Health Care Reform Challenge: Creating a High Performance Healthcare System. Tom Simmer, MD Chief Medical Officer, BCBSM February 6, 2013
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1 Health Care Reform Challenge: Creating a High Performance Healthcare System Tom Simmer, MD Chief Medical Officer, BCBSM February 6, 2013
2 Affordable Care Act Expands healthcare coverage, increasing demand for services. Creates exchanges ---a new process for individuals choosing coverage with strong market pressure to lower healthcare cost. Lowers Medicare per-case payments to facilities, and (likely) professionals. Estimated reduction over 10 years in Michigan: $22 Billion. Total payments over 10 years will grow. Places responsibility for lowering costs on provider organizations, i.e., Accountable Care Organizations or Organized System of Care 2
3 Lowering Healthcare Cost: The Buck Stops Here By expanding benefits and working through private insurers, it is clear that the government wants no direct role in reducing choice or use of services. Membership will shift to health plans with competitive pricing on the exchange. Health plans will increase utilization controls, but the main responsibility for lowering the cost of care will fall on healthcare providers, through Accountable Care Organizations (ACO s). Strong market pressure is pushing physician fees lower. Products with more restrictive network choices will gain market share. 3
4 Why is it really different this time around? All stakeholders--health Plans, Patients, Physicians and Hospitals face strong financial pressure to lower cost. Providers oriented to payment based on volume will be paid very low fees. Health Plans need competitive fees AND low utilization to succeed. Performance-based payments will determine hospital / health system viability. 4
5 The Challenge of Reform: Accountable Care Organizations (ACO) ACO s are provider organizations that hold performance-based contracts linking provider payment with population-level results. ACO s will serve patient populations in closed networks (HMO model) and in broad-access networks, (Medicare or BCBSM-PPO). BCBSM uses the term Organized Systems of Care (OSC) to emphasize that population management implies transformation change to become a high-performance system. 5
6 How is an OSC different from an ACO? Conceptually aligned: Provider organizations functioning to improve clinical outcomes measured at the population level with lower cost. Difference: OSC focuses on before the fact responsibility (infrastructure support); ACO after the fact accountability (contracts that link payment to population-level performance) OSC ACO BCBSM and Physicians Organizations collaboratively develop program, determine how communities of caregivers are identified, defined and organized Requirements defined by CMS (section 3022 of the Affordable Care Act) 6 6
7 CMS ACOs in Michigan and BCBSM OSCs CMS Michigan ACO CMS Pioneer ACO CMS MSSP BCBSM OSC Genesys PHO x x University of MI x x (GWACP) Michigan Pioneer ACO x x (DMC PHO) Accountable Healthcare Alliance x x Oakwood ACO x x ProMedica Physician Group Southeast Michigan Accountable Care x x CMS Pioneer ACO 2011 participants CMS Medicare Shared Savings program (MSSP) July 2012 participants ProMedica Physician Group - Ohio-based organization; serves 27 counties; 13 hospitals one in Michigan ( Bixby, Adrian, MI) Southeast Michigan Accountable Care UOP physician network; counties: Livingston, Oakland, Macomb, Wayne, and Washtenaw 7
8 8
9 A High Performance Healthcare System Addresses the root causes of low system performance Poorly aligned incentives Lack of population focus Fragmented health care delivery Weak primary care foundation Lack of focus on process excellence Payments strongly tiered based on performance measured at the population level. All-patient registries at the practice level, integrated registries at the ACO level. Performance measured and rewarded at population level. Organized Systems of Care Population focus for primary care physicians, hospitals, and specialists. Patient Centered Medical Home; Provider-Delivered Care Management Collaborative Quality Initiatives Lean process redesign 9
10 Primary Care Practice Transformation New capabilities required (partial list): Source of truth for identity of all patients with a care relationship with the practice Registry function that prompts delivery of recommended services at the point of care and supports routine outreach to patients Physician-led health care team with active nurse care management focused on supporting patient self management and coordinating care Active management of external information into the practice s care processes: Hospitalizations, ER visits, test results, specialty evaluation and care, community resources Actively manage health plan contracts aligned with reward/risk based on population level performance. Consider role for MSMS and/or PO s. 10
11 Transformation of Specialty and Hospital Care Physicians Physician Group Incentive Program 30 Initiatives aimed at Capability Building, Improving Quality of Care Delivery, and Appropriate Utilization of Services Types of Initiatives Include: Improvement Capacity Condition-Focused Service-Focused Core-Clinical Process- Focused Clinical Information Technology-Focused Hospital Collaborative Quality Initiatives (CQIs) BCBSM Cardiovascular Consortium Percutaneous Coronary Intervention and Peripheral Vascular Intervention CQIs Michigan Society of Thoracic & Cardiovascular Surgeons Quality Collaborative Michigan Bariatric Surgery Collaborative Michigan Breast Oncology Quality Initiative Advanced Cardiac Imaging Consortium Michigan Surgical Quality Collaborative Peri-Operative Outcomes Initiative Hospital Medicine Safety Collaborative Michigan Trauma Quality Improvement Program Michigan Arthroplasty Registry Collaborative for Quality Improvement (1Q12) Michigan Radiation Oncology Quality Collaborative (1Q12) Hospitals Hospital P4P Incentive Program P4P program consists of Quality Measures CQIs Quality Indicators Efficiency Measures Cost-per-Case Hospital per member per month trends Michigan Health & Hospital Association: Keystone Center for Patient Safety & Quality BCBSA Best of Blue Awards PGIP and CQIs 2010 PCMH (also received BlueWorks the premiere BCBSA award) MSQC, MBSC and MOQC (also received BlueWorks Awards for MSQC and MBSC)
