modern healthcare: acos for real- does it make sense for your organization?

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ACOs for Real: Does it make sense for your organization? Betsy Block Dave Marchand Director of Accountable Care CTO Solution Strategies Healthcare & Life Sciences Services

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Listen to the playback of the Modern Healthcare webinar led byDell's Betsy Block (Director of Accountable Care Solution Strategies) and Dave Marchand (CTO): http://info.modernhealthcare.com/DellConsultingWebinarRegistrationPage.html

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Page 1: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

ACOs for Real: Does it make sense for your organization?

Betsy Block Dave Marchand

Director of Accountable Care CTO Solution Strategies Healthcare & Life Sciences Services

Page 2: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Services 2

CMS timeline for reform

2010 2011 2012 2013 2014 2015

HIPAA 5010 ICD 10

PQRI PQRI (eRx) PQRS

Penalty for non

submission of PQRI

ARRA Meaningful Use Penalty for

non compliance

No Matching Payment

Hospital Acquired Conditions Reduced

Payment for HAC

Accountable Care Organizations

Penalties for High Rates of Readmissions

Inpatient Value Based Purchasing Program

Bundled Payment Pilot

Source: Kaiser Family Foundation Health Reform Source 11.10.2010

Page 3: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Accountable Care Organizations: What are they

Under section 3022 of the Affordable Care Act, Medicare providers and suppliers participating in Accountable Care Organizations (ACOs) can continue to receive traditional FFS payments and are eligible for additional payments based on meeting specified quality and savings requirements.

3 Services

Page 4: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Services

What Constitutes an ACO?

Who belongs to an ACO?

An ACO consists of a collection of providers in a given geography that can include primary care physicians, hospitals, specialists, home care, etc.

What are they Responsible for?

100% of the healthcare and costs for a defined group of patients

What Functions do they Perform?

• Coordination of all care activities between the providers in an ACO

• Measurement and improvement of outcomes and costs

• Financial management and distribution of cost savings across ACO

Page 5: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Early Success in Clinical Integration

• Advocate Physician Partners, Chicago • 3400 physicians, 8 hospitals, 280,000 Capitated lives, 137

performance measures

Performance Year Incentive Funds

Distributed

2005 $12.4 million

2006 $16.7 million

2007 $25.0 million

2008 $28.2 million

2009 $32 million*

* Estimated from 2010 Value Report, Advocate Physician Partners

Page 6: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Participants Region Organizational

Structure Number of Physicians

Part of Integrated Delivery

System?

Includes AMC?

Owns or Owned an

HMO?

Not For Profit?

Dartmouth-Hitchcock Clinic

Northeast Faculty/

Comm. Group Practice

907

Billings Clinic West Group Practice 232

Geisinger Clinic Northeast Group Practice 833

Middlesex Health System

Northeast Network Model 293

Marshfield Clinic Midwest Group Practice 1,039

Forsyth Medical Group South Group Practice 250

Park Nicollet Clinic Midwest Group Practice 648

St. John’s Clinic Midwest Group Practice 522

The Everett Clinic West Group Practice 250

University Of Michigan Faculty Group Practice

Midwest Faculty Practice

1,291

Source: CMS; Commonwealth Fund; WSJ, “Healthcare Overhaul Increases Rewards for Efficiency,” 11/2010

Organizational Characteristics of PGP Participants

PGP Demonstration

Page 7: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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The “secret sauce” of ACOs

• Clinical Integration is a physician and provider led effort

• Internally motivated to monitor themselves and deliver better quality and higher value – not something that is forced on them from the outside

• The “secret sauce” is the empowerment of the physicians

• Financial incentives are important but not the only motivating factor in a successful ACO

• Need to foster an entrepreneurial attitude and a desire to seek out novel solutions and accept the challenge to explore and learn how to make this work

Page 8: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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CMS ACO Development Timeline

Governance

• Legal organization

• Measures

• Incentives

• Participants and TINs

• Application

• Beneficiary representative

• Senior medical director

• Executive under governing body

• Marketing materials must be authorized

• PSA determination of ACO

Data Infrastructure

• Claims Data

• Quality Data

• Reporting

• Population ID

• Ancillary Data

• Disease Registries

• Pt Satisfaction (CAHPS)

• Summary of care documents

• Beneficiary access to med record

• Available to public using CMS format

Profiling

• Recruit members

• Establish connectivity

• Train on use of reporting tools

• Benchmarks

Analyzing

• Pull Reports

• Verify Data

• Care management: mechanism for care coordination

• Risk Management: ID high risk individuals and develop care plans

1/1/2012 7/1/2011

Page 9: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Proposed CMS ACO guidelines ACOs can choose between 2 options:

Track 1

– Shared savings for Year 1 and 2, Year 3 is shared savings and shared losses (if any) over certain threshold

– Savings and Losses are capped

– Bonus for including a FQHC or RHC

– 50% shared savings up to 7.5% of benchmark

Track 2

– Shared savings and shared loss (if any) all 3 years

– Savings and losses are capped

– Bonus for including a FQHC or RHC

– 60% shared savings up to 10% of benchmark

Page 10: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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CMS Math: Estimates per ACO, based on 100 ACOs

