12/9/2014

1

Value Based Approach to ACO/Shared Savings

Wendi Knapp, MD, FACP Medical Director Variation Reduction

Laura Holmes, MD, Variation Reduction Physician Champion and ACO/VR Liaison

Objectives

• Engaging physicians in the ACO journey

• Assessing readiness for the journey

• Characteristics of different contracting models

• How to use data as an engagement tool

• Exploring the use and power of data.

12/9/2014

2

What do we mean by a Value Based Approach?

What do we mean by ACO/Shared Savings?

12/9/2014

3

We’ll Tell You!

PAMF/SutterFacilities and Patient Growth

= 2007        = 2013

PAMF/Sutter cares for more than 1 million patients with a 1000 physicians and 3,500 employees50% Primary Care 50% SpecialtiesPhysicians compensation productivity or shift based reimbursement25% HMO/ACO and 75% fee for serviceHighest rated groups in quality by the state and P4P programs40 years of Managed Care experience in both full and shared risk programsKnown for excellence, innovation and caring for the communities we serveRecognized a leader in Northern California by Consumer Reports

12/9/2014

4

No Secret…Consumers are Unhappy & Unprepared

•62% of personal bankruptcy filings each year are related to medical bills• On 1 in 3 American Consumer’s believe they are unprepared to handle the cost of medical care

•Healthcare spending approaching 20% of GDP•Healthcare spend per capita $8,600•Our infant mortality rank is 50th in the world, nine spots below Cuba

The $2.7 Trillion Medical BillColonoscopies Explain Why U.S. Leads the World in Health Expenditures

International comparisons show comparatively higher prices in USTime Magazine

Plan B

Patients evolving into Consumers…

Confidential8

64% of consumers said they are open to trying new ways of seeking care if the price is right.

68% Looked at Report Cards 60% Ask About Pricing 38% shopped for Online for Pricing

12/9/2014

5

Background

Wide variation in medical practice-Jack Wennberg, MD, Dartmouth

Affects quality and cost

Not always a correlation between high cost and quality outcomes

National Variation

• Gawande: The Cost Conundrum

– The New Yorker June 1, 2009

– McAllen TX: $15K per Medicare enrollee, twice the national average

• Brownlee: Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer

12/9/2014

6

Local PAMF Variation

Urine Culture in Urgent Care

Variation Reduction

In 2008, a Variation Reduction Program was initiated at PAMF

12/9/2014

7

PAMF Variation Reduction

Project Selection:

• Initially specialty driven, expanding into primary care

• Regional Departmental Physicians work together

• Often begin by looking at top 10 diagnoses, top 10 procedures

• Physicians get to choose

Variation Reduction “Seed Tools”

• Top 10 Diagnoses

• Top 10 Procedures

• National Guidelines

• Specialty Literature

• Choosing Wisely

• ACO/Shared Savings Learnings

12/9/2014

8

Our Five Pillars

Keys to Engagement

• Bring small groups of physician peers together

• Create safe environment

• Its about the dialogue

• Collaboration produces best outcomes

12/9/2014

9

It’s About the Conversation?

It’s about…

• Cultural Change

• Engaging physicians at a grassroots level.

• How to talk about affordability

• How to work on quality

It’s all about Value!

Focus on Value

How do we Define Value in Healthcare?

VALUE = QUALITY/COST

12/9/2014

10

Local PAMF Variation

Urine Culture in Urgent Care

Variation Reduction

Physician driven

Value Based Approach

12/9/2014

11

Accountable Care Organization (ACO)

• Evolution of ACO in 2006

• This term was coined by Elliot Fisher, MD, MPH at The Dartmouth Institute and Mark McClellan, MD, PhD currently at Brookings Institution

• This model of care delivery was based on value not volume

ACO/Shared Savings Defined

Many different ACO Shared Savings – Medicare Shared Savings Plans

– Commercial Shared Savings Plans• Upside Plans

• Upside/Downside Plans

• Case Management Share

12/9/2014

12

ACO/Shared Savings at PAMF/Sutter

Currently we are an Upside Commercial Plan ACO/Shared Savings

-Transition of Care

-Complex Case Management

-Quality Metrics

-Patient Engagement

Sutter Bay AreaOur managed population is the fastest growing payer group, representing ~20% of the payer mix.

