Strategies for Commercial ACO Development

Sam Nussbaum, M.D.Executive Vice President, Clinical Health Policy and Chief Medical Officer

Second National Accountable Care Organization Congress

November 2, 2011Los Angeles, CA

2

Health Expenditures

16.0%

16.5%

17.0%

17.5%

18.0%

18.5%

19.0%

19.5%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Billion

s % GDP

$2.57 Trillion17.3% GDP

$4.48 Trillion19.3% GDP

2008 version of the National Health Expenditures (NHE) released in January 2010 Kaiser/HRET Survey of Employer‐Sponsored Health Benefits, 2001‐2011.

Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage,

2001–2011

3

Healthcare Costs are Concentrated

23 Million Beneficiaries•Spending $1,130 each•Total Spending = 5%

($26 B) 

16.1 Million Beneficiaries•Spending $6,150 each•Total Spending = 20%

($104 B) 

7 Million Beneficiaries•Spending $55,000 each•Total Spending = 75%

($391 B) 

4

Payment Innovation

Payment Reform ModelsPayment Reform Models

Fee-for-ServiceEnhancement

Episode-Based Payment (Bundled Payments)

Population-Based Payments

• Payment for quality (Q-HIP®) • Patient Centered Medical

Homes• Centers of Excellence• Enhanced payment for

immunization, urgent care

• Chronic illness risk adjusted (diabetes, heart disease)

• Surgical services• Transplant/cancer

• Accountable Care Organizations

• Capitation• Gain sharing• Global budgets

Performance Recognition Programs Reward Quality Outcomes (P4P)Performance Recognition Programs Reward Quality Outcomes (P4P)

5

Current Program Landscape

Fully Integrated

Early Integration

Fee-for-Service

Payment for Value

Anthem Models in Markets

Integration of Care Delivery

Valu

e-B

ased

R

eim

burs

emen

t

Physician P4P: Programs in 13 markets, 70k+ physiciansHospital P4P: Q-HIP programs in all markets, with 560 hospitals (approx. 55% of admissions)

PCMH currently in CA, CO, CT, ME, NH, NY, OHIncludes over 170k members

Bundled payments currently in MO, CO, ME, and NVExpansion underway in WI, CA, MO, GA and others

ACOs in CA and NH; over 90k membersExpansion underway in CA, IN, NY, OH

6

ACOs: The Race to Value-Based Care

Finish:Finish:ValueValue--Based CareBased Care

Concerns Along the Way:•Attribution•Overuse of supply sensitive care increases revenue; optimized FFS revenue model•Payment shifting to private sector; will gain sharing overpower FFS•Acquisition of specialty practices

Key Principles for the Race: •Primary Care is central•Commit to evidence-based medicine•Information at the point of care•Focus on health, prevention, risk reduction for chronic illness•Coordination of care

Start:Start:Fee For ServiceFee For Service

7

Membership• Defined by attribution for PPO and

member selection for HMO • All lines of Business including Senior,

Commercial (Small and Large Group, Local and National), and State Sponsored

Funding Types• Fully Insured• ASO (phased in)

Information Exchange• Core report set on quality and efficiency• Risk stratified population reports• Care gap population reports

Communications• Member, Employer, Broker

Payment Methodology• Fee For Service• Care management fee• Shared savings

Medical Managment•Traditional UM shifts to point of care •CM/DM shifts to physicians

Metrics – Quality & Resource• Facility• Physician

Anthem ACO Model

8

Dartmouth-Hitchcock ACO

Membership• Year 1 - ~12,000 Fully Insured

• Year 2 – Projecting ~15,000+ Fully Insured and PPO members

Cost • Year 1 Risk Adjusted costs

have declined 2.4% from the benchmark

Integrated Delivery System

Academic Medical Center

>1200 PCP’s and specialists

9

Pay For QualityProspective

Payment Prospective

Payment

Payment MethodologyPayment MethodologyPayment Methodology

NCQA’sPPC Recognition:

