fifty shades of variation: building a network of high quality performers as you move into risk

of Variation:

Building a Network of High Quality Performers as

You Move into Risk

How to transition intelligently into risk-sharing arrangements by understanding the characteristics of government population and practice pattern analysis

All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.Any use, reproduction or distribution of this information, in whole or in part, or the disclosure of any of its contents

without the prior written consent of the Company, is prohibited.2

Building a Network of High Quality Performers as You Move into Risk

Perverse Incentives

Freedom and Fear

Experimentation and Power

Performance on Display

FIFTY SHADES OF VARIATION




Perverse Incentives

Freedom and Fear






CMS Sun-setting FFS

CAPG: Innovative ExperimentersBroader market: From 5% to 50% risk30 cents / $ from variation drives success in riskNew variation measures and CMS

PERVERSE INCENTIVES



The world is catching up…

Be careful what you wish for

PERVERSE INCENTIVES



CMS is actively sun-setting FFS. You need to become well-versed not just in risk, but in using

government data sets as they will become essential inputs into running any health plan or risk-arrangement in future years.

PERVERSE INCENTIVES



How do we navigate the changing business environment ahead?

Most of your payments go to FFS with maybe some going to P4P

bonus

Payments will be much more diverse including FFS, P4P bonus, bundled payments,

shared savings, and global payments.

Payments Today Future Payment Mix

New and soon-to-be released government programs and arrangements require new metrics that reflect who creates value in risk arrangements (vs. operational box checking)

PERVERSE INCENTIVES



Goal: Reduce the 30% of the U.S.’s healthcare spend that on clinically appropriate, but unnecessary care

Over $9B in Orange County, CA

Want to see how much unnecessary spend is in your market by condition?

Over $66B in Florida

$850 Billion Unnecessary Spend in 2014

PERVERSE INCENTIVES

This drives Fee for Service billing, and will not show up in a traditional utilization review or actuarial analysis. Current Pay for Value metrics do not directly address it.

OrthoCardioReadmissionsEnd of Life

Least Unnecessary Spend

Most Unnecessary Spend

Models identify the cost-savings opportunities in a geography based on the collective intensity of care delivered by doctors in that area.



PERVERSE INCENTIVES

=

Matching collective provider practice patterns and the characteristics of the geographies they serve with

appropriate risk arrangements.

+

Risk-Readiness SMGeographic

ProfilesProviderPracticePatterns

Risk Arrangements

+



At the core of Risk-Readiness℠ is

Unwarranted Variation:

RowdMap applies Dartmouth Atlas for Unwarranted Variation methodologies to data on Medicare Parts B & D. This research has been repeatedly validated over the last 30 years and we now have a national data set to apply the methodologies at a large scale.

The estimated 30% of medical expense that goes to unnecessary care. This unnecessary spend drives billing in a fee-for-serve economic model, but success in pay-for-value comes from managing and mitigating these pockets of variation. Every provider has a unique practice

pattern that informs Risk-Readiness

PERVERSE INCENTIVES


without the prior written consent of the Company, is prohibited.

* Source: Dartmouth Atlas for Unwarranted Variation

*Unwarranted Variation

11

PERVERSE INCENTIVES



Every doctor practices medicine differently.

Some doctors prefer starting with lower intensity approaches…

…while others might jump right to surgery or narcotics.

The collective nuances of how each doctor practices can be aggregated into a unique practice pattern fingerprint.

PERVERSE INCENTIVES



Treatment Patterns highlight differences in pace and intensity of back pain treatment

Each doc has a unique practice pattern. Some docs tend go more quickly to higher intensity options

Figure out your providers then match the revenue models

PERVERSE INCENTIVES



Individual provider’s performance compared to geographic benchmarks

Build Relationships Put on Notice

Some Doctors tend go more quickly To higher intensity options

PERVERSE INCENTIVES



Identify & cultivate providers for riskThis doc is making money for whoever owns the riskThis type of doc is disproportionately important to your network/group

She might not be the highest producing and may cost more…

…but she’s disproportionately

reducing unwarranted costs and unnecessary negative impact

and patient experience

PERVERSE INCENTIVES



PERVERSE INCENTIVES

Great profile for aggressive risk

Tread carefully for some risk

Match appropriate risk arrangements based on provider practice patterns and Population characteristics within a geography.



