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Population Health in the Age of Health Care Reform Texas Association for Healthcare Financial Administration Seminar Series - Wichita Falls, Texas March 14, 2014. Joshua M. Weaver Polsinelli, PC (214)661-5514 Ashley E. Johnston Gray Reed & McGraw, PC (469) 320-6061

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Population Health in the Age of Health Care ReformTexas Association for Healthcare Financial Administration Seminar Series - Wichita Falls, TexasMarch 14, 2014

Joshua M. Weaver

Polsinelli, PC


Ashley E. Johnston

Gray Reed & McGraw, PC

(469) 320-6061


What is Population Health?

Why the Focus on Population Health?

Current Trends

Potential Delivery Models

what is population health
What is Population Health?
  • Population Health (“PH”) is a measurement of overall health outcomes across a defined population. It is the optimization of the health of a defined population.
  • The goal of population health management (“PHM”) is to keep a patient population as healthy as possible, minimizing the need for expensive care such as ED visits and hospitalizations.
  • Focus on needs of the population by focusing on the individual needs of the patient, from wellness and prevention to disease management
  • Care for entire population, not just those who seek care
what is population health1
What is Population Health?
  • Patient populations can be categorized into one of three segments:
    • Low risk patients (healthy or well-managed patient) [60%-80%]
    • Rising-risk patients (multiple risk factors) [15%-35%]
    • High-risk patients (complex illness, co-morbidities, and psychosocial problems) [5% - yet accounts for the majority of health care spending]
  • Different goals based upon risk of patients
    • Low-risk Population Goal: maintain population in healthy state through prevention and wellness programs
    • Rising-risk Population Goal: to avoid unnecessary care and prevent migration to the high-risk category
    • High-risk Population Goal: providing intensive, comprehensive and proactive management so that episodic and expensive care can be avoided
what is population health2
What is Population Health?
  • Different views of what is a “population”
    • Clinical View: those enrolled in the care of a specific provider, hospital system, insurer, or network
    • Public Health View: those in the geographic community
    • Illness-Specific View: Populations with Specific Illnesses
      • Ex: Cardiac, diabetes
what is population health3
What is Population Health?
  • Requires a significant change in way of thinking and in the practice patterns of providers.
  • Instead of doing more to earn more, providers will be rewarded for efficiency and quality.
key characteristics of population health
Key Characteristics of Population Health
  • Organized system of care;
  • Use of multidisciplinary care teams;
  • Coordination across care settings;
  • Enhanced access to primary care;
  • Centralized resource planning;
  • Continuous care
  • Patient self-management education
    • Apps (numerous apps that track care, medications, lifestyle, health
    • Group visits
  • A focus on health behavior and lifestyle changes;
  • Use of health information technology
    • Importance of Integration
us health care is poor quality and high cost
US Health Care is Poor Quality and High Cost
  • 250,000 deaths per year due to medical error
  • US quality ranks low when compared to other developed countries
  • Health care comprises 18% of GDP . . . and increasing
  • $2.5 trillion spent in 2009*; Projected growth to 4.6 trillion by 2020**
    • “Waste” in 2009 = $765 Billion (30% of total):
      • $210B - unnecessary services
      • $190B - excessive administrative costs
      • $130B - inefficiently delivered services
      • $105B - prices too high
      • $75B - fraud
      • $55B - missed prevention opportunities
  • 43 Million people in Medicare today; 78 Million by 2030 (last year of baby boomer eligibility)
  • $520B Medicare spending in 2010; $970B by 2021**
  • By 2019, Medicare rates projected to be below current Medicaid rates*

Sources: *Commonwealth Fund; Institute of Medicine, 2011; Medicare Office of Actuary; ** Kaiser Family Foundation

why the focus on population health
Why the Focus on Population Health?

Total Healthcare Expenditure as % of GDP

United States vs. the World

(Source: World Bank)

healthcare in crisis
Healthcare in Crisis

Average spending on health per capita

  • In 2010 we spent $2.6 trillion on health care, or $8,402 per person.
  • The share of economic activity (GDP) devoted to health care has increased from 7.2% in 1970 to 17.9% in 2009 and 2010.
  • Health care costs per capita have grown an average 2.4 % faster than the GDP since 1970.
  • Half of health care spending is used to treat just 5% of the population (another argument for PH).

