11th March 2014 Payment Innovation Breakout 1 There are 3 major complementary payment models being deployed in US 2 Full alignment of payment to outcomes Most applicable for Episodebased payment ID: 932983
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Slide1
London Health and Care Leaders Forum
11th
March 2014Payment Innovation Break-out
1
Slide2There are 3 major complementary payment models being deployed in US2
Full alignment of payment to outcomes
Most
applicable for:
Episode-based payment
Retrospective Episode Based Payment (
REBP
)
Bundled payment
Pay
for
value
Bonus payments tied to quality
Bonus payment tied to
value
Population-based payment
Capitation
Care for people with long term condition (e.g., managing diabetes,
CHF
) and elderly
Primary
prevention for healthy
Acute procedures (e.g., CABG, hips, perinatal)Most inpatient stays including post-acute care, readmissionsAcute outpatient care (e.g., broken arm, URI, some cancers, some behavior health)
Discrete services provided by entity with limited influence on upstream or downstream costs (e.g., MRI, prescription, medical device, Health Risk Assessment)
Slide3These models deliver significant net savings3
3-22% range
7-10% most
С
ost
savings as %
Slide4Speakers4
Dr.
Philip
Ozuah
John
Wardell
Ric
Marshall
Slide5Payment InnovationPhilip O. Ozuah, MD, PhD
Chief Operating OfficerMontefiore Health System
Slide6National Health Expenditures Per Capita
1980-2007
Slide7Health
Expenditures as
% of GDP
Slide8Byzantine Medicare Inpatient
Payment
Hospital Adjusted
Operating & Capital Base Payment
Rate
2009
Operating & Capital Base Payment Rate
2008
Update
Wage Index
MS-DRG Weight
(Medical Severity Adjusted* Diagnosis Related Group weight **)
Hospital AdjustedBase Payment Rate2009
* Principal Diagnosis, Procedure,
Complications & co-morbidities
** 745 individual DRG weights
Direct (pass-through) & Indirect Medical (Interns, Residents/bed) Education Pmt.Disproportionate Share Payments (if Medicaid & SSI Pt Days >15% of total)
Other Policy Payments
(Critical Access Hospital>35 mi, Medicare-dependent>60%)
Outlier Payments (Est. Cost > Loss Threshold)Reduction for Early Transfer (LOS <mean LOS-1)
Reduction if Quality Indicators not ProvidedPAYMENT RATE FOR AN INDIVIDUALPATIENT’SADMISSION
Mean
‘
08 Payment
$9,278 all hospitals
$13,499 large teaching
$6,026 small rural
Copyright 2008, J.B. Silvers,
Weatherhead
School of Management. Case Western University
Slide9Complicated Medicare Physician
Payment
Limitation
Adjusted for geographical cost factors
Conversion Factor
2009
Conversion Factor
2008
Update
Relative Value Units (RVU)*
-work
-practice expense
-malpractice expensePhysician Payment Rates by procedure
2009
* Determined for 10,000 procedures
as defined by Healthcare Common Procedure Coding System (HCPCS)
UPDATE ADJUSTMENT FACTOR (UAF)
SUSTAINABLE GROWTH RATE (SGR)
Growth rate that reflects inflation, enrollment,
real GDP per capita and policy changes
Change required to recoup (or pay extra) the cumulative difference between actual changesand max allowable under SGR (=< 7%)Copyright 2008, J.B. Silvers, Weatherhead School of Management. Case Western University
Slide10Cost Shifting Approach
To Financial Sustainability
*Source:
http://
publications.milliman.com/research/health-rr/pdfs/hospital-physician-cost-shift-RR12-01-08.pdf
, shows hospital operating margins by payer from 2006, based upon American Hospital Association survey data
Hospital Operating Margins by Payer*
3.8% overall margin
Cross-subsidization
Slide11Alternative to Cost Shifting
Focus on efficiency and rooting out waste to improve operating margins
Slide12The challenge
Traditional
Fee-for-Service
Pay-for-
Performance
Bundled
Payments
Shared
Savings
Partial
Risk
Full
Risk
Episodic Cost Accountability
Total Cost Accountability
Minimal
Substantial
Savings Potential for Health Plans and Customers
Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives
Slide13Montefiore
’
s
model
is evolving…
From
To
Fee-for-service
Risk
&
shared savings
One market
Multiple markets
Scale
for volume
Scale
for covered lives
Centralized
Networked
Owned
entities
Partnerships
More employed MDs
More voluntary
MDs
Evolving model…
Slide14This is payment and delivery system reform
Slide15London Health and Care Leaders Forum
14th March
2014John WardellDeputy Chief
Officer
Tower Hamlets Clinical Commissioning Group
15
Slide1616
Tower Hamlets before networks
8 Networks
1
were formed in the borough during 2009
Why networks?
