Are you ready for new health care payment and delivery models?

Carol Dorn Sanders
Carol Dorn Sanders|February 13, 2013

For more than two decades, we’ve read and heard about the unsustainable costs associated with our complex and fragmented health care system. We’ve attempted to steer away from the fee-for-service payment model, which pays for volume instead of value. And further, we’ve tried—with limited success—to shift some risk from payers to providers and costs from employers to consumers.  

We’ve reached a tipping point. Every single stakeholder—state and federal governments, private health plans, employers, and consumers—is struggling to cover its portion of the health care expenditures, which now amounts to 18 percent of the US Gross Domestic Product.

And while we thought the market could drive the transformation needed in the health care system, it didn’t happen in a timely manner; so as a result, Congress passed federal legislation to reform the system by serving as the impetus behind the change.

How do we bend the cost curve?
As Michael W. Painter, JD, MD, wrote in the HCI3 Improving Incentives Issue Brief, Bundled Payment Across the US Today, “Our task now is not to stay put or go back but rather to decide what way to proceed. In some ways we are fortunate. We have the urgency of now on our side. Our ongoing health reform debate, as well as the national attention to our ballooning federal deficit and the central role that rising health care costs plays in that deficit problem, all are prompting us to, as they say, ‘bend the health care cost curve.’ How should we do that?”

There are a number of suggested methods for bending the cost curve in the piece of referenced federal legislation—also known as the Affordable Care Act, including alternative payment and delivery models. So, as you consider whether to engage in a bundled payment program and/or possibly an accountable care organization, there are a number of questions you should consider. Some of them are listed below:   

 Leadership

  • Do you have a clear understanding of the new payment and delivery models and their potential benefits and possible unintended implications?
  • Do you have the vision of where you need to go as an organization—what changes need to be made?
  • Do you have the leadership in place to usher in payment reform to all levels—board, administration, medical staff, employees, etc.
  • Can the leadership team drive changes—short- and long-term?
  • Do you have a plan in place to educate and communicate the importance and benefits of payment reform in your organization?

 Financial Viability

  • Is your facility financially stable?
  • What impact will alternative payment models have on facility revenues/finances?
  • What impact will introducing and implementing alternative payment models have on available capital?
  • Do you have goals and metrics in place? Would you be able to realize negative implications quickly?
  • Do you know the equation for financial success with new payment models?
  • Could you juggle multiple payment models?

 Culture

  • Is your organizational culture innovative and entrepreneurial?
  • Do you encourage your employees to challenge the status quo?
  • Do you support risk-taking within your organization?
  • Is it a learning culture?
  • Is your culture collaborative? Does it support “team”?

 Alignment

  • Do you have clear, strong alignment of goals within your organization—alignment at all levels?
  • Are your affiliated physicians—whether employed or not—committed to the success of your facility and aligned as well?
  • Do you have total confidence that your physicians and other providers deliver the best care in the right place at the right time all of the time?
  • Do you have a network of post-acute care providers aligned?

 Patient Population

  • What is your patient mix?
  • What is the current health of your patient population?
  • What is the cost of care for your patient population?
  • Are there opportunities to manage patients differently and more efficiently?
  • What is your market share?
  • Is the hospital prepared to attract and drive new patients to your facility to support new financial models?
  • How would new patients impact financials?

 Resources/Infrastructure

  • Do you have the human resources, skills and knowledge in place to transform your payment model and/or juggle multiple models?
  • Do have the infrastructure and technology in place to facilitate payment reform? If not, do have a plan to cover the costs and implementation?
  • Do you have a data strategy?
  • Do you understand the insights you need to glean from the data you are generating? Can you translate those insights into action?

While we might not have an industry “how-to” manual yet on how to participate in reform, we do know that thorough and thoughtful preparation is going to be the key to mitigating risk during this period of transformation.

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US health payment reform - the carrot, or the stick?

Rick Ingraham
Rick Ingraham|February 5, 2013

Hardly a day goes by when the term “Obamacare” isn’t used in conjunction with some fact or news brief about US health care.

While the Affordable Care Act (ACA) may be the legal initiative, it should be noted that many of the concepts and programs within the ACA have long been in discussion, planning, and pilot experimentation in both the private and public sector before President Obama took office in 2009.

This past week, the Centers for Medicare and Medicaid Services (CMS) announced  the Bundled Payments for Care Improvement Initiative – another milestone where the work of many from outside the government and their collaboration within became a formalized federal program.

In this instance, bundled payments align incentives for providers, allowing them to work closely together across all specialties and settings to improve quality and outcomes and represent a shift to paying for value.

