Session 57 PD, Care Management in an Evolving Health Care World Moderator/Presenter: David V. Axene, FSA, CERA, FCA, MAAA Presenters: Craig Butler, MD, MBA Richard Fuller Timothy Willard Smith, ASA, MAAA
2016 SOA Health Meeting Session 57 Care Management in an Evolving World Presented by: David V. Axene, FSA, FCA, CERA, MAAA
Overview Introductions Richard Fuller, MS Economist Tim Smith, ASA, MAAA, MA Actuary and Health Analytics Craig Butler, MD Physician and Care Manager Agenda Short presentations by panel Free form discussion and respond to audience questions Targeted Outcome Understand care management Current view of care management Anticipated future of care management
So What is Care Management? Semantics may vary, even on our panel My view: Care management (sometimes called Medical Management) is the umbrella spanning a large number of activities which attempt to influence the way care is delivered A recent count suggested more than 30 activities under Care Management View of others Care management is one of several things under an umbrella with a different name Slide 3
So What is Care Management? continued Major objectives of care management include: increase the quality of care, increase the efficiency of care Increase the access to care Minimize potentially avoidable care situations Facilitate controlling the escalating cost of care (i.e., reduce or bend the trend) Identify those situations where a change in site of care could reduce the cost of care without impeding quality or outcome Care management is only one leg of the three legged stool It also requires synergistic reimbursement/ incentives and benefit plan design 6/27/2016 Axene Health Partners, LLC Slide 4
My Experience Most of my career has been spent on Care Management and related issues Developing provider incentive schemes Developing clinical practice guidelines with the help of physicians and nurses Assessing existing care management approaches (how effective are they?) Designing improved approaches Reviewing and assessing care management innovators Transitioning providers from fee-for-service to some form of population based revenues or value-based reimbursement However, the world is changing and evolving into something new Some is label management (e.g., capitation vs. population based revenues) Some is definitely new approaches (e.g., specialized complex case management, virtual medicine and patient management, etc.) Technology is often at the core of the new initiatives Slide 5
Today s Session We will hear from: A vendor (3M) and how they view the world A health system/provider and consultant perspective A clinical and large national health plan perspective I will try to facilitate a discussion among panel members and raise questions. We will respond to your questions too. Slide 6
Q&A and Wrap-Up
3M Health Information Systems, Inc. Defining (and adjusting for) value in health care Application of classification systems to MCOs Richard Fuller; Economist ; 3M HIS Clinical and Economic Research 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. The challenge of improving population health Not so long ago cost of care was treated as the sum of component services. While it was known there was variation in utilization and quality the cost of care was generally a separate calculation For managed care, quality components were typically estimated through targeted process and survey measures (e.g. CAHPS and HEDIS) with network size and inclusion of specific providers the major differentiator The increasing focus upon improving outcomes quality of population health recognition that variation in the cost of component services hides variation in their mix and effectiveness has led to a linkage between cost and outcomes quality. 2 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. What this change entails When we think of efficient networks delivering health care we no longer restrict ourselves to comparisons of single services for example a hospital admission. Rather we have to compare costs for similar admissions and link these differences in outcomes quality such as readmissions and hospital acquired complications (HAC). Quality adjusted comparisons need to take into account alternative treatment paths and the variation in outcomes that may result. This can be the difference between medical management or surgery or the provision of more primary care. 3 Ultimately our goal is to incentivize the same (or better) outcomes 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. A brief definitional note on efficiency 4 Outcomes efficiency is measured in three ways : Technical efficiency using the right amounts of a service/input and producing those inputs at lowest cost. This is more in keeping with comparisons of fee schedule or DRG pricing (albeit with increasing use of quality adjustment for outcomes). Productive efficiency using the most effective mix of services to achieve the outcomes we desire (site of service or service substitution to get the same outcomes) Allocative efficiency balancing resources across disease cohorts/regions/ses groups (etc) to more fairly distribute health care resources. Moreover balancing health and non-health spending. (We can t do this well until we achieve the first two efficiencies!) 