Principles and Pracitces of Accountable Care Transformation

© 2015 Health Catalyst

www.healthcatalyst.comProprietary and Confidential

c

May 2015

Principles and Practices of Accountable Care Transformation



Today’s Presentation

2

State of Value-Based Payment

Near-Term Priorities for Accountable Care

Driving toward Population Health Management





State of Value-Based Payment



Broad Support for Value-Based Payment

4

Source: HHS Press Release, January 26, 2015

2016

30%

55%

Alternative

Payment Models

(ACOs, bundled

payments, etc)

Other VBP

Programs

2018

50%

40%

Alternative

Payment Models

Other VBP

Programs

HHS Value-Based Payment GoalsHealth Care

Transformation Task Force

“Health Care Transformation

Task Force is an industry consortium

that brings together patients, payers,

providers and purchasers to align

private and public sector efforts to

clear the way for a sweeping

transformation of the U.S. health

care system

…We believe so strongly in our

mission that our payer and provider

members commit to put 75 percent

of their respective businesses

operating under value-based

payment arrangements that focus on

the Triple Aim by January 2020.”



2015 HealthLeaders Media industry survey, n=580

Still in a Pilot Phase

10%

28%

33%

6%

11%

4%3%

4%

0%

5%

10%

15%

20%

25%

30%

35%

Not pursuing Investigating Pilot underway Pilot done,rollout notscheduled

Pilot done,rollout

scheduled

Rollout nearlydone

Full rollout Do not know

Organization Status on Value Based Payment


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Kaufman Hall Survey Update April 2015

Anticipating a Tipping Point

22%

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Aug 14 Feb 15

7%

22%

0%

5%

10%

15%

20%

25%

Aug 14 Feb 15

Hospitals with More Than 10% of

Revenue from Value-Based Contracts

Hospitals Anticipating More than 50% of Revenue

from Value-Based Contracts in 24 Months



Poll Question #1

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What percentage of your organization’s revenue

comes from value-based contracts today? 130

respondents

Less than 10% - 61%

11-30% - 29%

31-50% - 5%

More than 50% - 5%



Poll Question #2

8

What types of value-based contracts

are most prevalent at your organization? – 134

Respondents

Fee-for-service plus bonus – 27%

Bundled payments – 12%

Shared savings – 20%

None of the above – 26%

All of the above – 15%



Fee for Service Fee for Value

The Common Denominator: Reduce Costs, Improve Quality

9

CostPayment

Cost

Payment



Balancing Short-Term Imperatives with Long-Term Transformation

10

Short-term goal:

Successfully Manage At-Risk Contracts

Owner: Accountable Care Team

Long-term goal:

Transform the Care Delivery System

Owner: Care Delivery TeamCost

Accountable Care

Population Health Management





Near-Term Priorities for Accountable Care



Contract Management

12

Focus Area Key Questions

When

Considering

New At-Risk

Contracts

• Which patient populations I want to manage under at-risk contracts?

• Where I can meaningfully drive down costs (and which areas already have low

costs and or minimal variation in care)?

• Which performance measures will best represent my organization?

• Which payers are a good partner (sufficient volume of patients, mutually

beneficial benefit design, willing to provide data)?

Today’s

At-Risk

Contracts

• How am I performing relative to contractual targets?

• How are key utilization metrics trending?

• What percentage and type of services am I sending out of network? Why?

• Who are my high-risk, high-cost patients?

• How am I performing on performance measures like the ACO 33?

• Do I have an understanding of areas of high cost and variation within my ACO?

On a Journey without a Map



Network ManagementMoving Beyond our Four Walls

13

How do I reduce

costs? How do I

improve referral

patterns?

Who are my

best (lowest

cost, highest

quality)

partners?

How do I reduce

leakage?

Partners

Out-of-Network

In Network

Manage

Leverage data on leakage

and referrals to pinpoint

opportunities to improve the

performance of your

provider network.

Optimize

Overlay information about

your patient population’s

needs and your provider

population (including

accessibility, cost, and

quality) to identify gaps.



Care Management

14

21.0%

49.5%

65.2%

75.0%

81.7%

97.3%

2.7%

0%

20%

40%

60%

80%

100%

Top 1% Top 5% Top 10% Top 15% Top 20% Top 50% Bottom 50%

Percent of Population, Ranked by Health Care Spending

Concentration of Health Care Spending

in the U.S. Population, 2010

(≥$53,238) (≥$18,086) (≥$10,044) (≥$6,696) (≥$4,639) (≥$829) (<$829)

Pe

rcen

t o

f To

tal H

ea

lth

Care

Sp

en

din

g

Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for

Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, 2010.

Today: High-Risk, High-Cost Patients



Care Management

15

IdentifyRight patients

Right care

Right provider

IntervenePlan

Execute

Adjust

AssessCompliance

ROI

Care Management

Identify the highest risk,

highest cost patients in need

of care management.

Patient Engagement

Care management will not

be the most appropriate

intervention for every

patient. As you target more

populations with a wider

array of interventions, this

becomes patient

engagement. The

principles—identify,

intervene, assess—remain.

Tomorrow: Patient Engagement



Performance Monitoring

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Minimizing Burden, Maximizing Value

“[T]he total number of health and health care measures in use today is unknown. Nonetheless,

reference points such as CMS Measure Inventory, which catalogs nearly 1,700 measures in use

by CMS programs, indicate that they number in the thousands…Change is clearly needed.

