Under Construction: At the Crossroads of Volume and Value. Session PCM1, February 19, 2017 David Smith, Chief Development Officer, Leavitt Partners

Transcription

1 Under Construction: At the Crossroads of Volume and Value Session PCM1, February 19, 2017 David Smith, Chief Development Officer, Leavitt Partners

2 2 Introduction David Smith Chief Development Officer Leavitt Partners Consulting

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9 Value Trends

10 Number of ACOs 10 ACO Growth Million Lives Q Q Q Q Q Q Q Q Q Q Q Q Number of Lives Covered (Millions) # of ACOs # of Covered Lives Source: Leavitt Partners Center for Accountable Care Intelligence

11 11 Number of Payment Arrangements Contract Growth Outpacing ACO Growth Source: Leavitt Partners Center for Accountable Care Intelligence # of ACOs # of Payment Arrangements Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q % 15% 6% 3% 2% 1% 1% >5 # of Payment Arrangements per ACO

12 Payment Arrangements Source: Leavitt Partners Center for Accountable Care Intelligence 12 ACO Growth by Payer Payment Arrangement Growth by Payer Type ACO Lives Per Payer 1266 (in Millions) Total Medicare Commercial Medicaid

13 % of Physicians Source: Leavitt Partners Center for Accountable Care Intelligence 22.5% 19.8% 17.6% 15.5% 12.7% 11.8% 8.7% 8.7% 8.8% 9.1% 17.0% 19.7% 12.6% 15.4% 13 Change in Physician Group Sizes 23% 25% -12.1% 21% 19% 17% 15% 13% 20% 15% 10% -11.9% -7.3% +0.2% +3.3 % % % 11% 9% 5% 7% 0% to 2 3 to 9 10 to to to to to 2 3 to 9 10 to to to to 499 June, 2013 December,

14 14 Where are they forming? ACOs by State ACOs by Referral Region

15 15 ACO Penetration of lives over time Source: Leavitt Partners Center for Accountable Care Intelligence

16 16 COMMERCIAL ACO PROGRAMS AETNA CIGNA UNITED HEALTHCARE Source: Leavitt Partners Center for Accountable Care Intelligence 16

17 Value Projections

18 Lives Covered (Millions) Lives Covered (Millions) Lives Covered (Millions) Lives Covered (Millions) 18 Projected ACO-Covered Lives BASELINE SCENARIO 105 Million FINANCIAL FAILURE SCENARIO 41 Million Predicted Actual BASELINE SCENARIO WITHOUT MACRA WIDESPREAD SUPPORT SCENARIO 177 Million 68 Million Source: Leavitt Partners Center for Accountable Care Intelligence

19 Value Transition Determinants

20 20 Challenges to Value Transformation Cost of investing in additional staff Inconsistent/high volume of VBP quality measures Engaging patients/consumers to support new VPM models Clinical cooperation across and within networks Administrative burden (Contract creation & maintenance) Negative results from current VPM models Payer/provider alignment on current VPM models Insufficient data sharing/technology Cost of investing in technology & analytics Payer/provider market power Capital constraints (Reserve requirements, etc.) Navigating divergent and overlapping VBP models 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not at all concerned Slightly Concerned Somewhat Concerned Moderately Concerned Extremely Concerned Source: Health Care Transformation Task Force 2016 Membership Survey

21 21 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergence & Predictability Consolidatio n

22 22 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergence & Predictability Consolidatio n

23 23 HHS: Better, Smarter, Healthier Goal #1: Tie 30% of all Medicare provider payments to value through alternative payment models by the end of 2016 (achieved March, 2016); 50% by Goal #2: Tie 85% of all Medicare FFS payments to quality and value by 2016; 90% by Source: healthit.gov

24 24 Goal #1: Achieved Through APMs Major APM Categories * MSSP started in 2012, Pioneer started in 2012, BPCI started in 2013, CPC started in 2012, MAPCP started in 2011, Maryland All Payer started in 2014 ESRD PP

25 25 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

26 26 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

27 27 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

28 28 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

29 29 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

30 30 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

31 31 Health Plan Enrollment Source: KFF 2016 Employer Health Benefit Survey

32 Percent of Population 32 Insured Population 60% 50% 40% 30% 20% 10% 0% Percent of Population by Insurance Coverage Type in 2014

33 33 Catalysts Impediments Government Action Commercial Economic Interests Information Asymmetry & Lag Regulation Interoperabili ty Patient Engagement Coverage Convergenc e & Predictabilit y Consolidatio n

34 34 Change in Physician Group Sizes % of Physicians Source: Author analysis of Medicare Physician Compare 22.5% 19.8% 17.6% 15.5% 12.7% 11.8% 8.7% 8.7% 8.8% 9.1% 17.0% 19.7% 12.6% 15.4% 23% 21% 19% 17% 15% 13% 25% 20% 15% 10% -12.1% -11.9% -7.3% +0.2% +3.3 % % % 11% 9% 5% 7% to 2 3 to 9 10 to to to to % 0 to 2 3 to 9 10 to to to to 499 June, 2013 December,

35 35 Change in Group Size by Specialty Percent Change 24.8% 19.1% 13.1% 12.1% 9.8% 9.9% 8.6% 8.6% 11.1% 10.6% 21.2% 23.9% 11.4% 15.9% 21.0% 19.9% 18.1% 16.3% 13.3% 12.6% 9.0% 9.2% 8.2% 8.5% 16.5% 18.4% 14.0% 15.1% 30% Primary Care Physicians Specialists 25% -29.8% +11.5% 25% -5.6% 20% 15% 10% - 8.8% +0.4% - 0.6% - 4.4% +28.3% 20% 15% 10% -11.5% -5.9% +2.6% +3.8% 10.8% +7.7% 5% 5% 0% 0 to 2 3 to 9 10 to to to to % 0 to 2 3 to 9 10 to to to to June, 2013 December, 2015

36 36 Current Hospital Consolidation Number of Announced Mergers Announced Hospital Mergers & Acquisitions,

37 37 National Variability Concentration of Hospitals at the State Level Concentration of Hospitals at the Hospital Referral Region Level Darker = More Concentrated

38 38 Non-Ownership Partnerships are Expanding Few mergers have been explicitly created to form riskbearing provider organizations Instead, hospitals and health systems are choosing nonownership affiliations It is more beneficial for both parties to work together to achieve mutual objectives.

39 Thank You