CREATING A PHYSICIAN-LED HEALTHCARE FUTURE Better Care for Patients, Lower Healthcare Spending, & Financially Viable Physician Practices

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1 CREATING A PHYSICIAN-LED HEALTHCARE FUTURE Better Care for Patients, Lower Healthcare Spending, & Financially Viable Physician Practices Harold D. Miller President and CEO Center for Healthcare Quality and Payment Reform

2 Healthcare Spending is the Biggest Driver of Federal Deficit Medicare 94% Increase ($1 Trillion) Social Security Other Mandatory Discretionary Spending 85% Increase ($770 Billion) 25% Increase ($400 Billion) 2

3 Premiums Have Increased 73% More Than Inflation Since 2002 Family Premiums $6,164 Higher Than Inflation Source: Medical Expenditure Panel Survey & Bureau of Labor Statistics 3

4 Premiums Have Grown Faster Than Worker Earnings Premiums Worker Pay Inflation Source: Medical Expenditure Panel Survey & Bureau of Labor Statistics 4

5 Family Premiums Now Equal to One-Third of Worker Pay Source: Medical Expenditure Panel Survey & Bureau of Labor Statistics 5

6 How Do You Control Growing Healthcare Spending? $ TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TIME 6

7 Payer Strategy #1: Cut Provider Fees for Services $ SAVINGS Cut Provider Fees TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE BY PAYERS 7

8 Payer Strategy #2: Shift Costs to Patients $ SAVINGS TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE BY PAYERS Higher Cost-Share & Deductibles 8

9 Payer Strategy #3: Delay or Deny Care to Patients $ SAVINGS TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE BY PAYERS Lack of Needed Care 9

10 Results of Typical Strategies Patients don t get the care they need and costs increase in the future Small physician practices and hospitals are forced out of business Health insurance premiums continue to rise and access to insurance coverage decreases 10

11 Results of Typical Strategies Patients don t get the care they need and costs increase in the future Small physician practices and hospitals are forced out of business Health insurance premiums continue to rise and access to insurance coverage decreases IS THERE A BETTER WAY? 11

12 The Right Focus: Spending That is Unnecessary or Avoidable $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY NECESSARY NECESSARY NECESSARY TIME 12

13 Avoidable Spending Occurs In All Aspects of Healthcare $ AVOIDABLE NECESSARY 13

14 Avoidable Spending Occurs In All Aspects of Healthcare $ AVOIDABLE NECESSARY CHRONIC DISEASE ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness 14

15 Avoidable Spending Occurs In All Aspects of Healthcare $ AVOIDABLE NECESSARY CHEST PAIN DIAGNOSIS/TREATMENT Overuse of high-tech stress tests/imaging Overuse of cardiac catheterization Overuse of PCIs, high-priced stents CHRONIC DISEASE ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness 15

16 Avoidable Spending Occurs In All Aspects of Healthcare $ AVOIDABLE NECESSARY CANCER TREATMENT Use of unnecessarily-expensive drugs ER visits/hospital stays for dehydration and avoidable complications Fruitless treatment at end of life Late-stage cancers due to poor screening CHEST PAIN DIAGNOSIS/TREATMENT Overuse of high-tech stress tests/imaging Overuse of cardiac catheterization Overuse of PCIs, high-priced stents CHRONIC DISEASE ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness 16

17 Avoidable Spending Occurs In All Aspects of Healthcare $ SURGERY Unnecessary surgery Use of unnecessarily-expensive implants Infections and complications of surgery Overuse of inpatient rehabilitation AVOIDABLE NECESSARY CANCER TREATMENT Use of unnecessarily-expensive drugs ER visits/hospital stays for dehydration and avoidable complications Fruitless treatment at end of life Late-stage cancers due to poor screening CHEST PAIN DIAGNOSIS/TREATMENT Overuse of high-tech stress tests/imaging Overuse of cardiac catheterization Overuse of PCIs, high-priced stents CHRONIC DISEASE ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness 17

18 Most Specialties Have Identified Areas of Avoidable Spending 18

19 Institute of Medicine Estimate: 30% of Spending is Avoidable 19

20 The Right Goal: Less Avoidable $, $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY TIME 20

21 The Right Goal: Less Avoidable $, More Necessary $ $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY NECESSARY NECESSARY NECESSARY TIME 21

22 Win-Win for Patients & Payers $ AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE Lower Spending for Payers NECESSARY NECESSARY NECESSARY NECESSARY Better Care for Patients TIME 22

23 Barriers in the Payment System Create a Win-Lose for Providers $ AVOIDABLE NECESSARY BARRIERS IN THE CURRENT PAYMENT SYSTEM SAVINGS AVOIDABLE NECESSARY 23

24 Barrier #1: No $ or Inadequate $ for High-Value Services $ AVOIDABLE NECESSARY UNPAID SERVICES No Payment or Inadequate Payment for: Services delivered outside of face-to-face visits with clinicians, e.g., phone calls, s, etc. Services delivered by non-clinicians, e.g., nurses, community health workers, etc. Communication between physicians to ensure accurate diagnosis & coordinate care Non-medical services, e.g., transportation Palliative care for patients at end of life 24

25 Barrier #2: Avoidable Spending May Be Revenue for Providers $ AVOIDABLE MARGIN NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY 25

26 And When Avoidable Services Aren t Delivered $ AVOIDABLE MARGIN AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY 26

27 Providers Revenue May Decrease $ AVOIDABLE MARGIN AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY PROVIDER REVENUE 27

28 But Fixed Costs Don t Vanish $ AVOIDABLE MARGIN Many Fixed Costs of Services Remain When Volume Decreases Leases & staff in physician practice Costs of hospital emergency room and other standby services AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY COST PROVIDER OF REVENUE SERVICE DELIVERY 28

29 But Fixed Costs Don t Vanish and New Costs May Be Added $ AVOIDABLE MARGIN Many Fixed Costs of Services Remain When Volume Decreases And New Costs May Be Incurred, Costs of nurse care managers Costs of unpaid physician services Costs of collecting quality data AVOIDABLE COST OF NEW SVCS NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY COST PROVIDER OF REVENUE SERVICE DELIVERY 29

30 Leaving Providers With Losses (or Bigger Losses Than Today) $ Many Fixed Costs of Services Remain When Volume Decreases And New Costs May Be Incurred, Potentially Causing Financial Losses AVOIDABLE MARGIN AVOIDABLE LOSS COST OF NEW SVCS NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY 30

