The Road to Health System Reform MMZ slide1.0 2/9/15 · “Of all the forms of inequality,...

Dr. Stephen Ondra SVP and Chief Medical Officer,

Health Care Service Corporation

The Road to Health System

Reform

Presenter

Presentation Notes

MMZ slide1.0 2/9/15

“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

~Dr. Martin Luther King Jr.

Presenter

Presentation Notes

MMZ slide19.0 2/9/15

Perfect laws come from mountains written on stone tablets,

the ACA is not a perfect law, but is a start that has catalyzed change.

Presenter

Presentation Notes

MMZ slide4.0 2/9/15 ACA was a Catalyst for Change, not a perfect law Perfect laws come from mountains written on stone tablets, CLICK 1: ACA was not a perfect law but a catalyst to change our broken health care system for the better. Some policies have both directive and suggestive components, and the suggestive aspect of the ACA is what allows us wiggle room to continue to define and clarify this law. The process of health reform was inevitable and will transform the entire health space. We need to be innovative, adaptable and collaborative, HCSC will evolve with market needs by: Redefining our value proposition Collaborating with providers in new ways Engaging and empowering the consumer Payers can be partners to work with you to help to shape a future we will share!

Presenter

Presentation Notes

MMZ slide5.0 2/9/15

How Does the U.S. Compare?

extra trillion dollars

If the United States spent the same percentage of GDP on health care in 2014 as the next highest spending country, the U.S. would have an

JAMA November 26, 2014

Presenter

Presentation Notes

MMZ slide3.0 2/9/15 Spending vs. Health Outcomes CLICK 1: “If the United States spent the same percentage of GDP on health care in 2014 as the next highest spending country, the Unites States would have an extra trillion dollars to spend on private and public consumption and investment...If individuals in the United States lived as long as residents in other developed democracies, average length of life would be increased by 2 years, an increase larger than that realized in a decade of medical progress.” Source: Critiquing US Healthcare, JAMA November 26, 2014 Volume 312, Number 20 To put into perspective how extraordinarily high our health spending is; the United States spends twice as much on health care as we do on food; and a third more on health care than the entire domestic personal consumption in China. This is simply not a realistic trajectory and is not sustainable. So the truth is, it is simple economic reality that is driving health reform. ______________________ Despite weak health spending growth worldwide, a number of countries still had substantial health care budgets as of 2012. Based on data released by the Organization for Economic Co-operation and Development (OECD), the U.S. led the developed world in 2012, spending $8,745 per capita on health care. Turkey, by contrast, spent just $984 per capita, the lowest among developed countries. 24/7 Wall St. reviewed the countries spending the most on health care per person in 2012. United States – more physician visits but that doesn’t equal a healthier population. Health expenditure per capita: $8,745 Expenditure as a pct. of GDP: 16.9% (the highest) CLICK 2: Health Ranking based on 2013 data. Out of 11 countries the US ranks last, with the most health care spend yet the failing to achieve better health outcomes than the other countries, and is last or near last on dimensions of access, efficiency, and equity. Pct. obese: 28.6% (the highest) The U.S. spent $8,745 per person on health care in 2012, roughly $2,500 more than Norway, the second highest spender per capita. On average, OECD countries spent $3,484 per capita on health care. The U.S. also dedicated 17% of its GDP to health care, the highest in the OECD. Like the rest of the developed world, U.S. health spending has risen in recent years. Between 2000 and 2012, health expenditures grew at an annualized rate of 3.9%, largely driven by public sector health expenditure, which grew at an annualized rate of 4.8% over the same period. While most OECD country health systems were funded disproportionately by public sources, health care spending in the U.S. was divided evenly between public and private entities. Despite spending the most, the U.S. had one of the lower life expectancies among OECD countries. And while Americans believed they were healthy — 90% reported that they were in "good" health — 28.6% of respondents reported they were obese, the highest rate in the OECD. Source: http://www.usatoday.com/story/money/business/2014/07/07/countries-spending-most-health-care/12282577/

