It works! Using Episode-Based Care to Improve …...It’s a Crazy Time in Healthcare! 2 Price Tag $69B 10,000+ community-based sites of care Price Tag $4B 40,000+ caregivers Market

It works! Using Episode-Based Care

to Improve Outcomes

2018 Mega Healthcare

1/16/18

It’s a Crazy Time in Healthcare!

2

Price Tag $69B

10,000+ community-based sites of care

Price Tag $4B

40,000+ caregivers

Market Cap $213B

25,000+ physicians

Amazon

3

health

• VBC and Payment Reform

• What We Have Learned from Bundled Payments

• Episode of Care Outcomes

• Attributes of Top Quartile Performers

• Creating Shadow Bundles Within ACOs

Agenda

4

CMS Payment Reform Path

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1) FFS not linked to Quality

2) FFS linked to Quality

3) APMs built on FFS Model

4) Population Based Payment

- HRRP

- VBP

- PVBM

- ACO

- Medical

Home

- Bundled

Payment

- Pioneer

ACO (Y3-5)

- Next Gen

ACO

Full Risk

No Risk

Transfer of Payment Risk: Payer to Provider

6

Rewarded forVolume Pay for Reporting Pay for Performance

Shared Savings, NoDownside Risk

Shared Savings,Some Downside

RiskShared Savings,

More Downside RiskPMPM, Payment forSpecialty Services

Global Budget orPercent of Premium

Integrated Finance &Delivery

Provider Downside Payer Downside

Full Risk

1) FFS not linked to Quality

2) FFS linked to Quality

3) APMs built on FFS Model 4) Population Based Payment

MSSP1

Next Gen

MSSP1+ MSSP2

MSSP3

No Risk

Bundled Payment

2017 CMS ACO Participation

7

438

6

36 45

0

50

100

150

200

250

300

350

400

450

500

MSSP 1 MSSP 2 MSSP 3 Next Gen

2017 CMS ACOs By Risk Track

• In essence, FFS-Based ACOs represent one BIG bundled payment

One BIG Bundled Payment

8

70%

30%

Total Medicare FFS Spend By Episode of Care (EOC) and Non-EOC

EOC Non-EOC

• 48 BPCI Episode Families

• Initiated by acute care stay

• 90-day post-acute period

Developing Essential Capabilities

Strategies to Mitigate Payment Risk

9

Payment Risk

Accountability

Analytics

Provider Comp

Group Individual

Population Episode

Group Individual

EOC

1) FFS not linked to Quality

2) FFS linked to Quality

3) APMs built on FFS Model 4) Population Based Payment

Episode of Care Approach Brings New Capabilities

10

Item ACO/Population Approach Episode of Care Approach

Target Payment

Measure

Population Average (Per Member Per

Month)

Per Episode of Care (Target Price)

Payment Accountability Provider Group (Shared Accountability) Individual Provider (Individual

Accountability)

Analytics Population-level Episode-level

Internal Cost Analysis Typically not addressed Episode-level

Quality Measures Population-based Episode-based

Focus of Provider

Engagement

Primary Care Providers Specialty Providers

Care Management

Focus

Gaps in care; longer term management

of Medically Complex and Chronic and

Acute Conditions

Clinical Pathways; shorter term

management of Procedures and Acute

Conditions

Provider Compensation Based on achievement of population-

level quality measures and net payment

savings

Based on achievement of episode-

specific quality measures and individual

contribution to net payment savings

• It’s a great way to engage specialists

• Post-acute providers are anxious to partner

• Granularity matters

• Focusing on one patient at a time works

• Don’t spend $1 to save 50 cents

• Measuring internal costs is necessary – No margin, no mission

• Individual accountability is crucial

• Applying episodes of care to conditions is complicated

What have we learned from EOC/Bundled Payments?

11

Episode of Care Accountability

12

Day 0 Day 90

Payment Accountability

Hospital MD SNF Imaging Home

Health Readmit ED

Outcome Accountability

Does Episode of Care approach improve outcomes?

BPCI Y3 Lewin Report, October 2017

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“…BPCI participants have responded to BPCI incentives, but there

are relatively few instances in which these responses significantly

changed key outcomes.” - The Lewin Group

“Because of the large number of situations encompassed under the

initiative, including the selective and heterogeneous group of

participants and limited and varied experience of participants, it is

challenging to reach conclusions about the overall impact of BPCI.”

