53 PD ACO Partnerships: Health Plan and Provider Perspectives
Moderator:
Alexander Mark Vojta, FSA, MAAA
Presenters:
Cheri Galt Lee Huskins
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SOA 2014 Health Meeting Session 53
San Francisco, CA June 24, 2014
ACO Partnerships: Health Plan and
Provider Perspectives
Alexander Vojta, FSA, MAAA Director of Network Analytics Blue Shield of California
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What we are all collectively solving for
ACO Program Overview ACO Program Results Covered California
Create partnerships that allow us to:
deliver below-market trends
Achieve financial results in acceptable and
sustainable returns for all parties
find cost and quality improvements
Increase market share
Health Plan
Hospital Physician Group
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Where it all started
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Where we are now – 200K+ mbrs and growing
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“This program is on our radar screen as one of the best examples of patient care in the country, and the kind of care that people elsewhere hope to
enjoy in the future.” U.S. Secretary of Health
and Human Services
Kathleen Sebelius
Garnering national attention for driving innovation and results
“Three private-sector health care partners saved the California Public Employees’ Retirement System $37 million in health care costs over two years
by agreeing to work together in what is considered a national model for bending the cost curve on employee benefits.”
“A rare alliance of healthcare rivals — a giant insurance company, a major hospital chain and a large doctors group — has managed to reduce
healthcare costs through a radical new strategy”
“Simply by working together, the three were able to reduce the number of times patients had to be readmitted to the hospital by 15 percent.”
….In San Francisco's case, officials say, early results have already resulted in lower costs and better care for 26,000 city employees, retirees and
dependents covered by Blue Shield of California.”
“Most significant was the providers’ willingness to work with Blue Shield in partnership rather than as adversaries across the bargaining table.”
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Positive results to date…since its inception, the Blue Shield of CA ACO program has achieved a <3% COHC trend1
•Data paid through 12/13
•Comparison of baseline (pre ACO) to most recent completed ACO contract period
•1 trend as of Feb 2013
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Illustrative example of risk share arrangement
ACO Program Overview ACO Program Results Covered California
Service Category Target (pmpm) Hospital Physician Group Plan
Hospital services (provider partner) $115 50% 25% 25%
Hospital services (non provider partner) $25 20% 30% 50%
Physician services $90 20% 50% 30%
Ancillary services $10 20% 30% 50%
Pharmacy card $50 10% 45% 45%
Total Cost $290
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Illustrative ACO Utilization Dashboard
ACO Program Overview ACO Program Results Covered California
5 55 105 155 205 255 30 35 40 45 50 55 60 Days /K A dmit ls /K
Inpatient Utilization, ABC Example ACO
Admits/K Target Admits/K
Risk-Adjusted Top Quartile Admits/K Days/K
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Illustrative ACO Utilization Dashboard
John Muir Health - Blue Shield of
California: an ACO Collaboration
Lee Huskins
President & Chief Administrative Officer John Muir Physician Network
Society of Actuaries 2014 Health Meeting Session 53
San Francisco, CA June 24, 2014
John Muir Health – proprietary and confidential 2
Objectives
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Overview of John Muir Health
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The Market
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John Muir’s Pathway to Risk-- Accountable Care
Organization (ACO) Collaboration
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Establishing a partnership
– Background and Terms
•
Outcomes/Results
John Muir Health – proprietary and confidential 3
Mission, Vision and Values
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Mission
– We are dedicated to improving the health of the communities we serve with quality and compassion.