Provider Consolidation

130,600 by 2025

Increased Cost - up to 20%

Presenter

Presentation Notes

MMZ slide6.0 2/9/15 Provider Consolidation and other issues CLICK 1: Uncertainty & Changing Business Needs are Driving Physician and Hospital Consolidation. Hospital consolidation generally results in higher prices. This is true across geographic markets and different data sources. When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent.* This is good for hospitals, but not for patients or the country.�As hospitals consolidate either merging with other hospitals or buying up physician practices, the health care costs go up. Provider consolidates gives hospitals greater negotiation strength and limits competition, resulting in higher prices for services, higher costs for patients, and no improvement in the quality of care delivered. In 2000, 5% of all specialists were hospital employees, today that figure is approximately 25%. Increasing market concentration leads to higher prices for consumers. *Source: http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf73261 CLICK 2: There is also the issue of physician shortage: With a growing, aging population, the demand for physicians has intensified, and communities the country are already experiencing doctor shortages. According to AAMC estimates, the United States faces a shortage of more than 130,600 physicians by 2025 . This shortage is equally distributed among primary care and medical specialties such as general surgery, cardiology, and oncology. To address this shortage, America’s medical schools are increasing their enrollments. However, in order to complete their training and begin seeing patients, new physicians must complete a residency training program, which are in shorter supply. Source: https://www.aamc.org/advocacy/campaigns_and_coalitions/fixdocshortage/

1930

1980 2010

Today

Presenter

Presentation Notes

MMZ slide8.0 2/9/15 CLICK 1: 1980 CLICK 2: 2010 CLICK 3: Today (iPad/telehealth) Can we expect to transform care delivering it in the same way we did over half a century ago? New providers, care models and business arrangements will evolve to meet consumer needs and add to traditional health care business paradigms. How these will impact old partnerships and business models is yet to be determined but this combined with the new and heightened level of consumer engagement in the purchasing process and new technology tools will no doubt add to the pace of change.

The Shift to and Challenges of Value Based Care

Presenter

Presentation Notes

MMZ slide7.2 4/16/15 CLICK 1: Brings in Apple logo, along with the Apple Newton and iPad mini The rise of Apple indeed lies with their attitude of “Thinking Differently”. While the company may not have always been heralded as a success, their strength over the years has come from great vision and not always doing the same things as the competition. “A lot of times, people don't know what they want until you show it to them.” — Steve Jobs The goal is to improve the value of care received tried APMs before and failed (80s/90s), which has informed ACA development – we’ve learned a lot that will allow this latest iteration of APMs to be successful. Why did apple succeed? They tied product development to their deep customer understanding. They met a need that the consumer didn’t realize they had. Click 2: Brings in the puzzle graphic with the different payment models. Shift to VBC in a Diverse Market The truth is that in as diverse a space as healthcare with so many different geographies and needs, there is really no one model that will meet the many different demands. It is also impractical to have thousands of one off models that are each custom built. So while the idea that a model that is right for urban Chicago will also be right for rural Texas is not realistic, we need to look at how we can create reusable components that can be assembled to meet a defined variety of use cases. With that in mind, we can pilot and refine a set of specific tools and care model component approaches, that can be used and assembled in different ways to meet the needs of different markets. So we should be thinking about each of the value based models that will be discussed as pieces of a puzzle that can be assembled in different ways to create different versions of a VCO or Value of Care Organization that is specific to an areas need but uses well researched and developed pieces.

Choosing the Right Tool for the Job

Presenter

Presentation Notes

CLICK 1: brings in hammer and screwdriver One size doesn’t fit all. Given the diversity of patient cases and the scope, depth, and complexity of their needs, we need to provide diverse solutions. Providers are unique – we must ensure that we choose the right VBC/APM scenario that is the best match.

