Sustaining the Transition to Value in a Time of Policy ...€¦ · Physicians and other eligible providers will take notice! 1 Emphasis on registry reporting, ... What type of non-physician

Sustaining the Transition to Value in a Time of Policy & Market Turmoil:Alternative Delivery & Payment Models for Employers

Houston Business Coalition on HealthDavid Lansky, PhD

June 28, 2017

©PBGH 2017 CONFIDENTIAL 2

PBGH Members


Health Reform: Where are we now??!

• Coverage

• Financing

• Cost

• Quality, safety, outcomes … value?


• Most people remember this…

Repeal and Replace is About Public Coverage


• But not this…

Reform is about changing the delivery system


Public Sector Health Care Payment is Changing


Key Things to Know about Public Purchasers

Physician payment is changing, due to MACRA:• MIPS – tying fee-for-service to quality

payments, up to +/- 9%• Alternative Payment Models (APMs):

• 5% positive incentive• Must take “nominal financial risk”

Hospital payment is changing, due to CMMI models• Bundled payments: joints, hearts, cancer• Accountable care organizations, including

NextGen model

Quality Reporting (was

PQRS)

Cost (was Value-based

Modifier)

Advancing Care Information

(was MU)

Improvement Activities

MIPS

Greater growth & competition around APMs, which could provide opportunity or additional friction.

3

Pressure growing on FFS practitioners, with push toward track 2 & alternative payment models (APMs)

2

Increased physician employment or collaboration. 4

Physicians and other eligible providers will take notice! 1

Emphasis on registry reporting, data

transparency, and public disclosure.

7

Planning should begin now for 2019.6

Details will require important policy decisions.8

Hospitals have extensive measure submission, VBP and

APM experience that will be of value to practitioners.

5

Implications for Providers under MACRA


Why do we care?

Medicare payments affect clinical behavior (more than ours’) - ~about 50% of hospital revenue, 60% of MD revenue

Medicare rules and payments drive business behavior: hospital consolidation, acquisition of MD practices, SNFs

Medicare sets the default measures of quality and value

Private payers align with Medicare, not vice versa (e.g., CPC+, bundled payments, ACOs)

But…weak incentives make for superficial changes


Meanwhile, is the private sector leading or following?

Do we see the problems the same way?

Are we implementing similar ways of paying doctors?

Are we mirroring these hospital payment models?

Are we using the same quality standards?

Are our health plans supporting similar and aligned value-based transformation efforts?

www.hcttf.org

11

Shift 75% of our respective businesses to be

under value-based care contracts by 2020

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70%

80%

90%

100%

110%

120%

130%

140%

150%

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Private

Payer

Medicaid(1)

Medicare(2)

AGGREGATE HOSPITAL PAYMENT-TO-COST RATIOS FOR PRIVATE PAYERS, MEDICARE AND MEDICAID, 1994 – 2014

Source: Analysis of American Hospital Association Annual Survey data, 2014, for community hospitals. (1) Includes Medicaid Disproportionate Share payments.(2) Includes Medicare Disproportionate Share payments.

AMERICAN HOSPITAL ASSOCIATION

EMPLOYERS MOST CONCERNED ABOUT HOSPITAL PRICES,SPECIALTY PHARMACEUTICALS AND CANCER CARE

Base: All Employer Health Benefit Decision Makers (bases vary) Q1707: Please indicate your level of concern for the following drivers of health care costs.

Level of Concern for Healthcare Cost Drivers, Total Employer Benefit Decision-Makers (Top 2 Box: Extremely/Very Concerned)

2013 2014 2016

Hospital inpatient prices - - 60%

Specialty pharmaceuticals 47% 54% 55%

Cancer care 54% 56% 54%

Hospital outpatient prices 47% 49% 50%

General pharmaceuticals 46% 50% 50%

Physician prices 54% 53% 48%

Obese patients generally 45% 53% 48%

Health plan fees for care management 45% 44% 44%

Diagnostic imaging 43% 47% 41%

Hospital outpatient utilization 40% 50% 40%

Innovative, breakthrough treatments/cures for disease - 46% 40%

Orthopedic surgery (hips/knees/etc) 41% 44% 39%

Diabetes patients - - 39%

Physician utilization 45% 45% 37%

NICU/early childhood disease costs 0% -- 36%

Low-back pain treatment 43% 40% 34%

Maternity care 41% 40% 32%

Routine preventative testing 40% 43% 31%

STRATEGIC HEALTH PERSPECTIVES

STRATEGIC HEALTH PERSPECTIVES℠

41%38%

34%32%31%31%31%

28%27%27%26%26%25%24%23%

Increased emphasis on wellness and…

Cost transparency tools for employees to…

Negotiated reference pricing for specific…

Better manage heavy utilizers of care

Private exchanges

Direct contracting with hospitals

Narrow network health plans

Consumer Directed Health Plans (CDHP)

MOST EMPLOYERS DO NOT THINK CURRENT INITIATIVES WORK WELL TO CONTAIN COSTS

Base: All Employer Health Benefit Decision Makers (n=340)Q1709 How well do you think each of the following initiatives will work to contain costs?

