www.openminds.com n 15 Lincoln Square, Gettysburg, Pennsylvania 17325 n 717-334-1329 n [email protected]
Succeeding In A Value-Based Health & Human Service Landscape:
Best Practices, Key Competencies & Strategies For Success
Ken Carr, Senior Associate, OPEN MINDS
June 13, 2019
2© 2018 OPEN MINDS© 2018 OPEN MINDS
Agenda
I. The Changing Health & Human Services Market Landscape, & The Drivers Shaping Value-Based Reimbursement
II. Strategic Implications Of The Market Changes & How Value-Based Reimbursement Is Being Implemented
III. Organizational Competencies & Management Best Practices For Value-Based Contracting
IV. Strategies For Engaging Payers In Value-Based Reimbursement Discussions
V. Six Key Strategies For Success In A Changing Market
Expertise
• Financial management of health and human service organizations
• Health information management and EHR selection and implementation
• Strategic planning and change management
• Strategic management and business process improvement
Highlights
• Chief Financial Officer, Elite DNA Therapy Services –Fort Myers, Florida
• Chief Financial Officer, The Centers – Ocala, Florida
• Chief Financial Officer, Guild Incorporated – St. Paul, Minnesota
• Administrative Director, American Red Cross National Testing Laboratory – St. Paul, Minnesota
Ken Carr, Senior Associate,
OPEN MINDS
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I. The Changing Health & Human Services Market Landscape, & The
Drivers Shaping Value-Based Reimbursement
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Service Delivery System Is Evolving –The Market Results Are An Unpredictable Synergy Of Many Factors
Science & Technology
Policy & Politics
Demographics & Culture
Health & Human Service Financing & Delivery System
Services For Consumers – Access, Treatment Model, Professional Setting
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Executive Teams Are Challenged By A Few Key Drivers Of Change
Mental Health & SDoH Drive Integrated & Coordinated
Care
Changing Reimbursement
New Technologies
Emerging Consumerism
Changing Sustainability
Drives Consolidation
The Landscape
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Acute care
Post-acute care
Primary care
Long-term care
Social and
human services
Facility-based Community-based Home-based
Payers & Health Plans Looking To “Care Coordination” & “Integration” To Reduce Costs – By Shifting Service Model
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More Managed Care
Payer Type
2011, % Of
U.S.
Population
Covered
2016, % Of
U.S.
Population
Covered
2011, % Of
Population
Enrolled In
Managed
Care
2016, % Of
Population
Enrolled In
Managed
Care
2017, % Of
Population
Enrolled In
Managed
Care
Medicare,
non dual eligible 14% 15% 23% 32% N/AMedicare,
dual eligible 3% 3% 25% 38% N/A
Medicaid 18% 23% 50% 70% 80%
Commercial 52% 54% 93% 98% 99%
Military 3% 3% 57% 49% 100%
Uninsured 15% 9% N/A N/A 9%
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The New Lexicon Of Managed Care
Managed care organization
Managed behavioral health
organization
Managing entity
Minnesota Managed Care
The Landscape
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Who is served by MCOs?
Families and children – 348,780
Adults with disabilities – 53,527
Seniors – 55,717
How much does it cost?
$5 billion annually
Federal law requires competitive procurement
State law requires re-procurement every five years
2019 procurement for 2020 contracts:
Greater Minnesota families and children with MinnesotaCare
Seniors
2020 procurement for 2021 contracts:
Metro families and children, including Next Generation IHP, and MinnesotaCare
Focus of re-procurement is quality care and best value
The next procurement will be open to for-profit MCOs
75% - DHS funding
through MCOs
25% - Fee for service
claims
© 2018 OPEN MINDS
ACO Overview, 2016
ACO
Contract
Payer
Number
Of ACOs
Number
Of
Contracts
Total
Beneficiaries
Percent Of
Attributed
Consumers
Medicare 412 485 14,615,007 41.7%
Medicaid 44 55 3,243,728 9.2%
Commercial 156 229 17,219,745 49.1%
Multiple
Contracts77 - - -
Total 689 769 35,078,480 100%
More ACOs
412
689
1011
2013
2016
2018Number Of ACOs
12.1%
2016
4.4%
2013
11.9
35.1 32.7
2013 2016 2018
Lives Covered (Millions)
U.S. Insured Population
Covered By An ACO
The Landscape
10.0%
2018
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The New Lexicon Of Accountable Care
Sustainability &
Infrastructure
Payment & Performance
on Cost
Members –Consumer
Assignment
Integration of Services
Quality & Patient
Outcomes Measurement
Accountable Care Organization
Independent Provider Associations
Patient Centered Medical Home
Total cost of care
Risk sharing
Upside risk
Downside risk
Minnesota Integrated Health Partnerships
The Landscape
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Key Decisions
2018 OPEN MINDS
Altair ACO
• Twelve disability service members
serving over 12,000 individuals
• Care coordination through “LifePlan
Model”
• Defines service outcome benchmarks
• Collaboration across multiple service
types:
• Disability services
• Behavioral health
• Primary care
• Public health
• Focus on developing improvement in
Health Information Technology/Health
Information Exchange
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Coordinates services for member
organizations serving individuals with
disabilities
Provides quality measurement and data
analytics to track outcomes
Facilitates information exchange
Implements alternate payment methods
ACO Advantages:
Better integration of services and consumer
choice through shared data and collaborative
relationships
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The Changing World Of Health Plans
Medical loss ratio limitations
Smaller subsidies for plans on health exchanges
Downward pressure on rates and increased competition
(from each other and from ACOs)
Focus on human service coordination for consumers with
complex needs
Consolidation to gain scale in operating costs
Backward integration – via acquisitions and gainsharing
reimbursement arrangements with providers
Large investments in technological substitution
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Commercial Health Plans Using More VBR
95.4% of commercial health plans have P4P and FFS
payments for behavioral health organizations
40% of commercial health plan reimbursements to in-
network provider organizations in 2014 are linked to
value-oriented initiatives. . . up from 11% in 2013
There are 156 ACOs with commercial contracts serving
over 17 million consumers in 2016
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State Medicaid Plans & Medicaid Health Plans Using Value-Based Reimbursement
Value-based reimbursement and alternative payment models are being used in some form across 46 states, District of Columbia, and Puerto Rico. The states of Georgia, Indiana, Mississippi, and West Virginia are the only States not engaged
Episode of care programs have been implemented across 16 states
At least 22 states are using or planning to use ACO or ACO-like entities
There are 38 states that are pursing State Innovation Models Initiative (SIM) Grants
Comprehensive Primary Care Plus (CPC+) has been approved in 18 states
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2018 OPEN MINDS
Medicare & Medicare Health Plans Using Value-Based Reimbursement
In 2016, Medicare moved 30% of payments to alternative payment models with a goal
to hit 50% by the end of 2018
618 ACOs with more than 8.9 million Medicare beneficiaries
97% of Medicare Advantage plans have P4P and FFS payments for behavioral health
organizations
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All Types Of Services Moving To Pay-For-Value
Specialty medical homes for consumers with serious mental
illness (SMI), addictions, traumatic brain injury (TBI),
Alzheimer’s, and chronic health conditions – with all care
coordination services paid in per member per month (PMPM)
payment
Capitated contracts for Intellectual and Developmental
Disabilities (I/DD) services – Kansas Medicaid and 18 other
states to follow
Capitated contracts for senior services (including nursing
home care) planned for 19 state Medicaid plans
Case rates for children’s services in child welfare system
Case rates for TBI support services
Voluntary self-directed I/DD services with individuals
consumer budgets launching in California
Pay-for-value changes the rules for service reimbursement – and opens up opportunities for leveraging new science and technology to reduce costs and improve consumer convenience.
The Landscape
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Changing Provider Reimbursement Models To Support “Integration”
Of the 38 states with Medicaid managed care, 22 require the Medicaid health plans to implement VBR with provider organizations At least 11 states have Medicaid ACOs
81% of Medicaid health plans have P4P FFS payments for behavioral health organizations
47% of Medicaid health plans have bundled payments for specific acute episodes
Nationally, specialty provider organizations with VBR revenue: 41% of primary care organizations
33% of behavioral health organizations
34% of child and family services organizations
14% of I/DD and LTSS organizations
The Landscape
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Value-Based Reimbursement Here To Stay Because...
