transformation lessons and issues · • coverage expansion boosting medicaid eligibility • most...

Health Care Advisory Board

Transformation Lessons and Issues

Hospital and System Experiences with Medical Homes— Pathways to ACOs?

Lisa Bielamowicz, MDManaging Director

The Advisory Board [email protected]

Road Map

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Medical Home Investment Imperatives

Revisiting the Value Proposition

The Care Management Mandate

Changing Role of Primary Care for Health Systems

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Evolution of Primary Care Investment Strategy

Viewing Primary Care in a New Light

Source: Innovations Center interviews and analysis.

Today Transition Potential Future

Primary Care as Referral Feeder, Mission Extension

Primary Care as Financially Sustainable Portfolio Entity, Future Payment Risk Buffer

Primary Care as Vehicle for Care Continuum Integration, Population Health Improvement

Decelerating Price Growth

Continuing Cost Pressure

Shifting Payer Mix

Deteriorating Case Mix

• Medical demand from aging population threatens to crowd out profitable procedures

• Incidence of chronic disease, multiple comorbidities rising

• No sign of slower cost growth ahead• Drivers of new cost growth largely

non-accretive

• Baby Boomers entering Medicare rolls• Coverage expansion boosting

Medicaid eligibility• Most demand growth over the next

decade comes from publicly insured patients

• Federal, state budget pressures constraining public payer price growth

• Payments subject to quality, cost-based risks

• Commercial cost shifting stretched to the limit

Four Forces Shaping Future Margins

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Financial, Clinical Profiles Shifting Dramatically

Today’s Reality

Source: Health Care Advisory Board interviews and analysis.

Moving Ever Closer to Single Payer

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Medicare to Constitute Majority of Discharges by 2021


Inpatient Volume by Payer Class

Medicaid

Commercial

Self Pay

Medicare

0.3%

Medicaid

Commercial

Self Pay

Medicare

2011 2021

Shifting payer mix

More Medicine On the Horizon

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Public Payer Volumes Composed of Predominantly Medical Cases


Medical and Surgical Shares of Volume, by Payer

Medical Medical Medical

Surgical Surgical Surgical

Commercial Medicare Medicaid

Deteriorating Case Mix

Patient Mix Problem Bigger than Payer Mix Problem

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All Else Equal, Case Mix Deterioration Hurts More than Payer Shift

Source: Health Care Advisory Board interviews and analysis.1) Based on five percentage point reduction in surgical share of inpatient volume.

Margin Impact of Potential Payer Mix ShiftTypical 300-bed Hospital

Margin Impact of Potential Case Mix Shift1

Typical 300-bed Hospital

Key Characteristics

Welcome to Pleasantville

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Average Care for Average People


Case in Brief: Pleasantville Hospital

• Health Care Advisory Board model hospital

• Revenue, cost, and operational inputs based on national averages

• Inputs adjusted to forecast impact on future financial performance

• Offers insight into relative opportunity of pulling various margin improvement levers

300Number of beds

2.2%Operating

margin

73%Medical share

of case mix

2021 Not So Pleasant

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Future State Untenable Without Major Improvement


Overall Impact of Market Forces at Pleasantville

2021

Current Margin

Projected Operating

Margin

Goal

Includes effects of:•Price growth trends•Cost growth trends•Payer mix shift•Case mix deterioration

20.9%:Total Gap to Goal

• Significant long-term capital needs across the board

• Tax-exempt debt unsuitable for financing IT, physician integration investments

• Retained earnings required to fund greater portion of capital

• Financial volatility demands higher margin to compensate for increased risk

The 4.0% Margin Imperative

Case Mix Management Closing the Gap

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Restoring Profitability with Aggressive Medical Management


Impact of Case Mix Improvement at Pleasantville

Case Mix Management

•Less profitable medical admissions prevented •Care management boosts outpatient volume•Inpatient space backfilled with high- value surgeries•New medical share of inpatient volume: 55%

Establishing the Medical Perimeter

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Extensive Ambulatory Care Network Addresses Medical Demand


Medical Management Investments

Health Information Exchanges

Electronic Medical Records

Medical Home Infrastructure

Primary Care Access Population

Health Analytics

Patient Activation

Post-Acute Alignment

Disease Management

Programs

Road Map

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A Growing Mandate

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Primary Care at the Top of Health System Executives’ Concerns

