Brave New World: The Effects of Health Reform Legislation on Hospitals. HFMA Annual National Meeting, Las Vegas, Nevada

Transcription

1 Brave New World: The Effects of Health Reform Legislation on Hospitals HFMA Annual National Meeting, Las Vegas, Nevada

2 Highlights of PPACA Requires most Americans to have health insurance Expands coverage through the Medicaid program Provides premium subsidies for persons living below 400% of Federal Poverty Guidelines Establishes health insurance exchanges Limits exchange participation to individuals and small businesses Assures guaranteed coverage and also prohibits health status premium adjustments Creates individual and employer penalties for people without coverage Is funded through Medicare and Medicaid spending reductions, additional Federal tax revenue and penalties Ingenix, Inc. 1

3 Improving the Affordability of Health Care Payer-Provider Collaboration Will Be Needed To Support Provider Realignment 1. The goal Increase Health Care Value Improve Quality Reduce Costs 2. Tactics 3. Prerequisite Medical Home Pay-for-Performance Bundled Payments ACOs Global Payments New Technology Ingenix, Inc. 2

4 Changes in Sources of Coverage under the Act Assuming Full Implementation in 2011 (millions) All Individuals Individuals with Employer Coverage Medicaid Employer Coverage Individual Coverage Uninsured Employers Who Drop Coverage Newly Covered Employed Plan Net Change In Employer Coverage Ingenix, Inc. 3

5 Medical Home Defined An approach to providing comprehensive primary that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient s family. 1 Principal Characteristics of a Medical Home: > Personal physician > Physician directed practice > Whole person care orientation > Coordinated care > Quality and safety > Enhanced access > Full value payment 1. 1As originally defined by the American Academy of Family Physicians (AAFP), American Academy of Pediatrics (AAP), American College of Physicians, American Osteopathic Association (AOA) Ingenix, Inc. 4

6 Medical Home Differentiators Dedicated care managers > Patient centered system with PHR > Care team approach > Care coordination and common referral pathways Expanded access > Same day appointment availability > Extended office hours evenings and weekends > E-visits Performance management tools > Technology to predict high risk patients and measure provider performance > Common set of evidence-based guidelines > Common electronic health record (EHR) > Systems that integrate EHR and claims information Effective incentive payments > Pay for coordination and management > Pay for performance > Shared savings programs Ingenix, Inc. 5

7 Payer-Provider Collaboration Payer (Partial List) Claims based gaps in care On-line HRA at no charge Nurse call center at scale PHR Reporting results to purchasers Remote medical monitoring Benefits adjustments Incentives administration Web delivered education IVR Prompts evisit payment Group visit payment Care Mgmt Fee Medical Home Provider (Partial List) EMR Registry Patient Trust Planned Visits NP Support Frail Elderly Care Care Cost Control Providers vary in ability to take over certain payer functions, e.g., HRA, PHR, call center, remote monitoring. Ingenix, Inc. 6

8 Moving from Medical Home towards ACOs Medical Home Physician Only Primary Care Based Accountable Care Organization Provider-led organization held accountable for cost and quality targets for a defined population Physicians and Hospital What do we need to do? Payment initially limited to a care management fee possibly gain sharing Facilitates hospital/physician alignment; Comprehensive, outcomes-based approach Bundled Payments Greater potential for gainsharing and fixed global payment (capitation) Ingenix, Inc. 7

9 Bundled Payments Episode of care based payment models that: Provide strong care coordination and financial incentives that would effectively reduce variations in the health care cost and quality Support the alignment of physician and hospital incentives to provide optimal care Generally begins with a discrete surgical procedure Enables gain sharing arrangements that are more expansive than medical homes Ingenix, Inc. 8

10 Shifting Risk Payment system reforms will require providers to bear greater population-based financial risk Low Degree of population risk transferred to provider by payment system High Fee for Service Pay for Coordination Pay for Performance Episodic Payments Shared Savings Capitation Paid for each unit of service w/o constraint on spending Additional per capita payment based on ability to manage care Payments tied to objective measures of performance Reform Value-Based Purchasing/ HAI Readmit Policy Payment based on delivery of services within a given timeframe Reform Bundled Payment Shared savings from better care coordination and disease management Reform ACOs Providers share savings from better care coordination and disease management Ingenix, Inc. 9

11 Successful ACO Design Solid understanding of performance baseline measures at the outset: > Individual provider profiling > Care coordination capabilities among providers > Competitive marketplace position Build on strong primary care base, preferably medical home, and include a hospital Cultural competencies, especially strong local physician leadership Keep it simple need legal infrastructure to manage risk, but consider outsourcing administrative functions Analytic tools to measure quality and cost Relationships with payers to grow membership, pay out-of-network claims Ingenix, Inc. 10

12 Successful ACO Design Accountable Care Organization Committed Leadership Accountabilities/Trust Strategic Plan Agreements on capitalization, ownership and governance Medical home Hospital Coordinated Specialist Relationships Performance Baseline Measures and Analytic Tools Ingenix, Inc. 11

13 Case Studies

14 Client: Illinois Dept. of Health care and Family Services Pay for Performance The Business Problem Illinois Department of Healthcare and Family Services (HFS) wanted to improve overall health outcomes Need to reduce long-term costs Encourage high-quality care The Solution Evaluated physician performance in five areas critical to promoting public health: child immunizations, child developmental screenings, asthma management, diabetes management and breast cancer screening, giving bonuses to those physicians who surpass the HEDIS Results Ability to distribute approximately $5 million to qualifying physicians in recognition of treatment they provided to Health Connect patients during 2008 Ingenix, Inc. 13

15 Client: Integrated HealthCare Association The Business Problem A coalition of hospitals, health plans and physician groups wished to use a pilot process to develop infrastructure for supporting procedure episode payment in the California market Procedures: total knee replacement; total hip replacement; third procedure TBD Services included in bundle > Hospital inpatient services, including device > Professional services > Radiology > Readmissions within 90 days The Solution Episode definition (Ingenix and PEG) Analytics and benchmarks to support pricing and contracting Contracting Quality and appropriateness metrics Results Bundled Payment Target Go-Live on August 1, 2010 Ultimate goal support implementation of real payment engagements learn from experience and results Ingenix, Inc. 14