Next Generation of Healthcare in the World of ACOs and VBP

Next Generation of Healthcare in the World of ACOs and VBP Arizona February 10, 2014 Identifying ways to align physicians and quality directors is the leading edge on our success or failure to delivering the highest quality. As healthcare continues to change, the art of managing patients is being redefined. Clear vision and forward thinking are keys to successfully pilot ourselves through the tortuous pathways to maximum quality. Physicians need to understand the latest information on meeting the agenda of quality directors. Providers will continue to come under more and more scrutiny. Public measurements will validate our practices and the sophistication of those measures will continue to become more narrowly focused. We will all need to adapt to the changes on the medical horizon. This session shall focus upon: 1. Practical strategies for value-based purchasing 2. Using accountable care principals for long-term clinical re-engineering 3. Refocus on performance and incentive-based reimbursement. Kayur V. Patel, MD, MRO, FACP, FACPE. FACHE, FACEP

Improve Quality Increase Healthcare Value Decrease Cost Reduce Episoctic Based Payments Reduce HAC Reduce preventable Readmision VBP ACO Electronic Health Records 3 Improve Quality Increase Healthcare Value Decrease Cost Physicain Profiling Medical Home VBP ACO Electronic Health Records Talking About Quality June 2009 4

. Variation in Care CORE Measures A New Culture of Quality and Safety HCAHPS Perception of Care Received.

. Pay for Quality VBP Accountability Perception of Care Received. Variation in Care Pay for Quality

. ACO Pay for Quality How did we get here? HOW DID WE GET HERE?

Evolution of Payment Plans Line Item Payment Plans Traditional Payment Plan Managerial mistake What is the unit of output? Line item service Evolution of Payment Plans Line Item: x-ray Production cost What is the unit of output? Produce lots of x-ray Productivity goes up.

Analysis of Line Item Model Production of chest x-ray Revenue Cost $ 30.00 ~ $ 22.00 each Bottom Line Increase volume, Increase encounters Efficient production Evolution of Payment Plans Diagnosis Related Group Mid 80s New rules Packaged bundle of care.

Evolution of Payment Plans DRG: Cost of an x-ray Unit of output is now unit of input Now it is a cost How do you cut cost now? Analysis of DRG Model Production Of Chest X-ray $ 00.00 Revenue Cost ~ $ 22.00 Bottom Line Efficient Production DO NOT do the x-ray Ideal patient?

Providers Behavior in DRG Model Physicians Line item Bundles Hospitals Technology Outpatient procedures, chronic IV antibiotics, hemodialysis, outpatient surgery, etc. Evolution of Payment Plans Today s Model Why stop now Let s bundle episodes of care Episodes of care/individual over time How will you maximize output?

Analysis of Current Model Production of chest x-ray ~ $ 22.00 Cost Revenue fixed amount per year per patient Bottom Line Increase volume Never want to see them IF I must then not often If a visit then low intensity preferred If I have to do an x-ray then do it in the most efficient way possible What did we leave out? Who was measuring Quality Clinical Care? How are we going to measure this?

CMS Vision Statement Every Person, Every Time Public Reporting Pay for Reporting Pay for Performance Payment Plans /Methods US Healthcare initiates pay-for-performance for primary care physicians HCFA publicly reports Medicare inpatient mortality rates Several states report mortality rates for hospitals performing cardiac surgery CMS launches pay-forperformance demonstration project NQF issues quality measure specifications for use in public reporting programs Pennsylvania publicly reports hospital HAI data Pay-for-performance program for hospitals to begin in 2013 ACA establishes pay-forreporting & publicly reports hospital processbased measures VBP 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

VBP HCAHPS Core CMS Quality Improvement Projects 34 Application of Data. Pay for Quality VBP Accountability

Hospital Value-Based Purchasing, HAIs, and Patient Protection and Affordable Care Act 2010 Health care-associated infections reporting is included in Section 3001 Hospital Value-Based Purchasing Program Value-Based Purchasing..that buyers should hold providers of health care accountable for both cost and quality of care..value-based purchasing brings together 1. information on the quality of health care, 2. including patient outcomes and health status 3. data on the dollar outlays going towards health.. http://www.valuebasedpurchasing.com/value_based_purchasing_bl/what_is_valuebased_purchasing/

VBP Goal The program is aimed to fix two previously identified problems: 1) preventable medical errors (Quality) 2) resulting health care costs. (Cost) VBP Time Line Department for Health & Human Services (HHS) announced the launch of the Hospital Inpatient Value-Based Purchasing (Hospital VBP) program under the Medicare Inpatient Prospective Payment System (IPPS)..April 29. Measurement for fiscal year 13 payments began July 1, 2011 and runs through March 31, 2012 total of 9 months. Hospital HVP program marks the beginning of an historic change in how Medicare pays health care providers and facilities for the first time, 3,500 hospitals across the country will be paid for inpatient acute care services based on care quality, not just the quantity of the services they provide. http://www.healthreformwatch.com/2011/05/11/final-value-based-purchasing-rule-released/