Political and competitive pressure on payers –federal government and employers
Downward price pressure on health plans
Pressure on health plan medical loss ratios
The success of ‘some’ ACOs
The early findings of the Medicare bundled rate initiative
Return to fee-for-service not feasible – only “lever” in FFS is to reduce rates
Consumerism
Technology
adoption
Value-based
reimbursement
“Integration” for
improved cost and
quality
The Landscape
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Shifting Role Of Technology In Health & Human Services
Administrative Tool
Compliance Requirement
Platform For Competitive Advantage
Compliance focus the past ten years
– Result - less focus on usability and clinical effectiveness
From ‘cost’ to ‘investment’
From ‘administrative management’ to ‘imbedded in service lines’
– Essential for competitive advantage – and market positioning - over the next five years
The Landscape
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Optimizing Organizational
Performance, Care
Coordination & Population
Health Management
Getting The Necessary
Data
Technology Infrastructure To Support Performance Management
Electronic
health records
Health information exchange
and data aggregation
Care
coordination
platforms
Advanced population analytics
and clinical decision support
Performance
monitoring and
management tools
Consumer
segmentation
and health risk
stratification
Consumer referral trackingPatient registries
The Landscape
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Reducing Service Cost
Engaging Consumers
Technology Infrastructure To Optimize Value Of Consumer Care
Patient portals,
websites, and web-
based consumer tools
Automated
consumer outreach
Telehealth and
telemedicine
Remote
monitoring and
distributedservice platforms
Tech improving
admin efficiencies
of staff
Tech-enabled
treatment
services
The Landscape
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The Four-Stage Evolution Of Service Lines In Health & Human Services
Stage I: The Transition To (Semi) Competitive Market
Stage 2: The Integration Phase
Stage 3: The Value-Based Reimbursement Phase
Stage 4: The Tech Leverage Phase
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The Value Of Investing In Technology
Competitive Advantage Driven By Value To Payers &
Consumers
Product
BenefitBrand
Equity
Marketing
Benefit
Price= Value
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Strategic Quality Concept
Invest in “quality improvement” that differentiates you
from competitors – and customer is willing to pay for
the differential cost
Requires an understanding of:
Customer perceptions
Customer segmentation
Competitive offerings
Customer perceptions of competitive offerings
Price elasticity
Eight Dimensions Of “Quality”
Performance
Features
Reliability of service system
Conformance to standards
Durability and length of effect
Serviceability and customer experience
Aesthetics
Perceived quality
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New developments in many scientific domains are
reshaping health and human
services
Brain science
Augmented intelligence
Enhanced telecommunicatio
ns systems
The Landscape
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Leverage Of Technology To Reinvent Services Key To Long-Term Sustainability
1. Personalization of consumer treatment
2.More effective care coordination
3. Transparency in measurement of “value”
Telehealth and virtual
consultation changing
geographic market
boundaries for services
Smartphone and other
technologies for inexpensive consumer-
directed disease
management
Health information exchange provides data exchange and creates
‘big data’ for better consumer service
planning
New treatment technologies have
changed the options for consumers
Technologies permit task shifting to less expensive
staff
The Landscape
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The New Consumerism
Consumer Engagement
Consumer Transparency
Consumer Financial
Participation
Consumer Experience &
Consumer Choice
The Landscape
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The New Consumerism
Consumer Engagement
Consumer Transparency
Consumer Financial
Participation
Consumer Experience &
Consumer Choice
Consumer engagement =
Process to help individuals take action to improve their
health, make informed decisions, and engage
effectively and efficiently with the health care system
Expected results =
Improved health status, reduced costs, and better
access
The Landscape
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The New Consumerism
Consumer Engagement
Consumer Transparency
Consumer Financial
Participation
Consumer Experience &
Consumer Choice
Consumer transparency =
Making available, in a reliable, and understandable manner, information on the health care system's quality, efficiency and consumer experience with care, which includes price and quality
data
Expected results =
Improved service quality and reduced costs
The Landscape
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The New Consumerism
Consumer Engagement
Consumer Transparency
Consumer Financial
Participation
Consumer Experience &
Consumer Choice
Consumer financial participation =
Proportion of health care spending paid by the
consumer
Expected results =
Reduced costs by increasing engagement
and reducing unnecessary expenses
The Landscape
40% Of U.S.
adults can't
cover $400
unexpected
expense
Average
lifetime out-of-
pocket cost for
65+ person in
U.S. is $130,000
Average annual
out-of-pocket
cost for under
65 is ~$750)
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The New Consumerism
Consumer Engagement
Consumer Transparency
Consumer Financial
Participation
Consumer Experience &
Consumer Choice
Consumer experience =
How consumers perceive their interaction with an organization, evaluated as useful, usable, and
enjoyable - resulting in the consumer perception of an
organization’s brand
Expected results =
Improved consumer preference for certain provider
organizations – while improving their level of engagement
The Landscape
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The New Competition
“Consolidator companies” putting pressure on fee-
for-service rates by mergers/acquisitions that
increase size/scale of organization
“Disruptor organizations” are offering new service
models that are appealing to consumers, health
plans, and payers
The Landscape
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The New Lexicon Of MA&A
“Specialty care”
boundaries
Geographic service
boundaries
Virtual delivery systems
Health system function
expansion –payer,
provider, vendor
Health plan consolidation
and backward integration
Health plan merger
Health plan backward integration
Health system merger
National health systems evolution
Health systems acquiring specialty capabilities
Specialty provider organization merger
National ‘specialty’ delivery system evolution
Health plans/pharma combinations
Provider organizations/pharma combinations
Pharma/tech combinations
Tech-enabled service delivery
The ‘Melting’ Value Chain Driving
Mergers, Acquisitions, & Affiliations
The Landscape
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Consolidation Continues in Health Systems
Some Of The Largest Health Systems – Annual Revenue
Ascension Health – $22.6 Billion
Trinity Health – $17.6 Billion
Catholic Health Initiatives – $15.5 Billion
UPMC - $11.4 Billion
Dignity Health – $10.2 Billion
Atrium Health - $9.8 Billion
John Hopkins Medicine - $8 Billion
Mercy Bon Secours – $8 Billion
LifePoint Health - $6.3 Billion
Providence Health & Services - $6 Billion
Northwestern Memorial Healthcare - $4.6 Billion
Adventist Health System – $3.9 Billion
Prime Healthcare - $3.3 Billion
The Landscape
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Consolidation Continues In Specialty Service Providers
Some Of The Largest Specialty Provider Organizations – Annual Revenue
Universal Health Services (UHS) – $10.4 Billion Elwyn - $276 Million
Kindred Healthcare – $6 Billion Mosaic – $232.3 Million
Acadia Healthcare – $2.8 Billion Bancroft – $146 Million
ResCare – $1.5 Billion Woods Services – $132 Million
Civitas Solutions – $1.4 Billion Public Health Management Corporation –
$155.5 Million
Sunrise Senior Living – $1.2 Billion Uplift – $118.1 Million
Merakey – $525 Million Atria Senior Living – $64.2 Million
Capital Senior Living – $463.6 Million Enlivant – $34 Million
Devereux – $429 Million Sequel – $33.5 Million
Centerstone – $400 Million Strategic Behavioral Health – $29.6 Million
American Addiction Centers – $318 Million KidsPeace – $28.5 Million
The Landscape
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New Competitors Form Disruptive Combinations
May 2018 – United Healthcare signs value-based
venture with Quest and LabCorp
January 2018 – Netsmart and American Well partner to
build telehealth network
2015 – Oscar health plan receives $165 M investment
from Alphabet (google)
May 2018 - ProMedica and Welltower partner to acquire
HCR ManorCare
December 2017 – Humana & TPG Capital acquire
Kindred Healthcare
December 2017 – CVS Health acquires Aetna
The Landscape
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Virtual Behavioral Health Delivery Systems
The Landscape
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Private Equity Investments In The Complex Consumer Space Increasing
CareGiver - I/DD
ExpertCare - I/DD
Suncoast New Options – I/DD
Florida Autism Center - Autism
Community Psychiatric – Mental Health
Agape – Addiction Treatment
Haven Behavioral - Mental Health
InnerChange - Mental Health
Walden Behavioral – Mental Health
Sun Behavioral - Mental Health
Sequel Youth & Family – Children’s Residential
Center For Autism & Related Disorders – Autism
AdvoServ - I/DD
BrghtSpring - I/DD
The Landscape
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Strategies For Achieving “Scale”
Talent Contracting Technology Capital
Merger
Acquisition
Collaboration
Integrated Provider Association
Administrative Service
Organization (ASO)
For-profit/non-profit issues
Synergies
Why Is Scale Important?
The Landscape
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Leveraging Resources For Scale
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Questions & Discussion
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II. Strategic Implications Of The Market Changes & How Value-Based
Reimbursement Is Being Implemented
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The Fee-For-Service Payer Network Contract
Most fundamental of all business relationships
for provider organizations in health and human services
Often need to begin with privileging professionals individually, rather than being privileged at the
organization level
Difficult market position but often necessary
No assurance of volume and no likelihood of
referrals
Often ‘commodity’ positioning
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Key Challenges In A FFS Environment
Revenue Cycle
• Aligning internal operations to manage payer requirements
Market Positioning
• Position the organization in the market to maximize payer opportunities
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Quality
• Member- and care-giver reported outcome measures
• Access to high quality services
• Provider Profiling
Cost Management
• Least restrictive setting
• Medical/service cost management
• Unit cost trends
Population Health
• Planning tied to population characteristics
• Interventions tied to better understanding of population health and desired outcomes
Evidence-Based Care
• New treatments and technologies
• Decisions based on clinical guidelines
Data-Driven
ACCESS, COST, QUALITY
Managed Care Principles
© 2018 OPEN MINDS
Triple Aim
High quality services in the least restrictive setting
Broad system of services, including natural supports
Consumers are empowered and engaged
Improved Outcomes
Population Health
Reduced Costs
Managed care and providers agree on the Triple Aim.
