successful strategies for a changing market 06 22 12 [read-only] · 2012-06-18 · 6/18/2012 1...

6/18/2012

1

Successful Strategies for a Changing Market

Health Care Compliance AssociationWest Coast Regional Conference

June 22, 2012

6/22/2012 ι 1THE CAMDEN GROUP

Healthcare Spending Growth


The Elephant in the Room: Increased Employer Cost

$4,918

$28,530

$10,743

+118%

+166%

Source: Paul Grundy, M.D., ICQV 2011 Clinical Integration Forum. AON Hewitt Trends in HR and Employee Benefits, November 2010 Report.

Why Innovate? Affordability

Pe

r C

ap

ita C

ost

s

6/18/2012

2



Government

Watchword is “Accountable” for 2012 and Beyond

Health Plans Employers


Where Does Your Health Insurance Dollar Go?

Based on a PricewaterhouseCoopers* analysis, Factors Fueling Rising Healthcare Costs 2006.© 2006 American’s Health Insurance Plans

* Includes prevention, disease management, care coordination, investments in health information technologies and health support.* Includes the inpatient costs of hospitals and the outpatient costs of hospitals and free-standing clinics.

6/18/2012

3


Healthcare Reform Summary of Dates: Providers

2012

ACOs Medicaid, Medicare (Adult and Pediatric)

Bundled payments Medicaid and expand for Medicare

Value-based Purchasing Program

Hospital acquired condition

Readmissions

2013 July: Co-ops

2014 American Health Benefit Exchanges

Hospital Disproportionate Share Hospital (“DSH”) payments reduced


Institute for Healthcare Improvement: The Triple Aim

The Triple AimTM set forth by the Institute for Healthcare Improvement:

Optimal care delivery within and across the continuum

Focused on improving the health of the population and cost of care

Right care, Right place, Right time

Triple Aim

Experienceof Care

Per CapitaCosts

PopulationHealth

Source: http://www.ihi.org/IHI/Programs/StrategicInitiatives/TripleAim.htm


Evolving From To

From

Pay for procedures

Fee-for-service

More facilities/capacity

Physicians/Hospitals acting independently

Physicians and Hospitals working in parallel

Hospital centric

Treat disease/episode of care

To

Pay for value

Case rates/budgets/capitation

Better access to appropriate settings

Physicians/Hospitals collaboration: global risk

Physicians and Hospitals working in a highly integrated manner

Continuum of Care (Population centric)

Maintain health

6/18/2012

4


Payment is Transitioning from Volume-driven to Value-driven

Value-driven Healthcare

Volume-driven Healthcare

Quality

Cost

Source: Center for Healthcare Quality and Payment Reform


Healthcare Reform: Insurance Exchange


Insurance Exchange: Benefits That Must Be Offered

The Patient Protection and Affordable Care Act named 10 areas that must be covered for a plan to be considered meaningful under the law.

Ambulatory services1

Emergency services2

Hospitalization3

Laboratory services4

Maternity and newborn care5

Mental health and substance-abuse services6

Pediatric services, including oral and vision7

Prescription drugs8

Preventive and wellness services and chronic disease management9

Rehabilitative and habilitative services and devices10

6/18/2012

5


Narrow band of premiums

Benefit design

Rate approvals

Driven at the State level

It is all about the benefits

Target small business and individuals

Think public utility

Health plans will consolidate and get bigger

Diversify to develop other revenue sources

Insurance Exchange Implications


California Health Benefit Exchange (“CHBE”)

Operational January 1, 2014

Purpose:

Design, develop, and create policy for the CHBE within the federal health reform

Website to purchase insurance

Cover people of up to 400 percent of Federal Poverty Limit (“FPL”), individuals, and businesses

Capabilities

Compare and select affordable health insurance (coverage options) - TRANSPARENCY!

Five options

For whom?

Individuals and small business

Eligible 8.3 million Californians


Health Insurance Sources, California Residents, 2000 and 2010*

Source: California Healthcare Foundation, 2011 Almanac

6/18/2012

6


Physician-Hospital Integration: Driving the Value Proposition

Integration

Impa

ct o

n V

alue

Limited Full

Low

High

COE/SpecialtyInstitutes

SpecialtyCo-management

Managed CareShared Risk

Medical Management

Medical FoundationPhysician Employment

AccountableCare

IDN/Health Plan

Medical Home

Bundled Payments


ACO Structure

Hospital

SNF

Outpatient Clinics/Centers

Physicians

Home Health

Rehab

Behavioral Medicine

Pharmacy

ACO

ACO responsible for:

Clinical care management (clinical integration)

Capture data for continuum of care

Measure and monitor costs and quality

Infrastructure(Provided or Contracted

ACO Operations)