Value Based Care Developments

Presenter

Presentation Notes

CLICK 1: CMS announced that overall, HHS seeks to have 85 percent of Medicare fee-for-service payments in value-based purchasing categories 2 through 4 by 2016 and 90 percent by 2018. CLICK 2: Health Care Transformation Task Force Announcement – 75% by 2020. Leaders Forming New Health Care Transformation Task Force Commit to Putting 75% of Their Businesses in Value-based Arrangements by 2020 CLICK 3: POTUS and LAN to share knowledge and speed adoption of APMs: Remarks by the President Marking the Fifth Anniversary of the Affordable Care Act – car analogy CLICK 4: Senate approves “doc fix” bill – fuel standards

2016

30%

85%

All Medicare FFS

50%

90%

All Medicare FFS

2018

All Medicare FFS (Categories 1-4)

FFS linked to quality (Categories 2-4)

Alternative payment models (Categories 3-4)

Target percentage of Medicare FFS payments linked to quality and alternative payment models in 2016 and 2018

Learning Action Network

Presenter

Presentation Notes

Providers need consistency across payers – some commonality and differentiation Car analogy – standard features that are highly regulated by the industry LAN will help us find the commonality and differences.

P a y m e n t Ta x o n o m y F r a m e w o r k Category 1:

Fee for Service—No Link to Quality

Category 2:

Fee for Service—Link to Quality

Category 3:

Alternative Payment Models Built on Fee-for-Service Architecture

Category 4:

Population-Based Payment

De

sc

rip

tio

n

Payments are based on volume of services and not linked to quality or efficiency

At least a portion of payments vary based on the quality or efficiency of health care delivery

Some payment is linked to the effective management of a population or an episode of care. Payments still triggered by delivery of services, but opportunities for shared savings or 2-sided risk

Payment is not directly triggered by service delivery so volume is not linked to payment. Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g. >1 yr)

Me

dic

are

FF

S

• Limited in Medicare fee-for-service

• Majority of Medicare payments now are linked to quality

• Hospital value-based purchasing

• Physician Value-Based Modifier

• Readmissions/Hospital Acquired Condition Reduction Program

• Accountable care organizations

• Medical homes • Bundled payments • Comprehensive primary

care initiative • Comprehensive ESRD • Medicare-Medicaid

Financial Alignment Initiative Fee-For-Service Model

• Eligible Pioneer accountable care organizations in years 3-5

Value-Oriented Payments: Medicare + Commercial + FFS Linked to Quality

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 11%

40%

75%

20%

85% 90%

30%

50%

Presenter

Presentation Notes

MMZ slide17.0 2/9/15 Public and Private payers have shown a rapid growth in value-based payments and have made public commitments to continue and accelerate the transition away from fee-for-volume and toward fee for value According to the group Catalyst for Payment Reform’s scorecard, the percentage of payments tied to value quadrupled from 2013 to 2014, going from around 11% to 40%. (CLICK 1: 11%/2013, 40%/2014) A private-sector collaboration of payers, providers, purchasers and patients have set targets of getting 75% of payments tied to value by 2020 (CLICK 2: an arrow pointing up to 75%/2020) On the public payer, side, CMS had virtually no payments in alternative payment models prior to passage of the Affordable Care Act. By 2014, 20% of payments were in alternative, value-based models (CLICK 3: 20%/2014; 30%/2016; 50%/2018). Earlier this year, CMS announced goals to grow the percentage of payments in value-based models to 30% in 2016 and 50% in 2018. Even with the public and private sectors creating critical mass and momentum solidifying the transition to value-based reimbursement, fee-for-service medicine will never fully disappear. But even in fee-for-service, there will be increased linkage to paying for quality – as evidenced by CMS’s goal to have CLICK 4: 95% of their total fee-for service spend liked to quality in some way, even outside of their alternative payment models.