PERVERSE INCENTIVES

For 50 years, reducing health care spend has focused on the smallest piece of the spending pie.

“It’s generally agreed that about 30 percent of what we spend on health care is unnecessary. If we

eliminate the unneeded care, there are more than enough resources in

our system to cover everybody.”

- Dr. Elliott Fisher,Dartmouth Institute for Health Policy

Shift focus from clinical edits, audits, and recovery efforts to identifying care that is clinically appropriate, but unnecessary. Historical efforts have shown returns, but they only look at a fraction of total spending. Unnecessary care can account for up to 30% of total spending and provides significantly larger opportunities for cost containment and quality improvement.

Fraud, Waste, and Abuse

$0.5bn

Appropriate Utilization$3.5bn

Clinically Appropriate, but Unnecessary Care

$1.0bn



If Dr. Fee for Service had same ratioas Dr. Pay for Value:• His decompression rate would drop from

6.01 to 0.436 per patient.• Which translates to 2,608 fewer

decompressions per year.• At an average cost of $332 per

decompression, this represents potential savings of over $850K

If Dr. Fee for Service’s decompression to fusion rate were average for orthopedic surgeons:• He would have 1629 fewer decompressions

for a potential savings of $540K.

For every 10 back fusions Dr. Fee for Service* does 103

decompressions.

For every 10 back fusions Dr. Pay for Value* does 2 decompressions.

Unwarranted variation = risk in value-based arrangements. You cannot manage risk without managing this variation

that accounts for 30% of your medical expense.

* Drs. names change to illustrate risk arrangement that matches their practice pattern

PERVERSE INCENTIVES



If Dr. Fee for Service had same ratioas Dr. Pay for Value:• His decompression rate would drop from

6.01 to 0.436 per patient.• Which translates to 2,608 fewer

decompressions per year.• At an average cost of $332 per

decompression, this represents potential savings of over $850K

If Dr. Fee for Service’s decompression to fusion rate were average for orthopedic surgeons:• He would have 1629 fewer decompressions

for a potential savings of $540K.

For every 10 back fusions Dr. Fee for Service* does 103

decompressions.

For every 10 back fusions Dr. Pay for Value* does 2 decompressions.

Unwarranted variation = risk in value-based arrangements. You cannot manage risk without managing this variation

that accounts for 30% of your medical expense.

* Drs. names change to illustrate risk arrangement that matches their practice pattern

Magnitudes of order larger savings than traditional utilization, fraud/waste/abuse or compliance/gap closure.

For example, 1 doc in 1 county on 1 DRG funnel = $850k unwarranted / unexpected spend.

This will not show up in traditional utilization review or actuarial analysis.

If only 5% of your book is at risk, you don’t care; but when you move to pay-for-value, this will sink your battleship.

PERVERSE INCENTIVES




Perverse Incentives

Freedom and Fear






New Data – FOIA

Yes, it’s scary, and naming namesIt can be used for poor conclusionsYes, bad PR releases & news

But it’s importantThe information is here and more comingIt can be used to your advantage

You are in the best place to use itMake sure you use it succeed

21

FREEDOM AND FEAR



There’s a lot of data and talk out there

FREEDOM AND FEAR



Let’s cut through

the buzz

FREEDOM AND FEAR



Government performance

data

Government provider etc.

data

Government socio-demo

data

Consumerweb / social

data

Analysis-based deriveddata

Sentiment as a Key Driver (psychographic) - measured by Index scores for: - Domains (chronic, wellness, quality of care, customer satisfaction, customer service);- Brands (parent org and you individually)

Market Growth; Census; Healthy Food; County Health Rankings & Indicators; Behavioral Health Factors; etc.*

Dartmouth Atlas; STAR; Hospital Compare; Actual, Expected & Predicted Readmissions; Part B & D, etc.*

STAR; Price, Bid, Rebate;Hospitals, Nursing Homes; Market, etc.*

* Dozens of Primary Data Sets, updated at various frequencies

When we say a lot…we mean a lot.

