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Operating an ACO - Part 2 June 23, 2011. Speakers. David Jones – CureIS Healthcare, Inc. (Minneapolis, MN) Michael Kosir – Initiate Consulting (St. Paul, MN). 612.834.4544 djones@cureis.com. 612.247.9728 mkosir@getideasmoving.com. Presentation Overview. What got us here

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Presentation Transcript
speakers
Speakers
  • David Jones – CureIS Healthcare, Inc. (Minneapolis, MN)
  • Michael Kosir – Initiate Consulting (St. Paul, MN)

612.834.4544

djones@cureis.com

612.247.9728

mkosir@getideasmoving.com

presentation overview
PresentationOverview
  • What got us here
  • Why ACO | Why Now
  • Commercial vs Government ACOs
  • Medicare Shared Savings
  • Governance
  • Data Driven
  • Care Management
  • Financial Formula
  • Summary
slide4

What Got Us Here

Texas Workers Compensation Research Institute

33% expenditure difference across state…with near-equal outcomes.

Striking the Balance: An Analysis of the Cost and Quality

of Medical Care in the Texas Workers’ Compensation System

TexasNew Yorker

50% Medicare expenditure difference between similar health populations of El Paso & McAllen.

A Cost Conundrum: What a Texas Town can teach us about health care

GlobalThe Commonwealth Fund

U.S. = highest cost but last in outcomes.

2007 study of 6 industrialized countries

slide5

What Got Us Here

Runaway Inflation

Spending on Health Care Services

In 2005 dollars

1965

$187 Billion

2005

$1.9 Trillion

4.9%

Average Annual Growth

Average annual GDP growth

2.1%

5.1%

of GDP

17.6%

of GDP

2009

Source: Congressional Budget Office based on health services and supplies, as defined in CMS national health expenditure accounts.

slide6

Why ACO | Why Now

Evolution

Fee For Service

Insurers pay for transactions

HMO

Controlled reimbursement | some quality

Domestic Medicine

1:1 doctor – patient relationship

Employer-based Care

Employed physicians serving employees

Medical Home

Medical team

ACO

Patient-centered care controlled by medical professionals

commercial

ACO Differences

Commercial

Medicare

  • Patients Assigned
  • Patients Free to Roam
  • Patients Stay in Medicare
  • Payment/Penalty Terms Set
  • Quality Measures in Place
  • Pioneer Option
  • Patients Engaged
  • Patients Corralled
  • Patients Change Jobs/Plans
  • Payment/Penalty Terms Negotiated
  • Quality Measures Similar
slide8

Medicare Shared Savings Program

Objectives (3 Part Aim)

1Better Care for Individuals

2Improved Health for Populations

3Lower Growth in Expenditures

Qualified & Quantified!

Data Information Data Information Data Information Data Information Data Information Data

slide9

Medicare Shared Savings Program

Requirements

  • Minimum term 3 years
  • Financial means to repay losses & facilitate receipt/distribution of savings
  • Minimum Medicare beneficiaries 5,000
  • Leadership & management for both clinical and administrative activities
  • Information Infrastructure ability to evaluate data & give feedback to organization
  • Shared governance representing beneficiaries, community partners, and provider/suppliers
  • Provider Driven 75% of governing body must be ACO participants
  • Public reporting of ACO performance and operational metrics

and more…

slide11

Governance – It REALLY Matters

A commitment by leadership to improve value as a top priority + a system of operational accountability to improve performance at the following levels:

  • Care Management
    • Total Medical Leadership Commitment
  • Administrative
    • Active Medical Leadership Participation
  • Marketing
    • Active Medical Leadership Participation
  • All Else
    • Active Medical Leadership Participation

If not engaged

nothing else

matters

slide12

Care Management

Critical Aspects

  • Early diagnosis & intervention diabetes, CHF, COPD, etc.
  • Active application of best practices alerts, etc.
  • Peer review participating providers
  • Reduction of unnecessary ER visits
  • Reductions of hospital readmissions alerts, etc.
  • Creative patient education services e-mail, text, etc.

Opportunities are endless…

slide13

Patient Satisfaction

Build it… they may not come

One of the 5 quality domains is Patient/Caregiver Experience. Simple Patient surveys assess the following:

  • Getting Timely Care, Appointments, and Information
  • How Well Your Doctors Communicate
  • Helpful, Courteous, Respectful Office Staff
  • Patients' Rating of Doctor
  • Health Promotion and Education
  • Shared Decision Making
  • Health Status/Functional Status

Imagine if 20% of your shared savings

were determined simply by

measuring patient satisfaction.

slide14

Quality

  • 65 Measures
  • 5 Domains includes patient/caregiver experience
  • 6 Core disease states
  • PQRI limits
  • EHR Meaningful use

and more…

slide15

Medicare Shared Savings Program

The Basic Formula

How It Works

FFS

Minimum Quality

Minimum Savings

+

[

+

=

$

]

Intent: increased quality and increased savings equals increased sharing.

slide16

Formula: Components

One Sided

  • Shared savings payments for achieving cost saving benchmarks

Two Sided

  • Shared savings payments (higher percentage) for achieving cost saving benchmarks
  • Repayment of shared losses

All ACOs will operate under the two sided model

in year 3 of the initial contract period and thereafter.

slide18

Formula: Components

Minimum savings rate for each one sided ACO based on the number of beneficiaries assigned. MSR calculated as follows:

slide19

Formula: Components

  • Retrospective benchmarks = 3 years of data

(weighted 60%. 30%, 10%)

  • No prescribed payments
  • Payments to TIN
  • Forfeit savings if ACO departs program early
  • 25% withhold of shared savings payment to offset possible future losses (2-sided only)
slide20

Formula: An Example

New Way ACO 1-Sided Model

20,000 patients @ $8K average cost/yr (3 yr historic avg.)

Benchmark = $160M

2.5% MSR = $4M

Target Spend = $156M

Performance Year 1 = $140M

Net Savings = $20M

50% of Savings = $10M

FQHC/RHC 2.5% Credit = $0.5M

Total Savings Share = $10.5M

Maximum = 7.5% of benchmark ($12M).

New Way keeps everything.

slide21

Sharing

Sharing the Savings

You Decide!

slide22

Summary

If You Remember Nothing,

Remember This:

  • Medical Leadership Engagement
  • Data & Information
  • Quality Care
  • Patient Satisfaction
  • Know Your Formula
upcoming webinars
UpcomingWebinars

Understanding Regulations of ACOs

July 14, 2011

For more information and to register, visitwww.aaacountablecare.org

for more information
ForMore Information

Don Giroux

Associate Director

952-896-3236

don@aaaccountablecare.org

AAACO Website

www.aaacountablecare.org