1/31/2012. St. Joseph Heritage Healthcare & Blue Shield of California ACO Collaborative Leveraging An IDS For Patients! Overview of Presentation

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1 & Blue Shield of California ACO Collaborative Leveraging An IDS For Patients! February 1 st, 2012 HASC Conference on Blurring the Lines C.R. Burke President/CEO cr.burke@stjoe.org Overview of Presentation St. Joseph Health System Where is Today Relevance of the Foundation Model as an ACO 3 About St. Joseph Health System SJHS serves ten distinct communities within three general regions Northern California, Southern California, and West Texas/New Mexico. Facilities: Fourteen hospitals, two home health agencies, integrated physician groups in every market, affiliated networks in O.C. and Lubbock, TX. Own one health plan. #1 in Every Market Employees: 24,565 Annualized Net Revenue: $4.5 billion Annualized Community Benefit: $283,233,000 Total licensed beds: 3,685 Annualized discharges: 138,771 Annualized patient days: 638,023 Annualized outpatient visits: 2,177,164 Scope: 25 beds 552 beds, rural critical access to large metropolitan market 1

2 All Clinical Services of the St. Joseph Health System Share Common Mission, Vision & Values Mission Why we exist: To extend the healing ministry of Jesus in the tradition of the Sisters of St. Joseph of Orange by continually improving the health and quality of life of people in the communities we serve Vision What we are striving for: To bring people together to provide compassionate care, promote health improvement, and create healthy communities Values The guiding principles for all we do: Dignity Service Excellence Justice Mission Outcomes Sacred Encounters: Every interaction will be experienced as a sacred encounter Perfect Care: All patients will receive perfect care Healthiest Communities: One hundred percent of the communities we serve will be in the top decile for healthiest communities Why Medical Practice Foundations? State and Federal Regulatory Background State Health and Safety Code Corporate Ban on Practice of Medicine Licensing for Clinics Has Exemptions But Not Employment 1206(d)-Hospital Outpatient Department With Contractor Who Owns Revenue Stream and Assigns to Hospital 1206(l)-Stand Alone IRS Exempt 501c(3) With Contractor, But Owns Revenue Stream and Assigns Negotiated Amounts to Contractor (1980) And Meets the Following Criteria:» Ten or More Specialties Represented» 40 or More Physicians Under Contract» Engages In Patient Education and Research Federal Issues Are Resolved When IRS Approves 501c(3) Generally Compensation Agreements With Contractor(s) Must Be Fair Market Value How to Work Closer with Physicians In California 1206 L Medical Practice Foundations 2

3 Some Background and Context founded in 1994 FYE June 2011 Net Revenues- $452 million Operate 7 Medical Group Professional Services Agreements(PSA s) Supports three distinct Affiliated Networks (75,000 lives) Over 1.2 million patient encounters per year in group models Direct relationship with 35,000 Medicare Part B Seniors Direct relationship with 130,000 PPO patients Significant managed care experience 170,000 capitated lives-23,000 Seniors (dual risk on seniors) Statewide initiative launched in late Why Are We Focused On Foundation Model? In 1993/1994 the focus was defensive reaction to HMO penetration in North Orange County..Friendly Hills, Mulliken, then MedPartners and PhyCor and Kaiser System wide and industry wide recognition that model is very efficient in working collaboratively with physicians across continuum of care in both group and network models Most effective model in competing with other large integrated systems in recruitment of physicians Most efficient model to adopt clinical IT in both hospital and office setting Improved clinical care, patient satisfaction and very importantly, significant physician satisfaction demonstrated by growth of physicians in model In Effective platform to work within Healthcare Reform ACO, Bundled Payments, PCMH, others The ESSENTIAL role PHYSICIANS have in implementing long term Mission Outcome goals of SJHS adopted in 2006: Perfect Care, Healthiest Communities, Sacred Encounters A Statewide Medical Practice Foundation 3

