Surviving Value-Based Purchasing in Healthcare

Surviving Value Based Care:
A Road Map to Success Under the New
Reimbursement Model

October 15, 2013

Proprietary and Confidential

© 2013 Health Catalyst
www.healthcatalyst.com

1

Agenda
• Overview of Value-Based Purchasing
• Review of metrics
• Improvement Framework


2


Poll Question #1
What is your primary area of focus?
 Physician/clinical
 Quality
 Information system

 Finance
 Other


3


Overview of Value-Based
Purchasing



4

Trend of Hospital Margins
Medicare Margins for Hospitals

15%

10%

5%

0%

IP
OP
-5%

Overall

-10%

-15%

-20%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Medpac report March 2013


5


Growing Dollars At Risk

Source: CMS website

6


Background from MedPAC
The current aim is to transform Medicare from a
fee-driven model to one that encourages delivery
of efficient, high-quality care.
Focus on:
Payment reform
Delivery system reform
Medicare payment policies tend to
set a precedent for other payers.


7


Context for Medicare payment policy
•

Growth in healthcare and Medicare spending

•

Impact on Federal budget and Medicare

•

Variation in healthcare spending


Significant variation in use and spending, which does not
correspond to better quality, raises flags that higher
healthcare use and spending are not improving overall health
and put beneficiaries at risk.


8


Facts from report
• Over the next 10 years, Medicare spending will

grow at annual rate of 6.8 percent, consisting of
3.9 percent per-beneficiary growth and 2.9
percent enrollment growth
• From 2004 to 2011, outpatient services per

beneficiary grew 34 percent and inpatient
admissions declined 8 percent.
• The overall 2013 Medicare margins are

projected to be -6%.


9


Medicare Facts
Medicare Spending

Disease Prevalence
Condition

100%
90%

23%

46%

70%
60%

>6 Conditions
4-5 Conditions

32%

40%

28%

Chronic
Chronic kidney
COPD
Congestive heart failure
Diabetes
Ischemic heart disease

9%
10%
15%
25%
31%

13%
10%
11%
27%
25%

2-3 Conditions

1%
7%
1%
4%

1%
7%
1%
4%

0-1 Conditions

30%
20%

2010

14%

80%

50%

2006

32%

19%

10%
7%

0%

Beneficiaries

Spending

Acute
AMI
Atrial fibrilation
Hip fracture
Stroke



10


High Performing Hospitals
Relatively
Efficient

Other

Number of hospitals

297

1,864

Share

14%

86%

Measures of Success:
• Risk adjusted mortality
• Risk adjusted readmit

Performance Metrics 2011 Risk adjusted
Composite 30 day mortality

87%

Readmission rates

95%

101%

Standardized cost per discharge

90%

102%

Relative % of patients highly satisfied

69%

67%

Median occupancy

63%

57%

Overall Medicare margin , 2011

2%

-5%

NonMedicare margin, 2011

5%

7%

Total margin, 2011

4%

rate

103%

4%

• Standardized costs

Median:



11


CMS Programs (subset of 41 programs)
• VBP (Value Based Purchasing) Incentive
• Readmission Penalty 2% for 2014
• HAC (Hospital Acquired Conditions Penalty in

2015)
─ Patient Injury and Prevention: Hospital Acquired
Infections (CAUTI and CLABSI), PSI90 Index

• Meaningful Use
• ACO (Accountable Care Organization) –

responsible for a population
• Bundled Payments

12


CMS Template for programs
• Identification of quality measures
• Payment for quality performance
• Measures of physician and provider resource use
• Payment for value- promote efficiency while

providing high quality care
• Alignment of financial incentives among providers
• Transparency and public reporting
Source: CMS: Roadmap for Implementing Value Driven Healthcare
in the Traditional Medicare Fee-for-Service Program


13


Metrics


14

Yearly Incentives

Readmit Program

Value Based Purchasing

2013

2014

2015

2013

2014

2015

1%

2%

3%

1%

1.25%

1.5%

Hospitals know penalty in advance
Decreased payment for all MSDRGs for year

All hospitals reduced payment by %
Can then receive add’l payment based on score


15


VBP Clinical Measures
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
AMI-7a

Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival

AMI-8a

Primary Percutaneous Coronary Intervention (PCI) Received Within 90 Minutes
of Hospital Arrival

HF-1

Discharge Instructions

IMM-2

Influenza Immunization

PN-3b

Blood Cultures Performed in the Emergency Department Prior to Initial
Antibiotic Received in Hospital

PN-6

Initial Antibiotic Selection for Community-Acquired Pneumonia (CAP) in
Immunocompetent Patient

SCIP-Inf-1

Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision

SCIP-Inf-2

Prophylactic Antibiotic Selection for Surgical Patients

SCIP-Inf-3

Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time

SCIP-Inf-4

Cardiac Surgery Patients with Controlled 6:00 a.m. Postoperative Serum
Glucose

SCIP-Card-2

Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker
During the Perioperative Period

SCIP-VTE-1

Surgery Patients with Recommended Venous Thromboembolism (VTE)
Prophylaxis Ordered

