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First Year Experience with a Commercial ACO AMGA 2012 Annual Conference, March 9, 2012 Mark Shields, MD, MBA, FACP Senior Medical Director

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First Year Experience with a Commercial ACO

AMGA 2012 Annual Conference, March 9, 2012

Mark Shields, MD, MBA, FACP

Senior Medical Director

Disclosure• Nothing in Today’s Presentation Should Be

Construed as Advising or Encouraging Any Person to Deal, Refuse to Deal or Threaten to Refuse to Deal with Any Payer, or Otherwise Interfere with Commerce

• Opinions Expressed by Speakers are Their Own

• APP Assumes No Responsibility for the Reliance by Conference Participants on Materials Presented at Today’s Session

2

Learning Objectives

Participants will be able to:

• Understand Challenges to ACO Development

• Understand How Clinical Integration Drives

Outcomes

• Describe Key Components of Clinical Integration

that Lead to Success

• Understand Early Results from a Large

Commercial Shared Savings Contract

3

Presentation Topics

• APP Overview and Role of CI

• Integrating Physicians

• CI to ACO

4

• APP Overview and Role of CI

• Integrating Physicians

• CI to ACO

5

• $4.5 Billion Annual Revenue• AA Rated• 12 Acute Care Hospitals

– 2 Children’s Hospitals – 5 Level 1 Trauma Centers– 4 Major Teaching Hospitals– 4 Magnet Designations

• Over 250 Sites of Care

– Advocate Medical Group– Dreyer Medical Clinic– Occupational Health– Imaging Centers– Immediate Care Centers– Surgery Centers– Home Health / Hospice

Advocate Health Care

6

Advocate Physician Partners

• Physician Membership

– 1,085 Primary Care Physicians

– 2,889 Specialist Physicians

– Total Membership Includes 987 Advocate-Employed Physicians

• 10 Acute Care Hospitals and 2 Children’s Hospitals

• Central Verification Office Certified by NCQA

• 230,000 Capitated Lives/700,000 PPO Lives

• 215,000 “Attributable” Lives

Advocate Physician Partners delivers

services throughout Chicagoland and

Downstate Illinois.

7

Clinical Integration: Definition

8

A Structured Collaboration Among APP

Physicians and Advocate Hospitals on an

Active and Ongoing Program Designed to

Improve the Quality and Efficiency of Health

Care. Joint Contracting with Fee-for-Service

Managed Care Organizations Is a Necessary

Component of This Program in Order to

Accelerate These Improvements in Health

Care Delivery.

Challenges of Health Reform

• Large Multi-specialty Groups Are the

Exception

• 9 of 10 Americans Get Their Medical Care

in a Solo or Small Practice*

• Infrastructure Is Required to Drive Quality

Outcomes Demonstrated by Multi-specialty

Groups

• Culture Is Not Created Over Night

* NEJM 360;7 Feb. 12, 2009

9

Clinical Integration is the Foundation of an ACO• Provides Infrastructure for Integration of Small

Practices

• Overcomes Problems Seen Within the Fee-

for-Service Model

– Incentives to Providers Drive Improvement

• Creates Business Case for Hospital and

Doctors to Work for Common Goals

• Allows One Approach for Commercial and

Governmental Payers

10

• APP Overview and Role of CI

• Integrating Physicians

• CI to ACO

11

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

12

Creating a Culture of Engaged Physicians• Physician Engagement in Governance

• Physician Leadership Development

• Shared Identity and Values → “Membership”

• Infrastructure Investment to Enable Success

• Appeal to Pride and Sense of Excellence– Recognition for Quality and Efficiency

