53 PD ACO Partnerships: Health Plan and Provider Perspectives. Moderator: Alexander Mark Vojta, FSA, MAAA. Presenters: Cheri Galt Lee Huskins

Transcription

1 53 PD ACO Partnerships: Health Plan and Provider Perspectives Moderator: Alexander Mark Vojta, FSA, MAAA Presenters: Cheri Galt Lee Huskins

2 ACO Partnerships: Health Plan and Provider Perspectives Alexander Vojta, FSA, MAAA Director of Network Analytics Blue Shield of California SOA 2014 Health Meeting Session 53 San Francisco, CA June 24,

3 ACO Program Overview ACO Program Results Covered California What we are all collectively solving for Create partnerships that allow us to: deliver below-market trends Achieve financial results in acceptable and sustainable returns for all parties find cost and quality improvements Increase market share Health Plan Trust Hospital Physician Group 2

4 ACO Program Overview ACO Program Results Covered California Where it all started 3

5 ACO Program Overview ACO Program Results Covered California Where we are now 200K+ mbrs and growing 4

6 ACO Program Overview ACO Program Results Covered California Garnering national attention for driving innovation and results U.S. Secretary of Health and Human Services Kathleen Sebelius This program is on our radar screen as one of the best examples of patient care in the country, and the kind of care that people elsewhere hope to enjoy in the future. A rare alliance of healthcare rivals a giant insurance company, a major hospital chain and a large doctors group has managed to reduce healthcare costs through a radical new strategy Three private-sector health care partners saved the California Public Employees Retirement System $37 million in health care costs over two years by agreeing to work together in what is considered a national model for bending the cost curve on employee benefits..in San Francisco's case, officials say, early results have already resulted in lower costs and better care for 26,000 city employees, retirees and dependents covered by Blue Shield of California. Simply by working together, the three were able to reduce the number of times patients had to be readmitted to the hospital by 15 percent. Most significant was the providers willingness to work with Blue Shield in partnership rather than as adversaries across the bargaining table. 5 5

7 ACO Program Overview ACO Program Results Covered California Positive results to date since its inception, the Blue Shield of CA ACO program has achieved a <3% COHC trend1 6 Data paid through 12/13 Comparison of baseline (pre ACO) to most recent completed ACO contract period 1 trend as of Feb 2013

8 ACO Program Overview ACO Program Results Covered California Illustrative example of risk share arrangement Partner at Risk Service Category Target (pmpm) Hospital Physician Group Plan Hospital services (provider partner) $115 50% 25% 25% Hospital services (non provider partner) $25 20% 30% 50% Physician services $90 20% 50% 30% Ancillary services $10 20% 30% 50% Pharmacy card $50 10% 45% 45% Total Cost $290 7

9 Admitls/K Days/K ACO Program Overview ACO Program Results Covered California Illustrative ACO Utilization Dashboard Inpatient Utilization, ABC Example ACO Admits/K Risk-Adjusted Top Quartile Admits/K Target Days/K Target Admits/K Days/K Risk-Adjusted Top Quartile Days/K

10 ACO Program Overview ACO Program Results Covered California Illustrative ACO Utilization Dashboard 9

11 John Muir Health - Blue Shield of California: an ACO Collaboration Society of Actuaries 2014 Health Meeting Session 53 San Francisco, CA June 24, 2014 Lee Huskins President & Chief Administrative Officer John Muir Physician Network

12 Objectives Overview of John Muir Health The Market John Muir s Pathway to Risk-- Accountable Care Organization (ACO) Collaboration Establishing a partnership Background and Terms Outcomes/Results Lessons Learned & Critical Success Factors 2 John Muir Health proprietary and confidential

13 Mission, Vision and Values Mission We are dedicated to improving the health of the communities we serve with quality and compassion. Vision We will exceed our patients expectations for seamless, consistently positive experiences with all aspects of John Muir Health Values Excellence, Honesty and Integrity, Mutual Respect and Teamwork, Caring and Compassion, Commitment to Patient Safety, Continuous Improvement, Stewardship of Resources, Access to Care 3 John Muir Health proprietary and confidential

14 John Muir Health Not-for-Profit, Independent Integrated Delivery System Contra Costa & West Alameda Counties, CA Two Acute Care Hospitals: John Muir Medical Center, Walnut Creek Campus (Level III Trauma Center) John Muir Medical Center, Concord Campus Behavioral Health Center 900+ physicians (IPA & John Muir Medical Group) Two Ambulatory Surgery Centers Joint Venture/Key Partners San Ramon Regional Medical Center & Lucile Packard 4 John Muir Health proprietary and confidential

