A Value Based World - HANYS

A Value‐Based World:Multiple Perspectives

Healthcare Association of New York State (HANYS)

Courtney BurkeSenior Vice President and Chief Strategy OfficerAlbany Medical Center

November 2, 2015

Part I: The Ideal Vision (my old perspective)

• Healthier New Yorkers (population health)• Lower costs• Engaged consumers

– i.e., the Triple Aim

Systems, programs, financing, policies that support and value these goals

The Acronyms• ACA – Affordable Care Act • ACO – Accountable Care

Organizations • APC – Advanced Primary Care• APD – All Payer Database • BIP – Balancing Incentives Program• DISCO – Developmental Disability

Individualized Supports & Care Coordination Organization

• DSRIP – Delivery System Reform Incentive Payment Program

• FIDA – Fully Integrated Dual Advantage

• HARPS – Health and Recovery Plans • HH – Health Homes (HH)• MLTC – Managed Long‐Term Care• MRT – Medicaid Redesign Team

• NYSOH – New York State of Health • PA – Prevention Agenda• PCMH – Patient Centered Medical

Home • PHIP – Population Health

Improvement Program • PPS – Performing Provider System• SHINY‐NY – Statewide Health

Information Network for New York Systems

• SHIP – New York State Health Innovation Plan

• SIM – State Innovation Model • VAP – Vital Access Provider• VAPAP – Vital Access Provider

Assistance Program• VBP – Value Based Payment

The Ingredients

• Vision – ACA/SHIP/PA • Resources/incentives – DSRIP/VBP• Tools/technology/mechanics – SHIN‐NY/APD/NYSOH• Organization – PPS/ACO/HH/HARP/DISCO/PCMH/MLTC• Grass roots buy‐in – PHIP/APC/MRT• Time and assistance for transition – VAP/Capital/VAPAP

The Overlap

ACAACOsPCMHHHFIDA

Prevention Care CoordinationPrimary Care &

Population HealthCollaboration, Cooperation

Shared AccountabilityAttention to

Behavioral HealthValue‐Based Payment

MRTHARP, DISCOPrevention AgendaNYSOHAPD

SHIN‐NYSHIP

DSRIP (PPS)PHIP

The Source of Funds (SHIP/DSRIP)Strong, expert, coordinated state leadership can create value over the next four years

DSRIP Advanced Primary Care

APD

PHIPs

NY SHIPvalue-basedpurchasing

Prevention Agenda

NY State of Health

Capital Restructuring

SIM Testing Grant ▪ Statewide

leadership▪ Stakeholder

alignment▪ Multi-payer

business design and support

Workforce strategy

Common Scorecard

SHIN-NY

Rate Review

Currently fundedSIM fundingMulti‐payer funding

Part II: The New Perspective

Overview of Albany Medical Center

Overview of Albany Medical Center

Albany Medical CenterOperating Financial StatisticsComparison to US Teaching Hospitals (N=147)Q4 2014

Albany Medical Center Hospital

Median All Hospitals

AMC Mean Last 4 Quarters

Avg Median All Hospitals Last 4

QuartersTotal Margin 0.07 0.07 0.07 0.07Operating Margin 0.06 0.06 0.06 0.06Inpatient Revenue as a Percent of Total Revenue 0.69 0.57 0.69 0.57Total Hospital Discharges 8,425 7,462 8,360 7,316Total Patient Days 53,684 41,223 52,240 40,664Average Length of Stay 6.37 5.68 6.25 5.66Total CMI 1.78 1.75 1.79 1.71Occupancy Rate 84% 78% 82% 77%Expense per Adjusted Discharge $16,237 $16,477 $15,686 $16,387CMI Adjusted Expense per Adjusted Discharge $9,113 $9,651 $8,777 $9,640Hospital Full Time Equivalents 5,697 4,994 5,576 4,881Hospital Full Time Equivalents per Adjusted Occupied Bed 6.68 5.95 6.69 6.01CMI Adjusted Hospital Full Time Equivalents per Adjusted Occupied Bed 3.75 3.43 3.74 3.5Charity Care Cost Share 0.01 0.01 0.01 0.02

Bad Debt $1,097,000 $8,330,665 $2,888,632 $8,169,346

The Financial Reality for HospitalsSource: Financial Challenges Top Healthcare CEO ConcernsJohn Commins, for HealthLeaders Media , January 14, 2014

“Among financial concerns, for example, government funding cuts ranked highest, led by inadequate reimbursements for Medicare and Medicaid, followed by an anticipated increase in bad debt due to high‐deductible health plans, decreasing patient volumes, staffing costs, competition from other providers, and inadequate funding for capital improvements.”

