The Interplay of Quality, Cost, and Technology in Fully Integrated Systems Kent Bottles, MD...

The Interplay of Quality, Cost, and Technology in Fully

Integrated SystemsKent Bottles, MD

[email protected]; www.kentbottles.com

Practical Strategies for Developing & Operating Your Accountable Care Organization

Minneapolis, Minnesota

September 13, 2010

mailto:[email protected]

mailto:[email protected]

http://www.kentbottles.com/



2

HEALTH CARE PLANS

•Insurance Companies

•HMOs

•PPOs; Etc.

CONSUMERS

•Children

•Families

•Elderly

•Insured

•Uninsured

PAYERS

•Employers

•Government

•Individuals

REGULATORS

•FDA

•JCAH

•Federal & state gov’ts

PROVIDERS

•Hospitals

•Outpatient

•Physician practices

•Nursing & residential

SUPPLIERS

•Pharmaceuticals

•Medical device co’s

•Medical suppliers

HEALTH DRIVERS

•Behavioral Choices (40%)

•Genetics (30%)

•Social Circumstances (15%)

•Medical Care Quality (10%)

•Environmental Conditions (5%)

HEALTH OUTCOMES

•Life expectancy

•Illness incidence

•System cost & quality

•Access & coverage

•Quality of life

THE CORE PROCESS

THE HEALTH CARE “SYSTEM”

Money Talks (Orszag Profile)Ryan Lizza, The New Yorker, May 4, 2009

“He became obsessed with the findings of a research team at Dartmouth showing some regions…spend far more money on health care than others but that patients in those high-spending areas don’t have better outcomes than those in regions that spend less money”


“If spending more on health care has no correlation with making people healthier, then there must be enormous savings that a smart government, by determining precisely which medical procedures are worth financing and which are not, could wring out of the system.”


“At the core of both the stimulus bill and the Obama budget is Orszag’s belief that a government empowered with research on the most effective medical treatments can, using the proper incentives, persuade doctors to become more efficient health-care providers, thus saving billions of dollars.”

Obama InterviewD. Leonhardt, After the Great Recession, NY Times Magazine, May 3, 2009

“There’s always going to be an asymmetry of information between patient and provider. And part of what I think government can do effectively is to be an honest broker in assessing and evaluating treatment options. And certainly that’s true when it come to Medicare and Medicaid, where taxpayers are footing the bill.”

Obama InterviewD. Leonhardt, After the Great Recession, NY Times Magazine, May 3, 2009

“If it turns out that doctors in Florida are spending 25% more on treating their patients as doctors in Minnesota, and the doctors in Minnesota are getting outcomes that are just as good -- then us going down to Florida and pointing out that this is how folks in Minnesota are doing it…--I think that conversation will ultimately yield some significant savings and some significant benefits.”

Federal Healthcare Reform

• The Patient Protection and Affordable Care Act• The Patient Health Care and Education Affordability

Reconciliation Act of 2010• March, 2010• 32 million Americans are now covered• Reduce costs via payment reductions and wellness &

prevention focus• Rewards for value-based care

Themes of Federal Reform

• Payment reform• Cost Control• Access• Payment reductions• Information

Payment Reform

• Health care delivery reform– Center for Medicare and Medicaid Innovation– Comparative effectiveness research panels– Multidisciplinary care teams– Electronic Health Records

• Organization of Health Care Reform– ACOs– Medical homes– Baskets of care– Health information exchange

• Payment Structure Reform– Bundled payments– Across the board payment reductions– Value based reimbursements

What Is an ACO?

• MedPAC: providers responsible for the health care of a population of Medicare beneficiaries

• Dartmouth: providers who receive new forms of payment designed for accountability for costs

• Shortell & Casalino (Accountable Care System): implement processes for improving quality and controlling costs of care and be held accountable

• Pittsburgh Regional Health Initiative (Accountable Care Network): transitional stage for small providers

• CBO (Bonus Eligible Organization): manage and coordinate care for patients

Medicare Shared Savings Program

• By Jan. 1, 2012 HHS Secretary will establish• Program requires participants to be part of ACO• Rules to be written by Fall 2010• Goals

– Provider accountability for all patient care– Coordination of Medicare Part A & B items & services– Encourage infrastructure investment– Redesign care processes for quality & efficiency– Achieved savings to be shared with eligible ACOs

Medicare Shared Savings Program Possible Participants

• Hospitals• Physicians• Nurse Practitioners• PAs• Social Workers• Dietitians• Specialists• SNF/Home Health• Rehabilitation/Long term care facilities