15 John Muir Health 2013: $ 1B+ Net Patient Revenue 50,000+ Commercial HMO/EPO lives 10,000+ Medicare Advantage lives 20,000+Medicare Shared Savings Program ACO IT Platform: Epic System 5 John Muir Health proprietary and confidential

16 JMH Awards and Recognitions 2013/2014 Health Grades America's 100 Best Hospitals (2013), Distinguished Hospital for Clinical Excellence (2014, 2013) Top 2% Excellence Award -- Gastrointestinal Care (2014), General Surgery (2014), Pulmonary Care (2014, 2013), Coronary Intervention (2014), Joint Replacement (2014), Patient Safety (2013), Critical Care (2014) Top 5% 5 Stars Coronary Interventional Procedures, Pacemaker Procedures, Diabetic Emergencies, Hip Replacement, Prostate Removal Surgery, Heart Failure, Sepsis, Bowel Obstruction, Gastrointestinal Bleed, Maternity Care, COPD, Pneumonia US News & World Report (2013/2014) #2 and #3 out of 45 hospitals in the SF Bay Area #7 and #11 of 400 acute care hospitals in CA 22 services nationally ranked or ranked as high performing Top 50 in Orthopedics, Gastroenterology & GI Surgery, Gynecology, Diabetes & Endocrinology Becker s Hospital Review (2013) 100 Great Community Hospitals 100 Great Hospitals in America #4 out of 17 Great Hospitals to Know in the West 100 Hospitals with Great Orthopedic Programs 100 Hospitals with Great Women s Health Programs 100 Hospitals with Great Heart Programs (2014) #13 out of 20 ACO s to Know in the West Elite Status from California Association of Physician Groups (JMPN) Integrated Healthcare Association P4P Most Improved and Top Performer (JMPN) California Dept. of Managed Health Care's Right Care Initiative -- Gold Level Achievement (JMPN) Leapfrog Group -- B" Hospital Safety Score Joint Commission's Gold Seal of Approval Accreditation Magnet Recognition for Nursing American Heart /American Stroke Association Get with the Guidelines Gold Performance Achievement American College of Radiology Accreditation Blue Distinction Center for Hip & Knee Replacement/Spine Surgery/Cardiac Care Certified Quality Breast Center of Excellence Chest Pain Center Accreditation Commission on Accreditation of Rehabilitation Facilities 6 John Muir Health proprietary and confidential

17 John Muir Health: Locations 7 John Muir Health proprietary and confidential

18 California Market Share by Payor 8 John Muir Health proprietary and confidential

19 Key Goal Areas Internally Competent 1 Deliver Top Tier Quality, Patient Safety & Patient Experience 2 Improve Affordability/Our Cost Position 3 Implement & Optimize EPIC and Other IT 4 Enhance Care Coordination 5 Develop John Muir Health People 6 7 Grow & Strengthen Our Local Delivery System - Ambulatory Network - Clinical Service Lines Position John Muir Health as the Provider of Choice Externally Focused 8 Develop Regional Affiliations & Payer Strategies Build Government Relations & Legislative Advocacy Capabilities John Muir Health proprietary and confidential

20 John Muir on a Pathway to Full Risk Percent of Charges Per Diem Case Rate/ DRG ACO Full Risk 10 John Muir Health proprietary and confidential

21 JMH Blue Shield of CA Partnership 11 John Muir Health proprietary and confidential

22 The Context behind the partnership Blue Shield had early ACO success in CA: John Muir Health would be the third collaboration Allows for premium price competition- which aligns health plan, hospital, physician and employers Potential long term, sustainable model for improving care delivery systems More cost competitive with Kaiser 12 John Muir Health proprietary and confidential

23 The Key Drivers to the Model Creation of a partnership that allows John Muir Health and Blue Shield to: Continuously improve quality and reduce cost while delivering below-market cost trends: goal to keep trend flat or negative Results in acceptable, sustainable financial returns for all parties Increases community offering Align incentives- each partner contributes to savings, and is at risk for any variance from targeted cost reduction goals Provide savings to local employers 13 John Muir Health proprietary and confidential

24 The Terms Contract Terms: Three year term (2012) with key concept to hold cost flat to 2011 levels ACO collaboration covers BSC enrollees with John Muir Physician Network (excluding Medicare Advantage). Establish baseline Per Member Per Month (PMPM) costs by service category (6/2012 7/2013 cost targets developed from JMH HMO experience for time period 7/01/2010 through 06/30/2011) Removed large facility claim amounts (+$750,000) per member per year from base period Per Member Per Month (PMPM) All-inclusive Cost Targets, adjusted for Medical Demographics, Pharmacy Demographic, Benefit Plan 14 John Muir Health proprietary and confidential