– Consistent Use of Evidence-based Medicine

– Power of the Outcomes of the Group

13

Total Physicians on Medical Staffs = 6,007

Total APP Physicians = 3,974

Independent Non-APP = 2,033

Independent APP = 2,987Employed /

Affiliated = 987

Affiliated (Dreyer) = 172AMG (Employed) = 815

Advocate’s Physician Platform

14

APP Board and Committee Composition

15

Lee Sacks, M.D., Chief ExecutiveRobert Zimmanck, M.D ,Chairman

Marty Manning, President

Contract Finance Committee

Robert Raines, M.D., Chairman Pankaj Patel, M.D., Chairman

Advocate Physician PartnersBoard of Directors

Utilization Management Committee Quality Improvement Committee

Mark Shields, M.D., Chairman

Local Site Engagement in Governance

16

APP Board and Committees

Condell

PHO

Christ

PHO

South

Suburban

PHO

Illinois

Masonic

PHO

BroMenn

PHO

Trinity

PHO

Good

Shepherd

PHO

Good

Samaritan

PHO

Lutheran

General

PHO

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

17

Health Plan Commitments

Includes All Major Payers in the Market

• Risk and Fee-for-Service Contracts

• Base and Incentive Compensation

• Same Measures Across All Payers

– Common Procedures at Practice Level for All

Contracted Plans

18

2012 Performance Metrics

19

• Physician Commitment to a Common Broad Set of Clinical Initiatives

– 60 Initiatives – Broad Area of Focus

– 159 Individual Performance Measures

• Primary Care and Specialty

– 4 AdvocateCare Measures

– 5 Performance Domains

• Clinical Outcomes

• Efficiency

• Medical and Technological Infrastructure

• Patient Safety

• Patient Satisfaction

Physicians Determine All New Performance Measures

Clinical Integration 3.0:Increasing Physician/System Integration

20

Early Years:

2004 - 2006

Primary Care/

Ambulatory Measures Increasing

Specialist

Measures

Middle Years:

2007 - 2009

Maturing Years:

2010 - 2013

Increasing

Physician/

System

Integration

Clinical

Integration

to

Accountable

Care

Health Reform:

2013 -

Year

2004 High Speed Internet Access in Physician Offices

Centralized Longitudinal Registries

Access to Hospital, Lab and Diagnostic Test Information Through a Centralized

Clinical Data Repository (Care Net and Care Connection)

2005 Electronic Data Interchange (EDI)

2006 Computerized Physician Order Entry (CPOE)

Electronic Medical Record Roll Out in Employed Groups

2007 Electronic Intensive Care Unit (eICU) Use

2008 e-Prescribing

2009 Web-based Point of Care Integrated Registries (CIRRIS)

2010 e-Learning Physician Continuing Education

Electronic Medical Records Roll Out in Independent Practices

2011 Care Management Software Plus Analytics

Advancing Technologies

21

Advancing Evidence-Based Medicine and Care

Year

2004 Physician Reminders for Care

Chart Based Patient Management

2006 Patient Outreach

2007 Physician Office Staff Training

Pharmacy Academic Detailing Program

Generic Voucher Program

2008 Diabetes Collaborative

Patient Coaching Program

Hospitalists

2009 Diabetes Wellness Clinics

Asthma and HF/CAD Collaborative

2011 Access and COPD Collaborative

22

• Web-Based Commercial Registry

• Integrates All Registries, Pharmacy, Labs, Claims and Performance Reporting

• Integrates Physicians

• Integrated with EMR

Clinical Integration Registry and Reporting Information System (CIRRIS)

23

Clinical Integration Program Progress Reports: Background• Progress Reports are Compiled and Made

Available Quarterly

– 4th Quarter Progress Report is Reflective of Full

Reporting Year Performance

• Basis for Determining Physician’s Incentive Fund Payment

• Physicians Retrieve a Customized Progress

Report and Documentation Supporting

Measurement on Key Initiatives (Efficiency

Areas)

24

Mechanisms to Increase Compliance

• APP QI/Credentials Committee

• Membership Criteria

• Peer Pressure/Local Medical Director

• Mandatory Provider Education/CME

• Physician’s Office Staff Training

• Financial Incentives/Report Cards

• Targeted Programs

25

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

26

Advocate Physician Partners’ Incentive Fund Design

PHOs 1-9

Residual Funds

Individual Incentives (70%)

Individual Distribution

Based on Individual

Criteria

Residual Funds

Group/PHO Incentives (30%)

Group/PHO Distribution

Based on Group/PHO

Criteria

Tier 1(50%)

Tier 2(33%)

Tier 3(17%)

Tiering based on individual

MD scores

Residual funds are rolled over into general CI fund available for distribution in the following year

27

Calculation and Distribution of CI Incentives to Physicians

• CI Incentive Distribution for Each Physician Based on the Following:

