Population Health Management: Dead or Alive? · (DART) & Baylor Scott & White Quality Alliance...

Copyright © 2019 BDC Advisors, LLC. All rights reserved.2

Today’s Discussion

1. The Prognosis for Population Health Management

2. Key Drivers of Success

3. Stories from the Front Lines

1. The Prognosis for Population Health Management


What is population health management? Population health management is a business model centered on getting paid to manage a defined population.

POPULATIONHEALTH

MANAGEMENT

Defined Population

PatientSegments

CareDeliveryModel

PatientOutreach and Engagement

Infrastructure

AlignedPayment

Model


Is Population Health Management Dead or Alive?

• Reimbursement remains largely FFS

• Hospitals still drive health system economics

• ACOs exiting the MSSP program

• Only 34% of ACOs earned shared savings from Medicare in 2017

Dead? Alive?

Making the Case

• Healthcare cost growth needs to be constrained

• Medicare refreshes ACO program to encourage move to downside risk

• Strong Medicare Advantage growth

• Private equity capital focused on acquiring and expanding risk-bearing physician groups


Source: AMGA:, “Taking risk, 3.0; Medical Groups Are Moving to Risk…Is Anyone Else?

Payment models are continuing on a steady march toward risk-based payments but reimbursement remains strongly fee for service.


The prognosis for population health management varies by market segment.

Medicare Medicaid Commercial

High Level Market Segments

Medicare is moving to population health models through the ACO program and increased Medicare Advantage penetration

Medicaid risk is largely still held by MCOs and the segment remains an underappreciated opportunity by many health systems

Commercial population health efforts remain nascent in many markets, exchange business will move before group does


Source: Moody’s

The Business Case for Population Health Management

For many health systems, a value-based, population health strategy may enable a

brighter financial future than one focused purely on FFS.


Payers are facing economic challenges as well and are becoming increasingly motivated partners.

Source: Data from health plans NAIC and DHMC databases, Deloitte analysis

2. Key Drivers of Success


Source: My compliments to Ian Morrison

If you approach population health management with a ‘merit badge mentality’, you will flounder


In the transition to value-based care, it is essential to stay within the ‘Sweet Spot’.

Value Capture in Population Health

Valu

e-Ba

sed

Cont

ract

ing

Fully Integrated Population Health

ManagerPopulation Health Transformation

T0

Full Financial Risk

Cost of care exceeds global payments resulting in negative margins

Value created accrues predominantly to the payer

Highest Value Creation and Capture

FFS & Gain Share

Source: https://www.bdcadvisors.com/finding-the-sweet-spot-in-value-based-contracts/


Essential ingredient: actual care transformation

Fee-for-Service Business Population Health & Total Cost of Care

Patients/customers Whoever makes an appointment Enrollment or attribution

Contracting Many contracts with different incentives

Few with similar incentives

Revenue Paid per unit of service Monthly Fixed Amount

Coding Revenue Acuity

Data Systems Revenue-Based Population-Based

Staffing Physician centric Team based

Compensation Productivity or revenue Panel management and quality

At a practice level, it is essential to achieve a sufficient critical mass of patients in total cost of care contracts to transition operations from a fee for service model to population health model.


Common denominator: payer partnership

Developing a Population Health Strategy & Executing a Risk-Based Contract

Clinical Capabilities & Opportunity Assessment

Payer PartnershipApproach

Deal Structure

• Understand clinical capabilities including ability to manage episodes of care and total cost of care risk

• Identify and assess potential opportunities

• Determine investments and time required to enhance clinical capabilities and pursue opportunities

• Define desired outcome for each market segment

• Pursue payer conversations mindful of market segment objectives

• Jointly craft the right partnership model

• Contract vs. joint product ownership vs. NewCo.

• Product, network & benefit design

• Delegation (as appropriate)• Payment model and risk

sharing• Contract terms and

conditions


Path to success in value-based contracts is not ‘one size fits all’

3. Stories from the Front Lines


Case studies illustrating drivers of success in population health management

Developing a Patient-Centered Medicare Advantage Business

Case Studies

Enabling Providers to Better Serve Exchange and Medicare Advantage patients

Developing Capabilities with Your Employee Population and then Going Direct to Employer

Transforming End of Life Care in LaCrosse, Wisconsin


Oak Street Health: Business ModelDeveloping a Patient-Centered Medicare Advantage Business

• Private Equity Backed Harbour Point Capital and Quantum Strategic

Partners led the latest round of investment• Exclusively Medicare – No commercial patients• Targets underserved communities

50% patients are dual-eligibles 40% have a diagnosis of Diabetes

• Does not operate under fee-for-service Value-based / risk contracts with managed care

payers (Humana, MeridianCare, Aetna, Health Alliance Plan, others)

MSSP Track 1 – Acorn Network - with other partners (presumably to achieve greater scale of beneficiaries)

• Fast growth: ~40,000 patients in 2017 Up from ~25,000 in 2016 and 5,000 in 2015


Oak Street Health: Value Proposition and Care ModelDeveloping a Patient-Centered Medicare Advantage Business

• “At Oak Street we have a great value proposition. We guarantee [insurers] a profit by delivering high quality care. We offer patients a better experience for free.”