The rapid proliferation of interest in, support for, and capacity for new measurement

activities has paradoxically blunted the effectiveness of those efforts.”

Institute of Medicine, Vital Signs, 2015



A Note about Data

17

• Claims Data—

• Key to providing an out-of-network view of care.

• Supports critical analyses related to PMPM performance,

leakage, and some performance measures.

• Clinical Data—

• Not only more comprehensive and timely, but it’s available

in advance of signing the at-risk agreements.

• Key to patient risk, referral, and performance measures.

Clinical or Claims Data? Both are Key





Driving toward Population Health Management



The Long-Term Vision: Transforming Care Delivery

19

Short-term goal:

Successfully Manage At-Risk Contracts

Owner: Accountable Care Team

Long-term goal:

Transform the Care Delivery System

Owner: Care Delivery TeamCost

Accountable Care




Outlier Management

# of

Cases

Current Condition:

Significant Volume and Variation

# of

Cases

Option 1: “Punish the Outliers”

or “Cut Off the Tail”

Mean

Focus on

Minimum

Standard

Metric

Excellent OutcomesPoor Outcomes Excellent OutcomesPoor Outcomes

Outlier Management

• Set a minimum standard of quality

• Focus improvement effort on those not meeting the minimum standard



Excellent OutcomesPoor Outcomes

# of

Cases

Excellent Outcomes

# of

Cases

Option 2: Identify Best Practice

“Narrow the curve and shift it to the right”

Mean

Poor Outcomes

Inlier Management (Focus on Better Care)

Inlier Management

• Identify evidenced based “Shared Baseline”

• Focus improvement effort on reducing variation

• Often those performing the best make the greatest improvements

Current Condition:

Significant Volume and Variation



Improvement Prioritization

2222

Care Process Families by Resources Consumed (High to Low)

To

tal R

eso

urc

es C

on

su

me

d

Top 10 Care Process

Families account for 34%

of the opportunity

Top 40 Care Process

Families account for 80%

of the opportunity



Choosing a Place to Start

23

Key Process Analysis

Total Net Revenue

Ad

juste

d C

oe

ffic

ien

t o

f V

aria

tio

n



Doing Well by Doing Good

= Negative Impact = Positive or Negative = Positive Impact

Care Process Family

Knowledge Asset

Discounted

FFS Per Diem

Per Case Bundled Per CaseCondition

Capitation

Full

CapitationCMS Commercial CMS Commercial

Workflow

Diagnostic Variation

Standing Orders

Medication Selection

Triage

Patient Safety

Ambulatory

Treatment and

Monitoring

Indications for

Referral

Indications for

Intervention



Creating a Case for Quality

25

Dr. J.

15 Cases

$60,000 Avg. Cost Per Case

Mean Cost per Case = $20,000

$40,000 x 15 cases =

$600,000 opportunityTotal Opportunity = $600,000

Total Opportunity = $1,475,000

$35,000 x 25 cases =

$875,000 opportunity



Cost Per Case, Vascular Procedures



For more information…

26

State of the Industry

Value-Based Reimbursement: The New Reality

On-Demand Webinar, Bobbi Brown, May 2015


Accountable Care Transformation Framework

White paper, Dr. David Burton

https://www.healthcatalyst.com/whitepaper/aco-

requirements-transformation-framework/

Health Care: A Better Way

Book, Dr. John Haughom, et all

https://www.healthcatalyst.com/ebooks/healthcare-

transformation-healthcare-a-better-way/

Analytic

System

Content System

Deployment System

https://www.healthcatalyst.com/whitepaper/aco-requirements-transformation-framework/

https://www.healthcatalyst.com/ebooks/healthcare-transformation-healthcare-a-better-way/



Readying Your Organization for Value-Based Payment

27

• Don’t underestimate the value of data in driving your transition to value-based payment;

you will need access to a wide variety of data sources to do meaningful analyses which

will be key to successfully managing your current at-risk contracts in addition to coming

to the table prepared for future contract negotiations

• Develop a plan for tacking each of the five short-term competencies, including: at-risk

contracting, network management, care management, performance monitoring, and

improvement prioritization. What are your capabilities in each of these areas today?

Where are your gaps and weaknesses? What data is available to drive decision making?

• Consider your organization’s timeline for true care transformation. Are you in a market

that is moving rapidly toward value-based payment? Or are you still in an early pilot

building phase? Will this journey take place in the next year or two or the next decade?

• Prioritize your care transformation efforts, identifying opportunities for improvement and

evaluating how closely your current payment models align with your proposed initiatives.

Consider opportunities to approach your payers proactively, around meaningful

improvement initiatives, to get paid for value.



Upcoming Webinar

Introducing Health Catalyst Academy: An Innovative Approach for Accelerating Outcomes Improvement

Tommy Prewitt, MD, Director, Healthcare Delivery Institute and Bryan Oshiro, MD, Chief Medical Officer, Health Catalyst

Wednesday, May 27, 1-2pm ET

https://pages.healthcatalyst.com/2015-05-27APProgramWebinarMasterEmail.html

28



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Principles and Pracitces of Accountable Care Transformation

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