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Medicine in 21st Century USA -- Kent Bottles, MD
1. EmCare Leadership Conference
Kent Bottles, MD
610 639 4956
www.kentbottlesmd.com
kent@kentbottlesmd.com
April 4, 2013
Las Vegas, Nevada
2. The Affordable Care Act
http://www.nytimes.com/2012/04/03/health/policy/the-abcs-of-the-health-care-law-and-its-
future.html
• Series of policies, regulations, subsidies,
and mandates that builds upon the
incoherent medical system of public &
private insurance
• Most important health care law since
enactment of Medicaid & Medicare in 1965
• 70,000 pages of guidance from HHS
3. Affordable Care Act
• Medicare, Medicaid, VA, CHIP, FEHIP
retained
• Employer furnished insurance retained (>50
employees must offer insurance)
• Individual mandate
• Fed subsidies to those too poor to pay
• Insurance exchanges in each state
4. Two Intertwined Goals
Reform the health care
delivery and payment
system to provide better
care in a more cost-efficient
manner
Goals
Make better health insurance
coverage more available and
affordable for legal residents
5. In 2009 . . .
• 50+ million (about 17%) uninsured
• Remaining 254 million
– 93 million on government programs
o 43 million on Medicare
o 48 million on Medicaid
– 195 million (56%) have private coverage
o 87% through employment
o Lowest rate since recordkeeping began
o About 10% underinsured
6. . . . by 2016
• Reduce number of uninsured to 22 million
– 2010-2013: no significant change
– 2014: down to 34 million
– 2015: down to 28 million
– 2016: down to 22 million
• 1/3 remaining uninsured = undocumented
immigrants
7. Seven-Part Solution
Offer incentives to expand coverage
Control rising costs
Regulate health plan coverage
Solution Impose individual mandate
Establish health insurance exchanges
Impose employer penalties
Expand Medicaid
8. Solution No. 1:
Offer Incentives to Expand Coverage
• Temporary high-risk pools
• Early retiree reinsurance program
• Tax credits for small employers
– Cover at least 50% of health insurance
costs
– Fewer than 25 FTEs, average wage less
than $50,000
– Credit = up to 35% of costs thru 2013; 50%
thereafter
9. Solution No. 2:
Control Rising Costs
• State grants for health
insurance premium reviews
• Cost containment
– Medicare savings of $500
billion over 10 years
• Comparative effectiveness studies
• Voluntary shared savings through
ACO
• Bundled payment pilots
• Reimbursing physicians based on
quality performance
10. Solution No. 3: Regulate Health Plan
Coverage All Plans – Now In Effect
• No lifetime limits on “essential benefits”
• Tighter restrictions on annual limits
• No rescission of coverage, except for fraud
or intentional misrepresentation
• Kids covered through 26th birthday
• No pre-existing condition exclusions for
kids <19
• Automatic enrollment of full-time
employees
– 200+ FTE; subject to employee opt-out
11. Regulate Health Plan Coverage
Guarantee Issue and Renewal
• Effective January 1, 2014
• Premium costs differ solely based on:
– Age (3:1)
– Tobacco use (1.5:1)
– Family composition
– Geographic location
12. Solution No. 4:
Impose Individual Mandate
• Maintain “minimum essential coverage” unless…
– Coverage costs >8% monthly income
– Income below the tax filing threshold
– Religious objection
– Native American
• 3 alternatives
– Employer/union-sponsored plan
– Purchase individual insurance through exchange
– Qualify for federal health care program
13. Impose Individual Mandate
Enforcement
• Pay penalty on federal tax return if fail to maintain
health insurance for 3+ months
• By 2016, penalty = greater of
– $695 per person (up to $2,085 per family)
– 2.5% of adjusted household income
• Failure to pay = lien against future tax refunds
– No criminal enforcement
– No civil penalties
14. Solution No. 5:
Establish Health Insurance Exchanges
• Each state to establish by 2014 (or feds step in)
• Individual and small employer market
– Expand to larger employers in 2017
• “Essential health benefits package”
– Policy must provide essential benefits
– Cost-sharing provisions must not exceed HSA out-of-
pocket limits (currently, $5,950 single/$11,900 family)
– Annual deductible capped at $4,000 family/$2,000 single
15. Establish Health Insurance Exchanges
Individual Tax Credit
• May be used only to purchase coverage through
Exchange
• Qualify if household income is 100-400% of FPL
– Unless eligible for Medicaid or employer-sponsored
coverage (except if employer pays less than 60% of total
benefit costs)
– Amount of credit varies with household income and cost
of Exchange-provided coverage
• Also eligible for cost-sharing reductions
• Impact of Medicaid “opt-out”
16. Solution No. 6:
Impose Employer Penalties
Source: CRS
analysis of
P.L. 111-148
and P.L. 111-152.
