ACOs and the Impact on Supply Chain

Today’s PresentersDennis Orthman, CMRP•Senior Director

•SMI - Strategic Marketplace Initiative

Thomas M. Lubotsky, FACHE•Vice President Supply Chain and Clinical Resource Management

•Advocate Health System

Adventist Health SystemCeleste West, Carole OwensAdvocate Health CareThomas LubotskyAllina Hospitals and ClinicsCheryl HarelstadAscension Health AllianceMichael GrayAvera Health*Steve HuckabaaBaptist Health SystemSherry WiningerBayCare Health SystemJudith LipscombBeth Israel Deaconess Medical CenterSteve CashtonBJC HealthCare*Nancy LeMasterCHE Florence DoyleCatholic Health InitiativesKevin Kakuda, Bev SlateCatholic Health PartnersCalvin Wright, Ed PryorChildren's Hospital of PhiladelphiaJoni RittlerCHRISTUS HealthEd HardinCleveland ClinicSimrit SandhuDana-Farber Cancer InstituteJohn WilliDenver Health and Hospital AuthorityPhilip Pettigrew, Stewart LayheDuke University Health SystemJane PleasantsFairview Health ServicesLeAnn BornFletcher Allen Health CareCharles Miceli

FMOL Health SystemWilliam MosserGeisinger Health System*Deborah Petretich Templeton, Joel MeckleyGreenville Hospital SystemJohn MatekaGroup Health CooperativeDavid EfroymsonInova Health SystemCharles NeikamIntermountain Healthcare*Brent JohnsonJohns Hopkins Health SystemBill KennettKaiser PermanenteLaurel JunkKettering Health NetworkTrisha OsbornLHP Hospital GroupAndrew MontgomeryLifespanNicholas Dominick, Ed BonettiMayo Clinic*James FrancisMercy / ROi*Vance Moore, Gene KirtserMethodist Hospital System, TheGary WagnerNorth Shore Long Island Jewish Health SystemDonna DrummondNorthwestern Memorial HealthCareGary FennessyNovant HealthMark WelchOchsner Health SystemMichael LouviereOhio State University Medical CenterRosalind ParkinsonOrlando HealthRandy Hayas, Rosaline Parson

OSF Healthcare SystemJohn HorneParallon Business SolutionsJay KirkpatrickParkland Health & Hospital SystemJoe VelasquezPartners HealthCareLisa, Scannell, Mark FaulknerPresbyterian Healthcare ServicesMatthew PehrsonProvidence Health & ServicesDavid HunterRoper St. Francis HealthcareScott FergusonSanford HealthThomas HarvieuxScottsdale HealthcareMichael HildebrandtSentara HealthcareDoug Farley, Nancy GrunewaldSSM Health CareMichael RosenblattSt. Luke's Health SystemCameron MarloweTexas Health ResourcesJohn GaidaThomas Jefferson University HospitalsRobert BurkholderUAB Health SustemBob TaylorUniversity Kentucky HealthCareLorra MiracleUnityPoint HealthPeggy Samuels, Sandra EricksonUPMCJames Szilagy, David HargravesVirginia Mason Medical CenterMilrose MercadoYale New Haven Health SystemPam Scagliarini

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3M Health CareBruce Bald, Paul Heerwald, Matt SchroerAbbott LaboratoriesSteve Christian, Jay Sullivan, Hal Lowe, David PacittiAesculapMark Meyer, Janelle BegoleAmerican Contract SystemsDavid ThomsonBaxter Healthcare CorporationAlan Mavis, Brad NewmanBecton, Dickinson & Company (BD)*Stephen Gundersen, Dennis BlackBoston Scientific CorporationLawrence Strauss, Jim MayberryBSN Medical, Inc.Mike RichardsC.R. Bard, Inc.*Carol Stone, Brian KellyCardinal HealthKenneth Kohler, Eric NelsonCare Line Industries, Inc.David LoveCarefusionMaryann Restino, David DahleColoplast Corporation*Keith JohnsonCook Medical IncorporatedDavid ReedCovidienArmin Cline, Matt Gattuso, Bill FallonDeRoyalBill Pittman, Greg HodgeGeorgia-Pacific CorporationDave Chybowski, Joe Sandora 

