Hpcio(final)

High Performance Clinically
Integrated Organization (HPCIO) sm

Prepared by:

Mark Tozzio, MA-IHHS, FACHE
President

Hospital and Physician Practice Development Consulting, Inc.

Overview of HPCIO Program Development … in a nutshell

August 1, 2011
1

High Performance Clinically Integrated Organization
(HPCIO) sm
Commercial Insurers are Embracing Pay-For-Performance Incentive Programs:
 WellPoint
 United Healthcare
 Blue Cross Blue Shield of Illinois

 Advocate Physician Partners (Chicagoland) was established as a Clinically Integrated model ten
years ago – today the program includes 3,800 physicians that focus on key clinical and financial
initiatives in these areas:
 Clinical outcomes improvement (including generic prescribing)
 Enhancement of operational efficiency (ambulatory and acute care settings)
 Robust medical and technological infrastructure
 Patient safety
 Patient experience FTC-compliant Clinically Integrated Organizations must
demonstrate that they meet the three principal tests
Resources: established by the Department of Justice (DOJ) and
Advocate Physician Partners, “The 2011 Value Report: Benefits from Clinical Federal Trade Commission (FTC) outlined in the 1996
Integration," http://www.advocatehealth.com/2009ValueReport, June 6, 2011. policy statement:
Web.
Great Boards, “Clinically Integrated Physician-Hospital Organizations,” Winter 1) The network’s program of clinical integration is likely to
2009, Vol. IX, No. 4. Print.
achieve “real” integration of providers;
2) The initiatives of the program are designed to achieve
likely improvements in healthcare cost, quality and
efficiency; and
3) Joint contracting with health plans is “reasonably
necessary” to achieve the efficiencies of the clinical
integration program.

2
Mark Tozzio, FACHE, HPPD, Inc., 918-521-7468, hppd@aol.com

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Lee B. Sacks, M.D., Advocate’s Executive Vice President and Chief Medical Officer, and CEO of
Advocate Physician Partners

Network of 3,800
Physicians and 10
hospitals and 2
integrated children’s
hospitals
Physician Led CI
Organizational
Governance
57 key quality and cost
initiatives carried out
in 2010
Pay-For-Performance
bonuses paid to APP
physicians from
commercial insurers
reportedly totaled =
$60 million in 2010

Resource: Advocate Physician Partners, “The 2011 Value Report: Benefits from Clinical Integration,"
http://www.advocatehealth.com/2010ValueReport, June 6, 2011. Web.

Mark Tozzio, FACHE, HPPD, Inc., 918-521-7468, hppd@aol.com 3

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And here comes the ACO… Share Savings Program to Reward Accountable Care
“It is in the public interest to harmonize the eligibility
criteria for ACOs that wish to participate in the Shared
Saving Program with the similar antitrust criteria on clinical
integration. As discussed in more detail in section II.I. of
this proposed rule, competition between ACOs is expected
to have significant benefits for Medicare beneficiaries, by
improving the quality of care they receive, protecting their
access to a variety of providers, and helping to sustain the
Medicare program by controlling costs. Furthermore,
because ACOs that operate in the Shared Savings Program
are likely to use the same organizational structure and
clinical care practices to serve both Medicare beneficiaries
and consumers covered by commercial insurance, the
certainty created by harmonizing our eligibility criteria with
antitrust requirements will help to ensure that an ACO
organization participating in the Share Saving Program will
CFR Vol. 76, No. 67, April 7, 2011, page 19542
not subsequently face an antirust challenge that its
conduct is per se illegal, which could prevent the ACO from
fulfilling the 3-year term of its agreement und the Shared
Savings Program” [emphasis added).


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CMS published their 412-page proposed guidelines for ACOs on March 31, 2011:
 Providers must sign up with CMS for a minimum of three years to participate as an ACO
 Primary care groups must be the driving force of ACOs – specialists and hospitals/other providers can
participate (in the clinical integration process)
 Participating ACOs must serve at least 5,000 Medicare beneficiaries in a region
 Medicare beneficiaries will be assigned to ACOs retrospectively – freedom to move in and out of
ACOs is preserved
 ACOs will bear risk for covered Medicare beneficiaries (two ACO payment tracks offered)
 Bonus incentive payments will depend on demonstrated cost savings and quality metrics to Medicare
(65 quality measures; significant transparency of ACO operations and financial performance)
 Unprecedented cooperation between DHHS/CMS, FTC, DOJ, and IRS to create “safety zones” to
address anti-trust and physician inurement concerns
 Final Regulations will be published after the comment period ending June 6th of this year
 ACO Program enrollment is set to start on January 1, 2012


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Stages of healthcare transformation:
 Healthcare reform will move providers along a transformational pathway within 3 main groups
over the next decade
Level of provider integration

Stage 3 – Some providers will be able to achieve:
>New collaboration models that truly/fully integrate the continuum of provider care
>Allocation of substantial resources to develop sophisticated business intelligence IT solutions
>Formation of HPCIO and ACO partnerships to capture P4P/Shared Savings/Bundled Payment

