“Stars” and “Bundles”: Latest Buzzwords or Real...
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“Stars” and “Bundles”: Latest Buzzwords or Real Change HFMA - Dallas May 13, 2016 BDO CENTER FOR HEALTHCARE EXCELLENCE & INNOVATION
Transcript of “Stars” and “Bundles”: Latest Buzzwords or Real...
“Stars” and “Bundles”:Latest Buzzwords or Real Change
HFMA - Dallas
May 13, 2016
BDO CENTER FOR HEALTHCARE EXCELLENCE & INNOVATION
BDO Center for Healthcare Excellence & Innovation
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The BDO Center for Healthcare Excellence & Innovation
DRIVING THE FUTURE OF HEALTHCARE
We help clients redefine their strategies,
operations, and processes based on both
patient-centric demands and rigorous best
practices – responding to the industry’s new
market disrupters, cost pressures, and
outcome-based reimbursement models.
Healthcare Executives Clinical Practitioners Valuation Professionals Turnaround / Restructuring Advisors
Investment Bankers Economists & Statisticians Auditors IT Specialists / Data Analysts
Forensic Technologists Regulatory Specialists Tax Accountants Real Estate Planners & Advisors
Strategy
Data Analytics
OperationsClinical
Financial
Our Team:
BDO Center for Healthcare Excellence & Innovation
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Agenda
1. Overview
2. Embracing care model redesign
3. Modeling success through data-informed network decisions
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Bundled Payments Overview
In January 2015 CMS announced their Better, Smarter, Healthier campaign,
shifting more than $300 Billion away from Fee-for-Service into Alternative
Payment models by 2018.
Bundled payments are starting to gain traction through an attractive care and
risk management option
― Designed specifically for specialists, acute and post-acute care providers
― Focus care coordination responsibilities and opportunities on the best
provider to treat ‘targeted’ patient populations
BDO believes bundled payment models are the best way to maximize
clinical outcomes, minimize expense and drive value based purchasing .
We predict bundled payments will become dominant in US $3T Healthcare
spend and represent the overwhelming part of this shift.
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Seismic Change in Reimbursement, Pricing and Valuation . . .
Focused on CLINICAL OUTCOMES and VALUE BASED
CMS deploying an array of voluntary and mandatory payment innovation models to
accelerate transition to accountable payments
Payment programs
Change Accelerators
Pay-for Performance
Total Cost of Care
Bundled Payments
2015 2016 2018
Alternate Payment Models 20% 30% 50%
Quality or Value 80% 85% 90%
CMS Payment Goals:
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From: Current Payment and Care Model
Hospital
DRG
Physicians
Medicare
Part B
Home
Health
HHPPS
60 Day
Episode
Skilled
Nursing
RUGS
Rehab
Services
IRF PPS
Hospice
RHC and
SIA
Pharma
Part D
Silos today: separate functions, separate billing, separate payment
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To: Bundled Payment and Care Model
Bundles align services and payments . . .
crossing all traditional lines
Risk Stratification, Care Transition, Care Coordination, Enabling Services
Index Admission
Post-Acute Care
Hospital
and
readmit
SNF, IRF
Home
Health,
Rehab
Enabling
ServicesPhysician
Services
Diagnostic
Services
BDO Center for Healthcare Excellence & Innovation
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Bundled Payment Impact on Providers
• Consolidating supply chains
• Pushing the point of care outside the hospital
• Providers aggregating risk and managing payments outside their system
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The Comprehensive Joint Replacement Program
An Immediate Future State
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Market and Timing
• Mandatory program—all hospitals in the total joint business in these MSAs are included
• 794 Hospitals in 67 MSAs (107,037 episodes in our data cohort)
• Five “performance years” started 1 April 2016
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Major Joint Replacement Cost Variance
Significant Variance in Cost Unrelated to Quality –$10,000 to $80,000 .