Information TechnologyEMR, CPOE, PACSData warehouseReportingHIE

Patient Portal Care ManagementHospitalists and

IntensivistsCMODisease managementClinical protocolsAdvanced analytics and

modelingCall centerUtilization managementKnowledge management

Health NetworkDelivery network

Financial/Payment Systems


California Pioneer ACO Participants

6/18/2012

7


New Paradigm: Increase the Defined Population We Care For

Quaternary

Tertiary

Surgical Specialists

Medical Specialists

Primary Care

Patient Responsibility

Defined Population

Lik

elih

oo

d o

f In

pa

tie

nt

Sta

y o

r C

os

t

Lo

wH

igh


Accountable Care Potential Market Segments: Enlarging the Pie

Accountable Care(IDN)

Medicare Medicaid Commercial Self Funded

FFS MA FFS HMO HMO PPO(tiered)Benefit

SystemEmployees

CommunityEmployers


Patient Accessand

Communication

Facilitiesand Technology

Principles of Patient-Centered Medical Home

“When and how” based on patient preference and needs

Metrics used to define performance: quality, access, efficiency

Culture of continuous improvement

Clear lines of authority/ responsibility and process for

decision-making

Team orientation

Work to top of license

Share resources to maximize efficiency

Orientation and training

Standardized roles and work flows

Facilities support teamwork, and efficient work flow

Technology facilitates aims of care model

Aligned providers

Facilitate physician-physician communication

Proactive in identifying patient needs

Patient-Centered Quality and

Efficient Care

Ensure patients have goals for their care and responsibility for health related behaviors

Processes assure smooth transition of care and communication between providers (across continuum)

Source: The Camden Group

6/18/2012

8


Stratifying Patients: Not as Simple as “Inpatient” and “Outpatient”

Level 4Home Care

Management

Level 2Complex Care and Disease

Management

Level 1Self-management and Health Education

Programs

Home Care ManagementProvides in-home medical and palliative care management by Specialized Physicians, Nurse Care Managers, and Social Workers for chronically frail seniors that have physical, mental, social, and financial limitations that limits access to outpatient care, forcing unnecessary utilization of hospitals.

Complex Care and Disease ManagementProvides long-term whole person care enhancement for the population using a multidisciplinary team approach.Diabetes, COPD, CHF, CKD, Depression, Dementia.

Self-management, PCPProvides self-management for people with chronic disease.

Level 3 High-risk Clinics

High-risk Clinics and Care ManagementIntensive one-on-one physician/nurse patient care and case management for the highest risk, most complex of the population. As the risk for hospitalization is reduced, patient is transferred to Level 2. Physicians and Care Managers are highly trained and closely integrated into community resources, physician offices or clinics.

High Cost Patient

Low Cost Patient

Hospice/Palliative Care

BaselinePreventive Care/Wellness programs

Population MonitoringPreventive care, education and monitoring for the community.

New Care Models Needed


ACO: How Might You Generate Savings?

50%Care Management

15-20% Lower Cost Site

15-20% Throughput

(Volume)

15-20%

Post acute, outpatient, ER use

Extended hours, higher occupancy, narrower network

Generic use, GPO, standardization

Population management

Well care Chronic disease

management Effective use of

appropriate clinicians

Medical home Bundled payment

Appropriate Economic Indicators


2011 Medical Expenditures

Physician Services

31%

Other(non-RX)

7%

Hospitals and Skilled Nursing

Facilities62%

Distribution of ExpendituresUnmanaged

Distribution of ExpendituresModerately Managed16% Lower Costs –

Different Distribution

* Target based on Moderately Managed Midwest Utilization Targets - Milliman

Physician Services

35%

Other(non-RX)

6%

Hospitals and Skilled Nursing

Facilities59%

6/18/2012

9


Where Sacramento Area

Who CalPERS (41,000 members)

When January - December 2010

Savings

$20 million ($15 million to BS and $5 million to Hill and CHW)

Reduced 30-day re-admissions (by 15 percent)

Reduced length-of-stay

No premium increase for some of employers

Reduced out-of-network treatment at hospitals

Reduced elective surgeries by 13 percent

12 percent of population uses 70 percent of the healthcare services

Pilot Program Results: CalPERS in 2010 (California)


Health Plan Acquisitions


Health Plan Activities: 2012

Use their huge cash reserves

Buy health plans (prefer Medicare)

Acquire medical groups and hospitals

Health plans are diversifying: 85 percent medical loss ratio (“MLR”) will impact profit margins

Market individuals in anticipation of the exchanges

Build BRAND

Partner with hospitals/medical groups

Accountable Care (joint risk sharing)

Narrow network delivery systems

Be the data supplier/infrastructure

Who is going to manage the population’s healthcare?

6/18/2012

10


Percentage of Hospitals Increasing the Number of Employed Physician by Type


Co-Management Structure

Hospital contracts with a physician organization, under which the physicians are granted input and managerial authority to design and enforce clinical and operational standards. Generally, the physicians provide only their time and no other personnel or items.

