monica e. oss, chief executive officer, open minds arizona ......monica e. oss, chief executive...
TRANSCRIPT
Monica E. Oss, Chief Executive Officer, OPEN MINDS
Arizona State University
July 19, 2012
• Why the demand for “coordinated care”? What factors are shaping emerging models?
• What are the emerging “coordinated care” models? What management practices are needed to assure both good performance and financial sustainability?
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I. Why The Demand For “Coordinated Care”? What Factors Are Shaping Emerging Models?
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1. Federal and state deficits
2. Insurers and managed care plans under price pressure
3. Consumers paying more out of pocket
4. Rising cost per person – aging population, longer life expectancies, new technologies
5. High proportion of population uninsured and uncertain future about implementation of reform
6. All ‘easy’ cost savings have been made
Payer focus is moving to the costs of care for consumers using largest proportion of resources. Driving interest in “coordinated” care
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•$11,487 per person 5% of U.S. population
account for half (49%)
of health care spending
•$664 per person 50% of population
account for only 3% of
spending
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• Services to support chronic illnesses contribute to 75% of the $2 trillion in U.S. annual spending
• Patients with co-morbid chronic conditions costs 7x as much as patients with one chronic condition
Nine Highest-Cost Chronic Conditions
1. Arthritis 2. Cancer 3. Chronic pain 4. Dementia 5. Depression 6. Diabetes 7. Schizophrenia 8. Post traumatic conditions 9. Vision/hearing loss
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Condition No Behavioral
Health Disorder
With Mental Illness And/Or
Addiction
Asthma/COPD $8,000 $24,598
Congestive Heart Failure
$9,488 $24,927
Coronary Heart Disease
$8,788 $24,443
Diabetes $9,498 $36,730
Hypertension $15,691 $35,840
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Total private
insurer
medical costs
for children
with autism is
3 to 7 times
greater than
for those
children
without
autism. . .
Rhonda
Robinson-Beale,
M.D., Optum
• Multiple specialists (and multiple prescriptions)
◦ Consumers with 5 or more chronic conditions see 16 physicians a year with 37 office visits
◦ Fill 50 prescriptions per year
• Poor follow-up from ER visits and hospitalizations ◦ 20% of Medicare hospitalizations are
followed by readmission within 30 days
◦ Among <65 Medicaid patients, 10% were readmitted within 30 days
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Readmissions add $15 billion in annual Medicaid and Medicare payments
Integration of
Primary Care &
Chronic Disease
Management
Integration of
Primary Care
& Behavioral
Health
Integration of Primary Care & Behavioral Health Coordination of behavioral health services and primary care services to improve consumer services and outcomes
Integration of Primary Care & Chronic Disease Management Coordination of services to manage and address multiple chronic disease states within or parallel to primary care
“Care coordination”
the key element in integrated
models
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22%
49%
64%
80%
97%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Top 1% Top 5% Top 10% Top 20% Top 50% Bottom 50%
Perc
en
t of Tota
l E
xpen
ditu
res
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• Management via ACOs, medical homes, and primary care
• Specialist role is secondary
• Focus on prevention and wellness
• Consumer self-care and consumer convenience is key
• Web presence (optimization, reputation, etc.) critical for consumer referrals
• Health information exchange a requirement
Primary care relationships with clearly defined specialty service
Consumer ‘experience’ (and preference) critical
Web presence key referral mechanism
Health information exchange capabilities
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• Coordination of medical, behavioral, and social service needs by specialty group within larger system
◦ Health homes
◦ Waiver-based HCB programs
◦ PACE programs
◦ Specialty care management programs
• Assumption of performance risk (with or without financial risk)
Cross-specialty and cross-system care coordination capability
EHR system and HIE with real-time care management metrics
Performance-based contracting and risk-based contracting capabilities
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New
Financing &
Service
Delivery
Models
New Tech
For
Treatment &
Service
Delivery
Less FFS More P4P
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More Organizations Are “Rating” Performance In Health Care
CMS Quality Initiatives
National Committee for Quality Assurance (NCQA)
National Quality Forum (NQF)
Substance Abuse and Mental Health Services Administration (SAMHSA)
The Joint Commission
Center For Excellence in Assisted Living
Care management organizations (HMOs, MCOs, PPOs, ACOs, etc.)
