l lClinical Integration:The Foundation for Accountable Care

Marvin O’QuinnSenior Executive Vice‐President andChief Operating Officer

October 20, 2014

Overview

• Introduction to Dignity Health

• Current State of the Industry

Overview

• Current State of the Industry

– What does reform mean? 

• Clinical Integration (CI)g ( )

– What is it?

– Components of CI

– Organizational Structure 

– Physician Interest & Responsibilities

O t iti & B fit– Opportunities & Benefits 

• The Bridge to Accountable Care

– Clinical Integration as a strategy

2

Clinical Integration as a strategy

Dignity Health TodayDignity Health Today

One of the largest health systems in the nation

56,000 39Employees Acute Care

20 380+ 9,000State Care Affiliated Employees Acute Care 

HospitalsState 

Network Care Sites

Affiliated Physicians 

Providing integrated, patient‐centered care to more than two million people annually

Di ifi d i ff i d t hi ti l ti h lthDiversified service offerings and partnerships supporting population health

Growing national footprint with U.S. HealthWorks

Hospitals in Arizona, California, and Nevada

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p , ,

Dignity Health Horizon 2020 – Framework for the FutureDignity Health Horizon 2020  Framework for the FutureQUALITY COST GROWTH

• Top decile quality• Evidence‐based medicine• Chronic disease

• Medicare performance• Revenue services/CBO Salar and benefit costs

• Return on assets• Newly insured• New service areas

CONNECTIVITYINTEGRATION

• Chronic disease management 

• National patient safety goals • Transformational care • Patient experience

• Salary and benefit costs• Clinical resource consumption

• Supply and purchased services

• New service areas• Commercial volume• Diversify non‐acute holdings

CONNECTIVITYINTEGRATION• Physicians• Health plan partnerships• Reimbursement models• Clinical integration • Clinical coding

• EHR Alliance• Physician connectivity• Patient connectivity• Physician EMR• Enterprise data A competitive cost structure, 

LEADERSHIP

p

• Workforce competencies• Community benefit

p ,high quality, clinical integration, a strong technology infrastructure 

and continued growth• Community benefit• Philanthropy• Nursing leadership • Employer of Choice • Public policy and advocacy

and continued growthare critical success factors

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Dignity Health: Moving Towards Accountable Care

• Leveraging Horizon 2020 strategies to build a system poised to address the demands of accountable care

Dignity Health: Moving Towards Accountable Care

address the demands of accountable care

Current

•Episodic Care

Future

•Population ManagementEpisodic Care

•Volume Driven/Fee‐For‐Service Payment Systems

•Acute Care Provider

Population Management

•Bundled Payments/Pay‐For‐Performance

•Diversified and Integrated Delivery System• IT Systems in Silos

•Hospital‐Physician Centric Interactions

Delivery System

• Integrated Information Systems Across Multiple Care Delivery Locations (Acute, Ambulatory, Home Health, Retail)Home Health, Retail)

Horizon 2020 Strategies

Growth, Cost, Quality, Integration, Connectivity, Leadership

Mission, Vision and Values

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Burning Platform for Change in Healthcare ReformBurning Platform for Change in Healthcare Reform

West Health Policy Center

6

Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage 1999‐2011and Total Premiums for Family Coverage, 1999‐2011

$12,106*$12,680*

$13,375*$13,770*

$15,073*

$9,068*

$9,950*

$10,880*

$11,480*

$5 791

$6,438*$7,061*

$8,003*

$ ,

$5,791

* Estimate is statistically different from estimate for the previous year shown (p<.05).

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.7

The Move from Volume to ValueThe Move from Volume to Value

The overwhelming consensus is that volume based reimbursement will be supplemented by or replaced by quality and value based measuresp y q y

Fee for Volume Fee for ValueFee‐for‐Volume Fee‐for‐Value

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Hospitals are Already Feeling the Pressures of ReformHospitals are Already Feeling the Pressures of Reform

l d h1. Value Based Purchasing

2. Penalties for Re‐admissions

d d d3. Reduced Medicare Margins

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Physicians and Hospitals Are Being Driven TogetherPhysicians and Hospitals Are Being Driven Together

Hospital Physicians

1 Economic Concerns

• Continued cost pressures• Payer Mix shift

• Declining volumes• Ancillary reimbursement cuts

f l f

2

Concerns

Health 

• Looming physician shortage

• Increased accountability for 

• Professional fee cuts• Rise in practice costs 

• Uncertainty around impact of new d lReform  costs out outcomes

• Emphasis on care value• Inpatient demand destruction

payment models, coverage     expansion

• Change in incentives• Specialty demand destruction

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©2011 THE ADVISORY BOARD COMPANY

Old Model of Stakeholders is ObsoleteOld Model of Stakeholders is Obsolete

The New Era Model is Joint Accountability!