25 ACO Service Categories Establish risk share by service category: Service Categories John Muir Other Hosp.- In Area OOA Hosp Referred OOA Hosp ER ASC All Other Facilities Professional Cap Professional FFS MH/Chiro/Acu Pharmacy Ancillary Description All IP & OP experience for JMPN members and SNF if billed under the hospital license. Also includes radiology technical component for IP MRI and CT services performed by outside vendors and includes Brentwood Surgery Center and Mt Diablo Surgery Center IP and OP experience for JMPN members at a non-jmh facility within CCC and SNF if billed under the Hospital's license Elective admissions (IP) and visits (OP) to facilities outside CCC (i.e UCSF, Stanford, etc.) ER/Urgent Admissions (IP) and visits (OP) to facilities outside CCC Non-JMH ASCs (Sequoia, Aspen, Premier, Laser, etc.) Dialysis, free-standing SNF, Hospice BSC FFS payments as described by DOFR (drugs, immunizations, ER pro fees) Cap to Specialists Cap to BSC Drug card experience - retail and mail order Biggest components are DME and Ambulance, but also included Prosthetics and Orthotics and out-of-area radiology/lab John Muir Hospitals- 30%, Blue Shield- 30%, John Muir Physicians 40% (Example for one category) The aggregate of the categories determines up side and down side risk per entity Stop-Loss provision on large dollar claims 15 John Muir Health proprietary and confidential

26 Specifications of the Collaboration ~ 16,000 Commercial Health Maintenance Organization (HMO) lives Care Coordination Strategy: (Actuarial Support Important for these steps) Implemented four practice based Patient-Centered Medical Homes Case Management engaged for major chronic disease classifications of population (Diabetes, Chronic Obstructive Pulmonary Disease (COPD), Congestive Heart Failure (CHF), etc.) Supply standardization Care pathway standardization Regular, ongoing reporting and data exchange Integrated workgroups and teams; regular meetings 16 John Muir Health proprietary and confidential

27 Outcomes and Problems Solved Key Questions/Outcomes: Were we able to eliminate negative Healthcare Inflation Trend in Contra Costa? Did employers include Blue Shield and John Muir as an offering to employees? Were health outcomes improved? Year Results Total YES and YES!!!!! Year 1 5.5% Savings $5M (8.5% Aggregate Reduction) Year 2 +2% Savings TBD Year 3 TBD TBD Summary: Total for first two years of collaborative equate to around 7% reduction from baseline and with no inflation trend Ability to add major Blue Shield as a Health plan to important employer in Contra Costa County 17 John Muir Health proprietary and confidential

28 Outcomes, Problems Solved and Opportunity Collaboration YTD (Year 2) Utilization Change from Baseline Year : Admits per 1,000: 14.5 % Days per 1,000: 26.3% ALOS: 13.7% Addressing Challenge: ED visits ED visits per 1,000: 1.9% Joint JMH-BSC ED Workgroup established and initiatives deployed 18 John Muir Health proprietary and confidential

29 Lessons Learned & Critical Success Factors Critical Success Factors: Partner Selection Committed Board of Directors Expense reduction established as a goal by Board at JMH Risk Strategy and Population management viewed as a top priority High Quality already framework for JMH, needed to prove cost reductions could be achieved without negatively impacting quality Actuarial Support Analytics Support Communication and transparency key 19 John Muir Health proprietary and confidential

30 Questions?

31 Dignity Health Blue Shield of CA Partnership Cheri Galt Director of Managed Care-Clinical Integration Dignity Health SOA 2014 Health Meeting Session 53 San Francisco, CA June 24,

32 Dignity Health Today 1-9 Sites Sites Sites Sites 20 State Network 380+ Care Sites 9,000 Affiliated Physicians 55,000 Employees As of May

33 Old Model of Stakeholders is Obsolete New Era is Joint Accountability! HEALTH SYSTEMS DOCTORS HEALTH PLANS CMS 3

34 Evolution of Dignity Health/Blue Shield Relationship Architecture of change: CalPERS ACO Pilot Architects and joint participants in innovative pilot project Collaborative, trusting partners Stereotypical siloed Healthplan vs. Hospital company relationship 4

