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Rewarding Better Care at Lower Cost: Re-Designing MD Compensation in the World of Accountable Care Craig E. Samitt, MD, MBA President & CEO, Dean Clinic Health Industry Forum October 22, 2012

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Page 1: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Rewarding Better

Care at Lower Cost:

Re-Designing MD

Compensation in the

World of Accountable

Care

Craig E. Samitt, MD, MBA

President & CEO, Dean Clinic

Health Industry Forum

October 22, 2012

Page 2: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 2

Our Discussion Today

• The Rationale: Our imperative for re-aligning incentives

• The Models: An overview of Dean’s primary care and

specialty value-based incentive models

• The Lessons Learned: Changing physician compensation

is like changing culture- it takes time, patience, and lots of

communication

• A Broader View: Trends in the Group Practice

environment and predictions for the future

Page 3: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

The Rationale Our Imperative for Re-aligning Incentives

Page 4: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 4

Non-Alignment of Incentives

was transformative at Dean

37.9% 37.5% 37.5% 37.4% 37.4% 37.7%

29.5% 30.3% 30.6% 31.2% 31.6% 32.7%

4.9% 5.1% 5.3% 5.5% 5.8%6.6%

27.7% 27.1% 26.6% 25.9% 25.2% 23.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008*

DHI Medicare Medical Assistance Other

FFS

FFS

Capitated

Capitated

Page 5: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 5

Dean’s Vision and Focus

• Our Vision: “We are passionate about

keeping our patients healthy,

exceptional at caring for them when

they are sick, and efficient in providing

them with the best value and service.”

• Our Focus: Let the rest of our

industry focus on Volume. We’re

focusing on Value.

– Delivering Effective Care

– Delivering Patient-Centered Care

– Delivering Efficient Care

Page 6: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 6

We quickly learned that we can’t pay

for volume in a value based world

Page 7: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

The Models An overview of Dean’s Primary Care

and Specialty Value-Based Incentive

Models

Page 8: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 8

So, we began the journey toward creating

a variable comp plan

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013

Dean MD Compensation Model Transformation 2009

to 2013

Growth

Efficiency

Quality

Service

Salary

Production

FFS/Volume

Based

Value

Based

Page 9: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 9

98%

2%

95%

60%

20%

15%

10%

10%

40%

20%

20%

15%

10%

10%

0%

20%

40%

60%

80%

100%

2009 2010

Option A

2010

Option B

Future?

Dean PCMH Compensation Model Transition

Efficiency

Quality

Service

Panel Size

RVUs - 5%

RVUs

Salary

95% 115% 115% 100%

In our Medical Home, the urgency for

re-alignment was even greater

Page 10: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 10

Dean Physician Incentive Model 2013

Patient Satisfaction

•CG-CAHPS Overall Rating of Doctor at

the individual level (or)

•CG-CAHPS Overall Rating of Doctor at

the department level (or)

•Service Improvement process metric Patient Satisfaction

Access/Growth

•Unique Patients Metric (or)

•CG-CAHPS Access Measure

Individual (or)

•CG-CAHPS Access Group

Access/Growth Quality

Quality

•Successful attainment of quality

metric as identified by

benchmarks or CAVE analysis

Cost Cost

•Successful attainment of efficient metric as identified

by benchmarks or CAVE analysis

Supplemental Goals

Supplemental Goals

•Superb Service Score

•Department Budget

•Staff Satisfaction with MDs

•Total Cost of Care

Page 11: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

The Lessons Learned Changing physician compensation is

like changing culture- it takes time,

patience, and lots of communication

Page 12: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 12

Lessons Learned along the Way

• “It’s a team effort” • While it takes time, and its fraught with many headaches, we encouraged

the Dean Board and a committee of physicians to lead the comp re-design process (rather than management). When all that your culture knows is “pay for volume”, it takes time and effort to design an effective solutions for a value-based world.

• “Comp Re-Design Doesn’t Solve Everything” • The flaw of most compensation model re-designs is that they try to do too

much. Remember that vision, data, peer-pressure, values, compacts, or guilt can sometimes be an effective way to bring people along.

• “Create a Balanced Scorecard” • If you want to reward value, the incentive plan (or other persuasion

techniques) need to have balanced measures to encourage service, quality, cost, growth and production.

• “Reward Corporate, Department and Individual Performance”

Page 13: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 13

Lessons Learned along the Way (continued)

• “Measure First” • It is most ideal to measure and report first, and link to comp second.

• “Options made the transition palatable” • Given the fear and anxiety associated with comp change, we created a menu of

options so that there were multiple chances to receive the incentive.

• “Incentive size made the transition palatable” • We initially set the incentive at very small percentages, e.g. 1-2% each.

• “Low thresholds made the transition palatable” • We initially made the goals as achievable as possible

• “We changed the metrics, decreased the options, increased the weights, and raised the thresholds over time”

• Once comfort with the new model set in, physicians were comfortable with more modifications.

Page 14: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

A Broader View Trends in the Group Practice Environment and predictions for the

future

Page 15: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

The GPIN Experience October 2012: “If you were to identify which quadrant your group falls in as of

today, which would you pick?”

Page 15

The Value Model:

Group’s risk-based payments are

>= 25% AND Physician’s incentives

for value are at least 10% of total

cash compensation or greater

The Charitable Model:

Group’s risk-based payments are

<25% AND Physician’s incentives

for value are at least 10% of total

cash compensation or greater

The Funky Model:

Group’s risk-based payments are

>=25% AND Physician’s incentives

for value are less than 10% of total

cash compensation

The Volume Model:

Group’s risk-based payments are

<25% AND Physician’s incentives

for value are less than 10% of total

cash compensation

1%

3%

5%

90+%

Page 16: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 16

Will incentive re-design be restricted

to ACOs, or will it go further?

Page 17: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 17

Page 18: Rewarding Better Care at Lower Cost - Brandeis University€¦ · 24/10/2012  · • The Models: An overview of Dean’s primary care and specialty value-based incentive models •

Page 18

Contact information:

Craig E. Samitt, MD, MBA

President and CEO

Dean Health System

1808 West Beltline Highway

Madison, WI 53713

E-mail: [email protected]

Telephone: (608) 250-1421