– Physician’s Allowable Physician Billings

– Individual CI Score

– CI Score of the Physician’s Primary PHO

– Work Incentive Volume and Performance

28

Aligning Physician and Hospital Incentives• 2009

– CPOE

– Core Measures

• 2010 – CPOE

– Core Measures

– Readmissions

– Length of Stay

• 2011– ED Efficiency

– Meaningful Use

– Core Measures

– Readmissions

– Length of Stay

29

• 2012– ED Efficiency

– Core Measures

– Readmissions

– Length of Stay

– Transfusion Safety

– Elective Induction of Labor

Incentives for OutcomesCI Incentive Funds Distribution

Performance Year Funds Distributed

2005 $12.4 Million

2006 $16.7 Million

2007 $25.0 Million

2008 $28.2 Million

2009 $38.0 Million

2010 $50.0 Million

2011 $101.0 Million Est.

30

230,000 Capitated Lives / 700,000 PPO Lives

215,000 “Attributable” Lives

Great Clinical Outcomes and Good Business

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

31

Transparency of CI Performance

• At Direction of APP Board of Directors,

Strategy Implemented to Increase

Transparency of CI Program Performance

• Statistics Shared with MDs for Them to See

How They Compare to Their Physician Peers

• All Individual Physician Performance Results

are Available for All to View and Compare

(Internally)

32

• Generic Prescribing: 6-9% > Local Plans

• LDL Good Control in Patients with Diabetes:

43% > National Rate

• Childhood Immunizations: 55% > National

Rate

• Depression Screening: 85% > National Rate

• Diabetic Care: Exceeded National Rate on All

9 Measures

• Asthma Action Plans: 75% > National Rate

Highlights of 2010 CI Program“Moving the Dial on Quality”

33

2011 Value Report

34

www.advocatehealth.com/valuereportor call 1-800-3-ADVOCATE

(1-800-323-8622)

Critical Success Factors• Physician Driven

• Same Metrics Across All

Payers

• Minimize Additional

Administrative Costs

• Additional Funds Recognize

Extra Work by Physicians and

Staff

• Infrastructure Necessary to

Support Improvement

• Physician/Hospital Alignment

35

Value for Physicians

• Better Alignment with Hospital

• Marketplace Recognition

• Focus on Outcomes

• Incentives Compensate for Additional Work

• Interface with Multiple Payers

36

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

37

• APP Overview and Role of CI

• Integrating Physicians

• CI to ACO

38

Advocate 2020

39

From Clinical Integration to Accountable Care

40

It’s a New Day

• Insurers Acknowledge Inability to Manage

Rising Costs

• Medicare Finances are Not Sustainable

• Payers Can No Longer Sustain Double-Digit

Increases

• Population is Aging

• Uninsured Will Enter Care Delivery System

41

Industry Has Difficulty Controlling…

• Utilization of High End Imaging

• Readmissions

• Outpatient Trend

• New Drugs & Technologies

• Ambulatory Sensitive Conditions

42

Change is Necessary

• Significant Waste In System

• Value of Partnering

– To Eliminate Waste

– To Have Price Competitive Product

• Current Payment Model Does Not Support

Shared Vision

• Sense of Urgency

43

Changing Paradigms

44

FROM... TO...

Silo Care Management Enterprise Care Management

Episodes of Care Coordination of Care

Discharges Transitions

Utilization Management Right Care at the Right Place

at the Right Time

Caring for the Sick Keeping People Well

Production (Volume) Performance (Value)

Unicorn

The Accountable Care Organization is like a

unicorn, a fantastic creature that is vested with

mythical powers. But no one has actually seen

one.

