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Steven R Peskin, MD, MBA, FACP EVP and Chief Medical Officer MediMedia USA Associate Clinical Professor of Medicine Robert Wood Johnson Medical School Grand Rounds Jersey Shore Medical Center Road to Healthcare Reform, The Medical Home and ACOs August 30, 2011

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Grand Rounds Jersey Shore Medical Center: Healthcare Reform, PCMH

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Page 1: Steven Peskin Grand Rounds1 8 30 11

Steven R Peskin, MD, MBA, FACP

EVP and Chief Medical Officer

MediMedia USA

Associate Clinical Professor of Medicine

Robert Wood Johnson Medical School

Grand Rounds Jersey Shore Medical Center

Road to Healthcare Reform, The Medical Home and ACOs

August 30, 2011

Page 2: Steven Peskin Grand Rounds1 8 30 11

Road to Healthcare Reform

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Health reform: early 20th century

1912: Theodore Roosevelt believed that no country could be strong whose people were sick and poor, campaigned on a platform that called for mandatory health insurance for workers

AMA originally supported universal coverage, but by 1920, many physicians viewed compulsory insurance as threat to private practice, paternalistic, and “un-American” and AMA House of Delegates voted to oppose.

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Health reform: mid 20th century

FDR spoke in favor of a right to medical care, but did not push compulsory HI over fear that it would endanger other Social Security reforms

Bill after bill introduced to mandate coverage, but none passed the Congress

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1945: Truman proposed a single plan to provide coverage for all age groups financed by 4% rise in Social Security payroll taxes

AMA raised $3.5 million to oppose the bill, calling it “regimentation” and “totalitarianism”—even though Truman had no chance of getting it through a GOP-controlled Congress

Health reform: mid-20th century

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Health reform: the 1960s

Kennedy campaigned for a comprehensive program of HI coverage for the elderly

AMA established AMPAC with goal of electing conservatives to Congress and opposing Medicare

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Health reform: the 1960s

Assassination of JFK and LBJ’s ascendancy changed everything; LBJ believed in Medicare even more than JFK and knew how to get legislation through Congress

1964 elections: LBJ trounced Goldwater and the Democrats gained a 2-1 majority in Congress

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Health reform: the 1960s

1965 Medicare and Medicaid passed, providing hospital and medical care for the elderly and creating a State/Federal partnership to cover the very poor

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Health reform: 1970s

Under Nixon, Medicare expanded to cover disabled, Wage and Price controls; beginning of limits on Medicare payments to physicians and hospitals, increased regulation of physicians and health care facilities

Nixon proposed mandatory employer-sponsored HI but didn’t pass Congress

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Health reform: 1970s

1976: Carter campaigns for catastrophic plan, but after election priority shifts to controlling health care costs

Sen. Kennedy offers new legislation for mandatory employer HI, government subsidies for poor, competition among private plans, and negotiated fees

Bills fail due to economic recession, rising health costs, Congressional committee restructuring, and failure of advocates for comprehensive coverage to compromise

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Health reform: 1980s

Reagan favored repeal of many of the regulatory laws passed in the previous decade (e.g., National Health Planning Act and PSRO program); market-based “pro-competition” approach and tax credits favored for expanding HI

Medicare catastrophic and prescription drug coverage enacted, but repealed as seniors objected to paying for it

Growth in budget deficits led to new methods of paying doctors and hospitals

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Health reform: 1990s

Rising health care costs and 46 million uninsured increased popular support for HI reform

Clinton administration became the first since Truman to pursue a comprehensive plan to provide universal coverage

Health Security Act called for mandated employer and individual coverage, managed competition, purchasing alliances, global budgets

Plan failed to pass congressional committees

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Health reform: late-1990s

Following defeat of Clinton plan, more modest goals were set for expanding coverage, including S-CHIP program for low-income children