FREEDOM AND FEAR



And it’s powerful, disruptive, game changing

David Wennberg,RowdMap Advisory Board

Government Data Outperforms Risk Adjustment!

FREEDOM AND FEAR



New Government Released Referral Data(Patient flows between PCPS, specialists, hospitals and post acute centers)

Dartmouth Atlas for Unwarranted Variation(Decades of research and data on unwarranted variation by condition and geography to keep things apples-to-apples for comparisons, hence “Unwarranted” in the name)

New Government Released Performance Data (Individual providers, groups, hospitals and post acute centers including the new part B&D)

Provider Pattern Intensity Profiles and Risk Readiness for every provider, hospital, post acute center in the US. All preloaded with no IT.

OPEN DATAAffordable Care Act data to determine Risk-Readiness of Providers / Networks

26

FREEDOM AND FEAR



a world where you had access to…

Benchmarks for

every hospitalPrescription patterns

for every doc

Prescription patterns for specific drugs Risk-readiness

score for every

docReferral patterns for your hospitals

FREEDOM AND FEAR



a world where you had access to…

Benchmarks for

every hospitalPrescription patterns

for every doc

Prescription patterns for specific drugs

1-10 score for

every doc

Referral patterns for your hospitals

Well, that world is here, today.

• Even though the AMA was skeptical about these data releases for 30 years, they are now on board.

• You have access to all of these data through government benchmarks.

• CMS understands network data like these are necessary for a competitive, direct-to-consumer health care market.

• No IT, no integration, no data warehouses—it’s here today.

FREEDOM AND FEAR



Here’s why these benchmarks are so powerful

29

Government benchmark data serves as the common language necessary to build relationships with providers to improve the member experience and profitability

The benchmarks are available today with no IT involvement

The data already have a level of analysis on top, so you can see if a provider is over/under benchmarks

It’s from CMS; it’s a standard; it’s already used to day to drive reimbursement

FREEDOM AND FEAR




Perverse Incentives

Freedom and Fear






Uses & Tactics

Design networks for populations

Choose the right risk arrangementCurrent and new (gov or specific payers)Setting up your own plan

Manage practice patterns and referrals

Negotiate with payers from authoritative info

EXPERIMENTATION AND POWER

Where are populations, and how healthy are they?

How do we manage practice variation to contain costs?

How do we highlight our performance & negotiate with payers?

Where are Risk-Ready SM providers, and what arrangements will lead to success?


32All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

Any use, reproduction or distribution of this information, in whole or in part, or the disclosure of any of its contents without the prior written consent of the Company, is prohibited.

32



County Profiles and Risk Drivers

Which counties will likely generate profit in a P&L given a payer’s characteristics?

California




County Health Factors Average Risk Scores

Population Demand & Provider Supply

Where is health risk underrepresented or under-coded?

Which areas have lower risk scores than their behavioral profile / cost drivers.

In other words, where does the population sees providers less and therefore has a lower risk profile based on the geography’s ‘supply’.






Chronic Prevalence Snohomish County, WA

Income

Obesity

Depression

PCP DensitySnohomish County, WA

Proximity to provider is more important for this geography. Is my network aligned to not only meet adequacy

but to reflect my member demographic?





Proximity to provider is more important for this geography. Is my network aligned to not only meet adequacy

but to reflect my member demographic?

Chronic Prevalence Los Angeles County , CA PCP Density

Los Angeles County, CA

Income

Obesity

Depression



Network Opportunity Index


Where are providers delivering the most efficient and appropriate care?








38



Which providers match which arrangements

Good candidates for full cap and aggressive risk

arrangements

Tread carefully and ramp up with upside here

Provider Risk-ReadinessLos Angeles County, CA




What’s driving a specific provider’s performance in comparison to peers?