17. Solution No. 7:
Medicaid Expansion
• Starting in 2014, state that expands Medicaid
eligibility to 133% FPL will receive higher FMAP for
newly eligible
– 100% in 2014-16; 95% in 2017; 94% in 2018; 93% in
2019; 90% in 2020+
– Administrative costs still 50/50
• Coverage must be at least as good as the minimum
essential health benefits available through
Exchanges
18. Medicaid Expansion
Impact on Hospitals
• Less-than-expected decline in uncompensated care
• Reductions in DSH payments
– Medicaid DSH reduced 50% by 2019
o HHS has not yet published methodology
– Medicare DSH reduced 75% in 2014 (with some amount
returned based on documented uncompensated care)
19. Medicaid Expansion in PA
• Governor Corbett turns down expansion
• Will not add 500,000 to Medicaid
• Cost to PA of $2.8 billion
• $37.8 billion in federal funds refused
• Governor Kasich of Ohio is participating
in Medicaid expansion
20. Deloitte Health Care Reform
Memo, January 7, 2013
• Implementation of the ACA in 2013
• Clarity
• Costs
• Compliance
• Consolidation
• Consumers
21. Deloitte Health Care Reform
Memo, January 7, 2013
• Clarity
– SCOTUS affirmed ACA
– November election winner Obama
– States decide on exchanges
– States decide on Medicaid expansion
22. Deloitte Health Care Reform
Memo, January 7, 2013
• Costs ($992 billion in waste; 47%)
– Health care costs seen as cause of debt crisis
– Failure of care delivery…$154 billion
– Failure of coordination.….$45 billion
– Overtreatment……………$226 billion
– Administration waste…….$389 billion
– Pricing failures…….…..…$178 billion
– Fraud and abuse………….$272 billion
23. Bending the Cost Curve through
Market-Based Incentives
• Medicare premium support replaces defined
benefit to be used to purchase insurance
• Convert tax subsidy for employer insurance
to predetermined refundable credit
• Transition from fee for service to bundled
payments
• High option plan for Medicare
24. Bending the Cost Curve through
Market-Based Incentives
• Regional Medicare plans to encourage
greater entrepreneurship
• Health insurance exchanges without “heavy
regulation imposed by ACA”
25. A Systematic Approach to
Containing Health Care Spending
• Model of state self regulation with spending
targets where public & private payers
negotiate payment rates with providers
• Replace fee-for-service with bundled and
global payments
• Medicare competitive bidding for med
devices, lab tests, X-rays, etc
26. A Systematic Approach to
Containing Health Care Spending
• Insurers should offer tiered plans with lower
copays if pt chooses high value providers
• Payers & providers electronically exchange
eligibility, claims, etc
• Single standardized MD credentialing
• Price transparency
• Non physician providers should practice to
full extent of their training
27. If Consumer Prices Had Risen as
Much as Healthcare since 1945
• A dozen eggs would cost $55.00
• A dozen oranges would cost $134.00
• A gallon of milk would cost $48.00
28. Why Health Care Costs So Much
http://www.kaiserhealthnews.org/Stories/2012/October/25/health-care-costs.aspx
• FFS payments to doctors, hospitals reward volume rather
than value
• Demographics: older, sicker, fatter
• Pogo: We want new stuff
• Tax breaks on health insurance; cost to patient low
• Lack of information to become savvy shopper
• Hospitals gaining market share; demand higher prices
• Supply and demand problems, legal issues make it hard to
slow spending
29. Health Care: The Disquieting
Truth
• We spend $2.5 trillion on healthcare
• Without control, federal budget deficit &
national debt will continue to grow
• US spends 2.5 times per person what
counterparts in Europe spend
• We spend more than enough to give good
care; the problem is the system not lack of
money
Arnold Relman, NYRB, September 30, 2010
30. Ezekiel Emanuel’s $2 Trillion
http://blog.lib.umn.edu/schwitz/healthnews/182728.html
• 1 million seconds: less than 2 weeks ago
• 1 billion seconds: 1974
• 1 trillion seconds: 30,000 BC
31. White House Sequester Health
Cuts
• CMS Supplemental Medical Insurance
Trust Fund: $5.2 billion
• CMS Hospital Ins. Trust Fund: $5.8 billion
• CMS Part D: $591 million
32. White House Sequester Health
Cuts
• CDC: $464 million
• Substance Abuse & Mental Health Services
Administration: $275 million
• FDA: $318 million
• NIH: $2.5 billion
• Indian Health Services: $320 million
