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How Physicians Can Achieve Success in the Arriving Population Health Model

Presented to:

University of Virginia Health System

Presented by:

John A. Deane CEO, Southwind Division

Lisa Bielamowicz, M.D.Executive Director & CMO The Advisory Board Company

September 26 , 2013

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National Trends Driving Physician Alignment

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Meet Your Newest Medicare Beneficiaries

5

Happy 65th Birthday!

Steven Tyler Ozzy Osbourne

Kathy Bates

Al Gore

James Taylor Terry Bradshaw

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A Population More Predisposed to Comorbidity

6

Worsening Case Mix Not Just Due to Aging

Obesity Rate Among U.S. Adults1

1988

Obesity Rate Among U.S. Adults1

2009

Source: Centers for Disease Control Behavioral Risk Factor Surveillance System, available at: http://www.cdc.gov/brfss/, accessed May 4, 2011; Health Care Advisory Board interviews and analysis.1) Body Mass Index ≥ 30, or 30 pounds overweight for 5’ 4” person.

No Data <10% 10%–14% 15-19% 20-24% 25-30% >30%

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Chronic Disease Growth Outpacing Population Growth

7

Source: Milken Institute, available at: http://www.milkeninstitute.org/ pdf/chronic_disease_report.pdf, accessed April 27, 2011; Health Care Advisory Board interviews and analysis.

Projected Increase in Chronic Disease Cases

2003-2023

Stroke

Pulm

onar

y Con

ditio

ns

Hyper

tens

ion

Heart

Diseas

e

Diabe

tes

Men

tal D

isord

ers

Cance

r

29.0% 31.0%

39.0% 41.0%

53.0% 54.0%

62.0% 19%: Projected population growth, 2003-2023

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Getting Paid Less to Do Less

8

New Payment Models Calling Old Imperatives Into Question

Accountable Payment Models

Cost of Care Quality of Care Volume of Care

Performance Risk Utilization Risk

Bundled Pricing

• Bundled Payments for Care Improvement program

• Commercial bundled contracts

Shared Savings

• Medicare Shared Savings Program

• Pioneer ACO Program• Commercial ACO

contracts

Pay-for-Performance

• Value-Based Purchasing• Readmissions penalties• Quality-based

commercial contracts

Source: Health Care Advisory Board interviews and analysis.

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Health Care Defects Occurring at an Alarming Rate

9

Growing Demand for Higher Value

Source: Modified from Buck, CR, General Electric; Health Care Advisory Board interviews and analysis; Southwind.

Health Care Quality Defect

Defectsper

Million

1,000,000

1,000

1

10,000

100,000

100

10

1(69%)

2(31%)

3(7%)

4(.6%)

5(.002%)

6(.00003%)

σ Level (% Defects)

Anesthesia-related fatality rate

Hospitalized patients injured

through negligence

Adverse drug eventsBreast cancer screening (65-69)

Post-MI beta-blockers

Overall health care in U.S.

Hospital- acquired infections

Airline baggage handling U.S. industry

best-in-class

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Bridging the Transition Between Payment Paradigms

10

Mitigating Incentive Disconnect Between FFS, Value Based Payment

Time

Rev

en

ue

Ge

ner

ate

d T

hro

ugh

In

cen

tive

Mo

del

Fee for Service

100%

0%

Total Cost Accountability

• Can increase FFS rates

• Stabilizes physician economics

• Improves performance on key quality and cost initiatives

• Can increase market share

• Creates infrastructure for care coordination, management

• Builds physician comfort with performance focus

Realizing Returns Today

Preparing for Tomorrow

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Forcing Tighter Ties

Payment Reforms Place Greater Burden on Care CoordinationStrategic Responses to New Payment Methodologies

