Aco structure presented by hankwitz 5.12.11 meeting

Northern Colorado IPA: Laying the Groundwork for a

Physician-Driven Clinically Integrated

Accountable Care Organization

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May 12, 2011

Presentation Agenda

• Market Trends, PPACA & Health Reform • NCIPA’S Current Situation

• IPA Profile• SWOT

• PVHS Offer to NCIPA re UMA• Scenarios of Future Vision, Roles and Functions• Group Discussion 

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Market Trends, PPACA and Health Reform

• PPACA is mostly about health insurance reform; it significantly impacts health care delivery reform

• For doctors and hospitals, the clearest aspects of PPACA spell out payment reduction schedules

• Health Reform’s government payment schedules are not keeping pace with inflation

• Providers must retain current commercial insurance base to ensure economic sustainability

• Kaiser

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PPACA & Health Care Reform

• Most substantive piece of legislation to affect the health care industry since the passage of Medicare in 1965

• Goal: Increase the scope of insurance coverage and access to a greater number of Americans and reduce cost

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Question

• So, how does the government propose to increase access and at the same time reduce cost?

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Start with Value & Triple Aim

• VALUE = Quality/Cost … as compared to peers

• TRIPLE AIM = Improved Outcomes, Lower Costs & Higher Patient Satisfaction

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& add Payment System Change

CURRENT FUTUREVolume Driven

- Admissions- Visits- Procedures- Interventions- Widgets- More volume equals ($) more revenue

Care Driven- Wellness & Prevention- Care Coordination- Clinical Integration- Care Management- IT Connectivity- Aligned Incentives leads to fair and equitable revenue

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Payment Reform = New Ways to Deliver Care

• If PPACA covers more lives, and payment reform is in place, what mechanisms do we have to ensure quality care?

• PPACA contemplates an Accountable Care Organization

ACO Defined

• An integrated health care delivery system that relies on a network of primary care physicians, one or more hospitals, and subspecialists to provide care to a defined population.

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Source: MedPAC

“ACOs have been compared to the unicorn:

Everyone seems to know what it looks like, but nobody’s actually seen one.”

Premier ACO Model

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Big ACO vs Small aco

• Big “A” Accountable Care Organization (ACO)– Medicare population– Draft Rules & Regs have not had positive reception

• Small “a” accountable care organization (aco)– PVHS Employee & other ERISA Health Plans

• Defined population• Self-funded• ERISA allows flexible plan design and reimbursement• Care coordination principles apply

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Clinical Integration

Care Coordinatio

n

Information Technology

Financial Managemen

t

aco

Cornerstones of an “aco”

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Basic Characteristics of Clinical Integration

• Careful selection of participating physicians• Significant contributions of financial and “sweat” capital by

participating physicians• Development and adoption of clinical protocols• A performance-monitoring process• Care review based on the implementation of protocols• Mechanism to ensure adherence to the protocols• Use of common information technology to ensure an exchange of

all relevant patient data• Aligned financial incentives

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Definition of Care Coordination

“Care coordination is the deliberate organization of patient care activities between two or more participants (including the patient) involved in a patient’s care to facilitate the appropriate delivery of health care services. Organizing care involves the marshalling of personnel and other resources needed to carry out all required patient care activities and is often managed by the exchange of information among participants responsible for different aspects of care.”

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Source: AHRQ

AHRQ Care Coordination Ring

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Must have available in all settings - -

Care Delivery & Care Coordination including:

• Population Management & Outreach

• Screening and Prevention• Acute intervention and

Referrals• Diagnosis and treatment

• Chronic Disease management

• Palliation and EOL Care1 5

Information Technology

• Necessary to manage the services and costs of care for a population

• Provide the right information, at the right time, in the right form • Appropriate infrastructure to assure security, maintenance, and

use• Permit practitioners to make decisions based on current,

comprehensive information and patient history• Ability to pay providers; redistribution of funds or claims

processing

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Key IT Functional Needs

• Access to comprehensive patient data, viewed across service providers

• Make established clinical guidelines available for all providers• Compliance reporting showing variations in care at the provider

and network level • Track physician performance against benchmarks and peers• Clinical decision support based on network determined guidelines

including point of care alerts • Secure mechanism for provider communication

– Facilitate PCP and specialty coordination– Support care transitions

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Financial Management

• Need tools and data to support strong modeling • Must have complete physician data as well as hospital information• Typical payor data sets won’t be enough – incomplete and far too

old to help manage care and COST of care

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NCIPA Profile

• Physician owned and operated Colorado corporation

• Consists of 667 providers– 168 Primary Care Physicians– 328 Specialist Physicians– 171 Other Contracted Providers