33. Deloitte Health Care Reform
Memo, January 7, 2013
• Consolidation
– Close to 100 hospital acquisitions in 2012
– Medical group deals increased 60%
– Physicians fleeing private practice for
employment with large ACOS, IDN
– “Go big or get out”
34. Deloitte Health Care Reform
Memo, January 7, 2013
• Compliance
– US invested $102 million to detect Medicaid
fraud
– Limit physician self referral
– Health plan regulation under the ACA
– Clinically unnecessary procedures and tests
35. Deloitte Health Care Reform
Memo, January 7, 2013
• Consumers
– Mobile apps enable comparison of treatment
options, costs, and providers who adhere EBM
– High deductible plans & individual insurance
market will drive price & quality sensitivity
– Transparency will demand access to
performance data from health plans, hospitals,
physicians, pharma, long-term care providers
36. How Will It All Turn Out?
• Consumers
• Employers
• States
• Health Care Providers
37. How Will It All Turn Out?
• Consumers
– For the 55% with employer insurance &
32% with government program not much
changes
– Challenge is getting 18 million young
adults who don’t have insurance to obtain
it.
– If young and healthy are not in risk pool the
math will not work
38. How Will It All Turn Out?
• Employers
– Most will wait and see
– Employers with more than 50 workers will
have to offer insurance to those working 30
hours a week or more
– CBO estimates 8 million fewer workers
(5%) will get insurance through employers
in 5 years
39. How Will It All Turn Out?
• Employers
– Robert Pear, NY Times, Feb 18, 2013, A9
– Companies with young, healthy workers
are self-insuring and opting out of regular
health insurance market
– Could destabilize small group insurance
markets and erode protections provided by
Affordable Care Act
40. How Will It All Turn Out?
• States
– About half of governors will expand
Medicaid
– About half won’t expand Medicaid
41. How Will It All Turn Out?
• States
– Will run exchange: 17 plus DC
– Will partner with Feds: 7
– Will let Feds do exchange: 26
42. How Will It All Turn Out?
• Providers
– Merge and grow bigger
– Integrated delivery systems like Kaiser and
Geisinger are seen as models of low cost,
high quality health care delivery
– Will hospital consolidation reduce costs?
43. Report Card on Health Care Reform
NY Times, March 24, 2013
• 6.6 million aged 19 to 25 insured
• 71 million received free preventive service
• 17 million kids with pre-existing condition
insured
• 107,000 adults with pre-existing conditions
insured
• Policies not canceled due to illness (10,000)
44. Report Card on Health Care Reform
NY Times, March 24, 2013
• $11 billion over 5 years for community
health centers
• $5 billion reinsurance program to help
companies retain retiree coverage
• 2012 Insurers paid $1.1 billion in rebates
• 6.3 million seniors have saved $6.1 billion
on prescription drugs since 2010
45. Report Card on Health Care Reform
NY Times, March 24, 2013
• Medicare Advantage premiums have fallen
by 10% and enrollment up 28% since law
passed
• % Medicare patients being readmitted to
hospital within 30 days dropped from 19%
over past 5 years to 17.8% in last half of
2012
• Pilot projects
46. Payment Reform
• Boards and Councils
– Independent Payment Advisory Board
– Federal Coordinating Council of Comparative Effectiveness Research
• Health care delivery reform
– Center for Medicare and Medicaid Innovation
– Comparative effectiveness research panels
– Multidisciplinary care teams
– Electronic Health Records
• Organization of Health Care Reform
– ACOs
– Medical homes
– Baskets of care
– Health information exchange
• Payment Structure Reform
– Bundled payments
– Across the board payment reductions
– Value based reimbursements
47. CMS The Physician
Feedback/Value-Based Modifier
Program
• The Physician Quality and Research Use
Reports (QRURs)
• The Development and implementation of a
Value-based Payment Modifier
• Allows MD to compare quality and cost of
CMS FFS patients’ care with that of other
patients in Iowa, Kansas, Missouri,
Nebraska
48. CMS The Physician
Feedback/Value-Based Modifier
Program
• Medicare Improvements for Patients and
Providers Act of 2008
• Extended by 2010 Affordable Care Act
• CMS will use the value-based payment
modifier to adjust CMS FFS payments to
physicians based on the quality of care they
furnish compared to the costs of such care
