Texas Care Alliance Transforming Care Across Texas April 29, 2016 1
Overview 1. Story of Transformation 2. Market Dynamics Impacting Healthcare 3. Texas Care Alliance 2
TRANSFORMATION 3
On Friday, April 8, 2016.. history was made.and an entire industry was revolutionized in a single moment 4
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Schematic: Revolutionary Model 9
HEALTH REFORM: SETTING THE STAGE 10
Why Health Reform? There are many reasons health reform was critically needed in the U.S. - High uninsured rate: In April 2014, the CBO estimated that 42 million Americans under the age of 65 are currently uninsured; representing about 1 out of 6 Americans in that age group. Without the ACA, the uninsured rate would continue to rise. Unsustainable spending: U.S. health care spending grew 5.3 percent in 2014, reaching $3.0 trillion or $9,523 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.5 percent. Lack of emphasis on prevention: Today, seven in 10 deaths in the U.S. are related to chronic diseases such as obesity, diabetes, high blood pressure, heart disease, and cancer, which are largely preventable. Additionally, 75 percent of our health care dollars are spent treating such diseases. However, only three cents of each health care dollar spent in the U.S. go toward prevention. Poor health outcomes: The U.S. spends far more on medical care than any other industrialized nation, but ranks 26 among 36 OECD countries in terms of life expectancy. Health disparities: While inequities related to income and access to coverage exist across demographic lines, population-based disparities are impossible to deny. 11
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TEXAS CARE ALLIANCE 14
About Texas Care Alliance In March of 2013, the Texas Care Alliance (TCA) was created as a central organization designed to build expertise in population health management, capitalize on economies of scale, and accelerate the rapid adoption of clinical and operational best practices. 15
Population Health in the ACA Era 16
Texas Care Alliance Mission The mission of TCA is to be a member driven coalition of hospitals, health systems and clinicians to improve the health of the various populations of communities served by studying, sharing, and adopting evidence-based best practices that produce superior outcomes and value. Vision TCA aims to be an electronically enabled network of healthcare providers committed to delivering safe, quality, comprehensive care to a defined population using shared evidence-based best practices. 17
TCA Membership - Statewide Map Covenant Health Lubbock Midland Memorial Hospital Midland Medical Center Health System Odessa United Regional Health Care System Wichita Falls Hendrick Health System Abilene Shannon Medical Center San Angelo Community Hospital Corporation Plano Baylor Scott & White Health Dallas Baylor Scott & White Health Temple CHI Saint Luke s Health Good Shepherd Health System Longview Trinity Mother Frances Hospitals & Clinics Tyler Baptist Hospitals of Southeast Texas/CHC
Achieving Sustainable Cost Savings in Healthcare As we approach costs, we have to look hard at how to improve the efficiency and effectiveness of the care delivery process. We can t just pick at the margin by reducing overhead or getting a better deal with a supplier. That s what we ve been doing for the past 20 or 30 years, and it s not getting us where we need to be. We have to actually get into the clinical care process itself to sustainably improve value and reduce costs in healthcare. Michael E. Porter Harvard Business School 19
Transformation Requires a System-Wide Approach to Demonstrate True Value 20
TCA Governance Structure 21
Clinician Leadership Structure 22
THE STRATEGY 23
We Are Already At-Risk As healthcare costs continue to rise, employers and payers are seeking alternative methods to require providers to demonstrate better quality, safety, service, and value for their healthcare dollar. As an alliance of 10 leading health systems across the State of Texas, the members of Texas Care Alliance are in a unique position to be leaders in demonstrating value and creating a culture of health in our communities. Collectively, TCA member health systems provide health benefits to approximately 94,765 employees and dependents across the State of Texas. Using the 2014 PEPY health system cost data provided by Towers Watson in the 2015 TCA Comparative Analysis Report, the estimated total healthcare spend for all TCA members is $1,019,326,638. 24
TCA Employee Health Plan Comparative Assessment 25
Physician Referrals Domestic Steerage Efficiency Performance Quality Value Network Analysis Standardization Augmentation Eliminate Administrative Duplication Strengthen the Network Program Design Implementation Evaluation Consistency Patient Engagement Hospitalist Programs Utilization Management Case Management Patient Centered Medical Home Multidisciplinary Care Teams THE STRATEGY: ENABLING THE JOURNEY TO VALUE BASED CARE CARE MANAGEMENT NETWORK OPTIMIZATION POPULATION HEALTH & PHARMACY MISSION To be a member driven coalition of hospitals, health systems, and cliniicians to improve the health of the various populations of communities served by studying, sharing, and adopting evidence-based best practices that produce superior outcomes and value. TARGET MARKET Health & Wellness Anchored by Primary Care Retail Pharmacy/Generi c Utilization Telephonic Coaching Benefit Plan Design Physician Driven/Technolog y Enabled Common Wellness Plans Risk Stratifcation Predictive Modeling
