Advocate Physician Partners approach to Population Health Don Calcagno President, Advocate Physician Partners March 9, 2016 Who are Advocate Health Care and Advocate Physician Partners? 1
Advocate Health Care Advocate Health Care 13 Hospitals 10 acute care hospitals 1 children s hospital 1 critical access hospital 1 clinically affiliated hospital 5 level 1 trauma centers 3 major teaching hospitals 2 physician groups with 1,400 physicians 250 sites of care 34,000 Employees Advocate Physician Partners 11 Physician Hospital Organizations 4,900 Participating Physicians 737,000 Covered Lives Nationally Recognized CI Program Leader in Population Health Management 3 2
Advocate Physician Partners Formed in 1995 as a super 11 physician hospital organizations Over 4,500 physicians Employed and independent Nationally recognized Clinical Integration program Named one of the nation s largest ACO by Modern Healthcare Magazine Clinical Integration 1,000,000+ Lives Shared Savings + Global Risk 553,000 Lives Global Risk 240,000 Lives Advocate Physician Partners To drive improvement in health outcomes, care coordination and value creation through an innovative and collaborative partnership with our physicians and the Advocate System Condell Good Shepherd Christ Hospital Good Samaritan South Suburban BroMenn Trinity Sherman Silver Cross Lutheran General Advocate Medical Group Illinois Masonic 6 3
Pluralistic Physician Approach Active physicians on medical staffs (7,000) Total APP physicians (4,900) 25% PCPs 75% specialists Employed (1,400) Aligned APP (3,500) Independent non-app (2,100) 7 APP Physicians By Practice Group Size 33% of PCPs Are Solo Practitioners, 25% In Offices of 2-3 350 300 250 200 150 100 50 0 Number of PCPs by Group Size 700 600 500 400 300 200 100 0 Number of Specialists by Group Size 1 2-3 4-5 6-10 11-20 >20 PCP Physician Group Size Specialist Physician Group Size 4
What we believe Population Health Management PHM is the coordination or management of medical care delivery to a population to improve clinical outcomes at a lower total cost of care. Successful PHM is a key means by which to achieve the Triple Aim : 1. Improving the patient experience. 2. Improving health outcomes. 3. Reducing the total cost of care. Use of PHM and aligned incentives are essential components of taking more financial risk. 10 5
Why we believe it Industry Challenges Unsustainable costs Deteriorating reimbursement Care breakdown penalties Manpower shortages Value based alternatives to fee-for-service are continuing to emerge Intensifying competition Capital access/capacity 6
Reimbursement Model Clinical Integration Care Model ACO Care Model Population Health Care Model 2/23/2016 Advocate s Approach to Population Health Management Over five years ago, Advocate recognized that health care providers could earn revenue three ways: 1. Maximize unit reimbursement. 2. For given unit reimbursement, maximize quantity. 3. Take financial risk for managing the health of a population and by lowering cost and serving a great number of unique patients. Advocate concluded scenario #3 would make it more competitive in the long run and improve the health of the communities it serves 13 Evolving APP Value-Based Contract Structures Global Risk Shared savings with downside risk Shared savings/global budgets Primary care management fees Bundled payment for episodes of care Bundled payment for acute care (inpatient only) P4P/value-based purchasing Inpatient case rates (eg, DRGs) Fee for service Scope of Risk 7
Our view The move from volume to value is well underway Consumerism will drive pricing transparency Care will continue to shift to the outpatient setting Scale necessary to manage a population Insurers Acknowledge Inability to Manage Rising Costs Medicare Finances are Not Sustainable Population is Aging Shared savings is a transitional model What we are doing about it 8
Advocate s Approach to Population Health Management PHM Implemented: Gain clinical accuracy through scale (size) and risk stratification (clustering like patients); Align the incentives of patients, physicians, and hospitals by rewarding diagnosis and treatment that reduces the cost of care; Achieve scale (horizontal and vertical) needed to effectively manage patients and alter their behavior; Obtain scale to lower variance and better manage financial risk. AdvocateCare Single Model of Care delivery across Advocate Requires collaboration and innovation From fee-for-service to *fee-for-value* model = Improving Outcomes Integrating care across the continuum and sustaining cost 17 Advocate s Population Health Focus Physician Office Hospital Post Acute Disease registries Enhanced IP & ED CM roles Hospital to home transition coaches Embedded /telephonic CMs Palliative care Medical home Field operations Standardized readmission risk tool Follow-up appointments with PCP office IP care coordination redesign SNFists & advanced practice nurses facility based teams Post-acute network built of preferred providers (SNF, inpatient rehab, LTACH) 9
Key Success Factors AdvocateCare Programs Across the Continuum 10
Key Success Factors Physician Driven Same Metrics Across All Payers Minimize Additional Administrative Costs Infrastructure Necessary to Support Improvement Physician/Hospital Alignment 21 Challenges 11
Challenges Living in 2 worlds at same time: FFS and FFV Alignment among physicians, insurers, hospitals and post-acute What is cost and what is revenue? Alignment of incentives Coordination of patients, their data and information Understanding the population Different products provide different wrap-around services Communication, communication, communication Translating complex into understandable Different nomenclature Difference lens = different view Change management Lessons Learned 12
Lessons Learned: Key Drivers Culture Feedback Loop Governance Transparency of Results Infrastructure Incentives 25 Value Of Accountable Care Supports Advocate s 2020 strategy and vision to develop lifelong relationships Transitions to one model of care Furthers physician engagement Aligns payment incentives across the system Brings down costs to allow participation in exchanges and HPN Requires partnership and innovation Paramount to success: Quality Improvement 13