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.


Examples of High Costs

Source: Washington Post (March 26, 2013)


Examples of High Costs

Source: Washington Post (March 26, 2013)


Examples of High Costs

Source: Washington Post (March 26, 2013)


Examples of High Costs

Source: Washington Post (March 26, 2013)

why the focus on population h ealth1
Why the Focus on Population Health?
  • Affordable Care Act
    • Expansion of insurance coverage (individual mandate, Medicaid expansion, insurance exchanges)
    • Provisions aimed at improving quality (CMS Center for Medicare and Medicaid Innovation, Patient-Centered Outcomes Research Institute)
    • Provider incentives to take responsibility for outcomes and quality (ACOs, HACs, VBP, Readmission penalties, etc.)
    • Community Health Needs Assessments
  • SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (being considered by the House of Representatives)
    • Repeals the SGR and replaces it with a system focused on quality, value and accountability
    • Rewards value over volume
    • Incentivizes movement to alternative payment models
    • Expands use of Medicare data for transparency and quality improvement
why the focus on population h ealth2
Why the Focus on Population Health?

Total: Over 6% of total Medicare payments at risk !!!

new model objectives
New Model Objectives

Change will happen

Those who wait will be left behind

No single solution for everyone, but

Quality, satisfaction and lower cost required!

The “Triple Aim” is a framework developed by the Institute for Healthcare Improvement that describes an approach to optimizing health system performance. It is IHI’s belief that new designs must be developed to simultaneously pursue three dimensions, which called the “Triple Aim”:

Improving the patient experience of care (including quality and satisfaction);

Improving the health of populations; and

Reducing the per capita cost of health care.

key considerations for all models
Key Considerations for all Models
  • Each Patient Population Will Be Different and Will Require Different Approaches
  • Key considerations:
    • What does your patient population look like?
    • How can you best serve this population?
    • What is your goal?
    • The inevitable – how will you get reimbursed?
key considerations for all models1
Key Considerations for all Models
  • In any situation, there must be an integrated system.
    • Will require collaboration among health care providers
    • Must develop relationships with community institution outside health care setting
      • Work with public health agencies, social service agencies, schools, etc.
    • Technology / Information Exchange
    • Education
current available delivery models
Current Available Delivery Models
  • Accountable Care Organizations
  • Clinically Integrated Networks
  • Bundled Payments
  • Narrow Networks
  • Patient Centered Medical Homes
  • Pay for Quality
  • Service Line Co-Management
how well do the current models meet the goals
How Well Do the Current Models Meet the Goals?

Current / Potential Delivery ModelsKey Considerations

More Effective

Less Effective

Level of Integration

accountable care organizations
Accountable Care Organizations
  • An accountable care organization is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.
  • Section 3022 of ACA allows ACOs to receive “shared savings” payment
  • NOT a pilot/demonstration
  • Goal
    • Break down silos between Part A and Part B payments.
    • Improve quality, improve patient experience and decrease cost for a DEFINED POPULATION
clinical integration
Clinical Integration
  • Clinical integration is a type of operational integration that enables patients to receive a variety of health services from the same organization or entity, which streamlines administrative processes and increases the potential for the delivery of high-quality healthcare.
  • Both an Antitrust and Operational Concept
  • Physician competitors who do not share substantial financial risk but engage in clinical integration also may use single source payor contracting if:
    • Establish and implement mechanisms creating high degree of interdependence and cooperation in order to control costs and assure quality
    • Create significant efficiencies and improvement in quality
cin aco example legal relationship governance structure

CIN Governance – Board and Committees

CIN/ACO Entity (New)

Health System

CI Services

HIE, Portals, Messaging, Care Management, Credentialing

Governing Board

CI and other contracts/ funds













Participation Agreements (provider services)

CIN/ACO Example: Legal, Relationship & Governance Structure
ci practical requirements
CI Practical Requirements




