Contrary to popular belief, capitation is not a necessary condition for truly implementing population health at the system level, according to one New Mexico health system.
There's probably no bigger buzz phrase right now in healthcare than population health.
Applying population health—the formulation of healthcare interventions to maximize the long-term health outcomes of a given group—can seem intimidating, because it could conjure thoughts about the expensive infrastructure and transformational business model healthcare leaders may believe are prerequisites for deploying it.
They rightly recognize the difficulty of changing the way healthcare is provided in such a way that cost and quality are improved without hurting the bottom line, in what's still largely a fee-for-service system.
While Presbyterian Healthcare Services, an eight-hospital Albuquerque, New Mexico–based system has many of the prerequisites, such as a proprietary health plan, to execute on population health strategies, Jason Mitchell, MD, its chief medical officer, insists such elements aren't necessary for other organizations to emulate strategies they've employed to cut costs, improve quality, and extract more value out of healthcare services.
Following are three tactics Presbyterian has successfully launched that don't necessarily need capitation to succeed.
1. Commit to 24/7 Services
You might say you already do commit to round-the-clock services, in that you have a 24/7 emergency room, but we're not talking about that kind of super-expensive care here.
Mitchell says Presbyterian's Complete Care program, which features a 24/7 call center care team, was developed to help "bend the cost curve" on the health system's highest-cost members—those who are frequently admitted to the ER and who generally have hard-to-manage chronic conditions.
"When they want to call 911, instead they call our 24-hour team," says Mitchell. "[The program] addresses the next segment of patients who are not homebound and not critically ill, but who are expected to be high spend."
Presbyterian identifies this patient cohort through analytical algorithms that identify patients likely to die within the next two years but are not showing signs of it yet, such as critical illness.
"There's magic in data, and population health is identifying who will benefit most from an intervention and applying that to them."
—Jason Mitchell
Presbyterian can access behavioral, pharmacy, and intensive teams to help triage and arrange care for the patient and determine whether he or she really needs emergency room care.
The data that populate Presbyterian's algorithm are data any system would likely have, but it took over a year to figure out how to analyze it properly.
"It's based partially on the number of diagnoses, the number of meds, and the frequency of their ED visits," he says. "When we put it together to model it, it was about 80% predictive of mortality in the next two years. There's magic in data, and population health is identifying who will benefit most from an intervention and applying that to them."
Perhaps not surprisingly, the patients end up preferring this system over just showing up at the ER, he says.
He attributes the 24/7 call center to a decrease in hospital admissions from the group by 50% and says it's had a big impact on length of life and patient satisfaction.
2. Commit to Standardization
Presbyterian's Complete Care program generally caters to around 600 unique patients, "which doesn’t sound like a lot, but if you think about the spend, keeping them out of the hospital can save millions and millions of dollars," says Mitchell.
That also leaves dollars to do things for other populations because population health begets population health, as Mitchell likes to say.
"In time, you drop the cost of care across large swaths of patients," he says.
Mitchell says Presbyterian follows the data to make sure it's recognizing all the possible benefits. For instance, with some of the savings, Presbyterian instituted a small blood utilization team to standardize how the health system uses blood.
"The truth is blood products are dangerous, costly, and in short supply," he says. "We were using more than we needed to, but by promoting stewardship and appropriate utilization, we saved half a million dollars last year focusing on reducing variation."
That's population health, too, he says.
Another area dollars have been invested is in standardizing care in the health system's cardio program. The cardio team's efforts decreased length of stay in the ICU by 1.5 days on all procedures and by 2.5 days in valve replacement surgery.
"We provide resources and enable [the cardio team] to do the work, and they’ll become autonomous with standardization over three to five years," he says. "We make population health a component of our culture by helping them lead and not telling them what we expect them to do."
3. Commit to Investing the Savings
Mitchell says with population health strategies, at some point, health systems will need to invest in areas that don't generate revenue, but that do generate savings for the benefit of the patients.
"If it doesn’t work, we can turn it off after a year," he says. "Anywhere you can drop the total cost of care and improve quality, that's great. Even if you're all fee-for-service with no risk arrangements, think about where you are, in theory, capitated."
Medicare DRGs are, in effect, capitated. Assuming resources are finite, hospitals could save enough money to further invest in population health.
"I don’t see a fee-for-service model interfering with this, but you have to find the right place to start," he says.
Demonstrated savings thanks to standardization or improving care or patient satisfaction opens the door to value-based alignment for payers.