Bonus Payout

$8,000,000

Cost $1,755,251 $1,265,897 $1,265,897 $4,287,075

Bonus left $3,712,925

• Source: CMS -1345-P Proposed Rule Medicare Shared Savings Program: Accountable Care 3. 31.2011 p.350

Year 1 Year 2 Year 3 Total 3 years

Page 11: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Infrastructure Cost Estimates For ACO Prototype (ACO includes 200 beds, 80 PCPS, 150 SPC)*

Categories of Costs Start Up Ongoing

Network Development and Management $2,275,000 $2,900,000

Care Coordination, Quality Improvement and Utilization Management $405,000 $1,515,000

Clinical Information Systems $2,350,000 $1,500,000

Data Analytics $285,000 $385,000

Total $5,315,000 $6,300,000

* White Paper - THE WORK AHEAD: Activities and Costs to Develop an Accountable Care Organization, AHA

Page 12: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Do we really need to do this?

As a small community hospital, you may wonder if you have to form an ACO or CI program

There are a number of reasons you should: – Commercial payers moving

to ACO model too – Competition for community

primary care physicians is on the rise

– Integrated delivery networks are forming

– Clinical integration principles are very successful in smaller hospitals

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Page 13: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare

Technology Infrastructure needed by ACOs

Page 14: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare 14

Healthcare Information Landscape is rapidly changing

ARRA/HITECH

HC REFORM

ICD-10/5010

CONSUMERISM

CONSOLIDATION

Page 15: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare 15

More Information is becoming DIGITAL

Genomics

Proteomics

Digital Pathology

Medical Images

Diet & Exercise

Medications

Results

Histories & Encounters

Procedures

Smart Medical Devices

Page 16: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare

Physicians

Health Plans

Long

Term

Care

Consumers

Other Medical

Intermediaries

Laboratories

Pharmacies

Public

Health

Agencies

Hospitals

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Data must be Shared, Aggregated, and Analyzed

Health Information needs

to be EXCHANGED within

Communities

Standardized Analytics &

Informatics solutions drive

improvements in QUALITY &

EFFICIENCY

Page 17: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare

8 Preventative

Health

10 At Risk Populations

Diabetes

7 At Risk Populations

Heart Failure

6 At Risk Populations

Coronary Artery Disease

2 At Risk Populations

Hypertension

3 At Risk Populations

COPD

3 At Risk Populations

Frail Elderly

2 Patient Safety

4 Care

Coordination / Transitions

5

Care Coordination /

Information Systems

7 Care

Coordination 7 Patient / Care

Giver Experience

Proposed Initial Quality Measures by Domain

Page 18: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare 18

Data + Analytics will drive Quality and Efficiency

Individual/Patient

• Care Gap Management • Preventative Health • Outreach/Education

Community

• Identified Data Analysis • Care Coordination • Financial Analysis

Population

• Disease Management • Care Improvement

Page 19: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare 19

Where does the Data come From?

Man

ual o

r A

uto

mate

d

• Targets for quality and care management standards

• Medical records • Clinical outcomes • Patient billing/Charge Master

• Labs, Rx • Encounters • Histories

• Historical patient data • “outside” treatment information • Reimbursement rules

• Surveillance data • Adverse drug events • Genomics/Imaging

EMR/PM/HIS

HIE

Payers

Quality Measures

Other

Page 20: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare

Dell’s Health Strategy – “In the Cloud”

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Healthcare Cloud Platform

Analytics Image

Archiving Reporting & Alerting

Portals

Electronic Medical Records

Revenue Cycle

Services

Payers Solutions

Healthcare Solutions

Data Management Interoperability Security Mobility

Simplifies use with interoperability that creates a true “healthcare system”

Hospitals Physicians Payers Life Science Other

Page 21: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Healthcare

Alerting Example

Patient Outreach Future Possibilities

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d JaneDoh Reminder to take 2 -100mg SOMA tablets

(sent at 8pm local time)

Medication Reminder Example

Pollen or Pollution

Patient List

Generic Alert

#AllergyAlert #HighPollenCount Plano, TX 5-12-2011

Patient Specific Alerts

d JaneDoh #HighPollenCount 5/12/11 take <med_name>

d JohnDoh #HighPollenCount 5/12/11 wear mask outside

Page 22: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

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Wrap Up

• Whether the current rules for an ACO survive as is or are modified, the concept of clinical integration and shared cost savings will survive

• The infrastructure needed for an ACO consisting of separate provider entities in a community is the same infrastructure needed for a single provider entity, such as a health system, to improve quality and efficiency

• The key to improving quality and efficiency is consistent ways to gather the data, compare the results, and look for patterns of improvement

• A cloud based infrastructure enables a standard set of interoperability and analytics tools to be utilized across ACO’s resulting in further efficiencies and sharing of best practices and innovation

• Change is Inevitable

Page 23: Modern Healthcare: ACOs for Real- Does it make sense for your organization?

Thank You

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Betsy Block Dave Marchand (317) 225-6244 (972) 577-5595 [email protected] [email protected]