Geisinger Health System: A Model for ACO Implementation

Geisinger Health System: A Model for ACO Implementation American College of Medical Quality National Conference February 18, 2011 Glenn Steele Jr., MD, PhD President and CEO Geisinger Health System Medical Quality 2011 Faculty Disclosure - No relevant financial relationships to disclose Not for reuse or distribution without permission

Where We Are Now (Nationally)

International Comparison of Spending on Health, 1980-2007 Average spending on health per capita ($US PPP) 7000 United States 6000 5000 4000 3000 2000 1000 0 Canada Netherlands Germany Australia United Kingdom New Zealand Total expenditures on health as percent of GDP 16 $7,290 16% 14 12 10 8 6 United States Germany $2,454 4 Canada Netherlands 2 New Zealand Australia United Kingdom 0 1980 1984 1988 1992 1996 2000 2004 1980 1984 1988 1992 1996 2000 2004 8% Note: $US PPP = purchasing power parity. Source: Organization for Economic Cooperation and Development, OECD Health Data, 2009 (Paris: OECD, Nov. 2009).

Total National Health Expenditures (NHE), 2009 2019 Before and After Reform NHE in trillions $5.0 $4.5 $4.0 $3.5 $3.0 Before Reform* After Reform 6.3% annual growth 5.7% annual growth $4.6 $4.3 $2.5 $2.0 $2.5 $1.5 $1.0 $0.5 $0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: * Estimate of pre-reform national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, The Impact of Health Reform on Health System Spending, (Washington and New York: Center for American Progress and The Commonwealth Fund, May 2010).

Where Is the U.S. on Health IT? Only 46% of U.S. primary care physicians have electronic medical records (EMRs), and only 26% have advanced IT capacity Percent reporting EMR Percent reporting nine or more of 14 IT functions* 99 97 97 96 100 95 94 94 100 92 91 89 50 25 72 75 75 66 68 46 37 50 25 54 49 36 26 19 15 14 0 NET NZ NOR UK AUS ITA SWE GER FR US CAN 0 NZ AUS UK ITA NET SWE GER US NOR FR CAN * Count of 14 functions includes: electronic medical record; electronic prescribing and ordering of tests; electronic access test results, Rx alerts, clinical notes; computerized system for tracking lab tests, guidelines, alerts to provide patients with test results, preventive/follow-up care reminders; and computerized list of patients by diagnosis, medications, due for tests or preventive care. Source: Commonwealth Fund 2009 International Health Policy Survey of Primary Care Physicians.

The Cost Shift ( Cross Subsidy ) 200% 175% 150% 125% 130% 119% 154% 131% 121% 118% 100% 75% 50% 25% 0% 78% 21% Medicare 37% Other FFS 33% A 45% B 32% C 48% 14% Medicaid id 37% 34% D E Percentage of Net Revenue to Total Cost by Payor

2010 MID-TERM ELECTIONS Question: And Now What?

Access Demand Perverse incentives still in play Piece rate Medicare/Medicaid payment units of work cost value Plus new incentives!!

Consolidation of insurance companies Consolidation of hospitals Integrated Delivery Systems Accountable Care Organizations

Where Do We Want to Be? 1. Affordable coverage for all 2. Payment for value 3. Coordinated care 4. Continuous improvement/innovation 5. National health goals, leadership, accountability The Path to a High Performance US Health System A 2020 Vision and the Policies to Pave the Way, pg. 16-21, The Commonwealth Fund

How Do We Get From Where We Are To Where We Want To Be?

State of the Evidence Volume 348(26) 26 June 2003 pp 2635-2645 The Quality of Health Care Delivered To Adults In the United States McGlynn, Elizabeth A.: Asch, Steven M.: Adams, John: Jeesey, Joan: Hicks, Jennifer: DeCristofaro, Alison: Kerr, Eve A. BACKGROUND We have little systematic information about the extent to which standard processes involved in healthcare a key element of quality are are delivered in the United States. METHODS We telephoned a random sample of adults living in 12 metropolitan areas in the United States and received written consent to copy their medical records to evaluate performance on 439 indicators of quality of care for 30 acute and chronic conditions as well as preventative care RESULTS Participants received 54.9 percent of recommended care. CONCLUSIONS The deficits we have identified in adherence to recommended processes for basic care pose serious threats to the health of the American public. Strategies to reduce these deficits are warranted. 12 Not for reuse or distribution without permission

