challenges and opportunities in the health care marketplaceevents/idn... · 2016-09-12 · source:...
TRANSCRIPT
Challenges and Opportunities in the
Health Care Marketplace
IDN Insights East MeetingAtlanta
Sept, 8 2016
*formerly North Shore-LIJ
Jeffrey KrautExecutive Vice President, Strategy and AnalyticsNorthwell Health
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Key Facts…The first and
largest integrated health system in
NY State
• 21 hospitals• Children’s Hospital• 2 Psychiatric Hospitals • 4 Nursing/Sub-acute facilities• 450 ambulatory locations• 13,600 affiliated physicians• 3,000 member physician
medical group
• 61,000 employees• Largest private employer in NYS• Major academic and research
center• A continuously growing footprint• Comprehensive and full
continuum of care
• Broad geographic coverage• 7 Counties - 10.8 million Population• Provides care to 4 million persons• 27% inpatient share• $9.5 billion revenue• “A” rated • Insurance Company – 85,000 Members
…More than a Health System
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• Inpatient Facilities
• Ambulatory/ Outpatient
• Long Term/ Home Care
• Hospice
• Medical Group
• Clinical Joint Ventures
• Medical Transport
• GME/CME
• School of Medicine
• Elmezzi GraduateSchool
• Graduate School of Nursing & Physician Assistants
• Center for Learning & Innovation
• Patient Safety Institute
• Bioskills Education Center
• Feinstein Institute
• Bio-Electronic Medicine
• Clinical Research Management
• Cold Spring Harbor Laboratory
• Karolinska Institutet
• Health Services/ Outcomes Research
• CareConnect
• Value-Based Purchasing
• Product Offerings
• Joint Product Offerings
• Employer Products
• Accountable Care Analytics
• Real Time Identification
• Point of Care Engagement
• Transitional Care Management
• Complex Care Management
• Advanced Illness Management
• 24/7 Clinical Call Center
• Community Paramedicine
• Community Benefit
• Access & Education Programs
• Veterans’ Programs
• Children’s Programs
• New Businesses
• Pharma Venture
• Consulting
• Partnerships
• Joint Ventures
Corporate Services Clinical Services Business Solutions
Integration-created Innovation and Business Operations
Corporate Services
• Revenue cycle
• General accounting
• Accounts payable
• Finance transaction processing
• Credentialing
• Procurement (GPO)
• Supply chain
• Human
Resources
• Education & training
• Patient scheduling
• Insurance verification
• HR Service Center
• Medical group MSO
• Biomedical engineering management
• Plant operations and real estate
• Environmental services
• Security
• Dietary
• Central sterile
• Pharmacy
• Network Development
• Clinical transformation
• Quality management
• Perioperative services
• Emergency management
• Ambulance transport
• Laboratory
• Care Coordination
Clinical Services Business Solutions
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4
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Demand for better Value andLower Cost
Increased Role of Government as Payor/Regulator
Strategy Landscape
Health System Consolidation
Technology&
BIG DATA
Provider/PayorConvergence
Partnerships & Collaborations
New Competition
Source: OECD Health Data 2014.
Average Health Care Spending per Capita, 1980–2012Adjusted for Differences in Cost of Living
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Dollars ($US)
* 2011.
US Last in Overall Ranking of 11 Countries
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8Health Care Spending per Capita by Source of Funding, 2012Adjusted for Differences in Cost of Living
* 2011.
Dollars ($US)
Source: OECD Health Data 2014.
8,745
6,080
4,811 4,698 4,6024,288
4,106 3,997
3,289 3,172
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21.0%
49.5%
65.2%
75.0%
81.7%
97.3%
2.7%
0%
20%
40%
60%
80%
100%
Top 1% Top 5% Top 10% Top 15% Top 20% Top 50% Bottom 50%
Percent of Population, Ranked by Health Care Spending
NOTE: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalizedpopulation, including those without any health care spending. Health care spending is total payments from all sources (including direct payments from individuals and families, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers (including dental care), and pharmacies; health insurance premiums are not included.
SOURCE: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, 2010.
