first illinois chapter hfma
TRANSCRIPT
Jack Hill, Executive Vice President & Partner
Model for Population Health Management with Quantifiable Results and Optimal Gain Sharing Potential
CFO Breakfast - March 23, 2012
Agenda
1. The Current Health Care Environment
2. Population Health Management Process
3. Proven Results4. Why You Should Care5. Opportunities for
Commercial ACO Deployment
Reform is Here and We Have to Deal with It
The Current Health Care Environment
3
The Patient Has to be Engaged
The Current Health Care Environment
4
The Political Landscape is Rife with Challenges
The Current Health Care Environment
5
The Train Has Left the Station – Reform for Medical Providers is in Play and Population Health Management should be THE Primary Objective
The Current Health Care Environment
6
The Current Health Care Environment
7
Patient /Payor Shifts
Payment Reductions/
Changes
The Current Health Care Environment
8
The Changing Health Care Environment
9
Structural
Organization
Phys
Hosp/etc
Data
Warehouse
Medical
Referral
Control
Employer
Stop Loss
Data Drill
Down
Capabilities
Gain Sharing
Formulas
Small
Employer
Financial
Targets
Recognition
of High Cost
Patients
Geographic
Benchmarks
Gain Sharing
Distribution
Methodology
Episodic
AnalysisPredictive
Modeling
Delivery of Quality
Healthcare
Controlled Healthcare Costs
Healthier Members=
Step Down
UM
Management
Ongoing
Educational
Resources
Employee
Healthcare
Indexing
Employer
Benefit
Consulting
Hospital/
Physician
Discounts
Physician
Profiling
Employer
Healthcare
Indexing
ACO Medical
Director
Chronic
Disease
Management
Treatment
Criteria
Compliance
Member
Incentive
Program
Personal
Health
Records
Wellness
Programs
On-site
Testing
Professional
Telephonic
Nurse Coaching
Health
Risk
Assessments
* *
*
* * *
* *
* * *
Community Healthcare
Partner
Population Health Management Process
10
Step 1• Turn Claims and ERM into Actionable & Intelligent Data
Step 2• Align & Engage With Highest Quality & Cost Efficient Physicians
Step 3• Improve Medical Utilization & Member Health Status
Step 4• Seamlessly Integrate the Entire Program
Step 5• Communicate Effectively to the Ultimate User – The Patient
Population Health Management Process
11
Population Health Management Process
12
Why? Because data mining identifies the risks.
Population Health Management Process
13
Population Health Management Process
14
Population Health Management Process
The Highest Quality Physicians…..
Provide the Needed Preventative Service Rates for Chronically Ill Patients…..
15
Population Health Management Process – Chronic Disease
Management
• Monitors and manages chronic diseases and co-morbidities that total 80% of costs
• Members with a chronic condition are assigned a Nurse Coach
• Physician profiling allows high dollar claimants to be shifted to high quality, cost effective providers
• Incentives can be aligned with desired health outcomes
• Built in benchmarks and accountability measures to demonstrate member compliance
• Reporting to the provider whether the chronically ill population meet the minimum care standards
• Documented ROI
• Reinsurance credit when used with predictive modeling and physician profiling
16
Population Health Management Process – Predictive Modeling
• Predictive modeling’s value proposition is that it shortens the cycle between an adverse event and intervention
• Utilizes a Predictive Risk Model which is the science of ranking individuals from those with the greatest probability of disease onset to the least probability
• The Predictive Risk Model utilizes a very sophisticated software application which takes the following factors into consideration resulting in the assignment of a Healthcare Index Age/gender Illness burden Co-morbidities Types/frequency of medicines
• Large claim prevention depends significantly on early identification, intervention and coaching
17
Population Health Management Process – Physician Profiling
• Patented process employs three stringent, clinically based tests which each physician provider must pass in order to be an Endorsed ProviderPractice patterns which result in low total costs for the types of illnesses
comparable to other physicians of the same specialtyDelivery of high levels of post-primary preventive care services for
chronically ill patientsPatterns of clinical and billing practices that avoid service up-coding,
services that are not appropriate for the diagnosis, invalid diagnostic coding and services performed more frequently than typically appropriate.
• It has been statistically validated that Endorsed Providers are on average 42% less expensive than providers who do not pass the three, clinically based tests
• There are on average 15% Non-Endorsed Providers in areas where there are enough episodes to statistically measure
• It has been actuarially validated that Non-Endorsed Providers on average will add 10% excess cost to costs
18
Proven Results
19
Why Should I Care?
Fee forService
Paid for eachunit of service
WITHOUTconstraint on
spending
Pay for Coordination
Additional perCapita payment
Based on ability toManage care
Pay forPerformance
Payment tied toobjective measures
of performanceReform
VBP/HIT/Readmit
EpisodicPayments
Payment based ondelivery of services
within a giventimeframe
ReformBundled Payment
Shared SavingsShared savings
From better carecoordination and
disease managementReformACOs
New PaymentModels
Providers sharefrom better
care coordinationand disease
management
20
Opportunities for Commercial ACO Deployment
CommunityEmployers
Hospital(s) &Physician(s)
Product Administration
21
Opportunities for Commercial ACO Deployment
22
Opportunities for Commercial ACO Deployment
BENEFIT BUDGET• Employers and Healthcare Providers determine health benefit budgets.• Healthcare Providers arrange for deeply discounted healthcare services.• Employers and Healthcare Providers share in the savings to the healthcare budget through
financial performance rewards.ENGINEERING AND COORDINATION OF CARE• ACO Medical Director engineers the coordination of patient care pathways through top
performing medical providers.BEST OF BREED CLINICAL VALUE NETWORKS AND PHYSICIAN RECRUITED• Best of breed physicians are identified by the ACO Medical Director and are heavily
incentivized by the gain sharing due to favorable variances to the employers’ healthcare budget.
