P.J. Brennan, MDChief Medical Officer

Penn MedicineApril 25, 2015

Pay for Performance: Alternative Payment Models in CV Care – Are you ready?

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ACCME Disclosures

NO DISCLOSURES

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Patients as Consumers of Health Care

Patients are increasingly being exposed to the cost of care through higher copays and deductibles

Many people (81%) purchasing insurance in the exchanges are selecting plans (e.g. bronze, silver) with sizeable deductions

Employees enrolling in private exchanges are more likely to select high-deductible plans

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National Trends Toward Value

The shift from volume-based to value-based payments continues (e.g. value-based purchasing)

Cost-sharing organizational arrangements (e.g. ACOs) and new payment models (e.g. bundles) have begun to proliferate differentially across markets

Our costs are increasing (e.g. increasing length of stay, increasing skill mix, need for academic support) at the same time that national policy, payers, and patients are focused on cost reductions

Patients are being “steered” towards specific providers and making their own choices on the basis of cost

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Program Goals

↓ Unnecessary clinical variation

↓ Potentially avoidable conditions/costs

Delivering the right care in the most appropriate setting

↓ LOS

Improve patient flow & clinical care processes

Improve operational/support processes

Efficient supply/resource useUPHS

UPHS

Lower Cost

Higher Quality

Reduction in unnecessary costs

Reduction in preventable conditions/costs

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Experimenting with new payment models

Hospitals and physicians are increasingly being asked to take on more financial risk and accountability for “managing appropriate care”

New payments models, like bundled payments, require us to better coordinate primary and specialty care to treat specific patient populations

Acc

ount

abili

ty fo

r M

anag

ing

Car

e

Low

High

Era of Reform1990s 2010s

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Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health CareSylvia M. Burwell | January 26, 2015DOI: 10.1056/NEJMp1500445

Powerful Signals from Government

“The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways:

1. Using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models;

2. Changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and

3. Harnessing the power of information to improve care for patients.”

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1. Characteristics of Payment Models

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2. The Framework for Care

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Outpatient Post-acute Services/ Chronic Care ManagementHospital Stay

Build a set of interventions that integrate the care continuum.

Risk Stratification

• Referrals to post-acute services

• Followup appointments & slots

• Followup phone calls

• MyPenn Pharmacy

Interdisciplinary Care Closing the Loops Getting Information to the Right Place

Follow-up Programs & New Payment Models

• Risk assessment linked to interventions

• Real-time readmission feedback

• PCP contact info

• Discharge summary to next provider

• Loopback communication & trouble-shooting

• Integrated platform of wraparound programs

• Care connectors

• Bundled payment experiments

• Shared clinical protocols across the continuum

• Patient & family education

• Med rec across the continuum

• Goals of care conversations

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3. Where Does Cost Accrue in a 90-Day Hospital Bundle

Starts with Admit

Anchor Admit33% of Bundle

Spending

Re- Admits

17%

Home Health

6%

Other Part B

7%

Physician Services (PCPs & Specialists)11%

Inpatient Stay thru 90+ Days Post Discharge

Core BPCI Elements• Starts with a hospitalization• Defined at MS-DRG level• CMS expects 2% savings/bundle• Includes all costs for up to 90 days post discharge• No change in fee for service billing

SNF/IRF/ LTCH26%

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3. Distribution of costs in a 90 day PCI bundle

Based on 2010-2011 data, a large portion of 90-day bundle costs occur in the post acute setting.

Percutaneous Coronary Intervention:

Spending Distribution for PCI Average Spend per Bundle: $21,922

“Manageable Post-Acute Costs”

SNF, IRF, & Readmission expenses represent 21% or $4,644

of the PCI bundle cost

SNF5% IRF/LTCH

2%

Readmissions14%

Anchor Admit54%

HHA3%

Part B Cost18%

Outpatient Cost4% DME Cost

1%

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3. Using Data Science to Detect HF Algorithm <1> Detection HF patients

Value: Increase HF Service Line volume by at least 300 patients*

Algorithm <2> Detect High Risk HF patient

Value: Productivity multiplier for resources. Apply less resources to low risk and more resources to high

risk to avoid Readmits and delay progression of illness

Algorithm <3> Detect candidates for Adv Care

Value: Increase volume for Advance Care and reduce risk of unsuccessful therapy

*Assumptions based on FY14: 66% of 900 HUP HF patients where captured into the HV Service Line at HUP. Creating an opportunity to identify 300 patients on admission to connect to HVSL for Penn Medicine.

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HCHSTargeted Programs

Internal & ExternalPrograms

HCHS Agencies

ServiceLines

CANCER SL

MSK SL

HV SL

WH SL

NS SL

Home Infusion

Penn Care at Home

Telemedicine

Wissahickon Hospice Caring Way IMPaCTTCM

Telehealth Hospital at Home

Telewound

GSPPRehab

Non-Penn Hospice

Non Penn Homecare

ReferringProviders

Non PennLTACHs

PCRC SNF

Non Penn Community

Health Services

PPMC SNF

DiseaseManagement

Prgms

GSPP LTACH

E-Lert Healthy

Planet

Life Line Integrated

data

ConnectivityClinical Data

Registries

My Penn Medicine

My Penn Pharmacy

Quality DataMart

The Array of Continuity Services

Care Connectors/Nurse Navigators

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“No Regret Moves” to Drive Value

General Principals

Establish benchmark goals for outcomes, service, cost

Map clinical pathways that can achieve goals (Engagement)

Promote coordination/integration of patient services (Continuity)

Improve efficiency by lower costs and LOS across all services (Value)

UPHS Strategies

Manage patients populations at a lower cost (cost of care)

Manage high CMI patients with “acute expression of chronic disease”

Leverage the advantage of a common EHR across all our sites

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Conclusion

Pressure to reduce health care costs; patients, payors and purchasers of health care want better value

Financial payments are a reward/penalty system. Historical Models have rewarded utilization. New health care payment models are being designed to reward or penalize hospitals and physicians based on value

Variations in care are everywhere; eliminating those that are unnecessary is essential to better value care.

Use evidence-based medicine to reduce unnecessary variation to improve quality, patient experience, and lower the cost of care

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