•Care Coordination•Process Redesign

•HIT

Evaluate Levels of Achievement

ClinicalProcess and Outcomes

Resource Use/Cost of Care

Satisfaction and Service

FFSFFS

For services currently recognized

through Medicare RBRVS system;

potential for additional services

Patient-Centered Medical Home

10

WellPoint PCMH Pilots

MA

MT

AK

HI

ME

V T

RINY

PA NJOH

W V

MD

VA

NC

SC

GA

F L

KS MOKY

TNAR

LA

MS AL

IA

IL IN

MNWI

MI

ND

SD

NEWY

CO

OKNM

TX

AZ

NVUTCA

M T

WA

OR

ID

D C

CTD E

NV

ID

N H

Colorado:•Convener: Health Team Works

Maine:Maine:•Convener: Quality Counts

New Hampshire:•Convener: NH Citizen’s Initiative

New York:•Convener: THINC RHIO (Hudson Valley)

•Convener: Hudson Headwaters (Adirondacks)

•Convener: EMPIRE (New York City)

Ohio:•Convener: Greater Cincinnati Health Improvement Collaborative

•Convener: Access Health - Columbus

Connecticut:•Convener: State of Connecticut Employer Group

11

COLORADO

• Quality improvement in nearly all diabetes measures

• 3.6% decrease in acute IP admissions per 1000 per year

• 6.1% decrease in total ER visits per 1000 per year

• 2% decrease in specialist visits per 1000 per year

• 1.3% increase in persistent medication usage

NEW HAMPSHIRE

NEW YORK

• IP rate per 1000 between 12% - 23% lower for PCMH providers

• ER rate per 1000 between 11% - 17% lower for PCMH providers

• Total medical and Rx cost for PCMH members was 14.5% lower than for members seeing non-PCMH providers

Highlights of PCMH Results

12

Improving Primary Care: Comprehensive Primary Care Initiative

• CMS led private-public initiative testing a primary care service delivery and payment model in 5-7 locations

• Service delivery model:

Risk-stratified Care Management

Access and Continuity

Planned Care for Chronic conditions and Preventive Care

Patient and Caregiver Engagement

Coordination of Care

• Payment Model: monthly care management fee to primary care practices for FFS Medicare beneficiaries; potential to share savings in 2-4 years

• Aligned payment from private insurers

13

Contractual Innovation: Improving Value and Affordability

New Model: Rate increases tied only to quality, safety, and value

Old Model: Rate increases not tied

to value

14

Hospital Quality: Q-HIP® Hospital Quality Program

Q-HIP® Hospital Pay-for-Performance rewards quality, safety, outcomes, and patient satisfaction

Patient Safety Section (35% of total Q-HIP® Score)

• Joint Commission National Patient Safety Goals

• Computerized Physician Order Entry (CPOE) System

• ICU Physician Staffing (IPS) Standards

• NQF Recommended Safe Practices

• IHI 5 Million Lives Campaign – ADE Medication Reconciliation and WHO Surgical Safety Checklist

• CDC/APIC Flu and Pneumonia Vaccine Guidelines

• NQF Perinatal Measures

Member Satisfaction Section (10% of Total Q-HIP® Score)

• H-CAHPS Survey Results

Patient Health Outcomes Section (55% of total Q-HIP® Score)

PCI Indicators• 5 ACC-NCDR/Indicators for Cardiac

Catheterization/PCI

Joint Commission/CMS Nat’l Hospital Quality Measures• Acute Myocardial Infarction (AMI) Indicators• Heart Failure (HF) Indicators• Pneumonia (PN) Indicators• Surgical Care Improvement Project (SCIP)

NSC Indicators• 4 JC/NQF Nursing Sensitive Care Indicators

CABG Indicators• 5 STS Coronary Artery Bypass Graft (CABG)

Measures

15

CareMore’s Model: Community Providers and CareMore Care Centers

Primary Care Physicians

CareMore Extensivists

Non-Frail Population Frail & Chronically Ill Population

The CareMore Model

CareMoreCare Centers

Extensivists

Provider Relations

Continuous Frailty Assessment Tools

Member Services

Case Managers

Primary Care Physicians

Specialists

Home Based Services

CareMore Care Centers

16

CareMore: Care Innovation

• Care Centers provide a “Healthy Start” initial evaluation and integrated care that combines wellness and medical supervision and offers personalized health planning

• Specialists intensively manage chronically ill members: approximately 20% of members that account for 60% of medical costs

• Biometric monitoring applied to care management

17

Improved Outcomes for Chronic Diseases

Diabetes End Stage Renal Disease Congestive Heart Failure

Result Result Result

7.08 average HbA1c for those attending

diabetes clinic

50% reduction in hospital admission

rate in 5 months

56% reduction in hospital admission

rate in 3 months