Changing'US'Healthcare'Market,'ACOs'and'the'Role'of'Pharmacy'

Spokane(Pharmacists(Associa2on(Mee2ng(November(6,(2015(

Spokane,(WA((

Sean(D.(Sullivan,(PhD(

Professor(and(Dean(

School(of(Pharmacy(University(of(Washington(

1(

Disclosure(

•  I(have(no(financial(or(other(conflicts(of(interest.(

Objec2ves(

•  Cri2cally(discuss(recent(health(care(changes,(par2cularly(related(to(delivery(and(financing.(

•  Describe(the(key(features(of(ACO(design(and(financing.(

•  Examine(the(role(of(pharmacy(and(pharmaceu2cals(in(a(future(where(integrated(delivery(and(global(budgets(are(widespread.(

Key(Trends(–(A(Tale(of(Two(Responses(

•  Unprecedented(Rate(of(Change(

•  Disrup2on(in(the(health(care(system(

•  Role(of(the(Pa2ent(as(a(Customer(for(Health(Care(Delivery(Systems(

•  The(ACO(

Global PMA Trends 5

The economies of the developed world markets—and that of the rest of the world—are climbing out of a v-shaped recession on a slow path to recovery

8 Mature Markets GDP Growth Economic Crisis

• All of the mature markets were in recession in 2009

• US, UK and Germany impacted first and most deeply

• Results for 2009: Japan: -5.9% contraction; US: -3.1% contraction

• U.K., Spain and Germany contracted into 2010 and beyond

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Jun 2008 outlookEmbedded March forecastLatest outlook*

Global Macroeconomic Dynamics & Current Economic Environment

Source: Economist Intelligence Unit, GDP forecasts Mar 2009; US, Japan, Canada, France, Germany, Italy, Spain, US

Disrup2on(in(the(US(health(care(system(

(•  Boeing(and(Cleveland(Clinic(

•  Intel(Corpora2on(

• Washington(State(Public(Employee((

Affordable(Care(Act(•  Expand(access(to(insurance((exchanges(and(subsidies)(and(other(payment(

mechanisms((Medicaid)(to(achieve(near(universal(coverage.(–  Reduces(uncompensated(care(that(drives(higher(costs(

•  Adopt(and(Incent(the(Triple(Aim(in(Health(Care(–  Improve(the(pa2ent(experience((quality(and(sa2sfac2on)(–  Improve(the(health(of(popula2ons(–  Reduce(per(capita(costs(

•  Reform(Payment(Mechanisms(–  Move(away(from(FFS(–  Toward(bundles,(shared(savings(and(global(budgets(–  Transfers(risk(to(the(health(care(system(

What'is'an'Accountable'Care'OrganizaAon?'

•  Provider(mix(dependent(on(whether(federal(or(commercial(ACO(structure(

Healthcare'organizaAon'with'a'coordinated'set'of'providers…'

•  Clinical(accountability(–(Quality(of(care(•  Financial(responsibility(–(Cost(of(Care(

Who'share'responsibility'and'accountability'for'the'conAnuum'of'care…'

•  Increase(quality(•  Decrease(costs(

By'providing'the'highest'possible'value'of'care…'

•  Value^based(payments(•  Reimbursement(for(achieving(cost(and(quality(goals(

For'financial'incenAves'or'“shared'savings”…'

•  Public(Payors((e.g.,(Medicare,(Medicaid)(•  Commercial(Payors((e.g.,(BCBS(of(MA)((

From'parAcipaAng'payors.'

�The$Promise$of$ACOs�$Accountable$Care$Organization$Learning$Network,$http://www.acolearningnetwork.org/whyBweBexist/theBpromiseBofBacos;$�Essential$Guide$to$Accountable$Care$Organizations:$Challenges,$Risks,$and$Opportunities$of$the$ACO$Model,�$The$Healthcare$Intelligence$Network,$2011.$$

Key'Principles'and'Elements'of'ACOs'

• Ability(to(provide(and(manage(con2nuum(of(care((• Responsible(and(accountable(for(quality(and(cost(of(care(• Incen2vize(providers(for(quality(–(not(quan2ty(

Local(Accountability(

• Legal(en2ty(and(governance(structure(that(allows(receiving/distribu2ng(shared(savings(payments(

• Invest(shared(savings(in(delivery(system(improvements((• Capable(of(financial(and(resource(planning((

Shared(Savings(

• Ongoing(metrics(to(obtain(evidence(of(meaningful(outcome(improvements(and(cost(impacts(

• Measurements(must(be(transparent(and(accessible((• Essen2al(cost(savings(are(result(of(meaningful(improvements(

Performance(Measurement(

�AC0$Model$Principles,�$The$Accountable$Care$Organization$Learning$Network,$http://www.acolearningnetwork.org/whyBweBexist/acoBmodelBprinciples$(Accessed$09/16/2011)$

ACOs will look very different, but a few characteristics are essential

10(

Can provide or manage continuum of care as a

real or virtually integrated delivery

system(

Are of a sufficient size

to support comprehensive performance measurement (

Are capable of prospectively

planning budgets and

resource needs(

1( 2( 3(

How are patients assigned to the ACO?

