adapting to future health care delivery...

Kenny J. Cole, MD, MHCDS

Adapting to Future Health Care Delivery Systems

March 5, 2016


Chief Clinical Transformation Officer

Baton Rouge General Medical Center

2

Understanding Systems

System: a set of connected things or parts forming a complex whole, in particular or a set of things working together as parts of a mechanism or an interconnecting scheme or method

2016 ACG/LGS Regional Postgraduate Course Copyright 2016 American College of Gastroenterology

of 25


Complex adaptive systems are a 'complex macroscopic collection' of relatively 'similar and partially connected micro-structures' –formed in order to adapt to the changing environment, and increase its survivability as a macro-structure They are complex in that they are dynamic networks of interactions,

and their relationships are not aggregations of the individual static entities

They are adaptive in that the individual and collective behavior mutate and self-organize corresponding to the change-initiating micro-event or collection of events

Complexity science Often used to describe the loosely organized academic field that has

grown up around the study of complex adaptive systems

Highly interdisciplinary

3

Complex Adaptive Systems

Communities

Global macroeconomic network

Stock market

Manufacturing businesses

Developing embryo

Immune system

Hospitals

Healthcare delivery system

River systems and tributaries

4

Examples of Complex Adaptive Systems


of 25


5

River Systems of the Pacific NorthwestExample of a complex adaptive system

6

Teton Dam Design Failure


of 25


7

Teton Dam Failure - Tragedy

8

Teton Dam Failure


of 25


9

Downstream Effects of Teton Dam Design Failure• 11 persons and 13,000 livestock dead• Thousands of homes and businesses

destroyed• $100 million to build the dam• $300 million in claims

Unsustainable Spending

10

U.S. Health

care spending

grew 5.3% in 2014 to $3 trillion


of 25


11

Hoover Dam

"Every system is perfectly designed to get the results it gets” - Paul Batalden, MD

12

It’s All About System Design


of 25


1. Current care systems cannot do the job

2. Trying harder will not work

3. Changing systems of care will

13

Crossing the Quality Chasm3 Conclusions of IOM Report:

Business 101

14

How to create value for customers?

Value-based competition


of 25


How to create value for customers?

15

What’s Value?Quality of

outcomes that matter to patients

Cost of delivering those outcomes


of 25


17

Why Change?

18


of 25


19

Why Is Healthcare So Expensive? It depends on who you ask…

Why PROVIDERS

Think Healthcare Is So Expensive

Insurance Companies

Trial Lawyers

Rx Medical Devices

Patients

JAMA. 2013;310(20):2199-2200. doi:10.1001/jama.2013.282135

Fee-for-service reimbursement

Fragmented care delivery

Administrative burden on

providers, payers and patients

Population aging, rising rates of

chronic disease and co-

morbidities, as well as lifestyle

factors and personal health

choices

Advances in medical technology

Tax treatment of health insurance

Insurance benefit design

Lack of transparency about

cost and quality, limited data to

inform consumer choice

Consolidation and competition

High unit prices of medical

services

Medical malpractice and fraud and

abuse laws

Structure and supply of the health

professional workforce

20

Why is Healthcare Really So Expensive?

“What Is Driving U.S. Health Care Spending?: America’s Unsustainable Health Care Cost Growth.” Bipartisan Policy Center, September 2012


of 25


22

The Cost Conundrum


of 25


The Price Conundrum Payment data from 3 of the country’s largest commercial insurers, Aetna, Humana, and United Healthcare Costs of care vary tremendously, but essentially zero

correlation between where a city ranks in Medicare spending and private insurance spending

The degree of market power and negotiating leverage over payers is primary determinant of transaction prices

Baton Rouge is one of the few regions in the country that ranks high in both Medicare and private insurance spending

23

Cooper et al., The Price Ain’t Right? Hospital Prices and Health Care Spending on the Privately Insured, December 2015

$15,745

$15,073

$13,770

$13,375

$12,680

$12,106

$11,480

$10,660

$9,950

$9,066

$8,003

$7,061

$6,438

$5,791

$5,615

$5,429

$5,049

$4,824

$4,704

$4,479

$4,242

$4,024

$3,695

$3,383

$3,083

$2,689

$2,471

$2,196

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Average Annual Premiums for Employer-Based Coverage, 1999-2012

