Realizing the Potential: Improving Population Health in Accountable Care. Healthcare in Transition: Current Trends
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1 Realizing the Potential: Improving Population Health in Accountable Care - ACOs - Another Passing Fad or Built to Last? - Jerry Vaccaro, MD President & CEO, APS Healthcare Richard Chung, MD Chief Clinical Officer, APS Healthcare Healthcare in Transition: Current Trends 16 th Annual East Hawaii IPA Healthcare Symposium Mauna Lani Bay Hotel & Bungalows, Kona, Hawaii 2012 APS Healthcare, Inc. 1 August 18, 2012
2 Agenda ACOs: Macro Trends, Rationale and History From Concept to Reality Case Study: One Emerging Approach 2012 APS Healthcare, Inc. 2
3 Why ACOs Compelling Concept Aligned incentives better, cheaper care But, It s the Economy, Stupid Current structures and practices are unsustainable, and the economy is bad The unthinkable now is thinkable Prior Efforts Have Met with Partial Success HMOs, IPAs, IDNs, PCMH Early Evidence Suggests ACOs have merit 2012 APS Healthcare, Inc. 3
4 Related Trends and Forces Patient Centered Medical Homes pave the way ACO construct being adopted and adapted by all payers PPACA Dramatic Growth in Medicaid Medicaid & Medicare Focus on Cost and Quality Initiatives: Value-Based Purchasing, STARs, Meaningful Use, etc APS Healthcare, Inc. 4
5 Lack of Coordination and Integration Drive the Problem 2012 APS Healthcare, Inc. 5
6 IDNs Tend to Perform Better 2012 APS Healthcare, Inc. 6
7 Has the Train Left the Station? CMS announced first wave and expects to announce the final group ASAP States are adopting the construct for Medicaid Commercial payers are migrating from PCMH ACO What will be left for the latecomers? 2012 APS Healthcare, Inc. 7
8 The Changing Landscape for Physicians Threatened reimbursement cuts from all payers, government and private Looming reimbursement cuts Penalties being used more as a tool to influence behavior Technology needs Significant investments in technology must be made to comply with ICD-10, meaningful use regulations, & SNOMED Difficulty in being small Changes are daunting for solo and small group practitioners to meet 2012 APS Healthcare, Inc. 8
9 Agenda ACOs: Rationale and History From Concept to Reality Case Study: One Emerging Approach 2012 APS Healthcare, Inc. 9
10 What is an Accountable Care Organization? Legal entity, typically a health system or independent provider organization, contracting with CMS Goals Better Care Improved Health Lower Per Capita Costs Results: CMS and ACO share savings 2012 APS Healthcare, Inc. 10
11 The Basics PCP Attribution: beneficiaries assigned based upon their pattern of utilization (No election or lock-in) Minimum 3 yr agreement, with increasing levels of risk Need organizational structure to receive and distribute payments for shared savings Enough PCPs and other providers to care for participating beneficiaries (minimum 5,000) 2012 APS Healthcare, Inc. 11
12 The Basics Program effective dates: 4/1/12, 7/1/12 and 1/1/13 Participation voluntary for providers Primary Care providers can participate in only one ACO Providers paid fee-for service by CMS Shared savings payment distribution made by ACO 2012 APS Healthcare, Inc. 12
13 Required Infrastructure Sufficient information systems to: Support beneficiary assignment Determine payments for shared savings Processes to promote: Evidence-based medicine Report data on quality & costs Coordinated care Ability to meet patient-centeredness criteria, such as: Member satisfaction survey Patient involvement in governance Assessment of population needs, with consideration of diversity Written standards for access and communication 2012 APS Healthcare, Inc. 13
