Yours, Mine, Ours:Provider-Payer Convergence &

the Future of Analytics

John Moore

President & FounderChilmark Research

Session #23

Objectives & Take-Aways

• Why Value-based Care & Need for Convergence

• What Does Convergence Look Like

• Analytics – The Foundational Platform

• Getting There

• Looking Ahead

Chilmark Research: Our Purpose, Our Values

Purpose:

• Help Organizations Adopt, Deploy and Use IT to Improve the Patient Experience

Values:

• Provide the Highest Quality, Objective Research

• Be Pragmatic

• Foster Intellectual Curiosity

• Contribute to the “Social Good”

ObservationsMove to Value-Based Care (VBC) Accelerating

Providers ill-prepared to assume risk and shift to a quality driven business model

Early Experiments with At-Risk Arrangements Inconclusive

ACOs struggle to invest in requisite organizational, process and technology strategies

Provider/Payer Relationships Increasing

Multiple financial and clinical models prevail, no clear “winners”

Emerging Provider/Payer Market Requires New

Business & Technology Strategies

Commercials/Employers Driving ACO GrowthBy 2020: - Employer Supported ACOs will Double to Nearly 50%- 75% of Aetna’s Spend will be in VBC Contracts

2011 2012 2013 2014 2015 2016 2017Total Commercial Medicare Medicaid

SOURCE: Leavitt Partners Center for Accountable Care Intelligence

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Con

tract

s

Providers Are Missing VBC Goals

SOURCE: McKesson Corporation 2016 Journey to Value: The State of Value Based Reimbursement in 2016

Payvider Strategy Is Collapsing• Payvider Success is Exceedingly Rare Successes are Outliers

• 37 Payviders Established Since 2010* Only 11% are Profitable

• Casualties Abound Mercy Health, OH

Northwell, NY

Profitable11%

Losing $$$73%

Folded16%

Profitable

Losing $$$

Folded

*SOURCE: Analysis of Integrated Delivery Systems and New Provider-Sponsored Health Plans, June 2017, RWJF

Three Points of Failure• Region-Specific Not Scalable

- ~250K members typically needed

Not Competitive with National Plans- Large, multi-State employers

• Requisite Skills Actuarial, Risk Modeling, Contracts…

• Culture Animosity Between Administrators & Clinical

Health Plan Success Not Always Aligned with Provider Success

Overlap, Misalignment and Gaps Persist

Several Paths to Convergence

Examples:Humana/ConcentraAnthem/CareMore

Optum/Monarch Health

Examples:Anthem/Aurora

Aetna/Innova HealthBright Health/Centura

Examples:KaiserDetroit Medical CenterGeisingerMemorial HermannUPMCPotential for the over 400 IDNs in the US

Examples:IoraWeCare

Payer Acquired Physician

Organizations

Joint Ventures

Provider Sponsored or Owned Health

Plans

Employer Sponsored Plans and Services

Poll Question #1

Which of the following is the most likely route to convergence for your organization?

a) Payer-acquired physician organizationb) Joint venturec) Provider-sponsored or -owned health pland) Direct contract; employer-sponsored plans and servicese) Unsure or not applicable

Growth Is in Co-Branded Relationships

SOURCE: Hospital Networks: Perspective from Three Years of Exchanges, 2016,McKinsey Center for U.S. Health System Reform

Objective: Provide a Health ServiceRespond to Rising Consumerism CDHP = Greater Out of

Pocket Expense- Digital Health/Engagement - Higher Quality, Better Value

Differentiate in Their Market Be All-in-One Service

- Employers, Consumers, etc.Deliver Highest Value

Silos Defeat Move to Consumer Centric Model

Biz, Ops, Tech, Data Synchronicity Required

ApplicationsRegistries, Risk Analysis, Clinical Guidelines, Reports, Actionable Guidelines

Enabling ProcessesCare Coordination & Mgmt, Eligibility, Prior Auth, Risk Mgmt, Engagement

Data GovernanceAccess, SSO, HIPAA, Consent Mgmt

Common, Shared Data Platform

Data Governance

Applications

Processes

Strategy & ObjectivesClinical, Operational & Financial Objectives, KPIs, Metrics for Success

$

Data PlatformShared Data Platform, Single Source of Truth

Convergence Demands Data Transparency

FFS P4P ACO JV

Dat

a Tr

ansp

aren

cy

Transactional Strategic

Convergence DOA without Data

Common, Shared Data Platform

Data Governance

Applications

Processes

Claims

PBM

Financial

Labs

Clinical

Financial

Provider Payer

Single Version of Truth Drives StrategyCommon Shared Data Platform Enables Ability to Optimize Prior Auth Facilitate Care & Utilization

Management Deliver Deeper Insights to Point of Care

- Care gaps, med lists (and fills), visits, evidence-based care pathways, visits, etc.

Deeper Consumer/Patient Engagement- Longitudinal record

Reduce Redundancies

The ChasmFFS Remains Primary Source of Revenue Value-based Care Revenue

Under 10%Parallels to Retail… Online ~10% of Retail Sales

- Amazon Purchase of Whole Foods

VBC & Requires Restructuring, Resources, Executive Commitment Cultural Realignment

FFS

Poll Question #2

What percentage of your organization’s revenue comes from a value-based contract?

1) Less than 10%2) 10-25%3) 26-40%4) Greater than 40%5) Unsure or not applicable

Trust?!

Creating a Data Platform Strategy for Convergence• Technology NOT a Limiting Factor 2012 – Only 20% of Leading Vendors Supported both Claims and Clinical Today – All Leading Vendors Support Claims and Clinical

• Not an IT Project, Not an Analytics Project Assemble Strategic, Multi-disciplinary Team

- All Stakeholders

• Reach Consensus on Core Data Elements Types & Sources Timeliness Quality Purpose Access

Top Challenge: Governance

• Its Policy, People, Privacy, Security & Trust

All “Soft” Issues

• Requires Diplomatic Leadership

Strength

Resolve

Humor

Respect

Meeting Partner(s) Where They Are• Convergence Not for Everyone

Market Dynamics Matter

- Parity Critical

• Align Incentives To Shared Economic Outcomes

Clinical Transformation

- Short-term Hit => Long-term Gain

• Clear Metrics to Drive Continuous Improvement

Performance, KPIs, Clinical, Process

- Common Shared Data Platform

Looking Ahead • Customer Centricity Key Differentiator Comprehensive & Complete Health Service

- Know Me, Care for Me, Serve Me, Show Me

• Best Practices Non-Existent Fragmentation Reigns

- Localization Paramount

• Soft Issues Define Success Inclusive Respect Trust

Takeaways/Recommendations• Get Internal House in Order Governance, Quality, Sources Understand Tolerance for Risk

- Ready to Invest for Long-term?

• Pay Attention to Early Innovators Model Structure

- JV, Shared Risk, Bundles & Post-acute- Incentives, Alignment, Success

• Sustained Executive Leadership True Commitment from All Parties?

Closing Thoughts• Migration to VBC will Accelerate

Few, Truly Ready Today

• Consumer Centricity Core to Success

Engage, Understand, Serve

• Success Contingent on Comprehensive Data

VBC Necessitates a Data-Driven Enterprise

“We are only as good as the information we have delivered at the point of decision.”

- Dr. David BlumenthalFormer Director ONC

Thank You