impact of health payment reform on health information management professionals ann chenoweth, mba,...
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Impact of Health Payment Reform on Health Information Management
ProfessionalsAnn Chenoweth, MBA, RHIA
Senior Director of Industry Relations3M Health Information Systems
NYHIMA 2014 Annual Meeting - June, 2014
Objectives
• Review payment reform initiatives impacting healthcare providers today
• Examine Information Governance concepts• Review research results on the impact of
payment reform on the HIM professional• Examine emerging opportunities for HIM
professionals
VOLUME-BASED SYSTEM VALUE-BASED SYSTEM
Our system is becoming more complex as it moves from rewarding volume to delivering value
Employers Exchanges
ACO
PCP
SpecialistPCP
Payer 1 Payer 2
ACO
PCP
Specialist
PCP
Medical Home
PCP
Specialist
PCP
Payer 3
SYSTEM
CLINICIAN
PATIENT
Payer 3
Specialist
Payer 1
PCP
PATIENT
Payer 2
PATIENT PATIENT
Providing Services
Managing Health
With Access to Capital Insurers Could Purchase Providers
AcquiresWest Penn
Allegheny Health Systems
andJefferson
Regional Medical Center
Concentra Urgent Care
CareMore Clinics
Weill CornellPhysicians
Organization
Acquires
Acquires
Acquires
Acquires
Aggregate Hospital Payment‐to‐Cost Ratios for Private Payers, Medicare, and Medicaid, 1990 – 2010
Distribution of Hospital Cost by Payer Type (% of Total Cost)
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2010, for community hospitals. (1)Includes Medicaid Disproportionate Share payments.(2)Uncompensated care represents bad debt expense and charity care, at cost.(3)Non‐patient represents costs for cafeterias, parking lots, gift shops and other non‐patient care operating services and are not attributed to any one payer.
Hospitals who do not prepare for healthcare’s fiscal cliff may not survive
Micro Economic Challenge: Loss of Volume in Profitable Segments Will Break Hospital Business Model
Traditional hospital cost shift increases expense to insurers and employers to pay for losses on governmental programs.
Decreasing employer/insurer volume and increasing governmental volume ends traditional cost shift. Healthcare reform accelerates this trend.
• Cuts and/or lack of increases to keep pace with medical inflation
• Increased reluctance to raise premiums will narrow hospital margins
• Significant exposure to preventable volume
• Demographics and reform will push Commercial lives into Medicaid and Medicare
Challenges and Opportunities as Focus Shifts from Volume to Value
• Common pilot programs not yielding long term, sustainable solutions
• Investments in HIT not producing significant change
• Medical Home selection bias
• Few scaled successes• Data to support success
still not readily available • Not all vendors make the
grade
• Providers use new contracting models to grab market share
• IPAs forming ACOs to increase steerage pressure
• Providers build market presence via physician & facility acquisitions
• Difficulty of managing actuarial risk for risk-based population contracts
• Payers may buy providers
• 25+M new commercial enrollees by 2019
• Potential for extensive innovation within small group and individual markets
• Disruption of existing distribution channels (Brokers)
• APCD explosion
Challenging Economics
Unfulfilled Promise
Market Consolidation
Introduction of Exchanges
Fees
Incentive alignment:Providers need a new business model for sustainability
Source: Charles Kennedy, M.D. Aetna HIMSS 2013
ACO – Shared Savings, Settling Up
Attribution and Each of the Spending Numbers Need to be Established and Should be Risk Adjusted
Quality Needs to be Protected and Improved
Data
Insights• Data does not
guarantee insights
Decisions• Insights do not
guarantee decisions
Actions• Decisions do not
ensure actions• Learning
A Stepped Approach: Move beyond data to insights, decisions, and actions to realize value
Adapted from PWC “Advancing healthcare informatics, the power of partnerships”
Industry and analytics skill sets are required to create hypotheses
and valuable insights
The “last mile” of action requires alignment of workflow,
personalized decisions and incentives
AnalyticsCapabilities
Analytics value
Switching from managing individual services for individual members to managing population health as part of an accountable care program poses new questions and requires new tools.
Which patients?
What services?
Which providers?
How is data shared?
What data is shared?
With whom is data shared?
New Questions, New Tools
Putting it all together locally - LEADERSHIP
Data & Analytics Transparency Human
Capital Process Value-Based Success
Aligning Incentives
Is it Working? Maryland PPC Payment Experience
• Inpatient complications payment reform– 0.5 percent of total hospital budget put at risk– Hospital payment reduction based of number of excess
inpatient complications– 49 types of complications included in payment
adjustment– In 2008, 53,000 of the 800,000 discharges had one or
more of the 49 complications• Results from first two years
– At the end of second year complication rate dropped by 15 percent
– Total savings over first two years $ 105.4 million
Is It Working? Minnesota Reducing Avoidable Readmissions Effectively (RARE) Program
• Collaborative statewide effort across healthcare organizations spearheaded the Minnesota Hospital Association, Institute for Clinical Systems Improvement and Stratis Health
• The 82 hospitals participating represented 85%of the annual statewide hospital readmissions in Minnesota
• Participating hospitals received clinically meaningful risk adjust reports and benchmarks identifying, comparing, and forecasting preventable readmissions
• Participating hospitals receive intensive support including technical assistance and best practice tools focusing on discharge planning, medication management, patient/family engagement, transition care support, and transition communication
• In 2011 and 2012 readmissions were reduced by over 20% by preventing 5,441 readmissions avoiding more than 16,000 bed days and saving over $40 million
• The RARE program received the 2013 John M. Eisenberg Patient Safety and Quality Award from the National Quality Forum and The Joint Commission
States are Moving Forward – New York• NY Hospital fee for service payment transformation
– 2008 APGs for OP services– 2009 APR DRGS for IP services
• Based on NY Regulations, Medicaid payment adjustments for five potentially preventable events are being implemented for fee-for-service and managed care– 2012 Readmissions, complications– 2014 Admissions, ER visits, ancillaries
• NY Dept. of Health and CMS negotiated an $8 billion waiver amendment to restructure the State’s health care delivery system (2014)– Foundation: Delivery System Reform Incentive Payment program– Goal: To reduce statewide avoidable hospital use by 25% over 5 years
• Statewide quality and care coordination initiatives open to large public hospital systems and to a wide array of safety-net providers (PPE and AHRQ measures)
States are Moving Forward
• Minnesota– Moving from short term contracts with focus on unit of
payment to long term relationship focused on collaborating on cost reduction through quality improvement and cost
– Payment adjustments to the 11 dominant ACOs are being implemented
• 2013 Readmissions, complications, admissions
• Texas– Based on Texas Law, Medicaid payment adjustments
for all five potentially preventable events are being implemented across all delivery organizations including fee-for-service, managed care, ACOs and medical homes
• 2013 Readmissions, complications• 2014 Admissions, ER visits, ancillaries