14 Challenges Access to real-time information Financial exposure could be high Regulatory and organizational burdens Fee-For-Service environment without controls Patients can opt-out and block data access Complex interventions needed for both providers and patients Mindset shifts (from FFS P4P, patients as partners) Organizational maturity 2012 APS Healthcare, Inc. 14
15 Who Will Thrive? IDNs almost certainly will do well Hospital-led coalitions: some will thrive, while others will struggle IPAs and other provider entities: some will thrive, usually in a partnership context 2012 APS Healthcare, Inc. 15
16 Agenda ACOs: Rationale and History From Concept to Reality Case Study: One Emerging Approach 2012 APS Healthcare, Inc. 16
17 Potential Models Go It Alone Partnerships Hospitals, existing IDNs, and related systems Health Plans and related entities eg. Specialty ACOs CHCS: Medicaid ACO Models: Community-based, Provider Led, & Hybrids (Health Plans & Providers At-Risk) 7 states: ME, MA, MN, NJ, OR, TX, & VT Oregon CCO: Providers & Community - At-Risk, Integrate Med/BH/Dental Minnesota Payment Demonstration New Jersey Community-based Care Team Model Hawaii Island Beacon Community Population-based Reimbursement All Lines of Business & Product Types No Change in Claim Submission Process Physician Centric 2012 APS Healthcare, Inc. 17
18 Background: CHC Solutions and APS ACO Profile 22 currently approved ACOs (ca. 30% of total) CHC Solutions provides administrative and financial supports for ACO entities APS provides health analytic, reporting, care coordination, and clinical management services 2012 APS Healthcare, Inc. 18
19 APS / Collaborative Health Solutions Approach Create/ establish required corporate entity Partnership in the new entity with clearly delineated ownership and governance Delineation of responsibilities (medical management, provider relations, analytics, etc) determined collectively, with an intent to capitalize upon the expertise of either party and maximize the delivery of services All regulatory and administrative supports provided by APS/ CHS 2012 APS Healthcare, Inc. 19
20 Clinical Management: Simple, Yet Not Practice Evidence-Based Medicine Coordinate Care and Services Keep patients informed, engaged, and satisfied Employ systems, services and organizations that enable better, cheaper care Quality Improvement Health Intelligence and Reporting Tele-health and Distance Monitoring 2012 APS Healthcare, Inc. 20
21 Clinical Focus Population-Based Ensure overall quality outcomes (HEDIS and HEDIS-like) Focus on improving measures for the entire population High Risk/ High Cost, Impactable Group Focus on a small group who account for most of the poor outcomes and cost 2012 APS Healthcare, Inc. 21
22 A Small Group Poor Outcomes & Higher Costs 100% State Medicaid 100% Low Income Childless Adults 80% 80% 60% 60% 40% 40% 20% 20% 0% 100% 80% 60% 40% 20% 0% Members Costs Members Costs Medicare Sample Health Plan 100% 80% 60% 40% 20% 0% Members Costs High Risk/High Cost 0% Members All Other Costs 2012 APS Healthcare, Inc. 22
23 High Risk/High Cost, Impactable Patients = 5% (Complex & Drive Utilization) The Small Grp is the HR/HC Patients & compared to the Remaining Patients: Average Monthly Spend: 8 10 times higher Emergency Room Visits: 3 5 times higher Inpatient Admissions: >20 times higher Readmissions: >80 times higher High Risk/High Cost Patients Have Significant Co-morbidities 2012 APS Healthcare, Inc. 23