Cost/Quality Correlation 50th %ile x ce to EBM) Quality Index % adherenc MD Q tcomes or % Higher (out Low wer Low Efficiency High Quality Low Efficiency i Low Quality (Nightmare Suppliers) High Efficiency High Quality (Dream Suppliers) High Efficiency Low Quality 50th %ile Lower Efficiency/ Higher Cost MD Longitudinal Cost Efficiency Index (total cost per case mix-adjusted treatment episode) Heal Teach Adapted Discover from Regence Serve Blue Shield; Copyright Arnie Geisinger Milstein, Health MD - System Mercer2011 Not for reuse or distribution without permission Higher Efficiency/ Lower Cost

Cost = Quality 2006-2010 2010 GHS Innovations Cost/Quality R 2003 Cost or Quality 1993-1994 Hillary-Care Debate

The Legacy Make my hospital right, make it the best. Abigail Geisinger 1827-1921 1921 Geisinger Quality Striving for Perfection 2006-2011

Geisinger Health System An Integrated Health Service Organization Provider Facilities Geisinger Medical Center - Hospital for Advanced Medicine & the Janet Weis Women s & Children s Hospital, Level I & II Trauma Center Geisinger Northeast (2 campuses) - Geisinger Wyoming Valley Medical Center with Heart Hospital, Henry Cancer Center, Level II Trauma Center - Adult & Pediatric Urgent Care Marworth Alcohol & Chemical Dependency Treatment Center 2 Ambulatory surgery centers >48K admissions/obs & SORU ~820 licensed in-patient beds Physician i Practice Group Multispecialty group ~860 physicians ~460 advanced practitioners ~62 primary and specialty clinic sites (37 community practice sites) 1 Outpatient surgery center >2.0m clinic outpatient visits ~350 residents and fellows Managed Care Companies ~250,000 members (incl. ~49,000 Medicare Adv.) Diversified products >25,000 contracted physicians/ facilities (including 110 non-geisinger hospitals) 42 PA counties

Geisinger Health System Last updated 12/16/10 Geisinger ProvenHealth Navigator Sites Contracted ProvenHealth Navigator Sites Geisinger Medical Groups Geisinger Specialty Clinics Geisinger Inpatient Facilities Ambulatory Care Facility Geisinger Health System Hub and Spoke Market Area Geisinger Health Plan Service Area Careworks Convenient Healthcare Non Geisinger Physicians With EHR

Electronic Health Record (EHR) > $130M invested (hardware, software, manpower, training) Running costs: ~4.4% of annual revenue of > $2.3B Fully-integrated EHR: 37 community practice sites; 2 hospitals; 2 EDs; 6 Careworks retail-based and worksite clinics Acute and chronic care management Optimized transitions of care Networked PHR - ~155,000 active users (33% of ongoing patients) Patient self-service (self-scheduling, kiosks) Home monitoring integrated with Medical Home Outreach Health IT - 2,600 non-geisinger physician users Remote support for regional ICUs Telestroke services to regional EDs Active Regional Health-Information Exchange (KeyHIE) 11 hospitals, 90+ practices, 400,000 patients consented e-health (eicu ) Programs Keystone Beacon Community HIT-enabled, Community-wide care coordination in 5 rural counties GHS awarded arded Most Wired health care system stem by Computer World eight years running; Dr. Steele awarded HIT CEO of the year, 2006

The Vision Quality Innovation Market Expansion Scale and Generalize Innovation Legacy Personal and Professional Well-being

Targets for Geisinger Innovation Unjustified variation Fragmentation of care-giving Perverse payment incentives Units of work Outcome irrelevant Patient as passive recipient of care

Innovation Initiatives ProvenCare for Acute Episodic Care (the Warranty ) ProvenCare Chronic Disease ProvenHealth Navigator SM (Advanced Medical Home) Transitions of Care GAPP (Geisinger Accelerated Performance Program)

The Geisinger Advantage Our professional staff, patients and partners Our market Vision and leadership Operational success and professional integration Enterprise-wide clinical decision support (via the EHR) Accountability, transparency, incentives all aligned Our insurance/provider Sweet Spot

ProvenCare for Acute Episodic Care (the Warranty )

ProvenCare for Acute Episodic Care ProvenCare Identify high-volume DRGs Determine best practice techniques Deliver evidence-based care GHP pays global fee No additional payment for complications

Quality/Value - Clinical Outcomes Before ProvenCare ProvenCare % Improvement (n=132) (n=321) In-hospital mortality 1.5 % 0.3 % 80 % Patients with any complication (STS) 38 % 33 % 13 % Patients t with >1 complication 84% 8.4 59% 5.9 30 % Atrial fibrillation 24 % 21 % 13 % Neurologic complication 1.5 % 0.9 % 40 % Any ypulmonary complication 7 % 5 % 29 % Re-intubation 2.3 % 0.9 % 61 % Blood products used 24 % 22 % 8 % Re-operation for bleeding 3.8 % 2.8 % 26 % Deep sternal wound infection 08% 0.8 03% 0.3 63 % Readmission within 30 days 6.9 % 5.6 % 20 %

