Post on 25-May-2015
Systemic Change and the Revenue Cycle
September 2014
Presented by:
David Smith, Partner
Twitter: @DavidSmithLP
Our Speakers
Michael Mast
Director, Product Marketing
GE Healthcare
David E. Smith
Director of Payer Services & Partner
Leavitt Partners
©2014 LEAVITT PARTNERS
Changes to Coverage
© 2014 Leavitt Partners
The Number of Uninsured is Certainly Falling
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Office
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Impact Dashboard
20.8 21.120 20.3
18.7 18.317.5
18.5 17.917.4
15.213.9
14.8
16.5 16.215.1
12.3
10.1
0
5
10
15
20
25
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Trends in Uninsured
states Not Expanding Medicaid All adults States Expanding Medicaid
Gallup Poll
Source: Urban Institute
Health Policy Center
© 2014 Leavitt Partners
But This Has Certainly Fostered an Increasingly Complex
Insurance Market because…..
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5
10
15
20
25
30
35
40
45
2014 2015 2016 2017 2018
CBO Public Exchange Projections
Accenture Predicted Private Exchange Enrollment
~65 M new
enrollees
© 2014 Leavitt Partners
Next Year’s Exchange Enrollment Could Double PY2014
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1 2 3 4
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
11/1/2014 12/1/2014 1/1/2015 2/1/2015 -
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
11/1/2014 12/1/2014 1/1/2015 2/1/2015
11/15/14 12/15/14 1/15/15 2/15/15
11/15/14 12/15/14 1/15/15 2/15/1511/15/14 12/15/14 1/15/15 2/15/15
Monthly Projection Cumulative Projection
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
1 2 2 3 3 4 411/15/1
4
12/15/1
41/15/15 2/15/15
© 2014 Leavitt Partners
Price Rules and HDHPs will be the New Normal for ~65M
Enrollees
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Impact Dashboard
©2014 LEAVITT PARTNERS
Q1: What is your most prominent strategy to accommodate
the volume and complexity associated with the ACA?
A. Major workflow realignments are already underway
B. Making technology investments
C. Consolidating business offices
D. Acquiring outpatient centers
E. All of the above
© 2014 Leavitt Partners
Catalyzing in Tremendous Pricing Pressure on Some Providers
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© 2014 Leavitt Partners
And Creating New Strategic Opportunities, Which
Exacerbates the Existing Complexity
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Impact Dashboard
© 2014 Leavitt Partners
Risk Mitigation Programs Will Necessitate Flawless Coding
Across Markets
Implementation Step Timing
1 Rate filings due for 2015 products (approximate) May 2014 (est.)
2 First installment of reinsurance contribution is due Jan 2015
3 Issuers submit year-end financials based on State schedule Mar 1 or Apr 1, 2015
4 Issuers submit full year 2014 data with 3 months of run-out, for risk adjustment Apr 2015
5 HHS calculates and reports final risk adjustment payments (in and out) Jun 30, 2015
6 HHS collects final risk adjustment payments from low-risk carriers Jul 2015
7 Risk corridor (and MLR) reporting deadline for 2014 benefit year Jul 31, 2015
8 HHS makes reinsurance payments to issuers Aug 2015 (est.)
9 HHS distributes final risk adjustment payment to high-risk carriers Aug 2015
10 Second installment of 2014 reinsurance contribution is invoiced (U.S. Treasury portion) Oct 2015 (est.)
11 Second installment of 2014 reinsurance contribution is due (U.S. Treasury portion) Dec 2015 (est.)
Source: Wakely Consulting
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© 2014 Leavitt Partners
Strategic Considerations
• Uninsured will continue to fall. Private and public exchange growth will drive greater access
and more complex products.
• Distribution changes will catalyze transformative economic considerations at the provider-
level.
• Unusual strategic partnerships will abound.
• Greater need for patient education in using/selecting health plans to mitigate bad debt.
• Proper coding and clinical documentation are mission-critical.
• Payer-based changes will require improved efficiencies on the front and back end of the
revenue cycle.
©2014 LEAVITT PARTNERS
Payment & Delivery System Reform
© 2014 Leavitt Partners
The Absolute Volume of ACOs Continues to Grow
8197
138 148
208
334356
458489
606 627631
0
100
200
300
400
500
600
700
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
#o
f A
CO
s
Leavitt Partners Center for Accountable Care Intelligence 2014
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© 2014 Leavitt Partners
73
145 150
197201 203
260
109
147
159 186197
203
238
2031 35
46 49 50 55
611 12
29 32 33
53
0
50
100
150
200
250
300
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
#o
f A
CO
s
Physician Group Hospital System Insurer Other
Physician Group Models are Becoming more Dominant
© 2014 Leavitt Partners
Different Strokes for Different Folks
© 2014 Leavitt Partners
Factors Driving Transition to VBP
© 2014 Leavitt Partners
Inflection Point: 2016
©2014 LEAVITT PARTNERS
Q2: Does your organization have a plan to assume a greater
percentage of risk?
