sedgwick © 2013 confidential – do not disclose or distribute. teresa bartlett, md

Sedgwick © 2013 Confidential – Do not disclose or distribute.

Teresa Bartlett, MD

Sedgwick © 2013 Confidential – Do not disclose or distribute. 2

Objective• Consumerism

• Setting the stage

• Discuss Affordable Care Act

• Explain Basic Premises of ACA

• Evidence Based Medicine

• Explore Potential Impact on Workers Comp System

• Political component

• Media • Direct to

consumer advertising

• Technology• Provider

marketing• Payer

communication

Consumerism Impacting the Health Delivery Model

Acce

ss to

info

rmati

on

Know

ledg

e m

anag

emen

t

• Perceptions• Health risks• Treatment

impact• Care

coordination• Outcome data• Generational

considerations

• Nurse navigators• Medical literacy• Physician

scheduling services

• Sound technology solutions

• Key stakeholder awareness

• Consumer driven plans

Mod

el c

onsi

dera

tions


Disease Burden: the perfect storm

• Patients with 1 chronic condition

– 3 times higher health care spend

• Patient with 5 or more chronic conditions

– 17 times higher health care spend

• 4 out of 5 Medicare beneficiaries are affected by at least one chronic condition

• Medicare population incident rates of:

– Obesity 38%

– Diabetes 27%

• Americans are living longer (78.2 years)

– Number of Medicare recipients expected to double in next 40 years

www.aha.org/research/policy/2012.shtml


Aberrant Economic Model

• Employers and Government pay for services

• Individuals consume the care

• Providers set prices

• Archaic administrative system


Drawback of Fee for Service model

• Limited physician patient time

• Rewards volume not value

• Coordinated care takes too much time and is not rewarded

• Quality care not rewarded


Affordable Care Act• Signed into law 2010

• Challenged constitutionality upheld June 2012

• Major Focus

– Create value based networks

– Create integrated health systems


Legality• Federal Trade Commission/Department of Justice February 13,

2013 letter of guidance (CIN)

– Antitrust law

– Usually joint contracting by physicians constitutes price fixing

– Rule of reason

– Measurement

– Time and Financial Commitment

– Initial Capital investment

– Financial risk

Norman Physician Hospital Organization


Health Care Change Impact in South Carolina

• Increased access to the Medicaid program

– 726,847 or 18% of South Carolina’s non-elderly residents are uninsured

• 50,000 young adults gained insurance coverage in South Carolina as of December 2011 (3.1 million nationwide)

• Medicare recipients saved over $84.3 million on prescription drugs since enactment of Medicare Part D (drug coverage)

– In 2012: 52,686 individuals in South Carolina saved over $35.6 million, or an average of $677 per beneficiary.

• Preventive Health Coverage at no cost share: colonoscopy, Pap smears, mammograms, well-child visits, and flu shots for all children and adults

– In 2011 and 2012, 71 million Americans with private health insurance gained preventive service coverage with no cost-sharing

– 980,000 in South Carolina.Healthcare.gov


Examples of Affordable Care Act Grants to South Carolina

• $4,300,000 for health professions workforce demonstration projects

• Assistance for low income families to fund training to enter health care professions in high demand

• $2,811,027 for school based centers to help clinics expand their capacity to provide more health care services and modernize their facilities

• $7,283,151 for maternal, infant, early childhood home visiting programs for at risk families

– health care

– early education

– parenting skills

– child abuse prevention

– nutrition

Healthcare.gov


Primary Care Physicians’ Collaboration (Columbia, SC)

• 800 diabetic patients

• Sponsored by BlueCross BlueShield of South Carolina, BlueChoice®, HealthPlan, and Palmetto Primary Care Physicians

• 2-year study

• Patient-centered medical home

• Results

– 14.7 percent fewer inpatient hospital days

– 25.9 percent fewer emergency room visits.

– better control of their blood pressure, cholesterol and glucose levels.

– healthier body mass index (BMI) rates, and

– more of them received eye exams.