ProvenCare CABG 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% February-06 April-06 June-06 August-06 October-06 December-06 February-07 April-07 June-07 August-07 October-07 December-07 February-08 April-08 June-08 August-08 October-08 December-08 February-09 April-09 June-09 August-09 October-09 December-09 February-10 April-10 June-10 August-10 October-10 % patients receiving all ProvenCare elem ents Not for reuse or distribution without permission Geisinger Health System Confidential and Proprietary 26 2009

ProvenCare CABG: Financial Outcomes Hospital: Contribution margin increased 17.6% Total inpatient profit per case improved $1946 Health Plan: Paid out 4.8% less per case for CAB with ProvenCare than it would have without Paid out 28 to 36% less for CAB with GHS than with other providers

Not Just Surgery Virtual Care Models: Epo Management Epo CKD (n=241)* Median days to goal = 35 days % Time below goal = 11.6% % Time in goal = 62.7% % Time above goal = 25.6% Control (n=74)** Median days to goal = 62.5 days % Time below goal = 39.7% % Time in goal = 43.9% % Time above goal = 16.4% Avg Epo Units/week = 4,400*** Avg Epo Units/week = 12,000 Home/Clinic = 82%/18% Home/Clinic = 39.2%/60.8% Expanded Dose Utilization = 74% Expanded Dose Utilization = 16% Avg Hgb at start = 10.4 mg/dl Avg Hgb at start = 10.0 mg/dl Avg T-Sat at start = 27% Avg T-Sat at start = 18% ***Savings $2,200/pt/year @ASP+6% (After management fee accounted for. Does not take into account benefit of decreased clinic administration cost) *VITALine results (as of 12/1/10), Hgb range 10-12 **Bucaloiu et. al, Managed Care Interface, June 2007. Hgb target range 11-13 at this time

ProvenCare Portfolio ProvenCare : CABG PCI (Percutaneous Coronary Interventions Angioplasty/Angioplasty + AMI) Hip replacement Cataract EPO Perinatal Bariatric surgery Low back Lung cancer

ProvenCare - Chronic Disease

Chronic Disease Portfolio Diabetes Congestive Heart Failure Coronary Artery Disease Hypertension Prevention Bundle

Improving Diabetes Care for 24,402 Patients 3/06 3/07 10/09 10/10 Diabetes Bundle Percentage 2.4% 7.2% 12.9% 11.8% % Influenza Vaccination 57% 73% 72% 74% % Pneumococcal Vaccination 59% 83% 84% 84% % Microalbumin Result 58% 87% 79% 78% % HgbA1c at Goal 33% 37% 45% 50% % LDL at Goal 50% 52% 62% 55%* % BP < 130/80 39% 44% 52% 53% % Documented Non-Smokers 74% 84% 85% 85% *Measure change resulted in a 9% decrease February 2010 Not for reuse or distribution without permission

Cumulative Hazard Function for Macro-Vascular and Micro-Vascular Disease Micro-vascular (Retinopathy and Amputation)

Cumulative Hazard Function for Macro-Vascular and Micro-Vascular Disease Macro-vascular outcomes (MI and Stroke)

Improving CAD Care for 15,268 Patients 9/06 3/07 10/09 10/10 CAD Bundle Percentage 8% 11% 20% 22% % LDL <100 or <70 if High Risk 38% 37% 48% 51% % ACE/ARB in LVSD,DM, HTN 65% 66% 75% 74% % BMI measured 79% 86% 99% 99% % BP < 140/90 74% 74% 79% 79% % Antiplatelet Therapy 89% 91% 92% 92% % Beta Blocker use S/P MI 97% 97% 97% 96% %D Documented dnon-smokers 86% 86% 87% 87% % Pneumococcal Vaccination 80% 80% 86% 86% % Influenza Vaccination 60% 74% 75% 77%

Improving Preventive Care for 213,561 Patients 11/07 10/10 Adult Preventive Bundle 9.2% 28% Breast Cancer Screening (q 2 40-49, 49, q 1 50-74) 46% 61% Cervical Cancer Screening (q 3 yr Age 21-64) 64% 73% Colon Cancer Screening (Age 50-84) 44% 64% Prostate Cancer Discussion ssion (Age 50-74) 72% 76% Lipid Screening (Every 5 yr M > 35, F > 45) 75% 85% Diabetes Screening (Every 3 yr > 45) 85% 88% Obesity Screening (BMI in Epic) 77% 96% Documented Non-Smokers 75% 78% Tetanus Diphtheria Immunization (every 10 yr) 35% 69% Pneumococcal Immunization (Once Age >65) 84% 87% Influenza Immunization (Yearly Age >50) 47% 57% Chlamydia Screening (Yearly Age 18-25) 22% 34% Osteoporosis Screening (every 3 yr Age > 65) 52% 73% Alcohol Intake Assessment 84% 89%

