Charting The Path to a Healthier California Health Care Moving Forward Innovate Accelerate Collaborate. Phillip L. Polakoff, M.D.
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1 Charting The Path to a Healthier California Health Care Moving Forward Innovate Accelerate Collaborate Phillip L. Polakoff, M.D.,MPH October 22, 2014
2 Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. 2
3 The Institute for Healthcare Improvement (IHI) The Triple Aim Population Health U.S. health care system is the most costly in the world Yet, we get the worst outcomes of nearly any industrialized country, even when adjusting for age and income Experience of Care Per Capita Cost Source: 3
4 Smallest Impact Largest Impact Health Impact Pyramid (CDC) Factors that Affect Health Counseling & Education Clinical Interventions Long-lasting Protective Interventions Changing the Context to make individuals default decisions healthy Socioeconomic Factors Examples Eat healthy, be physically active Rx for high blood pressure, high cholesterol, diabetes Immunizations, brief intervention, cessation treatment, colonoscopy Fluoridation, trans fat, smoke-free laws, tobacco tax Poverty, education, housing, inequality Source: Centers for Disease Control and Prevention 4
5 Our Nation: Nutrition, Physical Activity, and Obesity 5
6 Population Health Interactive Stakeholders: Health Systems Politicians Clinical Providers Payers Purchasers Patients/ Community Pharma/ Medical Devices/ Vendors Patient/ Community Advocates Educational Systems Policy Makers/ Advocates Public Health Agencies 6
7 The Healthcare Landscape Perspectives: Healthcare is a different industry than it used to be I don t blame anybody they re just doing what makes sense and we have to change what makes sense. Don Berwick Former CMS Administrator Digital Health feels like the PC industry in the early 80 s. John Sculley Former Apple and PepsiCo CEO I think the extreme complexity of medicine has become more than an individual clinician can handle. But not more than teams of clinicians can handle. Atul Gawande Surgeon, Author, Journalist 7
8 The Healthcare Landscape The Market Is Complex And Evolving The U.S. health market requires greater flexibility and insight than ever before. Leaders increasingly need expert advice to make sound decisions in today s climate. Aging Population Evolving Payment Models Quest for Value Consumerism Unprecedented Environmental Change Emerging Technologies Comparative Transparency Regulatory Environment Workforce Challenges State Budget Crises 8
9 The Healthcare Landscape Drivers and Enablers of Change Various economic, technological, regulatory and social factors are pushing the industry in new directions, creating problems that never before existed. Demographics Economic Pressure Healthcare Reform Key Drivers Population Growth Population Ageing Chronic Conditions Governments Employers Market Competition PPACA (US) Other global reform (e.g., GER) ARRA, HITECH for EHR Business Model Enablers Convergence Payer-Provider Integration Incentive Alignment Risk Shifting Consumerism Consumer Engagement Value-Based Benefits Wellness/Preventative Programs Care Model Redesign Population Models (e.g., PCMHs, ACOs) Condition Oriented Models (COEs, DM programs) Big Data Mobility Personalized Medicine Technological Enablers Aggregation, Storage and Analytics Pooling/Open Data Data Center Capacity Telemedicine Wireless Sensors Remote Patient Monitoring Apps/Social Media Genomics Targeted Therapeutics Personalized Treatments Pharma Firms Competing to Own The Disease 9
10 The Healthcare Landscape Where is the Industry Going? Healthcare transformation has afforded physicians unprecedented opportunities to shop their medical degrees to firms tasked with solving today s issues. The Past The Future Risk Employers, payers Providers, patients Reimbursement Service/volume-based Information Siloed, static, paper-based Treatment One-size-fits-all, volume-based Delivery Hospital-based, expert/specialist driven Performance/value-based Networked, dynamic, digitally-based Personalized, value-based Community/retail-based, team driven Physicians are in the unique position to help shape the industry s future 10
11 Healthcare Reform Health care organizations should take offensive and defensive strategic responses to these drivers: ISSUES SOLUTIONS IMPACT 1 High cost to families High Cost To Federal Government Holes in coverage Insurance denied for preexisting conditions, lifetime limits, small business costs 1 in 7 underinsured or lacks Insurance Reforms Adjustments to Government programs Health Insurance marketplace/exchanges Insurance Mandate $200 Billion savings over 10 years DON T IMPACT DEFICIT $124B in potential additional savings over 10 years In 2012 U.S. health care spending increased 3.7 percent to reach $2.8 trillion, or $8,915 per person 1 11
12 Healthcare Reform Health care organizations need to take offensive and defensive strategic responses to these drivers. Healthcare Plans 2011: Minimum medical loss ratio and rebates 2012: Medicare Advantage STAR Quality-based payments 2013: Administrative simplification 2014: Exchanges open to individuals and small employers 2017: Exchanges open for large employers Quality reporting Pay for performance Regulatory influence Transparency/data sharing New Sustainable Business Model Healthcare Providers Fall 2011: CMS ACO application period 2012: CMS ACOs begin Value-based incentives and avoidable readmission penalties 2013: Episode-based payment pilots begin 2015: HITECH penalties begin Federally mandated programs that focus on quality and patient safety 12