11(

Providers(sign(agreement(to(par2cipate(with(ACO/ACN((

(PCPs(must(be(exclusive(to(one(ACO;(Specialists(can(be(part(of(mul2ple(ACOs)(

Pa2ents(are(assigned(to(their(PCP(based(on(the(majority(of(their(outpa2ent(E&M(visits(

12(

1. Local accountability

•  We know that cost growth is a major challenge to health reform •  Local decisions (MRI purchases, ICU wings, high-tech devices) are a

first step in the chain to more-intensive practice patterns and the overuse of services

•  ACO-level measures of quality and costs would bring the impact of such decisions to light

•  The effects of expansions of acute care facilities or recruitment of additional specialists would be more easily identified –  The good and the bad –  Not just a vague pass-through that is built into future premiums

13(

2. Performance measurement

•  Oregon�s development of All Payer All Claims database provides rich set of opportunities for measurement

•  Focus: population health and per capita costs –  Not just outcomes & costs for a selected procedure

•  Measures and promotes coordination between physicians, clinics, and hospitals –  Not just silos

•  Opportunities for comparing outcomes different regions (and learning best practices)

•  Broad, diverse set of measures possible (public health, too!)

3. Shared savings

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•  The(principal(features(of(a(�shared(savings�(model(include:(–  Payers(and(ACOs(establish(budget(targets(for(the(total(health(spending(of(ACO�s(members.(

–  Payers(may(con2nue(to(make(payments(on(a(fee^for^service(basis.(

–  At(the(end(of(the(year,(the(actual(and(target(spending(are(reconciled.(

–  If(the(actual(spending(is(less(than(the(target,(and(if(the(ACO(has(performed(adequately(on(access(and(quality(metrics,(the(ACO,(payers,(employers,(and(consumers(share(the(difference((�shared(savings�).(

Shared savings based on spending targets

!3 !2 !1 0 1 2 3

Expe

nditu

res

Year

Projected(Spending(

Actual(Spending(

Shared'Savings'

Target(Spending(

ACO Launched

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Changing incentives

16(

•  Current focus: revenue growth –  Often driven by large capital investments with high fixed costs –  Incentives for more use

•  Extra MRI means more revenue •  Foregoing MRI means NO revenue •  Only way to make margins is to use more or charge more

–  Always leads to greater health care spending •  ACO Focus: spending targets & shared savings

–  Eliminate wasteful and low value care –  Provides incentive to avoid increases in capacity (and to reduce capacity

where feasible); and to improve care in domains previously ignored: care coordination, end-of-life

–  Promotes use of data to evaluate cost and quality

PotenAal'ACO'Structure'Commercial*ACOs*

The(UW(Medicine(ACN(•  UW(Medicine(

–  Harborview,(Northwest,(UWMC,(Valley,(UW(Physicians(

•  UW(Network(Partners(–  Mul2care((South(King(and(Pierce(County)(

–  Overlake((Bellevue)(–  Cascade((Arlington)(–  Skagit((Mt(Vernon)(

–  Island((Anacrotes)(–  PeaceHealth((Bellingham)(

–  Capital((Olympia)(

The(UW(Medicine(ACN(•  How(are(pharmacists(deployed(in(the(ACN(

–  Gehng(more(involved(in(customer(service(orienta2on(–(par2cularly(at(discharge(

–  Expanding(CDTA’s(in(the(inpa2ent(sehng(

–  Ac2ve(in(managing(pa2ents(during(the(transi2ons(of(care((–  Deploying(pharmacists(in(the(primary(care(clinics(and(u2lizing(them(as(primary(care(providers(for(certain(condi2ons(that(are(heavily(treated(with(drugs((HTN,(COPD,(Diabetes,(CHF,(etc)(

–  Strategy(team(to(reduce(30^day(admissions(

'But'Concerns'About'ACOs'•  Most(ACO’s(and(Bundled(Payments(Use(“Shared(Savings”(Approach(and(Not(“Fixed(Budgets”(

•  Pa2ents(Have(The(Right(to(Opt(Out(of(ACO’s(•  Both(ACO’s(and(Bundled(Payments(are(Voluntary(•  First(Genera2on(“Pioneer”(ACO’s(Have(Thus%Far%Had(Only(Limited(Success(

•  The(Need(for(Big(Systems(Which(Have(Used(Their(Market(Power(to(Extract(Higher(Prices(That(Could(Outweigh(Efficiency(Benefits(

How'Will'ACOs'be'Successful?*•  Aggressively$reduce$low$value$care.$•  Help$standardize$high$value$care$using$“Care$Pathways”$

•  Integrate$teams$of$providers$that$practice$at$the$“Top$of$their$License”$

•  Lead$and$participate$in$care$innovations$–$–  Reducing$admissions$–  Reducing$‘never$events’$–  Shared$decision$making$

•  Develop$leadership$teams$

�Medicare$Program;$Medicare$Shared$Savings$Program:$Accountable$Care$Organizations$and$Medicare$Program:$Waiver$Designs$in$Connection$With$the$Medicare$Shared$Savings$Program$and$the$Innovation$Center;$Proposed$Rule$and$Notice�$Federal$Register,$Vol.$76,$No.$67$(April$7,$2011),$p.$19643.$

How'Will'We'be'Successful?*•  Integrating$seamlessly$into$the$healthcare$team$–regardless$of$our$practice$setting.$

•  Helping$reduce$inefaiciency,$waste.$

•  Improving$the$patient$experience.$

•  Stepping$up$to$broader$leadership$opportunities.$

•  5557$B$$

Conclusion(•  Mul2ple(and(significant(health(care(changes,(par2cularly(related(to(delivery(and(financing.(

•  ACO(design(and(financing(varies.(

•  Pharmacy(and(the(delivery(of(pharmaceu2cals(in(a(future(where(integrated(delivery(and(global(budgets(are(widespread(will(be(cri2cal(to(success.(