Embracing the Future of Care Delivery: What have we learned?

Transcription

1 Embracing the Future of Care Delivery: What have we learned? Robert Nesse, M.D. Senior Advisor for Healthcare Policy and Payment Reform CEO, Mayo Clinic Health System MFMER slide-1

2 Fundamental changes require fundamentally different thinking 2014 MFMER slide-2

3 The Basics Understand the inconvenient truth of your current reality Understand the structure of the problem Discover the gaps in your position and performance relative to succeeding in your reality Honor your mission and values Adapt and move forward 2014 MFMER slide-3

4 The New World for Medicare/Medicaid The Affordable Care Act is firmly in place Medicare SGR repealed and will be replaced by pay for value and fixed prices ( MA) for 80% of Medicare patients by % of American seniors and >50% of MN Medicare patients are in Medicare Advantage now Medicare performance metrics and payment adjustments based on billing, patient care process quality, and pt experience are present in the market now 2014 MFMER slide-4

5 New Insurance Models Influence Choice Preferred Provider Network and Centers of Excellence Models Traditional Plans with increasing deductible High Deductible Health Plans Reference Based Benefit Design Gain share and risk 2014 MFMER slide-5

6 It is much more than Medicare and the ACA: Employees in High Deductible Health Plan (individual deduction> $1,000) 70 % of workers % of workers MFMER slide-6

7 The Reality of High Deductible Health Plans When asked what they would do if they had a $1,500 medical bill, 43% of those with highdeductible plans said they would have to borrow money or go into credit-card debt to cover a $1,500 medical bill. Fifteen percent said they would not be able to pay such a bill Kaiser Family Foundation MFMER slide-7

8 SG MFMER slide-8

9 The Trends for Community Hospitals 2013 Inpatient admissions in 2013 decreased more sharply (-2.0 percent) than in previous years and patient days also fell (-1.3 percent); Over the past four years, small facilities in rural settings, operated as Critical Access Hospitals, showed stronger negative trends in inpatient utilization (e.g., 14.2 percent decline in admissions), accompanied by substantial growth in outpatient services (20.5 percent). Minnesota Department of Health MFMER slide-9

10 What Keeps Us Up at Night? The Medicare population will increase by 86 million people over the next 10 years. ACA will expand Medicaid by 38%. This has major regulatory and financial implications starting now. Disruptive innovation is all around us. Are we disrupting ourselves enough to be relevant to the new markets? Lack of timely innovation in product development Motivation of the practice to change Our market is consolidating. We must go in with a full product spectrum to allow flexibility and competitiveness. Large self insured employers are our market. They may move to defined contribution insurance for their employees. Then what? Do we have a strategy to be visible to large employers? We must define specific measures that matter to them to differentiate us from others. We haven t differentiated our quality We must accelerate our move to population health. We do not have a robust position that reduces variation in our practice. The key is competitive relevance for our patients, their employers, government, and our own staff Mayo Clinic Payer Relations Workgroup discussion 8/ MFMER slide-10

11 Integrated, comprehensive care is our past, present and future. Value based care is best aligned with patient interests MFMER slide-11

12 Value is not new "We must bear in mind the difference between thoroughness and efficiency. Thoroughness gathers all the facts, but efficiency distinguishes the two-cent pieces of non-essential data from the twenty-dollar gold pieces of fundamental fact. William J. Mayo 2014 MFMER slide-12

13 Reporting Value to CMS is Not New 2014 MFMER slide-13

14 Complex Care Intermediate Care Population Health Management Wellness 2014 MFMER slide-14

15 Value based care and reporting is not aligned with the financial model for many groups MFMER slide-15

16 The New Model of Pay for Value Traditional Health Plan or Self Insured Employer New model Active employer engagement in care delivery or care choices if still offering insurance vs. fixed contribution Consumer responsible for a majority of usual costs Accountable provider group that patient sees for care must justify their performance to the consumer and the employer or government payer Bundling with set single payment for episode, transfers risk and care mgmt. to providers centered on the hospital MFMER slide-16

