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1 Value Based Care: Trends for 2018 Boston Chicago Houston Los Angeles Miami San Francisco Washington, DC
2 Need head shot David Fairchild, MD Director BDC Advisors Dave Terry CEO & Co-Founder Archway Health 1
3 Agenda Value: why has it been hard to achieve? Value based Care Trends for 2018 Incremental shifting from FFS to value-based reimbursement: stimulus for physician engagement Greater access to convenient, low cost care Patient centered care moving beyond lip service Population health strategies that work Bundled Payment Overview & Benefits Sample BPCI Advanced Analytics Q & A 2
4 Key Themes Real change takes time Population health strategies work, and are population specific Your key issues today are not necessarily population health Think: - Physician engagement - Perverse incentives of FFS Understand your local market and balance short term initiatives with longer term plays 3
5 2018 goal: actually deliver value Top 12 takeaways from the 2018 JP Morgan Healthcare Conference while the destination is uncertain, the direction is clear Written by Dan Michelson, CEO, Strata Decision Technology January 10, Scale 2. Smart growth and new revenue streams 3. Manage cost and margins 4. Become a brand 5. Operate as a system, not just call yourself one 6. Act small be nimble 7. Engage physicians 8. Leverage Analytics 9. Protect yourself cybersecurity 10. Manage social determinants of health 11. Work to end the opioid crisis 12. Deliver value 4
6 What is value? If I had an hour to solve a problem I d spend 55 minutes thinking about the problem and five minutes thinking about solutions. 5
7 America s epidemic Of Unnecessary Care The medical system had done what it so often does: performed tests, unnecessarily, to reveal problems that aren t quite problems to then be fixed, unnecessarily, at great expense and no little risk. Meanwhile, we avoid taking adequate care of the biggest problems that people face problems like diabetes, high blood pressure, or any number of less technologically intensive conditions. An entire health-care system has been devoted to this game. Atul Gawande, MD MPH
8 Revenue Is Still Fee For Service
9 Modifications To FFS Are Challenging to Implement MIPS cannot succeed Replicates flaws of prior value-based purchasing programs Burdensome and complex Much of the reported information is not meaningful Scores not comparable across clinicians MIPS payment adjustments will be minimal in first two years, large and arbitrary in later years MIPS will not succeed in helping beneficiaries choose clinicians, helping clinicians change practice patterns to improve value, or helping the Medicare program to reward clinicians based on value 5
10 Real change takes time: A century of progress against smoking
11 Trend: reimbursement will continue its (incremental) evolution from volume to value 10
12 Managing a complex patient population requires finding the sweet spot in value-based contracts. A well-designed contract establishes a sweet spot where a provider can create value through lower costs and capture an appropriate portion of the value created, through shared savings and market share gains. Source: BDC Advisors 11
13 Comprehensive Primary Care Plus (CPC+): creates incentive for practice innovation CMS pays primary care practices a monthly care management fee in addition to (reduced) fee-for-service (FFS) payments Up-front payments Comprehensive primary care payments Incentive payments kept or repaid based on performance Care Management Fee (PBPM) Performance Based Incentive Payment (PBPM) Payment Structure Redesign Objective Risk-adjusted support for augmented staffing and training for comprehensive primary care Reward practice performance on utilization and quality of care Reduce dependence on visit-based FFS to offer flexibility in care setting Track 1 $15 average $2.50 opportunity N/A (std FFS) Track 2 $28 average $4.00 opportunity Reduced FFS with prospective comprehensive primary Copyright care 2018 BDC Advisors, payment LLC. All rights reserved. 12
