The Challenges and Opportunities in Using Data Bundled Payment, Care Improvement Helen Macfie, Pharm.D., FABC For IHI Leading Population Heath Transformation February, 2017
It started with a project PHYSICIAN ACADEMY PROJECT: Study bundled payments and their impact on MemorialCare Examine current CMS (Center for Medicare and Medicaid services) Center for Innovation models for bundled payment and study some examples of what others have done across the country. Establish recommendations for the approach MemorialCare should take with bundled payments as an integrated healthcare delivery system.
Greatest Opportunity to Bend the Cost Curve Estimated Cumulative Percentage Changes in National Healthcare Expenditures, 2010 through 2019 Hussey P., et al. New England Journal of Medicine 2009;361:2109-2111 HIT denotes health information technology, NP denotes nurse practitioner, and PA denotes physician assistant.
2013 Academy weighed in RECOMMENDATIONS 1. Financial opportunity for physicians private practice & in the Medical Foundation 2. Creates common incentives for MemorialCare and physicians Win-Win 3. Working together creates the opportunity re-engineer care 4. Can serve as blueprint for MemorialCare & physicians to market to other payors So/and: Engage in the Medicare program with care Plus: Recommended model 2 physician payment as usual with potential shared savings payment post-care Foresaw participation helpful as Medicare is heading this way anyway (even before the press release) Provides us an opportunity to determine how this new payment method would work
Understanding our current state (in 2014) WHERE TO START Engaged a consultant we didn t know how to do this Actuarial assessment, 2013 data something else we didn t know Review of clinical service line readiness physicians, staff Identification of top clinical episodes at 3 campuses (3 x 3 = 9) These clinical episodes were selected for detailed review in the business case refresh and claims analysis based on higher volumes, savings opportunities, and operational readiness when compared to other clinical episodes.
Understanding current state WHERE TO START MemorialCare Health System Post-Acute Episode Cost Compared to Well Managed Target and National Average Major Joint Replacement of the Lower Extremity Calendar Year 2013 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 MemorialCare Average Cost (1-90 Days) Well Managed Target (1-90 Days) National Average (1-90 Days) Readmissions Inpatient Rehabilitation Facility Long-Term Acute Care Skilled Nursing Facility Home Health Other Source: Centers for Medicare & Medicaid Services, Milliman, and The Camden Group Note 1: Post-acute Other includes outpatient rehabilitation, Part B drugs, durable medical equipment, laboratory, radiology, and other facility and professional. Note 2: Well Managed target based on 80 percent achievement of utilization within each post-acute care setting for top performing hospitals with lower utilization than MemorialCare.
The decision - ROI WHERE TO START Cardiac and Ortho MemorialCare Health System Medicare Fee-for-Service Executive Summary Three-year Average of Projection Period Three-year Average Major Joint of the Lower CABGs PCI Total All Hospitals Cases Medicare Fee-for-Service 503 89 218 810 All Other Payers 1,251 213 518 1,982 1,754 302 736 2,792 Program Costs Discount (1) $303,327 $92,850 $100,791 $496,967 Service Line Leader/Medical Director 160,215 28,348 69,437 258,000 Consulting Fees 100,000 50,000 50,000 200,000 Total $563,542 $171,198 $220,228 $954,967 Savings Length-of-Stay Savings Opportunity $246,545 $178,632 $286,788 $711,965 Supply Cost Savings Opportunity 121,452 66,608 147,703 335,762 Readmissions Savings Opportunity (2) 128,065 119,184 367,053 614,302 Post-Acute Savings Opportunity (2) 1,676,876 434,605 393,633 2,505,115 Total $2,172,939 $799,028 $1,195,178 $4,167,145 Contribution Margin $1,609,397 $627,830 $974,950 $3,212,177 Shared Savings Bonus $804,698 $313,915 $487,475 $1,606,089 Hospital Margin/(Loss) $804,698 $313,915 $487,475 $1,606,089 Shared Savings per Case $1,600 $3,527 $2,236 $1,983 ttps://sharepoint.thecamdengroup.com/clients/memorialcare/bundled_payment_2013/finance/analysis/[memorial_bp_business_case_cardiac Source: MemorialCare Health System and Centers for Medicare & Medicaid Services (1) Discount based on historical claims data and w ill be impacted by future national trends affecting the target price. Assumes a 90-day episode length (2) Post-acute and readmissions savings opportunity based on historical claims data and achievement of 80 percent of Milliman w ell managed (top performing) benchmarks