• Patient-centered medical home

– Primary care based

– Leads medical team including care coordinators

– Coordinates health needs including prevention, acute and chronic care

– Providers were paid a per member per month fee plus a bonus for improved health in additional to fee for service

• Led to initiation of other projects (heart failure and hypertension)


Clinically Integrated Organization (CIO)

• Legal entity

Structured to hold contracts for

• Commercial

• Government based products

• Challenge for hospital systems to create arrangements that allow for shared savings

• Develop partnerships with physicians outside of the contractual arrangements in place today


CIO• Physician will be paid for care management and evidenced based

care

• Patient centric medicine

• Health plans are likely to

– Employ physicians

– Purchase physician practices


Accountable Care Organization (ACO)

• State based entity

• Qualifies to participate in Medicare shared savings program

• Must have 5000 Medicare beneficiaries• Comply with 33 Quality Metrics

PRIMARY MODEL• Medicare shared savings program• Launched 1-1-12• Maximum shared savings for hospitals and physicians is

10% of aggregate cost of patient care

THE BASIC PREMISEMoves from fee for service to a value based reimbursement


Measurements for ACO Value

• Better care

• Preventative care

• Patient safety

• Care coordination between specialties

• Focus on AT RISK populationsMeasurement and Reporting• Year one: must report on all 33 measures• Year two: must fall within the 30th percentile of National Medicare

quality performance measures for 70% of required measures• Year three: must meet the standards established in the second year


Other Models• Pioneer ACOs

– Health organizations selected by the federal government prior to the ACA to participate in a shared savings model

– Had prior managed care experience

– Can achieve greater savings and assume greater risk

– Can move to a capitated model in the 3rd year

• Bundled payments

• Patient centered medical homes (PCMH)www.innovation.cms.gov


Models• Advanced payment

– Developed by CMS innovation to provide up front monthly payments to encourage the development of ACOs in rural areas

– Limited capital

– Loans are deducted from any future savings

• Shared savings

Health organizations can opt for one or two risk models

– Bonus only- no risk

• Only available for the first 3 years

– Complex formula

• Higher savings

• Quality benchmarks


Health Exchanges• Federal

• State

• Private


Health Insurance Exchanges• 12 million Americans expected to begin purchasing health insurance

• October 2013 for coverage beginning 2014

• Federal subsidies will entice many to market

– Public

– Private

• Insurers need to be careful to balance healthy and sick members

• State requirement to educate consumers on financial assistance options

– 100% to 400% of poverty level qualify for subsidy or reduced cost sharing

• 40% of the volume will come from 5 states: NY, CA, TX, FL, IL

• State Insurance Exchanges are projecting $205 Billion opportunity for the health sector within the first seven years of operation


• Insurer-run (plan choices)

• Retailer-run (companies outside health industry that sell their own insurance products and will have bundles or buy up products such as wellness

• Third-party-run (an administrator that links consumers to a variety of plan choices across multiple insurers. (large brokers and insurance firms)

Private Exchanges


Industry Implications of Health Insurance Exchanges

• Providers

– Increased number of patients pent up need for care

– New expectations of patients (increased focus on customer experience)

– Uncertain payment landscape

• Insurers

– Pricing

– Risk selection

– Which markets should they enter

• Employers

Role of exchanges in the future

Penalty $2000/full time employee

Dropping coverage may lead to pressure to increase wages

Tax benefits of offering coverage

Employees view health care as a valuable benefitSource:Health Research Institute analysis


Only 20% of a physicians practice is based on hard

scienceAccording to the Federal Government

Evidenced based medicine leads to healthier patients and reduced costs


Dartmouth Atlas of Healthcare

US and UK data show that much of the variation in use of healthcare is accounted for by the willingness and ability of doctors

to offer treatment rather than differences in illness or patient preference. Identifying and reducing such variation should be a

priority for health providers “ John Wennberg”

EXAMPLEThe rates of coronary stents are three times higher in Elyria, Ohio, compared with nearby Cleveland, home

of the famous Cleveland Clinic


Why Such Variation in Care?• Supply-sensitive care

– due to differences in local capacity, and a payment system that ensures that existing capacity remains fully deployed

• Patient Preference-sensitive care comprises treatments for conditions where legitimate treatment options exist

