[webinar] new economics: health plans and payer contracts to advance value-based care
DESCRIPTION
Value-based care is now at the heart of a health system’s strategy. To speed the path to progress, a multi-pronged approach is key. In this webinar, we shared how one leading health system is driving community health improvement while also enhancing financial performance through the execution of a multi-year value-based care strategy. Key topics addressed: • How to capture value from provider-owned health plans and translate to value for payer partnerships • The impact of different contracting models on population health • How to align physicians (employed and independent) to a multi-pronged value-based care strategy The webinar shared highlights from Premier Health’s strategy of launching a health plan while simultaneously pursuing value-based partnerships with payers.TRANSCRIPT
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New Economics:
Health Plans and Payer Contracts to
Advance Value-Based Care
Webinar | October 8, 2014
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Presenters
Mike Maiberger
Senior Vice President,
Value-Based Services,
Premier Health
Mark Shaw
Vice President,
Managed Care and
Chief Revenue Officer,
Premier Health
Steve Wigginton
Chief Development Officer,
Evolent Health
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Agenda
• Brief Evolent Health Introduction
• Overview of Premier’s Value-Based Strategy
• Q&A
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Value-Based Care Now at Heart of System Strategy
• Rate cuts
• Narrow networks
• Price transparency
• Exchanges
• ACOs / at-risk MD groups
• A price-sensitive marketplace
Mounting Market Pressures
Managing “cost” through population
health, not price / rate reductions (other
than owned plan)
Compete on Outcomes
Health system well-positioned to grow /
protect market share at stable margins
Move Upstream to
Capture Volume
Explosion of Activity;
All Focused on Narrow
Networks and Total Cost of Care
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Not All Contracting Models Will Achieve theDesired Outcome
Today’s Market
StatusQuo
LaunchInvest.
Pop HealthReturns
NetGrowth
LaunchInvest.
Pop HealthReturns
NetGrowth
LaunchInvest.
Pop HealthReturns
NetGrowth
Syste
m P
rofi
t
Status Quo
Current market forces
will create a downward
pressure on premiums
and significantly reduce
system revenues.
Have the potential to create
gainshare but does further
cannibalize revenue and have
limited returns.
Provide systems with a higher
upside potential but also
increase downside risk.
Offers a significant increase in
revenues and high exposure to
downside risk.
Payer Partnerships
(low risk share)
Payer Partnerships
(high risk share)
Health Plan
NPV = ? NPV = $50–100M NPV = $100M
Cost
Cuts
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Siloed Models Frustrate Physicians and Patients
PortalCase
Management
Utilization
Management
Aetna
Cigna
UnitedHealthcare
Blue Cross
Blue Shield
Employer
EMR Portal
EMR Pod
Radiology
Benefit
Management
Patient
Physician A
Physician B
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Towards a Unified, Provider-Led Solution
OPTIMIZES CHOICES
AND CARE
Informed,
activated
patient and
caregiver
Prepared,
proactive
physician
team
PRODUCTIVE INTERACTION
Physician
Enterprise
Services
and Network
Value-Based Business OrganizationThrough Evolent partnership,
infrastructure to manage populations under risk
HEALTH SYSTEM
Population health goals: higher quality, lower
costs, better patient experience
Payers Face
Rising Costs
Insurance Company
Operational Focus
Administrative
FunctionsBilling, Customer
Service, Sales,
Marketing
Focus on Medical
ManagementAnalytics,
Stratification, High
Cost Areas
Efforts to engage
member in care
management
Clinical
ProgramsCHF, Diabetes,
HIV
Moving away from a failed model… …to a proven model
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Solution Architecture
BLUEPRINT
PAYER
VALUE ALLIANCE
HEALTH PLAN
VALUE EDGE
EMPLOYER
VALUE ADVANTAGE
MARKET FACING SOLUTIONS
VALUE BASED OPERATIONS
Population
Health Performance
Financial and
Administrative
Management
Delivery Network
Alignment
Organizational Transformation
Identifi Technology Platform
Powering Value-Based
Market Facing Solutions
Operating World-Class
Competencies
Charting Strategic Course
and Operating Plans
Transforming From the
Inside Out
Integrating Data, Analytics,
and Workflow
Establishing a Dedicated
Value Based Business
Infrastructure
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Accelerating the Path to Progress
Payer
Value Alliance
• Aligned value
contract templates
• National and regional
payer and
provider relationships
• Specialized managed
care negotiators
and actuaries
Health Plan
Value Edge
• Accelerated health
plan launch
• Provider-centric
product designs
• Nationally scaled
infrastructure
• Consumer and broker
marketing toolkits
Employer
Value Advantage
• Health system
employees
• Local employer
strategies
• Private exchanges
• Value-based plan index
• Benefit consulting
MARKET FACING SOLUTIONS
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Agenda
• Brief Evolent Health Introduction
• Overview of Premier’s Value-Based Strategy
• Q&A
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Premier Health: At A Glance
Located in
Dayton, OH:
1.5M+population
4hospitals
$1.8Bin annual
revenue
250+employed
physiciansNot-for-profit
Locally
governed
>14,000 employees
100+locations in
25communities
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Priorities:
1. Patients andFamily FIRST
2. The Partnership
3. The Partners
Mission
We will BUILD HEALTHIER
COMMUNITIES with others who share our
commitment to provide high-quality,
cost-competitive health care services.
