Dale Jarvis, Managing Consultant MCPP Healthcare Consulting dalemcpp

1. Dale Jarvis, Managing Consultant MCPP Healthcare Consultingdale@mcpp.net Healthcare Reform and the Behavioral Health Safety Net Michigan Association of Community Mental Health Boards 1

2. The Two-Part Problem “The American healthcare system is a dysfunctional mess.” (Ezekiel Emanuel, MD, Chair of the Department of Bioethics at the Clinical Center of the National Institutes of Health) 2

3. My Hypotheses Healthcare Reform is going to dramatically change the healthcare system in this country from a sick care system to a true health care system Federal Parity and New Research on the Prevalence and Costs associated with Americans with BH Disorders is going to alter the role of behavioral health in the new health care system: Behavioral Health Clinician demand is going to significantly increase as they become an essential part of this reformed system And the Behavioral Health Practice Setting of 2014 will likely look quite different than it does today 3

4. I have my “sick care/health care” hypothesis because… The American healthcare system is moving into an era of “Disruptive Innovation” to improve quality and bend the cost curve That began before the passage of the Accountable Care Act And will proceed, regardless of what happens in the elections of 2012 and 2014 4

5. And this transition is already happening… In Denmark, over the last few decades, the number of hospitals has dropped from 155 to 89 today, a 42% drop. (Sources: Paul Grundy, Director of Healthcare, Technology and Strategic Initiatives for IBM Global Wellbeing Services and Wikipedia) 5 Specialists: High performing Retire Decide to become PCPs Less opportunities available as med students think about their specialties PCPs More NPs & PAs Specialist conversions More med students going into primary care Specialists: High performing Retire Decide to become PCPs Less opportunities available as med students think about their specialties PCPs More NPs & PAs Specialist conversions More med students going into primary care

6. And in Seattle… The Group Health Cooperative Story 2002-2006: Move towards Medical Home Email your Doctor Online Medical Records Same Day/Next Day Appointment (Increased patient access but also saw provider burn-out and decline in quality scores) 2007: More robust Healthcare Home Pilot Added more staff (15% more docs; 44% more mid-levels; 17% more RNs; 18% more MAs/LPNs; 72% more pharmacists) Shifted to 30 minute PCP slots (Reduced burnout, increased quality scores, broke even in the first year) 6

7. Integrated Health Systems – The Holy Grail Global Capitation to an Integrated Health System 7 Group Health Cooperative 2002-2006: Move towards Medical Home Email PCP Online Medical Records Same Day/Next Day Appointment (Increased patient access but also saw provider burn-out and decline in HEDIS scores) 2007: More robust Healthcare Home Pilot / Added more staff (15% more docs; 44% more mid-levels; 17% more RNs; 18% more MAs/LPNs; 72% more pharmacists) // Shifted to 30 minute PCP slots // (Reduced burnout, increased HEDIS scores, no difference in overall costs)Group Health Cooperative 2002-2006: Move towards Medical Home Email PCP Online Medical Records Same Day/Next Day Appointment (Increased patient access but also saw provider burn-out and decline in HEDIS scores) 2007: More robust Healthcare Home Pilot / Added more staff (15% more docs; 44% more mid-levels; 17% more RNs; 18% more MAs/LPNs; 72% more pharmacists) // Shifted to 30 minute PCP slots // (Reduced burnout, increased HEDIS scores, no difference in overall costs)

8. 8 This Will Require New Payment Models and System Management Structures

9. Value-Based Purchasing – Medical Homes Fee for Service is headed towards extinction Health Care Home models are beginning with a 3-layer funding design with the goal of the FFS layer shrinking over time Being replaced with case rate or capitation with a pay for performance layer 9 Payment mechanisms will be tied to these measures in a variety of ways. Bundled payments that only pay for part of potentially avoidable complications (PACs) will penalize providers that have higher error rates. CBHOs that don’t have structures and staffing to provide effective prevention and early intervention services and manage chronic health conditions will not be eligible for case rates and capacity-based payments to fund that work. CBHOs that don’t hit performance measure targets will not earn their bonuses. A related issue from above is whether existing carve-out plans that have worked closely with CBHOs to develop innovative payment mechanisms such as sub-capitation, case rates, risk corridors with bonuses, etc. will still be in business in the near future. Should CBHO groups and existing behavioral health carve-outs look to align/merge with health plans such as members of the Association for Community Affiliated Plans? What other strategies could be used to ensure their survival?Payment mechanisms will be tied to these measures in a variety of ways. Bundled payments that only pay for part of potentially avoidable complications (PACs) will penalize providers that have higher error rates. CBHOs that don’t have structures and staffing to provide effective prevention and early intervention services and manage chronic health conditions will not be eligible for case rates and capacity-based payments to fund that work. CBHOs that don’t hit performance measure targets will not earn their bonuses. A related issue from above is whether existing carve-out plans that have worked closely with CBHOs to develop innovative payment mechanisms such as sub-capitation, case rates, risk corridors with bonuses, etc. will still be in business in the near future. Should CBHO groups and existing behavioral health carve-outs look to align/merge with health plans such as members of the Association for Community Affiliated Plans? What other strategies could be used to ensure their survival?

