Intensive Cardiac Rehabilitation: Value Creation in Today's FFS World and Reducing Medical Spending in a Value Based Environment

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1 Intensive Cardiac Rehabilitation: Value Creation in Today's FFS World and Reducing Medical Spending in a Value Based Environment Terri Merritt-Worden, MS, FAACVPR Vice President- Partnership Operations Healthways

2 Cardiac rehabilitation is one of the most cost-effective heart treatments available Decrease in Total (all cause) Mortality by 20% Decrease in Cardiac Mortality by 26% Each 1 MET increase in exercise capacity is associated with up to 35% improvement in survival 1

3 Cardiac Rehab vs PCI 40% of individuals require restenosis within 6 months of PCI Expense per Quality Adjusted Life Years: PCI - $126,400 - $300,000 Cardiac Rehab - $668-$16,118 2

4 Yet the benefits of cardiac rehabilitation are greatly underappreciated in the medical community. Arena, R et al. Increasing referral and participation rates to outpatient cardiac rehabilitation: the valuable role of healthcare professionals in the inpatient and home health settings. A Science Advisory From the American Heart Association. Circulation. January 30,

5 Referral Rates Nationally, only 20% of eligible candidates are referred to Cardiac Rehab Programs 4

6 Enrollment Rates Approximately 34% of referred actually enroll % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Participation Rates MI CABG PCI CAD 5

7 Completion Rates Only 49% of participants complete the traditional cardiac rehab program Resulting in only 3.3% achieving full-benefit from traditional cardiac rehab! 6

8 Time to move cardiac rehab from the basement 7

9 A New Day : changes in Medicare reimbursement rates CMS Reimbursement Rates for Cardiac Rehabilitation Rates, $120 $100 $7,344/patient $80 $102/hour $60 $40 $20 $37/hour $

10 A New Day: Intensive Cardiac Rehab Broad qualification opens access for many participants Intensive Cardiac Rehabilitation is currently reimbursed by Medicare (and other commercial payers*) as a National Coverage Determination for beneficiaries who have experienced one or more of the following: Acute myocardial infarction within the preceding 12 months Coronary artery bypass surgery Current stable angina pectoris Heart valve repair or replacement Percutaneous transluminal coronary angioplasty or coronary stenting Heart or heart-lung transplant *Some commercial plans have expanded clinical criteria. 9

11 Billing Codes Medicare Part B and certain other payers cover Intensive Cardiac Rehab when billed with the following G codes: GO422 Intensive Cardiac Rehabilitation With or Without Continuous ECG Monitoring, With Exercise Per Session GO423 Intensive Cardiac Rehabilitation, With or Without Continuous ECG Monitoring, Without Exercise Per Session 10

12 Approved Medicare ICR Programs Dr. Dean Ornish Program for Reversing Heart Disease The Pritikin Program The Benson-Henry Program 11

13 Bridge to the future THE FUTURE Reinforce your position as a leader in healthcare transformation Opportunity to continue building alignment with community PCPs THE PAST Predominately FFS reimbursement model Fragmented delivery systems and care Prepare delivery system for ACO, VBP and risk contracts Deliver options for consumers interested in disease reversal, prevention and well being Acute care focus Limited consumer options for prevention and well being No consumer options for disease reversal Transform while creating new revenue streams Source: The Heart Foundation 12

14 The Opportunity-ICR Program Financial Model Major Assumptions Geography/Eligibility: Eligibility driven by example patient encounter data. Assumes only Medicare/MA enrollment. Revenue: Based on the 2014 Maryland (DC Metro Area) Medicare Outpatient Prospective Payment System (OPPS) Fee Schedule of $ per hour. Assumes MA plans will cover program at same rate as Medicare FFS Additional revenue could be gained via a shared savings arrangement with a private payor or via an MSSP program via Medicare. This revenue is not included in any projections. Expenses: Average national rates for delivery team and program management All other expenses are dependent on capital investment, collections, and program-specific operations. 13