•
Vision
– We will exceed our patients’ expectations for seamless,
consistently positive experiences with all aspects of John Muir Health
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Values
– Excellence, Honesty and Integrity, Mutual Respect and
Teamwork, Caring and Compassion, Commitment to Patient Safety, Continuous Improvement, Stewardship of Resources, Access to Care
John Muir Health – proprietary and confidential 4
John Muir Health
• Not-for-Profit, Independent Integrated Delivery System
• Contra Costa & West Alameda Counties, CA
• Two Acute Care Hospitals:
− John Muir Medical Center, Walnut Creek Campus (Level III Trauma Center)
− John Muir Medical Center, Concord Campus
• Behavioral Health Center
• 900+ physicians (IPA & John Muir Medical Group)
• Two Ambulatory Surgery Centers
• Joint Venture/Key Partners
John Muir Health – proprietary and confidential 5
John Muir Health
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2013: $ 1B+ Net Patient Revenue
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50,000+ Commercial HMO/EPO lives
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10,000+ Medicare Advantage lives
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20,000+Medicare Shared Savings
Program ACO
John Muir Health – proprietary and confidential 6
• Health Grades
– America's 100 Best Hospitals (2013), Distinguished Hospital for Clinical Excellence (2014, 2013) – Top 2%
– Excellence Award -- Gastrointestinal Care (2014), General Surgery (2014), Pulmonary Care (2014, 2013), Coronary Intervention (2014), Joint Replacement (2014), Patient Safety (2013), Critical Care (2014) – Top 5%
– 5 Stars – Coronary Interventional Procedures, Pacemaker Procedures, Diabetic Emergencies, Hip Replacement, Prostate Removal Surgery, Heart Failure, Sepsis, Bowel Obstruction, Gastrointestinal Bleed, Maternity Care, COPD, Pneumonia • US News & World Report (2013/2014)
– #2 and #3 out of 45 hospitals in the SF Bay Area – #7 and #11 of 400 acute care hospitals in CA
– 22 services nationally ranked or ranked as high performing
– Top 50 in Orthopedics, Gastroenterology & GI Surgery, Gynecology, Diabetes & Endocrinology • Becker’s Hospital Review (2013)
– 100 Great Community Hospitals – 100 Great Hospitals in America
– #4 out of 17 “Great Hospitals” to Know in the West – 100 Hospitals with Great Orthopedic Programs – 100 Hospitals with Great Women’s Health Programs – 100 Hospitals with Great Heart Programs (2014) – #13 out of 20 ACO’s to Know in the West
• “Elite Status” from California Association of Physician Groups (JMPN)
• Integrated Healthcare Association P4P “Most Improved” and “Top Performer” (JMPN)
• California Dept. of Managed Health Care's Right Care Initiative -- Gold Level Achievement (JMPN) • Leapfrog Group -- “B" Hospital Safety Score
• Joint Commission's Gold Seal of Approval Accreditation • Magnet Recognition for Nursing
• American Heart /American Stroke Association Get with the Guidelines Gold Performance Achievement • American College of Radiology Accreditation
• Blue Distinction Center for Hip & Knee Replacement/Spine Surgery/Cardiac Care • Certified Quality Breast Center of Excellence
• Chest Pain Center Accreditation
• Commission on Accreditation of Rehabilitation Facilities
John Muir Health – proprietary and confidential 7
John Muir Health – proprietary and confidential 8
John Muir Health – proprietary and confidential 9
Key Goal Areas
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Internally Competent
1 Deliver Top Tier Quality, Patient Safety & Patient Experience 2 Improve Affordability/Our Cost Position 3 Implement & Optimize EPIC and Other IT 4 Enhance Care Coordination
5 Develop John Muir Health People
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Grow & Strengthen Our Local Delivery
System
- Ambulatory Network - Clinical Service Lines
7 Position John Muir Health as the Provider of Choice
8 Develop Regional Affiliations & Payer Strategies
9 Build Government Relations & Legislative Advocacy Capabilities
Externally Focused
John Muir Health – proprietary and confidential 10
John Muir on a Pathway to Full Risk
Per Diem Case Rate/ DRG ACO Full Risk Percent of Charges
John Muir Health – proprietary and confidential 11
John Muir Health – proprietary and confidential 12
The Context behind the partnership
• Blue Shield had early ACO success in CA:
• John Muir Health would be the third collaboration
• Allows for premium price competition- which aligns health plan, hospital, physician and employers
• Potential long term, sustainable model for improving care delivery systems
John Muir Health – proprietary and confidential 13
The Key Drivers to the Model
Creation of a partnership that allows John Muir Health and
Blue Shield to:
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Continuously improve quality and reduce cost while delivering
below-market cost trends: goal to keep trend flat or
negative
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Results in acceptable, sustainable financial returns for all
parties
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Increases community offering
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Align incentives- each partner contributes to savings, and is at
risk for any variance from targeted cost reduction goals
John Muir Health – proprietary and confidential 14
The Terms
Contract Terms:
– Three year term (2012) with key concept to hold cost flat to 2011 levels
– ACO collaboration covers BSC enrollees with John Muir Physician Network (excluding Medicare Advantage).
