Emerging Accountable Care Models: Paradigm Shift from Volume to Value

1. Emerging Accountable Care Models: Paradigm Shift from Volume to Value Shelley Price, MS, FHIMSS Director, Payer and Life Sciences, HIMSS @SPriceHIMSS | #GovHIT DISCLAIMER: The views and opinions expressed in this presentation are those of the author and do not necessarily represent official policy or position of HIMSS.

2. Learning Objectives Understand trends and drivers in healthcare reform from a volume-based system to a value-based system in both the private and public sectors Recognize and connect the common themes, issues and challenges between Population Health, new Payment Models, and Accountable Care Organizations Learn about new partnerships and efforts toward collaborative, accountable care Gain knowledge of the role of data and health IT in driving toward transformation through population health and new payment and delivery models

3. Agenda • Healthcare Reform: Why and How • Driving toward transformation through population health and new payment and delivery models • Themes, Issues and Challenges • Population Health • Payment Models • Accountable Care Organizations • Case Studies • Data and HIT • HIMSS Resources • Take-aways • Questions

4. Healthcare Reform • Trends • Drivers

5. How Do We Get There?

6. Pt 1. Population Health Management • Definition: Public health vs. population health • “…from apublic health perspective, populations are defined by geography of a community (e.g., city, county, regional, state, or national levels); and • from the perspective of the delivery system (individual providers, groups of providers, insurers, and health delivery systems), population health connotes a "panel" of patients served by the organization.” • Stakeholders • Care delivery / providers: • Enterprise systems, hospitals, rural systems, CAH, ACOs • CEO/CMO/CIO • Payers: • CMS for new payment models, private payers, State Medicaid • Data venues: • public health, HIEs, payers, Enterprise • Data users: • Researchers, analysts, consultants

7. PHM: Issues – Needs & Challenges • Starting up • C-Suite: Howdo I begin? Where do I begin? Sure it’s the way of the future…but I am overwhelmed with (go-live, ICD-10, reporting, et al); how can I start in on this? • Lack of a business plan • Project management problem • Available technology ‘toolkits’ • Many ‘solutions’ • Is it right for me? How do I use it? • Data • Access • Architecture • Timeliness • Funding • Initial investment cost; maintenance for activities; limited alternative payment models • Staffing • New skills needed (e.g. PHIM, analytics) • Staffing shortages

8. Pt 2: Payment Models • Enabler to Change • Reimbursement incentivizes action • Need financial framework to support health/healthcare change • Drivers: Triple Aim • Public Outcry • Public Policy • ACA • Pending SGR reform • Healthcare market competition • Providers • Payers • IT vendors

9. Pt 2: Payment Models • Examples of Models What’s the HIT component? • Benchmarking • Outcomes analysis and allocation • Quality measure reporting • Analytics • Risk-sharing

10. Pt 3: Accountable Care OrganizationsYou’ve Seen One, Then You’ve Seen One • What | Who | How? • In general…… • What / Definition / Purpose: • A group of defined providers working collaboratively, connectively, within a risk-baring structure to improve quality, heath outcomes, and costs of a defined patient population • Who / Stakeholders: • Primary: Large hospital systems, large group practices, small-group practices, primary care providers, payers (public and private), IT solution vendors • Secondary: Consultants, HIEs, regulators…patients???? • How? • That’s the secret sauce…

11. Federal ACOs

12. Background • 2010 Affordable Care Act: Encourage development of ACOs • Mirrors the Triple-Aim • Several programs driving to ‘value” by linking payment and outcomes, measured by quality • CMS Medicare Shared Savings (MSSP) Program intent: • Promote accountability for a population of Medicare beneficiaries • Improve the coordination of FFS items and services • Encourage investment in infrastructure and redesigned care processes • Incent higher value care

13. ACO Eligibility Requirements • An ACO must provide documentation in its application describing plans to: • Promote evidence-based medicine • Promote beneficiary engagement • Report internally on quality and cost metrics • Coordinate care

14. ACO Models: ‘Risk’ • Track One or One-Sided Model • Shared saving-only option • “On-ramp” with less risk • Potential of earning 50% shared savings • Track Two or Two-Sided Model • Shared savings/losses model • Performance based risk in exchange for higher reward • Potential of earning 60% shared savings • Two Track Approach for First Agreement Period Only • All ACOs must participate in the two sided model in subsequent agreement periods

