Session 26

New Competencies for Succeeding in Risk-Based Arrangements

Bobbi BrownSenior Vice President, Financial EngagementHealth Catalyst

Lynn GuilletteVice President, Payment InnovationsDartmouth-Hitchcock

Dan UngerVice President of Product Development, Financial Decision SupportHealth Catalyst

Learning Objectives

• Understand the current state of payment reform

• Dartmouth-Hitchcock Health’s experience in the Medicare Pioneer ACO program

• Learn how to monitor and more accurately capture the risk of your population

• Understand how one health system gets the most out of its quality incentives through analytics and reporting

• Learn how to leverage technology to identify creative, low-cost ways to improve population health

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Agenda• Population Health: Understanding the Changing System of Payment

• Dartmouth-Hitchcock: Real-life Learnings from Participation in a CMS Pioneer ACO

• Insights from the Market: High-Value Competencies

• Q & A

• Complete Feedback and Lessons Learned

Population HealthUnderstanding the Changing System of Payment

State of the Market in Healthcare

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Big question- When do we hit the tipping point?

Value orientation moving slowlyRecognition of future trendsNeed for preparation CMS role criticalMany models in use: p4p, bundles, ACO, shared risk (+, +/-)

ConsumerismGrowth in high-deductible plansInvolvement in price and value

Summarized from ANI Out of the Box, Martin Arrick, Managing Director, S&P Global Ratings

Goals of CMS

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Alternative PaymentLink with QualityFee for Service

Legend

Sheet1

Alternative Payment

Link with Quality

Fee for Service

CMS Objectives

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Aim to improve beneficiary outcomes and increase the value of care

Better care for

individuals

Better health for

population

Lower growth in

expenditures

Models

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Payment Methodology Quality Cost

Cost low low

Fee for Service low medium

Per case / outpatient grouping low medium

% of charges low low

Add quality metrics medium medium

Shared savings (+, +/-) medium/high medium/high

Bundled payment low medium/high

Add quality metrics medium/high high

Shared savings (+, +/-) medium/high high

Capitation medium/high high

Add quality metrics high high

Shared savings (+, +/-) high high

Incentive for Improvement

Survey Results

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Survey Results

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Survey Results

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Survey Results

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Poll Question # 1

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On a scale of 1-5, how effectively is your organization positioned for taking on significant risk via risk-based contracts like ACOs, bundled payments, etc.?

1) Not at all2) Somewhat3) Moderately4) Very5) Extremely6) Unsure or not applicable

Dartmouth-HitchcockReal-life learnings from participation in a CMS

Pioneer ACO

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We are creating a sustainable health system to improve the lives of the people and communities we

serve for generations to come.

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Imagine a health system that focuses on health, not just health care

Imagine a health system where care is based on value, not volume

Imagine a health system grounded in population-based strategy, not market share

Dartmouth-Hitchcock Health System: Mary Hitchcock Memorial Hospital (DHMC) Dartmouth-Hitchcock Clinic New London Hospital Mt. Ascutney Hospital & Health Center Cheshire Medical Center Alice Peck Day Memorial Hospital Visiting Nurse and Hospice for VT & NH “Dartmouth-Hitchcock Health ACO” Co-founder of OneCare Vermont ACO, LLC

Managing the Payment System Transition

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The current fee-for-service payment system is unsustainable. Alternative payment models offer an avenue to transition from pay-for-volume to pay-for-value in parallel with healthcare delivery transformation. The trick is how to design new payment models that foster sustainability without producing unintended consequences for providers and/or patients.

