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IHI ExpeditionExpedition: Preparing Care Teams for Bundled Payments
Session 1: Volume to Value
March 24, 2015
Trisha Frick, MS, RN Lucy Savitz, PhD, MBANick Bassett, MBAMolly Bogan, MA
Begins at 1:00 PM ET
Today’s Host2
Akiera Gilbert is a Project Assistant at the Institute for
Healthcare Improvement. She is primarily responsible
for the Passport membership, and is involved in the
facilitation of Expeditions. Her work also delves into the
Conversation Ready Project within Patient and Family-
Centered Care, as well as the Primary Care
Collaborative. Akiera is a second-year student at
Northeastern University, and is on her first co-op at IHI.
She is pursuing a Bachelor of Science in Human
Services (concentrating in Public Health) and a minor in
Social Entrepreneurship.
Audio Broadcast3
You will see a box
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If you are able to
listen to the
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Phone Connection (Preferred)4
To join by phone:
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icons in the top right
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2) Click the button
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3) A pop-up box will
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4) Please dial the phone
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number and your
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WebEx Quick Reference
• Please use chat to
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for questions
• For technology
issues only, please
chat to “Host”
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Enter Text
Select Chat recipient
Raise your hand
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Chat
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Name and the Organization you represent
Example: Sam Jones, Midwest Health
Please send your message to All Participants
8
For more information or to enroll, email [email protected]
By joining Passport, your entire staff gets access to a wide range of web-based
tools to help prioritize, deploy, and accelerate your improvement initiatives
without leaving your desks. Passport membership will:
• Bring IHI's world-class expertise to your doorstep (virtually) and support
multiple teams closest to the point of care as they make rapid improvements
in the areas of greatest concern to hospitals today.
• Help your staff meet its continuing education requirements for physicians,
nurses, and pharmacists.
• Give your middle managers the skills they need to guide your
organization's efforts to improve patient care and achieve its strategic goals.
• Save you time, set your teams up for success, and facilitate more effective
use of your resources.
IHI Open School Courses
• More than 20 online courses developed by world-renowned experts in the following topics
– Improvement Capability
– Patient Safety
– Person- and Family-Centered Care
– Triple Aim for Populations
– Quality, Cost, and Value
– Leadership
• More than 26 continuing education contact hours for nurses, physicians, and pharmacists. NAHQ has also approved the courses for CPHQ CE credit.
• Basic Certificate of Completion available upon completion of 16 foundational course.
• Mobile App for iPhone and iPad
• 20% Discount on organizational subscription for Passport Members
9
What is an Expedition?
ex•pe•di•tion (noun)
1. an excursion, journey, or voyage made for some specific
purpose
2. the group of persons engaged in such an activity
3. promptness or speed in accomplishing something
Expedition Director11
Molly Bogan, MA, co-leads IHI’s Quality, Cost and
Value portfolio of work. Molly began her career in
health working in clinics and outreach programs in
Washington State. She went on to join the US Peace
Corps, assisting local government with health services
planning in Paraguay. Molly also managed a USAID
Global Health fellowship program and an NIH-funded
child health improvement research program at Harvard
School of Public Health in Boston, MA. Molly holds a
Master of Arts in International Development and Global
Health Affairs from the University of Denver. Prior to
joining IHI, Molly was the Director of Finance and
Administration for an international health non-profit
organization.
12
Chat
12
What is your goal for participating
in this Expedition?
Please send your message to All Participants
Today’s Agenda13
Ground Rules & Introductions
Pre- Survey Debrief
Moving from Volume to Value
IHI’s Model for Improvement
Action Period Assignment
Ground Rules14
We learn from one another – “All teach, all learn”
Why reinvent the wheel? - Steal shamelessly
This is a transparent learning environment
All ideas/feedback are welcome and encouraged!
