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From the Lens of a CIO: Moving Forward on Value-Based Care Efforts Without a Roadmap (Part 1)

July 12, 2016
by Heather Landi
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This past April, 14 CIOs from leading healthcare organizations convened at the Scottsdale Institute’s Spring CIO Summit in Arizona to discuss the most important health IT-related challenges facing CIOs and to share insights on key IT-enabled strategies for value-based care.

Driven by the accelerating trend toward alternative payment models that reward quality of care rather than volume of services rendered, many of the organizations represented at the Scottsdale Institute CIO Summit have been preparing for value-based care with the development of clinically integrated networks for some time, while others are just getting started. Last year’s passage of the Medicare Access and CHIP Reauthorization Act (MACRA), which rapidly accelerates the transition to value-based payments, has especially spurred health systems to optimize and expand their clinically integrated networks, which presents CIOs with a number of IT challenges.

The Summit was hosted by the Scottsdale Institute, a Minn.-based not-for-profit membership organization of health systems advanced in IT, and sponsored by Impact Advisors, a Naperville, Ill.-based healthcare IT consultancy and moderated by Ralph Wakerly of Minneapolis-based consultancy C-Suite Resources. Insights from the discussions at the spring CIO Summit are outlined in the report, “Creating Clinically Integrated Networks: Challenges, Successes, Lessons Learned.” The group identified several lessons learned to be successful in a value-based environment, including the need for CIOs to be willing to make strategic decisions and learn quickly from their mistakes, the importance of data analytics, how to manage the complexity of new partnerships and the need for collaborative leadership moving forward.

Following the Summit, Healthcare Informatics Assistant Editor Heather Landi spoke with two CIOs who were in attendance—George Conklin, Senior VP and CIO at the Irving, Texas-based Christus Health, a 60-hospital integrated healthcare delivery system, and Mary Alice Annecharico, Senior VP and CIO at Henry Ford Health System, a five-hospital health system based in Detroit—as well as Tonya Edwards, M.D., physician executive at Impact Advisors. In Part 1 of this story, Healthcare Informatics provides an inside look at building clinically integrated networks from the lens of CIOs and the challenges they face. Below are excerpts of those discussions with Conklin, Annecharico and Edwards.

What was the general mood of the CIOs involved in the discussions at the CIO Summit?

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Edwards: There was a lot of energy and a sense of excitement about what the future holds, but also some nervousness about what the future holds, because so much is changing so very rapidly. Leaders from several organizations actually pointed out that there really is no roadmap. They are trying to make decisions quickly, be nimble and move forward on a path, but not knowing necessarily if the path they are going down is the right path. That said, there was a lot of excitement about being able to do some new things that could help drive health systems forward much faster, particularly around the area of analytics.

Conklin: Concerned, with a lot of focus around security, but also there was a sense of, How can we work together better to help protect all of us?

Cybersecurity wasn’t one of the key findings in the report from the CIO Summit, but it sounds as if it was discussed, so what were some of the takeaways from those discussions?

Annecharico: [Cybersecurity] was peppered throughout the conversations that we were having throughout the entire conference. It is a growing burden for our organizations to be able to keep the bad actors out and to manage our responsibilities at the federal level with managing the privacy and security of our data.

Mary Alice Annecharico

Conklin: Everybody is as focused as we are on it and there is a keen amount of interest. There was a concern relative to our ability to be able to respond effectively to all of the different evolving kinds of attacks that are occurring out there. There is a lot more cooperation amongst us, and evolving new ways of communicating when one of us sees something or is attacked by something, and communicating it out to other group members, and even enlisting each other to help in the event of an attack.

The CIO Summit specifically focused on the IT challenges of developing clinical integrated networks. Why is this a crucial time for healthcare organizations to build or expand their clinically integrated networks?