– Options involve significant trade offs and different possible outcomes

– Informed and educated decision

– Medical outcomes can vary greatly from place to place


Effective Care

Proven ValueNo trade offs Evidenced Based

Caused By:Underuse

Fragmented Care

Lack of system Process

The Solution: Clinically Integrated Quality Care Financial Incentives


EBM Tools for Practicing Physicians• Electronic Medical Records

• Prevents duplication of services

• Eliminates medication errors

• Office Notes appear as template (drop down/canned text)

• Links to latest evidenced based information

• Health alerts

– Pertinent items only to avoid “alert fatigue”

• Software tools to grade quality of evidence

• Transparency of performance

• Practice management

• Measurement

• Improvement plan


Challenges of Today’s World

• Learning versus dependency on technology

• Students and Residents use of smart technology

• Ensuring reference material is readily available

• Ensuring smart technology does not replace “Real

Learning”


Post Graduate Education• Communication is key

• It is not enough to prove you know what to do

• COMMUNCICATION SKILLS ASSESSMENT


Importance of Communication Skills

Patient Education

Medical LiteracySelf Care

Consulting Physician Education

Better Results Transfer of specific knowledge

Lifestyle choices

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Impact of Evidence Based Medicine

• Already seeing changes

• Physician/practices are spending up to 25% more time to justify tests

• Health plans are offering incentives and disincentives to physicians

– High cost imaging services

– Hospitals seeing dramatic reductions

• Physicians want positive position shared savings

• Hospitals want shared savings

– Following the lead of health plans


South CarolinaWorkers’ Compensation

Medical Spend Trend

Average Medical Spend

Medical Category 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Chiro $695 $952 $304 $493 $415 $286 $366 $73 $485 $450

Diagnostic $249 $377 $362 $454 $343 $326 $393 $223 $232 $272

DME $335 $785 $949 $1,227 $1,265 $927 $1,180 $836 $835 $1,506

In Patient Hosp $10,675 $9,988 $19,977 $11,763 $6,659 $57,365 $8,567 $10,087 $6,942 $11,189

Misc Medical $697 $317 $988 $706 $726 $864 $154 $259 $757 $276

Occ Therapy $729 $1,165 $1,002 $890 $892 $886 $1,386 $808 $726 $791

Out Patient Clinic $158 $101 $98 $191 $205 $160 $307 $423 $330 $485

Out Patient Surgery $2,059 $1,148 $1,536 $2,012 $1,090 $1,431 $1,425 $1,862 $1,657 $1,775

Pharmacy $575 $554 $603 $844 $650 $851 $838 $687 $659 $815

Practioner $915 $547 $500 $719 $548 $589 $746 $678 $644 $739

PT $1,060 $1,577 $1,295 $1,662 $1,533 $1,255 $1,431 $1,438 $1,651 $1,656Medical Exam-Independent (IME)/Agreed $775 $431 $399 $591 $419 $253 $1,144 $1,247 $540 $557

Field Case Management Fee $988 $1,117 $2,926 $1,503 $3,780 $1,494 $680 $1,594 $1,823 $1,965

All Other Medical $533 $460 $506 $1,192 $850 $808 $1,036 $1,360 $710 $836

Grand Total $892 $706 $789 $985 $755 $1,071 $939 $844 $744 $890


Likely impact on Workers’ Compensation

Benefits

– Use evidence based care and best practices

– High quality

– Single claim and note format

– Enhanced coordination of care

– Reduced duplication of services

– Enhanced communication

– Higher adoption of EHR

Potential Challenges

– Person centric ( focus on all medical problems not just WC)

– Networks

• Primary Care Single CIO

• Specialists multiple CIO


New Models of Care

Retail Markets


Trends to watch for• Hospital costs will continue to grow

• Physician alignment will be a moving target

• Health plans will evolve and try to grow in new lines of business

• New models of care

• Increased Transparency

• Volume will still be a focus

• Information technology is key

• Consolidations

• Creative branding


Questions and Discussion

sedgwick © 2013 confidential – do not disclose or distribute. teresa bartlett, md

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