CEO/President (N=60)

Transforming Primary Care to Drive

Growth and Improve Patient

Outcomes 3.68Supporting Sustainable Cost

Restructuring 3.67Transitioning from Volume‐Based to

Value‐Based Business Models 3.63Maximizing Revenues in a Slow‐

Growth Environment 3.63

Competing on Affordability and Value 3.56

C-Suite (N=230)

Transforming Primary Care to Drive

Growth and Improve Patient

Outcomes 3.65Supporting Sustainable Cost

Restructuring 3.62Transitioning from Volume‐Based to

Value‐Based Business Models 3.57Maximizing Revenues in a Slow‐

Growth Environment 3.54The Future of Profitable Growth in

the Acute Care Enterprise 3.45

Taking a Health System View of Transformation

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Five Imperatives for Sustained Success


1 Expand high-performance PCP network

2 Define financially-sustainable transition path

3 Identify opportunities to scale resources across the network

4 Scale system assets around patient needs

5 Extend reach of health system boundaries

Shifting Ratio Toward Primary Care

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Staff to Meet the Needs of Longitudinal Patient Management

Source: U.S. Bureau of Labor Statistics, “Physicians and Surgeons,” available at: http://www.bls.gov/, accessed: May 4, 2011.; Health Care Advisory Board interviews and analysis.

Expand high-performance PCP network

1) Includes internal medicine, family medicine, generalists.2) Health Care Advisory Board interviews and analysis.

Primary Care Physicians as a Percentage of All Physicians

Population Management Requires Different Workforce Mix“The medical home movement is going to have an impact on the volume of services sent to specialists. So I would not be surprised if we see a shift in the ratio from specialty-dominated services to primary-care dominated services as part of accountable care. That’s certainly going to affect a lot of specialists and specialty groups, and that is happening at Dean.” Craig Samitt, MD

CEO, Dean Health System

“United States, 2008 Health Systems Bearing Population Risk2

35%45%-60%

Making an Investment in Care Team Resources

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Health Coaches Drive Medical Home Success

Building the Health Coach as Center of Care TeamMercy Clinics, Des Moines, IA

Estimated

$1MMercy Clinics Physicians Earning P4P Bonuses

95/96Total Bonus Payments Earned

• Disease Registry Management• Pre‐visit Chart Review• Patient Self‐Management Support• Care Coordination• Quality Improvement Support

Health Coach Role

Case in Brief: Mercy Clinics• 150-physician group employed by Mercy Medical Center

located in Des Moines, Iowa• Health coaches, mostly RNs, deployed to all primary care

clinics• Health coach activities improve compliance and

documentation for chronic care patients• Physicians more likely to achieve pay-for-performance

bonuses from private payers

Percentage of Recommended Preventative, Chronic Care Delivered

A Sustainable Pathway to Medical Home Development

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Finding Nearly a 4:1 Return on Care Team Investment

Source: “Mercy Clinics: The Medical Home,” Group Practice Journal, April 2008; Health Care Advisory Board interviews and analysis.

Define financially-sustainable transition path

1) Revenue attributed to health coaches, does not include increases from focus on hypertension patients or increased referrals to additional preventive testing.

Revenue and Expenses at Mercy North Clinic, 200610 Physicians, 1.6 FTE Health Coaches

To help assess the financial ROI from adding a health coach to your PCP practice(s), please see the Medical Home Health Coach Practice Impact Calculator available at: www.advisory.com/hcab/medicalhome

Increased Diabetes Care,

Testing1

Pay-for- Performance

Bonuses1

Saved Physician,

Nurse Time1

Health Coach Staffing Costs

Increased Microalbumin

Cost

Increased HbA1c Cost

Net Contribution

$122 K

$114 K $15 K

($73 K) ($10 K) ($5 K)$163 K

Clinic makes profit on three out of four in- office diabetic tests

Overcoming Financial Barriers to Transition

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Source: Health Care Advisory Board 2011 Medical Home Benchmarking Survey,

Sources of Health System Return on Investment

Owned Health Plan

Self-Insured Employee Plan

Allows creation of new incentives related to accountable care while reducing costs of covered lives