Conklin: What we’re seeing is, and particularly within Christus, is our traditional business is mainly focused around acute care, so hospital episodes. What we’ve now seeing is a steady and consistent decrease in admissions and discharges and, as a result, revenues, and increasing demand for newer, higher-end technologies that require capital investments. Patients are getting their healthcare somewhere else, such as free-standing ERs, surgery centers, doctor’s offices and clinics that are constructed to be convenient to them and to handle episodic needs for treatment and services, but are not geared up to be able to handle the long-term and evolving needs of people who might have multiple co-comorbidities. So our focus in our healthcare systems, and universally across all the Scottsdale Institute membership, is beginning to develop a more balanced portfolio of services and products that network together community-based entities and physicians to provide care where patients want it. And, where these services are not present, the focus is to put in physician practices, establish free-standing ERs, imaging centers and surgery centers. The big positive being that all these things are tied together into a service network so that your information moves with you as you need different levels or types of care. That’s the big focus from an IT perspective—how do we bring in new partners to integrate into our networks, how do we build out and establish these new centers ourselves and how do we tie them all together? One of the other things we’re doing as well is we’re beginning to move into the health plan space and become an insurer on our own.

Annecharico: The IT challenges of creating clinical integrated networks is an important topic for many reasons, but the major reasons deal with our population health environments and the thirst for us to be able to organize data and use it meaningfully, to manage our local populations, and also the health and welfare of our regions and our nations. Population health is a major driver to help us take a look at cohort data differently and help us to use data to create an insight-driven environment. The other major component that is of value to Henry Ford and other organizations at the Summit is to figure out how to leverage contracting in a way that enables us to have fair value from our payers. Right now, each one of our organizations are fighting with our insurance companies to get the best value out of fair cost. This will enable us to do that, because we are looking at a diversity of services as well as the basic foundation for primary care and we’re moving into ambulatory care. We are able to speak with a larger voice. But it’s important that as our inpatient populations continue to decline, we’re realizing that we have economies of scale to move much of that into the ambulatory market. At the same time, we don’t get reimbursed the same way, and it’s taking more density, more concentrated services to be able to attain a normal state,. Most of us have seen up to 30 percent of our revenues declining from the payment models that exist today and that shift is really requiring us to use data differently to help us think smarter and more strategically.

One of the key recommendations for CIOs from the report was “fail fast, learn fast.” What does this mean?

Edwards: I think the main reason speed is important is there’s a sense of this acceleration of change, particularly with some of the things that have gone on the last few years, with the CMS announcements related to changing over to more value-based payment. After the January 2015 announcements, when MACRA came along, people started to take all of the anticipated changes much more seriously. And, now we are starting to feel quite a bit of pressure because folks know that, while the first year is 2019, the first performance period starts six months from now. People are beginning to understand that speed is going to be very important to get to a place where we can perform well under MACRA, and then also the rapidly changing commercial market, there’s been an acceleration on value-based payment there as well.

Tonya Edward, M.D.

Conklin: There is a need for speed, and a need for capital. And so given the prior context of decreased admissions, the capital bases are shrinking for us, so at the time when we need to make heavy investments in IT and build out those kinds of centers and things I’ve talked about, such as new doctor’s practices, we’re also having shrinking basic cash to be able to do that. One of the challenges is certainly doing it fast, but also doing it inexpensively, which means moving toward more standardization and a cookie cutter build-out of these places. So when you go into a free-standing ER or doctor’s practice, the look and feel is particularly a Christus Health look and feel and it’s the same format and construction for these sites regardless of where they are located.

Annecharico: We can’t know it all or do it all, but to be successful you have to make strategic decisions and move forward quickly and nimbly. If you have an idea and can assemble a business strategy around it and can really look at your return on investment, then you can move forward and put it into a small enough environment. It’s about whether you can learn from what’s working and not working and be resilient enough to either make adaptations or bail on that and try something else.

It may very well be that you have a bridge strategy where you want to get to the other side of the bridge and you have a couple of stops and starts to get there, but you ultimately know what your goal is. I’ll give you an example. For us, during the period of time that we were implementing Epic, we worked on a framework to transform our clinical operations. We did the entire organization, all of the inpatient and ambulatory as well as all of our revenue cycle consolidation, in a 16-month period of time. And with that, we were also trying to build the future state of what our enterprise data warehousing strategy was. And, we realized that one of the partners that we chose was slipping and falling too often and so we had to create a very defined timeline and indicate the deliverables that needed to be managed, the quality and the content of them, and, if not, then we will void the relationship. That’s difficult to do when you have multi-million dollar contracts, but we were so clear and gave it enough attention that we had defined the scope of the work as well as our outcomes. We were realizing that we couldn’t deliver our products to our end-user communities because we had this barrier in there, so along the same line, we decided that this was simply not working, but what we did do, at the same time, was we started building a bridge strategy to get us over the hump and evolve a permanent strategy right behind it. So that we ultimately had a better solution and a better line of products that we could deliver to our communities of users.