31 A Payment Change isn t Reform Unless It Removes the Barriers BARRIER #1 BARRIER #2 31

32 So Why Haven t We Fixed This??

33

34 In Healthcare, Payers Are From Mars, Providers Are From Venus

35 Provider Approach: Pay Us More $ PROVIDER SOLUTION: AVOIDABLE NEWLY PAID SERVICES NECESSARY NECESSARY UNPAID SERVICES 35

36 Provider Approach: Pay Us More and Trust Us on Savings $ PROVIDER SOLUTION: AVOIDABLE NECESSARY SAVINGS AVOIDABLE NEWLY PAID SERVICES NECESSARY Provider to Payer: Paying for the services saved money in a demonstration project, so you can safely assume that you will also save money if you pay all providers to deliver the services for all patients UNPAID SERVICES 36

37 Payer Concern: No Accountability to Reduce Avoidable Spending $ PROVIDER SOLUTION: PAYER FEAR: AVOIDABLE SAVINGS AVOIDABLE NEWLY PAID SERVICES AVOIDABLE NEWLY PAID SERVICES NECESSARY NECESSARY NECESSARY UNPAID SERVICES 37

38 Example: Accreditation Programs Physician practices and health systems want to be paid more if they are certified as delivering care the right way by an accrediting agency 38

39 Does Accreditation Assure High-Value Care? Thanks to Joint Commission hospital accreditation, there are no longer any infections or patient safety problems in hospitals Thanks to the Certification Commission for Health Information Technology (CCHIT), every EHR works effectively to support good patient care Thanks to college accreditation organizations, every parent who sends their child to college knows they will get a good education and a good job after graduation NOT 39

40 In Healthcare, Payers Are From Mars, Providers Are From Venus

41 Payer Approach: Value-Based Pay for Performance $ PAYER SOLUTION: Value-Based P4P Physicians/Hospitals Have to Justify a Portion of What They Would Have Otherwise Received Based on Performance on Quality/Cost Measures FEE FOR SERVICE PAYMENTS FEE FOR SERVICE PAYMENTS UNPAID SERVICES UNPAID SERVICES 41

42 $ Do Physicians Need Incentives or True Solutions to FFS Barriers? FEE FOR SERVICE PAYMENTS PAYER SOLUTION: Value-Based P4P FEE FOR SERVICE PAYMENTS P4P may not be enough to pay for delivering a high-value service or for the added costs of improving quality P4P may not be enough to offset the costs of collecting and reporting the quality data P4P may be less than the loss of fee-for-service revenue from healthier patients or lower utilization UNPAID SERVICES UNPAID SERVICES LOSS OF REVENUE 42

43 Payer Approach: Save Us Money $ YEAR 1 PAYER SOLUTION: AVOIDABLE SAVINGS AVOIDABLE NECESSARY NECESSARY UNPAID SERVICES UNPAID SERVICES LOSS OF REVENUE 43

44 $ Payer Approach: Save Us Money & (Maybe) We ll Pay More Next Year PAYER SOLUTION: YEAR 1 YEAR 2 AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE Shared Svgs NECESSARY NECESSARY NECESSARY UNPAID SERVICES UNPAID SERVICES LOSS OF REVENUE UNPAID SERVICES LOSS OF REVENUE 44

45 $ Provider Concern: Shared Savings is Too Little, Too Late PAYER SOLUTION: YEAR 1 YEAR 2 AVOIDABLE NECESSARY UNPAID SERVICES SAVINGS AVOIDABLE NECESSARY UNPAID SERVICES LOSS OF REVENUE How does provider cover upfront costs of additional services and loss of revenue? SAVINGS AVOIDABLE Shared Svgs NECESSARY UNPAID SERVICES LOSS OF REVENUE Shared savings, if received, may not cover costs & losses 45

46 Medicare s Shared Savings ACO Program Isn t Succeeding 2013 Results for Medicare Shared Savings ACOs 46% of ACOs (102/220) increased Medicare spending Only 24% (52/220) received shared savings payments After making shared savings payments, Medicare spent more than it saved Net loss to Medicare: $78 million 2014 Results for Medicare Shared Savings ACOs 45% of ACOs (152/333) increased Medicare spending Only 26% (86/333) received shared savings payments After making shared savings payments, Medicare spent more than it saved Net loss to Medicare: $50 million 2015 Results for Medicare Shared Savings ACOs 48% of ACOs (189/392) increased Medicare spending Only 30% (119/392) received shared savings payments After making shared savings payments, Medicare spent more than it saved Net loss to Medicare: $216 million 46

47 Private Shared Savings ACOs Are Also Floundering 47

48 Why Aren t ACOs Succeeding? PATIENTS Heart Disease ACO Cancer Back Pain Pregnancy Primary Care Cardiology Oncology Neurosurgery OB/GYN 48

49 No Change in the Way Physicians or Hospitals Are Paid MEDICARE PATIENTS Heart Disease Cancer Fee-for- Service Payment ACO Back Pain Pregnancy Primary Care Cardiology Oncology Neurosurgery OB/GYN 49

50 Providers Still Face All the Barriers in the Current Payment System MEDICARE PATIENTS Heart Disease Cancer Back Pain Pregnancy Fee-for- Service Payment Primary Care Cardiology ACO No payment for high-value services Inadequate revenues to cover costs when fewer services are delivered Oncology Neurosurgery OB/GYN 50

51 With Only the Potential for Receiving Future Shared Savings MEDICARE Shared Savings Payment Next Year??? PATIENTS Heart Disease Cancer Back Pain Pregnancy Fee-for- Service Payment Primary Care Cardiology ACO No payment for high-value services Inadequate revenues to cover costs when fewer services are delivered Oncology Neurosurgery OB/GYN 51

52 ACOs Try to Coordinate Care Without Fixing Payment Barriers MEDICARE Shared Savings Payment Next Year??? PATIENTS Heart Disease Cancer Back Pain Pregnancy Fee-for- Service Payment Primary Care Cardiology Expensive IT Systems ACO Care Coordinators No payment for high-value services Inadequate revenues to cover costs when fewer services are delivered Oncology Neurosurgery OB/GYN 52

53 Possibility of Future Bonuses Doesn t Overcome Current Barriers MEDICARE Shared Savings Payment??? PATIENTS Heart Disease Cancer Back Pain Pregnancy Fee-for- Service Payment Primary Care Cardiology Expensive IT Systems ACO Care Coordinators Part of Shared Savings?? No payment for high-value services Inadequate revenues to cover costs when fewer services are delivered Oncology Neurosurgery OB/GYN 53