A. Yes. A clearly defined 1-3 year plan
B. Yes. A clearly defined 3-5 year plan
C. Yes, but without a clear defined timeline
D. We do not have a plan in place
E. We do not plan to assume risk now or in the future
© 2014 Leavitt Partners
© 2014 Leavitt Partners
Strategic Considerations
• ACOs represent a systemic trend of evolving financial complexity in the short and medium
term.
• A confluence of government programs and commercial arrangements will drive delivery
system change.
• The pace of change varies widely from market to market resulting in unique solutions by
unique providers.
• The timing of the transition from volume to value is contingent on myriad factors; the
transition itself will require management of multiple payment models.
©2014 LEAVITT PARTNERS
Government Program Changes
© 2014 Leavitt Partners
Medicaid’s Systemic Influence is Rising
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© 2014 Leavitt Partners
1115 Demonstration waivers or
SPAs that have been approved
by CMS
In Negotiation DevelopmentPropose
d
POLICY OPTION/STRATEGY
Ark
an
sas
Iow
a
Mic
hig
an
Wis
con
sin
Pen
nsy
lvan
ia
Ind
ian
a
New
Ham
psh
ire
Uta
h
Private Option/Premium Assistance X X X X X
Health Savings Account Model X X X
Cost Sharing – Premiums X X X X X X
Cost Sharing – Service Copays
(above federal levels)X X X X2
Incentives for Healthy Behaviors X X X X X
Medical Home/Care Coordination/ACOs X X X
Work Component X X X X
Enrollment Limits X
Global Waiver/”Block Grant” X
• 4 States with
alternative waivers
and potentially
more to come
• Each alternative
waiver is tailored
to the state
• Most waivers are
quite different—no
standard model of
deviation
• Most states will
end up expanding
Medicaid
And Myriad Forms of Expansion will Prevail
© 2014 Leavitt Partners
Most States will Expand in Medium/Long Run
© 2014 Leavitt Partners
Most States will Expand in Medium/Long Run
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Impact Dashboard
© 2014 Leavitt Partners
State Innovation ModelsDuals Demonstration Projects
And Other Payment & Delivery Form Innovations will
Emerge
© 2014 Leavitt Partners
Strategic Considerations
• One in four Americans will be covered by Medicaid in some way by 2024.
• States are experimenting with myriad new payment models (privatization of Medicaid) ; that
will accelerate the transition to value.
• Expanded access to coverage on the part of the Medicaid population will increase provider
opportunity; complexity with different payment forms could exacerbate existing challenges.
• Other programs from CMMI are driving various innovations in the delivery system; CMMI is
poised to drive others.
A health care intelligence business
LeavittPartners.com
Imagination at work.
GE Healthcare IT
Integrated Care Solutions Connecting productivity with care
JB21000XX | May 2014
37JB21000XX | May 2014
©2014 General Electric Company – All rights reserved.
The results expressed in this document may not be applicable to a particular site or installation and individual results may vary. This document and its
contents are provided to you for informational purposes only and do not constitute a representation, warranty or performance guarantee. GE
disclaims liability for any loss, which may arise from reliance on or use of information, contained in this document. All illustrations are provided as
fictional examples only. Your product features and configuration may be different than those shown. Information contained herein is proprietary to
GE. No part of this publication may be reproduced for any purpose without written permission of GE.
DESCRIPTIONS OF FUTURE FUNCTIONALITY REFLECT CURRENT PRODUCT DIRECTION, ARE FOR INFORMATIONAL PURPOSES ONLY
AND DO NOT CONSTITUTE A COMMITMENT TO PROVIDE SPECIFIC FUNCTIONALITY. TIMING AND AVAILABILITY REMAIN AT GE’S
DISCRETION AND ARE SUBJECT TO CHANGE AND APPLICABLE REGULATORY CLEARANCE.
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Predix provides an integrated stack of technologies for distributed computing and big data analytics, asset management, machine-to-machine
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GE, the GE Monogram, Centricity, Predix, and imagination at work are trademarks of General Electric Company.
Caradigm is a registered trademark of Caradigm USA LLC. Omnyx is a trademark of Omnyx, LLC.
All other product names and logos are trademarks or registered trademarks of their respective companies.
General Electric Company, by and through its GE Healthcare division.
38
HYPOTHETICAL EXAMPLE . Information presented in this example is hypothetical and for illustrative purposes only. Any analysis or information derived from this
example is for general information purposes only and is being furnished free of charge without representation or warranty of any kind whatsoever, including with respect to
the calculations, inputs, outputs, and/or information provided in such analysis. While this example allows several variables to be entered by you and is based on your
unaudited inputs, it also contains certain assumptions that may not be valid for your specific facts and circumstances. Actual expenses will vary depending on many
factors including, without limitation, your specific operating costs, savings, actual numbers and types of procedures performed. This example and any analysis are
provided for your use only and may not be transferred to any third party.