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At the D.C. Department of Health Care Finance, Digging into Data Issues to Collaborate Across Healthcare

November 22, 2018
by Mark Hagland, Editor-in-Chief
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The D.C. Department of Health Care of Finance’s Kerda DeHaan shares her perspectives on data management for healthcare collaboration

Collaboration is taking place more and more across different types of healthcare entities these days—not only between hospitals and health insurers, for example, but also very much between local government entities on the one hand, and both providers (hospitals and physicians) and managed Medicaid plans, as well.

Among those government agencies moving forward to engage more fully with providers and provider organizations is the District of Columbia Department of Health Care Finance (DHCF), which is working across numerous lines in order to improve both the care management and cost profiles of care delivery for Medicaid recipients in Washington, D.C.

The work that Kerda DeHaan, a management analyst with the D.C. Department of Health Care, is helping to lead with colleagues in her area is ongoing, and involves multiple elements, including data management, project management, and health information exchange. DeHaan spoke recently with Healthcare Informatics Editor-in-Chief Mark Hagland regarding this ongoing work. Below are excerpts from that interview.

You’re involved in a number of data management-related types of work right now, correct?

Yes. Among other things, we’re in the midst of building our Medicaid data warehouse; we’ve been going through the independent validation and verification (IVV) process with CMS [the federal Centers for Medicare and Medicaid Services]. We’ve been working with HealthEC, incorporating all of our Medicaid claims data into their platform. So we are creating endless reports.

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Kerda DeHaan

We track utilization, cost, we track on the managed health plan side the capitation payments we pay them versus MLR [medical loss ratio data]; our fraud and abuse team has been making great use of it. They’ve identified $8 million in costs from beneficiaries no longer in the District of Columbia, but who’ve remained on our rolls. And for the reconciliation of our payments, we can use the data warehouse for our payments. Previously, we’d have to get a report from the MMIS [Medicaid management information system] vendor, in order to [match and verify data]. With HealthEC, we’ve got a 3D analytics platform that we’re using, and we’ve saved money in identifying the beneficiaries who should not be on the rolls, and improved the time it takes for us to process payments, and we can now more closely track MCO [managed care organization] payments—the capitation payments.

That involves a very high volume of healthcare payments, correct?

Yes. For every beneficiary, we pay the managed care organizations a certain amount of money every month to handle the care for that beneficiary. We’ve got 190,000 people covered. And the MCOs report to us what the provider payments were, on a monthly basis. Now we can track better what the MCOs are spending to pay the providers. The dashboard makes it much easier to track those payments. It’s improved our overall functioning.

We have over 250,000 between managed care and FFS. Managed care 190,000, FFS, around 60,000. We also manage the Alliance population—that’s another program that the district has for individuals who are legal non-citizen residents.

What are the underlying functional challenges in this area of data management?

Before we’d implemented the data warehouse, we had to rely on our data analysis and research division to run all the reports for us. We’d have to put in a data request and hope for results within a week. This allows anyone in the agency to run their own reports and get access to data. And they’re really backed up: they do both internal and external data reports. And so you could be waiting for a while, especially during the time of the year when we have budget questions; and anything the director might want would be their top priority.

So now, the concern is, having everyone understand what they’re seeing, and looking at the data in the same way, and standardizing what they’re meaning; before, we couldn’t even get access.

Has budget been an issue?

So far, budget has not been an issue; I know the warehouse cost more than originally anticipated; but we haven’t had any constraints so far.

What are the lessons learned so far in going through a process like this?

One big lesson was that, in the beginning, we didn’t really understand the scope of what really needed to happen. So it was underfunded initially just because there wasn’t a clear understanding of how to accomplish this project. So the first lesson would be, to do more analysis upfront, to really understand the requirements. But in a lot of cases, we feel the pressure to move ahead.

Second, you really need strong project management from the outset. There was a time when we didn’t have the appropriate resources applied to this. And, just as when you’re building a house, one thing needs to happen before another, we were trying to do too many things simultaneously at the time.