10. Accountable Care Organizations (ACOs) – the homes for medical homes The Affordable Care Act calls for the creation of a national voluntary program for ACOs by January, 2012; states are also moving to this model ACOs are provider groups that accept responsibility for the cost and quality of care delivered to a group of patients that are cared for by ACO clinicians Medicare-approved ACOs will need to serve at least 5,000 patients, have sufficient primary care capacity, and be able to report on cost, quality and patientexperience 10

11. Accountable Care Organizations ACOs dual purpose: Organization structure to support coordination of care and payments between Healthcare Homes, Specialists and Hospitals Way for small to mid-sized primary care practices to obtain the infrastructure of larger practices as they work to become Person-Centered Healthcare Homes 11

12. These innovations are leading to… An inversion of the Resource Allocation Triangle so that... Prevention Activities will be funded and widely deployed Primary Care will become a desirable occupation Resulting in Decreased Demand in the Specialty and Acute Care Systems 12 Specialists: High performing Retire Decide to become PCPs Less opportunities available as med students think about their specialties PCPs More NPs & PAs Specialist conversions More med students going into primary care Specialists: High performing Retire Decide to become PCPs Less opportunities available as med students think about their specialties PCPs More NPs & PAs Specialist conversions More med students going into primary care

13. I have my “importance of behavioral health” hypothesis because… The health policy community has been connecting three dots First: Healthcare Cost Cost Growth of the American Healthcare System is unsustainable Growing at a rate much higher than the rest of the Economy 13

14. Connecting three Dots: Second: Healthcare Quality The U.S. Healthcare System is both the Best and the Worst Healthcare System in the Industrialized World 14

15. Connecting three Dots: Third: The Importance of Behavioral Health Mental Health, Substance Use, and Co-Occurring Disorders: an inseparable part of the equation 15

16. The 53 year lifespan for Americans with a Serious Mental Illness is comparable with Sub-Saharan Africa Americans with a COD are dying, on average, at age 45 (Oregon Department of Human Services Addiction and Mental Health Division, June, 2008) 16 The Consequences for Americans with a SMI and a COD

17. The Consequences for the Overall Healthcare System 17

18. This is important to the healthcare system because we are moving into a new era of risk & reward 18

19. Supported by Four Strategies in the Accountable Care Act... 19

20. Alignment of the Stars for Persons with MH/SU/COD Disorders A growing awareness of the prevalence of MH/SU disorders and the cost of not providing effective treatment and supports Combined with the an awareness that Behavioral Health is necessary for Health Prevention is Effective Treatment Works People Recover Results in increasing recognition that we can’t manage the risk and earn the bonuses in Health Plans, ACOs and Medical Homes without addressing the healthcare needs of persons with a SMI and the MH/SU needs of all Americans 20

21. Creating a Vision for the Next Generation Washington Safety Net Healthcare System Robust Medical Homes and ACOs are critical… We also need to expand the available services in Medical Homes to include a focus on the behavioral health, housing, social and personal supports needed to achieve and maintain health And “flip” theResourceAllocationTriangle toadequatelyfund neededservices andsupports 21

22. CBHOs will play two important rolesand be embedded in ACOs or IDSs 22

23. Revisiting My Hypotheses Healthcare Reform is going to dramatically change the healthcare system in this country from a sick care system to a true health care system Federal Parity and New Research on the Prevalence and Costs associated with Americans with BH Disorders is going to alter the role of behavioral health in the new health care system: Behavioral Health Clinician demand is going to significantly increase as they become an essential part of this reformed system And the Behavioral Health Practice Setting of 2014 will likely look quite different than it does today 23