Integrated Systems and Payment Models

PEAK Symposium

Connie MarchPresident & CEO, Presence Life ConnectionsMarch 16, 2014Washington, D.C.

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HonestyThe Value of Honesty instills in us the courage to always speak the truth, to act in ways consistent with our Mission and Values, and to choose to the right thing.

OnenessThe Value of Oneness inspires us to recognize that we are interdependent, interrelated and interconnected with each other and all those we are called to serve.

PeopleThe Value of People encourages us to honor the diversity and dignity of each individual as a person created and loved by God, bestowed with unique and personal gifts and blessings, and an inherently sacred and valuable member of the community.

ExcellenceThe Value of Excellence empowers us to always strive for exceptional performance as we work individually and collectively to best serve those in need.

Inspired by the healing ministry of Jesus Christ, we, Presence Health, a Catholic health system, provide compassionate, holistic care with a spirit of healing and hope in the communities we serve.

Mission

Va

lue

s

We will be a leader in transforming health care by delivering clinical excellence, outstanding value and exceptional experience to achieve better health for our communities.

Vision

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Presence Health: At a glanceMidwest Regional Catholic-sponsored Healthcare System

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Presence Life Connections: At a glance. A division of Presence Health that provides a peri-acute constellation of

care, support and services that enhances lives by connecting the right person to the right service at the right time.

Peri-acute Constellation

PortfolioOperating

ModelFinance

Innovative Care Model

Growth & Integration

Culture Transformation

Presence Health Strategic Plan

Vision:

We will be a leader in transforming health care by delivering clinical excellence, outstanding value and exceptional experience to achieve better health for our communities.

Status Quo

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Presence Health is moving toward an integrated operating model

Operating CompanyHolding Company

Holding company

Strategic guidance

Strategic control

Integrated operating company

Fully integrated operating company

• Stand alone functions

• Decisions at ministry level

• Decentralized• Not integrated

• Integrated common functions

• Major decisions made at the System level

• All key capabilities standardized

• Highly integrated • Unified/consistent

brand & experience

• System guidance to ministries

• System input into some operating decisions

• Some standardization

• Little integration

• System directives with some ministry autonomy

• System participates in all major decisions

• Many key processes standardized

• Some integration

• System directed operations

• System makes all operating decisions

• All processes standardized

• Wholly integrated

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Culture Transformation: Core Competencies that Support Population Health Management

A culture that can embrace change

A clinical delivery system that has care coordination at its center

A very sophisticated information technology platform

A cost structure that can cope with an unpredictable revenue platform

Capability to take risk all the way to full capitation

A physician alignment strategy that supports all of the above

A Very Demanding Going-Forward Agenda

Reference: Kaufman Hall

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Presence Health PartnersInnovative Care Models

Goal: Create integrated network (Presence Health Partners) capable of supporting Presence Health in managing 50% of top-line revenue from value-based contracts in 2017

Requires Presence Health to enroll 520,000 covered lives by 2017

Assumes 50% of Presence Health’s current Medicare, Medicaid and commercially insured patients will be seen through some form of value-based payment – ACO, ACE, capitation, % of premium, etc.

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Presence Health CMS Innovative Care Model Pilots• Medicare Shared Savings Program • Bundled Payment for Care Improvement, Models 2 & 3

Presence Health has two internal shared risk care models and one external risk care models

– Medicare Shared Savings Program (MSSP)– Bundled Payment for Care Improvement (BPCI), Model 2– Bundled Payment for Care Improvement (BPCI), Model 3

Presence is participating in these projects to develop the capabilities to manage the health of populations and assume risk for the outcomes:

– Quality, Cost and Patient Experience

Presence believes that developing expertise in this arena is a critical strategy and will position the organization and our partners for success in the evolving healthcare environment

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Recent National Reports Indicate Some Medicare Shared Savings Program (MSSP) ACOs will be Successful

There are 400 CMS MSSP and Pioneer ACOs in operation today

50% have generated savings

15% have generated sufficient savings to distribute shared savings to network participants.