• Holds multiple contracts– Health Plan – Direct ERISA

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NCIPA Membership

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Groups < 10 240

Groups 11-15 40

Groups 16+ 219

Membership Breakdown

49%51%

Primary Care

Groups <10Groups >10

47%53%

Specialists

Groups <10Groups >10

2 2February 28, 2011

NCIPA Primary Care ProfilePhysicians/practice

# Ind PCP Practices

% Ind PCP Practices

# PV PCP Practices

% PV PCP Practices

# Total PCP Practices

% Total PCP Practices

Solo 22 64.71% 3 25.00% 25 47.17%

2 to 4 7 20.59% 6 50.00% 13 24.53%

5 to 9 2 5.88% 1 8.33% 3 5.66%

10 and more 3 8.82% 2 16.67% 5 9.43%

Total Practices 34 100.00% 12 100.00% 53 100.00%

Total Physicians

103 61.30% 65 38.70% 168 100.00%

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NCIPA Specialist Profile

Physicians/practice# Ind SCP Practices

% Ind SCP Practices

# PV SCP Practices

% PV SCP Practices

# Total SCP Practices

% Total SCP Practices

Solo 42 53.85% 1 14.29% 43 50.59%

2 to 4 25 32.05% 3 42.86% 28 32.94%

5 to 9 5 6.41% 1 14.29% 6 7.06%

10 and more 6 7.69% 2 28.57% 8 9.41%

Total Practices 78 100.00% 7 100.00% 85 100.00%

Total Physicians 249 61.30% 79 38.70% 328 100.00%

Current Situation

UMA

NCIPAPVHS

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50 % ownership50 % ownership

Services: - Provider Network - Claims Adjudication

and Payment

Customers: - PVHS - Poudre School

District - Columbine (400 lives)

PVHS Proposal

• “We (PVHS) would purchase NCIPA’s fifty-percent (50%) interest (in UMA), becoming the sole owners of UMA.”

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How Can We Help PVHS Do This?

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By collaborating with PVHS to become the physician driven vehicle through which UMA can quickly develop a Clinically Integrated

accountable care organization

Infrastructure

Clinically Integrated

accountable care organization

Clinical

Physician Driven

Administrative

Administrative Driven

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Administrative Driven Infrastructure Components

• Third Party Administration• Financial Management• Healthcare Operations Management

– Utilization Management– Quality Assurance– CVO– Case Management

• Business Operations Management• IT Systems and Analysis • Payor Contracting & Contract Management• LegalM A Y 1 2 , 2 0 1 1

2 8

Physician Driven Infrastructure Components &/or Committees

• Clinical Integration

• Care Coordination

• Health Information Technology & IT Management

• Credentialing

• Network Development

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Role & Functions to Consider• To be the physician driven vehicle through which UMA

can:– Provide clinically integrated services– Perform Utilization Management– Develop, approve and implement EBM practice

guidelines for all specialties (HealthTeam Works)– Monitor physician compliance to practice guidelines

and report compliance to participating providers (Verisk Health – Sightlines Medical Intelligence)

– Counsel non-compliant providers and discipline them if non-compliance continues

– Implement and assist Systems of Care supporting patient centered medical homes and medical neighborhoods (CO Medical Society initiative)

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Role & Functions to Consider (continued)

• To be the physician driven vehicle through which UMA can:– Prove that value to those who are paying for healthcare

is critical to receiving fair reimbursement for services rendered in that receiving fair reimbursement is essential to achieving the professional satisfaction of NCIPA providers

– Ensure only high quality providers satisfying established criteria participate in the network (Credentialing)

– Promote clinical HIE interconnectivity in collaboration with CORHIO

– Establish compensation options such as P4P, bundled payments and shared savings arrangements (starting with PVHS as the Beta site)

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PHO vs ACO

PHOLegal entity owned by hospitals & docs

designed to strengthen referral base and alignment

with physicians

Historically formed to enable joint

contracting aimed at achieving higher

reimbursement rates

ACOLegal entity owned

by providers (hospital not

required) designed to achieve the Triple Aim of quality, cost

and satisfaction

Payment anticipated to be based on

Medicare fee for service with bonus for shared-savings

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Examples of “aco” Models

• Physician-only “aco” (Summit)

• For Profit Corporation (HWHN modified)

• Hospital Division or Single-Member LLC (LHP)

• LLC Model (UMA?)

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

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Source: Ropes & Gray 11/16/10 “ACO Strategy and Organizational Structure” webinar

Getting Ready…

• Readiness Assessment– Convene a team – Inventory existing projects and initiatives that align

with strategic goals– Identify strengths and gaps

• Critically examine:– Structure– Governance– Financial alignment– Systems integration– Clinical integration

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Getting Ready…

• Identify operational infrastructure opportunities that are readily transferable to a Medicare ACO – Mitigation of unnecessary 30 day readmits– Expedient provision of meaningful clinical information

to PCP upon patient admission or discharge– Identify ACE and Bundled Payment opportunities

• Facilitate medical management of the ERISA health plans– Identify and manage the most costly disease categories– Manage the most costly ETG’s– Manage to appropriate site of service

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Getting Ready…

• WORK TOGETHER!• Create a Clinically Integrated Network • Success factors

– High quality and appropriate utilization – Performance demonstrated through quality metrics– Care coordination and collaboration among hospitals,

physicians, other providers– Data collection and data sharing

• Implement – Just do it!

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DISCUSSION

A Walter Hankwitz, MBA, FACHE, CMPEHighlands Health Management, Inc.awhankwitz@highlandshealth.comB: 423/863-1363 C: 423/534-0212