"Go to payers and ask what their biggest challenges are and how you can help," he says. "Maybe you can work out a special payment to provide additional services."
Rod Hochman, MD, president and CEO of Providence St. Joseph Health, says he's focused for now on 'deconstructing' the traditional health system.
Toward the end of 2017, the Wall Street Journal cited anonymous sources in reporting that a merger between Providence St. Joseph Health and Ascension might be imminent. That story proved more than a little premature.
Then in late March, anonymous sources reported again that those discussions had halted. Pundits and journalists were left to speculate as to whether those talks were legitimate or just rumor.
HealthLeaders Media recently spoke with Rod Hochman, MD, president and CEO of Providence St. Joseph Health, who opened up about the extent of the merger discussions and shared why the union with Ascension didn't happen.
Following is a lightly edited transcript of that conversation.
1. Not ready to go national
HealthLeaders Media: Rod, there were rumors about discussions with Ascension to combine with Providence St. Joseph Health. How real were those discussions, and how far did they get?
Hochman: We did have those discussions. What we wanted to explore was the possibility of the two organizations coming together. We have a lot of respect for each other. If we wanted to get to a national scale, they are [an organization] we'd love to work with.
We put a lot of time and effort into it, but both organizations have a lot of work to do in 2018. Sometimes it's just knee-jerk to say, 'Let's go ahead and do it,' but we learned a lot about each other. Since then, I had dinner with Tony [Anthony Tersigni, president and CEO of Ascension] at a conference in Phoenix. I've known him forever and our people like each other.
What we both said is we've done a lot of good work, but now let's just execute on what we have to do in 2018 and possibly look at it again after that. The timing wasn't right.
2. Asymmetric partnerships attractive
HLM: Do you feel like your health system ultimately needs a national scope?
Hochman: Scale matters, but we need to do it for the right reasons. There has to be a method to it. That's what we studied carefully [with Ascension].
I heard a speaker talking recently about theAurora-Advocate merger. Neither are struggling, but advocacy and the balance sheet are strengthened by coming together. We've been growing substantially over the past eight years but always for the right reasons.
At some point, if the opportunity came for something that would give us a national presence, we would look at it. But we're also as interested in partnerships that aren't necessarily full-on mergers. A good example is the generic drug coalition. We'll see a lot more of that; for example: an asymmetric partnership between an insurer, a health system, and a data company.
3. Less emphasis on hospitals
HLM: If another merger isn't on your strategic horizon, what adjustments does Providence St. Joseph Health need to make in the near future?
Hochman: We're deconstructing the traditional health system. We have been built around large hospitals. That's an old version of the successful health system, or soon will be. Our new plan makes us more digital, more ambulatory, and there's less emphasis of the hospital as the core. That's part of the execution we wanted to make sure we got done, and major mergers make some of that hard to accomplish. We're moving ahead on that at light speed.
Our bets are different than a for-profit company. We're in public housing, in education—a lot of nontraditional areas. But the rating agencies also feel confident in our strategic plan.
One big nontraditional area for us is the four-letter word: data. We're not going to be in the cloud business, so we need a data management partner. Even in areas like social media and understanding the consumer, we need good partners. Business processes too. We've got to be humble about this. Should we do them alone, or let someone else do them? Healthcare systems are one of the biggest data depositories. The resource most of us are sitting on is incredibly valuable but it has to be tapped in the right way. The advantage goes to those who partner earlier with those companies.
Close to half of Americans say they will delay Medicare enrollment beyond age 65, yet most health plan marketing efforts halt if patients don't opt in before their 65th birthday.
Health plans are likely forgoing millions in potential revenue by halting marketing efforts to potential Medicare enrollees if they don't opt in by their 65th birthday.
A surveyby professional services company Accenture shows that 48% of Americans plan to delay Medicare enrollment past the age of 65, and health plans that fail to rethink how they market to this growing cohort will likely miss a huge opportunity.
The survey of 2,301 consumers showed that:
48% of consumers intend to delay Medicare enrollment beyond the age of 65
70% of those nearing Medicare age have performed at least one health activity online
53% say they will shop for their Medicare plan online
With each new Medicare Advantage enrollee worth about $11,000 in government premium reimbursement per year, improved marketing performance can lead to hundreds of millions in revenue increases for health plans over time, the company says. For example, for a plan that has 100,000 annual age-ins in its service area, improving conversion rates by capturing late enrollees (those more than 66 years of age) could mean as much as $85 million in additional yearly revenue.