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. Medicaid managed care as an example Medicaid managed care is being extended to ever more complex enrollees making riskadjustment simultaneously more complex and more essential It is no longer sufficient to look at historic cost, trend it forward and develop rates based upon those projections. Medicaid programs increasingly require a determination of inefficiency to be identified and subtracted from the PMPM rates paid to participating MCOs. The same PMPM rates adjusted for MCOs should require supporting documentation of how that waste is determined and where that waste resides. In summary, the cap rate is no longer a blind tool but a map of what needs to be done to improve the network which is provided to MCOs to act upon. The Medicaid agency is the only entity capable and motivated to improve efficiency(e.g. how plans compare to each other) or relative provider performance across the state and, more importantly population health. 5 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. How do we improve population health and identify efficiencies within a Cap Rate Framework Total Cost of Care in the community or institution by enrollee single/multiple years trended over time Clinical Risk Groups Quality Adjusted Unit Cost Volume Inpatient All Patient Refined Diagnosis Related Groups (APR DRG) Adjusted by Potentially Preventable Complications (PPC) Potentially Preventable Readmissions (PPR) Potentially Preventable Admissions (PPA) Site Neutrality (APR DRG / EAPG) Hospital Spending ED Enhanced Ambulatory Patient Groups (EAPG) Potentially Preventable ED Visits (PPV) Potentially Preventable Readmissions (PPR) Ambulatory Care Settings Outpatient ASC Physician Enhanced Ambulatory Patient Groups (EAPG) Adjusted by Outpatient Potentially preventable Complications (OPPC) Enhanced Ambulatory Patient Groups (EAPG) Adjusted by Outpatient Potentially preventable Complications (OPPC) Enhanced Ambulatory Patient Groups (EAPG) Adjusted by Clinical Risk Groups (CRG) Potentially Preventable Services (PPS) Potentially Preventable Services (PPS) Potentially Preventable Services (PPS) Post Acute care Rehab/SNF/Home Health All Patient Refined Diagnosis Related Groups (APR DRG) Adjusted by Clinical Risk Groups (CRG) Patient Focused Episodes (PFE) Long Term Institutional Care Nursing facilities Clinical Risk Groups (CRG) Adjusted by Functional Status ADLs 6 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. 3M Potentially Preventable Events (PPEs) 7 A prime component of health care inefficiency and waste is the delivery of services that would be unnecessary if effective and/or timely care was delivered Unnecessary services often lead to a increased payment In the context of a payer with a fixed expenditure budget, payments for unnecessary services result in lower payments to those providers who are delivering only necessary services No mandated care processes - gives local control to hospitals/plans/acos etc. to determine path to outcomes targets 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. A map of network efficiency can guide MCOs but care management is still essential We apply the foundational total cost of care Clinical Risk Group (CRG) tool to select, stratify and monitor candidates for case management CRGs help target individuals, disease cohorts or clinical clusters that might not have consumed significant resources in the past but are at considerable risk for exponentially increasing resource use in the future Alternatively, enrollees can be de-selected from Case Management if they have expended resources historically but are predicted not do so in the future After selection it is imperative that we monitor ongoing changes in severity over time and changes among categories or groups over time as the disease profile of the patients change 8 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
3M Health Information Systems Inc. The bottom line Improving Population Health Means Cost should be linked to outcomes quality trends These cost/outcomes quality trends should use increasingly detailed risk adjustment methodologies that capture the variation in cost/outcomes of, for example, dual eligible enrollees. Providing broad dull incentives (i.e. a single cap rate) should also contain information available in a transparent manner identifying broad categories ripe for population health improvement that can be linked to costs. 9 3M 2013. All Rights Reserved. 3M Confidential for customer's internal review only. Further use or disclosure requires prior approval from 3M.
