Understanding the Impact of Accountable Care on Marketing Strategy

NASHVILLE CHAPTER AMERICAN MARKETING ASSOCIATION
Welcome to NAMA’s
May Healthcare SIG

NAMA Non-profit SIG
Wednesday, May 22nd
8:00am – 9:30am
“E-mail Marketing for Non-Profits”
Emma, 9 Lea Avenue, Nashville
Visit NashvilleAMA.org to register
Upcoming nama Events

Carol Murdock
Chief Marketing Officer, Lumeris
Today’s speaker:

May’s Healthcare SIG Sponsored by

“Helping Marketers Understand the
Impact of Accountable Care on
Marketing Strategy"
Today’s topic:

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NAMA Presentation
Carol Murdock, CMO
May 6, 2013

NAMA PRESENTATION • May 6, 2013
1) A National Emergency
and
2) The biggest business
opportunity of our lifetime is:
“Keep this from happening!”
2019
$4.6 trillion
2001
$1.46 trillion
2010
$2.60 trillion
6.6% CAGR

Source: Mary Meeker, USA, Inc.

FFS Hamster
Wheel Care
• Medicare RBRVS 1992
• “Toxic Reimbursement
System” 2001
Primary Care Model
• Primary Care Centers 1920
• Institute of Medicine 1978
• Barbara Starfield 1992 4 C’s
Accountable Primary Care
• Esse Health, late 1990’s
• Primary Care: 9 C’s, 2012
Chronic
Care
Model
• Early 1990’s,
• 1998
Medical Home
• AAP 1967
• 2007, 8, 11
Accountable Delivery System
• IDS or virtually-Integrated Delivery System
• Collaborative Payer Model (CPM, 2008)
Triple Aim
2008
+1
ACOs 2006
HISTORICAL CONTEXT

November 1, 1999 To Err is Human: Building a Safer Health
System – Institute of Medicine
March 23, 2010 Affordable Care Act (ACA) signed by
President Obama
* June 28, 2012 Supreme Court Declares ACA is
Constitutional – Roberts Ruling
September 6, 2012 Better Care at Lower Cost: The Path to
Continuously Learning Health Care in
America – Institute of Medicine
* January 1, 2014 Major Components of ACA Benefits
Become Effective
*Tipping Point

Institute of Medicine Reports US Healthcare System Wastes $750 Billion/yr
- September 6, 2012
If the US Healthcare System was a ……………
Further, they went on to say,
• BANK– ATMs transactions would take days
• HOME BUILDER – Carpenters, electricians and plumbers would
work from different blueprints and hardly talk to each other
• RETAILER– Prices would not be posted and could vary widely within
the same store, depending on who was paying
• AIRLINE– Individual pilots would be free to design their own preflight
safety checks, or not perform one at all

Category Estimate of Excess Costs per Year
Unnecessary Services $210 billion
Inefficiently Delivered Services $130 billion
Excess Administrative Costs $190 billion
Prices That Are Too High $105 billion
Missed Prevention Opportunities $55 billion
Fraud $75 billion
Lack of Accurate, Timely Information and Collaboration
Source: IOM Report, September 2012

“The U.S. has uniquely screwed up healthcare in a way that is so clever. We
fund things at any price and focus on sickness rather than health…The U.S.
healthcare system is the only system I know of where innovation is your
enemy. In every other industry, innovation changes the rules of the game.
But in healthcare, innovation is just a clever word that is used to justify
driving up the cost of care per person to an unsustainable price.”
Bill Gates, KPCB Summit September 14, 2012

1. Healthcare data will be largely digitized in 3 years
2. Connectivity is ubiquitous
3. Industry has embraced behavioral economics and aligned incentives to
drive outcomes
4. Disaggregation(decentralization) of healthcare services is moving them to
lowest cost, highest quality, most timely provider
5. Country is broke! …..and healthcare is big contributor
Five Reasons Why Healthcare Will Be Disrupted in Five Years

• Ensuring every patient receives…
The Right Care,
in the Right Setting,
at the Right Cost.
With Clear Accountability for
Clinical, Financial, and
Quality Outcomes.
Population
Health
Management
Lower Per
Capita Costs
Physician
Satisfaction
Enhanced
Patient
Experience
Triple
Aim* + 1
*DM Berwick, TW Nolan, and J Whittington, “The Triple Aim: Care, Health, And Cost”, Health Affairs, 27, no.3 (2008):759-769

Healthcare Market
Vertical
Integration
Collaborative
Partnerships
Status Quo
Value-Based HealthcareFFS