Many factors are causing people to delay entering Medicare, but an important one is that the Social Security "full retirement age" with maximum benefit is 66 years and two months.
According to Accenture, health plans should focus their marketing efforts on the older-than-65 age group by:
Resetting their approach to later entrants: Rather than catering to those about to turn 65 in a traditional linear manner, health plans should address the existence and value or later buyers with equal vigor. Those who adapt quickly will gain a first-mover advantage.
Making "digital" the center of engagement: New-to-Medicare consumers are using digital more often, and health plans often underestimate their digital prowess. Some 70% of people nearing Medicare age have gone online to perform at least one health activity in the past year. Also, generally, they are a healthier subset of consumers.
Personalizing those digital journeys: The life situations of those reaching Medicare age are markedly different, so health plans would be wise to use data offered by potential enrollees to personalize the enrollment experience by delivering personally relevant content, thus becoming a valued and respected resource.
A report suggests nonprofit health systems will need to expand patient access, master digital efficiencies, recruit top talent, and maintain financial flexibility in order to thrive in the future.
High-margin inpatient services will represent less of a nonprofit health system's future success profile, and their leaders will need to adapt to that changing reality by modifying their long-term strategic focus.
So says a report from Moody's Investors Service that reinforces the notion that future success will come more from outpatient services as more procedures migrate from the high-margin inpatient space upon which hospital leaders have historically depended for financial success.
The report highlights four key strategies that will be effective as healthcare procedures continue their outpatient migration.
Invest in access. Hospitals will need to balance investments in access points with maintaining high-margin inpatient services, the report says. While outpatient facilities are an efficient way of treating lower severity cases in a cost-effective setting, margins are generally weaker than for inpatient services. Still, hospitals will need to cannibalize their own inpatient business to a degree instead of fighting this clear trend, as the supply of inpatient beds will decline as hospital space accommodates mainly higher acuity cases.
Digitalization will be critical. Investment in electronic medical records will morph into using the data contained in the EHR toward improving efficiencies and clinical outcomes, and spurring innovation, while protecting data through cybersecurity. However, electronic medical record implementations will continue to impose financial risk through expensive installation costs, temporary disruption to patient services and operations, and the risk of receivables write-offs. Nevertheless, hospitals will rely on sophisticated data analytics working in tandem with the EHR to manage care and costs and to ultimately predict healthcare needs.
Build your talent. Investment in talent will represent a growing portion of operating costs, particularly if the nursing and physician shortage continues, the report says. With a limited supply and rising cost of nurses and physicians, it will be critical for nonprofit health systems to drive toward improving productivity and redesigning workflows. One strategy for mitigating increasing talent costs will be the degree to which health systems are able to integrate telehealth as a cost-effective means of delivering care, and improving access and throughput, as opposed to staffing physicians 24/7, or paying on-call wages.
Be able to adjust between growth and contraction. Operational and funding flexibility in a changing healthcare environment, and ability to grow and contract, will be crucial to overall credit quality, Moody's says. Hospitals will need to remain flexible in deploying capital and adapting strategies as the healthcare landscape changes. Those with healthy liquidity will be better able to manage volatility and adapt to changing markets.
Minimum patient thresholds and high investment levels can be hurdles for most regional health systems to participate in ACOs, but a new collaborative ACO could overcome those challenges.
Managing an ACO is tough.
Even in Medicare Shared Savings ACOs with no downside risk, providers who follow care protocols, ensure patients have yearly wellness visits, and effectively manage metrics to decrease spending on Medicare beneficiaries may learn that their ACO didn't meet benchmarks, and they don't qualify for a shared savings check.
Frustratingly, the reverse is also true.
Those who joined the program and made no substantive changes managing their patients sometimes meet targets and get the check.
What gives?
Small ACOs, huge risk
In large part, says Rachelle Schultz, president and CEO of Winona (Minnesota) Health, it's because of the variable risk component for ACOs with relatively small numbers of attributed lives.
Winona Health's current ACO, even with five rural partners around the state, consists of about 12,000 people.
"The data over the past few years suggests the size that's needed is in the 100,000 range," Schultz says. "[The ACO] is something we all want to continue and even though it's not the end-all and be-all, it's the right pathway to transformation, and at least moves that work forward in the most positive way and removes that risk component."
Winona Health is forming a new, larger, collaborative ACO with other health systems using the administrative services and regulatory expertise of Caravan Health.