GOP take-over of Congress led to enactment of Balanced Budget Act of 1997, which mandated cuts in payments to hospitals, physicians, other providers and new “Medicare+Choice” program—first step toward goal of privatizing Medicare

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Ironically, Republican Congress passed and President George W. Bush sign into law the largest expansion of federal entitlements since 1965: Medicare Prescription Drug Program (Part D)• Decision to run the program through private

insurers and PBMs put a conservative “stamp” on expansion of entitlements

• No dedicated funding or offsets, adding to federal deficit

Health reform: early 21st century

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Obama campaigned for universal health care coverage, 2008 elections returned the Democrats to the White House and solidified control over Congress

After 18 months of contentious debate, Congress passes health care reform in March, 2010

Health reform: the present

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Health reform: the present

March 22, 2010:

Almost 100 years after a U.S. President first proposed Health insurance for all, the Patient Protection and Affordable Care Act is signed into law

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ACA: Coverage

No pre-existing condition exclusions• Children (2010)

• Adults: Temporary high risk pool (2010), then all plans must cover (2014)

No rescissions (2011)

Up to age 26 covered by parents’ plan (2010)

Preventive services with no-cost sharing (2010 for new plans, 2014 for all HI)

Page 18: Steven Peskin Grand Rounds1 8 30 11

ACA: Coverage Medicare Part D doughnut hole:

$250 rebate (2010), 50% discount on brand name drugs (2011), to be completely phased out by 2020

Individual and small business tax credits applied to purchase of HI through state exchanges (2014)

Qualified health plans must offer basic benefits packages: bronze, silver, gold, platinum, plus low cost-plan for under age 30 (2014)

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ACA: Coverage

Large employers must pay a penalty if their employees obtain coverage through an exchange (2014)

Individuals required to buy coverage or pay penalty (2014)

Medicaid expanded to 133% of FPL with 100% of cost initially paid for by federal government (2014), phases down to 90%

Page 20: Steven Peskin Grand Rounds1 8 30 11

ACA: Coverage

When fully implemented, 34 million previously uninsured Americans will have coverage (94% of legal residents)• Half by HI offered through exchanges, half by

Medicaid

• But most Americans will continue to obtain coverage through employer-sponsored HI

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ACA: Workforce

Primary Care Incentive Program: 10% bonus for designated services by primary care physicians (2011-2015)

Medicaid primary care parity: states can pay no less than Medicare rates for visits and vaccines by primary care physicians (2013, 2014)

Workforce Commission (appointed 2011, not yet funded) to project workforce needs and addresses barriers to primary care

Page 22: Steven Peskin Grand Rounds1 8 30 11

ACA: Workforce

Unused residency slots redistributed to primary care (2011)

GME offered through Teaching Health Centers (2011)

NHSC: more slots for scholarships and loan forgiveness, higher maximum awards, and part-time awards (2011)

Community Health Centers (2011)

Page 23: Steven Peskin Grand Rounds1 8 30 11

ACA: Workforce

Title VII funding for primary care training programs, scholarships, faculty and curricula development (2011)

State workforce grants (2011)

State grants for primary care extension program (2011)

Grants for health teams to support smaller practices become PCMHs (2011)

Page 24: Steven Peskin Grand Rounds1 8 30 11

ACA: Cost and Quality

Center on Medicare and Medicaid Innovation (ongoing) • ACOs

• Bundling

• Other voluntary pilots to align incentives with value

• Must include models to reform primary care payments

Pay-for-performance (ongoing)

Review of Mis-valued services (ongoing)

Page 25: Steven Peskin Grand Rounds1 8 30 11

ACA: Cost and Quality

Insurers must spend at least 85% of premium dollar on direct patient care or pay a rebate (80% for small employers), 2011

Insurers will be required to streamline and reduce paperwork on patients and physicians, including enrollment, electronic funds transfers, and authorization requirements or pay a fine (rules to be rolled out starting in 2011)

Page 26: Steven Peskin Grand Rounds1 8 30 11

ACA: Cost and Quality

Patient-Centered Outcomes Research Institute (ongoing)

Wellness and prevention trust fund (ongoing)

National Quality Strategy (2011)

Employers may offer 50% premium discount for employees who achieve personal health goals (2014)

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How is the ACA funded?