Ultimately, where is this going for your organization in the next few years?

What we’re hoping is that this would be incorporated into our health information exchange. We have a separate project for that, utilizing the claims data in our warehouse to share it with providers. We’d like to improve on that, so there’s sharing between what’s in the electronic health record, and claims. So there’s an effort to access the EHR [electronic health record] data, especially from the FQHCs [federally qualified health centers] that we work closely with, and expanding out from there. The data warehouse is quite capable of ingesting that information. Some paperwork has to be worked through, to facilitate that. And then, ultimately, helping providers see their own performance. So as we move towards more value-based arrangements—and we already have P4P with some of the MCOs, FQHCs, and nursing homes—they’ll be able to track their own performance, and see what we’re seeing, all in real time. So that’s the long-term goal.

With regard to pulling EHR information from the FQHCs, have there been some process issues involved?

Yes, absolutely. There have been quite a few process issues in general, and sometimes, it comes down to other organizations requiring us to help them procure whatever systems they might need to connect to us, which we’re not against doing, but those things take time. And then there’s the ownership piece: can we trust the data? But for the most part, especially with the FHQCs and some of our sister agencies, we’re getting to the point where everyone sees it as a win-wing, and there’s enough of a consensus in order to move forward.

What might CIOs and CMIOs think about, around all this, especially around the potential for collaboration with government agencies like yours?

Ideally, we’d like for hospitals to partner with us and our managed care organizations in solving some of these issues in healthcare, including the cost of emergency department care, and so on. That would be the biggest thing. Right now, and this is not a secret, a couple of our hospital systems in the District are hoping to hold out for better contracts with our managed care organizations, and 80 percent of our beneficiaries are served by those MCOs. So we’d like to understand that we’re trying to help folks who need care, and not focus so much on the revenues involved. We’re over 96-percent insured now in the District. So there’s probably enough to go around, so we’d love for them to move forward with us collaboratively. And we have to ponder whether we should encourage the development and participation in ACOs, including among our FQHCs. Things have to be seen as helping our beneficiaries.

What does the future of data management for population health and care management, look like to you, in the next several years?

For us in the District, the future is going to be not only a robust warehouse that includes claims information, vital records information, and EHR data, but also, more connectivity with our community partners, and forming more of a robust referral network, so that if one agency sees someone who has a problem, say, with housing, they can immediately send the referral, seamlessly through the system, to get care. We’re looking at it as very inter-connected. You can develop a pretty good snapshot, based on a variety of sources.

The social determinants of health are clearly a big element in all this; and you’re already focused on those, obviously.

Yes, we are very focused on those; we’re just very limited in terms of our access to that data. We’re working with our human services and public health agencies, to improve access. And I should mention a big initiative within the Department of Health Care Finance: we have two health home programs, one for people with serious mental illness issues, the other with chronic conditions. The Department of Behavioral Health manages the first, and the Department of Health Care Finance, my agency, DC Medicaid, manages the second. You have to have three or more chronic conditions in order to qualify.

We have partnerships with 12 providers, in those, mostly FQHCs, a few community providers, and a couple of hospital systems. We’ve been using another module from HealthEC for those programs. We need to get permission to have external users to come in; but at that point, they’d be able to capture a lot of the social determinants as well. We feel we’re a bit closer to the providers, in that sense, since they work closely with the beneficiaries. And we’ve got a technical assistance grant to help them understand how to incorporate this kind of care management into their practice, to move into a value-based planning mode. That’s a big effort. We’re just now developing our performance measures on that, to see how we’ve been doing. It’s been live for about a year. It’s called MyHealth GPS, Guiding Patients to Services. And we’re using the HealthEC Care Manager Module, which we call the Care Coordination Navigation Program; it’s a case management system. Also, we do plan to expand that to incorporate medication therapy management. We have a pharmacist on board who will be using part of that care management module to manage his side of things.