Caravan Health was founded by community hospital CEOs and physicians to administer and provide operating advice to smaller hospitals and health systems that want to participate in value-based reimbursement programs.
"When you look at the little ACOs, you have significant variation, which means you could have one really positive year and one really negative year," Schultz says. "At about 100,000, the statistical variance gets addressed so you don't have those random huge swings."
No rhyme or reason
Lynn Barr, Caravan's CEO, says the idea for "super-ACOs" came about when the company discovered that some of the 38 ACOs for which it collects and reports data were inconsistently performing.
But Caravan couldn't nail down a reason for the inconsistency. In fact, savings and losses swung wildly from quarter to quarter and year to year. Since Caravan tracks progress made in transformation of care protocols along with statistics, there should have been a pattern.
There wasn't.
"We track effort, and we know who should be having savings and who’s doing the work and who's not, and there was no correlation with anything," Barr says. "We finally hired actuaries to examine the data in 2016, and they found that in the aggregate, the data is consistent but individually it’s not."
Caravan's solution? Combine the smaller ACOs into one or two big ones. The company took the idea to its ACOs and made the pitch to build two ACOs out of the dozens ready to renew for 2019.
"Instead of having 23 ACOs, we should have two: one ready for risk and one that isn’t," she says, adding that she's stunned by how well the company's clients understood the reasoning and bought into the collaborative ACO idea.
"Size matters, and insurance companies know this," she says. "Government is saying it's going to make providers the payer and, fundamentally, you have to pool your lives and your risk. If not, you’re randomly going to win or lose."
Collaborative ACO mechanics
Caravan ensures the health systems involved in the ACOs each have their own steering committee, and the individual hospitals or health systems are rewarded based on how they perform on leading indicators, individually.
"They don’t get paid on how much they save, because we can’t tell that," she says. "If they don’t meet the benchmarks, they go into remediation and, if that's not successful, they leave. Every community has one vote in the ACO."
Caravan is urging participants that are ready to take risk to move forward because it's potentially more lucrative.
"We’re aggregating all these participants under one umbrella, so they can get reliable performance. But the bigger thing is that CMS is giving great rewards to those who are willing to take risk."
The collaborative ACO with one-sided risk that Winona Health will be joining won't be its first foray into Shared Savings.
Its current ACO is in the third year of its three-year contract; the new ACO should have six in-state partners. Schultz says to get to 100,000 lives, the new ACO may add organizations in neighboring states.
"It's a virtual model, so it doesn't particularly matter if they're all in the state. It's not a requirement," she says.
The application with CMS is due in July to begin a contract in January 2019.
Beyond the collaborative ACO model, Schultz is hopeful the health system's demonstrated success in Medicare ACOs has the potential to jump-start value-based negotiations with commercial payers.
"We have changed the standard of care and we've been doing it across the board—prevention, wellness, management of chronic conditions—so now we have results we can show the rest of our payers. We've found the needles in the haystack."
Thirty-eight percent of U.S. workers may be willing to pay more each month for better health plans, according to the survey.
The survey tallied the responses of nearly 5,000 U.S. employees.
More granularly, health plans and health service providers may be able to exploit the following opportunities:
More than half (55%) of employees would accept a more generous health plan in exchange for an equivalent change in pay.
Choice and flexibility increase employee appreciation of their benefits packages, says Julie Stone, a managing director of health benefits for Willis Towers Watson.
65% said managing their health is a top priority in their life.
Only 39% said the initiatives offered by their employer to support health and well-being meet their needs; 66% say their current healthcare plan meets their needs.
46% said they would be willing to pay a higher amount out of their pay each month to have lower, more predictable costs when actually using healthcare services.
51% said employers should financially reward employees for living healthier lifestyles.
If employees were in charge of their own benefits budget, they would allocate 27% to healthcare services and health and well-being plans, according to the survey. That's slightly less than the 31% they would allocate to retirement and financial well-being plans. The remaining portions of the budget would go to life insurance, vision and personal insurance, and annual leave.
Starting with an idea on the back of a napkin in 2012, ProMedica Innovations helps ProMedica Health System rise above its competitors and brings a development boost to an economically challenged region.
Hospitals and health systems often struggle with innovation, and what innovation means.
At Toledo, Ohio-based ProMedica Health System, it means developing an internal arm to fund early-stage health-related companies where it can serve as the lead, or the follow-on investor.
