the journey to value - orchard software · • assigned by the payer for the aggregate number of...
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The Journey to Value Matt Modleski, Executive Vice President of Business Development
Orchard Software Corporation June 20, 2018
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1. The Big Picture: The terrain.
2. Objective: SMART.
3. Competition: Who do I have to beat?
4. Strategy: What I rely upon to achieve objective.
5. Tactics: The activities I do to execute strategy.
Strategic Thinking and/or Planning
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The Journey: Volume to Value • From FFS to Downside Risk ACOs to Full Risk:
Follow the Money • How the Lab Directly Contributes to Success,
Including POC • Four Key Takeaways
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• 1 Million Seconds = 11 Days • 1 Billion Seconds = 32 Years • 1 Trillion Seconds = 32,000 Years
• We are borrowing or printing half a trillion dollars per
year at the federal level.
• 47 cents of every dollar spent in healthcare is a taxpayer dollar.
• Even the best “Hopium” can’t erase that math.
The Journey to Value
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“The Evolution of Healthcare Insurance” -from Cottage Industry I -to FFS/DFFS -to Managed Care (managed $$$) -to Service Line Focus II -to Integrated Practice Units (IPU)* -to Accountable Care Organizations -to include PCMH’s -to Value-based Care & Risk III
Growth & Change
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• FFS/Discounted FFS Medicine: We have to do more to make what we used to make as the amount paid per activity is discounted. Hamster Wheel of Volume: This started in the 70s & 80s.
How $$ Flows in VB Contracts
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Payment Requires Measurements
+
Measure Cost Measure Quality
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Payment Requires Measurements
Measure Quality
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ACO Metrics
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HEDIS, STAR Performance Metrics
ABA Adult BMI Assessment Hybrid 1.0 4.00 4.00
CDCEYE Diabetes Care – Eye Exam Hybrid 1.0 3.00 3.00
CDCNEP Diabetes - Kidney Disease Hybrid 1.0 4.00 4.00
CDCA1C9 Diabetes - Blood Sugar Hybrid 3.0 4.00 5.00
MAD Med Adherence - Diabetes Acumen 3.0 3.00 4.00
CBP Controlling Blood Pressure Hybrid 3.0 3.00 2.00
MAH Med Adherence - Hypertension Acumen 3.0 4.00 5.00
MAC Med Adherence - Cholesterol Acumen 3.0 3.00 4.00
Measure Level Performance
Measure Description ID Measure Name Type Weight
STAR Ratings by Plan
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Payment Requires Measurements
Measure Cost
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• Assigned by the payer for the aggregate number of lives you have assigned in a given market.
• A running total is accrued based on claims. The payers review those numbers with a committee formed by your quality folks (Pop Health?), contracting folks, administration members, and probably your CMO.
• This can be a wildly frustrating process/discussion based on your ability to control the total cost of care in a market.
• Only if quality metrics are good and MCR is met do shared savings occur.
Medical Cost Ratio (MCR/BCR)
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How the Resource Glass Is Filled
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The Resource Glass: Who Benefits
Healthcare Costs Supporting Higher Premiums— Incentive Is to Grow the Size of the Overall Cylinder Healthcare Costs Supporting
Higher Premiums
Insurers 15% of the Pie Insurers 15% of the Pie
Primary Care Costs Primary Care Costs
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The Resource Glass: ACO
Healthcare Costs Supporting Higher Premiums—85% of Premium Spent on
Care
85% of Premium Spent on Care— Incentive Is to Grow the Size of the 15% & Take Part of Work Done on Quality & Cost
Shared Savings Opportunity
Insurers 15% of the Pie Insurers 15% of the Pie
Primary Care Costs Primary Care Costs
Need a min savings to gain access to a share of the bucket.
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The Resource Glass: Full Risk
FFS: Codes That Get Paid ACOs: Codes That Close Gaps on Specific Measures
Insurers 15% of the Pie Insurers 15% of the Pie
Primary Care Costs Primary Care Costs
Full Risk: Codes That Document Disease Burden & Care Gaps Linked to HEDIS
Measures
Insurers 15%-ish of the Pie
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How the Resource Glass Is Filled From “more is better” to “I think more is still better” to “We are already full and value based decisions are critical.”
DFFS FT4 & TSH?
Sure.
ACOs TSH only maybe?
Full Risk Do I need a thyroid test
at all?
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1. The Big Picture: The terrain.