Global Healthcare Exchange (GHX)*Bruce Johnson, Karen Conway, Derek SmithHill-Rom Company, Inc.*Susan Schuette, David CoriglianoInfor (previously Lawson)*Keith Lohkamp, Michelle RobbinsIntegrated Medical Systems International (IMS)Kevin McMillen, James Mundy IIIJohnson & Johnson Health Care Systems, Inc.Larry Malloy, Fred Wagner, Bill DonatoKimberly-Clark Health CareKeith Kuchta, Kelly PawlowskiManagement Health Solutions (AtPar)Michael FerrisMcKesson Healthcare CorporationMary Jo Ellis, Scott Pruyn, Jeff BennishMedical Action Industries, Inc.Chris CorpMediclick, Inc.Mike Merwarth, Nick ToscanoMedline Industries, Inc.Tim Jacobson, Tom EganMedSpeedGail NelsonMolnlycke Health CareRon SpinuzziOmnicell, Inc.James Taylor     

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Owens & Minor, Inc.Charles Colpo, Joe AlexPAR Excellence Systems, Inc.Richard FelgerRoundTable Healthcare PartnersJohn McConachieSage ProductsWilliam HowesSciQuestDavid ForlenzaSeneca Medical, Inc.Lisa HohmanSmith & NephewRandolph Williams, Larry DooleySmiths MedicalRegina McIntosh, Connie PettijohnStaplesSusan LouisSterilMed, Inc.Randy MarkerSTERIS CorporationTim Chapman, Cary MajorsStryker CorporationLara Latham, Walker LambiotteSuture ExpressBrian ForsytheTECSYSNancy Pakieser, Peter BreretonThermo Fisher Scientific - Fisher HealthCare DivisionDavid Bespalko, Dino AlfanoVUEMEDLana MakhanikW.L. Gore & Associates, Inc.Gene Tierney     

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This Executive Briefing and

other free SMI Tools are

available at

www.smisupplychain.com

Slide 6

ACOs: Foundational Keys:

• MDs are the decision-makers and leaders whose buy-in is crucial for an accountable care program to succeed.

• Payment models incentivize providers to become successful episodic care managers, a key step toward population health management.

Slide 7

ACO Growth in 2013

Slide 8

5 elements of accountable care impacting supply chain

Slide 9

1 Physician Integration

2 Alignment of Incentives

3 Clinical Integration

4 Information Management

5 Supply Chain Engagement.

1 Physician Integration

2 Alignment of Incentives

3 Clinical Integration

4 Information Management

5 Supply Chain Engagement.

Element #1

Physician Integration

Slide 10

0.0%

50.0%

100.0%

0-50 beds 51-100beds

101-250beds

251-500beds

500+beds

85.7% 80.0% 88.9% 100.0% 100.0%

Hospital Physician Employment Trend 2011-2014 © 2011-2013 MDSI

% expected to have fewer employed physicians

% expected to have more employed physicians

In 2000, 57 % of physicians were independent.

In 2013, 39 % were independent.

Element #2

Alignment of Incentives• Volume – will no longer drive physician

compensation or hospital compensation

• ACO payment models can include:

• Measurements for hospitals include:

Slide 11

Capitation (full/partial)

Bundled Payments

Shared Savings

HAIs ReadmissionsPatient Falls

Element #3

Clinical IntegrationPCMH:

•takes an integrated team consultation approach.

•assigns a care coordinator to:–avoid unnecessary testing

–perform patient education

–coordinate follow-up care

– fill/monitor prescriptions

Slide 12

Accountable care seeks to monitor and coordinate care across all stages and locations of care, often via a patient-centered medical home (PCMH).

Accountable care seeks to monitor and coordinate care across all stages and locations of care, often via a patient-centered medical home (PCMH).

Element #4

Information Management

Slide 13

Evidence

Patient Tracking

Population Health

Performance MetricsValue Based Contracting

Interconnected Information SystemsData Warehouse

EHR HIEERP

Element #4

Information Management• Serious Challenges

–Costs

–Lack of uniform standards

–Limits on data mineability

–Resistance

Slide 14

“Big data equals

big costs.” Patrick Flaherty UPMC, SMI Provider Partner

“Big data equals

big costs.” Patrick Flaherty UPMC, SMI Provider Partner

“When folks deploy EHRs, only about 30 percent of the information is really reportable, with the rest in free-form text that structured reports cannot pull out.” Mary Beth Lang, PhD, UPMC, SMI Provider Partner

“When folks deploy EHRs, only about 30 percent of the information is really reportable, with the rest in free-form text that structured reports cannot pull out.” Mary Beth Lang, PhD, UPMC, SMI Provider Partner

Element #5

Supply Chain Engagement• Emergence of the “Service Line”

organizational model presents a supply chain opportunity.

