8/5/2013. Partners Approach to Managing the Economics of Population Health Management. What do you know about US health care?

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1 Partners Approach to Managing the Economics of Population Health Management Creagh Milford, DO, MPH Associate Medical Director, Population Health Management Partners HealthCare Assistant Medical Director, Mass General Physician s Organization August 2, 2013 What do you know about US health care? Poor quality Too expensive Gawande A. The cost conundrum: What a texas town can teach us about health care. The New Yorker, July 1, McGlynn EA, Asch SM, Adams J, Keesey J, Hicks J, DeCristofaro A, et al. (2003). The quality of health care delivered to adults in the united states. The New England Journal of Medicine, 348(26), Chapter 54, 2006 Massachusetts now has the lowest rate of un insurance in the country With that done, healthcare costs have become the singular policy focus; a wave of regulatory activity has followed 3 1

2 New 2012 Law Cost Controls Chapter 224 New Oversight Entities & Activities Push for providers to take financial risk on TME (public and private payers) A new Health Policy Commission 25 new boards, commissions & taskforces, 278+ appointments, plus staff Health Care Cost Growth Limits : No more than growth in the state economy (GSP) : State GSP less 0.5% 4 MGH mortality and costs Per discharge in 2010 dollars,

3 What we re facing Constraining the growth of healthcare costs is a national priority Involvement of physicians through changed incentives is unavoidable PPACA the imperative will persist even if the specifics change The market is using a similar play book closed networks, budgetbased risk, cost sharing, restriction of choice and this may generate the same backlash as 1990s managed care era But... The economy was much worse Government is proactive (3.6%) Rate of change is slower (caps on increases, not cuts) And we have Better health IT and data for population Strategies and tactics that we know will improve care and reduce costs 8 Implications for providers The focus should be on reducing medical expense trend to as close to the rate of general inflation as we can This means taking financial risk for costs of care Shared savings (Pioneer ACO) Bundled payments Global payments Challenges 1. We need tactics that will be successful under any of the new payment models 2. How to make external incentives meaningful to our physicians 3. Moving at the right pace Too fast: we will lose the docs in the rush to implement MDs attitude often creates the patientʹs attitude (managed care backlash) Too slow: will mean not succeeding under the contracts and worsening the regulatory environment 9 3

4 Why Partners is aggressively pursuing global payment/population Leadership opportunity to bend cost curve Efforts to reduce health care spending not going away Government being proactive Lesser of two evils Continued fee for service with endless rate cuts Global payments care redesign decreased utilization shared savings Partners increased ability to care for populations of patients Successful CMS Demo Universally adopted EHR 10 The path we re traveling at Partners Pressure to reduce cost trend New contracts with risk for trend Changes to Partners org structure Investment in Population Management Infrastructure Internal Performance Framework Network Affiliations 1 Partners in Care (PCMH & care coordination for high risk patients) 2 Enhanced access to specialty 3 Implement new local incentives/compensation 4 New relationships with community hospitals and doctors Sustained cost trends near GDP 11 One year in. Lives under the Accountable Care Model Medicare Commercial Medicaid Self Insured Pioneer Accountable Care Organization Alternative Quality Contract (AQC) State PCC ACO Program Partners Plus Elderly population, care central to trend Covered lives: ~65k Younger population, specialists critical to Covered lives: ~350K Population with significant disability, mental health, and substance abuse challenges Coming Soon Covered lives: ~75K Commercial population, but savings accrue directly to Partners, and improves our own lives Covered lives: ~80k Partners currently manages roughly 500,000 lives in various accountable care relationships 12 4

5 Measuring success under the Partners Pioneer ACO Expenditures for Pioneer ACO s population Expenditures for reference population Gross savings generated by Pioneer ACO Expected growth rate for Pioneer ACO s aligned population threshold for savings = X% Actual growth rate for Pioneer ACO s aligned population Growth rate for reference population Expenditures in baseline period Expenditures in performance year 13 Economics of managing margin and populations Infrastructure Costs (1.5% annually) Margin Margin ROI Backfill Shared Savings Margin ROI Backfill (Non Risk patients) Shared Savings Margin FFS Revenue Expenses FFS Revenue (At Risk Patients) Expenses FFS Revenue (At Risk Patients) Expenses FFS Revenue (At Risk Patients) Expenses Year 0 Year 1 Year 2 Year 3 Legend: Infrastructure Costs = New PHS Infrastructure costs for Population Health Management Population and global risk contracts Population is one part of our overall strategy We are taking risk on just a portion of our business (25% of commercial revenue, 35% of Medicare revenue) this pleases regulators and payers Patient centered medical home is a key to our success Other providers are already at risk for a portion of our commercial referral business With expanded risk this segment will likely grow Care redesign and bundled payments can help our population effort but they are critical to our future providing referral Commercial Revenue 25% Risk Business Referral Business Medicare Revenue 35% ACO Beneficiaries Referral Business 15 5