• High Quality, Cost Effective Physicians.DEVELOP A CULTURE OF WELLNESS• Member Health Incentive Programs.• Healthcare Coaching - Ongoing Healthcare Education.
23
Opportunities for Commercial ACO Deployment
24
Opportunities for Commercial ACO Deployment
Single 375.72$
Family 939.30$
Month Total Total Target
January 155,172.26$ 464,953.21$ 620,125.47$
February 159,680.90$ 458,378.11$ 618,059.01$
March 157,050.86$ 460,256.71$ 617,307.57$
April 158,929.46$ 462,135.31$ 621,064.77$
May 160,808.06$ 460,256.71$ 621,064.77$
June 160,056.62$ 460,256.71$ 620,313.33$
July 157,426.58$ 463,074.61$ 620,501.19$
August 158,553.74$ 465,892.51$ 624,446.25$
September 160,432.34$ 468,710.41$ 629,142.75$
October 160,808.06$ 467,771.11$ 628,579.17$
November 159,680.90$ 461,196.01$ 620,876.91$
December 160,056.62$ 460,256.71$ 620,313.33$
IBNR 1,908,656.41$ 5,553,138.13$ 7,461,794.53$
January
February
March
April
7,461,794.53$
Favorable
Variance to
Budget
246,395.45$
Single Census Family Census Factor
106,849.34$
Sample Monthly Calculation
425 375.72$ 488 939.30$ 200,483.45$
281,896.78$
657,759.15$
Factor
Average Expected Paid Claims
Annual Budget Target
$7,441,506
Monthly Target Factors
$7,531,413
Reinsurer 1 Reinsurer 2
$7,391,071
Reinsurer 3
$7,402,033
Actual
419
422
Total Bonus Pool
Hospital
Physicians
413 375.72$ 495 939.30$
418 375.72$ 490 939.30$
427
428
425
426
375.72$
375.72$
375.72$
375.72$
375.72$
375.72$
375.72$
375.72$
375.72$
423
428
426
939.30$
939.30$
939.30$
939.30$
939.30$
332,940.76$
512,394.34$
529,450.56$
488,394.34$
501,935.40$
462,384.56$
440,586.45$
523,940.56$
412,940.56$
88,496.45$
198,485.67$
5,582,482.68$
1,879,311.85$
939.30$
939.30$
SAMPLE GAINSHARING TARGET FORMULA ONE
$100,000 Specific Stop Loss
4,758,695.77$
323,859.34$
212,945.45$
939.30$
939.30$
499
498
491
490
492
490
490
493
496
Example: Total Bonus Pool $716,700
Hospital $238,898
Physician $477,795
Physician# of
Patients
Patient
Risk
Score
Target
PMPM
Risk
Adjusted
PMPM
Actual
PMPM
Difference -
Risk Adjusted
minus Actual
Total Patient
Cost Difference
per Year
Patient Cost
Difference per
Year for
Allocation
AllocationDistribution
Amount
Physician
Profiling
Index
Index
Bonus
Factor
Bonus
Forfeiture
Bonus
Forfeiture
Reallocation
Bonus
Distribution
a b c d e f g h i j k l m n o p
(c x d) (e - f) (g x b x 12) (i / total of i)(j x bonus
pool)(l x m)
(pro-rata
allocation)(k + n + o)
1 1,400 0.95 $700 $665 $650 $15 252,000$ 252,000$ 11.6% 55,358$ 0.80 20.0% -$ 7,545$ 62,903$
2 1,200 0.98 700 686 710 (24) (345,600) - 0.0% - 0.85 15.0% - - -
3 1,100 1.01 700 707 690 17 224,400 224,400 10.3% 49,295 0.90 12.0% 6,719 56,014
4 1,250 1.08 700 756 715 41 615,000 615,000 28.3% 135,101 1.00 8.0% 18,414 153,514
5 1,100 1.10 700 770 800 (30) (396,000) - 0.0% - 1.50 0.0% -
6 1,200 1.12 700 784 725 59 849,600 849,600 39.1% 186,637 1.75 -12.0% (22,396) 164,240
7 1,300 1.15 700 805 790 15 234,000 234,000 10.8% 51,404 2.00 -20.0% (10,281) 41,123
1,433,400$ 2,175,000$ 100.00% 477,795$ (32,677)$ 32,677$ 477,795$
SAMPLE GAINSHARING DISTRIBUTION FORMULA
25
Physician Distribution
Health Index Score of Patient Population
Score Indicates Physician is Practicing High Quality Cost Efficient Medicine
Opportunities for Commercial ACO Deployment
26
Public Programs (Medicare under ACO Rules & Medicaid)
ACO Gain Sharing and Risk Mature Management Expertise – Proven Results
Commercial Payers
Participate in closed networks and risk Reduce trend
Local Employers
Gain Sharing with little or no risk Shared Benchmarks & Incentives
Uninsured
Currently Underwriting Risk Need to be Managed & Risk Mitigated
Medical Providers’ Own Employees
Captured Population Controlled Population
Targeted Strategy
27
Questions & Answers
Jack Hill Executive VP & Partner
www.accountablecaresg.com
Phone: 630.878.7539 Email: [email protected]