VBP Why 1) One in seven Medicare patients will experience some adverse event such as a preventable illness or injury while in the hospital. 2) One in three Medicare beneficiaries who leave the hospital today will be back in the hospital within a month. 3) Every year, as many as 98,000 Americans die from errors in hospital care. 4) In addition to adding to the suffering of patients and their caregivers, these errors lead to significant unnecessary health care spending. 5) Medicare spent an estimated $4.4 billion in 2009 to care for patients who had been harmed in the hospital. 6) Readmissions cost Medicare another $26 billion. VBP Quality Measures Original proposal was 17 clinical process of care measures and 8 HCAHPS measures, now 12 clinical process of care measures and 8 HCAHPS measures.

How Will Hospitals Be Evaluated? Total Performance Score VBP 12 CLINICAL PROCESS OF CARE MEASURES 1. AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival 2. AMI-8 Primary PCI Received Within 90 Minutes of Hospital Arrival 3. HF-1 Discharge Instructions 4. PN-3b Blood Cultures Performed in the Emergency Department Prior to Initial Antibiotic Received in Hospital 5. PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient 6. SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision 7. SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients 8. SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time 9. SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose 10. SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period 11. SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered 12. SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours

VBP Who is being measured? 1. Links Medicare payment to qualify performance 2. PPS hospitals only (no Critical Access hospitals) 3. Uses a subset of Hospital Compare measures 4. An overall value based purchasing score will be calculated for each hospital 5. Will calculate a benchmark and achievement threshold for each measure (already done) 1. Benchmark: Average of top 10% 2. Achievement threshold: Median VBP Funding This pool will be funded by an across the board reduction to Medicare IPPS payments 1% in FY 2013 Increase by 0.25% each year 2% for FY 2017 and beyond FY 2013 each Hospital had deducted 1% of Medicare reimbursement and earns back that 1% and perhaps more if performance compared to other hospitals is exceptional A pool of VBP funds will be redistributed to hospitals based on performance

. Pay for Quality VBP Accountability Improve Quality Increase Healthcare Value Decrease Cost ACO Electronic Health Records Talking About Quality June 2009 56

Patients. MD/RN/Hospitals Payors ACO Genesis of the ACO Concept Concept began to take shape in 2001 based on work of AMGA to define principles of Accountable Physician Groups Council of Accountable Physician Practices (CAPP) formed in 2002 by AMGA Vision: to foster the development and recognition of accountable physician practices as a model for transforming the American health care system Elliot Fisher Creating Accountable Care Organizations: The Extended Medical Staff, Health Affairs, 2007,26:w44-w57 Fostering Accountable Health Care; Moving Forward in Medicare, Health Affairs, 2009, 28:w219-w231 Formally proposed and defined in MedPac report to congress in June 2009 ACO Pilots supported in reform bills

Six Facets of ACOs 1. Readmissions and length of stay. 2. Hospital acquired infections. 3. Continuum of care. 4. Hospital-physician alignment. 5. Patient experience. 6. Collaborative skill sets. ACO Population health Chronic disease management Integration of EMR between Hospitals and PMD Integration of home services with acute care TEAM APPROACH

ACO Legal structure 5,000 medicare beneficiary Assigend by Primary Care Physician Electronic Health Record Integrating Care through ACOs ACOs can serve as integrators that link fragmented entities of the health care system around accountability for value Illustrative ACO Other Providers Operating Outside the ACO Specialty Group PCPs or PCMHs Health Plans Home Health Services Mental Health Facility Hospitals Other Providers Other providers Employer Initiatives (e.g., smoking cessation, wellness programs) Affordable, safe housing Community Services & Supports Wellness (e.g., transportation, translation Initiatives services)

ACO Hospitals Acute Care CAF Primary Care Physicians Midlevel Services Speciality Care Electronic Health Record

Improve Quality Increase Healthcare Value Decrease Cost Medical Home Financial Redesigne Talking About Quality June 2009 75 Medical Home Today's medical home is a cultivated partnership between the patient, family, and primary provider in cooperation with specialists and support from the community. The patient/family is the focal point of this model, and the medical home is built around this center.