49. CMS The Physician
Feedback/Value-Based Modifier
Program
• HHS Secretary will phase in program over a
2 year period beginning in 2015
• Beginning in 2017 the value based payment
modifier will apply to all payments made
under Medicare FFS payment schedule
50. CMS The Physician
Feedback/Value-Based Modifier
Program
• All cost data in your report have been price
standardized and risk adjusted to account
for differences in patients’ age, gender,
Medicaid eligibility, and history of medical
conditions so we make apples to apples
comparisons
51. CMS The Physician
Feedback/Value-Based Modifier
Program
• COPD • Diabetes
• Bone, joint, muscle • Gyn
• Cancer • Heart conditions
• HIV • Mental health
• Prevention • Medication
mangement
52. CMS The Physician
Feedback/Value-Based Modifier
Program
• Patients whose care you directed: you
billed 35% or more of all their outpatient
E&M visits
• Patients whose care you influenced: you
billed less than 35% of outpatient E&M
visits but 20% or more of their costs
• Patients to whose care you contributed
are those you billed less than 35% of visits
and less than 20% of their total costs
53.
54. Alternative Methods of Payment
• Fee for service
• FFS and shared savings
• Episode payment
• Partial comprehensive payment and P4P
• Comprehensive (Global payment)
• Capitation
55. Reducing Costs Without Rationing
Is Also Quality Improvement!
Healthy Continued
Consumer Health
Preventable No
Condition Hospitalization
Efficient
Acute Care Successful
Episode Outcome
High-Cost
Successful
Outcome
Complications,
Infections,
Readmissions
56. “Episode Payments” to Reward
Value Within Episodes
Healthy Continued
Consumer Health
Preventable No
Condition Hospitalization
Efficient
Acute Care Successful
Episode Outcome
$
High-Cost
Successful
Episode Outcome
Payment Complications,
A Single Payment Infections,
For All Care Needed (“Baskets Readmissions
From All Providers in of Care”)
the Episode,
With a Warranty For
Complications
57. Yes, a Health Care Provider
Can Offer a Warranty
Geisinger Health System ProvenCare SM
– A single payment for an ENTIRE 90 day period including:
• ALL related pre-admission care
• ALL inpatient physician and hospital services
• ALL related post-acute care
• ALL care for any related complications or readmissions
– Types of conditions/treatments currently offered:
• Cardiac Bypass Surgery
• Cardiac Stents
• Cataract Surgery
• Total Hip Replacement
• Bariatric Surgery
• Perinatal Care
• Low Back Pain
58. Comprehensive Care Payments
To Avoid Episodes
Healthy Continued
Consumer Health
Preventable No
Condition Hospitalization
Efficient
Acute Care Successful
Episode Outcome
$
High-Cost
Comprehensive Successful
Care Outcome
Payment Complications,
Infections,
A Single or Readmissions
Payment “Global”
For All Care Payment
Needed For
A Condition
59. Isn’t This Capitation?
No – It’s Different
CAPITATION COMPREHENSIVE
(WORST VERSIONS) CARE PAYMENT
No Additional Revenue Payment Levels
for Taking Sicker Adjusted Based on
Patients Patient Conditions
Providers Lose Money Limits on Total Risk
On Unusually Expensive Providers Accept for
Cases Unpredictable Events
Providers Are Paid Bonuses/Penalties
Regardless of the Quality Based on Quality
of Care Measurement
Provider Makes Provider Makes
More Money If More Money If Patients
Patients Stay Well Stay Well
Flexibility to Deliver
Highest-Value Flexibility to Deliver
Services Highest-Value Services
60. New Roles & Responsibilities
• Hospitals/Specialists
– Reduce volume
– Improve value
• Primary care providers
– Manage costs
– Coordinate patient care
• Consumers
– Manage health, self care
– Choose high-value care
61. New Roles & Responsibilities
• Health plans
• Change payment systems
• Support providers
• Purchasers
• Change benefit designs
• Pick value-based payers
62. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Emergency Room Utilization
• Care Coordination
• Financial Impact
• Relationship with the Community
63. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Emergency Room Utilization
– Prudent layperson standard of emergency
– ACOs desire decreased inappropriate ED visits
– EMTALA vs. ACO
– Alternative sites of care will be encouraged
64. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Care Coordination
– Triage systems will become more important
– Call centers, telemedicine opportunity for growth?
