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A Value‐Based World:Multiple Perspectives
Healthcare Association of New York State (HANYS)
Courtney BurkeSenior Vice President and Chief Strategy OfficerAlbany Medical Center
November 2, 2015
Part I: The Ideal Vision (my old perspective)
• Healthier New Yorkers (population health)• Lower costs• Engaged consumers
– i.e., the Triple Aim
Systems, programs, financing, policies that support and value these goals
The Acronyms• ACA – Affordable Care Act • ACO – Accountable Care
Organizations • APC – Advanced Primary Care• APD – All Payer Database • BIP – Balancing Incentives Program• DISCO – Developmental Disability
Individualized Supports & Care Coordination Organization
• DSRIP – Delivery System Reform Incentive Payment Program
• FIDA – Fully Integrated Dual Advantage
• HARPS – Health and Recovery Plans • HH – Health Homes (HH)• MLTC – Managed Long‐Term Care• MRT – Medicaid Redesign Team
• NYSOH – New York State of Health • PA – Prevention Agenda• PCMH – Patient Centered Medical
Home • PHIP – Population Health
Improvement Program • PPS – Performing Provider System• SHINY‐NY – Statewide Health
Information Network for New York Systems
• SHIP – New York State Health Innovation Plan
• SIM – State Innovation Model • VAP – Vital Access Provider• VAPAP – Vital Access Provider
Assistance Program• VBP – Value Based Payment
The Ingredients
• Vision – ACA/SHIP/PA • Resources/incentives – DSRIP/VBP• Tools/technology/mechanics – SHIN‐NY/APD/NYSOH• Organization – PPS/ACO/HH/HARP/DISCO/PCMH/MLTC• Grass roots buy‐in – PHIP/APC/MRT• Time and assistance for transition – VAP/Capital/VAPAP
The Overlap
ACAACOsPCMHHHFIDA
Prevention Care CoordinationPrimary Care &
Population HealthCollaboration, Cooperation
Shared AccountabilityAttention to
Behavioral HealthValue‐Based Payment
MRTHARP, DISCOPrevention AgendaNYSOHAPD
SHIN‐NYSHIP
DSRIP (PPS)PHIP
The Source of Funds (SHIP/DSRIP)Strong, expert, coordinated state leadership can create value over the next four years
DSRIP Advanced Primary Care
APD
PHIPs
NY SHIPvalue-basedpurchasing
Prevention Agenda
NY State of Health
Capital Restructuring
SIM Testing Grant ▪ Statewide
leadership▪ Stakeholder
alignment▪ Multi-payer
business design and support
Workforce strategy
Common Scorecard
SHIN-NY
Rate Review
Currently fundedSIM fundingMulti‐payer funding
Part II: The New Perspective
Overview of Albany Medical Center
Overview of Albany Medical Center
Albany Medical CenterOperating Financial StatisticsComparison to US Teaching Hospitals (N=147)Q4 2014
Albany Medical Center Hospital
Median All Hospitals
AMC Mean Last 4 Quarters
Avg Median All Hospitals Last 4
QuartersTotal Margin 0.07 0.07 0.07 0.07Operating Margin 0.06 0.06 0.06 0.06Inpatient Revenue as a Percent of Total Revenue 0.69 0.57 0.69 0.57Total Hospital Discharges 8,425 7,462 8,360 7,316Total Patient Days 53,684 41,223 52,240 40,664Average Length of Stay 6.37 5.68 6.25 5.66Total CMI 1.78 1.75 1.79 1.71Occupancy Rate 84% 78% 82% 77%Expense per Adjusted Discharge $16,237 $16,477 $15,686 $16,387CMI Adjusted Expense per Adjusted Discharge $9,113 $9,651 $8,777 $9,640Hospital Full Time Equivalents 5,697 4,994 5,576 4,881Hospital Full Time Equivalents per Adjusted Occupied Bed 6.68 5.95 6.69 6.01CMI Adjusted Hospital Full Time Equivalents per Adjusted Occupied Bed 3.75 3.43 3.74 3.5Charity Care Cost Share 0.01 0.01 0.01 0.02
Bad Debt $1,097,000 $8,330,665 $2,888,632 $8,169,346
The Financial Reality for HospitalsSource: Financial Challenges Top Healthcare CEO ConcernsJohn Commins, for HealthLeaders Media , January 14, 2014
“Among financial concerns, for example, government funding cuts ranked highest, led by inadequate reimbursements for Medicare and Medicaid, followed by an anticipated increase in bad debt due to high‐deductible health plans, decreasing patient volumes, staffing costs, competition from other providers, and inadequate funding for capital improvements.”