© 2018 OPEN MINDS
Tools To Improve Quality & Cost Outcomes
Provider-Focused Tools
• High-performance networks and providers, including
Centers of excellence
• Delivery system innovation, such as patient-
centered medical homes and accountable care
organizations (ACOs)
• Electronic medical records (EHRs), apply population
health characteristics
• Information exchanges and learning collaboratives
• Pre-service / concurrent / retrospective review and
physician education
• Outpatient, inpatient, and pharmacy utilization review
• Provider performance measurement and quality
improvement programs
• Value-based provider payments
Core Tools
• Benefit plan design
• Medical necessity clinical guidelines
and medical/service policies
• Coverage determination guidelines
• Appeals and grievances for members
and for providers
• Technology assessment
Provider & Member-Focused Tools
• Health care information technology
• Sophisticated clinical analytics to identify gaps in
care and in affordability
• Collaborative measurement projects, using multi-
payer claims databases
• Administrative simplification through automation
Member-Focused Tools
• Health and wellness programs
• Case management
• Disease or condition management
• Care coordination
• Transparency re: provider performance
• Consumer-directed incentives for healthier
behavior
• Value-based benefits, including tiered benefit
and rewards to seek services with high
value providers
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Cost/Effectiveness Analysis Of MCO Interventions
10
100
0
Intervention Effectiveness
Intervention
Cost
• Effectiveness of typical interventions plotted against
the relative cost per consumer to implement
• For example, incentives may be effective an
intervention as benefit design is far more expensive
to implement
Peer
Comparisons Outcomes
Rating By
Case
Benefit
Structure
Provider
Newsletter
Mailed
Education
Materials
Provider
Letter
General
CEU
Session
Public
Recognition
Targeted
CEU
Session
Formal
Patient
Steerage
Provider
Transparency
Intensive
Case
Management
Feedback
Incentives
Provider
Detailing
Auditing
Against
Guidelines
Utilization
Review
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Strategic Implications Of Managed Care Principles
• Develop positive payor relationships
• Evaluate measure collection and analysis against measures expected by payors/state
• Understand unit costs and improvement opportunities
• Review current workflows against managed care requirements (e.g., authorization rules, reports)
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The Shifting Reimbursement Market
A Change In Focus:
Reducing Costs While Delivering &
Demonstrating Value
A Change In Methods:
Managed Care & Value-Based Purchasing
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Business Model Transition For Provider Organizations
Payer Policy
Pay-For-Cost/Volume
Payer Policy Pay-For-Value
Business Model
What is paid for is
good for the
consumer and
doing more is the
business model
Business Model
Giving the
consumer (and
their payer) good
outcomes at a low
cost, conveniently
A revolution in
performance
management
required
Focus on achieving
outcomes and
managing risk
Focus on maximizing
price and managing
volume
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Capitation + Performance
-Based Contracting
CapitationShared RiskShared Savings
Bundled & Episodic
Payments
Performance-Based
Contracting
Fee-for-service
Transition Of Payment To Provider Organizations From Volume To Value
Compensation Continuum By Level Of Financial Risk
No Financial Accountability Moderate Financial Accountability Full Financial Accountability
Passive Involvement Provider Engaged Provider Active In Management Providers Assumes Accountability
Management Via 100% Case By
Case External Review
Internal Ownership Of Performance
Using Internal Data Management
Small % Of Financial Risk Moderate % Of Financial Risk Large % Of Financial Risk
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Reimbursement Methods
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Fee-for-service
Pay for performance
Case rate or bundled rate
Diagnosis Related Group (DRG)
Shared savings and shared risk
Capitation
1
2
3
4
5
6
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• Payments match services
• Complete utilization data
• More transparency
• Provides audit trail
Pros
• Incentivizes over utilization
• Rigid and stands in the way of innovation
• Discourages efficiencies of integrated care
Cons
53
Definition: Separate payment to a health care
provider for each unbundled medical service
rendered to a patient
FFS Example
• “ABC” Health Plan pays a flat rate of $110
for CPT 90791 for a qualified, credentialed,
independent licensed provider
• “XYZ” Heath Plan pays a flat rate of $750
for Rev code 124 for acute inpatient level of
care after approved authorization
Fee-For-Service (FFS)
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© 2018 OPEN MINDS
• Incentivizes behavior change
• Lead to improvement of quality measures
• Encourage more efficient coordination
Pros
• Provider only focused on care that affects measures, and ignore other factors - “manage to metric” or “cherry pick” member
• Incentive may not be large enough to promote behavior change
• Provider could see overall reduction in revenue if unable to fill vacancy
• Difficult to evaluate causality v. random fluctuation
Cons
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Definition: Providers are financially rewarded for
meeting pre-established targets for delivery of
healthcare services
Pay For Performance Example
• “ABC” Health Plan pays an escalator of up
to 6% for rev code 124 (acute inpatient
level of care) based on achievement of
HEDIS 7-day ambulatory follow up
• “ABC” Plan pays a 1 time bonus of
$50,000 for achievement of key
performance measures included assuring
consumer compliance with annual dentist
visit
Pay For Performance
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• May decrease need for authorization and concurrent review
• Controls cost per episode
• Incentivizes fewer re-admissions
• Can bundle multiple services and promote innovation
Pros
• Incentivizes shifting treatment to other settings or codes
• Increase oversight to manage quality
• Increases risk to providers
• Potential for double payment if member switches provider
• Encourages discharge once member passes breakeven point
• Incentivizes admissions
• Need to make many assumptions, e.g.. service mix, license mix, etc
• Requires system to support
Cons
55
Definition: A flat payment for a group of procedures
and/or servicesCase Rate Or Bundle Rate Example
• “ABC” Health Plan pays a monthly rate of
$1,200 for Medication Assisted Treatment
(MAT) to include medication management,
counseling services, and lab services
associated with treatment, excluding
medication costs
• “XYZ” Health Plan pays a case rate of $7,000
for acute inpatient episode to include all
services (e.g., physician fees, labs, etc.) for a
single treatment episode. A readmission
warranty includes a 10% withhold for any case
that is readmitted within 90 days of treatment
• “EFG” Health Plan pays a tiered case rate of
$800 for day 1 of treatment, $600 for days 3-5,
and $200 for Days 6 and 7 with no payment
after day 7 for acute inpatient treatment
Case Rate Or Bundled Rate
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Minnesota Certified Community Behavioral Health Clinic
• Outpatient mental health and substance use
services
• Primary care screening and monitoring
• Screening, assessment and diagnosis,
including risk management
• Psychiatric rehabilitation services, including
ARMHS and CTSS
• Crisis mental health services, including 24-
mobile crisis teams, emergency crisis
Intervention services and crisis stabilization
• Patient-centered treatment planning
• Targeted case management
• Peer and family support
• Services for members of the armed forces
and veterans
• Connections with other providers and
systems
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Service delivery model
Focused on integration of mental health and
substance use disorder treatment services
Integration is across all health and social
services
Improved access
Evidence-based protocols – to provide
specific, consistent outcomes
Alternate payment method:
Daily “bundled” encounter rate
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• Single predictable payment allows provider to manage services
• Generally state of CMS-defined
Pros
• May not include outlier protocols for complex cases
• May be more medically driven
• May focus scrutiny on admission approval
Cons
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Definition: A flat payment for a bundled group of
procedures and/or services that are needed to treat a
particular disease
DRG Example
• “ABC” Health Plan pays 100% of the state-
defined DRG with no outlier methodology.
Diagnosis Related Group (DRG)
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• Offer a reward split among those contributing to the success (e.g., payer supports analytics and member assignment and provider implements interventions to reduce costs
• Shared risk is a variation in which the provider is “at risk” for the service costs
• Good step toward capitation if successful
Pros
• “Shared” is not always a 50/50 share
• Achievement may result in little room for ongoing improvement—need to develop go-forward model of sustainability
Cons
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Definition: Provider and payer share in the healthcare
savings pool generated by performance improvement
(e.g., reduced behavioral costs or total cost of care)
Shared Savings & Shared Risk Example
• A Core Service Agency (CSA) offers a full
continuum of care and has been assigned
500 seriously and emotionally disturbed
(SED) children to manage with a goal of
improving community tenure and reducing
out-of-state foster care placement.
