Transcript Mountain States Health Alliance Annual Membership

The Transformation of Healthcare
Dennis Vonderfecht, President and CEO MSHA
February 24, 2011
Healthcare Reform Assumptions – The Present
• Healthcare spending as % of GDP risen from 15.5% in 1998
to 17.3% in 2009.
• Demand for services is increasing (aging of population,
increasingly unhealthy population).
• Funds available for reimbursement are declining (Medicare
bankrupt in 2017, State Medicaid budgets compressed,
employers dropping coverage, fewer taxpayers to support
aging population).
• Current reimbursement system rewards volume with limited
consequence for quality variation.
2008 Healthcare
expenditures:
$2.3 trillion
20%
1998 Healthcare
expenditures:
$1.2 trillion
P 18%
D
G
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o
t
n 14%
e
c
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e
p 12%
a
s 10%
a
d
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e 8%
p
s
e
r 6%
a
c
h
lt 4%
a
e
H
2%
300%
Commercial
Premiums
Medicare Spend
US Nominal GDP
0%
In
250% d
e
x
e
d
p
re
200% m
iu
m
/G
D
150% P
v
s
1
9
9
8
100%
50%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Healthcare Reform Assumptions – The Future
•
•
•
•
•
•
•
Pay for Volume to Pay for Value
Episodic Care to Population Health
Expanded Coverage
Elimination of Redundancy
Standardization of Care
Reimbursement Compression
Reduced Volumes (Admissions and Outpatient Visits)
Volume driven business model
 Patients
 Visits
 Ancillaries
 Fixed costs
 Variable costs
 Profit
Fee for service
Health value driven business model






Patients
Episodes
Treatments
Patient satisfaction
Resource /case
Case outcome
 Profit / case
 Case mix
Fee for value
Care models move today’s market where patients self-direct care towards a more
coordinated approach that provides more comprehensive care at a lower cost
Today’s patient self-navigates the healthcare system
Future patient care will be more coordinated and integrated
Patient Conditions (example)
Patient Conditions (example)
 Early stage diabetes
 Back pain
 Elevated cholesterol
 Early stage diabetes
 Back pain
 Elevated cholesterol
Patient
Primary Care
Physician
Lab
Rx
Endocrinologist
Lab
Rx
Glucose
monitor
Cardiologist
Lab
Rx
Stress test
Coordinating
Physician
Patient
Orthopedic
Surgeon
Hospital
inpatient
Surgery
Rehab
(Hospital
outpatient)
Complex, uncoordinated system allows for unnecessary
procedures, redundant tests, and conflicting treatment protocols
© 2010 Oliver Wyman  www.oliverwyman.com
RX Management
Lab
Nutrition
Other specialists
Hospital inpatient
Rehab (Hospital
outpatient)
A coordinating physician (e.g., PCP) plays an active role as the
coordinator for more comprehensive patient care
XPB001-11-19
4
Healthcare Reform – Federal Legislation
Patient Protection and Affordable Care Act (PPACA)
Increased insurance coverage (32 million)
• Expansion of Medicaid (16 million)
• Creation of insurance exchanges (16 million)
• Coverage mandates for individuals and businesses
Greater regulatory oversight & control of the health insurance market
Experimentation with movement toward value-based purchasing
mechanisms (bundled payments, quality incentives, penalties for avoidable
adverse events)
Estimated cost of $1 trillion over 10 years
• Increased taxes
• Reduced payments to providers
• Industry fees
• Reduced payments to Medicare Advantage Plans
MSHA Preparation
Core Strategies
I. Transform the delivery of care through the development and
implementation of care models using evidence based practices
designed towards improving cost and quality.
II. Achieve smart growth.
III. Aggressively pursue and achieve operational cost efficiencies and
manage fixed costs in alignment with market volume reduction.
Patient
Coordinating
Physician
RX Management
Specialists
Lab
Hospital inpatient
Nutrition
Rehab (Hospital
outpatient)
MSHA Preparation
Support Strategies
IV. Enhance organizational infrastructure to support current needs
and realize future vision.
V. Enhance relationships to support value-based business model.
VI. Build technology infrastructure to support current needs and realize
future vision.
MSHA Strategic Plan Focus
ACO Workgroup Components
• Care Models
• Bundled Payments
• Patient-Centered Medical Home
• Patient-Centered Care
• Physician Integration
• Evidence-Based Medicine
• Physician Recruitment
• Shifting to Lower Care Settings
• Value-Based Performance
• Information Technology
• Project Management
• Quality Healthcare Team
• Relationships with Other
Providers and Health Systems
ACO Structure
• ISHN Development
• ACO Pilot
• Premier Implementation
Collaborative
• Population Health Management
• Payer and Employer Relations
Executive Team
• Baldrige Business Model
• Lean Operations
• Service Line Growth
• Revenue Cycle
• IP Market Share & OP
Volumes
• Retail Strategy
• Fixed Costs
• Hospital Construction
Projects
• Corporate Citizenship
Integrated Solutions Health Network (ISHN)
• Provider-sponsored health care solutions company
– Focused on the integration of the delivery system
– Leader in improving system accountability as measured by quality and
cost of care
– Community-based network of healthcare facilities and professionals
• Integrated network consists of:
– 1,916 physicians in Northeast
Tennessee, Southwest Virginia
and Western North Carolina
– 275 provider groups
– 531 primary care physicians
– 1,385 specialists
– 14 hospitals
– 5 skilled nursing facilities
– 6 orthotic/prosthetic providers
– 4 DME providers
– 9 home health providers, 2
hospice providers
– 1 laboratory provider
– 1 rehabilitation facility
– 4 ambulatory surgery centers
MSHA ACO Approach
Accountable Care
Executive Steering
Committee
D. Vonderfecht
Implementation
Collaborative
ACO Leadership
WG1
Facilitate &
Coordinate Work
Groups
People Centered
Foundation
WG2
Health Homes
WG3
High Value
Networks
WG4
Populaton Health
Management
WG5
Payer
Partnerships
WG6
Public Policy
WG7
Develop Legal
Framework
Establish Advisory
Councils
Develop PCMH
Develop Care
Models
Develop Population
Mgmt Capability
Implement Bundled
Payments
Implementation
Collaborative
Outcomes
Oversight
Develop Health
Records
Develop Care Mgmt
Processes
Reduce
Readmissions
Dev Clinical Data
Warehouse
Solution
Establish Payer
Relationships
Partnerships
Care Coordination
Infrastructure
Establish Lean
Infrastructure
Coordinate with
CMS
Develop Physician
Profile System
Understand Public
Policy Implications
Establish
Governance
Structure
Setup Contracting