 ‐

 100,000

 200,000

 300,000

 400,000

 500,000

 600,000

 700,000

 800,000

 900,000

 1,000,000

2009 2010 2011 2012 2013 2014 (E)

Shared savings commercial

Capitated Medicare

Capitated Commercial

Unknown/Others

Self‐Pay

FFS Medicare

FFS MEDI CAL

FFS Commercial

CAGR2011-2014(E)

TCOC11.3%

Total Growth

6.3%

Payer Mix Patient Volume

2009 - 2014

* 2014 Estimated patient count assumes overall growth at 2012-2013 rate for all categories and shift of additional 35K lives into Shared savings (Anthem)

*

12/9/2014

13

PAMF/SutterACO Plans: Snapshot

Plan Share Patients Limits

Anthem Upside 74,000 $250,000

Cigna Upside 35,000 $250,000

UHC #1 Upside 2,500 $100,000

UHC #2 Upside 7,500 $100,000

ACO/Shared Savings

What is a successful ACO/Shared Savings?

It’s not all about the Savings…

It’s about keeping our patients.

It’s about adjusting to transparency.

It’s about Quality Care.

It’s about ENGAGING the providers

12/9/2014

14

Readiness for ACO/Shared Savings

Attributes for a Successful ACO/Shared Savings1

• Provider led

• Providers and payers co own responsibility for the cost and quality of care.

• Defined population attribution to ACOs with choice.

• Health engagement/wellness initiatives that are tailored to the individual.

• Diverse groups of providers and facilities.

• Robust data technology and performance metrics

• Agreed provider/payer share of data on a timely basis

• Long-term partnerships

• 1 CommonWealth Fund ACO Whitepaper 2012

12/9/2014

15

What We Do Know?

• Medical Care is moving toward a Value Based model

• ACO/Shared Savings are one method of promoting value

• Variation Reduction is a way to move value to the provider level

What is the connection between Variation Reduction and ACO?

12/9/2014

16

What we do know about how VR and ACO’s Can Work Together

• Physician/Plan/Patient Engagement

• Facilitating Transparency

• Relevant Quality and Affordability Data

• Setting strategy

So Where does Variation Reduction and ACOs intersect

How do we use this physician driven

Value based approach to support

Commercial ACO/Shared Savings

Plans?

12/9/2014

17

VR & ACO: How do they work together?

• VR Philosophy: Committed to physicians choosing their own projects

• How do we use ACO data in a way that physicians want to use it for their VR projects

• Physicians become interested in ACO data when it is data that may have public reporting

• Or, when tied to compensation

Diagnosis Prevalence - Commercial

• high blood pressure and high cholesterol are predictive (and likely causative) of future high medical expense• Injury prevention and depression management

* Van Den Bos, J, Low Cost vs. High Cost Patients: What Medical Conditions Are Most Common, Milliman Pharmaco-Actuarial Advisor, June 2010.

34

12/9/2014

18

ACO Claims Data

• Can use your ACO Year-End Claims data to develop your top 20 diagnosis and Cost Lists

• They can become one of your “seed tools” for Variation Reduction

Top 20 Example of Claims Data

DX CODE DIAGNOSIS NAME

V202 Routine infant or child health check

7242 Lumbago

V7262Laboratory examination ordered as part of a routine general medical examination

V0481 Need for prophylactic vaccination and inoculation against influenza

V700 Routine general medical examination at a health care facility

71941 Pain in joint, shoulder region

7231 Cervicalgia

2724 Other and unspecified hyperlipidemia

71946 Pain in joint, lower leg

V571 Other physical therapy

V7231 Routine gynecological examination

V7612 Other screening mammogram

7295 Pain in limb

32723 Obstructive sleep apnea (adult) (pediatric)

1749 Malignant neoplasm of breast (female), unspecified site (HCC)

7391 Nonallopathic lesion of cervical region, not elsewhere classified

25000Type II or unspecified type diabetes mellitus without mention of complication, not stated as uncontrolled (HCC)

2449 Unspecified hypothyroidism

78079 Other malaise and fatigue

8470 Sprain of neck

DX CODE DIAGNOSIS NAME

V3000Single liveborn, born in hospital, delivered without mention of cesarean delivery

28803 Drug induced neutropenia(288.03) (HCC)

V7651 Special screening for malignant neoplasms, colon

1749 Malignant neoplasm of breast (female), unspecified site (HCC)

5770 Acute pancreatitis (HCC)

20530Myeloid sarcoma, without mention of having achieved remission(205.30) (HCC)

0389 Unspecified septicemia(038.9) (HCC)

V202 Routine infant or child health check

V700 Routine general medical examination at a health care facility

V5811 Encounter for antineoplastic chemotherapy

20500Acute myeloid leukemia, without mention of having achieved remission (HCC)