14 More providers will be in APMs in will see more Providers in APMs than in 2017 CMS goal: 50% of Medicare fee-for-service payments through alternative payment models by 2018 More ACOs anticipated in 2018 To avoid MIPS and qualify as an APM if ready Challenges have caused ~100 ACOs to drop out There is no pop health switch Insufficient infrastructure Engaging providers - Especially specialists 13
15 Bundles on the rebound Mandatory cardiac and surgical hip and femur fx episode payment models (EPMs) were cancelled in late years into the Comprehensive Care for Joint Replacement (CCJR) Half the 67 sites changed from mandatory to voluntary A voluntary Bundled Payment for Care Improvement (BPCI) Advanced initiative came out Jan 2018 Opportunity for specialist engagement 14
16 Trend: consumerism will reward greater access to convenient, low cost, care 15 15
17 Envision a national network of PCPs CVS strengthening its own provider capabilities 9700 pharm locations 1100 Minute Clinics - Primary care? - Coordinate chronic care? Aetna 3 rd largest insurer, 22 million members Will likely create incentives for pts to use Minute Clinic - No co-pays or prior authorizations, e.g. Aligned incentives around med adherence Friend or foe? 16
18 Put medical care on the shopping list in 2009 Vanderbilt moved more than 20 clinics to the 100 Oaks Shopping Center it now does 25% of its total business there
19 Transportation and Convenience Uber and Lyft revolutionized transportation Case Study - Geisinger Now, they want to revolutionize non-urgent care transportation Many no-shows are due to lack of transportation Source: Geisinger Zoc Doc/Uber Announcements
20 Population health strategies that work 19
21
22 Developing Population Health Strategy Identify Population and Create Registry Risk Contract (Medicare Advantage, Commercial, Medicaid, Employer) Perform Meaningful Analytics Fee For Service with Attribution (Medicare, Commercial) HRA PAM Claims Data Clinical Data Lab Results Pharmacy Create Functional Segments Preventive Screenings At Risk Gaps in Chronic Dz Care High Cost Case Management Care Management Stage and Target Interventions Social Workers Medication Reconciliation Transitions In Care Referral Management Remote Monitoring Quality Measurement and Monitoring Cost
23 Key Competencies To Operationalize Population Health Management Accurately assess population health market opportunity Develop physician leadership Contracting expertise including alignment of incentives across contracts Functional IT system including analytics and workflow Effective patient segmentation and interventions System of care designed around the patient Engaging and activating patients Identify and foster a performance network Strategic selection of partners including community organizations Incentives aligned with transparent clinical and financial performance metrics
24 Interventions Work But Take Time Effects Within Months Activity Expected Impact Transitions of care management Reduce readmissions 3 mos Case management for high-risk patients with targeted conditions: diabetes, heart failure, COPD Reduce primary admissions and ED Time to Impact 3 6 mos Case management for other high-risk patients Reduce primary admissions and ED 6 12 mos Pharmacy management Increase generic use 6 12 mos Effects within 1 2 yr. Nursing home management More efficient specialists and ancillary providers Reduce readmissions/primary admissions Decrease cost per episode of care mos mos High-end imaging Reduce unnecessary testing mos Effects within 3 5+ yr. Interventions for low-risk chronic disease patients: disease registries, chronic disease care optimization Preventive care; screening; lifestyle change; wellness Source: Geisenger Improved control; avoid complications Earlier identification and treatment; decrease incidence of chronic diseases 2 5 yr yr.