Achievement of pre-defined target measures
(using baseline year of data) will result in the
Plan and the CSA splitting the savings
(generated from reduced higher level of care
costs) 50/50
• Variation – CSA is at risk for the
membership and splits any achievement
with the Plan, but must pay all services
and provide transparency into service
utilization and costs
Shared Savings & Shared Risk
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• Rewards groups, and in turn those groups’ individual physicians, who deliver cost-efficient care
• Costs stable and predictable
• No billing
Pros
• Takes away from our value proposition, we lose control
• Selection incentives; promotes under-treatment
• Dependent on marketplace factors and a group’s negotiating prowess
• Difficult to reduce capitation payments
• Increase need for oversight
• Must ensure provider stays solvent
• Regulatory hurdles
• Requires system to support
Cons
59
Definition: A set payment for each enrolled person
assigned to that physician or group of physicians,
whether or not that person seeks care, per period of
time
Capitation Example
• An outpatient provider is paid a per
member per month (PMPM) to support the
care coordination of an assigned cohort of
500 individuals that meet the state
definition of severe and persistently
mentally ill (SPMI). The provider can earn a
bonus on top of the PMPM if key
performance measures are achieved.
Capitation
6
© 2018 OPEN MINDS
Key Components Of Performance-Based Contracts
• Submit claims electronically with fast turn around time and/or have data sharing capabilities
• Participate in review and intervention discussion (e.g. once a month)
• Adhere to current managed care requirements and clinical guidelines
Entry Level Criteria
• Balance of Quality and Cost/Efficiency Measures with Social Determinants of Health tracking
• Emphasis on outcome vs treatment process measures
• Examples: PCP visit in past 12 months, #/% employed in integrated program, wages earned over 2 week in paid community job, national core indicators (NCI)
Measures
• Annual escalator
• Bonus payment
• Prorated based on performance to capped amount
Rewards
© 2018 OPEN MINDS
Most Commonly Used Performance Measures Of Specialty Provider Organizations, 2016-2018
Follow-up after hospitalization for
mental illness
Emergency room utilization
Readmission rates Patient or consumer
satisfactionPCP Engagement
Access to care measures
Diabetes screening for people with
Schizophrenia using an antipsychotic
Antidepressant medication
managementCommunity Tenure
Depression monitoring via
PHQ-9
Patient Reported Outcomes
Involvement of family/significant
other
Initiation/engagement of
alcohol and other drugs
Diabetes care –blood sugar controlled
Adherence to antipsychotic medication for
people with schizophrenia
Use of depression screening and follow-
upRisk adjusted ALOS
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The Intersection Of Value-Based Reimbursement (VBR) & Social Determinants Of Health (SDOH)
VBR – Ties reimbursement to quality and efficiency measures Facilitates the achievement of
the triple aim—improving population health, reducing the costs of health care and improving individual member outcomes
Supports provider engagement and payer/provider collaboration
Rewards provider performance on agreed upon measures of quality and utilization
SDOH– Environmental factors that influence a population’s health and functioning (e.g., socio-economic status, transportation, age) Provide important detail that can
guide interventions to achieve VBR goals
Increase understanding of population needs
Move VBR beyond easy-to-access measures that hold greater meaning
62
VBR SDOH
© 2018 OPEN MINDS
Population Health Drivers
10
100
0
Social
inclusion/
exclusion
Impact on Health
Ease of
Collection
What is the return on investment in collecting social
determinants of health?
Disabilty
Income
Age
Ethnicity
Education
Early
childhood
development
Social
Supports
Food
Insecurity
Housing
Access to
Health
Services Healthy
Behaviors
StressLiteracy
2018 OPEN MINDS
ICD-10-CM “Z” Codes For Social Determinants
• Z55 – Problems related to education and
literacy
• Z56 – Problems related to employment and
unemployment
• Z57 – Occupational exposure to risk factors
• Z59 – Problems related to housing and
economic circumstances
• Z60 – Problems related to social
environment
• Z62 – Problems related to upbringing
• Z63 – Other problems related to primary
support group, including family
circumstances
• Z64 – Problems related to certain
psychosocial circumstances
• Z65 – Problems related to other
psychosocial circumstances
64
Can be captures as part of ICD-10 coding
Potential health hazards related to
socioeconomic and psychosocial
circumstances
Requires an assessment at the time of primary
care or other health services
Focus of “Z” codes:
To better track the impact of social
determinants and create referrals by
healthcare professionals
© 2018 OPEN MINDS
What Are the Pay-For-Value Reimbursement Options?
Medical Homes & Specialty Medical Homes
Capitation And/Or Population Health Gainsharing Arrangements
With P
ay-F
or-
Perf
orm
ance C
om
ponents
Specialist
positioning
Comprehensivist
positioning
Case
Rates &
Bundled Rates
65
© 2018 OPEN MINDS
Case Rates, Bundled Rates, Episodic Payments
Based on:
Diagnosis or functional status
Other consumer characteristics
Package of services included
Length of time
Payment of a flat amount for a defined group of procedures and services
Per treatment episode Per time period
Case Rates
© 2018 OPEN MINDS
Capitation In Population Health Arrangements
A contracted rate for each member assigned, known as the "per-member-per-
month" (PMPM) rate
Regardless of the number or
nature of services provided
Contractual rates are usually
adjusted for age, gender, illness,
and regional differences
• PMPM for behavioral health treatment benefits (or other cognitive disability support services)
Behavioral Health Carve-Out Capitation
• PMPM to cover the cost of care coordination and preventative services
Medical Home/Health
Home Capitation
• PMPM for primary care services (assess, prescribe, refer)
Primary Care Capitation
• PMPM for cost of delivering all (or some) of the care for a group of consumers
Global Capitation
Capitation/Subcapitation Population Health Capitation
© 2018 OPEN MINDS
Key Effects Of Moving From FFS To Managed VBR
Focus On Outcomes
Create A Data-Driven Culture
Data, Analytics, Change
Management
Implement Effective
Technology
Manage Unit Costs &
Financial Risk
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© 2018 OPEN MINDS
22%
22%
23%
32%
36%
Access to caremeasures
Patient/consumersatisfaction
Emergency roomutilization
Readmission rates
Follow-up afterhospitalization
Follow-Up After Hospitalization & Readmission Rates Are The Most Popular Measures For Determining Performance
Top Five Performance Measures In Value-Based Contracts, %, 2019
69
© 2018 OPEN MINDS
Top Five Performance Measures In Value-Based Reimbursement Contracts With Specialty Provider Organizations, By Market, %, 2019
Top Five Performance Measures By Market, %, 2019
Behavioral Health Child Services I/DD & LTSS Primary Care
1. Follow-up after
hospitalization –
41%
2. Readmission rates
– 33%
3. Access to care
measures – 27%
4. Patient/consumer
satisfaction – 26%
5. Emergency room
utilization – 24%
1. Readmission rates
– 19%
2. Follow-up after
hospitalization –
16%
3. Emergency room
utilization – 13%
4. Access to care
measures – 10%
5. Patient/consumer
satisfaction – 10%
1. Use of evidence-
based care
protocols – 24%
2. Follow-up after
hospitalization –
21%
3. Readmission rates
– 21%
4. Patient/consumer
satisfaction – 14%
5. Emergency room
utilization – 14%
1. Readmission rates
– 58%
2. Follow-up after
hospitalization –
54%
3. Emergency room
utilization – 46%
4. BMI assessment –
46%
5. Annual flu vaccine
– 42%
70
© 2018 OPEN MINDS
17%
19%
19%
23%
25%
39%
Risk management capabilities
Finding the experienced managers to manageperformance-based reimbursement
Managing care coordination for consumers
Lack of clarity about performance requirementsfrom payers
Building needed IT infrastructure
Data management and reporting
% of Organizations
Typ
es O
f C
ha
llen
ge
s
Top Five Challenges To Managing Value, %, 2019Specialty Provider Organization Executive Teams
71
© 2018 OPEN MINDS
Services Focused On Effective Outcomes & Value
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
72
2018 OPEN MINDS
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Services Focused On Effective Outcomes & Value
Specialty care coordination for
consumers with behavioral
disorders
Home-based service delivery
2018 OPEN MINDS
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Services Focused On Effective Outcomes & Value
Hospital readmission
prevention programs
Specialty behavioral health
ER/crisis stabilizationHospital diversion programs
Community-based/mobile crisis
response
2018 OPEN MINDS
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Services Focused On Effective Outcomes & Value
Specialty ‘center of excellence’
programs for acute conditions
Management of short-term
inpatient psychiatric and
addiction treatment programs
2018 OPEN MINDS
Services Focused On Effective Outcomes & Value
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Behavioral health consultation
in office-based service
locations – live or via telehealth
Behavioral health service
system sub-capitation
76
2018 OPEN MINDS
Services Focused On Effective Outcomes & Value
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Management of specific acute
episodes or chronic conditions
via case rate or
episodic/bundled payment
77
2018 OPEN MINDS
Services Focused On Effective Outcomes & Value
Behavioral health service system sub-capitation
Specialty care coordination for consumers with
behavioral disorders
Specialty ‘center of excellence’ programs for
acute conditions
Behavioral health consultation in office-
based service locations –live or via telehealth
Management of specific acute episodes or chronic conditions via case rate or episodic/bundled payment
Management of short-term inpatient psychiatric and addiction treatment
programs
Psychiatric consultation –live or via telehealth – in