Switching Perspective (Reality)
• The world is actually changing out here
• A new financial reality – Many new financial
penalties have come and are coming
– New financial opportunities exist as the world changes
– Some provider are thriving, most are struggling
• We have an old regulatory system, but some opportunity to waive old regulations
• Timelines are constantly changing, but change is real
• Systems are still siloed, but providers/organizations are talking
• Markets are changing, rapidly and geographically
{
13
University of Vermont Health Network
URMC
Bassett
Trinity
Health Quest
Westchester Medical Center
Greater Hudson Valley Health System
Mergers, partnerships, and changing markets
Trinity
Montefiore
St. Joseph’s Auburn
IHANY
St. Peter’s Health Partners
Albany Medical CenterColumbia Memorial Health
Patient CareAlbany Medical Center
Columbia Memorial Health
Total
Licensed Beds 734 192 926
Skilled Nursing Home Beds ‐ * 120
Patient Admissions 35,151 5,988 41,139
Patient Days 212,666 31,630 244,296
Observation Cases 3,070 2,271 5,341
Average Length of Stay 6.1 5.3
Average Daily Census 593 87
Albany Medical CenterColumbia Memorial Health
Patient CareAlbany Medical Center
Columbia Memorial Health
Total
Surgical Cases 29,352 3,745 33,097
Case Mix:
All Payer 2.39 1.15
Medicare 2.00 1.29
Emergency Dept Visits 72,980 31,047 104,027
Outpatient Visits 771,436 407,573 1,179,009
Albany Medical CenterColumbia Memorial Health
WorkforceAlbany Medical Center
Columbia Memorial Health
Total
Full‐time Equivalent Employees 7,635 1,270 8,905
Employed Physicians 465 68 533
Voluntary Physicians 600 210 810
Basic Science Faculty 113 N/A 113
Residents 433 N/A 433
CollegeAlbany Medical Center
Columbia Memorial Health
Total
Graduate Students 191 N/A 191
Medical Students 545 N/A 545
Research Funding $16.0m N/A $16.0m
Albany Medical CenterColumbia Memorial Health
Financial StatisticsAlbany Medical Center
Columbia Memorial Health
Total
Unrestricted Revenues $1.107.9m $144.9m $1,252.8m
Unrestricted Expenses $1,067.5m $144.1m $1,211.6m
Albany Medical Center and Columbia Memorial Health
Main Campuses and off‐site locations
Albany Medical Center and Saratoga
Hospital
Main Campuses and off‐site locations
Albany Medical Center, Columbia
Memorial Health and Saratoga Hospital
Main Campuses and off‐site locations
The World of Value‐Based Care
Changing Payment is RealSource: Healthcare Association of New York State (HANYS)
PART III: How to Survive the New Reality
Understand the World of Population Health Management
Population Health
Management
Do a Gap Assessment• Level of alignment among hospital, physician, clinicians – and others
• Utilization of evidence‐based practices for quality
• Financial management, efficiency & productivity
• Integrated information systems
• Other: PCP relations, staff development, new contracts ‐ quality, VBP
Figure out Where You Fit
Figure How You Fill the Gaps• Build• Buy • Collaborate/Partner
– 40/60 (Westchester – Bon Secours– Active parent– Clinical affiliation– Management Services Organization
Identify Opportunities (behavioral health examples)
Source: “ Integrating Primary Care into Behavioral Health Settings: What Works for Individuals with Serious Mental Illness” by Martha Gerrity – The Reforming States Group & The Milbank Memorial, 12/14.
• Individuals with SMI or substance use disorder have higher rates of acute and chronic medical conditions, shorter life expectancies (by an average of 25 years), and worse quality‐of‐life than the general medical population.
• Modifiable risk factors for medical conditions (e.g., smoking, obesity, lack of exercise) and social conditions (e.g., homelessness, poverty, exposure to violence) account for some of the increased risk, but fragmented care increases overall health disparities in these populations.
• People with SMI and/or substance use disorder frequently have limited access to primary care, due to stigma and environmental factors, and are often underdiagnosed and undertreated.
• Poor medication management contributes to inappropriate polypharmacy, inadequate medication trials, and inconsistent monitoring of metabolic and other side effects.
• Individuals with SMI or substance use disorder also have higher utilization of emergency and inpatient resources.
29
Initially Focus on your Expertise, with an Eye to Expansion / Growth Opportunities
• Albany Med’s expertise – Secondary Prevention and Acute care
• Opportunities for expansion– Primary prevention, home care and sub‐acute
• Opportunities for growth– Palliative and long term care
Source: Dr. Ferdinand Venditti – Albany Medical CenterBirth Death
FFS FFS &Incentives(up only)(up/down)
SharedSavings(up sideonly)
SharedSavings(up andDown)
PartialCapitation
FullCapitation(PMPMfee)
InsuranceRisk
(PMPMmedical risk,plus insurancecompany)
Bundledpayments
Payor readiness
Identify Opportunities (by population)RISK CONTINUUM
High Risk Populations2015(MSSP) (MSSP Payors)
PainManagement
Asthma
People – Process – Technology – Regulatory – Partnerships ‐ Owner
Mental Health/Substance Abuse
InjuryPrevention
FFS FFS &Incentives(up only)(up/down)
SharedSavings(up sideonly)
SharedSavings(up andDown)
PartialCapitation
FullCapitation(PMPMfee)
InsuranceRisk
(PMPMmedical risk,plus insurancecompany)
Bundledpayments
Payor readiness
Identify Opportunities (by department)RISK CONTINUUMUrology ‐ 2015
(MSSP) (MSSP Payors)
RadicalProstatectomy
Partial Nephrectomy
People – Process – Technology – Regulatory – Partnerships ‐ Owner
TotalCystectomy
Nephrectomy
Use Data to Inform DecisionsSource: Healthcare Association of New York State (HANYS) – DataGen
Administrative Data
Mandatory State‐collected data
Agency for Healthcare Quality Research
H‐CUP
Payer Data
Medicaid/Medicare
Direct from Payer
APCD
Claims Aggregators
Consulting Firms
Internal Data
EMR System
Billing System
RHIO/HIE
Self‐insured Program
Community Health Data
Census/Inter‐census Survey
Public Health DataCDC, etc.