Expedition Objectives
At the conclusion of this Expedition, participants will be able to:
Describe the benefits of transitioning to a value-based purchasing model
Understand and apply an activity-based cost accounting methodology to at least one care process
Demonstrate examples of how to engage stakeholders in building a bundle
Describe how to customize care team redesign to deliver optimum care under value-based purchasing
15
Schedule of Calls
Session 1 – Moving from Volume to ValueDate: Tuesday, March 24, 1:00 - 2:30 PM Eastern Time
Session 2 – Building a Care Bundle
Date: Tuesday, April 7, 1:00 - 2:00 PM Eastern Time
Session 3 – Collecting Data Using Activity-based CostingDate: Tuesday, April 21, 1:00 - 2:00 PM Eastern Time
Session 4 – Engaging Stakeholders in Bundle DesignDate: Tuesday, May 5, 1:00 - 2:00 PM Eastern Time
Session 5 – Care Team RedesignDate: Tuesday, May 19, 1:00 - 2:00 PM Eastern Time
Session 5 – Putting it All Together: Case StudyDate: Tuesday, June 2, 1:00 - 2:00 PM Eastern Time
16
Pre-Work Assignment & Survey Results
• Complete the IHI Open School Course QI 102: The
Model For Improvement: Your Engine for Change
• Complete the Preparing Care Teams for Bundled
Payments Pre-Survey (thanks to all who already
completed!)
17
Faculty18
Lucy Savitz, PhD, MBA
Director of Research and
Education
Intermountain Healthcare
Salt Lake City, Utah
Trisha Frick, MS, RN
Assistant Director of
Managed Care
Johns Hopkins
HealthCare LLC
Glen Burnie, Maryland
Nick Bassett, MBA
Healthcare
Transformation
Manager
Intermountain
Healthcare
Salt Lake City, Utah
Introduction to Bundled Payments
Public and private payers are moving toward global
payment arrangements with health care providers
Agreements tie set payments to successful deployment
of specific bundles of care
Require teams from across the system – from
contracting and finance teams to physicians and front-
line care teams – to engage in coordinating care
19
Volume to Value
Focus on the cultural changes required to coordinate
care under the new payment structures
Relationship between better patient care and potential
savings – keep the patient at the center
Quality indicators must not decline as costs are reduced
New skill sets and mindsets required – are your teams
ready?
20
Setting the Stage
“Bundled payment is generally touted as a promising
example of payment innovation — but the true benefit of
bundling payments derives from reengineering care
delivery, not from combining separately paid line items into
a single tab. Bundled payment provides the impetus, but
the work of care redesign must follow if the promise of
bundled payment is to be realized.”
- Tom Williams and Jill Yegian, Modern Healthcare blog
21
IHI Expedition:
Preparing Care Teams for
Bundled PaymentsMarch 24, 2015 Webinar
Lucy A. Savitz, Ph.D., MBA
Director of Research and Education
Intermountain Institute for Health Care Delivery Research
The Burning Platform
Driving Change
• An eagerness to accelerate reforms in
healthcare financing ahead of evidence that
the new models will succeed.
• Bundled payments and other ACA payment
reforms have strong Federal support and a
growing private-sector following.
The Promise
• Bundled payment will lead to higher-
quality, more coordinated care and
lower costs.
• Episode-based bundled payment may
serve to align financial incentives across
the spectrum of care.
Creating a Learning Commons
• Evaluation results of in-progress,
episodic bundle payment initiatives will
not be available for several years.
• Making the case for shared learning as
we go.
Medicare’s Bundled Payment Initiative: Most Hospitals
Are Focused on A Few High-Volume Conditions Tsai TC et al., Health Affairs, March 2015, 371-380
• Aim is to bundle a single payment for an episode of
acute care (while hospitalized) with related post-
acute care in an appropriate setting.
• Participating hospitals are:
– Mostly large
– Non-profit
– Teaching hospitals in the Northeast
– Cover conditions with high clinical volumes
Reported Findings
Claims-based analysis
Focused on only a few clinical conditions
• No significant differences in spending
between participating & non-participating
hospitals
• Post-acute care explains the largest
variation in overall spending
– Presents an opportunity to align incentives
across providers
HHS Announcement
In three words, our vision for improving health delivery is about better, smarter, healthier.
If we find better ways to pay providers, deliver care, and distribute information:
Encourage the integration and coordination of clinical care services
Improve population health
Promote patient engagement through shared decision making
Incentives
Create transparency on cost and quality information
Bring electronic health information to the point of care for meaningful use
Focus Areas Description
Care
Delivery
Information
Promote value-based payment systems
– Test new alternative payment models
– Increase linkage of Medicaid, Medicare FFS, and other payments to value
Bring proven payment models to scale
HHS AnnouncementBetter Care. Smarter Spending. Healthier People
We can receive better care.
