Southwind Survival in the New Market Clinical Integration as
the Foundation Meridian Health Partners Physician Summit June 7,
2014
Slide 2
2014 The Advisory Board Company advisory.com 2 Southwind in
Brief 2 $300 M + In total opportunities identified across past five
years 1,150+ Engagements completed 1,800+ Years of experience
PHYSICIAN PRACTICE MANAGEMENT Long-term management solution for the
physician enterprise Interim management ideal for driving
meaningful improvement efforts Deep-dive assessment to identify and
quantify improvement opportunities Executive recruiting for the
physician enterprise Experienced, progressive physician practice
management PRACTICE PERFORMANCE IMPROVEMENT Specialized team of
experts in patient flow, revenue cycle, and IT Start-to-finish
physician compensation redesign Financial data consolidation,
reporting, and benchmarking Satisfaction solutions through patient
and provider satisfaction surveys Focused improvement efforts that
achieve a significant ROI MERGERS & ACQUISITIONS Thorough pre-
acquisition due diligence Negotiating deal terms to reach a
definitive agreement Post-transaction transition assistance
Structuring physician practice acquisitions for long-term success
VALUE-BASED CARE PROGRAMS Clinical integration and accountable care
Patient-centered medical homes Clinical transformation Bundled
payments Co-management Establishing value- based care programs for
shifting payment models MEDICAL STAFF PLANNING Strategic community/
physician needs assessment Determining fair market value and
reasonableness of compensation Recruitment policies for a
high-performing medical staff Comprehensive medical staff
development planning HOSPITAL PERFORMANCE MANAGEMENT Subject matter
experts in clinical operations, strategy and financial improvement
Achieving required margins at government rates Coordination of care
across the continuum Capacity optimization Navigating strategic
imperatives Enhancing strategic and operational performance to
ensure sustainability advisory.com/southwind
Slide 3
2014 The Advisory Board Company advisory.com 3 Activities
Required for Success Crafting a sustainable economic model Provide
comprehensive, coordinated care across the continuum Identify
patients at risk for avoidable adverse conditions in time to change
course of care Build scaled operations to support care management
across the system Match timing of deployment to contracting
environment Scaling the care management enterprise Building and
optimizing the provider network Assemble a strong provider network
aligned with system-wide performance goals and engaged in quality
improvement Develop organization, governance, incentives to enable
joint contracting and drive success Introduce/optimize data
analytics to drive network construction and performance monitoring
Craft a sustainable value-based payment strategy with a solid
financial foundation for profitability and growth Balance near term
opportunities with longer term investments matched to payer
environment Reduce network leakage to promote growth objectives
Incorporate targeted programs to manage inpatient margins
Full-spectrum of services to solve for challenges facing provider
organizations to position for success within transition to value
based care From assessment, through formation, to operations Create
and implement Road Map to support formation of Population Health
Management capabilities inclusive of: robust economic modeling;
care model design across full spectrum of risk profiles and
clinical conditions; and, available patient risk stratification
Support and implement notable strategies to deliver product to the
commercial market Advisory Board/Southwind Capabilities and Assets
2014 The Advisory Board Company advisory.com
Slide 4
4 2 3 4 1 Road Map Discussion, Questions and Answers Case Study
Examples Forces Driving Change Building Blocks for Transition to
Value Based Payment
Slide 5
2014 The Advisory Board Company advisory.com 5 Financial,
Clinical Profiles Shifting Dramatically Todays Economics Mandate
Transition to Value Decelerating Price Growth Continuing Cost
Pressure Shifting Payer Mix Deteriorating Case Mix Medical demand
from aging population threatens to crowd out profitable procedures
Incidence of chronic disease, multiple comorbidities rising No sign
of slower cost growth ahead Drivers of new cost growth largely
non-accretive Baby Boomers entering Medicare rolls Coverage
expansion boosting Medicaid eligibility Most demand growth over
next decade comes from publicly insured patients Federal, state
budget pressures constraining public payer price growth Payments
subject to quality, cost-based risks Commercial cost shifting
