Transcript Accountable Care Organizations The Challenges

Accountable Care Organizations
The Challenges, Expectations and Opportunities
for Health Care Providers
Michael G. Rock, MD
Medical Director, Mayo Clinic Hospitals
Texas Hospital Association
February 3rd, 2011
Patient Protection and Affordable Care Act
Progress
Challenges
• Expanded
coverage
• Does it “bend
the cost curve?”
• Quality
• Will it expedite
delivery system
reform?
• Value
• Population health
management
BK
PPACA
Major Payment and Delivery Initiatives
• Productivity adjustments
2010
• Center for Medicaid/Medicare Innovation
2011
• Eliminate Medicaid payments for H.A.C.
2011
• Reduce Medicare payment for readmissions 2012
• Value based purchasing for hospitals
2012
• Bundled and global payment programs
2012
• Accountable care organizations
2012
• Reduce Medicare payment for H.A.I.
2015
What is an ACO?...2010
The term Accountable Care Organization (ACO)
was formalized by Dr. Elliott Fisher in 2006.
• Describes partnership between hospitals
and physicians to coordinate and deliver
efficient care
• Removes barriers in order to improve the
value of care
• Alters payment system that currently
rewards volume and intensity to one that
rewards quality and cost performance
What is an ACO…2010?
• Local health care organization accountable
for 100% of expenditures and care for a defined
population (Deloitte)
• Organization of health care providers that agrees
to be accountable for the quality, cost and overall
care of Medicare beneficiaries who are assigned
to it (CMS)
Concept is currently part of federal reform and state
response to develop a true community health
system that improves the health of the population
it serves while controlling cost.
Commercial payers are watching closely.
Accountable Care Organizations
Each ACO will become increasingly accountable for
• Delivery and coordination of all medical care
needed by the population of patients enrolled
• Quality of care
• Reducing cost
• Practical shift of responsibility for outcomes of all
care and transition of financial risk to providers
• Medicare, with expansion to Medicaid, and state
risk pool populations
• Commercial sector poised to follow
• At this time there is no standard, few rules,
multiple and varied “experiments”
Accountable Care Organizations
PAC Episode Bundling
Acute Care Episode with PAC Bundling
Primary
Care
Physician
s
Specialty
Care
Physician
s
Outpatien
t Hospital
Care and
ASCs
Inpatient
Hospital
Acute
Care
Acute Care Bundling
Medical Home
Long
Term
Acute
Hospital
Care
Inpatient
Rehab
Hospital
Care
Skilled
Nursing
Facility
Care
Home
Health
Care
New Responsibilities of Accountable Care
Accountable Care Risk Outlook
Performance Risk
Utilization Risk
Cost of Care
Bundled Pricing
•Episodic Efficiency
•Readmission Reduction
•Care Standardization
Quality of Care
Pay-for-Performance
•Process Reliability
•Clinical Quality
•Patient Experience
Volume of Care
Shared Savings
•Chronic Care Management
•Care Substitution
•Disease Prevention
Accountable Care Organizations
4 Areas of Focus
• Physician Integration
• Shared sense of purpose
• Be selective
• Clinical Transformation
• Longitudinal care
• Focused approach
• Standardize
• Engage patient
• Payment Transformation
• Risk of asynchrony
• Self-insured employees
• Information powered care
• Contemporaneous provider specific data
• Business intelligence
• Knowledge transfer
How Could ACOs Control Cost?
• Better capacity planning
• Appropriate work force planning
• Improved quality
• Less need for costly hospital care
• Better health for patients
• Reduced waste
• Duplication of care
• More efficient delivery systems
• Reduction in unnecessary resource use
• Better coordination of care
10
Payment Reform with ACOs
• Comprehensive Global Compensation
• Full or partial capitation
• Could be condition specific, procedure related
or a global capitation rate
• Selected Fee-for-Service could be used, but
with results targets linked to bonuses and
penalties
• Financial risk related to full capitation
• Practice risk
• Excessive utilization of resources
• Unnecessary testing, consultations, treatment
• Avoidable complications
• Use of more expensive devices, supplies
Implications for Practice
• Shift from volume to value-quantity to quality
• Goal is appropriate use of resources
and best outcomes at lowest cost
• Timely (current, rapidly accessible) practice
management data will be needed, even at
point of care, to make sure that unnecessary
testing is avoided and that best practices
(standardized protocols) are followed and
quality is assured
• Practice analytics,proof of performance will
need to drive contracting
Accountable Care Organizations
Required Organizational Competencies
• Engaged and informed leadership
• Manage the full continuum of care, including medical
home
• Collaborative relationships with other providers
• I.T. infrastructure for population management and care
coordination
• Infrastructure for monitoring, managing and reporting
quality
• Ability to receive and distribute payments/savings
• Financial integration with commercial and public
payers
• Resources for patient education and support
• Ability to manage financial risk
Accountable Care Organization
Recognize the emphasis on population/
public health and the multiple
interdependencies that will need to work in
concert
• Enhance scope, breadth of primary care services
• Community health services
• State-health services and hospital associations
• Local/regional physician practices
• Transitional care facilities – LTCH, Rehabilitation
Accountable Care Organization
Challenges to Implementation for Providers
• Physician buy-in
• Consumer response
• Payments and incentives
• Risk management infrastructure
Challenges for Government
• CMS budget
• Consolidation of disparate stakeholders (CMS, CMI,
IPAB, CDC, NIH)
• FTC regulatory restrictions
• Expedite pilot implementation and transport
Accountable Care Organizations
Health care industry response
Majority are waiting on a mandate, electing to
conduct business as usual
• HMO Redux – failed in 1990s
• Repeal/defunding will stop implementation
• Strong hospital revenues and margins
• Lack requisites for population health
management
• Significant change in business model with
risks
Political Forecast
• November congressional elections
• Repeal unlikely but will law change over time
• Timelines likely to slip-political gridlock
• Funding will be challenged
• Is deficit/debt reduction next on agenda?