Medicare Shared Savings Program ACO Requirements

• Accountable for quality, cost, and care• Legal structure to receive incentives• Enough PCPs to care for minimum of 5000 patients• Promote EBM and Patient engagement• Patient-centered• Leadership and management structure• Report on quality and performance data• Three year agreement

Medicare Shared Savings Program Payment Structure

• Medicare Fee-for-Service plus Shared Savings• Per beneficiary cost benchmark established every

year by CMS • Risk adjusted• Participants must meet both cost and quality

performance goals to be eligible for shared savings

Medicare Shared Savings Program Quality Reporting

• Defined by HHS Secretary• Guidance from Physician Group Practice Demo,

Meaningful Use Criteria, Physician Quality Reporting Initiative

• Metrics– Clinical processes and outcomes– Patient and provider experience– Utilization rates– Care transitions across continuum of care– Quality measures phased in and raised over time

17© 2010 Center for Healthcare Quality and Payment Reform, Network for Regional Healthcare Improvement

Reducing Costs Without RationingIs Also Quality Improvement!

PreventableCondition

ContinuedHealth

HealthyConsumer

NoHospitalization

Acute Care Episode

Efficient Successful Outcome

Complications,Infections,

Readmissions

High-CostSuccessfulOutcome

How Primary Care Can Provide Value

• Improved access to care• Improved prevention and early diagnosis• Reduce unnecessary testing, referrals, meds• Use lower cost treatment options• Reduce preventable ER visits• Reduce preventable hospitalizations


Competencies for Primary Care to Be Successful as ACO

• Timely information about their patients• Technology & skills for population management and

coordination of care• Resources for patient ed and self management• Culture of teamwork and accountability among staff• Coordinated relationships with specialists• Ability to measure and report on quality of care• Infrastructure and skills for management of financial

risk• Leadership commitment to improving value

How Hospitals/Specialists Can Provide Value

• Improve efficiency of patient care• Use lower cost treatment options• Reduce adverse events• Reduce preventable readmissions


Reducing Costs Without RationingIs Also Quality Improvement!


ContinuedHealth

HealthyConsumer

NoHospitalization

Acute Care Episode



Readmissions



Dramatic Reductions in Rate of Hospitalizations Are Possible

Examples:

• 40% reduction in hospital admissions, 41% reduction in ER visits for exacerbations of Chronic Obstructive Pulmonary Disease (COPD) using in-home & phone patient education by nurses or respiratory therapists

• 66% reduction in hospitalizations for Congestive Heart Failure patients using home-based telemonitoring

• 27% reduction in hospital admissions, 21% reduction in ER visits for Chronic Obstructive Pulmonary Disease (COPD) through self-management education

Alternative Methods of Payment

• Fee for service• FFS and shared savings• Episode payment• Partial comprehensive payment and P4P• Comprehensive (Global payment)• Capitation


“Episode Payments” to Reward Value Within Episodes


ContinuedHealth

HealthyConsumer

NoHospitalization

Acute Care Episode



Readmissions

High-CostSuccessfulOutcomeEpisode

Payment(“Basketsof Care”)

$A Single Payment

For All Care Needed From All Providers in

the Episode, With a Warranty For

Complications


Yes, a Health Care ProviderCan Offer a Warranty

Geisinger Health System ProvenCareSM

– A single payment for an ENTIRE 90 day period including:• ALL related pre-admission care• ALL inpatient physician and hospital services• ALL related post-acute care• ALL care for any related complications or readmissions

– Types of conditions/treatments currently offered:• Cardiac Bypass Surgery• Cardiac Stents• Cataract Surgery• Total Hip Replacement• Bariatric Surgery• Perinatal Care• Low Back Pain• Treatment of Chronic Kidney Disease


Comprehensive Care PaymentsTo Avoid Episodes


ContinuedHealth

HealthyConsumer

NoHospitalization

Acute Care Episode



Readmissions


A Single Payment

For All CareNeeded ForA Condition

$ ComprehensiveCare

Paymentor

“Global”Payment


No Additional Revenuefor Taking Sicker

Patients

Payment Levels Adjusted Based on Patient Conditions

Providers Lose Money On Unusually

Expensive Cases

Limits on Total RiskProviders Accept forUnpredictable Events

Providers Are Paid Regardless of the

Quality of Care

Bonuses/PenaltiesBased on Quality

Measurement

Provider Makes More Money If

Patients Stay Well

Provider Makes More Money If

Patients Stay Well

Flexibility to DeliverHighest-Value

Services

Flexibility to DeliverHighest-Value

Services

CAPITATION (WORST VERSIONS)