 

 


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At the Beverly Hills HIT Summit, APG’s Crane Offers a Vision of the Future of Medical Care

November 11, 2018
by Mark Hagland, Editor-in-Chief
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Don Crane, CEO of APG, a nationwide association of physician groups involved in risk-based contracting, offered Beverly Hills HIT Summit attendees a vision of a coordinated care-based future

The signs are that the policy and payment incentives around value-based healthcare are accelerating now and may soon become much clearer, a nationwide physician leader told attendees at the Beverly Hills Health IT Summit, being held in Los Angeles this week and sponsored by Healthcare Informatics. Don Crane, the president and CEO of the Los Angeles-based APG (America’s Physician Groups), a nationwide association of more than 300 physician groups involved in risk-based contracting in healthcare, though participation in accountable care organizations (ACOs) and in all types of value-based contracting, which his association refers to as coordinated care.

Crane, whose organization counts member physician groups in 43 states, the District of Columbia, and Puerto Rico, told his audience at the Sofitel Hotel Los Angeles at Beverly Hills that he believes that the most senior federal health officials—at the Department of Health and Human Services (HHS), at the Centers for Medicare and Medicaid Services (CMS), and at the Center for Medicare and Medicaid Innovation (CMMI), are planning to move forward rapidly and decisively to push as many physicians and physician organizations as possible into risk-based contracting, through a variety of means. Statements from HHS Secretary Alex Azar, CMS Administrator Seema Verma, and CMMI director Adam Boehler, have made it clear that plans are afoot to accelerate the transition from fee-for-service payment to risk-based and value-based reimbursement, he said.


Don Crane

Speaking of his own organization, Crane said, “What distinguishes us from similar trade organizations is that capitation is the preferred model. Probably half of my members are already there in terms of professional or global risk. And what we’re developing is the antithesis of fee-for-service [healthcare delivery]. We’re very much central to the value movement.” Further, he said, “Capitation is the destination” of the current evolution of the U.S. healthcare system. “Groups everywhere are experimenting with Medicare ACOs, other kinds of programs and projects,” he noted, adding that physician groups are advancing forward organically through a series of phases, “starting with fee-for-service with some sort of bonus-based quality incentives, moving next to some sort of shared savings program, then shared-risk, leading to primary care-based capitation or shared risk, and ultimately to global capitation or full risk.”

Further, speaking of APG’s member organizations, Crane told his audience, “All of us see capitation as the destination; our hair is on fire about it; we’re excited about it. We want to move the system to that model, because it produces higher quality at lower cost. As you all know, we’re at 18 percent of GDP right now, with really poor results, and we want to change that, through coordinated care.”

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Speaking of the mid-term legislative elections that had taken place three days earlier, Crane told his audience, “This election on Tuesday means a number of things: for one thing, repeal and replace is dead, yes,” referring to efforts to eliminate the Affordable Care Act over the past two years. “The big takeaway for us in the healthcare industry is the extent to which the ACA has been cemented into our landscape, right there with Medicare and Medicaid,” he said, referring to the legislation, which had been signed into law by President Barack Obama in March 2010. “So with the Democrats controlling the House, there’s nary a chance that it will be repealed or replaced in the next two years. Also, in three states, initiatives were passed that would expand Medicaid.”

Asked by an audience member about the sustainability of the state-based health insurance exchanges, Crane said, “The notion is that, if you don’t get everybody to pay into the risk pool, how can you get everyone covered? The answer is, time will tell. People have worried that the repeal of the mandate would undermine the exchanges; that hasn’t happened. And in fact, premium costs have seen a fairly moderate risk in the past year of about 2 percent.”

Meanwhile, Crane said, moving into the core of his presentation, “Whither and what of the value movement? The value moment got started with the ACA in 2010 with ACOs. More recently, in 2015, MACRA, the Medicare Access and CHIP Reauthorization Act, was passed, and that gave us MIPS [the Merit-based Incentive Performance System] and APMs”—alternative payment models. “So a big tailwind was put behind the whole value movement, where physicians and physician groups would be graded on quality measures, and that so that was brought into the fabric in 2015. And we’re well into the value landscape now.”

Documented evidence of the value of coordinated care

What’s more, Crane told the audience of healthcare leaders, “the announcements that you’re hearing from Alex Azar”—the Secretary of Health and Human Services—“are ones in which he repeatedly says that one of their missions is to accelerate the value movement.” Indeed, he said, referring to the proposal by CMS and referred to as “Pathways to Success,” “We’ve seen a pending rule soon to be made final, that will basically push these 400-plus Medicare ACOs much more rapidly into downside risk. And that’s hard to do unless you’ve got a sophisticated system with rich informatics. Many will be afraid of that, but those who are afraid will be winnowed out, and it will leave a more robust, stalwart cohort.”