– Alternative sites of care (How to integrate with PC; will
increase upfront cost of ACO)
• Urgent care
• Fast track units
• Free standing EDs
• Retail minute clinics
65. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Care Coordination
– ED patients who are not admitted to hospital
• Observation units
• ED-run follow-up clinics
• ED-run follow-up call centers
• ED-run home health services
• Next day community follow-up visits
• Accepted community standards for COPD, CHF,
cellulitis care
66. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Financial Impact on Emergency Medicine
– Prepaid health plan models of 1980s, 1990s
• 23% of premium went to PCP
• 56% went to specialists (including EM)
• 14% went to ancillary services
• 7% went to administration
• Emergency care services (facility + professional)
less than 4%
• Physician PMPM payment $0.44 to $1.50
67. ACOs: What Do They Mean for
Emergency Medicine? http://www.acep.org/ACO/
• Relationship to the community
– Small group of frequent flyers
– Medical management in partnership with local
community providers can decrease ED
utilization
– Camden, NJ
– Henry Ford, Detroit
– ED mission creep
68. EMR for ACOs Need 9 Capabilities
Michelle McNicle, Healthcare IT New, 7/11/2012
• Sophisticated pt relationship management
• Get data through business intelligence
• Data integration for analytics capabilities
• Granular clinical data sharing
• Payer, billing and pricing data sharing
• Aggregate data sharing
• Sharing clinical effectiveness evidence
• Population management
• Change management
69. Launching ACOs
Don Berwick, NEJM, March 31, 2011
• Fragmentation of payment & delivery
• Nobody takes full responsibility for health
of a patient or a community
• Fragmentation leads to waste & duplication
and unnecessarily high costs
• Section 3022 of the ACA: Medicare Shared
Savings Program for ACO as a solution
70. Pioneer ACO
• CMS Innovation Center initiative
• Experienced ACOs
• More coordinated care/lower cost
• Test different payment arrangements
71. Pioneer ACO
• Request for Applications May 2011
• 32 Pioneer ACOs announced Dec 2011
72. Pioneer ACO
• ACO professionals in group practice
• Networks of individual practices of ACO
professionals
• Partnerships or joint ventures between
hospitals and ACO professionals
• Hospitals employing ACO professionals
• Federally Qualified Health Centers
73. Pioneer ACO
• Patients get full benefits under FFS Medicare
• Patients have right to go to any provider
• Quality measures mirror Shared Savings Program
• By end of 2012 Pioneer ACO have at least 50% of
PCP have met meaningful use of EHR for receipt
of payments through Medicare and Medicaid
74. Iowa Health System/Wellmark
Model
• Attribute members to primary care only
• Six domains around quality not 33
• Provider quality incentive in addition to
shared savings opportunity
• Governance much more simple than
Medicare ACO
75. Florida Blue, Baptist Health South
Florida, Advanced Medical Specialties
• Oncology ACO
• Coordinated care approach
• Oncologists worried about decreasing
reimbursement for cancer drugs from CMS
• 500-1000 of Florida Blue’s commercial
customers will be involved
• Data intensive process
• http://www.healthleadersmedia.com/page-1/LED-280059/Florida-Blue-Launches-
Oncology-ACO
76. Aetna ACO Strategy
http://www.fiercehealthpayer.com/special-reports/3-effective-aetna-aco-strategies?utm_campaign=twitter-Share-NL
• 68 ACO relationships all over the USA
• All are unique
• Based on three strategies
• Choosing the right partner
• Sharing data
• Embedding case manager in the practice
77. Aetna ACO Strategy
http://www.fiercehealthpayer.com/special-reports/3-effective-aetna-aco-strategies?utm_campaign=twitter-Share-NL
• Choosing the right partner
