Acute Care Episode (ACE) Demonstration

Transcription

1 Acute Care Episode (ACE) Demonstration Gary L. Whittington CFO, Region Services Baptist Health System San Antonio, Texas Daniel Hurry VP, Supply Chain & Purchased Services Baptist Health System San Antonio, Texas

2 BAPTIST HEALTH SYSTEM SAN ANTONIO, TEXAS 5 acute-care hospitals 1,741 licensed beds ~2,600 Member Medical Staff Regional Children s Center Bariatric Center of Excellence AirLIFE Air Medical Transport Healthy Women s Centers The Brain & Stroke Network M&S Imaging Centers School of Health Professions HealthLink Wellness Centers Accredited Chest Pain Centers Vascular Institute of San Antonio Baptist Cancer Center

3 ACUTE CARE EPISODIC (ACE) DEMONSTRATION PROJECT To determine whether improvements in quality of care can result from the alignment of financial incentives between hospitals and physicians in such a way that they must coordinate care on a case-bycase basis.

4 ACUTE CARE EPISODIC (ACE) COMPONENTS

5 Why did Baptist Health System participate in ACE? Competitive advantage Reach quality goals Infrastructure in place Fragmented physician staff Position for future of health care

6 Baptist Health System ACE framework Physician Integration Established new PHO: Physicians Alliance for ACE (PAACE) Created physician standardization committees Contracted with a third party administrator for physician payment Physicians paid at 100% CPT Gainshare Decision to pay gainshare monthly based on meeting criteria Up to 25% of Part B allowable Collaborative and individual incentive

7 Baptist Health System ACE framework Centered on Quality Integration of RN patient navigators Quality metrics for gainshare Vendor Negotiations Consolidation Pricing concessions

8 Keys to Baptist Successful Vendor Negotiations Physician Champions Understanding the relationship between the vendors and physicians Constant Communication Willingness to consolidate Stomach to follow through

9 Results of Year 1 Negotiations Orthopedics Consolidated from 6 vendors to 4 generating an expected 15% savings on implants The average cost of implants per case in FY10 was $4,982 compared to the baseline average of $5,896 (16% reduction) Cardiology New contracts were expected to save approximately 10% Average cost of implant/case in FY10 was $3,436 compared to the baseline average of $3,951 (13% reduction) 9

10 Orthopedic Snapshot 10

11 Orthopedic - Cost Reduction Process and Update Bidding Process Electronic bidding process 7 participating vendors (4 current, 3 new) Constructs: same as today Changes: Revision max threshold New tech addressed as one off reviews Initial Bid Results Current Vendors 3 parked at current pricing 1 reduced pricing for constructs and increased revision rate reduction by 5% New Vendors Varying discounts from as much as an aggregate weight of 16% reduction with maximum threshold revisions to minimal construct change with increased revision discounts 11

12 Orthopedic Next Steps Cost/Vendor Alignment Request alignment to re-review pricing with vendors for incremental changes Upon final agreement with vendor committee and vendor selection is closed, write and sign contracts Patient Continuum Sub-Committee review of various opportunities in alignment with the marketing team for a system approach to the strategy and execution 12

13 Cardiac Overview Cost Create Cardiac sub-committee to review product and vendor opportunities Define and align a strategy for negotiations and implementation Patient Continuum Sub-Committee review and create ancillary vendor support opportunities as part of the review process Pre and post procedure opportunities explored and identified Define way to integrate vendor support into the program 13

14 Cardiac Cost Reduction Opportunities 14

15 Cardiovascular Vendor Breakdown 15

16 Hospital Part A Payment Physician Part B Payment Global Payment per case Discount BHS standardization, quality and cost savings CMS savings on case BHS discount to CMS BHS savings on case Admin Costs CMS Retains Gainsharing Pool 50% of savings shared with Beneficiaries 50% Physicians 50% Baptist Health System

17 Hypothetical DRG Payment DRG Major joint replacement or reattachment of lower extremity w/o MCC Before ACE Surgeon = $1,200 ( 80%) + $300 (20% co-pay) Hospital = $10,400 Patient = $ 0 With ACE Surgeon = $1,500 Hospital = $9,800 Patient =$300 up to 50% of CMS savings

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19 Quality Measures for Gainshare A total of 22 quality metrics are tracked for orthopedic and cardiac services and are submitted quarterly to CMS. A subset of these metrics are used as criteria for gainshare. Orthopedic Metrics HIP & KNEE MEASURES 1* Antibiotic received within 1 hour of surgical incision 2* Antibiotic selection for surgical patients 3* Discontinuation of antibiotics within 24 hours after surgery end time 4* Appropriate VTE prophylaxis within 24 hours prior to surgery to 24 hours after surgery end time 5* Smoking cessation ordered

20 ACUTE CARE EPISODIC (ACE) GAINSHARE EXAMPLE DRG 470 Major Joint Replacement or Reattachment of Lower Extremity w/o MCC 710 Medicare Admissions Medicare Part B Physician Payment = $1,065,000

21 Baptist Health System Experience to Date Patient Impact Distribution of Shared Savings Payment checks by CMS on Aug 20, payments to date, over 1,355 patients have received $ 504,346 Patient Satisfaction Physician Impact Over 90% of physicians meeting gainshare criteria Physician Satisfaction Creation of standardized order sets by physician committees Physician Alignment, Leadership and Ownership Increased interest from non-participating physicians Shift towards evidence-based practice Transparency is improving physician collaboration 82 physicians received gain share payments of $ 407,302

22 Baptist Health System Experience to Date System Impact Quality at or approaching 100% for all metrics Greater physician focus on quality measures Renegotiated implant vendor contracts generating supply savings Process standardization for pre-admission testing and screening Integration of patient navigators at all BHS facilities to educate, communicate and manage ACE patients, families and physicians Inquiries from managed care organizations about bundled pricing Marketing efforts continue to reach out to primary care physicians

23 ACUTE CARE EPISODIC (ACE) OVERALL EXPERIENCE Immediate Improvements in Quality Measures Tied to Gainsharing Shift Towards Evidence-Based Practice Sooner Than Expected Gainshare Distributions Information System Opportunities Labor Intensive to Administer Program

24 ACUTE CARE EPISODIC (ACE) YEAR TWO CHALLENGES 1. Reach Beyond Low Hanging Fruit 2. Focus on Clinical Outcomes 3. Further Leverage Pricing Power 4. Move Market Share 5. Drive Efficiencies in Clinical Care 6. Prepare for Post-Acute Bundling 7. Explore Commercial Bundling Options

25 Baptist Health System Keys to Success Transparency and collaboration Identifying physician champions Demonstrate quality outcomes Improved care processes Product standardization Consumer Awareness/Marketing Smoothing of reimbursement process

26 Excerpt from the Stimulus Package: An estimated $17.8 billion could be saved through 2019 by moving the hospital industry toward packaged or bundled payments, according to the plan. Modern Healthcare Journal, February 26, 2009

27 QUESTIONS Gary Whittington, CPA Chief Financial Officer (210) Daniel Hurry VP, Supply Chain & Purchased Services (210) Baptist Health System One Lexington Medical Building 215 E. Quincy Street, Suite 200 San Antonio, Texas 78215