2016 SOA Health Meeting Tim Smith, ASA, MAAA, MS Care Management in an Evolving Health Care World June 16, 2016
Care Management in an Evolving Health Care World Tim Smith, ASA, MAAA, MS 2
Introduction Tim Smith, ASA, MAAA, MS Senior Consulting Actuary at Axene Health Partners Opened the Pittsburgh office in 2015 Prior roles Actuary for the new Integrated Delivery & Financing System (IDFS), through Highmark s acquisition and creation of the Allegheny Health Network Medical Economics / Provider Analytics at Coventry Health Care Adjunct Professor in Information Technology, Penn State 3
Care Management in the Evolving Health Care World We will review - The Past Early Capitation and Risk deals, Utilization Management focus The emergence of Disease Management & Wellness programs The Current The Triple Aim Renewed focus on care management through: Identifying the right risk risk prediction and ROI Aligning incentives new value-based reimbursement deals The Future Care management in the most efficient setting Provider takes full-risk again armed with data, analytics and Actuaries? 4
A hospital system accepting full-risk and full utilization management 1999 The Fall Of The House Of AHERF: The Allegheny Bankruptcy A chronicle of the how s and whys of the nation s largest nonprofit health care failure. AHERF was the parent organization that grew from Allegheny General Hospital Signed fully-capitated Commercial risk deals with Coventry and Aetna, set at a % of premium, with no hospital system input into pricing Health System took over all utilization management responsibilities, resources TODAY + => 5
Disease Management & Wellness within Health Insurance Not an ideal fit, in my opinion Disease management ROIs are achieved in later years; ROIs are often less than 1 in 1 st year after patient signup Does not match annual turnover in health care plans Disease management and Wellness ROIs need to consider other factors such as work productivity and quality of life These gains are of more value to employers, government entities and employees/patients Points to a better fit being the Physician/Consumer relationship 6
The Triple Aim: Population Health and Care Management s role Care management (CM) has emerged as a leading practice-based strategy for managing the health of populations. 3 Key Strategies for emerging CM programs Identify population with modifiable risks Align CM services to needs to population Identify and deploy appropriate personnel to deliver the needed services Source: AHRQ 7
Key Care Management Strategies Strategy ID Population w Modifiable Risks Align CM Services to Population Appropriate Personnel to Deliver CM Recommendations for Medical Practice Use Multiple metrics to identify patients Develop risk-based approach to ID patients most in need Tailor services to meet specific population needs Use EMR to facilitate effective coordination Determine who should provide CM services Interprofessional team-based Recommendations for Health Policy Consider ROI Establish metrics to track progress and measure outcomes Implement value-based payment methodologies Incentivize CM through use of new CMS CM billing codes Provide financial support to develop and sustain programs Rewards programs that achieved the triple aim Incentivize care manager training Develop CM certifications Source: AHRQ 8
Care Management example: Transitions of Care - Discharge Planning Identifying the population: Seniors with an inpatient admit in select DRGs Care management program: Improving Transitions of Care at discharge Implement Value-Based payment: Bundled-payment reimbursement Set metrics & Measure ROI : Simple savings model below to set bundle price, to achieve a win-win ROI for both Provider and Payer Initial Admit Readmit Sub-acute Savings at Best-in- Class Physician Practice or Hospital System Avg cost % Avg Cost (all bundles) % Avg Cost (all bundles) AVERAGE TOTAL COST Best In Class $ 10,000 5% $ 500 15% $ 1,200 $ 11,700 Practice A $ 12,000 10% $ 1,200 50% $ 5,000 $ 18,200 $ 6,500 Practice B $ 11,000 15% $ 1,800 70% $ 7,000 $ 19,800 $ 8,100 9
Payer / Provider Roles in Care Management: Transitions of Care - Discharge Planning Task Health Plan role Provider role Discharge Plan Efficient Care Reimbursement Methodology Integrated data Gives permission for sub-acute are Narrows network to not include SNFs with High LOS Contracts to not pay for a 30-day readmission At a disadvantage without EMR/outcomes data Shares in savings for avoiding subacute altogether Shares in savings for using SNFs with low LOS Wants to contract to not pay for 30- day readmission At a disadvantage without complete patient history 10
A Children s Hospital takes over Care Management Medicaid SSI Population, a small N of very sick, disabled kids Majority of care being provided by local Children s hospital Brought together all Medicaid payers in the market to collaborate with the Hospital system Actuary hired to act as scorekeeper, interpreter Helped focus the group by educating on Volatility of Small Populations, Risk Scores, Outliers, ROIs Modeled the ROI of Care Management moving from the health plan into the hospital system Helped establish the Care Management fee and metrics 11
Care Management shift to Provider: A simple ROI Model Population Patients CM Fee Total Spend Savings Total SSI Patient Population = Under CM $40 PPPM $1,000 PPPM $85 PPPM Patients Selected to be Managed in the Program 10-15% $300 PPPM $5,000 PPPM $500 PPPM Assumes 10% savings + Patients determined to not be a focus 85-90% $0 PPPM $400 PPPM $20 PPPM Assumes 5% savings through sentinel effect Care management costs (nurses, coordinators, technology, Actuarial ) were approximately $30 PMPM, for an approximate 3-1 ROI, with $10 PMPM going to the Hospital, and $45 PMPM to the payer (who is accepting the risk, currently) 12
In Summary In seems logical that Care Management, including Disease Management and Wellness, has the best fit on the Provider side of the Health Care equation. Providers need to become more diligent and comfortable with the Utilization Management and Risk Acceptance roles traditionally held by Insurers. Actuarial support and advancements in analytics will help drive success in this next wave of Providers accepting risk. 13