SCIP-VTE-2

Surgery Patients Who Received Appropriate Venous Thromboembolism
Prophylaxis Within 24 Hours Prior to Surgery to 24 Hours After Surgery

SCIP-Inf-9

Postoperative urinary catheter removal on postoperative day 1 or2

Key:


Active

Inactive

16


VBP- continued
Patient experience of care measure

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

Hospital Consumer Assessment of Healthcare Providers and Systems
Survey (HCAHPS)
Communication with nurses

Communication with physicians
Responsiveness of Hospital Staff
Pain Management
Communication about Medicine
Cleanliness and Quietness of Hospital Environment
Discharge Information
Overall rating of hospital

Outcome Measures
Mort-30-AMI AMI 30 day mortality rate
Mort-30-HF
HF 30 day mortality rate
Mort-30-PN
Pneumonia 30 day mortality rate
AHRQ PSI composite
Composite for patient safety
CLABSI
Cental line blood associated infection
CAUTI
Catheter-Associated Urinary Tract Infection
SSI
Surgical site infection- colon and abdominal hysterectomy

MSPB-1

Efficiency Measures
Medicare spending per beneficiary


17


Metric weights by year
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

30%

25%

30%

70%

20%

25%

40%

40%

25%

25%

10%

10%

FY 2016

FY 2017

30%

30%
45%
20%

FY 2013

25%

FY 2014

FY 2015

Clinical Process

Patient Experience

Outcome Measures

Efficiency Measures

Dates for FY 2014
Performance
4-1-2012 to 12-312012

Clinical

Baseline
4-1-2010 to 12-312010

Patient
Experience

Baseline
4-1-2010 to 12-312010

Performance
4-1-2012 to 12-312012

Outcome

Baseline
7-1-2009 to 6-302010

Performance
7-1-2011 to 6-302012


18


Example of scoring
Improvement
My hospital compared to my
baseline performance

Achievement
My hospital compared to all hospitals

Measure

SCIP-1 -prophylactic ABX
received w/n 1 hr prior
to surgical incision

Hospital
Baseline
Performance

98.55

99.22

National
Benchmark
Threshold

99.98


97.35

Achieve Improve

7

4

19

Points

7


Updates on Programs
Readmission


• 2013- 1% $280M for

• In 2013, 1,557 hospitals got

2,213 hospitals
- Average fine .42%

additional payment and 1,427
hospitals got less payment

2,225 hospitals

In a forecast for year one, the
researchers found that:

- Average fine .38%

• 65% of hospitals would have

• 2014- 2% $227M for

experienced a payment change
between -0.25% and 0.24%;

• Overall readmit rate

for Medicare 12%

Source: Kaiser Health News

•

3% of hospitals would have
received a payment decrease
larger than 0.5%; and 2.4%
would have received a payment
increase larger than 0.5%.

Source: Health Affairs Sept 2012

20


New Financial Metrics

Source: Health Catalyst Example Metrics
21



Commercial Market
United Healthcare unveils ACO expansion plan:
Set to double deals by 2017
Blue Cross Blue Shield of
Massachusetts saved $107 per
patient and improved quality of care
for chronically ill adults in the 2nd
year of an ACO

A large medical ACO partnership in
California saved $20 million in costs
and reduced readmissions by 22
percent.


22


California P4P
Integrated Healthcare Association
• Started in 2003 with incentive program
• Now 8 health plans, 200 physician groups and 10

million commercial HMO members and $40 million
annual payout
• 85 uniform measures publicly reported

• Steady, incremental improvements


23


Value Based Health Care
Vaccines. Anesthesia. Penicillin. Bypass surgery.
Decoding the human genome. Unquestionably, all
are life-saving medical breakthroughs. But one
breakthrough that will change the face of medicine is
being slowed by criticism, misunderstanding, and a
reluctance to do things differently.
That breakthrough is value-based care, the goal of
which is to lower health care costs and improve
quality and outcomes. Value-Based Health Care Is
Inevitable and That’s Good
- by Toby Cosgrove, M.D., Cleveland Clinic CEO
Source: http://blogs.hbr.org/2013/09/value-based-health-care-is-inevitable-and-thats-good/


24


Impact of Changes in Payment
Volume

Value

• Fee for service

• Payment to manage

- Per case

population

• No quality rewards

• Incentives and penalties

for quality metrics

• Collaboration/partnership

not valued
• No IT investment

incentives

• Shared accountabilities
• IT core to strategy


25


Framework


26

Poll Question #2
How does your organization distribute outcome
performance?
 Internal web site
 External web site
 Only to quality staff
 Does not distribute


27


Information Flow
Hospital publically
reports IQR
measures

Hospital improves
performance

Each measure
scored
0-10

The incentive
payment is
calculated on TPS

Measures are
grouped into
domains and scored

Total performance
score is calculated
based on weighting
of domains
Excerpted from StratisHealth

28


It doesn’t just happen……
Hospital Improves Performance
Data
Measurement
& Analytics

