Tag Archives: Value Based Health Care

Longitudinal Patient Care Remains a Challenge Despite Commitment to Value-Based Care Delivery Competencies

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Provider organizations’ ability to deliver longitudinal value-based care for patients remains a work in progress.

Survey results from the 2017 HealthLeaders Media Value-Based Readiness: Setting the Right Pace survey reveal that the majority of respondents currently demonstrate a broad commitment to developing care delivery competencies to prepare for value-based care.

For example, the top three care delivery areas that respondents say that their organization has committed to developing or has already developed competencies to prepare for value-base care are care coordination/guiding patients to appropriate care (79%), clinical integration (73%), and broader access to care (68%), and the top five areas all receive a response greater than 65%.

On the other hand, longitudinal patient care (40%) is low on the list of responses and is the only area below a 50% response, although its result is up nine points over last year’s survey.

The response for this critical area indicates the early stage at which most respondents currently reside in the transition to value-based care.

Note that as providers continue to commit to developing care delivery competencies to prepare for value-based care, longitudinal patient care will play an increasingly important role as providers manage patient care over longer periods of time and across multiple care settings.

Survey results also reveal that respondents are confident in their ability to deliver value-based care within the various areas of care delivery.

For example, 73% say that their level of ability is very strong (20%) or somewhat strong (53%) for broader access to care, 72% say that their level of ability is very strong (21%) or somewhat strong (51%) for clinical integration, and 72% say that their level of ability is very strong (20%) or somewhat strong (52%) for care coordination/guiding patients to appropriate care.

However, longitudinal patient care receives the lowest rating for respondent organizations’ ability to deliver value-based care in this area. For example, 54% of respondents indicate that this is very weak (11%) or somewhat weak (43%), an indication that it remains a work in progress for respondents.

As Healthcare Changes, So Must its CEOs, CFOs, COOs…

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To keep up with big changes in how healthcare is administered, financed, and organized, top leaders are finding a need for new talents and organizational structures.

To keep up with big changes in how healthcare is administered, financed, and organized, top leaders are finding a need for new talents and organizational structures.

Healthcare reform as a term has become so ubiquitous that it is almost indefinable. At first, and broadly, it meant removing the waste in an excessively expensive healthcare system that too often added to the problems of the people whose health it aimed to improve. Then it became legislative and regulatory, in the form of the Patient Protection and Affordable Care Act and its incentives aimed at improving the continuum of care and expanding the pool of those covered by health insurance.

Now, for many in the industry, healthcare reform has matured into a business imperative: the process of ingraining tactics, strategies, and reimbursement changes so that health systems improve quality and efficiency with the parallel goal of weaning us all off a system in which incentives have been so misaligned that neither quality nor efficiency was rewarded.

That leaders finally are able to translate healthcare reform into action is welcome, but to many health systems trying to survive and thrive in a rapidly changing business environment, the old maxim that all healthcare is local is being proved true. Making sense of healthcare reform is up to individual organizations and their unique local circumstances. Fortunately, there are some broad themes and organizational principles that are helpful for all that are trying to make this transition. What works in one place won’t necessarily work in another, but the innovation level is off the charts as healthcare organization leaders reshape what being a leading healthcare organization means as well as what it requires.

Healthcare’s Consolidation Landscape

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Market and regulatory factors have unleashed a wave of merger, acquisition, and partnership activity that is changing the delivery of healthcare services.

Consolidation in the healthcare-provider sector has accelerated in recent years, reshaping the relationships between health systems, hospitals, and independent physicians across the country.

In the Buckeye State, healthcare consolidation activity has been a transformational force at OhioHealth, says Michael Louge, CPA, who serves as executive vice president and chief operating officer at the 11-hospital health system based in Columbus.

“When you look at OhioHealth, and you go back two or three decades, it was a much different organization. The reason it is different today is because of philosophy and the way we approach regional partnerships—how we have worked with physicians and hospitals in the region. Our whole organization’s evolution has been through successful partnerships and consolidations with regional players.”

Over the past year, statistics have been gathered on the pace of healthcare-provider consolidation.

In a recent HealthLeaders Media survey, 159 healthcare executives—mainly from health systems, hospitals, and physician practices—were asked about their merger, acquisition, and partnership (MAP) deals.

Eighty-seven percent of the respondents said their organizations were expected to both explore potential deals and complete deals that were underway in the next 12–18 months. Only 13% of the respondents said their organizations were not planning MAP deals in that same time period.

