Transcript Karen Lewis-Smith, Executive Director

Medicare Payment
Innovations:
Perspective from
Group Health
Inland Northwest State of Reform
Conference
Karen Lewis Smith
Executive Director, Government Programs
Group Health Cooperative
September 15, 2015
Today’s Presentation
• Group Health Overview
• HHS Payment Reform
• Group Health’s Value-Based Approach
− Contracting
− Bundles
− Value-Based Insurance Design (VBID)
• Challenges and Opportunities Ahead
2
About Group Health
Founded in 1947, we are a consumer-governed nonprofit health care
system that coordinates care and coverage.
~ 600,000 members served by Group Health Physicians, contracted
physicians and contracted hospitals/other facilities
Group Health Physicians: largest multispecialty medical group in
State with 1,000 physicians
• 25 primary care sites
• 60 specialties and subspecialties
• Salaried physicians
• Focus on high value, not high volume
~ 80,000 members in our Medicare Advantage plan
• 5-Star rating four years in a row – 2012, 2013, 2014, and 2015
• No longer accept original Medicare/FFS in Group Health Medical
Centers
• Value-based contracting arrangements
3
Triple Aim
Together: Triple Aim and Payment
Reform
Improve
Patient
Experience
Improve
Health of
Population
Reduce
Costs
Payment Reform
FFS
• Volume driven model with
unaligned incentives between
payers and providers
• Fragmented care with focus on
acute singular care event
ValueBased
• Aligned incentives between
payers and providers; pay for
value, not volume
• Improved outcomes with focus
on prevention, management of
conditions over full-cycle of care
4
1/15 News Alert: HHS Releases
Value-Based Payment Targets
 Goal 1: 30% of Medicare FFS payments are tied to value through alternative
payment models by the end of 2016, and 50% by the end of 2018
 Goal 2: 85% of all Medicare FFS payments are tied to quality metrics by the end
of 2016, and 90% by the end of 2018
CMS Framework
2016
2018
1. FFS w/no link to quality
2. FFS w/link to quality
30%
3. Alternative payment built on FFS
4. Population based payment
All Medicare FFS
85%
FFS linked to quality
50%
90%
Alternative payment models
5
Group Health: Pioneers in ValueBased Contracting
Full risk for
TCC & quality
Shared savings
Large
undifferentiated
FFS
Quality
initiatives/
bonuses
• Since 2012, Group Health has been partnering with
contracted network providers to move them
successfully along our value-based payment
continuum.
• And today, 77% of our membership, representing
84% of our costs, are covered by a value based
arrangement
6
Group Health’s Journey: Value-Based
Payment and Provider Contracting
Journey along the Value Continuum
8
4
1
4
1
4
2
Shared
Savings
Shared
Risk
2014
17
2015
17
2016
Fee-For-Service
with Quality
Bonus
Fee-ForService
PLUS
Capitation
or Full Risk
7
Bundles: Driving Value and Better
Outcomes
In 2013, the Bree Collaborative adopted bundled payment model for
knee and hip replacements (TKR, THR)
• Selected because of significant
variation in cost and outcomes
What are bundles?
• Episode‐based payment for multiple
providers, bundled into a single,
comprehensive payment covering all
services in a patient’s care over set
period
•
Usually acute, some chronic care
Evolving Care
Delivery:
Bundles
Existing Value
Solutions
Triple Aim
Improved Health
Outcomes
Health Care Cost
Management
Great Customer
Experience
New Smart Solution
8
7/15 News Alert: CMS Proposed
Rule for CCJR
• Released July 9, 2015, comment period ended last week; five year
performance period begins January 1, 2016
• Focus on Medicare FFS
• Establishes a bundled payment model for TKR and THR in 75
Metropolitan Statistical Areas (MSAs)
• Bundle includes hospitalization for surgery through 90 days post-op
• Hospital bears financial responsibility
− Two-sided risk sharing based on target pricing and quality
measures
• Hospitals may establish financial arrangements with the supply chain
(e.g. physician group practices, SNF, PT, etc.) to share two-sided risk
9
Group Health’s Bundles Journey
2017
• Launch with two
more hospitals
• Launch with one
additional purchaser
• Explore additional
bundle packages
2016
2015
2014
COMMERCIAL
MEDICARE FFS
• Approached by
two large
Purchasers for
THR and TKR
• GH bears risk
• Pilot with
one hospital
• Performance
assessment /
refinement
GH
Positioned
as a Leader
• CCJR announced
• Hospital bears
financial risk
• May establish
financial
arrangements
w/supply chain
• Performance
year
• Reconciliation year
• Next set of CMS
bundles?
GH
Positioned
as a Partner
10
GH: Value-Based Insurance Design
for Commercial Populations (VBID)
“Total Health” program - Reduced cost-sharing for chronic care
medications to increase adherence to care plans and reduce avoidable
hospital admissions. Results:
• 90% participation rate
• Multi-million dollar reduction in expected costs
“Engaged Partnership” program – Benefit design includes cash
incentives/discounts for valued-added interventions and increased co-pays
to dis-incent inappropriate ER use. Results:
Utilization
with Prior
Carrier
Year One
Year Three
Improvement Improvement
from Prior
from Year 1
Carrier to
to Year 3 YTD
Year 3 YTD
ER Visits/1,000
327
272
231
29%
15%
IP Admits/1,000
92
88
77
16%
13%
IP Days/1,000
369
313
262
29%
16%
11
Challenges Ahead
• Medicare Advantage
− Increased flexibility in benefit design (e.g. VBID)
• Value based contracting
− Committed leadership
− Time it takes to implement and see results
− Aligned contracting incentives
• Bundles
− Ability to understand true costs
− Flexibility to be leader and a partner
− Meaningful spread
− Many payment reform strategies remain “opt in”
12
© 2015 Group Health Cooperative and Group Health Options, Inc.