Value-Based Services The Hospital Perspective

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1 Value-Based Services The Hospital Perspective Meals on Wheels America Annual Conference and Expo Nashville, Tennessee September 1, 2016 Brian M. Duke MHA MBE System Director, Senior Services Main Line Health

2 Transformational Industry Changes 2 Entire economic foundation has shifted from volume to value Increasingly limited resources and expanded pressure to reduce costs Consumerism is driving purchase: access, cost, convenience and transparency of value Patients will be directed by narrow provider and population health networks Emergence of technological resources for maintaining health and managing illness MLH s Business Strategy Physician manpower shortage will require redefining the care model Marketplace is crowded with traditional and nontraditional competitors from broader regions Shift from episodic treatment to chronic disease management and wellness are driving population-based care and other new care models Consolidation of marketplace into mega systems is redefining brand equity

3 Redefining the Value Proposition Four Imperatives For Health Systems Desirable Network Attributes Low Cost Geographic Reach and Clinical Scope Clinical and Service Quality Competitive Unit Prices Total Cost Control Strategic Imperatives: Strategic Imperatives: Strategic Imperatives: Strategic Imperatives: Match service portfolios, footprints to target purchasers Explore partnership strategies that strengthen market presence Present unimpeachable clinical credentials to wholesale buyers Emphasize access, experience advantages to individual consumers Avoid reactive position vis-a-vis price cuts, transparency Radically restructure cost structures to sustain lower unit prices Develop population health model to control cost trend Clearly communicate total cost advantage to potential purchasers Source: Health Care Advisory Board interviews and analysis. And allow us to care for our patients across the continuum

4 Consumer Preferences Anything But Uniform 4 CONVENIENCE Extended Hours Clinic is open 24/7 highest-ranked convenience attribute Time to First Available I can walk in without an appointment and be seen within 30 minutes ranked highest among convenience attributes by these cohorts Ancillaries On-site I can get lab tests or x- rays done at clinic highest attribute ACCESS After-Hours Access These cohorts preferred After-hours access over Weekend access Weekend Availability These cohorts preferred Weekend access over After-hours access VALUE REPUTATION QUALITY Eliminating Out-of-Pocket Charges Convenience > Free Convenience, Service Trump Free Visit will be free was these cohort s top preference across all 56 clinic attributes Time to first available and Ancillaries on-site over Free visit What Reputation? These cohorts cared less about reputation than the 65+ cohort no reputation factors appeared in their top 20 attributes. Their highest reputation factor was Clinic s patient satisfaction survey scores are in top 10% for my area Cutting Edge Technology and Provider Credentials Provider continuity, credentials over Free visit Brand/Affiliation 4 of top 20 clinic attributes were on reputation Treatment by a doctor instead of a nurse practitioner and Clinic has latest, cutting-edge technology were the highest-ranked quality preferences across all cohorts, both were preferred over Clinic's quality scores are in the top 10% for my area for all cohorts Source: The Advisory Board Company, 2014 Primary Care Consumer Choice Survey, Marketing and Planning Leadership Council; Health Care Advisory Board interviews and analysis.

5 All Payers Seeking to Change Providers Incentives 5 Traditional Fee-For-Service (FFS) Value-Based Purchasing Bundled Payments Accountable Care Organizations (ACOs) Definition Payments are based on volume of service and no link to quality or efficiency Pay-for-performance program differentially rewards or punishes based on performance against predefined process and outcomes performance measures Purchaser disburses single payment to cover certain combination of hospital, physician, postacute, or other services performed during an inpatient stay or across an episode of care; providers propose discounts, can gain-share on any money saved Network of providers collectively accountable for the total cost and quality of care for a population of patients; ACOs are reimbursed through total cost payment structures, such as the shared savings model or capitation Purpose Reward based on volume (more tests, more admissions, more ED visits) necessary or not Create material link between reimbursement and clinical quality, patient satisfaction scores Incent multiple types of providers to coordinate care, reduce expenses associated with care episodes Reward providers for reducing total cost of care for patients through prevention, disease management & care coordination Source: Health Care Advisory Board interviews and analysis.

6 CMS Commits to VBP Reformation 6 FFS Increasingly Tied to Value Percent of Medicare Payments Tied to Quality (Portion of payment vary based on quality/efficiency of care) 80% 85% 90% Aggressive Targets for Transition to Risk Percent of Medicare Payments Tied to Risk Models (Some payments linked to effective management of population or episode of care; triggered by care delivery with opportunities for shared savings or 2-sided risk) 20% 30% 50% Examples of Quality/ Value Programs Hospital-Acquired Condition Reduction Program Hospital Value-Based Purchasing Program Hospital Readmissions Reduction Program Merit-Based Incentive Payment System Examples of Qualifying Risk Models Medicare Shared Savings Program Bundled Payments for Care Improvement Initiative Patient-Centered Medical Home Source: The Advisory Board Company HHS, Progress Towards Achieving Better Care, Smarter Spending, Healthier People, available at: accessed February 2015; Health Care Advisory Board interviews and analysis.

