Center for Medicare and Medicaid Innovation Grant

Barbara McAneny MD, CEOInnovative Oncology Business

Solutions, Inc.

Funded BY CMMI:

• The project described is supported by Funding Opportunity Number CMS-ICI-12-0001 from Centers for Medicare and Medicaid Services, Center for Medicare and Medicaid Innovation

• The content of the presentation and the projects are solely the responsibility of the author and does not necessarily represent the official views of HHS or of any of its agencies.

Another Disclaimer

• The opinions expressed are my own and do not necessarily reflect the opinions of the AMA

Why do we need to change?

• What have we already tried?• How did that work?• What are are out options?

The Best Health Care in the World???

• HOW THE US STACKS UP ON PREVENTABLE DEATHS1. France -- 652. Japan -- 713. Australia -- 714. Spain -- 745. Italy -- 746. Canada -- 777. Norway -- 808. Netherlands -- 829. Sweden -- 8210. Greece --8411. Austria -- 8412. Germany -- 9013. Finland -- 9314. New Zealand -- 9615. Denmark -- 10116. UK -- 10317. Ireland --10318. Portugal --10419. US -- 110The U.S. ranks at the bottom of 19 industrialized nations in the number of preventable deaths by conditions such as diabetes, epilepsy, stroke, influenza, ulcers, pneumonia, infant mortality and appendicitis. The number at the right represents the number of preventable deaths per 100,000 population in each country in 2002-2003.Source: Commonwealth Fund, Health Affairs, World Health Organization

Patient’s Inability to pay

• 62.1% of Bankruptcies are from Medical bills : 48% of the bills are from Hospitals, 18% drugs, 15% physicians

• Annual Health Care Costs $16,771• 2/3 of filers were insured

Some People are Suffering (seniors)

Not everyone is suffering

• ANNUAL COMPENSATION OF HEALTH INSURANCE COMPANY EXECS (2006, 2007, or 2008 figures):• Ronald A. Williams, Chair/ CEO, Aetna Inc., $23,045,834; $24.3 million in 2008• H. Edward Hanway, Chair/ CEO, Cigna Corp, $30.16 million• David B. Snow, Jr, Chair/ CEO, Medco Health, $21.76 million• Michael B. MCallister, CEO, Humana Inc, $20.06 million• Stephen J. Hemsley, CEO, UnitedHealth Group, $13,164,529• Angela F. Braly, President/ CEO, Wellpoint, $9,094,771; $9.8 million in 2008• Dale B. Wolf, CEO, Coventry Health Care, $20.86 million• Jay M. Gellert, President/ CEO, Health Net, $16.65 million• William C. Van Faasen, Chairman, Blue Cross Blue Shield of Massachusetts, $3 million plus $16.4 million in stock options 

HMO Profits

HMO

Net Income after Tax before extra items

United Healthcare

Humana

Cigna Corporation

Wellpoint, Inc.

Aetna, Inc.

Net IncomeIn millions of USD (except for per share items)

3 months ending 2010-06-30

$1,123M$1340.08M

$294M$722M$491M

http://www.google.com/finance?q=NYSE:

We already have a government run health care system

Medicare 101

• Part A: Hospital insurance trust fund• Part B: Supplementary Medical Insurance

Trust Fund from general tax revenues and a premium paid by enrollee

• Sustainable Growth Rate Formula (SGR)– Designed to control Part B expenses– Zero Sum Game (Budget Neutrality)

We Cannot Afford Medicare as it is

Medicare Deficit

Costs of Part A

Health Insurance Trust Fund is Going Broke

Part B Expenses

Part B Expenses

Physician Income Already at Risk

19

Profit per Patient

Private Practice Medical Oncologists

Drug Margins1

Private Practice Medical Oncologists

Threatening Future Viability of Medical Oncology Delivery Model

Source: McKesson, “Onmark 3rd Annual Benchmarking Survey Shows Community Oncology Practices Seeing More Patients, Makey Uses Profit Per Physician,” July 29, 2008, available at: www.mckesson.com, accessed September 2, 2009.