54 Creating More Risk Won t Solve the Problems with Payment Either MEDICARE More Downside Risk PATIENTS Heart Disease Cancer Back Pain Pregnancy Fee-for- Service Payment Primary Care Cardiology Expensive IT Systems ACO Care Coordinators No payment for high-value services Inadequate revenues to cover costs when fewer services are delivered Oncology Neurosurgery OB/GYN 54

55 Value-Based Payment Is Being Designed the Wrong Way Today 55

56 Value-Based Payment Is Being Designed the Wrong Way Today TOP-DOWN PAYMENT REFORM Medicare and Health Plans Define Payment Systems Physicians and Hospitals Have To Change Care to Align With Payment Systems 56

57 Value-Based Payment Is Being Designed the Wrong Way Today TOP-DOWN PAYMENT REFORM Medicare and Health Plans Define Payment Systems Physicians and Hospitals Have To Change Care to Align With Payment Systems Both Patients and Providers May Lose 57

58 Physicians Need to Design Payments to Support Good Care TOP-DOWN PAYMENT REFORM BOTTOM-UP PAYMENT REFORM Medicare and Health Plans Define Payment Systems Physicians and Hospitals Have To Change Care to Align With Payment Systems Both Patients and Providers May Lose Physicians Redesign Care and Identify Payment Barriers 58

59 Physicians Need to Design Payments to Support Good Care TOP-DOWN PAYMENT REFORM BOTTOM-UP PAYMENT REFORM Medicare and Health Plans Define Payment Systems Physicians and Hospitals Have To Change Care to Align With Payment Systems Both Patients and Providers May Lose Payers Change Payment to Support Redesigned Care Physicians Redesign Care and Identify Payment Barriers 59

60 Physicians Need to Design Payments to Support Good Care TOP-DOWN PAYMENT REFORM BOTTOM-UP PAYMENT REFORM Medicare and Health Plans Define Payment Systems Physicians and Hospitals Have To Change Care to Align With Payment Systems Both Patients and Providers May Lose Payers Change Payment to Support Redesigned Care Physicians Redesign Care and Identify Payment Barriers Patients Get Better Care and Providers Stay Financially Viable 60

61 Congress Wants Physicians to Develop Better Payment Models Congress created the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to solicit and review proposals from physician groups, medical specialty societies, and others for physician-focused payment models and to make recommendations to CMS as to which models to implement Physicians who receive most of their revenues through approved Alternative Payment Models (APMs): are exempt from MIPS receive a 5% lump sum bonus receive a higher annual update (increase) in their FFS revenues receive the benefits of participating in the APM 61

62 What Happens When Physicians Redesign Patient Care and Receive Adequate Payments to Support It?

63 Better Care at Lower Cost for Crohn s Disease PHYSICIAN LEADER: Lawrence R. Kosinski, MD Managing Partner, Illinois Gastroenterology Group 63

64 Better Care at Lower Cost for Crohn s Disease PHYSICIAN LEADER: Lawrence R. Kosinski, MD Managing Partner, Illinois Gastroenterology Group OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Health plan spends $11,000/year/patient on patients with Crohn s >50% of expenses are for hospital care, most due to complications <33% of patients seen by physician in 30 days prior to hospitalization 10% of expenses for biologics, many administered in hospitals 3.5% of spending goes to gastroenterologists 64

65 Better Care at Lower Cost for Crohn s Disease PHYSICIAN LEADER: Lawrence R. Kosinski, MD Managing Partner, Illinois Gastroenterology Group OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Health plan spends $11,000/year/patient on patients with Crohn s >50% of expenses are for hospital care, most due to complications <33% of patients seen by physician in 30 days prior to hospitalization 10% of expenses for biologics, many administered in hospitals 3.5% of spending goes to gastroenterologists BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment to support medical home services in gastroenterology practice: No payment for nurse care manager No payment for clinical decision support tools to ensure evidencebased care No payment for proactive telephone contact with patients 65

66 Better Care at Lower Cost for Crohn s Disease PHYSICIAN LEADER: Lawrence R. Kosinski, MD Managing Partner, Illinois Gastroenterology Group OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Health plan spends $11,000/year/patient on patients with Crohn s >50% of expenses are for hospital care, most due to complications <33% of patients seen by physician in 30 days prior to hospitalization 10% of expenses for biologics, many administered in hospitals 3.5% of spending goes to gastroenterologists BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment to support medical home services in gastroenterology practice: No payment for nurse care manager No payment for clinical decision support tools to ensure evidencebased care No payment for proactive telephone contact with patients RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE Hospitalization rate cut by more than 50% Total spending reduced by 10% even with higher payments to the physician practice Improved patient satisfaction due to fewer complications and lower out-of-pocket costs 66

67 1 st Physician-Focused Payment Model Recommended by PTAC PHYSICIAN LEADER: Lawrence R. Kosinski, MD Managing Partner, Illinois Gastroenterology Group PTAC members are supportive of the proposal s care model..[which] leverages technology to enable specialty practices to remotely monitor their patients who are at risk of complications and hospitalizations and initiate early interventions PTAC believes that the merits of the proposal justify a recommendation for limited-scale testing. RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE Hospitalization rate cut by more than 50% Total spending reduced by 10% even with higher payments to the physician practice Improved patient satisfaction due to fewer complications and lower out-of-pocket costs 67

68 Better Care at Lower Cost for Total Joint Replacement PHYSICIAN LEADER: Stephen J. Zabinski, MD Director, Division of Orthopaedic Surgery, Shore Medical Ctr 68

69 Better Care at Lower Cost for Total Joint Replacement PHYSICIAN LEADER: Stephen J. Zabinski, MD Director, Division of Orthopaedic Surgery, Shore Medical Ctr OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Reduce surgical complications by reducing patient risk factors prior to surgery Obtain lower prices for implants from vendors Match implants to patient needs Return patients home as quickly as possible Use lower cost settings for surgery and rehabilitation 69

70 Better Care at Lower Cost for Total Joint Replacement PHYSICIAN LEADER: Stephen J. Zabinski, MD Director, Division of Orthopaedic Surgery, Shore Medical Ctr OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Reduce surgical complications by reducing patient risk factors prior to surgery Obtain lower prices for implants from vendors Match implants to patient needs Return patients home as quickly as possible Use lower cost settings for surgery and rehabilitation BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for pre-operative patient risk reduction programs No payment for care coordination throughout surgical episode Separate payments to hospital and physician No data on costs of facilities 70

