A presentation given at the Future of Healthcare in Washington Summit. An unprecedented assembly of Washington healthcare thought and action leaders for a day of executive briefing, connection and inspiration.
3. Let’s Start at The Beginning – One Year Ago
5 Years
68 MSAs
90 Day Episode Payment
788Participating Hospitals
CMS will provide hospitals
with a TARGET PRICE that
they must meet per episode.
April 1st 2016 – Comprehensive Care for Joint Replacement (CJR) Begins…
4. CMS Setting the Target Price
•2/3 Hospital
•1/3 Regional
Year 1
•2/3 Hospital
•1/3 Regional
Year 2
•1/3 Hospital
•2/3 Regional
Year 3
•All Regional
Year 4
•All Regional
Year 5
Each Year Target Pricing Moves Towards
Regional Pricing AND Stop Loss Increases
5. Variation Across the Country
Seattle, WA
Knee Replacement
Variation – Acute Only
Min
$22,570
Mean
$33,949
Max
$61,609
% Diff
185%
Fresno, CA: (Same Region as WA) – Mean = $19,653 w/ 1% Variation
6. Sample Exposure
Estimated Financial Exposure Over 5 Years for CJR
6
STRONG PERFORMER Year I Year II Year III Year IV Year V
Episode Price (Adjusted for Inflation) $25,464 $28,991 $31,751 $33,765 $37,057
Target Price (Assumes Quality Discount) $26,915 $29,392 $32,096 $35,050 $38,275
Stop Loss/Gain 0/+5% -5/+5% -10/+10% -20/+20% -20/+20%
Volume 355 380 406 435 465
OPPORTUNITY
Maximum Penalty Per Episode $0 $1,470 $3,210 $7,010 $7,655
Annual Opportunity (CMS Pays Hospital) $0 $558,448 $1,303,098 $3,049,350 $3,559,575
Hospitals are eligible are receive remuneration from CMS if the hospitals achieves
both COST and QUALITY metrics. Each year the stop gain will increase.
7. Sample Exposure
Estimated Financial Exposure Over 5 Years for CJR
7
THREAT
Maximum Penalty Per Episode $0 $1,470 $3,210 $7,010 $7,655
Annual Threat (Hospital Pays CMS) $0 $558,448 $1,303,098 $3,049,350 $3,559,575
POOR PERFORMER Year I Year II Year III Year IV Year V
Episode Price (Adjusted for Inflation) $27,464 $29,991 $32,751 $35,765 $39,057
Target Price (Assumes Quality Discount) $26,915 $29,392 $32,096 $35,050 $38,275
Stop Loss 0% 5% 10% 20% 20%
Volume 355 380 406 435 465
9. Call For Speakers
November 1st 2016 - Future of Healthcare in Washington Call For Speakers
9
How much
could really
change in a
few months?
10. And The Winner Is
November 8th 2016 – Donald Trump elected the 45th President
10
Trump Wins in Stunning Upset
Congress and Executive Branch
Now in Republican Control
11. The Dots Are Spreading
December 20th 2016 – CABG, AMI, SHFFT Models Finalized
11
Selected for AMI-CABG Model
Number of WA Participants:22
Surgical Hip and Femur Fracture
Treatment (SHFFT) Model
Number of WA Participants:25
12. Newly Confirmed
Feb 10th – March 13th 2017 - Verma & Price Confirmed
12
• National health policy
consultant from Indiana
• Helped shape Medicaid
expansion in IN, OH, KY, TN
CMS: Seema Verma HHS: Tome Price
• Georgia Representative and
retired Orthopedic Surgeon.
• Opposed to Obamacare and
Mandatory Bundled Payments
13. Let’s Just Slow All This Down
March 20th 2017 – CMS Delays AMI and CABG Rollout & CJR Expansion
13
“This additional three-month delay is
necessary to allow time for additional
review, to ensure that the agency has
adequate time to undertake notice and
comment rulemaking to modify the
policy if modifications are warranted.”
