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Delivery System & Payment Reform under the ACO Initiative. September 7, 2011. C. Edward Brown Chief Executive Officer The Iowa Clinic. The Iowa Clinic. Multi-specialty clinic, 37 specialties 120 physicians, 16 mid-level providers 15% Primary Care, 85% Specialty Care

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Delivery system payment reform under the aco initiative

Delivery System & Payment Reformunder the ACO Initiative

September 7, 2011

C. Edward Brown

Chief Executive Officer

The Iowa Clinic


The iowa clinic
The Iowa Clinic

  • Multi-specialty clinic, 37 specialties

  • 120 physicians, 16 mid-level providers

  • 15% Primary Care, 85% Specialty Care

  • 2 primary locations (West Des Moines, Methodist Medical Center), 21 outreach locations

  • 120,000 patients served annually

  • Over 400,000 outpatient visits annually


Health care reform
Health Care Reform

  • Regulation:

    • Control costs by controlling total resources going into the system

  • The Market:

    • Control costs through insurance competition and informed consumers

  • System Reform:

    • Control costs from inside-out through information, delivery models, and payment incentives

  • 3


    A new health care model
    A New Health Care Model

    Past

    Future

    • Provider-centered

    • Price-driven

    • Knowledge disconnect

    • Slow innovation

    • Reactive, episodic care

    • Outcome ignored

    • Costs increase

    • Patient-centered

    • Value-driven

    • Knowledge intensive

    • Rapid innovation

    • Health-oriented involvement

    • Accountable

    • Costs stable/decrease

    4


    Paying for value
    Paying for Value

    It’s on the horizon . . .

    • Government: CMS is encouraged by demonstration results:

      • Hospital Quality Incentive (HQID)

      • Physician Group Practice (PGP)

      • Medicare Care Management Performance (MCMP)

      • Nursing Home Value-Based Purchasing

      • Hospital Gainsharing

      • Physician Hospital Collaboration

    • Commercial: Starting to pilot

      • Wellmark

        • 2011 Pilot ACO project

        • Looking to bundle payment for some surgeries


    Physician group practice pgp demo project
    (Physician Group Practice) PGP Demo Project

    Timeline:2004 Base yearYr 1: Mar 2006Yr 2: Mar 2007Yr 3: Mar 2008Yr 4: Mar 2009Yr 5: Mar 2010

    Data is available only for the first four years.

    • CMS Objectives

      • Encourage coordination of Part A & Part B

      • Coordinate care for chronically ill and high cost beneficiaries in an efficient manner

      • Decrease the growth in Medicare spending over the next 3 years


    PGP Demo Financial Model

    • Savings Threshold:

      • The first 2% of savings goes entirely to CMS

    • Residual savings:

      • 80% Group/20% CMS

        • Yr 1 allocation: 30% Quality, 70% Efficiency

        • Yr 2 allocation: 40% Quality, 60% Efficiency

        • Yrs 3-5 allocation: 50/50 Quality & Efficiency



    Success in value based payment will be defined by increasing value
    Success in value-based paymentwill be defined by INCREASING VALUE

    Quality

    Value

    Cost

    Requires Physician & Facility

    Collaboration and Mutual Accountability


    Hospital physician collaboration options
    Hospital/PhysicianCollaboration Options

    An ACO is a TACTIC, not a STRATEGY.

    • Bundled Payment

    • Inpatient Gainsharing

    • Co-Management

    • Clinical Integration

    • Employment/Merger

    Financial Integration

    5

    4

    3

    2

    1

    Physician Engagement is the critical success factor.

    Physician Involvement


    Building an aco keys to success
    Building an ACO:Keys to Success

    • Culture of Collaboration

    • Coordination of Care

    • Compensation Incentives

    Apply whether Employed, Merged, or Clinically Integrated


    Building an aco keys to success1
    Building an ACO:Keys to Success

    Culture

    • Both Physicians and Facility must:

      • Have shared vision of high-quality, low-cost care – Patient-centric

      • Be willing to collaborate

      • Be willing to change

  • Consider strategy, quality, and culture when selecting ACO partners

    • Not just facility-physician, but physician-physician as well


  • Building an aco keys to success2
    Building an ACO:Keys to Success

    Culture

    • Transition to Team-Based Care (Medical Neighborhood)

      • Care coordination

      • Care Management staff

      • PCP role as Gathering Point

    Medical Home

    Medical Neighborhood


    Building an aco keys to success3
    Building an ACO:Keys to Success

    Care Coordination

    • Formalize shared Governance and Management

      • Governance: Collaborative Leadership Structure that includes both Physician and Facility representation

      • Management: Pair Physician and Administrative leaders into Dyads


    Building an aco keys to success4
    Building an ACO:Keys to Success

    Care Coordination

    • Strong Physician Leadership

      • Must lead physician-physician and physician-facility collaboration

      • Must lead care coordination and management

      • Must lead role transitions

      • Need administrative and financial support


    Building an aco keys to success5
    Building an ACO:Keys to Success

    Care Coordination

    • Empower Ownership to Front-Line Physicians

      • Need wide representation

      • Can support, believe in, and effectively implement their own ideas

      • Ideas needed to improve cost & quality


    Building an aco keys to success6
    Building an ACO:Keys to Success

    Care Coordination

    • Establish 2-Way Data Exchange

      • Implement Performance Management System that combines cost-quality data @ patient level

      • Establish standardized clinical pathways

      • Use it to drive quality outcomes and reduce costs


    Building an aco keys to success7
    Building an ACO:Keys to Success

    Compensation Incentives

    • Align incentives with ACO objectives

      • Population Management

        • Patient Population for PCP’s, Specialists and Coordinators

        • Scaled Network to Population

      • Quality

      • Cost

    Reward Value!


    Building an aco keys to success8
    Building an ACO:Keys to Success

    Compensation Incentives

    • Support additional costs for care management teams

      • Burden on physicians will prevent progress

    • Support IT Infrastructure costs

      • Data critical to success

      • Use IT to minimize Human overhead


    Impediments to reform
    Impediments to Reform

    • National economics

    • Government driven vs. Commercial

    • Provider Commitment

    • American Consumers


    Implications for physician groups
    Implications for Physician Groups

    • Disruption of high margin care

    • Payment for outcomes

    • Contracts with ACO’s and commercial insurers

    • In-depth knowledge of cost and outcomes

    • Cultural acceptance of standardization

    • Rapid application of best practice

    • Population health management

    • Develop Physician Leaders

    21


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