participants.

What is Population Health Management?

• Goal is optimal patient health• Healthcare, not sick care

– Proactive, not reactive

• Align care team resources to meet the needs of different patient segments and personalized to the patient.

• Reduce the need for higher cost services (ED, hospitalizations, imaging tests, etc)

Past Solutions: Cost-Shifting Gov’t Cuts to Private Payers

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2008, for community hospitals.

Medicare

Medicaid

Private Payer

70%

80%

90%

100%

110%

120%

130%

140%

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

Hospital Payment-to-Cost Ratios for Private Payers, Medicare, and Medicaid, 1988 – 2008

Medicaid Reform and Expansion

Why this topic is important to businesses?

• General health of a population and availability of quality health care important to potential employers

• Medicaid expansion isn’t a panacea for payment reform, but will help address the health care needs of an “at-risk” population

• Transforming the health system requires new investments and innovations in care delivery and expansion of Medicaid will:– Help deploy new approaches to a broad population– Allow flexibility to try new approaches to Population Health Management

which hold great potential for lower cost patient care