NAMA PRESENTATION • May 6, 2013Proprietary and Confidential.
Copyright 2013 Lumeris.
•
•
•
•
•
•
•

1. Exchanges (Individual, Small Group, Large Group)
2. Access to provider clinical information
3. Providers developing autonomous risk management capabilities
4. Providers direct contracting
5. Ascension of new variations of the Integrated Delivery Network model
6. Data transparency and provider collaboration
7. Accountable care competencies - risk-based contracting and risk adjustment
8. Delivering predictable accountable care to multi-geography groups
9. Delivering a consistent customer experience across franchise boundaries
10. Disincentive to disrupt current FFS model
11. Leveraging massive member/patient databases
12. Structuring coopetition models in multi-payer, multi-provider approaches to serving patients
13. Consumerism
Opportunities and Risks of Accountable Care To Existing Payer/Provider
Business Models

Winners and Losers
PayersHealthcare

Revenue
Specialized Services
Commercial Services
Government Services
$0 - Breakeven Breakeven
KPMG Survey June 2012
“Key question is whether or not any
organization can be both committed to non-
volume-based care economics while at the
same time working to sustain a volume-driven
reimbursement status quo.” 1
1 Ed Giniat, National Sector Leader, KPMG Healthcare & Pharmaceuticals.
Hospitals Future

Massive cultural change
• Fewer heads in beds – changing of
economic models
• Pricing transparency – consumers
sharing cost burden
• Partnering and improved
collaboration with other
providers, payers
• Fewer independent hospitals
• Entrenched fee-for-service model
shifting to risk
• Need for increased IT investment –
data integration and care
management
Hospital Impact

Primary Care is King
ACA emphasizes importance of primary care in reducing costs
• Bundled Payment for Care Improvement Initiative
• Comprehensive Primary Care Initiative
• Financial Alignment Initiative
• FQHC Advanced Primary Practice Demonstration
• Independence at Home Demonstration
• Medicare Graduate Medical Education program to expand PCP and nurse
supply
Physicians see fewer options and are looking for partners. The percentage of doctors
owning their own practices has dropped from 51% in 2005 to 43% in 2009 and
projected 33% in 2013 (Source: Accenture)

Payer Relevance
Opportunity
• Actuarial analysis
• Ability to take insurance risk
• Benefit design experience
• Compliance and risk management
• Risk Adjustment
• Claims adjudication
• Call center support for
• members and providers
• Medical management
• Wellness
Challenges
• 15% administration cap
• Shrinking Market – Exchanges and
Self-funded
• Challenging markets for growth
• Changing business model – B to C
• Increasing accountability for Quality
metrics
• Access to clinical information
• Relevance – a set of services that
physician networks/patients and
employers will find valuable
• Providers considering first dollar
risk (becoming a payer)
Collaborate

Marketing in Uncertain Times
Role is to lead the change and guide the team

Marketing is Strategy
Turn Strategy to Action

Market Dynamics
Michael Porters, Five Forces

Value of Research
• Understand your market
• Key players /dynamics
• How do participants view one
another?
• Talk to Customers
• Physicians
• Patients/Members
• Employers
• Talk to Competitors
• Provide data to support or refute
the strategy

PAY FOR “Clinical”
PERFORMANCE
(P4P)
UPSIDE
GAIN SHARING
“Shared Savings”
DOWNSIDE
RISK SHARING
“Shared Risk”
GLOBAL CAPITATION
FFS Analytics
Care Management
Claims & Encounter Data Aggregation
Population Health
Platform & Workflow
CHOICE: Implement Common Population Health Architecture
or
Be Your Own Data and Systems Integrator

The Solution Purpose Built for Accountable Care
Solution Packages for ALL Accountable Care Models
MSSPs • Commercial ACOs • PCMH Programs • CPCi • MAPD
• 4.5 Star rated MAPD plan
• 69% MCR (before incentives)
• # 1 plan in market
Proof
• 70% of Clinicians and Hospitals
• Multi-Payer
• 300M Annual Transactions
Connectivity
• Innovation & Best Practices
• Provider Transformation
Transformation
Accountable Delivery
System Platform
Platform
• Cloud-Based Enterprise IT
• 22 ACO Core Competencies
• 800+ Man-Years Invested

The Lumeris Solution: Technology Supported by Services

Culture &
Governance
Transformation
Collaborative
Contract
Development
Quality & Cost
Modeling
Primary Care &
Care
Management
Training
Population
Management
Interventions
Performance
Measurement &
Assessment

QUESTIONS

Understanding the Impact of Accountable Care on Marketing Strategy

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