Transcript Powering Quality Improvement via Value Based Payments: Silver Linings in Healthcare Reform Joanne Conroy, MD Chief Health Care Officer, AAMC Carolyn Simpkins, MD, PhD Clinical Director, BMJ.

Powering Quality
Improvement via Value
Based Payments: Silver
Linings in Healthcare
Reform
Joanne Conroy, MD
Chief Health Care Officer, AAMC
Carolyn Simpkins, MD, PhD
Clinical Director, BMJ
Disclosures
Disclosure of Conflicts of Interest for Joanne
Conroy and Carolyn Simpkins:
2
•
We have no commercial or personal
conflicts to disclose.
•
This presentation has not received financial
support from any commercial organization.
•
This program has received in-kind support
from our employers the Association of
American Medical Colleges and BMJ
Learning.
What We Will Cover
3
•
The Patient Protection and Affordable Care Act
(ACA) was enacted….what happened?
•
Why do other countries care?
•
What are we learning?
•
Some of our baggage
•
Path forward
What We Will Cover
4
•
The Patient Protection and Affordable Care Act
(ACA) was enacted….what happened?
•
Why do other countries care?
•
What are we learning?
•
Some of our baggage
•
Path forward
The ACA: Improving Healthcare Quality,
Efficiency, and Accountability
•
Beyond insurance reforms, the ACA begins to realign
the healthcare system for long-term changes in
healthcare quality.
•
There will be broad changes in Medicare and Medicaid
that empower both the Secretary of Health and Human
Services (HHS) and state Medicaid programs to test
new models of payment and service delivery.
•
The ACA aims to:
1)
2)
3)
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encourage changes to the healthcare system by creating
clinically integrated teams;
publically measure the quality for all providers;
target preventable hospital admissions and readmissions.
The ACA: Improving Healthcare Quality,
Efficiency, and Accountability
• Develop a National Quality Strategy.
• Build on the Health Information Technology for
Economic and Clinical Health Act to leverage EMRs.
• Create the Patient Centered Outcomes Research
Institute (PCORI) to promote the type of research
essential to identifying the most appropriate and efficient
means of delivering healthcare.
• The ACA offsets these expenditures through curbs on
Medicare and Medicaid spending, new taxes on high
cost plans, and tax shelters used most heavily by
affluent families.
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ACA Implementation (What Happened?): Bundled
Payment for Care Improvement (BPCI)
7
•
Purpose: breakdown payment silos and reward
providers for improving coordination, quality and
efficiency of care.
•
HHS Secretary to develop five year voluntary pilot by
2013.
•
CMMI unveiled its Bundled Payments for Care
Improvement Initiative (BCPI) in 2011; 48 conditions
(bundles) that represent 70% of spending.
•
Tasks: select one or more of the above episodes,
identify variation over time and across care sites, map
pathways of care and physician practice patterns,
adhere to target price.
ACA Implementation (What Happened?):
Bundled Payment for Care Improvement
(BPCI)
Lessons Learned from AAMC facilitator-convener experience:
• In 2012, AAMC partnered with 10 teaching hospitals who became the
academic medical center(AMC) pioneers of bundled payment in BPCI.
• Our early observations were:
• The AMC innately understood which bundles to pursue, even without
national data. They knew where their clinical expertise was located and
optimal outcomes occurred.
• Having access to CMS data that provided information across the
continuum of care sites and over time served to reinforce their clinical,
operational, and financial judgment.
• Analyzing the data allowed them to make decisions about program
participation, condition selection, episode duration, and key partner
identification.
• The data revealed essential details about the association of chronic conditions
with higher costs, higher readmit rates, patterns of utilization, and the resulting
challenges inherent in bundling these conditions, regardless of episode
duration.
• Scientific literature on evidence-based practices in care redesign over a 90 day
continuum is limited.
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BPCI Themes
• Health systems are:





