creating a value-based medical group

Creating a Value-Based Medical Group

2013 MGMA Annual Conference

October 7, 2013

John A. Lutz, FACMPE, Managing Director, Huron Healthcare

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Agenda

I. Learning Objectives

II. Why Create a Value-Based Medical Group?

III. Key Components for Success

IV. Examples

V. Necessary Competencies

VI. Patient Centered Medical Homes/Practices

VII. Challenges and Opportunities – Next Steps

VIII. Q & A

© 2013 Huron Consulting Group. All rights reserved. Proprietary & Confidential.

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Learning Objectives

Understand the strong practice framework necessary for enabling improved efficiency, care effectiveness, and profitability.

Identify key operational drivers and opportunities for enhanced capacity and productivity.

Implement the operational changes that improve profitability and support long-term medical group practice goals.


QUESTION:

As you think about the future, what about your group practice keeps you awake at night?

A. Uncertainty

B. Independence

C. Stability

D. Income Preservation

E. Staffing, reduced hours, work/life balance

F. All of the above

Why Create a Value-Based Medical Group?

A Dynamic Environment

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Accountable Care Act:

• Focus on population health and covered lives

• Value-based payment models continue to grow

Federal and commercial reimbursement reductions and changes:

• Reduced payment per procedure

• Continuous SGR threat

• Bundled payment initiatives

• The reality of transitioning payment from procedure to value (e.g., bundles)


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Physician groups must take a proactive approach to improving operational efficiency to be optimally positioned to thrive

Physician succession and supply/demand deficits

Physician compliance with evidence-based guidelines for chronic diseases and acute conditions

Research and technology advances

Patient and referring physician satisfaction

It’s the right thing for our patients!


Key Components

for Creating a Successful

Value-Based, High Performing Medical Group

What Defines a High Performing Medical Group?

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Characteristics

Physician leadership in medical care and shared responsibility for non-clinical activities.

Uses defined policies and processes for quality measurement and improvement activities across sites of care and between patient visits.

Shared financial and regulatory responsibility and accountability for successfully managing the cost of health care, improving the patient care experience, and improving the health of its respective populations.

Uses a team-based approach that supports collaboration and communication among the patient, physician, and licensed or certified medical professionals across medical specialties and health care settings.

Use of interoperable information technology and comparative analytics.

Use of compensation structures that provide incentives to physicians and licensed Advanced Practice Professionals (APPs) to leverage physician time, improve outcomes and manage expense.

Definition:

A high performing medical group is able to meet the clinical

demands of its target patient market and its partner

institution(s) by:

1) Providing ready access to the right mix of primary and

specialty care providers; and

2) Supporting clinical staff in the right place and within well-

defined clinical quality, revenue, and expense

parameters.

Source: American Medical Group Association

Key Financial Metric 2012 Median Performance

2013 Median Performance

Median total medical revenue per FTE $538,803 $569,935

Median total operating cost per FTE $387,586 $413,334

Median total non-physician (comp/benefits) per FTE $32,895 $34,108

Median total physician compensation/benefits per FTE $299,853 $322,274

Median total financial support per FTE $150,903 $82,683

Average practice overhead is ~35% of net patient revenue

Internal Huron Benchmarks


Total provider compensation is ~50% of net patient revenue



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Financial Characteristics

Source: MGMA Physician Compensation and Production Survey: 2012 Report Based on 2011 Data & 2013 Report Based on 2012 Data (with appropriate MGMA

resource).Used with permission from the Medical Group Management Association, 104 Inverness Terrace East, Englewood, Colorado 80112. www.mgma.com.

Notes: While hospital ownership is a growing component (~50% in 2012), independent groups still report higher median performance characteristics. Median compensation variances substantially by specialty.

FTE = Full-Time Equivalent Physician

http://www.mgma.com/

Direction: What is your strategic plan?


We (the group) must know (and agree on) what we want, the direction, and how to achieve it (together) in

order for us to accomplish it (by objective measurement) and be successful (defined up front) in the future

(time period).

Creating Success:FIVE KEY COMPONENTS


There are five key components that must be optimized in

order for a group to be high-performing, value-based, and

successful under evolving payment models.

HIGH PERFORMING MEDICAL GROUP

ACCESS & CAPACITY

MANAGEMENT

OPERATIONAL EFFICIENCY

FINANCIAL

STABILITY

CLINICAL EFFECTIVENESS

CLINICAL

INTEGRATION

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Clinical Integration:

Right care, right time, right place, most appropriate cost.

“Triple Aim” commitment Governance and leadership IT Medical management Payer contracting Compliance Provider network Financial strength Defined population


CLINICAL

INTEGRATION

CLINICAL

INTEGRATION

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Operational Efficiency:

Optimizing provider & staff productivity Management control processes Open scheduling Ready patient access Trained & proficient staff Maximum technology utilization - EHR Measurement – actual to benchmarks Care coordination – PCMH Referral management


OPERATIONAL EFFICIENCY

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Access & Capacity Management:

Patient access to physicians, staff, & facilities

Succession planning Strategic partnerships Appropriate contracted services Revenue growth potential Market share Care coordination Referral management


ACCESS & CAPACITY

MANAGEMENT

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Financial Stability:

Realistic goals Revenue & expense controls Effective revenue cycle Actual to budget performance Variance analysis & benchmarking Progressive physician compensation Downstream revenue management Payer contracting audits Shared rewards for success


FINANCIAL

STABILITY

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Clinical Effectiveness:

Quality management Patient centered – Outcomes focused

(PCMH) Interdisciplinary care coordination Performance dashboard Care variation management Member retention & growth Downstream services contribution Governance & leadership Continuous improvement


CLINICAL EFFECTIVENESS

QUESTIONS:

Does your group practice have a strategic plan?

