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Delivery System Reform The ACA and Beyond:
ChallengesStrategiesSuccesses FailuresFuture
Arnold EpsteinMSU 2018 Health Care Policy Conference
April 6, 2018
The Good Ole Days
2
Centers for Medicare & Medicaid Services
Per Capita National Healthcare Expenditures2000-2014
5300
6500
79008700
9650
3000
4000
5000
6000
7000
8000
9000
10000
McGlynn et al reviewed charts of 6,712 patients in 12 American Cities
4
Patients received the proper diagnosis and care only 55% of the time
McGlynn, et al, N Engl J Med 2003
Overuse, Underuse
and Misuse of Services
45%
Recommended Care55%
Medical Error is the 8th Leading Cause of Death
Who is the Culprit?
• Unfettered Fee-for-Service• Fragmented, uncoordinated care• Inadequate competition• Excessive competition• Inadequate incentives for patients
Evolution in the Health Care Delivery System
Traditional Care
Characteristics of Care Fragmented Care Producer Centered
Payment and Policies Fee-For-Service Payment
Systems
Characteristics of Care Coordinated Care Patient-centered
Payment and Policies Episode-based payments
Alternative payment models Incentives for quality—value based
payments
Evolving future state
The delivery system is moving from fragmented quantity-based care towards coordinated value-based care
Affordable Care Act—2010 (ACA)
8
The ACA is Not Just About Coverage Expansion
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Affordable Care Act
Insurance Market Reform
Coverage Expansion
Medicaid Marketplace
Delivery System Reform
Delivery System Reform Through the ACA (CMMI)
• Changing Payment Systems– Hospital Readmissions – Value Based Purchasing
• Holding Providers Accountable – Accountable care organizations ACOs – Bundled Payments for Care Improvement (BPCI)
• Tools to Improve Care – Incentives for HIT – Technical Assistance– Patient Centered Outcome Research Institute (PCORI)
10
ACA Programs
• Hospital Readmission Reduction Program
• Hospital Value Based Purchasing
• Accountable Care Organizations
• Bundled Payments for Care Improvement
11
Hospital Readmissions Reduction Program (HRRP)
• Established by the ACA (2010), Penalties initiated FY 2013
• Up to 3% penalty for high readmission rate (“excess” readmissions)
• Initially three conditions: AMI, pneumonia, heart failure
• Roughly two thirds of hospitals penalized each year
Did the Hospital Readmissions Reductions Program (HRRP) Catalyze Changes in Behavior
and Lower Readmissions?
Hospital Readmissions Have Declined Since the ACA
14
21.5%
17.8%
15.3%
13.1%12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
Read
miss
ion
Rate
Trends in Readmission within 30 Days of Discharge
HRRP* Conditions (heart attack, heart failure,
pneumonia)
Other Admissions
Affordable Care Act Passed HRRP Penalties Began
*HRRP: Hospital Readmissions Reduction Program. Heart attack, heart failure, and pneumonia were used in the program beginning in October 2013. Chronic obstructive pulmonary disease and hip and knee replacement were added in October 2015 and are not included in this graph.Zuckerman et al, N Engl J Med, 2016
What Are the Worries?
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Comorbidity Count Increased in HRRP Hospitals After Start of the HRRP in April 2010
Source: Ibrahim et al. JAMA Internal Medicine 2017.1/08 to 4/10 vs. 4/10 to 12/14
63% of the Reduction in Risk-Adjusted Readmissions After HRRP Was Due to Increases in Comorbidities
Hospitals With More Minorities, Less Educated and Poorer Patients are More likely to be Penalized?
Barnett et al., JAMA IM 2015. Courtesy Ashish Jha
6.3%
20.9%23.4%
16.0%
30.4%
37.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Percentage Black Less than High School Diploma Lowest Quartile of HouseholdIncome
Low readmission rate hospital High readmission rate hospital
ACA Programs
• Hospital Readmission Reduction Program
• Hospital Value Based Purchasing
• Accountable Care Organizations
• Bundled Payments for Care Improvement
19
Hospital Value Based Payment (HVBP, formerly known as P4P)
• Established in FY 13
• Budget Neutral: 1% of Medicare payment going to 2% in FY 17
• Broad set of quality metrics
– Clinical Process (5%):
– Patient experience (25%)
– Outcomes (25%) e.g. CHF mortality
– Safety (20%) e.g. Hospital acquired infections
– Efficiency (25%)
Has Hospital VBP Been Successful in Improving
Quality?
Ryan AM et al. N Engl J Med 2017;376:2358-2366.
