hpcio(final)

High Performance ClinicallyIntegrated Organization (HPCIO)sm

Overview of HPCIO Program Development … in a nutshell

August 1, 2011

Prepared by:

Mark Tozzio, MA-IHHS, FACHEPresident

Hospital and Physician Practice Development Consulting, Inc.

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Mark Tozzio, FACHE, HPPD, Inc., 918-521-7468, [email protected]

Commercial Insurers are Embracing Pay-For-Performance Incentive Programs:

WellPoint United Healthcare Blue Cross Blue Shield of Illinois

Advocate Physician Partners (Chicagoland) was established as a Clinically Integrated model tenyears ago – today the program includes 3,800 physicians that focus on key clinical and financialinitiatives in these areas: Clinical outcomes improvement (including generic prescribing) Enhancement of operational efficiency (ambulatory and acute care settings) Robust medical and technological infrastructure Patient safety Patient experience

High Performance Clinically Integrated Organization(HPCIO) sm

Resources:Advocate Physician Partners, “The 2011 Value Report: Benefits from ClinicalIntegration," http://www.advocatehealth.com/2009ValueReport, June 6, 2011.Web.Great Boards, “Clinically Integrated Physician-Hospital Organizations,” Winter2009, Vol. IX, No. 4. Print.

FTC-compliant Clinically Integrated Organizations mustdemonstrate that they meet the three principal testsestablished by the Department of Justice (DOJ) andFederal Trade Commission (FTC) outlined in the 1996policy statement:

1) The network’s program of clinical integration is likely toachieve “real” integration of providers;

2) The initiatives of the program are designed to achievelikely improvements in healthcare cost, quality andefficiency; and

3) Joint contracting with health plans is “reasonablynecessary” to achieve the efficiencies of the clinicalintegration program.

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mailto:[email protected]

http://www.advocatehealth.com/2009ValueReport



Resource: Advocate Physician Partners, “The 2011 Value Report: Benefits from Clinical Integration,"http://www.advocatehealth.com/2010ValueReport, June 6, 2011. Web.

Lee B. Sacks, M.D., Advocate’s Executive Vice President and Chief Medical Officer, and CEO ofAdvocate Physician Partners

Network of 3,800Physicians and 10hospitals and 2integrated children’shospitals

Physician Led CIOrganizationalGovernance

57 key quality and costinitiatives carried outin 2010

Pay-For-Performancebonuses paid to APPphysicians fromcommercial insurersreportedly totaled =$60 million in 2010

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http://www.advocatehealth.com/2010ValueReport


“It is in the public interest to harmonize the eligibilitycriteria for ACOs that wish to participate in the SharedSaving Program with the similar antitrust criteria on clinicalintegration. As discussed in more detail in section II.I. ofthis proposed rule, competition between ACOs is expectedto have significant benefits for Medicare beneficiaries, byimproving the quality of care they receive, protecting theiraccess to a variety of providers, and helping to sustain theMedicare program by controlling costs. Furthermore,because ACOs that operate in the Shared Savings Programare likely to use the same organizational structure andclinical care practices to serve both Medicare beneficiariesand consumers covered by commercial insurance, thecertainty created by harmonizing our eligibility criteria withantitrust requirements will help to ensure that an ACOorganization participating in the Share Saving Program willnot subsequently face an antirust challenge that itsconduct is per se illegal, which could prevent the ACO fromfulfilling the 3-year term of its agreement und the SharedSavings Program” [emphasis added).


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CFR Vol. 76, No. 67, April 7, 2011, page 19542

And here comes the ACO… Share Savings Program to Reward Accountable Care



CMS published their 412-page proposed guidelines for ACOs on March 31, 2011:

Providers must sign up with CMS for a minimum of three years to participate as an ACO Primary care groups must be the driving force of ACOs – specialists and hospitals/other providers can

participate (in the clinical integration process) Participating ACOs must serve at least 5,000 Medicare beneficiaries in a region Medicare beneficiaries will be assigned to ACOs retrospectively – freedom to move in and out of

ACOs is preserved ACOs will bear risk for covered Medicare beneficiaries (two ACO payment tracks offered) Bonus incentive payments will depend on demonstrated cost savings and quality metrics to Medicare

(65 quality measures; significant transparency of ACO operations and financial performance) Unprecedented cooperation between DHHS/CMS, FTC, DOJ, and IRS to create “safety zones” to

address anti-trust and physician inurement concerns Final Regulations will be published after the comment period ending June 6th of this year ACO Program enrollment is set to start on January 1, 2012


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High Performance Clinically Integrated Organization(HPCIO)


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Stages of healthcare transformation:

Healthcare reform will move providers along a transformational pathway within 3 main groupsover the next decade

Stage 3 – Some providers will be able to achieve:

>New collaboration models that truly/fully integrate the continuum of provider care

>Allocation of substantial resources to develop sophisticated business intelligence IT solutions

>Formation of HPCIO and ACO partnerships to capture P4P/Shared Savings/Bundled Payment

Stage 2 – Many providers will have to achieve:

>Formal medical staff development – physician recruitment, retention, loyalty enhancement and leadership training

>Clinical integration initiatives along service lines that expand market share and stabilize positive revenue streams

>Robust IT and HR infrastructure to support “value-based purchasing” and P4P programs - commercial and CMS

>Consolidation of affiliate hospitals and physicians along mission, values, and vision horizons

>Chronic care management and preventive care delivery systems throughout the health service area

Stage 1 – All providers will need to achieve:

>Control over escalating operating costs and increase productivity (do more with less)

>Superb customer satisfaction (patients, physicians, vendors, donors, etc.)

