Integrated Health System

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2 Integrated Health System Please note that the views expressed are those of the conference speakers and do not necessarily reflect the views of the American Hospital Association and Health Forum. Page 2

3 Integrated Health System: U of U Health $281 Million+ Grants in FY2016 1,250 Health Care Providers Trained Annually Over 1,400 Providers HOSPITALS & CLINICS EDUCATION RESEARCH PYSICIANS Page 3

4 Audience Question Which bests fits your perspective? a. Hospital b. Physician c. Insurance Carrier d. Pharmacy Page 4

5 Audience Question As a percentage, how much of your budget is spent on employee health care coverage? a. 0% b. 0-5% c. 5-10% d % e. I don t know Page 5

6 National Average Page 6

7 Think Like an Employer Employer demands to keep costs down UM & Prior-Authorizations Requirement Page 7

8 Unsustainability of Health Care Page 8

9 Unsustainability of Health Care Page 9

10 Cost Shift to Employees Page 10

11 How Health Systems Measure Quality Page 11

12 How Employers and Patients Measure Quality Page 12

13 What Patients Really Value is Affordability and Access Register for White Paper at: UofUHealth.org/ValueSurvey Page 13

14 Most Valued Select five (5) statements from the list below that best reflect what you value most when getting services from a health care provider. A health care provider is someone who is licensed to provide health services, including doctors, nurses, physicians assistants, nurse practitioners, etc. 45% 39% 38% 36% 36% 34% 33% 32% Percent Selected 31% 45% - My out-of-pocket cost is affordable 39% - I m able to schedule a timely appointment 26% 25% 25% 24% 21% 17% 15% 12% 10% My out-ofpocket cost is affordable I'm able to schedule a timely appointment I'm confident in the provider's expertise The office is conveniently located The provider knows and cares about me The provider reviews the results of exams, labs, and imaging with me The staff are friendly and helpful My health improves The wait time at the office is reasonable The provider includes me in choosing treatment options The provider knows and considers my insurance plan when providing treatment I don't experience complications or medical errors Enough time is spent with the provider I can easily communicate with my provider between appointments I get specific treatments I want (like antibiotics or an MRI) My mental health needs are considered in my treatment plan The provider reviews my prescription medications and discusses their cost The provider has extended office hours (nights and weekends) Total sample; Weight: final; base n = 5031; effective sample size = 3416 (68%) 14

15 Responsibility Who s primarily responsible for ensuring that Me (the patient) My health care provider My health care system My insurance company My employer I don't experience complications or medical errors The wait time at the office is reasonable The staff are friendly and helpful The provider reviews the results of exams, labs, and imaging with me The provider has extended office hours (nights and weekends) I get specific treatments I want (like antibiotics or an MRI) Enough time is spent with the provider The provider knows and cares about me The provider knows and considers my insurance plan when providing My out-of-pocket cost is affordable The provider includes me in choosing treatment options The provider reviews my prescription medications and discusses their cost My mental health needs are considered in my treatment plan I can easily communicate with my provider between appointments My health improves I'm confident in the provider's expertise I'm able to schedule a timely appointment The office is conveniently located 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total sample; Weight: final; base n = from 488 to 2338; total n = 5031; 4543 missing; effective sample size = 1546 (66%) 15

16 Audience Question What is the average margin of a health insurance company is? a. 0% b. 0-5% c. 5-10% d % e % Page 16

17 How Can We Work Together Efficiently? Hospital Physician Patient Pharmacy Insurance Employer Page 17

18 How Can We Work Together Page 18

19 Q & A Break Page 19

20 Managing Risk from a CMO Perspective COST - Managing the Population s Health Care Management Integration with Clinicians Our approach to Population Health REVENUE - Risk Adjustment Overview Strategies for optimization Page 20

21 Care Management The Evidence Randomized trial 174,120 people to telephone-based care management or non-intervention Followed for 1 year Total costs $7.96 (3.6%) PMPM lower in the care managed group Cost of program $2.00 PMPM 10.1% reduction in hospital admissions accounted for majority of savings N Engl J Med 2010;363: Page 21

