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VolumetoValueTransitionintheUSA

LeeA.Fleisher,M.D.RobertD.Dripps ProfessorandChairofAnesthesiology

PerelmanSchoolofMedicineattheUniversityofPennsylvaniaEmail:lee.fleisher@uphs.upenn.edu

Acknowledgement:PatrickConway,MD(formerActingAdministratorofCMS)forsomeofhisslides

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Unexplained Variation

Dartmouth Atlas of Healthcare

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Value

• The core issue in health care is the value of health care delivered

• Value is the only goal that can unite the interests of all system participants

Value=Patienthealthoutcomesperdollarspent

Michael Porter NEJM 2010

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• Triple Aim• better care for individuals• better health for populations• lower costs

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The Six Goals of the National Quality Strategy

Make care safer by reducing harm caused in the delivery of care

Strengthen person and family engagement as partners in their care

Promote effective communication and coordination of care

Promote effective prevention and treatment of chronic disease

Work with communities to promote healthy living

Make care affordable

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CMSsupportofhealthcareDeliverySystemReformwillresultinbettercare,smarterspending,andhealthierpeople

Keycharacteristics§ Producer-centered§ Incentivesforvolume§ Unsustainable§ FragmentedCare

SystemsandPolicies§ Fee-For-ServicePayment

Systems

Keycharacteristics§ Patient-centered§ Incentivesforoutcomes§ Sustainable§ Coordinatedcare

SystemsandPolicies§ Value-basedpurchasing§ AccountableCareOrganizations§ Episode-basedpayments§ MedicalHomes§ Quality/costtransparency

PublicandPrivatesectors

EvolvingfuturestateHistoricalstate

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Value-Based Programs

• Goal is to reward providers and health systems that deliver better outcomes in health and health care at lower cost to the beneficiaries and communities they serve.

• Five Principles

- Define the end goal, not the process for achieving it

- All providers’ incentives must be aligned

- Right measure must be developed and implemented in rapid cycle

- CMS must actively support quality improvement

- Clinical community and patients must be actively engaged

VanLare JM, Conway PH. Value-Based Purchasing – National Programs to Move from Volume to Value. NEJM July 26, 2012

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CMShasadoptedaframeworkthatcategorizespaymentstoproviders

Description

MedicareFee-for-Serviceexamples

§ Paymentsarebasedonvolumeofservicesandnotlinkedtoqualityorefficiency

Category1:FeeforService–NoLinktoValue

Category2:FeeforService–LinktoQuality

Category3:AlternativePaymentModelsBuiltonFee-for-ServiceArchitecture

Category4:Population-BasedPayment

§ Atleastaportionofpaymentsvarybasedonthequalityorefficiencyofhealthcaredelivery

§ Somepaymentislinkedtotheeffectivemanagementofapopulationoranepisodeofcare

§ Paymentsstilltriggeredbydeliveryofservices,butopportunitiesforsharedsavingsor2-sidedrisk

§ Paymentisnotdirectlytriggeredbyservicedeliverysovolumeisnotlinkedtopayment

§ Cliniciansandorganizationsarepaidandresponsibleforthecareofabeneficiaryforalongperiod(e.g.,≥1year)

§ LimitedinMedicarefee-for-service

§MajorityofMedicarepaymentsnowarelinkedtoquality

§ Hospitalvalue-basedpurchasing

§ PhysicianValueModifier

§ Readmissions/HospitalAcquiredConditionReductionProgram

§ AccountableCareOrganizations§Medicalhomes§ Bundledpayments§ ComprehensivePrimaryCareinitiative

§ ComprehensiveESRD§Medicare-MedicaidFinancialAlignmentInitiativeFee-For-ServiceModel

§ EligiblePioneerAccountableCareOrganizationsinyears3-5

§Marylandhospitals

Source:RajkumarR,ConwayPH,Tavenner M.CMS─engagingmultiplepayersinpaymentreform.JAMA2014;311:1967-8.

BlumenthalDetal.NEnglJMed2015;372:2451-2458.

Ten-Year Medicare Spending Projections, January 2010 through March 2015.