>Optimized quality outcomes (CORE measures; PQRS, SCIP, etc.), and improve safety (HAI, errors, complication rates, etc.)

>Efficiency of operations at all levels of healthcare delivery

>Expanded care coordination before, during and after hospitalization involving physicians along the healthcare continuum

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Adapted from: Gelineau, Stephen, “Hospital ofthe Future: Strategies in an Era of HealthcareReform," ACHE Presentation, June 6, 2011. Print.



ClinicallyIntegratedOrganization(CI)

AccountableCare

Organization(ACO)

Commercial Insurance Focus CMS Medicare / Medicaid Focus


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Medical Center

EmployedPhysicians

IndependentPhysicians

Physician-Led

Governance

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The HPCIO negotiates with payers for incremental P4P and bonus payments on top of thefee schedule on behalf of all members based on demonstrated improvements in quality andcost effectiveness of care rendered to patients under the care of the organization



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Image © Copyright 2011 PSCI Solutions, Inc. All rights reserved [Reproduced with approval of PSCI Solutions]

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PSCI Solutions’ Quality Organization Maturity Model: There are four distinct phases of quality maturation in hospitals and health systems; at

present, very few organizations reach Phase IV performance

Improve Quality Scores

Followers

● Project orientation

● VP Quality

● Shared service center

“Compliance”

IIPHASE

1. Focus on qualitycompliance

2. Cross-functionalquality alignment

3. Ad-hoc physicianintegration

4. Minimizemeasurement errors

Link Cost-Quality

Leaders

● Process orientation

● Chief Quality Officer

● Shared Service Center

“Processes &Variance”

IIIPHASE

1. Focus on internalquality improvementprojects

2. Facilitate changemanagement

3. Monitor and reportQI project success

4. Process-drivenphysician integration

MaximizeQuality-Revenue Curve

Innovators

● Strategic orientation

● Chief Quality Officer

● Revenue Center

“InstitutionalizeQuality”

IVPHASE

1. Focus on hospitalmargin improvement

2. Pay-for-performance,patient satisfaction,clinical-financialalignment, integration

3. Link quality of care tocost, report impact ofquality improvementon margin

4. Physician scorecards

Improve Productivity

Laggards

● Tactical

● Director of Quality

● Facility cost center

“Reporting”

IPHASE

1. Focus on externalquality reporting

2. Measuresdepartmentproductivity

3. Data collectionefficiencies

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9Mark Tozzio, FACHE, HPPD, Inc., 918-521-7468, [email protected]

The key to clinical integration involves serious commitment to:

Development of enhanced infrastructure and technological enablers Shared governance organizational structure with strong physician leadership and broad participation Contractual relationships between HPCIO members and payers in order to align clinical and financial

incentive across the continuum of care environmentTech

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Share performance metrics across theorganization – ambulatory, inpatient,post-acute settings, and communityhealth status

Implement real-time businessintelligence solutions (BI) reportingorganization-wide accomplishments(dashboards, trend monitoring, etc.)

Publish report cards that clearlydemonstrate added value to patientsand payers

Negotiate on behalf of HPCIOmembers for performance-basedincentive payments with commercialand governmental payers

Promote accountable care Tie community health status

improvement to financial incentives Expand HPCIO to include additional

providers beyond the initial core

Operate a physician-led governance structure withstrong leadership representing both independent andemployed providers across all specialties with thesupport of the health system’s management team

Establish relevant participation criteria that encouragesinvolvement of quality-driven physicians (30 to 40% ofmedical staff initially)

Include a remediation process for non-compliantmembers

Adopt interdisciplinary clinical and financial metrics andinitiatives to improve outcomes and control costs



HPCIO implementation process:

Phase 1 – HPCIO Readiness Assessment involves a comprehensive analysis of the

health system and physician leaders, employed and independent physicians, thatindicates that the medical community is able and willing to become clinically integrated(approximately 45 days to complete the Phase 1 study once the Client’s key information isobtained)

Go / No-Go decision by stakeholders and commitment to invest time and resources intothe program

Phase 2 – Implement HPCIO – entails establishing a physician-led organizationalstructure for the HPCIO in partnership with the health system (six to seven months fromthe date that an agreement is signed with consultancy to move to Phase 2) Create HPCIO’s legal entity Identify key transformational metrics Implement robust IT infrastructure (ambulatory and inpatient) Seek regulatory confirmation that program is structured appropriately as a clinically

integrated entity and meet the “safe harbor” conditions Negotiate with payers regarding performance objectives Establish incentive pay program for providers in the ACO Apply for CMS ACO certification (if it makes business sense)