• Physicians already working on quality and
decreasing costs strategies
• Chemistry
• Large number of PCPs in group
78. Aetna ACO Strategy
http://www.fiercehealthpayer.com/special-reports/3-effective-aetna-aco-strategies?utm_campaign=twitter-Share-NL
• Sharing the data
• Concentrate on actionable data
• Process measures, outcomes measures,
benchmarking information
• Case manager is the key conduit for data
exchange and use between Aetna and
doctors
79. Aetna ACO Strategy
http://www.fiercehealthpayer.com/special-reports/3-effective-aetna-aco-strategies?utm_campaign=twitter-Share-NL
• Embedded case managers
• Experienced nurses or social workers
• Training in geriatrics, pain management,
case management, terminal illness
management, cultural sensitivity, patient
engagement
• Prevent disconnects from happening
80. Aetna ACO Strategy
http://www.fiercehealthpayer.com/special-reports/3-effective-aetna-aco-strategies?utm_campaign=twitter-Share-NL
• Results Aetna/NovaHealth Portland ME
• Reduced inpatient days by 50%
• Cut hospital admissions by 45%
• 99% of patients visit doctor for prevention
and follow-up care
• Dropped total per member, per month costs
by 33%
81. Kaiser Ids Gaps in MD Readiness
for a Reformed Delivery System Crosson,
Health Affairs, 2011
• Systems thinking
• Leadership and management skills
• Continuity of Care
• Care coordination
• Procedural skills
• Office-based practice competencies
– Inter-professional team skills
– Clinical IT meaningful use skills
– Population management skills
– Reflective practice and CQI skills
82. AHA Physician Leadership Forum:
Competency Development
• Leadership Training
• Systems theory and analysis
• Use of information technology
• Cross-disciplinary training/team building
83. AHA Physician Leadership Forum:
Competency Development
• Interpersonal and communication skills
– Member of the team
– Empathy/customer service
– Time management
– Conflict management/performance feedback
– Cultural and economic diversity
– Emotional intelligence
• Additional education around
– Population health management
– End of Life/Palliative care
– Resource management
– Health policy and regulation
84. AHA Physician Leadership Forum:
Competency Development: Gaps
• Systems based practice: cost conscious, effective
evidence based medical care
• Communication skills: effective information
exchange
• Systems based practice: Coordinate care with
other providers
• Communication skills: Work effectively with
other team members
85. AHA Physician Leadership Forum:
Competency Development: Missing
• Conflict management/performance feedback
• End of life/palliative care
• Systems theory and analysis
• Customer service/patient experience
• Use of informatics
86. The ACO Surprise
http://www.oliverwyman.com/the-aco-surprise.htm#.ULTEfqXrWGU
• 25 to 31 million get health care from ACOs
• 2.4 million in CMS ACOs
• 15 million non CMS patients in CMS ACOs
• 8 to 14 million in non CMS ACOs
• More than 40% live in primary care service
areas with at least one ACO
87. Questions to Ponder in Each
Community
• Are we going to create an integrated delivery
system where physicians, hospitals, long term
care, home health, and allied health professionals
assume risk for costs and outcomes?
• Are we willing to make substantial investments in
infrastructure and process work redesign to
achieve coordinated, cost-effective, high quality
care for our patients?
88. Questions to Ponder in Each
Community
• Do we know how to manage population-based
outcomes and costs and do we know how to
manage risk?
• What are our core competencies and what are the
core competencies of potential strategic partners?
• We should think about which of the CMS
initiatives make the most sense for success in our
local community.