Provides opportunity to learn population management competencies, lower expenditures

Uninsured Population

Medicaid Population

Proactive care management may reduce bad debt potential of this population

Hospitals may find new ways to contain costs in partnership with states through innovative programs

Joint Contracting /P4PNegotiating hospital-level contracts with incentives linked to successful population management

GrowthPanel size expansion and increased practice productivity are opportunities to bring more patients into the system

Lack of payer support still a barrier

38% Health system-sponsored medical homes citing lack of payer support as most important issue to overcome for widespread

medical home adoption

Leveraging Health System Advantage

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Aggregating Providers Allows Efficient Use of Medical Home Resources


3. Identify opportunities to scale resources across the network

Models of Team-Based Care Enabling Scaled Care

Characteristics In-Practice Care Team External Practice Resource

DescriptionHospital provides support that practices are able to access within their practice, at their discretion

Hospital provides external support for group of practices; may be network- wide outpatient center

Type of Resource Could include RN, dietitian, and/or chronic disease educator

Typically comprises RNs, NPs; may also include dietitians, trained educators, mental health providers

Applicability Resource may be permanently placed within practice

May be utilized by both employed and independent physicians

Creating the Health System Medical Neighborhood

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Clinical Services to Consider Scaling Across Medical Home Practices

Health System Entities to Consider Involving in Medical Home Practices

Outpatient Diabetes Center

Outpatient Heart Failure Center

Wellness Center

Discharge Coordination Service

Home Health Agency

MedicalSpecialists

• Geriatrician• Ophthalmologist• Cardiologist• Pulmonologist• Podiatrist

Available at System Level

• Certified Diabetes Educator

• Dietician• Pharmacist• Behavioral

Health Specialist

Available at System Level

• Physician• Mid-level provider• RN/LVN• MA

Resources Needed

Expansion of Primary Care Team

Adopting a Patient-Centered Approach to Scale

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Integrating Access Points, Full Continuum of Providers to Improve Care


Reevaluating the Health System Asset Portfolio

1) Federally Qualified Health Center.

Extending the Scope of the Organization to Meet Patients’ Needs

Medical Home

Retail Clinic

Post-Acute Care Providers

Affiliating Across the Care Continuum

FQHC1

Home Monitoring

Home Health

Hospital Network

Ongoing Care Management Acute Care Post-Acute Care

The Perfect Storm for Population Health

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State Mandate Creates Sole Health Care Provider in Market

Source: Valenti K, “A Hospital-Owned, Facility-Based Medical Home: Lessons from Ellis Medicine,” presented at: The National Medical Home Summit, March 14, 2011, Philadelphia; Health Care Advisory Board interviews and analysis.

4. Scale system assets around patient needs

Three Competing Hospitals

Force of Change

Ellis Medicine: A True Community Provider

Berger Commission

Bellevue Women’s Hospital

Ellis: “Hospital on the Hill”

St. Clare’s: “The People’s Hospital” Ellis

Hospital

Medical Home

Women’s Center

All Under One Roof

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Redeploying Inpatient Assets as Nexus of Comprehensive Care

1) Pre-admission Testing.

Ellis Health Medical Home (Former St. Clare’s Inpatient Facility)

Source: Valenti K, “A Hospital-Owned, Facility-Based Medical Home: Lessons from Ellis Medicine,” presented at: The National Medical Home Summit, March 14, 2011, Philadelphia; Health Care Advisory Board interviews and analysis.

Imaging

Family Health Center

Pediatric Health Center

Wound Care/ Infusion Therapy

Day Surgery

Dental Health Center

Emergency Services

Health Services Navigators

PAT1

Chapel

Auditorium

Lab

Conf. Room

Customer Services/ Patient Advocate

Schenectady City School District

Welcome Center

The Ultimate Reluctant Consumer

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Today’s Health System Not Part of a Person’s Daily Life


Sphere of Patient Activity and Interactions

Community Workforce Drives Neighborhood Health

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Block-by-Block Surfaces Patient Care Needs Before Acute Episode

Source: Block-By-Block Program, available at: www.block-by- block.org, accessed May 4, 2011.; Health Care Advisory Board interviews and analysis.

