Post on 21-Apr-2017
© 2015 Health Catalystwww.healthcatalyst.comProprietary and Confidential
c
Webinar - December 2, 2015
How to Thrive in the New
Value-Based Care Delivery World
Tom BurtonExecutive Vice President, Health CatalystCo-founded Health Catalyst 2008Intermountain Healthcare – 2002-2008
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Learning Objectives1. Understand how to use analytics to
manage at risk contracts in value-based care delivery
2. Understand network optimization through provider selection and leakage reduction
3. Understand a balanced approach to care management
4. Understand the three capabilities required for systematic population health management
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Population Health Components
3
Clinical Quality Improvement(Broad Processes & Workflow)
Care Management(Patient Specific)
Enterprise Data Warehouse(Enables Data Integration and Interpretation)
Financial Claims EMRs Other(Social/Economic)
Cost
Population HealthShared & At Risk
Management & Administration
1) Manage at risk contracts
2) Network optimization
4) Systematic improvement
3) Balanced care management
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Fee for Service Fee for Value
The Common Denominator: Reduce Costs, Improve Quality
CostPayment
CostPayment
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Balancing Short-Term Imperatives
with Long-Term Transformation Short-term goal:
Successfully Manage At-Risk ContractsOwner: Accountable Care Team
Long-term goal:Transform the Care Delivery System
Owner: Care Delivery TeamCost
Accountable Care
Population Health Management
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Understand how to use analytics to manage at risk contracts in value-based care delivery
6
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Come on down!
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Lowest bid, but still make money
Last Years PMPM Payment 180 180 180 180
PMPM BID 175 182 165 170
- Actual PMPM Cost -170 -170 -170 -170
PMPM Margin 5 12 -5 0
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Diabetes Population to Bid on
• 15,000 Diabetes Patients
• Total claims paid last year for this patient group was $45 Million, or payments of $250 PMPM
• Readmission Rate of 15.1%
• Number of inpatient days last year was 9,014
• This is a condition capitation arrangement with the payer for primary or secondary diagnosis of diabetes
What is your PMPM (per member per month) bid?Remember the winner is the lowest bid, but still make money
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Lowest bid, but still make money
Last Years PMPM Payment 250 250 250 250
PMPM BID 245 249 235 240
- Actual PMPM Cost -240 240 240 240
PMPM Margin 5 9 -5 0
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Need for Improved CostingVariable Expenses
Labor Supplies Total
Unit Charge Qty RCC RCC RCCHip Implant - Device $8,500 1 $1,000 $3,000 $4,000Hip Implant - OR Time $9,600 1 $3,300 $1,500 $4,800
All other expenses $5,000Total cost $13,800
RCC
Costi
ng
Unit Charge Qty RVU Avg Cost RVU + AvgHip Implant - Device $8,500 1 200.0 $4,000 $4,200OR Level 2 Per Minute $200 120 3.5 $12 $5,640
All other expenses $5,000Total cost $14,840
RVU
Cos
ting
Unit Charge Qty ABCAcquisition
CostABC +
AcquisitionHip Implant - Uber Max $8,500 1 $400 $5,000 $5,400OR Level 2 Per Minute $200 120 $50 $13 $7,560
All other expenses $5,000Total cost $17,960
Activ
ity-B
ased
Co
sting
Bundled payment of $15,000
Yes
Maybe
No – unless actual cost can
be reduced to < $15 K
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Data Capture Data AnalysisResultsEMRs
HR Supplies
Data Provisioning
Enterprise Data
Warehouse
• Ratio of Cost to Charges• Volumes• Relative Value Units• Duration Based• Explicit (e.g. Drugs)
More Allocated
More Explicit
2) Attach costs to Patients• Not just by charge items
but by more explicit activities
Prioritized cost reduction opportunities based on actual workflow variation
Less Expensive Staffing Models through predictive activity based algorithms
Informed payer contracting by understanding true PMPM costs for specific populations
1) Attach costs to Drivers usingbest available costing method:
3) Custom groupers of like patients to identify opportunities
• Bundled Payments• Payer negotiations• Outsource decisions on
specialty care
Rx Blood
Allocations of costs to activities
How an Activity Based Costing Solutions works:
General Ledger
Real-Time Location Services (RTLS)
Cost Center Manager User Interface
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Retrospective AnalyticsMonth-Over-Month PMPM Performance
Principle: Know what’s driving your PMPM payments AND costs
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PMPM Trend, ContinuedTop Contributors to the Overall Trend
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Poll QuestionWhat kind of costing capabilities does your organization have?