THIS example IS BASED UPON CERTAIN PUBLIC INFORMATION AND ASSUMPTIONS WHICH MAY NOT APPLY TO YOU Certain values provided in this example
were obtained from available third party sources and are being furnished by way of example only. No representations or warranties are given regarding the accuracy of
any such values.
YOU MUST INDEPENDENTLY VERIFY THIS INFORMATION AND SEEK EXPERT ADVICE. You should not rely on any analysis, calculation, output or information
provided by this example. Any reliance shall be at your sole risk, and we shall have no liability to you or any third party for any reason. Nothing in this example and no
analysis derived therefrom should be construed as constituting tax, accounting, legal or financial advice. You should consult your own professional advisors for such
advice. Nothing herein constitutes a proposal or commitment for any particular transaction. Any such transaction would be subject to execution of documentation in form
and substance satisfactory to GE.
HEALTHCARE PROFESSIONALS ARE RESPONSIBLE FOR MAKING INDEPENDENT CLINICAL DECISIONS AND APPROPRIATELY BILLING, CODING AND
DOCUMENTATION THEIR SERVICES. This example is not intended to interfere with a health care professional’s independent clinical decision making. Other important
considerations should be taken into account when making purchasing decisions, including clinical value. The health care provider has the responsibility, when billing to
government and other payers (including patients), to submit claims or invoices for payment only for procedures which are appropriate and medically necessary and in
accordance with applicable laws. You should consult with your reimbursement manager or healthcare consultant, as well as experienced legal counsel, prior to any
expansion of service.
© 2014 General Electric Company – All rights reserved
ROI Disclaimer
JB21000XX | May 2014
39
The world has changed…
40
The rapid rise of value-driven healthcare
JB21000XX | May 2014
Increased government
policiesand financial pressures…
…drive shift to more integratedand value-based care models…
…which require software-enabled
solutions to deliver on cost and
quality
41
Our joint opportunityHealthcare IT transformation to help drive better outcomes
Accelerating workflows,
streamlining processes, improving analytics
capabilities…
Liberate and create new
value from dataEnable patientswith more informed and proactive healthcare experience
Give providerstools to help deliver better outcomes
From treating illness to managing health
JB21000XX | May 2014
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Key ingredients to deliver successful outcomes
Software & Analytics
Workflow & Domain Expertise
StrongEcosystem
JB21000XX | May 2014
All three elements required to improve healthcare delivery
43
Bringing it all together to deliver successful outcomes
JB21000XX | May 2014
Software Analytics Services Expertise Ecosystem
Care Delivery Management
Enterprise Imaging
Population Health Management
Financial Management
Financial Performance
Clinical Quality
Operational Efficiency
Outcomes
Solutions
Enablers
44
Turning Insights into Outcomes
Common Approach:
High Cost patients
77,000 Diabetics
High Cost Population
High Impact Population
54,552patients
925patients
Savings Potential
$6,403,775
1.6 M population
Stronger Analytics:
Acute Impact
Quality Compliance
Motivation
Movers
Savings potential
$425 PM/PY
Risk Management - Maximizing Return on InterventionFocus on the right interventions with the most actionable patients
Savings potential
$7000 PM/PY
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Enterprise Revenue Cycle Solution
Integrated
EDI
Financial
Risk
Manager
Patient
Access
Mobile
Connectivity
Services
Practice
Mgmt
Systems
High-performingDrives financial results through increased efficiency from scheduling through collections
Integrated financialsIs reform-ready from ambulatory to hospital
Comprehensive automationEnables control of every aspect of your accounts receivable -- every payer, every edit, every rejection
46
Financial Management
Reduced billing lag time by 69%1“How can we take on risk
and still deliver solid patient outcomes?”
Financial Risk Management Solutions
Decreased A/R days by 58%2“What type of healthcare
reform model is rightfor my practice?”
Contract Modeling & Management
Helped reduce cost to collect to less than 4%3
“Which metrics should I focus on to drive
maximum profitability?”
Revenue Cycle Management
Activity-Based Costing
Increased up-front collections by $2M to $12M3
“How do I connect my ITsystems to ensure accuracy and great
outcomes in reporting?”
EDI & Claims Processing
1 Baystate Health in Massachusetts: reduced billing lag time by 69% - Source: Baystate Health in Massachusetts Case Study, 20122 University of Missouri Health: decreased days in A/R by 58% - Source: University of Missouri Health Case Study, 20123 Saint Francis Health System: increased up-front collections by $2M to $12M. Source: Optimizing Revenue Cycle Management: A Case Study of Centricity Business at Saint Francis Health System, IDC Health Insight, August 2012
Customer Challenges GE Solutions Customer Outcomes
JB21000XX | May 2014
47
Questions