- The Lewin Group

Ref: https://downloads.cms.gov/files/cmmi/bpci-models2-4yr3evalrpt.pdf

Does Episode of Care approach improve outcomes?

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8.9%

7.7% 7.3%

-12.4%

-4.8% -4.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

COPD CHF LEJR

Mean Percent Change in Payment Per Episode By Episode Type Top Quartile vs Bottom Quartile, BPCI Q4-13 to Q2-15

Top 1/4 Mean % Bottom 1/4 Mean %

Ref: https://downloads.cms.gov/files/cmmi/bpci-models2-4yr3evalrpt.pdf

What distinguishes the top quartile?

Key Attributes

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Alignment

Data

Integration Care

Redesign

Optimization

Improving

Results

Alignment

• Governance

• Physician Leadership

• Transparency

• Role Clarity and Accountability

• Team Engagement – including the continuum

• Incentives and/or Gainsharing

Savings

HospitalPhysicians

• Payment and Internal Cost Data

• Measuring Workflow Execution

• Timely and Actionable Provider-Level Reporting

Data Integration

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Data Integration

Provider-Specific and Actionable

18

Ability to

forecast

performance

Individual

Physician

performance

Data Integration

PAC Provider Reports

19

Individual SNF

Performance

Data Integration

Granularity

20

Site of

readmissions

and related

costs

Readmission

diagnoses

and related

costs

• Common Attribute of Top Performers: EXECUTION

• It’s a marathon, not a sprint

• Give equal attention to outcomes and ROI

• Don’t spend $1 to save 50 cents!

Care Redesign

21

Care Redesign

ROI Focused: Effective and Efficient Care Management

22

Episode Care

Coordinator

Episode Managing

Physician

Acute Care Post-Acute Care Pre-Hospital

• Clarity

• Accountability

• Efficiency

200:1

to

800:1

Optimization

Risk Stratification

Risk

Algorithm

High $$$$, Plan A

Moderate $$, Plan B

Low $, Plan C

Risk

Optimized

Care Plan

Optimization

Example: Risk-Optimized Care Plans

RISK:

70

ASSESSMEN

T

CARE PLAN

CARE PLAN

Quality

• Readmissions reduced by 56%

• 32% lower post-acute care utilization

Financial

• Care coordinator productivity increased 3x

• Average 7:1 return on investment

• 18% reduction in average episode cost

Risk-Optimized Management By Exception Model

Results

25

56%

32%

3x

7:1

18%

Optimization

Create High-Performing PAC Networks

73% of Medicare FFS variation is attributed to Post-Acute Care

$

$

$

$

$

Ref: Variation in Health Care Spending, Institute of Medicine, 2013 (http://nap.edu/18393)

Optimization

Actively Manage the PAC Network

• Set utilization expectations

• Track and report performance

• Evaluate and refine the network

• Risk Adjusted Episodes of Care

• Predictive Analytics & Machine Learning

• Post-Acute Care Risk/Gain Sharing

• Remote Patient Monitoring (RPM)

• More Impactful Patient Engagement Tools

• Condition-Based Episodes of Care

• ACOs Embrace Episode of Care Approach

Optimization

Looking Ahead (next 3-5 years)

28

EDW ML

Consumers

Integrating APM Learning and Capabilities

29

1) FFS not linked to Quality

2) FFS linked to Quality

3) APMs built on FFS Model 4) Population Based Payment

ACO

OCM

CPC+

CEC (ESRD)

Bundled Payment

Condition-Based

Bundled Payment

and Risk

Work Streams

• Building Episode of Care Capabilities

Creating “Shadow” Bundles Within ACOs

30

2018

• Team Formation

• Care Design (1)

• EOC Analytics

• Internal Cost Analysis

• Specialist Funds Flow Models

• Payment Accountability Models

• Engage Employed MDs

2019

• Care Design (2-3)

• Pilot Shadow Bundle (Internal)

• Test Funds Flow Models

• Test Payment Accountability Models

• Engage independent MDs

• MD Comp Models

2020

• Care Design (3-5)

• Implement Shadow Bundles (1-3)

• Funds Flow

• Internal Costs

• Payment Accountability

• Internal MD Comp

CPC+

© 2018 PinpointCare | Confidential and Proprietary. Do not distribute or copy.

For more information:

31

Dennis O’Donnell, MHA, PT

Chief Executive Officer

[email protected]

(224) 548-4812