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DuringJanuary2015,HHSannouncedgoalsforvalue-basedpaymentswithintheMedicareFFSsystem

OnMarch3,2016,PresidentObamaandHHSannouncedthat30percentofMedicarepaymentsaretiedtoqualitypaymentsthroughAPMs.Thisgoalwasachievedoneyearaheadofschedule!

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2016

30%

85%

2018

50%

90%

Targetpercentageofpaymentsin‘FFSlinkedtoquality’and‘alternativepaymentmodels’by2016and2018

2014

~20%

>80%

2011

0%

~70%

GoalsHistoricalPerformance

AllMedicareFFS(Categories1-4)FFSlinkedtoquality(Categories2-4)Alternativepaymentmodels(Categories3-4)

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PartnershipforPatientscontributestoqualityimprovements

Ventilator-Associated Pneumonia

Early Elective Delivery

Central Line-Associated

Blood Stream Infections

Venous thromboembolic complications

Re-admissions

LeadingIndicators,changefrom2010to2013

62.4% ↓ 70.4% ↓ 12.3% ↓ 14.2% ↓ 7.3% ↓

Datashowsfrom2010to2014…

87,0002.1 millionPATIENT HARM EVENTS AVOIDED

$20 billionIN SAVINGS

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Legend: CL: controllimit;UCL: upper control limit; LCL: lower controllimit

ReadmissionRate

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'Jaw-dropping': Medicare deaths,hospitalizations AND costs reduced

Sample consisted of 68,374,904 unique Medicare beneficiaries (FFS and Medicare Advantage).

Mortality, Hospitalizations, and Expenditures for the Medicare Population Aged 65 Years or Older, 1999-2013; Harlan M.Krumholz, MD, SM; Sudhakar V.Nuti, BA; Nicholas S. Downing,MD; Sharon-Lise T. Normand, PhD; YunWang, PhD; JAMA.

2015;314(4):355-365.; doi:10.1001/jama.2015.8035

1999 2013 Difference

All-cause mortality 5.30% 4.45% -0.85%

TotalHospitalizations/

100,000beneficiaries

35,274 26,930 -8,344

In-patientExpenditures/

Medicare fee-for-service beneficiary

$3,290 $2,801 -$489

End of LifeHospitalization (last 6months)/100 deaths

131.1 102.9 -28.2

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Payment reform

• Traditional fee-for-service• Reduced

reimbursement• Bundled payments• Accountable Care

Organizations

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Thebundledpaymentmodeltargets48conditionswithasinglepaymentforanepisodeofcare

Ø Incentivizesproviderstotakeaccountabilityforbothcostandqualityofcare

Ø FourModels- Model1:Retrospectiveacutecarehospitalstayonly- Model2:Retrospectiveacutecarehospitalstaypluspost-acutecare- Model3:Retrospectivepost-acutecareonly- Model4:Prospectiveacutecarehospitalstayonly

§ 337Awardeesandover1500EpisodeInitiators asofJanuary2016

BundledPaymentsforCareImprovementisalsogrowingrapidly

§ Durationofmodelisscheduledfor5years:§ Model1:AwardeesbeganPeriodofPerformancein

April2013§ Models2,3,4:AwardeesbeganPeriodof

PerformanceinOctober2013

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Medicare Payment Prior to MACRA

The Sustainable Growth Rate(SGR)

• Established in 1997 to control the cost of Medicare paymentstophysicians

Fee-for-service (FFS) payment system,where clinicians are paid based onvolume of services, not value.

TargetMedicare

expenditures

Overallphysiciancosts

>IF Physicianpaymentscut

across the board

Each year, Congress passed temporary “doc fixes” to avert cuts(no fixin 2015would have meant a 21% cut in Medicare paymentstoclinicians)

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Implications of MACRA

Clinician InvolvementRelationships/Partnerships/Arrangements will need to evolve in order to attract, retain, evaluate and optimize

Patient EngagementGreater coordination of care and two-sided risk for health care providers will raise the stakes for health care providers to foster closer ties with patients and help them actively manage their health

ReputationalMIPS Composite Performance Score (CPS) results will be made public and transparency will expose the good and the bad

Strategic/CompetitivePrioritizes strategic Physician Acquisition/Growth decisions related to who (Primary Care Physicians (PCPs)/Specialties, etc.), where, when, how (types of arrangements)

TechnologicalRequires robust clinical data capabilities (data governance, capture, collection, validation and reporting)

ClinicalRequires clinicians to change/ add incremental workflow and assess and improve clinical quality outcomes

Requires organization-wide collaboration and coordination of eligibility, multiple moving parts and regulatory requirements

FinancialAffects future Medicare reimbursement for all clinicians paid under the Medicare PFS

Key Impact Areas

The new MACRA law significantly impacts a number of key areas across health care providerorganizations

Operational

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MIPS: First Stepto a Fresh Start

ü MIPS is a new program

ü MIPS provides clinicians the flexibility tochoose the activities andmeasuresthat aremostmeaningful totheir practice todemonstrateperformance.

