Healthcare Reimbursement Change VBP -The Future is Now
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1 Healthcare Reimbursement Change VBP -The Future is Now 1
2 On the Move Volume/ Fee-for-Service Fee-for-service reimbursement High quality not rewarded No shared financial risk Stand-alone systems can thrive Value/ Budgeted Care Payment rewards population value: quality and efficiency Quality impacts reimbursement Partnerships with shared risk IT utilization essential for population health management Realigned incentives, encourage coordination 2
3 FFS Payment at risk or being cut Value-Based Purchasing (VBP) 1.0% 1.25% 1.5% 1.75% 2.0% 30-day Readmissions Caps 1.0% 2.0% 3.0% Hospital-acquired conditions 1.0% Market basket reductions 0.1% 0.1% 0.3% 0.2% 0.2% 0.75% Multifactor Productivity cut* 1.0% 0.7% 0.5% 0.4% 0.3% 0.4% 0.4% 0.7% 0.7% 0.5% Documentation and Coding Adjustment** 4.9% 1.9% 0.8% 1.6% 2.4% 3.6% Sequestration *** 2.0% Other Adjustments 0.2% TOTAL IMPACT 6.0% 5.7% 7.1% 9.7% 10.7% 12.8% 9.2% 10% 9.5% 8.7% 8.5% *The Multifactor Productivity Adjustment is an estimate generated by the CMS Office of the Actuary **DCA, also known as the behavioral offset. Estimates FY 2015-FY 2017 impact of the American Taxpayer Relief Act of 2012 *** Sequestration (across the board cuts to reduce the federal budget deficit) will stay in place unless otherwise reversed by Congress
4 Catalysts for Future Change Reform, the rise in technology, and value-based contracting Healthcare Reform The Affordable Care Act is driving significant changes across the healthcare landscape, including expansion of the insurance market 25 million purchasing on exchange million newly eligible on Medicaid 10,000 age into Medicare every day $300 billion dual market eligible Healthcare fee-for-service revenues are expected to decline Consumerism and Use of Technology Consumers are ready for more innovative and high-tech health care solutions 1 57% would like to customize their own health plans 62% are interested in using self-monitoring devices to report information to doctors electronically 70% would like to see hospital prices and quality-of-care information on the internet 67% are interested in using videoconferencing for follow-up care visits Rising consumer share of health related cost Per capita out of pocket spending will increase by 46% over the next decade By 2020, retail marketplace is expected to account for 46% of the overall market 2 Value-Based Care In three years 3 : 78% of physician practices expect to have meaningful value-based revenue 49% of facility revenue is projected to be derived from value-based payments 40% of health plans predict that value-based models will support the majority of their business By 2020, approximately 50% of health care dollars could be paid through value-based payment models 4 Reimbursement increasingly tied to quality and outcomes 1 Deloitte s 2012 Survey of U.S. Health Care Customers 2 Based on CBO and Accenture projections and estimated based on projected US population 3 Availity, Meaningful defined as at least 15% of revenues 4 Extrapolation of Availity survey results 4
5 Movement toward outcomes and efficiency Hospitals VBP payment will increasingly be based on their performance on outcomes/efficiency FY 2013 FY 2014 FY 2015 FY % 25% 30% 20% 30% 25% 25% 70% 45% 30% 20% 40% 10% Active Performance Period Clinical process Patient experience Outcomes Efficiency 5 PROPRIETARY & CONFIDENTIAL 2013 PREMIER INC.
6 Movement to Value-Based Payment Models Significant pressure is being placed on future revenue streams Shared Risk Capitation Level of Financial Risk Performance- Based Contracts Primary Care Incentives Bundled / Episode Payments Shared Savings Performance-Based Programs Accountable Care Programs Centers of Excellence Fee-for-Service Degree of Provider Integration and Accountability 6
7 VBP - Examples CMS VBP clinical outcomes measures VBP HCAHPS Readmission penalties HACs Demonstration Projects ACO ACE Medical Home Prometheus Payment Pilot (withhold/earn back methodologies) 7
8 VBP Examples Other Direct to delivery contracting P4R, P4P, COE, gain share and at-risk contracting BCBS of Michigan all patient registry Integrated Health Assn (CA) bundled - episode of care UHC/Most other Payers o Withhold o gain share o Gain share/risk share o PCMH pilots o PC Incentive Program (Rhode Island) o ACOs o capitation 8
9 Essentials for Managing Risk Using Data and Analytics Integration and Collaboration Use of Evidenced Based Practice Removal of Waste and Variation Challenging YOUR Thinking about Leading the Business 9
10 VBP at Presbyterian Intel Corporation Going local and connecting care Collaborative partnership launched January 1, 2013 Custom Built Network 11 PCMH + Neighborhood (Includes onsite PCMH) Pay for Performance Aligned incentives through gain and risk sharing Measure Results Accountability - developed metrics to measure 5 key attributes 10
11 Case Study 1 VBP Initiatives at Presbyterian ED Patient Navigation Program Patients presenting in the ED receive a medical screening exam to determine health condition. If non-emergent, patients are offered treatment in the most appropriate clinical setting. Patients are assisted by on-site patient navigators in making an appointment to treat their acute condition within 12 to 24 hours and establishing a primary care physician for ongoing care. All patients are navigated, not only our health plan members. Patient navigators are part of our Presbyterian Customer Service Center (PCSC). They are specially trained representatives who have access to a broad range of resources and systems to meet our patients needs. 11
12 Case Study 1- VBP Initiatives at PHS ED Patient Navigation Program Results 20% 10% 0% -10% -20% -30% 10% ED Use Rates -25% -40% Over 14,000 patients navigated in two years (10% ED volume) Low repeat navigation rate (7%) 40% reduction in post-navigation ED use 25% reduction in overall ED use by health plan Medicaid population -40% -50% National Trend 4-County Medicaid Post-Navigation* 12
13 Case Study 2 VBP Initiatives at Presbyterian Hospital At Home Opened in 2008 and has served over 900 patients as an alternative to traditional IP hospitalization. Worked with Bruce Leff MD from Johns Hopkins who developed the Hospital at Home concept. Aging population with chronic disease PNU, HF,COPD. Also DVT, Stable PE, nausea/vomiting, dehydration and complicated UTI. Patients admitted directly from ED, clinics, home and early hospital discharge. Teams of MDs, RNs, Telehealth, HH Aides, CSRs, MSWs, chaplains, Rehab, pharmacy, DME and community partners. Daily MD,RN and HHA visits, ECGs, lab and x-rays, Meds and DME provided along with coordination of visits.
14 Case Study 2 VBP Initiatives at Presbyterian Hospital At Home INITIAL RESULTS 100% of patients received core measure elements for HF and PNU Falls = 0 Restraints = 0 Mortality < 1% Readmissions w/in 30 days = 2.47% Readmissions w/in 90 days = 7.4% Increased patient satisfaction (89.5 to 96.8%) Cost decreased by 19% v equivalent IP episode
15 The Future. Outside of facility/in-home visits Increased use of technology Analytics driven intervention focused on prevention of exacerbation of many chronic illnesses Higher level of care coordination with 24/7 on-call availability to high risk patients Payment increasingly placed on value, declining FFS A dynamic hospital of the future the right care, at the right time and in the right setting.
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