17 The new metrics for financial success Today Expense per admission Revenue per admission Rates x volume = revenue Profitability by payer Revenues by payer Market share by # of visits and admissions 2018 Expense per episode of care Revenue per beneficiary in Med Home Episode cost / fixed payment = revenue Revenues from FFS vs. fixed payment Market share gain Adapted from : Moody s Investors Service 5/10/ MFMER slide-17

18 Integration and Consolidation are accelerating and the business model is changing. Our values must remain 2014 MFMER slide-18

19 Consolidation of Healthcare and Commercial Insurance The Economist 7/17/ MFMER slide-19

20 It isn t just physician groups: 10 must do strategies of the AHA Aligning hospitals, physicians and other providers across the continuum of care Utilizing evidence-based practices to improve quality and patient safety Improving efficiency through productivity and financial management Developing integrated information systems Joining and growing integrated provider networks and care systems Educating and engaging employees and physicians to create leaders Strengthening finances to facilitate reinvestment and innovation Partnering with payers Advancing an organization through scenario-based strategic, financial and operational planning Seeking population health improvement through pursuit of the Triple Aim 2014 MFMER slide-20

21 Mayo Clinic s Primary Value: The best interests of the patient are the only interest to be considered 2014 MFMER slide-21

22 The Core Business of Mayo Clinic Essential strategic requirement Core Business Essential organizational requirement 2014 MFMER slide-22

23 E-services are expanding and relevant. We must embrace them and connect with our patients to secure their connections with us MFMER slide-23

24 Digital Health Solutions Patient Portal Mobile Patient App HIE Pre-visit information Notes, labs, radiology and path reports Secure messaging Internal econsults External econsults Telestroke etumor boards eicu edermatology eemergency Dept Neonatology Video Assisted Resuscitation 2014 MFMER slide-24

25 We have options and opportunities. We need to move now to take advantage of them 2014 MFMER slide-25

26 Integration of Care Regional Hub (Secondary Care) Regional Hub (Secondary Care) Destination Center (Tertiary / Quaternary Care) Regional Hub (Secondary Care) Regional Hub (Secondary Care) May MFMER slide-26

27 2014 MFMER 27 slide-27 We re changing the community care model Focus will shift from sick care to health and wellness we ll provide more proactive care We ll partner more with the community to connect our patients with vital resources and support community health and wellness initiatives. (Good for our patients, good for community!)

28 Bundling Demonstrations Mandates FOR IMMEDIATE RELEASE July 9, 2015 Contact: HHS Press Office CMS proposes major initiative for hip and knee replacements Model supports quality and care improvements for patient s transition from surgery to recovery Hip and knee replacements are some of the most common surgeries that Medicare beneficiaries receive.. While some incentives exist for hospitals to avoid post-surgery complications the quality and cost of care for these hip and knee replacement surgeries still vary greatly among providers 2014 MFMER slide-28

29 Normalized cost per case The Inconvenient Truth about Bundles of Care Ex: The Cost Distribution Curve for CVS 10,000 Adult Cardiac Surgery Patients (Mayo Clinic data) Outliers 90 th PERCENTILE 2.11 Appropriate for bundles Median th PERCENTILE Proportion of patients 1. Describes internal cost to deliver care in approximately 10,000 adult cardiac surgery patients 2. Median cost is set as 1 and cost (by patient) is stratified from most to least costly 3. The most costly population segment has costs 2-25 times the median cost of adult cardiac surgery 2014 MFMER slide-29

30 What is the relationship between provider capability and the fundamental requirements for success? A network of providers Physical or virtual Governance model Alignment of purpose Coordinated care delivery Teamwork Group Process Inter disciplinary Training Emotional Intelligence Communications Practice analytics Financial alignment Health Services Research New age statistics Population Health Self learning 2014 MFMER slide-30

31 Our patients needs come first Always have, always will. Transforming our practices will provide: Better care Healthier communities More satisfied patients Lower cost 2014 MFMER slide-31

32 Payment Transformation Why Aren t We Moving Faster? Structural Barriers? A NARROW CORRIDOR FOR SUCCESS Inertia and Daily Management challenges Past Experience with Contracts and payment Mission and Culture Provider angst We must do this right Lose on Risk Payments from payer Lose on FFS Payments from payer Care Transformation 2014 MFMER slide-32