Provider organizations will enter into payment arrangements that include financial and performance accountability for episodes of care. These payment models may lead to higher-quality, more-coordinated care at a lower cost to Medicare.

What drove federal payment reform?
If one looks at the initiative announced last week in terms of a single point-in-time, it might be logical to assume that the debates in Washington around the postponed fiscal cliff, deficit reduction and entitlement levels are the underlying drivers. 

Many would contend payment reform is the “stick” to drive new behaviors in health-care delivery.

I’d prefer to put it in the context of the streams of dialogue and work encompassing the past 10 years, if not longer.

Here are a few snippets
The dilemma the US health-care sector has faced for years can be put in context of its “poor” standing in the world community. Despite high levels of spending on health care – 17 percent of GDP, expected to increase to 20 percent by 2020 – outcomes in the US rate among the lowest in return.

Throughout the US, consortiums and collegial gatherings have addressed the various conundrums within our health-care “system.”  You’d be hard-pressed to find a health-care professional today who hasn’t actively debated the findings within “Crossing the Quality Chasm” (Institute of Medicine report 2001) or raised some serious eyebrows while delving into the Commonwealth Fund’s State Scorecard on Health System Performance for 2007 and 2009.

It turns out, with respect to getting “top care,” it really does matter where you live. But should it?

The “Graphical Variation in Access to Care – the Relationship with Quality,” published online June 13, 2012 by the New England Journal of Medicine, lends an even more current update to a realtor’s nightmare or secret sauce.

“Yes, US health care is expensive, but we have the best in the world!” many blindly asserted. Yet, in 2003, we learned how only 55 percent of patients receive care in accordance with best practices (McGlynn, E.A. et. al. “The Quality of Health Care Delivered to Adults in the US,” New England Journal of Medicine 2003).

A slippery slope?
After a decade in which so many of us burned the midnight oil discussing the balance of health-care cost, quality, outcomes, safety, efficacy and efficiency, it has become crystal clear that addressing one dimension without the other is a slippery slope.

Hence, the challenge for an industry that is so “siloed” in its payment and delivery.

Yet, for me, the dialogue taking place this decade has been the most invigorating in my career.

A wealth of thought leadership
Many of us have recognized that an entire health-care delivery model operating within the fee-for-service model carried some unintended consequences of duplicative care; gaps in post-discharge care; and fraud, waste and abuse.

Moving multiple generations of care-delivery professionals over to new payment models with new delivery models has increasingly been the topic for the academic-thesis arena, yet much more difficult to operationalize.

Uwe Reinhardt illustrated the criticality of this effort for me in Berlin in 2008 at World Health Care Congress (WHCC), and it built upon earlier discussions around pay-for-performance.

Then Clayton Christensen’s vision (WHCC Washington, DC 2008 and the Innovator’s Prescription – Disruptive Solutions for Healthcare, copyright 2009) for service delivery models ranging from fee-for-service “solution shops” to value-add processes “fee-for-outcomes” even to facilitated network’s “fee-for-use” further opened my mind to what can and needs to be accomplished.

The models of Patient-Centered Medical Homes and Accountable Care Organizations are not first-developed concepts within the ACA.  

Rather, the dialogues of Christensen and Reinhardt, blended with the Institute for Healthcare Improvement’s Triple Aim of Improving Care, Improving Health and Lowering Cost have served as the basis for many early pilots (Humana, Dean Health, Dartmouth-Hitchcock Clinic, Brooking-Dartmouth, for example) and state level adopters (Children’s Hospital and Clinics of Minnesota, Colorado Department of Health Care Policy & Financing, Carolinas Healthcare System, etc.).

What is the ACA’s value to this continuing evolution in health care?
It can serve as both the carrot and the stick to progress. For example, many have recognized the potential improvement via the adoption of electronic medical records systems (EMR). Yet given the cost to procure or develop and then install, relatively few chose to do so.

Once the American Recovery and Reinvestment Act of 2009 included HITECH funding (the carrot) for providers wishing to move toward EMR, yet also carry penalties (the stick) for failing to meet Meaningful Use phase requirements, we began to see the traction in EMR adoptions.  

Similarly, the Bundled Payments for Care Improvement Initiative now provides the mechanism by which the new care delivery models can be more broadly operationalized.

Payment reform can put incentives in the right place to thereby improve outcomes while reducing cost. Payment reform can help focus on prevention rather than “simply treating.” Payment reform can serve as the impetus for improved provider focus on engaging the patient. Payment reform can make care more efficient and effective, thus improving actual and perceived value. Payment reform can protect and extend the life of Medicare and Medicaid. But will it?