22 Total Cost of Care (PMPM) Group Nonintervention Care Managed $ Difference % Difference Chronic Conditions at the top 10% of financial risk $1,659 $1,576 -$84-5% Care Gaps $502 $678 +$ % Only a select group of individuals benefit from care management How do we find those people? N Engl J Med 2010;363: Page 22

23 Culling Candidates for Care Management Page 23

24 Production Methodology Predicting Intervenable Risk Initial Filter RISK STRATIFICATION FLAG SCORE Number and severity of chronic diseases ED visits Inpatient Hospitalizations Risk score migration- Higher prospective than concurrent Mental Health Diagnosis Page 24

25 Validity of Stratification Model Page 25

26 Risk Stratification 0-2 flags 3 flags 4 flags >5 flags <1% 2% 9% 6% 9% 26% 87% 59% % of Membership % of Cost Page 26

27 Next Step: Integration Getting Data to Our Providers We work with providers to create an efficient care pathway Other Carriers Page 27

28 Lessons Learned 1. Our tool is too blunt. Touching too many lives to find a patient suitable for care management. Can big data solutions help? Lots of vendors seem to think so. 2. Data to the provider isn t very useful unless it integrates with clinician s workflow. Implementing Epic Caboodle which will allow integration of health plan claims into clinical workflow. 3. Is data alone enough? A prelude to Alternative Payment Methodologies. Page 28

29 Our Approach to Population Health Building Blocks Page 29

30 Something is Working 20% Reduction in ED visits ED visits per 1000 members 30% Reduction in inpatient admissions Inpatient Admits per 1000 members Page 30

31 Revenue Capturing Risk Premium Page 31

32 Managed Risk Isn t all Bad MLR by HCC Chronic Conditions Categories Chronic Heart Disease Cancers HIV Mental Health No HCC's Student Athletes Page 32

33 Risk Adjustment Medicare Advantage CMS-HCC model Prospective Model: This year s claims used to determine next years capitated rate for each member. Individual and Small Group Exchange HHS-HCC model Concurrent Model: This year s claims used to determine risk transfer for current year. Zero Sum: Transfers are made between carriers in each state. Carrier with healthier members pay carriers with sicker members. Medicaid Varies by state Generally CDPS prospective model Page 33

34 How it Works - NOW Each diagnosis code billed in the calendar year is grouped into disease categories Each Condition Category is given a weight Rules in place to prevent duplication- (Hierarchical) For example: Breast cancer and metastatic cancer are different HCC s. Coding metastatic cancer will negate the breast cancer HCC. Medicare: Average beneficiary has risk score of 1 Exchange: Built on commercial data and calibrated to 1 National Average 2015 = 1.62 (Range ) CMS: Summary Report on Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2015 Benefit Year Page 34

35 Common HCCs Diagnosis HCC Category 2014 Weight Chronic Hepatitis B, C Acute Hepatitis, or unspecified None None Diabetes, Uncomplicated Diabetes with Complications Morbidly Obesity, BMI > Page 35

36 CMS HCC Example No Diagnoses 80 y/o Male Medicaid Eligible Total Risk PMPM $557 Annual Reimbursement $6,682 Some Diagnoses 80 y/o Male Medicaid Eligible Diabetes (250.0) Peripheral Vascular Dz Total Risk PMPM $815 Annual Reimbursement $9,788 Specific Diagnoses 80 y/o Male Medicaid Eligible DM with Vascular Complications Peripheral Vascular Dz CHF Interaction CHF- DM Total Risk PMPM $1,315 Annual Reimbursement $15,788 Page 36

37 Improving your Risk Score 37 % of patients with major chronic conditions go uncoded* *Optum: Accurate coding: the foundation of accountable care accessed online June 7, 2017 Page 37

38 Is This Allowable? We do not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record. CMS 2008 IPPS Final Rule, p. 208 Medicare Payment Advisory Commission: Letter to Acting Administrator Leslie Norwalk, June 11, 2007, page 12. Page 38