We can spend our health dollars more wisely.
We can have healthier communities, a healthier economy, and a healthier country.
Source: CMS
Target percentage of Medicare FFS
payments linked to quality and alternative
payment models in 2016 & 2018
2016
All Medicare FFS (Categories 1-4)
FFS linked to quality (Categories 2-4)
Alternative payment models (Categories 3-4)
2018
50
%
85
%
30
%
90
%
Source: CMS
Payment Taxonomy Framework
Category 1:
Fee for Service—
No Link to Quality
Category 2:
Fee for Service—Link to
Quality
Category 3:
Alternative Payment Models Built on Fee-
for-Service Architecture
Category 4:
Population-Based Payment
Des
crip
tio
n
Payments are based
on volume of
services and not
linked to quality or
efficiency
At least a portion of
payments vary based on
the quality or efficiency
of health care delivery
Some payment is linked to the effective
management of a population or an episode
of care. Payments still triggered by
delivery of services, but opportunities for
shared savings or 2-sided risk
Payment is not directly
triggered by service delivery
so volume is not linked to
payment. Clinicians and
organizations are paid and
responsible for the care of a
beneficiary for a long period
(e.g. >1 yr)
Med
icar
e F
FS
Limited in
Medicare fee-
for-service
Majority of
Medicare
payments
now are
linked to
quality
Hospital value-
based purchasing
Physician Value-
Based Modifier
Readmissions/Hosp
ital Acquired
Condition
Reduction Program
Accountable care organizations
Medical homes
Bundled payments
Comprehensive primary care
initiative
Comprehensive ESRD
Medicare-Medicaid Financial
Alignment Initiative Fee-For-Service
Model
Eligible Pioneer
accountable care
organizations in years 3-
5
Source: CMS
Sustainable Growth Rate
SGR Repeal & Reform Timeline
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Sunset of existing quality value
penalties under PQRS, VBM, EHR
12/31/2017
Permanent repeal of SGR
0.5% update in physician payments
(2014-2018)
0% update in physician base payments
(2019-2023)
APM participating providers exempt from MIPS; receive annual 5% bonus (2018-2023)
Merit-Based Incentive Payment System (MIPS) adjustments 2018
+/-4%
2019
+/- 5%
2020
+/- 7%
Tr
ac
k 1
Tr
ac
k 2
2021 & beyond
+/- 9%
• CBO estimate of bipartisan, bicameral bill: @$122B/10 years
• Medicare extenders will add another @$25 - 30B to cost of bill
Cu
rre
nt
law 2018
4%
Physician Quality Reporting System Penalty2015
-1.5%
2016 & beyond
-2.0%
Meaningful Use Penalty (up to %)2015
-1.0%
2016
-2.0%
2017
-3.0%
2018
-4.0%
Value-based Payment Modifier penalty (up to %)2015
-1.0%
2016
-2.0%
2017
-4.0% (NPRM)
2019 & beyond
-5.0%
2018 & beyond
???%
Ready to Test the Waters
Getting to Bundles• Identify potential areas to bundle
• Identify available clinical champion(s)
• Identify payer partner(s)
• Flow chart out the episode process of care across the
continuum
• Capture cost and revenue streams for each process segment
• Identify cost structure and/or innovation opportunities to
streamline/eliminate waste
• Apply parameters to historical data &/or run prospective
“shadow” system to assess net financial impact
• Determine which opportunities present “goodness of fit”
• Collaboratively establish monitoring/feedback system—cost,
quality, service, patient experience
Launch
TPS Lean Based on U.S. Manufacturing Expertise
• Henry Ford first to use concepts of
eliminating waste & increasing
efficiency
• Taiichi Ohno pioneered Toyota
Production System (TPS), drawing on
writings of Ford
• Deming added to Japanese post WWII
bid to overtake U.S. manufacturing
Quality Costs• Represent the difference between the
actual cost of a product or service and what the reduced cost would be if there were no possibility of substandard service, failure of products, or defects in their manufacture.
