Governance Implementation Planning Team

Pre-Decisional deliberative matter – For official use only within DoD

Institute of Medicine

Moving to a More Integrated Health System

Assistant Secretary of Defense for Health Affairs

March 20, 2013

The Military Health System

Dr. Jonathan Woodson

The Military Health System

A global organization with medical readiness at the center of the mission

– Integral component of a military fighting force – ensuring a medically ready force

and a ready medical system to respond to the full spectrum of military operations

– A comprehensive, integrated Healthcare delivery system including:

• A hospital system - 56 hospitals world-wide

• An integrated outpatient care system – 363 medical clinics, 282 dental clinics

• A health insurance plan – 9.6 million covered lives, 380,000 participating

providers…70% of our care is purchased from civilian sources

• A global public health system – providing community health, global health and

environmental surveillance

• An education and training system – including a University with an accredited

medical school and graduate programs, a large scale accredited graduate

medical education, enlisted and medical officer training platforms

• Comprehensive medical research and development (R&D) programs

A unique, indispensable, $53 billion per year military medical enterprise

3

The MHS is measured against each of the roles for which it is responsible –

warfighter support, employer, provider, insurer, educator, and researcher

The Quadruple Aim

4

Improved Readiness Ensuring that the total

military force is medically

ready to deploy and that the

medical force is ready to

deliver health care anytime,

anywhere in support of the

full range of military

operations, including

humanitarian missions.

Better Care Providing a care

experience that is patient

and family centered,

compassionate,

convenient, equitable,

safe and always of the

highest quality.

Better Health Reducing the generators

of ill health by

encouraging healthy

behaviors and decreasing

the likelihood of illness

through focused

prevention and the

development of increased

resilience.

Lower Cost Creating value by

focusing on quality,

eliminating waste, and

reducing unwarranted

variation; considering the

total cost of care over

time, not just the cost of

an individual health care

activity.

A Ready Medical Force Survival Rates on Battlefield Against Expected Outcomes

70%

75%

80%

85%

90%

95%

100%

2007 2008 2009 2010 2011

% S

urv

ive

d (

30

Day O

utc

om

e)

Observed Survival Expected Survival 5

An Employer’s Perspective

Health Budget as Percent of Defense Budget

5.9%

7.5%

8.1% 8.1%

8.9% 9.3% 9.4%

9.1% 8.7%

9.4% 9.3%

10.0% 9.6%

10.0% 10.2% 10.4%

10.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

$-

$10

$20

$30

$40

$50

$60

$70

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

% o

d D

oD

To

plin

e

$B

Unified Medical Budget % of DoD Topline Projections

6

Military Health: A Learning Organization

• We have been a learning,

innovative organization on the

battlefield

• We know how to reduce

errors, improve processes and

save lives in the most austere

environments imaginable

7

Military Health: A Learning Organization

• We inform, and are informed

by, the broader American

medical community

• Our advances did not occur in

isolation, but in partnership

with our federal and civilian

colleagues

• Now, we are extending this

integrated approach to our

entire health system

8

9

Better Health OPERATION LIVE WELL/ Healthy Base Initiative

Quadruple Aim

National Prevention Strategy • Health and Safe

Community Environments

• Clinical and Community Preventive Services

• Empowered People

• Elimination of Health Disparities

• Readiness

• Population Health

• Experience of Care

• Per Capita Cost

Objectives

• Active Living

• Healthy Eating

• Tobacco Free Living

• Mental & Emotional Well Being

Operation Live Well

Expected Outcomes

•Improve readiness – retention

and recruitment

•Improve quality of life for all

•Reduce costs

•Help the military model ideal

health behaviors for the nation

Military Health System: New Governance Model

Stronger, Better, and More Relevant for Future • Deputy Secretary of Defense has directed major change in future organization

– Establishing an integrated organization in 2013 – Defense Health Agency:

• Management/oversight of Shared Services: Health IT, Medical Logistics, Medical

Facilities, Health Plan, Pharmacy Operations, Medical R&D, Public Health,

Resource Management, Contracting – Multi-Service Markets (MSMs):

• Major medical markets with multiple military facilities; central to our readiness

mission and maintenance of clinical skills for wartime

• Move from facility-based perspective to five-year, market-based performance

plans

• Central to our efforts for standardizing clinical and business processes – National Capital Region:

• A unique model that sustains our primary casualty-receiving medical center

(Walter Reed National Military Medical Center) and a local military community

hospital (Fort Belvoir) as joint medical facilities

• Implementation is underway – initial stand-up of Defense Health Agency is slated for

October 1, 2013; fully operational by October 1, 2015…and Congress is watching.