Medicare is a big target
• Huge challenges for states
• Who benefits from failure?
• Market based approach
• Single payer approach
Low
Integration
High
Integration
Potential ACO
Organizations
Independent
Provider
Association
PhysicianHospital
Organization
MultiSpecialty
Group
Integrated
Health
System
Organizations fall
along a spectrum
with different risk
profiles requiring
different set up
AMGA Readiness Assessment Survey
• Provides a useful tool to determine level of internal
capabilities needed to operate an effective ACO
• Assessment categories
• Organization is a physician led multispecialty group
practice
or other physician led organized system of care
• Willing to accountable for clinical results and cost
efficiency
• Primary care core supported by the appropriate
specialty
and care teams
• IT infrastructure supports efficient and effective practice
and also tracks and reports on cost and quality of care
• Capable of coordinating care across all care settings
Accountable Care Organizations
Institution meets criteria-AMGA self assessment 4-5
• Proceed with gap analysis, address deficiencies and
implementation challenges
• Influence payment models, quality and financial metrics
by joining the ACO Implementation Collaborative1/2011
Institutions not quite there-AMGA self assessment1-3
• Increase primary care physician/A.H. recruitment
• Promote employed physicians to adopt a clinical
integrated network
• Invest in I.T. – connectivity, contemporaneous data
• May necessitate revising institutional vision, strategy,
provider reimbursement, re-allocation of capital
• Join the ACO Development Collaborative 10/1/2010
Mayo Clinic System
A network for accountable care
• Physicians & Scientists 800
• Physicians & Scientists
• Total Employees
• Total Employees
7,300
>4600
> 57,000
• Hospitals
0
• Hospitals
• Sites
2
• Sites
82
• Revenue
$7,221m
• Revenue
$381m
Mayo Health System
•800 physicians
•17 hospitals
•70 sites
22
A New Model for Healthcare
• Past
• Provider Centered
• Price Driven
• Knowledge Disconnect
• Slow Innovation
• Reactive, episodic care
• Paper based
• Outcomes ignored
• Overall Cost Increase
• Present and Future
• Patient Centered (integrated)
• Driven by Value (quality/cost)
• Knowledge Intensive
• Rapid Innovation
• Health Oriented Involvement
• Accountable
• Overall Cost Stable or Decrease
Robert Waller M.D. 1986
Next steps to support the development of Mayo
Clinic’s ACO strategy
• ACO competencies assessment to identify capability gaps
and determine sourcing strategyAMGA;Deloitte;Advisory group
• Geographic analysis to understand opportunities and
develop high-level strategy in each of Mayo’s geographic
markets
• Risk analysis to assess potential risks and align with
Mayo’s risk profile
• Scenario analysis to drive strategic flexibility to enable
Mayo to adapt to ACO regulations as they are published
and revised
• Population analysis to assess potential ACO populations for
Mayo
Readiness Survey Results
Mayo Clinic in the Midwest scores well in each
of the five defined AMGA areas:
• Physician leadership
• Willingness to accept accountability
• Good primary care base supported by specialty
care teams
• IT infrastructure for appropriate reporting
• Capabilities of complete care coordination
Regional Highlights – Midwest
• Full range of services are already in place
including robust primary care base
• Already providing significant primary care
and Medicare services in our service areas
• Strong perception that we are high quality
(but high cost)
• Mayo Clinic Health System goals include
support
of new payment models and integration of Mayo
Clinic in Rochester and Mayo Clinic Health
System
• Minnesota state support of health care reform
Levels of Care
Mayo Clinic’s Position
Core of our contracting message for negotiations
Rationale for good reimbursement
Complex
Care
Potential to be impacted by restrictions on patient
choice stemming from the emphasis on population
management and risk share arrangements
between other providers and payers
Services under greatest price pressure
from economy and reform
Quality metrics not yet defined
Intermediate
Care
Considered “commodity” services by payers –
main differentiator is price
Services most prone to tiering in benefit plan designs
Payers’ specialty networks focused here
Value message an opportunity
Focus of reform and expanded coverage
Population
Health
Management
Has not been key in our contracting
message – highly price sensitive
Focus of quality transparency.
Success depends on well developed
community health models –
infrastructure and data needed
to grow here
Mayo’s
Referral Practice
Referral
Practice
Complex
Care
Intermediate
Care
Contracts
Primary
Care
ACOs, insurers,
& others
We All Have to Change
Providers
Patients
• Improve effectiveness
and efficiency
• Better integration
• Stress treatment adherence
and prevention
• Prevention/healthier lifestyles
• Chronic disease adherence
• Fair financial stake
Payers/employers
• Encourage prevention,
compliance and health
• Value-based benefit design
• Change payment to reward
providers who deliver value
Government
• Independent “health board”
to ensure transparency,
standardize billing and drive pay
for value
• Financial help to those in need
• Support research and education
John Kotter’s 5 Degrees of Change
revised for health care
• Little Change: Providing quality service with current system
• Continuous Improvement: Constant incremental change
• Non- incremental change within the business: Regular
introduction of new clinical services, technology and service
amenities with significant system improvements
• Whole new businesses: In addition to above, inventing ways
to redefine health care services
• Whole new business models: In addition to the above new
economic and organizational models
“Winning now means handling steps 1-3 well. Sustaining
success in the new economy means handling all 5 steps well.”
John Kotter: “Leading Change” lecture 12/10/02