TCA ACTION PLAN: 1-5 YEAR TIMELINE PHASE I PHASE II PHASE III Leverage TCA Partner Services Evaluate development of physician referral steerage to TCA partner facilities/specialists for domestic service gaps. Consider Enterprise wide agreement for favored nation pricing to TCA members. Improve Management of Non-Domestic Utilization Evaluate development of process for TCA systems to identify admitted patients that are employees of TCA partner systems. Evaluate program to educate systems on post-discharge services available at the patient s home system. Utilization Management Evaluate program to ensure all systems have effective pre-certification, post-discharge and readmission avoidance programs for all care. Case Management Evaluate implementation of programs to include specialized management of all benefits and robust predictive modeling tools to proactively identify potential high cost members. Wellness Evaluate telephonic coaching programs focused on main risk factors; Consider jointly developed wellness program and/or selection of common wellness vendor for all TCA health systems. Retail Pharmacy Evaluate program to eliminate coverage of medications where there are suitable OTC options (Nexium). Evaluate program to improve generic utilization by educating/incentivizing physicians to use generics Leverage TCA Partner Services Create plan design steerage to TCA partner facilities/ specialists for domestic service gaps. Develop second opinion process for providers on complex cases Improve Management of Non-Domestic Utilization Enable clinical information and post discharge plans of patients from TCA partner systems to be transmitted to home facility and PCP at patient's home system Utilization Management UM programs across all facilities are consistent in structure, processes, protocols, and delivery Case Management Consistent assessment and processes across all TCA partner systems Hospitalist Programs All hospitalist programs have similar structure and components across all TCA partner systems (schedules, coverage, census, rewards, etc.) Wellness Telephonic coaching that collaborates with onsite or member services Specialty Pharmacy Plan designs to steer acquisition of specialty medications to specialty pharmacy vendor Utilization Management Centralized programs with virtual nurses that interface with facility nurses, hospitalist, and physician offices Wellness Physician driven programs supported by onsite coaches and web and mobile app enabled information sources Retail Pharmacy Collaborate on common formularies that are narrow and focus on generics first with consistent or centralized P&T approval process Specialty Pharmacy Centralized specialty pharmacy case management unit across all member systems. Consistent or centralized P&T approval process Category Legend: = = = Network Optimization Care Management Population Health & Pharmacy 27
Committee Structure & Initiatives Best Care Committee Leverage TCA Partner Services (Referral Steerage Program) Clinical Quality Initiatives Evaluation of Wellness Programs Oversight of Comparative Effectiveness Assessment of All TCA Health Systems HR Executive Committee Comparison and Development of Best-in-Class Benefit Design Evaluation of Employee Health Plan Performance Data Evaluation of Wellness Programs Evaluation of SWHP Offerings Advocacy Committee Education of TCA Member Hospitals, Health Systems, and Clinicians in Regulatory Matters Related to the Triple Aim Development of TCA Legislative Priorities for 2016-2017 P&T Committee Reduction of Compound Drug Costs Management of Specialty Drugs Increase of Low-Cost Generic Drug Utilization Evaluation of Prescriptive Best Practices Practitioner Leadership Council Evaluation and Dissemination of TCA Member Health System Best Practices Educational Forum for Physician and Nursing Leaders Across TCA to Share Evidence Based Best Practices Managed Care Committee Managed Care Committee to be Re-engaged in Q2 of 2016 Assist in Development of TCA Referral Steerage Programs Assist in Proposed Shared Savings Contracting Initiatives 28
Texas Care Alliance 29
Enjoy the Conference! 30
Overview: Strategic Objectives NETWORK OPTIMIZATION Build the Foundation/Optimize the Network Through Network Enhancement, Facilitate Infrastructure Development to Improve Care Coordination and Patient Engagement Leverage TCA Member Services Improve Management Of Non Domestic Utilization CARE MANAGEMENT Effectively Manage Health Care Costs Through Evidence-Based Assessments and Guidelines for Appropriateness of Care Improved Management of High-risk Patients Utilization Management Case Management Programs Consistent, Standardized Hospitalist Programs Across All TCA Member Organizations Hospitalist Programs POPULATION HEALTH AND PHARMACY Effective Wellness Programs Driven by TCA Clinicians and Designed to Maximize Member Engagement Create a Culture of Health and Wellness by Influencing Behavior Effectively Manage Retail Pharmacy Costs Via Utilization Review, Formulary Design, Education, and Consistent and Centralized P&T Approval Processes Evaluate Plan Designs & Development of Centralized Specialty Pharmacy Case Management Unit Across All TCA Systems Wellness Incentives Retail Pharmacy Specialty Pharmacy 31
