Healthcare Reform and Its Impact on the Care Delivery System · Source: HFMA | DHG 5 . The CMS Goal...
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Healthcare Reform and Its Impact on the Care Delivery System
Transcript of Healthcare Reform and Its Impact on the Care Delivery System · Source: HFMA | DHG 5 . The CMS Goal...
Healthcare Reform and Its Impact on the Care
Delivery System
Agenda
SESSION DESCRIPTION:
‘Healthcare Reform’ has been part of our local and national dialogue for almost 10 years. But
how much has actually changed, and how has that change impacted patients, employers,
payers, and providers across the delivery system? This session will explore the scope and
impact of healthcare reform on issues such as care delivery, value-based payments, risk
capability, clinical integration and data analytics, with a focus on post-acute providers.
1) The Era of Healthcare Reform
2) Healthcare Reform and Post-Acute Care
3) Succeeding in the Reform Era: Managing the Continuum of Health
4) Post-Acute Care and End of Life Care
5) Planning for the Future of Healthcare Reform
1
The Era of Healthcare Reform
2
The Demands of Today and the Near Term are…
3
EVERYWHERE INTENSE REAL
Healthcare Costs Continue to Rise – Paced by Spending on Elderly
4
U.S. is spending much
more for older ages Healthcare Costs by Age
Source: Fischbeck, Paul. “US-Europe Comparisons of Health
Risk for Specific Gender-Age Groups.” Carnegie Mellon
University; September, 2009.
The Era of Healthcare Reform
• Physician Alignment
• Provider Integration
• New Model Adoption
• Electronic Health Records
• Adopt New Models of Care Delivery
• Shift Accountability and Risk to Providers
• Redirect and Shrink the Dollars
• Provide Coverage for the Uninsured
• Improve Quality
• Increase Access
• Reduce Costs
PREREQUISTES
OBJECTIVES
GOALS
PPACA (March 2010)
Source: HFMA | DHG 5
The CMS Goal to Transform Healthcare Delivery
2016
30%
In 2016, at least
30% of U.S. health
care payments are
linked to quality and
value through
APMs.
2018
50% In 2018, at least
50% of U.S. health
care payments are
so linked.
These payment reforms are
expected to demonstrate better
outcomes and lower costs for
patients.
Adoption of Alternative Payment Models (APMs)
Better Care, Smarter Spending, Healthier People
6
Innovative Programs to Bring CMS’s Goal to Realization
AMB/Physician Acute Post Acute
Mandatory
VBPM/PQRS/MI
PS
Meaningful Use
VBP/RRP/HAC
MU, CAPC
Star Rating
CJR
SNF-VBP
Star Ratings
Home Health-
VBP
Star Ratings
Voluntary
MSSP/Next Gen/AIM
Bundled Payment/ Oncology Care Improvement
Transitions of Care
Other
State Initiatives (Bundles, DSRIP, Reform Programs)
Price Transparency
Value Based Contracting/Review: All Payers
7
CMS ALTERNATIVE PAYMENT MODELS // SCHEDULE
2014 2015 2016 2017 2018 2019
ACUTE CARE PROGRAMS
• Readmission (RRP)
• Value Based (VBP)
VOLUNTARY EPISODIC PROGRAMS
• BPCI Model 1-4 Live
• BPCI Voluntary Program
(2017)
MANDATORY EPISODIC PROGRAMS
• Comprehensive Joint (CJR)
• Episodic Payment (EPM)
ACCOUNTABLE CARE ORGANIZATIONS
• Pioneer ACO Model
(Started 2012)
• MSSP – ACO (Started 2012)
• Next Gen
CMS Alternative Payment Model // Schedule
8 ANNOUNCED LIVE
The Rise of Value-Based Contracting
In Three Years…
78% 49% 40%
Of physician practices
expect to have
meaningful value-
based revenue
Of facility revenue is
projected to be derived
from value-based
payments
Of health plans predict
that value-based
models will support the
majority of their
business
Source: Aetna 2013 Investor Conference Presentation
*Extrapolation of Availity survey results; 9
By 2020, approximately 50% of healthcare dollars could be paid through value-based
payment models.