From the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010 through the end of last year, merger and acquisition transactions involving acute-care hospitals increased 55% from 66 announced deals to 102, according to Skokie, Illinois–based Kaufman Hall. Last year, the operating revenue of acquired organizations was more than $22 billion, according to the consultancy.

Kit Kamholz, managing director at Kaufman Hall, says two sets of drivers are propelling consolidation activity among health systems and hospitals.

“There are transactions that are driven by financial rationale. This is driven by a level of distress at the smaller organization, either from a historical-financial standpoint, an access-to-capital standpoint, or they are experiencing some significant clinical deficiencies. … The second bucket is in the category of strategic rationale. These are organizations that tend to be relatively strong financially, that are considered to be strong community-based providers in their marketplaces; but they are looking at the landscape of the evolving healthcare environment and saying, ‘Do we have the skills and capabilities to be successful in this new era of value-based care?’ ”

Healthcare consolidation activity is impacting the country’s physician practices and physician-employment trends.

California’s New Single-Payer Proposal Embraces Some Costly Old Ways

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http://khn.org/news/californias-new-single-payer-proposal-embraces-some-costly-old-ways/

Three of the dirtiest words in health care are “fee for service.”

For years, U.S. officials have sought to move Medicare away from paying doctors and hospitals for each task they perform, a costly approach that rewards the quantity of care over quality. State Medicaid programs and private insurers are pursuing similar changes.

Yet the $400 billion single-payer proposal that’s advancing in the California legislature would restore fee-for-service to its once-dominant perch in California.

A state Senate analysis released last week warned that fee-for-service and other provisions in the legislation would “strongly limit the state’s ability to control costs.” Cost containment will be key in persuading lawmakers and the public to support the increased taxes that would be necessary to finance this ambitious, universal health care system for 39 million Californians.

Several health experts expressed skepticism about the bill’s prospects in its current form.

“Single-payer has its pros and cons, but if it’s built on the foundation of fee-for-service it will be a disaster,” said Stephen Shortell, dean emeritus of the School of Public Health at the University of California-Berkeley. “It would be a huge step backwards in delivering health care.”

Paul Ginsburg, a health economist and professor at the University of Southern California, agreed and said the legislation reads like something out of the 1960s in terms of how it wants to reimburse providers.

“There’s broad consensus we ought to go from volume to value. This bill ignores all the signs pointing to progress and advocates a system that failed,” he said.

Backers of the Healthy California proposal are pushing for a vote in the Senate by Friday so the legislation can go to the state Assembly and remain in play for this year’s session.

The authors say that their single-payer proposal won’t rely entirely on old-fashioned fee-for-service and that there’s plenty of time for the bill to be amended. According to the authors, some of the criticism in the legislative analysis reflects a misreading of the bill: It would, they say, include some use of managed care.

Top 10 MACRA Considerations for Providers

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Most physician practices are running a race against time to implement Medicare’s value-based payment system, survey data indicates. They have a lot to think about as they go about it.

As Medicare’s reviled Sustainable Growth Rate (SGR) formula for physician reimbursement fades to extinction, its replacement, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, is posing a new set of challenges.

This week Black Book Research identified 10 of the top MACRA challenges that physician practices are facing. The survey is based on responses from 8,845 physician practices collected from February to April.

1. MIPS compliance technology: Physician practices are seeking technological solutions to help them achieve reporting compliance, with 77% of practices that have at least three clinicians mulling the purchase of Merit-Based Incentive Payment System Compliance Technology Solutions (MIPS) software.

2. Electronic Health Record (EHR) optimization: MACRA appears to be a golden opportunity for the largest EHR vendors. For the top eight EHR companies, 83% of their physician-practice users reported working to upgrade their system for MIPS compliance. At physician practices with smaller EHR vendor partners, however, 72% reported they were not working with their vendor partner to upgrade their system for MIPS compliance.

3. Consultant opportunity: The EHR capabilities required for participation in MIPS or Alternative Payment Models (APMs) represent a business opportunity for EHR consultants. Most (80%) of physician practices report that conducting a technology inventory is key to strategic planning for a value-based payment system.

4. Data wrangling: Taming data to conform with the reporting requirements of MIPS and APMs is daunting for many physician practices. At practices with at least four clinicians, 81% of physicians report being unable to align their data with the new reporting requirements.