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Deploying many interventions during hospitalization
and immediate post-discharge periods but far fewer
are connecting acute, primary care, and post-acute
settings.
Developing and implementing patient level risk
assessment tools across the continuum.
Using standardized pathways and processes of care.
Hiring care coordinators, disease managers, and
others to facilitate out-of-hospital interventions for
bundled patients.
Emphasizing organization-wide staff education and
re-training on new care processes.
Primary Reasons for Not Pursuing
Bundled Payments
Lack of clinical readiness and clinical
leadership, minimal service line
development
Necessary relationships with providers
and post-acute partners still evolving
Organizational infrastructure to manage
bundled payments still being developed
Health system occupied with other major
alternative payment or innovation
program, restructuring, acquisitions, etc.
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Utilization Trends at 30 Days Post
Discharge from 10 Teaching Hospitals
30 day aggregate data in the 10 AAMC participating teaching hospitals
showed that:
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There were 14,283 eligible cases in 9 condition bundles; these
accounted for 11% of all Medicare admits.
•
The readmit rate overall was 18%. Two-thirds of these admissions
returned to the index admission hospital and one-third to other
hospitals.
•
The Emergency Department (ED) rate was 9%; yet, only 52% of
cases had an office visit within 30 days of the index admission,
ranging from 42% for joint replacement to 50% in CHF.
•
The readmission cost, on average, was 5% of the total episode
allowed amount overall. It accounted for 17% for CHF episodes but
only 2% for joint replacements.
•
Post acute care (PAC) cost accounted for about 24% of the total
episode allowed amount overall but 38% for CHF and joints.
Utilization Trends at 90 Days Post
Discharge from 10 Teaching Hospitals
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The readmit rate overall was 35% (compared with 18%
at 30 days). Two-thirds of these admissions returned to
the index admission hospital and one-third to other
hospitals.
•
The ED rate was 18%. Only 50% of cases had an office
visit within 30 days of the index stay.
•
The readmission cost was only 9% of the total episode
allowed amount overall. It accounted for 30% of CHF
episodes but only 3.5% for joint replacements.
•
PAC cost accounted for about 35% of the total episode
allowed amount overall but 50% of all costs for CHF
and joints.
Detailed Considerations for BPCI Success
Leadership & Operational Team
Clinical Approach

Engage leadership at multiple levels


Assess physician champions and
competing priorities
Risk stratify patients and track bundled
payment patients throughout the episode

Implement clinical pathways across
continuum and assure effective discharge
planning

Ensure a mix of clinical, legal, and finance
staff participate in the management and
implementation of bundle(s)

Dedicated operational team to manage
the bundled payment initiative

Understand the applications outside of the
immediate bundle that allows leveraging
the lessons and investments
Assure the ability to track quality
indicators and patient outcomes across an
array of services and settings

Identify required measures

Assess current reporting capabilities and
gaps relative to new requirements

Determine partners’ quality reporting
capabilities

Be able to deliver, or contract for,
the entire bundle of services to be
rendered

Understand risk exposure

Manage medical complications and
go at risk for readmissions

Manage care transitions with discipline

Monitor patient clinical status and coordinate
medication management across the acute
and post-acute settings

Have the necessary financial
systems to administer payment
across multiple entities

Utilize interoperable health IT and decision
support systems

Examine cost accounting and payer
data to identify opportunities for
savings and revenue protection

Assess capabilities of financial
system (claims warehouses,
payment distribution tools, data
analytics, utilization reporting tools,
etc). Systems must integrate current
fee-for-service claims systems and
determine: (1) when episodes are
triggered, (2) which claims are part
of the bundle and which are not,
and (3) how much to reimburse
based on patient-specific risk
factors.
Quality Measurement

Financial Considerations
Patient Engagement

Identify target population and current
population risk metrics

Assess processes and systems to identify
patients proactively and a process for
concurrent identification

Develop targeted strategies for engagement
(e.g., communication plans, education
materials, health IT tools)

Consider patient portals for communication
and creating a patient advisory committee
Adapted from Center for Post-acute Studies (2009). Bundling Payment for Post-acute Care: Building Blocks and Policy
Options. Washington, DC: National Rehabilitation Hospital.
http://www.post-acute.org/bundling/Bundling%20Report%20V15.pdf
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The Most Inspiring BPCI Experiences
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The health systems/teaching hospitals who joined BPCI could have
continued to engage in fee-for-service payments in their markets
but decided to pursue learning population health as an
organizational goal.
•
They engaged in a candid assessment of organizational strengths
and weaknesses.
•
They encouraged growth in their physician leaders and the new
partnerships between clinical and operational teams.
•
They demonstrated a strong commitment to knowing real costs.
•
They paid attention to increasing the strength of their analytics to
succeed in new payment environments.
•
They committed to understanding and partnering with PAC
providers.
•
They recognized that their future in fee-for-service payment is
limited, and now with national expansion of BPCI, they are
expanding their commitment to new bundles.
Lessons from the Front Line: University of
California San Francisco
 One of the nation’s top 10
hospitals by US News &
World Report
 38,000 admissions
 770,000 patient visits
 8,000 employees
 $1.6B in revenue
 690 beds
 NIH Research funding:
$521.3 million in total
through contracts and grants
(2nd highest nationally)
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Lessons from the Front Line:
Duke University Medical Center
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
One of the nation’s top 10
hospitals by US News &
World Reports

