The Journey to High-Value Healthcare
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- Geraldine Perkins
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1 The Journey to High-Value Healthcare Susan DeVore President and CEO Premier healthcare alliance Rowland-Hite Health Planning Seminar May 5,
2 Journey to top performance
3 Our current model is unsustainable 25 Differential of: Actual Projection Percent of GDP Percentage Points 1 Percentage Point Zero Tax rates 2050: 10% 26% 25% 66% 35% 92% Source: Congressional Budget Office 2
4 Provider perspective on reform Track 1 Track 2 Cuts to Existing FFS System Market basket reductions DSH cuts P4P & nonpayment for anything preventable or unnecessary Disrupt Existing System Bundled Payments Innovation Center/ demonstrations ACOs 3
5 What are we trying to incent? 4
6 Common sense Acuity and costs increase Acute care episode Worsened condition Preventable condition Source: Harold Miller. How to Create Accountable Care Organizations, 2009 Hospital care Medical care & treatment required Secondary prevention Healthy person Primary prevention Successful outcome High cost outcome Complications No hospitalization Acute care episode Resumed health Worsened condition Continued health Preventable condition
7 Market forces for change - consumers Americans are sick, with high chronic disease rates Health status Healthcare expense Care control Choice 8% of Americans have diabetes, 15% have high cholesterol, 8% have asthma, 12% have heart disease and 35% are obese, 20% smoke cigarettes Aging population 35% of people with insurance spend more than $1,000 a year on out of pocket expenses; one-third spend more than 10% on healthcare 43% of Americans report difficulty getting and affording insurance as individuals 25% of people skip tests, fail to fill a prescription or fail to schedule specialist care due to expense People want to decide what care they need in cooperation with clinicians, not an insurer. People want the right to select their doctors Less interest traditionally in selecting hospitals or insurers 6
8 Market forces for change - providers Increasing efforts to pay for value, not volume (VBP, readmissions, HACs, etc.) Health reform Tremendous risk in FFS, and shared savings provides temporary partial relief A step ahead of where the system will be moving Market competition Employers Mission Managing more patients at Medicaid-like reimbursement rates If you don t move toward integration, physician organizations, clinics, insurers and employers will Market consolidation is inevitable Early adopters are early winners Employers may be in the position to direct care to you, or not Opportunity to improve the health of your population 7
9 Market forces for change - payors of all premiums must go to medical expenses Health reform Market competition Employers CMS Premium rates are under intense scrutiny Medicare Advantage cuts, new state exchanges Transparency on cost and quality demanded by patients, reform law Insurers will need to compete on value Market consolidation is perceived as enabling cost increases Employers must cut their healthcare spend ACOs are an attractive way to cut costs, while possibly offering better benefits CMS pilot programs will test payment reform There is clear direction that CMS is moving toward pay for value models Representing a large chunk of reimbursement volume, CMS will impact the market Medicaid expansion and dire straits for state budgets 8
10 A new way to envision care Colorectal screening Breast cancer screening Flu shot Pneumonia vaccination Diabetes care Harm prevention Risk adjusted mortality Evidence based care Provider network Payor partners Community services partnerships Shared management and contracting Medical management Patients Improve population health Partnerships across the care continuum Peoplecentered foundation Improve care experience Reduce per capita costs Global rating of all healthcare Global rating of personal doctor Global rating of specialist seen most often Getting needed care Shared decision making Total cost PMPM Admits per 1000 members/year 30 day readmissions ED visits/1000 Hospital admissions for ambulatory care sensitive conditions 9
11 How do we know it will work? Systematic improvement (Inpatient/outpatient value) Population total value Process Improvement (Evidence-Based Care) 10
12 HQID inspired, but did not define VBP Rule VBP Rule Released April 2011 Concerns HCAHPS Weighting Performance thresholds Harm/HAC s double jeopardy Measures
13 Ensuring pay-for-performance success Evidence-Based Care Performance % All or Nothing - Total Inpatient Cost per Case Mix Adjusted Discharge - Waste report and focus on appropriate utilization Observed to Expected Mortality Ratio Composite Harm Index Reduce Preventable Readmissions HCAHPS Top Box Global Measures Composite, stratified by demographics 12
14 QUEST collaborative driving improvements Year 1 and Year 2 Results % of Hospitals in the QUEST Top Performance Threshold (TPT) 71% 94% 25% 25% 68% 71% 59% 49% 50% Baseline Year 1 Year 2 # Hospitals Achieving QUEST TPT in all 3 Dimensions Evidence-Based Care Mortality Cost of Care Baseline Year 1 Year 2 Year 1 18 Months Year 2 30 months Lives saved 8,043 14,649 22,164 25,235 Dollars saved $577M $1.036B $2.13B $2.85B Patients receiving EBC 24,818 41,130 43,741 63,094 13
15 Bending the cost curve Case Mix Adjusted Cost Per Discharge Not Adjusted for Inflation Four quarter Moving Averages Source: Quality Advisor % change over last 2.5 years $9,500 $9,000 $8,500 21% increase $8,000 $7,500 $7,000 4% increase $6,500 $6,000 3q06 4q06 1q07 2q07 3q07 4q07 1q08 2q08 3q08 4q08 1q09 2q09 3q09 4q09 1q10 2q10 Non Participants (N = 146) QUEST Participants (N = 146) National Trend 14