Consumer-driven open-source rating organizations
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reserved. 17
OPEN MINDS © 2012. All rights
reserved. 18
FFS Financing
Payer (or MCO) maintains risk for unit cost
and quantity of services used
Consumers request services
Provider organizations deliver services
and are reimbursed based on volume
Beyond FFS Financing
Payer (or MCO) contracts with provider
organizations to deliver services to a
population for a fixed amount of dollars
Consumers request services
Provider organizations determine type and
amount of service, delivers service, and
manage pool of dollars
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MCO “approves” service
OPEN MINDS © 2012. All rights
reserved. 20
Synergistic Environmental Factors In Current Market
Emerging Developments in
Neuroscience New Health Data Systems
& Informatics
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New Functionality In Telecommunications
Ability to monitor
brain functionality and
changes
Changing theory of
brain development
and maturity –
longer and later
Identification of genetic and
epigenetic factors in behavioral
and cognitive disability
Better understanding of
brain chemistry
Discovery of
possibility of brain
cell regeneration
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Emerging Developments in Neuroscience
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New Functionality In Telecommunications
Telehealth
Telecare & Assistive
Technology ehealth
Smart home Technology
Tech-assisted cognitive retraining
Companion robots
Remote monitoring
systems
Remote vital sign sensors
Wearable wireless devices
mhealth
Smartphone applications
Text message
alerts
Telehealth
Real-time consultation
Remote audio/video
therapy
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Bioconnectivity
Single Real-Time Clinical, Admin, &
Cost Data Set
EMRs & EMR Data (NHIN of the future)
Clinical Metrics From
Telehealth
Connection of & Access To All Data Sets Via Web Tools -- For Consumers,
Professionals, Health Systems
Clinical Data From
New Diagnostics
& Neurotech
New Health Data Systems & Informatics
Electronic health
recordkeeping
systems
Computer-assisted
treatment planning
and clinical expert
systems
Predictive clinical
analytics
Remote monitoring
and smart homes
Web-based consumer
interaction and
consumer self-
management
Telehealth, virtual and
alternate reality
technologies, and web-
based treatment
management
Neurotech devices
and computer-based
cognitive retraining
tools
New pharmacological
delivery systems - smart drug delivery systems:
patches, injectibles,
microchips, etc.
New diagnostics –
scans, biologic
testing, web-based
assessments, etc.
Integrated performance metrics monitoring – clinical, HR, financial, marketing
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New
Technologies
Allow Greater (&
More Effective)
Integration &
Coordination Of
Care
Telehealth and virtual
consultation
Interoperable
electronic
recordkeeping
systems
Smartphone and other
technologies for
consumer-directed
disease management
Participation
in health
information
exchange
programs
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Integrated care is a model
of health care delivery that
engages people in the full
range of physical,
behavioral, preventive and
therapeutic services to
support a healthy life.
In an integrated care
setting, behavioral
health and medical
providers work together to
coordinate treatment and
follow-up of a person’s
health care.
II. What Are The Strategies To Assure Good Performance & Financial Sustainability?
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1. Payers and consumers want “coordinated care” models – for different reasons
2. Coordinated care models – if done well – can meet the objectives of both payers and consumers
3. Initial evaluation data on “coordinated care” models is positive but not definitive
Despite this, the sustainability of coordinated care models is questionable. The question – how to support the performance of these new models – and make them financially sustainable?
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• Treatment of depression in primary care setting
• Standardized assessment questionnaire for PCPs
• Clinical care manager for patient education and psychiatrist for team consult
• 4,862 depression screenings (PHQ9) at 80 clinics over a three year period from March 2008-2011
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Consumer Outcomes
Before After
Depression remission
30% of patients after 6 months
53% of patients after 12 months
Depression response
40% of patients after 6 months
70% of patients after 12 months
OPEN MINDS © 2012. All Rights Reserved
• 22 clinical locations in 15 Tennessee counties ◦ Sites including primary care clinics, schools and Head Start Centers
• Behavioral health consultant (BHC) embedded, as full -time member of the primary care team
• Psychiatrist is available by telephone for consults
• Primary Care Provider (PCP) “hands off” the patient to the BHC for assessment or intervention.