Vision
Patients, physicians and
employees will CHOOSE
Premier Health over any health
care provider in
southwestern Ohio.
We will EARN their choice, and GROW our
market leadership,
by anticipating their needs and exceeding
their expectations.
ValuesWe…
… RESPECT each person’s dignity.
… act with INTEGRITY to do the right
thing in all aspects of
our responsibilities.
… serve with COMPASSION that
embraces each individual’s concerns
and hopes.
… commit to EXCELLENCE as measured
to the highest level
of performance.
Premier Health: Mission, Vision and Values
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Dayton Market Context
Providers:
• Premier: >50% market share
• Competing system: >30% market
share
Payers:
• Anthem: >40% market share
• United: >30% market share
Primary care physicians:
• Premier-employed: ~15%
• Competing system-employed: ~5%
• Independent: ~80%
Additional market context:
• Total population growth flat, with
mix shifting to Medicare
• Anthem launched narrow network
product with competing system on
public exchange on 1/1/14
Dayton
Premier
hospitalCompeting
system
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Premier’s Vision for Population Health
Premier Health can drive substantial
community health improvement with the potential to
enhance annual financial performance at scale
by $10M+ by 2020 on 150K+ lives through the execution of a
multi-year Population Health Strategy
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Premier is Launching a Comprehensive Multi-Year Population Health Strategy to Achieve the Vision
Employee
Health
Medicare
Advantage
Commercial
Payer
Partnerships
• 17,000+ employees and dependents
• Full replacement plan in 2014
• State-of-the-art wellness program
• MA HMO and D-SNP
products in 2015
• Individual market on- and off-
exchange in 2015
• Small group off-exchange, large
group, self-insured in 2015
• Small group on-exchange TBD
• Exploring risk-based
partnerships in Medicare,
Medicaid, and Commercial
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Organizational Structure for the Population Health Business
Premier Value-
Based Services
Premier
Health Plan
Premier
Health Group
• Leads product development,
including self-insured,
Medicare Advantage, and
Commercial products
• Leads sales and marketing
of products
• Holds insurance license,
reserves, and bears risk
of financial losses
• Leads development and
management of
provider network
• Leads population health
management, including care
management operations,
quality improvement and
physician alignment
• Contracts with 3rd party
payers to manage their
populations’ health
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The Importance of Having a Health Plan
Maximum ability to understand what drives economics of population health
to keep payer partnerships sustainable
Maximum ability to capture value from population health:
$1 in utilization reduction = $1 in health plan margin
Maximum ability to integrate and optimize payer and provider functions to
improve outcomes and patient and physician experience, e.g.:
• Administrative and clinical data
• Payer call center and provider scheduling
• Payer utilization review and provider case management
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19040
250
320
50
980 980
10
280 310
1,700 1,710
2012 2018
But it Has Limits…We Project ~3-7% of Dayton Population Will be Covered by Premier Health Plan
Covered Lives (in Thousands)
Premier Health Plan
+0% p.a.
Uninsured
Medicaid
Commercial
Medicare
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… And it Takes Time to Build
~ 15,000
~ 30,000
~ 40,000
~ 50,000
~ 60,000
2014 2015 2016 2017 2018
Estimated Premier Health Plan Membership
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Payer Partnerships are an Important Complementary Strategy, Particularly in the Early Years
Greater
Physician
Mindshare
Greater
Alignment with
Independent
Physicians
Greater
Scale
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Building a Custom Network to SupportPayer Partnerships
Health Plan
ProductPremier Health Plan Other Payer 1 Other Payer 2
Broad Access
Network
Subset of
Broad
Access
Network(s)
Driving Payer
Partnerships
Customers
Medicare
Advantage
Enrollees
IndividualsEmployers
PHG
Broad Network
Other Payer 1
Broad Network
Other Payer 2
Broad Networks
Payer Partnership Network (PPN)
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Payer 5
Payer 4
Payer 3
Payer 2
Payer 1
Differing Processes Lead to Confusion and Cost Within the Physician Practice
??
?
Risk AdjustmentProcess Key Care Management Success Metrics
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Payer Partnership Network Creates Streamlined Processes for Physician
Payer 5
Payer 4
Payer 3
Payer 2
Payer 1 Payer Partnership Network
Multi-disciplinary
Care Team
Integrated Technology
Solution
Optimized Process
Physician
Quality Bonuses
Payer 6
Risk AdjustmentProcess Key Care Management Success Metrics
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If We’re Successful, We Get to Determine Our Future
Build capabilities using both Health Plan and Payer Partnerships
As capabilities mature, we have improved strategic relevance to payers
Long-term, we provide multiple sustainable options to the community for
accessing our advanced care model
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Agenda
• Brief Evolent Health Introduction
• Overview of Premier’s Value-Based Strategy
• Q&A
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