Concentration of Health Care Spending in the U.S. Population, 2010
(≥$53,238) (≥$18,086) (≥$10,044) (≥$6,696) (≥$4,639) (≥$829) (<$829)
Perc
ent
of
Tota
l Hea
lth
Car
e Sp
end
ing
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Notes: GDP refers to gross domestic product.Source: E. H. Bradley and L. A. Taylor, The American Health Care Paradox: Why Spending More Is Getting Us Less, Public Affairs, 2013.
Health and Social Care Spending as a Percentage of GDP
12 12 11 11 1216
9 8 9 10 9
21 2120 18 15
9
1615 11 10
11
0
10
20
30
40
FR SWE SWIZ GER NETH US NOR UK NZ CAN AUS
Health care Social care
Percent
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Paradox of American Health Care Spending
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Pharmaceutical Spending per Capita, 2012Adjusted for Differences in Cost of Living
* 2011.
Source: OECD Health Data 2014.
Dollars ($US)
Spending on Health Insurance Administration per Capita, 2012Adjusted for Differences in Cost of Living
Source: OECD Health Data 2014.
Dollars ($US)
* 2011.12
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STRATEGIC HEALTH PERSPECTIVES℠
Theory:High Deductible health plans will impose market discipline
on providers
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Triple Aim
Better Health
Better Health Care Lower Cost
Triple AimInformation
IncentivesIntegration
Integrity
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The Evolving Landscape
• ED Treat & Release Growth• Strategic Physician Investments • Increasing Joint Venture Activity
• New Businesses & Partnerships• Broadening of Network• Focus on Outcomes, Service & Wellness
• Inpatient Volume Declines• Case Mix & Payer Mix Changes• Migration to Outpatient Settings
• Governmental Payer Rate Reductions• Governmental Reform • Commercial Downgrades & Contract
Negotiations
Inpatient Volume Trends
Continued Downward Pressure on Revenue
Ambulatory Volume Growth
Diversification of Revenue Streams
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Relentless Pressure • Conversion of one-day stays to observation status• Two Midnight Rule- Reduction in 2-day stays• Declining LOS through operating efficiencies• Reduction in readmissions and PQI’s admissions• Hospital Acquired Conditions Penalties• Elimination of 3 day hospital stay for a SNF
admission• Reduction in inappropriate SNF transfers to
hospitals• Reduction in inappropriate utilization of the
Emergency Department• Utilization declines due to other DSRIP initiatives• Movement of clinical care from inpatient to
ambulatory setting
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TRY TO GET PAID FOR THE REST:
• Inpatient denials,
• Pressure on price, trends and spend
• Transformation from FFS to VBP
• Shift from commercial to government and exchange products resulting in lower payment rates • 17
Where is Your Strategy Aligned ?
Better HealthBetter Health Care Lower Cost
• Accountable Care• Empowering Patients• Capturing Big Data• Data Analytics• Predictive Modeling• Social Determinants
• Improved Processes• Increased Efficiency• Delivery Redesign• Scope of Practice• Lowest Cost Site of Care• Tele-health• Digital Substitution• Self-Care• End of Life Care
• Improved Quality Outcomes• Better Patient Experience• Reducing variation• Continuum of Care Settings• Performance Transparency• Shared Decision-Making• Clinical Guidelines
Value =(Access + Quality + Experience)
Cost
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Top Quartile: Top quartile (20 systems) overlapping the Citi study
Other Integrated: 2nd-4th quartiles (58 systems) overlapping the Citi study
Integrated Scale Matters !Consolidation continues toward 100-200 Large Regional Systems
T:\NY Public Finance\PTC\Health Alliance Henry Ford\Pusey_130110\wksp\USA.wor
Henry Ford Health SystemMcLaren Health Care Corp
Fairview Health Services
Gundersen Lutheran Health Care Network
ProMedica Health System
Advocate Health Care
University Hospitals
Intermountain Healthcare
MultiCare Health System
Baystate Health
Geisinger Health System
UPMC
Inova Health SystemSentara HealthcareCommunity Health Network
Presbyterian Healthcare Services
Banner HealthSharp HealthCare
Novant Health
WellStar Health System
University of Michigan Health System
Sparrow Health System
Spectrum HealthAurora Health Care Inc
Wheaton Franciscan Healthcare
Univ Wisconsin Hospital & Clinics
Sanford Health
Beaumont Hospitals
Oakwood Healthcare
BJC HealthCare
Iowa Health System
Akron General Health System
Legacy Health System
Renown Health
Sutter Health
John Muir Health
Kaleida Health
Fletcher Allen Health Care Rochester General Health System
MaineHealth
Lahey Clinic
Lifespan
Yale New Haven Health System
North Shore - Long Island Jewish Health System
Meridian Health System
Lehigh Valley Hospital and Health Network
Crozer - Keystone Health System
Lancaster General Health
WellSpan HealthMedStar Health
Moses Cone Health System
OSF HealthCareMemorial Health System
Saint Francis Health System
Scripps Health
Saint Lukes Health System
Roper St Francis Healthcare
Greenville Hospital System
St. Josephs/Candler
Health First
Palmetto Health
Spartanburg Regional Healthcare System
Carolinas HealthCare System
Lee Memorial Health System
Mountain States Health Alliance
University Health Systems of Eastern CarolinaCovenant Health
Baylor Health Care System
Ochsner Health System
CoxHealth
Methodist Healthcare
Memorial Hermann Healthcare System
Scott & White Memorial Healthcare
Texas Health Resources
Norton Healthcare Carilion Clinic
Integris Health
OhioHealth
Source: IMS Integrated Healthcare Network Benchmark Report Surveys 2008-2012. Map displays the overlapping top systems with Citi’s database.