stretched to the limit
Slide 6
2014 The Advisory Board Company advisory.com 6 Private Market
Initiatives Developing Nationwide Direction Not Just Coming From
Washington BCBS Massachusettss Alternative Quality Contract: Annual
global budget, quality incentives for participating providers Blue
Shield California: Two ACOs in Northern California Cigna: Medical
home contract with Piedmont Physicians Group BCBS Illinois: Shared
savings contract with Advocate Health Care BCBS Minnesota: Shared
savings contract with five providers UnitedHealth Care: ACO with
Tucson Medical Center Maine Health Management Coalition:
Multi-stakeholder group supporting ACO pilots Providence Health
& Services: $30M, two-year contract with public employee
benefits board Humana: ACO pilot with Norton Healthcare Anthem Blue
Cross: ACO pilot with Sharp HealthCare medical groups Multiple
Plans in NY: PMPM with Shared Savings for Providers Source: Anthem
Blue Cross, Sharp HealthCare Pilot San Diego-Area ACO, available
at: www.healthcarefinancenews.com; Norton Healthcare, Humana Launch
ACO Pilot, Aetna, Carilion Clinic Building ACO in VA, available at
www.healthleadersmedia.com; An ACO Takes Root in San Francisco,
available at: www.chwhealth.org; 8 Aspects of UnitedHealthcare's
Plans to Fund an ACO at Tucson Medical Center, available at:
www.beckershospitalreview.com; Advocate Health Care, Blue Cross and
Blue Shield of Illinois Sign Agreement Focusing on Improving
Quality, Bending the Health Care Cost Curve, available at:
www.bcbsil.com; Minnesotas Largest Health Plan Signs Total Cost Of
Care Agreement With Park Nicollet Health Services, available at:
www.bcbs.com; BCBS Massachusetts Announces First Year Results of
Alternative Quality Contract, available at: www.bluecrossma.com;
CIGNA and Piedmont Physicians Group Launch Accountable Care
Organization Pilot Program, available at: newsroom.cigna.com; Maine
Health Management Coalition, available at: www.mehmc.org; Health
Care Advisory Board interviews and analysis.
Slide 7
2014 The Advisory Board Company advisory.com 7 A Population
More Predisposed to Co-Morbidity Worsening Case Mix Not Just Due to
Aging Obesity Rate Among U.S. Adults 1 1988 Source: Centers for
Disease Control Behavioral Risk Factor Surveillance System,
available at: http://www.cdc.gov/brfss/, accessed May 4, 2011;
Health Care Advisory Board interviews and analysis. 1)Body Mass
Index 30, or 30 pounds overweight for 5 4 person. No Data 30%
Obesity Rate Among U.S. Adults 1 2009
Slide 8
2014 The Advisory Board Company advisory.com 8 The Looming
Demographic Conundrum Number of People 20-64 for Every Person
>65 1 Aging Beyond Our Ability to Support Source: Kaiser Family
Foundation, Medicare Spending and Financing, A Primer, 2011,
available at: http://www.kff.org/medicare/spending.cfm.; The
Economist, Too Much, Too Young, April 2011; The Wall Street
Journal, Baby Boomers and the Labor Force, March 22, 1011; all
accessed: May 4, 2011; Health Care Advisory Board interviews and
analysis. 1)Organization for Economic Cooperation and Development
(OECD) average. 2)Males. 3)Projected. 1950 7.2 1980 5.1 2011 4.1
2050 3 2.1 Living Longer US Life Expectancy at 65 2 1940: 12 years
2007: 18 years 623 K 1.6 M 2X New Medicare beneficiaries each year
2010-2030 New Medicare beneficiaries each year 1995-2010 In 2030,
Medicare will have twice as many beneficiaries as 2010
Slide 9
2014 The Advisory Board Company advisory.com 9 2 3 4 1 Road Map
Discussion, Questions and Answers Case Study Examples Forces
Driving Change Building Blocks for Transition to Value Based
Payment
Slide 10
2014 The Advisory Board Company advisory.com 10 Success Clear
in Theory, but Challenges Abound Transform Patient Care Manage
Financial Outcomes Build the Provider Network Optimize Network
Performance Ensure Cultural Evolution Which high-quality providers
are splitting referrals and how can we strengthen alignment? How
can we engage outlier physicians in performance improvement? Do we
know how our clinical initiatives will impact revenue across all
contracts? Are care teams delivering proactive, evidence-based care
across the continuum? Have we developed and implemented a robust
change management strategy? ? ? ? ? ? Execution will Determine
Success
Slide 11
2014 THE ADVISORY BOARD COMPANY Each Organization on a
Transition Path 11 Migrating to a Value-Based Business Model
Payment Transformation Care Transformation Leading with Care
Transformation Invest quickly Prove concept Obtain value- based
payment Leading with Value- Based Contracts Meet payer demands for
risk Secure share Adapt care model Source: Advisory Board
interviews and analysis.