SGR Repeal: Encouraging APM Participation

Presenter

Presentation Notes

CLICK 1 brings in part of bill encouraging APM participation Proposed legislation sets up a two-tier payment system that provides incentives for doctors to shift more of their practice into value-based payment models, including ACOs, bundles PCMHs. In order to qualify for higher payments, a doctor would need to have at least 25% of Medicare revenue tied to such payment models by 2019. That threshold rises to 75% in 2023, although physicians could opt to tally all revenue sources, not just Medicare, to meet that threshold. SGR Repeal: Encouraging Participation in APMs Professionals who receive a significant share of their revenues through an APM(s) that involves risk of financial losses and a quality measurement component will receive a five-percent bonus each year from 2019-2024. A patient-centered medical home APM will be exempted from the downside financial risk requirement if proven to work in the Medicare population. Two tracks will be available for professionals to qualify for the bonus. The first option will be based on receiving a significant percent of Medicare revenue through an APM The second will be based on receiving a significant percent of APM revenue combined from Medicare and other payers. The second option makes it possible for professionals to qualify for the bonus even if Medicare APM options are unavailable in their area. If no Medicaid APM is available in a state, a professional’s Medicaid revenue will not be counted against the proportion of revenue in an APM. In states where Medicaid APMs are available, Medicaid medical homes will also be exempted from downside financial risk if they are proven to work in the Medicaid population. Professionals who meet these criteria will be excluded from the MIPS assessment and most EHR meaningful use requirements. The bonus payment for APM participation encourages professionals to consider participation and testing of new APMs, recognizes that practice changes are needed to facilitate such participation, and promotes the alignment of incentives across payers. To make the bonus opportunity available to the greatest number of professionals, the Secretary is specifically encouraged to test APMs relevant to specialty professionals, professionals in small practices, and those that align with private and state-based payer initiatives.

The Path to Value

ACA

FFS to

FFV

CMS Targets

Presenter

Presentation Notes

MMZ slide13.0 2/9/15 The Value Pathway: Moving from FFS to FFV As we move to an ever more consumer driven and efficient healthcare system, it will be imperative for all stakeholders to make the move from a volume driven system that incents the efficiency of patient throughput to get to an outcome; to one that is value driven and incents the efficiency of resource utilization to get to that same outcome. One can see that in such a system, it is not simply about lowering costs but increasing the value of services. Cost can actually go up if there is a matching clear increase in the quality and outcome of care. In most cases, value increase can and must be driven by greater efficiency to maintain, or even increase, quality while lowering costs. Decreasing cost in necessary but not sufficient. Two cardinal rules for the value equation: The numerator can NEVER be decreased The absolute value must increase Examples of increasing value: Cost can increase and still meet the conditions for value, if the quality or outcome also increases If cost decreases but so does value…�Rule #1 is broken If value does not increase and cost decreases… Rule #2 is broken If value increases or stays the same and cost decreases, the conditions are met CLICK 1: ACA was a starting point for change CLICK 2: Moving from Fee for Service to Fee for Value – this is happening throughout the industry, the drive towards better value and quality in health care an overwhelming theme. CLICK 3: CMS announced that overall, HHS seeks to have 85 percent of Medicare fee-for-service payments in value-based purchasing categories 2 through 4 by 2016 and 90 percent by 2018. category 1—fee-for-service with no link of payment to quality category 2—fee-for-service with a link of payment to quality category 3—alternative payment models built on fee-for-service architecture category 4—population-based payment

Measuring Value: Focusing on the Numerator

550 measures in use by 23 Payers

95% Different

R E D U C E

5% the

SAME

Presenter

Presentation Notes

As quality takes center stage in payment models, quality measurement becomes increasingly critical. HCSC is working collaboratively with other payers and providers to achieve three quality measurement goals: Reduce the total number of measures by eliminating low value metrics and introducing consistency across payers in their requirements for quality reporting, Refine the measures that remain to further ease the burden of collection, Relate measures to patient health outcomes, focusing on “measures that matter.” States from AHIP Core Measures Collaborative Paper A recent study of 48 state and regional measures sets identified 509 distinct measures in use, with only 20% of the measures used in more than one program and not a single measure common across all programs.5 CLICK 1: A 2013 study of measures in use by 23 private payers identified approximately 550 measures in use by these payers, including 27 composite measures that combine two or more distinct measures into a single measure. CLICK 2: Of these, less than 5% (26 measures) were used by more than half of the plans surveyed.