16 Needs improvement: Harm & patient satisfaction 2Q Q QUEST vs Non QUEST Harm Composite 4 Quarter Moving Averages Source: Quality Advisor NonQUEST QUEST 0.55 Harm Composite q08 3q08 4q08 1q09 2q09 3q09 4q09 1q10 2q10 15
17 Readmissions Reform provisions & QUEST approach Reform Provisions Cut to all DRGs based on excess readmissions Penalty Escalation FY2013 Up to 1% FY2014 Up to 2% FY2015 not to exceed 3% in and beyond Populations of focus (Medicare pop): Initial: AMI, CHF, PN FY2015 Expansion:: COPD,CABG, PTCA and other vascular 30 day risk-standardized readmission rate (RSRR) HHS to make available PSOs to assist lowperforming hospitals Key Drivers Need for increased physician alignment Strong focus on care transitions Coordination with post-acute providers Additional measures to be developed QUEST Approach Hospital-specific impact and comparative analyses Planned measure: 30- day all cause same hospitals unadjusted readmission all DRG and all Payor* Currently engaging with Harlan Krumholz as SME for risk-adjustment Improvement Sprints focused on key strategic areas Educational best practice webcasts *TPT 25 th percentile 16
18 Preventing hospitalizations: Focus on ambulatory-care sensitive conditions Focus conditions Resulting admissions Cost per admission Congestive heart failure 31.8% $10,300 Bacterial pneumonia 25.5% $ 7,000 COPD 11.9% $ 4,900 Urinary infection 11.2% $ 7,200 Dehydration 7.1% $ 7,600 Adult asthma 3.3% $ 7,600 Hypertension 2% $ 4,200 Diabetes short term complication 0.5% $18,400 Ambulatory care sensitive admission rates, Milliman, Jan 2009
19 Patient-centered integrated care delivery Accountable care capabilities framework Collaborative sharing Alternative care delivery models Core component guidebooks Clinical integration and physician alignment models Data and information Payor contracts, legal guidance Financial models Payment model impact analysis 18
20 42 States redesigning care 19
21 The models are different Integrated delivery systems/networks (IDN) Multispecialty group practice Physician hospital organization (PHO) Independent practice association (IPA) Virtual physician organization *Source: Article by Stephen M. Shortell and Lawrence P. Casalino 20
22 Payor and Employer partners are at the table (representative list) Provider-sponsored Plans Private Plans Government Payors Employers Geisinger Health Plan Presbyterian (NM) Health Plan Health New England (Baystate) SummaCare (Summa) Billings Clinic First Health Anthem/WellPoint Cigna Coventry HealthSpring/Bravo Medica United Aetna BCBS MT HMSA Horizon BCBS New West CMS State Medicaid plans S-CHIP plans VA IBM Caterpillar Eastman Chemical UNITE HERE Local 54 representing: Trump Entertainment Resorts, Inc. Harrah s Entertainment Hilton Hotels Corp. MGM Mirage BCBS MA 21
23 Baseline assessment Implementation Collaborative Overall Assessment * Readiness Collaborative Overall Assessment ** *Data from 26 markets **Data from 46 assessments Blue = High Green = Average Red = Low 22
24 Common Gaps in moving toward Patient Centered Integrated Care Delivery Substantive change leadership support Physician integration/alignment models and implementation support Care delivery models/maps across the continuum of care Health home development and implementation support Coordination of care execution care All payor and population data modeling capabilities Advanced payor contracting models/analytic capabilities Partnership building models and capabilities across the continuum State-based (Medicaid and exchange driven) models for accountable care 23
25 Population selection: AtlantiCare example 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Target population, by prevalence This population s care costs $15,000 a year, 4X the average 24
26 Measures selection: AtlantiCare example Special Care Center Outcomes Measures Population health Chronic disease outcomes in top decile Reduction or elimination of racial/ethnic disparities 98% medication compliance Cost effectiveness 40% reduction in hospital and ED usage 10-25% reduction in overall care costs Experience of care 2X improvement in care experience scores 25
27 Outcomes: AtlantiCare example 63% of heart and lung patients quit smoking Prescription fill rates between 97%-99% For patients with high blood pressure, the average drop after 6 months was 26 points For patients with diabetes, A1C dropped 2.38 points on average 30 day hospital readmissions range from 4 to 5 percent, compared to baseline of 10 to 12 percent Net healthcare costs in the first year declined12.3% 23% drop in outpatient procedures 41% fewer inpatient hospital admissions 48% percent fewer ED visits 26
28 CMS ACO Shared Savings Rule 2 Tracks Track 1 Bonus only in years 1 and 2 no downside risk Two-sided risk at year 3 Up to 52.5% shared savings Caps savings at 7.5% of benchmark in years 1 & 2 and 10% in year 3 Caps losses in year 3 at 5% Threshold of 2%-3.9% depending on size of population Track 2 Two-sided risk starting in year 1 Up to 65% shared savings First dollar savings/loss after threshold surpassed Caps savings at 10% of benchmark Caps losses at 5% in year 1, 7.5% in year 2, 10% in year 3 Threshold of 2% 27
29 Proposed ACO regulations What we like: What we want: Timely data from CMS Educating beneficiaries Multiple payment models Clinically integrated for antitrust purposes Safe harbors Consensus-based measures Antitrust safety zones Expedited advisory opinion process Higher shared savings and no withhold Payment model with no risk Preference to ACOs in private market Relax EHR MU requirement Capitation model Broadened legal waivers Exclusion of IME/DSH Wage adjustment Medicaid Adjust risk scores each year 28
30 We must move forward, regardless of reform
31 Why all this matters 30
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