Value based care: A system overhaul

Lee A. Fleisher, M.D.

Robert D. Dripps Professor and Chair of Anesthesiology

Perelman School of Medicine at the University of Pennsylvania

Email: lee.fleisher@uphs.upenn.edu

Unexplained Variation

Dartmouth Atlas of Healthcare

Value

• The core issue in health care is the value of health care delivered

• Value is the only goal that can unite the interests of all system participants

Value = Patient health outcomes per dollar spent

Michael Porter NEJM 2010

7

CMS support of health care Delivery System Reform will result in better care, smarter spending, and healthier people

Key characteristics▪ Producer-centered▪ Incentives for volume▪ Unsustainable▪ Fragmented Care

Systems and Policies▪ Fee-For-Service Payment

Systems

Key characteristics▪ Patient-centered▪ Incentives for outcomes▪ Sustainable▪ Coordinated care

Systems and Policies▪ Value-based purchasing▪ Accountable Care Organizations▪ Episode-based payments▪ Medical Homes▪ Quality/cost transparency

Public and Private sectors

Evolving future stateHistorical state

CMS framework for measurement maps to the six national priorities

Greatest commonality of measure concepts across domains

– Measures should be patient-centered and outcome-oriented whenever possible

– Measure concepts in each of the six domains that are common across providers and settings can form a core set of measures

Person- and Caregiver-centered experience and

engagment

•CAHPS or equivalent measures for each settings•Shared decision-making

Efficiency and cost reduction

•Spend per beneficiary measures•Episode cost measures•Quality to cost measures

Care coordination

•Transition of care measures•Admission and readmission measures•Other measures of care coordination

Clinical quality of care

•HHS primary care and CV quality measures•Prevention measures•Setting-specific measures•Specialty-specific measures

Population/ community health

•Measures that assess health of the community•Measures that reduce health disparities•Access to care and equitability measures

Safety

•Healthcare Acquired Infections•Healthcare acquired conditions• Harm

CMS has adopted a framework that categorizes payments to providers

Description

Medicare Fee-for-Service examples

▪ Payments are based on volume of services and not linked to quality or efficiency

Category 1:

Fee for Service –No Link to Value

Category 2:

Fee for Service –Link to Quality

Category 3:

Alternative Payment Models Built on Fee-for-Service Architecture

Category 4:

Population-Based Payment

▪ At least a portion of payments vary based on the quality or efficiency of health care delivery

▪ Some payment is linked to the effective management of a population or an episode of care

▪ Payments still triggered by delivery of services, but opportunities for shared savings or 2-sided risk

▪ Payment is not directly triggered by service delivery so volume is not linked to payment

▪ Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g., ≥1 year)

▪ Limited in Medicare fee-for-service

▪Majority of Medicare payments now are linked to quality

▪ Hospital value-based purchasing

▪ Physician Value Modifier

▪ Readmissions / Hospital Acquired Condition Reduction Program

▪ Accountable Care Organizations▪Medical homes▪ Bundled payments ▪ Comprehensive Primary Care

initiative▪ Comprehensive ESRD▪Medicare-Medicaid Financial

Alignment Initiative Fee-For-Service Model

▪ Eligible Pioneer Accountable Care Organizations in years 3-5

▪Maryland hospitals

Source: Rajkumar R, Conway PH, Tavenner M. CMS ─ engaging multiple payers in payment reform. JAMA 2014; 311: 1967-8.

The CMS Innovation Center

The purpose of the [Center] is to test innovative

payment and service delivery models to reduce

program expenditures…while preserving or

enhancing the quality of care furnished to

individuals under such titles.

