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"Delivery System Reform in Rhode Island: BCBSRI's role in 2013 and beyond"
Gus Manocchia, chief medical officer, BCBSRISeptember 20, 2013
The Rhode Island Healthcare Landscape
The U.S. spends more per person on care than any country in the world, with the average family of four spending more than $20,000 annually.
In Rhode Island, skyrocketing healthcare costs contribute to an ongoing weak local economy.
Flaws in the current healthcare system have led to increased costs and fragmented and inconsistent care.
The current system focuses on:
• Patients who are already ill• Paying for the number of services, not the quality of those services • The service provided but not the cost/benefit of providing it
Key Cost DriversThe cost of healthcare services for BCBSRI’s insured members exceeded $1.3 billion in 2011. A breakdown of those costs:
Pharmacy: Drug costs are expected to grow faster than those for both hospital care and other professional services through 2019.
Professional services: Providers’ reimbursement is based on the number of patients he/she sees, not the quality of care delivered.
Hospitals: Increases in hospital reimbursements continue to outpace inflation and account for more than one-third of our members’ claims.
BCBSRI’s perspective on transformation
Informed Patient makes better choices
• We are committed to providing our members with more transparent data on the quality and cost of healthcare services
• We want them to be informed healthcare consumers
• Currently, our members can read and write “reviews” about a provider they have seen
• This fall they will be able to use a member out of pocket estimator as well as a “Ways to Save” tool
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Giving our members tools to be educated consumers- Physician Finder
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Members can search “Estimated Costs by Treatment”
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Members can also search “Estimated Costs by Doctor”
Coordination of Patient Care
• Coordinated, team based care is the future of healthcare
• Rhode Island’s healthcare providers, with the support of payers and regulators, must evolve to an aligned, patient-centric healthcare delivery system resulting in:– Improved patient health outcomes and care experience– Higher quality of care and patient safety– Lower cost of care for patients
In total, 38% of Blue Cross local adult membership has an affiliation with either a PCMH or CSI-sponsored physician.
Patient-Centered Medical Homes
Group Covered Adult Lives
Anchor 6755
Aquidneck 1973
Coastal 24085
Medical Assoc of Rhode Island 5211
RIPCPC 28678
University Internal Medicine 3038
University Medicine 8709
WellOne 1996
Wood River 785
Total 92657
Primary Care Practice Transformation
• RI has the highest per capita rate of NCQA recognized PCMH sites, which offers a level of discipline not found in non-PCMH practices
• 200k unique member encounters by nurse case managers per year• Implementation of team-based care maximizing the use of each individual• Consistent use of EHR systems greatly improved
– 245 PCMH Providers already attested to Meaningful Use• Pre-visit planning saving time and empowering employees• Improved After Hours and Same Day Access through weekend pilots and NCQA required same day visit slots• Patient portal roll out at most sophisticated sites• High sense of camaraderie and collaboration across program – shared learning• Quality, utilization, and cost of care benchmarks increasingly becoming a part of practice life
* Specific to BCBSRI program only 11Our investments in PCMH’s have helped create infrastructure, process, technology, and expertise in patient –
centered care
Benchmark
Blue Cross Commercial members in a PCMH could incur 15% fewer emergency room visits than members who are not in a PCMH.
This 15% translates to a potential of 3,227 avoided emergency room visits.
Avoided ER Mean $/ER Visit Savings
3,227 × $1,200 = $3,872,400
Patient-Centered Medical Homes
Benchmark
Blue Cross Commercial members in a PCMH could incur 11% fewer inpatient admissions and 17% fewer inpatient readmissions than members who are not in a PCMH. This translates to a potential of 756 fewer inpatient admissions and 100 fewer inpatient readmissions. The decreased utilization ultimately equates to more than $12M in potential savings.
