Five Myths Surrounding the Business of Population Health Management

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1 Five Myths Surrounding the Business of Population Health Management Joan Moss, RN, MSN Robert Sehring Chief Nursing Officer and Chief Ministry Services Officer, Senior Vice President, Sg2 OSF HealthCare System

2 Agenda Sg2 s Five Myths OSF HealthCare: The Real Business of Population Health Management Confidential and Proprietary 2013 Sg2 2

3 Meet Sg2 Sg2 is the health care industry s premier provider of market data and information. Our analytics and expertise help hospitals and health systems understand market dynamics and capitalize on opportunities for growth. Your single source for market data solutions. Sg2 Offerings: Powerful Analytics Data Resources Unmatched Expertise and Intelligence Industry-Leading Consulting Confidential and Proprietary 2013 Sg2 3

4 Population Health Management: What Is Your Answer? Survey of Hospital Investments in PHM 49 % Planning a Deferred Investment 17 % No Planned Investment 15 % Planning to Invest in Near-term 13 % Current Limited Investment 7 % Current Significant Investment Nearly two-thirds of respondents are planning to invest in PHM capabilities.. Note: Pie chart percentage total may vary due to rounding. PHM = population health management Source: Healthcare Financial Management Association. Value in Health Care: Current State and Future Directions. June Confidential and Proprietary 2013 Sg2 4

5 A Number of Common Misconceptions Permeate the Marketplace MYTH PHM is a strategy. PHM is just more of what we ve already been doing. Every market is ready for population health. FACT PHM is a sophisticated care delivery model that requires competencies not found in most hospitals today. Many factors that affect the health of a population extend beyond the realm of traditional hospital operations. Key factors such as partner availability and risk contracting activity will vary across markets. 4 I can do this on a small scale. A safe bet is a goal of ramping up to a minimum of 250,000 to 500,000 covered lives. 5 We will all be population health organizations. The vast majority of health systems do not have the operating scale, population base, financial resources and cultural characteristics needed to build a comprehensive PHM program. Confidential and Proprietary 2013 Sg2 5

6 Myth #1: PHM Is a Strategy Think of PHM as More of a Competency One That Takes a Long Time to Master PHM is a sophisticated care delivery model that involves a systematic effort to assess the health needs of a target population and proactively provide services to maintain and improve the health of that population. Confidential and Proprietary 2013 Sg2 6

7 Myth #2: PHM Is Just More of What We ve Already Been Doing Most of the Work of a PHM Organization Takes Place Outside the Hospital A Framework for Population Health Management Population Identification Health Assessment Risk Stratification Health Continuum Low or No Risk Moderate Risk High Risk Portfolio of Health Management Interventions * Preventive Services Lifestyle Coaching Transitional Care Complex Care Management Palliative and End-of-Life Care *This list is illustrative only and is not meant to be comprehensive. Source: Adapted from Care Continuum Alliance. Achieving Accountable Care: Essential Population Health Management Tools for ACOs. April Confidential and Proprietary 2013 Sg2 7

8 Myth #3: Every Market Is Ready for Population Health Not Every Market and Not Every Organization Is Ready for Population Health Factors Suggesting Readiness for PHM Market Health plans interested in funding care delivery innovations and infrastructure support Self-insured employers willing to partner on population-based payment models Provider partners willing and able to collaborate Favorable population density and long-term growth rates Availability of clinical expertise and technical resources in the marketplace Organizational Organizational culture that is willing to experiment and learn from mistakes Leadership team well versed in change management Physicians and nurses interested in using novel care delivery and workforce models Robust, strategically aligned primary care network well integrated via IT History of strong financial performance and capacity to make ongoing investments IT = information technology. Confidential and Proprietary 2013 Sg2 8

9 Myth #4: I Can Do This on a Small Scale Scale Is a Must Have Realizing PHM s Economic Benefits Will Likely Take Years Operating Scale Multisite organizations maintain the ability to scale infrastructure, technology and workforce investments across a wider asset base. Health systems with broad geographic coverage have access to a more expansive population base. Population Scale Minimum number of covered lives for a stable risk pool: 40,000 to 50,000 Estimates from a few systems to make the math work: 1,000,000 A safe bet: Plan on ramping up to 250,000 to 500,000 covered lives. Confidential and Proprietary 2013 Sg2 9

10 Myth #5: We Will All Be Population Health Organizations There Are Simply Too Many Barriers to Widespread Industry Adoption Operating scale Population scale Financial resources Significant workforce and technology investments ROI is often unknown or realized several years after deployment. Cultural characteristics Focus on innovation and experimentation Readiness to fail fast and learn faster ROI = return on investment. Confidential and Proprietary 2013 Sg2 10

11 Getting Started Clearly, Not Everyone Should Engage in Population Health, but Know This Health systems and their physician groups are uniquely positioned to conduct PHM due to their prominence in the community and proximity to the population. PHM represents an important way of rethinking health care. Despite barriers to adoption, all leaders should thoughtfully consider if and how PHM fits into their enterprise strategy. Confidential and Proprietary 2013 Sg2 11

12 Begin With a Comprehensive Organizational Readiness Assessment GETTING STARTED Domains in Sg2 s PHM Organizational Self-Assessment ENTERPRISE CHARACTERISTICS Strategic Alignment Prior Organizational Experience CARE DELIVERY INFRASTRUCTURE Care Delivery Model Behavioral Health Infrastructure Workforce Model Population Engagement Techniques TECHNOLOGY INFRASTRUCTURE Technology Tools and Supporting Processes Analytical Tools and Expertise TALENT AND CULTURE Governance Model Physician Leadership and Commitment Confidential and Proprietary 2013 Sg2 12

