cisummit 2013: bruce landon, clinically integrated networks and acos: preparing for risk and reward
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Clinically Integrated Networks and ACOs: Preparing for Risk and Reward
Bruce E. Landon, M.D., M.B.A.
Connected Insight Summit 2013October 8, 2013
Agenda
• Background—Policy context• Defining ACOs• Déjà vu• Identifying Organizations• Early Evidence and Major challenges
* Estimate is statistically different from estimate for the previous year shown (p<.05).
SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2013.
Average Annual Premiums for Single and Family Coverage, 1999-2013
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000
$16,351*
$15,745*
$15,073*
$13,770*
$13,375*
$12,680*
$12,106*
$11,480*
$10,880*
$9,950*
$9,068*
$8,003*
$7,061*
$6,438*
$5,791*
$5,884*
$5,615*
$5,429*
$5,049*
$4,824*
$4,704*
$4,479*
$4,242*
$4,024*
$3,695*
$3,383*
$3,083*
$2,689*
$2,471*
$2,196*
Single CoverageFamily Coverage
Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2013
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
50%
100%
150%
200%
250%
57%
119%
182%
56%
117%
196%
14%
34%
50%
11%
29%40%
Health Insurance PremiumsWorkers' Contribution to PremiumsWorkers' EarningsOverall Inflation
SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2013. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2013; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2013 (April to April).
Health Insurance Coverage in MA
Motivation
UnsustainableSpending
Sub-optimalQuality
“Accountable” CareOrganizations (ACOs)
Defining Accountable Care Organizations (ACOs)
• A group of providers (can include hospitals) that accepts joint accountability for health care spending and quality for a defined population of patients.– Spending compared to a target “budget”– Quality measured separately– Patients either elect in or are assigned
(prospectively or retrospectively)
The Evolution of Payment Systems:From Quantity to Value
Fee-for-ServicePay for performance
Bundled/Global payment (capitation)
• Time spent improving quality is time away from revenue generating visits
• Rewards quantity over quality
• Adds incentives for quality performance
• May support infrastructure costs
• Rewarded if downstream spending avoided
• Robust quality incentives needed
Accountability for SpendingKey: Spending is measured relative to a target.
1-sided ACOSpending
Target
This yearLast year Next year
Savings
Excess
2-sided ACO
-- Penalty
Reward Reward
Determined by FFS
Spending
ACOs in MedicarePioneer– 32 “Advanced” orgs, 15,000+
benes– 1 sided2 sided riskglobal
payment – Prospective assignment– 669,000 benes
• Shared Savings Program– Section 3022 of ACA– 220 selected, 5,000+ benes– Mostly one-sided (215/220)– Retrospective assignment– 3.2 million benes
Déjà vu?
• Why is today different?• What did we learn from the 90s?
Back in the 90s….
• What happened if an organization performed really well?
LOWER BUDGETS!
Multiyear Agreements
• Global payment is now a multi-period game– Success is not (necessarily) rewarded with a
budget cut!• Sufficiently long to learn and then accrue the
benefits of improved care management• Changing practice (and culture takes time)• Growth rates trend down over time
“I wish I could help you. The problem is that you’re too sick for managed care.”
Selection
• If risk plans siphon the healthiest patients, savings might be illusory
• Many examples from the past– Medicare plans with offices on the second floor– Offering free gym memberships, sneakers, etc.
Risk Adjustment
• Used to be age/sex • Now age/sex/diagnoses
– uses concurrent to adjust prospectively set budgets
– Best models (DxCG)– Diagnoses (in), procedures/drugs/hospitalizations
(out)• R2 20.6% in commercial, 15-17% in Medicare
• Prior spending for your population
Flying Blind
Infrastructure
• Better, more available data• Widespread adoption of EMRs (particularly
here)• Increasing EMR functionality• E-prescribing• Care management systems, enhanced ability
to coordinate and manage care
Robust Quality Incentives
• Pay for performance and other infrastructure payments
• Robust sets of measures (AQC and Medicare)• Higher amounts at stake
– AQC: originally up to 10% of budget, now determines shared savings
– Medicare: determines shared savings
Accountability for QualityKey: Quality is measured and reported, with incentives tied to performance.
Domain # Example
Patient Experience 7 Patient’s rating of doctor
Care Coordination 6 Rates of readmissions
Preventive health 8 Tobacco screening
At-risk populations 12 Hemoglobin A1c < 8%
Medicare “Shared Savings Program”
Year 1 – pay for reportingYears 2-3 – pay for reporting and performance
Who Should Become an ACO?