And, Crane continued, referring to Adam Boehler of CMMI, “We’ve participated in a number of roundtables with Adam Boehler; in fact, I’m seeing him again next Thursday. We haven’t seen any pending rules yet, but we need to get ready for some bold moves in Medicare, where they accelerate the movement. One thing that’s gotten a lot of attention is delegating large portions of the country to players that want to take risk, and then turn around with physicians and hospitals to deliver care to employers like Google. That would allow for prime contracting that would lead to subcontracting for the delivery of care. Much of it is conjectural, but I think it’s coming. With regard to their request for proposals on direct contracting a few months ago—one can see, coming in from out of the mist, as you read the tea leaves, you can see some profound changes in original Medicare that will accelerate this forward.”

Crane went on to review in some detail the results of a study released on March 1 of this year. As the press release announcing those results noted, “Health care quality and cost for commercially insured Californians varied dramatically in 2015, indicating that where you live affects the care you receive and how much it costs, just one of the new findings from the California Regional Health Care Cost & Quality Atlas. Developed by the nonprofit IHA, in partnership with the California Health Care Foundation (CHCF) and California Health and Human Services (CHHS) Agency, the Atlas is the state’s source of comparable performance information about the quality and cost of care provided to 29 million Californians.”

Further, the March 1 press release noted, “The second edition of the Atlas brings together 2013 and 2015 multi-payer data by geographic region—including commercial insurance, Medicare, and Medi-Cal—on more than 30 standardized measures of health care quality, cost, patient cost sharing and utilization to help purchasers, health plans, and policymakers target performance improvement initiatives. An IHA fact sheet provides more details about the Atlas and measures. In 2015, clinical quality varied across the state’s 19 geographic regions by an average of 25 percentage points and costs ranged from 22 percent below to 29 percent above the statewide average. These differences mean: If care for all commercially insured Californians were provided at the same quality as top-performing regions, nearly 205,000 more people would have been screened for colorectal cancer and 31,000 more women would have been screened for breast cancer in 2015. [And] If care for all commercially insured Californians were provided at the same cost as observed in San Diego―a relatively high-quality, low-cost region―overall cost of care would decrease by an estimated $2.6 billion annually, or about 5 percent of the $55 billion total cost of care for the commercially insured.”

That study’s press release included a comment by CHHS Secretary Diana Dooley, who noted that “Increasing transparency is essential for improving quality, lowering cost and gaining consumer confidence. Atlas 2 shows where quality and cost are trending in the right direction and where there is room for more improvement.”

As Crane noted at the Summit, “This was a meta-study commissioned by the Secretary of State for California and the California Health Care Foundation. It aggregated the data of 29 million Californians participating with 10 of the major health plans in CA, all the physician groups. The study had two purposes: one, it looked at geographic variation; the other focus was to compare and contrast the two predominant models in California and elsewhere—fragmented, fee-for-service PPO, compared to capitated, integrated HMO. They were looking at products, but that’s how they looked at the delivery and payment models under those products.

There were three domains—familiar HEDIS measures in the quality domain, which was the first domain; hospital utilization measures in the second domain; and then third and finally, and this is where this is such a distinguishing study, total cost of care—not just premium, hospital fees, physician fees, but also the patient’s share of the premium pay and of co-pays and deductibles. So you get quality and spend, so you have what you need to get to the question of where the value is,” when evaluating data from all those domains.

“So you see 19 different contracting regions through CoverCalifornia, the California exchange,” Crane noted, as he shared a slide with visual results from Atlas 2. “The chief thing is that you should look at the little blue pyramids, commercial HMO, and the orange dots, commercial PPO results. The HMO measures show HMOs outperforming PPOs on quality—very important,” he said, referring to the slide, which showed all the blue pyramids rising above the orange dots. “The chief takeaway here is that PPO products are costlier nearly everywhere, with a few small outliers; and we’re not talking about premium here, but about total cost of care. HMOs—representing capitated, integrated delivery models—performed better on cost and quality across the board.”