10

Overhead and Governance Headquarters Only Part of the Story

11

Private Sector

$16,377M

Direct Care

$8,149M

Consolidated

Health

$2,194M

Edu. and

Train.

$705M

Base

Operations

$1,743M

Info Mgt

$1,423

Management

Activity

$312M

Concluding Perspectives

• The Military Health System is a high-performing organization, operating under conditions unimagined 11 years ago

• Even with conclusion of engagement in Iraq and drawdown in Afghanistan, global environment – political / military / global health / humanitarian risks remain highly unpredictable

• Still, federal spending is not going to grow…it’s going to shrink, even(particularly) in defense spending

– Across-the-board cuts will not save money in health spending

– Better Health and Better Care are critical to our strategy

– Federal and civilian partnerships will grow; we welcome them and seek them

• Our continued strength and relevance will be achieved by our sustained focus on readiness, greater integration within our system and with external partners, moving from healthcare to health, and an enduring commitment to quality and safety

12

Near Term MHS Transformation Efforts

13

The Goal: Deliver Value

14

Creating a high value Military Health System is

predicated on defining and measuring value.

Value =

Readiness Experience

of Care

Population

Health + +

Cost (Over a Span of Time)

Value =

Outcomes

Cost

Simultaneous Transformation of Care and Payment Can

Help Reduce Costs while Improving Care/Health

The Past

Transition

Ideal

Delivery System

Level 2/3 Medical

Homes

Fully Integrated

Delivery System

Volume-driven

Fragmented Care

Bundled/Episode

Payment, Full

Prepayment

Outcome measures

large % of total

payment

Primary Care Sub-

Capitation; FFS for Specialty/IP

Care coordination and

intermediate outcome

measures (moderate %

of total payment)

Fee-for-service

Simple process and

structure measures

(small % of total

payment)

Payment

Bundling

P4P Design

Adapted from “From Volume to Value: Better Ways to Pay for Health Care,” Health Affairs, Sep/Oct 2009. 15

16

Medically Ready Force – Occupational Medicine

Resource Perspective

Healthy and Resilient Individuals, Families and Communities

Ready Medical Force – Operational Medicine

Achieving better system integration from the ground up.

Primary Execution Structure

Research and

Development

Education and

Training

(METC, GME, USUHS)

Shared Services (IM/IT, Contracting, Logistics, HR

Mgmt, Facilities, Fin Mgmt, etc)

Shared and Support Services – The Defense Health Agency

Health Plan

Management

Community

Hospitals

and Clinics

Major Multi-Service

Market MTFs (NCA,

SA, SD, Tidewater,

Madigan, Tripler, CO)

Operational

Medicine

Tricare

Network of

Providers

Developing Our Integrated Delivery System – The MHS

Portfolio of Strategic Initiatives • Foundational Elements

– Strengthened Governance – Defense Health Agency supporting Military Medicine

– Culture of continuous improvement –leadership development, process based mgmt

– Optimizing resources – 10 Enterprise shared services with five year business plans

– Information for better decisions – IT Strategic Alignment

• Readiness

• Sustaining a Ready Medical Force (currency) and Medically Ready Force (IMR)

• Population Health

• Annual health assessment; Healthy Base Initiative; lowering obesity and tobacco use

• Care delivery priorities

– Shared decision making - Patient Centered Medical Home 2.0 (2.5M enrollees)

– Integrated care - Market Management / Medical Neighborhood

– Patient Safety and Quality– Standard workflow embedded in EHR (low back pain,

metabolic syndrome, depression); P4P

– Targeted services –Meeting the needs generated by 11 years of war

• Reliability and feedback –

– Embedded safeguards – Patient safety center, simulation, comparative effectiveness

– Internal transparency – Partnership with GAO to demonstrate success through

public accountability

17

Reference: Ten strategies to lower costs, improve quality, and engage patients …, Health Affairs, Feb 2013, 32:2.