Decide How Much Risk You Can AbsorbSource: Healthcare Association of NYS (HANYS)
Type Financial RequirementWho
Conducts Review?
Interactionwith DSRIP
VBP
Insurance License
Escrow Deposit – 5% of annual projected medical expenses
Contingent Reserve Requirement – 7.25% of premium incomeDFS and DOH
Prepaid Capitation Financial Security Deposit (FSD) of 12.5%* DFS Level 3
DownsideRisk
If withhold is more than 25% of total payments:
• Positive Net Worth – No FSD
• Negative Net Worth – 12.5% FSD*
DOH Level 2
Upside Risk
If bonus is more than 25% of total payments:
• Positive Net Worth – No FSD
• Negative Net Worth – 12.5 % FSD*
DOH Level 1
Pay for Performance Nothing required DOH Level 0
Decide How to Capture the Value Source: Healthcare Association of NYS (HANYS)
Splitting the premium
Plan partnership
Plan partnership
Earning the whole
premium
Insurance license
Insurance license
More than the premium
New disruptors
New disruptors
Pick a Collaborative Care Management Intervention Model(Organized by the Chronic Care Model)
Components of the Chronic Care Model
Specific Features of the Interventions
Delivery System Redesign • Care/case management* or integrated practices • Medical care, mental health, or CD enhancement (on‐site or off‐site by
appropriate specialists) to provide –Supervision of care managers –Direct patient care when needed –Education and consultation
• Screening
Patient Self‐Management Support (often delivered by care managers)
• Educational programs (e.g., Life Goals Program) and materials • Goal setting • Motivational interviewing • Systematic follow‐up of symptoms and adherence to treatment • Links to community resources (e.g., travel, housing)
Decision Support • Treatment algorithms and guidelines • Expert advice from specialists
Clinical Information Systems
• Patient registry • Refill monitoring through pharmacy databases to assure adherence
• Care manager functions include coordination and communication among health care providers, systematic follow‐up with structured monitoring of symptoms and treatment adherence, patient education and self‐management support including motivational interviewing.
• Source: http://nyshealthfoundation.org/uploads/resources/integrating‐primary‐care‐behavioral‐health‐settings‐milbank‐memorial‐fund.pdf
Decide Which Programs Are the Best Fit for Your Organization (Medicare)
• Bundled payments for care improvement initiatives
• Comprehensive primary care initiatives
• Federally qualified health center advanced primary care practice demonstration
• Pioneer ACO (or other ACO)• Medicare Shared
Savings Program• Medicare Advantage
(arrangement withprivate health plans)
Know WHY Your Organization is Making These Changes
(as learned from attending the Kaufman Hall Conference in Chicago on 10/22‐23/15)
• Don’t be Blockbuster when you could be Netflix
• Know the value proposition
• What will happen if Uber comes to healthcare? Maybe it is already here.
• Why would someone invest millions to build a new health facility in the Grand Caymans?
• Doesn’t the Patient deserve better care and better value?
Additional Recommendations
• Know your strengths, and others’ shortcomings
• Know your limits
• Know your market and its trends
• Don’t just understand the new lingo/acronyms: DRGs, APGs, risk corridors, VBP, IDS, CIN, etc. – figure out how to make them a reality
• Use DSRIP to begin to build an infrastructure
• Figure out whether to build, buy, or partner – because Use your expertise (e.g., care management, insurance, specialties)
• Build an organizational structure that supports your work
• Develop a plan to integrate advanced primary care and providers that support the social determinants of health
It Can Work: The Maryland ExampleSource: National Public Radio story 10/23/15
• “The pilot worked, and in January 2014, after 18 months of negotiations between Maryland and the federal authorities, global budgeting went statewide.
• It was voluntary for hospitals, but within six months every hospital in the state had signed up.
• Now, nearly two years into the five‐year agreement, the Centersfor Medicare and Medicaid Services says that hospitals are well on track to hit targets. Under the deal, Maryland has to save $330 million for Medicare over five years and reduce hospital readmission rates all while improving the overall health of residents.
• The Maryland Hospital Association says in the first year alone, cost savings topped more than $100 million, and hospital readmissions were down at a rate faster than the national average.”
What Will it Be?
Seize the RIGHT moment ….OR …
“If our beds are filled,
we have failed”
‐Mt. Sinai Hospital System Advertisement appearing in many major media outlets
CONTACT INFORMATION
Courtney BurkeSenior Vice President and Chief Strategy OfficerAlbany Medical Center43 New Scotland Avenue(518) 262‐9590