89. LarsonAllen Expects 7 Themes
• Providers will be asked to accept greater financial risk for
outcomes
• Operational efficiency will be critical
• Collaboration among all providers to survive
• Investments in technology will be needed
• Increased quality expectations, reporting, and monitoring
• Elevated regulatory risk
• Increased focus on community-based services and care
90. Can ACOs Improve Health
While Reducing Costs? WSJ, 1/23/2012
• Jeff Goldsmith and Tom Scully
• ACO is Exhibit A in yawning disconnect
between policy world and the real world
• ACO is like asking the hungry horse to
guard the granary. To get the savings
hospitals and their specialists have to turn
their backs on five decades of making more
by doing more
91. Can ACOs Improve Health
While Reducing Costs? WSJ, 1/23/2012
• The ACO actually looks like a terrible
business deal for providers
• The patient’s role is the biggest problem
with the ACO
– Patients need to be active agents in their health
– Patients need to choose to participate
– Patients need to be rewarded for healthy actions
– In ACOs patients do not choose to participate
92. Can ACOs Improve Health
While Reducing Costs? WSJ, 1/23/2012
• The biggest flaw with ACOs is more power
to hospitals, not doctors
• Start up cost of ACO is $30 million
• Regional hospital based oligopolies – not
good for doctors, patients, or saving money
93. Disease Management Care Blog
http://diseasemanagementcareblog.blogspot.com/2013/03/aco-market-dominance-whats-
happening-at.html
• Jaan Sidorov, MD
• FTC & Idaho attorney general file antitrust
challenge to unravel 3 month old
acquisition of Saltzer Medical Group by St.
Lukes
• Trinity Health vs. St. Lukes law suit
• “The result of the acquisition will be higher
prices for the services that those physicians
provide.”
94. Can ACOs Improve Health
While Reducing Costs? WSJ, 1/23/2012
• The ACO reminds me of the “backyard
steel mill” initiative during Mao’s
disastrous Great leap forward during the
1950s…. This effort ignored the scale
economies and quality controls required to
make steel efficiently. Having each
community, large and small, set up its own
ACO is like setting up a backyard steel mill.
95. The Coming Failure of
Accountable Care WSJ 2/18/2013
• Clay Christensen, Jeffrey Flier (Dean,
Harvard Medical School)
• Untenable assumption is ACOs will be
successful without major changes in
doctors’ behavior
• Mistaken assumption is ACOs can succeed
without changing patient behavior
96. The Coming Failure of
Accountable Care WSJ 2/18/2013
• Patient behavior
– Medicare patients can go where they want
– No preferential pricing to steer patients to most
effective providers
– Patients do not have to comply with
recommended treatment or lifestyle changes
97. The Coming Failure of
Accountable Care WSJ 2/18/2013
• Third flawed assumption is ACOs will save
money
– CBO estimates of full impact of Pioneer ACOs
$1.1 billion over five years ($468 billion CMS)
– Only 2 of Physicians’ Group Practice from
2005 to 2010 generated savings in all 5 years
– Marshfield Clinic ½ total savings for all 10
– Park Nicollet despite 30 years of managed care
experience got only a single year of savings
98. Outpatient Intensivist Medical
Teams
• University of New Mexico ECHO Project
• $8.5 million grant from HHS Innovation
• 5000 high cost, high utilization, high
severity patients in NM, Washington State
• Out patient intensivist teams of nurse
practitioners, case managers, counselors,
community health workers
99. California Quality Collaborative
Intensive Outpatient Care
• Care Manager
– Patient panel of 200
– Practice panel of 15 MDs maximum
– Primary partner for patient
– 24/7 access
– Rules-based contacts, bidirectional
patient contact at least monthly
100. California Quality Collaborative
Intensive Outpatient Care
• Primary care intensivist
– Physician
– Email/phone access for patients
– Same day access for patients
101. California Quality Collaborative
Intensive Outpatient Care
• Coordination with ED/Hospital
– Same day notification of patients in ED
– 48 hour post discharge contact with
patient
102. HHS Care Innovations Summit
• Alan Hoops, Chairman and CEO, CareMore
• Many frail patients have average of 11 MDs
• 20% of frail pop generates 60% of costs
• Costs in last year of life increases 7 fold
• Low patient compliance with chronic care
management protocols
103. HHS Care Innovations Summit
• Frail and Chronically Ill Patients
– Strength and training program
– Home care
– Mental health programs
– Social Services
– Podiatry
– Palliative Care
– Wellness
104. HHS Care Innovations Summit
• Speed of action
• Intimacy of Contact
– Requires constant knowledge of patient’s
condition
• Proactive intervention
– Integration & coordination of care not
voluntary
105. HHS Care Innovations Summit
• Frail and Chronically Ill Patients
– CareMore Care Center
– Case Managers
• Results Bed Days Per 1000
– CareMore 2004: 965
– CareMore 2005: 940
– CareMore 2006: 1076
– CareMore 2007: 1085
– Industry Average: 1450