Strategic Imperative

Exec

Sponsor Performance Measure

Development

Status

Previous

Performance

Current

Performance Change

FY2012

Target

FY2014

Target

FY2016

Target MHS Strategic Initiatives

Readin

ess

Improve Individual

and Family Medical

Readiness

FHPC Medically Ready to Deploy 82% 84% +2% 82% 85% 85%

Implement Policies, Procedures &

Partnerships to Meet Individual Medical

Readiness Goals

Optimize Healthcare Markets to Support

GME and Readiness TBD Measure of Family Readiness (i.e., PHA for families) -

Enhance

Psychological

Health & Resiliency

FHPC PTSD Screening, Referral (R) and Treatment (T) 52%/73% 49%/72% -3%/-1% 50%/75% 50%/75% 50%/75%

Integrate & Optimize Psychological Health

Programs to Improve Outcomes and

Enhance Value

FHPC Depression Screening, Referral (R) and Treatment (T) 71%/75% 67%/76% -4%/+1% 50%/75% 50%/75% 50%/75%

Popula

tion

Health

Engage Patients in

Healthy Behaviors

CPSC MHS Cigarette Use Rate (Active Duty 18-24) 21% 20% -1% 18% 16% TBD

Improve Measurement and Management

of Population Health to Accelerate the

Shift from Healthcare to Health

CPSC Adults with Diagnosis of Overweight or Obese 7%/28% 8%/30% +1%/+2% 50%/90% 100%/100% 100%/100%

CPSC Adolescents & Children with Diagnosis of Overweight or

Obese 11%/30% 9%/31% -2%+1% 50%/75% 100%/100% 100%/100%

CPSC Exclusive Breastfeeding During Newborn Hospitalization 60% 63% +3% 70% 80% 80%

CPSC HEDIS Index: Preventive Cancer Screens & Well Child Visits

(DC/PC) 8/6 10/5 +2/-1 12/10 15/12 15/16

Experience o

f C

are

Deliver Evidence-

Based Care

CPSC HEDIS Index: Cardiovascular, Diabetic & Mental Health Care

(DC/PC) 28/5 24/4 -4/-1 36/12 50/16 50/21

Implement Evidence Based Practices

Across the MHS to Improve Quality and

Safety

Optimize Pharmacy Practices to Improve

Quality and Reduce Cost

Implement Patient Centered Medical

Home Model of Care to Increase

Satisfaction, Improve Care and Reduce

Per Capita Costs

CPSC Direct Care Readmission Rate (Medical/Surgical) - - - -

CPSC Wrong Site Surgery and Procedures (Direct Care) 1 1 - 0 0 0

CPSC Antibiotic Received Within 1 Hour Prior to Surgical Incision 96% 97% +1% 98% 98% 98%

Excel in Wounded,

Ill and Injured Care

CPSC Medical Evaluation Board Stage Timeliness – Integrated

Disability Evaluation System (IDES) 85 77 -8 35 35 35

CPSC Percent of Service Members Rating Medical Evaluation Board

Experience as Favorable 53% 47% -6% 70% 75% TBD

Optimize Access to

Care

JHOC Primary Care 3rd Available Appointment (Routine/Acute) 72%/51% 68%/49% -4%/-2% 78%/62% 86%/68% 94%/75%

JHOC Satisfaction with Getting Timely Care Rate 77% 76% -1% 80% 82% TBD

JHOC Potentially Recapturable Primary Care Workload for MTF

Enrollment Sites 27% 22% -5% 24% 22% TBD

Promote Patient-

Centeredness

JHOC Percent of Visits Where MTF Enrollees See Their PCM 56% 57% +1% 60% 65% 70%

JHOC Satisfaction with Health Care 59% 60% +1 62% 64% TBD

Per

Capita

Cost

Manage Health

Care Costs

CFOIC Annual Percent Increase in Per Capita Costs 1.8% 4.3% +2.5% 9.5% - -

Implement Alternative Payment

Mechanisms to Pay for Value CFOIC Emergency Room Visits Per 100 Enrollees Per Year 44 45 +1 30 28 26

