Seattle, Washington June 10, 2011

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1 Physician-Led ACOs: Do Physicians Really Want Them? Seattle, Washington June 10, 2011 Presented by: Max Reiboldt, CPA President/CEO

2 AGENDA What is the Impetus Behind ACOs? How Will Outcome-Based Results Affect Healthcare? The Physician s Role in ACOs Physician-Led ACOs: How Are They Working? What Are the Opportunities? 2

3 ACOS? WHAT IS THEIMPETUS MPETUSBEHIND EHINDACO

4 MEDICAREENROLLEES Source: AHA and CMS 4

5 COSTSATTRIBUTED TOCHRONICILLNESSES 83%of healthcare dollars are spent on chronic illnesses Projected to increase through % 83% 5

6 WHYDIDHEALTHREFORMINCLUDEACOS? Increasing number of Medicare Recipients (baby-boomers) Increase in Medicare expenditures Large growth in healthcare expenses for chronically ill Increasing readmission rates for Medicarees Critical need to focus on quality and outcomes 6

7 MEDICARESPENDINGGROWTH TOTAL MANDATORY MEDICARE BENEFIT PAYMENTS ACTUAL AND PROJECTED (in billions) YEAR 2007 $ $ $484.7 PAYMENTS 2010 $ $ $ $ $ $727.2 Source: cms.org (Congressional Budget Office) 7

8 PROJECTEDACO SAVINGS HHSprojects that Medicare ACOs could save $510 million during first three years Projections are based upon ACOs established by 1/1/2012 CMS anticipates substantial savings through: Reduced hospitalizations & related services Reduced ER visits Improved quality for chronic conditions 8

9 BOTTOMLINE CMS needs to reduce overall reimbursements: goal is via fewer or short hospitalizations and other high dollar expenditures Common goal to improve patient care and increase patient involvement in their care Many Medicarees are non-compliant either because they don t have the desire to follow physician recommendations or simply do not understand or they don t have the ability to do so More coaching/education by physicians and/or care coordinators is showing better results Involvement with caregivers is also improving compliance 9

10 OUTCOME UTCOME-BASED ASEDRESULTS ESULTS

11 EVIDENCE-BASEDMEDICINE The CMS ACO proposed regulations require ACOs to practice evidence-based medicine CMS has created an ACO goal they tagged as the three-part aim 1. Better care for individuals 2. Better health for the population 3. Lower growth in expenditures 11

12 EVIDENCE-BASEDMEDICINE Under ACOs, medical providers will focus on outcomes, utilizing evidence-based medicine CMS ACO must have physician-directed quality assurance/process improvement committee Quality must be #1 priority 12

13 CHRONICCONDITIONS(CMS ACOS) Diabetes COPD Congestive Heart Failure Heart Failure Coronary Artery Disease Hypertension 13

14 EFFECT OFOUTCOME-BASEDHEALTHCARE If Physicians and patients follow the evidence-based protocols, the desired outcomes for treatment of chronic conditions should be achieved (as always, each patient s unique situation will be considered) Patients ability/desire to be compliant to obtain desired outcomes can be a challenge In an ACOenvironment, a key will be coordinating the patient s care with all attending physicians to reduce duplication of tests, ensure the focus on a mutual treatment plan, and delivery of high quality of care 14

15 EFFECT OFOUTCOME-BASEDHEALTHCARE If everything works the final effects on healthcare should be: Better quality of care Improved health for the population Reduction in overall healthcare expenses 15

16 THE HEPHYSICIAN HYSICIAN SROLE IN INACO ACOS

17 THEACOJOURNEY: MANYPOSSIBILITIES 17

18 PHYSICIAN SROLE FORACO SUCCESS Physicians must be masters of change and be flexible to adopt for the new journeys ahead. 18

19 PHYSICIAN SROLE FORACO SUCCESS Physicians must understand they are the critical link in the process Physicians must play the key role in coordinating all patient care The patient/physician connection is essential for the success of an ACO program The PCP must stay in continuous communication with specialists 19

