Todd Berner: Assessment of Payer ACOs: Industry's Role

Assessment of Payer ACOs:Industry’s Role

Todd Berner MDMedical DirectorHead Global Medical Affairs Strategy, Immunology

7th Partnering with ACOs SummitJune 6, 2016

Muller RW, ECRI Institute Conference 11.28.2012

Global Downward Trends in per capita Healthcare Spending

Deloitte Health Care Current 2016

Winning under reform:Critical success factors

High quality; reduce costs Ability to aggregate clinical capabilities and deliver

evidence-based care Access to capital Ability to aggregate lives Physician / Hospital alignment Ability to aggregate and analyze data Ability to engage consumers Manage transition with one foot in FFS and stepping

into risk-based contracting Ability to manage risk Understand benefit design

Commercial ACO Growth

Health Value Summit – Leon Panetta

"The drawback to ACOs, is losing money"

-Deborah Dorman-Rodriguez, Attorney

Organizations with private ACO contracts tend to be larger and more

advanced than those with public ACO contracts only

Size of private payer ACOs• Cigna operates 114 collaborative accountable care

initiatives in 28 states, encompassing more than 1.2 million customers and more than 48,000 doctors.

• United Healthcare reports that 11 million beneficiaries are enrolled in accountable care type programs. It expects total payments to physicians and hospitals in these arrangements to reach $43 billion in 2015 and $65 billion by the end of 2018.

Philips Financial Report 2015

ACO Contracts are Defined by Risk

They hold a group of providers collectively responsible for both the total cost of care and the quality of care for a defined patient populationThis would exclude pay-for-performance that does not include responsibility for total cost of care, and capitation without a major quality component.

Lewis VA et al AJMC 2014

Implementation of Alternative Payment Models (APMs) in the Private Sector

• Parallels CMS efforts to increase APMs ties to FFS payments (30% by 2016, 50% by 2018)

• MACRA physician payment strategies will accelerate change within private sector payment models

Higgins A et al AJMC 2016

Overlap of Private Payer and Public ACO Contracts


Differences between Commercial and MA populations drive VBC adoption

• Commercial populations do not lend themselves to investments in population health

“In MA you look at an attempt at a marriage, whereas in commercial you look at a one-night stand. In commercial, you are really managing unit cost – things like maternity and accidents. You are not going to affect those incidents.”

• Commercial populations are more transient than MA populations • Employer can move a large group to a different plan;• Members move due to job changes

• Heterogeneity of commercial populations, member needs and plan designs across various insurance lines make population health management much more challenging and elusive than in MA

Deloitte Center for Health Solutions 2015

“Understanding the nature of ACO contracts is critical to even beginning to understand the potential effect of the ACO model on healthcare costs and quality”

• Most ACOs had only 1 ACO contract (57%)• About half of ACOs had a contract with a private payer• The single most common private payer ACO contract was an

upside-only shared savings model (41%), although the majority of private contracts included some form of downside risk (56%)

• A large majority of contracts made shared savings contingent upon• Quality performance (79%)• Bonus payments for quality performance (39%)• Upfront payments, such as care management payments (56%) or capital

investment (17%)


Characteristics of Largest Private Payer ACO Contracts


Types of Value Based Contract Participation by Providers


65% of provider respondents believe that participating in VBC programs with CMS will help them succeed in VBC arrangements with health plans.

Population Health


“Twenty percent of readmissions are due to patients not taking their drugs correctly post-discharge. Investing in pharmacy gives the best bang for the buck. We do this with highest-risk patients: congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), heart attack, pneumonia. We also have a catch-all category – we call it “social” – no matter what we do they are at high risk of readmission. Additionally, the pharmacists can identify problems; they can send a PA or NP for a home visit, for a more detailed evaluation.”