Source: Centers for Medicare and Medicaid Services; 2013 data
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DRG Cost Variance Across SNFs$
17
,84
5
$1
4,2
42
$1
5,9
98
$1
1,2
17
$2
7,2
24
$2
8,3
94
$1
3,1
00
$1
4,9
24
$1
6,7
55
$2
0,6
00
$1
8,1
97
$2
0,3
21
$2
8,6
93
$1
9,3
56
$1
6,9
02
$1
9,3
41
$1
2,4
56
$9
,27
2 $1
5,7
30 $2
2,3
73
$1
1,5
19
$1
6,7
48
$1
3,0
38
$1
3,2
54
$1
3,6
76
$0
$7,000
$14,000
$21,000
$28,000
$35,000
871 - Septicemia orsevere sepsis w/o MV
96+ hours w MCC
292 - Heart failure &shock w CC
470 - Major jointreplacement or
reattachment of lowerextremity w/o MCC
189 - Pulmonary edema& respiratory failure
690 - Kidney & urinarytract infections w/o MCC
Source: Centers for Medicare and Medicaid Services; 2013 data
Hospitals and CMS are shifting their focus to more consistent, lower cost
facilities creating narrow networks.
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New Care Model: “End-to-End” Systems
Manage Inside and Outside the Hospital Walls
Develop an “end-to-end” clinical system
Internal (hospital processes)
• Standardize the “upstream” supply chain
• Understand, quantify, and manage inbound risk
External (person-centric care system)
• Understand, quantify, and manage “downstream” risk
• Develop and operate a post-acute care system
• Proactively manage care transitions
• Monitor post acute care workflow
• Create non-institutional contact points
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Timely Data Required to Focus
on the Risks and Opportunities Across a Bundle
Represents a single episode of care for illustrative purposes only
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Comparative SNF Performance in Market
SNF ProviderEpisodes to SNF Payments to SNF Readmissions
ALOSTotal % to Total Avg % of Total Total Readmit Rate
National Benchmark $15,294 16.6 % 29.8
State Benchmark $17,700 16.6 % 35.0SNF 1 158 11.2% $20,737 12.6% 32 20.3% 48.9SNF 2 154 10.9% $20,309 12.0% 36 23.4% 41.1SNF 3 109 7.7% $13,483 5.6% 7 6.4% 31.9
SNF 4 85 6.0% $17,223 5.6% 14 16.5% 34.9
SNF 5 78 5.5% $16,693 5.0% 13 16.7% 33.5SNF 6 74 5.2% $15,841 4.5% 13 17.6% 33.1
SNF 7 71 5.0% $18,540 5.1% 12 16.9% 44.0All Other Average 684 48.4% $18,849 49.5% 141 20.6% 39.3Total when SNF is the 1st PAC 1,331 $19,550 268 20.1% 43.1
Hospitals are analyzing partners across the complete episode of care as bundled
payments drive narrow network formation.
Costs and quality are being assessed to identify best options for SNFs partners
going forward.
Source: Centers for Medicare and Medicaid Services; 2013 data
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Five Star Rating System
Tool created by CMS in 2008 to help
consumers select and compare
skilled nursing care centers.
Uses information from Health Care
Surveys (standard, focus and
complaint), Quality Measures, and
Staffing
CMS intends to move to a five star-
rating system for all of its
"Compare" sites, "with a goal of full
transition to star ratings by 2016,”
• This will include hospitals.
Overall Star Rating ★
QualityMeasures ★+1 for 5 stars -1 for 1 Star
Staffing ★+1 for 4 or 5 stars if above
survey stars-1 for 1 Star
Survey ★3 years Annual 36 months complaints
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High Quality, Low Cost SNFs are a Must
1 Star 2 Star 3 Star 4 Star 5 Star
National 14.9% 19.8% 18.9% 23.5% 22.8%
N=15446 2307 3057 2926 3267 3529
LA 10.3% 20% 19.1% 23.7% 26.8%
N=560 58 122 107 133 150
OC 6.5% 25% 19.7% 28.9% 23.6%
N = 76 5 19 15 22 18
MSA 10% 20.5% 19.2% 24.4% 26.4%
N=636 63 131 122 155 168*
How do you find them?About 55% are 3-Star rated or lower.
Quality scores impact your ability to collaborate with every SNF in the market.
You need to be highly selective about your partners in this program.
