Future Healthcare Payment Models An Overview

Transcription

1 Future Healthcare Payment Models An Overview Carter Dredge

2 THERE IS A CRITICAL NEED TO TRANSFORM HEALTHCARE DELIVERY & PAYMENT 2

3 Significant Variation in Population Utilization Spine Surgeries per 1,000 Medicare Enrollees Source: Dartmouth Atlas of Healthcare

4 Significant Variation in Intra-Episode Utilization 4

5 Paying for Medicare Income taxes would have to increase by more than 160% to finance growth at the historical rate of 2.5 percentage points faster than GDP growth, increasing the income tax rate in the top bracket, for example, to 92% from 35%. The Economics of Financing Medicare, New England Journal, July 2011

6 Getting to Affordability Intermountain Healthcare Patient Services Net Revenue in Millions $6,000 Lower Revenue Rate Increases Manage Utilization $5,500 Historical Revenue Growth Trend $5,000 $4,500 $4,000 $3,500 $3,

7 We Have A Number of Options for Payment Reform Reference: APII Public Meeting

8 If I took the liberty to update this today * * ** *** Where we will focus on our discussion Episodic and Global Payment the Clear Winners *Robert Mechanic & Stuart Altman (Health Affairs -2009)

9 Total Cost Per Person Cost = Per X Process Processes Per Episode X Episodes Per Person Examples Cost per Day in a Hospital # of Days in a Hospital A Hospital Stay Incentive Efficiency Intra-Episode Utilization Population Utilization FFS Bundled Global

10 Bundled Payment Cost Example Total Knee Replacement Payment Hospital Inpatient (i.e. DRG pmt) $ 10,500 Hospital Outpatient $ 500 Inpatient Rehab (IRF) - 25% $ 5,000 Skilled Nursing Facility (SNF) 15% $ 1,500 Home Health 25% $ 750 Home 50% $ 500 Part B Professional (i.e. Professional Fee) $ 3,000 All other Part B (i.e. Pharmacy, DME, etc.) $ 300 Total Episode Cost $ 22,050 10

11 Risks and Rewards Risk = Uncertainty of the level of spending and clinical outcomes Risks and rewards go together More risk is not inherently bad, and typically speaking, the larger the risk, the larger the potential reward; managing risk is about influence, control, and scale Two main classifications of risk for healthcare payment: Actuarial Risk: (e.g. someone getting sick) Performance Risk: (e.g. errors, inefficiencies, patient behavior) Payment reform is about shifting performance risk to providers, with the logic that those providers have more control over these risks RISK CASH TRANSFER 11

12 Clinical Evolution Population Needs- Based Care Management, Evidence Based Prevention and Wellness CDS, Continuum of Care Analytics, Transition Management, Predictive Modeling Value improvement benefits flow exclusively to payers Payment model rewards providers for higher value care Registries, Basic Care Management, Population Analytics, EBM Protocols Limited Capability Payment model rewards focus on acute, episodic care Unmanageable risk for providers Independent Physicians and Hospitals- FFS Insurance Company Bears Financial Risk for a Population Care Coordination Fees- PCMH Bundled Case Rates Payment Evolution Population- Based Risk Contracts Health System Bears Financial Risk for a Population

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14 Barriers to Adopting New Forms of Payment Individual payer initiatives can create first-mover disadvantages Need to reach the tipping point Different episode definitions and a lack of a payment distribution mechanism/network In short Free-riding Not Enough Critical Mass Complexity These Can Be Solved Through Strategic Leadership!

15 In Summary Organizations that want to seriously move to Population Health Management need to do the following key things: Manage the full spectrum of a member s health Accept financial risk to a much broader degree Significantly increase the level of evidence-based high value care provided Engage with patients, clinicians, any many other new partners in new ways Intermountain Healthcare, 2014

16 Retrospective Reconciliation Overview Reference: AHCPII Public Town Hall Hall Meeting

17 Retrospective Reconciliation Thresholds Reference: AHCPII Public Town Hall Meeting

18 Retrospective Reconciliation Gains and Losses Reference: AHCPII Public Town Hall Meeting Reference: AHCPII Public Town Hall Meeting

19 "Because of the way we measure things, it doesn't make sense to do what makes sense. Clayton Christensen

20 Miles Per Gallon 32 Ton-Miles Per Gallon 17 How Do We Measure Success? Source: Greg Poulsen, 2016 Trustee Conference Presentation

21 Population Health Value DME $1 spent on mobility HME potential savings of $17 in fall related costs $1 spent on supplemental O2 therapy potential savings of $10 in avoided COPD complications $1 spent on CPAP therapy potential savings of $7 in obstructive sleep apnea (OSA) complications Source: VGM Spring Meeting (

22 Team-Based Care (i.e. PPC & MHI) Results 13.73% p< Emergency Visits Hospital Admissions 4.15% p< Specialty Visits Laboratory Tests Radiology Tests 2.20% p< PCP Visits Urgent Care Visits % p= % p=0.002 Prescriptions % p= % p< % p< % Change in Utilization Routinized TBC vs. No TBC

23 Team-Based Care (i.e. PPC & MHI) Results All Patients None 1 condition 2 conditions 3 conditions 4 conditions >5 conditions $-115 p=0.008 $-72 p=0.184 $-191 p=0.010 $-285 p=0.025 $-981 p< $-745 p=0.029 PMPY Impact (Delivery System Payments) by # of Chronic Conditions Routinized TBC vs. No TBC $-1349 p=0.060

24 TeleHealth PPC & MHI Continuous Improvement and Analytics Patient Education Health Promo & Wellness New SelectHealth Products Capital Budgeting Pricing / Transparency Building The Bridge Integrated Care Management Regional Alignment Structure Payer Contracts Shared Dec Benefit Design Fee for Service World Evidence Based Medicine Used Evidence Based Medicine Defined Physician Pmt Model Homecare Services Population Health Management World

25 WHY SHOULD WE TRANSFORM HEALTHCARE PAYMENT?

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30 Thank You! Questions? Carter Dredge