SUPER-ACO s. The Millennial s of Accountable Care. Presented by Robert Resnik MD MDA. Please do not distribute without written permission
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1 SUPER-ACO s The Millennial s of Accountable Care Presented by Robert Resnik MD MDA Please do not distribute without written permission
2 Key Considerations Pace of change and partnership opportunities in their market Market concentration and the organization s size relative to larger competitors Whether the organization is financially strong enough to participate How prepared the organization is for accountable care and population management Whether the organization is equipped to care for new patient populations
3 A clinically integrated network (CIN) of employed and independent physicians is an essential component of any Super ACO
4 Benefits Small systems may gain economies of scale in their population health management capabilities, infrastructure, and contracting. Expanded geographic coverage to meet the needs of a larger population Enhanced ability to focus attention and resources on high-priority gaps in care delivery that contribute directly to performance Reduced competition Enables organizations to avoid the complexity and costs that come with ownership and governance changes under formal mergers.
5 Essential Requirements A compatible culture A willingness and ability to collaborate A relatively low cost position A strong brand Sufficient scale to generate economies of scale Moderate market overlap Experience in accountable care or risk contracting Committed leaders who will ensure the Super ACO is successful
6 Advantages Economies of scale can reduce each partner s investment in accountable care and population health management, including the cost of developing physician networks and IT infrastructure. Super ACOs allow development of joint venture health plans and other go to market vehicles. Super ACOs can expand the partners geographic coverage to access a larger population base.
7 Advantages Super ACOs can focus management attention and resources on closing gaps in care delivery that contribute directly to performance shortfalls. Retaining separate health system ownership avoids the complexity and costs associated with changes in health system ownership and governance.
8 Criteria for Partnerships Aligned Strategic Goals Compatible Cultural Values Willingness and Ability to Collaborate Relatively low costs Strong Brand Potential for Scale Moderate Market Overlap Experience with Population Management Strong Leadership
9 North Carolina BCBS Markets Source BCBS Cost Estimator Blank spaces Information not provided on BCBS site for this hospital Options/ADV Options/ADV Knee Replacement Deviation Deviation from Hip Replacement Deviation Deviation from Value Options/ADV From Mean Lowest Cost Value Options/ADV From Mean Lowest Cost CMC-University (Charlotte) $ 33,441 $ 33,441 $ 1,034 $ 12,387 $ 34,079 $ 34,079 $ 2,265 $ 8,852 Novant Presby-Charlotte $ 28,685 $ 28,685 $ (3,722) $ 7,631 $ 24,386 $ 28,379 $ (3,435) $ 3,152 CMC-Blythe Rd (Charlotte) $ 41,397 $ 8,990 $ 20,343 $ 41,810 $ 9,996 $ 16,583 CMC-Pineville (Charlotte) $ 39,451 $ 