R E F I N E

Presenter

Presentation Notes

CLICK 1 activates the graphic As quality takes center stage in payment models, quality measurement becomes increasingly critical. HCSC is working collaboratively with other payers and providers to achieve three quality measurement goals: Reduce the total number of measures by eliminating low value metrics and introducing consistency across payers in their requirements for quality reporting, Refine the measures that remain to further ease the burden of collection, Relate measures to patient health outcomes, focusing on “measures that matter.” States from AHIP Core Measures Collaborative Paper A recent study of 48 state and regional measures sets identified 509 distinct measures in use, with only 20% of the measures used in more than one program and not a single measure common across all programs.5 A 2013 study of measures in use by 23 private payers identified approximately 550 measures in use by these payers, including 27 composite measures that combine two or more distinct measures into a single measure. Of these, less than 5% (26 measures) were used by more than half of the plans surveyed.

R E L AT E


What Matters Most to Patients and Providers?

Presenter

Presentation Notes

CLICK 1 brings in the knee replacement comparison. As quality takes center stage in payment models, quality measurement becomes increasingly critical. HCSC is working collaboratively with other payers and providers to achieve three quality measurement goals: Reduce the total number of measures by eliminating low value metrics and introducing consistency across payers in their requirements for quality reporting, Refine the measures that remain to further ease the burden of collection, Relate measures to patient health outcomes, focusing on “measures that matter.” States from AHIP Core Measures Collaborative Paper A recent study of 48 state and regional measures sets identified 509 distinct measures in use, with only 20% of the measures used in more than one program and not a single measure common across all programs.5 A 2013 study of measures in use by 23 private payers identified approximately 550 measures in use by these payers, including 27 composite measures that combine two or more distinct measures into a single measure. Of these, less than 5% (26 measures) were used by more than half of the plans surveyed.

Is Value Based Care Working?

▲19% ACO Quality Scores

▲30/33 Improved Quality Measures

▼$817,000,000 Generated Savings To Date

= Value COST

QUALITY

Medicare and Medicaid shared savings program two year results.

Presenter

Presentation Notes

MMZ slide16.0 2/9/15 Is VBC Working? Early results from CMMI Pioneer and Medicare Shared Savings ACO programs….it’s mixed and generalizations are difficult and not really representative – some ACOs are doing great, others aren’t…but at a high level this slide represents the optimist’s view. Source: http://www.brookings.edu/blogs/up-front/posts/2014/09/22-medicare-aco-results-mcclellan We can use the Value Equation to determine if VBC is working: CLICK 1: Quality and Cost disappear and ▲19% appears. The mean quality score among Pioneer ACOs increased by 19 percent, from 71.8 percent in 2012 to 85.2 percent in 2013. CLICK 2: ▲30/33 appears. Shared Savings Program ACOs improved on 30 of 33 quality measures. CLICK 3: ▼$817,000,000 appears. To date, the two programs have generated savings of $817 million—$372 million of which has been saved by Medicare and another $445 that has been returned to the ACOs through shared savings. Further detail: Impact on Quality: Mean quality scores increased 19 % MSSP ACOs improved quality in 30/33 measures Impact on Cost 32 Pioneer ACOs (13 dropped) 17 had neutral to or positive results 2 had savings of $ 817 M ($445 to ACO and 372 to CMS) HCSC Experience Reduced comparable trend by 2.5 % PMPM cost savings of $11.78 Improved quality scores

From Claims Reimbursement To… …Partnering with Providers to Become a Care Management Company.