– CMS Final Rule
14. Dead on Arrival
March 24th 2017 – Repeal of Obamacare Dies in House
14
“Nobody knew
that health care
could be so
complicated…”
-President Donald Trump
15. So What’s Next
Congress Choosing Between Payment Reform and Payment Cuts
15
Payment
Reform
Payment
Cuts
Providers accept alternative payment
models and move rapidly away from
fee-for-service status quo
Providers remain in fee-for-service
but face ever-more stringent
reimbursement cuts
16. Bundled Payments Aren’t Going Away
Bundled Payments are Low Hanging Fruit for Medicare and Insurers
16
MACRA
Bundled
Payments
ACO
CJR Estimated Medicare Savings
$343M over 5 Years
Cardiac and SHFFT Savings
$170M over 5 Years
Qualifies for APM Track
New HIT requirements in 2018
allow bundles to count toward
MACRA APM track
17. And Payers Are Already Adopting Them Too
Bundled Payments are Low Hanging Fruit for Medicare and Insurers
17
18. The $1,000,000 Question
18
What does it take to succeed in Bundled Payments?
…or up to 20% of the Quality Adjusted Target Payment Over Actual Spend
Improve Acute Care Cost Patient Engagement
Telehealth Post Acute Management
19. Follow The Money
Concrete Example: CJR bundles to pay $25k per episode:
19
• Inpatient hospital stay: $13,193
• Skilled nursing facility: $5,034
• Inpatient rehabilitation facility:
$1,568
• Home health agency: $2,123
• Physician: $1,675
• Hospital readmissions: $1,155
• Outpatient: $604
• Durable medical equipment: $122
http://www.beckersspine.com/orthopedic-spine-practices-improving-profits/item/30556-cjr-
bundles-to-pay-25k-per-episode-8-statistics-on-cost-breakdown.html
20. Follow The Money
Another Way of Looking at the Bundle
20
• Pre-Op: $?,???
• Acute: $13,193
• Post Acute: $ 9,934
The Average CJR Bundle
ACUTE POST ACUTE OTHER
What investments are
organizations making
and where along the
care continuum are
they placing them?
Most of the current technology that is making a splash in healthcare is on the pre and
post hospitalization side where market entry and regulations are easier.
22. Disruptive Technologies in the Pre-Procedure Arena
Engaging the Patient Before They Hit The Floor
22
• Transparency Websites
• Healthcare Cost
• Healthcare Outcomes
• Crowdsourced Review Websites
• Consumer Healthcare Shopping
• Bundled Procedure Episodes
23. Living Under A Microscope
Consumers Have More Access to Information than Ever Before
23https://healthcarebluebook.com/page_ProcedureDetails.aspx?c
ftid=28&g=Total%20Hip%20Replacement&directsearch=true
24. E-Harmony for Patient Care
Doctors Routinely Update Profiles to Attract Patients
24
https://www.healthgrades.com/physician/dr-robert-tait-x34k2
25. Nearly Half of Patients Use Crowdsource Clinical Reviews
Consumers Have More Access to Options than Ever Before
25
“According to a survey performed by
Softwareadvice.com in 2013 and
2014,1 the percentage of patients
using online reviews to find their
physician increased from 25% to 42%.”
JAMA Facial Plast Surg. Published online January 26, 2017.
doi:10.1001/jamafacial.2016.2039
26. Shopping for a Hip Just Like a Car
Consumers Can Now Buy and Bid for Care Online
26
27. Request A Price Estimate Online
27
Next Evolution
ZendyHealth was started by a
Cedars-Sinai affiliate. It utilizes
a “Pick You Price” tool similar
to travel websites.
Surgery Center of Oklahoma
directly advertises their Total
Knee replacement cost directly
on their website.
28. Identifying Partners in Pre-Acute Care
People Now Have Healthcare Options on Every Corner
28
Urgent Care
• Zoom Clinic
• Mend
• OrthoNow
Retail Clinics
• Walgreens
• CVS
• Bartell Drugs
Physician
Hailing
• Pager.com
• Med Zed
Leveraging new “disruptive” services as part of the care team will become common.
30. Technology Investments to Control Acute Spend
Tools That Organizations Are Using To Address Acute Cost of Joint Replacement
30
• Artificial Intelligence
• Clinical Pathways
• Patient Selection
• Business Intelligence
• Clinical and Financial Dashboards
• Health Information Exchanges
• Reduced Ordering of Duplicate Labs
• Rapid Medicine Reconciliation
31. But First You Must Work to Understand You Cost
The Most Effective Tools Sit On Top of Robust Systems Using Activity Based Costing
31
Cost Productivity
Information Is Essential
To Improve Service Cost
Performance In An Era
Of Shifting Service
Volumes and Locations
http://www.himssconference.org/sites/himssconference/files
/pdf/230_0.pdf
33. Artificial Intelligence – Clinical Pathways
Internal Benchmarking and Pathway Discovery to Optimize Care
33
In this example multiple distinct
care pathways were identified using
unsupervised learning techniques.
