MESC 2013 HIE: Strategic Planning for Long Term Sustainability Session
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1 Transforming Healthcare and Improving Patient Care in the Greater Philadelphia Region. MESC 2013 HIE: Strategic Planning for Long Term Sustainability Session HealthShare Exchange Sustainability Planning Longer Term September 9 th,
2 Agenda Background Barriers to Long Term Financial Sustainability Best Practices, Lessons Learned and Outcomes The Road Ahead Plans for Long Term Sustainability Questions 2
3 Driving the Need for Health Information Exchange (HIE) Legislative/Regulatory Drivers ARRA HITECH Act Affordable Care Act CMS HVBP Program CMMI Grants CMS Medicare Advantage Star Rating Program Region Specific Drivers Current environment The standards of the region s system The Patient-Provider-Health System Dynamic in SE PA HCIF Partnership for Patient Care PAVE Study Emerging environment Adoption of ACO Principles Transitional care / Readmission reduction programs Consumerism Reduced Malpractice 3
4 HealthShare Exchange Development Timeline Initial Use Case discussions, evaluation and development took place by a number of interested healthcare entities in the region. Coalition of Regional Healthcare entities formed SE PA HIO workgroup: HCIF DVHC IBC Amerihealth Mercy/Caritas Business Plan Completed and Approved. Began seeking Federal/State Grants, Stakeholder Contributions. Technology Vendor Identified to begin Contract Discussions ARRA and HITECH Act are passed and invoked. HCIF PAVE Project Initiated. Engaged with Management Consulting Firm North Highland for Development of Business Plan. Corporation Formed in May: HealthShare Exchange of Southeastern Pennsylvania, Inc. Board formed in January 4
5 Concentration of HealthCare in the Region The five county region represents the largest and most densely populated healthcare marketplace in the Commonwealth: Accounting for 32% of all consumers. 36% of all hospital discharges in the State (PA DOH FY2010 Hospital reports, all hospital discharges (acute, specialty and federal hospitals)) 39% of Pennsylvanian s births occur in the region(pa DoH report 2009) 42% of all Medicaid admissions in the State (PHC4 County Utilization Reports for CY2010) 5
6 No Dominant Health System in the Region 11% 7% 5% 4% 12% 3% 6% 7% 6% 4% 1% 6% 0% 6% 5% 1% 10% 4% 1% 1% Prepared 6/29/11 by DVHC of HAP. Source: PA DOH, 2009 ABINGTON HEALTH ALBERT EINSTEIN HEALTH SYSTEM ARIA HEALTH CATHOLIC HEALTH EAST COMMUNITY HEALTH SYSTEM CROZER-KEYSTONE HEALTH SYSTEM DRUG AND ALCOHOL REHAB (3) LTAC (7) MERCY HS MLHS NORTH PHILADELPHIA HS PSYCHIATRIC (10) SOLIS HEALTHCARE SPECIALTY (5) ST LUKES HEALTHSYSTEM TEMPLE HS TENET HEALTHCARE TJUH UPHS INDEPENDENT ACUTE (7) As a healthcare market, SE PA is ripe for health information exchange because of the complexity and diversity of the health care provider network in the region. 6
7 Solving a Critical Healthcare Problem in the Region Uncoordinated Discharge Process - At time of discharge from an inpatient stay or ER visit, the hand-off to the next provider is not well-coordinated. Unknown PCPs - Whether part of an IDN or not, in many cases, the discharging facility does not know the name of the patient s primary physician or how to contact them. Incomplete Information - Even if information is transmitted, it is usually incomplete and sent by handwritten hard copy or fax instead of electronically. Results in Failed System - This less than optimal process, leads to medication mix-ups and errors, absence or delay in follow-up care, greater use of emergency rooms, and potential avoidable hospital admissions and readmissions. Based on these findings, the SE PA HIO stakeholders determined that the time was long overdue to focus on improving the health outcomes of the region by focusing on clinical use cases that facilitated and improved care transitions. Two initial clinical use cases Discharge Information and Clinical History 7
8 se Case Focus Hospital 1. Hospital sends discharge (Inpatient or ED) message to health plan for the patient at time of discharge. 5. Alert provided to hospital if eligibility is checked for a patient that has had a recent admission. 2. HIE routes information to PCP or other appropriate care giver via provider portal alerting process. HIE Health Plan Care Manager Discharge Information-This is a core clinical benefit of HIE. It enables the transfer of key information following an acute health event so that appropriately informed follow-up care can take place. It supports appropriate use of emergency rooms by supplying physicians and utilization managers with detailed discharge information. Patient Primary Care Provider 3. PCP contacts patient, schedules visit, and supports post-discharge transition of care process. 4. If member under care management the plan alerts the care manager who contacts member and facilitates visit to PCP as appropriate. Hospital 1. Patient Visits Provider (Hospital or Practice) Clinical Summary The following are several clinically relevant areas that illustrate how the information would be accessed: Emergency Room Visit Hospital Admission Office Visit PCP Office Visit Specialist EHR Provider Practice 2. Provider requests eligibility and medication history from HIE/Plan 5. Provider accesses data via EHR or paper printout for medication reconciliation and treatment HIE 3. Plan Obtains Medication History and Claims Data Health Plan 4. Information returned via portal or CCD which can be consumed by EHR Pharmacy Benefits Manager Plan Claims Data 8