COMPREHENSIVE CARE PAYMENT

Isn’t This Capitation?No – It’s Different


Comprehensive Care & Episode Payment Can Be Complementary


ContinuedHealth

HealthyConsumer

NoHospitalization

Acute Care Episode



Readmissions


$Comp.Care/

Global Payment

EpisodePayment

E.g., an annual paymentto manage an individual’schronic disease, includingcosts of hospitalizationsfor exacerbations

E.g., the payment madewhen the individualhas an exacerbationrequiring hospitalization

Difficult to Address All Costs

• Primary care: prevention, early diagnosis, appropriate testing/referral, reduce ER/hospitalizations

• Specialists: Improved outcomes and efficiency for most common diseases

• Hospitals: Greater efficiency and improved clinical outcomes for inpatient care

• Public health agencies and safety net clinics: Better management of complex and low-income patients

Different Organizations Exist in Different Parts of Country

• Primary care group practice• IPA• Multi-speciality group practice• IPA• Integrated Delivery System • PHO• Systems like Denver Health


From Health System Perspective:ACO = Our Hospital + PCPs

PATIENT

Surgery

HOSPITAL

ACOPrimary Care

Physician

Medical Care

Labor & Delivery

Primary CarePhysician

Primary CarePhysician

PATIENT

PATIENT

PATIENT

PATIENT

PATIENT


Looking Through the Patient’s(& Purchaser’s) Eyes

PATIENT

High Cost/Low QualityCardiac Surgery

Low Cost/High QualityOrthopedic Surgery HOSPITAL

#2

Low Cost/High QualityCardiac Surgery

High Cost/Low QualityOrthopedic Surgery HOSPITAL

#1

Low QualityPrimary Care

Physician

High QualityPrimary Care

PhysicianAvg. Quality Primary Care

Physician

REGION


Patients Will Want: Medical Homes + Value-Based Acute Care Choice

PATIENTPrimary CareMedical Home

High Cost/Low QualityCardiac Surgery

Low Cost/High QualityOrthopedic Surgery HOSPITAL

#2

Low Cost/High QualityCardiac Surgery

High Cost/Low QualityOrthopedic Surgery HOSPITAL

#1

Med. Quality Primary Care

Physician

Low QualityPrimary Care

Physician

Brookings/Dartmouth Carilion Clinic, Roanoke, VA Pilot

• Large group, fully integrated, with little competition• 900 providers• 60,000 Medicare patients• ACO pilot starts 2010• UHC, Anthem, CIGNA, South Health interested• Anticipate savings from reduced ancillary and ER

visits, hospitalizations, and readmissions

Brookings/Dartmouth Norton Healthcare, Louisville, KY Pilot

• Medium group, not completely integrated, with moderate competition

• 398 employed providers• 30,000 Medicare patients• Formed steering group• Internal discussions with providers, board,

management• Active discussions with payers• Bi-weekly calls with Brookings, Dartmouth, Humana

Brookings/Dartmouth Tucson Medical Center, Tucson, AZ Pilot

• Small group, independent provider groups, with highly competitive provider/clinical environment

• 50 providers• 5,000 Medicare patients• Collaborative ACO vs. Integrated ACO• Quality and Efficiency programs• Patient-centered medical home• P4P and gainsharing models• EHR/HIE initiatives

Implications of Federal Reform

• Fee-for-service eliminated• Survival will depend on health information technology

– Tracking: quality, claims– Care transitions– Data mining and exchange– Disease management

• New purchasers of services– ACOs– Medicare– Consumers (CLASS Act)

LarsonAllen Expects 7 Themes

• Providers will be asked to accept greater financial risk for outcomes

• Operational efficiency will be critical• Collaboration among all providers to survive• Investments in technology will be needed• Increased quality expectations, reporting, and

monitoring• Elevated regulatory risk• Increased focus on community-based services and

care

The Hype Cycle: Waves of Irrational Exuberance

Time

Expectations

Real Progress

Trigger Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

Adapted from Gartner Research

ACO Hype 2010

Annals of Science: The CovenantPeter J. Boyer, The New Yorker, September 6, 2010

• “Collins concedes that the prospects of sudden, practical benefits from the genome were initially overstated by some, and may still be a decade or more away. ‘You know about the first law of technology…A technological advance of a major sort almost always is overestimated in the short run, for its consequences – and underestimated in the long run’”

• Venter estimates the medical benefits derived from the human genome to be “close to zero”

References

• Harold Miller, How to Create Accountable Care Organizations, Center for Health Care Quality and Payment Reform

• Fostering Accountable Health Care, Health Affairs 28, no. 2 (2009), 219-231

• Brookings/Dartmouth Issue Brief on ACOs• Nicole Otto Fallon, Shifting from Volume to Value,

VCPI, August 24, 2010

The Interplay of Quality, Cost, and Technology in Fully Integrated Systems Kent Bottles, MD...

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