A) Just Starting: We are still in a fee-for-service mindset – most clinicians have no idea what it costs to deliver care
B) Mid-Journey: We use rudimentary costing techniques such as Cost to Charge Ratios or Relative Value Units – some clinicians understand the cost of care they deliver
C) Mature: We have a robust Activity Based Costing system. Every clinician knows precisely what it costs to delivery care for each individual patient
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Back & Neck Pain Population
• 12,000 Back & Neck Pain Patients
• Total claims paid last year for this patient group was $9 Million
• Last years actual cost was $114 PMPM, payment was $125 PMPM
• Number of inpatient days last year was 1,894
• This is a condition capitation arrangement with the payer for primary or secondary diagnosis of neck and back pain
What is your PMPM (per member per month) bid?
Remember the winner is the lowest bid, but still make money
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Lowest bid, but still make money
Last Years PMPM Cost 114 114 114 114
PMPM BID 115 119 124 120
- Actual PMPM Cost -118 -118 -118 -118
PMPM Margin -3 1 6 2
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Predictive AnalyticsPredictive model for rising risk patients
Principle: Use data beyond traditional claims to predict rising risk in populations
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Poll QuestionHow is your organization at predicting rising risk?
A) Just Starting: We are just now realizing this may be important in a value-based care delivery world
B) Mid-Journey: We have a few analysts in our finance department who manually calculate rising risk in spreadsheets as we prepare for negotiations with payers
C) Mature: We use robust predicative analytics to measure the rising risks in populations and clinicians can access predictive risk models for each individual patients to attempt to prevent bad clinical and cost outcomes.
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Full Capitation Population
• 175,000 Members
• Total claims paid last year for this patient group was $500 Million
• Last years payments were $238 PMPM and next years predicted cost are $225 PMPM using rising risk models
• Number of inpatient days last year was 38,820
• This is full capitation arrangement with the payer
What is your PMPM (per member per month) bid?Remember the winner is the lowest bid, but still make money
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Lowest bid, but still make money
Predictive Cost 225 225 225 225
PMPM BID 230 190 220 215
- Actual PMPM Cost -200 -200 -200 -200
PMPM Margin 30 -10 20 15
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Improvement Prioritization
22
Care Process Families by Resources Consumed (High to Low)
Tota
l Res
ourc
es C
onsu
med
Top 10 Care Process Families account for 34%
of the opportunity
Top 40 Care Process Families account for 80%
of the opportunity
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The Long-Term Vision: Transforming Care Delivery
Short-term goal:Successfully Manage At-Risk Contracts
Owner: Accountable Care Team
Long-term goal:Transform the Care Delivery System
Owner: Care Delivery TeamCost
Accountable Care
Population Health Management
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Outlier Management
# of Cases
Current Condition: Significant Volume and Variation
# of Cases
Option 1: “Punish the Outliers” or “Cut Off the Tail”
Mean
Focus on MinimumStandard
Metric
Excellent OutcomesPoor Outcomes Excellent OutcomesPoor Outcomes
Outlier Management• Set a minimum standard of quality• Focus improvement effort on those not meeting the minimum standard
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Excellent OutcomesPoor Outcomes
# of Cases
Excellent Outcomes
# of Cases
Option 2: Identify Best Practice “Narrow the curve and shift it to the right”
Mean
Poor Outcomes
Inlier Management (Focus on Better Care)
Inlier Management• Identify evidenced based “Shared Baseline”• Focus improvement effort on reducing variation• Often those performing the best make the greatest improvements
Current Condition: Significant Volume and Variation
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Prescriptive AnalyticsOpportunity analysis can focus efforts
Principle: Use variation and volume key process analysis to identify opportunities likely to produce significant savings
Total Variable Cost
Sev
erity
Adj
uste
d C
oeffi
cien
t of V
aria
tion
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Learning Objective Review• Understand how to use analytics to
manage at risk contracts in value-based care delivery
Retrospective Analytics – Know your historic costs PMPM (Per Member Per Month)
Predictive Analytics – Gain the ability to predict future costs – especially in rising risk patients
Prescriptive Analytics – Use analytics to prioritized opportunities to eliminate waste from care delivery
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Understand network optimization through provider selection and leakage reduction
28
© 2015 Health Catalystwww.healthcatalyst.comProprietary and Confidential
Population Health Components
29
Clinical Quality Improvement(Broad Processes & Workflow)
Care Management(Patient Specific)
Enterprise Data Warehouse(Enables Data Integration and Interpretation)
Financial Claims EMRs Other(Social/Economic)
Cost
Population HealthShared & At Risk
Management & Administration
1) Manage at risk contracts
2) Network optimization
4) Systematic improvement
3) Balanced care management
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Network ManagementMoving Beyond our Four Walls
How do I reduce costs? How do I improve referral patterns?