• Commonly accepted categories of quality cost (in manufacturing circa 1945) are:
– Failures
– Appraisal
– Prevention
Muda or Quality Waste
• Mistakes
• Defects
• Overproduction
• Processing
• Transportation and/or Motion
• Waiting
• Inventory
40
Capturing Waste
• Designing an effective system for capturing costs
• Requires comprehensive identification & collection of data
• Must be practical
• Determining when, where, & how to use a tool
Evolving Technology, Ease of Use
35
2 6
4
53
2
0.010.020.030.040.050.060.070.0
0.010.020.030.040.050.060.070.0
Average Number of Activities(Number of observations per unit)
0
5
10
15
20
25
30
35
% Interrupted
35
2 6
45
3
2
0.02.04.06.08.010.012.014.016.018.020.0
0.02.04.06.08.0
10.012.014.016.018.020.0
Average Number of Interruptions(Number of observations per unit)
3
5
2 6
4
5
3
2
0.00.51.01.52.02.53.03.54.04.5
0.00.51.01.52.02.53.03.54.04.5
Avg Number of Abandoned Activities(Number of observations per unit)
Facilitated Discussion
Questions & Answers
Group Discussion
Questions/Discussion47
Raise your hand
Use the chat
Action Period Assignment
• Identify one patient population to test a
potential bundled payment design.
• Consider one of the top 10 DRGs or procedures
from your systems
• Request for volunteers to share learning from
test at start of next session
Expedition Communications
• All sessions are recorded
• Materials are sent one day in advance
• Listserv address for session communications:
• To add colleagues, email us at [email protected]
49
Session 250
Tuesday, April 7, 2015, 1:00 - 2:00 PM ET
Building a Care Bundle
Trisha Frick, MS, RN
Assistant Director of Managed Care
Johns Hopkins HealthCare LLC
Glen Burnie, Maryland
Nick Bassett, MBA
Healthcare Transformation Manager
Intermountain Healthcare
Salt Lake City, Utah
Thank You!51
Molly Bogan
Akiera Gilbert
Please let us know if you have any questions or
feedback following today’s Expedition webinar.
VideosBob Lloyd’s Whiteboard Videos:
Model for Improvement, Part 1: http://www.ihi.org/education/IHIOpenSchool/resources/Pages/AudioandVideo/Whiteboard3.aspx
Model for Improvement, Part 2: http://www.ihi.org/education/IHIOpenSchool/resources/Pages/AudioandVideo/Whiteboard4.aspx
PDSA Cycles, Part 1: http://www.ihi.org/education/IHIOpenSchool/resources/Pages/AudioandVideo/Whiteboard5.aspx
PDSA Cycles, Part 2: http://www.ihi.org/education/IHIOpenSchool/resources/Pages/AudioandVideo/Whiteboard6.aspx
52
What are we trying toaccomplish?
How will we know that achange is an improvement?
What change can we make that
will result in improvement?
Model for Improvement
Act Plan
Study Do
Aim of Improvement
Measurement of
Improvement
Developing a Change
Testing a Change
Adapted from Langley, G. J., Nolan, K. M., Nolan, T. W.,
Norman, C. L., & Provost, L. P. The Improvement Guide:
A Practical Approach to Enhancing Organizational
Performance. San Francisco, CA: Jossey-Bass, 1996.
Why Test?
• Increase the belief that the change will result in
improvement
• Predict how much improvement can be
expected from the change
• Learn how to adapt the change to conditions in
the local environment
• Evaluate costs and side-effects of the change
• Minimize resistance upon implementation
Repeated Use of the PDSA Cycle55
Hunches
Theories
Ideas
Changes that Result
in Improvement
A P
S D
A P
S D
Very Small
Scale Test
Follow-up
Tests
Wide-Scale Tests
of Change
Implementation of
Change
Sequential building of knowledge under a wide range
of conditions
Spread
Multiple PDSA Cycle Ramps
Transfusion
Administration
Safety
Communication
and Awareness
Strategies
Engaging with
Leadership
56
Implementing
Transfusion
Guidelines
Final Questions/Discussion57
Raise your hand
Use the chat