From Volume to Value:

New Opportunities for DNPs

July 9, 2014

David Chin, MD, MBA

Distinguished Scholar

Department of Health Policy and Management

Johns Hopkins Bloomberg School of Public Health

dchin5@jhu.edu

• Context

• National

• Maryland – 2014 Waiver from CMS

• Definition of Accountable Care

• Kroch Framework for Accountable Care

• Specific Opportunities for Improvement

• Opportunities for DNP Leaders

• Summary

Agenda

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Choluteca Bridge

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Waste in US Healthcare

Source: Analysis by PwC’s Health Research Institute based on published studies on inefficiencies in healthcare.

Waste cannot be eliminated immediately. However, by viewing waste in these baskets, the size of opportunities can be prioritized and rewarded. Like health spending itself, these categories overlap. Reducing one basket can affect the size of the others.

Total Waste $1.2 Trillion

Behavioral $303B to $493B

Clinical $312B

Operational $126B to $315B

Obesity/ overwieght $200B

Smoking $567M to 191B

Non-Adherence $100B

Alcohol Abuse $2B

Claims processing $21B to 210B

Ineffective use of IT $81B to 88B

Staffing turnover $21B

Paper prescription $4B

Defensive medicine $210B

Preventable hospital readmin $25B

Poorly managed diabetes $22B

Medical errors $17B

Unnecessary ER visits $14B

Treatment variations $10B

Hospital acquired infections $3B

Over-prescribing antibiotics $1B

Opportunities to eliminate wasteful spending in healthcare add up to $1.2 trillion of the annual $2.2 trillion spent nationally; these categories overlap

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Medicare ACO Background

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The 2010 Affordable Care Act (ACA) created the Medicare Shared Savings Program or Medicare ACO

Accountable for the quality, cost and overall care of a population of patients; Seek to coordinate care across the continuum with sufficient primary care

Provider Led with Formal Separate Structure

Voluntary program; In Medicare ACO, Medicare “fee-for-service” beneficiaries ONLY

Patients pick any doctor. No ACO “lock in” for patients.

3 Year Agreement Period

Susan Phelps

Medicare ACO Background

Fee-for-service is preserved; possibility for shared savings if reduce per capita cost vs. benchmark

Strict quality measure criteria (33 quality measures) 2 Tracks for Participation:

“Track 1” (one sided; shared savings; carrots only)

for duration of 1st agreement period. Max up to 50%

shared savings.

“Track 2” (two sided; shared risk; carrots/sticks) Max

up to 60% shared savings.

Many programmatic requirements related to patient protections and transparency

Susan Phelps

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New Maryland All Payer System

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Component

Hard cap 3.58% per capita growth for all payers for Maryland residents.

Cumulative Cumulative Medicare savings of $330 million over 5 years to equal trend after

year one and 0.5% reduction per year in years 2 -5

Spending Target

Length of 5 year demonstration. Trigger points on cost and quality with

demonstration and opportunities to correct. If terminated, 2 year transition.

triggers

Population-based Increased movement of revenue in global payment.At least 80% by year 5.

and global Payments not under global payment subject to variable cost factor(s),

approaches volume governor.

Quality Metrics Readmission, HACs, other VBP measures

Readmission rate for Medicare to national level within 5 years

Reduction in Maryland Hospital Aquired Conditions of 30% over 5

years

Revenue at risk in VBP measures on par with national Medicare levels

New Model--Change in Approach Under

Population Based System

Total Actual Revenue Base Year—Maryland Residents

Hard Cap Increase Population Change

Maximum Allowed Revenue Target Year—Maryland

Residents

The new approach will shift the focus to total revenue per capita.

Example: Base Revenue

Less: Out of State

Note: Subject to HSCRC approved rates

Known at the beginning of year

$ 15.0 Billion

$ 1.2 (Note)

$ 13.8

3.58%

0.60%

X Hard Cap Increase X

Population Increase

$ 14.4 Billion

Out of State Revenue Actual

Target Year Maximum

Revenue-‐Residents

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Implement

Work with HSCRC to implement and monitor new model

Manage and monitor Medicare revenue and utilization

Reduce avoidable volumes

Reduce avoidable admissions, re-hospitalizations and ER visits by linking patients to more appropriate resources that prevent episodic/urgent care needs

Intensify efforts to reduce preventable complications/hospital acquired conditions

Redesign/create more efficient service settings

A ssess investments for specific programs/ services in context of community need

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Near Term Hospital Success Factors

• Triple Aim

• Provider /Payer Collaboration

• Defined Population

• Alignment of Incentives

• Alignment of Infrastructure

• Bottom Line: Volume to Value

Attributes of Accountable Care

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Accountable Care Core Components

People Centered

Foundation Health Home

High Value Network

Population Health Data

Management

ACO Leadership

Payer Partnerships

Foundational Philosophy: Triple Aim™

The Bridge from FFS to Accountable Care

What are the underpinning

building blocks?

Current

FFS

System

Accountable

Care

Measurement

Kroch, et al, Measuring Progress towards Accountable Care 12

• Primary Care MDs

• Specialists

• Sites of Care

Pham, et al; Ann Intern Med 2009;356(11) 236-42

Care Management in Medicare

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Hopkins’ Efforts along the

Accountable Care Journey

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Johns Hopkins Community Health Partnership (J-CHiP) - $20M

CMMI Award – aka ACO on Training Wheels

ACO application was submitted to CMS in July, 2013

Epic implementation

Growing our network

The Initiative (standardizing clinical processes, supply chain

centralization)

Patty Brown

Ambulatory Sensitive Conditions

• Uncontrolled diabetes w/o complications • Short-term diabetes complications • Long-term diabetes complications • Lower extremity amputation among diabetics • Congestive Heart Failure • Hypertension • Angina without a procedure • Adult Asthma • Pediatric Asthma • Chronic Obstructive Pulmonary Disease • Bacterial Pneumonia • Dehydration • Urinary tract infection • Perforated appendix • Pediatric gastroenteritis • Low-weight birth

AHRQ Prevention Quality Indicators 2004

Change in Chicago ACSAs 2010 – 2012

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Kaufman, Hall & Associates , Health Affairs Blog Jan 6, 2014

Opportunities for DNP Leaders

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– Alignment of Incentives for hospitals, caregivers, and

patients

• Global budgets

• Value Based Purchasing

• High Deductible Plans

– Critical mass of Primary care and Healthy Patients

– Care Management across Continuum of Care

– Effective IT Infrastructure

– Effective Metrics and Transparency of Data

– Efficiency – reduction of unnecessary variation, care in

right setting (access), reduction in unit costs

• Context

• National

• Maryland – 2014 CMS Waiver

• Definition of Accountable Care

• Kroch Framework for Accountable Care

• Specific Opportunities for Improvement

• Opportunities for DNP Leaders

Summary

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