15. Quality Reporting and Performance • 33 measures selected combining • Process measures; easier to calculate based on administrative data, such as claims • Outcome measures including patient experience of care provide a more complete picture of quality of care improvement but rely on both claims and clinical qualitydata • Risk adjustment is included for a number of proposed measures • Of the 33 measures: • 7 are collected via the patient survey, • 3 are calculated via claims data, • 1 is derived from the EHR Incentive Program, and • 22 are collected via the GPRO web interface

16. Quality Reporting and Performance

17. ACOs: By the Numbers – CBO Estimates • Estimated Participation • ACOs: 50-270 • Beneficiaries: 1.0-5.0M • Costs and Savings (3 years) • Total savings: $470M (Federal) • Bonuses to ACOs: $1.31B • Penalties from ACOs: $20M • Average ACO startup cost incl 1st yr operating: $.58M

18. Federal Programs Today (MSSP) • April 10, 2012: 27 selected • Est. 375,000 beneficiaries, 10,000 physicians, 10 hospitals, 13-smaller physician-driven organizations in 18 States • July 9, 2012: 89 selected • Est. 1.2 million beneficiaries in 40 States and Washington, D.C. • Jan 10, 2013: 106 selected • 47 States, PR, and DC are now served • Increasing trend toward physician-led practices (approx half of new group) • serving <10,000 beneficiaries each; approx20 percent CHCs, rural health clinics and CAH • Dec 23, 2013: 123 selected • Est. 1.5 million additional beneficiaries • Focus on underserved: 1 in 5 ACOs include CHCs, rural health clinics, and CAH that serve low-income and rural communities

19. Geo Dispersion: Medicare Shared Savings ACOs 3rd Round 2nd Round 1st Round Source: Center for Medicare & Medicaid Innovation

20. Federal Programs Today • Other Programs • Pioneer Model ACOs • December 2011: 32 organizations • Advanced Payment ACOs • January 2013: 15 organizations • Physician Group Practice Transition Demonstration • January 2012: 6 organizations • All Told: more than 5.3 million beneficiaries through nearly 400 organizations in all states except Delaware are receiving care from providers participating in CMS initiatives

21. 4 million Medicare beneficiaries having care coordinated by 220 MSSP and 32 Pioneers ACOs(Geographic Distribution of ACO Population) Source: Centers for Medicare & Medicaid

22. But What is Really Going on? • MSSP ACOs • Jan 2013 reporting of 1st cohort (27): • Track 1 – Successfully reported quality measures: 25 (incl. 4 out of 5 Advanced Payment) • Track 2 – Generated Losses: 2 • Track 2 – Generated Savings: 2 • Pioneer Model ACOs • 32 Original Pioneer ACOs caring for 669,000 Medicare patients and all met the quality criteria. Of those, • 18 lowered the average Medicare cost below the benchmark • 13 saved enough to share a total of $76M with Medicare • 5 with savings not sufficient enough to share with Medicare • 14 increased average Medicare costs

23. Commercial ACOs

24. ACO Lives and Contracts Source: Leavitt Partners Center for Accountable Care Intelligence 2013

25. Types of ACOs • Insurer-Led ACO • More likely to be a physician group (physician problems) • Insurer likely to retain formulary decisions • Multiple-Provider ACO • High likelihood of separate governing structures (unless M/A in the works) • Decisions may be joint but purchases are along original lines (hospital/physician group) Payer-Provider Collaboration • Provider partners are diverse • Payer-involvement varies from • TPA/MSO • First-payer status (temporary exclusivity) • True collaborative partner Single-Provider ACO • Tends to be original entity (Billings Clinic, Sharp Healthcare) • More likely to be looking to develop in-house competency (unless existing) • Decision making mechanism is less likely to see change* Source: Leavitt Partners Center for Accountable Care Intelligence 2013