9 Financial and Letter Commitments Hospital Members: Currently 37 of the regions acute care hospitals are part of HSX (+93% EDs in the region). Received Signed 4 year Letters of Commitment (LOC). Received Year 1 Contribution (based on split between admits and discharges as compared to the region). Health Plans: Three Health Plans IBC, AmeriHealth Mercy and Health Partners (+62% of covered lives in region). Aetna, Cigna and United Healthcare Conversations continue for year 2 membership. Contribution based on covered lives in region. 9
10 Current Funding Approach Contribution Allocation (as of April 2013) 54% State Contribution* Hospital Share Health Plan Share 20% 26% 10
11 Barriers to Long Term Financial Sustainability 11
12 The Barriers to Success The HIE Inherent Conflict Provider Stakeholders Support HIE Mission, Yet Face Near Term Revenue Loss as Industry away from fee-for-service. Gaining Consensus on Common Vision and Strategy. Competing Models: Private HIEs, IDNs State HIE ACOs HISPs Recognition of Grant Funding Cliff. HIE Needs is a Team Sport! Determining ROI Remains Difficult but Needs to be Done. 12
13 The HIE Hill to Climb 2011 Report on HIE: Sustainability Report - 8 Figure 1. HEALTH INFORMATION EXCHANGE STAGES OF DEVELOPMENT A D V A N C E D H I E S STAGE 7 INNOVATING Sustainable and fully operational health information organization. Demonstration of expansion of organization to provide value-add services, such as advanced analytics, quality reporting, clinical decision support, PACs reporting, EMS services. STAGE 6 SUSTAINING Fully operational health information organization; transmitting data that is being used by healthcare stakeholders and have a sustainable business model. STAGE 5 OPERATING Fully operational health information organization; transmitting data that is being used by healthcare stakeholders. Well under way with implementation technical, financial and legal. STAGE 4 PILOTING Transferring vision, goals and objectives to tactics and business plan; defining your needs and requirements; securing funding. STAGE 3 PLANNING Getting organized; defining shared vision, goals, and objectives; identifying funding sources, setting up legal and governance structures. STAGE 2 ORGANIZING Recognition of the need for health information exchange among multiple stakeholders in your state, region or community. STAGE 1 STARTING 13
14 HIE s - Many Critical Dimensions to Address Source: North Highland HIE Maturity Model(2012) 14
15 Best Practices, Lessons Learned And Outcomes 15
16 Best Practice: Followed a Sustainability Framework Identify Use Cases /Services Stakeholders & Beneficiaries Fee Models and Revenue Sources Identify Services and specific use cases which may be enabled by the HIE Identify Stakeholders and options related to fee models for services Assess Use Cases /Services Core Value-Add Value Proposition By use case by Stakeholder By Fee Model Market Demand By Service/By Stakeholder Define Phases Prioritize use cases Determine which use cases should be core and which should be value-add Utilize stakeholder engagement and environmental scan information to assess market demand for services Identify value by individual use cases by stakeholder Model Service Costs By Phase Initial & Ongoing Cash Flow Models Variable Fee Models Variable Service Models System Funding Flow Income Distributions Research and document costs for services Model implementation and on-going operational costs Develop revenue assumptions and model cash flow Identify system funding flow 16
17 Lesson: Start Simple (Use Cases) It s a Journey Discharge Information Use Case Value Assessment Stakeholder Financial Value Start with simple solutions offering highest value Providers Hospitals Higher over time as more providers migrate toward pay for performance Low but could be higher if connected to pay for performance Clinical Value High Moderate -- Reduced readmissions are valuable, but could be more work for some hospitals Health Plans Moderate Moderate to low Already has much of this information but more timely Other Value More efficient interaction with the patient, improve quality and cost of care thru better coordination and information flow. Key to acceptance is seamless integration with hospital & office workflow. Could be a revenue detractor as readmissions go down but there could be penalty avoidance and cost savings. May avoid repeated ER visits and cut down on frequent flyers Impacts HEDIS scores and helps prevent avoidable readmissions. State/Fed Programs Moderate Moderate to low could further population health initiatives Patient Moderate High Avoid inconvenience and frustration of uncoordinated care N/A 17