Top NFP Integrated Health Systems
Majority of Top Quartile Have Health Plans
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The Marathon Runners - Built for the JourneyLook for Organizational Strength
Scale and integration
Market essentiality
Leading quality and patient safety
Aligned physicians
Sophisticated IT with high adoption rates
Highly efficient cost structures
Population health focus
New payment model competencies
Reasonable capital access
Progressive governance and leadership
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Possess Attributes and Skills Needed to Succeed
Care Management• Coordinating care across the continuum• Designing new care delivery models and systems to monitor and manage care• Ability to meet performance goals and transparency
Cost Management• The imperative of being optimally efficient and productive• Preparation for price transparency and to compete on price• Rationalize capacity: reduce variation within Health System
Physician Integration• Aligned medical staff (full time & voluntary) characterized by
goals and clinical and service outcomes
Service Distribution System• Provision of innovative access to sites of care beyond traditional models• Bring care to the customer – promote retail and occupational sites
within communities
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Scale and Geographic Reach• Development of network relationships that expand beyond current
geographic footprint• Drive market innovation; be indispensible to health plans and ability to
launch your own health plan
Population Health Management• Expertise in managing discrete populations (clinical, geographic, etc.)
not just individuals
Talent Management• Continued development of professional and non-professional capabilities• Become a talent “factory” – become best place to work
Customer Service• Create culture that fully recognizes we are in the customer service business• More than individual patients, need to engage families, friends, neighbors and
co-workers
Operational Strength• Sustained success in operations, revenue growth, profitability and
strengthening of the balance sheet• Creation of new businesses and revenue streams by optimizing current assets
and engaging in joint partnerships
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Payer Consolidation
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Source: Kaiser Family Foundation, State Health Facts, 2016
Individual Market CompetitionMarket Share of the Largest Insurer, 2013
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Number of Carriers Participating in Exchange, 2016
“Obamacare Options? In Many Parts of Country, Only One Insurer Will Remain” New York Times, August 19,2016 26
By 2017, In Many Parts of Country, Only One Insurer Will Remain
The Path From Volume-Based Health Care to Value-Based Health Care Is a Continuum
Volume-Based Value-Based
Un-integrated provider networks
in the community and post-acute
settings
Traditional Provider and Payor
models
Patient as a transactional shopper
Strong integration in provider networks in
community and post-acute settings
Provider as health insurer, payor as provider
Significant collaboration to manage risk
sharing between providers and payors
Increased provider service offerings
Patient as an attributed life
Partial integration in provider networks in
the community and post-acute settings
Increasing delivery and payment reform
(ex. ACO’s and PCMH)
Increasing collaboration to manage risk
between Providers and payors
Patients as a savvy consumer
Low Risk
Sharing, Low
Value
High-Risk Sharing,
High-Value Potential
Traditional
Fee for
Service
Episode-
Based
Payment
Global
Payment
Limited
Capitation
Bundled
Payment
Market Evolution
Pay for
Performance
27Confidential and Proprietary © 2016 Sg2
% of Members 80% 15% 5%
Cost Per Member Low Medium High
Types of Members
• Worried well• Self resolving
illness• Low grade
acute illness
• Chronic disease
• Moderate to severe acute illness
• Significant diagnoses• Multiple co-morbidities• Often within 2 years of death• Psychological, social and
financial predicaments
Management Approach
• Wellness• Screening and
Prevention• Demand
management
• Diseasemanagement
• Case management
• Complex care management• Advanced Illness Management• Palliative Care