5. Paying for procrastination: Physician practices that have not developed an in-house strategy for participating in MIPS or an APM are looking for outsourcing options. Of these practice procrastinators, 80% are planning to find turnkey software or a MACRA-administration partner this year.

6. MACRA-induced physician-practice consolidation: Black Book found that three-quarters of independent physician practices surveyed are considering selling their practice to a health system, hospital, or large group practice because of the regulatory and capital-cost burdens of MACRA.

In an equally dour data point, 68% of independent physicians predicted that MACRA would either burden or bankrupt their practice by 2020.

7. Economic incentives: For the first five years of the Quality Payment Program, there are powerful economic incentives to beat the MIPS performance threshold.

In 2019, MIPS is set to redistribute about $199 million from physicians who perform below the performance threshold to physicians above the threshold, and this redistribution mechanism is set to expand over time.

There also is $500 million in supplemental funding available for each of the first five years of MIPS implementation. To chase these opportunities, 64% of hospital-networked physician organizations reported including incentives in physician-compensation packages to boost MIPS performance.

8. Reputation risk: A majority (54%) of those surveyed did not know that MACRA would result in performance data being reported publicly through Medicare’s Physician Compare website and other rating systems.

9. ACO appeal: Joining an accountable care organization can increase the odds of MIPS success through penalty avoidance and resource utilization bonuses. Small physician practices have taken notice, with 67% considering joining an ACO to increase the likelihood of MIPS success.

10. Cost and quality transparency: Based on its physician-practice survey and other research, Black Book Research expects MACRA to be one of the market factors driving healthcare cost and quality transparency.

One survey noted 52% of large group practices, independent practice associations, ACOs, and integrated delivery networks reported they were preparing to release cost and quality measures for individual physicians by next year.

 

Value-Based Readiness

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Providers continue to take a cautious approach as they prepare their organizations for a value-based future, focusing their efforts on making the necessary changes to care delivery, finance, and infrastructure they will need to transition from fee-for-service successfully. While their approach has generally been one of restraint, there are reasons for optimism given the level of progress that has been made.

According to the 2017 HealthLeaders Media Value-Based Readiness Survey, for example, respondents have a much more positive appraisal when evaluating their organizations’ level of strength in preparing for value-based care compared with last year’s survey results. Seventy-three percent say that their level of strength is very strong (21%) or somewhat strong (52%) for overall preparation for value-based care delivery changes, up 18 percentage points, and preparation for value-based financial changes is also very positive, with 72% saying that their level of strength is very strong (16%) or somewhat strong (56%), up 21 percentage points. Further, preparation of a value-based infrastructure is also encouraging, with 65% reporting that their level of strength is very strong (14%) or somewhat strong (51%), up 21 percentage points.

However, while respondents paint an optimistic picture of their level of strength in these areas, survey results also reveal that gaps in value-based competencies still exist.

“People think that they’re ready for value-based care, but based on some of the other survey results, I’m not sure they are,” says Pamela J. Stoyanoff, MBA, CPA, FACHE, executive vice president, chief operating officer at Methodist Health System, a Dallas-based nonprofit integrated healthcare network with 10 hospitals and 28 family health centers, and the lead advisor for this Intelligence Report.

A Medicare Drug Incentive That Leads to Greater Hospitalizations

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Many studies have demonstrated what economics theory tells us must be true: When consumers have to pay more for their prescriptions, they take fewer drugs. That can be a big problem.

For some conditions — diabetes and asthma, to name a few — certain drugs are necessary to avoid more costly care, like hospitalizations. This simple principle gives rise to a little-recognized problem with Medicare’s prescription drug benefit.

For sicker Medicare beneficiaries, the Harvard economist Amitabh Chandra and colleagues found, increased Medicare hospital spending exceeded any savings from reduced drug prescriptions and doctor’s visits. Consider patients who need a drug but skip it because they feel the co-payment is too high. This could increase hospitalizations and their costs, which would make them worse off than if they’d selected a higher-premium plan with a lower co-payment.

Though just a simplified example, this is analogous to what Medicare stand-alone prescription drug plans do. They achieve lower premiums by raising co-payments. This acts to discourage the use of drugs that would help protect against other, more disruptive and serious health care use, like hospitalization.

Studies show that insurers, many of which are for-profit companies after all, are using such incentives to dissuade high-cost patients from enrolling or using the benefit. There’s evidence this occurs for Medicare’s drug benefit, as well as in the Affordable Care Act’s marketplaces.