20 PHYSICIAN SROLE FORACO SUCCESS The PCP must maintain a strong alignment with hospitals and other providers of care Physicians need to coordinate the care with mid-levels and instill the team-based approach Physicians must put the patient first, while also focusing on cost reductions All physicians need to embrace technology as it is a critical component for ACO success 20

21 PHYSICIAN-LEDACOS: HOWARETHEYWORKING?

22 WHATISA PRIVATEACO? - Many providers have taken the initiative to create private ACOs across the country (some are hospital-based, some are physician initiated) All possess the same characteristics: Patient-centered care Focus on quality Focus on coordinated care Focus on reduced expenses (fewer hospital admissions and fewer ER visits, etc.) 22

23 PIEDMONTPHYSICIANGROUPACO PILOT ACO pilot initiated by physician group (CIGNA is payer partner) 100 PCPs based in Atlanta area Began July 1, 2010 with approximately 10,000 CIGNA insureds Patient care (for certain chronic conditions) will be coordinated by an RN (care coordinator) 23

24 PIEDMONTPHYSICIANGROUPACO PILOT Data results for the patient-centered focus will be keyed into CIGNA s system for analysis and reporting (minimum of 12 months) Physicians will receive standard reimbursement for services, plus a fee for care coordination and medical home services Physicians will be eligible to receive pay for performance bonus if they qualify under the established quality and cost benchmarks 24

25 PIEDMONTPHYSICIANGROUPACO PILOT Approximately 10% of an average PCP s patient volume is part of the ACOpilot RN Care coordinators have been key addition to the success of the program and coordination of patient s care (especially for coaching for success compliance) Major chronic diagnosis treated under this program is diabetes All physicians utilize the same EHR as they are in the same practice 25

26 PIEDMONTPHYSICIANGROUPACO PILOT Patients have been pleased with program and the focus on their care coordination Some physicians were resistant when program was introduced; believed it would be more work for same pay -- they now see the benefits of program and improved clinical results for their patients CIGNA has been a true partner in the program; is always offering to help; will be instrumental in data compilation and analysis; provided funding for nurse coordinators who are employed by Piedmont 26

27 PIEDMONTPHYSICIANGROUPACO PILOT Data will be fully analyzed after one-year anniversary in late summer Group will soon be certified as patient-centered medical home Goal is to handle all stages of patient care: Acute Chronic Preventative End of life Source: Dr. James Sams, Med. Director Piedmont Phys. Group) 27

28 SIMPLYWELL, LLC Integrated health solutions organization founded in 1998 in Nebraska Focus is on outcome-driven health care and comprehensive wellness management Functions as a messenger model PHO (no direct contracting) Physician-based with primary care staff directing and managing patient s care 28

29 SIMPLYWELL, LLC No payers are currently involved at this time Organization works directly with large employers in the regional area to sponsor the programs It becomes a win/win situation for the employers: Healthier employees Reduced costs in their self-funded health plans PCPs are paid under a higher fee schedule to offset increased patient focus, time spent with patients, care coordination, administration, etc. 29

30 SIMPLYWELL, LLC In addition to chronic conditions, there is also a focus on wellness and preventive care Program is delivering Reduced medical expenses Decreased hospitalizations Improved quality Physicians, patients and employers view the program as very successful Source: Dr. James Canedy, Pres., SimplyWell, LLC 30

31 WHAT HATARE THEOPPORTUNITIES PPORTUNITIES?

32 WHATDOESTHISMEAN TOPHYSICIANS HYSICIANS?

33 WHATDOESTHISMEAN? Changes are coming! Participation is voluntary, however..... It s an opportunity to deliver patientcentered care: care that is coordinated with PCPs, other specialists and other providers to deliver cohesive, quality care 33