From Health Care to Health ; New Thinking , New Language , New Strategic Literacy
COMMUNITY PARTNERSHIPS
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Moving to Me Health Care
KNOW MESHOW METHE PATH
HELP MECOORDINATE
EMPOWER ME
Touch Points in a Digitally Integrated Care Continuum
Patients
&
Families
Community
PhysiciansEmployed
Physicians
ED
Acute Care
RHIOs
Pharmacies
Laboratory
Home / Work
Imaging
Social
Services
LTC
Senior Living
Wellness /
Fitness
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31Confidential and Proprietary © 2016 Sg2
Sg2 Projects
Advanced Markets
Will Double by
2018
What This Means to You – Know Your Markets
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The “4 C’s” Catalyze Market Movement
Pressure on consumers to pay for care
Rise in consumer-directed health plans
Shift of customers to emerging retail platforms
Consumerism
Blurring of the lines between channels
Health systems starting health plans
Payers acquiring provider organizations
Funders working directly with providers
Convergence
Adoption of value orientation in the health ecosystem
Expansion and success of value-based models
Barriers to value-based care
Opportunities for value-based care
Emergence of disruptive technologies
Cohesion
Merging of customers into larger players
Consolidation of providers
Consolidation of payers
Consolidation
32Confidential and Proprietary © 2016 Sg2
Supplier Programs Are Increasing Both inNumber and Scope
Product
Warranty
Outcomes and
Complications
Long-Term Patient
Management
SUPPLIER PROGRAMS ACROSS THE EPISODE SCOPE
Provider-Specific
Needs
Patient Selection
and Tracking
Care
Redesign
Episode Scope LONGERSHORTER
33Confidential and Proprietary © 2016 Sg2
Industry Examples of Providing Value by Program
Example of Programs / Suppliers Value Service Principle
Warranty
BionsenseAssuring device/product functionality to build confidence among
stakeholders and business partners.Titan
Biomet Oxford Knee
Patient Selection
Novartis Offering analytical or diagnostic solutions to target key patient groups to reduce overall cost of care and improve quality.Aetna–Medtronic
Outcomes St JudeAssuring product functionality based on agreed outcome metrics
(tied to financial incentives/guarantees).
Coding and Episode
Definition
VoxHealthProviding support with coding definitions and structuring of
bundled payments.Stryker Bundled Payment Solutions
InventoryManagement
TransactRx and AthenaHealth
Supporting with inventory management and billing.
Strategic Advisor /
Consulting
Stryker Performance
SolutionsOffering strategic advisory and consulting services to improve
health systems’ operational performance.
Siemens CareXcell
34Confidential and Proprietary © 2016 Sg2
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Partnerships & Joint VenturesClinical & Research
Clinical Access
Technology
Business Solutions
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Data Driven Business Models
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What are You Doing with Your Data ?
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• Current transformations are irreversible; change not temporary.
• Health care not unique in this regard; all industries being transformed.
• Importance of the long view – avoid addiction to short-term thinking.
• Operating in a new reality; terms of competition and success are changing – a key word is ‘value’.
• Must take a broader view of the marketplace
Thinking differently
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• Not just a hospital or hospital system anymore• Not just an Insurance Company• Not Just a Supplier
• We can be a provider and also a payer;
• We can invest or partner with our suppliers
• Only a few organizations (systems) in each large market area will survive and be sustainable.
• Managing paradox – stability versus change; old versus new; flexibility versus decisiveness; freedom versus control.
• Exciting time to be in health care.
Thinking differently
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Challenges and Opportunities in the
Health Care Marketplace
IDN Insights East MeetingAtlanta
Sept, 8 2016
*formerly North Shore-LIJ
Jeffrey KrautExecutive Vice President, Strategy and AnalyticsNorthwell Health