15 Volume Projections ELIGIBLE COUNT PARTICPATION RATES PARTICPANTS ANNUAL HIGH LOW LOW HIGH LOW LOW INPATIENT MEDICARE/MA 1, % 15.0% 7.5% INPATIENT COMMERCIAL 15.0% 8.0% 4.0% OUTPATIENT MEDICARE/MA 1, % 8.0% 4.0% OUTPATIENT COMMERCIAL 5.0% 2.5% 1.3% SERVICE AREA OPPORTUNITY 2, EMPLOYEES % 8.0% 5.0% COMPETITIVE MARKET OPPORTUNITY 1, % 2.0% 1.0% TOTAL PROJECTED PARTICIPATION HIGH LOW LOW OVERALL PARTICIPATION RATE 20.4% 13.1% 6.6% ASSUMPTIONS COHORTS PER YEAR PROVIDER MARKET SHARE 20% PROVIDER PRIME/SECOND TOTAL 2,365 MARKET ESTIMATE 11,825 COMPETITOR SHARE 9,460 MARKET LEAKAGE 20% AVAILABLE COMPETITOR MARKET 1,892 PROVIDER EMPLOYEES/COVERED LIVES 5,000 ELIGIBLE EMPLOYEES % Confidential Information of Healthways, Inc. All figures used are for purposes of illustration only. Actual results may vary and will depend on customer assumptions, market demand, and other factors. 14

16 Financial Results: Moderate Enrollment Example Ornish Program Year 1 Year 2 Year 3 Total Patients Enrolling Program Revenue Medicare/Medicare Advantage $ 1,980,622 $ 2,222,258 $ 2,493,373 Commercial $ - $ - $ - Market Opportunity $ 67,657 $ 75,911 $ 85,172 Total Ornish Program Revenue $ 2,048,279 $ 2,298,169 $ 2,578,546 Expenses Program Staff $ 391,033 $ 430,136 $ 473,149 Program Management $ 205,000 $ 205,000 $ 205,000 Other Expenses $ 87,961 $ 94,707 $ 102,127 Bad Debt $ 61,448 $ 68,945 $ 77,356 Depreciation of Build Out/Equipment $ 18,750 $ 25,000 $ 25,000 Total Direct Expenses $ 764,192 $ 823,788 $ 882,633 Program Gross Margin $ 1,284,087 $ 1,474,381 $ 1,695,913 Confidential Information of Healthways, Inc. All figures used are for purposes of illustration only. Actual results may vary and will depend on customer assumptions, market demand, and other factors. 15

17 Savings Illustration Example claims savings based on 95/189 patients enrolled in an ICR program. Savings estimate based on Highmark BCBS study (adjusted for inflation). Enrolled subset shown assumed to be ill enough to require intervention. 5% Enrollment Scenario 10% Enrollment Scenario Y1 Y2 Y3 TOTAL Y1 Y2 Y3 TOTAL Clinically Eligible 1,892 1,892 1,892 1,892 1,892 1,892 1,892 1,892 Lives Enrolled Savings Per Life $ 23,471 $ 23,471 $ 23,471 $ 23,471 $ 23,471 $ 23,471 $ 23,471 $ 23,471 Total Savings $ 2,220,357 $ 2,220,357 $ 2,220,357 $ 6,661,070 $ 4,440,713 $ 4,440,713 $ 4,440,713 $ 13,322,140 Incremental Labor $ 119,196 $ 119,196 $ 119,196 $ 357,588 $ 238,392 $ 238,392 $ 238,392 $ 715,176 Other Cost, Food, materials, etc $ 52,169 $ 52,169 $ 52,169 $ 156,507 $ 104,338 $ 104,338 $ 104,338 $ 313,014 Cost $ 171,365 $ 171,365 $ 171,365 $ 514,095 $ 501,155 $ 501,155 $ 501,155 $ 1,503,465 Gross Margin Benefit $ 2,048,992 $ 2,048,992 $ 2,048,992 $ 6,146,975 $ 3,939,558 $ 3,939,558 $ 3,939,558 $ 11,818,674 * Savings would be realized over three years for each cohort, while expenses would be incurred in first year Confidential Information of Healthways, Inc. All figures used are for purposes of illustration only. Actual results may vary and will depend on customer assumptions, market demand, and other factors. 16