Slide 12
2014 The Advisory Board Company advisory.com 12 Transforming
the Care Delivery Enterprise Stages of Program Development Develop
sustainable financial model at the outset Alignment of physician
platform; Identify common burning platform to motivate across
stakeholders Establish ambitious standards for delivery system
redesign Build IT network to support care management, performance
improvement Create scalable care management infrastructure 12345
Five Lessons on Successful Care Transformation
Slide 13
2014 The Advisory Board Company advisory.com 13 Engaging
Physicians in Shared Quality Improvement Efforts Source: Health
Care Advisory Board interviews and analysis. Building a Unified
Alignment Strategy Based on Value Clinical Integration Organization
Core Contract Components Selective Physician Partnerships : Network
of physicians opting to collaborate with hospitals in delivering
evidence-based care and improving quality, efficiency, and
coordination of care Comprehensive Improvement Initiatives:
Identified and evolving metrics and targets designed to
meaningfully impact clinical practice of all physicians in network
to improve value across full continuum of care Performance
Improvement Architecture : Data-driven mechanisms and processes to
monitor and manage utilization of health care services, designed to
control costs and ensure quality of care Clinical Integration
Contract Hospital or System Independent Physicians Employed
Physicians Payer Employer Hospital Joint Payer Negotiations
Professional Fees P4P Incentives Shared Savings
Slide 14
2014 The Advisory Board Company advisory.com 14 A Three-Part
Test of Antitrust Acceptability Source: U.S. Department of Justice
and Federal Trade Commission, Statements of Antitrust Enforcement
Policy in Health Care, August 1996; Health Care Advisory Board
interviews and analysis CI Viability Contingent on Meeting
Regulatory Bar Statements of Antitrust Enforcement Policy in Health
Care Issued by the U.S. Department of Justice and the Federal Trade
Commission August 1996 Program includes mechanisms to monitor and
control utilization of health care services, assure quality
Selective choice of network physicians likely to further efficiency
objectives Participants are making a significant investment of
capital, both monetary and human, in necessary infrastructure and
capability to realize claimed efficiencies The Network Is Likely to
Achieve Substantial Efficiencies 1 Joint Contracting Is Reasonably
Necessary to Achieve Efficiencies Active participation by
physicians in all contracts is needed Cross-referrals among
participating providers are important for program success Joint
contracting facilitates revenue sharing needed for collaboration 2
Market share above 35 to 40 percent of physicians in any specialty
can raise market power concerns Substantially higher market share
may be tolerated if collaboration is non- exclusive (i.e.,
providers free to contract outside network), particularly in areas
such as rural markets, where number of available providers is low
The Collaboration Will Not Give Participating Providers Market
Power 3
Slide 15
2014 The Advisory Board Company advisory.com 15 Clinical
Integration Works Across Diverse Systems Three Bright Lines for
Program Design Program must be real Containing authentic
initiatives, actually undertaken by the network Involves all
physicians in the network Promotes collaboration and
interdependence so physicians can achieve more than they likely
could independently Initiatives of the program have the potential
to achieve likely improvements in health care quality and
efficiency Joint contracting with fee-for- service health plans is
reasonably necessary to achieve the efficiencies of the Clinical
Integration program Representative CI Networks 4-Hospital, 800 Bed
System 11-Hospital, 2,000 Bed System 120 Bed, Standalone Hospital
5-Hospital, 1,400 Bed System 300 Bed, Standalone Hospital
Slide 16
2014 The Advisory Board Company advisory.com 16 Accountable
Care Success Requires More Advanced Capabilities Source: Health
Care Advisory Board interviews and analysis. 1)Pay-for-performance.