• “If there was a silver bullet, if it was easy, Oak Street wouldn't exist because everyone would be doing it. But the answer is doing a thousand little things every single day and having the proper support systems to make that happen.”

• Three keys to success1) Make primary care the focus and put primary

care physicians in the driver’s seat. 2) Have a deep understanding for how to manage

the care needs of an aging population. 3) Be small enough to effectively engage your

Medicare beneficiaries and collaborate with your fellow primary care providers on best practices

• Clinics create a community environment and provide education on skills such as how to use a computer, the internet, learning Spanish

• Leverage a Community-Based Care model (community outreach from churches, YMCAs, community health and wellness events at care centers)

• Integrates intensive home care, transportation, and preventive services such as eye exams (40% of their patients have diabetes)

• ~6 clinician team manage a panel of 400-600 patients Physicians do not have to chart; They do have to

go to the hospital, the patient’s home, etc. and ensure the patients are getting the right care at the right place 24x7

24x7 access to physicians Flexible scheduling (walk in hours and same day

appointments) Transportation

What They Say What They Do


Bright HealthEnabling Providers to Better Serve Exchange and Medicare Advantage patients

• 2 year old company• Founding partners include ex-CEO of UnitedHealthcare• Bright Health partners with 1 “care partner” in a market

- Similar to becoming a provider sponsored health plan, but business model is a strategic partnership, not a JV

• Partnership focused on optimizing care by:- Leveraging the provider’s network and pop health

strengths- Integrating with Bright health’s administrative and

care management expertise- Aligning the health plan with the investments the

provider has made in population health infrastructure

Overview

Patients

• Competitive pricing for Individual & family plan insurance as well as Medicare Advantage

• Provider relationship continuity over time (commercial => Medicare) within one (narrow) provider network

Providers

• Enables providers to access individual purchaser markets (Exchange, MA) and effectively compete for market segment willing to trade network for a competitive price

• Increase in domestic utilization (40-50% grows to 85-90%) which also enables greater clinical integration and better coordinated patient care

• Marketing to grow membership

Value Proposition

Experience with their first Care Partner• 95% domestic utilization• 50% care navigation engagement• 2x membership growth in 2nd year


Source: HFMA Leadership +, D Magazine

Baylor Scott & White Quality AllianceDeveloping Capabilities with Your Employee Population and then Going Direct to Employer

• Results seen from 4 year BSWQA ACO pilot with its own 67,000 employee & dependent population:- 22% decrease in hospital admissions - 23.7% lower medical-cost relative to market- $57 million in savings

• Direct-to-Employer ACO Arrangement between Dallas Area Rapid Transit (DART) & Baylor Scott & White Quality Alliance (BSWQA)- Started Jan. 1, 2018- DART: 3,600 employees and dependents- BSWQA: 5,000 primary care and specialty physicians, 50 hospitals

and 95+ post acute facilities, and other healthcare stakeholders • DTE Plan Structure

- Value-based contract with BSWQA ACO through third party administrator (HealthScope)

- BSWQA ACO taking on downside risk tied to health outcomes - Option for employees to receive cost-sharing or premium reductions if

positive steps taking to improve health - Aims to reduce cost and improve health for DART and its employees

Dallas Area Rapid Transit (DART) & Baylor Scott & White Quality Alliance (BSWQA)


Gundersen Health NetworkTransforming End of Life Care in LaCrosse, Wisconsin

1990

• 2% of people with advanced directives

2009

• 96% of people with advanced directives

SOURCE: Hatkoff et al, “How to Die in America: Welcome to LaCrosse, Wisconsin” Forbes, September 2014.

18.2

26

Avg. Spending for Patient’s Last Two Years of Life ($K)

LaCrosse US Avg.


The water is getting hot for providers…How hot does it need to get before we make the jump?

In Summary

• Economic ‘temperature’ continues to rise on health systems• CMS pushing downside risk on providers• Providers and health systems will need to develop population health

competency to participate in value-based contracts

• The ”Merit badge” approach to population health is DOA (dead on arrival)• But there are living examples that a population health management strategy

can be effective• Requires:

- Critical mass of patients in risk contracts- Development of new IT, care management, and analytic capabilities- Willingness to pivot away from FFS- Alignment around a value-based care strategy

Thank You!

David Fairchild, MD, MPH

Director, BDC AdvisorsProfessor of Medicine, UMass Medical [email protected]

mailto:[email protected]

Population Health Management: Dead or Alive? · (DART) & Baylor Scott & White Quality Alliance...

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