Single Coverage

Family Coverage

24

Why Change Is Needed…The Rising Cost of Employer-Sponsored Health Insurance

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012


of 25


Volume to Value

The one thing the medical profession has not been traditionally rewarded for is better, higher-value care (where value = quality/cost)

Instead we have been financially rewarded either for doing more stuff or for securing monopoly power

26

In a fee-for-service payment system, we are actually penalized for making the effort to organize and deliver care with the best service, quality, and efficiency


of 25


Four Ways out of the Price Conundrum

1. Regulate prices that hospitals and providers can charge consumers (e.g., Maryland)

2. Health systems can become insurers (e.g., Kaiser Permanente)

3. Expand Medicare to more and more people until we are single payer

4. True value-based competition where hospitals and providers compete on who can deliver the best outcomes, best service, and lowest prices ACOs and Clinical Integration

27

Three categories of care:1. Effective or necessary care accounts < 15% of total

Medicare spending Includes care that all eligible patients should receive

Defined by medical science—by objective information about outcomes of treatment and by evidence-based guidelines

Biggest problem is underuse2. Preference-sensitive care accounts for 25% of Medicare

spending More than one option exists and decision as to which option is right for

the individual patient depends on patient preference

3. Supply-sensitive care accounts for ~ 60% of Medicare spending

28

Categories of Care


of 25


29

Preference-Sensitive CareMoving from

Informed Consent and Delegated

Decision Making

To Informed Patient Choice and Shared Decision Making

About the frequency with which everyday medical care is used in treating patients with acute and chronic illnesses

Examples include: Frequency of physician visits

Referrals for consultation, home health care, or imaging exams

Admissions to hospitals, ICUs, or skilled nursing homes

These types of medical interventions are generally NOT driven by explicit medical theories and scientific evidence

These types of decisions are strongly influenced by the capacity of the local medical market—the per capita numbers of PCPs, medical specialists, and hospitals or ICU beds

Market is in disequilibrium supply pushes demand or utilization

30

Supply-Sensitive Care


of 25


EnvironmentWhat is Driving Change in Healthcare?

Risk Shift from Volume to Value

payment models for providers

Provider risk of a defined population (e.g. bundled payments, shared savings, ACO)

Value Based Purchasing percent at risk and scope with increase weight on efficiency

Non-reimbursed events (e.g. Hospital Acquired Conditions)

Patient out of pocket costs –Increase in Price Sensitivity

Shift from Physician to Patient-directed care

Transparency and demand for price to quality information

Public Insurance Exchanges

Private Insurance Exchanges – employers shift from defined benefit to defined contribution

Payments Payment Rates

Supplemental payment programs (UPL, UCC/DSH)

Commercial Rates – gap will continue to close between commercial and government payor rates

Managed Medicaid and Medicare Advantage

Demand (?) Insured

Number of Insured – Medicaid Expansion/ Waiver & Individual Mandate

? State Privatization of Safety Net Hospitals

Medicare Beneficiaries –Aging Population

% of commercial patients

Shift in Utilization

Shift from higher to lower cost treatments and settings as well as increased preventative health – Utilization Cost

Inpatient services

Outpatient services

Emphasis on right care, right time, right place

Shift from loosely managed to well managed markets

Supply (?) Horizontal integration –

Consolidation of hospitals

Vertical integration – Networks broadening their influence across the continuum of care

Scope of practice for non-physician practitioners

Alternative settings (e.g. Walgreens) and technology (e.g. telemedicine, eVisits)

31

Change is Hard, But Necessary

It is not necessary to change…survival is not mandatory – W. Edwards Deming

It’s impossible for someone to understand something if their income depends on understanding the opposite – Upton Sinclair


of 25


33

Accountable Care Organizations (ACO)An Accountable Care Organization (ACO) is a group of providers willing and capable of accepting accountability for the total cost and quality of care for a defined population.