71 Better Care at Lower Cost for Total Joint Replacement PHYSICIAN LEADER: Stephen J. Zabinski, MD Director, Division of Orthopaedic Surgery, Shore Medical Ctr OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Reduce surgical complications by reducing patient risk factors prior to surgery Obtain lower prices for implants from vendors Match implants to patient needs Return patients home as quickly as possible Use lower cost settings for surgery and rehabilitation BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for pre-operative patient risk reduction programs No payment for care coordination throughout surgical episode Separate payments to hospital and physician No data on costs of facilities RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE Average length of stay TKR: days THR: days Average device cost $6,301 $4,242 Discharges to home 34% 78% Readmission rate 3.2% 2.7% Total Episode Spending TKR: $25,365 $19,597 THR: $26,580 $20,636 71

72 Better Care at Lower Cost for Cancer PHYSICIAN LEADER: Barbara McAneny, MD CEO, New Mexico Cancer Center 72

73 Better Care at Lower Cost for Cancer PHYSICIAN LEADER: Barbara McAneny, MD CEO, New Mexico Cancer Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 40-50% of patients receiving chemotherapy are hospitalized for complications of treatment 73

74 Better Care at Lower Cost for Cancer PHYSICIAN LEADER: Barbara McAneny, MD CEO, New Mexico Cancer Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 40-50% of patients receiving chemotherapy are hospitalized for complications of treatment BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for triage services to enable rapid response to patient complications No payment for patient and family education about complications and how to respond Inadequate payment to reserve capacity for IV hydration of patients experiencing problems 74

75 Better Care at Lower Cost for Cancer PHYSICIAN LEADER: Barbara McAneny, MD CEO, New Mexico Cancer Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 40-50% of patients receiving chemotherapy are hospitalized for complications of treatment BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for triage services to enable rapid response to patient complications No payment for patient and family education about complications and how to respond Inadequate payment to reserve capacity for IV hydration of patients experiencing problems RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE 36% fewer ED visits 43% fewer admissions 22% reduction in total cost of care ($4,784 over six months) 75

76 Better Care at Lower Cost for Pregnancy PHYSICIAN LEADER: Steve Calvin, MD Medical Director, Minnesota Birth Center 76

77 Better Care at Lower Cost for Pregnancy PHYSICIAN LEADER: Steve Calvin, MD Medical Director, Minnesota Birth Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 33% C-section rate, 2x recommended rate 25% of mothers want to deliver in a birth center, <2% actually do Significantly lower costs for delivery in birth centers than hospitals 77

78 Better Care at Lower Cost for Pregnancy PHYSICIAN LEADER: Steve Calvin, MD Medical Director, Minnesota Birth Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 33% C-section rate, 2x recommended rate 25% of mothers want to deliver in a birth center, <2% actually do Significantly lower costs for delivery in birth centers than hospitals BARRIERS IN THE CURRENT PAYMENT SYSTEM Inadequate payment or no payment at all for deliveries in birth centers Higher payments to hospitals for C-sections, higher $/hour to physicians for C-sections Impossible to determine or compare total cost of delivery with separate payments for facility, OB/Gyn, pediatrician, and others and separate payments for mother and baby 78

79 Better Care at Lower Cost for Pregnancy PHYSICIAN LEADER: Steve Calvin, MD Medical Director, Minnesota Birth Center OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS 33% C-section rate, 2x recommended rate 25% of mothers want to deliver in a birth center, <2% actually do Significantly lower costs for delivery in birth centers than hospitals BARRIERS IN THE CURRENT PAYMENT SYSTEM Inadequate payment or no payment at all for deliveries in birth centers Higher payments to hospitals for C-sections, higher $/hour to physicians for C-sections Impossible to determine or compare total cost of delivery with separate payments for facility, OB/Gyn, pediatrician, and others and separate payments for mother and baby RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE 68% of deliveries in birth center 9% C-section rate 28% reduction in cost of maternity care 79

80 Better Care at Lower Cost for Emergency Room Patients PHYSICIAN LEADER: Jennifer L. Wiler, MD Assoc. Prof. of Emergency Medicine, University of Colorado 80

81 Better Care at Lower Cost for Emergency Room Patients PHYSICIAN LEADER: Jennifer L. Wiler, MD Assoc. Prof. of Emergency Medicine, University of Colorado OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Many individuals have 3+ Emergency Department visits per year Many frequent ED users have no insurance or inability to afford copays, behavioral health problems, and no PCP 81

82 Better Care at Lower Cost for Emergency Room Patients PHYSICIAN LEADER: Jennifer L. Wiler, MD Assoc. Prof. of Emergency Medicine, University of Colorado OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Many individuals have 3+ Emergency Department visits per year Many frequent ED users have no insurance or inability to afford copays, behavioral health problems, and no PCP BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for patient education and care coordination in the ED No payment for home visits to help patients after discharge No funding to address non-medical needs such as lack of transportation 82

83 Better Care at Lower Cost for Emergency Room Patients PHYSICIAN LEADER: Jennifer L. Wiler, MD Assoc. Prof. of Emergency Medicine, University of Colorado OPPORTUNITIES TO IMPROVE CARE AND LOWER COSTS Many individuals have 3+ Emergency Department visits per year Many frequent ED users have no insurance or inability to afford copays, behavioral health problems, and no PCP BARRIERS IN THE CURRENT PAYMENT SYSTEM No payment for patient education and care coordination in the ED No payment for home visits to help patients after discharge No funding to address non-medical needs such as lack of transportation RESULTS WITH ADEQUATE PAYMENT FOR BETTER CARE 41% fewer ED visits 49% fewer admissions 80% now have a primary care provider 50% lower total spending including cost of program 83

84 How Do You Design a Good Alternative Payment Model?

85 $ Step #1: Identify Avoidable Spending in FFS FEE FOR SERVICE AVOIDABLE OPPORTUNITIES TO REDUCE TOTAL Avoidable Hospital Admissions/Readmissions Unnecessary Tests and Procedures Use of Lower-Cost Settings Use of Lower-Cost Treatments Preventable Complications of Treatment Prevention & Early Identification of Disease NECESSARY 85

86 $ FEE FOR SERVICE Step #2: Identify Barriers in FFS AVOIDABLE NECESSARY UNPAID SERVICES LOSS OF REVENUE BARRIERS IN CURRENT FFS SYSTEM No payment for high-value services Phone calls, s with physicians Services delivered by nurses, community workers Communication/coordination among physicians Non-medical services, e.g., transportation Palliative care for patients at end of life Inadequate payment for patients who need more time or resources Inadequate revenue to cover fixed costs when utilization of services is reduced 86

87 $ FEE FOR SERVICE Step #3: Remove the FFS Barriers ALTERNATIVE PAYMENT MODEL AVOIDABLE NECESSARY ADEQUATE, FLEXIBLE PAYMENT FOR HIGH- VALUE SERVICES Upfront payment to support improved delivery of care UNPAID SERVICES LOSS OF REVENUE 87