HEALTH SYSTEMS

DOCTORSHEALTHPLANS

CMS

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The FTC’s Definition of CIThe FTC s Definition of CI

Clinical Integration is an arrangement in which physicians modify practice patterns and create a high degree of 

i i d l d h licooperation in order to control costs and ensure the quality of services provided 1

The FTC also indicates Clinical Integration programs may include the following:include the following:

Establishing mechanisms to  Selectively choosing

Significant investment of capital both

1. 2. 3.

monitor and control utilization of health care services that are designed to control costs and assure 

Selectively choosing network physicians who are likely to 

further these efficiency objectives

of capital, both monetary and human, 

for the necessary infrastructure and 

capability to realize the claimed efficienciesquality of care claimed efficiencies

The core of a CI program is a network of physicians, working  collaboratively on a comprehensive set of quality and cost improvement initiatives selected as clinically appropriate and matched to the needs of their local markets, and supported by a p y pp p pp yrobust information system that enables the delivery of higher value care.2

1) Adapted from FTC Opinions 2) Adapted from Southwind 

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Components of Clinical IntegrationComponents of Clinical Integration

Care coordination

Performance management

Commitment to

coordination infrastructure

management system

Legal, f lCommitment to 

standardized care

meaningful performance‐

based incentives

ClinicalSelective  Capability to j i tl t tClinical 

Integrationmembership 

criteria

jointly contract with commercial 

payors

13Adapted from The Advisory Board, “Building the Performance‐Focused Physician Network.” 2010. 

Why Clinical Integration?

1. Improve quality of care

2 Increase efficiency/reduce cost

Why Clinical Integration?

ModelReasonable

C

Includes All

Joint C i2. Increase efficiency/reduce cost

3. Provide a structure for independent and aligned physicians to partner with

ModelCost

All Specialties

Contracting

Employment ‐ + +physicians to partner with hospitals

4. Gives physicians opportunity to get be rewarded for their hard 

Employment + +

Clinical I t ti + + +g

work via beneficial contracts

5. Facilitate physician buy‐in for hospital quality and cost 

Integration + + +

Co‐initiatives

CoManagement + ‐ ‐

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Our only hope for the 21st Century is to form a “mass thick network f ti ll b t ”of creative collaborators.”

Bill Clinton at California Association of Physician Groups Conference 6‐8‐13 15

Transition Between Payment ParadigmsTransition Between Payment Paradigms

100%Fee For Value

Through 

elen

erated

 Tntive Mod

even

ue Ge

Incen

D COMPA

NY

Fee‐For‐ServiceRe

0%

HE ADVISO

RY BOARD Fee For Service

16

Time???

©20

11 TH

Dignity Health CI: If We Build It, Will They Come?Dignity Health CI: If We Build It, Will They Come?

Is this Heaven?

No, Dignity Health.

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Physician Enrollment in Clinical Integration

3,601 4,000

Physician Enrollment in Clinical Integration

2,651 

2,955  2,945 2,800 3,000

3,500

1,536 

2,140 2,267  2,365 

2,000

2,500

,

1,000

1,500

0

500

Q1 2013 Q2  Q3  Q4 Q1 2014 Q2 Q3 Q4  Q1 2015

18

CI Contracts to Date

14

CI Contracts to Date

10

12

6

8Global Cap ‐ Duals

Exchange Product ‐ FFS

IFP* PPO ACO

4

6PPO ACO

Medicare HMO

0

2

In Negotiations Fully Executed

19

In Negotiations Fully Executed

*Individual and Family Plan products sold both on and off the Covered CA Insurance Exchange

CI Network Organizational Structure: Physician Led & Physician DrivenPhysician Led & Physician Driven

Operating Agreement

MedProVidex CI Program NetworkManagement 

Services Agreement

Board of ManagersManagers

Initiatives Payer Remediation

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Initiatives Committee

PayerCommittee

Remediation Committee

Physician Responsibilities for MembershipPhysician Responsibilities for Membership

• Adopt and adhere to physician‐developed standards to improvedeveloped standards to improve quality and efficiency

• Collaborate with colleagues to improve performance

3,601 participating providers

p p

• Agree to be measured and to share quality data with the network via technology provided with the 