13 Strategic Vision Guiding Principles for Creating Value Bring value to all key stakeholders such as patients, physicians and purchasers in a manner that is: Physician Led Patient Centric and Population Focused Guided by Fairness and Transparency Measured by Metrics that Reflect Continuum of Care Transformation, Not Incremental 13
14 Rx for Balanced Healthcare Transformation What is Success? In a world that is rapidly changing, what does success mean? CURRENT STATE FUTURE STATE VISION Financial Outcomes Market share Filling beds Financial Outcomes? Market share? Filling beds? + Clinical Outcomes? Treating the Full Person? Better Population Health/ Public Health? Source: Polakoff, P. Rx for Transformation. September FTI Journal. Clearly understand your organization s readiness and design the structure accordingly Establish strong governance structure with wide participation Don t rush or overreach up front Focus your efforts - identify top 3 to 5 opportunities for reducing costs/enhancing revenue Data is key communicate results regularly and avoid surprises 14
15 Heath System Transformation Overview Acute Care System Episodic Non-Integrated Care Coordinated Seamless Healthcare System Outcome Accountable Care Community Integrated Healthcare System Community Integrated Healthcare Episodic health care Lack integrated care networks Lack quality and cost performance transparency Poorly coordinate chronic care management Patient/person centered Transparent cost and quality performance Accountable provider networks designed around the patient Shared financial risk HIT integrated Focus on care management and preventive care Healthy population centered Population health focused strategies Integrated networks linked to community resources capable of addressing psycho social/ economic needs Population-based reimbursement Learning organization capable of rapid deployment of best practices Community health integrated E-health and telehealth capable Source: Neal Halfon, UCLA Center for Healthier Children, Families & Communities 15
16 New Business Models Patient Protection and Affordable Care Act of 2010 encourages providers to take responsibility for the cost and quality of care and enables the formation of ACOs. Accountable Care Organization Clinically Integrated Network Other Shared-Savings Program Centers for Medicare and Medicaid Services (CMS) created shared-savings program for accountable care organizations (ACOs) ACOs Groups of hospitals and doctors committed to reducing the cost and improving the quality of care 16
17 Physician Engagement Patient Care Is a Team Sport Now TODAY TOMORROW 17
18 Physician Engagement Engaging Doctors in the Healthcare Revolution Motivation How to Apply It Example To engage in a noble, shared purpose Appeal to the satisfaction of pursuing a common organizational goal The Cleveland Clinic reinforced its commitment to compassionate care by launching a same day appointment policy To satisfy selfinterest To earn respect To embrace tradition Provide financial or other rewards for achieving targets Leverage peer pressure to encourage desired performance Create standards to align behaviors, and make adherence a requirement for community membership At Geisinger Health System, 20% of endocrinologists compensation is tied to goals such as improving control of patients diabetes Patients ratings of University of Utah physicians are shared both internally and on public websites to drive improvements in patient experience At the Mayo Clinic, a strict dress code and communication rules signal the Mayo way of doing things Source: Adapted from Max Weber by Toby Cosgrove, MD and Thomas Lee, MD, Harvard Business Review, June
19 Clinical Quality Improvement Three Core Metric Objectives Functional Status Morbidity Rate Mortality Rate 19
20 Clinical Quality Improvement Impact Evaluation Metrics QUALITY Care gap closure Peer review Care pathway compliance SATISFACTION/QUALITY OF LIFE Patient satisfaction Provider satisfaction MD/staff retention rates EFFICIENCY/RISK Acute Length of Stay by DRG/ CPT, etc. Effective coding for Population Health Management PROCESS/BEHAVIOR CHANGE Health Risk Assessments completed ED wait times Smoking Cessation BMI Reduction OUTCOMES/HEALTH STATUS Potentially preventable admissions (PPAs) Readmissions Other potentially preventable events 20
21 Clinical Data Capture & Analytics Big Data Improving Healthcare Through Enhanced Technology Population Risk Stratification/ Management Care Management/ Coordination Patient Engagement/ Outreach Data Repository Claims Data Handling Terminology Mapping Physician Scorecarding Existing Quality Measures External Benchmarking EMR Interfaces Clinical Data Handling Predictive Risk Models Care Gap Reporting Customizable Filters Performance Reporting Provider Dashboards Patient Registries Care Gap Reporting/ Alerts Visit Planner/Patient Summary Care Transitions & Coordination Clinical Decision Support EMR Integration Patient Portal Patient Education Mobile Applications Automated Reminders Response Tracking Patient Assessments Wellness Programs = At-Risk Population Management Risk Stratification Requirement (Timing TBD) = FTC & CLIO Payer Requirement (2014) 21
22 Population Health The First Line of Defense The goal of population health management is to keep a patient population as healthy as possible, minimizing the need for expensive interventions. Accountable Care Coordinated Care Patient Registries Population Health Patient- Centered Medical Home Care Teams Disease Management Proactive preventive and chronic care to all of a patients during and between encounters Manage high-risk patients to prevent them from becoming unhealthier and developing complications Use of evidence-based protocols to diagnose and treat in a consistent, cost-effective manner 22