7,044 $ 18,397 $ 38,141 $ 38,141 $ 6,327 $ 12,914 CMC-Northeast (Concord) $ 42,294 $ 9,887 $ 21,240 $ 43,801 $ 11,987 $ 18,574 Wake Med Cary $ 21,092 $ 27,838 $ (4,569) $ 6,784 $ 21,271 $ 27,982 $ (3,832) $ 2,755 Wake Med Raleigh $ 21,246 $ 28,000 $ (4,407) $ 6,946 $ 20,609 $ 27,360 $ (4,454) $ 2,133 Rex- Raleigh $ 25,536 $ 31,542 $ (865) $ 10,488 $ 26,400 $ 32,665 $ 851 $ 7,438 Duke Raleigh $ 21,054 $ (11,353) $ - $ 26,751 $ (5,063) $ 1,524 Duke Univ Durham $ 29,273 $ (3,134) $ 8,219 $ 25,227 $ (6,587) $ - UNC - Chapel Hill $ 29,206 $ 35,962 $ 3,555 $ 14,908 $ 28,676 $ 35,429 $ 3,615 $ 10,202 Novant Forsyth -Winston $ 27,021 $ 32,116 $ (291) $ 11,062 $ 24,826 $ 29,374 $ (2,440) $ 4,147 Baptist Winston-Salem $ 28,108 $ 32,578 $ 171 $ 11,524 $ 25,125 $ 29,047 $ (2,767) $ 3,820 Alamance- Burlington $ 28,680 $ 28,680 $ (3,727) $ 7,626 $ 25,915 $ 25,915 $ (5,899) $ 688 High Point $ 32,510 $ 32,510 $ 103 $ 11,456 $ 29,534 $ 29,534 $ (2,280) $ 4,307 Moses Cone-Greensboro $ 33,684 $ 33,684 $ 1,277 $ 12,630 $ 33,525 $ 33,525 $ 1,711 $ 8,298 AVERAGE $ 28, $ 32, $ - $ 11, $ 27, $ 31, $ - $ 6,586.69
10 North Carolina BCBS Markets Source BCBS Cost Estimator Blank spaces Information not provided on BCBS site for this hospital Options/ADV Options/ADV Options/ADV Options/ADV Instert/Replace Defib Deviation Deviation from CABG w/o cath Deviation Deviation from Value Options/ADV From Mean Lowest Cost Value Options/ADV From Mean Lowest Cost CMC-University (Charlotte) Novant Presby-Charlotte $ 60,858 $ 70,974 $ (789) $ 15,445 CMC-Blythe Rd (Charlotte) $ 61,859 $ (2,127) $ 28,857 $ 82,722 $ 10,959 $ 27,193 CMC-Pineville (Charlotte) $ 96,814 $ 25,051 $ 41,285 CMC-Northeast (Concord) $ 81,825 $ 10,062 $ 26,296 Wake Med Cary Wake Med Raleigh $ 91,640 $ 27,655 $ 58,638 $ 63,520 $ 83,323 $ 11,560 $ 27,794 Rex- Raleigh $ 58,933 $ 76,076 $ 12,091 $ 43,074 $ 53,414 $ 64,705 $ (7,058) $ 9,176 Duke Raleigh $ 68,791 $ 4,806 $ 35,789 Duke Univ Durham $ 83,111 $ 19,126 $ 50,109 $ 59,493 $ (12,270) $ 3,964 UNC - Chapel Hill $ 45,576 $ 58,831 $ (5,155) $ 25,829 $ 49,089 $ 60,039 $ (11,724) $ 4,510 Novant Forsyth -Winston $ 57,140 $ 67,289 $ (4,474) $ 11,760 Baptist Winston-Salem $ 27,875 $ 33,002 $ (30,984) $ - $ 64,509 $ 75,183 $ 3,420 $ 19,654 Alamance- Burlington High Point $ 63,259 $ 63,259 $ (8,504) $ 7,730 Moses Cone-Greensboro $ 38,574 $ 38,574 $ (25,412) $ 5,572 $ 55,529 $ 55,529 $ (16,234) $ - AVERAGE $ 42, $ 63, $ - $ 30, $ 58, $ 71, $ (0.00) $ 16,233.92
11 North Carolina BCBS Markets Source BCBS Cost Estimator Blank spaces Information not provided on BCBS site for this hospital Options/ADV Options/ADV Options/ADV Options/ADV Angioplasty with Stent Deviation Deviation from Lap Gallbladder Deviation Deviation from Value Options/ADV From Mean Lowest Cost Value Options/ADV From Mean Lowest Cost CMC-University (Charlotte) $ 11,426 $ (1,057) $ 4,885 Novant Presby-Charlotte $ 25,937 $ 30,558 $ (1,322) $ 8,698 $ 14,017 $ 16,396 $ 3,913 $ 9,855 CMC-Blythe Rd (Charlotte) $ 39,714 $ 7,834 $ 17,854 $ 18,308 $ 5,825 $ 11,767 CMC-Pineville (Charlotte) $ 31,358 $ (522) $ 9,498 $ 14,813 $ 2,330 $ 8,272 CMC-Northeast (Concord) $ 6,541 $ (5,942) $ - Wake Med Cary Wake Med