88 $ Step #4: Build in Accountability for Results FEE FOR SERVICE AVOIDABLE ALTERNATIVE PAYMENT MODEL LOWER AVOIDABLE NECESSARY ADEQUATE, FLEXIBLE PAYMENT FOR HIGH- VALUE SERVICES Accountability for reducing avoidable spending Upfront payment to support improved delivery of care UNPAID SERVICES LOSS OF REVENUE 88

89 $ True Alternative Payment Models FEE FOR SERVICE AVOIDABLE Can Be Win-Win-Wins ALTERNATIVE PAYMENT MODEL SAVINGS LOWER AVOIDABLE Win for Payer: Lower Total Spending (and Lower Premiums) Win for Patient: Better Care Without Unnecessary Services NECESSARY ADEQUATE, FLEXIBLE PAYMENT FOR HIGH- VALUE SERVICES Win for Providers: Adequate Payment for High-Value Services UNPAID SERVICES LOSS OF REVENUE 89

90 $ FEE FOR SERVICE Most Healthcare Spending Doesn t Go to Physicians AVOIDABLE NECESSARY Physician Payment Hospitals 38% Part D Drugs 22% SNF/HH/Hospice 14% DME/Labs/Meds 12% Physicians 15% Most of the Spending (and Most of the Avoidable Spending) Isn t Going to Physicians 90

91 But Individual Physicians Can t Control All Avoidable Spending FEE FOR SERVICE $ Spending the AVOIDABLE Physician Cannot Control Avoidable Spending Physician Can Control NECESSARY FEE FOR SERVICE PCPs can t reduce surgical site infections surgeons can t prevent diabetic foot ulcers oncologists can t prevent cancer PCPs can help diabetics avoid amputations surgeons can reduce surgical site infections oncologists can reduce complications of cancer treatment Physician Payment 91

92 $ APM Design Must Focus on What Physician Can Control CURRENT FFS ALTERNATIVE PAYMENT MODEL Avoidable Spending Physician Can Control Necessary Spending Physician Payment Unpaid Service Revenue Loss SAVINGS Avoidable Spending ADEQUATE, FLEXIBLE PAYMENT FOR HIGH- VALUE SERVICES 92

93 Multiple APMs Needed for Different Opportunities & Barriers APM #1: Payment for a High-Value Service APM #2: Condition-Based Payment for a Physician s Services APM #3: Multi-Physician Bundled Payment APM #4: Physician-Facility Procedure Bundle APM #5: Warrantied Payment for Physician Services APM #6: Episode Payment for a Procedure APM #7: Condition-Based Payment 93

94 Example: Reducing Preventable Admissions for Chronic Disease 94

95 Example: Reducing Preventable Admissions for Chronic Disease PCP Payments CURRENT UNDER FFS $/Patient # Pts Total $ Office Visits $ $150,000 PCP Management of Chronic Disease 500 patients with a chronic condition (e.g., asthma, COPD, diabetes, etc.) 3 visits with PCP each $100/visit 95

96 Example: Reducing Preventable Admissions for Chronic Disease PCP Payments CURRENT UNDER FFS $/Patient # Pts Total $ Office Visits $ $150,000 Hospital Admits $10, $1,000,000 PCP Management of Chronic Disease 500 patients with a chronic condition (e.g., asthma, COPD, diabetes, etc.) 3 visits with PCP each $100/visit 20% of patients are hospitalized during the $10,000 per admission 96

97 Example: Reducing Preventable Admissions for Chronic Disease PCP Payments CURRENT UNDER FFS $/Patient # Pts Total $ Office Visits $ $150,000 Hospital Admits $10, $1,000,000 Payer Spending 500 $1,150,000 PCP Management of Chronic Disease 500 patients with a chronic condition (e.g., asthma, COPD, diabetes, etc.) 3 visits with PCP each $100/visit 20% of patients are hospitalized during the $10,000 per admission 97

98 Example: Reducing Preventable Admissions for Chronic Disease PCP Payments CURRENT UNDER FFS $/Patient # Pts Total $ Office Visits $ $150,000 Hospital Admits $10, $1,000,000 Payer Spending 500 $1,150,000 PCP Revenue $150,000 Practice Costs ($150,000) PCP Margin $0 PCP Management of Chronic Disease 500 patients with a chronic condition (e.g., asthma, COPD, diabetes, etc.) 3 visits with PCP each $100/visit 20% of patients are hospitalized during the $10,000 per admission Current PCP revenue covers the PCP s practice costs 98

99 What if Hiring a Nurse Care Mgr CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 Hospital Admits 100 Payer Spending 500 $1,150,000 PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr $80,000 PCP Margin $0 99

100 What if Hiring a Nurse Care Mgr Could Reduce Hospital Admissions? CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 Hospital Admits % Payer Spending 500 $1,150,000 PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr $80,000 PCP Margin $0 100

101 Significant Savings for Payer from Reducing Hospital Admissions CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,000,000-13% Savings $150,000 PCP Revenue $150,000 $150,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 101

102 Big Financial Loss for PCP Because No Payment for Nurse Care Mgr CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,000,000-13% Savings $150,000 PCP Revenue $150,000 $150,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 ($80,000) 102

103 A Small MIPS/P4P Bonus Won t Solve the Problem CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% MIPS/P4P 4% $6,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,006,000-13% Savings $144,000 PCP Revenue $150,000 $156,000 +4% Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 ($74,000) 103

104 PCP Payments What if We Paid the PCP for Managing Care, Not Just for Visits? CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 Payer Spending 500 $1,150,000 Savings PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr PCP Margin $0 Pay the PCP $13.33/mo per patient to manage the patient s care 104

105 PCP Payments PCP Could Now Afford to Hire the Nurse Care Manager CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 Payer Spending 500 $1,150,000 Savings Pay the PCP $13.33/mo per patient to manage the patient s care PCP Revenue $150,000 $230, % Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 105

106 And the Payer is Still Spending Less CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,080,000-6% Savings $70,000 PCP Revenue $150,000 $230, % Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 106

107 PCP Payments Win-Win-Win for Patient, PCP, and Payer CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,080,000-6% Savings Better Care for Patient $70,000 Lower Spending for Payer Adequate Margin for PCP PCP Revenue $150,000 $230, % Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 107

108 How Does the Payer Know the PCP Will Reduce Hospital Admissions? CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 $10, $1,000,000 0% Payer Spending 500 $1,150,000 PCP Revenue $150,000 $230, % Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 108

109 More $ for PCP with No Change in Admits Increases Total Spending CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 Hospital Admits $10, $1,000,000 $10, $1,000,000 0% Payer Spending 500 $1,150, $1,230,000 +7% Increased Cost ($80,000) PCP Revenue $150,000 $230, % Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 109