Pay-for-Performance

Hospital-Physician Bundling

Episodic Bundling

Shared-Savings Model

Degree of Management

Challenge

• Engage active medical staff

• Standardize care processes

• Track and analyze performance

• Leverage physician incentives

• Standardize devices• Reduce orders and

consults

• Partner with post-acute providers

• Standardize care site transitions

• Partner with PCPs• Invest in chronic

disease management• Reduce utilization

Actions needed under all payment reforms

Provider Cost Accountability

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• Organize "Integrated Practice Units" or "IPUs" around patient conditions

• Organize primary and preventative care to serve distinct patient segments

• Measure outcomes & cost

• Offer bundled pricing arrangements

• Integrate delivery across separate facilities

• Expand geographic coverage by excellent providers

• Build and enable information technology

Creating a Value-Based Health Care Delivery System

The Strategic Agenda

12

Michael Porter, Harvard University, 2013

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This Is Not a Cup of Coffee

Source: Health Care Advisory Board interviews and analysis.

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An Absurdly Fragmented Market Offering

Dozens of Businesses, Thousands of Products

Source: Accreditation Council for Graduate Medical Education, http://www.acgme.org/acWebsite/RRC_sharedDocs/ACGME-Accredited_Specialties_and_Subspecialties.pdf, accessed May 14, 2012; Health Care Advisory Board interviews and analysis.

1) Medicare Severity-Diagnosis Related Group.2) Healthcare Common Procedure Coding System.3) Accreditation Council for Graduate Medical Education.

Quite a Lot on the Menu

745 MS-DRGs1

~15,000 HCPCS2 Codes

26ACGME3-Accredited Specialties

Emergency Department

Office Visits Imaging

Outpatient Procedures

RehabLong-Term

Care

Lab Tests

Inpatient Procedures

Pharmacy

Typical Silos in Health Care Delivery

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In Consumers’ View, Only Two Products

Individual Services Merely Inputs; System’s Role is in Assembly

Health Care Production Model Inputs

Office Visits

Imaging

Lab

Emergency Care

Inpatient Procedures

Outpatient Procedures

Rehabilitation

Long-Term Care

Pharmacy

Health System

Acute Care Episodes

Longitudinal Management

• High-quality, low-cost treatment of acute illness

• Includes pre-acute, post-acute services, readmission

• Ongoing, comprehensive health management

• Includes chronic disease care, wellness, prevention

Value-Added Products

• Planning• Coordination• Delivery

Source: Health Care Advisory Board interviews and analysis.

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Physicians at the Nexus

Physicians Essential to Generating Value from Systemness

1) Independent Practice Association.

Care Planning

Care Delivery

Care Coordination

Payers Integrating Physicians

Examples:• Texas Health Resources acquires Medical Edge• St. Thomas forms 1,600-strong IPA1 in two years• MemorialCare acquires 400-physician Nautilus

Examples:• UnitedHealth acquires Monarch HealthCare• Humana acquires Concentra• WellPoint acquires CareMore

Hospitals Integrating Physicians

Source: Health Care Advisory Board interviews and analysis.

Value-Added Processes

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Moving Beyond “Us and Them”

True Systemness Requires Demolition of Individual, Group Silos

1) Clinically integrated.

New Ambition for Hospital-Physician Relations

Traditional Goal:Strengthen ties within medical group/CI1 network

Traditional Goal:Strengthen individual practice ties to hospital center

Today’s Goal: Align priorities, strategies, and efforts of system leadership with those of broader physician network

Collaborative Care Enterprise

Source: Health Care Advisory Board interviews and analysis.

Words Matter

“The language hospital leaders use to describe physician alignment—‘how do we get them to work with us’—reveals how deeply rooted this sense of separateness is.”

Health System Executive

”

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The New Hospital-Physician Compact

Collaborating to Deliver Value to Patients

Patient Demands, System Responsibilities

Timely Access

Source: Health Care Advisory Board interviews and analysis.