– Establish baseline Per Member Per Month (PMPM) costs by service category (6/2012 – 7/2013 cost targets developed from JMH HMO experience for time period 7/01/2010 through 06/30/2011)
• Removed large facility claim amounts (+$750,000) per member per year from base period
• Per Member Per Month (PMPM) All-inclusive Cost Targets, adjusted for Medical Demographics , Pharmacy Demographic, Benefit Plan
John Muir Health – proprietary and confidential 15
• Establish risk share by service category:
Service Categories Description
John Muir All IP & OP experience for JMPN members and SNF if billed under the hospital license. Also includes radiology technical component for IP MRI and CT services performed by outside vendors and includes Brentwood Surgery Center and Mt Diablo Surgery Center
Other Hosp.- In Area IP and OP experience for JMPN members at a non-JMH facility within CCC and SNF if billed under the Hospital's license
OOA Hosp – Referred Elective admissions (IP) and visits (OP) to facilities outside CCC (i.e UCSF, Stanford, etc.) OOA Hosp – ER ER/Urgent Admissions (IP) and visits (OP) to facilities outside CCC
ASC Non-JMH ASCs (Sequoia, Aspen, Premier, Laser, etc.) All Other Facilities Dialysis, free-standing SNF, Hospice
Professional Cap BSC FFS payments as described by DOFR (drugs, immunizations, ER pro fees) Professional FFS Cap to Specialists
MH/Chiro/Acu Cap to BSC
Pharmacy Drug card experience - retail and mail order
Ancillary Biggest components are DME and Ambulance, but also included Prosthetics and Orthotics and out-of-area radiology/lab
ACO Service Categories
• John Muir Hospitals- 30%, Blue Shield- 30%, John Muir Physicians 40% (Example for one category)
• The aggregate of the categories determines up side and down side risk per entity • Stop-Loss provision on large dollar claims
John Muir Health – proprietary and confidential 16
Specifications of the Collaboration
• ~ 16,000 Commercial Health Maintenance Organization (HMO) lives
• Care Coordination Strategy: (Actuarial Support Important for these
steps)
– Implemented four practice based Patient-Centered Medical Homes
– Case Management engaged for major chronic disease
classifications of population (Diabetes, Chronic Obstructive Pulmonary Disease (COPD), Congestive Heart Failure (CHF), etc.)
– Supply standardization
– Care pathway standardization
• Regular, ongoing reporting and data exchange
John Muir Health – proprietary and confidential 17
Outcomes and Problems Solved
Key Questions/Outcomes:
• Were we able to eliminate negative Healthcare Inflation Trend in Contra
Costa?
• Did employers include Blue Shield and John Muir as an offering to
employees?
• Were health outcomes improved?
YES and YES!!!!!
Summary:
• Total for first two years of collaborative equate to around 7% reduction from
baseline and with no inflation trend
• Ability to add major Blue Shield as a Health plan to important employer in
Contra Costa County
Year Results Total
2013- Year 1 5.5% Savings $5M (8.5% Aggregate
Reduction)
2014- Year 2 +2% Savings TBD
John Muir Health – proprietary and confidential 18
Outcomes, Problems Solved and
Opportunity
Collaboration YTD (Year 2) Utilization Change from
Baseline Year :
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Admits per 1,000: 14.5 %
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Days per 1,000: 26.3%
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ALOS:
13.7%
Addressing Challenge: ED visits
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ED visits per 1,000:
1.9%
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Joint JMH-BSC ED Workgroup established and
initiatives deployed
John Muir Health – proprietary and confidential 19
L
essons Learned & Critical Success
Factors
• Critical Success Factors:
– Partner Selection
– Committed Board of Directors
• Expense reduction established as a goal by Board at JMH
• Risk Strategy and Population management viewed as a top priority
• High Quality already framework for JMH, needed to prove cost reductions could be achieved without negatively
impacting quality
– Actuarial Support
– Analytics Support
1 SOA 2014 Health Meeting
Session 53
San Francisco, CA June 24, 2014
Dignity Health – Blue Shield of CA
Partnership
Cheri Galt
Director of Managed Care-Clinical Integration Dignity Health
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Dignity Health Today
2 20 State Network 380+ Care Sites 9,000 Affiliated Physicians 55,000 Employees
1-9 Sites
10-49 Sites
50-99 Sites 100-200 Sites
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Old Model of Stakeholders is Obsolete
HEALTH
SYSTEMS
DOCTORS
HEALTH
PLANS CMS
4 Stereotypical siloed Healthplan vs. Hospital company relationship Architects and joint participants in innovative pilot project Collaborative, trusting partners
Evolution of Dignity Health/Blue Shield Relationship
Architecture of change: CalPERS ACO Pilot6
• Blue Shield/Dignity Health/Hill Physicians Medical Group • 40,000 lives initially
• Discussions began in 2007, project launched in 2010, now in its 4th year
• Overall savings to date: more than $105 million (net savings of $95million to CalPERS members)
• Established cost of healthcare targets based on historical trend, demographic factors, population use patterns and potential interventions.