hospital emergency rooms
Behavioral health consultation program for inpatient programs – live or via telehealth
Hospital diversion programs
Specialty behavioral health ER/crisis
stabilization
Hospital readmission prevention programs
Community-based/mobile crisis
response
Home-based service delivery
Specialty primary care
Specialty primary care
78
© 2018 OPEN MINDS
Provider Changes In A Value-Based Market
On The Increase Tech-enabled, hybrid service delivery –
BYOD in any location
Programs with superior consumer experience, including web-enabled organization interfaces
Professional “lifestyle” practices
“Top of practice” delivery models
Decision support and process excellence
Any service – medical, behavioral, social – with demonstrated ROI and VBP reimbursement
Case rate/bundled rate service programs for acute and chronic conditions
On The Decrease Provider organizations with poor
consumer interface (access, experience)
High unit cost services without ‘value’ equation
Long-term outpatient services except in EBP
Hospital and residential treatment, overall
Office-based services without tech-enabled consumer link
Solo practice, except for cash
79
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Questions & Discussion
80
© 2018 OPEN MINDS© 2018 OPEN MINDS
III. Organizational Competencies & Management Best Practices For
Value-Based Contracting
81
© 2018 OPEN MINDS
I. Provider Network Management
II. Clinical Management & Clinical Performance Optimization
III. Consumer Access, Service, & Engagement
IV. Financial Management
V. Technology & Reporting Infrastructure
VI. Leadership & Governance
Six Domains In OPEN MINDS Model For Assessing Value-Based Reimbursement Management Readiness
82
© 2018 OPEN MINDS
Four Competencies Of Provider Network Management
1. Network Management & Credentialing
2. Care Coordination &
Care Management
3. Consumer Screening, Care,
Provider Referrals & Case Authorizations
4.Integration of Physical Health,
Behavioral Health & Social Services
I. Provider Network Management
83
© 2018 OPEN MINDS
1. Network Management & Credentialing
Focus:
Ability to negotiate contracts, manage
credentials of clinicians, and meet the requirements of payer
organizations
Key Competencies For Success
Accreditation in serving consumers
with complex needs
Payer relationship management
Identification of payer needs
Effective workflows for managing
clinician credentials
I. Provider Network Management
84
© 2018 OPEN MINDS
2. Care Coordination & Care Management
Focus:
Ability to identify care management needs,
obtain payer authorizations and refer to appropriate
services
Key Competencies For Success
Processes in place to receive care
management referrals, assess
needs and refer consumers for
services
Authorizations expertise
Focus on integration, follow-up and
communications
I. Provider Network Management
85
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3. Consumer Screening, Care Provider Referrals & Case Authorizations
Focus:
Ability to identify high-risk and high-needs
individuals and ensure the more effective care management plan and
services
Key Competencies For Success
Ability to identify high-utilization
consumers
Process to screen, assess and refer
consumers to the appropriate level
of service
Systems to track usage of other
community providers
I. Provider Network Management
86
© 2018 OPEN MINDS
4. Integration Of Physical Health, Behavioral Health & Social Services
Focus:
Ability to ensure that chronic physical health issues are integrated
into the care plan
Key Competencies For Success
Established referral and data
sharing relationships with primary
care
Established protocols for referrals
and care transitions
Focus on identifying consumer
preferences when making primary
care referrals
I. Provider Network Management
87
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Two Key Competencies Of Clinical Management & Performance Optimization
1. Decision Support & Care Standardization
2. Clinical Performance Tracking, Assessment &
Optimization
II. Clinical Management & Clinical Performance Optimization
88
© 2018 OPEN MINDS
1. Decision Support & Care Standardization
Focus:
Ability to use data to determine the most effective evidenced-
based practices
Key Competencies For Success
Standardized guide to care
management and treatment
Implementation of data-informed
planning, treatment and referral
Continuity of care planning and
transition between care settings
II. Clinical Management & Clinical Performance Optimization
89
© 2018 OPEN MINDS
2. Clinical Performance Tracking, Assessment & Optimization
Focus:
Ability to track outcomes, assess how to optimize services,
and implement performance
improvements
Key Competencies For Success
Established KPIs
Ability to measure clinical outcomes
Process to assess outcomes
against KPIs and improve quality
II. Clinical Management & Clinical Performance Optimization
90
© 2018 OPEN MINDS
Seven Key Competencies Of Consumer Access, Service, & Engagement
1. Consumer-Informed Access
To Services
2. Automated Consumer
Service Functionality
3. Mobile Health Applications
4. Consumer Wellness Support
5. Appeals & Grievance
Procedures
6. Consumer Satisfaction Feedback
7. Consumer Performance
Metrics
III. Consumer Access, Service, & Engagement
91
© 2018 OPEN MINDS
1. Consumer-Informed Access To Care
Focus:
Technology to improve consumer access to self-service tools for
both clinical and administrative services
Key Competencies For Success
Access to online forms and
assessment tools
Centralized call center with 24/7
accessibility
Web-enabled provider network
access and self-referral process
Web-enabled follow-up care
processes
III. Consumer Access, Service, & Engagement
92
© 2018 OPEN MINDS
2. Automated Consumer Service Functionality
Focus:
Ability for consumers to seek information and
self-refer to services in a timely fashion
Key Competencies For Success
Focus on identifying and responding
to consumer access preferences
Identification and removal of
consumer barriers to health
information
Care and treatment approach that
involved consumers and family
members
Prompt availability of services
III. Consumer Access, Service, & Engagement
93
© 2018 OPEN MINDS
3. Mobile Health Applications
Focus:
Ability to maximize consumer engagement
through the use of mobile health applications
Key Competencies For Success
Availability of mobile technology that
assists with assessment, clinical
decision support, treatment, and
cognitive function restoration
Availability of mobile technology
supporting early detection of relapse
and relapse prevention
Availability of mobile technology that
makes treatment more accessible
Link of mobile technology to care
coordination functionality
III. Consumer Access, Service, & Engagement
94
© 2018 OPEN MINDS
4. Consumer Wellness Support
Focus:
Ability to educate, provide resources, and
document effectiveness related to
wellness support
Key Competencies For Success
Processes and program to engage
consumers in ongoing wellness
support and self-management
III. Consumer Access, Service, & Engagement
95
© 2018 OPEN MINDS
5. Appeals & Grievance Procedures
Focus:
Ability to receive, investigate, and resolve consumer concerns in a fast, effective manner
Key Competencies For Success
Function to notify consumers of
rights processes related to
grievances and appeals
Established processes for receiving,
tracking, investigating and resolving
consumers’ grievances
Process to inform systems of
provider organizations in system of
care of appeal and grievance
issues, with the focus on preventing
avoidable grievances
III. Consumer Access, Service, & Engagement
96
© 2018 OPEN MINDS
6. Customer Satisfaction Feedback
Focus:
Assess ability to obtain frequent consumer
feedback through easy, non-obtrusive methods
Key Competencies For Success
Survey tools and processes for
obtaining consumer feedback on the
consumer experience including: Access to care
Facilities
Interactions with staff
Effectiveness of treatment
Net promoter score (consumer
willingness to refer other for treatment)
III. Consumer Access, Service, & Engagement
97
© 2018 OPEN MINDS
7. Clinical Performance Metrics
Focus:
Ability to track and analyze outcomes, identify options to
improve services, and quickly change
processes
Key Competencies For Success
Systems in place to measure clinical
quality of care, patient experience
and service cost measures
Transparent process to publicly
report outcomes
Collaborative efforts to identify
performance improvement initiatives
III. Consumer Access, Service, & Engagement
98
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Four Key Competencies Of Financial Management
1. Revenue Cycle Effectiveness
2. Encounter Reporting
3. Value-Based Payment
Capabilities
4. Financial Performance Monitoring
IV. Financial Management
99
© 2018 OPEN MINDS
1. Revenue Cycle Effectiveness
Focus:
Ability to align operational and
financial processes to assure adequate cash
flow
Key Competencies For Success
Effective processes for
reconciliation of authorizations and
payment verification to credentialed
provider organizations
Ability to submit invoices to payers
for services delivered under value-
based reimbursement agreements
IV. Financial Management
100
© 2018 OPEN MINDS
2. Encounter Reporting
Focus:
Ability to capture, analyze, and report
granular utilization data to payers and to internal teams for
management
Key Competencies For Success
Ability to electronically capture and
report reliable encounter data in the
format and in the timeframe
required by payers
Ability to analyze encounter data to
manage service outcomes and
utilization
Aggregation of encounter data to
manage value-based
reimbursement agreements
IV. Financial Management
101
© 2018 OPEN MINDS
3. Value-Based Payment Capabilities
Focus:
Ability to track manage contractual outcomes
and payments
Key Competencies For Success
Ability to report on actual
performance data – outcomes and
financial performance – against
budget and against contractual
targets
Ability to bill for multiple types of
value-based reimbursement models
IV. Financial Management
102
© 2018 OPEN MINDS
4. Financial Performance Monitoring
Focus:
Ability to monitor actual financial results against contracts, budgets, and
forecasts