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36 CalPERS ACO Pilot Blue Shield/Dignity Health/Hill Physicians Medical Group 40,000 lives initially Discussions began in 2007, project launched in 2010, now in its 4 th year Overall savings to date: more than $105 million (net savings of $95million to CalPERS members) Established cost of healthcare targets based on historical trend, demographic factors, population use patterns and potential interventions. Initial work: Cost drivers were knee replacements, hysterectomies, and bariatric surgery. Focus on efficiency improvements, post-discharge PCP visits, readmissions, emergency room usage. Currently and in the future: Patient centered medical homes, virtual care teams, and proactive population health. More emphasis will be placed on creating efficiencies in the ambulatory settings. Future progress will require a more profound transformation. Added focus on quality is increased as the ACO evolves. 6

37 CalPERS ACO Pilot initial cost drivers Implemented agreed upon protocals for surgery Implemented an enhanced authorization process Achieved improvements within 6 months pre-pilot 6 months later total hysterectomies open 11 1 lap 3 2 ALOS total knee procedures 11 7 ALOS total hip procedures 4 3 ALOS total spinal procedures 4 1 ALOS total bariatric procedures 2 4 ALOS

38 Taking the Model On the Road # Region/ Launch Date Blue Shield s Partners 1 3 Sacramento January 2010 San Francisco July 2011 Dignity Health / Hill Physicians (CalPERS members) Dignity Health / UCSF / Hill Physicians (San Francisco Health Service System members) 8 11 Santa Cruz July 2012 San Joaquin January 2014 Physicians Medical Group of Santa Cruz / Dignity Health Dignity Health / Hill Physicians 13 Kern January 2014 Dignity Health/ GEMCare 15 Sacramento January 2014 Dignity Health / Hill Physicians (Commercial Expansion) 6 new IFP projects 6 Covered California rating regions/ (launch In process) Dignity Health/ 6 different physician organizations 8

39 Expanding our ACO & PCMH footprint with Covered California (IFP on/off exchange) To reduce cost and improve care for BSC s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets Covered California Region Region 3: Greater Sacramento Region 8: San Mateo Region 9: Monterey Bay Region 12: South Coast Region 14: Kern Region 17: Inland Empire Dignity Portion of Region Sacramento, El Dorado, Yolo, Placer San Mateo Santa Cruz Ventura Kern San Bernardino Population for Inclusion: All attributed Blue Shield non-grandfathered individual and family plan ( IFP ) members

40 IFP PPO On/Off Exchange ACO & PCMH Challenges & Opportunity Challenges To reduce cost and improve care for BSC s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets Very limited data on IFP book Less than 50% of 2014 members were with Blue Shield in 2013 Makes traditional member-based measures (i.e. PMPMs, svc/1000) hard to measure Need to solve the attribution problem (since it s PPO) Need to incorporate quality as Exchanges are putting a greater emphasis on it Opportunity Population of newly insured individuals has the potential to have lots of health issues but a great opportunity to get ahead of the curve and help manage these patients

41 IFP PPO On/Off Exchange ACO & PCMH - Solution ACO To reduce cost and improve care for BSC s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets Limited measures to ALOS and Readmission Rates for year 1 This solved the member-based measurement issue Applied an attribution algorithm to assign members back to medical group Incorporated quality as adjuster to payout Gainshare (upside only payout to provider) PCMH Care Mgmt team set up to care to enroll those with chronic conditions in the program to help manage their care A PMPM care mgmt fee is paid for these individuals

42 IFP PPO On/Off Exchange ACO & PCMH Key Technical Issues Adjustments needed to be made for ALOS and Readmission Rate To reduce cost and improve care for BSC s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model benchmarks (CCMM) in six statewide Covered California markets ALOS: CMI Adjusted using MS-DRG arithmetic LOS Readmission Rate: Will use 2014 IFP book as benchmark Attribution Defined hierarchy of PCPs and SCPs and CPT codes Do we use plurality of visits over time period or most recent visit? Quality Limited to inpatient quality measures, simple pass/fail criteria Drives the % of savings shared with the provider Upside only gainshare introduces risk of payout on randomness Created confidence intervals to only pay incentive beyond hurdle rate

43 Shared Purpose and Trust Doesn t happen overnight. Everyone comes to change at their own pace. First align incentives, to remove this focus barrier Seek to understand each other s business practices Operate in partnership. Collaborate Remain transparent Focus on creating the right culture Maintain a long-term mindset This starts at the top through shared governance and cascades through to the performance of the caregivers. 13

44 Role of Actuaries 90% of the work in these projects is data driven Actuaries are integral members of the negotiating teams Actuaries design the architecture for effective incentive models Actuaries are trusted advisors for managing risk Actuaries drive the ongoing data tools for population management 14

45 Share Learnings Blue Shield ACO Summit annual meeting of all ACO partners Blue Shield ACO Quality Council quarterly quality meeting, includes ACO partner clinical thought leaders 15