23 Population Health Transitioning to Value is a Huge Change CURRENT VIEW: 30 patients per day 14 have chronic conditions Unknown health risks Office visits too short for coaching Volume-Based/Episodic Care NEW POPULATION VIEW: 2500 patient population 900 have chronic conditions have moderate/high health risk Care teams leveraged by HIT Value-Based/Continuous Care 23
24 Population Health Dynamics: Chronic Disease Payment Rewards Behavioral Health Health vs. Care Community Health Public Health Public Safety K-12 Education Community Investment Ref.: Truman Medical Centers 24
25 Payers/Providers: The Great Divide By the Numbers 1 Consider disparities in current state and expectations around payer-physician relationships: Over half of payers say that many of their commercial contracts remain fee-for-service 4 out of 10 Physicians not currently in a value-based relationship say their biggest obstacle to entering into one is their distrust of payers The majority of payers consider the quality and degree of physician engagement a critical factor in making the decision to approach potential provider partners Only 16% of physicians are willing to accept risk (note: almost half of physicians are mostly interested in upside risk-sharing models) 1 Source: FTI Consulting Payer-Physician survey in April and June of
26 The Gap Between Payers and Physicians Since the passage of the 2010 Affordable Care Act (ACA), healthcare payers and providers have prepared for value-based reimbursement programs, albeit each with their own reservations. PAYERS Moving toward value-based reimbursement strategies, such as capitation Nearly four-fifths currently building Accountable Care Organization (ACO)-type arrangements Hesitant about physician willingness to accept downside risk PHYSICIANS Eager to reap the rewards of improving quality and controlling costs under valuebased arrangements Less confident in their ability to curb factors that could lead to missed targets and ultimately, penalties Leery of entering into arrangements with payers 26
27 Trailblazing the Payer-Physician Arrangement National Examples Various payers, hospital systems and physician groups have begun to experiment with new agreements and plans to transition into the age of value-based payments. Anthem Blue Cross Vivity Calif. Premera BlueCross Wash. Unique partnership among Anthem Blue Cross and seven competing hospital systems in the Los Angeles area Aim is to simplify the care experience and align incentives to eliminate waste and redundancy Has enrolled a significant population in a global outcomes contracting program with Puget Sound s largest multi-specialty clinic No downside physician risk but potential for exclusion or lowered program rates Reading Health System Penn. Created a wholly owned, clinically integrated structure to create shared value for various stakeholders Critical to success was the input and leadership from physicians Crystal Run Healthcare N.Y. Faced engagement issues among its physicians; generated physician data on select treatments to emphasize clinical variation and cost correlation Recently penetrated the NYC market by partnering with Mount Sinai Health System in an alliance that will share best practices, financial resources and work toward value-based care goals 27
28 Three Payer-Physician Disconnects Risk Information Technology Clinical Integration & Scale Payers want equitable risk sharing Payers want to see providers invest in healthcare IT, especially tools supporting CI and PHM Most physicians will have to learn how to operate within an integrated environment 28
29 Risk Physician Problems with Risk Sharing Given such comments as: Many experts believe it is essential that payers and providers eventually share risks to control costs and improve quality If [providers] had their preference, they would stay at fee-for-service - Payer Respondent 1 The [providers] approaching us ready to talk about risk are prepared to discuss only upside shared savings programs - Payer Respondent 1 it stands to reason then that: Providers including hospitals and independent physician practices are often leery of entering into arrangements in which their revenues and income are placed at hazard with a partner they do not trust 1 Source: FTI Consulting Payer-Physician survey in April and June of
30 Three Best Practices Proposed Framework Use the following construct to maximize value-based patient-provider synergy: Patient-Centric Care PATIENT-CENTRIC CARE Focus on care that manages the patient from discharge to readmission Include non-clinical aspects of care, ranging from transportation to behavior modification through organized wellness programs Data and IT DATA AND IT Payers should share clinical and administrative data with provider partners Payers and providers should integrate information systems and operate on a common platform CARE ENGAGEMENT DATA Physician Engagement PHYSICIAN ENGAGEMENT Set expectations (and communicate them broadly) for provider groups for risk sharing Establish clinical teams to optimize communication and ensure continuity of care 30
31 Doing Care Differently: Journey to a Healthier California A Final Thought Logic will get you from A to B Imagination will take you everywhere - Albert Einstein 31
32 Discussion 32
33 Contact Information Phillip L. Polakoff, M.D. Senior Managing Director Chief Medical Executive Health Solutions FTI Consulting
34 Critical Thinking at the Critical Time
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