Transforming Physician Practices: Evolution of ACOs in California. National Association of ACOs - Washington, DC October 2015
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1 Transforming Physician Practices: Evolution of ACOs in California National Association of ACOs - Washington, DC October 2015
2 Integrated Healthcare Association Statewide multi-stakeholder leadership group that promotes quality improvement, accountability, and affordability of health care in California. Actively convenes all health care parties for cross-sector collaboration on health care topics; administers regional and statewide programs; and serves as an incubator for pilot programs and projects. Organized as a 501(c)(6) nonprofit association; does not operate as a trade association. Mission: To create breakthrough improvements in health care services for Californians through collaboration among key stakeholders Integrated Healthcare Association. All rights reserved. 2
3 Value Based Pay for Performance $500m paid out 200 Medical Groups and IPAs 35,000 physicians 10 Plans 9 Million Californians 2016 Integrated Healthcare Association. All rights reserved. 3
4 Evolution of ACOs in California 2016 Integrated Healthcare Association. All rights reserved. 4
5 Project Overview Partnership between IHA and UC Berkeley Participating Physician Organizations AltaMed, Los Angeles Brown and Toland, San Francisco HealthCare Partners, Los Angeles St. Joseph Heritage, Orange Monarch, Orange Funding from the Robert Wood Johnson Foundation, April 2013-March 2015 Part of a cohort of four grantees studying ACOs across the country 2016 Integrated Healthcare Association. All rights reserved. 5
6 IHA Issue Briefs 1. Imperatives and Challenges of Physician- Hospital Alignment (Jamie Robinson) 2. Referral Management and Disease Management in California s Accountable Care Organizations (Jamie Robinson) 3. ACO Contractual Arrangements in California s Commercial PPO Market (Tom Williams) 4. A Large Community Health Center Adapts to a Changing Insurance Market (Jill Yegian) 2016 Integrated Healthcare Association. All rights reserved. 6
7 Activities and Timeline Project launch 1 st round interviews with health plan executives 2 nd round interviews with health plan executives Spring 2013 Summer 2013 Fall 2013 Summer 2014 Fall 2014 May st round interviews with physician organizations 2 nd round interviews with physician organizations Issue briefs on ACO contracts, hospitals role in ACOs, patient engagement 2016 Integrated Healthcare Association. All rights reserved. 7
8 Market Context California's long history in managed care Strong presence of organized physician groups with capacity to provide integrated care Decline in HMO enrollment in California outside Kaiser Increasing enrollment in high-deductible products, PPO platform Opportunity to leverage infrastructure created to serve HMO enrollees Care management, quality assurance, performance measurement What issues are encountered when applying HMO care coordination infrastructure to PPO platform? 2016 Integrated Healthcare Association. All rights reserved. 8
9 Takeaways Commercial Experience Many different variants HMO shifting back toward full risk PPO supplementing with care management fee (for all, or just chronic) Both HMO and PPO have shared savings No savings = no bonus, regardless of quality Targets vary set against market vs. own trend Healthy population harder to find savings (relative to Medicare) Mixed financial results Total cost of care difficult to predict, difficult to control Often unclear what, specifically, resulted in shared savings 2016 Integrated Healthcare Association. All rights reserved. 9
10 Takeaways Pioneer Experience Selective network for patient attribution more successful than land grab strategy PCP vs. specialist Risk selection is major issue Difficult to obtain inpatient, ED data for care management Lag in data from Medicare Hospital notification varies Post-acute care transitions present a challenge SNF utilization difficult to manage Mixed financial results Monarch and B&T continuing Pioneer, HCP shifted to MSSP 2016 Integrated Healthcare Association. All rights reserved. 10
11 Referral Management Total cost of care strongly influenced by specialist and inpatient services obtained by attributed patients Careful thought required when creating ACO network (physicians to whom patients will be attributed) Physician organizations may not have full information about costs negotiated by health plans Benefit design has not yet caught up Generally, no explicit consumer-facing incentives that favor ACO network Inducements not allowed in Medicare FFS Patients may be unaware of ACO, or skeptical/resistant Without consumer-facing incentives, referral management important RM can yield lower cost AND higher patient satisfaction Better coordination, lower OOP costs Maternity: can t avoid admission, rely on steerage 2016 Integrated Healthcare Association. All rights reserved. 11
12 Patient Engagement Difficult to engage PPO and Medicare FFS patients (vs. HMO & Medicare Advantage) Patients may not realize they are in an ACO, skeptical Inducements for beneficiaries prohibited Physician-led communication with ACO patients trumps plan-initiated outreach Plans delegating care management Physician organizations may not be familiar to beneficiary Doctor s office needs to lead, with support from PO and plan 2016 Integrated Healthcare Association. All rights reserved. 12
13 Data Access POs with ACO contracts receive data from plans on inpatient and ED utilization Can see the whole patient s care use Patterns of referral and self-referral emerge Data often still lacking to support real-time care management Hospitals often not inclined to notify POs when an ACO member has been admitted Contractual requirement for HMO enrollees but not for ACO 2016 Integrated Healthcare Association. All rights reserved. 13
14 Performance Measurement Proliferating measures that vary across contracts is very challenging for POs Potential for standardization if agreement can be reached but many plans are national One PO has ACO contracts with four health plans Number of measures ranges from 7-39 Only three common across all four plans 2016 Integrated Healthcare Association. All rights reserved. 14
15 Surprise Finding: Hospitals Role Hospitals less active than POs & plans on ACOs Varying success among POs in case study on developing hospital partnerships Several hospital systems in California pursuing vertical integration strategy (plan/delivery system) New models emerging based on hospital network Vivity HMO: Anthem s joint venture with 7 hospitals in SoCal Notable exception: Dignity Health Hospitals Active pursuit of ACO strategy over last several years CalPERS ACO: Dignity, Hill Physicians, Blue Shield of CA New initiative announced in October with Hill Physicians, Aetna 2016 Integrated Healthcare Association. All rights reserved. 15
16 Potential Directions Benefit design steerage with consumer-facing incentives Performance measurement and reporting standardize, measure and report Major Takeaway - no magic hard work of figuring out how to create integrated care for patients accustomed to PPO platform 2016 Integrated Healthcare Association. All rights reserved. 16
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