185 Malignant neoplasm of prostate (HCC)

4240 Mitral valve disorders

64893Other current maternal conditions classifiable elsewhere, antepartum

73313 Pathologic fracture of vertebrae (HCC)

7103 Dermatomyositis (HCC)

4254 Other primary cardiomyopathies (HCC)

V7612 Other screening mammogram

41071Acute myocardial infarction, subendocardial infarction, initial episode of care (HCC)

5409 Acute appendicitis without mention of peritonitis

Utilization Cost

12/9/2014

19

Align with our Projects

DX CODE DIAGNOSIS NAME

V3000 Single liveborn, born in hospital, delivered without mention of cesarean delivery

28803 Drug induced neutropenia(288.03) (HCC)

V7651 Special screening for malignant neoplasms, colon

1749 Malignant neoplasm of breast (female), unspecified site (HCC)

5770 Acute pancreatitis (HCC)

20530 Myeloid sarcoma, without mention of having achieved remission(205.30) (HCC)

0389 Unspecified septicemia(038.9) (HCC)

V202 Routine infant or child health check

V700 Routine general medical examination at a health care facility

V5811 Encounter for antineoplastic chemotherapy

20500 Acute myeloid leukemia, without mention of having achieved remission (HCC)

185 Malignant neoplasm of prostate (HCC)

4240 Mitral valve disorders

64893 Other current maternal conditions classifiable elsewhere, antepartum

73313 Pathologic fracture of vertebrae (HCC)

Focus on Real Patients

Total Patient Savings

No. of Patients in the Registry Average Savings 

per Patient No. of Patients

Savings for Patients (Post Standard)

Obstructive Sleep Apnea / Adult $   6,722,562  12,173 $   552.25  59 $        32,582.86 

Colonoscopy / Colon Cancer Screening $    130,152  9,622 $     13.53  112 $           1,514.97 

Epidural Cspine Tspine $      61,356  3,952 $   15.53  71 $           1,102.30 

Epidural Limb Pain $   1,846,275  7,789 $  237.04  100 $        23,703.62 

Routine Gyn Exam / PAP Smear $        1,811,960  54,707 $              33.12  263 $           8,710.87 

Breast Cancer treatment $  6,519,985  1,469 $  4,438.38  16 $        71,014.13 

TOTAL $      138,628.75 

12/9/2014

20

How to Make it Relevant

Where we met the employer on Radiology

New Ankle Sprain Standard

New Rheum Hand Imaging Standard

Lower Extremity OA Imaging Standard

New Primary Care Low Back Pain Guideline

How do you make your Claims Data request to your ACO Health Plan?

• the claim id

• line number

• patient id

• Name

• Dob

• date of service

• servicing provider

• CPT/HCPC code/corresponding ICD-9 diagnosis codes

• unit count

• DRG

• Paid date

• Net payment (ask for net payment, but most likely will get total charges)

• The claims data should be at the claim-line level (or procedure-level) and not be restricted to PAMF/Sutter servicing providers -so we’ll need claims submitted by PAMF/Sutter and non-PAMF/Sutter medical providers.

• Every claim-line information should contain (but not limited to):

12/9/2014

21

Employer/Patient Story

“It’s not just a contract, it is a journey” Elliott Fisher

Variation Reduction and ACO both dependent on data

“Data is oxygen”

12/9/2014

22

Data Dependency Requires:

How do we use this data and interpret it?

12/9/2014

23

WWII Example

High Risk Assignment

12/9/2014

24

WWII Example

Where would you put the armor?

12/9/2014

25

Abraham Wald Patrick Maynard Blackett

Where did they put the armor?

This is where they put the armor!

12/9/2014

26

How do we overcome our own bias?

• Example:

• Low Back pain

• In the top 20 on Claims Data for diagnosis and charges

• In the US, estimated 50-100 billion dollars per year

Where do we put our efforts?Understanding our audience

• If you are the CFO or are working on your ACO 12 month shared savings or even in Variation Reduction—where do you want to focus on cost savings on back pain

12/9/2014

27

But what is bringing down the plane?

• This is where claims data can take us further in population health

• While the CFO/Health Plan/Medical Group may be interested in the 12 month savings

• The employer is interested in the long term

– Drill down to patient characteristics

– What percentage have BMI greater than 30

– Sedentary

– Should our focus be on weight reduction, “get moving” programs

Our Preliminary Drill-down!

12/9/2014

28

What was Driving the Cost?

Have We Answered Their Question?

12/9/2014

29

The End?