34 WHATDOESTHISMEAN? Is it a good fit for you? How do you make that determination? How could your compensation be affected? Do you take a wait and see attitude? 34

35 WHATDOESTHISMEAN? Every provider needs to make an independent decision based upon knowledge and calculated assumptions Start-up costs for an ACO are unknown, but estimated to be over $1million for an average ACO entity There are alternatives to a full fledged entitytype structure Many healthcare providers across the country have already developed partnerships for accountable care 35

36 WHATDOESTHISMEAN? (continued) Under CMS, reimbursement will be made under existing Medicare schedules Opportunity to share in savings Possibility to have to make proportionate repayments for losses 36

37 WHATDOESTHISMEAN FORCOMPENSATION ANDCOSTS? Under CMS, only Medicare beneficiaries would be covered under an ACO, and assignment to an ACO is based upon PCP selection, and thus referral to specialist This means that reimbursement for non- Medicare patients would be unaffected Specialists would have to commit to ACO philosophies and make investments, as required in technology, patient care, reporting, time, etc. 37

38 STRATEGIES FOR AN ANACO M ACO MODEL

39 DECISIONS, DECISIONS, DECISIONS First ---conduct a self-analysis to determine if you support the ACO philosophies and if it would be a good fit for you As a specialist, you have less of an opportunity to anticipate your possible ACO patient base (easier for PCPs to guess ) Talk to PCPs, orthopaediccolleagues and other providers to obtain interest level in ACO participation 39

40 CORECOMPETENCIESNEEDED Robust, fully integration IT system and strong IT infrastructure The right leadership Organizational culture that supports teamwork Attitude for success and remaining positive Operational efficiencies and ability to streamline processes Ability to manage financial risk Case management infrastructure for managing care, reporting, monitoring, updating Flexibility, flexibility, flexibility Resources for community and patient communications 40

41 HOWDOYOUGET THERE? 41

42 RECOMMENDEDACO READINESSPROCESSES Task 1 Visioning Session: Meeting with organization leadership (hospital/physicians) to elicit their thoughts about where the organization is on the integration continuum Task 2 Assessment: Review of the current status of the organization to include data capabilities, medical staff complexion to include employed vs. private, available legal vehicles for the ACO, current financial performance, and payer profiles Task 3 Status Report: Creation of a Readiness Report detailing the position of the organization along the integration continuum and the steps needed to position the organization for ACO development Task 4 Action Plan: Preparation of a detailed plan for addressing any gaps that require attention to move toward ACO-readiness 42

43 RECOMMENDEDACO READINESSPROCESSES Task 5 Infrastructure Development: Creation of the structure and resources needed to move beyond the planning stage Task 6 Demonstration Project: Identification of a clinical area, service, or procedure that would benefit from a quality improvement/cost reduction effort Task 7 Program Expansion: Based on the results of the demonstration effort, expansion of the focus to other clinical areas that are identified as either quality or cost outliers when compared to available clinical bestpractices data Task 8 Market Assessment: Working with client staff, reimbursement consultants will approach market payers to identify demonstration opportunities 43

44 STEPS TOTAKENOW TOPREPARE FORACOS Implement the right EHR as soon as possible Engage management team in discussions to review goals and various options Review current alignments or create an alignment Analyze your options for hospital alignment or other provider alignments Seriously review your operational flow, processes, etc. and streamline them as possible Determine your true cost of services 44

45 STEPS TOTAKENOW TOPREPARE FORACOS Develop a plan that includes the organization s philosophy on ACO development and identifies strategic options Respond to the market Focus needs to be on the patient Evaluate utilization of evidence-based medicine Align incentives (providers and hospitals) Evaluate culture Miller, Thomas, PhD, MBA, Accountable Care Organizations in the Rural Setting, Presentation, November 10,

46 QUESTIONS ANDANSWERS NSWERS

47 THANK YOU MAXREIBOLDT,, CPA PRESIDENT/CEO

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