Value Stream Mapping

Waste Reduction

Outcome

Patient
Experience
of Care

Alignment

Reduced Cost

Improved Quality

Efficiency

Clinical
Processes
of Care
Observation

Root Cause Analysis
Coordination

29


VBP FY2014 Worksheet Example


30


Need a sustainable framework
…..because we can’t go back

Clinical Process of Care and
Patient Experience of Care Measures Timeline
Baseline
April 1, 2010
to
December 31, 2010

Performance Period
April 1, 2012
To
December 31, 2012

Fiscal Year (FY)
2014
October 1, 2013
to
September 30, 2014

…..let’s get ahead of the curve


Ingredients for Success
Get the right people
doing the right work

People

Develop standard,
reliable processes

Process

Technology
Leverage technology
where possible



Legacy Reporting Environment

DEPARTMENTAL
SOURCES
(e.g. Apollo)

FINANCIAL SOURCES
(e.g. Lawson)

Financial
Reports

Departmental
Reports

ADMINISTRATIVE
SOURCES
(e.g. API Time Tracking)

PATIENT SATISFACTION
SOURCES
(e.g. Press/Ganey)

Administrative
Reports

Patient Satisfaction Sources
(e.g. Press/Ganey)

EMR SOURCE
(e.g. Epic)

HR

Epic Reports

HR Reports

Legacy Reporting Environment
• Ease of Use: Coding report objects were cryptic and relationships

between data was poorly defined
• Integration: Integration of data from different source systems was

hard or impossible
• Efficiency: Report run times were long and in some cases did not

complete at all
• Visualization: End user presentation reporting tools non-existent

• User Self Reliance: No ability for report consumers to “fish for

themselves”



Catalyst Adaptive Data Warehouse

Catalyst’s Adaptive Data Model
Metadata: EDW Atlas Security and Auditing

Common, Linkable
Vocabulary

Financial Sources
(e.g., EPSi,
Peoplesoft, Lawson)

Financial
Source Marts

Departmental
Sources
(e.g., Apollo)

Departmental
Source Marts

Readmissions
Administrative
Sources
(e.g., API Time
Tracking)

Administrative
Source Marts

Diabetes

Patient
Source Marts

Patient Satisfaction
Sources
(e.g., NRC Picker,
Press Ganey)

Sepsis

EMR
Source Marts

HR
Source Mart

EMR Source

Human Resources
(e.g., PeopleSoft)

(e.g., Epic, Cerner)

More Transformation


Less Transformation


Patient Satisfaction-Sample Visualization



Patient Satisfaction – Drill Down


38


Team Composition

Key:

Subject Matter Experts

Data Provisioning

Data Analysis

Involve & Align the right people
1. Identify strong process champion
2. Engage the people who do the work
3. Connect them with the “data people”
4. Measure what matters

5. Feedback….feedback….feedback



Identify Opportunities


43


Reduce Wasted Time
Initial assessment:
At least 80% of time spent
hunting for and gathering data
rather than understanding and
interpreting data

Abstractor, Analyst or Clinician Time
1.

1. Understanding the need
2.

1.
2.
3.

2. Hunting for the data
3. Gathering or compiling
4. Interpreting & Improving

3.
4.

5. Distribution of data

Value-add

Waste

4.

5.


5.


Personal Testimony
Important words from a leader accountable for infection prevention:
“The immediate effect is the freeing up of data specialists’ and
infection preventionists’ time. Data specialists no longer have to cobble
together reports manually. Health Catalyst’s data automation allows them
to move from data gathering and report generation to providing analysis.
She cites more time to operate at the top of her license, moving from
manual chart abstraction to delivering improved patient care. “We’re
extremely strapped for time in the infection prevention world,” she said,
“and CMS is coming out with new regulations every year.”

“The more we’re out there preventing – rather than measuring –
infections, the bigger a difference we can make, educating clinicians
and, as a result, increasing patient safety and quality.”
IMPRESSIVE RESULTS
 80-90 percent estimated reduction in surveillance activities
 Estimated 87 percent decrease in manual reporting resources
 Rapid time to value with 10-week implementation



Closing Thoughts
• It is not optional
• Engage & align providers, analysts, abstractors,

and subject matter experts
• Leverage data (close to the source) to drive change
• Be transparent
• Keep the patient at the center



Resources
●

White Paper: Surviving Value-Based Purchasing in
Healthcare

●

How-to Guide: How to Prepare for Value-based Payment

www.cms.gov
●

The Official Website for the Medicare Hospital Value-based
Purchasing Program

●

Innovation Models


47


Questions and Answers
Speakers

Next Webinars

Bobbi Brown

Analytics Adoption Model

Bobbi.brown@healthcatalyst.com

Dale Sanders
10/23/13 - Register

Jane Felmlee

Healthcare Transformation

Jane.felmlee@healthcatalyst.com

Dr. John Haughom
10/30/13 - Register

The Value Equation
Dr. Charles Macias, Texas Children’s
Hospital
11/6/13


48


Surviving Value-Based Purchasing in Healthcare

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