25 Challenges Abound To Implement Population Health Source: AMGA survey of physician groups
26 % of ACOs receiving shared savings Medicare ACO Financial Results Correlated with Benchmark Not Specific Shared Programs savings more likely for MSSP ACOs with higher historical service use 70% 60% 50% 40% 30% 20% 10% 0% Q1 ($7,911) Q2 ($8,933) Q3 ($9,733) Q4 ($10,511) Q5 ($13,160) Quintile (average price-adjusted benchmark) Note. Excludes 38 ACOs serving beneficiaries in multiple states that do not share a border (e.g., an ACO serving beneficiaries in both New York and California). Source: CMS data. Results preliminary and subject to change. 10
27 What is right compensation model for value-based world? Suitability of different provider compensation methodologies by reimbursement environment: Volume vs Value Volume (FFS) RVU % collections Visits Salary Case-mix adjusted panel size Quality P4P Capitation Value 26
28 Summary Majority of provider revenue is still in FFS, even in 2018 Real change takes time Population health strategies work, and are population specific Your key issues today are not necessarily population health Think: - Physician engagement Understand your local market and balance short term initiatives with longer term plays Strengthen population health capabilities now to prepare for continued expansion of value-based reimbursement 27
29 01 BUNDLED PAYMENT OVERVIEW 28
30 What is a Bundled Payment? In a bundled payment model, a single provider is responsible for managing all aspects of care during a discrete episode. Provider as Conductor Bundle Definition Trigger event starts episode (specific DRG or procedure) Defined end date - 90-day episode length Providers are given a bundle-specific Target Price All clinically relevant costs are included in the Target Price Providers share in savings below Target Price Retrospective payment model 29
31 State avg post acute care cost for LEJR w/o CC/MCC ranges from $4,800 to $12,700 30
32 Example: Variation in CHF w/mcc spending by NJ Hospital MS-DRG 291 Avg post acute care spend for CHF w/mcc among NJ hospitals ranges from $15,600 to $27,500 31
33 BPCI Performance Archway Bundled Payment Performance Q Q Major Joint Replacement Baseline Period BPCI Performance Period 16% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Anchor Readmission SNF HHA Part B OP Other COPD Baseline Period BPCI Performance Period 14% $0 $5,000 $10,000 $15,000 $20,000 $25,000 Anchor Readmission SNF HHA Part B OP Other CHF Baseline Period BPCI Performance Period 16% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Anchor Readmission SNF HHA Part B OP Other 32
34 BPCI Results: Sample Provider Revenue Growth Sample Provider A B C Annual Volume 1,498 1,783 4,575 Savings per Case $2,076 $2,050 $2,647 New Provider Annual Revenue $3,109,786 $3,654,487 $12,108,789 33
35 Benefits of Bundled Payments Increased provider autonomy over the care process Years of data from the full continuum Opportunity for to specialty providers to participate in an Advanced Alternative Payment Models (APMs) Potential to significantly increase revenue and profitability Non-binding CMS application process 34
36 BPCI Advanced Model Key takeaways Voluntary program; Medicare FFS beneficiaries only Episode Initiators (EIs) can be acute hospitals or Physician Group Practices 90 day bundles; all clinically relevant Part A & B costs included Bi-annual retrospective reconciliation; 20% stop loss at EI level Qualifies as an Advanced Alternative Payment Model (APM) Under MACRA Quality performance will adjust incentive payments More sophisticated target pricing methodology CJR, Next Gen ACO, MSSP Track 3 take precedence over BPCI Advanced While still non-binding, application for BPCI Advanced is more robust than recent open window periods 29 inpatient bundles and 3 outpatient bundles 35
37 02 SAMPLE BPCI ADVANCED DATA ANALYTICS 36
38 Bundle Analytics Hospital Opportunity Snapshot-All Bundles
39 Bundle Analytics Hospital Volume & Cost Summary-All Bundles
40 Bundle Analytics Hospital Opportunity Summary-All Bundles
41 Bundle Analytics Performance Benchmarking - CHF 40
42 Bundle Analytics Physician Benchmarking - CHF Hospital Blinded 41
43 Post-Acute Deep Dive Skilled Nursing Facilities-CHF
44 BPCI Advanced Application Timeline Through March May - June 12 th, 2018 June July August Oct 1 Submit non-binding application to CMS in order to: 1. Secure option to participate 2. Receive cost and quality data 3. Receive Target Prices May: Receive data and target prices from CMS May June: Review data for strategic opportunity June: CMS offers participant agreements to applicants Participants select bundles Participants select Convener Signed participant agreement due to CMS Performance period begins 43
45 Questions Contact Info David Fairchild, MD Director BDC Advisors Dave Terry CEO Archway Health 617/
46 Value Based Care Trends for 2018 March 5, 2018
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