76 76 The Dream Safety and Quality Care is Coordinated and Integrated Whole Person Orientation Personal Physician House calls Enhanced Access Physician Directed Practice Payment for Added Value Patient-Centered Care Health care that establishes a partnership among practitioners, patients, and their families (when appropriate) to ensure that decisions respect patients wants, needs, and preferences and that patients have the education and support they need to make decisions and participate in their own care. - Institute of Medicine (IOM)

78 The Medical Home Patient Centered Care Open Access Scheduling Same day visit Coordinate Navigate Care Within our Health system MD Consults for 20 minutes Access to Medical Records via a repository 79 Patient-Centered Medical Home (PCMH) The medical home model holds promise as a way to improve health care in America by transforming how primary care is organized and delivered. Building on the work of a large and growing community, the Agency for Healthcare Research and Quality (AHRQ) defines a medical home not simply as a place but as a model of the organization of primary care that delivers the core functions of primary health care. The medical home encompasses five functions and attributes:

. Why HEALTHY LIVES Mortality Amenable to Health Care Deaths per 100,000 population* 150 1997/98 2002/03 130 134 128 100 76 81 88 84 89 89 99 97 88 97 109 106 116 115 113 115 50 65 71 71 74 74 77 80 82 82 84 84 90 93 96 101 103 103 104 110 0 France Japan Australia Spain Italy Canada Norway Netherlands Sweden Greece Austria Germany Finland New Zealand Denmark United Kingdom Ireland Portugal United States * Countries age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections. See report Appendix B for list of all conditions considered amenable to health care in the analysis. Data: E. Nolte and C. M. McKee, London School of Hygiene and Tropical Medicine analysis of World Health Organization mortality files (Nolte and McKee 2008). Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008 81

HEALTHY LIVES Infant Mortality Rate Infant deaths per 1,000 live births National Average and State Distribution International Comparison, 2004 U.S. average Bottom 10% states Top 10% states 12 10.3 11.1 10.2 9.9 9.9 9.6 10.1 8 7.2 7.0 6.9 6.8 7.0 6.8 6.8 6.8 4 5.3 5.1 5.0 4.9 4.8 4.7 4.7 2.8 2.8 3.1 3.2 3.3 4.4 5.3 0 1998 1999 2000 2001 2002^ 2003 2004 Japan Iceland Sweden Norway Finland Denmark Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008 82 Canada ^ Denotes baseline year. Data: National and state National Vital Statistics System, Linked Birth and Infant Death Data (AHRQ 2003, 2004, 2005, 2006, 2007a); international comparison OECD Health Data 2007, Version 10/2007. HEALTHY LIVES Healthy Life Expectancy at Age 60, 2002 U.S. Years 30 20 10 0 Japan 22 20 20 20 20 20 19 19 19 19 19 19 19 19 18 18 18 18 18 18 18 17 17 18 17 17 16 17 17 16 16 16 16 16 16 18 16 16 16 16 16 15 15 15 15 14 Switzerland France Developed by the World Health Organization, healthy life expectancy is based on life expectancy adjusted for time spent in poor health due to disease and/or injury Spain Sweden Women Note: Indicator was not updated due to lack of data. Baseline figures are presented. Data: The World Health Report 2003 (WHO 2003, Annex Table 4). Men Australia Italy Austria Canada Belgium Germany Norway Iceland Finland Netherlands New Zealand Greece United Kingdom United States Portugal Ireland Denmark Czech Republic Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008 83

86 Agency for Healthcare Research and Quality (AHRQ) Large number of research and technical assistance activities are currently underway at AHRQ that are designed to advance the conceptualization of the medical home model and help primary care practices transform to deliver more patient-centered care. AHRQ is collaborating with most of the agencies in the Federal sector that work on medical homes and is in a unique position to convene the disparate Federal agencies to advance collaboration and consensus within the field. Federal PCMH Activities 87 The Center for Medicare and Medicaid Services The CMS Center for Medicare and Medicaid Innovation (CMMI) has implemented the Medicare Multi-Payer Advanced Primary Care Practice Demonstration (MAPCP) and Federally Qualified Health Center Advanced Primary Care Demonstration (FQHC APCP). They are also developing other demonstration projects that will test and evaluate advanced primary care models of care delivery and payment. Federal PCMH Activities

88 Department of Defense DOD has a variety of internal marketing materials, policies and demonstrations that are being used to evaluate its transition to PCMH-based model of healthcare for beneficiaries in the direct care system. In addition, the DOD works closely with the Department of Veterans Affairs (VA) to achieve mutual goals. Federal PCMH Activities 89 Health Resource Service Administration HRSA has been funding projects on the medical home concept since the 1980s, and is currently engaged in a number of projects related to the PCMH. HRSA has collaborated with many agencies on the PCMH, as well as a number of private organizations and associations. It has produced several toolkits and other resources related to the PCMH which are publically available. Federal PCMH Activities

90 Substance Abuse & Mental Health Services Administration SAMHSA funds a variety of behavioral health-specific programs and hopes to promote their use in primary care and PCMH settings. In addition, SAMHSA is providing substance abuse and mental health expertise to other agencies working to develop and implement medical home models of care. Federal PCMH Activities 91 National Institute of Health NCI primarily funds research activities and has published a variety of reports and tools that are of use to the design and improvement of a medical home model. Federal PCMH Activities