Los Angeles County, CAProvider Benchmarks


Tread carefully with referrals

Drug costs and scripts per patient driving low

costs per patient

Los Angeles CountyCareMore Med. Group Physicians Physician Risk-Readiness

Individual physicians with the largest panels are

the most risk-ready




Which physicians are driving a group’s risk-readiness?



How do local hospitals perform against national benchmarks?

EOL Hosp Days: Which hospitals fewer end-of-life days than their peers?

Chronic Admits: Which hospitals see their most chronic population repeatedly/ with the most frequency?

Cardiac Imaging: Which hospitals are more likely to over-utilize cardiac imaging compared to their peers?

Hospital Profiles and Risk Drivers




Spending 1-30 Days Post Discharge

Long Beach Memorial Med. Center

43

What are the patterns of care and preferred pathways?

Hospital Risk Drivers


Readmissions



Market Share & Hospital Benchmarks

Hospital Profiles

Cedars Sinai Medical Center

Los Angeles County, CA

Where are providers delivering the most and the appropriate care?




How do local post acute centers perform against national benchmarks? How are local hospitals routing, especially those

with poor chronic readmits & post discharge rates?


Post Acute Center Profiles



Physician Name

Decompression / Fusion Funnel

Avg Cost Per

Patient


Physician Segments by Risk-Readiness SM

Identify providers who are best suited for more aggressive risk arrangements, curated networks, ACOs

and setting up plans.








47

48

Least Unnecessary Spend

Most Unnecessary Spend

Option 2: Reinforce highest-performing referral

and care pathways. Increase the number of patient

interactions with green dot doctors.

Option 1: Improve provider performance and change provider practice patterns.

Increase the number of green dot doctors.

Zoom to zip




Primary Care Dx Radiologist

Green = good performance; red = bad. Find the highest performing patient flows and

encourage care to happen through those pathways.

Referral Patterns and Physician Value Chains

49


NPI

NPI

NPINPINPI

NPI

NPI

NPI

NPINPI

NPI

NPINPI

NPINPI

NPI

NPI

NPI

NPI

NPI

NPI

Neuro or Ortho





Referral Patterns and Physician Value Chains

Identify high performing providers and downstream referral patterns. Encourage referrals to

high-performing specialists. 50









51



Put your best foot forward and explain the value you create using government benchmarks. For example, providers that are risk ready and

limit unnecessary spending will not show up in a utilization review and may have a higher unit costs but create value for whoever owns the risk. Highlight high benchmark performers looking to grow. Highlight providers

with large panels with efforts to improve efficiency.

Large panel and improving.

High performers with practice patterns out-performing unit cost

and utilization analysis due to case mix and population factors.

Looking to grow.


Negotiate from Unnecessary Spend


without the prior written consent of the Company, is prohibited. 53

Los Angeles, County

What are the natural, not necessarily the contracted,

patient flows between providers (paths of least resistance) in my market?

Inbound Referrals

Outbound Referrals Informal Network 1

Informal Network 2

Informal Network 3

Informal Network 4

Negotiate from Natural Market Control




Adequacy Optimized for Performance

Adequacy Met Performance Drivers


Negotiate from Network Optimization

54

Emphasize your place in an optimized network based on population health, provider performance, and adequacy

requirements. Supersede adequacy for PCPs in areas with high chronic populations.




Where are specific payers weak/strong on profit, costs, risk and network? Where and how are you most needed?

(Health Behaviors and Costs)

Profit Opportunity Index (Exchanges)

Network Opportunity Index Risk ScoresCalifornia

Payer Profiles and Report Cards

Market Portfolio Position



Population Demand & Risk Alignment

Price Sensitivity


Which payers have plans that draw specific patient panels?How does a payer’s plan positioning affect patients?

Which benefit configuration patterns influence care?



Benefit Configuration & Risk Alignment

Avg

Pay Later

Pay Now

Typical Markets have at least two ‘Winning Patterns:’

Pay Now & Pay Later

HealthNet

HealthNet

Aetna

Los Angeles


Which payers have plans that draw specific patient panels?How does a payer’s plan positioning affect patients?

Which benefit configuration patterns influence care?

High vs. low deductibles are the difference

between health plans paying you versus

chasing patients for deductibles.