Works Extremely/Very Well to Contain CostsAmong Employer Health Benefit Decision Makers


Purchaser Approaches to Affordability

High level of concern and frustration re: modest industry efforts

Not a silver bullet: payment reform is important but not enough

Policy and payment reforms create the ecosystem that encourages delivery system redesign

The most effective interventions include all of:• Payment change• Consumer education and incentives• Information on costs and outcomes• Clinical redesign and quality improvement

Public-private purchaser alignment is critical


Four market-oriented strategies … • Bundled payments• Reference pricing• Accountable care models (and narrow networks)• High-cost patient models

How do we reward value in these markets?• Selective contracting with high-performing

organizations• Steering patients (tiering, benefit design) to high-

performing organizations • Increasing or decreasing payment based on

performance (P4P, shared savings, etc)

PBGH channels for action (as of now…)


Getting value from bundled payments

Virginia Mason Medical Center

Seattle, WA

ECEN Centers of Excellence Locations

18

Kaiser Permanente

Irvine Medical Center

Irvine, CA

Mercy Hospital, Springfield

Springfield, MO

Johns Hopkins Bayview

Medical Center

Baltimore, MD

Geisinger Medical Center

Danville, PA

Joints

Spines

Bariatrics

Scripps Mercy Hospital

San Diego, CA


2014 Employer Outcomes*

Quality Metric Carrier ECEN

Number of Total Joint Replacements (DRG

470)350 231

Discharge to Skilled Nursing Facility 9.1% 0.0%

Readmissions < 30 Days 6.6% 0.4%

Revisions within 6 months 1.1% 0.0%

ECEN Utilization (Joint Replacements 1/1/14 – 08/31/16)

Intakes (unique inquiries): 3,958

Referrals to a Center of Excellence: 2,293

Completed surgeries: 1,372

Intakes:

3958Referr

als: 2293

Completed

Cases:

1372

*Data from one participating employer


Reference Pricing - Orthopedics

Source: Robinson JC and Brown TT, “Increases in Consumer Cost Sharing Redirect Patient Volumes and Reduce Hospital Prices for Orthopedic Surgery.” Health Affairs 32(8), 2013, pp. 1392-1397.


Getting value from accountable care models

(and narrow networks)


Direct ACO contracting model


Direct ACO contracting model


Health Plans’ Self-Reported ACO Results


Employers looking “under the hood”


Assessing ACO Value: Process Reviews

• Patient identification: does health plan data support patient

identification? Does ACO embellish with provider data? Data refresh

frequency?

• Data feeds: does ACO receive behavioral health and Rx claims data?

How are you notified of ED use? Hospital admissions?

• Feedback loop between care coordinator, PCP, specialists, and health

plan. Are attributed patients easily identified in the EMR?

• Team make-up: What type of non-physician clinicians engage, what are

their roles? How do they engage?

• Patient centeredness: Do patients opt in? Is there a face-to-face

meeting? Are personal goals established? Readiness to change?

Motivational interviewing? Shared decision making? Depression

screening?

• Outreach process: Frequency standards? Communication options?

• Referral process: What data supports referrals to high performing

specialists? Hospital arrangements.

• Measurement: ACO-level measures; internal measures of provider

performance? Measures provided by plan to providers.

• Incentives: How are savings shared with participating providers?


Alternative to ACO: “narrow the networks”


Create a market of competing care systems in a region

– Purchasers impose common standards, metrics, improvement goals through a model contract

– Each purchaser chooses its own mode of administration, contracting, and employee choice

– Care systems bear financial risk based on total cost of care and population health outcomes

A Market Transformation Strategy


Challenges to Value Purchasing• Corporate culture

• Unwillingness to disrupt employees’ relationships• Loyalty/continuity with incumbent payers, TPAs, vendors

• Provider culture• Provider discomfort with non-process measures (span of control,

methods, accountability)• Consumer culture

• Low consumer engagement with decisionmaking tools• Consumer desire for “choice” – large networks

• Business issues• Provider resistance to data disclosure• Uniformity of large, blended health plan networks• Low patient volume with individual purchasers• Regulatory pressure for “network adequacy”

• Technical issues• Poor HIT and HIE infrastructure• Difficulty of aggregating data across settings, across time• Difficulty of acquiring data from patients


What can a community do?

• Agree on priorities and expectations for clinical

pathways and performance metrics

• Enable the information infrastructure to make that work

• Help buyers get organized to send the right signals

• Honestly evaluate your capabilities and make investments to address shortcomings

Sustaining the Transition to Value in a Time of Policy ...€¦ · Physicians and other eligible providers will take notice! 1 Emphasis on registry reporting, ... What type of non-physician

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