92 Department of Veterans Affair VA has funded a significant number of pilot projects, training programs, and system improvements that promote a medical home model of care. The Department sees the PCMH as central to its mission to deliver direct care to veterans, and as such, has partnered with several agencies and regularly shares its experiences with interested stakeholders. Federal PCMH Activities

. Why me? 95 95 Your Name Here Medicare Medical Home Demonstration Bridges to Excellent Medical Home Initiative $ 40.40 $ 51.70 $ 125.00 Payment for Added Value

97 97 NCQA 24 hr coverage Timely appointments HIM, e-prescribing Clinical decision support Care coordination report quality and patient experience Do you qualify? 99 99 Patients Incentives Patients Incentives Discount on premiums Waived deductibles

100 100 Old Dream Safety and Quality Care is Coordinated and Integrated Whole Person Orientation Personal Physician House calls Enhanced Access Physician Directed Practice Payment for Added Value Medical Home History 1967 The American Academy of Pediatrics (AAP) introduced the medical home in 1967 as a way to enhance the care of children with special needs. 2002 The seven national family medicine organizations launch The Future of Family Medicine (FFM) project and produce The Future of Family Medicine: A Collaborative Project of the Family Medicine Community. The report recommends that health system change will "include taking steps to ensure that every American has a personal medical home [... and] developing reimbursement models to sustain family medicine and primary care. 2006 The AAFP developed a related policy statement, and the American College of Physicians (ACP) introduced the advanced medical home 2007 The major primary care physician associations develop and endorse the Joint Principles of the Patient- Centered Medical Home. 2010 Health care reform law (Patient Protection and Affordable Care Act) 2012 According to the National Academy for State Health Policy, 47 states adopt policies and programs to advance the medical home.

. Who? Medical Home Results Alaska Native Medical Center, Anchorage, AK 50% fewer urgent care and emergency room (ER) visits 53% fewer hospital admissions 65% reduction in specialist utilization Capital Health Plan, Tallahassee, FL 40% fewer inpatient stays 37% fewer ER visits 18% lower health care claims costs Geisinger Health System, Danville, PA 25% fewer hospital admissions 50% fewer hospital readmissions 7% lower cumulative total spending Group Health of Washington, Seattle, WA 15% fewer inpatient stays 15% fewer hospital readmissions Estimated costs savings of $15 million (2009-10) 18-65% improvements in medication management

Medical Home Results HealthPartners, Bloomington, MN 39% fewer ER visits 40% fewer hospital readmissions Reduced appointment wait time from 26 days to 1 day Horizon Blue Cross Blue Shield of New Jersey 25% fewer hospital readmissions 21% fewer inpatient admissions 31% increase in self-management of blood sugar Maryland CareFirst Blue Cross Blue Shield 4.2% reduction in patients' overall health care costs Estimated cost savings of $40 million (2011) Vermont Medicaid 31% fewer ER visits 21% reduction in inpatient services 22% lower per member per month costs (2008-10) Patient-centered Medical Home checklist, www.aafp.org/pcmhresources

Patient-centered Medical Home checklist, www.aafp.org/pcmhresources Patient-centered Medical Home checklist, www.aafp.org/pcmhresources

Does your provider make house calls? 128

Physician Profiling Proliferates 1) By default data will be available to everyone 2) Privileging 3) Professional organization databases 4) Physicians will need to know who they are referring to 5) Consumers will use this data for MD search 6) Payers will use this to drive traffic. Reliable Data Reliable Data?

The Payor Reliable Data? Grade A Providers 30% Length of stay in a hospital Decrease infection rate Decrease in hospital DVT rate The Consumer Group A Financially Driven 60% Group B Quality Driven 40% Grade A Providers 30% Length of stay in a hospital Decrease infection rate Decrease in hospital DVT rate

Redirecting Traffic Group A Financially Driven 60% Group B Quality Driven 40% Who will drive this? Why will they drive it? Grade A Providers 30% Length of stay in a hospital Decrease infection rate Decrease in hospital DVT rate Group A Financially Driven 60% Future Traffic What are the variables? Group B Quality Driven 40% Will they continue to drive this? Reliable Data? Grade A Providers 30% Length of stay in a hospital Decrease infection rate Decrease in hospital DVT rate

and Nationally Centers of Excellence Network for Major Procedures. 140 Providers ranked in top 25 th percentile by CareChex Procedures performed at guaranteed, case-based rates Up to 40% savings per procedure Telemedicine capabilities Remote diagnostics and second opinions by top specialists KP

Where are we headed? Acknowledgements Christie Lee Health Care Excel Mary Ellen Jackson, BSN, RN Cathie Pritchard, RN Beck Royer, RN Carolyn Hamilton, RN Quality Net Conference If You Want To Get To The Top, Prepare To Kiss A Lot Of The Bottom.