12 Specialist Practice Transformation BCBSM is developing population-level performance measures for specialists and tiering fees based on population-level performance. To be eligible for higher payment levels, specialists must partner with PCP s through Physician Organizations or OSC s. Current emphasis: improved communication and responsiveness to PCP s and to the organizations held responsible under contracts based on population-level performance---the ACO s. 12
13 So We are entering a world where provider payments (hospital and physician) are low unless supplemented by performance-based income. Performance-based income is channeled through Accountable Care Organizations that hold contracts with government and commercial health plans. Caring for individual patients in a way that achieves better populationlevel results requires a new set of organizational capabilities and new model for patient care. This can only be done with a payment model that sustains it. Success requires a costly population management infrastructure while reducing overall costs. Reliance on discounted fee for service will drastically reduce physician payment while failing to control cost. 13
14 Summary The Affordable Care Act places responsibility for managing the care delivered to insured populations with provider organizations called Accountable Care Organizations. By addressing the root causes of performance deficiencies, Lack of incentive alignment Weak primary care foundation Lack of focus on process management Lack of population management capabilites, and Fragmentation of healcare delivery, Accountable Care Organizations will create high-performance healthcare systems. BCBSM is actively working to support and sustain health systems attempting to create High performing systems of care. 14
15 Questions 1. What standards do you think will be in place for the minimum insurance coverage package and do you see these effectively meeting the needs of the uninsured today? 15
16 Questions 2. As a part of the process of transitioning to a mutual insurance corporation, BCBSM has pledged to establish a separate Health and Wellness Foundation with an investment of $1.5 billion, paid to the State of Michigan over 18 years. What will be the specific priorities of this foundation in serving Michigan communities? How have you begun the process of assuring these funds will reach those who need it most? 16
17 Questions 3. How would you see a hypothetical future public option impacting the existing insurance landscape? 17
18 Questions 4. How will hospitals that serve vulnerable populations deal with the increase in Medicaid patients if private insurance companies seek to reduce their riskpools by denying patients with less than stellar health, leaving these folks to rely on Medicaid? This will raise costs for Medicaid, which will likely mean decreases in reimbursement, and potential harm to hospital finances. This will subsequently worsen Medicaid patients' lack of access to health care, leading to substandard health outcomes. What changes to the current proposal would eliminate this problem? 18
19 Questions 5. Do you think insurance companies have a responsibility in providing preventive medicine services? If yes, how is/will BCBS be involved in promoting preventive public healthcare practices and lifestyle changes? Are these factors considered in part of a physician's reimbursement? 19
20 Questions 6. Can you comment on the results of the health reform in Massachusetts and talk about whether they are prognostic for PPACA s future? 20
21 Questions 7. The Emergency Medical Treatment and Active Labor Act (EMTALA) prohibit emergency rooms from turning away patients needing emergency healthcare. Thus, unlike physicians in private practice or specialists consulted for their expertise, ED physicians must treat anyone and everyone that walk through their door versus accepting patients that are vested in their health and have the means to pay for it. This creates an environment where job satisfaction is low as the patient population that is cared for is less engaged in their overall well-being: from frequent flyers just looking for "3 hots and a cot" and patients that want to abuse medication to patients that want to get tests done that are "free" versus using something over-the-counter (like an EPT). Furthermore, a large portion of healthcare expenditures are being drained using the ED as many patients' primary care physician. Although the cost burden of EMTALA predominantly falls on CMS, what are some ways BCBS is addressing how to bring down costs, improve quality and ensure that the goal of sustainable, affordable coverage is realized? 21
22 Questions 8. Could you please elaborate on SB 1293 and 1294? If BCBS supports over 7000 jobs in Michigan, will the proposed legislative changes in SB 1293 and 1294 have a favorable impact on need for paneled physicians? Will BCBS be positioned to offer loan forgiveness to physicians willing to locate in communities where consumer demand is high and therefore supporting the marketplace? 22
23 Contact Information Tom Simmer, MD Senior Vice President and Chief Medical Officer Blue Cross Blue Shield of Michigan 600 E. Lafayette Blvd Detroit, MI
Blue Cross Blue Shield of Michigan
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