Strategy and Leadership:Achieving Rewards for Measurable

Value

Understand Your Market | Prepare to Change| Innovate Around Value | Lead and Manage Change

Jim HoymeTherapy Partnersjhoyme@therapypartners.com

• Therapy Partners - MSO and Value Networks

• Signs of the Times – Connect the Dots for Opportunity

• Volume to Value Change Revolution in the Market

• Leading Change

Planning to Deliver Value

Therapy Partners

Minnesota-Western Wisc MSO

All Health Plan Contracts Under TPI TIN including Risk Sharing

FOTO Care / Outcomes Management

Common Billing Office Rev Cycle & Payment Managemt

Common Billing & EMR Technology

Credentialing, Compliance

Professional Development – Leadership – Strategy - Collaboration

Value Networks

Value Based, Shared Savings Contracts Health Plan, ACO

Strategy and Change Leadership

High Touch FOTO Training for High Level Outcomes

FOTO Outcomes Management for Clinics

Risk Sharing Contract Management with Plans and ACO

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Therapy Partners MSO

Member Practices• Simplify

Processes / Reduce Costs• Predictable

Outcomes and Costs• Triple Aim

Value

Plans and ACOs• Reduce

Operational Costs• Improve

Reimbursement• Strengthen

Market Position

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Brings Measurable VALUE to

The Member Practices, Health Plans, and ACOs

MSO and FOTO

2006 tp 2009 - Failure

No Leadership

Cast no FOTO Vision

Lacked clear Reason (Urgency)

No defined Management

High resistance – 20% embrace

Negative impact on culture

Inconsistent process and use

Low outcome scores

“65 / 20 / 40”

2010 on - Raging Success

Leadership: Clear Direction

Vision: Strength in mkt; help team

Urgency: Pilot; Help PTs and Pts.

Management: Goals, Accountable

Fully embraced with rewards

Positive impact – proud of quality

Defined processes and message

High level outcomes

“85 / 45 / 19”

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Therapy Partners Value Networks

Value Networks • Goal – Win – Win

Win - Increase $$ to PracticesWin - Reduce TCOC for Plans

• Value Network Model Loose knit Keep own TIN and own billing/EMR Organize around “Measured Value” using FOTO Seek Value Based, Shared Savings Pilots/Contracts

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Therapy Partners Value Networks

Value Networks• Most clients have existing networks

• Health plans embrace value focus and our value-based,

shared savings models

• 3 Plans have provided us large amounts of cost data -

health services provided for musculoskeletal conditions

• Work with plans to analyze cost data – develop pilot

models

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What’s Going On Around Us

Connect the DOTS

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PwC Health Care Division

“Approximately 50% of the $3Trillion spent

on health care in the US in 2012 was

either unnecessary or duplicative.”

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The Message . . . We waste about $1.5T annually on services that add no value to patients.

Could greater access to skilled therapists with proven value outcomes reduce unnecessary costs?

United Health Care“In 2013, the US spent 17% its health care

expenditures on musculoskeletal conditions.

Only 7% of people with musculoskeletal

conditions received physical therapy care”

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The Message . . . We spend ≅ $500B/yr on MSK pain. $250B wasted? Could greater access to skilled PTs reduce cost of musculoskeletal conditions?

United Health Care 3/14“In 2012, the most costly procedures

performed in operating rooms were1. Spinal Fusions

2. Total Knee Replacements

3. Cardiac Angioplasty

4. Total Hip Replacements

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The Message . . . We spend a lot of money on orthopedic surgeriesCould greater access to skilled PTs with proven outcomes reduce a % of these surgeries?

ACA – Obama Care

“We must insure more people and

reduce the rapidly rising costs in

health care so 100% of Americans can

get better care at a lower cost.”

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The Message . . . The government is demanding Greater Access, Better Quality, Lower Total Costs

ACA – Obama Care

“We must hold providers accountable

through accountable care organizations,

outcomes, and financial risk sharing.”

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The Message . . . The government is demanding accountability – what gets measured gets managed

Can innovative therapists deliver measured outcomes and successfully share financial risk?