18 Best Practice: Use Case Discharge Information ROI Value: Reduced readmissions and completion of follow-up care Total Hospital Admissions in SE PA 1 Readmits within 30 days of discharge 2 Readmits due to inadequate discharge summaries Potentially avoidable hospital readmits Probability of reduced readmits with adequate discharge summary 3 Estimated avoidable hospital readmits 575,274 X 12.2% X 27% = 18,949 X 25% = 4,737 X Average cost per I/P discharge 1 Gross savings Increment. cost of postdischarge care result. from discharge plan 3 Potential Savings to SE PA Participants $8.3K = $39.3M - 20% = $31.4M 1: FY 2010 Hospital Admission data provided by DVHC; Avg Cost data from the 2011 Almanac of Hospital Financial Operating indicators, 2009 median cost per discharge. 2 : Baseline reported readmission rate at participating PAVE Hospitals, April June 2010, as reported by DVHC 3 : Effect of Discharge Summary Availability During Post-discharge Visits on Hospital Readmission, Carl Van Walraven MD
19 Lesson: Start Simple with Technology Approach DIRECT Messaging via HISP (Years 1-2) Introduction of DIRECT secure messaging Introduction of Robust HIE (Years 3-4) Continued onboarding of HISP services to HSX stakeholders 3-4 large health systems 8-10 community hospitals Enablement of 2 use cases: Discharge Information Additional health plans Introduction of robust HIE Medication / Clinical History Onboarding of HSX stakeholders 4 large health systems 9 community hospitals 2-3 health plans Introduction of new HSX use cases Identification of new healthcare stakeholders for participation in HSX 19
20 Outcomes: HealthShare Exchange Grant Pursuits 1. State/ONC Grant - Pennsylvania ehealth Partnership Authority Approved! Received $1.5M in December Terms of Grant Repayment of 75% in Commitment Required by 12/31/13. Participation Fees TBD for State Shared Services. 2. PA DPW/CMS Medicaid Grant Approved! Awarded $1.2 over two years for HIE Startup Activities. Due to Receive Funds Starting in Federal Fiscal Year
21 Best Practice: Medicaid HIE Startup Grant Background As outlined in the State Medicaid Director s letter issued by the Centers for Medicare and Medicaid Services (CMS) on May 18, Administrative matching funds must be for activities that are proper and efficient for the administration of the Medicaid EHR Incentive Program; Costs are divided equitably across other payers; The approach leverages efficiencies with other Federal HIE funding; Allocated costs are developmental and time-limited in nature and are not for on-going HIE costs where these services are fully operational. Great Collaborative Effort Initiated Between Commonwealth of PA, HealthShare Exchange, CMS, and City of Philadelphia. 21
22 Best Practice: Medicaid HIE Startup Grant Approach and Outcome HealthShare Exchange has identified a cost allocation process which is based upon a primary service type of Regional Discharges. The Denominator in the Fair Share Equation: a. For the five county area encompassed by SE PA, identify (through the Utilization by Payer, PHC4 County Profiles report) the number of hospital admissions for the most recent four quarter period. b. Identify hospital discharges by payer c. Remove hospital discharges supported by Medicare The Numerator in the Fair Share Equation: From the number in the denominator, identify the number of hospital discharges which are paid for by Medicaid. Outcome: First Regional IAPD Approved July 2013, HealthShare Exchange to Receive Funds Starting October
23 Outcomes: Updated Budget Review 2013(update) and 2014(forecasted) 2013 Contributions 2014 Contributions $744,287 $550,848 $1,500,000 CSS Grant Hospital Contributions $858,055 $660,945 Medicaid Grant (Year 1) Hospital (Year 2) Payer Contributions $575,000 Payer (Year 2) Costs Comparison to Business Plan Year 1 (Actual vs. Business Plan) Year 2 (forecasted vs. Business Plan) Administrative Under Budget Under Budget Communication/Outreach Under Budget Under Budget Project Management/SMEs Under Budget Under Budget Technology Under Budget Under Budget 23
24 Plans for Long Term Sustainability 24
25 The Road Ahead The Plan For Longer Term Financial Sustainability Sustainability is an On-going Process Continue to Evaluate Sustainability Models. Diversification Needed for Revenue Sources. Appreciate Profitability is not Sustainability. Continued Investments in New Services, Marketing, Adoption. Leverage Unique Model of Health Systems and Plans Working Together for Improved Care Coordination. Identify and Recruit New Members. Continuous Service-Value Alignment. HIE sustainability = Ongoing revenue operating expenses + Investments + Cushion Source: Literature Review of Health Information Exchange sustainability Texas Health Services Authority, Weaver Report, April