Key Competencies For Success
Ability to report incurred but not
reported (IBNR) liabilities
Ability to monitor service utilization and
costs and reconcile to service and
revenue projections
System to link population health
management and value-based
contracting strategies to resources
planning and reporting
Comprehensive set of key performance
indicators for short-term and long-term
financial health
IV. Financial Management
103
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Seven Key Competencies Of Technology & Reporting Infrastructure
1. Capacity To Collect Data
2. Capacity To Analyze Data For Population Health
Management
3. Ability To Manage Value-
Based Contracts
4. Ability To Exchange Healthcare Information
5. Care Management Functionality
6. Consumer Portal
Functionality
7. IT Performance Monitoring
V. Technology & Reporting
104
© 2018 OPEN MINDS
1. Capacity To Collect Data
Focus:
Technology infrastructure to collect
data strategic in identifying health
needs of the population of consumers served
Key Competencies For Success
EHR core functionalities fully
implemented
Structured data collection around
assessments, diagnoses, and services
Workflows and processes to ensure
data integrity
Ability to collect data at the time and
source of service provision
V. Technology & Reporting
105
© 2018 OPEN MINDS
2. Capacity To Analyze Data For Population Health Management
Focus:
Ability to perform strategic analysis of
data for risk stratification and care
management
Key Competencies For Success
Development of or access to consumer
data registries
Deployment of data analysis tools
Implementation of risk stratification
strategies
Ability to integrate multiple sources of
data
V. Technology & Reporting
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3. Ability To Manage Value-Based Contracts
Focus:
Ability to track performance metrics, submit invoices, and
maximize performance of value-based
contracts
Key Competencies For Success
EHR functionality that meets billing
requirements for value-based
purchasing models
Integration of clinical, operational and
financial data
Unit costing and cost accounting
capabilities
Predictive modeling and forecasting
capabilities
V. Technology & Reporting
107
© 2018 OPEN MINDS
4. Ability To Exchange Health Care Information
Focus:
Ability to exchange clinical and financial
information with other health care provider
organizations
Key Competencies For Success
Health information exchange
agreements with key providers
Secure infrastructure, policies and
workflows that comply with HIPAA and
HITECH
Service notification agreements,
automation and processes with other
providers
V. Technology & Reporting
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5. Care Management Functionality
Focus:
Ability to manage eligibility, coordination
of benefits, inquiries/referrals,
decision support, care authorization, care coordination and
utilization management
Key Competencies For Success
Automated risk assessment tools
Redesigned workflows to maximize
care management technology
Provider referral database to aid in care
matching and management
V. Technology & Reporting
109
© 2018 OPEN MINDS
6. Consumer Portal Functionality
Focus:
Ability to provide service data, resources and interaction options
with consumers through the EHR
Key Competencies For Success
Convenient, secure access to
personal health information through
the internet
Ability to access staff and services
through technology
Access to forms and account
payment functionality
V. Technology & Reporting
110
© 2018 OPEN MINDS
7. IT Performance Monitoring
Focus:
Ability to monitor actual IT outcomes against
established goals
Key Competencies For Success
Established key performance
indicators
Ability to generate real-time
reporting on performance under
value-based reimbursement
arrangements
V. Technology & Reporting
111
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Three Key Competencies Of Leadership & Governance
1. Strategic Alignment Around Population Health
Management
2. Culture Of Innovation
3. Workforce Adequacy
VI. Leadership & Governance
112
© 2018 OPEN MINDS
1. Strategic Alignment Around Population Health Management
Focus:
Alignment of leadership around population
health management and the ability to
manage financial risk
Key Competencies For Success
Resources and infrastructure to
manage clinical and financial risks
of population health management
VI. Leadership & Governance
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© 2018 OPEN MINDS
2. Workforce Adequacy
Focus:
Ability to attract and retain the right staff to succeed at population health management
Key Competencies For Success
Workforce culture, experience, and
capacity to innovate and adapt to
new service and business models
Ability to attract, develop, and retain
staff with expertise in clinical
innovation, technology. and financial
management
Compensation alignment with
performance outcomes and
strategic priorities
VI. Leadership & Governance
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3. Culture Of Innovation
Focus:
Ability to adapt and realign current services
to meet the needs of population health
management – staff openness to change and ability to develop
new services
Key Competencies For Success
Established and effective quality
improvement processes in place –
Lean, Root Cause Analysis, Six
Sigma
Experience and expertise creating
new services lines
Blue Ocean Strategy
Three Box Solution
VI. Leadership & Governance
115
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Questions & Discussion
116
© 2018 OPEN MINDS© 2018 OPEN MINDS
IV. Strategies For Engaging Payers In Value-Based Reimbursement
Discussions
117
© 2018 OPEN MINDS
Six Key Strategies For Engaging Payers In Value-Based Contracting Discussions
1• External Market Analysis
2• Internal Marketing & Business Development Planning
3• Payer-Focused Service Line Development
4• Health Plan Engagement & Contract Development
5• Payer Relationship Management
6• Performance Management: Delivering On Your Promises
© 2018 OPEN MINDS
Step 1
Assemble the Team
Step 2
Define the Goal
Step 3
Determine Metrics
Step 4
Approach Payer with Proposal, Metrics, Financial Arrangement
Step 5
Develop Reporting Structure
Step 6-10
Launch
• Collect
• Develop
• Monitor
• Review
• Maintain
The 10 Steps Of VBR With A Payer
119
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Assemble the TeamInclude leadership for awareness and those directly engaged in implementation and monitoring
Step 1: Assemble The Team
Example:A residential program seeking a VBC arrangement involved for awareness and buy in- CEO, COO, and clinical leaders. Payer
Relations & Finance Leader coordinated contract with payer review and approval of CFO/CEO. Achieving VBR reward required
workflow changes and technology changes which required engagement of care team across all shifts; CTO to support
availability of technology and discharge planner.
CFO: Name Clinical Leader: Name
CEO: Name Billing: Name
COO: Name Team/Unit Leaders: Name
Data/Reporting/Analytic
Support:
Name Others
(Direct control over implementation of
intervention or vested interest)
Name(s)
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Define the Goal
Example:
a. Reduce out-of-state placement for foster care
b. Increase community tenure
c. Improve consumer reported health & wellness
d. Reduce readmissions
e. Improve medication adherence
Step 2: Define The Goal
Goal
Text here
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Step 3: Determine Metrics
Example:
State offers incentive to improve 7 day follow up
and PCP engagement. MBHO is missing targets
on these measures.
Determine Metrics
a. Balance of Quality & Efficiency metrics
b. Obtain payer and/or State feedback/input
1. What measures is the State/Payer
endorsing or incentivizing
2. What pain points exist for payer/state
client
3. Consider social determinants of health
(SDOH)
Metrics List
Quality: Source:
a) Consumer participates in annual PCP visit.
b) Consumer health outcome score improves on SF-12. change pre and post.
a) Health plan claims
b) SF-12 collected by case based 12 months prior and 12 months
post program engagement
Efficiency:
a) HP Claims
Efficiency:
a) Community tenure
Determine data definition and
collection route
Quality:
Efficiency:
SDOH:
Quality:
Efficiency:
SDOH:
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Step 4: Approach Payer With Proposal, Metrics, Financial Arrangement
Meet with Payer Pitch the Idea
1. Reach as high into organization as
possible – C-Suite
2. Learn payer pain points and objectives
3. Identify payer preferred provider
programs
4. Seek congruence across payers
1. Keep proposal succinct – goal. measurable,
objective, planned activities, return on investment
2. Illustrate this is a “win-win-win” for the payer,
provider, and consumer
3. Find the WIFM (What’s in it for me?)
Do Unit Cost Homework Finalize the Financial Arrangement
1. Map activities and processes
2. Determine cost of each activity process
3. Determine service level unit costs
• Costs per case
• Understand drivers of cost variation
• Cost per diagnosis and clinical path
• Population cost distribution
1. Consider an upside pay for performance as a 1st
step (e.g. bonus for achieving outcomes) prorated
against achievement
2. Risk share should aim for 50/50 split with
estimated return on investment (ROI)
3. Bundle payments may fit if you offer an array of
services each month – know your monthly costs.
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Develop Reporting StructureIt all starts with Structure
Structure Process Outcome
Develop regular structure for reporting (e.g. scorecards), monitoring and evaluation to include intervention
development
a. Ideally, know your scores before the payer scorecard is released
b. Review case level detail weekly, monthly, and in aggregate
c. Capture root cause issues and interventions
d. Leverage EHR and SDOH data to avoid spreadsheet rainfall
Step 5: Develop Reporting Structure
The Value-Based Reimbursement Checklist
© 2018 OPEN MINDS
Step 6-10: Launch
Launch
Collect and analyze data
Develop interventions based on analysis
Monitor intervention impact
Review interventions based on outcomes
Maintain monitoring and evaluation efforts.
