acos and other partnerships: what it takes to make them successful

ACOs and Other Partnerships: What it Takes to Make Them SuccessfulMike Meyer, President October 19, 2011 V6

Meyer Consulting5900 N. Granite Reef RoadSuite 100Scottsdale, AZ 85250602/321.0753www.meyerconsultinginc.com

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Results from a nationwide survey of hospitals,

health plans and multi-specialty medical groups

regarding trends in contracting and partnerships

HOW IMPORTANT ARE ACOS?

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Meyer Consulting Proprietary and Confidential

What percentage of cost-savings do you believe can be taken out of the healthcare system in the next three years without substantially impacting quality?

0 10 20 30 40 50 60 70 80

Average = 15%

3


In preparing your organization for health care reform, which of these partnerships will be the most essential? Why?

Hospital and Physician Partner-shipsHospital, Physician and Health Plan PartnershipsProvider and Major Corporate Part-nershipsProvider, Corporate and Health Plan Partnerships

55%

23%18%4%

4


What types of alternative contracting approaches are you considering?

Accou

ntab

le C

are

Organ

izatio

n

Pay

for P

erfo

rman

ce

Bundl

ed P

aym

ents

Case

Rates

Conta

ct C

apita

tion

0%

20%

40%

60%

80%

5


In preparing your organization for health care reform, which of these partnerships will be the most essential? Why?

“Hospital and physician partnerships are obvious…hospitals need the

physicians’ cooperation to drive more effective and efficient outcomes.

The health plan partnership will need to evolve to align financial

incentives equitably and appropriately. It will be a challenge to change

from the current adversarial partnership of necessity to one that is

collaborative.” – Health Plan Respondent

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Culture, Leadership and Organization will Define ACO Partnership Success

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Paradigm Shift

Old Paradigm

Reimbursement

Market Share Quality –

Patient Centric

New Paradigm Quality – Patient and

Population Centric Improving

Patient/Provider satisfaction

Bending the Cost Curve

Market Share Aligned Incentives

(Clinical, Financial)

8


The ACO / Partnership Circle

Health Plan• Culture• Mission• Vision

Hospital• Culture• Mission• Vision

Physicians• Culture• Mission• Vision

Leadership

Leadership

Leadership

ACO• Culture• Mission• Vision•

Leadership• Execution

9


The ACO / Partnership Circle

Health Plan• Culture• Mission• Vision

Hospital• Culture• Mission• Vision

Physicians• Culture• Mission• Vision

Leadership

Leadership

LeadershipACO• Culture• Mission• Vision•

Leadership• Execution

Major Corporation• Culture• Mission• Vision

Leadership

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Culture Matters11


Culture Defined

Basically, “organizational culture” is the defining characteristics of an organization.

Culture is comprised of the values, norms, mission and vision of organization members and their behaviors.

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Examples of Types of Health Care Organization Cultures

Physician-Centric Academic Technology-Centric Intrapreneurial Tolerance for Risk

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Continuous Process Improvement

Not-For-Profit For-Profit System

Leadership Matters14


Characteristics Necessary in ACO Leaders

Ability to align financial and quality incentives Commitment to ACO Mission and Vision Physician-centric Innovator Capable of integrating teams Technology-centric Understanding of quality Entrepreneurial Analytical Someone who gets things done

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Each partner must have a leader who other partners see as competent, fair and committed.

If you don’t have that the ACO partnership WILL FAIL.

Characteristics Necessary in ACO Leaders

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How to Identify ACO Leaders

Finding leaders (Board and Management) with years of ACO experience is difficult.

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How to Identify ACO Leaders

EXTERNAL – In organizations that represent partnerships between physicians, hospitals and health plans Integrated Delivery Systems Sophisticated medical groups Hospitals

INTERNAL - Within each partner organization These leaders bring first-hand

understanding of the desired culture and local market dynamics

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Health plans Consultants Military


Skills Needed in ACO Leaders

Skill Expert Intermediate

Optional

Medical/Care Management X

Analytics X

Information Technology X

Finance X

Actuarial X

Legal X

Network Development/Management

X

Business Development/Marketing

X

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Organization Matters20


Models for ACO Organization Structure

Embedded model Separate company by one or more

of the partners Separate ACO/corporation formed

by the partners

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Functions Under the ACO

ACO structure must include authority over certain functions to ensure success

Necessary Functions: Medical/Care Management Analytics/IT Finance and Actuarial Business Development/Marketing Network Development/Management

Optional/Shared Functions: Medical Group Management Legal

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ACO / Partnership Board

How should Board Members be selected; Board Chair?

Is there an agreed upon Mission / Vision Statement?

Does the Board have Fiduciary Responsibility?

Are there Position Descriptions for Board Chair and Members?

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ACO / Partnership Teams

Who are the team members responsible for planning and execution? Is there a CEO or “Leader” designated?

Do team members have time, resources and authority to execute successfully?

How are they selected? What worked and did not work?

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ACO Resources and Compliance

Have sufficient resources been budgeted?

