Value based care: A system overhaul

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1 Value based care: A system overhaul Lee A. Fleisher, M.D. Robert D. Dripps Professor and Chair of Anesthesiology Perelman School of Medicine at the University of Pennsylvania

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3 Unexplained Variation Dartmouth Atlas of Healthcare

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6 Value The core issue in health care is the value of health care delivered Value = Patient health outcomes per dollar spent Value is the only goal that can unite the interests of all system participants Michael Porter NEJM 2010

7 CMS support of health care Delivery System Reform will result in better care, smarter spending, and healthier people Historical state Evolving future state Public and Private sectors Key characteristics Producer-centered Incentives for volume Unsustainable Fragmented Care Systems and Policies Fee-For-Service Payment Systems Key characteristics Patient-centered Incentives for outcomes Sustainable Coordinated care Systems and Policies Value-based purchasing Accountable Care Organizations Episode-based payments Medical Homes Quality/cost transparency 7

8 CMS framework for measurement maps to the six national priorities Clinical quality of care HHS primary care and CV quality measures Prevention measures Setting-specific measures Specialty-specific measures Person- and Caregivercentered experience and engagment CAHPS or equivalent measures for each settings Shared decision-making Care coordination Transition of care measures Admission and readmission measures Other measures of care coordination Safety Healthcare Acquired Infections Healthcare acquired conditions Harm Population/ community health Measures that assess health of the community Measures that reduce health disparities Access to care and equitability measures Efficiency and cost reduction Spend per beneficiary measures Episode cost measures Quality to cost measures Greatest commonality of measure concepts across domains Measures should be patientcentered and outcomeoriented whenever possible Measure concepts in each of the six domains that are common across providers and settings can form a core set of measures

9 CMS has adopted a framework that categorizes payments to providers Category 1: Fee for Service No Link to Value Category 2: Fee for Service Link to Quality Category 3: Alternative Payment Models Built on Fee-for-Service Architecture Category 4: Population-Based Payment Description Payments are based on volume of services and not linked to quality or efficiency At least a portion of payments vary based on the quality or efficiency of health care delivery Some payment is linked to the effective management of a population or an episode of care Payments still triggered by delivery of services, but opportunities for shared savings or 2-sided risk Payment is not directly triggered by service delivery so volume is not linked to payment Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g., 1 year) Medicare Fee-for- Service examples Limited in Medicare feefor-service Majority of Medicare payments now are linked to quality Hospital valuebased purchasing Physician Value Modifier Readmissions / Hospital Acquired Condition Reduction Program Accountable Care Organizations Medical homes Bundled payments Comprehensive Primary Care initiative Comprehensive ESRD Medicare-Medicaid Financial Alignment Initiative Fee-For- Service Model Eligible Pioneer Accountable Care Organizations in years 3-5 Maryland hospitals Source: Rajkumar R, Conway PH, Tavenner M. CMS engaging multiple payers in payment reform. JAMA 2014; 311:

10 The CMS Innovation Center Identify, Test, Evaluate, Scale The purpose of the [Center] is to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals under such titles. - The Affordable Care Act

11 CMS Innovations Portfolio: Testing New Models to Improve Quality Accountable Care Organizations (ACOs) Medicare Shared Savings Program (Center for Medicare) Pioneer ACO Model Advance Payment ACO Model Comprehensive ERSD Care Initiative Primary Care Transformation Comprehensive Primary Care Initiative (CPC) Multi-Payer Advanced Primary Care Practice (MAPCP) Demonstration Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration Independence at Home Demonstration Graduate Nurse Education Demonstration Bundled Payment for Care Improvement Model 1: Retrospective Acute Care Model 2: Retrospective Acute Care Episode & Post Acute Model 3: Retrospective Post Acute Care Model 4: Prospective Acute Care Capacity to Spread Innovation Partnership for Patients Community-Based Care Transitions Million Hearts Health Care Innovation Awards State Innovation Models Initiative Initiatives Focused on the Medicaid Population Medicaid Emergency Psychiatric Demonstration Medicaid Incentives for Prevention of Chronic Diseases Strong Start Initiative Medicare-Medicaid Enrollees Financial Alignment Initiative Initiative to Reduce Avoidable Hospitalizations of Nursing Facility Residents

12 Target percentage of payments in FFS linked to quality and alternative payment models by 2016 and 2018 Alternative payment models (Categories 3-4) FFS linked to quality (Categories 2-4) All Medicare FFS (Categories 1-4) % ~20% 30% 50% ~70% >80% 85% 90% Historical Performance Goals

13 Partnership for Patients contributes to quality improvements Data shows from 2010 to , million PATIENT HARM EVENTS AVOIDED $20 billion IN SAVINGS Leading Indicators, change from 2010 to 2013 Ventilator- Associated Pneumonia Early Elective Delivery Central Line- Associated Blood Stream Infections Venous thromboembolic complications Readmissions 62.4% 70.4% 12.3% 14.2% 7.3%

14 Payment reform Traditional fee-for-service Reduced reimbursement Bundled payments Accountable Care Organizations

15 Bundled Payments for Care Improvement is also growing rapidly The bundled payment model targets 48 conditions with a single payment for an episode of care Incentivizes providers to take accountability for both cost and quality of care Four Models - Model 1: Retrospective acute care hospital stay only - Model 2: Retrospective acute care hospital stay plus post-acute care - Model 3: Retrospective post-acute care only - Model 4: Prospective acute care hospital stay only 337 Awardees and over 1500 Episode Initiators as of January 2016 Duration of model is scheduled for 5 years: Model 1: Awardees began Period of Performance in April 2013 Models 2, 3, 4: Awardees began Period of Performance in October 2013

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18 Healthcare Consumerism

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21 Is Policy Reform Good for Anesthesiologists/Perioperative Physicians Bundled care- How do we divvy up the pie? Traditional FFS Fixed payment Lower fixed payment and share in any profit margin Should the anesthesiologist be allowed to share in potential reward? Does the anesthesiologist want to assume any risk?

22 What is shared accountability?

23 So how do we fix it from a policy perspective?

24 Current Status of State Medicaid Expansion Decisions WA OR NV CA ID AZ* UT MT* WY CO NM ND SD NE KS OK MN WI* IA* IL MO AR* MS VT NY MI* PA OH IN* WV VA KY NC TN SC AL GA ME NH* MA CT RI NJ DE MD DC TX LA AK HI FL Adopted (32 States including DC) Not Adopting At This Time (19 States) NOTES: Current status for each state is based on KCMU tracking and analysis of state executive activity. *AR, AZ, IA, IN, MI, MT, and NH have approved Section 1115 waivers. WI covers adults up to 100% FPL in Medicaid, but did not adopt the ACA expansion. SOURCE: Status of State Action on the Medicaid Expansion Decision, KFF State Health Facts, updated January 1,

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28 Summary The US healthcare system is transitioning from volume to value, but lives in both worlds Bundled payment is one of the few measures that improves quality and reduces cost Perioperative physicians must be engaged in the care.

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