6 3 phases of work for improving population health Phase 3 Phase 2 Phase 1 1 Primary care: The hub for managing populations: preventive, chronic illness, high risk 2 3 Specialty care: Where a large fraction of costs are incurred, especially in commercial populations Patient engagement: Involving patients in better self of care 4 Wellness Promotion: Programs to prevent or delay the progression of illness Ongoing: IS, analytics and central infrastructure 16 Developing an incentive structure Partners Contracts with Payers Incentive: Manage TME Allocation within Partners Internal Performance Framework Within Institutions Incentive: Provider compensation 17 Internal Performance Framework 2013 Strategic Medical Expense Trend Quality (40%) Measures focused on key activities aligned with clinical strategy. (35%) Total Medical Expense (TME) trend better than target. PCHI target in development (MA state target = 3.6%) (25%) External measures of quality. All primary care focused. Separate MD and hospital incentive pool Trend is based on cost standardized calculation of TME 18 6

7 Re Chronic condition 19 CMS Demonstration Overview 3 year demonstration started in 2006, designed to improve the quality and reduce the costs of care for high cost beneficiaries Care managers embedded in primary care practices Coordinate the care of patients at risk for poor outcomes Supported by health IT (universal EHR, patient tracking, home monitoring) The payment model was similar to proposed shared savings for ACOs Paid a monthly fee upfront based on number of enrolled patients Claims paid as in FFS Required to cover the costs of the program Success was determined by RTI against a prospective matched comparison group Ferris TG, et al; Cost Savings from Managing High Risk Patients in The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington (DC): National Academies Press (US); , Care Culture and System Redesign. Available from: 20 Medicare Demonstration Patients Selection 19 primary care practices (190+ PCPs) Risk and cost criteria applied to claims, then vetted by PCP s (highest risk selected for enrollment) 2,500 chronically ill patients initially, >90% enrollment Characteristics Average # of medications: 12.6 Average age: ~75 Average # of hospitalizations/year: 3.4 Annual mortality: 20% % with behavioral health issues: 56% Sickest patients were the most loyal An enrolled patient brought her medications to review at an office visit Total annual cost of enrolled patients: ~ $60 million 21 7

8 Medicare Demonstration Results Patient Outcomes Hospitalization rate: 20% lower ED visit rate: 25% lower Mortality rate: 4% lower Savings (Phase 1) 7.1% net savings (12.1% gross) Approximately 4% annual savings for the total population Source: Lessons from Medicare s Demonstration Projects on Disease Management and Care Coordination, Lyle Nelson, Congressional Budget Office, January 2012, Working Paper RTI evaluation 22 Re Chronic condition 23 MGH virtual visits and technology tools Technology Videoconferencing Telephone MGH Pilots Primary Care Provider reviews patient s pre visit questionnaire to determine treatment options and assess the need for visit or phone appointment. Psychiatrist conducts a follow up visit with an adolescent patient with autism for medication. Cardiologist calls stable CAD patient to check in on medications and symptoms between annual visits. Text Messaging Primary Care physician is alerted of alarm symptom in a patient who is completing an asynchronous virtual visit via web portal. Electronic Curbside Specialist reviews referral requests and triages to curbside consult answers PCP questions by

9 Re Chronic condition 25 Idealized patient journey through an episode of care that includes a procedure Assess Shared Personalized Decision Consent Criteria Patient Assess Making Form Problem Risk Tier 1, 2 Outcome Measures Tier 3 Outcome Measures Physician encounter Possible Need for Procedure Outcome measures hierarchy: Tier Category Examples 1 Health status achieved Survival and degree of health recovery 2 Process of recovery Time to recovery and return to normal activities 3 Sustainability of health Sustained recovery and recurrences, including long term consequences of therapy 26 PrOE: Inputs and outputs INPUTS PrOE tool OUTPUTS Procedure Scheduling Schedule Pre- Procedure Recovery Informed OR Procedure Consent Testing Prepopulated data fields (NLP search) Indications & Decision support Internal Performance Dashboards LMR, OnCall RPM, RPDR, CDR, EMPI PCI, CABG, Vascular, Harris Joint EMR EHR note created Data storage Copy of appropriateness results placed in LMR and CDR Existing registries Data passback to registries (Web service) Data Repository & analysis of appropriateness and outcomes inform guidelines and indications in real time Public Reporting Billing and Prior Authorization Personalized consent form 27 9