Plan
Do
Check
Act
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Revenue Cycle
Referral & Intake
Service Delivery
Billing & Collections
Monitoring & Process
Improvement
• Verifications
• Authorizations
• Credentials
• Documentation
• Claims Submission
• Denials Management
• Payment Receipt &
Posting
• Claims Analytics
• Process
Improvement
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Strategic Financial Implications Of Shifting Reimbursement Market
Improve understanding of cost drivers – manage and reduce costs
Develop infrastructure,
information technology, and re-align processes
Develop competencies and internal
culture to compete in a performance-based market
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How Does Activity Based Costing Work?
Determine and manage the cost of services
Evaluate outsourcing options
Develop “What if” scenarios for service expansion or reduction
Assist marketing staff in product design and service pricing
Develop budgets
Measure performance
Evaluate the cost benefits of alliances or mergers
Map Activities & Processes
Determine The Cost of Each
Activity & Process
Determine How Activities Relate
To Services
Select Measures To Track Each Activity & Its
Cost
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Success Factors
1. Embrace Change
2. Develop Payor Relationships
3. Establish Or Revise Key Performance Indicators
4. Embrace Technology & Innovation
5. Think Collaboratively
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Embrace Change
Key Principles
Success Factor #1
Be a change leader; create a culture that is able to flex and rewards flexibility.
Start at the top but involve every mind.
Address both the rational reason for the change and the emotional case - what’s in it for me (WIFM).
Identify and celebrate small wins; break the change into smaller components.
Assess and communicate, communicate, communicate.
Celebrate success.
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Develop Payor Relationships
• Know what the payer needs and wants.
• Get to know key payer leaders/decision makers on a personal level.
• Pitch a pilot that resonates with the payer’s needs and the provider organization’s needs - Payer/Provider Pilot.
• Community Mental Health Center (CMHC) and payer concerned about medication adherence of high risk members
• Engaged vendor who specialized in co-located pharmacies that offer specialized adherence packaging, consults, alerts, member education, refill reminders, and reporting
• RESULT: $58 PMPM savings; Incentive payment for the CHMC.
Success Factor #2
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Establish Or Revise Key Performance Indicators
Follow-up after hospitalization
Emergency room utilization
Readmission rates Consumer & caregiver
satisfaction
Use of evidence-based care protocols
Access to services measures
Diabetes screening Medication Adherence
Appropriate referrals to other providers
Depression monitoring via PHQ-9
Consumer employmentInvolvement of
family/significant other
Annual eye examConsumer reported
health measuresAnnual Dentist Visit
Annual Physical (PCP engagement)
Success Factor #3
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Measure Performance With Defined Outcomes
Measuring treatment response is an effective quality measure.
• Depression screenings
• Initiation and maintenance of antidepressant medication therapy
• Depression remission
• Identification and treatment of substance use disorders
These typically illustrate provider or consumer adherence to care improvement processes and are substitutes when outcomes may be difficult to calculate.
• Scheduling appointments for 7-and 30-day follow-up after hospitalization for mental illness
• Treatment initiation and engagement benchmarks for substance use disorder
• Notification of inpatient admission
These are quantitative outcomes that demonstrate whether or not a targeted goal was achieved.
• Actual percentage for 7- and 30-day readmissions
• Actual percentage of “kept appointments” for 7-and 30-day follow-up after hospitalization for mental illness
Many behavioral health conditions contribute directly to deficits in social determinants of health. Measurements of social determinant outcomes can illustrate high quality behavioral health outcomes.
• Employment status
• Housing status
• Education status
• Quality of life
• Independent living
Measuring Treatment &
Service ResponseProcess Measures Outcome Measures
Social Determinants Of
Health Measures
Defining Outcomes
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Embrace Technology & Innovation
Success Factor #4
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Diagnostics
• Tele-psychiatry using IronWorks™
• M3 (My Mood Monitor™)
• Brain scanning tech
Consumer Education/ Decision Support
• Video Doctor
• Common Ground
• Virtual Handheld Clinic
• PTSD Coach
• True Colours
• ChronoRecord
• Health Steps for Bipolar
• Biomarker: BDNF levels
• myStrength
Clinical Treatment
• TMS Therapy®
• Beating the Blues
• SilverCloud
Cognitive Function
Restoration
• My Mood Map
• eCBT Mood©
• MyBrain Solutions
Early Detection of
Relapse
• Automatic Trail Making Tests™
• fMRI
• ITAREPS
• MONARCA
• Actiwatch
• Health Buddy®
• OPTIMI
Relapse Prevention
• Technology Enhanced Recovery™
• REAC-CRM (REAC-lithium)
• PSYCHE
• Personalised Ambient Monitoring (PAM)
• MoodMapping
Remote Monitoring of
Patient Health
• ViTelCare™ T400
• SenseWear® Armband System
• MagneTrace
• ID-Cap
• Electronic Medication Management Assistant® (EMMA)
• Implantable RF Transceiver ZL70102
• Motionlogger Actigraph
• Helius™
• MOBUS
Treatment-Enabling Technologies Along The Service Continuum
Success Factor #4
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The Human Support Factor
Coach-supported web-based
interventions
Are effective (ds=.56 – 1.08)
Patients are adherent (~9 logins)
Coaches do not need to be
mental health professionals
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Success Factor #4
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Collaborative Care Model (CoCM)
Primary Care
Practitioner
Behavioral Health
Care ManagerVirtual
Psychiatrist
Collaborative Care Model (CoCM)
Rewards PCP and multi-disciplinary treatment team to screen members for anxiety and depression
Virtual psychiatrist provides consultation to PCP for complex cases
Embedded care manager coordinates care and updates data register
Success Factor #5
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Mental Health Case Study
• CMHC agrees to participate in monthly score card review
• Coordinate with Primary Care Physician (PCP) and other specialty providers to support medical Healthcare Effectiveness Data and Information Set (HEDIS) measure improvement (e.g. Dental appointments)
• Support collaborative care model by offering care coordination support and/or virtual prescriber access
Entry Level Criteria
• Follow up within 7 days post inpatient discharge and 7 days post Emergency Room (ER) visit.
• Diabetes screening
• Community tenure
Measures
• PMPM bonus payment prorated by outcome results
Rewards
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Mental Health/Pharmacy Case Study
• CMHC, Pharmacy programs agree to report measures and meet monthly to review scorecard and implement intervention
• Agreed upon roles and responsibilities regarding consumer engagement workflows
Entry Level Criteria
• Rx adherence measures by percentages of days covered for anti-psychotic medication
• Rx adherence measures by percentages of days covered for anti-depressant medication
• Rx adherence measures by percentages of days covered for diabetes medication
• Rx adherence measures by percentages of days covered for hypertension medication
• Medication gaps
Measures
• PMPM bonus payment prorated by outcome results
Rewards
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V. Six Key Strategies For Success In A Changing Market
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Six Key Strategies To Beat The Disruptive Competition
1• Best Practice Strategy Development & Sustainability – Driven Innovation
2• Adaptive Standardization
3• Market-Responsive Service Line Evolution
4• Metrics-Informed Performance Management
5• Nimble Tech Adoption & Deployment
6• Structure & Team To Manage Complexity
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Strategy For Sustainability Should Drive “Innovation”
1• Develop vision of future competitive advantage and market positioning – set objectives
2• External market analysis and internal portfolio analysis/performance benchmarking
3• Scenario-based strategic plan incorporating alternate future positioning options
4• Detailed plans – marketing, financial, operational, capital, HR, etc. – to implement strategy and future
vision
5• Key performance metrics and metrics-based management to track strategy implementation, and allow
for mid-course adjustments
6
• Optimization of current operations to keep current programs as competitive (and profitable) as possible as long as possible
7• New service line and service model development to support future vision
8• Collaborations and partnerships as needed to facilitate strategy implementation
Innovation
1. Market-Facing Strategy Driving Innovation
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Strategy Development Best Practices
Focused on mission, objectives, and sustainability
Market metrics-informed - tests strategy against
external market realities
Scenario-based (and scenario prepared)
Integrated into budgeting processTranslates strategy into tactics
and action items
Has measurable performance indicators – that allow metrics-
based, incremental implementation
Nimble and adjusted on an on-going basis based on market
metrics and performance metrics
1. Market-Facing Strategy Driving Innovation
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The Building Blocks Of Strategy Success
Market intelligence –understanding the
customers and competitors
Performance metrics – assessing your
performance relative to customer preferences and competitors ability
Strategy – plan for success and
sustainability that directs investment
Talent – leadership staff, technical staff, team communication
and cooperation
Strategy execution –make strategy a reality
1. Market-Facing Strategy Driving Innovation
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The Amazon Flywheel As
Strategic Investment Model
The Concept
A flywheel, when you feed any part of
it, naturally accelerates the entire loop.
1. Market-Facing Strategy Driving Innovation
Lower cost = more customers.
Better customer experience = more customers.
Better customer outcomes = more customers.
