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Opportunities and Challenges for Health Care Integration: A Framework for Success
at Mayo Clinic
Robert E. Nesse MD
Chief Executive Officer
Mayo Clinic Health System
Associate Professor of Family Medicine
Mayo School of Medicine
• We will see more patients and reimbursement for their care will decrease
• Care must focus on the needs of the patient rather than focus on any single facility or site of care.
• We will be accountable for the value of our care and our results.
• We must develop integrated systems of care with shared services, coordinated expertise, and public accountability for the quality and cost of our care .
Where are we Headed?
Why should Mayo Clinic Integrate?
• Implications of the Patient Protection and Affordable Care Act of 2010?
• Accountable Care requirements• Continuity of care• Transparent quality and safety metrics• New payment models (care baskets, outcome based
payment, episode of care payment)• Preventive care and wellness
• Broad access and eligibility for government sponsored insurance and public programs?
• Reimbursement will decrease for care• Public patients will increase in our practice
“A union of forces is necessary” Wm Mayo 1910
The basis of Accountable Care Organizations
• Section 3022 of the Patient Protection and Affordable Care Act
• Regardless of whether the country embraces Federal ACOs we must
change to be relevant and competent in delivering accountable care to our
patients
Harvard Business Review2008. 86:5,99-106.
The Inconvenient Truth about Health Care and Health Reform
Selected Characteristics of a Wicked Problem
• A wicked problem involves many stakeholders who all will have different ideas about what the problem really is and what its causes are
• A wicked problem has innumerable causes, is tough to describe, and does not have a “right” answer.
• Every wicked problem can be considered to be a symptom of another problem
• Wicked problems have no stopping rule
Harvard Business Review2008. 86:5,99-106.
The Mayo Clinic System 1980-2012
• Physicians & Scientists 800
• Total Employees 7,300
• Hospitals 0
• Sites 2
• Revenue $381m
• Physicians & Scientists >5000
• Total Employees > 58,000
• Hospitals 22
• Sites 83
• Revenue $8500mMayo Health System•900 physicians•18 hospitals•73 sites
Mayo Clinic Rochester, MN
• Founding Mayo Clinic site where Drs. Mayo established their practice
• Campus of inpatient, outpatient, research, education and administrative buildings in downtown Rochester
• MCR campus square ft. is 3x Mall of America
• 2,059 inpatient beds
• Saint Mary's Hospital
• Rochester Methodist Hospital
• Mayo Eugenio Litta Children's Hospital and T. Denny Sanford Pediatric Center
• 1,700 Physicians in 80 specialties
• 350,493 unique patients in 2010
Red Wing
The Statements of Mayo Clinic
• Primary Value • The needs of the patient come first.
• Mission • To inspire hope and contribute to health and well being by providing
the best care to every patient through integrated clinical practice, education, and research.
• Vision • Mayo Clinic will provide an unparalleled experience as the most
trusted partner for health care.
• Core Business • Create, connect and apply integrated knowledge to deliver the best
health care, health guidance and health information.
• Value Proposition/Differentiation Statement • Mayo Clinic combines knowledge, integrity, and teamwork into a
uniquely effective, integrated model of care
3050920-12
Unify as a single practice
Embrace a culture committedto integration
Invent new practice models
Improve care by using collective resources
Our patients deserve a system that can…
Community-based care has been partof Mayo Clinic since the beginning
Community care providers deliverthe Mayo Clinic Model of Care
Mayo Clinic Care for a Lifetime
Core Business
The Core Business
Essential strategic requirement
Essential organizational requirement
A New Approach to Health Care Reform: A Third Way?
• The Regulators • The best way to slow increasing costs is to control the
total resources going into the health care system
• The Marketers• Competing health plans and information-
empowered ..consumers would drive down costs, especially if insurance were restructured to give people the right incentives
• Systems Reformers. • The best way to bend the cost curve is from the inside
out, by creating a smarter health care system with the information base, new delivery models and payment incentives that will improve quality and lower costs.
“The "Third School" for Controlling Health Care Costs". Drew Altman. KFF. 2009
Mayo Clinic Health System Goals 2012
• Assure regional patient access to Mayo Clinic
• Further develop an integrated, geographically dispersed provider network in our system
• Improve community-based healthcare in the region surrounding Rochester, Min
• Support quality reporting and shared system efficiencies as a single system
• Align our systems to support an ACO and new payment models
• Deliver value to the market for competitive relevance
What are the fundamental requirements for success ?