 The most popular type of Medicare drug coverage is through a stand-alone prescription drug plan. A stand-alone plan never has to pay for hospital or physician visits — those are covered by traditional Medicare. Another way to get drug benefits from Medicare is through a Medicare Advantage plan that also covers those other forms of health care and is subsidized by the government to do so.

Because of this difference, stand-alone drug plans are less invested than Medicare Advantage plans in keeping people healthy enough to avoid some hospital visits.

A study by the economists Kurt Lavetti, of Ohio State University, and Kosali Simon, of Indiana University, quantifies the cost. Compared with Medicare Advantage plans, stand-alone drug plans charge enrollees about 13 percent more in cost sharing for drugs that are highly likely to help patients avoid an adverse health event within two months. They charge up to 6 percent more for drugs that help avoid adverse health events within a year.

Of course, people have choices about plans. Those who have selected a stand-alone drug plan, as opposed to a Medicare Advantage plan, have done so voluntarily. Why do some make this choice?

One answer is that some people are not comfortable with the more narrow networks Medicare Advantage plans offer, with their fewer choices of doctors and hospitals. By choosing a stand-alone drug plan, they can remain in traditional Medicare, which has an open network.

In addition, consumers are generally more attracted to lower-premium plans than higher ones, even if the difference is exactly made up in co-payments. This may be because premiums are easier to understand than cost sharing. Moreover, premiums reflect a sure loss — you must pay the premium to remain in the plan. A higher co-payment, on the other hand, won’t necessarily lead to a loss because you may not use a service.

The appeal of lower premiums is an incentive for stand-alone drug plans to reduce them and increase co-payments. But that can dissuade those who need medications from filling prescriptions and taking them.

Part of the purpose of Medicare’s drug benefit is to encourage enrollees to take prescription drugs that can keep them out of the hospital. In July 2003, promoting the legislation that created Medicare’s drug benefit, President George W. Bush articulated this point. “Drug coverage under Medicare will allow seniors to replace more expensive surgeries and hospitalizations with less expensive prescription medicine,” he said.

But the design of Medicare’s drug benefit includes stand-alone plans that aren’t liable for hospital costs, so they don’t work as hard to avoid them. Encouraging more beneficiaries into comprehensive plans — through Medicare Advantage — or offering a drug plan as part of traditional Medicare itself would address this limitation.

 

 

Enrollment in a Health Plan with a Tiered Provider Network Decreased Medical Spending by 5 Percent

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http://www.commonwealthfund.org/publications/in-the-literature/2017/may/tiered-provider-network-enrollment?omnicid=EALERT1207817&mid=henrykotula@yahoo.com

Synopsis

Employers and health plans are increasingly using tiered provider networks to steer patients to doctors and hospitals that provide higher-quality care at a lower cost. An analysis of tiered network plans in Massachusetts found that they were associated with a 5 percent decrease in spending—$43.36 less per member per quarter compared with per-member spending in similar plans not offering tiered networks.

The Issue

“Tiered-network benefit designs have the potential to deliver higher value and be a tool that employers and other payers can use to decrease spending in the U.S. health care system.”

In health insurance plans featuring tiered provider networks, providers (e.g., physicians and hospitals) are categorized by the quality and cost of their patient care. Providers with higher quality and lower costs are typically placed in the most-preferred tier rankings. Plans furnish their enrollees with information about providers’ relative value and use financial incentives like lower cost-sharing to steer them to preferred providers. In this Commonwealth Fund–supported study, researchers examined the impact of tiered primary care physician groups and hospitals—offered through Blue Cross Blue Shield of Massachusetts (BCBSMA)—on inpatient care, outpatient care, outpatient radiology, and total health care spending.

Key Findings

  • The tiered network plans offered by BCBSMA were associated with lower total adjusted medical spending of $43.36 per member per quarter relative to enrollee spending in similar plans without a tiered network ($830.07 vs. $873.43). This represents a 5 percent decrease in spending.
  • The tiered network plans were also associated with 4.6 percent lower spending on outpatient care per member per quarter compared with nontiered network plans ($576.89 vs. $604.76) and 6.5 percent lower spending on outpatient radiology ($93.71 vs. $100.23). Savings for inpatient care were not significant.
  • Results were similar when the researchers compared spending only within large-group plans, and only within small-group plans.

The Big Picture

Tiered network plans may be more palatable to consumers than narrow-network plans, the authors say, since they cover care from nonpreferred providers, albeit with higher cost-sharing. These findings also suggest that tiered network plans may be a valuable tool for providers that are under pressure to decrease spending. Provider groups could mirror their referral patterns to match tiered networks.