Who are my best (lowest cost, highest quality) partners?
How do I reduce leakage?
Partners
Out-of-Network
In Network
ManageLeverage data on leakage and referrals to pinpoint
opportunities to improve the performance of your
provider network.
OptimizeOverlay information about your patient population’s needs and your provider
population (including accessibility, cost, and
quality) to identify gaps.
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Network Optimization Game
Polarity Principle:• Reduce inappropriate utilization costs AND
reduce out of network leakage
Analogy:• Include anywhere from 1 to all 10 providers• Must reach target of <10% leakage AND
PMPM must be less than $240 PMPM
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3
8
4 5
10
9
6 7
2
1
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Sample Results:• If you included all MDs
Leakage = 0% (every MD is “In-Network”)
… But, PMPM costs may be very high
• If you include only a few MDs (you guess at low cost providers)
Your PMPM cost may be much lower
… But, your leakage may be a high % (patient may not want to travel long distances to see MD)
Solution: Use analytics to help design your network
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Network coverage optimizationService Area Definition
Dartmouth AtlasHospital Referral Regions
(boundaries based on cardiac surgery and neurosurgery)
Central Place Theory (boundaries based on distribution of medical
specialties)
Venn overlap of Health Referral Regions and
Central Place Theory boundaries
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Example: Leakage
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Where do your patients live?
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Where are your patients receiving care?Network overlay on population density
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How far is it to drive to your PCP?Network drive time isochrones
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3
8
4 5
10
9
6 7
2
1
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3
8
4 5
10
9
6 7
2
1
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3
8
4 5
10
9
6 7
2
1
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3
8
4 5
10
9
6 7
2
1
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Poll QuestionHow well do you feel your organization is at designing an effective network?
A) Just Starting: We are not using data analysis to help design our network or monitor leakage, referrals are based primarily on physician relationships
B) Mid-Journey: We use rudimentary provider cost and quality metrics to evaluate who should be included in our network
C) Mature: We have a robust geospatial analytics which help us overlay cost, quality and experience data with drive time, population density and other useful information to create ideal network design
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Principle Review Network Optimization• Designing a care delivery network should include the following
considerations
Who are the low cost providers? (you want them in your network)
Where does your population live?
What are the natural barriers geographically (rivers, freeways, train tracks)? This can cause leakage
ACTION: remove and add providers to your network to minimize leakage AND achieve the lowest appropriate cost
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Understand a balanced approach to care management
45
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Population Health Components
46
Clinical Quality Improvement(Broad Processes & Workflow)
Care Management(Patient Specific)
Enterprise Data Warehouse(Enables Data Integration and Interpretation)
Financial Claims EMRs Other(Social/Economic)
Cost
Population HealthShared & At Risk
Management & Administration
1) Manage at risk contracts
2) Network optimization
4) Systematic improvement
3) Balanced care management
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Care Management Basics
Population Health
Care Mgmt.
Case/ Disease Mgmt.
Sometimes referred to as Care Coordination
Broader than traditional Case or Disease Management.
