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ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO

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Page 1: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

ARE YOU FUTURE PROOF?How bundled payment can help us

rethink healthcare

0

Bundled Payment SummitOctober 13, 2011Susan DeVorePresident and CEO

Page 2: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Begin with the end in mind…

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Page 3: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

The context: Unsustainability

Projected deficits•

Medicalization of social issues

Compounding demographics•

Fragmentation

Jobs•

Income

Politics

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Page 4: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

How do we get THERE from here?

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Page 5: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

How to Future-Proof in a time of transition

4

Radically Different Mindset

Stress Test

Re-craft Care

Delivery

Scale Innovate

Page 6: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

5

Stakeholder Value Model

CUSTOMER“Better health,

lower cost, and a good experience for the patient”

POPULATION NEEDS

DELIVERY PROMISEON THE

DELIVERY TEAMS

Page 7: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Build…Test…Scale…Along the road to value

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Value Based Purchasing

Preventable harm, readmissions,

mortality

Medical Home

Re-crafted care delivery system

Risk-assuming re-

crafted care

delivery system

Predictable capitated care

delivery systemBundled Payment

Care model must fundamentally change

Page 8: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Process, Outcomes, Population Health

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Process Improvement (Evidence-Based Care)

Systematic improvement (Inpatient/outpatient value)

Population total value

Payer Partners

► Insurers

► Employers

► States

► CMS

Bundled Payment

Page 9: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Advanced measures framework - DRAFT

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Goal:

Value =Health (time)

Experience

Expenditures

+

Drivers

Primary Secondary Tertiary Quaternary

Healthy Days (Patient reported)

Physical•

Mental•

Both•

Other (Social)

Patient….•

Pain•

Mobility•

Symptoms•

Lifestyle Risks

Clinical…•

Biometrics•

Past medical history…•

Outcomes (Population specific)

Care Delivery Processes•

Disease-specific•

Care model•

Care paths•

Transitions of care

Overall patient experience

Satisfaction•

Confidence (self)•

Confidence (care team)

Setting-specific surveys•

Provider-specific surveys•

Disease-specific surveys

Patient engagement/ activation

Provider culture

Health delivery expenditures

Non-HC delivery cost (opportunity cost)

Payor•

Patient and lost wages

Productivity•

Absenteeism•

Employer-sponsor health programs

-

Wellness-

Incentives

(RE) Admission•

ER visits•

Provider costs•

Rx cost/utilization•

Post-acute care•

Utilization-

Diagnoses-

Procedures- Surgery

Home health network (Primary care)-

Care team

Disease specific cost of care

Focused measures of waste and overuse

Focused measures of harm and treatment failures

Page 10: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

NQF High-Impact Clinical Conditions by Priority

Page 11: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Considerations for bundled payment

Which conditions should be considered?

What providers and services should be included in the bundle?

How are provider accountabilities determined?

What is the appropriate timeframe?

What infrastructure does the organization need to administer the bundled payment?

What fundamental changes in care delivery need to be occur?

How will payments be set?•

How will payments be distributed?

What risk adjustments need to be considered?

What measurement tools need to be put into place to understand results post-

implementation?

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Page 12: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Making the leap to bundled payment What we can learn from a car dealership

Key Drivers

Financial imperative

Accountability

Risk

Productivity & Quality

Payment & Profitability

Ability to Drive Desired Effects/Outcomes

Mindset change from volume to value –

longer warranties require better quality control along entire value chain.

Preventing and identifying defects

Assigning accountability

Intermingled incentives require stronger relationships, shared vision, trust, and structured way to resolve conflicts

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Page 13: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Factors contributing to successful implementation of bundled payments

Board and physician leadership

Organizational structure•

Pricing methodology for bidding

Evidence-based medical practice guidelines with detailed clinical metrics and decision support to measure quality and case progression

Supply (implants) cost management

Process efficiency and length-of-stay management

Clinical IT•

Proactive, aggressive case management

Business development and marketing strategy

Financial management system

12Source: HFMA April 2011

Page 14: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

Consequences

Intended•Encourages providers to coordinate care•Reduction in fragmented care for patients.•Standardization of clinical process•Better clinical outcomes•Reduced cost•Aligned incentives between providers•Better care experience•Data driven care management•Shared savings anti trust clearance•Lower readmissions•Drives additional market share.

Unintended•Volume spikes as unit price declines•Market concentration•Reduction in choice•Administrative cost increases•Fixed cost shifting•Additional measurement requirements•Significant profit erosion•Payor

involvement in implant procurement

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Page 15: ARE YOU FUTURE PROOF?ARE YOU FUTURE PROOF? How bundled payment can help us rethink healthcare 0 Bundled Payment Summit October 13, 2011 Susan DeVore President and CEO Medical Home

WILL YOU BE FUTURE PROOF?

THANK YOUFor questions or comments:

[email protected]

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