39 Risk Adjustment Visits Provider is given a list of suspected diagnoses based on historical claims and other triggers Page 39

40 HCC Scout Creeps through text looking for diagnoses which were not billed Page 40

41 The Bottom Line Page 41

42 Q & A Break Page 43

43 Alternative Payment Models Better Care, Smarter Spending, Healthier People Background Fully at-risk for Medicaid Future of health care industry Commitment to ACO principles Improved care coordination and clinical outcomes Improved access and member/patient satisfaction Controlled cost aligning payment and incentives Practice with integrated system safe environment before rolling out to other practices and payers Page 44

44 Alternative Payment Models Maturity of Payment Risk Fee for Service Gain Sharing Bundle Specific/ Partial Capitation Global Capitation No Risk Increasing Risk Full Risk Value Based Payment July 2013 Modeled Pediatric Health Management July 2016 Page 45

45 Membership & Dollars Under Alternative Payment Models MEDICAID MEMBERSHIP Fee for service Gain Sharing Capitation 25.20% MEDICAID PAID DOLLARS Fee for service Gain Sharing Capitation 10.70% 64.10% 10.70% 33.60% 55.70% Page 46

46 The Starting Point 2013 Membership Member Concentration 31% 9% 7% 9% 52% 2% 15% 75% Medicaid Dual Eligible Employee Plan TPA U Health Care Clinic 2 Clinic 3 Clinic 4 Page 47

47 Gain Sharing Value Based Payment Model Attribution based model Fee for service Enhanced payments Thin cap Shared savings based on Financial baseline Quality measures Data analytics and reporting Shared care management Page 48

48 Capitation Pediatric Health Management Model UUHP Medicaid 33,000 children PSS Capitation model Pediatric sub-specialty care UUMG pediatric subspecialists Primary Children s Budgeted Capitation Payment Model Based on defined pediatric services and historical claims trend UUHP passes two-sided risk for defined sub-specialty care, in-scope services Provider risk exposure mitigated Large dollar carve-out Risk corridor High-cost drug carve-out Physician/Hospital shared risk Page 49

49 Status of Models Financial Results PROVIDER PAYMENT Gain Sharing Focus Level of on-going provider risk Data sharing parameters and best venue Care management collaboration Page 50

50 Lessons Learned Control is key Physicians more comfortable with controlling quality than cost Unanticipated costs are barriers to engagement $625,000-$750,000 First Year $1,000 a pill (daily) New York Times, Costly Drug for Fatal Muscular Disease Wins F.D.A. Approval, December 30, 2016 New York Times, How Much Should Hepatitis C Treatment Cost?, March 15, 2014 Page 51

51 Lessons Learned Control is key Physicians more comfortable with controlling quality than cost Unanticipated costs are barriers to engagement Phase-in approach Timing and scope KPMG/AMA MACRA Survey, Are physicians ready for MACRA/QPP?, June 2017 Page 52

52 Lessons Learned Control is key Physicians more comfortable with controlling quality than cost Unanticipated costs are barriers to engagement Phase-in approach Timing and scope Making data available isn t enough Analytics of data high risk and clinical priority Operationalize changes within practice useable data integrated in work flow Understand impact to financial outcomes actuarial support Page 53

53 Reporting & Analytics Page 54

54 Lessons Learned Control is key Physicians more comfortable with controlling quality than cost Unanticipated costs are barriers to engagement Phase-in approach Timing and scope Making data available isn t enough Analytics of data high risk and clinical priority Operationalize changes within practice useable data integrated in work flow Understand impact to financial outcomes actuarial support Shared care management approach is worth the effort Page 55

55 Collaboration of Care Management Provider UUHP Patients in defined risk stratification categories Patients with ED visits >= 5 in 12 months Patients discharged from inpatient hospitalization Ambulatory sensitive conditions U Baby Program participants Restricted Healthy U Medicaid members Who bears the risk? High cost/catastrophic Notification of University hospitalizations Page 56

56 Q & A Break Page 57