PhysicianGroup/Venture

HospitalCo-Management Service Agreement

(“Co-MSA”)

ExecutivePhysician

Director and Physicians

Service Line/Department

DirectorService Line

Co-management Committee


Physicians Are Involved In Each Aspect of Operations

Co-management company governance structure includes various committees for managing all aspects of planning and care delivery (i.e., Quality Care Committee, Technology Committee,

Operations Committee, Finance Committee, Research Committee)

Possible Co-management Responsibilities

Financial and Operations

• Management oversight of staffing• Negotiation of service arrangements• Operating and capital budgets• LOS management and patient throughput

Planning and Business Development

• Strategic plan development• Technology planning• Marketing strategies• Clinical research plan

Quality of Care

• Development of care protocols• Quality management and improvement policies• Quality outcomes• Patient experience

Hospital

Physicians

6/18/2012

11


Healthcare Trends for 2012

Economic Conditions

Soft demand for elective procedures

Bad debt pressure on providers

More price shopping for services (especially outpatient-elective)

Continued consolidation of hospitals, physician organizations, and outpatient providers

Employers Employees are picking up more of the cost and employers and health plans are

pushing alternative models through benefit design (e.g., Patient-Centered Medical Home,

ACO, Bundled Payment)

Physicians

Physicians are under pressure and are increasingly

looking to hospitals for relief

Shortages are becoming evident


Healthcare Trends for 2012

Payers

Unpredictable impact of health plans acquiring medical groups

Vertical Integration

Uncertainty regarding structure and impact of health insurance exchanges

Labor reductions

Mostly non-clinical

Health plans

Brand more

Diversify more (locked in MLR)

Acquire market position with seniors/knowledge to manage care

Care models changing

Accountable Care (“ACO”)

Bundled payments

Medical home

You will be at risk “back to the 80’s”


Strategy Check List

1. Operating costs: target Medicare reimbursement by 2014

A. Consolidation of clinical support services (e.g., laboratory, imaging, pharmacy)

B. Outsourcing departments?

C. Higher throughput, expanded hours of availability

D. Optimize current and in process investments

2. Physician alignment: (Access Points and Cost Management)

A. Primary care preferred (access points)

B. Specialists (think bundled payments)

C. Urgent care? Freestanding EDs?

3. New delivery models (ACO, BP, Medical Home)

A. Population management

B. Delivering superior value

C. Aligning a continuum of care

D. Risk pools (again)

6/18/2012

12


Strategy Check List

4. Clinical performance: Patient Safety and Quality

A. Effectiveness of case management, hospitalist, and intensivist programs

B. Clinical integration/care continuum (e.g., handoffs)

C. Set targets and measure performance: Improve Quality Outcomes

D. Reduce readmission rates

E. Maximize P4P

F. Value-based Purchasing Program

5. Information technology:

A. aEMR/EMR

B. Patient portal

C. Computerized physician order entry (“CPOE”)

D. Enterprise data warehouse (“EDW”)

E. Health information exchange (“HIE”)

F. Target meaningful use compliance (Stage 1 then 2)

G. ICD-10 (delayed)


Strategy Check List

6. Capital:

A. Focus on fundraising where possible

B. Measure against targeted credit rating

C. Sufficient IT Prioritization

7. Market share: Of what?

A. Increase: Period

8. Health Plan

A. Own it

B. Private label

C. Narrow network contracting


Strategy Check List: Physician

Depends on your future

Less than five years left – who cares

Mid-career then:

Join/Affiliate with a larger entity

Assume risk (e.g., case rates, budgets, capitation)

Access to managed care infrastructure

– Clinical protocols

– IT (aEMR, HIE, results reporting)

– Case management

– Hospitalists

Seek additional revenue opportunities

Explore new delivery models:

– Medical home

– Chronic disease centers

– Co-management agreements

– Accountable care delivery models

– Bundled payments

6/18/2012

13


Strategy Check List: Physician

Younger physician/getting started

Minimize economic risk

Manage work/life balance

Join a group or health plans

Infrastructure provided (e.g., practice management and managed care)

No capital investments or debt required (e.g., IT, clinical care)

Little marketing required

– Established medical group

– Health plan enrollment


Compliance: What to Watch For

Pressure on physician (lower utilization, SGR, and inadequate payment) leads to:

Co-management

Bundled payment

Medical directorships

Income guarantee/employment

Medical Foundation

ACO/Clinical Integration

Patient-Centered Medical Home

Joint ventures

Fair market value (“FMV”) and opinion letters


Compliance: What to Watch For

Pressure on hospitals/health systems leads to:

Need more physicians

Bigger pyramid (population)

Per capita use going down, more people

Reimbursement pressures

Kaiser

Health plans (buy groups, ACO, infrastructure)

Medical staff slowing down

\\sharepoint.thecamdengroup.com@SSL\DavWWWRoot\Clients\HCCA\Presentation\Successful_Strategies_for_A_Changing_Market_06_22_12.pptx

successful strategies for a changing market 06 22 12 [read-only] · 2012-06-18 · 6/18/2012 1...

Documents