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Snapshot MarketAssessment

1

OrganizationalKey Performance

Assessment

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Foundations OfClinical Integration

Complete Clinical Integration Prospects and Design Roadmap with Physician & HealthSystem Leader ship Stakeholders

3

Physician

Integration Options

Companion for CI, evaluate optional structures, and evolving mix of PCP & specialists;assess impact of trending practice reimbursement conflicts

4

Organizational

Structure

Criteria for independent models applied to decision scenarios and impacts; Based onphysician alignment, regulatory, and payer performance driven leverage; culture-drivenperformance indicators applied for feasibility

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Network PayersAnalysis & Strategies

Relative contracting positions vs. Medicare assessed; market impact for specific serviceline bundles and overall evaluated

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Community Health

& Service Bundling

Develop joint programs with public health, community leaders and establish pilotmetrics for population health program; coordinate with Payers & evolving CMS rules.

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Tactical Plans For

HPCIO Implementation

Based on service line quality & operating cost savings, develop continuum action planswith aligned physicians & stabilized margins

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Develop Market Profiles & Trends, Competitive Intensity, Technology and Clinical Trends;Performance Review: Inpatient and Ambulatory settings

Assess Organization & Service Line Alignment Options, 3 YR capital needs; Complete ForServices And Facilities, Projected baseline EBIDA 3 YR Returns & reimbursement impacts


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HPCIO Assessment and Implementation Road Map

ResearchingHospital-PhysicianIntegrationAlternatives

AssessingHPCIO

Feasibility

Establishing the HighPerformance Clinically

IntegratedOrganizational

Structure

DevelopingPhysician-Led High

PerformanceMetrics

EnhancingPerformanceImprovementInfrastructure

ROI AssessmentPhase – 45 days

Implementation Phase – 6 to 7 monthsPre-AssessmentPeriod


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The HPCIO implementation team delivers results – on time and on budget

Our multi-specialty leadership team delivers the highest quality consultative services at affordablerates for our Clients

The expertise of our leadership team provides effective guidance and knowledge transfer to ourclients so they can operate independently once the HPCIO program is operational

We implement the HPCIO program over a shorter period of time compared to our competitors –nearly half the time of other consultancies specializing in the Affordable Care initiative withexcellent results (6 to 7 months implementation schedule)

Our guaranteed maximum “program investment” is very competitive with fees charged byother recognized firms because of our efficient delivery process and breadth of expertise among ourdelivery team

Our team prides itself in providing a personalized (not a canned) program that is physician-led,and involves key stakeholders that drive the program’s long term success

Our team of experts will also be available to assist with the preparation of application documentsnecessary for acceptance by regulatory agencies and commercial insurers

The HPCIO organizational structure/governance and clinical integration program is designedto meet the requirements for participation in the CMS’ Shared Savings Program and otherperformance-based incentive programs offered by selected commercial insurance companies andself-insured plans – this dual approach saves our Clients time and money when compared to otheralternatives


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HPCIO Advisory Team:

Mark Tozzio, Masters Health and Human Services Administration, FACHE - Healthcare Program/ServicesDevelopment and Clinical Integration (35 years of healthcare management experience with large and small hospitalsystems and physician groups)

Rich Miller, MPH - Strategy, Project Management and Performance Analysis Expert (32 years of healthcare strategyand development; including 20 years of consulting for clients nationwide)

David Woodrum, FAAHA, FACHE - Board/Leadership and Services Line Management Development (40 years of in-hospital, physician owned facilities, and consulting expertise; served as Vice President of the American HospitalAssociation and Chairman of Woodrum Ambulatory System Development)

Steve Dobbs, MHA, FACHE - Executive Officer for Integrated Health Systems and Key Participant in the CMSBundled Payment Prototype at Ardent’s Hillcrest Medical Center in Tulsa, OK (35 years of healthcare managementexperience and program innovation/physician partnerships development)

Jay Reddy, MBA - Co-Founder and President of PSCI, a leading Business Information and Advanced Technologiesfirm specializing in quality analytics and decision support solutions for healthcare organizations (20 years of innovationin information technology systems to enhance quality and operational performance)

Dennis Dvorak, Bachelors Business Administration - Physician Practice Administration (32 years of progressivemanagement experience with multispecialty groups and integrated organizations as large as 120 providers)

Steve Money, JD, MD - Medical-Legal Advisor Services (20 years of legal practice combined with medical training;corporate law and compliance expertise)

Carolyn Davies, CPA – Physician practice management consultant with over 25 years of healthcare experience withsmall and large groups (financial performance improvement, benchmarking, contract negotiations, cash flowmanagement, etc.); Carolyn has worked for national managed care companies

Depending on your specific needs, we will assign additional clinical support consultants for Phase 1 and Phase 2






91%• Don’t have a CI/AC

program

64%• Are planning to develop

a program

39%• Will implement a

program in 2012


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