• Service line leadership monitors and manages cost, quality, and outcomes.

• Supply chain’s value analysis approach needs to integrate with service lines.

Slide 15

Hospitals4 teaching hospitals1 children's hospital1 critical access hospital5 level 1 trauma centers

Physicians6,250 medical staff members4,525 Advocate PhysicianPartners1,250 employed physicians

Post-acute

$5.0B RevenueAA Rated34,000 Associates

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Advocate Health Care

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Key Drivers Of Physician Engagement

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Advocate Physician PartnersVision

To be a faith-based system providing the safest environment and best health outcomes, while building

lifelong relationships with the people we serve.

Our RoleTo drive improvement in health outcomes,

care coordination and value creation through an innovative and collaborative partnership with our

physicians and the Advocate system.

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Pluralistic Physician Approach

Active physicians on medical staffs (6,250)

Total APP physicians (4,525)25% PCPs – 75% specialists

Employed/affiliated(1,250)

Independent APP(3,275)

Independent non-APP(1,725)

Advocate Medical Group(1,067)

DreyerAffiliated

(183)

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More Than 100 Physicians Involved In APP Governance

APP Board of DirectorsClass A - PhysiciansClass B - Advocate

Pharmacy & Therapeutics Committee

Clinical Integration Measures Committee

PHO Boards

ContractFinance

Committee

UtilizationManagement

Committee

UtilizationManagement

Committee

Quality & CIImprovement

Committee

Quality & CIImprovement

Committee

Credentialing Committee

Audit Committee

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Value Based AgreementsContract Lives Total Spend

Commercial 389,000 $1.8 B

Medicare Advantage 27,000 $0.3 B

Advocate Employee 23,000 $0.1 B

Medicare ACO 114,000 $1.3 B

Total 553,000 $3.5 B

1422

Advancing Evidence-Based Medicine And Care

Year 2004 Physician Reminders for Care

Chart Based Patient Management

2006 Patient Outreach

2007 Physician Office Staff Training

Pharmacy Academic Detailing Program

Generic Voucher Program

2008 Diabetes Collaborative

Patient Coaching Program

Hospitalists

2009 Diabetes Wellness Clinics

Asthma and HF/CAD Collaborative

2011 Access and COPD Collaborative

2012 Patient Experience CME and Coaching

Practice Coaching (Data Sharing)23

Our cost is 1530

Mission:To continuously improve the standard of care across the system, rooted in evidence and achieved through shared best practices

Better health outcomes (including those that matter to patients)

VALUE

Cost to achieve those health outcomes

Projects do not Advance if: Decrease in Safety and/or Quality No Value-Based Cost Benefit

Involve:PhysiciansNursesAllied Health ProvidersStaff

Principles:Data-DrivenEvidence-basedBest Practices

Tools:Education (CBTs, Rounds, Thought Leaders)Physician to Physician DetailingCommunications/PR (Multiple “Touch Points”)Metrics (Feedback, Tracking)Formulary Restrictions (Pharmacy, Supply Chain)EMR (Removal, Clinical Decision Support, Hard Stops, Order Sets)Guidelines / PoliciesCI Measures

Focus Areas:Lab utilizationImaging utilizationPharmacy utilizationPhysician preference itemsSupply chain opportunities

Clinical Effectiveness Governance• Clinical Effectiveness Advisory Committee

– Multi-disciplinary senior leadership team

• Provide advice and oversight• Remove barriers to progress • Membership

• Specialist Subcommittees

VP, Medical Management Sr. Leadership, APP

Chief Nurse Executive VP, Finance

VP, Supply Chain VP, CHIS

Medical Staff Leadership VP, Information Systems

Clinical Integration GoalCardiac Rhythm Management Devices

Supply Chain – Cardiac Rhythm Management Compliance – Practice Group

Percentage of total CRM implants using devices designated by Advocate Supply Chain

Cardiologists, Cardio Electrophysiology Cardiovascular Surgery, Interventional Cardiology

>=90% of total CRM implants

use devices designated

by Advocate

Supply Chain

0.50 Point

>=90% of total CRM implants

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Targeted Area of Focus: Clinical Effectiveness

Governance of Product Use and Adoption

New Product Introductions

Variation of Use is widely permissive.

Advocate Physician PartnersCombined Incentive Fund Distribution History2008-2013 ($ in millions)

Note: 2008-2010 unearned applied to clinical integration incentive only

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2013 Value Report

To download a copy of the 2013 Value Report, go to:advocatehealth.com/valuereport

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Questions

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