What will it take for providers to thrive?
One thing is for sure: It takes a new discipline for providers to thrive in a world of bundled payments, capitated payments and gain sharing agreements.

This will require:

1.)  Heightened insight into episodes of care through evidence-based case modeling.

2.)  Frank study of care effectiveness by provider, location and specialty.

3.)  Ramped-up predictive capacity to identify and adjust to business model risks.

4.)  Increased analysis of patient engagement methods to ensure adherence.

 

I submit that the use of high performance analytics will directly impact the success of any government carrots or sticks incenting the continued improvement within US health care … And this challenge keeps me invigorated – albeit up at night on occasion.

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Data is King for CMS Bundled Payment Pilots

Graham Hughes, MD
Graham Hughes, MD|February 4, 2013

On January 31st 2013, the Centers for Medicare & Medicaid Services (CMS) announced the widely anticipated list of more than 450 organizations that will begin participating in the Bundled Payments for Care Improvement (BPCI) initiative, to test whether bundling payments for episodes of care results in higher quality, more coordinated care for beneficiaries and lower costs for Medicare.

For those who aren't familiar with the initiative, here's how Medicare describes the background and high level goals on their website....  "Traditionally, Medicare makes separate payments to providers for each of the individual services they furnish to beneficiaries for a single illness or course of treatment. This approach can result in fragmented care with minimal coordination across providers and health care settings. Payment rewards the quantity of services offered by providers rather than the quality of care furnished. Research has shown that bundled payments can align incentives for providers – hospitals, post-acute care providers, physicians, and other practitioners– allowing them to work closely together across all specialties and settings."

Just as we saw with the rapid adoption of Medicare's Accountable Care Program, this most recent announcement signals that it's not just a few, leading edge, brand name healthcare organizations that are confident enough to dip their toe in the relatively uncharted waters of Value Based Payment, we are witnessing  a broad, grass roots recognition that Value Based Payment models are here to stay and that it's prudent to jump in early, while the downside risk is minimal and the financial upside is sufficient to be enticing.

Let's take a slightly deeper look at the 4 Bundled Payment models being piloted, which ones appear to be the most popular and how many episodes  most organizations are signing up for.

Who Signed Up for Which Model?

Model 1:  Retrospective Acute Care Hospital Stay Only

Under this model, Medicare continues to pay physicians separately and according to the existing fee schedule but will pay participating hospitals a discounted amount for the hospital stay compared to the standard DRG payment.  All DRGs are considered under the agreement and some or all of the savings below the discounted target may be shared between the hospital and physicians who participated in the care redesign efforts.

32 pilot sites - supported by three convening organizations

Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care

Includes the inpatient stay plus post-acute care for a fixed period (30, 60 or 90 days) following discharge. Participants can select up to 48 episodes to pilot.

 193 pilot sites - supported by multiple convening organizations, including Remedy Partners Inc., Geisinger Health System & Clinics and NaviHealth.  Roughly split 60:40 between sites piloting the majority of the 48 currently defined episode types vs. those only exploring 1 or two episodes.

Model 3: Retrospective Post Acute Care Only

Post-acute care following inpatient stay. Episode initiated within 30 days of discharge and includes care delivered by participating skilled nursing facility, inpatient rehabilitation facility, long-term care hospital or home health agency. Ends 30, 60 or 90 days after the initiation of the episode.

165 pilot sites - supported by multiple convening organizations, including Optum, Remedy Partners Inc. and Amedisys Holdings.  Roughly split 70:20:10 between all 48 episodes, 16 episodes and 2 to 3 episodes.

Model 4: Acute Care Hospital Stay Only

Lump sum prospective payment that covers all services delivered to patient by the hospital, physicians and other practitioners.

76 pilot sites - supported by multiple convening organizations, including Tenet Healthcare Corporation and ScrippsCare.  The vast majority of organizations choosing to pilot ten or less episode types, mainly orthopedic and cardiovascular procedures with only a small handful piloting medical episodes such as stroke, pneumonia and CHF.

So, you might ask "why the need for all these convening organizations?"  The answer lies in the complexity of both the data analysis as well as the organizational process change that needs to be undertaken to ensure that the pilots are a win-win for all involved.   This is an initiative where economies of scale help to ensure success, whether in data preparation and risk modeling, opportunity identification and prioritization, cross team care coordination and clinical change management or claims submission, payment tracking and distribution of shared savings.