4 By the Numbers Core Business Functions and Infrastructure In Place With Single TIN# Ministry Financial Reporting/Budgeting 10 Unique Groups/Networks Payroll Support/Processing Six Unique TIN# Physician Corporations Benefit and retirement plan support/administration for Six PC s Professional Liability Management/Risk Management for Six PC s Payroll Support for SJHH Staff in Four Geographic Divisions Central Billing Office Support for all divisions Physician Productivity Tracking/Reporting All Networks Full managed care/risk contract operations support Claims Processing for both Professional and Institutional Services TouchWorks Team Supporting Six Groups and 35 physical Practice Locations ETC, ETC, ETC. Functional Clinical Areas and Infrastructure In Place Quality Management Utilization Management Regional/Network Medical Directors Delegated Credentialing Specialty Care Case Management for High Risk/Chronic Disease Integrated Hospitalist/Critical Care Physician Teams Geriatric Focused SNF ist Team Palliative Care Physician and Mid-Levels Clinical Disease Registry (NCQA Audited) Claims Processing for both Professional and Institutional Services Clinical Educators in Diabetes Care and CHF Coumadin Clinics.multi-disciplinary staffing EHR (Implemented in 2003) Deployed statewide Nurse Advice Line 24/7 with EMR Integration 4

5 Relevance of the Foundation Model as an ACO Business Model/Infrastructure Well Suited Based on All We Know From CMS Regs and Commercial Models Such as BSC Group Models Currently Serve over 27,000 FFS Medicare Patients alongside 13,000 MA Members Affiliated Network Physicians Well Established With Foundation Model on Senior Risk Members, 10,000 MA Members and 15+years of Network Model Success Affiliated Networks Likely Seeing 10,000+/- FFS Medicare Patients Business and Clinical Systems In Place to Track Multiple Populations/Geographies to Fit Local ACO Community EHR Investments and HIE Commitment Hospitals Investment in HIT Blue Shield ACO in O.C. with CalPers and others effective 9/1/2011 Why the Delivery System Works Long-term partnerships among doctors, administration, staff Comprehensive network of care a full delivery system Consistent alignment with vision and values Patient is unit of focus Resource utilization is optimized Organization is responsive to market changes and needs Focus on being neighborly, wellness, performance, and high quality Future of Capitation vs. Patient Coordination Fees To bridge the gap, new models are emerging, for example, ACOs, episodic payment programs, patient-centered medical homes; in sum or in part, these models have resurrected capitation and are expected to achieve quality outcomes with reduced inefficiency in care delivery processes given the following are in place: Established standards of best practices Expanded healthcare information technology capabilities Integrated delivery systems of physicians and hospitals Consolidation among physicians and hospitals, creating larger provider entities capable of delivering more integrated care Trust and collaboration between the health plan payer and the providers Capitation models offer appropriate risk-adjusted capitation rates with an emphasis on quality outcomes and evidence-based medicine These models are supported by the largest payer, the U.S. government 5

6 Incentives Based on Quality, IT and Patient Experience Are Not New IHA manages California s Pay for Performance (P4P) program, the longest nongovernmental physician incentive program in the United States. It represents eight health plans and is in its eighth year of reporting. Clinical Quality: In FY 2011, out of a possible 35 clinical measures, SJHMG ranked in the 90 th percentile, in 23 measures. SJuHMG ranked in the 90 th percentile, in 12 measures. Coordinated Diabetes Care: Measures include process and outcome clinical measures, population management activities such as registries and actionable reports, individual physician level measurement, and care management processes. SJHMG and SJuHMG were both ranked in the 90 th percentile, for 7 of the 10 measures. IHA Accolades (Cont.) Patient Satisfaction measures patient ratings of care they received from their doctor and other providers in the physician group. SJuHMG is in the 75th percentile in three measures. Information Technology measures support and infrastructure for population management, point of care tools, care management, continuity of care, and individual physician-level performance measurement and incentives. SJHMG and SJuHMG both received 20 out of 20 points Announcement 2011 is Three Years Running! OPA.CA.GOV Have you been there lately? Check out the Website: opa.ca.gov You can see by county how your local Medical Group or IPA performed across a wide range of outcome measures in clinical, IT and patient experience domains. It will be predictive of success in ACO or PCMH models 6

7 Looking Forward to the Panel Q&A! Thank You 7