1 Measured as gross revenue divided by total number of patients.

Cost of Parts B&D

Decline in Drug Administration Since 2004

Source: Projections based on data from the Centers for Medicare & Medicaid Services

Future needs for cancer care

• 70% of cancer patients will be in Medicare in 2030

• (60% are Medicare now)• 30% shortfall in number of oncologists needed

to treat cancer patients• 30% cut in the conversion factors will put the

rest of community oncology at risk, and severely strain the hospital based clinics

Triple Aim

• Better health

• Better Healthcare

• Lower cost

CMS Demonstration Projects

• Since 1967 CMS has had the authority to create demonstration projects– Disease management and care coordination (6)

• Nurses are care managers

– Value based payment(4)

Medicare Demonstration Projects

• Integrated systems: Group practice demonstrations

• Value based purchasing (P4P)• Disease management• Utilization Review

Disease management

• CBO Jan 2012: “most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program”

Medicare Group Practice Demonstration Project

• The 10 practices, chosen from 26 applicants, are:• Dartmouth-Hitchcock Clinic, Bedford, N.H. • Deaconess Billings Clinic, Billings, Mont. • The Everett Clinic, Everett, Wash. • Forsyth Medical Group, Winston-Salem, N.C. • Geisinger Health System, Danville, Pa.• Marshfield Clinic, Marshfield, Wis.• Middlesex Health System, Middletown, Conn. • Park Nicollet Health Services, St. Louis Park, Minn. • St. John's Health System, Springfield, Mo.• University of Michigan Faculty Group Practice, Ann Arbor

2 of the 10 saved some money

• In the first year, Marshfield saved the Medicare trust fund just more than $6 million, and the facility is set to receive roughly $4.5 million of that. Forsyth saved Medicare about $3.5 million and is in line for a roughly $2.8 million payout.

CBO on the P4P demonstration

• A detailed analysis of the demonstration is currently available only for the first two years. That analysis showed that, for patients in the 10 group practices during the second year, average Medicare spending excluding the bonuses paid to physician groups was about 1 percent below projections; with bonuses included, average Medicare spending was just 0.1 percent below projections—about $7 per beneficiary.

Value Based SystemsCBO comments 1/2012

• In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries; Medicare’s spending for those services was reduced by about 10 percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.

My Theory

• Hospital based systems are not the answer:– Overpaid– Inefficiencies are built in– No incentive to decrease utilization

• Practices, if right sized and properly structured, can be very efficient ways to deliver cancer care– Big enough to attain economies of scale– Small enough to be managed

Potential Cost Savings from Medical Homes: Supporting Literature

Study Patient Types

ED Visits

IP Adm

Group Health Coop of Puget Sound (12 mos) All Pts - 29 % - 11 %

Community Care of North Carolina Asthma - 16 % - 40%

Health Partners Medical Group BestCare Patient Centered Medical Home (PCMH) (5 Yrs)

All Pts - 39 % - 24 %

Genessee Health Plan HealthWorks PCMH (4 yrs) All Pts - 50% - 15 %

Johns Hopkins Guided Care (12 mos) Chronic Disease

- 15 % - 24 %

Geisenger Health System ProvenHealth Navigator Chronic Disease

--- - 14 %

Intermountain Healthcare Medical Group PCMH All Pts --- - 10%

Chemotherapy costs by site of service (annualized)

• Physician fee schedule payments: $47,500• Hospital Outpatient Prospective Payment

System: $54,000

• Milliman Client Report Oct 19, 2011 by Fitch and Pyenson

MEDPAC March 2011

• When patients visit a physician office that is part of a hospital’s outpatient department, Medicare pays a facility fee to the hospital and a reduced fee for the physician’s services. The combined fees paid for visits to hospital-based practices are often more than 50 percent greater than rates paid to freestanding practices.