Resource use

• Streamlines 3currently independent programs towork as oneandtoeaseclinician burden.

• Addsa fourth component topromote ongoing improvement andinnovation to clinical activities.

2aQuality

:Advancingcareinformation

Clinicalpracticeimprovementactivities

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Traditional Model:Organize by Specialty and Discrete Service

Porter’s Integrated Practice Unit

Shared Ancillary ServicesSmoking Cessation Patient Education Substance Abuse

Primary Care

Physicians

Shared FacilitiesOperating Rooms

Chemotherapy Radiation Therapy Diagnostic Imaging

Pathology Lab

Emerging Model:Organize into Integrated Practice Units Around Conditions

Shared SpecialtiesAnesthesiologist

Cardiologist,Endocrinologist

& OtherSpecialties

Head & Neck Center

Medical Oncologists Surgical Oncologists Radiation Oncologists Dental Oncologists Radiologist Pathologist

NurseSocial Worker Patient Access Nutritionist PatientAdvocate

Facilities Outpatient Clinic Swallowing Lab Hearing Lab ProsthodonticLab

Outpatient Oncologist

SurgicalOncologist

Speech & Swallow

Dentist

Primary Care Physician

Radiation Oncologist

Radiologist

Pathologist

Anesthesiologist

22Source: Porter, Michael E., Jain, Sachin, The University of Texas MD Anderson Cancer Center: Interdisciplinary Cancer Care. February 26, 2013.

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Why do we need to define value?

Bundled care-How do we divvy up the pie?

Traditional FFSFixed paymentLower fixed payment and share in any profit margin

Shouldtheanesthesiologistbeallowedtoshareinpotentialreward?

Doestheanesthesiologistwanttoassumeanyrisk?

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Healthcare Consumerism

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HCAHPS Patient Experience Domains

• Summary Measures• Communication with nurses (3 items)• Communication with doctors (3 items)• Responsiveness of hospital staff (2 items)• Pain management (2 items)• Communication about medicines (2 items)• Discharge information (2 items)

• Individual Measures• Cleanliness of hospital environment• Quietness of hospital environment

• Global Measures• Overall rating of hospital

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RACI CHART

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My vision

• When we transition from volume to value, we will need to be more engaged in patient care• Perioperative Care- SURGEON IS ACCOUNTABLE BUT MAY DELEGATE

• eg.Urology,OrthoatUCI,Kaiser• Decision making with regard to surgery- ANESTHESIOLOGIST AS

CONSULTANT• Intraoperative Management- ANESTHESIOLOGIST RESPONSIBLE• Postoperative Care- ICU- ANESTHESIOLOGIST RESPONSIBLE

• Ward- NURSESRESPONSIBLE,ANESTHESIOLOGISTORSURGEONORINTERNIST/HOSPITALISTINFORMEDABOUTPAIN

WHO IS ACCOUNTABLE- EG. CARDIAC SURGEONS DELEGATE TO ANESTHESIOLOGIST AT PENN

• Post-discharge- SURGEON ACCOUNTABLE BUT MAY DELEGATE TO INTERNIST

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Ø Alternativepaymentmodelsgreaterthan50%ofpayments

- ACOs

- BundledPayments

- ComprehensivePrimaryCare

- OtherAPMs

Ø PrivatepayerandCMScollaborationcritical

Ø StatesandcommunitiesdrivingInnovationanddeliverysystemreform

Ø Increasingintegrationofpublichealthandpopulationhealthwithhealthcaredeliverysystem

Ø Patient-centered,coordinatedcareisthenorm

Ø Focusonqualityandoutcomes

FutureofHealthSystem