Ian Morrison

45

AdvocateCare

• ACO-Like Contract

• Shared Savings Model

• Improved Health Care Outcomes

– Reductions in Waste, Duplications and

Inefficiencies

46

AdvocateCare - A Global Care Contracting Framework

• Global Cost Management Overlay On Top

of Existing FFS Structures

• Responsibility for Managing Comparative

Trend

• Method for Sharing Savings

• Involves Partnering With the Payer

• One Model for Governmental &

Commercial ACO-Like Contracts

47

Ranking of Respondent ACOs by Covered LivesAccountable Care Organizations

Year ACO Formed

Number of Covered Lives

Number of Physicians

Participating

Advocate Physician PartnersOak Brook, IL

2011 350,000 3,900

Bronx Accountable Healthcare NetworkNew York

1995 140,000 3,000

Pendulum HealthCare Development Corp.1

Rockford, IL2010 100,000 500

Southeast Texas Accountable Care OrganizationHouston

2011 60,000 30

Blue Shield of California1

San Francisco20102 41,500 520

AnewCare Collaborative3

Johnson City, Tenn.2011 10,000 1,500

Norton Healthcare1

Louisville, KY2011 6,026 176

Gonzaba Medical Group1

San Antonio2007 5,252 50

Castle Health Group1

Kailua, Hawaii19964 2,500 125

48

Ranking of Respondent ACOs by Covered Lives (continued)

Accountable Care OrganizationsYear ACO Formed

Number of Covered Lives

Number of Physicians

Participating

Agnesian HealthCare1

Fond du Lac, WI2010 05 2,000

Atlantic ACOMorristown, NJ

2011 0 300

Southeast Michigan Accountable CareDearborn

2010 06 1247

Palmetto Health Quality CollaborativeColumbia, SC

2010 -- 210

1 Sponsoring organization.2 Memorandum of understanding signed in April 2009, launched Jan. 1, 2010.3 Mountain States Health Alliance affiliated company.4 Formed as a physician-hospital in 1996, currently evolving toward an ACO-type organization.5 No contracts for covered lives; estimate of 250,000 potential lives.6 No lives covered at this point; ACO was formed to participate in the Medicare Shared Savings Program.7 Primary-care providers are participating owners.

Source: Modern Healthcare’s 2011 Accountable Care Organizations Survey

49

Shared Savings Model

50

$ Per

Attributed

Life Per Year

(Risk

Adjusted)

0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Shared

Savings

Summary Results of the Physician GroupPractice Demonstration Performance Years 1-4*

51

Physician Group Practice Percentage of Quality Goals Attained

YEAR 1 YEAR 2 YEAR 3 YEAR 4

Billings Clinic, Billings, MT 90.91 97.78 98.11 92.45

Dartmouth-Hitchcock Clinic, Lebanon, NH 95.45 97.78 92.45 94.34

Everett Clinic, Everett, WA 86.36 95.56 94.34 94.34

Forsyth Medical Group, Winston-Salem,NC 100.00 100.00 96.23 96.23

Geisinger Clinic, Danville, PA 72.73 100.00 100.00 100.00

Marshfield Clinic, Marshfield, WI 81.82 100.00 98.11 100.00

Middlesex Health System, Middletown, CT 86.36 95.56 92.45 94.34

Park Nicollet Clinic, St. Louis Park, MN 95.45 97.78 100.00 100.00

St. John’s Clinic, Springfield, MO 100.00 100.00 96.23 98.11

University of Michigan Faculty Group Practice, Ann Arbor

95.45 100.00 94.34 96.23

• Because the CMS applied different weights to each quality measure, the agency calculated the quality goals attained as percentages, rather than absolute numbers of measures. Data are from RTI International.

Published in NEJM, 364:198-200, Jan 20, 2011

51

Physician Group Practice Shared Savings Payments ($)

YEAR 1 YEAR 2 YEAR 3 YEAR 4

Billings Clinic, MT 0 0 0 0

Dartmouth-Hitchcock Clinic, NH 0 6,689,879 3,570,173 328,798

Everett Clinic, WA 0 129,268 0 0

Forsyth Medical Group, NC 0 0 0 0

Geisinger Clinic, PA 0 0 1,950,649 1,788,196

Marshfield Clinic, WI 4,565,327 5,781,573 13,816,922 16,154,242

Middlesex Health System, CT 0 0 0 0

Park Nicollet Clinic, MN 0 0 0 0

St. John’s Clinic, MO 0 0 3,143,044 8,185,757

University of Michigan Faculty Group Practice, Ann Arbor

2,758,370 1,239,294 2,798,006 5,222,852

Summary Results of the Physician GroupPractice Demonstration (continued)

