Accountable Care Organizations - Atrium Health€¦ · Accountable Care Organizations. 2014...

www.TriadHealthCareNetwork.com

Steve NeorrExecutive Director, Triad HealthCare Network

Cone Health

Accountable Care Organizations2014 Carolinas Rehab Summit

November 6, 2014


Health Care Reform JeopardyYou guess the bill…

• Major Provisions– Require Individuals To Purchase Health Insurance – Requires Employers To Offer Health Insurance To Employees– Bans Denying Medical Coverage For Pre-existing Conditions – Establish State-based Exchanges/Purchasing Groups– Offers Subsidies For Low-Income People To Buy Insurance – Makes Efforts To Create More Efficient Health Care System – Reduces Growth In Medicare Spending– Prohibits Insurance Company From Cancelling Coverage

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Health Care Reform JeopardyYou guess the bill…

• The Health Equity and Access Reform Today Act of 1993

• Sponsored by Republican Sen. John Chafee, R-R.I., during the Clinton presidency as Republican alternative to “HilaryCare”

• Primary differences– No Medicaid expansion– Attempted to tackle malpractice reform– Did not extend coverage to dependents

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Triad HealthCare NetworkWhy are we here?

www.TriadHealthCareNetwork.com4

• US spends almost double per capita on total health expenditures than average of other industrialized countries

• Estimated 2011 US healthcare expenditures ~ $2.6 trillion -highest worldwide at 17.2 % of GDP

• US healthcare outcomes are inconsistent with high cost of care:– Life Expectancy - 27th out of the 34 industrialized countries– Highest or near-highest prevalence of infant mortality, heart and lung disease,

injuries, homicides, disability…1

• Widespread clinical variation; more care not equated with better care

• Growing acknowledgement that current US health care payment and delivery systems are unsustainable

1 "U.S. Health in International Perspective: Shorter Lives, Poorer Health" (2013) National Institutes of Health Committee on Population, Board on Population Health and Public Health Practice4

Triad HealthCare NetworkUnderstanding the Impact of System Design


“Every system is perfectly designed to get the results it gets.”

- Paul Batalden, M.D.Dartmouth Medical School

“If we keep doing what we have been doing, we'll keep getting what we've always gotten"—an expensive, high-tech, inefficient health-care system. "The health-care system needs to be redesigned.”

Dartmouth Medicine, Spring 2006

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Triad HealthCare NetworkTwo Roads….

CutsRealign Incentives through Reform

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Triad HealthCare NetworkImportant Trends


• Unsustainable spending growth driving unprecedented changes:– Medicare Payment Innovation

• New risk-based payment models – Value-Based Modifier, MSSP, Bundling• Growth of Medicare Advantage – ‘privatization’ of public dollars

– Market-Based Medicaid Reform• Potential expansion to 30 million individuals• Growth of Medicaid Managed Care• Commercialization through “Private Option”

– Increased Commercial Market Competition• New dynamic individual market through exchanges• New channels for competition in group market – entrenched payers being

supplanted

Source: The Advisory Board Company: The Coming Retail Revolution

Health care transformation is not going to happen… it is happening

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Source: The Advisory Board Company: The Coming Retail Revolution

“Our price is now given by the market. Our business is changing from cost-based pricing to price-based costing.”

Health Plan Executive

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Impact of Price-Based Pricing…. Bundling

“OrthoCarolina of Charlotte to bundle knee, hip replacement costs”By Karen GarlochMonday, Sep. 29, 2014

“Patients undergoing knee and hip replacements can get a single bill with a “bundled payment” that covers preoperative care, surgery, followupappointments, 90 days of physical therapy and the services of a “patient navigator” who serves as a guide through the process.”

“OrthoCarolina also has a contract with Duke Energy that requires all employees (and dependents covered by Duke’s health insurance plan) to use OrthoCarolina and the Lake Norman hospital if they are having joint replacements or spinal surgery.”

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Networks Narrowing on the Public Exchanges as Plans respond to premium sensitivity

Recent study showed 40% reduction in cost for Massachusetts state employees using a ‘limited network plan’

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There is currently a ‘transparency revolution’ which will transform healthcare

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Transparency is creating a retail revolution

There’s an app for that!

Castlight Health presents provider cost and quality

data to employees real time – directs

to preferred providers

MediBid is a Priceline for medical services12


Care is and will be steered to the most efficient Specialists

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Triad HealthCare NetworkWhat is an Accountable Care Organization (ACO)?

• Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their patients.

• The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.