• Initial work: Cost drivers were knee replacements, hysterectomies, and bariatric surgery. Focus on efficiency improvements, post-discharge PCP visits, readmissions, emergency room usage.
• Currently and in the future: Patient centered medical homes, virtual care teams, and proactive population health. More emphasis will be placed on creating efficiencies in the ambulatory settings. Future progress will require a more profound transformation.
• Added focus on quality is increased as the ACO evolves.
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CalPERS ACO Pilot – initial cost drivers
pre-pilot 6 months later total hysterectomies open 11 1
lap 3 2
ALOS 1.8 1.7
total knee procedures 11 7
ALOS 3.0 2.4
total hip procedures 4 3
ALOS 3.3 2.7
total spinal procedures 4 1
ALOS 1.3 1.0
total bariatric procedures 2 4
ALOS 1.0 2.3
• Implemented agreed upon protocals for surgery
• Implemented an enhanced authorization process
• Achieved improvements within 6 months
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Taking the Model “On the Road”
# Launch Date Region/ Blue Shield’s Partners
1 January 2010 Sacramento Dignity Health / Hill Physicians (CalPERS members)
3 San Francisco July 2011
Dignity Health / UCSF / Hill Physicians (San Francisco
Health Service System members)
8 Santa Cruz July 2012 Physicians Medical Group of Santa Cruz / Dignity Health 11 January 2014 Dignity Health / Hill Physicians San Joaquin
13 January 2014 Kern Dignity Health/ GEMCare 15 January 2014 Sacramento Dignity Health / Hill Physicians (Commercial Expansion)
6 new IFP projects 6 Covered California rating regions/ (launch In
Expanding our ACO & PCMH footprint with Covered California (IFP on/off exchange)
To reduce cost and improve care for BSC’s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets
Covered California Region Dignity Portion of Region
Region 3: Greater Sacramento Sacramento, El Dorado, Yolo, Placer
Region 8: San Mateo San Mateo
Region 9: Monterey Bay Santa Cruz
Region 12: South Coast Ventura
Region 14: Kern Kern
Region 17: Inland Empire San Bernardino
Population for Inclusion:
IFP PPO On/Off Exchange ACO & PCMH –
Challenges & Opportunity
To reduce cost and improve care for BSC’s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets
Challenges
Very limited data on IFP book
Less than 50% of 2014 members were with Blue Shield in 2013
Makes traditional member-based measures (i.e. PMPMs, svc/1000) hardto measure
Need to solve the attribution problem (since it’s PPO)
Need to incorporate quality as Exchanges are putting a greater emphasis on it
Opportunity
Population of newly insured individuals has the potential to have lots of health issues – but a great opportunity to get ahead of the curve and help manage these patients
IFP PPO On/Off Exchange ACO & PCMH -
Solution
To reduce cost and improve care for BSC’s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets
ACO
Limited measures to ALOS and Readmission Rates for year 1
This solved the member-based measurement issue
Applied an attribution algorithm to assign members back to medical group
Incorporated quality as adjuster to payout
Gainshare (upside only payout to provider)
PCMH
Care Mgmt team set up to care to enroll those with chronic conditions inthe program to help manage their care
IFP PPO On/Off Exchange ACO & PCMH –
Key Technical Issues
To reduce cost and improve care for BSC’s Covered California members, BSC is collaborating with Dignity Health to implement one Accountable Care Organization (ACO) and one Comprehensive Care Management Model (CCMM) in six statewide Covered California markets
Adjustments needed to be made for ALOS and Readmission Rate benchmarks
ALOS: CMI Adjusted using MS-DRG arithmetic LOS
Readmission Rate: Will use 2014 IFP book as benchmark
Attribution
Defined hierarchy of PCPs and SCPs and CPT codes
Do we use plurality of visits over time period or most recent visit?
Quality
Limited to inpatient quality measures, simple pass/fail criteria
Drives the % of savings shared with the provider
Upside only gainshare introduces risk of payout on randomness13
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Doesn’t happen overnight. Everyone comes to change at their own pace.• First align incentives, to remove this focus barrier
• Seek to understand each other’s business practices
• Operate in partnership. Collaborate
• Remain transparent
• Focus on creating the right culture
• Maintain a long-term mindset
• This starts at the top through shared governance and cascades through to the performance of the caregivers.
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90% of the work in these projects is data driven
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Actuaries are integral members of the negotiating teams
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Actuaries design the architecture for effective incentive models
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Actuaries are trusted advisors for managing risk
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Actuaries drive the ongoing data tools for population
management
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