14%Type 2 diabetes risk for the 72-block Humboldt Park area

7% National risk for diabetes

Humboldt Park Community Profile

• Need for grassroots engagement• Strong community culture• Multilingual population

Block-by-Block Program Components

• Peer led door-to-door health screenings

• Building Diabetes Empowerment Center

5. Extend Health System Boundaries

Community Leaders Impact Individual Health Activation

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Peers Promote Wellness in Local Neighborhood

Source: Block-By-Block Program, available at: www.block-by-block.org.; La Voz del Paseo Boricua, “Diabetes Empowerment Center opens its doors to the Humboldt Park Community,” available at: http://lavoz-prcc.org/2010/05/diabetes-empowerment-center-opens-its- doors-to-the-humboldt-park-community.; all accessed May 4, 2011.; Health Care Advisory Board interviews and analysis.

Block-by-Block Diabetes Program

1,000Residents have been connected

to a health care provider to discuss diabetes risk

Block Captains Trained Block Captains Deployed Diabetes Empowerment Center

• Four-week training program for Humboldt Park volunteers

• Engage neighbors in diabetes self-management activities

• Conduct door-to-door diabetes screenings

• Connect residents to a PCP and resources available at the Diabetes Empowerment Center

• Full time dietitian, test kitchen• Diabetes self-management,

education, exercise, wellness programs

• Nutritionist engages community eateries in menu planning

Extending Reach as Population Managers

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Range of Potential Investments, Partnerships to Support Wellness

Source: Oakland Tribune, “Bringing Health Care to Fire Stations,” available at: http://www.insidebayarea.com/ci_1 7859788?source= most_emailed.; Celadon Trucking, available at: https://www.celadontrucking..com/drivers/drart icles.aspx?id=4148.; all accessed May 4, 2011.; Health Care Advisory Board interviews and analysis.

Creating a New Type of Health Care Footprint

Cayuga Medical Center is majority owner of health and fitness center, preparing for second site

Community Health Network and Celadon Trucking Services opened a truck stop medical clinic

Ellis Health medical home campus has satellite site for school enrollment

Alameda County Health Care Services is placing medical clinics in fire houses

Extended Reach of Health Organization

Baylor Diabetes and Wellness Institute holds farmers markets

Road Map

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How Far Can We Go?

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Aurora’s Multipronged Approach to Panel Management


Patient Panel Size per PCP

Case in Brief: Aurora Health Care

• Fifteen-hospital system based in Milwaukee, Wisconsin

• Over 10 years, made a range of primary care network investments

• Currently piloting the medical home model, e-visits, and patient portals with its 700 employed primary care physicians

Planning 10 K Per MD?

“In the future, we may need patient panels as high as 10,000 per primary care providers…we have to start thinking how to prepare for that possibility.”

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Bruce Van Cleave, MDCMO, Aurora Health Care

Expanded Hours, E-visits

Care Teams

Plans to roll out medical home model across all employed practices

2,500 Patients

Saturday, evening access at all Aurora employed PCP practices, e-visits being piloted

Urgent Care Centers

Retail Clinics

Network of 10 AuroraQuickCare retail clinics

10,000 Patients

Network of 18 Aurora urgent care centers

Potential Target

Harnessing the Potential of Primary Care

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Medical Home’s Value Proposition for Hospitals and Health Systems


Source: Innovations Center interviews and analysis.

Improved Clinical Quality Improved Economics

Improved Physician Satisfaction Improved Patient Satisfaction

• Better chronic disease, preventive care for patients

• Reduced readmission rate• Reduction of “preventable” chronic

disease admissions, ED visits• Improved care coordination due to better

communication among providers

• Stronger margins for employed primary care practices

• Increased network referral capture• Reduced hospital readmissions• Lower cost of care for health

system employees• Framework for participation in new

care delivery systems

• Greater retention, less feeling of burnout for employed PCPs

• Vehicle to access network of system support resources

• Improved employed practice, residency program recruitment

• Improved care coordination among providers, care settings

• Access to broad suite of health improvement resources

• Improved access to care team• Stronger identification with health system

as provider of all health care needs

transformation lessons and issues · • coverage expansion boosting medicaid eligibility • most...

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