One stood out as optimal when
solving for cost and quality metrics.
The organization was able to share
with the care team and rapidly
improve the care pathways.
https://www.amga.org/docs/Meetings
/AC/2017/Handouts/Stewart_Campion
.pdf
34. Risk Stratification– Clinical Calculators
EMR Integrated Index Tools to Predict Readmissions
34
L.A.C.E. scores each of the variables
based on various criteria for each
patient encounter to arrive at the
probability of the patient getting
readmitted within 30 days of
discharge.
http://blog.syntelinc.com/leveraging-the-lace-algorithm-for-
readmission-prediction/
35. Business Intelligence Platforms
Democratizing Data to Put it In the Hands of The People That Need It
35
Organizations around the country
are taking steps to serve data in a
more user friendly and intuitive
way.
Integration of the “Internet of
Things” creating scenarios of real
time patient interventions
https://www.hc1.com/wp-content/uploads/2016/10/Screen-
Shot-2016-10-06-at-4.47.01-PM.png
36. Business Intelligence Platforms
Best Practice Dictates That Reporting Should Be Role Specific
36
Don’t spend six months building a
dashboard without figuring out
what the user wants and what is
important to them.
Leverage the process to finds gaps
in your data capture process…and
then act upon.
https://www.geisinger.org/
38. Technologies to Manage Post Discharge
Hospitals To Be The New Big Brother of Healthcare
38
• Displacing Current Care Models
• Physical Therapy
• Home Health
• Post-Op Visits
• Engaging Patient
• Outcomes Monitoring
• Medication Adherence
• Smart Devices and Wearables
39. Physical Therapy in Front of Your TV
Gamification Meets Proactive Rehab
39http://reflexionhealth.com/our-solution/
Patient is using a commercially available
Xbox to complete Physical Therapy.
Patient progress is tracked automatically
and share with care team. The system
can even generate alerts when progress
is not tracking as planned.
40. Eliminate the Non-Urgent Follow Up
Eliminating Wasted Time and Unneeded Visits is Key to Post Op Management
40http://captureproof.com/cjr-solution/
Using Asynchronous Telemedicine allows
the clinical staff to monitor and track
patients remotely.
These types of interventions have been
noted to reduce “Bundle Killers” like
readmissions from surgical
complications.
41. Capturing Patient Scores Before CMS Does
Topic Domain Overlap Provides Hospital With an Opportunity to Intervene Rapidly
41
Study in Brief: Yelp Reviews Of Hospital Care Can Supplement And Inform
Traditional Surveys Of The Patient Experience Of Care
•Published in Health Affairs, April 2016
•Analysis of 16,862 hospital Yelp reviews, HCAHPS scores for 1,352 hospitals
•Moderate correlation found between Yelp, HCAHPS scores
http://wwbp.org/papers/yelp_reviews_2016.pdf
42. Patient Reported Outcomes
Additional Incentive for Hospitals and Clinics to Capture PRO
42
Bundled Payment Pilots also carry
quality incentives as well as
incentives for reporting certain
scores.
New tools allow for patient
engagement and real-time tracking
of patient recovery.
Capture Dates:
0-3 Months Before Surgery
9-12 Months After Surgery
44. So What’s Going To Happen With Bundled Payments
“85 percent of all traditional
Medicare payments will be
tied to quality or value by
2016 and 90 percent by 2018
through programs such as
Hospital Value Based
Purchasing and Hospital
Readmissions Reduction.”
-HHS Annual Update
MACRA
Bundled
Payments
ACO
45. Where Should Our Efforts Be Focused First
Recommended Order:
First: Acute
Second: Post Acute
Third: Pre-Op
Critical Stakeholders:
Physician Buy In
Post-Acute Partners
46. Closing: The Winning Items Needed to Succeed
Cost and Quality Data
Physician Engagement
Patient Engagement
BI or AI
Reporting System
Post – Acute Patient
Management
Solution
Pre Op Engagement
Strategy