Principled Referrals Unified Care Experience

Top-Quality Care

Open CommunicationCost-Effective Care

• Physicians build schedules around patient needs, connect to other providers to expand options

• System invests in alternative access points and needed capacity

• Physicians build and utilize evidence-based care standards

• Clinical decisions prioritize quality• All providers accept, respond to

transparent performance data

• Physicians, care teams respond promptly to patient inquiries

• Providers proactively engage patients in care management

• Referral decisions based on quality and cost, not habit

• Physicians coordinate with peers to ensure safe and effective transitions

• Care transitions appear seamless to patients

• Information is a system asset, updated and utilized by all to streamline care experience

• Physicians actively work to reduce cost, unnecessary utilization

• System encourages use of low-cost care pathways

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Executing Strategy in the Accountable Care Era

Tactics for Evolving Primary Care to Support Accountable Care Strategy

• Align clinical, operational and financial goals

• Manage inappropriate utilization of high- risk patients

• Reduce costs through quality improvement, care coordination

• Leverage business intelligence systems to identify core competencies

• Consider value-based contracts across payers

• Tailor interventions for population health management

Securing Physician Alignment

Care Transformation

Reducing Costs, Advancing

Quality

Managing Total Population

Risk

• Evaluate, secure and stabilize primary care base

• “Clinically Integrate” the network

• Engage physicians in leadership, governance

• Promote adoption of evidence-based care standards with aggressive quality targets

• Start medical home transformation

• Foster seamless data exchange across sites of care

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Start by Segmenting Medical Staff by Role in ACO

The Accountable Physician Enterprise

CommunityContractors

Hospital-BasedNon Admitting

Specialists

Proceduralists Primary Care

Community-BasedMedical Specialists

DermatologyOphthalmology

RadiologyAnesthesiologyPathologyED Physicians

General SurgeryCardiac SurgeryNeurosurgeryOrthopedics

Internal MedicinePediatricsFamily MedicineHospitalist

Cardiology Medical OncologyEndocrinologyOB/GYN

Effective Care Management EnterpriseEfficient Procedural Enterprise

“ACO Partners”

“ACO Collaborators”

“ACO Principals”

Minimal Relationship

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More Than Just Great Clinicians

Ideal Partners Willing to Demonstrate Cultural Compatibility

Information-Powered Value-Conscious

Open to Transparency System-Oriented

• Instinctively pursues system goals

• Prioritizes system needs over individual ambitions

• Trusts that decisions made with interest of patients, not politics, in mind

• Understands benefit of full data transparency

• Accepts results as validated, unbiased, accurate

• Views release of performance data as opportunity to improve

• Supplements personal experience with communal knowledge resources

• Actively contributes to expanding body of knowledge on care standards, patient records

• Click to add iconDo not use Microsoft generic icons

• Click to add iconDo not use Microsoft generic icons

• Click to add iconDo not use Microsoft generic icons

Source: Health Care Advisory Board interviews and analysis.

• Click to add iconDo not use Microsoft generic icons

Four Attributes of the Ideal Physician Partner

• Acknowledges continuous cost pressures within system

• Actively works to improve patient care in cost-effective manner

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Address Physician Concerns About Team-Based Care

Key Responses to Common Physician Pushback

Source: Innovations Center interviews and analysis.

Fear of “Losing” Patients• Medical Home is a physician-led team of providers

• Key relationship built around maximizing patient-physician interaction

• Physician actively engaged in overall patient care

Protecting “Physician-Required” Tasks• Best practices are standardized, maximizing physician time

• “Triggers” to engage physician can be built into care processes

• Physician-required tasks are not offloaded to team

Imposition on Physician Time, Productivity• Role and goals of physician defines how team is used

• Team extends time available to patient, without requiring additional physician time

Cost of Creating the Care Team• More efficient visits improve financial performance of practice

• More cost-effective to minimize physician time spent on non-physician tasks

• Allows team members to operate at the top of their licenses

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Finding the Right Physician Leaders

Best Ambassadors Are Eager, Committed, Humble

Source: Intermountain Healthcare, “How to Run Your Own Clinical Quality Improvement Training Program,” available at: http://intermountainhealthcare.org/, accessed May 14, 2012; Health Care Advisory Board interviews and analysis.