110 Solution: Add Accountability for Controlling Hospital Admissions CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 Chronic Care $ $80,000 P4P (goal: 90) $1,800 Hospital Admits $10, $1,000,000 Payer Spending $2, $1,150,000 PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr PCP Margin $0 110

111 Achieving the Goal Creates Payer Savings with Adequate Payment CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 P4P (goal: 90) $1,800 0 $0 Hospital Admits $10, $1,000,000 $10, $900,000-10% Payer Spending $2, $1,150,000 $2, $1,130,000-2% Savings $20,000 PCP Revenue $150,000 $230,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $0 111

112 Failure to Meet Goal Reduces PCP Payment CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 P4P (goal: 90) $1, ($18,000) Hospital Admits $10, $1,000,000 $10, $1,000,000 0% Payer Spending $2, $1,150,000 $2, $1,212,000 5% Increased Cost ($62,000) PCP Revenue $150,000 $212,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 ($18,000) 112

113 Beating the Goal Benefits Patients, Payers, and PCP CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $150,000 0% Chronic Care $ $80,000 P4P (goal: 90) $1,800 5 $9,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,089,000-5% Savings $61,000 PCP Revenue $150,000 $239,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $9,

114 APM= Adequate Payment + PCP Payments CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Chronic Care $ $80,000 Nurse Care Mgr ($80,000) 114

115 APM= Adequate Payment + Accountability for Achievable Goals CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Chronic Care $ $80,000 P4P (goal: 90) $1,800 Hospital Admits Nurse Care Mgr ($80,000) 115

116 APM #1: Payment for a High-Value Service Continuation of existing FFS payments Payment for additional services Measurement of avoidable utilization and/or quality/outcomes Adjustment of payment amounts based on performance 116

117 Medicare Comprehensive Primary Care Plus TRACK 1 Comprehensive Primary Care Plus (CPC+) Current FFS: Practice continues to bill for office visits Care Management Fee (CMF): Average of $15 per patient per month Performance-Based Incentive Payment: $2.50 per patient per month Quality: $1.25 returned for failure to meet quality/patient experience goals Utilization: $1.25 returned for failure to meet ED visit/admission goals 117

118 Not Just PCPs; Similar Approach Can Be Used for Specialist Payment Oncology Helping patients avoid ED visits/admissions for complications of chemotherapy Cardiology Helping heart failure patients avoid ED visits/hospitalizations Pulmonology Helping COPD patients avoid ED visits/hospitalizations Allergy/Asthma/Immunology Helping asthma patients avoid ED visits/hospitalizations Gastroenterology Helping inflammatory bowel disease patients avoid ED visits/hospitalizations Rheumatology Helping rheumatoid arthritis patients avoid ED visits/hospitalizations 118

119 PCP Payments What If Better Managed Patients Need Fewer Office Visits? CURRENT UNDER FFS APM #1 $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Office Visits $ $150,000 $ $100,000-33% Chronic Care $ $80,000 P4P (goal: 90) $1,800 5 $9,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,039,000-10% Savings $101,000 PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr PCP Margin $0 119

120 Continued Reliance on FFS Results in a Win-Lose for Payer & PCP CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 $ $100,000-33% Chronic Care $ $80,000 P4P (goal: 90) $1,800 5 $9,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,039,000-10% Savings $101,000 PCP Revenue $150,000 $189,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 ($41,000) 120

121 PCP Payments Solution: Pay for All PCP Services Using a Monthly Payment CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Office Visits $ $150,000 $0 Chronic Care $ $230,000 P4P (goal: 90) Hospital Admits $10, $1,000,000 Payer Spending 500 $1,150,000 Savings Pay the PCP $38.33/mo. per patient to manage the patient s care PCP Revenue $150,000 Practice Costs ($150,000) Nurse Care Mgr PCP Margin $0 121

122 Adequate & Flexible Payment for PCP with Accountability for Results CURRENT UNDER FFS APM $/Patient # Pts Total $ $/Patient # Pts Total $ Chg PCP Payments Office Visits $ $150,000 Chronic Care $ $230,000 P4P (goal: 90) $1,800 5 $9,000 Hospital Admits $10, $1,000,000 $10, $850,000-15% Payer Spending 500 $1,150, $1,089,000-5% Savings $61,000 PCP Revenue $150,000 $239,000 Practice Costs ($150,000) ($150,000) Nurse Care Mgr ($80,000) PCP Margin $0 $9,

123 APM #2: Condition-Based Payment for a Physician s Services Payment based on the patient s health condition(s) rather than specific services delivered Payment replaces some or all current FFS payments Measurement of appropriateness and/or outcomes Adjustment of payments based on performance 123

124 Medicare Comprehensive Primary Care Plus TRACK 1 Comprehensive Primary Care Plus (CPC+) Current FFS: Practice continues to bill for office visits Care Management Fee (CMF): Average of $15 per patient per month Performance-Based Incentive Payment: $2.50 per patient per month Quality: $1.25 returned for failure to meet quality/patient experience goals Utilization: $1.25 returned for failure to meet ED visit/admission goals TRACK 2 CPC+ Reduced FFS: Office visits and other payments reduced by 40%-65% Comprehensive Primary Care Payment (CPCP): PMPM equal to 35-60% of prior average billings on FFS Care Management Fee: Average of $28 per patient per month Performance-Based Incentive Payment: $4.00 per patient per month 124

125 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis 125

126 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis Primary Care CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Treatment of Knee Osteoarthritis 100 patients with knee pain visit PCP for evaluation 126

127 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis Primary Care CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Treatment of Knee Osteoarthritis 100 patients with knee pain visit PCP for evaluation Physical therapy used by 20% of patients 127

128 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis Primary Care CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Treatment of Knee Osteoarthritis 100 patients with knee pain visit PCP for evaluation Physical therapy used by 20% of patients Surgery performed procedure on 80% of evaluated patients 128

129 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis Primary Care CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Treatment of Knee Osteoarthritis 100 patients with knee pain visit PCP for evaluation Physical therapy used by 20% of patients Surgery performed procedure on 80% of evaluated patients 129

130 Example 2: Reducing Avoidable Surgeries for Knee Osteoarthritis Primary Care CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Treatment of Knee Osteoarthritis 100 patients with knee pain visit PCP for evaluation Physical therapy used by 20% of patients Surgery performed procedure on 80% of evaluated patients 25% of surgeries avoidable with better outpatient management 130

131 Primary Care Under FFS, Low Payment for Diagnosis & Treatment Planning CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,