Raleigh $ 18,467 $ 25,213 $ (6,667) $ 3,353 $ 9,689 $ 9,689 $ (2,794) $ 3,148 Rex- Raleigh $ 35,767 $ 35,767 $ 3,887 $ 13,907 $ 9,650 $ 11,609 $ (874) $ 5,068 Duke Raleigh $ 11,070 $ (1,413) $ 4,529 Duke Univ Durham $ 23,306 $ (8,574) $ 1,446 $ 11,173 $ (1,310) $ 4,632 UNC - Chapel Hill $ 10,778 $ 13,253 $ 770 $ 6,712 Novant Forsyth -Winston $ 10,700 $ 12,649 $ 166 $ 6,108 Baptist Winston-Salem $ 27,711 $ 31,814 $ (66) $ 9,954 $ 10,143 $ 11,736 $ (747) $ 5,195 Alamance- Burlington $ 10,184 $ 10,184 $ (2,299) $ 3,643 High Point $ 21,860 $ 21,860 $ (10,020) $ - $ 17,002 $ 17,002 $ 4,519 $ 10,461 Moses Cone-Greensboro $ 47,332 $ 47,332 $ 15,452 $ 10,345 $ (2,138) $ 3,804 Average $ 29,512 $ 31,880 $ - $ 8,089 $ 11,520 $ 12,483 $ 0 $ 5,942
12 North Carolina BCBS Markets Source BCBS Cost Estimator Blank spaces Information not provided on BCBS site for this hospital Options/ADV Options/ADV Options/ADV Options/ADV Laminectomy Inpatient Deviation Deviation from Chemo with acute leukemia Deviation Deviation from Value Options/ADV From Mean Lowest Cost Value Options/ADV From Mean Lowest Cost CMC-University (Charlotte) $ 17,892 $ 17,892 $ 2,294 $ 6,190 Novant Presby-Charlotte $ 16,566 $ 19,208 $ 3,610 $ 7,506 CMC-Blythe Rd (Charlotte) $ 22,259 $ 6,661 $ 10,557 $ 17,453 $ (478) $ 6,495 CMC-Pineville (Charlotte) CMC-Northeast (Concord) $ 20,191 $ 4,593 $ 8,489 Wake Med Cary Wake Med Raleigh $ 12,368 $ 12,368 $ (3,230) $ 666 Rex- Raleigh $ 10,315 $ 12,267 $ (3,331) $ 565 $ 8,788 $ 10,958 $ (6,973) $ - Duke Raleigh $ 14,192 $ (1,406) $ 2,490 Duke Univ Durham $ 11,702 $ (3,896) $ - $ 25,605 $ 7,674 $ 14,647 UNC - Chapel Hill $ 12,844 $ 15,633 $ 35 $ 3,931 $ 18,148 $ 22,904 $ 4,973 $ 11,946 Novant Forsyth -Winston $ 14,317 $ 16,520 $ 922 $ 4,818 Baptist Winston-Salem $ 11,478 $ 13,205 $ (2,393) $ 1,503 $ 10,927 $ 12,735 $ (5,196) $ 1,777 Alamance- Burlington High Point $ 16,557 $ 16,557 $ 959 $ 4,855 Moses Cone-Greensboro $ 13,069 $ (2,529) $ 1,367 AVERAGE $ 13,492 $ 15,598 $ (0) $ 3,896 $ 12,621 $ 17,931 $ - $ 6,973
13 Regulatory Concerns Participation in a Super ACO also requires consideration of possible regulatory issues. Regulators such as the Federal Trade Commission and the U.S. Department of Justice have issued a number of rules and opinions on appropriate ways for independent physicians to work together in CINs They offered relatively little definitive guidance for independent health systems trying to collaborate in delivering accountable care
14 Minimizing the Regulatory Risk Work directly with clinically integrated physician networks to align hospital services with the CIN s activities Invest in clinical integration infrastructure (for example, clinical performance management systems, protocol development, quality and value reporting) and use performance on metrics as the basis for determining resource allocations and bonus distributions Contract with existing health plans on a nonexclusive basis (as exclusivity provisions are a red flag for regulators) Share financial risk (for example, through joint ownership of a new health plan product) Avoid driving up the cost of care to buyers
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