Potential Winners and Losers?
McWilliams, Chernew, Zaslavsky, Landon. Delivery System Integration and Health Care Spending and Quality for Medicare Beneficiaries. JAMA Intern Med. 2013;173(15):1447-1456. doi:10.1001/jamainternmed.2013.6886
Profligate Spenders v. Organized Groups?
• Profligate Spenders– Loosely connected– Poorly integrated– Culture of excess– But…..budgets will be
generous
• Organized Groups– Tightly integrated– Tightly managed– Culture of value– But…budgets are already
constrained!
Identifying ACOs
• Organic networks could form the rational basis for ACOs– To identify organizations ready to become ACOs– To identify markets ready to transition to global payment
• Monitoring performance– Measuring cohesiveness over time using a variety of
measures– Measuring leakage
Barabasi A. N Engl J Med 2007;357:404-407
Complex Networks of Relevance to Network Medicine
Building Physician Networks
Date of download: 9/21/2012Copyright © 2012 American Medical Association.
All rights reserved.
From: Variation in Patient-Sharing Networks of Physicians Across the United States
JAMA. 2012;308(3):265-273. doi:10.1001/jama.2012.7615
Methods: Community Detection
• Network communities are associated with functional networks
• Identify sets of nodes that are more connected than expected—optimize assignment across communities
• Straw man—compare properties with hospital affiliation networks
Community Detection Algorithm
is number of shared patients between two MDs is the degree (or strength) of node is the number of edges in the network (or their weight) is the community assignment of node is the Kronecker delta which is equal to 1 if the arguments are identical, otherwise it is zero
𝑄= 12𝑚∑
𝑖∑𝑗
[𝐴𝑖𝑗−𝑘𝑖𝑘 𝑗
2𝑚 ]𝛿(𝑠𝑖 , 𝑠 𝑗)
Tallahassee FL and Norfolk VA
Using Administrative Data to Identify Naturally Occurring Networks of Physicians.Landon, Bruce; MD, MBA; Onnela, Jukka-Pekka; Keating, Nancy; MD, MPH; Barnett, Michael; Paul, Sudeshna; OMalley, Alistair; Keegan, Thomas; Christakis, Nicholas; MD, PhD Medical Care. 51(8):715-721, August 2013.
Communities (n=273) Hospitals (n=416)
Percent with at least 1:
Orthopedist 97 97
Ophthalmologist 9 92
Cardiologist 96 87***
Neurologist 91 82**
Psychiatrist 84 76*
Dermatologist 85 75*
Gastroenterologist 86 82
Network Characteristics of Community and Hospital Networks
Percentage of Care in Potential ACOs, at Least 5 PCPs and 3,000+ Patients
0
10
20
30
40
50
Hospital
Community (1 hospital per community)
Emer
gen
cy R
oo
m V
isit
s (%
)
6264666870727476
Adm
issi
ons
(%)
Percentage of Care in Potential ACOs, at Least 5 PCPs and 3,000+ Patients
020406080
100
Phys
icia
n Vi
sits
(%
)
020406080
100
Hospital
Community (1 hospital per community)
PCP
Visi
ts (%
)
Overall Standardized to Median Sized Hospital
Standardized to Median Sized Community
020406080
100
Spec
ialis
t Vis
its
(%)
Early Evidence
The Alternative Quality Contract (BCBSMA)
The “Halo” Effect(Spillover to Medicare Patients)
McWilliams, Landon, Chernew. JAMA. 2013;310(8):829-836. doi:10.1001/jama.2013.276302
1
Challenges/Issues
• Alignment of Incentives• “Keeping Score”*• Investing to reorganize care delivery• Disincentives for advanced organizations• ACO model versus Medicare Advantage
*Perspective. Keeping Score under a Global Payment System. Bruce E. Landon, M.D., M.B.A.N Engl J Med 2012; 366:393-395
Viewpoint July 24, 2013. Reenvisioning Specialty Care and Payment Under Global Payment SystemsBruce E. Landon, MD, MBA; David H. Roberts, MD
Conclusions
• Maintaining the status quo is no longer tenable• ACOs are at the vanguard of a larger movement
towards payment reform• Time of great change…with great opportunity• To succeed under these arrangements will take
significant efforts to reorganize how care is delivered
• Network Science might provide useful tools for identifying and tracking ACO performance
Thank you!
• landon@hcp.med.harvard.edu• blandon@bidmc.harvard.edu
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