Washington

Which payers are buying membership; how valuable is your panel to them? Which payers have membership but need to mitigate their own

risk through risk-ready networks with low unnecessary spend; how valuable is your risk-readiness to them?


Payer Profiles and Tactics




Payer Profiles and Report CardsCalifornia

Determine which payers have healthy profits and where you contribute to those. Determine which payers have acute needs and how can you

help them. For example, a payer with low reimbursement, poor population health scores and poor overall clinical metrics (Star, QRS, etc.)

and a small population, negotiate less from your medical performance and more from your coding and panel size.



Get to know gov data especially variation & risk

Rank your markets and docs by Risk-Readiness

Match your docs & markets w/ the right arrangements

Build your business & negotiate around this





Get Crackin’[Referrals: http://1.usa.gov/1FzoEOV][Variation: http://go.cms.gov/1D8j7LE][Shared Savings: http://go.cms.gov/1Hh8vx0][Medicare FFS Part B: http://go.cms.gov/OCmyoy] [Medicare FFS Part D: http://bit.ly/1mGyBxk][Medicaid: http://go.cms.gov/1z7b5ic][Dartmouth: http://bit.ly/1GXvlJp][Behaviors: http://1.usa.gov/1PzcisT][Health Data All Stars: http://bit.ly/1GAsVC3]




Perverse Incentives

Freedom and Fear






PERFORMANCE ON DISPLAY

Get Crackin’ CAPG

AppendixProvider Risk-Readiness SM Profiles

64

How to Read RowdMap’s Provider Risk-Readiness SM ProfilesAll metrics are based on “appropriateness of care” as defined by the Dartmouth Atlas for Unwarranted

Variation. CMS data sets (inclusive of Part B and Part D claims) were used to calculate efficiency (this can be done on individual claims across all lines of business and holds up with astonishing accuracy across populations as FFS offers the largest national dataset for benchmarking and makes an ideal target for measuring practices patterns against unnecessary spend with natural referral networks.

All providers are compared against peers or cohorts. Physicians designate a primary specialty with CMS. All physicians with the same specialty designation are classified as a cohort and peers may be normalized based on actual practice patterns. For example, a GP is compared with other primary care focused physicians. This allows apples-to-apples measurement against different specialties. Providers can be measured against similar specialists in similar geographies or across lines of service.

Procedural efficiency address performance for pertinent procedures; prescription efficiency for prescriptions; visit addresses visits per patient per condition per provider based on practice pattern; referrals addresses referrals to specialists belonging to that condition ranked by intensity of specialist type and practice patterns from target specialists; overall efficiency is composite score (weighting can be adjusted based on domain, individual drill down metric or individual specialty, DRG or drug class).

A green dot indicates good performance (high efficiency / low unnecessary spend / risk-readiness) and a red dot indicates low performance (low efficiency / high unnecessary spend / limited risk-readiness). The dotted line in each profile indicates the national average for the metric (benchmarks can be set against geographies). (Visualizations can includes dynamic tables, geo-coding, funnels and arcs.)





Catholic Health Initiatives

Top Physicians by VolumeRisk-Readiness SM Metrics



Catholic Health Initiatives

Top Physicians by VolumeDrill Down Metrics



The Everett Clinic




HealthCare Partners




Sutter Health Foundation & Affiliated Groups (without radiology)




Sharp Community Health Group




WellMed




Heritage Provider Network


Across the board:

Above average Risk-Readiness SM

Overall Risk Readiness performance is better than individual drivers indicating physicians are providing value beyond measures typically assessed in utilization review or by actuarial analysis (unit cost, etc.).

This should be highlighted in payer negotiations and likely indicates strong performance in when moving into very aggressive arrangements including setting up plans.

Notable variation within groups around overall performance and individual performance domains including referrals.

This indicates greater than average opportunities to contain unnecessary costs based on internal best practices within a group and across CAPG and should lead to greater than average performance improvements particularly for specialists.



PERFORMANCE ON DISPLAY

CAPG at First Glance

fifty shades of variation: building a network of high quality performers as you move into risk

Healthcare