Some of the innovation ideas are sourced from ProMedica's employees, and some are early-stage healthcare companies started outside of ProMedica. The ideas have the potential to improve healthcare and generate investments to an economically depressed region.
The nine-person executive team at ProMedica Innovations says three factors helped them integrate innovation into the health system's mission. Here's how your health system can do it.
1. Make innovation a core value
ProMedica spent a lot of time and effort developing and defining its core values, starting with input from its employees. The 13-hospital nonprofit health system, which covers northwest Ohio and southern Michigan, defined four core values: compassion, teamwork, excellence, and innovation. Executives credit employees with the genesis of the venture arm.
"If you asked every health system what you mean by innovation, you'd get a different answer at every one," says John Pigott, MD, chief innovation officer with the venture arm. "But we invest in our employees' ideas, and they voted on innovation becoming one of our core values."
ProMedica Innovations started with an idea on the back of a napkin in 2012, says James Richardson, a financial analyst and investment associate at the venture fund.
"One of our huge advantages is we get a first look at the technology and often proprietary, best-in-class care, so there's a financial upside, but also the confidence that we can hit ProMedica's mission, not just with specific technologies but also trends," Richardson says. "There's a gap in the financing sector in that seed financing can be difficult, so we fit that niche."
The napkin idea evolved into one of the first investments ProMedica Innovations made, a device one of its vascular surgeons invented to make vessel preparation in the treatment of peripheral artery disease simpler, quicker, and more cost-effective. That surgeon was Mayo Clinic–trained Pigott, and the company that now sells the FDA-approved device, VentureMed Group, developed through $15 million in seed financing from ProMedica Innovations.
2. Bring a long-term commitment to the process
It's essential for health systems looking to fund innovation through an idea's early stages to understand how long it might take to get a payoff in return on investment, says Richardson.
"It's a longer-than-usual process," he says. "It's not the same as building a hospital. We have commitment from the very top and they understand the time frame. We're starting to see those results and we're grateful, but doing something like this is a very different thing for any health system."
As a division of the parent company, ProMedica Innovations has been in existence since late 2013, but has only been making investments and doing what Richardson calls "refined due diligence" for the past three years.
Pigott cautions others looking to do the same: "There will be some startup costs, so do your homework, but this can elevate you above your competitors, and there are real monies that can come into the region."
Because of ProMedica Innovations, more than $50 million in venture capital dollars have come to the region, but he says leadership must take a long-term view because an innovation program will have some of the same development costs and lead time as a startup company.
Pigott says conservatively, it will take six to eight years in terms of financials to make ProMedica Innovations self-sustaining.
3. Align your investments with your mission
"Our mission is your health, so when we look at a company to invest in through ProMedica Innovations ventures, it has to be life-sciences focused," says Pigott. "We look at a lot of financial metrics, but if it doesn't meet that basic criteria, that's a first cut."
Right now, the division has teams working on about 36 projects in different stages, he says. Many are early stage, meaning they begin in developing a product from the idea stage through proof of concept.
ProMedica Innovations has funded about 14 investments to date.
Its latest investment, announced in March, is $1 million in TELA Bio, which markets surgical implants called OviTex Reinforced BioScaffolds, a combined biologic and synthetic material that helps in the repair of hernias and in abdominal wall reconstruction. Its implants were approved by the FDA in 2016 for soft tissue repairs.
"It has some advantages in that it's strong and infection-resistant, where some other meshes have had difficulties with infection or inflammatory response," says Pigott. "The company is young, but it has an experienced management team and they are well financed."
Having an integrated delivery system to help evaluate such investments offers a competitive advantage, as is the case with most of its investments, Pigott says.
"I'm not a hernia surgeon, but we could go to our surgeons and ask them if it made sense, and at what price does it make sense with our supply people," he says. "It is FDA-cleared, and they're doing very well on their sales."
Improvement in the CMS ranking metric can also boost enrollment by 8-12% as provider-owned plans compete ever more acutely with traditional payers.
A one-star improvement in CMS star ratings can increase revenue from rapidly growing provider-based Medicare Advantage plans, according to new research from Navigant.
Approximately one-third of current Medicare beneficiaries participate in MA plans versus traditional Medicare, which has grown from only 13% of beneficiaries in 2004. But competition for those patients is acute. With ongoing expansion by traditional payers such as Anthem, Aetna, Humana and UnitedHealth Group, provider plans must look to distinguish themselves not only to attract patients, but also to gain other benefits available by regulation based on CMS star rating, the researchers said.