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Presence Health’s Accountable Care Organization (ACO)Medicare Shared Savings Program (MSSP)

Presence is:– Serving as an accountable care organization

– Taking risk on overall health cost and outcomes for Medicare population

Medicare Value Partners (PH) ACO began operations January 1, 2013

Medicare Shared Savings Program

20,000 beneficiaries attributed to ACO

94% of beneficiaries in Cook County (Chicago)

400 providers in two Presence Health acute care Chicago regions

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Presence Health’s ACOMedicare Value Partners: PLC Participation

ACO Board Membership

Participation in service development

Participating PLC providers within ACO Geographic Area– Nursing Facilities

– Home Care

– Exploring HCBS participation

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Bundled Payment for Care Improvement, Model 2

Presence Health is:

Serving as awardee convener

Taking risk on outcomes and cost for Medicare total hip and knee replacement episodes of care 3 days pre-op through 90 days post acute

Three year pilot; start date January 1, 2014

Rewards performance – Fee for Value vs Fee for Service

Providers may assume risk

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Bundled Payment, Model 2PLC Participation

Care design teams

PLC providers within BPCI Geographic Area– Nursing and Rehab Centers

– Home Care

Assuming risk for quality and cost outcomes for hip and knee replacement for PLC post-acute care for 90 days

Gainsharing participant

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BPCI OverviewCare Model Redesign and Support

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PH Network – Provider Network

Selection Criteria•Historical volumes•Physician preference•Geographic distribution•Engagement in the project•Value added to the network

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Gainsharing OverviewBundled Payment for Care Improvement, Model 2

To encourage innovation, CMS and the Office of the Inspector General (OIG) are waiving rules that prohibit gainsharing

Providers have flexibility in determining how savings will be distributed among participating providers

CMS will reconcile Presence performance against a Target Price, which is the historical payments per episode trended forward to 2013 and then discounted by pre-determined percentage

CMS savings (CMS payment reductions) may be shared among the participating providers

Presence has a Gainsharing Committee that oversees the gainsharing accounting and fund distributions

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Bundled Payment for Care Improvement, Model 3

Awardee convener is Illinois Bone and Joint Institute (IBJI)

Taking risk on outcomes and cost for Medicare total hip and knee replacement post-acute care for 90 days

Northern Chicago area market

Three year pilot

Start date: January 1, 2014

Providers may assume risk

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Bundled Payment for Care Improvement, Model 3

Presence Life Connections is:

Post-acute provider

Assuming risk for outcomes and cost for Medicare hip and knee replacement for PLC site post-acute care within 90 days

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PLC Participation in Non-Presence Medicare ACOs

Service Providers– Selected Nursing and Rehab Centers within Geographic market

– Selection Criteria Varies• Typically 4 or 5 star CMS overall rating, may specify quality star rating• Low hospital readmission rate• Short post acute length of stay• Preferred referral services within ACO system services• Physician and/or patient preferences

Program designed by ACO, typically with little or no post acute provider input

Requires quality data submission to ACO

Participation at discretion of ACO

Fee for service

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Presence Innovative Care Model Outcomes

Medicare Shared Savings Program-Presence Health ACO– Quality data submission end of March

• Must attain quality metric targets to access shared savings

– Initial cost data promising but too early for final determination

– Reviewing placement criteria based on early data analysis

– Learning importance of physician & provider collaborations

BPCI, Model 2 and Model 3– Initiated January 1, 2014

– Too early for meaningful outcomes data

– Learning importance of clear communication as model is refined

Medicare Shared Savings Program-Non-Presence ACO– Insight into ACO metrics prior to PH ACO started

– Hospital readmissions, Emergency Dept. visits reduced

– Progressive shortening of post acute patient lengths of stay

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Challenges with Innovative Models

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Business model is transitioning from pre-reform…

Pre-Reform Business Model

Hospitals

ddDoctors

ddPatients

Source: Kaufman, Hall & Associates, Inc.

26Source: Kaufman, Hall & Associates, Inc.

The Post Post-Reform Business Model

… to a post-reform business model

Patients

Healthcare Company

Hospital Outpatient ServicesDoctors Continuum

of Care

Content of Care

• Commodity • Make vs. buy • Low-cost provider• Contract to

specifications

Select Contract(?)

Who Is This?

Employers Medicare and Medicaid

Fee-for-Value Model

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Opportunities—Value-based Care Peri-acute Providers

Determine your path

Make the tough decisions and start now

Drive down per unit costs

Use evidence to demonstrate value to partners

Ability to assume care for higher acuity and/or specialty population care

Care management

Good quality outcomes

High participant satisfaction

Market your value

Fill the care/service gaps

Be open to new opportunities

Commercial ACO/Insurance

Bundled Payment, Model 2

Peri-acute Constellation

Medicaid Managed Care

Medicare Shared Savings Program

Medicaid Assisted Living

Veterans CareHome Bound Elderly-

Targeted At Risk Population Segment

Medical Home

Bundled Payment, Model 3

Narrow Network

Dual Eligible Managed Care

Multiple Opportunities