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Long Term Services and Supports
and Health Care Reform
Mark McClellan, MD, PhD
Engelberg Center for Health Care Reform
The Brookings Institution
10/30/2010

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Overview
• Health Care Reform and Long-Term Services and
Supports: Goals vs Reality
• Key Issues for Real Health Care Reform
– Identify key opportunities to improve care
– Measure
– Align payments
– Align benefits
– Better evidence
• Accountable Care
• Next Steps

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Long Term Services and Supports:
Essential Element of Health Care Reform
• Large and growing part of health care expenditures
• Over $200 billion annually (10% of total)
• Expected to rise, along with doubling of older
population in next 30 years
• Disproportionately affects patients who account for most
health care costs and spending growth
• 80 percent Medicare spending from the 20 percent of
beneficiaries with multiple chronic conditions
• Disproportionate share of admissions, institutional
costs, and other health care costs
• Potential for “medical home” vs home

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Opportunities for Innovative LTSS
• Promise: Reductions in overall health care costs and
improvements in health, quality of life through…
– Supportive care
– Living arrangements
– Technology
– Other opportunities?
• Reality: Uneven quality and availability, variations in
quality, limited funding in traditional payment systems
• Example: Preventing admissions and readmissions

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Traditional Health Care Reform
• Expand coverage
– More populations
– Incremental coverage of enumerated services
• Reduce payment rates, delay coverage of innovative
services
• Affordable Care Act:
– Medicaid expansions and credits for insurance through health
information exchanges
– Incremental Medicare benefit expansions
– Medicare payment reductions (and additional tax revenues)
• Future outlook: rising cost pressures

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Achieving Real Health Care Reform:
Aligning Policies and Care Goals
• Health care reform
• Measurement
• Payment reform
• Benefit reform
• Better evidence

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• Robust health IT infrastructure can greatly
improve care delivery
– VNSNY uses EHRs to exchange real-time
information and care instructions, and
telehealth to avoid visits
– Care Management Plus provides special geriatric training to providers
and tracks patient-provider conversations
• Integration of medical services and social supports is essential
– Guided Care uses highly skilled nurses to create an evidence-based
care plan that helps integrate medical services and social supports
• Sustain effective care delivery reforms through simultaneous
payment and benefit reforms
– PACE coordinates all medical services and social supports by
combining various funding streams
– ACOs/Shared Savings Programs: Support actual or virtual integration
– PCMH: Carilion Clinic, TMC, Indianapolis, CCNC, Vermont pilots
– Bundled payments
• Better performance measurement should also be used to
support and rigorously evaluate care delivery reforms
– Long-Term Quality Alliance created to develop and implement quality
measures reflecting care continuum, to achieve improvements in care
Key Themes

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Accountable Care and Health Care Reform
Absent or poor data leaves practice
unexamined and presumption that
more is better
Better information that engages
providers, supports improvement; informs
consumers for best care
Non-aligned payments reinforce
problems, reward fragmentation,
induce preventable complications and
inefficient care
Pay more for better, more efficient
care: Align financial incentives with
professional aims
Principles
Unclear aims creates conflicts about
what we’re trying to produce
Clarify aims: Better health, better care
lower costs – for patients and communities
Fragmented delivery system, without
accountability for capacity, quality or
costs
Foster provider accountability for the full
continuum of care – and for the capacity of
the local health system
Barrier

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Important Caveats
• ACOs are not gatekeepers
• ACOs do not require changes to benefit structures
• ACOs do not require exclusive patient enrollment
Key Elements of an ACO

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Improving Care through ACOs
Challenges
Need for More Effective
Measures
…promote more holistic care and
effective care transitions through
saved savings and performance
measurement.
…pay more to providers who use
social supports effectively (e.g.,
providing care in lower cost
settings, like the home, through
integrating funding streams).
…require robust performance
measurement, which can help
identify the most effective care
strategies for those with multiple
chronic conditions or functional
impairments.
Fragmentation of Financing
and Care
Lack of Integration between
Medical Services and Social
Supports
ACOs…

