Misconceptions, Confusion, Naiveté, and Silliness
Description: Misconceptions, Confusion, Naiveté, and Silliness Five Random Real World Observations on the Transition to Value Based Care Reimbursement Prepared for: HealthTechNet Scott Pickens Jamie Solak Arlington Healthcare Group May 20, 2016
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slide1. Misconceptions, Confusion, Naiveté, and Silliness Five Random Real World Observations on the Transition to Value Based Care & Reimbursement Prepared for: HealthTechNet
Scott Pickens & Jamie Solak – Arlington Healthcare Group May 20, 2016 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved Slide 1<br>
slide2. Moving Risk Doesn’t Increase Value Moving risk incentivizes cost cutting – not necessarily value.
True for all forms of risk transfer – bundles, shared savings, capitation
Some value impact from care coordination in effort to cut costs.
P4P must be added.
Bundles are not differentiating – they make service packages a commodity
CMS will force standardization of bundle definitions.
Compete on add-ons or price.
Bundles are essential to successful Direct to Employer contracting and Medical Travel. Slide 2 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide3. Follow the Money Despite what they say, it’s about money – not quality. Real goal is minimally acceptable quality at lowest possible cost.
Cost reduction per “patient quality unit” is essential.
Sophisticated ABC based cost accounting is critical – very rare in providers.
Sophisticated new system analytics capability to measure and report quality and cost by population segment by contract is critical.
All new investment (did someone say lower cost??). Slide 3 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide4. Old Business Model is Dead If it works, you eventually go out of business. Arithmetic doesn’t work. You save $1 and if you’re lucky you get back a portion of it. Then they move the bar.
Revenue will drop if utilization drops. You have to make it up in volume. Less margin/unit – More units.
Medical travel – out of area patients
Outstanding performance to get in network.
Outstanding performance to do DTE contracting
Own more of the health value chain – vertical integration – M&A/collaboration Slide 4 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide5. Pop Health Yes. Wellness….Meh….. Sickest patients cost the most. Appropriate intervention can save the most. (DUH!).
Trick is to know where to draw the line in intervention investment.
Healthy people staying healthy incur less cost over time. (DUH!)
But don’t think there is a viable business model for wellness program investments unless you also believe in unicorns.
Pop Health manages cost one person at a time. For real ROI optimize your provider networks. Slide 5 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide6. Don’t Be The Monkey in The Middle If you are the accountable care entity you sit between the payer and the providers. You are at risk so be sure your providers are also at risk. Push accountability – risk/reward – down. Slide 6 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide7. Contact us! For more information, feel free to visit us on our website at www.ArlingtonHealthcareGroup.com or contact us directly.
Scott Pickens
Scott.Pickens@ArlingtonHealthcareGroup.com
703-887-6615
Jamie Beth Solak
Jamie.Solak@ArlingtonHealthcareGroup.com
703-967-1440 Slide 7 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
Scott Pickens & Jamie Solak – Arlington Healthcare Group May 20, 2016 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved Slide 1<br>
slide2. Moving Risk Doesn’t Increase Value Moving risk incentivizes cost cutting – not necessarily value.
True for all forms of risk transfer – bundles, shared savings, capitation
Some value impact from care coordination in effort to cut costs.
P4P must be added.
Bundles are not differentiating – they make service packages a commodity
CMS will force standardization of bundle definitions.
Compete on add-ons or price.
Bundles are essential to successful Direct to Employer contracting and Medical Travel. Slide 2 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide3. Follow the Money Despite what they say, it’s about money – not quality. Real goal is minimally acceptable quality at lowest possible cost.
Cost reduction per “patient quality unit” is essential.
Sophisticated ABC based cost accounting is critical – very rare in providers.
Sophisticated new system analytics capability to measure and report quality and cost by population segment by contract is critical.
All new investment (did someone say lower cost??). Slide 3 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide4. Old Business Model is Dead If it works, you eventually go out of business. Arithmetic doesn’t work. You save $1 and if you’re lucky you get back a portion of it. Then they move the bar.
Revenue will drop if utilization drops. You have to make it up in volume. Less margin/unit – More units.
Medical travel – out of area patients
Outstanding performance to get in network.
Outstanding performance to do DTE contracting
Own more of the health value chain – vertical integration – M&A/collaboration Slide 4 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide5. Pop Health Yes. Wellness….Meh….. Sickest patients cost the most. Appropriate intervention can save the most. (DUH!).
Trick is to know where to draw the line in intervention investment.
Healthy people staying healthy incur less cost over time. (DUH!)
But don’t think there is a viable business model for wellness program investments unless you also believe in unicorns.
Pop Health manages cost one person at a time. For real ROI optimize your provider networks. Slide 5 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide6. Don’t Be The Monkey in The Middle If you are the accountable care entity you sit between the payer and the providers. You are at risk so be sure your providers are also at risk. Push accountability – risk/reward – down. Slide 6 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>
slide7. Contact us! For more information, feel free to visit us on our website at www.ArlingtonHealthcareGroup.com or contact us directly.
Scott Pickens
Scott.Pickens@ArlingtonHealthcareGroup.com
703-887-6615
Jamie Beth Solak
Jamie.Solak@ArlingtonHealthcareGroup.com
703-967-1440 Slide 7 Confidential and proprietary, Arlington Healthcare Group, © 2016, All Rights Reserved<br>