Standardized Clinical-Process and Patient-Experience Performance among Matched Exposed and Matched
Control Hospitals, 2008–2015.
Ryan AM et al. N Engl J Med 2017;376:2358-2366.
30-Day Risk-Standardized Mortality among Hospitalized Patients With Acute Myocardial Infarction (MI), Heart Failure, or Pneumonia in
Exposed and Matched Control Hospitals, 2008-2014.
What About Unintended Consequences?
Unintended Consequences: Penalizing Hospitals Caring for Indigent Patients
0.06%
-0.02%-0.03%
-0.10%-0.10%
-0.08%
-0.06%
-0.04%
-0.02%
0.00%
0.02%
0.04%
0.06%
Lowest DSH Low DSH Medium DSH High DSH
Net
VBP
Bon
us /
Pen
alty
Jha, Online Blog, 2014
ACO Programs
• Hospital Readmission Reduction Program
• Hospital Value Based Purchasing
• Accountable Care Organizations
• Bundled Payments for Care Improvement
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Accountable Care Organizations (ACOs)
• Groups of providers that take responsibility for care of a population
• If medical expenditures are below the benchmark providers get a share of the savings; if above the benchmark may have to pay a penalty
• Financial incentives for meeting various quality standards• Medicare Shared Savings Program and Pioneer established by the
ACA
How are ACOs doing?
The Medicare Shared Savings Program is Growing
15-20% of Medicare beneficiaries is in an ACO
146
252
366
424477
0
100
200
300
400
500
600
2012 2013 2014 2015 2016
Medicare Shared Savings Program(Almost all one sided risk)
Quality Results- positive ACOs that reported in both 2013 and 2014 improved average
performance on 27 of 33 quality measures
Financial Results- mixed to weakly positive In 2015: 203 ACOs (52%) held spending $1.56 billion below their
targets 189 ACOs (48%) spent more than their targets by 1.13 billion Initial Savings to CMS $429 million, cost CMS shared savings
$645 million, Net impact to CMS: loss of $216 millionSource: Ashish Jha Blog, August 2016; CMS fact sheet 2015
ACOs in the program for longer are doing better(2015 Data)
Net Per Capita SavingsInitial Year
2015
2014
2013
2012 $46
-$60
-$83
-$33
ACA/CMMI Program
• Hospital Readmission Reduction Program
• Hospital Value Based Purchasing
• Accountable Care Organizations
• Bundled Payments for Care Improvement (BPCI)
32
Bundled Payments for Care Improvement Initiative is Sizeable
33
The bundled payment model targets 48 conditions with a single payment for an episode of care
In the most popular version hospitals or physician group practices are accountable for initial hospitalization and all care received in the following 90 days and share in any gains or shortfalls Provides incentives for quality of care as well
More than 2000 organizations participating as awardees or episode initiators by July 2015
* Current until July 2015 Source:CMS Fact Sheet, August, 2015
Despite Little Information on BPCI, It Has and Will be Expanding
• Preliminary evaluation by the Lewin group examined 11 of 48 conditions and found savings for one: total hip or knee replacement.
Nonetheless• Mandatory bundle for total joint replacement began in 8
states in April, 2016• New version of voluntary BPCI due to start in October, 2018
for 27 Conditions and 3 procedures
34
To Summarize---The ACA and Other Forces Kindled Lots of Activity
• Some of it seems helpful• Several programs show promise• Further adjustments and additional time may help• Overall is it winner—at this point, not so clear• No home runs yet
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35
35
B-
5951
57 58 6052
72
90
107
88100
112102
0
20
40
60
80
100
120
Hospital Mergers and Acquisitions, 2004-2016
Source: American Hospital Association, Modern HealthCare
The Delivery System is Consolidating
76.1%
53.2% 50.8% 47.1%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
1983 2012 2014 2016
Percentage of Physicians Who Were Owners of Their Practices
Percentage ofPhysicians whowere owners oftheir practices
Source AMA 2017 Updated data on physician practice arrangements
Independent Physicians are Steadily Disappearing
Goals for Medicare
Alternative Payment Models
FFS Linked to Quality or Value
2016 2018
20182016
Federal targets for moving towards value-based payments in Medicare FFS system
What to Expect Going Forward
• An oasis of partisan support remains for delivery system reform
• Continued evolution in payment systems with more risk to providers
• More emphasis on efficiency and costs• Further integration and consolidation• Expansion of activity to aid practice transformation
– More IT, practice facilitators, management partners• A long journey ahead
40
We Have Made Progress – But it is a Long Way to the Finish Line
41
End of Presentation
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