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ACOs in the Affordable Care Act
• Part of Medicare – Not Pilot Program
– Wide range of provider groups meeting certain criteria can implement an
ACO outside of traditional CMS demonstration process through shared
savings program
– Can collaborate or build upon private-sector and state-based ACOs
• Evaluation Methods Based on Pre-Specified Benchmarks
– New law authorizes pre-post budget projection approach that uses
historical spending and utilization data to develop quantitative, pre-
specified targets to track ACO performance
• Broad Range of ACO Payment Models
– Broader than current Medicare shared savings demonstrations
– Benchmark based on projected absolute growth in national per capita
expenditures
– One-sided and two-sided/symmetric shared savings models
– Range of partial capitation models can be established to replace a
portion of fee-for-service payments

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ACOs in the Affordable Care Act
• Medicare Shared Savings Program Starts Jan. 1, 2012
– Regulations from CMS expected around December 2010
– Qualifying Medicare ACO requirements:
• Willingness to be accountable for quality, cost, and overall care of Medicare
fee-for-service beneficiaries for a minimum of three years
• Have a formal legal structure to receive and distribute shared savings
• Have at least 5,000 assigned beneficiaries with sufficient number of primary
care ACO professionals
• Report on quality, cost, and care coordination measures and meet patient-
centeredness criteria set forth by the HHS Secretary
• May initially focus on one-sided shared savings models
• Center for Medicare and Medicaid Innovation (CMI) to Evaluate
Broad Range of Payment and Delivery Reforms by Jan. 1, 2011
– $10 billion appropriated for FY2011 to FY2019
– ACO and related pilots expected before the start of the 2012 Shared
Savings program to test different ACO concepts
• Interaction with Other Payment Reforms
– Health IT Meaningful Use Payments
– Payments for Quality Reporting and Improvement
– Readmission-related payment incentives
– Other Medicare Payment Reform Initiatives

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ACOs can strengthen ongoing
reform efforts
 Medical home
 Episode, readmission initiatives
 HIT
Medical & social service coordination
ACOs can operate in
conjunction with current
payment structures
 FFS
 Bundled payments
 Partial/full capitation
ACOs
Confusing aims Fragmented care
ACOs Provide Transition Path,
Reinforcement for Value-Focused Payment
Absent or poor measurement
Wrong financial incentives

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Important Caveats
• Accountability for assigned patients lies with the ACO, not individual providers
alone
• Providers are part of the ACO system of care
• Providers affiliated with an ACO, even exclusively, can refer patients to non-
ACO providers
Unique primary
provider assigned
for each patient
Unique primary
provider assigned
for each patient
No “lock in” of
patients to the
ACO (not a
gatekeeper
model)
No “lock in” of
patients to the
ACO (not a
gatekeeper
model)
Assigned based
on where they
received primary
care in the past
Assigned based
on where they
received primary
care in the past
Minimizes
“dumping” of
high risk or high
cost patients
Minimizes
“dumping” of
high risk or high
cost patients
Beneficiary Attribution

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• New payment model: shared savings if quality targets met
– Current per-capita spending for assigned patients determined from
claims
– Spending target is negotiated (private payers) or determined (Medicare)
– If actual spending lower than target, savings are shared
– IF quality targets are also achieved
Actual
Shared Savings
ACO Launched
Target
Projected
Incentives Aligned with Aims

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Advanced
• ACOs use more complete
clinical data (e.g.,
electronic records,
registries) and robust
patient-generated data
(e.g., Health Risk
Appraisals, functional
status)
• Well-established and
robust HIT infrastructure
• Focus on full spectrum of
care and health system
priorities
Intermediate
• ACOs use specific clinical
data (e.g., electronic
laboratory results) and
limited survey data
• More sophisticated HIT
infrastructure in place
• Greater focus on full
spectrum of care
Beginning
• ACOs have access to
medical, pharmacy, and
laboratory claims from
payers (claims-based
measures)
• Relatively limited health
infrastructure
• Limited to focusing on
primary care services
(starter set of measures)
Measures should be outcome-oriented, span population and continuum
of care, become more sophisticated along with care capabilities
Meaningful Performance Measures