Key Considerations To BPCI or not to BPCI Market Differentiation & Growth Cons/Risks of BPCI, mitigate Lack of defined post-acute partners (can select/narrow) Note: Monarch lives could decrease volume slightly-smmc Pros/Benefits of BPCI, maximize Link to our COE cardiac, ortho Pop health/vertical network build Defensive, others might do and pull doctors/patients to them Possible deductible waiver (to eval) Quality & Value Data support needs (EDW, quality) Common clinical approach across all campuses to foster integration Improved care coordination Data transparency across Fosters Best Practice focus Improve outcomes Financial Resilience Take a 2% discount and apply to funds pool Budgetary support assistance, staffing (prioritize existing first, one FTE in PH FY 15; FY 16) ROI offsets are deferred Physicians as Partners Complexity in the model Dissapoint if we fail to execute Substantial enough $, frequency Governance & Leadership Entering into some unknown territory CMMI evolving models People & Culture Modified workflows (admit, redesign, point of service) Pay for value test of change Shared savings on post-acute Halo effect, all payor Limited exposure with risk-based CMS future direction evolving Materials/PPI opportunity No RAC on these cases Partnership non MCMF also Shared governance, voice Learning how to do this well on smaller scale Get on the in list with CMMI to add more episode types prn Build internal capabilities Foster transformation
Getting started, good timing WHERE TO START BPCI: Timeline of Key Events Go/No-go April 18, 2014 July, 2014 October, 2014 November, 2014 July, 2015 Submit request to participate in BPCI Episodes added to Phase 1 (nonrisk-bearing period) upon CMS approval Receipt of CMS confirmation of participation, awardee agreement, and historical data files Submitted awardee agreement and commit to Phase 2 riskbearing period Physician enrolled with Condition of Participation Began BPCI episodes in Phase 2 (3-year project)
Getting line of sight on our data HOW ARE WE DOING? We had decent facility data to mine already Direct variable cost Quality, registries Medication reconciliation Complications of care Patient engagement 360 view of claims Making sense of files Opportunity to visualize Post-Acute variation It s not all about data
Before data, go and see TO GEMBA Key point (tomorrow s session)
Episode Claims vs. Target Price Note: 3-6 month claims lag
Average Episode Cost: Anchor vs. Post-Acute
Average Post-Acute Spend Note: 3-6 month claims lag
Post Acute Medicare Claims Drill Note: 3-6 month claims lag
First PAC Trends
Helpful drilldown views VARIATION STORIES Who s in the house? SNF waivers Daily huddles Readmission lists ED visit lists SNF lists and SNF utilization Patient journey view Quality & Utilization Physician and team performance Registry data
Outcomes SAVINGS ON TOTAL COST OF CARE Quality gate met 12 of 18 pools funding (to date) Medicare wins
Hospital results and HALO effect Ortho (469-470) MEDICARE A&B ALL OTHERS LOS (already low) DV$ (vs 2014) 30 Day Readmits Complications of Care
CMS quality gate adds Ortho (469-470) Medication Reconciliation Physician Society / MHS Bold Goal Internal Perfect Care measure All meds reconciled Admission, discharge, PTA review For Lewin BPCI reporting, we narrow to just bundled patients Discharge med rec only HCAHPS MHS Bold Goal All Hands Navigation
Lessons learned BPCI data KEYS 1. Choose DRG families wisely (or as mandated!) 2. Assess cultural readiness before/as you start 3. Go and see, get the stories 4. Gain actuarial support, tools and create standard reports 5. Anticipate claims lag and changing trend factors 6. Small volume impact (FFS only) on direct variable and total cost of care 7. Drilldown, drilldown 8. Plan for added resourcing over time to facilitate, capture learnings, calculate shared savings and more 9. Remember the halo impact ROI 10. Leveraging for physician alignment