1. Perverse Payment Model

2. Wrong-sized Medical Staff

3. Technology Platform Incompatibility

4. Lack of Physician Leadership and Management Structure

34

Why ACOs Fail

Clayton ChristensenHarvard Business School and Best-selling Author


of 25


How did they do it? How did it pay off?

Invested in IT (40% of costs) Identified metrics from EMRs and

analyzed data to generate insights into improvement opportunities

Population health analytical tools and business intelligence tools

Engaged in Clinical Transformation

Solicited patient feedback, transformed waiting rooms, allowed for same day appointments, and expanded hours

Invested in care management resources to manage across continuum of care

Shared Savings $20 million below Medicare

Baseline and received reimbursements in over $11 million

Improved Health outcomes Performed in the top 5th percentile on all measures (see below)

35

RIO Grande Valley ACO

When ACO’s succeed

36

Disruptive InnovationThreats vs. Opportunities


of 25


BENTONVILLE, AR - As it looks to both reduce out-of-pockets costs for employees, while also lowering its total healthcare costs, global retailer Wal-Mart announced last month a new program that will pay 100 percent of the costs for certain spine and cardiac surgeries plus travel expenses at six selected healthcare systems across the country.

Wal-Mart’s Centers of Excellence

37

Health Transformation Alliance

38

• 20 major companies with 4 million health plan beneficiaries• Plan to share data about health care spending and outcomes• Plan to use collective data and market power to hold down

health care costs• Could subsequently ripple through the world of employer-

provided health care coverage – 170 million people


of 25


39

Transparency Availability of provider

specific information on the price of health care services to the consumer

Information on efficiency and effectiveness of specialists made available to PCPs to help guide targeted referral patterns

Information on cost & quality of facilities to help guide informed consumer choices

Volume Value


of 25


No Outcome, No Income

Transformation

Strategy Organizational Structure Culture

Data & Analytics

Measured Results

Processes

Outcomes

Craft-based vs. Lean ProductionSequential vs. Iterative Care Processes

Clinical Integration

42


of 25


Creation of a safe, reliable, high-value, sustainable health care system

43

The Challenge We Face

44

How can we Improve what we don’t Measure?

Data Analyze Data

Generate Insights

Create Opportunity for Improvement

The Value of an Electronic Medical Record and Analytical Tools


of 25


Intermountain Healthcare Non-profit healthcare system

Located in Utah and southeastern Idaho

Comprised of 20 hospitals & 25,000 employees

Recognized as an international leader in healthcare quality improvement

Outcomes among the best in the nation

Provides healthcare at a fraction of the cost of most other healthcare organizations

46

Evolution of Knowledge-The Knowledge Funnel

As the state of knowledge

advances over time it can

ultimately be converted into

a codified algorithm


of 25


Integrated Care Delivery ProtocolsDisease management systems and care process models (CPMs) consisting of:

1. Adherence to evidence-based practice guidelines or protocols

2. Creation and on-going modification of workflow tools to blend the guidelines into care delivery as a “shared baseline” that meets unique individual patient needs

3. Development of clinical management information systems that both identify and track all medical, cost, and service outcomes related to a particular care process

4. Utilization of decision support tools, analytical tools, and business intelligence tools to identify opportunities for improvement

5. Availability of education materials for both health professionals and patients

48

HealthPartners Care Model Process for Diabetes• Improved Access• Increased Coordination• Standardization then

Customization• Data & Analytics• Cultural Change• Transparency• Improved Workflows and

Processes• Collaboration & Teamwork

Over $15,500,000 in total savings in 2011 from improvements in quality of diabetes care!

Diabetes Optimal Measure

BP <140/90 A1c <8.0

LDL <100 non-smoker

HealthPartners Care Model Process for Diabetes


of 25


3 conclusions from that report…..

Current systems cannot do the job… trying harder will not work… changing systems will

49

Institute of Medicine ReportCrossing the Quality Chasm

Healthcare Should Be…. Safe Effective Patient-centered Timely Efficient Equitable

IOM, Crossing the Quality Chasm, 2001


of 25

adapting to future health care delivery...

Documents