• ACOs’ success can be measured by reporting quality metrics for defined populations of patients and spending health care dollars more wisely leading to lower costs.


Triad HealthCare NetworkHistory and Overview

• Began as a 20-member physician-led steering committee in fall 2010

• Developed over eight months as collaboration between independent and employed community physicians and Cone Health

• Formed officially in 2011 as a Clinically Integrated Network serving the Piedmont Triad area; Approved as a Medicare Shared Savings Program ACO in June 2012 (40,000+ beneficiaries)

• Is an affiliate of the Cone Health System, but governance and operations is led and driven by physicians


Triad HealthCare NetworkGoals

• Allow physicians to lead and drive the necessary changes in healthcare

• Engage physicians to develop new models of care and true “transformation” of the local healthcare delivery system

• Provide resources to physicians to meet the growing demands of accountability and transparency

• Create greater collaboration and trust among physicians, hospitals, patients and payers

• Be renowned as a clinically integrated system of care delivering superior value measured by high quality outcomes, affordability and exceptional customer experience


Triad HealthCare NetworkStructure and Membership (as of September 2014)

• 875 Affiliated physicians representing 63 entities across four counties– 360 employed by Cone/ARMC– 60% independent community physicians

• 277 Primary Care Physicians– 213 Adult Medicine– 64 Pediatricians

• Facilities– 6 Hospitals - 1,342 Acute Care Beds– 2 Ambulatory Surgery Centers– 1 Nursing Home – 92 Beds– 2 Freestanding Ambulatory Care Campuses, Inc a Freestanding ED


Triad HealthCare NetworkCurrent Contracts

• Medicare Shared Savings Program 40,000 • Cone Health employees/dependents 16,000• Humana Medicare Advantage 4,000• United Medicare Advantage 10,000


70,000 Patients

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Triad HealthCare NetworkMedicare Shared Savings Program - Results

• THN began participation in the Medicare Shared Savings Program (MSSP) in July 2012

• During its first 18 month measurement period, THN saved just over 4.6% compared to its historic benchmark generating $21,505,622 in savings for the Medicare program.– $463,194,583 Benchmark versus $441,688,961 Actual

• THN’s total performance payment for its first 18 months of performance in the MSSP is $10,537,755

• Of the 53 ACOs who generated savings, THN was one of the top five in the country in terms of total dollars saved!

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• Physician engagement is key. Provide many opportunities for involvement.

• Take the time to develop understanding, unity and buy-in from your core physician leaders – Build champions

• Make barriers to entry low and do not focus on ‘high bar performance’ early on

• Be cognizant of and transparent about hot button topics –money, employed vs. independent, PCP vs specialists; MEC

• Develop a model to distribute “maybe money” earlier versus later

• Don’t forget importance of engaging staff

Triad HealthCare Network Lessons Learned

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• Primary Care Physician alignment/attribution is difficult• Aggregating clinical and claims data and reporting is

extremely difficult and takes longer than anyone will admit• Have a plan to manage your population assuming you do

not have much data initially• Limit your initiatives and focus on key areas• Lowering cost/saving money is more difficult than it would

seem• Community Care Management home assessments and

interventions have been most effective• Most surprising: the impact of ‘non-medical’ drivers on cost

– transportation, meals, HVAC, housing, literacy, finances

Triad HealthCare Network Lessons Learned

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Triad HealthCare NetworkEvolution Towards Risk

• Began journey by entering into ‘shared savings’ agreements under which THN would earn revenue if it achieved savings from past spending benchmarks or a percentage of the premium spent on medical care.

• Realized shared savings is not ideal as the more savings are generated, the harder it is to generate them in the future.

• But did start to understand the financing of healthcare and the need to have physicians incented to understand and be more in control of medical spending.

• Started planning to transition to risk in 2013


Triad HealthCare NetworkEvolution Towards Risk

• Effective 9/1/14, transitioned existing Humana Medicare Advantage shared savings agreement to full global capitated agreement through our strategic partner North Texas Specialty Physicians (“NTSP”)

• THN has become payer to THN providers– Primary goal to move away from straight FFS to value-based

compensation– PCPs paid at FFS through 2016; transition performance based PCP

capitation –% of premium based on quality metrics and RAF scores– Specialists paid on contact-capitation with 100% Medicare floor in

first year


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Questions?

For further information, please visit www.TriadHealthCareNetwork.com


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http://www.triadhealthcarenetwork.com/

Accountable Care Organizations - Atrium Health€¦ · Accountable Care Organizations. 2014...

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