Ongoing Issues Benefit to patients? More individualized targets? Smaller cohorts? Specialist / PCP interactions

ProvenHealth Navigator SM (Advanced d Medical Home)

ProvenHealth Navigator SM (Advanced Medical Home) Partnership between primary care physicians and GHP that provides 360-degree, 24/7 continuum of care Embedded nurses Assured easy phone access Follow-up calls post-discharge and post-ed visit Telephonic monitoring/case management Group visits/educational services Personalized tools (e.g., chronic disease report cards)

A Health Insurer Pays More to Save By Reed Abelson August 2010

ProvenHealth Navigator SM Expansion since 2007 MA Commercial Medicare Sites members Members members Total Phase 1 3 3,100 800 Phase 2 10 7,300 8,500 Phase 3 12 4,600 7,000 2,000 11,000 7,800 Phase 4 Phase 5 12 4,300 7,100 7 1,700 5,400 5,300 3,000 Total 44* 21,000 28,800 29,100 78,900 * 37 Geisinger primary care practices & 7 non Geisinger primary care practices

ProvenHealth Navigator SM (Advanced d Medical Home) Currently serves 50,000000 Medicare recipients and ~29,000 commercial patients Results from best primary care sites: 25% patients admissions 23% days/1000 53% readmissions following discharge Significant benefit e to patients and families, avoiding multiple hospital admissions

Cumulative percent difference in spending attributable to PHN 0% -2% -4% -6% -8% 95% Confidence Interval Median Estimate 95% Confidence Interval -10% -12% Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Cumulative percent difference in spending (Pre Rx Allowed PMPM $) attributable to Cumulative percent difference in spending (Pre Rx Allowed PMPM $) attributable to PHN in the first 21 PHN clinics for calendar years 2005 2009. Dotted lines represent 95% confidence interval. P = < 0.003

Ongoing Issues Scalability? Generalizability? Specialist / PCP interactions

PGP Demo Quality Payments (Overall Benefits to Medicare) Geisinger Results: Year 4 Shared Savings $1.8 Million earned ($1.3 Million paid after holdback) $900 Thousand based on Quality $900 Thousand based on Efficiency Physician Quality Reporting Initiative (PQRI) 100% of earnings based on PGP quality score $1.1 1 Million Physician Group Practice Demonstration Performance Year 4 Quality Measures Results August 20, 2010 RTI International

Transitions of Care

Transitions of Care Began January 2008 as joint quality/efficiency initiative that complements ProvenHealth Navigator SM (Advanced d Medical Home) Inpatient and outpatient interventions Eliminate unnecessary admissions Reduce preventable readmissions Free up capacity for more acutely-ill patients Focused on risk stratification, team communication, and post discharge communication and follow-up Program expansion is planned to look at targeted DRGs (CHF, AMI and Pneumonia) Modeling and predictive instruments used

Fundamental Innovation at Geisinger How and Why? Anatomy Continuum of Care (provider all-in ) Hub and spoke provider design Aligned incentives Insurance/provider joint goals Market Demography Brand Market share (insurance and provider) Electronic enabler across 43 counties

Fundamental Innovation at Geisinger How and Why? Financial Health Balance sheet Operating margin Hedging strategy Planned risk taking Sociology IHS culture Clinical leadership (insurance and provider) Patient centric design The common good goal

All of the above permissive but not enough Clinical leadership Pride of purpose Professionalism Overarching

Question: And Now What? Answer: Reengineering i Care!

More value for patients!

Or "Price controls!!"

Caveats I For all of the Innovations Cost in hospital Hospital volume Total cost of care New relationship to payer or New payment incentives or Backfilled volume with new payer mix

Caveats II Scalable? Applicable to non-integrated Delivery Systems? Applicable in absence of real-time EHR? Applicable in fee-for-service settings? Pending wider use in marketplace

Scalability Experiments PGP ACO Turbo TPA (Third Party Administrator) Geisinger Innovation Engine Plus ACO s GHS, Jefferson University Health, et. al Premier ACO Collaborative National Collaboration Dartmouth, et. al Geisinger Consulting ACS Commission on Cancer Collaboration