26. Innovation in the Commercial Marketplace • Commercial Health Plans are engaging with Providers toward Accountable Care. Examples: • Aetna • Facilitating the clinical, financial, technological and cultural changes ; Aiding in implementing technology to unlock the power of evidence-based medicine and preventive care • Example of results: 45% reduction in hospital admissions; 50% fewer patient hospital days; $600 annual savings per patient • Cigna • Strong focus on care coordinators and case managers • 89 ‘collaboratives’ in 27 states • covering 910,000 lives and • through 36,000 providers

27. HIMSS Perspective

28. Pediatric ACOs HIMSS TOWN HALL: Understanding the Particular Characteristics of Pediatric Populations and How They Could Impact Accountable Care Organizations Presentation by Deb Wells, CHOP for the HIMSS ACO Task Force April 4, 2014

29. Population Characteristics Compared High cost-high risk Chronic Disease Healthy

30. Meet the Family Orthodontist Home Care Behavioral Health Pediatric Specialty Summer Camp Hospital Family Sub-Specialty Care Patient School & Day Care Primary Care Long-term & Rehab Dentist Unique Services Community Services Sometimes the Same for Routine Care Sports Eye Care Adoption & Foster Care Pharmacy Minute Clinics Head Start & Others

31. Key Issues • Kid’s unique medical needs and social environment necessitate care from pediatric-trained physicians and child-specific community resources such as schools • It is essential to select performance metrics that are meaningful to pediatrics and that accurately measure the quality of pediatric care • Population characteristics and scarce sub-specialists require a regional vslocal provider base • Technology needs to include functionality to support pediatric care • Children with medical complexity usually have many subspecialists and rely on community resources and will need special care throughout their lives • The family is generally responsible for a child’s health care, rather than the patient him- or herself • Federal leadership provided by Medicare is lacking in Medicaid, but states have begun working with providers to form Medicaid ACOs • A largely healthy population means that a larger number of patients is needed to show significant cost savings

32. Influencing Quality and the Payer Relationship with C&BI CASE STUDY by the C&BI Value Task Force April 4, 2014

33. Key Issues • Current coding and FFS program not sufficient nor indicative of quality in complex obstetrics cases • Hawaii Pacific Health and Hawaii Medical Service Association (BCBS) partnered on obstetrics program • Contract tying reimbursement to outcomes synchronously achieved patient outcomes and fiscal objectives • Results: • State-of-the-art obstetrical service line • Decrease in C-Section in low-risk deliveries • Value-based payments: Increase to 15% of payments • New contract: moving to 50% of payment value-based

34. Data and HIT

35. Clinical & Business Intelligence – Turn Data into Action Hope & promise…. and the challenge Financial Data Clinical Data Operational Data • Data warehousing • Healthcare data integration • Enterprise analytics • Predictive analytics • Population health

36. PHM and ACO Common Challenges Some common clinical analytics: • “Defensive” Risk Management • Readmissions Management • Chronic Disease Detection • Inpatient Length of Stay Management • At Risk Population Detection • Hospital Acquired Condition Prevention • “Offensive” Risk Management • Chronic Care Management • Tailored Benefit Design • Wellness Program Management • Disease Detection & Early Intervention Some common financial analytics: • Revenue Cycle • Clinical Quality & Outcomes • Physician Performance & Outcomes Analysis • Patient/Customer Satisfaction • Market (to assess ROI) • Labor Management

37. HIMSS Resources • Population Health and Accountable Care • Resources • C&BI Task Force: 10 Steps to Build a PHM Program, definitions for clinicians, CEO/CMO interviews, Using your ED for PHM • Accountable Care Task Force: Various resources including ACO Core IT Capabilities; ACO and mobile case studies • ACO Federal Programs resource page • State HIT ACO Dashboard • Education • HIMSS14: 24 sessions (Pop Health) • HIMSS14: 12 sessions (ACOs), ACO symposium; virtual education • Congressional Seminar Series • Communities • www.himss.org/ProviderPayerCommunity • www.himss.org/ClinBusIntelCommunity

38. Take-Aways • Transitioning healthcare system to fee-for-value is hard • The accountable care / fee-for-value concept is here to stay • You've seen one, you’ve seen one • Technology is both the key and a challenge

39. Questions?Thank you! Shelley Price, MS, FHIMSS Director, Payer & Life Sciences, HIMSS Phone: 703-562-8846 Mobile: 703-967-4425Email:  sprice@himss.org @SPriceHIMSS | #GovHIT