More narrow than full Population Health
Source: Frost & Sullivan 2015
• Only the health plan had Incentives for care management in a “Fee-For-Service” model
• “At-Risk” reimbursement aligns the incentive with care providers
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Care Coordination Reduces Costs
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Five Core Capabilities for Care Mgmt
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Data Integration (EDW)
Patient Stratification & Refinement
Care Coordination Patient Engagement
Performance Measurement
Key Components of Effective Care Management
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51
Patient Stratification & Care Strategy
5%
30% Rising Risk
65% Latent/Lower Risk
Complex, Acute & High Risk
Car
e M
anag
emen
tC
ondi
tion/
Dis
ease
M
anag
emen
t
• Personal Relationship• Comorbidity Management• Cross Continuum
• Risk of Escalation• Self Management• Condition/Disease Focused
• Self Service• Preventive• Coaching
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52
Balloon Dart Board AnalogyPick your darts (care plans) you have $100 to spend
$25 for red darts $10 for yellow darts$5 for green darts
Preventative / Latent Risk Rising Risk High CostHigh Risk
Hit a green balloon
get $10 back
Hit a yellow balloon
get $25 back
Hit a red balloon
get $ 65 back
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Poll questionsHow many of each type of dart do you want?
• A) 4 red darts• B) 3 red darts, 2 yellow darts, 2 green darts• C) 2 red darts, 3 yellow darts, 4 green darts• D) 1 red dart, 6 yellow darts, 3 green darts
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54
So what is the correct answer?Pick your darts (care plans) you have $100 to spend
$25 for red darts $10 for yellow darts$5 for green darts
Preventative / Latent Risk Rising Risk High CostHigh Risk
Hit a green balloon
get $10 back
Hit a green balloon
get $25 back
Hit a green balloon
get $ 65 back
D) 1 red dart, 6 yellow darts, 3 green darts
163Here’s why…..
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Actual Opportunity Dart BoardPreventative / Latent Risk Rising Risk High Cost
High Risk
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Data Integration (EDW)
Patient Stratification & Refinement
Care Coordination Patient Engagement
Performance Measurement
Key Components of Effective Care Management
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Identify High-Risk, High-Cost PatientsData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Patient Stratification AnalyticsData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
Key Take-away: Use Analytics to assign the right patients, to the right care program with the right care team
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Data Integration (EDW)
Patient Stratification & Refinement
Care Coordination Patient Engagement
Performance Measurement
Key Components of Effective Care Management
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Care Management Detail
AB
A
BA
AB
A
BA
A
A
A
AA
AB
ACare Program A
Care Program B
Claims Clinical
EDW
Population Under at Risk
Contract
Configurable Patient Complexity Score &
Stratification
Configurable cut point and initial;
program, PCP, and team attribution
Pre-enrollment patient list refinement (add/remove)
Final attribution to Care Program
Fina
l attr
ibut
ion
to C
are
Team
and
PC
P
Data Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Data Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
Care Coordination & Patient Engagement
Agreement on:- Patient Centered Goals- Tasks to drive to Goals
Initial tasks are prioritized, scheduled, and dispersed
On an ongoing basis;- Goals are modified- Tasks are modified- Tasks are re-assigned- Alerts are created and sent based on
task- Extended care team members are
added (or removed) as needed- Secure SMS communication between
all playersTypes of tasks for patients include;- Education materials to be reviewed- PROM surveys to be completed- Daily activity and measurements to be
enteredTypes of tasks for care team include;- Active medications review- Follow up appointment creation- Identify local resource/support for
patient
Patient “discharged” from care program
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Manage CM Team WorkflowData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Review Patients ProgressData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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64
Communications is Critical to the Circle of Care
http://www.ahrq.gov/professionals/prevention-chronic-care/improve/coordination/atlas2014/index.html
Patient
Care Coordinator
Provider Team
Primary Care
Pharmacist
FamilyHomeCare
Acute Care
Mental Health
CommunityResources
SpecialtyCare
Two Key Factors:1. Single platform for
secure communications across the continuum
2. Work hand in hand with EMRs
Source: Lori Evans Bernstein, President GSI Health in Health IT News, Dec 2013
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Engage Patients with Mobile technologies
Data Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Communicate frequently with patients
Data Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Data Integration (EDW)
Patient Stratification & Refinement
Care Coordination Patient Engagement
Performance Measurement
Evaluate Care Management Effectiveness
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Data Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance MeasurementMonitor Care Management ROI
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Evaluate Care Plan EffectivenessData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Measure Engagement by Care PlanData
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Project Cost Savings Data
Integration
Patient Stratification
& Refinement
Care Coordination
Patient Engagement
Performance Measurement
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Data Integration (EDW)
Patient Stratification & Refinement
Care Coordination Patient Engagement
Performance Measurement
Review: Key Components of Effective Care Management
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Principle ReviewCare ManagementTraditional Process – Very Rare that this produces an ROI
List High Risk, High Cost Patients – perform a bunch of interventions to attempt to lower costs in the short term
Balanced Approach – Greater chance for long term ROI
Involve more stakeholders – better Patient Engagement
Choose the right interventions for the right patients
Play to win Long Term – ounce of Prevention, pound of cure
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Understand the three capabilities required for systematic population health management
74
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Population Health Components
75
Clinical Quality Improvement(Broad Processes & Workflow)
Care Management(Patient Specific)
Enterprise Data Warehouse(Enables Data Integration and Interpretation)
Financial Claims EMRs Other(Social/Economic)
Cost
Population HealthShared & At Risk
Management & Administration
1) Manage at risk contracts
2) Network optimization
4) Systematic improvement
3) Balanced care management
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Three Core Capabilities for Systematic Improvement
76
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Questions the 3 Systems answer
77
What should we be doing? How are we doing?