COA Practice Impact Report

CMMI Grant

• $19.8M• 7 practices• Significant savings from being an Oncology

Medical Home• Goal is to learn how to do bundled payments• Shared savings, but not gainsharing

COME HOME Model

1. Best Practices Care: Triage, Diagnostic & Therapeutic Pathways

3. Team-Based Care: Med/Rad Onc, Diag Radiology, NPs, RNs, LPNs, Pharmacists, Med Techs, Care Coordinators, first responders – working as team to keep patients in OP

setting and out of ER and hospital

4. Active Disease Management: Patient Education, patient/provider web portal

5. Enhanced Access: 24/7 Triage Line with “first responders” (8-6) and On-Call

Providers (6-8)

6. Enhanced Care: On- or near-site lab, imaging, pharmacy

7. Financial Support for Medical Home Services

2. Electronic Health Records – to share/track real-time patient information;

monitor quality

Oncology Patient

COME HOME Project Partners• Innovative Oncology Business Solutions (IOBS) – managing organization

formed for the purposes of administering project• Seven community oncology practices

– New Mexico Cancer Center– Center for Cancer & Blood Disorders (Ft. Worth)– Dayton Physician Network (OH)– Space Coast Oncology– Maine Center for Cancer Medicine– NW Georgia Oncology Centers– To be determined

• Net.Orange – HIT company creating customized quality & pathway performance dashboards using claims data and integrated EHRs

• KEW Group – integration of genetic markers into diagnostic and therapeutic pathways

• UTHSC – evaluation, cost, quality measurement expertise; using claims data for rapid-cycle feedback of cost/utilization performance

COME HOME: Targeted Patients

• Newly diagnosed or relapsed oncology patients• Seven tumor types will be put on Diagnostic/

Therapeutic Pathways:– Breast– Lung– Colorectal– Lymphoma– Melanoma– Pancreas– Thyroid

• Seeking care @ 1 of 7 participating sites

COME HOME: Estimated Enrollment

Patient Type Medicare Non-Medicare Total

Breast Cancer 1,587 304 1,891

Lung Cancer 1,536 294 1,830

Colorectal Cancer 888 170 1,058

Lymphoma 538 103 641

Melanoma 439 84 523

Pancreas 402 77 479

Thyroid 147 28 175

Other Cancers 2,485 476 2,961

Total Cases 8,022 1,536 9,558

Community Oncology Medical HOME

• Medical home model of aggressive management of the side effects of cancer and its therapies

• Patient education• Triage• Same day visits• Prospective interventions

COME HOME: Services To Be Delivered

• Enhanced Services (Phase I)– Patient education & medication management– 24/7 practice access: telephone triage, triage

pathways, night/weekend clinic hours, on-call physicians

– On-site or near-site imaging, lab testing– Admitting physicians who shepherd pts through IP

encounters, avoiding handoffs & readmits, ensure seamless care

Pathways

• Diagnostic pathways, including genetic markers (Phase II)

• Therapeutic pathways, including genetic markers (Phase III)

• Decision support

Data Management is Key

• Extracting data from EHRs– All practices fully electronic– Outcomes will be documented

• Combining with Medicare Claims Data– Essential to know savings

• Real time (or close)– Able to drill down to monitor adherence

• Control groups

Projected Savings to Medicare (CMS)

Service

Average Cost Per Unit of Service

Baseline Total Costs Per Patient*

Projected Decrease in Costs

Projected Total Costs Per Patient

ProjectedAverage Savings Per Patient

Hospital $8,225 $17,108 - 21.15 % $13,489 $3,619

ED Visits $ 554 $ 1,136 - 52.2 % $543 $ 593

Physician $ 228 $ 6,398 + 7.6 % $6,882 - $ 484

Pharmacy $ 90 $13,355 - 3.4 % $12,905 $ 450

Other $9,480 $28,573 0.00 % $28,573 $ 0

Total $66,569 6.276 % $62,391 $4,178

*Cost Projections based on Medical Expenditure Panel Survey (MEPS) data for Medicare beneficiaries in ‘poor health’, inflated to reflect higher expenditures associated with cancer.

Bundled payments

• First one to get the money wins?• Transparency is essential• Need a quality pool• Need a mechanism to avoid the law of small

numbers• Need good data on costs and payments, real

time

Shared savings

• Not Gainsharing: I don’t want to compete against myself

• Pick a target with a reputation for quality • Need accurate claims data• NCCN systems defined as the patients treated

by an NCCN hospital

Questions?

• I appreciate the opportunity to present this project

• Thanks for listening