The one thing that all of these 450+ sites have in common is that they need to become adept at manipulating large amounts of data, not just to understand past performance but to predict as accurately as possible the likely impact that organizational changes will make to both the cost and quality of care.  To do both the planning and execution well at scale requires a new breed of analytics-powered software solutions, designed specifically for this new generation of Bundled Payment episodes.   Episode based Case Rate (ECR) Analytic packages, such as Prometheus Payment ECR Analytics, that had previously only been available to the largest health plans will start to be used routinely by healthcare delivery organizations that will, over time, become experts in optimizing the risk/reward equation associated with Value Based Payment.

In 2012, SAS and HCI3 announced a partnership to jointly develop the next generation of pioneering Prometheus Payment ECR Analytics, and we provided sophisticated software to support many organizations submit their applications to become BPCI pilots.   We are looking forward to working with many of the selected pilot sites in 2013 to apply advanced analytics and deliver data-driven insights that allow their organization to more deeply understand the most significant areas of opportunity for improvement and to guide towards what can be done to tap into the upside linked to these new bundled payment models.

Will Bundled Payments and ACOs have the quality improvement and cost saving impact that CMS is hoping for? Nobody knows, but many of us are not only keeping our fingers crossed but also actively working to provide information that enables success.  2013 will be a year of broad experimentation and with any luck, we'll start to see a number of innovative sites deliver some high impact successes that will help others better understand how to leverage these new value based incentive models to deliver higher quality care at lower costs.

 

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And the winner is.....??

Graham Hughes, MD
Graham Hughes, MD|November 5, 2012

Well, it's finally upon us:  It's the eve of the US Presidential Election, and by end of day tomorrow we will know whether The Patient Protection and Affordable Care Act (PPACA) of 2010 will progress according to the Obama Administration's detailed playbook, or whether we can expect "Obamacare" to be repealed and dismantled as promised by the Republican Party.

After months of incessant TV ads, sound-bite-driven debates and blatantly misleading statements that have created a new mini-industry of fact-checkers, the election remains too close to call.  While it's been a fascinating spectacle over these past few months, it's also been painful to see the emphasis on trying to polarize issues to create distance between both parties policies, rather than actually debating how to address the challenges.  

Health-care reform has been the poster child for this kind of political maneuvering, in which sound bites monopolize the dialogue and little if any clarity has been brought to where the parties differ on how to bend the costs curve in health care. Many of us are now eager to just move on and, as time is of the essence, if there is a change in administration we want to know the specifics of the revised approach as soon as possible.

With all that said, and I know I'll probably regret this, I'm going to make a prediction.  I'll bet that whatever the outcome of this election, if we look at what needs to be done to improve health care, the following analytic imperatives will still be as relevant by the end of the year as they are now.

The five imperatives that won't change are:

  1. Simplify data integration across the extended enterprise.
    Data is the essential lifeblood that enables deeper business insights and the foundation on which to begin to design and build all subsequent strategies.
  2. Understand and manage financial risks and incentives.
    As incentives change in the health-care industry, so will behavior. The move from pay-for-volume to pay-for-value will require organizations to both predict and measure the value they deliver.
  3. Proactively improve care quality and outcomes.
    Tracking what happened in the past is no longer good enough. We now need to predict quality issues before they occur so that we can intervene early and effectively.
  4. Drive greater efficiency of care delivery.
    Inappropriate levels of variation in health care account for up to 40 percent of all health-care costs. Avoidable waste needs to be tracked rigorously if it is to be reduced.
  5. Engage patients as unique individuals.
    Patient-centered health care means just that – adapting health care to fit the patient’s needs and lifestyle rather than expecting the patient to adapt to the provider’s needs.

Do you agree?

We may not know whether these specific predictions are correct for another month or so, but my sense is that they are essential elements to any rational health-care system, whether in the US or in any other first-world country.  

Data volumes don't get smaller, fee-for-service won't suddenly be the next best thing, and understanding and engaging patients in their own health care isn't a passing fad.

Analytics are here to stay. In the coming years, it won't be good enough to focus on reporting what's already happened. Rather, the health-care system of the future will focus on early intervention through the proactive use of data for prediction and optimization.

 

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Are health plan leaders establishing transformation deadlines?

Alice Swearingen
Alice Swearingen|September 4, 2012

We all have significant deadlines in our lives marked by a date on a calendar.  Deadlines that come to mind for me this year include: annual tax submissions, sending a child off to college,  year-end sales targets, and putting a home on the market.  I usually launch into these larger life-event deadlines by starting with the end date in mind, then counting backwards until the present day, adding in milestone goals to digest the large “deliverable” into consumable pieces.  And in some of these cases, the milestones require  the help of others to achieve success, on occasion, even the smallest team members, the pets must change their routine and comforts for the end goal to be achieved.