26 HealthShare Exchange - Revenue Diversification $3,500,000 $3,000,000 HSX Revenue Sources $2,500,000 $2,000,000 $1,500,000 $1,000,000 Additional grants Value-add service fees Non-acute contributions Hospital contributions Payer contributions CMS Medicaid Grant State CSS Grant $500,000 $ The above illustrates current and planned revenue sources (with dollar amounts) for HSX showing a solid financial foundation for Developing a longer term financial sustainability plan and approach. 26
27 HealthShare Exchange - Operating Reserves Outlook The above illustrates operating reserve we have stated and plan to accumulate in the out years of HSX. This is compared to the expected expenses and revenue. 27
28 Revenue Options for Consideration Approach Description Benefits Challenges Usage Fees - Subscription Usage Fees - Transaction Shared Revenue Grants - Public Grants - Private Fees assessed on users based upon size of organization and services accessed Fees assessed on a per transaction basis. Third-party provides services via the HIE and the HIE shares in the revenues. The HIE serves as a marketplace allowing others to sell applications or services. Includes HITECH related grants from ONC, CMS, ARHQ, HRSA and other public sources. Typically time-limited availability and tightly defined allowable expenditures. Includes private foundation or organization grants which may include Robert Wood Johnson, Commonwealth Fund and the Kellogg Foundation Stable revenue source with minimal administrative requirements Revenue generated aligns well with costs to provide services Minimal initial capital investment on the part of the HIE. Low risk to the HIE with a focus on innovation and private-public partnerships Grants tend to be targeted toward entities such as state based HIEs, are generally larger Many options are available. Grants can be flexible in nature and some foundations accept grant request unsolicited Initial cash flow dependent on obtaining subscribers Revenues will fluctuate with usage. Per transaction fee may be a detriment to increased usage. Administratively burdensome to operate Services may need to be identified through a competitive bidding process and administrative oversight of the private partner would be necessary. Typically short-term and not contributive toward longer-term sustainability. Considerable grant management and administrative requirements. Matching funds generally required. Typically small grants structured for predefined services which may not coincide with the goals of the HIE. Not contributive toward longer-term sustainability
29 Revenue Options for Consideration (cont.) Approach Description Benefits Challenges Direct Marketing to Users Secondary Data Use Medicaid Agency Contribution Utility Provide online (Google-like) marketing access to patients through patient health records and to physicians through the HIE Secondary use of data for clinical research or other purposes in which the data can be deidentified Allocate a portion of the overall cost of the HIE to the Medicaid agency based on the percentage of Medicaid clients benefiting from the HIE Taxes or fees are levied across a broad set of constituents such as providers or hospitals based on encounters, claims, bed days or some other usage based measure Active group of businesses interested in accessing this market. Could potentially provide helpful, targeted information to patients and physicians Public good may be served by expediting the discovery and approval of medications. Research entities have expressed interest in the use of de-identified data Depending on the activity, a portion of the cost would be covered by Federal Medicaid funds (50 to 90%) Provides for a steady, immediate funding stream which is equitable distributed across a broad set of potential beneficiaries May be perceived as a violation of patient privacy. May be a barrier to participation. Concerns with the public perception of privacy and security related to the use of their data. Benefits will not fully accrue until the HIE gains access to a critical mass of data. Would have to ensure that cost allocation approach is representative of the benefit gained by the Medicaid program. Not popular in the current economic and political environment. Would likely require authority via statue or regulation. Would need to be driven by those being assessed the fee.
30 Questions? 30
31 Contact Information: Thank You! Matt McGeorge OMAP HIT Coordinator Department of Public Welfare Commonwealth of Pennsylvania Martin Lupinetti Executive Director HealthShare Exchange of Southeastern Pennsylvania, Inc
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