MA represents a competitive landscape between payers and providers largely because both see the plans as a good way to move toward capturing the premium dollar and transitioning toward a more value-based form of reimbursement.
According to Navigant, providers and payers like MA for different reasons, but they are compelling.
It offers additional upside opportunity to improve quality by closing gaps in care, which feeds directly into determining plan’s star rating)
It improves coding accuracy (ensures appropriate funding from CMS for assigned members’ conditions),
It lowers unnecessary utilization, and,
Shares in rebates, which reduces certain expenses
Payers like MA because:
Plan premiums, which can average around $1,000 per member per month, are paid by the federal government, ensuring a steady revenue stream.
It's more profitable than administrative services-only self-funded plans.
MA provides retention potential for plan’s commercial members who age out of commercial into traditional Medicare.
MA members are much more likely to stay with their MA payer, unlike commercial members who tend to switch around plans.
Despite the competitive environment between payers and providers, the research suggests that providers can drastically improve the success of their program beyond what they think a star rating improvement might provide.
That's because per member, per month rates paid by CMS hinge on certain star thresholds. For instance, plans rated 3.5 stars or less are paid a base rate based on the county in which beneficiaries are enrolled, but if the plan is rated 4 stars or more, the plan gets a 5% bonus in addition to the base rate. Also, plans that achieve a 5-star rating can enroll members throughout the year, while plans below that threshold can only enroll members during the late fall open enrollment period.
The analysis shows that a 1-star increase in rating was associated with an 8-12% increase in beneficiary enrollment in the year following the increase. Furthermore, an improvement from 3 to 4 stars should result in revenue increase of between 13.4% and 17.6%, which would mean between $12 million and $16.2 million in revenue increase for a plan with 9,600 members.
Navigant researchers suggest MA plans seek to employ five mechanisms to help achieve financial viability—steps which also support star rating increases in a virtuous circle of improvement.
Comprehensive and accurate patient risk scoring and diagnosis coding accuracy to reflect member health status
Quality programs to identify and close gaps in care
Managing the total cost of care for the covered population while maintaining or improving quality
Reducing administrative loss ratio by expanding enrollment to optimize the operational infrastructure needed and spread fixed costs; and
Negotiating value-based arrangements with MA providers to engage in population health management and share in the savings that can achieve.
UnityPoint Health's foray into CMS' NextGen ACO model is helping the health system transition its entire book of business to a value-based model.
UnityPoint Health's participation in the initial rollout of CMS' Next Generation ACO Model helped them succeed beyond their expectations in their transition to reimbursement risk.
In performance year 1 (2016), UnityPoint's 85,000-member Iowa Health ACO earned more than $10.5 million in shared savings.
Like most health systems, UnityPoint still gets more revenue from fee-for-service than what Vice President and Chief Analytics Officer Betsy McVay calls fee-for-value, but she says the NextGen ACO model offered the health system an opportunity to transition to a value-based payment model.
"We know we need to be successful in risk models and, ultimately, full capitation, to provide the best quality care," she says. "It’s absolutely necessary."
Though most top leaders concede that not only is value-based care necessary, it's also ethically better to make that transition, many executive leaders at hospitals and health systems struggle with how quickly and fully to embrace the commitment, given that the two reimbursement systems are diametrically opposed, and how thin healthcare margins can be.
UnityPoint leaders say they believe navigating those two payment models can be done effectively and without absorbing huge losses in the process. Here's what they did to achieve savings.
Step 1: Target unnecessary costs by leveraging IT
Aric Sharp, the vice president of UnityPoint Accountable Care, which has responsibility over the NextGen ACO as well as several other commercial value-based contracts for the company, says its 15-person ACO division is critical in targeting interventions that can save costs through better patient management and elimination of variation.
The ACO team manages what Sharp calls a "broad-matrixed team effort" to move the organization toward value. UnityPoint's network consists of about 7,500 providers (approximately 2,000 are employed by UnityPoint) and 40-plus hospitals.
The organization's value-based contracts cover about 250,000 patients, a little more than a quarter of the patients in the entire health system, including about 85,000 in the NextGen ACO.
Sharp says UnityPoint wanted to move to the NextGen ACO partly to increase the patient population under risk contracting, but more broadly to force cultural change around patient care. Also, with its characteristic prospective as opposed to retrospective patient attribution, NextGen's architecture gets closer to where analytics can make a difference on cost and quality.