Many CI Programs Still Focused on Basic P4P 1 CI Program Attributes
Under Different Payment Imperatives Pay-for- Performance Focus on
basic quality improvement Resources to collect, monitor physician
performance data Primary reward: preferred fee schedule, P4P 1
bonus Value-Based Purchasing Focus on reducing readmissions, unit
costs Resources to improve cross- continuum handoffs, standardize
care Primary reward: penalty avoidance, inpatient cost savings Full
Population Accountability Focus on reducing utilization, costs
Resources to manage high-risk patients Primary reward: bonus based
on total cost reduction Adequate for commercial fee-for- service
joint contracting Necessary for successful management of
performance and population risk
Slide 17
2014 The Advisory Board Company advisory.com 17 Creating an
Infrastructure to Drive Results Valid, useful and real-time data
engage physicians and prove value Charges/Patient Billing Evidence
based medicine order sets EMR/CPOE Cost accounting info Decision
Support Combining hospital data Claims clearing house Practice
management system with ambulatory claims Integrates inpatient and
ambulatory data Measures performance on cost, quality, guideline
adherence Data drillable to actionable level to monitor and manage
physician performance Business Intelligence Tool Metric Selection
Data Aggregation Program Management Physician Scoring Clinical
Redesign
Slide 18
2014 The Advisory Board Company advisory.com 18 Consistent
Building Blocks for Success 18 Source: Health Care Advisory Board
interviews and analysis. A Multi-Pronged Undertaking Performance
Monitoring Systems to track physician performance Process to remedy
underperformance Optimized IT Infrastructure Platforms for seamless
data exchange Disease registry and other clinical tools Performance
Incentive Pool Bonus structure tied to program goals, physician
performance Support for Clinical Redesign Scalable care
coordination infrastructure Principled referral management policies
Selective Physician Partners Right specialty mix to advance care
delivery Clear participation requirements Physician Oversight Broad
engagement in governance, management Platforms for shared
hospital-physician decision making Payer Engagement Early
involvement in initiative selection Joint contracts that recognize
CI value Meaningful Performance Metrics Program-wide and
specialty-specific measures High-yield targets and objectives
Slide 19
2014 The Advisory Board Company advisory.com 19 Sustainable,
Population Centered, Data Driven, Coordinated Care Southwind
Solution to Population Health Management Care Model Establish
ambitious clinical standards for delivery system redesign and care
management resources Economics Craft a sustainable value-based
payment strategy with a solid financial foundation for
profitability and growth Infrastructure and Technology Deploy
staffing, IT and other resources to support delivery system
redesign, provider accountability, value-based quality monitoring,
and patient engagement Network Assemble a strong provider network
aligned with system- wide performance goals and engaged in quality
improvement
Slide 20
2014 The Advisory Board Company advisory.com 20 Focus on
Building Blocks Needed to Manage and Coordinate Care Source: Health
Care Advisory Board interviews and analysis. Population Focus
Requires New Set of Capabilities Population Management Core
CompetencesRequired Network Support Systems Ready access to
information about all care received by patients across the
continuum Coordination across specialties, care sites on treatment
for complex patients Robust care management staff resources to
augment physician-provided care Data analysis to identify best
opportunities for care cost reduction, quality improvement Forums
to bring physicians, other providers together around care
improvement Integrated information technology platform for data
collection and exchange Ability to collect robust data, plus
predictive analytic tool and data analysis staff Staffing resources
provided at scale, deployed efficiently across practices as needed
Clinically integrated or employed primary care physicians that
coordinate care for improved quality and lower cost Each of the
elements below: communication, technology, data, and a care
management team
Slide 21
2014 The Advisory Board Company advisory.com 21 Source: Health
Care Advisory Board interviews and analysis. Risk Stratification
for Defining Patient Management High- Risk Patients Rising-Risk
Patients Low-Risk Patients 60-80% of patients; any minor conditions
are easily managed 15-35% of patients; may have conditions not
under control 5% of patients; usually with complex disease(s),
comorbidities Managing Three Distinct Patient Populations Keep
patient healthy, loyal to the system Avoid unnecessary
higher-acuity, higher- cost spending Trade high-cost services for
low- cost management
Slide 22
2014 The Advisory Board Company advisory.com 22 Significant
Investments in IT and Staffing Necessary Key Components of
Population Health Infrastructure Identify, analyze and act on
opportunities to reduce direct cost and improve quality Identify
physician outliers and educate and motivate in behavior change
Minimize unnecessary physician practice variation Engaging
Physicians in Performance Improvement Manage total cost of care for
at-risk populations across health system Support plan management
with population-level intelligence to manage avoidable utilization
and close gaps in care across at-risk lives Analyzing Populations
at the Network & Plan Levels Enable comprehensive,
patient-centered care across conditions and wellness needs Empower
care managers with actionable data and workflow tools to deliver
evidence- based care and activate patients in self-management
Prioritize patients at risk for avoidable adverse episodes in time
to change course of care Inform real-time resource allocation
decisions to deliver intensive interventions to patients most at
risk for acute events Inflecting Care Delivery & Outcomes at
the Practice Level Intervening on Risk in Real Time Across the
Continuum Population Health Management Imperatives
Slide 23
2014 The Advisory Board Company advisory.com 23 2 3 4 1 Road
Map Discussion, Questions and Answers Case Study Examples Forces
Driving Change Building Blocks for Transition to Value Based
Payment
Slide 24
2014 The Advisory Board Company advisory.com 24 CI Partnership
Yields Hospital Cost Savings at Covenant Case Study #1 Source:
Health Care Advisory Board interviews and analysis.