Does your group practice currently utilize these five key components?

Necessary Competencies

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Necessary Competencies for Value-Based Groups

Realistic goals Physician commitment Administrative leadership Staff proficiency Information technology Aligned incentives Expense management Care management (From episodic to longitudinal care models) Aligned “partnerships”


Clinical EffectivenessIMPROVEMENT AREAS

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Patient Access Case Management

Care Variation

Management

Interdisciplinary Care

Coordination

Ensures patients access the right care setting at the

right time to improve outcomes and maximize the

use of valuable resources.

Proactive management of patients across the

continuum, driving quality and cost effective care.

Strong case management reduces avoidable

admissions and minimizes delays in clinical settings

(e.g. PCMH).

Clinical practice redesign that improves the

reliability, quality, and safety of patient care by

integrating medical, nursing, and ancillary practice

while decreasing process variation.

Increases communication with the care team,

ensures continuity of care, provides seamless

transitions for your patients.

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Clinical OperationsA COMPREHENSIVE APPROACH

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Operational Transparency

Accountable Culture

Process Improvement

Sustained Operational Improvement | Increased Patient & Staff Satisfaction | Recurring Financial Benefit

Optimize Technology

Collective Ownership

Stockamp

Patient Progression® Solution Current Hallmark Discharge Process

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CONFIDENTIAL AND PROPRIETARY

Written discharge orders are placed in chart

Discharge orders are entered into

SCM

Orders print out at nursing station

Unit Secretary distributes orders into floor nurse's

boxes

Floor nurses check boxes once an

hour for discharge orders

Are prescriptions written and placed

in chart?

Floor nurse will page physician for

prescription

Physician writes prescription

Family arrives at hospital

Patient/Family are given discharge

instructions

Does the physician utilize SCM to notify

nurses of discharge?

Nurse notifies patient that their discharge is definite

Nurse writes the discharge

instructions A

A

Patient Discharges

Are the discharge

orders written?

Nurse waits for physician to write

orders, as day progresses

No

Unit secretary periodically checks

the printer for orders

Does the physician

respond to page?

Physician verbally notifies nurse that the prescriptions have been written or leaves

them in the chart

Is notification successful?

How is the patient

leaving?

Patient given discharge

instructions

Yes Yes

Yes

No

Self

No

Physician or patient, if capable,

notifies family

Family

Yes

Does the patient require

prescriptions?No

No

Yes

Yes

Patient is identified as a pending

discharge

Nurse pages MD to

complete the orders

MD must find beside or charge nurse to

communicate the DC orders are now complete

No

Standardized Processes

Executive Reporting

Accountability Structure

Status Communication

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• Establish consistent processes that minimize artificial variability

• Clarify individual roles and performance expectations

• Improve timeliness and effectiveness of communication (e.g., tools, key medical record inputs,

policies)

• End-to-end process visibility allows staff to see beyond their unit

• Establish goals and trend metrics across functions and departments

• Integrate tools to support best practices (e.g., reporting, bed board)

• Institute governance structure and collaboration forums

• Use metrics to support decision making and monitor performance

• Individual accountability through performance monitoring and feedback

Patient-Centered Medical Home

Patient-Centered Medical Home (PCMH)


Patients are cared for in a Medical Home by a multi-disciplinary team. A Navigator or Health Coach works with the patient to engage the patient, assess health risks, and develop a Health

Plan. Self-care management is enabled through tools, processes, and benefit design.

• Medical Home Team: Multidisciplinary team including participants such as Health Coach, Primary Care Physician,

Nurse Practitioners, Dietician, Social Worker (provides integrated behavioral health clinical services and linkage to

other community-based services), Physical Therapist, etc.

• Care Manager: Supports Medical Home Team

People

Process

Tools/Systems/Enablers

• Health Risk Assessment Tool: Used to identify health risks

• Patient Self-Care & Education Tools: Multiple vehicles such as 24x7 care line staffed by RNs, online/ interactive tools,

social media, brochures (e.g., on Urgent Care Clinic availability), etc.

• Benefit designs promoting self-care: e.g., no co-pays for office visits.

• Rewards for activities: such as joining a smoking cessation program.

• EMR / Personal Health Record: Medical history, medications, recent hospitalizations, emergency or urgent care visits, health

maintenance.

• Advance Directives

• Patient registries, referral protocols, medication adherence guidelines

• Community resources

• Health Planning: Periodic assessment of a patient’s specific health risks and development of a customized Health Plan. The Health Plan incorporates age/sex-appropriate wellness monitoring and interventions (e.g., mammograms, immunizations).

• Health Management: Monitoring the patient’s health (e.g., hospitalizations), updating the Health Plan, monitoring compliance, and initiating reminders based on triggers to ensure patients stay on track with Physician’s orders. Includes coordinating care across

the continuum (e.g., referral specialists, emergency care, hospital admissions, therapeutic care, skilled nursing facilities, home care). Includes medication reconciliation. Self-care management is supported and patients are provided with tools to proactively

manage their health.

• Health Education: Providing patient self-management information about managing existing health conditions as well as preventative care.

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Next Steps

Operational Challenges & Opportunities

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Identification of goals and specific needs:

• Existing patients• Community served• Group owners • Employees/payers

Resource capabilities:

• Physicians/APPs • Administrative leadership• Other staff members • IT • Medical management • Connectivity • Capital


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Third party partnerships Measurement and evaluation capabilities Third party contracting Continuous performance improvement and strategic planning Incentives and rewards for measurable improvement “Go slow to go fast” OPC - Outcomes/Processes/Connections


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