Presenter

Presentation Notes

MMZ slide12.0 2/9/15 From Claims Reimbursement To… CLICK 1: …Partnering with Providers to become a Care Management Company. We’re no longer just a payer reimbursing claims, in this new environment we have to see ourselves as a care management company.

20%

50%

28%

2%

HOW We Segment The Population According To Health Needs

Middle 44%

Healthy

Chronic or Severe Chronic

Top 5%

Top 1%

Severe Significant Multiple Chronic Conditions

Dominant Chronic & single events

Bottom 50%

Percent of Spending Population

Presenter

Presentation Notes

MMZ slide15.0 2/9/15 CLICK 1: 20% CLICK 2: 50% CLICK 3: 28% CLICK 4: 2% We should try to get these figures for HCSC, but in the meantime this is the visual I’m thinking of: http://radar.oreilly.com/2013/08/the-next-top-5-identifying-patients-for-additional-care-through-micro-segmentation-2.html

Smarter Networks for Higher Value

Presenter

Presentation Notes

MMZ slide18.0 2/11/15 CLICK 1: Fades out gray dots to Blue Distinction Centers in the US, then Blue Distinction logo in silhouette of the US. In order to keep insurance affordable and maximize access to health care, HCSC will focus on creating high value networks that align incentives to deliver affordable, coordinated, quality care. We understand that not all providers will be equally willing and able to engage in a new way of doing business and therefore the networks of tomorrow may look different than today. In comparison to traditional, broad PPO networks, our focus on value may result in provider networks with fewer providers or different providers than are in our current networks. Working with provider organizations that have demonstrated outstanding quality at the most affordable cost will help us bring the highest value to our members and keep premiums low. This will in turn make insurance more affordable for more people. This will also help us shift from a market dominated by fee-for-volume contracts and the associated inefficiencies, to fee-for-value shared risk reimbursement models that align the incentives of consumers, payers and providers in a way that maintains or improves quality and lowers the cost of care delivery. Shared risk does not mean simply shifting risk to either the provider or member. Rather, it means working together more closely and collaboratively to improve the quality and lower the cost of care. That is good for payers, providers and most importantly, consumers. It is an exciting opportunity to give us a better health system. One that delivers better care, through smarter incentives, to create healthier people and communities

The Role of the Payer in VBC

Facilitate Provider Success

Provide Information

Quality Measures

Cost Measurements

Member Experience

Presenter

Presentation Notes

Facilitate provider success in new reimbursement models that increase the value of care by supplying providers with the clinical and other information needed for success: CLICK 1 Provide Information to Facilitate Diverse Patient Care Needs and Management CLICK 2 Outcome Relevant and Co-Developed Clinical Quality Measures CLICK 3 Cost Measurements CLICK 4 Member Experience

Impact of The ACA on

HCSC will evolve by redefining our value proposition, collaborating with providers in new ways, and engaging and empowering the consumer

Transformation of the health space requires innovation,

adaptation and collaboration

Presenter

Presentation Notes

CLICK 1 The process of health reform was inevitable and will transform the entire health space Need to be innovative, adaptable and collaborative CLICK 2 HCSC will evolve with market needs by Redefining our value proposition Collaborating with providers in new ways Engaging and empowering the consumer Payers can be partners to work with you to help to shape a future we will share!

Working together, we can make a more accessible, equitable and economically sustainable health system. Thank You.

Follow me on Twitter @StephenOndra

Presenter

Presentation Notes

MMZ slide20.0 2/9/15

The Road to Health System Reform MMZ slide1.0 2/9/15 · “Of all the forms of inequality,...

Documents

Transcript of The Road to Health System Reform MMZ slide1.0 2/9/15 · “Of all the forms of inequality,...