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Health IT Infrastructure &

Data Use

Governance & Culture

Financial Readiness

Quality & Process

Improvement

Care Coordination

Patient Risk Assessment

& Stratification

Patient EngagementReadiness to

Accept Value-Based Payment Models

Health IT Infrastructure & Data Use

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Financial Readiness Capabilities

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Shared Savings/Loss

distribution policies

Contract performance reporting & accounting

Staff & infrastructure investment

Patient attribution

methodology

Benchmarking methodology

Budget projections

Actuarial services/

consultations

Reinsurance/ stop-loss

Financial risk assessment

Provider financial

alignment

D-HH’s CMS Pioneer ACO Experience

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Three full performance years with mixed financial results, but positive quality performance

Built out ACO infrastructure to manage Pioneer and commercial ACO contracts

Withdrew from program in 2015 primarily because of: Concerns with benchmarking

methodology Use of national vs. regional trends

Comparison of All Pioneers PY3 Benchmark PBPY (Beneficiary count shown in thousands for each Pioneer)

45K 20K 9K 29K 20K

42K

13K 13K 13K 31K 17K 53K 70K 10K 63K 20K 35K 77K 24K 17K $6,500

$7,500

$8,500

$9,500

$10,500

$11,500

$12,500

$13,500

$14,500

$15,500

$16,500

Average ACO Benchmark PBPY = $11,141

D-HH Benchmark PBPY = $9,297, which is 17% below the all Pioneers ACO average

It’s All About the Benchmark!

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Applied and deferred participation for 2016

in the CMS Next Generation ACO

Re-applied for 2017 CMS Next Generation

ACO participation

Next Generation ACO vs. MACRA MIPS …. Lesser of two evils or

path to success?

Poll Question # 2

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Has your organization been impacted by the benchmarking methodologies in a risk-based contract?

a) Yes - negativelyb) Yes - positivelyc) No significant impactd) I don’t knowe) Not applicable

Review –Readiness Capabilities

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Health IT Infrastructure &

Data Use

Governance & Culture

Financial Readiness

Quality & Process

Improvement

Care Coordination

Patient Risk Assessment

& Stratification

Patient Engagement

Lessons Learned

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• It’s all about the benchmark!• Investing in outside

actuarial/accounting/consulting services may be worth it–even if just to support your own internally drawn conclusions.

• Assessing financial and quality contract performance lags at least six months after contract period ends; ROI measurement also lags.

• You may have the data, but do you have insights into the data?

Insights from the MarketHigh-Value Competencies

Lessons from the Market

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Realize Your True Risk Adjustment Factor Improve Self-Pay

Collections

Avoid Adverse / Unnecessary Events

Utilization Reduction via Public Health-ish Initiatives

Advanced Cost Reduction

Actively Manage High-Risk patients

Prioritize High-Value Quality Measures

Poll Question # 3

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Which competency would you want to learn more about?

a) Realize your true risk adjustment factorb) Prioritize high-value quality measuresc) Avoid adverse eventsd) Clinical process improvemente) Advanced cost reductionf) Utilization reduction via public health-ish initiatives

Lessons from the Market

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Realize Your True Risk Adjustment Factor Improve Self-Pay

Collections

Avoid Adverse / Unnecessary Events

Utilization Reduction via Public Health-ish Initiatives

Advanced Cost Reduction

Actively Manage High-Risk patients

Prioritize High-Value Quality Measures

Realize Your True Risk Adjustment Factor

You don’t have much control over reimbursement in a capitated world, but you DO have the data and the

capabilities to understand, track, and impact this important metric.

Minor changes in RAF can translate into millions of $.

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Realize Your True Risk Adjustment Factor

Many health systems fail to get full financial credit for the risk they are taking due to lack of timely insights into:

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Patient Access

Coding/ Documentation

Patients known to have persistent

conditions that you haven’t seen this year

Previously coded with higher-level, persistent

condition

Consistent coding across providers for high-risk conditions

High-risk condition in problem list, but not

coded

New patients to your network that you

haven’t seen this year

Hospital billingProfessional billingClaimsRisk Adjustment Variables

Risk score is calculated for a patient at a particular point in time off diagnosis codes and patient demographic information over the previous rolling year for that patient.