Importantly, Crane noted, with regard to quality outcomes among Medicare Advantage-enrolled seniors in California over those enrolled in basic Medicare, “Medicare Advantage outcomes were all superior to those in original Medicare.” Indeed, he noted, “Medicare Advantage outperforms fee-for-service Medicare on hospital utilization, on all-cause readmissions, on ED use, on length of inpatient stays. In short, all Medicare Advantage is shown to be of higher quality and lower-cost than original Medicare—and, importantly, our APG members outperformed everyone else on all of these measures.”

Further, Crane said, “Capitated, integrated care delivery was found to be 14 points higher in quality, and 9 percent lower in total cost of care in commercial health insurance products. And there was $4,450 less total cost of care PMPY [per member per year] in Medicare Advantage in California.”

As the Atlas 2 report itself notes, “In 2015, HMO products delivered clinical quality that averaged 14 percentage points higher than PPO products at an 8% lower total cost when member cost sharing is included. PPO members paid, on average, $620 more out of pocket for care in 2015 than HMO members. HMO hospital utilization was generally higher than PPO even though total cost was lower. Given HMO products typically offer networks composed of integrated providers to a greater degree than PPO products, integrated care (HMOs) offered superior value.”

What’s more, Crane said, “Atlas 2 confirmed a total spend of $16,000 a year on average for seniors; that’s 25 percent lower than in original Medicare. Think of the savings that would be achieved if we overlaid this across all the seniors in California or the United States. This is proof positive of a better model, the model of the future, and one on which we will depend on your participation and your leadership.”

APG’s initiatives around advanced payment models

Crane went on to describe initiatives taking place at APG; in particular, he pointed to the Risk Evolution Task Force, and Third Option, two programs that he said show the way to the future for physician groups and for coordinated care. “The Risk Evolution Task Force,” he explained, “is essentially a benchmarking program mostly for our Medicare ACO and Next Gen participants. In the past, twice, I tried to initiate benchmarking programs, in which members had to submit data.” The mechanics of doing so turned out to be difficult to sustain those past initiatives, he conceded. “But moving forward, this data will be freely available in Medicare off 1500 forms.” Meanwhile, he continued, “Third Option is our proposal that we think will see light of day in a month or so. A few months ago,” he said, “CMMI issued an RFI on director-provider contracting. We said, we have the model. Direct contracting with CMS and a sophisticated qualifying medical group. It would have a capitated payment model. The benefit design would be a hybrid of Medicare Advantage—integrated, capitated; but it would be like original Medicare in that enrollees would still have freedom of choice; but the catch is if you went out of network, you’d pay more. It’s very much like a point-of-service model. So it drives patients in network. We think we’ll see a model that bears some resemblance to this model, coming out of CMMI. That will be a red-letter day for us.”

Importantly, Crane said, “We see a model like this as offering the antidote to single-payer proposals,” including proposals that governor-elect Gavin Newsom indicated interest in, during the gubernatorial campaign that he won on Tuesday. “We’ve been dialoguing with Gavin Newsom,” he reported, “and we’ve said, look, look, if you were to take the capitated, integrated model and spread it across all of California, the savings would be more than the savings needed to generated universal coverage. All we would need would be subsidies and other support.”

In response to a question from the audience about physicians’ reactions to practicing under capitation, Crane said, “The overarching reaction has been extremely good. Physician burnout nationwide is driven by the fee-for-service model. The fee-for-service physician is a hamster on a wheel, continuing to try to see more and more patients, as Medicare payments go down. Contrast that to where you can focus on the patients with highest needs. Take WellMed in Texas,” Crane said, referring to one APG member group, WellMed Medical Group, based in the Dallas area. “Their PCPs are seeing 15 patients a day, and they want to drive that down to 13, using a multidisciplinary team of clinicians and others to drive down the levels of work” to allied health professionals, in order to relieve some of the burdens physicians are facing in their work lives. “And so one of the byproducts is higher levels of physician satisfaction. So just as this model produces results around the Triple Aim, a byproduct is improved physician satisfaction.”

Finally, in closing his address, Crane addressed the healthcare IT leadership audience directly, saying, “You guys are so central to the management of a population. Informatics has been important in the FFS world to a certain extent. But to a physician group being paid through capitated, needs to know who’s’ diabetic, who’s being admitted to hospitals, who will become sicker in the next year, all of that depends on informatics. So I see our fates as inextricably linked.”

 

 


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