Learn

ing &

Gro

wth

Enable Better

Decisions CPSC EHR Usability - - - - Deliver information for better decisions

(Clinical Enterprise Intelligence)

Implement Modernized iEHR to Improve

Outcomes and Enhance Interoperability

Improve Governance to Achieve Better

Quadruple Aim Performance

Foster Innovation CFOIC Effectiveness in Going from Product to Practice (Translational

Research) -

Develop Our People

CFOIC Human Capital Readiness / Build Skills & Currency -

CFOIC Primary Care Staff Satisfaction 58% 58% - 62% 65% 71%

MHS Strategic Imperatives Scorecard

Concept Only Measure Algorithm

Developed

Current Performance Known

and Current Target Approved Out-Year Targets

Approved Design Phase Approved Funded

18

19

Health Care Management Model Logic Structure

Increasing Resource Requirements

State 1:

Free of Disease,

Low risk

State 2:

Free of Disease,

High risk

State 3:

Has Disease,

Uncomplicated

State 4:

Has Disease,

Complicated

Health Care Management Model Conceptual Structure

•Population Data •Allocation Policy •Access Barriers •Resource Capacities

Scenario Data

HMM • Disease States • Clinical Programs

– Resource Consumption Rates – Disease State Transition

Probabilities

Clinical Data

Disease Profile over time

Workload over time

Health Care Management Model Projected Analytic Results

•Control your future or be a victim of the future

Aspirational Model

Futures-Based Agile Thinking

• Implemented Scenario-Based Methodology (Alternative Futuring)

• Identified 4 Transformational/Environmental Issues

• Developed 8 Strategic Themes from 854 Strategic Implications

• Postulated 5 axioms --- Evolved 6 Pathways to the future

• 3 integrative thrusts : leadership development; wisdom; resource stewardship

•

• Framework for mapping the present to the future –Vector to White House summit on creating wellness

–Summits as fast-moving pacing events

–Learning Labs and Focused Meetings

–Support Team / SMEs

Inspiration Phase – (2010-2011)

Ideation Phase – (2011-2012)

Implementation – (2012-2013)

Strategic Themes

• Strategic Themes

– Strategic Planning and Alliances

– Healthcare Diplomacy

– Recruiting and Training

– Translational Research

– Disaster Response

– Information Assurance

– Patient Centric Healthcare

– Surveillance, Prevention and

Control

– Meaningful Measures

– Challenging Ethics

• Backcasting

– Reach back (2027) to a more

definable waypoint

– Define archetypes for

consideration to address

themes in 2027

203

5

202

7

20

15

AFMS Vector

or String

204

5

Federal Health Strategy Map

•Identify common priorities

•Identify common principles

•Outline common objectives

Federal Health Strategic Matrix

Leade

rship

Devel

opme

nt Wisd

om

Gene

ratio

n Reso

urce

Stewa

rdshi

p

Leadership Readiness Value Quality

Optimize

Healthiness

Team

Effectiveness

Agility

Resiliency

Prioritize

Investment

Excellence in

Execution

Increase Access

Cost Efficiency

Collaborative Partnership Federal Collaboration

Research and Development Innovation, Science, Technology

Education and Training Health as a Team Sport

Knowledge, Data Management, and Analytics

Humanitarian Response

Knowledge

Access

Situational

Awareness

Strengthen

Communications

Focused

Acquisition

Interagency

Initiatives

Choice/Options

Standardization

Continuous Care

Accountability

Risk Taking

Transform

Management

Strengthen

Systems

Recapture Care

Manage Cost

Facility Renewal

Fiscal

Stewardship

National

Quality

Strategy

Value Stream of the WIN Initiative Human Flourishing

National

Prevention

Strategy

↑Growth

Disparity↓ Grow

Connect

Live

Survive

↑Quality

Cost↓

↓ National Debt

↓ National Medical Bill

Productivity ↑

Preparedness↑

Prosperity ↑

← Value Proposition →

Wellness Initiative

for the Nation

Environment

Beneficent Purpose

Health Care

Pyramid of Prosperity Core Components

Back Up

31

Proposed Incentive Measures

• Readiness: • **IMR – Indeterminate Rate

• Currency - Further study.