Surgical Home JOC

Pediatric Head CT JOC

End of Life Care JOC

Order Set

Editorial Board

Clinical Ethics & Palliative Care


Peer Review

Acute Surgery

narrow networks bundled payments
Narrow Networks/Bundled Payments
  • Narrow Networks (NN): With narrow network plans, patients are only allowed to see physicians in the narrow network.
    • Intel and Presbyterian Healthcare Services’ narrow-network, accountable care-style arrangement for Intel’s employees in New Mexico
  • Bundled Payment (BP): Defined as the reimbursement of health care providers (such as hospitals and physicians) on the basis of expected costs for clinically-defined episodes of care.
    • Allocates risk to providers
why the focus on nn bps shift to self funding
Employers Bearing More Risk, Turning to Providers as AlliesWhy the Focus on NN/BPs?Shift to Self-Funding

Employer Interest in Provider-Oriented Strategies

Percentage of Self-Insured Employers

Partially or Completely Self-Insured

Adopt new accountable payment models

Contract directly with hospitals, physicians, ACOs

Offer incentives for care coordination

In Place in 2013

Planned for 2014

Offer performance-based payments

Employers want a reliable product with predictable and stable costs


Network Provider Agreement

Group / Health System / Provider

Commercial Payors

Network Provider Agreement


Participating Network Provider Agreement

  • Physician Groups
  • Physician Services
  • Other providers
  • Acute Care Hospitals
  • Rehab Hospitals
  • HHA
  • SNF
  • Health System or Hospitals
  • Acute Care Hospitals
  • Rehab Hospitals
  • HHA
current trends
Current Trends
  • Delivery System Reform Incentive Payment (“DSRIP”) Program
  • Clinical Preventative Services
  • Group Visits
  • Technology Advancements – Options for Continued Improvement
    • Discharge Information
    • Patient Education
    • Patient Reminders etc.
key legal considerations for all models
Key Legal Considerations for all Models
  • No one size fits all solution.
  • Structural Options
  • Forming the Entity
    • Separate entity required?
    • Tax and antitrust considerations
  • Determination of participants
    • What types of providers?
    • How to structure physician participation (ownership, governing body, committees, compensation)
  • Fraud and abuse/compliance considerations
    • Be wary of compensation stacking (i.e., multiple relationships with same providers)
key legal considerations for all models1
Key Legal Considerations for all Models
  • Tax Issues: Tax Exemption, Unrelated Business Income, Private Inurement & Benefit
  • Antitrust issues: FTC/DOJ ACO Antitrust Enforcement Policy
  • Peer review privilege
  • Clinical Pathway and Protocol Development
      • Contractual commitment
      • Active physician/provider participation
      • Create, implement, review
  • Metrics and Scorecards
      • Contractual commitment
      • Clearly defined “rewards & punishments”
      • Proactive enforcement
key considerations for all models2
Key Considerations for all Models
  • What Physicians are in and out?
  • Who are the Physician champions?
  • Physician leadership in development and implementation is key.
  • “Only Engaged and Aligned Physicians need apply”
  • Accredited Investor Inquiry

Joshua M. Weaver

(214) 661-5514

Ashley Johnston

(469) 320-6061

  • Josh and Ashley provide counsel to health care providers on complex operational, transactional and compliance issues. They have experience advising hospitals, ambulatory surgery centers, independent diagnostic testing facilities, laboratories, pharmacies, physicians and other health care providers on various issues, including matters implicating the Federal Anti-Kickback Statute, the Physician Self-Referral ("Stark") Statute, the Texas Illegal Remuneration Statute, The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the False Claims Act, and the Emergency Medical Treatment and Active Labor Act ("EMTALA"), among many others. Josh and Ashley also advise clients with respect to reimbursement issues and payor audits. Their transactional experience includes drafting and negotiating a variety of health care contracts, including professional services agreements, physician employment agreements, asset purchase agreements, management and co-management agreements, business associate agreements, operating agreements, and equipment and space leases, among others.
  • Josh and Ashley also assist clients in the formation and syndication of hospitals, ASCs, joint ventures, pharmacies, and laboratories.
  • Josh and Ashley are both Board Certified in Health Law by the Texas Board of Legal Specialization.