Switching Perspective (Reality)

• The world is actually changing out here

• A new financial reality – Many new financial

penalties have come and are coming

– New financial opportunities exist as the world changes

– Some provider are thriving, most are struggling

• We have an old regulatory system, but some opportunity to waive old regulations

• Timelines are constantly changing, but change is real

• Systems are still siloed, but providers/organizations are talking

• Markets are changing, rapidly and geographically

{

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University of Vermont Health Network

URMC

Bassett

Trinity

Health Quest

Westchester Medical Center

Greater Hudson Valley Health System

Mergers, partnerships, and changing markets

Trinity

Montefiore

St. Joseph’s Auburn

IHANY

St. Peter’s Health Partners

Albany Medical CenterColumbia Memorial Health

Patient CareAlbany Medical Center

Columbia Memorial Health

Total

Licensed Beds 734 192 926

Skilled Nursing Home Beds ‐ * 120

Patient Admissions 35,151 5,988 41,139

Patient Days 212,666 31,630 244,296

Observation Cases 3,070 2,271 5,341

Average Length of Stay 6.1 5.3

Average Daily Census 593 87


Patient CareAlbany Medical Center


Total

Surgical Cases 29,352 3,745 33,097

Case Mix:

All Payer 2.39 1.15

Medicare 2.00 1.29

Emergency Dept Visits 72,980 31,047 104,027

Outpatient Visits 771,436 407,573 1,179,009


WorkforceAlbany Medical Center


Total

Full‐time Equivalent Employees 7,635 1,270 8,905

Employed Physicians 465 68 533

Voluntary Physicians 600 210 810

Basic Science Faculty 113 N/A 113

Residents 433 N/A 433

CollegeAlbany Medical Center


Total

Graduate Students 191 N/A 191

Medical Students 545 N/A 545

Research Funding $16.0m N/A $16.0m


Financial StatisticsAlbany Medical Center


Total

Unrestricted Revenues $1.107.9m $144.9m $1,252.8m

Unrestricted Expenses $1,067.5m $144.1m $1,211.6m

Albany Medical Center and Columbia Memorial Health

Main Campuses and off‐site locations

Albany Medical Center and Saratoga

Hospital


Albany Medical Center, Columbia

Memorial Health and Saratoga Hospital


The World of Value‐Based Care

Changing Payment is RealSource: Healthcare Association of New York State (HANYS)

PART III: How to Survive the New Reality

Understand the World of Population Health Management

Population Health

Management

Do a Gap Assessment• Level of alignment among hospital, physician, clinicians – and others

• Utilization of evidence‐based practices for quality

• Financial management, efficiency & productivity

• Integrated information systems

• Other: PCP relations, staff development, new contracts ‐ quality, VBP

Figure out Where You Fit

Figure How You Fill the Gaps• Build• Buy • Collaborate/Partner

– 40/60 (Westchester – Bon Secours– Active parent– Clinical affiliation– Management Services Organization

Identify Opportunities (behavioral health examples)

Source: “ Integrating Primary Care into Behavioral Health Settings: What Works for Individuals with Serious Mental Illness” by Martha Gerrity – The Reforming States Group & The Milbank Memorial, 12/14.

• Individuals with SMI or substance use disorder have higher rates of acute and chronic medical conditions, shorter life expectancies (by an average of 25 years), and worse quality‐of‐life than the general medical population.

• Modifiable risk factors for medical conditions (e.g., smoking, obesity, lack of exercise) and social conditions (e.g., homelessness, poverty, exposure to violence) account for some of the increased risk, but fragmented care increases overall health disparities in these populations.

• People with SMI and/or substance use disorder frequently have limited access to primary care, due to stigma and environmental factors, and are often underdiagnosed and undertreated.

• Poor medication management contributes to inappropriate polypharmacy, inadequate medication trials, and inconsistent monitoring of metabolic and other side effects.

• Individuals with SMI or substance use disorder also have higher utilization of emergency and inpatient resources.

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Initially Focus on your Expertise, with an Eye to Expansion / Growth Opportunities

• Albany Med’s expertise – Secondary Prevention and Acute care

• Opportunities for expansion– Primary prevention, home care and sub‐acute

• Opportunities for growth– Palliative and long term care

Source: Dr. Ferdinand Venditti – Albany Medical CenterBirth Death

FFS FFS &Incentives(up only)(up/down)

SharedSavings(up sideonly)

SharedSavings(up andDown)

PartialCapitation

FullCapitation(PMPMfee)

InsuranceRisk

(PMPMmedical risk,plus insurancecompany)

Bundledpayments

Payor readiness

Identify Opportunities (by population)RISK CONTINUUM

High Risk Populations2015(MSSP) (MSSP Payors)

PainManagement

Asthma

People – Process – Technology – Regulatory – Partnerships ‐ Owner

Mental Health/Substance Abuse

InjuryPrevention

FFS FFS &Incentives(up only)(up/down)

SharedSavings(up sideonly)

SharedSavings(up andDown)

PartialCapitation

FullCapitation(PMPMfee)

InsuranceRisk

(PMPMmedical risk,plus insurancecompany)

Bundledpayments

Payor readiness

Identify Opportunities (by department)RISK CONTINUUMUrology ‐ 2015

(MSSP) (MSSP Payors)

RadicalProstatectomy

Partial Nephrectomy

People – Process – Technology – Regulatory – Partnerships ‐ Owner

TotalCystectomy

Nephrectomy

Use Data to Inform DecisionsSource: Healthcare Association of New York State (HANYS) – DataGen

Administrative Data

Mandatory State‐collected data

Agency for Healthcare Quality Research

H‐CUP

Payer Data

Medicaid/Medicare

Direct from Payer

APCD

Claims Aggregators

Consulting Firms

Internal Data

EMR System

Billing System

RHIO/HIE

Self‐insured Program

Community Health Data

Census/Inter‐census Survey

Public Health DataCDC, etc.