10 PrOE Procedure Decision Support Scale: 28 Re Chronic condition 29 Process for defining episode process standards Document current state process map Identify opportunities for improvement Assess implications Define recommended care innovations Activities Hand-Offs/ transitions Phases of care Timing Quality improvement Cost savings Population mix Quality Cost (internal and market) System-level recommendations Implementation options Performance metrics to monitor implementation Themes in Care Redesign Recommendations Implement scheduling and navigation functions Reduce unwarranted variation in resource use Ensure reliable implementation of planned processes Develop capacity to monitor patients prospectively, longitudinally 30 10

11 Stroke care map detailed process map 31 Re Chronic condition 32 Order entry with decision support for imaging Yearly Growth Rates Before and After Radiology Utilization Management Harpole LH, Khorasani R, Fiskio J, Kuperman GJ, Bates DW. (1997). Automated evidence based critiquing of orders for abdominal radiographs: Impact on utilization and appropriateness. Journal of the American Medical Informatics Association: JAMIA, 4(6), Sistrom C, Dang P, Weilburg, J, Dreyer K., Rosenthal D, Thrall J. (2009). Effect of computerized order entry with integrated decision support on the growth of outpatient procedure volumes: Seven year time series analysis. Radiology, 251(1),

12 Re Chronic condition 34 Variation in use of high cost imaging Practice [N=11942] Dr. S [N=347] Dr. R [N=930] Dr. P [N=661] Dr. N [N=460] Dr. M [N=528] Dr. L [N=2101] Dr. K [N=1071] Dr. J [N=217] Dr. H [N=1304] Dr. G [N=538] Dr. F [N=963] Dr. E [N=839] Dr. D [N=409] Dr. C [N=397] Dr. B [N=700] Dr. A [N=460] Providers Observed / Expected Ordered by: = Patient s PCP =Specialists =95% CI 35 Utilization and variation both decreased from Adjusted Images / 100 Patients By Doctor (N=137) Images / 100 Patients practice mean = 16.1 standard error = practice mean = 12.1 standard error = Doctors sorted by low to high (left-right) in each year 36 12

13 Re Chronic condition 37 Quality Incentive Program 1,700 eligible physicians Clinically active, non trainees In at least 2 major managed care contracts Grouped into 3 RVU based tiers Includes hospital based and MGPO MDs Incentive payments total $6.5 million/year (~1.5% NPSR) Started with a bonus check in December 2006 Since then, 2 terms, 2 incentive payments per year (July & December) Max of $5,000 per MD per year Plan to pay out ~80% of funds each term Eligibility Distribution 3 quality measures per term Tier 1 ($500) Tier 2 ($1250) Tier 3 ($2500) 2 are system measures & apply to all docs is chosen by the clinical department in consultation with the QI Program RVUs over 6 months can be individual, practice group, department or hospital wide ~140 different measures have been used to date 38 MGH QI incentive system measures T1 T2 T1 T2 T1 T2 T1 T2 T1 EMR Adoption Prelim Training Notes (%) ROE Use E-Prescribing 10 scripts PCPs: 85% Specs: 80% Hand Hygiene Dept: 90% *Dept: 80% Dept: 85% MD: 85% MD: 85% JC Training Safety Rpt. or CC Training MD Communication Training Hospital HCAHP S Score Service HCAHPS Score Final Note Timeliness *Target was decreased For T1, 2009 due to adoption of more stringent measurement criteria

14 Benefits of improved hand hygiene HH and MRSA Rates Before contact rates After contact rates MRSA Rate 100% % 80% % 60% % 40% 30% 20% % 0% 0.00 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter MD hand hygiene (Q3) Before contact: 30% After contact: 71% 2008 (Q3) Before contact: 79% After contact: 93% MRSA rate (Q3): (Q3): 0.61 Meyer G, Torchiana D, Colton D, Mountford J, Mort E, Lenz S, et al. (Aug 2008). The use of modest incentives to boost adoption of safety practices and systems. In Henriksen K, Battles JB, Keyes MA, Grady M (Ed.), Advances in patient safety: New directions and alternative approaches (Vol 3: Performance Tools). Rockville (MD): Agency for Healthcare Research and Quality. 40 Re Chronic condition 41 What we measure: putting it all together Each cell in this graphic represents something we measure. We cannot measure everything, but we measure a lot. Publically reported Ongoing physician performance assessment Quality incentive program 29% Outcome Measures 14