38,200 admissions

996,000 patient visits

9,963 employees

$2.6B in revenue (for Duke
Health)

957 beds

NIH Research funding:
$295 million
Video
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A leadership committed to innovation
…at all levels of the organization
…executive to frontline clinical workers
An engaged frontline clinical staff taking ownership of
initiatives and generating ideas for improvement is the
most powerful force for ongoing change
What motivates physicians to get involved and
become champions?
… financial survival... competition with their peers
But they are most driven by their fundamental
commitment to their patients: to ensure they are
delivering the best possible care to their patients
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Environmental Challenges
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RAND Estimates 21% to 47% of Health
Care Spending is Waste
JAMA. 2012;307(14):1513-1516. doi:10.1001/jama.2012.362
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Our Challenge
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Over 75% of spending in the Medicare program is
associated with patients under treatment for five or
more medical conditions and virtually all the growth in
Medicare spending since 1987 has come from patients
with multiple chronic conditions.
•
Despite these fiscal facts, traditional, fee-for-service
Medicare does not provide coordinated care for
chronically ill patients. Such care requires “team-based
care” that includes transitional care, comprehensive
medication management, health coaching, and a care
coordinator among other elements.
Targeting Interventions to
Population
10% of Population
52% of Payments
High
Risk
30% of Population
39% of Payments
Rising
Risk
Usual
Risk
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60% of Population
9% of Payments
Unintended Consequences of the
ACA
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Market moving faster than the legislation.
•
Physician engagement lags.
•
Fight over Medicaid expansion.
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Development of narrow networks within the
public and private exchanges.
•
How employers are cutting costs: continued
movement to defined contribution from defined
benefit in health plans.
Market Moving Faster than Legislation:
BPCI
In a KPMG poll of 190 healthcare providers, largely
represented by large physician groups, hospitals and
health systems …
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Market Moving Faster than Legislation:
BPCI
KPMG report: Where do you see the largest challenge of
bundled payments?
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Physician Engagement Lags
26
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Physician employment does not automatically
lead to physician integration, a new American
College of Physician Executives survey found.
•
Healthcare reform is meant to make hospitals
and physician offices more efficient, but that is
proving to have its costs.
 Other factors, such as increased workloads,
electronic medical records and physicians'
apprehension to work for hospitals, add to
the underlying stress.
“Fight” Over Medicaid Expansion
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Post ACA Bright Spots
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Centers for Medicare & Medicaid
Innovation (What Happened?): Where
Innovation is Happening
Statewide
Local
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Patient Centered Medical Home (PCMH) Adoption
as Measured by NCQA Certification (What
Happened?)
Percent of Primary Care Physicians NCQA Certified, 2011
MN
CA
OK
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NC
University of Pittsburgh Medical
Center
Characteristic
Cost
Management/
Quality of
Care
Features
• UPMC Health Plan contracts with primary care providers using a PCMH/shared savings
arrangement. Specialty physicians are incentivized to develop high quality, lower cost
services as PCPs will gravitate toward specialists who are low cost and high-quality.
UPMC Primary Care Practices:
Supported by the UPMC Health Plan
Referrals to High-Performing
Specialists
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• Specialists are developing clinical pathways and other
tools to improve quality and lower costs.
• Specialists are incentivized by referrals; primary care
physicians incentivized through shared savings
targets.
• Both primary care physicians and health plan benefit
financially.
Consumers Open to an Expanded Role for
Nurse Practitioners/Physician Assistants
No preference
Prefer MD
Prefer
NP/PA
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Copyrighted and published by Project HOPE/Health Affairs as Michael J. Dill, Stacie Pankow, Clese
Erikson, and Scott Shipman. “Survey Shows Consumers Open to A Greater Role for Physician Assistants
And Nurse Practitioners.” Health Affairs, 32, no.6 (2013): 1135-1142. The published article is archived
and available online at www.healthaffairs.org".
What We Will Cover
33
•
The Patient Protection and Affordable Care Act
(ACA) was enacted….what happened?
•
Why should other countries care?
•
What are we learning?
•
Some of our baggage
•
Path forward
Why Should Other Countries Care?
34
•
Most countries, while committed to comprehensive
access to care still struggle with cost.
•
A number of countries have also experimented with
bundled payments, most notably the Netherlands and
Germany.
•
We are finally learning from others that costs matter.
•