OPEN MINDS © 2012. All Rights Reserved
System Performance
28% decrease in medical utilization for Medicaid patients Medicaid patients
20% decrease in medical utilization for commercially‐‐insured patients
27% decrease in psychiatry visits
34% decrease in psychotherapy sessions
48% decrease in mobile crisis team encounters
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Sources of Funding For Integrated Care Programs
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Funding Obstacles For Sustainability Of Integrated Care Programs
1. Define the coordinated care business model
2. Develop a financial sustainability plan for the business model
3. Establish key performance metrics to track both clinical performance and financial performance
4. Adopt metrics-based management practices to manage to the metrics and assure on-going success
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Structural
Financing
Model
Service
Delivery
Model
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Structural Financing Options Reimbursement Options
ACO partner (FFS P4P Or risk-based) FFS, FFS with P4P, risk-based
Specialty ACO provider or partner FFS, FFS with P4P, risk-based
Medical home provider FFS, FFS with P4P, risk-based
Medical home partner FFS, FFS with P4P
Health home provider FFS, FFS with P4P, risk-based
Health home partner FFS, FFS with P4P
Case rate-reimbursed specialty program (by population)
Case rate, episodic payment, etc.
High-performing network provider and/or “Center Of Excellence”
FFS, FFS with P4P, case rate
Network provider FFS
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Characteristic Delivery System Elements
Services Delivered
• Service unit by professional type
Reimbursement • $ reimbursement per service unit (FFS, within case rate, etc.)
Service Volume • Referral generation (if FFS) • Utilization of population (if case rate or capitation)
Location • Physically co-located • Tech-enabled co-location • Coordination between separate sites
Organizational Affiliations
• Single legal organization • Co-owned legal organization • Exclusive contractual relationship • Contractual relationship
Information System Platform
• Same EHR system • EHR connected via HIE with integrated data • EHR connected via HIE with non-integrated data
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Conduct a
breakeven
analysis
Develop
profit/loss
projections
Business model
to imbed in
organizational
strategic plan,
operating plans,
and final budget
38
• Breakeven analysis answers question ‘at what level of revenue will the program break even”?
• Breakeven analysis is a supply side (i.e. costs only) analysis – does not address revenue side of the equation
• Construct breakeven analysis for the specific coordinated care business model both with and without organizational overhead
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• Key breakeven analysis factors: ◦ Annual yield/productivity of service
units (by type) per direct service (billable) clinical team member
◦ Average annual total compensation cost per direct service (billable) clinical team member
• Assumptions in breakeven analysis: ◦ Constant fixed costs
◦ Average variable costs with assumptions
◦ Relationship of revenue to variable expense in assumptions
◦ Factors affecting assumption of yield/productivity of team members
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• Financial statement summarizing revenues (with associated costs and expenses) incurred during a specific period of time
• Illustrate the ability of the program to generate a margin by increasing revenue and reducing costs
• Revenue projections – and assumptions – are key element of P/L projections
• Typically, revenue projections in health and human services are created by payer/contract
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• All services provided (and paid) in
integrated care setting (assessment codes, etc.) Address same-day billing
restrictions of specific payers • Number of annual unique
consumers by payer • Number of annual service units
(by type) per consumer by payer • Negotiated contract rate for each
service unit by type and by payer • Billing and collections yield (% of
total units billed that are collected) by payer
• If P4P bonuses or penalties, the projected performance on each P4P performance measure
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Key issues include:
• Relationship of new program models to overall service portfolio
• Allocation of organizational overhead by program and/or payer contract
• Allocation of organizational marketing expenses
Business model should provide executive team with:
• Capital investment requirements
• Cash needs for start-up
• Cash needed until breakeven point achieved
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If you don’t measure it, you can’t manage it
Whatever gets measured...
