Strategies for Commercial ACO Development

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1 Strategies for Commercial ACO Development Second National Accountable Care Organization Congress November 2, 2011 Los Angeles, CA Sam Nussbaum, M.D. Executive Vice President, Clinical Health Policy and Chief Medical Officer

2 Health Expenditures $4,500 $4,000 $4.48 Trillion 19.3% GDP 19.5% 19.0% Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, $3,500 $3,000 $2.57 Trillion 17.3% GDP 18.5% Billions $2,500 $2, % 17.5% % GDP $1,500 $1,000 $500 $ % 16.5% 16.0% 2008 version of the National Health Expenditures (NHE) released in January 2010 Kaiser/HRET Survey of Employer Sponsored Health Benefits,

3 Healthcare Costs are Concentrated 23 Million Beneficiaries Spending $1,130 each Total Spending = 5% ($26 B) 16.1 Million Beneficiaries Spending $6,150 each Total Spending = 20% ($104 B) 7 Million Beneficiaries Spending $55,000 each Total Spending = 75% ($391 B) 3

4 Payment Innovation Payment Reform Models Fee-for-Service Enhancement Payment for quality (Q-HIP ) Patient Centered Medical Homes Centers of Excellence Enhanced payment for immunization, urgent care Episode-Based Payment (Bundled Payments) Chronic illness risk adjusted (diabetes, heart disease) Surgical services Transplant/cancer Population-Based Payments Accountable Care Organizations Capitation Gain sharing Global budgets Performance Recognition Programs Reward Quality Outcomes (P4P) 4

5 Current Program Landscape Anthem Models in Markets Payment for Value ACOs in CA and NH; over 90k members Expansion underway in CA, IN, NY, OH Value-Based Reimbursement Bundled payments currently in MO, CO, ME, and NV Expansion underway in WI, CA, MO, GA and others PCMH currently in CA, CO, CT, ME, NH, NY, OH Includes over 170k members Fee-for- Service Physician P4P: Programs in 13 markets, 70k+ physicians Hospital P4P: Q-HIP programs in all markets, with 560 hospitals (approx. 55% of admissions) Early Integration Integration of Care Delivery Fully Integrated 5

6 ACOs: The Race to Value-Based Care Start: Fee For Service Concerns Along the Way: Attribution Overuse of supply sensitive care increases revenue; optimized FFS revenue model Payment shifting to private sector; will gain sharing overpower FFS Acquisition of specialty practices Key Principles for the Race: Primary Care is central Commit to evidence-based medicine Information at the point of care Focus on health, prevention, risk reduction for chronic illness Coordination of care Finish: Value-Based Care 6

7 Anthem ACO Model Membership Defined by attribution for PPO and member selection for HMO All lines of Business including Senior, Commercial (Small and Large Group, Local and National), and State Sponsored Payment Methodology Fee For Service Care management fee Shared savings Funding Types Fully Insured ASO (phased in) Information Exchange Core report set on quality and efficiency Risk stratified population reports Care gap population reports Metrics Quality & Resource Facility Physician Medical Managment Traditional UM shifts to point of care CM/DM shifts to physicians Communications Member, Employer, Broker 7

8 Dartmouth-Hitchcock ACO Membership Year 1 - ~12,000 Fully Insured Integrated Delivery System Academic Medical Center >1200 PCP s and specialists Year 2 Projecting ~15,000+ Fully Insured and PPO members Cost Year 1 Risk Adjusted costs have declined 2.4% from the benchmark 8

9 Patient-Centered Medical Home Payment Methodology FFS Prospective Payment Pay For Quality For services currently recognized through Medicare RBRVS system; potential for additional services NCQA s PPC Recognition: Care Coordination Process Redesign HIT Evaluate Levels of Achievement Clinical Process and Outcomes Resource Use/ Cost of Care Satisfaction and Service 9

