Transcript History of the Maryland Model - North Carolina Hospital Association

Ascendient
The Maryland Model – Strategic
Considerations for a Fixed Payment System
September 30, 2015
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October 8, 2015 Webinar
The Maryland Model – Strategic Considerations for a
Fixed Payment System
Guide for Today’s Discussion
Introductions
History of Maryland Model
Current Model Structure
Initial Progress & Lessons
Learned
Implications & Near-term
Considerations for NC
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Our Firm:
Health and Healthcare Focus
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Our Firm:
Locations
Quadrangle Office Park
Chapel Hill
National Harbor
Maryland
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Today’s Presenters
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Brian Ackerman, MHA
Daniel Carter, MBA
Principal
Principal
National Harbor Office
Chapel Hill Office
History of the Maryland Model
History...the Old Model
• Maryland - Only state where hospitals (and insurers) don’t
decide how much to charge for care
• Health Services Cost Review Commission – Establishes
hospital rates...all payors must pay the same rate
• 26 Percent – The amount Maryland hospitals were above the
national average cost per discharge in 1976
• Medicare waiver – Maryland hospitals “waived” from
Federal Medicare payment models
• Criteria – Waiver to remain in place as long as:
 The system remains “all-payor”
 Inpatient payments per Medicare discharge grow at a rate
less than the nation
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The Old Model...Results
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Source: Maryland HSCRC
The Old Model...Results
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Source: Maryland HSCRC
The Old Model...
Limitations for a Future Delivery System
Inpatient Only
Cost per Unit/
Hospital Stay
Medicare Only
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Current Model Structure
Current Waiver...
Why it Should Matter to You
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Current Waiver...Shifting Focus
Waiver
Modernization
Old Model
Inpatient Only
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Care Focus
All Hospital Care
Cost per Unit/
Hospital Stay
Metric Focus
Total Cost of
Hospital Care &
Quality
Medicare Only
Payor Focus
All payers
Waiver Modernization:
What it Means for Maryland Hospitals
Global Payment Model linked to
total hospital revenue received from
all payors
Ceiling (and floor) placed on a
hospital’s total revenue based on
recent top-line performance
E.g. If your total revenue was $200M
last year, it will be $200M next
year...with some slight adjustments
More volume does not create more
revenue...only increased expenses
and lower margins
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Waiver Modernization:
How Hospital Revenue is Calculated
Global Payment Model
Base Year
Revenue
X
Adjustments
• Population growth
• Quality scores
• Shift to unregulated
setting
• Service level changes
(e.g. program closure)
Allowed Revenue
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• Market share changes
Waiver Modernization:
Terms of Agreement with Medicare
• Must achieve $330M Medicare savings over five years
• Maryland’s all-payer per capita total hospital cost growth
limited to 3.58%...10-year CAGR for per capita GDP
• Limit total Medicare spending in Maryland to no more than
national growth
• Reduce Maryland readmission rate to national average
within five years...currently ranked 49 of 51 in the U.S.
• Reduce hospital-acquired conditions by 30 percent within
five years
• If Maryland fails during five-year performance period,
hospitals will transition to national Medicare payment
systems
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Initial Progress & Lessons Learned
Waiver Modernization:
Recent Performance Dashboard
Medicare savings to-date: Estimated at ~$100M
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Source: www.mhaonline.org
Waiver Modernization:
Additional Performance Measures
Operating
profits
$71M or
15%
Operating
margin
1%
# of
Hospitals
w/ Losses
10 to
7
Hospital
Admissions
4.1%
Flat
Potentially
Avoidable
Admissions
6.0%
ED Visits
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What’s Changed
Increased use & availability of:
• Health coaches
• In-home post-discharge visits
• Social workers in the ED
• Transportation to primary care appts.
