Transition to Value-Based Payment Models

Will Callicoat, (CFO if Value-Based Contracting is successful. If not, title changes to Barista.)

Our Vision: To Be The National Model for Patient Centered Care.

State of Reform

September 15, 2015

Agenda

I. Definitions

II. Why Value Based Care is important to Grays Harbor County

III. Implementation at SPMC

IV. The path forward

V. Provider compensation

VI. Value proposition

VII. Financial impact

VIII. Key considerations

IX. Timeline

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"The existing systems do not reflect the relative value of health care services in important aspects of quality, such as clinical quality, patient-centeredness, and efficiency...nor recognize or reward care coordination...(in) prevention and the treatment of chronic conditions."

- IOM Report 2006

Definitions

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4

Why It’s Important

» Current system isn’t working» Extremely high costs with

corresponding poorer outcomes

» Necessitates innovation» FFS is antithetical to PCMH

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Why It’s Important

Social environment• Life span in GH county is 3 years less than WA

avg. (Was 5 years less in 2000)• Higher drug use and smoking• Early instances of sexual activity• Less healthy eating and physical activity• In 2013, the unemployment rate was almost

double the state rate

Education and economics• 24% of county residents have a college or tech

degree vs. 42% in WA• GH County median income is $34,160. 42% less

than state median income of $58,585 (2013)Source: Grays Harbor County Community Health Needs Assessment

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Why It’s Important

Cancer * Heart Disease * Respiratory Diseases

Accidents Stroke0

50

100

150

200

250

300

Leading Causes of Mortality: Deaths per 100,000 Grays Harbor County

Service Area

State

* Variance from State is statistically significant.

Implementation at SPMC

Summit Pacific Medical Center (SPMC)• Licensed for 24 beds, using 15• 13,000 ED visits per year• 3 Rural Health Clinics, including urgent

careo 30,000 visits per yearo 12 family medicine primary care

providerso Internal medicine hospitalists consult

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Implementation at SPMC

1. Medicare Shared Savings Program / Accountable Care Organization 2015• Shared savings aligns the moral incentive

with the financial incentiveo Care Coordinationo Transitional Care Managemento Integrate mental healthcare into

primary careo Use internal medicine in-between

family medicine and specialty medicine 2. Data, data, data!!!

• If Medicare paid for it, you now know about ito High utilizerso high cost providers 3

Implementation at SPMC

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ICU or Specialty AdmissionGeneral

Admission

Surgeries

Specialists

Emergency Department

Primary Care

Increasing Costs

Mos

t Use

d

L

east

Used

Implementation at SPMC

3

ICU or Specialty AdmissionGeneral

Admission

Surgeries

Internal Med. / Specialists

Emergency Department

Primary Care

Increasing Costs

Mos

t Use

d

L

east

Used

Implementation at SPMC

Reimbursement for SPMC’s Current Practices

ACO MSSP

Medicaid Managed

Care

Private Payers

Care CoordinationInvesting in Pop. Health

Infrastructure

Now that we have VBP infrastructure for Medicare, need to pivot to other payers

Implementation at SPMC

Organizational Readiness – pivot to other payers

• 2-hour Survey (built by ECG); completed with clinicians and operational leaders

• Identified organizational strengths and deficiencies in these categories:i. Care delivery transformationii. Comprehensive provider networkiii. Robust clinical informaticsiv. Effective payment modelsv. Strong organizational foundation

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Financial Impact of Value-Based ContractsSensitivity Analysis

There are plausible scenarios in which SPMC’s total revenue will decline from present levels under value-based contracts.

Pessimistic Moderate Optimistic$17,000,000

$17,500,000

$18,000,000

$18,500,000

$19,000,000

$19,500,000

SPMC Revenue (All payers) under 3 Value-Based Contracting Scenarios

Fee-for-Service Payments Care Coordination Fees Quality/Patient Sat Bonus Current Revenue

Utilization reductions are the biggest drivers of revenue changes under value-based contracts.

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The Path Forward

Tactic 1:

Create a communication plan for payers.

Tactic 2:

Focus on managing

chronic conditions.

Tactic 3:

Expand access to

primary and urgent care.

Tactic 4:

Create an internal task

force focused on value.

Tactic 5:

Align provider compensation

with value.

Tactic 6:

Standardize clinical

processes.

Tactic 7:

Integrate a psychiatric NP into the continuum

of care.

Move payments from volume to value.

» Obtain value-based payer contracts.» Earn value-based payments.

» Define and demonstrate value to payers.» Make the internal changes necessary to improve patient

outcomes and patient health while reducing costs.» Obtain appropriate compensation from payers for

improving health and reducing costs.

Goal

Objectives

Strategy

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The Path Forward

Organizational Changes

Access the Lightbeam

data

Enhanced transparency

Focus on chronic

conditions

Operational Changes

Expanded access

Protocols as clinical

frameworks

Collaboration across care continuum

Cultural Changes

Provider compensation aligned with

value

Aligned mission

Leveraged internal and

external services

Technological Changes

Risk stratification of patients

Population health

software

Integrated EHR

The Path Forward

Use internal medicine as a consult for family medicine

Provide robust care coordination and transitional care management

Integrate psychiatric NP into care continuum

Expand access to primary and urgent care

Demonstrate value to payers

Align provider compensation with value

Standardize clinical processes

Identify low cost, high quality partners

Value Proposition

» Maintained three primary care clinics

» Created 7-day per week urgent care center

» Implemented a care coordination program for high-risk patients

» Established a value-based steering committee

» Hired a psychiatric NP

» Improve quality.» Lower the total cost of

care by reducing:› ED visits.› Admissions.› The use of specialists.

» Increase patient satisfaction.

» Reimburse SPMC for:› Care coordination.› Increased access to

primary and urgent care.

› Quality and patient satisfaction.

» Assist SPMC in developing a value-based care infrastructure.

What SPMC Has Accomplished

What SPMC Can Do for payers

What payers Can Do for SPMC

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Provider Compensation Tied to Quality

» 25-50% of annual goal bonuses tied to value by 2016› 2-3 month shadow period

» No penalty for not meeting measures

» Metrics will be “weighted”

» New technologies will support tracking

» Not as easy to tie provider comp to quality in a rural setting

Provider Compensation Tied to Quality

S.M.A.R.T. Specific, Measurable, Attainable, Relevant, and Timely

» Adherence to 6 process measures:1. Access to PCP Visits

2. Patients’ Rating of Provider

3. PHQ-2/PHQ-9 screening

4. HbA1C in Poor Control

5. Antibiotic Utilization

6. Medication Management and Reconciliation

» Accessory measures:1. ER utilization

2. 30-day Readmissions (AMI, PN, HF)

Key Considerations

SPMC must decide what to do next.

Payers» Without value-based contracts from some payers, will we begin to see disparate

results within our community?» Will our providers be able to provide care coordination to some patients but not

others? End Game» As costs decrease, the potential for future costs savings decreases

Bundled Payments» How will this impact rural hospitals that provide post-acute care (Swing bed and

therapies)

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Timeline

2018

ACO Ends Bundled Payments?

2017Contract with more private payers

2016Value-based Payment Quality-based incentives

2015Meet with Payers Initial Contracts

Questions?

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Thank you!

Does anyone know how to make a latte?

Contact information:WillC@sp-mc.org(360) 346-2244