Focus on
population health
across a geography
Collaborative relationships with
wide range of partners
(e.g. Borough, schools, charities)
Sufficient
scale for specialisation
of staff, ability to access rare skills and ensure access, resources (e.g. equipment)Integration with estates plan
Understanding the development of federated networks
6
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Pop:
29,892
Pop: 18,027
Pop: 29,801
Pop: 35,720
Pop: 28,995
Pop: 33,186
Pop: 27,839
Pop: 31,975
33
34
35
36
8
LAPs
36
practices
Total population of ~
245,000
Practice list sizes of 3,000 to 11,000
Slide1717
Case for change…
Wide variation in clinical practice and outcomes for diabetes patients
Economies of scale
Poor uptake of diabetes education and retinal screening
Need to do things differently
The right people to do the right tasks at the right time
Specialist support
Transparency of data
Putting the patient at the
centre
of their
care
Slide1818
How did it work…
Care packages are:
Networks:
Focus on population health across a defined area
Have collaborative relationships with a wide range of partners (e.g. Borough, Schools, Charities)
Provide sufficient scale for:
Specialisation
of staff
Ability to access rare skills
Resources (e.g. equipment)
Ability to ensure access
Integrate with estates plan
Organisational development
Information and
technology
What supports it all?
Payment Model
Contracted at network level 70% upfront and 30% on performance
Reducing variability through the use of evidence based pathways
Ensuring the right people to do the right tasks at the right time
Enabling transparency of data at individual patient, clinician, practice, and network level
Facilitating an integrated and coherent approachCosting of care packages
Slide1919
Outcomes
Slide20Improving MMR vaccination rates: herd immunity is a realistic goal.
Cockman
P, Dawson L, Mathur R, Hull S, BMJ2011;343doi: 10.1136/bmj.d5703
MMR
Immunisation
2006-10
Maintaining
MMR
improvement
20
Slide2121
Good clinical leadership and engagement of specialists
Emphasis on quality of care and outcomes for patients
Contracting and paying for outcomes
Organisational
development
IT and information sharing
Presentation of the right data regularly
Geographical network boundaries (not based on historical practice relationships with one another)
Critical success factors
Slide22Behaviour
change
Guideline
Education
Incentives
Comparative
Feedback
Practice
networks
Belief
Act
Motivate
Organisation change
IT
Equity
audit
IT
Dash-
board
IT
Review
&
recall
IT
Prompts &
Decision
support
22
Slide2323
Integration Going Forward
Slide2424
Forward Plan
2015/16 and 16/17 shadow
capitation
2014/15 and 15/16 local provider consortia
Current state and
14/15
2016/17
fully capitated
Enablers for end state
Payor
/provider configuration
Local
CCGs
provider consortia for all IC services
Local
CCGs
provider consortia for all IC services
Local
CCGs
provider consortia for all IC services
Local
CCGs
provider consortia for all IC services
Reimbursement model
Capitated model
Pay for performance model
Pay for performance model
Pay for performance model
Service configuration
Services contracted through consortia
Services contracted through consortia
Services contracted through consortia
Services contracted
individually
Health and social care
Pooled social and health funding
Joint working agreed
Joint working agreed
Separate social and health funding
Outcome linked reward/risk
Provides
control/share
full risk
for activity
and
outcomes
Providers share more risk for activity and outcomes
Providers share more risk for activity and outcomes
Commissioners bear risk for activity and outcomes
Might need to break
PbR
for target population
Indicative individual budgets with shadow capitation model
Indicative individual budgets
Agreement on reimbursement models to be implemented
Slide2525
What are we commissioning for integrated care
WELC
will provide nine key
interventions
for its population underpinned by
five components
and enablers
Health and social care
navigation
Self-care,
behaviour
,
and expectation management
Care planning
Specialist
input In the
community
Discharge support from
acute to
community
Discharge support formental health patients fromsecondary to primary careRapid response with shortteam reablement
Mental health liaison (RAID)Areas of interventions
Essential components
Information sharing platform
Evidence-based pathways &
care packages
(e.g. last years of
life, diabetes
,
COPD
,
CHD
.