• Nurse hotlines
• Bedside prescription delivery
• Subsidized medications
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Priority on partnerships:
Population health focus:
• Strengthened collaboration and
coordination with primary care and SNFs
• Additional wellness initiatives
• Meaningful health coalitions
• Expansion of mental health &
substance abuse clinics
• Physician education
• Use of predictive analytics
• Increased data sharing
• Additional mobile clinics
What’s Changed:
Focus on Chronic Disease Management
 Understanding of most at risk/costly patients
 In-home visits after discharge, to connect people with needed
support and resources
 Free or reduced-cost clinics for underserved patients with chronic
diseases (including mental health and substance abuse)
 Tele-health monitoring for chronic disease management
 Increased community health education
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What’s Next for Maryland?
Waiver expansion...to
physicians, unregulated
settings, post-acute
providers
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Implications and Near-Term Considerations
for North Carolina
So...
What Does it All Mean?
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Reset Your Expectations...
Discharges will Continue to Decline
Growth in discharges
Decline in discharges
Discharges in Avg. NC Market
25,000
20,000
15,000
10,000
5,000
0
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20%25%
Current
Discharges
Population
Change
ACSAs
PSAs
Misc.
Conditions
Source: Ascendient “Healthytown” predictive modeling based on DRG-specific data from Truven
Medicare
Readmissions
2025
Discharges
Reset Your Expectations:
Healthytown 2025
Healthytown, USA
Transformation of Healthcare Delivery in a Statistically Average American Community
A complete copy of the report can be found at:
http://ascendient.com/2015/08/healthytown-usa/
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Primary Care
Utilization
86%
ED Visits
35%
Primary Care
Physician
Demand
46%
Rethink How/Where You Will Grow
Although uncertainty around future payment methods still remains, we are
clearly moving away from a system that rewards volume:
Payment
Method
What it
Looks Like
Volume
Based
Fee-forservice
Outcome
Based
Reduced
Re-admissions
Bundled
Payment
ACOs or
“ACO-like”
organizations
Key Implication:
Most of today’s revenue centers will be tomorrow’s cost centers
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Redefine Traditional Definitions
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Past
Future
LEAN within our
departments
Efficiency
LEAN-mindset
across the
community
A nice thought
Collaboration
A requirement
Of patients/volume
Market
Share
Of covered lives
As a consideration
Flexibility
As a priority
Learn to Accept Greater Risk...Quickly!
Commercial Payors,
Federal & State Payors
Hospitals &
Health Systems
Risk
Where to start?
1. Begin where you’re already at risk...employees, self-pay
2. Leverage pilot programs, where appropriate
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Learn to Accept Greater Risk...
CMS Comprehensive Care for Joint Replacement (CCJR)
• Medicare’s first mandatory bundled payment model
• Applies to hip and knee replacement patients
• Will hold hospitals accountable for the quality and cost of care through 90
days post-discharge
• Applies to hospitals within 18 NC counties
• At conclusion of transition period payment will be regionally based:
 Within the South Atlantic, 69% of CCJR hospitals have episode spending above
the regional average*
Phases of Preparation^
Assess Data/
Know Where you
Stand
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Assess Your
Alternatives
Sources: *ww.avalere.com; ^Excerpt from Ascendient work plan
Develop Your
Narrow Network
Implement &
Monitor
So...What Should We Be Doing Today?
1. Enhance and expand collaborative efforts across the
continuum
2. Know who your most at-risk patients are...establish
proactive processes for intervention, follow-up, and
monitoring
3. Build flexibility into new provider contracts
4. Start managing the health of those populations for which
you are already at risk
5. Build your IT infrastructure:
a) Can you track the cost/utilization of a patient across your
system?
b) Can you track the cost/utilization of a patient across your
community?
c) Are you collecting information necessary to support future
predictive analytics efforts?
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What Hospitals in NC Are Already Doing
• Developing profiles of all providers/facilities within the
community and prioritizing those for collaboration
• Establishing structure to develop physician leaders...
particularly within primary care
• Developing processes and structure to most fully leverage
advanced care practitioners
• Piloting population health management initiatives on
employees
• Centralizing services and/or reducing unnecessary
duplication across the system
• Developing “Gap” assessment related to the competencies
necessary for participation in a clinically integrated network
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And in Conclusion...
Always Remember
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Thank You!
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Brian Ackerman
Daniel Carter
[email protected]
[email protected]
240.776.4752
919.403.3300