52

Published in NEJM, 364:198-200, Jan 20, 2011

52

Attributed Patient Cost Concentration Supports Care Management Model

Person Years Predicted ExpendituresNumber Percent Mean $ Percent

Very Low Risk 54,398 30.5% $ 784 3%

Low Risk 78,520 44.1% $ 4,054 22%

Moderate Risk 24,906 14.0% $ 11,517 20%

High Risk 16,056 9.0% $ 24,054 27%

Very High Risk 4,270 2.4% $ 91,062 27%

Total 178,149 100.0% $ 7,987 100%

53

53

Some Key Issues to Address

• Improving PCP Access

• Reducing Avoidable Admissions

• Intensive Outpatient Management

• Achieving “Hospitalism”

• Affecting “Perfect Transitions”

• Increasing Alignment with Private Practice

Physicians

• Real Time Clinical Decision Support

54

2011 ECM Infrastructure & Support

Outpatient Care Management

• Dedicated Outpatient CMs for High-Risk patients

Emergency/Acute Care Management

• Inpatient CMs

• ED CMs

• Hospitalists

• Physician-Partnered CM Model

Post Acute

• SNF CM Model

• SNF, LTACH, Inpatient Rehab Network

• Transition Coaches

Physician Office Performance

Coaches

Market Share Growth/Backfill

Data & AnalyticsCM

Risk/Reporting System

PCP Access/Virtual

Visits

Communication Strategies

55

Implications for Primary Care

• Renaissance of Primary Care

• Appropriate Incentive Structures

– Access/Avoidance of ER

– Medical Home

– Managing Ambulatory Sensitive Conditions

– Admission Rates & LOS

– Readmissions

– Specialist & Ancillary Efficiency

• Greater Alignment with Single System

56

Implications for Specialists

• Specialists are Integral to Success

• Structures Needed to Unlock Creativity

• “Pay for Work Done” Will Work for You

• Greater Transparency Around Efficiency

• Backfill Strategy Will Work for You

• Efficacious Specialists Will Thrive

57

Implications for IDNs

• Communicating a Complex Message

– Management & Physicians

• Building a Climate of Trust

• Ensuring Physician Access (Both Employed

& Private Practice)

• Less Volume from Existing Sources

• “Re-Purposing” Parts of the Enterprise

– Business Development, Physician Relations, UM,

Operations Management

58

Implementing ACOs: 10 Mistakes Singer and Shortell, JAMA, 8/9/11

Overestimate Organization Capabilities

• Manage Risk

• EHR

• Performance Measures

• Implement Protocols

Failure to Engage Stakeholders

• Balanced Governance

• Engage Patients

• Specialist Selection and Engagement

• Regulations/Legal

• Integrate Beyond Structures

Failure to Recognize Interdependencies

• Address All of Above

59

Implementing ACOs

To Overcome These Mistakes:

• Adapt to Local Contexts

• Use Learning Systems Internally and

Externally

• Mature Measurement Systems Internally and

Externally

60

Early Results

The Highlights Compare Key Utilization Metrics

for 200,000 Advocate-attributed Patients to

Identical Metrics for a Control Coup of

1,000,000 Non-Advocate-Attributed PPO

Patients.

61

BCBS Data-1st Six Months

62

Utilization Metrics(PPO) AdvocateCare Market

Inpatient Admit Rate(Admit Rate/1000)

(10.6%) (8.8%)

Length of Stay (0.2%) (1.2%)

Days/1000 (10.8%) (9.8%)

% Days @ Advocate Hospitals

(12.9%) X

Outpatient ER Cases/1000 (5.4%) (4.6%)

OP Surgery/1000 (8.4%) (9.8%)

OP Other/1000 1.5% (2.0%)

Advance Imaging (6.7%) (7.5%)

Professional Office E and M/1000 (procedures/1000)

(5.9%) (6.1%)

Pharmacy Prescriptions/1000 1.3% (3.3%)

Figure 1: Utilization Dashboard-Q1 & Q2 2011 vs. 2010

Summary of Key Points

• Culture Evolves Over Time and Takes Effort

• Physician Engagement Requires Physician Involvement

• Technology Plays Important Role

• Evidence-based Management is Key

• The Need for Change – Preparing for the Future

63

Key Drivers

Culture

Governance

Infrastructure

Incentives

Transparency of Results

Feedback Loop

64

Speaker:

Mark Shields, MD, MBA, FACPVice President, Advocate Health CareSenior Medical Director, Advocate Physician [email protected]