From Volume to Value - Is It Real or Just Hype?
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FROM VOLUME TO VALUE: IS IT REAL OR JUST HYPE? David A. Williams, CPA, MPH, FHFMA
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Transcript of From Volume to Value - Is It Real or Just Hype?
FROM VOLUME TO VALUE:IS IT REAL OR JUST HYPE?
David A. Williams, CPA, MPH, FHFMA
What’s your opinion on the new location for Tri-State?
1. Really like the new location
2. Location is ok, but go back to Tunica
3. Doesn’t matter where, I’m a Tri-State groupie!
Really lik
e the new lo
cation
Locati
on is ok b
ut go back...
Doesn’t m
atter where, I’
...
0% 0%0%
2
1. CMS Leads Transition to Value Based Payment2. Market drivers – Curb spending3. Bundles – are they voluntary?4. Implications for Providers5. Predictions
AGENDA
3
Should Congress repeal or work to improve ACA?
A. RepealB. Work to improveC. Leave it alone
Repeal
Work to Im
prove
Leav
e it alone
0% 0%0%
4
Total
Favorable
Unfavorable
Democrat
Independent
Republican
0.58
0.9
0.31
0.85
0.56
0.31
0.35
0.07
0.63
0.1
0.39
0.62
Work to improve the law Work to repeal the law and replace it with something else
MORE WANT CONGRESS TO IMPROVE ACA THAN REPEAL AND
REPLACE
*NOTE: Neither of these/they should do something else and Don’t know/Refused answers not shown.SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted April 15-21, 2014)
By Overall ACA Opinion
By Political Party ID
Which would you rather see your representative in Congress do when it comes to the health care law?
5
“quality in relation to the total payment for care”
-Quality is the composite of clinical outcomes, safety and patient experiences with health services
-Payment is the amount paid by all purchasers of health care, including the insurer and patient
Higher quality does not mean higher costs!
QUALITY AND PAYMENTS
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Volume of
Services
Value for Payment
s
SHIFT OF EMPHASIS
7
2006 2007 2008 2009 2010 2011 2012 2013 20140%
1%
2%
3%
4%
5%
6%
7% 6.50% 6.30%
4.80%
3.80% 3.90% 3.90% 4.10% 3.60%
5.00%
Annual Growth in NHE
Annual Growth in NHE
A RETURN TO PRE-RECESSION HEALTH CARE SPENDING?
8
2010 2011 2012 2013 2014 2015-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%3.5%
1.6%
2.7%2.9%
1.5%
-0.1%
Hospital Price GrowthHospital Price Growth
A LOOK AT HOSPITAL NUMBERSTELL A DIFFERENT STORY
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700+ hospitals received net payment increase
1700 Hospitals received a bonus payment
3000+ Hospitals in VBP
MANDATORY RISK PROGRAMSIMPACT HOSPITALS
10
Terri Postma, MD, Performance Based Payment Policy Group, CMS at the ACO Learning Network, Brookings Institute…
“CMS will transition payments being tied to value of 85% by 2016 and a minimum of 90% by 2018”
“Payments tied to risk goals 20% - 2015, 30% - 2016 and 50% by 2018”
“Care delivery re-design is a must to reach future improvement goals”
APRIL 9, 2015
11
CMS will reach the alternative payment model-based goals as proposed.
A. TrueB. False
TrueFa
lse
0%0%
12
The Comprehensive Care for Joint Replacement Model (CJR)Coming to 67 markets near youProgram goals
• Focus on joints ($16.5k to 33k)• Comprehensive episode• Retrospective bundle• Estimated savings over 5 years $343mil
VOLUNTOLD BUNDLES
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1. Leadership buy-in2. Re-design clinical processes around best
practices3. Care Pathway management is not optional4. Post Acute Care coordination
4 MUST DO ITEMS FOR CJRS
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MACRA
Replacement of SGR pushes risk2 Payment models beginning in 2019
• Merit Based Incentive Payment System (MIPS)
• Alternative Payment Models (APMs) – 25%
25%
15%30%
30%
MIPS Weights
E.H.R UseClinical Im-provementQualityResource Use
15
Government
M Advantage reform
Medicare risk programs
Medicaid managed CareMedicaid block grant funding
1332
Employers
From plans to exchanges
Self funded emphasis on
utilization
Consumers
Premium sensitivity
Price at point of service
MARKET FORCES WILL CURB SPENDING
*NOTE: Some other reason (vol.) and Don’t know/Refused responses not shown.SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted April 15-21, 2014)
COST IS PRIMARY REASON FOR REMAINING UNINSURED
You tried to get coverage but it was too expensive
You don’t think the requirement applies to you
You didn’t know about the requirement to have health insurance
You tried to get coverage but were unable
You would rather pay the fine than pay for health insurance
36%
14%
13%
12%
7%
AMONG THE UNINSURED AGES 18-64: As you may know, the health care law requires nearly all Americans to have health insurance this year or else pay a fine. Which of the following comes closest to why you personally have not gotten health insurance this year?