24 HMSA Quest Member Comparisons Population n = 147,530 Excludes maternity/newborns Top 1% HR/HC Next 4% HR/HC Next 15% All Other 80% PMPM $3,496 $901 $258 $40 % Male 56% 49% 45% 50% Average Age Average Months of Eligibility Average # of Conditions Average # RX Average # of Physicians Average Risk Score Inpatient Admits Per , ER Visits Per ,145 1, Readmits per Members in Top 5%: PMPM = $1, ER per 1000 = 2,227 IP per 1000 = Average # Rx = 44.8
25 HR/HC Members Have Complex Health Needs TANF Adult Top 5% Population n = 6,157 Anxiety Arthritis Asthma Bipolar On diagonal frequencies are straight probabilities of disease conditions. Off diagonal frequencies are conditional probabilities of column header disease given row header disease Depression Anxiety 17.4% 9.9% 15.4% 23.1% 64.9% 17.1% 23.2% 27.2% 43.1% 40.3% 15.7% 44.0% Arthritis 15.0% 11.5% 15.2% 8.9% 34.8% 35.2% 30.0% 45.3% 49.9% 73.4% 5.1% 17.5% Asthma 21.4% 13.9% 12.5% 13.2% 38.4% 28.7% 25.3% 35.1% 40.2% 39.6% 6.3% 24.3% Bipolar 33.7% 8.6% 13.9% 11.9% 55.7% 11.6% 17.7% 18.1% 34.4% 35.4% 22.6% 47.4% Depression 31.7% 11.2% 13.5% 18.7% 35.6% 20.6% 20.7% 29.6% 38.9% 39.5% 14.4% 40.0% Diabetes 9.5% 12.9% 11.5% 4.4% 23.5% 31.2% 26.6% 47.4% 29.0% 37.2% 4.3% 10.0% Hyperlipidemia 18.1% 15.4% 14.2% 9.5% 33.0% 37.2% 22.3% 48.1% 37.8% 41.0% 9.0% 16.8% Hypertension 14.1% 15.4% 13.1% 6.4% 31.3% 43.9% 31.9% 33.7% 32.6% 38.7% 6.1% 16.5% Lowback 23.4% 17.9% 15.7% 12.8% 43.3% 28.3% 26.4% 34.2% 32.0% 51.3% 8.5% 25.8% MuscSkel 20.0% 24.0% 14.1% 12.0% 40.0% 33.1% 26.1% 37.1% 46.7% 35.1% 8.3% 23.0% Schizophrenia 27.4% 5.8% 7.9% 27.1% 51.5% 13.4% 20.2% 20.8% 27.3% 29.5% 9.9% 44.1% SubAbuse 31.0% 8.1% 12.3% 22.8% 57.5% 12.7% 15.1% 22.4% 33.3% 32.7% 17.7% 24.8% Diabetes Hyperlipidemia Hypertension Lowback MuscSkel Schizophrenia SubAbuse Excludes maternity/newborns
26 Chronic Disease Members Odds Ratios of Being In The Top 5% Odds Ratios Stay Top 5 05 and 06 Next to Top 5 06 Bottom to Top 5 06 Age 1.00* 1.01* 1.02* Diabetes 1.92* 1.84* 1.17* CAD 1.48* 1.70* 1.23* CHF 2.83* 1.81* 1.51* COPD 1.56* 1.72* NS Asthma 1.94* 2.0* NS High Cost Mbrs with Chronic Conditions Tend to Stay High Cost Mid-range Cost Mbrs with Diabetes or Asthma Most Likely Move to High Cost Low Cost Mbrs with Diabetes, CAD or CHF Most Likely Move to High Cost Gender Not Significantly Related to likelihood of Between Group Movement Commercial & Medicare Population, 2012 APS Healthcare, Inc. 26
27 The Top 5% = Complicated Members ~5% of members ~50% of cost of care Typical profiles Chronic diseases, multiple co-morbidities, co-morbid SMI/SA Members not utilizing care efficiently Multiple providers, settings, and levels of care Healthcare is uncoordinated - medical home not existent or not effective Unnecessary ER use, hospitalizations/readmits Poly-pharmacy Poor engagement with conventional DM Reducing uncoordinated care reduces costs, improves quality 2012 APS Healthcare, Inc. 27
28 Total Population Management Focus on the 5% who drive 50% of cost: 5% Solution High Touch, Feet on the Street Technology-driven APS Percolator TM : the secret sauce CareConnection Platform: linked to Percolator, shapes work Essential Features Patient Tracking (Use of Registries) Care Coordination (Inter-visit Contact/Coordination of Care) Enhanced Access (Same Day Appt or Levels of Care, Appropriate Use) Quality Improvement (Use of PDSA for QI Activities) 2012 APS Healthcare, Inc. 28
29 The Four-Pillar Strategic Approach to Care Management Medical / Health Care Home IDENTIFY FIND ENGAGE SUSTAIN Data Driven, Fed by Percolator Physically Locating Patients Continuous Patient and Provider Education and Engagement Preventing The Slip and Slide Back Into HC/HR Provider* Support and Tools *Providers can be traditional clinical providers as well as non traditional service providers 2012 APS Healthcare, Inc. 29