1)Ventilator-associated pneumonia. Improving Inpatient Efficiency
and Standardization Upfront payment Estimated savings Hospital ROI
After One Year Primary Sources of ROI Decreased length of stay
Increased coding revenue Reduced VAP 1 cases Decreased Foley
catheter use and associated infections $3M $12M Case in Brief:
Covenant Health Five-hospital integrated delivery system in
Lubbock, Texas; corporate parent of Covenant Health Partners (CHP),
a 310-physician CI network Focus on inpatient as well as outpatient
efficiency strengthens achievement of health system goals CI Metric
List Covers both inpatient and outpatient care Inpatient measures
focus on longstanding cost and quality targets Health System CI
Network
Slide 25
2014 The Advisory Board Company advisory.com 25 CI Program
Affiliation Boosts Volumes for In-Network Specialists Case Study #2
Source: Health Care Advisory Board interviews and analysis.
1)Pseudonym. Tightening the Referral Network Specialty Referral
Patterns Case in Brief: Oliver Hospital 1 Mid-size hospital with
200-physician CI network CI contracts reward physicians for
quality, cost improvements CI specialists focus on communication,
efficiency encourages PCPs to refer locally rather than to hospital
in nearby town, increasing Oliver Hospitals inpatient volumes CI
Network PCPs Out-of-Network Specialists In-Network Specialists
Competing Hospital Oliver Hospital No formal performance
improvement focus Follow metrics focused on communication,
efficiency
Slide 26
2014 The Advisory Board Company advisory.com 26 Expanding the
Care Management Infrastructure 26 Scaling Resources to Support
Physicians in Clinical Transformation Case Study #3 * - Pseudonym
Case in Brief: August Health Partners* 840-physician network
affiliated with a four-hospital faith based system in Southeast
U.S. Launched CI program in 2007 Has gradually expanded number of
care management resources provided, with ultimate goal of
redesigning delivery system for transition to accountable care
Train office staff in care coordination, disease management Counsel
practices on medical home transition Implement disease registry
Launch patient activation, education tools Support expanded EMR use
Time Investment Level 2007 2012 20082012 PHO FTE Staff 3 120
Slide 27
2014 The Advisory Board Company advisory.com 27 Source: Health
Care Advisory Board interviews and analysis. 1)Clinical
Integration. Putting Clinical Integration Into Practice Key Program
Characteristics Case in Brief: Advocate Health Care Nine-hospital
system with a large physician network located in northern Illinois
Advocate Physician Partners (APP) is a platform for risk
contracting and CI 1 programs APP composed of over 3,200
physicians, about 65 percent of the medical staff Approximately 75
percent of participants are independent physicians Patient Safety
Training Diabetic Collaboratives Online Physician Portal Physician
Report Cards P4P Bonus Payments All Major Plans in Market
Selective, scalable membership Physician-led care improvement
efforts Infrastructure for care coordination Performance management
system Legal, meaningful incentives Joint commercial contracts
123456 Case Study #4
Slide 28
2014 The Advisory Board Company advisory.com 28 2 3 4 1 Road
Map Discussion, Questions and Answers Case Study Examples Forces
Driving Change Building Blocks for Transition to Value Based
Payment
Slide 29
2014 The Advisory Board Company advisory.com 29
[email protected] 818-669-2180 Ken Keller, MBA Vice President
Contact Information
Slide 30
2445 M Street NW I Washington DC 20037 P 202.266.5600 I F
202.266.5700 advisory.com