17
CMS will reach the alternative payment model-based goals as proposed.
A. TrueB. False
TrueFa
lse
0%0%
18
• Lacks patient-centric coordination• Fragmented payment system• Variable quality measures• Volume rewarded• Provider focused• Confusing pricing structure
CURRENT INDUSTRY STATUS
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• Patient-centric care and coordination• Value based payment system• Uniform set of quality measures• Transparency in price and quality
FUTURE STATE
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RISKS AND REWARDS
Risk = Uncertainty of the level of spending and clinical outcomes for a clinical episodeRisks and rewards go together
More risk is not inherently bad, and typically speaking, the larger the risk, the larger the potential reward; managing risk is about influence, control, and scale
Two main classifications of risk for healthcare payment:Actuarial Risk (e.g. someone getting sick) Performance Risk (e.g., errors, inefficiencies, patient behavior)
The APII is shifting performance risk to providers, with the logic that those providers have more control over these risks
RISKTRANSFER
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Common Objectives
Communication Strategies
Cooperative Relationship
ESSENTIAL ELEMENTS BETWEEN CLINICAL AND FINANCIAL TEAM
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TRUST
• Consider a system model that includes integration• Understand care management – variation will cost
$$$• Reducing costs allows for pricing options• Efficiency is a must for voluntold bundles• Build patient/consumer relationships
LEADERS SHOULD POSITION BY
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Top 3 Issues in 20161. Financial challenges2. Reform implementation3. Government mandates4. Patient safety5. Care of uninsured6. Patient satisfaction7. Physician-Hospital
relations8. Population health
management9. Technology10. Personnel shortages Fin
ancial C
hallenges
Government m
andates
Care of u
ninsured
Physician Hospita
l relations
Technology
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ACHE SURVEY OF TOP 10 ISSUES 2014
25
• Data Strategy• Data Availability• Data Integrity
BUSINESS INTELLIGENCE
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Cost effectiveness• Lean and mean• Narrow portfolio• Rightsized platform
Enterprise-wide perspective• Clinical navigators with engaged leadership team• Cross continuum of care assets are appropriately deployed
- Appropriate Care In the Appropriate SettingConnectivity
• Interconnected patient flow information• Seamless transfer of information
Mass Customization• Uniform care processes to produce consistent clinical
outcomes• Communication and implementation of best practices
CORE COMPETENCIES ESSENTIAL FOR BUSINESS INTELLIGENCE IN AN INTEGRATED DELIVERY SYSTEM
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• Experience
• Quality
• Access• Cost
Competitive Price
Structure
Appropriate Care at
Proper Setting
Brand Identificati
on
Better Than the
Rest
PROVING THE “WORTH”COMPETITIVE ADVANTAGE
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• Hospitals are bearing the load of FFS payments• DSH, IPPS Update MACRA, IPPS Update Cuts for FY
• 16 - $29B• 17 - $38B• 18 - $54B• 19 - $67B• 20 - $76B
• Inpatient utilization continues to trend downward
WHY IS APPROPRIATE SETTING IMPORTANT?
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Source: MedPAC: A Data Book: Health Care Spending and the Medicare Program, June 2012
Source: HC Advisory Board interviews and analysis
• Has duplicative services poorly distributed across markets
• Overbuilt and unused capacity – real estate is a drag on cost, not an investment
• Incompatible offerings – Market demands are totally ignored, unable to match patient acuity
THE SYSTEM THAT IS HEADEDFOR A CRASH
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WHERE DO YOU FALL?
31
My Hospital profit margin trend is:
A. IncreasingB. DecreasingC. Remains the same
Increasin
g
Decreasin
g
Remains t
he same
0% 0%0%
32
My Hospital profit margin trend, excluding supplemental payments, is:
A. IncreasingB. DecreasingC. Remains the same
Increasin
g
Decreasin
g
Remains t
he same
0% 0%0%
33
CLEAR WINDSHIELD VIEW?
34
OFF THE BEATEN PATH?
35
IT’S COMPLICATED, BUT WE’VE GOT THIS
36
CLEAR AS MUD!
37
My organization is prepared for the future.
A. Strongly AgreeB. Kind ofC. Strongly Disagree
Strongly Agre
e
Kind of
Strongly Disa
gree
0% 0%0%
38
NOW THAT WE’VE DISCUSSED THE MODELS, LET’S TALK…
• What questions does the group have?
• What other information would be helpful to you?
• Where are you currently at in terms of pursuing a bundled payment strategy, if you plan to?
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Who will win the Democratic Nomination?
A. Bernie SandersB. Hillary ClintonC. Other
Bernie Sanders
Hillary Clin
tonOther
0% 0%0%
40
Who will win the Republican Nomination?
A. Donald TrumpB. Ted CruzC. Marco RubioD. Other
Donald Trump
Ted Cruz
Marco Rubio
Other
0% 0%0%0%
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