Stage 2 – Many providers will have to achieve:
>Formal medical staff development – physician recruitment, retention, loyalty enhancement and leadership training
>Clinical integration initiatives along service lines that expand market share and stabilize positive revenue streams
>Robust IT and HR infrastructure to support “value-based purchasing” and P4P programs - commercial and CMS
>Consolidation of affiliate hospitals and physicians along mission, values, and vision horizons
>Chronic care management and preventive care delivery systems throughout the health service area

Stage 1 – All providers will need to achieve:
>Control over escalating operating costs and increase productivity (do more with less)
>Superb customer satisfaction (patients, physicians, vendors, donors, etc.)
>Optimized quality outcomes (CORE measures; PQRS, SCIP, etc.), and improve safety (HAI, errors, complication rates, etc.)
>Efficiency of operations at all levels of healthcare delivery
>Expanded care coordination before, during and after hospitalization involving physicians along the healthcare continuum

Adapted from: Gelineau, Stephen, “Hospital of
the Future: Strategies in an Era of Healthcare
Reform," ACHE Presentation, June 6, 2011. Print.

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Medical Center

Physician-
Led
Governance
Independent Employed
Physicians Physicians

Commercial Insurance Focus CMS Medicare / Medicaid Focus

Clinically Accountable
Integrated Care
Organization Organization
(CI) (ACO)

The HPCIO negotiates with payers for incremental P4P and bonus payments on top of the
fee schedule on behalf of all members based on demonstrated improvements in quality and
cost effectiveness of care rendered to patients under the care of the organization


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PSCI Solutions’ Quality Organization Maturity Model:
 There are four distinct phases of quality maturation in hospitals and health systems; at
present, very few organizations reach Phase IV performance

PHASE
I PHASE
II PHASE
III PHASE
IV
“Processes & “Institutionalize
“Reporting” “Compliance”
Variance” Quality”
Laggards Followers Leaders Innovators

1. Focus on external 1. Focus on quality 1. Focus on internal 1. Focus on hospital
quality reporting compliance quality improvement margin improvement
2. Measures 2. Cross-functional projects 2. Pay-for-performance,
department quality alignment 2. Facilitate change patient satisfaction,
productivity 3. Ad-hoc physician management clinical-financial
3. Data collection integration 3. Monitor and report alignment, integration
efficiencies 4. Minimize QI project success 3. Link quality of care to
measurement errors 4. Process-driven cost, report impact of
physician integration quality improvement
on margin
4. Physician scorecards

Maximize
Improve Productivity Improve Quality Scores Link Cost-Quality
Quality-Revenue Curve
● Tactical ● Project orientation ● Process orientation ● Strategic orientation
● Director of Quality ● VP Quality ● Chief Quality Officer ● Chief Quality Officer
● Facility cost center ● Shared service center ● Shared Service Center ● Revenue Center
8
sm

Image © Copyright 2011 PSCI Solutions, Inc. All rights reserved [Reproduced with approval of PSCI Solutions] 8

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The key to clinical integration involves serious commitment to:
 Development of enhanced infrastructure and technological enablers
 Shared governance organizational structure with strong physician leadership and broad participation
 Contractual relationships between HPCIO members and payers in order to align clinical and financial
incentive across the continuum of care environment

Alignment of
Collaboration
Technological

Incentives
Effectiveness

Provider
 Share performance metrics across the  Operate a physician-led governance structure with  Negotiate on behalf of HPCIO
organization – ambulatory, inpatient, strong leadership representing both independent and members for performance-based
post-acute settings, and community employed providers across all specialties with the incentive payments with commercial
health status support of the health system’s management team and governmental payers
 Implement real-time business  Establish relevant participation criteria that encourages  Promote accountable care
intelligence solutions (BI) reporting involvement of quality-driven physicians (30 to 40% of  Tie community health status
organization-wide accomplishments medical staff initially) improvement to financial incentives
(dashboards, trend monitoring, etc.)  Include a remediation process for non-compliant  Expand HPCIO to include additional
 Publish report cards that clearly members providers beyond the initial core
demonstrate added value to patients  Adopt interdisciplinary clinical and financial metrics and
and payers initiatives to improve outcomes and control costs


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HPCIO implementation process:
 Phase 1 – HPCIO Readiness Assessment involves a comprehensive analysis of the
health system and physician leaders, employed and independent physicians, that
indicates that the medical community is able and willing to become clinically integrated
(approximately 45 days to complete the Phase 1 study once the Client’s key information is
obtained)
 Go / No-Go decision by stakeholders and commitment to invest time and resources into
the program
 Phase 2 – Implement HPCIO – entails establishing a physician-led organizational
structure for the HPCIO in partnership with the health system (six to seven months from
the date that an agreement is signed with consultancy to move to Phase 2)
 Create HPCIO’s legal entity
 Identify key transformational metrics
 Implement robust IT infrastructure (ambulatory and inpatient)
 Seek regulatory confirmation that program is structured appropriately as a clinically
integrated entity and meet the “safe harbor” conditions
 Negotiate with payers regarding performance objectives
 Establish incentive pay program for providers in the ACO
 Apply for CMS ACO certification (if it makes business sense)