No measureable commitment to population heath but
we are all finally talking about it.
•
We may together develop a strategy that is scalable
across countries.
German Health Care System
Challenges
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High and rising costs.
•
Overcapacity and low reimbursement levels
leading to excessive utilization.
 High service utilization and costs are not
producing better health outcomes.
•
Large variation in quality across providers .
 No systematic measurement of outcomes
and costs.
•
Fragmentation of services across inpatient and
outpatient care.
Netherlands Bundled Payments
•
A one-year evaluation found that almost all providers
reported improved care delivery processes, including greater
coordination and adherence to protocols.
•
Transparency increased as providers faced stricter reporting
requirements, though outdated information technology
systems meant this was accompanied by a greater
administrative burden.
•
Prices for the care bundle varied dramatically and some
subcontracted providers reported that care groups had
distortive market power.
 In particular, questions were raised about the potential
conflict of interest for general practitioners, since they are
both commissioning and providing care.
de Bakker DH, et al, “Early Results From Adoption of Bundled Payment for Diabetes Care in the
Netherlands Show Improvement in Care Coordination,” Health Affairs, February 2012 31(2):426-33.
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International Bundled Payment
Systems
 Belgium IPPS ( 1995)
 NHS Payment by Results (2003)
 Italy IPPS (1995)
 Japan Outpatient Dialysis Bundle (2006)
 Sweden IPPS (1992)
 Taiwan Hospital Case Payment ( 1997)
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US Bundling History
 Geisinger ProvenCare ( 2006)
 Medicare CABG bundles (1991-1996)
 Medicare Cataract Alternative Payment (1991-
1996)
 Michigan Arthroscopic Surgery Blue Cross/Blue
Shield ( 1987)
 Medicare ACE Demo ( 2009-2012)
 Medicare Inpatient Rehab, Home Health, Long
Term Acute Care Prospective Payment
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What We Will Cover
39
•
The Patient Protection and Affordable Care Act
(ACA) was enacted….what happened?
•
Why do other countries care?
•
What are we learning?
•
Some of our baggage
•
Path forward
What are We Learning?
40
•
Americans are paying increasing amounts out
of pocket for healthcare.
•
Some systems are early adopters.
•
Bundled payments and ACOs are our first
steps toward accountability for value.
•
The ACA, as of yet, did not drive as many
uninsured into the insurance market as we had
hoped.
•
There are implications for the workforce.
41
Patient Preferences
42
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Ways Companies Reduce Costs
1. Health improvement efforts (wellness/disease management,
free preventive care, etc.)
2. Increased employee financial responsibility (High Deductible
Health Plans (HDHP), higher copays, reduced subsidies for
retiree/dependent coverage, etc.)
3. Plan design (consumer-directed health plans or utilization
management to detect unnecessary care)
4. Network management (narrower networks, direct
hospital/physician contracting, accountable care
organizations, etc.)
5. Defined contribution (provision of predetermined amount of
funding for employee use toward health plan purchased)
6. Reduced benefits/plan value (cuts to covered benefits)
7. Limit/control hours worked (reduce number of full-time
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equivalent employees)
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47
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Estimate Through 2019, Given Implementation
of Possible Approaches to Spending Reform.
Hussey PS et al. N Engl J Med 2009;361:2109-2111.
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Bundled Payments vs Capitation
Debate
50
•
Bundled payments focus the physician on the
appropriate management of the patient yet
maintain essential role of the
insurer/organization to manage risk.
•
However, if we focus on just performing more
“bundles” we are not dealing with the issue of
unnecessary care. Is the bundle a newer
version of the DRG?
•
Capitation (global payments) would make
unnecessary care a cost rather than a profit
center.
Bundled Payments vs Capitation
Debate
51
•
Current bundle selection is weighted more
towards acute conditions rather than chronic
care.
•
In the current bundled payment model, the
primary care physician is less engaged.
•
Capitation works best with closed networks.
How do you manage patient desire to move
outside of closed networks for certain services?
Advantages and Disadvantages of
Payment Currencies
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Bundled Payments vs ACOs
• Accountable Care Organizations (ACOs) and
bundled payments both require care redesign
and the ability to adapt to a new payment
model.
 HOWEVER, organizations need to consider
strategically which model to undertake and
with which payer.
• ACOs mandate population health management
with populations of patients typically attributed
through primary care visits.
• Bundles offer the opportunity for focused care
redesign on a particular condition or set of
conditions over time.
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Bundled Payments vs ACOs
54
•
ACOs are voluntary, and thus can’t be
expanded nationwide.
•
ACOs are not appropriate for many (rural)
areas of the country.
•
Bundled payments are easier to implement,
require less upfront investment.
•