-Medical Director, Provider-sponsored Plan

Innovative Approaches to Population Health Management Not yet widely adopted by Providers


Health Plans and Providers disagree about biggest Challenges in VBC Contracting


Population Health from the Perspective of the Private Payer

• Focus on managing high-risk populations – populations with co-morbidities and chronic conditions that use a lot of health resources and are ultimate drivers of additional costs in the healthcare system• Holistically manage the health of high-risk populations., like insurer providing

care coordinators and even embedding clinical staff onsite with the providers• Per member – per month care coordination fees and other types of

compensation that incentive providers to population health management• Moving providers towards a shared savings or shared risk compensation

model incentivizes population health management because the provider knows they are financially responsible for a defined population• Programs and models of care similar to ACOs and patient-centered medical

homes• Cost savings from avoiding hospital or ER readmissions, Shifts provider

mindset as provider will see additional revenue from avoiding that type of care


Population Health from the Perspective of the Private Payer


• Health plans generally have better data about member behavior and utilization patterns than Providers, and can analyze the data at the member, physician, and population level

• Health plans have deeper data analytic capabilities than the typical provider organization– Predictive models to identify high-risk beneficiaries for Care Management interventions

• Many Health plans already share their data with Providers, but often there is a considerable time lag; the information is poorly integrated in providers’ workflows

• Data exchange between health plans and providers will likely evolve to combine claims history and clinical information from EHRs; providers then would be able to access the data on demand and at the point of care in real time

From an Industry perspective: Providers recognize the need for analytic capabilities, and while it may not

be feasible for health plans to directly fund analytics software for providers, sharing data in new ways and lending support in collecting and analyzing providers’ own clinical data could ameliorate this need. In other areas (e.g., data sharing, clinical care pathways, and staffing) plans’ investments appear to align with what providers value

“We share data with health systems, showing 30-40 percent leakage from their network of employed physicians. Because we have more visibility into longitudinal care – care outside their walls – we show we can increase keepage in their system. We are able to track progress over time, showing providersʼ incremental changes in their utilization patterns.” -Medical Director, National Health Plan


Alignment of Health Plan Investments with Provider Needs

Payer ACOs Technical Assistance to Providers


Payer ACOs Provider Eligibility Criteria


Characteristics of Providers with Private ACO Contracts

• Providers with private contracts are more likely to be integrated and anchored by a hospital

• Achieve higher levels of electronic health record meaningful use among their primary care physicians

• Have more full-time equivalent primary care physicians and specialists

• Experienced in pay-for-performance initiatives and other reforms

“When you come to a wall that is too high to climb,

throw your hat over the wall, and then go get your hat.”

-Old Irish Adage

Increasing ACO Focus on Cancer and Specialty Conditions

HIRC ReportACOs: Specialty and Oncology Management Initiatives 2015-2018

ACOs with commercial contracts in-place can be responsible for drug costs as part of total cost of care

measures


Specialty Pharma’s ACO Care Management Support


Listening to the Patient Voice in Research

Value Evidence Generation

Access

Real World Evidence:Efficacy vs. Effectiveness

Example- • RCT data

• Extremely high placebo response rates• Difficult to show efficacy for drug compared to placebo• It is essentially all non-pharmacologic therapy compared to

non-pharmacologic therapy + drug• Real World data

• All of the behavioral, non-pharmacologic intervention associated with the RCT moves over to the drug side of the ledger

• This becomes a comparison of activated, engaged Rx recipients vs. those with just an Rx

Identifying the various Stakeholders

Opportunities for ACOs to Better Manage Costs

• Consider distinctions among medications• Acquisition costs• Utilization• Overall medical costs

• Identify interventions• Utilization management strategies• Drug formulations• Best practices for risk management• Care coordination

• Developing a ‘Change Package’• Forging new types of relationships to answer questions of relevance to

ACOs• The Imperative to Remain Relevant


• Consumerism in health care may trigger the industry to change even more rapidly than before

• Awakened by consumer-driven trends in other industries• Driven by high deductibles and high co-pays• Health care consumers are beginning to seek out

organizations that approach health care with the same technological and value-driven focus as the financial and consumer products industries

• New ventures are shaking up traditional business models and placing the consumer at the forefront



• FasterCures, BIO, and Eli Lilly developed independent yet complementary proposals for Congress as part of 21st Century Cures to authorize a public private partnership dedicated to developing tools and methods to support science-based approaches for collecting patient input

• The Science of Patient Input• Integrates patient perspectives for research-based methods and tools to

measure the effectiveness of incorporating patient input into the system and, ultimately, its impact on patient health