18 Current Treatment Alternatives In 2010, 511,000 angioplasties and 173,000 bypass operations were performed at a cost of more than $77 billion National Center for Health Statistics A meta-analysis of all 8 randomized trials of stents (7,229 patients) found no evidence of benefit for prevention of death, nonfatal MI, unplanned revascularization, or angina. Arch Intern Med Feb 27;172(4):312-9 In a randomized trial of 1,212 patients, coronary bypass surgery did not prolong life Velasquez EJ et al. N Engl J Med April 4, 2011 Intensive Cardiac Rehabilitation focused on comprehensive lifestyle behavior change provides a better alternative 17

19 Adherence to ICR Program vs Medication Therapy 87.9% 35% Adherence to lifestyle changes 1 year after participation : Multi-Center Lifestyle Improvement Site, Highmark 2011 Data Adherence to medications of cardiovascular patients after 1 year : AHA

20 Mutual of Omaha Cost Savings Study 333 study participants presenting for revascularization procedures (CABG or PTCA) 194 = Ornish Program 139 = Control Group (66 PTCA / 73 CABG) Control Group Needed an additional 34 procedures (23 PTCA / 11 CABG) within the following 3 years -totally 173 procedures) Cost $6.6m ($46,647/participant) Cost reflects only the cost of the procedure and no other medical costs are included. Ornish Group 57 procedures in the following 3 years (31 PTCA / 26 CABG). Estimated cost $3.5M ($18,119/participant) Cost savings = $3.1M ($29,000/participant*) over a three year period. *1998 Dollars Ornish D, et al, American Journal of Cardiology, 1998; 82:

21 Early Research Findings Using one-year results and predicted rate of procedures for the first 242 patients* enrolled in the program, Highmark BCBS estimated a cost savings of $23,000 (adjusted to 2014 rates) over a threeyear period. *This cohort of individuals were patients who were ill enough to require an intervention (angioplasty or CABG). 20

22 PMPM Cost Analysis- Highmark BCBS $546 PMPM $273 PMPM = 50% Claims cost the year prior to entering the program. Claims cost the year after entering the program. Results: REDUCTION A control group of similar patients had virtually no change in their PMPM costs over the same period. Data is in 2009 dollars 21

23 Intensive Cardiac Rehabilitation: The West Virginia University Healthcare Experience Dave Harshbarger, MS Wellness Manager & Ornish Program Director WVU Healthcare, Health Sciences Campus

24 Delivering the Ornish Program Since

25 Element 1: Exercise Exercise is just one part of the Ornish program for reversing heart disease. Patients Mike Rich and Dawn Diven hit the machines at the West Virginia University Heart Institute in Morgantown. 24

26 Element 2: Stress Management Stress management program techniques include: Gentle yoga practice Meditation Breath work Visualization Progressive relaxation 25

27 Element 3: Group/Social Support Psychosocial support for patients is an important aid for compliance. 26

28 Element 4: Nutrition A whole food, plantbased diet is one major aspect of the program. Participants fill their plates with healthy food selections during an educational lunch session. 27

29 A Multi-Disciplinary Team Approach We know treatment works so much better when we work on chronic diseases as a team. -Internist Shanthi Manivannan, MD, Medical Director of the Ornish Program at West Virginia University Healthcare s Ruby Memorial Hospital in Morgantown, W.Va., a Medicare-certified site 28

30 Ornish Program Data: WVU Healthcare (62 patients) Baseline 12 weeks Weight BMI Systolic BP Diastolic BP METs

31 Ornish Program Data: WVU Healthcare (62 patients) Dietary fat (% of calories) Baseline 12 weeks Cholesterol LDL Triglycerides HbA1c

32 Ornish Program Data: WVU Healthcare (62 patients) Baseline 12 weeks Minutes of Ex week Stress Mgmt min/week Depression Scale (CES-D) Hostility Score *Note: Most patients are decreasing their meds while experiencing these improvements. 31

33 Program Contrasts Traditional Cardiac Rehab Reimbursed 36 hours/ sessions over Up to 2 sessions/day Intensive Cardiac Rehab Reimbursed 72 hours/ session over 18 wks Up to 6 sessions/day > 85% completion rate Greater CV risk factor reduction, weight loss and improvement in DM control 32