Gets attention
Gets done
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Having a plan is not enough – tracking and managing performance of plan is key . . .
• Assess timing of the market changes
• Facilitate operational improvement
• Assure sound financial management
• Make strategic course corrections
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Management Dashboards & Alerts
Benchmarking & Performance Targets
Key Performance Indicators
Routine Operational & Management Reports
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• Key performance indicators (KPIs) are financial and non-financial measures used by the management team to ensure that the agency is moving forward in achieving its strategic and organizational objectives
• Driven by structured data from the information system, the KPIs represent those data points that measure the “health” of your organization
• Indicator utility: ◦ Lagging indicator
◦ Coincident indicator
◦ Leading indicator
• KPIs are typically tied to an organization's strategy using concepts or techniques such as the Balanced Scorecard
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Vision
&
Strategy
Customer "To achieve our
vision, how
should we
appear to our
customers?"
Ob
jective
s
Me
asu
res
Ta
rge
ts
Initia
tive
s
Financial "To succeed
financially, how
should we
appear to our
shareholders?"
Ob
jective
s
Me
asu
res
Ta
rge
ts
Initia
tive
s
Growth &
Innovation "To achieve our
vision, how will we
sustain our ability
to change and
improve?
Ob
jective
s
Me
asu
res
Ta
rge
ts
Initia
tive
s
Internal Business
Processes
Ob
jective
s
Me
asu
res
Ta
rge
ts
Initia
tive
s
"To satisfy our
shareholders and
customers, what
business
processes must
we excel at?"
The Balanced Scorecard Concept
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• Use benchmarks and performance targets to challenge and drive continuous improvement in service quality and operations
• Benchmark benefits ◦ To compare with other organizations
◦ To develop cross-industry comparisons
◦ To develop points of reference or standards of practice
◦ To make best-in-class determinations
◦ To develop best practices
Beware the “benchmarking mediocrity” trap!!
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Dashboard -- A computer interface that organizes key performance indicators in an easy to read format, displaying the information that executives need to run an organization
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Operating Unit
Performance Indicators
Organization Strategic
Plan & Objectives
Operating Unit Plan
& Objectives
Program Plan
& Objectives
Overall Agency
Performance
Organization-Wide
Performance
Indicators
Program-Specific
Performance Indicators
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Once you have the plan and the tools, it’s all about execution
• Achieving required operational excellence for operating in risk-based environment
• Managing to the metrics – assumptions in the strategy
• Discipline to achieve those metrics
Which brings us to metrics-based management
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Metrics-based management is a performance management system that relies on three components, each of which must be quantitatively and qualitatively expressed.
• Current State: Baseline measures of your organization’s current performance
• Desired State: Where your organization wants to be regarding key priorities
• Bridging the Gaps: A definitive plan for how you'll move your organization to achieve the desired performance
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Learning about
markets,
customers,
competitors, and
processes
Measure the
metric
Analyze the
metrics against
budget and
benchmarks
Identify
improvement
opportunities
Design and
develop the
improvement
Launch the
improvement
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Optimization What’s the best that can happen?
Predictive Modeling What will happen next?
Forecasting / Extrapolation What if these trends continue?
Statistical Analysis Why is this happening?
Alerts What actions are needed?
Query / Drill Down Where exactly is the problem?
Ad hoc reports How many, how often, where?
Standard Reports What happened?
Degree of Intelligence
Co
mp
eti
tive A
dvan
tag
e
• Executive team and board interaction
• Business unit manager accountabilities
• Supervisory positions and their reports
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• Cultural shift toward accountability for performance metrics – executive team, program managers, and supervisors
• Role of the manager is to ensure the targets are met – planning, human capital, processes, policies, etc.
• Metrics should be integral part of individual performance evaluations and compensation
• In risk-base environments, managing to the metrics is essential to success
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Moving
From
Strategy To
Future
Success
Mission Focus &
Living Values
Culture of
Responsibility
&
Accountability
Building
Entrepreneurship
Dynamic &
Engaged
Leadership
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www.openminds.com [email protected]
717-334-1329 | 877-350-6463 163 York Street, Gettysburg , Pennsylvania 17325
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