• Began as an extension of patient advocacy • Has evolved into an emerging scientific discipline aimed at understanding and

incorporating patient needs into the processes of developing, regulating, and delivering new therapies

Anderson M McCleary KK Science Trans Med 2015

Methods of assessing patient preference adapted from health economics, outcomes research,

epidemiology, social sciences, and marketing sciences • Despite the increasing number and scope of patient-involvement initiatives, there is no

accepted master framework for systematic patient involvement in industry led medicines research and development, regulatory review, or market access decisions

• Ensure that patients and their needs are embedded at the heart of medicines development and lifecycle management

• Clinical Trials Transformation Initiative, National Health Council, University of Maryland’s Center of Excellence for Regulatory Science Innovation, and PCORI have provided opportunities to share emerging practices and lessons learned• Develop structured assessment of benefits and risks, Benefit-Risk Assessment Team from Pharmaceutical

Research and Manufacturers of America, the Centre for Innovation in Regulatory Sciences, and special interest groups within the International Society for Pharmacoeconomics and Outcomes Research, FasterCures’s Benefit-Risk Advisory Council

• For medical devices and biologics, FDA’s CDRH and Center for Biologics Evaluation and Research draft guidance “Patient preference information—Submission, review in PMAs, HDE applications, and de novo requests, and inclusion in device labeling”

• Medical Device Innovation Consortium (MDIC), a public-private partnership, “Framework and catalog of methods for incorporating information on patient preferences regarding benefit and risk into the regulatory assessments of new medical technologies”


Methods of assessing patient preference adapted from health economics, outcomes research,

epidemiology, social sciences, and marketing sciences

• Patient organizations have piloted new approaches to meet the demand for data that supplement personal testimony and participation of individual advocates as patient representatives in decision-making bodies• Parent Project Muscular Dystrophy (PPMD) sponsored a benefit-risk–

preference study among parents of boys with the Duchenne • FDA opened a public docket to receive comments on PPMD’s guidance

document • Other patient organizations are following PPMD’s model—seeking academic

partners, building patient registries, and educating their patient communities about new opportunities to reshape treatment pipelines and care delivery


Opportunities for Industry within ACO Delivery and Management of Specialty Pharmaceuticals

• Commercial ACOs are beginning to focus on higher cost, lower prevalence disease states , like oncology• Anthem Cancer Care Quality Program, Cardinal Health P4 program, United Healthcare and

Florida Blue clinical pathways • Oncology-focused ACOs • Some ACOs lack the scale and resources needed to extend comprehensive patient support

prior to, during and after therapy • Commercial ACOs are leveraging the existing infrastructure and expertise of specialty

pharmacies

• Strategies include:• Drug acquisition and drug regimen selection (clinical pathways)• Minimizing waste and improving efficiency• Late stage treatment selection and planning (split filling)• Reducing avoidable complication and adverse events• Adherence programs• Data sharing across care teams • Patient engagement

Rebecca M. Shanahan, Chief Executive Officer, Avella Specialty Pharmacy

ACOs Managing Site of Care for Costly Procedures

• Member cost savings achieved when procedures shifted to outpatient settings • Angioplasty performed in an outpatient facility, saved

an average of $1,062 per procedure out-of-pocket compared to when performed at an inpatient facility

• Annual procedure cost trends were greater for inpatient procedures• Angioplasties experienced the greatest difference,

with inpatient cost trend at 6.1 percent and outpatient cost trend at 1.4 percent across the five-year time period

• While outpatient utilization increased over a five-year period, overall utilization did not increase • Outpatient utilization increases were offset by significant

decreases in inpatient utilization

BCBSA “How Consumers Are Saving with the Shift to Outpatient Care” [February 2016]



Drug Regulation and PricingCan Regulators Influence Affordability?

1. Rapid approval of biosimilars2. Continue to approve ‘me-too’ products3. Clinical Trial design that demonstrates Value

EMA Parallel Scientific Advice Sessions

4. Post approval studies that generate relevant patient level outcomes data Entresto

Eichler HG et al NEJM 2016

“Knowing is not enough; we must apply. Willing is not enough; we must do.”

-Johann Wolfgang von Goethe