Health Plan Execs“Even if we have a President and Congress

who repeal the ACA – health care reform will

continue. Rising costs are unsustainable for

the people who pay for health care.” cost.”

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The Message . . . The private sector is demanding measurable quality health care at lower costs.

Can therapists prove they deliver excellent functional and cost outcomes?

Med Director - Large Plan“We have a shortage of 1° care MDs across the

country – we need at least 300 more 1° care MDs in

our small state and at least that many ‘mid-level’

providers. It’s the same all over the country and will

get worse as more people are insured.”

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The Message . . . Patients must wait too long to see a qualified provider when we are trying to attain better accessCan skilled therapists become 1° care for MSK?

US Military and Keiser “PTs serve as primary care providers for

musculoskeletal pain. It reduces pressure on

primary care MDs, is more efficient, and they

know more about the problems than MDs.”

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The Message . . . Skilled PTs can provide quicker access better care for MSK patients

Virginia Mason MD-PT Team“Physical therapy is the best treatment for

LBP. Same day access to PT reduces costs

dramatically and results in measurable

functional gains. Because we have such great

results, we get more LBP patients”

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The Message . . . Quick access for people with LBP to skilled PTs results in lower costs and better outcomes

Julie Fritz, PT, PhD and Intermountain Research Team –

Spine“Physical Therapy provided within 2 weeks of

primary care MD visit for patients with LBP yields lower total cost of care. Delayed physical

therapy care resulted in higher total costs.”

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The Message . . . Early access to PTs results in lower costs

Alfred Gellhorn, MD U of Washington Research Team –

Spine

“Early access to physical therapists for Medicare patients with LBP resulted in lower costs.”

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The Message . . . Early access to PTs results in lower costs

Incentives Drive Behavior“A majority of providers are paid based on volume of services provides – FFS. More

interventions results in higher payments. Care is driven not by what is best for the patient but by

what provides best reimbursement for the provider.”

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The Message . . . FFS creates volume incents high utilization and drives up costs with no regard for quality – function/healthCan skilled therapists reduce costs if given an incentive to achieve high outcomes?

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In a word . . .

Yes!

TPI Data from Health Plan“For people with MSK conditions who

received PT – Upstream Costs – 40%

Physical Therapy Costs – 30%Downstream Costs – 30%.

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The Message . . . Inconsistent care paths, many providers, no measured outcomes – high costs

Upstream Costs 40% PT Costs 30% Downstream 30%1° Care Visits, Imaging, Injections, Ortho Visits, Meds

Imaging, injections, ortho visits, surgery, surg ctr, hosp

Can a consistent care path involving earlier PT with a focus on outcomes reduce unnecessary costs?

TPI – PT Network Pilot“PTs using FOTO to manage their care and focus

on achieving higher functional outcomes

reduced TECOC associated with shoulder pain by

30% and shared in the savings. Big reduction in

hospital, significant reduction in

imaging/orthopedic surgery, and slight reduction

in direct PT costs.”

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The Message . . . Outcomes, value-focused physical therapy care can reduce total cost of care

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Shortage of Primary

Care Providers

$3T in health care costs – 17% MSK pain -

$500B

Measured Quality –

Better Health

Plans will Provide

Incentives for Value

Spine Fusions,

Total Joints Very Costly

Half of Health Care $$ add no

Value

Hold Providers

Accountable Outcomes

Research Early PT -

Low $ High Results

Many PTs Best Access

Point for MSK Pts

Must Reduce Cost

of Health Care

But must have better

access to care

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$3T in health care costs –

17% MSK pain - $500B

Spine Fusions,

Total Joints Very Costly

Half of Health Care $$ add

no Value

Hold Providers

Accountable -Outcomes

Must Reduce Cost

of Health Care

Skilled Innovative Physical

TherapistsCan be a Value Based Solution

But must have better access

to careMeasured Quality –

Better Health

Shortage of Primary

Care Providers

Many PTs Best Access

Point for MSK Pts

Research Early PT -

Low $ High Results

Plans will Provide

Incentives for Value

The Volume to Value Revolution

“If the rate of change on the

outside exceeds

the rate of change on the inside . .

. the end is in sight.”