Decide How Much Risk You Can AbsorbSource: Healthcare Association of NYS (HANYS)

Type Financial RequirementWho

Conducts Review?

Interactionwith DSRIP

VBP

Insurance License

Escrow Deposit – 5% of annual projected medical expenses

Contingent Reserve Requirement – 7.25% of premium incomeDFS and DOH

Prepaid Capitation Financial Security Deposit (FSD) of 12.5%* DFS Level 3

DownsideRisk

If withhold is more than 25% of total payments:

• Positive Net Worth – No FSD

• Negative Net Worth – 12.5% FSD*

DOH Level 2

Upside Risk

If bonus is more than 25% of total payments:

• Positive Net Worth – No FSD

• Negative Net Worth – 12.5 % FSD*

DOH Level 1

Pay for Performance Nothing required DOH Level 0

Decide How to Capture the Value Source: Healthcare Association of NYS (HANYS)

Splitting the premium

Plan partnership

Plan partnership

Earning the whole

premium

Insurance license

Insurance license

More than the premium

New disruptors

New disruptors

Pick a Collaborative Care Management Intervention Model(Organized by the Chronic Care Model)

Components of the Chronic Care Model

Specific Features of the Interventions

Delivery System Redesign • Care/case management* or integrated practices • Medical care, mental health, or CD enhancement (on‐site or off‐site by

appropriate specialists) to provide –Supervision of care managers –Direct patient care when needed –Education and consultation

• Screening

Patient Self‐Management Support (often delivered by care managers)

• Educational programs (e.g., Life Goals Program) and materials • Goal setting • Motivational interviewing • Systematic follow‐up of symptoms and adherence to treatment • Links to community resources (e.g., travel, housing)

Decision Support • Treatment algorithms and guidelines • Expert advice from specialists

Clinical Information Systems

• Patient registry • Refill monitoring through pharmacy databases to assure adherence

• Care manager functions include coordination and communication among health care providers, systematic follow‐up with structured monitoring of symptoms and treatment adherence, patient education and self‐management support including motivational interviewing.

• Source: http://nyshealthfoundation.org/uploads/resources/integrating‐primary‐care‐behavioral‐health‐settings‐milbank‐memorial‐fund.pdf

Decide Which Programs Are the Best Fit for Your Organization (Medicare)

• Bundled payments for care improvement initiatives

• Comprehensive primary care initiatives

• Federally qualified health center advanced primary care practice demonstration

• Pioneer ACO (or other ACO)• Medicare Shared

Savings Program• Medicare Advantage

(arrangement withprivate health plans)

Know WHY Your Organization is Making These Changes

(as learned from attending the Kaufman Hall Conference in Chicago on 10/22‐23/15)

• Don’t be Blockbuster when you could be Netflix

• Know the value proposition

• What will happen if Uber comes to healthcare? Maybe it is already here.

• Why would someone invest millions to build a new health facility in the Grand Caymans?

• Doesn’t the Patient deserve better care and better value?

Additional Recommendations

• Know your strengths, and others’ shortcomings

• Know your limits

• Know your market and its trends

• Don’t just understand the new lingo/acronyms: DRGs, APGs, risk corridors, VBP, IDS, CIN, etc. – figure out how to make them a reality

• Use DSRIP to begin to build an infrastructure

• Figure out whether to build, buy, or partner – because Use your expertise (e.g., care management, insurance, specialties)

• Build an organizational structure that supports your work

• Develop a plan to integrate advanced primary care and providers that support the social determinants of health

It Can Work: The Maryland ExampleSource: National Public Radio story 10/23/15

• “The pilot worked, and in January 2014, after 18 months of negotiations between Maryland and the federal authorities, global budgeting went statewide.

• It was voluntary for hospitals, but within six months every hospital in the state had signed up.

• Now, nearly two years into the five‐year agreement, the Centersfor Medicare and Medicaid Services says that hospitals are well on track to hit targets. Under the deal, Maryland has to save $330 million for Medicare over five years and reduce hospital readmission rates all while improving the overall health of residents.

• The Maryland Hospital Association says in the first year alone, cost savings topped more than $100 million, and hospital readmissions were down at a rate faster than the national average.”

What Will it Be?

Seize the RIGHT moment ….OR …

“If our beds are filled,

we have failed”

‐Mt. Sinai Hospital System Advertisement appearing in many major media outlets

CONTACT INFORMATION

Courtney BurkeSenior Vice President and Chief Strategy OfficerAlbany Medical Center43 New Scotland Avenue(518) 262‐9590

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A Value Based World - HANYS