Data sources

Hospital Billing

Professional Billing

Claims

Data Needed

Variables

Risk Adjustment Factor VariablesCMS Risk Variables Age Variables

Sources:https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Risk-Adjustors.htmlhttp://www.nber.org/risk-adjustment/2016/2016-Midyear-Final-Model/CMS-HCC_software_V2216.79.L1/hcccoefn.csv

Demographic Variables

Disease Interaction Variables

Disability Interaction Variables

Prevalence of disease: Prevalence of ~ 80 different diagnoses in the population

Age and gender: Distribution of age and gender in the population ~24 variables

Demographic (aka Medicaid status): Prevalence of Medicaid eligibility in the population, which is essentially a proxy for economic status. 8 variables.

Comorbidities: Prevalence of ~20 disease comorbidities

Disability with disease: Prevalence of ~20 diagnoses comorbid with a disability

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Risk-Adjustors.htmlhttp://www.nber.org/risk-adjustment/2016/2016-Midyear-Final-Model/CMS-HCC_software_V2216.79.L1/hcccoefn.csv

Prioritizing Risk Adjustment Gaps

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• High-level view of potential score gap and actionable buckets

• Drill down by PCP, specialty, and location

Coding Benchmarking

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• Compare providers and locations for specific condition groups

• Goal is to improve coding accuracy, not to up-code

• Leverage for discussions with coding and physicians

Prioritize High-Value Quality Measures

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START SIMPLE!!!

• Centralize tracking of quality measures across contracts

• Estimate high-level financial impact

Prioritize High-Value Quality Measures

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Long-term Goal• Understand $ impact from

quality incentives

• Timely reporting and trending of measures

• Proactively improve results

• Improved contracting

• Which of these actually impact utilization, too?

Reducing Utilization via Public Health Initiatives

41Source: http://www.governing.com/topics/transportation-infrastructure/gov-can-roadside-witticisms-save-lives.html

In Iowa, road deaths decreased approximately 10% in both of the years following the start of this initiative

Lessons Learned

• Payment reform is real, but overall impact is still minimal…for now

• Understanding the benchmarking methodologies for ACO contracts is critical

• Don’t be afraid to leverage outside expertise

• Two ways that health systems out there are using data and analytics to improve their ability to survive in at-risk contracts:

Receiving appropriate credit for the risk you are taking on

Improving financial performance through simple monitoring of quality measures

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Analytic Insights

AQuestions &

Answers

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What You Learned…

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Write down the key things you’ve learned related to each of the learning objectives

after attending this session

Thank You

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Session 26��New Competencies for Succeeding in �Risk-Based Arrangements Learning Objectives�AgendaPopulation Health�Understanding the Changing System of PaymentState of the Market in HealthcareGoals of CMSCMS ObjectivesModelsSurvey ResultsSurvey ResultsSurvey ResultsSurvey ResultsPoll Question # 1Dartmouth-Hitchcock�Real-life learnings from participation in a CMS Pioneer ACOSlide Number 15Slide Number 16Slide Number 17Slide Number 18Managing the Payment System TransitionSlide Number 20Health IT Infrastructure & Data UseFinancial Readiness CapabilitiesD-HH’s CMS Pioneer ACO ExperienceComparison of All Pioneers PY3 Benchmark PBPY �(Beneficiary count shown in thousands for each Pioneer)It’s All About the Benchmark!Poll Question # 2Review – Readiness Capabilities Lessons LearnedInsights from the Market�High-Value CompetenciesLessons from the MarketPoll Question # 3Lessons from the MarketRealize Your True Risk Adjustment FactorRealize Your True Risk Adjustment FactorData sourcesRisk Adjustment Factor VariablesPrioritizing Risk Adjustment GapsCoding BenchmarkingPrioritize High-Value Quality MeasuresPrioritize High-Value Quality MeasuresReducing Utilization via Public Health InitiativesLessons Learned�Analytic �InsightsWhat You Learned…Thank �YouSession Feedback SurveyUpcoming Session