what's a physician to do?
TRANSCRIPT
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What’s a Physician To Do? Chicago Health System Presented by: Sage Growth Partners November 6, 2014
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Hypothesis I: Health Care Will be Disrupted
There is an overwhelming confluence of
interests, incen9ves, and macro-‐environmental forces that will disrupt the industry and drive
real change – Payment model redesign will be a core catalyst for
change
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A Step Further
• Even if no net-‐new, domes9c U.S. HC is a $1T arbitrage opportunity – and its largely in facili9es, specialists, transi9ons, and chronic care management
• Health care will experience its industrial revolu9on – Transparency – Standards – Focus on efficiency
• In an industrial model – community organizers/entrepreneurs (PCPs) are very well suited to assume the mantle of leadership
• The garage is coming to health care • Incen9ves are aligned between payers and enlightened providers beRer
then ever – economics and ACA are driving payers to shiT risk
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Elements of the New Paradigm
• All healthcare is local but the ecosystem needs to be beRer defined
• Will have to master (at least survive) “foot in two canoes” • PCP as the QB of the healthcare team
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PCP as QB – Industrializing Healthcare
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Logistics
Telemetry
Supply Chain
Performance Management
Interoperability
Workflow & Business Process Redesign
Change Management
Practice Transformation
Capabilities
Requirements
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Lots of QuesTons
• The role of physicians -‐ How do I stay independent? • The role of hospitals and health systems • The role of subs9tutes -‐ IoT • The pace of migra9on to VBP • The pace of provider/payer convergence
• WHAT IS A PHYSICIAN TO DO?
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The Three Dominant Strategies
Best Care
Dominant Delivery
Organiza9on(s)
Dominant Delivery Network
Dominant Enabling Business Plaform
Best Health Status Best Value
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Volume to value: Reasons for the shiX Risk ShiX
Payer Value Based PorZolio
0
20
40
60
80
100
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
Medicare Medicaid Private Health Insurance
Driver: Public Reimbursement as % of Commercial
ACO Growth
687 Medicaid MCOs 2013
Porter Research Study 2013 *Including SGR rate cuts CMS Office of the Actuary May 2012
LeaviR Partners 2014
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Private Health Insurance Benefits by Spending Category
18% current OUTPATIENT
32% current INPATIENT
32% current
PHYSICIAN
4% current
OTHER
15% current DRUGS
Fastest Growth 2007 -‐ 2012
Slowest Growth 2007-‐2012
8.2% Growth
10% Growth
8% Growth
6.1% Growth
5.4% Growth
Source: Price Waterhouse Coopers Medical Cost Trend: Behind the Numbers 2013 “Other” category includes services such as ambulance, home health and durable medical equipment 15
PCP = 6%
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IncenTves Drive (bad) Behavior
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Trust but Verify Explore New OpTons
Build for the Future
Legacy Payer RelaTonships Partner with Plans/Purchasers DIY
Fee-‐for-‐Service Contract
P4P Contract
Shared Savings Contract
Full Cap/ Global Budget Contract
Private-‐ Label
Product Partnership
Provider Sponsored Health Plan
-‐ Outsourced Services
Provider Sponsored Health Plan
Lower Risk / Reward Tradeoffs Higher
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Why VBP?
• Purchasers are demanding more accountability around quality and cost
• Medicare and Medicaid need the “stop loss” • Its a way to take and grow share • It allows a focus on “industrial improvement”
• Its working in key markets -‐ Its driving quality outcomes
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Revenue Cycle Redesign & Alignment is CriTcal • Hospitals who have financial rela9onships with physicians will
be changed as the reimbursement methodologies change • Volume-‐based methodologies will transi9on to more specific
clinical and cost metrics – Risk-‐based purchasing – Reducing readmissions & HAI/HAC
• These new methodologies will need to be documented in new contracts with hospitals and physicians – This will be PAINFUL
• Foot in two canoes will require new system capabili9es
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Which Service Lines Will you Focus On Over the Next 12-‐18 Months?
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Perc
enta
ge o
f Pay
er C
omm
unity
77%
54%
46%
44%
5%
EMPLOYER GROUP PLANS
MEDICARE PLANS
MEDICAID PLANS
INDIVIDUAL PLANS
OTHER
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ImplicaTons of a Clinically Integrated Network • Expecta9ons Have Changed: – Payors will be expec9ng hospitals to behave in a different way
– Hospitals will be expec9ng physicians to behave in a different way
– Physicians and pa9ents will be expected to be more engaged and informed and to work together more closely
– Popula9on health management
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CITI research1 Framework for managing populaTon health
1Source: Popula9on Health Management-‐Hill’s Handbook to the Next Decade in Healthcare Technology, 14 May 2013
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Build, Buy, Partner
Dominant Delivery
Organiza9on(s)
Dominant Delivery Network
Dominant Enabling Business Plaform
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If I were a physician, I’d be thinking about…
• Business Model ConsideraTons – Running through walls to enhance/aggregate primary care – Build a new economic model – “the era of 3x” – Scope of the “New PCP” – Telemetry, monitoring, driving
interven9ons, building supply chains (trading partners) – Employment op9ons – Find the MD entrepreneurs
• PopulaTon Health – let’s define – Where do I fit? – ARribu9on/iden9fica9on – Surveillance – Risk assessment – Risk stra9fica9on – what’s our triangle look like? – Gap assessment – Coordinate/drive interven9ons
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If I were a physician, I’d be thinking about… • Becoming part of value-‐added network and aggressively courTng
Payers/Purchasers (Insurers, TPA/ASO, Employers, Unions, Purchasing Groups) – Make something different happen – Get out and talk early and oTen – Don’t make assump9ons and don’t ignore purchasers – How to do this
• Embracing transparency wholeheartedly – Prices, Costs, Quality
• Plan the Ecosystem – Do I have the Right Partners? – Technologies: Rev Cycle, Messaging, CDS, PH, PI, Retail, remote
monitoring, etc. etc. etc. – Trading partners – Interoperability – Plaform Partners
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