2. Objective: SMART.
3. Competition: Who do I have to beat?
4. Strategy: What I rely upon to achieve objective.
5. Tactics: The activities I do to execute strategy.
Strategic Thinking and/or Planning
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1. Lab is important on the journey to value and so are you!
2. Green Words need clarification and a mathematical component in order for you to know who to help.
3. POC information is critical to both ACO success as well as all levels of risk-based contracting. Ask, “Who is reconciling contract performance with the payers? How can the lab help?”
4. Performance-based contracts are fulfilled through data and reporting. Your data analyst and VB contracts folks need your knowledge. Quiz.
Four Key Takeaways
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Thank you!
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Appendix Slides
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American Health Network Onboarding Overview
10%=70%
Manage first to stabilize here and then move to lower tier if possible.
Moderate Complexity
Healthy Patients Learn to grow/maintain this population with best value tools;
Panel size key in global risk environment.
Population health tactics that yield value today but serve the dual purpose of preparing us for a future of global risk.
Value Today, Prepare for Tomorrow
Max Value Intervention
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• The government has an algorithm for paying the insurance companies a per-member-per-month amount for MA patients that starts with a base amount that is market based. Our disease-burden documentation is a straight line multiplier of that base amount.
• In an ACO, that same type of algorithm is used to put dollars into the pool of money available to “share savings from.” Our contribution to the bucket comes in the form of accurately documenting quality measures, the disease burden (of new Pts.), and cost control of our patients. Our upside for doing it well is limited to what’s left in the pool after all claims are paid in a normal FFS environment.
How the Resource Bucket Is Filled
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• In Global Risk, we become the payer of all claims but we do that with the entire pool of resources from the first example above. Our disease-burden documentation is critical, but so is our systemic management of our patient’s cost and quality because all their costs (with a few exceptions) are now paid from that large resource pool that’s been delegated to us.
How the Resource Bucket Is Filled
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How This Looks Side by Side in 2018 DFFS Patient comes in, paid an E and M code for visit and fees for ancillaries. Disease burden plays no role so our HCC coding skills are non-existent. The amount of resources left over for filling patient care needs are miniscule.
Full Global Risk Based on disease-burden documentation and CMS market analysis, we are paid a monthly amount to take care of ALL patient care needs. Disease burden directly determines the multiplier used on the market base that CMS establishes. Primary Care has resources to close care gaps, invest in things that fill in gaps in the continuum of care (i.e., van service to appointments), and improve outcomes. Our upside is we control the spend of about 85% of the premium dollar and what’s not spent is the profitability we enjoy. (We reverse roles with the insurance company in the ACO as the beneficiary of our hard work.)
ACO Patient comes in, paid an E and M code for visit and fees for ancillaries. Disease burden plays a role in the amount of shared savings money in the bucket; (developing HCC coding skills). Few resources for additional patient care needs; shared savings can help offset that reality. Our upside is limited to our portion of the savings we generate. The insurers do very well in this model if we’re successful.
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How the Math Works for AWVs FFS Patient comes in, paid an E and M code for visit and fees for ancillaries. Disease burden plays no role so our HCC coding skills are non-existent. 1st AWV: $162.38 paid
Full Global Risk Based on disease-burden documentation and CMS market analysis, we are paid a monthly amount to take care of ALL patient care needs. Disease burden directly determines the multiplier used on the market base that CMS establishes. Primary purpose of AWVs and SAWVs is disease burden documentation. An additional .200 RAF delivers (in a $1,000.00 PMPM Market) an additional $200 monthly or $2400 annually for patient care needs. If we miss it, we still have to pay for the care (but without the resources available).
ACO Patient comes in, paid an E and M code for visit and fees for ancillaries. Disease burden plays a role in the amount of shared savings money in the bucket; developing HCC coding skills. Subsequent AWVs: $110.26 paid and potentially identify and/or close care gaps that may contribute to shared savings.
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The Resource Glass: Medicare
Healthcare Costs Supporting Higher Premiums
Resources paid by government to payer are directly linked to
disease-burden documentation. Insurance company shares some
of increased revenue based on quality and cost of members.
Insurers 15% of the Pie Insurers 15% of the Pie
Primary Care Costs Primary Care Costs
At Full Risk, using data, a referral network, and IT systems, efforts are focused to control spending
(about 85% of premium). Patients and providers directly
benefit from this approach to care and cost control. Disease-burden
documentation is critical.
Insurers 15%-ish of the Pie