Healthcare Reform and Post-Acute Care
10
Healthcare Reform and the Impact Across the Care Continuum
11
Significance of Post-Acute Care
• PAC services drive a significant amount of current health care expenditure
that for many populations is essentially unmanaged and
• Recent CMS programs highlight the important of clinical coordination and
integration across the transition from acute to PAC facilities as success in any
episodic payment model is based on the ability to manage and control post-
acute care spend
• Relatively short timeline for this type of program implementation can produce
decreasing costs over a shorter period of time
• Cross positive impact on Readmissions penalties and Hospital Value Based
Purchasing penalties/bonus on the Medicare Spend Per Beneficiary domain
• Cross positive impact on Physicians in the Cost component in both the
network and the Cost component of MIPs
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60% of episodic spending occurs post-acute
up to
Post-Acute Care Performance Impacts
13
Impacting Spend in the PAC Environment: Where Opportunity Exists
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0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Hip & femur procedures except major joint
Lower extremity and humerus procedure excepthip, foot, femur
Fractures of the femur and hip or pelvis
Major cardiovascular procedure
Other vascular surgery
Stroke
Medical non-infectious orthopedic
Major joint replacement of the lower extremity
Acute myocardial infarction
Other respiratory
HHA IRF LTCH Out-patient Readmission SNF
Succeeding in the Era of Healthcare Reform:
Managing the Continuum of Health
15
16
Enterprise Intelligence Advancing levels of risk require more sophisticated analytical
models that can access data sets offering insight into cost and
quality for a given population.
Revenue Transformation Managed Revenue Transformation emphasizes the need for a
“next-gen” revenue management platform focused on
reimbursement for value with an aligned distribution
methodology.
Critical Success Factors Requirement for Change
Information / Analytics Capital / Technology
Critical Success Factors Requirement for Change
Systems Controls / Processes
Clinical Enterprise Maturity An integrated Clinical Enterprise structurally engages
providers around improved health outcomes, management
of costs, acceptance of risk contracts, and value delivery to
healthcare marketplaces.
Critical Success Factors Requirement for Change
Alignment / Integration Incentives / Time (People)
The
Basics
Becoming Risk Capable
Strategy: Aligned Continuum of Health
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TELEHEALTH
Post-Acute Care Collaboration
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MINIMAL COMMITMENT
Ma
turity
/In
tegra
tion
Of D
eliv
ery
Syste
m
SYSTEM INTEGRATION
FINANCIAL AND DATA INTEGRATION
PARTNERSHIP
CONDITIONAL COLLABORATION
Infr
astr
uctu
re / IT
Ne
ed
ed
Source: http://www.healthagen.com/blog/acos-and-post-acute-
care-integrating-care-across-continuum
The Benefits of Effective Post Acute Care Coordination
Direct patients to most appropriate, lowest cost post-acute setting
Select PAC providers based on clinical capabilities and performance indicators
Ensure most effective care for most appropriate length of time
Define referral patterns with clear clinical pathways
Establish interdisciplinary teams for smooth care transitions and patient management
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Post Acute Care and End of Life Care
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Spending for End of Life Care
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End of life care remains a significant portion of healthcare spend
Average Medicare spending per beneficiary in traditional Medicare who died in
2014 - almost four times higher than the average cost per capita for seniors
who did not die during the year. $34,529
Percentage of spending for health care services provided to beneficiaries age
65 and older in the last year of life. Research shows that spending during the
year of death decreases with age after age 73.
25%
Where the
spending
occurs: Hospital inpatient Skilled nursing Hospice
Where the Spending for End of Life Occurs
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Medicare covers a comprehensive set of healthcare services that include care in hospitals
and several other settings, home health care, physician services, diagnostic tests, and
prescription drug coverage through a separate Medicare benefit.