13 GETTING STARTED Take a Staged but Not too Incremental Approach to Development Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Prepare Build the Foundation Begin Culture Change Deploy Core Capabilities Develop Advanced Capabilities Care Delivery Infrastructure Identify set of administrative, physician and nurse champions. Expand primary care network. Establish OP behavioral health. Pilot medical home model at key sites. Test population engagement tools. Expand medical home models. Deploy health and wellness services. Refine care pathways and resource deployment. Technology Infrastructure Define EMR and broader IT requirements. Adopt registries for select chronic conditions. Deploy risk stratification and predictive modeling tools. Develop advanced risk stratification and predictive modeling tools. Integrate systems with regional information exchanges. Talent and Culture Define clinical workforce requirements. Deploy advanced practitioner and care team models in key areas. Create formal leadership model Assign dedicated analytical resources. Consider acquiring in-house epidemiological and actuarial expertise. Create formal innovation lab. Capstone Activities Complete medical staff and board of trustee education. Reaffirm ability to undertake risk-based contracting. Use interventions on employee base. Pilot shared savings contract. Expand shared savings contract. Contract with selfinsured employers. Market narrow network insurance product. EMR = electronic medical record; IT = information technology; OP = outpatient. Confidential and Proprietary 2013 Sg2 13

14 Agenda Sg2 s Five Myths OSF HealthCare: The Real Business of Population Health Management The content of this part of the presentation is the sole responsibility of the presenter and does not reflect the work product of Sg2. Confidential and Proprietary 2013 Sg2 14

15 OSF HealthCare: Who We Are and the Communities We Serve MISSION In the spirit of Christ and the example of Francis of Assisi, the Mission of OSF HealthCare is to serve persons with the greatest care and love in a community that celebrates the Gift of Life. VISION Embracing God s great gift of life, we are one OSF ministry, transforming health care to improve the lives of those we serve. 15

16 OSF HealthCare: Who We Are and the Communities We Serve (Cont d) HOSPITALS & AMBULATORY SITES Eight acute care hospitals One heart hospital One children s hospital 70 OSF Medical Group locations 192 clinic site locations 11 prompt care sites MEDICAL STAFF & COWORKERS 15,343 coworkers 629 physicians 279 midlevel providers FY 2012 UTILIZATION 1,288 licensed beds 207,850 ED visits 1,216,880 outpatient visits 1,273,511 physician visits 59,157 inpatient discharges 179,135 home health annual visits FINANCIAL INFORMATION $6,016,573,128 annual gross patient services revenue, FY12 $2,626,563,000 total assets, FY12 $18,588,882 foundation contributions $277,682,281 charity care ED = emergency department; FY = fiscal year. 16

17 Accountable Care Relationships at OSF 34,000 Medicare beneficiaries PIONEER ACO Shared risk 15,000 HMO members HEALTH ALLIANCE Shared risk 30,000 members QUALITY CARE PLAN Self-insured employee benefit program 40,000 projected members as of January 1, ,500 Medicare Advantage members BLUE CROSS Shared risk PPO and capitated HMO (ambulatory services) HUMANA Capitated HMO and shared savings PPO VALUE-BASED PAYMENT STREAMS Today 25% of Revenue 150,000 Covered Lives Future 60% of Revenue 400,000 Covered Lives ACO = accountable care organization; HMO = health maintenance organization; PPO = preferred provider organization. 17

18 Why Did OSF Choose to Become a Pioneer ACO? Alignment with OSF values and mission Consistent with OSF strategic plan and vision Opportunity to collaborate with CMS and other Pioneer ACOs Accelerate move from fee for services to pay for value Facilitates closer alignment with community caregivers CMS = Centers for Medicare & Medicaid Services. 18

19 Challenges for OSF HealthCare System s ACO Limited psychiatric/substance abuse services in the community Ongoing need to expand access to primary care physicians and midlevel providers Communication constraints Independent provider engagement Establishing consistency across accountable care agreements Balancing dueling business models Maintaining timely access to data and identifying appropriate benchmarks 19

20 Near-term Opportunities Reduce avoidable admissions and readmissions Reduce length of stay Decrease avoidable ED visits Improve care coordination Improve care transitions Enhance SNF patient management SNF = skilled nursing facility. 20

21 Population Health Management (ACO) Starting Points DATA AND ANALYTICS Enterprise data warehouse PCP OFFICE-BASED CARE MANAGERS Embedded care managers Centralized support TRANSITIONS OF CARE PROGRAM Risk stratification Follow-up phone call and PCP visit Medication reconciliation Provider handoffs SNFist PROGRAM Preferred SNFs based on quality and services Physician and advanced practitioners rounding on ACO patients daily 21

22 Lessons Learned and Next Steps Lessons Learned Next Steps It really is all about the data. It s impossible to overcommunicate. Expand access to care. Manage out-of-network utilization. Change management is critical. 22

23 You can t dabble in population health. SENIOR VICE PRESIDENT, EAST COAST HEALTH SYSTEM Words of Wisdom Organizations must have the financial wherewithal to make it to the other side. SENIOR VICE PRESIDENT, WEST COAST HEALTH SYSTEM A PHM program needs a good IT system, but it doesn t need to be perfect. SENIOR VICE PRESIDENT, EAST COAST HEALTH SYSTEM Organizations need to really let this play out over time before declaring it a success or failure. VICE PRESIDENT, MIDWEST HEALTH SYSTEM Source: Sg2 Interviews, January 2013 February Confidential and Proprietary 2013 Sg2 23

24 Sg2 is the health care industry s premier provider of market data and information. Our analytics and expertise help hospitals and health systems understand market dynamics and capitalize on opportunities for growth. Sg2.com

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