33% of Dignity Health’s total 

program

• Be accountable for compliance with network policies and procedures

medical staff

• Maintain medical staff privileges at or referring relationship with the local Dignity Health member hospital

Dignity Health’s CI program has been presented to the 

FTC

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Clinical Integration Data Flow

CI Portal and Dashboard (Clear DATA)User 

Provision 

& 

CI Data Store and Calculation Engines

Acute Hospital Data

Tool

entication

 &thorization

Dashboard

File Ambulatory Claims 

Data

Admin Metrics

Authe

Aut Upload 

ToolAmbulatory 

Sampled Quality Data

P bli & P i tPublic & Private Network

Web Pages

All data transmitted through secure firewall and resides OUTSIDE Dignity Health

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Benefits for All Major StakeholdersBenefits for All Major Stakeholders

Dignity H lth Physicians Payors Employers PatientsHealth

Hospitals

Quality

Physicians

Incentives for 

Payors

Growth

Employers Patients

I dQuality Improvement

Growth (market share, payor 

mix)

Quality Improvement

Growth(market share, payor mix)

Growth(market share, risk 

distribution)

Cost 

Improved Employee Health

Improved Clinical 

Outcomes

)

Platform for HCR (e.g., bundled payments, 

VBP, ACOs)

Physician 

p y )

System positioned for 

HCR

Coordinated

Reduction

Marketable Provider N k

Coordinated Care

yIntegration without 

Employment

Financial Improvement

Coordinated Care System

Potential Higher Reimbursement from Payors

Network

Improved Quality

Cost Control Cost Control (reduction in co‐pays)

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Clinical Integration: The Bridge to Accountable CareClinical Integration: The Bridge to Accountable Care

Accountable

Fee‐for‐

Accountable Care

Fee forService

24

Opportunities Shift Towards Population HealthOpportunities Shift Towards Population Health

Commercial

PPO 

ACO Commercial PPO

P4P

Direct to Employer

Clinical Integration Program

P4P

MedicarePatient Centered  Program

(Physician Network, Quality & IT Infrastructure)

AdvantageMedical Homes

Medicare

ACOCMS 

Bundled

Managed Medicaid / 

Duals

Bundled Services

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The Strategic Advantage of CI

• The new care delivery models of accountable care require coordination across the continuum both inpatient and

The Strategic Advantage of CI

coordination across the continuum, both inpatient and ambulatory.

– ACOs

– Bundled payment programs

– Patient Centered Medical Homes

• Development of an aligned and coordinated physician network is vital for optimal performance in population management and to bring down the total cost of healthcare. 

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Clinical Integration & Accountable Care Organizations

Clinical Integration (CI)

A physician led program that will

Accountable Care Organization (ACO)

A f id d li f

Clinical Integration & Accountable Care Organizations

– A physician led program that will improve quality and efficiency, and allow for new avenues for reimbursement from commercial fee‐

– A group of providers and suppliers of services that will work together to coordinate care for the patients they serve. 

for‐service payers. 

– The CI Network of Physicians will work collaboratively, share data, and hold 

– The goal of an ACO is to deliver seamless, high‐quality care, instead of the fragmented care that often results from a 

each other accountable for performance against physician developed and agreed upon clinical performance and efficiency standards

fee‐for‐service payment system. 

– When specific goals and benchmarks are met, an ACO has the opportunity to share performance and efficiency standards.in the cost savings created by improved care coordination.

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Mechanics of the Medicare Shared Savings Program

– Program began January 1, 2013, contracts to last minimum of three years

Mechanics of the Medicare Shared Savings Program

years

– Physician groups and hospitals eligible to participate, but primary care physicians must be included in anyphysicians must be included in any ACO group

– Participating ACO’s must serve at least 5,000 Medicare beneficiaries

– Bonus potential to depend on Medicare cost savings and quality metrics

– Two payment models available: one with no downside risk, the second with downside risk in all three years

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Why ACOs Matter to Dignity Health

–We believe that everyone who walks through our doors should be treated like a person not a patient

Why ACOs Matter to Dignity Health

be treated like a person, not a patient.

–We have been advocating for meaningful reform since our founding, because we believe access to care is a right.g, g

– The debate about health care is too narrowly focused on cost and politics and not on whether the system works.

–We want to implement reform in a way that brings humanity back into health care, which means understanding that human 

ti h ki d h l l h lconnection – humankindness – helps people heal.

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Th k YThank You

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