30 Integrated Health Management Components All members have access to preventive reminders and various online services to drive positive health behaviors Continuous assessment of service utilization to stratify population by risk and need Members with greatest need get most intensive support 2012 APS Healthcare, Inc. 30
31 Comprehensive Person-centered Support Domains Assessed Clinical Functional, Cognitive Self help/care abilities Psychosocial Needs Auto Generated Based on Best Practice Guidelines Service Needs Assessment Social/Community Supports to Sustain Community Living Member/Family/Provider Review and Endorsement 2012 APS Healthcare, Inc. 31 Providers of Care & Service Clinical (medical & behavioral) Community Waiver type Service CareConnection Portals Accessible to all
32 APS Percolator TM Daily Process to Drive Staff Workflow Daily prioritization using Claims/Pharmacy/Utilization Management as available Self report Assessment APS staff interactions Program goals Highest need members identified Role-based activities set to address highest need per member. APS Team activities documented 2012 APS Healthcare, Inc. 32
33 Case Management: Overcoming Ratios and Cost The Problem: Ratios of Patients to Case Mgrs Different kinds of case management Fixed protocols = fixed costs Static predictive models vs. dynamic individual needs High cost/high risk vs. provider group care coordination Medical vs. BioPsychoSocial case coordination The Solution: APS Percolator TM and Case Finding Dynamic workflow management Access to medical services; deliver necessary education Team based care coordination Targeted field-based case management Manage psychosocial barriers; coordinate medical transitions 2012 APS Healthcare, Inc. 33
34 Impact: Measurable Improvements in Risk, Cost California Seniors and Persons with Disabilities Program Program Focused on Population Subset 35,000 members (SPD, complex service needs, some with SMI) Savings Accrued over Entire Program, Driven by Targeted Group Savings achieved after first 11 month of operations Evaluation conducted with data for members in original 4 counties Impact on Total Population Impact on Targeted Top 5% Impact on Next 15% Impact on Lowest 80% Total Spend -5% - 19% -7% + 5% PMPM + 3% - 10% -1% + 15% Admits/1000-5% - 10% -8% + 2% Readmits/1000-6% -6% -5% -7% ER/ % +5% +4% +3% *Same SPD (ABD) members measured in the same risk group from baseline to impact year 2012 APS Healthcare, Inc. 34
35 Third Party Validated Results Medicaid Program #1 >80,000 ABD and TANF members $13 million in annual cost avoidance (3:1 ROI) 24% reduction in inpatient utilization 11% reduction in emergency utilization Medicaid Program #2 40,000 ABD members $80 million in cost stabilization in each of first two operational years Program #1 Validated by Milliman Consultants; Program #2 by Mercer and AON Consulting 2012 APS Healthcare, Inc. 35
36 Third Party Validated Results Medicaid Program #3 >120,000 members with at least one chronic condition $150 million reduction in total annual costs (>7:1 ROI) >95% members with Medical Home 42% reduction in inpatient admission rates 38% reduction in ER utilization rates Enhanced treatment compliance(1.5x) Significant Improvements in all HEDIS metrics Program #3 Validated by Milliman Consultants 2012 APS Healthcare, Inc. 36
37 Questions Contact Information Jerry Vaccaro, MD (914) Richard Chung, MD (808) APS Healthcare, Inc. 37
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