Source: Kaiser Family Foundation (excludes Medicate
Advantage beneficiaries) – 2014 Medicare Claims Data
The Future of Post-Acute Care in the New Healthcare Era
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CURRENT STATE FUTURE STATE
LOS Management LOS Management
Any discharge setting RIGHT discharge setting
Any PAC provider EFFECTIVE PAC partner
Acute Focused Post Acute Management
Uncoordinated care teams Integrated, interdisciplinary team
Readmission interest Readmission Focus
High cost variation Consistent, evidence based care
Planning for the Future of Healthcare Reform
The New Era of Healthcare Reform
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The new reform era will be driven by free market principles:
MARKET COMPETITION and CONSUMER CHOICE
Health Savings
Accounts
Tax credits for
individuals paying
out-of-pocket
Cross-state
Insurance Sales
Negotiations
with Drugs
Makers
Increased
Transparency
Block-granting
Medicaid
Re-importation
of Medications
The New Political Agenda and its Impact on Healthcare Delivery
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Repeal and Replace ACA
Require Provider Price
Transparency
Expand Health Savings Account
Allow sale of insurance plans
across state lines
Re-importation of prescription
drugs
Allow Medicare to negotiate
drugs prices
Block grants for Medicaid funding Allow deduction of health
insurance premiums
Payers:
NEGATIVE
Providers:
NEGATIVE
Payers:
POSITIVE
Providers:
NEGATIVE
Payers:
POSITIVE
Providers:
NEGATIVE
Payers:
NEUTRAL
Providers:
NEGATIVE Payers:
POSITIVE
Providers:
POSITIVE
Payers:
NEUTRAL
Providers:
NEUTRAL
Payers:
NEUTRAL
Providers:
NEUTRAL
Payers:
NEUTRAL
Providers:
NEUTRAL
Emergence of Consumerism in the New Reform Era
Growing number of buyers
1
Traditional Market
Passive employer,
price-insulated employee
Broad, open networks
No platform for apples-to-
apples plan comparison
Disruptive for employers to
change benefit options
Constant employee premium
contribution, low deductibles
Consumer Market
Activist employer,
price-sensitive individual
Narrow, custom networks
Clear plan comparison on
exchange platforms
Easy for individuals to switch
plans annually
Variable individual premium
contribution, high deductibles
CHARACTERISTICS OF A TRADITIONAL VS. CONSUMER MARKET
Proliferation of product options
2
Increased transparency
3
Reduced switching costs
4
Greater consumer cost exposure
5
Source: Health Care Advisory Board interviews and analysis 27
A Disciplined Response to Healthcare Reform
MARKET URGENCY ASSESSMENT
ORGANIZATIONAL READINESS ASSESSMENT
GAP ANALYSIS
STRATEGY DEFINITION
PRIORITIZATION AND RESOURCE ALLOCATION
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The Demands of Today and the Near Term are…
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EVERYWHERE
BUT LONG TERM SUSTAINABILITY REQUIRES PERSPECTIVE THAT IS…
INNOVATIVE
INTENSE REAL
HONEST WIDE ANGLED
APPENDIX
Readmission Reduction Program
• 9% of Current and Future Medicare Reimbursement at
Risk
– 3% penalty of Medicare Reimbursement at risk each
program year
– Measured Populations 30 days from DISCHARGE
• AMI, HF, PN, COPD, THA & TKA, CABG
• August 2014: CABG Added to FY 2017
• Performance Periods: 3 Year Rolling Program
– FY’16: July 1, 2011 – June 30, 2014 – 3%
– FY’17: July 1, 2012 – June 30, 2015 – 3%
– FY’18: July 1, 2013 – June 30, 2016 – 3%
– FY’19: July 1, 2014 – June 30, 2017 – 3%
– FY’20: July 1, 2015 – June 30, 2018 – 3%
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Currently
participating in 3
performance periods
simultaneously
VBP - Efficiency
Medicare Spend Per Beneficiary (MSPB)
• Captures total Medicare Spending Per Beneficiary
relative to a hospital stay, bundling hospital sources with
post-acute care
• Bundles the cost of care delivered to a beneficiary for an
episode across the continuum of care:
– 3 days prior
– Hospital Inpatient Stay
– 30 days post-discharge
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End of Life Care Spending
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Healthcare Spending Continues to Soar
35
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MARKET URGENCY ASSESSMENT
ORGANIZATIONAL READINESS ASSESSMENT
GAP ANALYSIS
PRIORITIZATION AND RESOURCE ALLOCATION
• ORGANIZATIONAL CHANGE
• LEADERSHIP COMMITMENT
• CONSUMER INTELLIGENCE AND ANALYTICS PLATFORM
• OPERATIONAL EXCELLENCE
• PRICING TRANSPARENCY AND APM
• SERVICE ALLOCATION
• ACCESS SITES AND TOUCH POINTS
• CARE DELIVERY NETWORK
STRATEGY DEFINITION
Strategic Response and Key Initiatives
Example of Post-Acute Care Opportunity
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Inpatient and PAC Fee-for-Service Model Total Joint Replacement (DRG 470)
MD • Home Health
• SNF
• IRF
• OP Rehab Readmission
Home
$3,207 $10,129 $8,965 $616 + + + = $22,927
x 98%
$22,468
Bundled Episode
Note: Any aggregate payments lower than
$22,468 can be shared with providers
Episodic period for model 2: 3 days prior to admission
to 90 days post discharge from hospital
Effectively managing the Bundled Payment is dependent on Post-Acute Care