Annual fee on health insurers and excise tax on high cost health plans

Excise tax on medical devices and fee on drug manufacturers

Tanning salon tax

Tax on earned/unearned income of higher wage persons

Pay cuts to hospitals, home health and MA plans

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Healthcare Reform and the Patient Centered

Medical Home

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The Need

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Need for a New Healthcare Delivery Model Increasing costs

• Healthcare costs are growing faster than the economy and the cost of care is becoming difficult for employers, government and individuals to meet.

Need to improve quality• Patients receiving recommended treatment 55 % of

the time

• Poor U.S. performance on healthcare benchmarks compared to other developed countries despite spending more.

Regional variation• Healthcare cost and quality vary substantially among

geographic regions. Little relationship between cost and quality.

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Need for a New Healthcare Delivery Model Inadequate response to chronic care

needs• Increasingly aging and chronically ill population

with payment system that doesn’t recognize services found necessary for essential care e.g. care coordination, evidence-based population management, disease self management

Decreased Interest in Primary Care• The number of new students entering into primary

care is decreasing and physicians who have chosen the field are disproportionately leaving compared to other specialties.

• Both domestic and international data indicating that higher proportion of primary care physicians related to higher healthcare quality and lower costs.

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Key Elements of Patient Centered Medical Home

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A Joint Proposed SolutionThe Patient-Centered Medical Home (PCMH)

Modern “medical home” concept originally in Pediatric literature in the 1960’s—a central source of care for “Special Needs” children.

AAFP—Future of Family Medicine Project (2004) “Personal Medical Home”

ACP—Advanced Medical Home (2006)

Key elements of a PCMH are described in a March 2007 joint statement of principles from ACP, AAFP, AAP and AOA. Often referred to as the “Joint Principles”.

Nexus of patient-centered care, primary care and chronic care model concepts

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The Patient-Centered Medical Home

Redesigns clinical delivery and payment to facilitate• Patient-centered, longitudinal, coordinated

care delivered by a “recognized” practice with a personal physician

• Who accepts responsibility for the patient’s “whole person”

• Who acts in partnership with patients and in collaboration with multidisciplinary teams (nurses, physician specialists, health educators, pharmacists)

• Who uses practice level systems to improve access and communication, care integration, patient safety and outcomes

• Who accepts accountability for care provided through on-going performance measurement and quality improvement.

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A New Model of Care that Redesignsthe Way Primary Care is Delivered and Financed

Patient Personal Physician

Trusted personal physician Physician who provides, manages and facilitates care Care is coordinated or integrated across healthcare

system

More accessible practice with increased hours and easier scheduling

Enhanced payment that recognizes the added value of delivering care through the PCMH model

Assistance to practices seeking transformation Support to practices adopting HIT for QI

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Not Defined by any Certain Specialty

Personal PhysicianPatient

v

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Physician as Facilitator, Not a Gatekeeper

Specialist Care Pharmacist Care

Hospital Care

Personal PhysicianPatient

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(5) Changes in Clinician Incentives

Fee For Service Fee for service

Prospective payment

Pay for outcomes

Blended Payment Improved Patient InteractionBetter Work Environment

Team effort

Increased responsibility for admin and clinicians

More time for patients

Better communication and access

Case management

Personal Physician

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PPC 1: Access & Communication (9)

PPC 2: Patient Tracking & Registry Functions (21)

PPC 3: Care Management (20)

PPC 4: Patient Self-Management Support (6)

PPC 5: Electronic Prescribing (8)

PPC 6: Test Tracking (13)

PPC 7: Referral Tracking (4)

PPC 8: Performance Reporting & Improvement (15)

PPC 9: Advanced Electronic Communication (4)

TOTAL POINTS: 100

Nine Core Components

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Demonstration Projects

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(Patient Centered Medical Home)

6% decrease in hospital admissions

24 % decrease emergency room

$500, Per member per years savings

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Horizon Blue Cross Blue Shield/Partners In Care

For the New Jersey State Health Benefits Program

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Results: Clinical Process Metric Improvement

HbA1c Testing

January 2007

November2007

Permission from Horizon Blue Cross Blue Shield and Partners in Care, Corp.