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1 Develop Market Profiles & Trends, Competitive Intensity, Technology and Clinical Trends;
Snapshot Market
Performance Review: Inpatient and Ambulatory settings
Assessment

2 Organizational
Assess Organization & Service Line Alignment Options, 3 YR capital needs; Complete For
Key Performance
Services And Facilities, Projected baseline EBIDA 3 YR Returns & reimbursement impacts
Assessment
3 Foundations Of Complete Clinical Integration Prospects and Design Roadmap with Physician & Health
Clinical Integration System Leader ship Stakeholders
4 Physician Companion for CI, evaluate optional structures, and evolving mix of PCP & specialists;
Integration Options assess impact of trending practice reimbursement conflicts

5 Organizational Criteria for independent models applied to decision scenarios and impacts; Based on
physician alignment, regulatory, and payer performance driven leverage; culture-driven
Structure
performance indicators applied for feasibility
6 Network Payers Relative contracting positions vs. Medicare assessed; market impact for specific service
Analysis & Strategies line bundles and overall evaluated

7 Community Health Develop joint programs with public health, community leaders and establish pilot
& Service Bundling metrics for population health program; coordinate with Payers & evolving CMS rules.

8 Tactical Plans For Based on service line quality & operating cost savings, develop continuum action plans
HPCIO Implementation with aligned physicians & stabilized margins


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HPCIO Assessment and Implementation Road Map

ROI Assessment
Phase – 45 days
Researching Establishing the High Developing
Hospital- Assessing Performance Clinically Physician- Enhancing
Physician HPCIO Integrated Led High Performance
Integration Feasibility Organizational Performance Improvement
Alternatives Structure Metrics Infrastructure

Pre-Assessment Implementation Phase – 6 to 7 months
Period


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The HPCIO implementation team delivers results – on time and on budget
 Our multi-specialty leadership team delivers the highest quality consultative services at affordable
rates for our Clients
 The expertise of our leadership team provides effective guidance and knowledge transfer to our
clients so they can operate independently once the HPCIO program is operational
 We implement the HPCIO program over a shorter period of time compared to our competitors –
nearly half the time of other consultancies specializing in the Affordable Care initiative with
excellent results (6 to 7 months implementation schedule)
 Our guaranteed maximum “program investment” is very competitive with fees charged by
other recognized firms because of our efficient delivery process and breadth of expertise among our
delivery team
 Our team prides itself in providing a personalized (not a canned) program that is physician-led,
and involves key stakeholders that drive the program’s long term success
 Our team of experts will also be available to assist with the preparation of application documents
necessary for acceptance by regulatory agencies and commercial insurers
 The HPCIO organizational structure/governance and clinical integration program is designed
to meet the requirements for participation in the CMS’ Shared Savings Program and other
performance-based incentive programs offered by selected commercial insurance companies and
self-insured plans – this dual approach saves our Clients time and money when compared to other
alternatives


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HPCIO Advisory Team:
 Mark Tozzio, Masters Health and Human Services Administration, FACHE - Healthcare Program/Services
Development and Clinical Integration (35 years of healthcare management experience with large and small hospital
systems and physician groups)
 Rich Miller, MPH - Strategy, Project Management and Performance Analysis Expert (32 years of healthcare strategy
and development; including 20 years of consulting for clients nationwide)
 David Woodrum, FAAHA, FACHE - Board/Leadership and Services Line Management Development (40 years of in-
hospital, physician owned facilities, and consulting expertise; served as Vice President of the American Hospital
Association and Chairman of Woodrum Ambulatory System Development)
 Steve Dobbs, MHA, FACHE - Executive Officer for Integrated Health Systems and Key Participant in the CMS
Bundled Payment Prototype at Ardent’s Hillcrest Medical Center in Tulsa, OK (35 years of healthcare management
experience and program innovation/physician partnerships development)
 Jay Reddy, MBA - Co-Founder and President of PSCI, a leading Business Information and Advanced Technologies
firm specializing in quality analytics and decision support solutions for healthcare organizations (20 years of innovation
in information technology systems to enhance quality and operational performance)
 Dennis Dvorak, Bachelors Business Administration - Physician Practice Administration (32 years of progressive
management experience with multispecialty groups and integrated organizations as large as 120 providers)
 Steve Money, JD, MD - Medical-Legal Advisor Services (20 years of legal practice combined with medical training;
corporate law and compliance expertise)
 Carolyn Davies, CPA – Physician practice management consultant with over 25 years of healthcare experience with
small and large groups (financial performance improvement, benchmarking, contract negotiations, cash flow
management, etc.); Carolyn has worked for national managed care companies

Depending on your specific needs, we will assign additional clinical support consultants for Phase 1 and Phase 2


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• Don’t have a CI/AC
91% program

• Are planning to develop
64% a program

• Will implement a
39% program in 2012


Hpcio(final)

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