"You don't get the churn that you experience in the retroactive models," says Sharp, whose background is in multispecialty physician group management.
"You have to be data-driven in this work," he says. "One of the key steps is having the ability to mesh your claims data with your EHR data, which gives you a more robust picture of what’s going on in the population you’re accountable for."
That said, getting the data to mesh is difficult, but once you can make inferences from the combined data sources, you can see the opportunities for improvement, he says, in certain chronic diseases, procedures, and in identifying and interacting with rising risk and high-risk patients.
"You start to realize what you need to work on because you can’t do it all," he says.
In the initial years, UnityPoint's ACO focused more on quality metrics and identifying gaps in preventive care. As they got better at that, the focus morphed to gaps in chronic disease care.
"Now we’re focusing more on the postacute space, where we’re really lagging in performance, and using data to quantify the opportunities to use hard-wiring and decision support tools to drive quality improvement as well as decreases in costs," he says.
For example, in 2015, UnityPoint discovered it was two standard deviations higher than the mean in SNF average length of stay than the rest of the NextGen cohort. So, it put a lot of effort into building a network of preferred skilled nursing facilities, instituted EHR-based decision support for discharge nurses, and implemented programs that hard-wired follow-up with patients and caregivers.
SNF average length of stay has dropped from 26 to 21 days over the first two years of UnityPoint's efforts. Over this period the SNF network has also grown as UnityPoint Accountable Care has expanded its NextGen ACO into other regions. New regions joining the effort have experienced similar drops in SNF average length of stay as well as favorable movement in SNF hospital readmission rates. For example, in 2016 when a series of new SNFs were added the SNF hospital readmission rate moved from 16.28% to 11.31%.
"Not only length of stay, but also readmission rates have gone down, which is exactly what you would want," says Sharp. "Not only are we proud of the work—and it's taken hundreds of people to pull that off—but look what we can do when data shows us where we can improve."
Step 2: Use data analytics to improve care quality, clinical effectiveness, and patient experience
Indeed, data analytics can play an increasing role, says McVay.
Now the emphasis is on predictive modeling—using data to predict which patients are likeliest to be admitted to inpatient care within six months, for example.
It’s exciting to be at the front end of this change in industry norms, of the shift to value, Sharp says, but he says leaders must keep in mind that the models are evolutionary and returns diminish over time, so shared risk models are not the end game.
"We ultimately want to be in a place where we’re taking full risk on populations and doing it as good or better than anyone else," he says. "We see the shared savings models as evolutionary and we're happy we’re in them, but how do we make sure we are successful under full risk?"
Ultimately, UnityPoint recognizes that being successful is anchored in efficiency and removing unnecessary utilization. One way to be successful in that endeavor is understanding more about the population, including their health and risks through claims data. Then, more sophisticated operators can apply predictive models to those groups, says McVay, informing them of ways they can intervene.
"Analytics is a big piece of the foundational building blocks of value-based care," she says. "We’ve created an avenue to know who’s been in the hospital in the past 30 days, who’s likely to be readmitted, and patients who are likely to not show up to follow-up appointments."
That allows the analytics department to serve as partners to clinicians or financial leaders rather than taskmasters, says Rhiannon Harms, executive director of analytics at UnityPoint.
"In the [Medicare Shared Savings Program] we didn't earn shared savings, but we saw metrics improve. In NextGen, we’re seeing those savings and are pleased with the results but a lot has come through analytics," says Sharp.
The ability to merge claims and clinical data helps create a holistic picture of patients when they’re seen at UnityPoint, because the EHR data can be overlaid with information from claims.
From a financial perspective, a lot of modeling can be done on per member per month costs, and actuarial methodologies can be used to support metrics that are traditionally found in claims data, says McVay.
She says that UnityPoint's approach to analytics is to collaborate with clinicians on how to best leverage the information and solve problems together.
"It's very tactical. To be successful at value-based care means different partnerships," McVay says.
For example, UnityPoint doesn't employ all the physicians in its network nor does it ever expect to, so they must figure out how to engage independent physicians and postacute partners in a different way—by helping them achieve the patient care and financial goals of the ACO.
Step 3: Transition physicians from a productivity to value-based model
Perhaps the most critical aspect of ensuring that a value-based payment system works is getting physicians aligned with an organization's imperative to reduce unnecessary utilization and readmissions, among other metrics. For those used to productivity-based compensation, it can be difficult for them to make the transition to a compensation plan based on achieving goals in patient experience or quality, for example.