How do we transform?
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Capabilities the 3 systems provide
78
• Enterprise Data Warehouse• Actionable Metrics• Predictive Models
• Checklists• Protocols• Interventions
• Adaptive Leadership• Data Governance• Improvement Teams
• Clinical Outcomes• Cost Outcomes• Experience Outcomes
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Key Principles
79
• Prioritize using Key Process Analysis• Data Quality Assurance• Designing Data Systems• Understanding Variation
• Gather Best Practice Knowledge Asset • Pick one Asset to standardize first• Protocol Design – make it easy to do
the right thing
• Start with the Why• Diffusion of Innovation• Fingerprinting and Adaptive Leadership• Permanent Teams• Iterative Design• Aim and Goal Selection• Team Interaction and Implementation
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Information System Centric
“If we build it they will come.” Focus on
reducing information request queue.
No real outcomes improve.
What if only 1/3 Systems is present?
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Research Centric
Academic ideas with no practical
application. Lots of published papers.
No real outcomes improve.
What if only 1/3 Systems is present?
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Motivational Speaker Centric
Management “Flavor of the month”
Most clinicians disengage if best practice and
analytics are both missing
No real outcomes improve.
What if only 1/3 Systems is present?
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Automation Centric
“Paved Cow Paths”
Process is electronic but NOT improved –
many EMR “analytics” deployments
Limited Improvement.
What if only 2/3 Systems are present?
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LEAN Centric
Un-sustainable Improvements. Can’t manually
measure after 2 or 3 projects.
Limited Improvement.
What if only 2/3 Systems are present?
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Science Project Centric
Pockets of excellence, Limited
roll-out of improvement
across all units and facilities
Limited Improvement.
What if only 2/3 Systems are present?
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Principle Review: Three Capabilities for Scalable Outcomes Improvement
86
What should we be doing? How are we doing?
How do we transform?
• Clinical Outcomes• Cost Outcomes• Experience Outcomes
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Thriving in a Value-Based Care Delivery World
87
Clinical Quality Improvement(Broad Processes & Workflow)
Care Management(Patient Specific)
Enterprise Data Warehouse(Enables Data Integration and Interpretation)
Financial Claims EMRs Other(Social/Economic)
Cost
Population HealthShared & At Risk
Management & Administration
1) Manage at risk contracts
2) Network optimization
4) Systematic improvement
3) Balanced care management
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Today’s Lessons LearnedManage At Risk Contracting
Retrospective Analytics – know your historic costs before you go at risk Predictive Analytics – anticipate rising risk Prescriptive Analytics – let data point to outcomes improvement opportunities
Network Optimization Know where your patients live Be aware of natural boundaries thru geo-spatial analytics Include lowest cost providers in your network
Balanced Care Management Increase patient engagement with more stakeholders Match interventions to patients using analytics Have balanced care management strategy (more than claims based CM)
Systematic Outcomes Improvement Analytics, Best Practices AND Adoption produce Outcomes Improvement If you are missing one or two of these three systems then results are limited
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Thank You
89
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Appendix