Jack Welch

Former CEO, GE

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BIG Change

In Provider Incentives is Coming

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And When Incentives Change 180° . . .

Provider Behavior Must Change Accordingly

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Financial Incentives for

Health Care Providers

are

Volume Based

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$ $

(Profitable Services x Max Fees) x (Max f )

Minus

Minimized Expense

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The

Volume Equation

This Creates Conflict

Provider – How can I maximize Volume so I can get paid more?

Payers – How can we minimize Volume so I can pay less?

But it’s

NOT Based On

What Consumers Want

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Volume Based

Provider Focus

Drive Consumer Demand for

ChanGe

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To Models that Deliver

Value

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“The days of business as usual are over. Incremental

fixes attempted by health care policy makers have not

worked.

It’s time for a fundamental change. A change from

provider focused volume incentives to models that

reward providers for delivering patient centered value -

collaboratively achieving the Best Outcomes at the

Lowest Total Cost.”

Michael Porter, Phd, Harvard Business School

from

The Strategy That Will Fix Health Care - HBR

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The Value Equation

Quality + Service + Convenience + Caring

Cost

How can I maximize value to my patients?

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The Value Equation

Is What Consumers Want

Individuals who are your patientsBusiness who employ them

Health Plans who insure them

But Providers Do Not Have a

Financial Incentive to Deliver Valuebecause

”The more you do, the more you get paid”

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So the Market is

Changing

and

Financial Incentives

are beginning to

Reward

Value39

ReimbursementValue – Risk Share

Triple Aim Value

PatientCenteredness

Consolidation

Patient CenteredMedical Home

ACOs

Collaboration

Innovation

Key Aspects of Health

Care Reform that Drive

Value

PowerGovernment

Purchasers of Health CareHealth Plans

ACOs – Medical HomesReality

The Triple AimMeasurable Quality

An Exceptional Patient ExperienceLower TCOC

Your Mission

ValueOutcomes

Patient CenterednessCollaboration

Care ManagementYour Culture

InnovationIntegration

Care Model ChangeRisk Sharing Payment

ArrangementsYour Strategy

Aligning Health Care Reform for Value Focused Success

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UnderUtilization

OverUtilization

Increasing Visits

Increasing Function

Lower than Expected

1 2 3

4 5 6

7 8 9

Higher than Expected

Expected

Lower than Expected

FOTO’s 9 Cell Value Matrix

Increasing Functional Change –

Effectiveness

Fewer Visits - Efficiency

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It’s Time for

Innovation . . .

But ChanGe

doesn’t come easy

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Most People Struggle with

ChangeAnd Need Leaders to Guide Them and Managers to Help

Them

5-10%Hate It!Resist It!

Try to Make It Fail!

15-20%

Hate It!Resist It!

30-40%Go with the FlowBut Won’t Try to Convert Resistors

15-20%Embrace ChangeConvert Resistors

5-10%Love it! I’m Your Change

Champion

20-30% Hold You

Back

50-70% Take Your

Time

20-30% Will Help

You

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LeadersVision | Drive Change |

Inspire | Define the Culture

ManagersPlan | Organize | Analyze |

Hold People Accountable

+ Leadership Poor ManagemtLeaders: compelling urgency – vision - ongoing enthusiasmManagers: fail to plan – fail to hold team members accountableResult: Early progress; change dies

+ Leadership + ManagemtLeaders: compelling urgency – vision - inspiration –enthusiasmManagers: Solid plan – Analyze problem solve – accountabilityResults: Change is Culture

Poor Leadership Poor ManagemtLeaders: Early urgency/vision – lack enthusiasm – not a priorityManagers: fail to plan – fail to hold team members accountable Result: Change never starts

Poor Leadership + ManagemtLeaders: Early urgency/vision – lack enthusiasm – not a priorityManagers: Want to succeed – plan – analyze –problem solve- give upResult: Good start; change dies

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Making the FOTO

Change Work

Requires Effective

Leadership and

Management

“In God we Trust . . .

Everyone else bring data.”Edward Deming - Statistician

Dennis Hart, PT, PhD

FOTO Inc.

2/3/1948 – 4/11/2012

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