More customers = lower cost
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Structured Approach To Improving “Value”
Adaptive standardization –evidence-based standardization of routine care and services
Adaptive response for service line evolution –continual change of service portfolio based on both science and market
Effective performance management – continuous performance measurement ‘hardwired’ into all services
Standardization, Service Lines, & Continuous Improvement Need To Be Driven By
Improving Value Equation
2. Adaptive Standardization
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Standardization Of Clinical & Administrative Processes
Standardization - uniform standards and methods for
delivery of a service that assures maximize safety,
replicability, and performance
Elements of standardization:
Terminology
Processes, approaches, protocols
Personnel
Technical systems – technology, physical plant,
devices, etc.
Results
This is more than measuring ‘fidelity to the model’
Developing rates for value-based
reimbursement requires service
standardization
Business Management
Best Practices
“How we do it”
Clinical Services Best Practice
“What we do”
How Do You Assure That Consumers With The Same Problem Get
The Same Solution & The Same Experience Every Time?
2. Adaptive Standardization
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Continuous Service Line Evolution –Are Your Services Keeping Current With The Market?
Strategic Portfolio Review
Review Of Possible Service Options - New &
Refreshed
Review of New Science &
Technology
Clinical Standards
Review
Business Model Review
Go/No Go Decision &
Implementation Execution
Performance Monitoring & Continuous
Improvement
Continuous portfolio
management critical. . .
3. Responsive Service Line Development
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The Blue Ocean Strategy Model
Blue ocean strategy
focuses not on beating the
competition - but making
the competition irrelevant
by creating new,
uncontested market space
Costs
Buyer Value
Value Creation
3. Responsive Service Line Development
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Metrics-Based Performance Management –How Services Compare To The Competition?
Metrics-based management is
the path from information to
action
Process Strategy
PeopleInformation
Technology
Performance
Metrics
Process Implementation
Process DesignP
rocess M
onito
ring &
Contro
lling
Pro
cess E
xecution
4. Metrics-Based Performance Management
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How To Select What Metrics To Manage?Employ The ‘Strategic Quality’ Concept
Invest in ‘performance improvement’ that
differentiates you from your competitors – and
customers are willing to pay for the differential cost
Part of the ‘market positioning’ of each service
Requires an understanding of:
Customer perceptions
Customer segmentation
Competitive offerings
Customer perceptions of competitive offerings
Price elasticity
Eight Dimensions Of “Strategic Quality”
Performance
Features
Reliability of service system
Conformance to standards
Durability and length of effect
Serviceability and customer experience
Aesthetics
“Perceived” quality
4. Metrics-Based Performance Management
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Manage Performance In All Functions Of The Organization
Customer Experience
Clinical Performance
Compliance
Financial Sustainability
Marketing & Business
Development
Fundraising & Grants
Payer Contract
Performance
Employee Experience
Technology & Data
Analysis
4. Metrics-Based Performance Management
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Focus On Four Types Of Outcomes For VBR Success
The New Value Assessment
1. Contract-Specific Performance
Measures
2. Routine Services and Transactions
3. Great Customer Service
4. Cutting Edge Expertise
4. Metrics-Based Performance Management
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1. Contract-Specific Performance Measures
The floor for success
Requires a payer perspective and a consumer
perspective of ‘value’
Reflect outcomes that are the costliest to the
payer
Reflect outcomes that the payer is accountable
to achieve to receive maximum reimbursement
Mandated Health Home Performance
Measures
Adult body mass index assessment
Controlling high blood pressure
Screening for clinical depression and
follow-up plan
Follow-up after hospitalization for
mental illness (7 and 30 day)
Initiation and engagement of alcohol
and other drug (AOD) dependence
treatment
Plan all-cause readmissions
Prevention quality indicator (PQI) 92:
chronic conditions composite
Ambulatory care: emergency
department visits
Inpatient utilization
Nursing facility utilization
10 National Health Home
Measures
NCQA HEDIS Measures
CMS STARS Measures
Most Common Health Plan
Contract Measures
Your Specific Health Plan
Contract Measures
4. Metrics-Based Performance Management
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2. Routine Services & Transactions
Consumer sovereignty – a business philosophy assuming the best profit will
come from providing customers with the best products and best customer
service at the lowest possible price
The Amazon
Doctrine –
above all else,
align with
customers.
“Win when they
win. Win only
when they win.”
Search Engine Ranking &
Optimization Scores
InquiriesInquiry
Response Time
Inquiry Conversion
Rates
Time To Appointment
Service Rates
4. Metrics-Based Performance Management
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3. Customer Service
Providing service that creates ‘passionate advocates’ of your brand
Designing workflow from a consumer experience perspective –
preventing consumers from “feeling like they are simply another
transaction”
Developing a written
service strategy to
ensure consistency of
consumer experience
– and cultivate
consumer loyalty
Net Promoter Score
Customer Satisfaction
Customer Experience Monitoring (“Mystery
Shopper”) Results
Online Reputation
4. Metrics-Based Performance Management
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4. Clinically Cutting Edge – A Consumer Advisor On Emerging Science
Can you be replaced by an online clinical decision support tool?
Understanding the new science in your area of specialization
Mastering the
new technologies
– and integrating
them into your
service array
(whether you
provide them or
not)
Consistency In ‘Treatment Model’ -
Lack Of Unexplained Variability
Time To Evaluation/Adoption Of
New Treatment Technology
4. Metrics-Based Performance Management
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Top Five Key Performance Indicators
Domain Indicator Goal Review Parameters
Customer
ExperienceNet Promoter
Score
Assessment of customer
satisfaction and referral
development
Response to question about likelihood of
recommending our organization to friends and family
members; Monthly - Total, By Market, By Service
Line, YTD, Previous Year
Employee
ExperienceRevenue lost due
to vacancies
Identification of employee
satisfaction issues impacting
turnover and organizational
sustainability
Average revenue times time open for unfilled
positions; Monthly - Total, By Market, YTD, Previous
Year
Financial
SustainabilityA/R (days in
receivables)
Assessment of future cash flow and
identification of payer issuesTotal A/R divided by average daily charges; Monthly -
Total, By Market, By Service Line, YTD, Previous
Year
Clinical
Performance
ER utilization
(service lines
TBD)
Effectiveness in sustaining recovery
by providing timely, nonacute
services
Monthly - Total, By Market , By Service Line, YTD,
Previous Year – will require data sharing and/or
integration
Technology &
Data AnalysisNumber of report
requests and time
to complete
Organization use of analytics;
analytics resource adequacy and
effectiveness
Count of requests submitted and number of work
days from request to completion; Monthly - Total, By
Market, YTD, Year over year
Customer
ExperienceDays to
appointment
Assessment of customer
satisfaction and service quality
Monthly, Total, By Market, By Service Line, YTD,
Previous Year
4. Metrics-Based Performance Management
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The Big Technology Problem –The Science To Service Gap In Health & Human Services
Adoption Of New
Technologies
New Service Models For
Health & Human
Services
15- to 20-year lag
between the
development of a
practice and its
common use at
the community
level
5. Nimble Tech Adoption
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The Health & Human Service Organization Problem
For success with new tech adoption, health and
human service organizations need:
Metrics-based process improvement - and
competitive performance benchmarking – to
identify needs for strategic tech investment
(and estimate ROI)
Functionality-based technology selection with
ROI analysis
Ownership of technology implementation
Process (and resources) for on-going
technology process/performance curation
Moving beyond
compliance to strategy -
lack of formal process
link of technology to
strategy
5. Nimble Tech Adoption
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Both the technology company and the health and human service organization have to be focused on the same performance metrics –and the same ROI
Health and human service organization managers need to leverage the new processes that technologies create – and not focus on automation of current processes
The tech company and the provider organization partners need to plan ‘beyond the pilot’ for scalability – role in larger health system, on-going operating processes, data interoperability, financing, and more
Making Provider/Vendor Partnerships Work In Health & Human Service Field Requires. . .
5. Nimble Tech Adoption
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Health & Human Service Market Has Gone From Complicated To Complex
When things interact, they change one another in unexpected and
irreversible ways – creating unexpected innovations and outcomes – or
systems emergence.
Complicated systems may have many parts
but when the parts interact they do not change each other
The distinction between ‘‘complexity’’
and ‘‘complicated’’
Complexity is about rich interconnectivity
6. Complexity Management
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Leading In A Complex Environment Requires Adaptive Response
• Complex environments need structures and leaders that
enable adaptive response!
6. Complexity Management
Adaptive space requires two systems – operational and entrepreneurial
Allows team members to take innovation to commercialization – and create a new business model
Provides an organizational construct to resist the “orthodoxy” from winning (allows change to happen)
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Entrepreneurial
Leadership
Enabling
Leadership
Operational
Leadership
Leadership For ChangeNew Leadership Model Needed For Innovation In A Changing Market
6. Complexity Management
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Value, Competitive Advantage, SustainabilityStrategy
Improved Performance
Reduced Cost
New Partnerships
New Service
New Population
New Tech
Sustainable Competitive
Service Model
Innovation
Sustainability In Health & Human Services Needs A Measured Approach To Respond to New (& Disruptive) Competition
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Questions & Discussion
166
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