Advancing Population Health Capabilities Across Texas Source: McAlearney, A. S. 2012. Population Health Management: Strategies to Improve Outcomes. 32
TCA Best Care Committee LEVERAGE TCA PARTNER SERVICES REFERRAL STEERAGE PROGRAM: The following recommendations were submitted by the BCC as initial areas of focus for the TCA referral steerage program: Transplants (liver, heart, kidney) Interventional pulmonology Pediatric specialties, and Behavioral health 33
Referral Steerage Diagram 34
TCA HR Executive Committee BEST-IN-CLASS BENEFIT DESIGN The HR Executive Committee has been charged with leading the evaluation and development of a best-in-class benefit design. All TCA members have submitted their Summary of Benefits and Coverage documents, which have been aggregated into a comprehensive matrix for comparison across TCA. Performance data is currently being collected to evaluate changes in cost, quality, and utilization over time. 35
TCA Pharmacy &Therapeutics Committee PHARMACY MANAGEMENT The TCA P&T Committee has reviewed detailed cost/utilization data across TCA in order to identify areas of opportunity. The following areas of focus will be highlighted in 2016: Reduction of Compound Drug Costs Management of Specialty Drugs Increase of Low-Cost Generic Drug Utilization Evaluation of Prescriptive Best Practices 36
TCA Practitioner Leadership Council IMPLEMENTATION AND DISSEMINATION OF EVIDENCE BASED BEST PRACTICES: The Practitioner Leadership Council met on 2/26 to discuss the following: Key Legislative Priorities for 2016 Combined/joint session for both the PLC and the Advocacy Committee focused on forecasting the legislative landscape for healthcare providers in 2016. Mary Elizabeth Jackson (Chair, TCA Advocacy Committee, TMF), Marisa Finley (Vice President, Center for Healthcare Policy, BSWH) and Don Gilbert (Former State Health Commissioner) provided an overview of the current election process, federal/state issues related to managed care legislative priorities, the current state of Texas funding, HHSC issues, and a brief update on the Medicaid Waiver challenges and opportunities. Medicare Spending Per Beneficiary Presentation on the Medicare Spending Per Beneficiary program including program goals, definition and calculation, financial implications, post-acute care strategies, and a case study from the Baylor Scott & White Quality Alliance (QA) presented by Kim Morris (BSWH) and Jim Giordano (Kurt Salmon) Sentinel Event: Facility Fire Medical Center Health System shared their challenges and insights from a recent fire in their Women s and Children s Building presented by Matt Collins (VP of Support Services, MCHS) Explorys Update Overview of the QA analytics initiative at BSWH, including an update on how the QA is clinically integrating to redefine value and leveraging data to improve care coordination across the continuum presented by Brandon Pope (Director of Analytics, BSWH) What Employers Demand from Health Systems Educational session providing insights into what employers and payers are looking for as health systems change for the future presented by Dianne Grussendorf (Senior Vice President, Managed Care, BSWH) 37
TCA Advocacy Committee The purpose of the TCA Advocacy Committee is to facilitate engagement in the education of TCA member hospitals, health systems, clinicians, and elected officials in regulatory matters directly related to the Triple Aim Objectives improved population health, enhanced patient experience (including quality, access, and reliability), and reduced per capita costs of care. The Advocacy Committee is currently developing guidelines and governance considerations that will help to establish a foundation for collective advocacy efforts heading into the next legislative session. 38
SPECIALTY PHARMACY 39
Accelerating Focus on Specialty Pharmacy and Other Pharmacy Benefits Source: Prime Therapeutics 40
Best Practices in Pharmacy Management No single pharmacy benefit program can completely eliminate trend year over year. A host of approaches and pharmacy strategies: Source: 2016 Willis Towers Watson/NBGH Best Practices in Health Care Employer Survey 41
Specialty Drug Approvals Source: PWC Health Research Institute, 2016 42
STRATEGIC COST TRANSFORMATION 43
HEALTH REFORM 44
HEALTHCARE CARTOONS 45
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EXPERT QUOTES 52
Achieving Sustainable Cost Savings in Healthcare If we can find a way to reorganize care delivery to optimize value where value is defined as achieving the best outcomes at the lowest cost that is the most powerful cost reduction tool of all. Michael E. Porter Harvard Business School 53
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FINANCIAL CHARTS 56
How Healthcare Sector and Index Performance Compares to Other Industries 57
Market Capitalization Rankings 58
Breakdown By Market Capitalization 59
What Healthcare Sectors are Driving Profitability? 60