132 Primary Care Under FFS, Low Payment for Non-Surgical Options CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,

133 Primary Care Under FFS, High Payment for CURRENT $/Patient # Pts Total $ Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Surgery 133

134 Under FFS, Fewer Surgeries = Losses for Surgeons & Hospitals CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 $1, $84,000-25% Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096,

135 A P4P/MIPS Bonus to the Surgeon Doesn t Offset Loss of Revenue CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 $1, $87,360-22% Hospital Pmt Surgeries $12, $960,000 +4% Total Pmt/Cost 100 $1,096,

136 Is There a Better Way? CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000? Non-Surg.Tx Management $ $4,000? Phys. Therapy $ $10,000? Subtotal $14,000 Surgeon $1, $112,000? Hospital Pmt Surgeries $12, $960,000? Total Pmt/Cost 100 $1,096,

137 Primary Care A Better Way: Pay PCPs for Good Diagnosis & Treatment Planning CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Evaluations $ $10,000 $200 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Better Payment for Condition Management PCP paid adequately to help patient decide on treatment options 137

138 Primary Care A Better Way: Pay Adequately for Non-Surgical Management CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Evaluations $ $10,000 $200 Non-Surg.Tx Management $ $4,000 $500 Phys. Therapy $ $10,000 $750 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Better Payment for Condition Management PCP paid adequately to help patient decide on treatment options Physiatrists & physical therapists paid to deliver effective non-surgical care 138

139 Primary Care A Better Way: Pay Adequately For the Necessary Surgeries CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Evaluations $ $10,000 $200 Non-Surg.Tx Management $ $4,000 $500 Phys. Therapy $ $10,000 $750 Subtotal $14,000 Surgeon $1, $112,000 $2,100 Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,000 Better Payment for Condition Management PCP paid adequately to help patient decide on treatment options Physiatrists & physical therapists paid to deliver effective non-surgical care Surgeon paid more per surgery for patients who need surgery 139

140 If That Results in 25% Fewer Surgeries CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ Non-Surg.Tx Management $ $4,000 $ Phys. Therapy $ $10,000 $ Subtotal $14,000 Surgeon $1, $112,000 $2, Hospital Pmt Surgeries $12, $960,000 $12, Total Pmt/Cost 100 $1,096,

141 Physicians Could Be Paid More CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 Total Pmt/Cost 100 $1,096,

142 Physicians Could Be Paid More.While Still Reducing Total $ CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096, $916,000-16% 142

143 Win-Win-Win for Physicians, Payers, & Patients CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096, $916,000-16% Physicians Win Patients Win Payer Wins 143

144 What About the Hospital? CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096, $916,000-16% Hospital Loses 144

145 Do Hospitals Have to Lose In Order for Physicians & Payers To Win? CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096, $916,000-16% Physicians Win Hospital Loses Payer Wins 145

146 What Should Matter to Hospitals is Margin, Not Revenues (Volume) 146

147 $000 Hospital Costs Are Not Proportional to Utilization Cost & Revenue Changes With Fewer Patients 20% reduction in volume 7% reduction in cost $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Costs. #Patients 147

148 $000 Reductions in Utilization Reduce Revenues More Than Costs Cost & Revenue Changes With Fewer Patients 20% reduction in volume 7% reduction in cost 20% reduction in revenue $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Revenues Costs #Patients 148

149 $000 Causing Negative Margins for Hospitals Cost & Revenue Changes With Fewer Patients Payers Will Be Underpaying For Care If Surgeries, Readmissions, Etc. Are Reduced $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Revenues Costs #Patients 149

150 $000 But Spending Can Be Reduced Without Bankrupting Hospitals Cost & Revenue Changes With Fewer Patients Payers Can $1,000 Still Save $ $980 Without Causing $960 Negative Margins $940 for Hospital $920 $900 $880 Revenues $860 Costs $840 $820 $800 #Patients 150

151 We Need to Understand the Hospital s Cost Structure CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Surgeries $12, $960,000 $12, $720,000-25% Total Pmt/Cost 100 $1,096, $916,000-16% 151

152 Adequacy of Payment Depends On Fixed/Variable Costs & Margins CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 Variable Costs $5,400 45% $432,000 Margin $600 5% $48,000 Subtotal $12, $960,000 Total Pmt/Cost 100 $1,096,

153 Now, if the Number of Procedures is Reduced CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 Variable Costs $5,400 45% $432,000 Margin $600 5% $48,000 Subtotal $12, $960, Total Pmt/Cost 100 $1,096,

154 Fixed Costs Will Remain the Same (in the Short Run) CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 Margin $600 5% $48,000 Subtotal $12, $960, Total Pmt/Cost 100 $1,096,

155 Variable Costs Will Go Down in Proportion to Procedures CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 Subtotal $12, $960, Total Pmt/Cost 100 $1,096,

156 And Even With a Higher Margin for the Hospital CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, Total Pmt/Cost 100 $1,096,

157 The Hospital Gets Less Total Revenue But Higher Margin CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Total Pmt/Cost 100 $1,096,

158 And The Payer Still Saves Money CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Total Pmt/Cost 100 $1,096, $1,052,800-4% 158

159 Win-Win-Win-Win for Patients, Physicians, Hospital, and Payer CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Physicians Win Hospital Wins Payer Wins Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Total Pmt/Cost 100 $1,096, $1,052,800-4% 159

160 What Payment Model Supports This Win-Win-Win Approach? CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Total Pmt/Cost 100 $1,096, $1,052,800-4% 160

161 Renegotiating Every Individual Fee is Impractical CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960,000 $14, $856,800-11% Total Pmt/Cost 100 $1,096, $1,052,800-4% 161

162 What Assures The Payer That There Will Be Fewer Procedures? CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $5,400 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960,000 $14, $856,800-11% Total Pmt/Cost 100 $1,096, $1,052,800-4%? 162

163 Solution:Pay Based on the Patient s Condition, Not on the Procedures CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Fixed Costs $6,000 50% $480,000 Variable Costs $5,400 45% $432,000 Margin $600 5% $48,000 Subtotal $12, $960,000 Total Pmt/Cost $10, $1,096,

164 Plan to Offer Care of the Condition at a Lower Cost Per Patient CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 Surgeon $1, $112,000 Hospital Pmt Fixed Costs $6,000 50% $480,000 Variable Costs $5,400 45% $432,000 Margin $600 5% $48,000 Subtotal $12, $960,000 Total Pmt/Cost $10, $1,096,000 $10, % 164