ACOs take time to realize returns on
investment.
•
Bundled payments yield immediate price
savings.
Bundling Participation Benefits Health
Systems:
55
•
Choice of payment (prospective vs. retrospective).
•
Choice of episode length.
•
Choice of episodes with option to add or delete quarterly.
•
Episode families within clinical conditions that recognized patterns
of clinical comorbidities.
•
Inclusion of clinically related conditions but exclusion of cancer and
trauma.
•
Outlier protection and flexibility in risk tracks by episode.
•
The model is not shared savings; once a 2-3% discount is paid, all
remaining savings are returned to the provider.
•
Payer is guaranteed savings through the discount, which allows for
experimentation with one or multiple bundles.
Bundling Participation Benefits
for Physicians
56
•
Demonstrate clinical quality.
•
Participate in the decision of evidence-based
clinical initiatives and care paths.
•
Enhance patient experience across the
continuum.
•
Benefit through the use of integrated
infrastructure.
•
Participate in gain-sharing arrangements that
align the institution and practitioner.
Bundling Participation Benefits
for Patients
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Better value for their health care dollar.
•
More coordinated care with enhanced
physician outreach.
•
Improved outcomes.
•
Better information to support choice.
•
Should be seamless to the patient.
Some of our “Baggage”
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Vast Majority of Those Who Need
Care Can Get It
85%
Thinking about the times you needed medical care in the last
12 months, how often were you able to get it? (June 2013)
12%
3%
Always
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Sometimes
Never
But That Leaves 15% or More Who
Can’t
21%
19%
21%
19%
19%
15%
Dec 2010
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June 2011
Dec 2011
June 2012
Dec 2011
June 2013
Access to Care Depends on Type of
Insurance Coverage (June 2013)
Sometimes
Did not have
insurance
Never
Medicaid
Medicare only
Private insurance
Medicare + Medigap
0%
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10%
20%
30%
40%
50%
For Those Who Cannot Get Care, Cost is
the Most Common Culprit (June 2013)
What best describes why you were unable to obtain medical care?
56%
Could not afford
Could not get an appt soon enough
17%
Could not find provider
17%
4%
Could not get to provider's office
6%
Other
0%
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10%
20%
30%
40%
50%
60%
New Health Insurance Marketplaces
Enrolling Few Uninsured Americans, Two
Surveys Find
•
Only one in 10 uninsured persons who qualify for private
plans through the new marketplaces enrolled as of last
month.
•
23% of uninsured U.S. residents said they were not aware of
the health insurance exchanges.
•
The study found that low-income and uninsured adults were
less likely to have heard about the exchanges than their
respective peers.
•
3.3 million people have signed up for private insurance plans
through the Affordable Care Act's exchanges.
•
Another 6 million people have signed up for Medicaid.
Amy Goldstein The Washington Post, March 6, 2014
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Haven’t We Been Here Before?
64
What We Will Cover
65
•
The Patient Protection and Affordable Care Act
(ACA) was enacted….what happened?
•
Why do other countries care?
•
What are we learning?
•
Some of our baggage
•
Path forward
The Path Forward
The President’s budget summary:
1) Bundling is here to stay for a while. It will
extend across post-acute care, to our health
center’s inpatient rehab facilities and skilled
nursing facilities. The bundles will get longer
and wider.
2) Primary care training expansion and paying for
ambulatory teaching.
3) Value Based Purchasing for all levels and
types of providers.
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Market changes
67
•
Healthcare of the future will be system based.
•
Will require strong and aligned governance,
organization, and management systems.
•
Growth and complexity of these systems requires
enhanced profile for physician leaders and the
evolution of the practice structures.
•
Transparency in quality, performance, and financial
information at all levels is central to high achievement.
•
Competitive viability and long term mission
sustainability will require a radically restructured
operating model for cost and quality performance.
•
Population health is here.
Conclusion
68
•
The ACA and CMMI has created real innovation.
•
Better value will be achieved through a blend of market
forces, government regulation, and intense
experimentation.
•
The reality that we have to manage the cost of care is
finally getting through!
•
Reforms are still incremental instead of fundamental.
•
The confluence of insurance reform, employers’ shift
from defined health insurance benefit to defined
contribution, price transparency and an emerging retail
market will make health care very interesting over the
next few years.
The Opportunities
“Being challenged in life is
inevitable, being defeated is
optional.”
-- Roger Crawford
“A healthy attitude is
contagious but don't wait to
catch it from others. Be a
carrier.”
--Tom Stoppard
“If you dislike change, you’re
going to dislike irrelevance
even more”
-- Gen. Eric Shinseki
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Ways to Stay Informed on Impact
of ACA
http://theincidentaleconomist.com/
http://healthaffairs.org/blog/
http://wingofzock.org/
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