• Health: • ** Self reported health status (Use of Tri-service work flow standard

question)

• ** Depression Symptom Prevalence – PHQ 2 (Use of Tri-service

work flow)

• ** Activity Level - (Use of Tri-service work flow standard question)

• ** HEDIS Preventive Measures

– Breast, Cervical, and Colorectal CA , Well Child Visits

• Lost duty days due to injury or illness - Further Study

32

** = Measure to be included in initial set of incentive

measures

Proposed Incentive Measures (Con’t)

• Healthcare:

– Service to Market Measures:

• ** Safety - Partnership for Patients Index (Harm events, readmissions)

• **HEDIS Disease management Measures (Cardio Vascular Disease,

Diabetes)

• **Average Daily Patient Load / Occupancy Rate

• **Operating Room Utilization Rate

• **Primary Care Manager Continuity

• ** 3rd Available Appointment (acute, routine) Subject to revision of measure

• **Satisfaction with Care

Further Study

• Low Back Pain CPG (Diagnostic imaging in LBP) - development

• ORYX inpatient measures

• CPGs for Specialty Care (Ortho, Mental Health)

• Ambulatory care sensitive admission rate

• Perinatal Care (NPIC Index)

• Administrative Cost Efficiency (Support Costs / Direct Care Costs)

33

** = Measure to be included in initial set of incentive

measures

Proposed Incentive Measures (Con’t)

• Cost:

– ** Private Sector Care Cost (Market specific)

– ** ER Utilization Rate

– ** Bed Days per Thousand

– ** % Retail Pharmacy

– ** Referrals accepted by MTFs (ROFR) (Market Specific)

– **% Specialty done in Private Sector

– Note: Cost measures relate to cost management at the population level, not

primarily at the hospital or clinic level. We have included some measures of care

efficiency in the “better care” section of measures.

34

• People (All measures in development)

– Staff Engagement

– Staff Safety

– PC Staff Satisfaction

** = Measure to be included in initial set of incentive

measures

2012 MHS Performance Report Card

2012 *

Improving Target Current

Readiness

1 Medically Ready to Deploy 82% 84%

2 PTSD Screening, Referral (R) and Treatment (T) 50%/75% 49%/72% /

3 Depression Screening, Referral (R) and Treatment (T) 50%/75% 67%/76% /

Population Health

4 MHS Cigarette Use Rate (Active Duty 18-24) ($) 18% 20%

5 Adults with Diagnosis of Overweight or Obese 50%/90% 8%/30% /

6 Adolescents & Children with Diagnosis of Overweight or Obese 50%/75% 9%/31% /

7 Exclusive Breastfeeding During Newborn Hospitalization 70% 63%

8 HEDIS Index: Preventive Cancer Screens & Well Child Visits (DC/PC) 12/10 10/5 /

Experience of Care

9 HEDIS Index: Cardiovascular, Diabetic & Mental Health Care (DC/PC) 36/12 24/4 /

10 Direct Care Readmission Rate (Medical/Surgical) --

11 Wrong Site Surgery and Procedures (Direct Care) 0 1 NC

12 Antibiotic Received Within 1 Hour Prior to Surgical Incision 98% 97%

13 Medical Evaluation Board Stage Timeliness – Integrated Disability Evaluation System (IDES) ($) 35 77

14 Percent of Service Members Rating Medical Evaluation Board Experience as Favorable 70% 47%

15 Primary Care 3rd Available Appointment (Routine/Acute) 78%/62% 68%/49% /

16 Satisfaction with Getting Timely Care 80% 76%

17 Potentially Recapturable Primary Care Workload for MTF Enrollment Sites ($) 24% 22%

18 Percent of Visits Where MTF Enrollees See Their PCM 60% 57%

19 Satisfaction with Health Care 62% 60%

Per Capita Cost

20 Annual Percent Increase in Per Capita Costs ($) 9.5 4.3%

21 Emergency Room Visits Per 100 Enrollees Per Year ($) 30 45

22 Primary Care Staff Satisfaction 62% 58% NC

($) Denotes lower is better * Data lag 3-6months No Yes 35