165 Use the Payment as a Budget to Redesign Care CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10, $20, % Non-Surg.Tx Management $ $4,000 Phys. Therapy $ $10,000 Subtotal $14,000 $50, % Surgeon $1, $112, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 Variable Costs $5,400 45% $432,000 $324,000 Margin $600 5% $48,000 $52,800 Subtotal $12, $960, $856,800 Total Pmt/Cost $10, $1,096,000 $10, $1,052,800-4% 165

166 And Let Providers & Hospitals Decide How They Should Be Paid CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $500 Phys. Therapy $ $10,000 $750 Subtotal $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 Variable Costs $5,400 45% $432,000 $324,000 Margin $600 5% $48,000 $52,800 Subtotal $12, $960, $856,800 Total Pmt/Cost $10, $1,096,000 $10, $1,052,800-4% 166

167 Condition-Based Payment Allows True Win-Win-Win Solutions CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg Primary Care Evaluations $ $10,000 $ $20, % Non-Surg.Tx Management $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % Subtotal $14,000 $50, % Physicians Win Surgeon $1, $112,000 $2, $126, % Hospital Wins Payer Wins Hospital Pmt $200 Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Condition Pmt. $10, $1,096,000 $10, $1,052,800-4% 167

168 APM #7: Condition-Based Payment Payment based on the patient s health condition Payment covers multiple treatment options delivered by the physician(s) and other providers Measurement of appropriateness, quality, and/or outcomes Adjustment of payments based on performance 168

169 Opportunities for Fewer Procedures for Many Conditions Knee Osteoarthritis Home-based rehab instead of facility-based rehab Physical therapy instead of surgery Maternity Care Vaginal delivery instead of C-Section Term delivery instead of early elective delivery Delivery in birth center instead of hospital Chest Pain Non-invasive imaging instead of invasive imaging Medical management instead of invasive treatment 169

170 Primary Care Condition-Based Payment Requires Condition Mgt Team a Team Approach to Care Delivery CURRENT FUTURE $/Patient # Pts Total $ $/Patient # Pts Total $ Chg $ $10,000 $ $20, % $ $4,000 $ $20, % Phys. Therapy $ $10,000 $ $30, % $14,000 $50, % Surgeon $1, $112,000 $2, $126, % Hospital Pmt Fixed Costs $6,000 50% $480,000 $480,000 0% Variable Costs $5,400 45% $432,000 $324,000-25% Margin $600 5% $48,000 $52, % Subtotal $12, $960, $856,800-11% Condition Pmt. $10, $1,096,000 $10, $1,052,800-4% 170

171 If You re No Longer Paying Based on the Services Delivered, How Does the Patient Know They re Not Being Undertreated?

172 To Prevent Undertreatment, Tie Payment to Outcomes Patient return to functionality Lack of pain Avoiding infections for surgery 172

173 Patients Differ in Their Need for Surgery vs. Physical Therapy LOWER-RISK PATIENTS HIGHER-RISK PATIENTS # Pts # Pts Primary Care Evaluations Non-Surg.Tx Management Phys. Therapy Surgery % Need Surgery 80% Need Surgery 173

174 Condition-Based Payment Amount Must Be Stratified on Patient Needs LOWER-RISK PATIENTS HIGHER-RISK PATIENTS $/Patient # Pts Total $ $/Patient # Pts Total $ Primary Care Evaluations $ $10,000 $ $10,000 Non-Surg.Tx Management $ $15,000 $ $5,000 Phys. Therapy $ $22,500 $ $7,500 Subtotal $37,500 $12,500 Surgeon $2, $42,000 $2, $84,000 Hospital Pmt Fixed Costs $192,000 $288,000 Variable Costs $5,400 $108,000 $5,400 $216,000 Margin $21,120 $31,680 Subtotal 20 $321, $535,680 Total Pmt/Cost $8, $410,620 $12, $642,

175 More Than Comorbidities Affect Patient Need and Outcomes Most risk adjustment systems are based on comorbidities measured by ICD diagnosis codes But current diagnosis codes don t measure many factors used to determine appropriateness and risk of poor outcomes: Radiologic measure of joint space narrowing and bone attrition Knee joint mobility and stability Severity of pain Patient functional status Nature of patient activities Trial of and response to physical therapy and medications Risk adjustment systems such as CMS Hierarchical Condition Categories (HCC) won t support APMs Physicians need to identify the factors that affect costs and outcomes and start tracking that information to support more patient-focused payment systems 175

176 Factors Needed for Risk Adjustment Differ by Condition Cancer Asthma Headache Stage of cancer Frequency of asthma Type of headaches symptoms Patient functional status Frequency of headaches Severity of asthma Toxicity of treatment symptoms Severity of headaches Response to initial Response to initial treatments treatments 176

177 Should Providers Fear the Risks of Alternative Payment Models? Risks Under APMs Will the amount of payment be adequate to cover the services patients need? Will risk adjustment be adequate to control for differences in need? How will you control the costs of other providers involved in the care in the alternative payment model? What portion of payments will be withheld based on quality measures? Will you have enough patients to cover the costs of managing the new payment? 177

178 Risk Is Not New to Providers, It s Just Different Risk in APMs Risks Under FFS Will fee levels from payers be adequate to cover the costs of delivering services? What utilization controls will payers impose on your services? What value-based reductions will be made in your payments based on efficiency measures? What value-based reductions will be made in your fees based on quality measures? Will you have enough patients to cover your practice or hospital expenses? Risks Under APMs Will the amount of payment be adequate to cover the services patients need? Will risk adjustment be adequate to control for differences in need? How will you control the costs of other providers involved in the care in the alternative payment model? What portion of payments will be withheld based on quality measures? Will you have enough patients to cover the costs of managing the new payment? 178

179 There Are NOT (Just) Two Choices Under MACRA #1 MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS) MACRA #2 CMS-DESIGNED ALTERNATIVE PAYMENT MODELS (e.g., Shared Savings ACOs) 179

180 There are 3 Paths to the Future: Which Will Physicians Choose? #1 MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS) MACRA #2 CMS-DESIGNED ALTERNATIVE PAYMENT MODELS (e.g., Shared Savings ACOs) #3 PHYSICIAN-DESIGNED ALTERNATIVE PAYMENT MODELS 180

181 A Different Triple Aim Better Care for Patients Physicians having the flexibility to design care that matches patient needs Lower Spending for Payers Physicians able to use the best combination of services for patients without worrying about which service generates more profits Financially Viable Physician Practices (and Hospitals) Physicians paid adequately to deliver high-quality care Physicians able to remain independent if they want to Hospitals paid adequately to cover their standby costs Hospitals able to thrive without acquiring physician practices 181

182 Learn More About Win-Win-Win Payment and Delivery Reform 182