10 WellPoint PCMH Pilots WA OR NV NV CA AK ID UT AZ HI MT M T WY NM CO ND MN WI SD IA NE IL KS MO OK AR MS TX LA MI IN KY TN AL OH GA W V SC F L V T ME N NY H MA PA NJ RI CT MD D VA ED C NC Colorado: Convener: Health Team Works Maine: Convener: Quality Counts New Hampshire: Convener: NH Citizen s Initiative New York: Convener: THINC RHIO (Hudson Valley) Convener: Hudson Headwaters (Adirondacks) Convener: EMPIRE (New York City) Ohio: Convener: Greater Cincinnati Health Improvement Collaborative Convener: Access Health - Columbus Connecticut: Convener: State of Connecticut Employer Group 10

11 Highlights of PCMH Results Quality improvement in nearly all diabetes measures 3.6% decrease in acute IP admissions per 1000 per year COLORADO 6.1% decrease in total ER visits per 1000 per year 2% decrease in specialist visits per 1000 per year NEW HAMPSHIRE 1.3% increase in persistent medication usage IP rate per 1000 between 12% - 23% lower for PCMH providers ER rate per 1000 between 11% - 17% lower for PCMH providers NEW YORK Total medical and Rx cost for PCMH members was 14.5% lower than for members seeing non-pcmh providers 11

12 Improving Primary Care: Comprehensive Primary Care Initiative CMS led private-public initiative testing a primary care service delivery and payment model in 5-7 locations Service delivery model: Risk-stratified Care Management Access and Continuity Planned Care for Chronic conditions and Preventive Care Patient and Caregiver Engagement Coordination of Care Payment Model: monthly care management fee to primary care practices for FFS Medicare beneficiaries; potential to share savings in 2-4 years Aligned payment from private insurers 12

13 Contractual Innovation: Improving Value and Affordability Old Model: Rate increases not tied to value New Model: Rate increases tied only to quality, safety, and value 13

14 Hospital Quality: Q-HIP Hospital Quality Program Q-HIP Hospital Pay-for-Performance rewards quality, safety, outcomes, and patient satisfaction Patient Safety Section (35% of total Q-HIP Score) Joint Commission National Patient Safety Goals Computerized Physician Order Entry (CPOE) System ICU Physician Staffing (IPS) Standards NQF Recommended Safe Practices IHI 5 Million Lives Campaign ADE Medication Reconciliation and WHO Surgical Safety Checklist CDC/APIC Flu and Pneumonia Vaccine Guidelines NQF Perinatal Measures Member Satisfaction Section (10% of Total Q-HIP Score) H-CAHPS Survey Results Patient Health Outcomes Section (55% of total Q-HIP Score) PCI Indicators 5 ACC-NCDR/Indicators for Cardiac Catheterization/PCI Joint Commission/CMS Nat l Hospital Quality Measures Acute Myocardial Infarction (AMI) Indicators Heart Failure (HF) Indicators Pneumonia (PN) Indicators Surgical Care Improvement Project (SCIP) NSC Indicators 4 JC/NQF Nursing Sensitive Care Indicators CABG Indicators 5 STS Coronary Artery Bypass Graft (CABG) Measures 14

15 CareMore s Model: Community Providers and CareMore Care Centers Non-Frail Population Frail & Chronically Ill Population Extensivists Member Services Primary Care Physicians Specialists CareMore Care Centers Primary Care Physicians CareMore Extensivists CareMore Care Centers Provider Relations Home Based Services Continuous Frailty Assessment Tools Case Managers The CareMore Model 15

16 CareMore: Care Innovation Care Centers provide a Healthy Start initial evaluation and integrated care that combines wellness and medical supervision and offers personalized health planning Specialists intensively manage chronically ill members: approximately 20% of members that account for 60% of medical costs Biometric monitoring applied to care management 16

17 Improved Outcomes for Chronic Diseases Diabetes End Stage Renal Disease Congestive Heart Failure Result Result Result 7.08 average HbA1c for those attending diabetes clinic 50% reduction in hospital admission rate in 5 months 56% reduction in hospital admission rate in 3 months 17

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