Conversations on transitioning the physician compensation plan began in 2015, says Keith Seashore, executive vice president and chief financial officer at UnityPoint Clinic, the physician organization within UnityPoint.
"From a philosophical perspective, it hasn't been super-challenging," he says, noting that physicians are tired of the "rat race," that is, compensation tied to the [relative value unit] model, which is incompatible with reducing readmissions and increasing patient satisfaction.
"They’re eager to get there," he says.
But it will take time. The unit's compensation committee, which is led by physicians and other practitioners, is leading the transformation. Productivity doesn’t necessarily drive value in value-based contracts, so the challenge is to create metrics that align with them, says Seashore, and find ways to measure compliance and tie compensation to compliance levels.
"They will make the right decision for the organization if you point them in the right direction," he says.
To transition from the RVU model, Seashore says the physicians will gradually transfer to a panel size model and be partly reimbursed on that panel's risk adjustment.
One metric that will factor into the new compensation model is based on thorough documentation and risk coding, including severity of illness. Clinicians and their office staff also spend a lot of effort ensuring that Medicare patients come in for annual appointments, and that they're compliant with medications and screenings. They've also worked hard to coordinate what Seashore calls "whole care services," which encompass transitional postacute care.
"Additionally, we've spent quite a bit of time developing relationships with skilled nursing facilities to ensure alignment with high-cost care," he says. "That's a big component to how you’re going to be successful inside the NextGen products."
It's a slow process. For primary care, the goal was to put 30% of comp at risk within three years from about 10% at the outset. Five pilot sites are testing the model.
"That’s helping us work out the kinks and has developed physician champions who can help move the model forward," Seashore says.
In 2017, they were about 16% at risk, he says, but by 2020, 30% of physician compensation will be at risk, which he calls, "pretty aggressive."
"Many physicians will do very well, and this is budget-neutral, but there will be winners and losers—that's why we have a three-year transition," he says.
In the meantime, UnityPoint will provide coaching, resources, and tools to improve patient experience, quality, or in fixing other problems.
The most challenging issue right now is working through data to ensure accuracy and reliability," he says.
"That’s not new and you’ll hear it from many, but it's not easy to get accurate data on quality and other financial items," he says. "You can’t ignore it because you can’t allow data snafus to undermine the value of this [initiative]. We’re not perfect yet, but we know we have to be good at making sure data is reliable if we’re putting that much comp at risk."
A new study suggests that emergency surgeries performed by surgeons age 50 and up produce lower mortality rates than those performed by younger surgeons.
A new study in the British Medical Journal suggests older surgeons' emergency surgery patients experience lower mortality rates than patients who were operated on by younger physicians, according to researchers from UCLA and several other institutions. The study adjusted for various patient characteristics.
Though researchers did not speculate as to why mortality rates were uniformly less as surgeons' age rose, they did suggest there is a need for more oversight and supervision of surgeons in their early post-residency careers and that more research is needed.
Mortality rates were:
6.6% for surgeons aged 40 and younger.
6.5% for those 40 to 49 years old.
6.4% for surgeons aged 50 to 59 years.
6.3% for surgeons age 60 and older.
Mortality rates did not differ significantly depending on whether the surgeon was male or female, although female surgeons in their 50s experienced the lowest mortality rate.
Researchers examined medical records of 892,18 Medicare patients age 65 to 99 who experienced one of 20 common types of emergency surgery between 2011 and 2014. Records incorporated procedures performed by 45,826 surgeons. The study focused on surgeries, based on their emergency nature, for which patients are less likely to select their surgeons, and surgeons are less likely to select their patients, and measured mortality within 30 days of the operative procedure.
Researchers conducted the study in large part because of debates about surgical outcomes and the age of surgeons performing them, and whether surgeons should have a formal retirement age.
Although some evidence suggests that older surgeons may have higher patient mortality than their younger peers, the data are old, both surgical training and surgical technology have changed substantially since these studies were conducted, and previous studies included elective surgeries, making it possible that older, more experienced surgeons treated more complicated patients.
The difference is likely clinically meaningful. The researchers suggest that for every 333 Medicare beneficiaries who undergo surgery, one fewer death would occur if surgical quality of care was equivalent between younger and older surgeons.
Researchers stressed that the findings may not be applicable to long-term mortality and complication rates, and that the analysis was limited to Medicare patients and may not apply to non-Medicare patients, physicians in other specialties and outpatient care.