91%

43%0

25

50

75

100

January 2007

November2007

HbA1c Testing

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Lewisburg Pennsylvania

preTest period Jan - Oct 2006

First pilot year Jan – Oct 2007

Percent reduction

Hospital Admission

365/1000 291/1000 -20%

Hospital readmissions

15.2% 7.9% -48%

Cost 7% less

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Page 47: Steven Peskin Grand Rounds1 8 30 11

9%

4%

22%

13%

0%

5%

10%

15%

20%

25%

Year 1 Year 2 Year 3 Year 4 Year 4.5

Hospitalization E.R. Visit

Marillac’s Integrated Care Patients (PCMH)

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Overview of PCMH Commercial

Pilot Activity

• 22 projects• 16 states

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Overview of PCMH Commercial

Pilot Activity (cont.)Since October 2008:• Alabama• California• Indiana• Maryland• North Carolina• Oklahoma• Oregon• West Virginia

New commercial

PCMH projects under development in at least 8 more states:

Additionally, new projects are under development in the previous states, such as Colorado (Family Medicine Residency Program), Michigan (Priority Health), and Tennessee (BCBS-TN)

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= Identified to have a medical home initiative

Source: National Academy for State Health Policy State Scan, November 2008

Initiatives to Advance Medical Homes in Medicaid/ SCHIP

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Combined Medical Home Activity

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Healthcare Reform: Accountable Care

Organizations

Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively

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Accountable Care Organizations

“…consist of providers who are jointly held accountable for achieving measured quality improvements and reductions in the rate of spending growth.” ¹

MEDPAC Explanation: “…a group of physicians teamed with a hospital would have joint responsibility for the quality and cost of care provided to a large Medicare patient population…Potential ACOs include: integrated delivery systems, physician–hospital organizations, a hospital plus multispecialty groups, and a hospital teamed with independent practices.” ²¹McClellan et al: Health Affairs, May 2010

²MEDPAC June 2009 report

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PatientPhysician Practice Team

Physician Practice Team

Physician

Practice Team

Physician

Practice Team

Integrated Delivery System

Accountable Care Organization

Clinical Integration IndependentPractice Assoc.

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Provider Organizations That Can Become ACOs

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ACO Payment Options

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Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively

U.S. Encourages Bundling Medicare Payments

The Centers for Medicare and Medicaid invited providers on Tuesday to help develop four models to bundle payments as part of a larger effort to improve patient care and reduce costs.

The program is meant to encourage hospitals, doctors and other specialists to coordinate in treating a patient's specific condition during a single hospital stay and recovery.

The four models give providers flexibility on how they get paid and for which services, as well as give them financial incentives to avoid unnecessary or duplicative procedures. Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively

Applicants for these models would also decide whether to define the episode of care as the acute care hospital stay only (Model 1), the acute care hospital stay plus post-acute care associated with the stay (Model 2), or just the post-acute care, beginning with the initiation of post-acute care services after discharge from an acute inpatient stay (Model 3).  Under the fourth model, CMS would make a single, prospective bundled payment that would encompass all services furnished during an inpatient stay by the hospital, physicians and other practitioners.

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7 Core ACO Competencies and Associated Critical Success Factors

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7 Core ACO Competencies and Associated Critical Success Factors

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Thank You!

Discussion

Three models involve a retrospective bundled payment arrangement, and one model would pay providers prospectively