About the Study

The study population consisted of 184,385 nonelderly enrollees (age 64 and younger) who were enrolled in a Blue Cross Blue Shield of Massachusetts smallor large-group tiered network plan for at least one quarter in 2008–2012 and 927,491 nonelderly enrollees in health plans with matched benefit designs, except for no tiered network, in the same period. Enrollees in the tiered network plans paid different cost-sharing levels depending on the tier ranking of their provider.

The Bottom Line

Tiered provider networks have the potential to reduce overall health care spending.

Why supply chain is a healthcare leader’s most strategic asset

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http://www.beckershospitalreview.com/supply-chain/why-supply-chain-is-a-healthcare-leader-s-most-strategic-asset.html

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Healthcare’s movement toward value-based care is not only underscoring the importance of an efficient healthcare supply chain, but also redefining the supply chain leader role.

Once a very transactional process, the supply chain is now considered a core competency for hospitals to reduce waste and lower costs, while supporting patient care initiatives. More and more, supply chain leaders are also taking a seat in C-suite discussions to help executives mitigate potential financial penalties and make more informed decisions under the ever-changing value-based care programs.

To ensure they’re using devices and medical supplies in the most efficient ways possible, hospitals must turn to data, according to Peter Mallow, PhD, program director of health economics, market access and reimbursement for Dublin, Ohio-based Cardinal Health.

Dr. Mallow and Steve Thompson, director of strategic solutions for Cardinal Health, recently spoke with Becker’s Hospital Review about the evolving role of supply chain leaders and shared strategies for using data to better inform patient care and reduce supply chain inefficiencies.

Health care fixes miss the mark

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http://www.detroitnews.com/story/opinion/2017/04/23/valenti-health-care/100822732/

 

 

The phrase “repeal and replace Obamacare” might be in the news, but any new legislation regarding it means little for Michiganians.

Obamacare and the Republicans’ fix, the American Health Care Act, are almost entirely focused on the individual insurance market, yet the majority of Americans receive employer-sponsored health insurance coverage. More importantly, more than one million Metro Detroiters are covered by employers who “self-fund” or self-insure their employee health care benefits.

What does self-insure mean? It means your employer pays, right out of its annual budget, 100 percent of employee medical claims. Your card might read Blue Cross Blue Shield or Aetna, but the insurance company is simply the administrator who collects the claims and sends them off to your employer for payment.

Regardless of who is paying, rising health care costs are the No. 1 threat to American prosperity. Health care costs forced General Motors, Chrysler and the city of Detroit into bankruptcy; health care costs are the main reason wages have not grown in 20 years; and, Michigan spends 40 percent (and growing) of its annual budget on health care — crowding out spending on everything else.

But fixing our health care cost problem today doesn’t require a single action from Congress. Instead of marching on Washington and yelling at elected officials, we should be talking to our CEOs and heads of human resources.

Self-insured employers have tremendous power to change health care. Most employers simply outsource health care benefit construction to consultants and brokers — the same people who are compensated to perpetuate our high-cost health care status quo.

When the lame, status quo attempts at cost-control fail, the usual employer response is to cut, cut, cut. They resort to using an axe to prune rose bushes; high deductible health plans are blunt force instruments that do not sustainably control health care costs and will eventually exacerbate our cost problem.

Indeed, a few, truly innovative employers are providing better employee benefits and reducing health care costs 20-50 percent. If everyone followed their lead, it could result in $2,500 to $5,000 annual raises for each of us and immediately pump $2 billion to 4 billion into the Metro Detroit economy every year.

The solution isn’t a secret. In fact, a non-profit/501(c)(3) called the Health Rosetta was formed to publicize the simple fixes. The organization was spurred by a concerned citizen and the former global head of Microsoft’s health care business named Dave Chase.

The Health Rosetta identifies a few, easy to implement, specific improvements, the most important of which focuses on the intake or front-end of the system: primary care. Hence, the Health Rosetta’s foundation is called Value-Based Primary Care or Direct Primary Care. Other improvements are then built on top, such as “Transparent Medical Markets,” where patients receive up-front pricing and even quality guarantees on a range of surgeries and procedures.

These are the kinds of solutions employers should be considering as everyone wrestles with skyrocketing health care costs.

Tom Valenti is the founding partner of Forthright Health.