Disruptively Opposed

GrudginglyObedient

Willingly Cooperative

Passionately Leading

DistractinglyOver-Enthused

Best suited to spearhead change, disseminate system vision

Putting Our Best Foot Forward

“Even today, we still have people within our system who viscerally oppose our ongoing shift to clinical process management and improvement. Change is hard. However, we have enough people who “get it”—and are deeply convinced of and committed to it—that we can move vigorously ahead.” Dr. Brent James

Chief Quality Officer, Intermountain Healthcare

”

Spectrum of Physician Engagement with System Strategy

Least Engaged Most Engaged

Great majority of physicians willing to support system strategy but need strong physician leadership

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Building an Effective Ambassador Corps

Small Groups of Leaders Make Large Impact

Source: Intermountain Healthcare, “How to Run Your Own Clinical Quality Improvement Training Program,” available at: http://intermountainhealthcare.org/, accessed May 14, 2012; Health Care Advisory Board interviews and analysis.

How Much is “Critical Mass”?

Rule of thumb from change management research: The number of leaders necessary to spearhead organizational change is equal to the square root of n, where n is the total number of individuals in an organization

Ambassador Corps

Rank-and-File Physicians

n

•Respected clinicians•Ethic of trust and

stewardship•Effective communicators•Skilled at resolving conflict•Natural problem-solvers

Attributes of Effective Physician Ambassadors

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Funneling Patients Through A Siloed Enterprise

Individual Components Strong But Disconnected

Traditional Clinical Enterprise

Source: Health Care Advisory Board interviews and analysis.1) Fee-for-Service.

• Primary care practices serve as feeders to specialty service lines

• Each practice as individual point of care, not comprehensive network

• Specialty service lines serve as core business under FFS1 model

• Care, services streamlined within each specialty but not across service lines

• Ambulatory space serves as driver of volumes to inpatient setting, treatment

• Hospital as nexus of clinical enterprise rather than node on care continuum

Primary Care

Specialty Service Lines

Acute Care Hospital

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A Week in the Life of a Diabetic

Fragmented Pathways, Poor Coordination Threaten Outcomes

Source: Health Care Advisory Board interviews and analysis.

Typical Diabetic Complication Pathway

Call to PCP Office

ED VisitMed/Surg

AdmissionSurgeryConsult

Wound Team Intervention

DischargeUrgent

Care Visit

Typical Typical Failure

Practice closes early on Friday, unable to see patient

No access to chart; patient sent to ED for wound care

ED unable to contact wound care specialist, admits patient

Hospitalist unclear about Parkinson’s medications, gives wrong dose

Diagnostics delayed due to mental status changes; surgeon refuses to see patient

Clinicians determine care plan without consulting outpatient team

LOS two days longer than needed

Lack of coordination, interfacing across service lines, specialties

Primary care pathways, providers fractured across care continuum

Lines of control fail to converge at any actionable level

Root Causes of Care Management Breakdowns

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Patient Problems Often Span Multiple Specialties

Source: Health Care Advisory Board interviews and analysis.

Specialists Required to Generate Post-Op Wound Prevention Standards

Even Simple Problems Require Broad Specialist Collaboration

Surgical SpecialistsGuarantee pre-, post-op care order consistency

7Total number of specialists required for comprehensive wound care

Infectious Disease SpecialistEnsures appropriate antibiotic use

Wound Care SpecialistSupervises wound therapy pre-, post-discharge

Hospitalists, IntensivistsManage general post-op care

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Meeting Clinical Needs Head On

Organizing Quality Around Patient Issues

Source: Health Care Advisory Board interviews and analysis.1) Congestive Heart Failure.2) Chronic Obstructive Pulmonary Disorder.