BCBSRI Commercial Membership Inpatient
Patient-Centered Medical Homes
ROI – Quality Performance
14Our PCMH partners have materially higher quality scores when compared to our network
Expanding our PCMH Footprint
* Specific to BCSRI program only 15
We’ve experienced rapid growth rates in both physician adoption and PCMH membership since 2009 and will continue to drive new ways to enroll our physicians and members in PCMH’s
* The # of PCMH providers has grown from 32 to an expected 330, an annual growth rate of 58%
* The # of members in a PCMH has grown from 15k to an expected 127k , a compound annual growth rate of 63%
# of Providers
% of RI Providers in PCMH’s
# of Members
% of BCBSRI Members in a PCMH
Forecasted Value
Claims Expense w/o PCMH
Claims Expense w/ PCMH
Aggregate Savings
Year 1 $ 1,790.6 M $ 1,772.8 M $ 17.8 M
Year 2 $ 1,898.1 M $ 1,865.2 M $ 32.9 M
Year 3 $ 2,012.0 M $ 1,969.7 M $ 42.3 M
Total $ 93.0 M
Patient-Centered Medical Homes
Adoption of value-based contracting
• Reimbursing providers based value, not volume improves care and affordability– Future reimbursement increases are based on
actions that measurably improve patient experience, health outcomes and cost improvement
– Provider cost and quality data become transparent
– Non-participating (engaged) providers could see fee reductions
Moving to value-based contracting
• Shared savings agreements:– Coastal Medical– University Medicine Foundation
• Bundled payment arrangements in development• Creating new products with provider partners:
– Lifespan– CNE
• New relationships emerging in the market– CNE affiliation with RIPC– CNE merger with Memorial Hospital
PAYMENT MODEL
Spectrum of Payment Models for Health Plans and Providers
Fee for Service
Negotiated Payment for
Volume
Performance Based Fee for
Service
Negotiated Payment for
Volume+
Escalators for Quality and
Patient Experience
(Prospective without “settle
up”)
Shared Savings
Global Targetwith
Shared SavingsIf Interim Costs
< Target
Risk Sharing
Global Targetwith
Shared Savings if Interim Costs
< Targetand
Shared Losses ifInterim Costs
> Target
Full Capitation
Global Targetwith
All Savings /Losses Going to Provider
Care Delivery System Today and in Five Years
Traditional Model BCBSRI / Delivery System Collaboration
Value Creation for Care Delivery
Contractual Fee For Service Relationship
Contractual Relationship with Shared Value
Contractual Relationship with Shared Value with BCBSRI integrated services
Level of Delivery System and BCBS Integration (Financial, Capabilities, People)Low High
CredentialingIn Network Benefits
Pay for PerformanceCare Model Coordination
Aligned vision / planningShared economicsInformation SharingEnterprise alignment with an integrated view of patient
Description
Value Levers
60% 35% 5%
40-50% 30-40% 20-30%
% of members in each model
Today
2015
A simpler, less expensive system
• Parity with national benchmarks for administrative cost levels across the system
• Processes and information are directly related to patient care and simplified
• Unnecessary and redundant process between delivery system and partners are identified and eliminated
Operating Leaner and Smarter
By 2014, we plan to reduce our overall operating expense base by 25% since 2009 through more efficient operations and technology
Focused efforts to improve performance in key areas of staffing, operations, and supplier contracting have resulted in an annual expense reduction of close to $15
million.
SelectRI
SelectRI
• SelectRI is an innovative network option that empowers members to get the care they need at the best price.
• They’ll still have the flexibility to choose any provider in our national network, but when they use SelectRI providers, they’ll have the lowest out-of-pocket costs and access to comprehensive primary care with many extra services.
Lower costs. Enhanced primary care. Better value. SelectRI gives employers and their employees more for their healthcare dollars.
—James Schwartz, MD, Coastal Medical
SelectRI is changing the way care is delivered in Rhode Island through a partnership with Coastal Medical, the state’s largest private primary care group.
SelectRI is changing the way care is delivered in Rhode Island through a partnership with Coastal Medical, the state’s largest private primary care group.
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SelectRI
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SelectRI
Wellness Features• Wellness Portal
– Health Assessment (HA) - $50 Incentive for Completion– Online Tools and Programs– PureRunner Mobile App
• Telephonic Wellness Coaching
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Questions?