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• Providers to Whom Patients are Assigned:
– Deliver primary and preventative care services to ACO patients (e.g.,
Internal Medicine & Family Practice, Endocrinology, Geriatrics, etc…)
– Core responsibility for managing total cost and health
• Other Specialists with Potential for High Resource Use and
Care Impact:
– Manage chronic diseases as well as resource intensive acute events
(e.g., General Surgery; Hospitalists; Oncology, Orthopedics; etc…)
• Other Specialists with some Potential to Impact Resource Use
and Procedure Quality and Efficiency:
– Typically do not have an ongoing relationship with patients (e.g.,
Anesthesiology; Radiology; Emergency medicine, etc…)
• Long-Term Service and Support Providers:
– Integrate or contract with other providers to provide care coordination
and support services
– Wellness, monitoring and adherence for chronic diseases
– Less costly substitution for traditional health care
• Non-Contracted Providers:
– Providers not contracted with ACO can still provide care for patients
ACO Provider Roles

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Next Steps from CMS
• Regulations for the Medicare Shared Savings (ACO) program
expected around Dec 2010
– Framed in terms of “Triple Aim”: Improve the health of the population;
enhance the patient experience of care; and, reduce, or control, the per
capita cost of care
– Some form of patient notification likely to be required
– Expect use of core set of nationally consistent performance metrics to
measure progress
– Expect to build on private/ multipayer payment reforms
• Center for Medicare and Medicaid Innovation (CMI)
– To evaluate pilot payment and delivery reforms beginning 2011
– $10 billion appropriated for FY2011 to FY2019
– Activity on ACO and related pilots expected before the start of the 2012
Shared Savings program, to test different ACO concepts
• Opportunities for Interaction with Other Payment Reforms
– Health IT Meaningful Use Payments, Grants
– Payments for Quality Reporting and Improvement
– Dual Eligible Initiatives
– Regional and private-sector initiatives

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Benefit Reforms Based on Value
• Money Follows the Person
– Payments Directed by Beneficiary – Not Restricted by Coverage
– Adjustments Based on Severity
– Higher satisfaction and better outcomes for same/lower costs
• Medicare Part D Experience
– Benefit tiers now based on value (or drug cost?)
– Much lower costs than projected
• Implications for Health Care Reform
– Benefit design reforms to support wellness, better adherence and
healthier behaviors
– More comprehensive and more personalized application of tiering:
“Centers for Excellence” including LTSS
– CLASS Act Implementation

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Better Evidence
• Patient-Centered Outcomes Research Institute
• Improving Infrastructure
– Consistent Measures
• Supported by ACOs, other payment reforms
– Research Networks
• Comparing Practices, Policy Reforms

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2009-10 Network 2010-11 Network
Information-Seeking
Conceptual Implementation
• Focused on defining the ACO model
and describing its technical
components (e.g., patient attribution,
performance measurement, etc.)
• Included regular webinars, ACO
materials, and discounts to events
• Over 100 members including
provider groups, payers, and
policymakers
• Provides practical leadership on how
to implement an ACO especially in
light of emerging Federal/state ACO
regulations and pilots
• Includes implementation-focused
webinar series, exclusive member-
driven conferences, Brookings-
Dartmouth ACO newsletter, other
web-based resources, and ACO
implementation groups
• Open to all parties interested in
advancing accountable care – 1st
webinar in late November
Brookings-Dartmouth ACO Learning Network

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Time is Now
• Alignment Strategy for Higher Value Now
– Care reforms + payment reforms, before reimbursement tightens further
– Stepwise, not too disruptive or incremental
• Better Data to Support Care Improvement, Quality Measures
– Faster and more meaningful access to needed data
– Guidance from regional and national efforts for consistent performance
measurement
– Get paid for it (or collaborate with providers who get paid for it) by Medicare,
Medicaid and private payers
• Movement Toward Sustainable Payment Reform
– Partner with other providers to improve care, track and share savings
– Consider implementing now with private plans, states, community collaborations
(will have momentum for coming CMS support)
– Take integrated view of Medicare/Medicaid payment opportunities
– Work on new contractual approaches with device and drug manufacturers that
claim better outcomes, lower overall costs
• Opportunities for Technical Support
– CAST
– ACO Learning Network
– Expanding Federal support: ONC/Beacon support, HIT “Extension Centers,”
Multiple Pilots