• A network of providers• Physical or virtual
• Governance model
• Alignment of purpose
• Coordinated care delivery
• Common measures
• Financial alignment
A New Model for Healthcare
• Past•Provider Centered•Price Driven•Knowledge Disconnect•Slow Innovation•Reactive, episodic care•Paper based•Outcomes ignored•Overall Cost Increase
• Present and Future•Patient Centered (integrated)•Driven by Value (quality/cost)•Knowledge Intensive•Rapid Innovation•Health Oriented Involvement•Accountable•Overall Cost Stable or Decrease
Robert Waller M.D. 1995
•What are the economics of “best practice”?•Do improved process measures improve outcomes of care?•How should we manage co-morbid chronic disease?•What is the cost of best practice for an episode of care?•What rules support high value care for Americans?•How can we decrease cost and improve quality?•Can we break even on Medicare?
We Must Answer the Following Questions
What are the economics of “high value practice”?
Do we have a business model??
System Cost percentile and DM Control
0123456789
10 Percentile 25thPercentile
50thPercentile
75thPercentile
95thPercentile
100thPercentile
Cost Percentile
Hb
A1
c
2003 2008Mayo Clinic Div. of HCPR
Understanding the Distribution of Costs – Diabetes (n=1,376)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10th($2,786)
25th($4,250)
50th($7,732)
75th($13,404)
95th($19,618)
100th($76,438)
Percentile
Per
cen
t
Inpatient ED Laboratory Radiology E&M Office Visits
Outpt Surgery Other outpatient Other miscellaneous Prescription Drugs Out-of-pocket
** Mean Annual Costs Per Year over 4-yearsMayo Clinic Div. of HCPR
Percent of Patients WithMultiple Conditions by Cost Percentile
(Mayo Clinic Rochester Employees+Dependents)
0
10
20
30
40
50
60
70
80
90
<10 26-50 75-95 >95
Low Back Pain
Diabetes
Depression
IHD
Asthma
COST PERCENTILE
%
Mayo Clinic Div. of HCPR 2008
Ave. Cost/Year by Primary Diagnosis and Co-morbid Illness burden
0
5000
10000
15000
20000
25000
Diabetes Asthma Depression CAD
1-2 Conditions
3-4 Conditions
5+ Conditions
Mayo Clinic Div. of HCPR 2010
$
Primary Diagnosis
Cost Concentration Percentage of patients in
Top 20th percentile every year orTop 5th percentile any year
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
1 condition 2 conditions 3 conditions 4 conditions 5+ conditions
Top 20th % every year
Top 5% any year
Mayo Clinic Div. of HCPR 2010
This cohort is lessThis cohort is lessthan than 3%3% of the total of the total
groupgroup
%
The Genesis of High Costs over Time
• Co-morbidity• For every disease cohort, co-morbidity is the
major logistic regression coefficient correlated to cost • (Usual System)
• Consider the number of patients + cost• (Precision Medicine)
• Consider co-morbidity burden at the patient level.
Population Health Resource Relationship2010 data from Mayo Clinic HSER
COST Chronic Disease Services
Population% of community
50% 5% 3+
45% 45% 1-2
5% 50% 0
% of Medicare Spending
Multi-disciplinaryCare Teams, Home
Monitoring+
“Medical Home”Utilization EducationCommunity Support
+Wellness, Risk ScreeningShared Decision Making
Health Education
A More Precise Approach for High Value Care
• There are 3 types of patients in most systems
• Majority are healthy (or pre-symptomatic)• Wellness programs, Risk Screening, Proactive Mgmt• Healthy living education & shared decision making
• Office and outreach services + acute care
• Minority have 1-2 chronic conditions• Medical home• Rx management and utilization education• Plus all of the above
• Small Group have multiple chronic conditions• Medical home• Multidisciplinary care team• Home monitoring and case management
Accountable Care: What does this mean for Providers?
Business
• Disruption in referrals
• Increased financial risk
• New model Contracts with commercial insurers
• Cost sensitivity will heighten expectations of “consumers”
• Government policies still in development and vague
Practice
• In depth knowledgeof cost, patient outcomes of service lines
• Rapid application of best practices
• Cultural acceptanceof best practice models
• Population health management tools, expertise
• Efficient, seamless care across organizations
R. Scott Gorman. Mayo Clinic Az. 2011
Health Policy Development WorkEtheredge, L. Technology of Health Policy. Health Affairs 26(6):1537-8. 2007
• “Partisan ideologies do not explain the adoption of major health policy changes over the past 25 years.”
• Four factors came together to bring about previous national health policy changes• Previous policies were no longer satisfactory• Urgent feeling of need for change• New policy prescriptions were proposed• Pragmatic judgments were made as to whether the
promising idea could be implemented on a national scale
For their adoption, new national health policies must be For their adoption, new national health policies must be developed into implementable measures by the time developed into implementable measures by the time decision makers demand the new approach”decision makers demand the new approach”