falls,alcohol
and substance misuse)
Joint health & social care
assessment
Creation of new roles within
the workforce:
Case
manager
Hybrid
health & social worker
Health &
social care coordinator
Discharge
coordinator based
in acute
wards
Organisation
of practices
into networks
Enablers
Patient engagement
Joint decision making
and accountability
Clinical leadership and
culture development
Information sharing and
decision support
Aligned incentives and
reimbursement models
Care coordination
Ensuring people are in the most appropriate setting of care
Self-care
Joint health, social care and mental health approach
Case management
Slide2626
Contracting approach – Standard
NHS
Contracts
CCG
Mental Health Liasion (RAID)
Discharge Management
Rapid response
Social services
Care Co-ordination
Integration function delivered collectively by all providers in collaboration
Generic schedule
for
all
Provider specific schedules
Provider specific schedules
Slide27Provider assurance process
Indicative summary provider development approach to commissioning integrated care services
Prospectus
Brings key documents together
Adds detail to provider letter
Signals what might be in future phases
Payment mechanism
Sets out approach to payment on outcomes
Outlines incentives for providers to work together to provide integration of services
Provider letter
Lists for each provider the services we anticipate they will provide in 14/15
Signals 70/30 split for 14/15
Outlines next steps (below comes from
CCG
)
KPIs
Sets out individual services and system side performance measures
SEP
+
+
+
6-9 month procurement process
Stage 1 assessment
Individual providers outline how they will provide services against the borough integrated care services specifications
Also asked about how they will integrate with others
OCT
Stage 2 assessment
Providers given feedback to Stage 1
Providers asked jointly to outline how they will ensure services are integrated
Asked if they are revising responses to Stage 1 in the light of and feedback or work done with other providers to date
NOV-JAN
Provider collaborative interview
Providers given feedback to Stage 2 and questions to answer at interview
Presentation and interview on collaboration governance arrangements and plans to deliver jointly on
KPIs
JAN
Evaluation
Further dialogue with providers about plans and clarification of details
FEB
Formal tender process
Likely to be competitive dialogue
Likely to be 6-9 months
MAR
Not approved
Contracting process
Service specification and integration written into existing contracts with providers
Payment on outcomes 14/15
Approved
Dashboard
27
Monitoring
Development of 15/16 contract begins for similar process to start in Sept 2014
Slide28Questions?28
Slide29London Health and Care Leaders Forum
14th March
2014Ric MarshallDirector of Pricing
Monitor
29
Slide30Contents30
The Health & Social Care Act 2012
What next for 2014?
Slide31The Health & Social Care Act 2012 sets out the approach for pricing and the
roles
for NHS England and Monitor
Slide32What next for 2014?32
Slide33Thank you…..Any questions please?Further information:
http://www.monitor-nhsft.gov.uk/sites/default/files/publications/MakingThePaymentSystemDoMore%20-%
2028Feb.pdf