7 CMS Charting a Path Toward Greater Risk: Continuum of Medicare Risk Models 7 Track 3, Pioneer and Next-Gen ACO Filling Out the Continuum Pay-for- Performance Bundled Payments Shared Savings Shared Risk Full Risk Hospital Value-Based Payment (VBP) Program Hospital Readmissions Reduction Program Hospital Acquired Condition (HAC) Reduction Program Merit-Based Incentive Payment System MLH participating Bundled Payments for Care Improvement Initiative (BPCI) Select Health Care organizations participating Can choose from four episode-based payment models Medicare Shared Savings Program Track 1 (one-sided) MLH participating MSSP Track 2 (two-sided risk) MSSP Track 3 (two-sided risk) Next-Generation ACO (two-sided risk) Next-Generation ACO (optional full performance risk) Medicare Advantage (providersponsored) While participation in the BPCI initiative was voluntary, CMS finalized a rule that will go into effect on April 1, 2016 requiring certain hospitals within 67 predetermined areas to participate in a bundled payment program for lower extremity joint replacement; Philadelphia Metro area is not one of the 67. Increasing Financial Risk Source: Health Care Advisory Board interviews and analysis.

8 Health Systems Benefit by Proactively Transitioning to Value 8 Advantages to Being Ahead of the Curve Increasing sustainability by attracting new customers as valuebased purchasing takes hold Gaining experience in managing risk Building relationships with partner providers, government and social services to coordinate complex services Avoiding the alternative to action lower-quality, higher-priced care Source: Kaiser, Laura S. and Lee, Thomas H.; Turning Volume Based Health Care Into A Real Business Model; Harvard Business Review, October 8, 2015

9 Population Health is Driving Innovation and Team-Based Approach to Care 9 Health Care Innovation Convergence Financing and Care Innovation Disruptive Innovation ZOOM+- performance health insurance Payment Innovation Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) Health Plan Consolidation 5 health plans will now cover 61% of the US commercial market The Role of the Family Caregiver Family caregivers contributions improve care recipients health and reduce healthcare expenditures REACH II Community Living Program Care Transitions Source: 1. William Copeland, Vice President, US Life Sciences and Health Care, Deloitte LLP Stevens, Alan B.; 2. Thorud, Jennifer L., The Symbiosis of Population Health and Family Caregiving Drives Effective Programs that Support Patients and Families, Generations, Winter Vol. 39.No. 4

10 Considerations for Health Systems in the Journey Towards Value 10 Partnerships Opportunities Challenges Hospitals and Health Systems Managed Care Organizations Accountable Care Organizations Medicare Advantage Information and Referral Health and Wellness Social Determinants of Health Care Transitions Family Caregiver Support Post Acute Care Offerings/ Coordination/ Management Measures of Value Continuous Change Operational Transformation Payment Social and non-medical needs are medical needs - Dr Jandel Allen-David MD Vice President Kaiser Permanente

11 Transitions in Care MLH Skilled Nursing Facility Strategy 11 SNF costs account for over 50% of total post acute costs; MLH must develop collaborations with SNFs in order to improve overall outcomes, reduce total costs and reduce readmissions. How have we engaged our partner SNFs? Conduct quarterly engagement meetings at each Hospital Developed educational brochures for patients and SNF capabilities grid for MLH staff Enhanced nurse-to-nurse hand-offs Decreased elective joints going to SNFs Monitoring readmissions from SNFs Working with DVACO Developed SNF Quality Rating Model What are we working towards? Quality and Collaboration Change the culture for care management, therapy and patients using specific criteria to determine most appropriate post-acute level of care Increase quality together through: SNF ambassador program Physician engagement focus on Medical Directors Physician, employee, caregiver, and patient education Domains for SNF Quality Rating Readmissions ACO (probably only this) MLH Rating (Skilled Nursing Facility (SNF) Compare) Overall Rating Staffing Rating Physician Services Physician Weekend Visits Averages number of Days to Initial PCP Visit Quality Metrics (SNF Compare) % of Long Stay Residents With a Urinary Tract Infection % of Long Stay Residents Experiencing One or More Falls with Major Injury % of Short Stay Residents Who Self Report Moderate to Severe Pain % of Short Stay Residents With Pressure Ulcers That Are New or Worsened % of Short Stay Residents Who Newly Received an Antipsychotic Medication Average Length of Stay (LOS) Snapshot of SNF Quality Rating Dashboard

12 12 Meals on Wheels Greater Pittsburgh 2016 National Resource Center on Nutrition & Aging Learning Collaborative Grant - Submitted by Northern Area Multi Service Center (NAMS) of Allegheny County MOWGP is a collaborative of seven 501(c)(3) organizations including NAMS, LifeSpan, Inc., Eastern Area Adult Services, Hill House Association, Plum Senior Community Center, Riverview Community Action Corporations and the Catholic Youth Association. - Goal: to integrate nutritional support delivery with health and human services

13 13 Meals on Wheels Greater Pittsburgh Areas of focus simplify process of including nutrition supports in MLTSS plans expand service delivery to dual eligible participants in LIFE/PACE programs Ensure nutritional support is more readily available post acute Create the marketing\communication materials for the MOWGP collaborative Create a common set of service delivery\performance standards Position nutritional support services within a comprehensive set of service that preserve consumer independence

14 14 Market Trends Rebalancing CMS Alternative Payment Mechanisms Reduction of Hospital Readmissions/Admissions Calculation of Cost Avoidance Evolution of Care Management Managed Long Term Services and Supports

15 15 Meal Delivery Programs Should Consider Definition of services with information related to evolving needs or people served or potential populations to serve Development of measurements which demonstrate continued success with the process and which demonstrate impact on the health and wellness of participants Exploration of ways to extend expertise and services into other markets Research into risk sharing Expand connections in health care including primary care practices and accountable care organizations and long term services and supports Two way relationships and collaborative possibilities

16 16 Meal Delivery Programs Should Consider Completion of homework - definition of population; history; determination of cost; knowledge of capacity; feasibility of partnerships

17 17 Contact Information Brian M. Duke MHA MBE System Director, Senior Services Main Line Health

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