34 Charleston Area Medical Center: Ornish Program Cardiac Rehabilitation Metric Baseline 12 weeks Metric Baseline Completion BMI (9% decrease) Waist Circum (8.1% decrease) Systolic BP (11.5% decrease) Diastolic BP (14.5% decrease) Cholesterol (15.2% decrease) BMI (1% decrease) Waist. Circum (2.4% decrease) Systolic BP (1.3% decrease) Diastolic BP (1.4% decrease) Cholesterol (13.5% decrease) 33

35 Metric Baseline 12 weeks Metric Baseline Completion HbA1c (11.9% decrease) Depression Scale (CES-D) Vitality (SF-36) Charleston Area Medical Center: Ornish Program (39% decrease) (43% increase) HbA1c (1.5% increase) Depression (Dartmouth COOP) PRFS (Distress Score) Note: N = 270 for cardiac rehab, N = 70 for Ornish Program Cardiac Rehabilitation (21% decrease) (4% decrease) Cardiac Rehab patients have very different demographics from Ornish Program participants. 70% male in CR vs. 45% male in Ornish. Average age in CR is 64 vs. 52 in Ornish Program. Physicians send patients to CR whereas people self refer to the Ornish Program and are screened prior to entering the program to be sure they are committed to a healthier lifestyle. 34

36 WVU Healthcare Success Stories Ultimately, without the Ornish program I wouldn t have the hope for the future that I do now. In fact, I probably would have had a heart attack by now. -Amanda Amanda, 37 years old Health Problems: Heart disease, diabetes, immune deficiency 35

37 WVU Healthcare Success Stories Jim, 62 years old Health Problems: COPD, diabetes, hyperlipidemia, hypertension, spinal stenosis, trauma from a mining accident, morphine pump, was depressed and stayed in bed most of the time. The program is excellent. While all of my numbers dropped, I am especially happy that I lost over 90 pounds, went from taking 17 medications to only 5 now, and unexpectedly was able to remove my morphine pump for pain because the yoga helps manage the pain now. -Jim 36

38 Speaker Biography Terri Merritt-Worden, MS, CES, FAACVPR is a healthcare executive who received her BS in physical education at the State University of New York at Buffalo and her MS in exercise science at the University of Arizona. She has been actively involved in cardiac rehabilitation and intensive lifestyle modification research for over three decades and is most well known for her work at the Preventive Medicine Research Institute with Dean Ornish, MD and the development of hospital based intensive lifestyle modification programs. Terri has served on the Board of Director's of the American Heart Association- San Francisco Division, the California Society of Cardiac Rehabilitation (CSCR) and the American Association of Cardiovascular and Pulmonary Rehabilitation (AACVPR). She is also an American College of Sports Medicine Certified Exercise Specialist, a certified Integral Yoga Institute instructor and a fellow of AACVPR. In 2002 she received the AACVPR Distinguished Service Award and completed the Cardiovascular Health Fellowship with the Health Forum/American Hospital Association. Prior to her current position of Vice President, Partnership Operations, at Healthways, Inc, she was the Vice President of Health and Wellness at Silverton Health in Silverton, Oregon. Originally from West Virginia, Dave Harshbarger has been with West Virginia University Hospitals since 1995 as the Wellness Manager for the Health Sciences Campus of West Virginia University. Here he manages an on-site wellness program for more than 7,000 employees. Dave is also the Program Director for the Dr. Dean Ornish Program for Reversing Heart Disease which is a clinical program offered to patients. Prior to this he lived in the Boston, MA area for eight years while working for Fitcorp. While at Fitcorp, he managed fitness and wellness facilities and oversaw the delivery of these services to corporate clients. Dave earned his M.S. in Exercise Physiology from the University of Delaware, and his B.S. from West Virginia University in Physical Education. He is a member of the Board of Directors for the Wellness Council of West Virginia since in 1995 and past president and also serves on the Board of Directors for the Mon River Trails Conservancy better known as our local Rails Trails. 37

39 Thank you!

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