*Source: BDO analysis of CMS data
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Making Data-Driven Care Decisions
Across the Bundle--Access to Timely Data is a Must
Access to timely data is necessary to analyze performance across a bundle
• CMS program data is not shipped in ready to use format and requires competent assembly
• Delivery has been delayed in the past
Need to develop supplemental and timely data sources that can be analyzed in advance of and parallel to
the CMS data set
Analyzing more timely data facilitates:
• Stratifying episodes into high, medium, and low opportunities
• Reducing readmission rates
• Increasing patient satisfaction
• Lowering unnecessary costs
• Driving care improvements
• Providing pointed insights to drive bundled payments performance
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Making Data-Driven Care Decisions
Across the Bundle--Access to Timely Data is a Must
Timely inputs:
• Analyze raw claims as they arrive and gain instant updates on how individual
episodes are performing
• Gain insights on the optimal way to help patients get better as fast as possible
for the lowest cost and drive quality care improvements along the way
Post care delivery:
Quantify gains and exposure levels, what worked and what didn’t
• View performance relative to goals and quality metrics
• Identify opportunities to create quality improvements, optimize the network
and institutionalize behaviors and patterns that led to the success
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Example of Monitoring and Optimizing a Network
• Market avg. indicates 90-day readmission rates for the selected clinical conditions for patients
discharged to SNFs within a 25mi radius from the facilities
• Dark blue dots are SNFs, pale blue dots are clinical conditions or service lines
• Thicker lines => larger case count, thinner lines indicate fewer cases
Improvement relative to
average 90d readmission rates
Under-performance relative to
average 90d readmission rates
National average 90-day readmission rates across discharge destinations
Line colors are driven by comparison to national averages:
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SNF Readmission Rates
by Service Line
• 3 Star Rating
• Above average for Ortho
Other Medical and Neurology
• Opportunities for improvement:
— Cardiology
— Respiratory
— Sepsis
— Digestive
— Vascular
SNF 1
20% or better improvement relative
to average 90d readmission rates
>20% under-performance relative
to average 90d readmission rates
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Why are Readmissions Important?
• 30-day readmission penalties: Hospitals are subject to penalties for excessive
rates of patients readmitting 30 days following a hospitalization
• With bundled payment programs, hospitals are assuming financial risk for longer
time periods –60 and 90 days following a hospitalization
― Hospitals narrowing networks, directing patients to centers of excellence in post acute care to
reduce readmissions and PAC LOS and ultimately, overall utilization
• SNF cost load is increased by cost of readmissions following SNF stay:
― In a typical Medicare AMI bundle costing $23K, SNF costs amount to $3.6K. However, 90-day
readmission costs tack on another $5.5K in costs!
• CMS now includes a re-hospitalization measure into Nursing Home Compare
― Percentage of short-stay residents who were re-hospitalized after a nursing home admission
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Going “inside the numbers” reveals risk
in primary total joint cases
SNF 1
10% BELOW national avg
20% BETTER than national avg
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Curating the Care Process
1
2 Identify required process
change, care model redesign
Receive, process, analyze
data…build cost models
Operating systems,
dashboards, feedback,
reconciliation process
Secure collaborators,
”manage outside the walls”3
4
Data
Care Model
Clinical System
Operations
“Curate”
From the Latin root
“CURARE”
one responsible for the
care of souls
BDO Center for Healthcare Excellence & Innovation
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Initial
analyses
Program
development &
implementation
Gain SharingProgram
Operations
Abstract results/
capabilities to
support
commercial
bundle
expansion
How to Mitigate Risk
BDO Center for Healthcare Excellence & Innovation
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Conclusion
• Majority of saving opportunities will be in post acute care, requiring key coordination
with post acute providers.
• Analyzing historical data in a meaningful fashion to identify all areas for cost savings and
quality improvement measures.
• Implementing quality measures for early identification of readmission patient
populations.
• Developing strategic gain share options with all providers (physician groups and post
acute providers)
• Accurately capturing high outlier group
• Utilizing data analytics for predictable outcomes
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Thank You
Randy Zarin, MBA, MPH, CPA
Managing Director
BDO Center for Healthcare Excellence and Innovation
713-407-3831