- The Affordable Care Act

Identify, Test, Evaluate, Scale

CMS Innovations Portfolio: Testing New Models to Improve Quality

Accountable Care Organizations (ACOs)

• Medicare Shared Savings Program (Center for

Medicare)

• Pioneer ACO Model

• Advance Payment ACO Model

• Comprehensive ERSD Care Initiative

Primary Care Transformation

• Comprehensive Primary Care Initiative (CPC)

• Multi-Payer Advanced Primary Care Practice (MAPCP)

Demonstration

• Federally Qualified Health Center (FQHC) Advanced

Primary Care Practice Demonstration

• Independence at Home Demonstration

• Graduate Nurse Education Demonstration

Bundled Payment for Care Improvement

• Model 1: Retrospective Acute Care

• Model 2: Retrospective Acute Care Episode &

Post Acute

• Model 3: Retrospective Post Acute Care

• Model 4: Prospective Acute Care

Capacity to Spread Innovation

• Partnership for Patients

• Community-Based Care Transitions

• Million Hearts

Health Care Innovation Awards

State Innovation Models Initiative

Initiatives Focused on the Medicaid Population

• Medicaid Emergency Psychiatric Demonstration

• Medicaid Incentives for Prevention of Chronic

Diseases

• Strong Start Initiative

Medicare-Medicaid Enrollees

• Financial Alignment Initiative

• Initiative to Reduce Avoidable Hospitalizations of

Nursing Facility Residents

2016

30%

85%

2018

50%

90%

Target percentage of payments in ‘FFS linked to quality’ and ‘alternative payment models’ by 2016 and 2018

2014

~20%

>80%

2011

0%

~70%

GoalsHistorical Performance

All Medicare FFS (Categories 1-4)

FFS linked to quality (Categories 2-4)

Alternative payment models (Categories 3-4)

Partnership for Patients contributes to quality improvements

Data shows from 2010 to 2014…

Ventilator-

Associated

Pneumonia

Early

Elective

Delivery

Central Line-

Associated

Blood Stream

Infections

Venous

thromboembolic

complications

Re-

admissions

Leading Indicators, change from 2010 to 2013

62.4% ↓ 70.4% ↓ 12.3% ↓ 14.2% ↓ 7.3% ↓

87,000

2.1 million

PATIENT HARM

EVENTS AVOIDED

$20 billion

IN SAVINGS

Payment reform

• Traditional fee-for-service

– Reduced reimbursement

• Bundled payments

• Accountable Care Organizations

The bundled payment model targets 48 conditions with a single payment for an episode of care

➢ Incentivizes providers to take accountability for both cost and quality of care

➢ Four Models - Model 1: Retrospective acute care hospital stay only

- Model 2: Retrospective acute care hospital stay plus post-acute care

- Model 3: Retrospective post-acute care only

- Model 4: Prospective acute care hospital stay only

▪ 337 Awardees and over 1500 Episode Initiators as of January 2016

Bundled Payments for Care Improvement is also growing rapidly

▪ Duration of model is scheduled for 5 years:▪ Model 1: Awardees began Period of Performance in

April 2013▪ Models 2, 3, 4: Awardees began Period of

Performance in October 2013

Healthcare Consumerism

Is Policy Reform Good for Anesthesiologists/Perioperative Physicians

Bundled care-

How do we divvy up the pie?

Traditional FFS

Fixed payment

Lower fixed payment and share in any profit margin

Should the anesthesiologist be allowed to share in potential reward?

Does the anesthesiologist want to assume any risk?

What is shared accountability?

So how do we fix it from a policy perspective?

NOTES: Current status for each state is based on KCMU tracking and analysis of state executive activity. *AR, AZ, IA, IN, MI, MT, and NH have approved Section 1115 waivers. WI covers adults up to 100% FPL in Medicaid, but did not adopt the ACA expansion. SOURCE: “Status of State Action on the Medicaid Expansion Decision,” KFF State Health Facts, updated January 1, 2017.http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/

Current Status of State Medicaid Expansion Decisions

WY

WI*

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

ND

NC

NY

NM

NJ

NH*

NVNE

MT*

MO

MS

MN

MI*

MA

MD

ME

LA

KYKS

IA*

IN*IL

ID

HI

GA

FL

DC

DE

CT

COCA

AR*AZ*

AK

AL

Adopted (32 States including DC)

Not Adopting At This Time (19 States)

Summary

• The US healthcare system is transitioning from volume to value, but lives in both worlds

• Bundled payment is one of the few measures that improves quality and reduces cost

• Perioperative physicians must be engaged in the care.