Quality Committee Characteristics

Nine quality committees organized around initiatives rather than specialties

All physicians required to spend two hours per month on a committee

Physicians not compensated for time

Case in Brief: MissionPoint Health Partners

• 1,400-physician clinically integrated population management network affiliated with St. Thomas Health located in Nashville, Tennessee

• Mandates multidisciplinary physician participation on quality committees;18 percent of physicians participate on a committee at any given time

MissionPoint Quality Committees

• Cardiac – CHF1 and Chest Pain

• Diabetes Mellitus

• Respiratory – Asthma/COPD2

• Sepsis

• Preventive Care

• Depression

• Joint Pain (including back pain)

• Women/Newborn Health

• Weight Loss

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Evolving to a New Physician Leadership Bench

New Crop of Leaders Rising To Meet Tomorrow’s Challenges

Traditional Hospital Physician Leadership

Source: Health Care Advisory Board interviews and analysis.

VP of Medical Affairs

Chief Medical Officer

Tomorrow’s Health System Leaders

• Roles largely limited to inpatient quality management, standards

• Legacy of independent medical staff model, responsible for credentialing

• Limited authority to enact true change across organization

Chief Clinical Officer

Chief Medical Information Officer

VP of Care Transformation

• Leads transition to evidence-based practice

• Sets unified quality standards across care continuum

Chief Quality Officer

• Bridges communications gap between IT staff, physicians

• Provides guidance on realities of clinical practice as IT systems are deployed

• Applies systematic analysis to pilot effective population health programs

• Tailors offerings, rolls out stratified risk programs

• Holds management jurisdiction, authority over entire clinical enterprise

• Bridges stakeholder relationships

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Patient-Focused Culture Not an Overnight Change

Transforming Personal Relationships, Attitudes Takes Time

Source: Health Care Advisory Board interviews and analysis.

Shifting Perspectives

“Comfort Zone” New Expectation

Clinical Practice Model

• Physician makes treatment decisions unilaterally

• Main responsibility to advance patient to next stage of care continuum

• Physician collaborates with colleagues, adheres to evidence-based standards

• Responsibility extends to coordination across entire care continuum

Understanding of Success

• Personal financial performance paramount

• Profit potential proportional to volume

• Individual success closely linked to system objectives

• Financial return dependent on quality, coordination

Relationship to Hospital

• Physician refers to, practices at hospital

• Relationship based on convenience, financial ties

• Physician engages with hospital as strategic partner

• Relationship based on common culture, patient focus

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Tough Decisions Require New Paradigms

Successful Physician Alignment Must Be Redefined

Difficult (But Necessary) Transformations

New Measures of Success

Restrict network participation to culturally-aligned, performance-focused physician partners

Empower physicians with meaningful influence in system strategic planning

Restructure reporting relationships to emphasize unified, coordinated patient care over parochial interests

• Physician satisfaction• Network size• Physician “buy-in” to hospital-led strategy• Minimized losses on employed practices

• Stronger physician engagement with system• Network integrity, compatibility with payer

contracting objectives• Physician contribution to jointly-led strategy• Physician impact on quality, cost of care

Traditional Goals

Source: Health Care Advisory Board interviews and analysis.

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Value Proposition of Systemness Broadening

Attracting Physicians to New Model Requires Making Benefits Clear

Traditional Physician Benefits of Systemness

Additional Value Proposition

Stronger negotiating position with payers

Affiliation with larger, respected brand

Access to investment capital

Efficiency through shared services

Collaboration with network peers

Coordination across care continuum

Comprehensive IT infrastructure

Stronger negotiating position with payers

Affiliation with larger, respected brand

Access to investment capital

Efficiency through shared services

Patient-focused care model

Source: Health Care Advisory Board interviews and analysis.

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Three Fundamental Principles

Recalling the Tenets of True Systemness

Source: Health Care Advisory Board interviews and analysis.

Hospital leaders, physicians must move beyond “us vs. them” mentality to one of system unity, shared purpose

An End to Factionalism

System leaders need not be physicians, but must have collegial, productive relationships with physician partners

Physician-Oriented Leadership

All stakeholders must understand that system value derives from serving patient needs through high-quality, cost-effective care

Patients at the Center

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Questions

34