Is venture in compliance with FTC, DOJ and HHS requirements? “Meaningful Clinical Integration”

25

Examples26


Co-Management Organizational and Leadership Model

Health System

SERVICE LINE 1

SERVICE LINE 2

SERVICE LINEAll other functions not specified in the MSA

ACO / Partnership Legal Structure

Operating Agreement

Physician Group(s)

Shareholders

Management Services Agreement

Board Chair

Clinical Management

Financial Management

Operational Management

EVP/COOEVP/CMO

Intra Company Funding

Commitment

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CalPERS ACO Collaboration Structure

SVP Managed Care

HOSPITAL

Chief Operating

Officer, MG

VP, ACO and Network

Management, BSC VP, Managed Care

HOSPITAL

Core Team

ACO Director, BSC

Senior Director,

Managed Care, HOSPITALChief Medical Services

Officer, MG

Executive Pilot Board

Drivers

Data Analytics Resources

Program/Project Resources

Clinical/ProjectResources

Director of Case Management,

HOSPITAL

Director, Case Management/

Medical Review, MG

Director Integrated Health, MG

Director of Clinical Support, MG

Regional Manager Health Resource

Management, MG

Director, Clinical Pharmacy

Programs, BSC

Director Medical Informatics, BSC

Actuarial Analyst,BSC

Senior Business Analyst, BSC

Manager Business Partner Programs,

MG

Senior Program Manager, BSC

Clinical Pharmacy Programs

Coordinator, BSC

Chairman of Hospital Medicine, ,

HOSPITAL

VP, Medical Management and

Palliative Care,HOSPITAL

VP & Chief Nurse Executive, HOSPITAL

Senior Director, Physician &

Ambulatory IT Strategy, HOSPITAL

Chief Information Officers, MG

Director, Regional Services, MG

Manager, Financial

Analysis, MG

Manager Member Health

Improvement, MG

Manager, Clinical Analysis and Reporting,

MG

Case Manager, MG

Network Management

Consultant, MG

Health Educator, RNMG

CCR ManagerMG

CCR Supervisor

MG

Clinical Pharmacy Coordinator,MG

Actuarial Analyst, BSC

Director Clinical Analytics, MG

Project Manager, MG

Project Manager, MG

Program Owners

Director of Case

Management, HOSPITAL

Product Director, BSC

VP, Medical Group Services,

MG

Manager, Managed Care

Operations, HOSPITAL

Chief Operating Officer, BSC

Chief Executive

Officer MG

Network Management, BSC


CCSF ACO Collaboration Structure

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MG Director, Ambulatory Services Emergency Department, RN Manager

BSC: Medical DirectorDirector Medical InformaticsActuarial Analyst

ER Utilization Mgmt Sub Group

HOSPTIAL: Director, Managed CareDirector of Emergency Nursing Vice President Nursing/CNE

MG: Manager, Prior Authorization – Health Resource Management

Integrated Care Transition Sub Group

Program Management: Program Manager - BSC Program Manager MG Manager, Business Partner Programs

HOSPITAL Project Manager

Avoidable Day Complex Case MgmtDischarge Planning &

Readmissions Reductions

Project Driver:Director of Clinical Services and Quality

Project Manager:

MG: Manager Health Resources Manager, Concurrent Review

HOSPITAL

Project Driver:Director Case Management

Project Manager:

Project Driver:HOSPITAL Assistant Director, Adult Case ManagementHOSPITAL Director, Case ManagementHOSPITAL Director, Utilization & Case Management Project Managers;HOSPITAL Project ManagerMG Project Manager

Subject Matter Experts

MG: Associate Chief Medical OfficerDirector of Patient Transition ManagementDirector, Spine, Orthopedics, Surgery Service LinesProject Manager, Patient Safety/QualityInterim Assistant Director of Social Work

BSC: Medical DirectorDirector Medical InformaticsActuarial Analyst

MG

Chief Medical Services Officer

HOSPITAL

Director, Managed Care;

Vice President, Patient Care Services

HOSPITAL

Manager, Hospital Contracting and Operations

BSC:

Program Director, ACO;

Director, Greenfield

Subject Matter Experts

Project Driver:Director Quality Management

Project Manager: Project Manager

Core Leadership Team

MG

Director, Contracts & Network Development

HOSPITAL ,

Director of Managed Care

HOSPITAL

Executive Director

BSC:

Vice President, Provider Network Management

ACO Governance

Integration Touch Points points: Physician Engagement, Member Engagement, Reporting and IT/System, and Employer (CCSF) Engagement

Finding the Right Partner30


Test Motivation of the Potential Partner Are they responding promptly? Have they assigned senior people? Do you have a shared vision? Will the partnership work in the long run?

Finding the Right Partners

31


Test if Potential Partner has Ability to Execute On core competencies Financial resources If not, can they get there?


32


If Partner is a Provider how are Physicians being paid?

Test Sophistication to be a Partner Is there a solid Board structure? Is there a commitment to Evidence-Based

Medicine?


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The More Partners, The More Difficult It Gets34


Good or Bad Partners?

35


Put Three in Mix…Even Harder

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Four…Even Harder

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Meyer Consulting

Mike MeyerPresident

5900 North Granite Reef RoadSuite 100

Scottsdale, AZ 85250

Phone: 602/[email protected]

www.meyerconsultinginc.com

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acos and other partnerships: what it takes to make them successful

Documents

organizational culture

health plan partnership

successfulmike meyer

health care reform

health plans

vision of organization

aco leadersability

physician partnerships