Health plans are no different, they face numerous financial, sales and marketing deadlines every year, so what is different about now?  Now health plans are also facing the deadlines for the new “medical consumerism or retail health care market” created by market forces and legislation.  The changes health plans must incorporate into their existing business model are not just “beefing-up” or opening an individual retail market branch- it is MUCH more extensive than that.  What we are asking health plans, and the US healthcare ecosystem in totality to do, is:

  • decrease cost-of-care,
  • increase access to coverage,
  • improve patient outcomes, and
  • enhance the customer experience.

And for health plans, all while maximizing membership growth and maintaining financial stability. Those are monumental tasks, even if long overdue, to be accomplished in a relatively short period of time.

Is it happening? Are we witnessing health plan leaders transforming their organization?  Yes, albeit the transformation goals and the appropriate change management focus vary across the country.

Why should health plans accomplish this dramatic transformation?

Booz & Company offered a few reasons in their article, Healthcare after the Ruling Let the Work Continue.   …“Consumers’ ability to vote with their feet in a world of guaranteed issue and renewal will raise the bar on service and delivery across the board.  Providers and payors will need to understand healthcare consumers and cater to their specific needs in a simple, empathetic manner to engender lifetime loyalty.” …

www.booz.com/media/uploads/2012-Healthcare-After-the-Ruling.pdf

How is the transformation occurring? 

Most health plans are requiring new skills and capabilities from their employees and consultants, redesigning the organizational structure, refreshing the culture and of course, infusing capital.  Many are crafting new business processes to design, manage and optimize their portfolio performance.   The changes are a struggle for some in the organization, and meet opposition or skeptics;  without proper change management focus, the new processes can be derailed. In the end, the market will define the look, feel and core capabilities of a successful health plan.

Some health plans are looking outside the industry and learning the consumer retail market nuances from other industries; adopting their best practices to drive health plan innovation.  They may be utilizing non-traditional health plan methodologies AND imbedding new processes across the organization for consistency and transparency.   One “borrowed” best practice is the use of advanced analytics and non-traditional data sources to gain deeper market insights.   As in other industries, successful plans will likely segment their members, individual and group, to develop better products for them.   Yet more than just understanding  member preferences, advanced analytics can be utilized to better predict market risk in new ways and get to know their customers as individuals.  Knowing members more intimately can drive better medical management by providing personalized services, products, and programs.

More specifically, the advanced analytical platform, as in other retail markets, may further enhance the health plan competencies to:

  • Design a portfolio of products and services to achieve a specific revenue target
  • Make informed decisions for each book of business by understanding  consumers/ members
  • Evaluate scenarios with new or enhanced product/service combinations and membership sizing
  •  Budget for membership acquisition and on-going engagement
  • Optimize market offers
  • Maximize the commission structure
  • Better predict cost to more accurately price individuals and groups
  • Better target for care management programs
  • Deploy resources to higher value activities
  • Centralize a base for business decisions across divisions

What will be a few US healthcare medical consumerism transformation outcomes?

Products will be developed and priced according to individual preference and perceived value

Health plans currently use medical and pharmacy claims along with member demographic information to understand financial risk and underwrite groups and members.  With the changing health care landscape traditional models can be utilized with new information to provide insights to health plans for strategically addressing product design, marketing initiatives, and financial implications in the new healthcare marketplace.  Through adding consumer behaviors and lifestyle information to health trends, a health plan can evaluate current member tendencies and predict new population preferences and valuation criteria.

Health plans will work with the health care continuum to improve population health

Health plans will continue working with large employer groups, developing wellness and incentive programs to improve health specific to their employees, and measuring the program for a positive ROI.  For the individual/fully-insured members, health plans must gain insights into the motivations and incentives that drive member behaviors for improving health.  Finally, health plans may partner with providers and others to surround the member with the health care message.

Will the market meet the deadline?

Most health plans will meet the deadlines and roll out new retail offerings, and some plans will be more successful than others.  The definition of success likely varies across the health plan continuum as much as the level of effort, capital and change management the health plan leadership allocated to this new market.  In the end, the market will decide who got it right, with some second guessing their choices made during this critical transition period.

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New Healthcare Ecosystem Requires New Collaboration Approaches

Brad Sitler
Brad Sitler|August 6, 2012

In reading a recent article published by PharmaExec on Innovative Contracting, http://blog.pharmexec.com/2012/07/25/innovative-contracting-whats-the-verdict/, it was encouraging to see continued discussion within Life Sciences arena that strives to address the needs of their customers, the payers and providers.

Payers and providers are both taking on significantly more risk with the Affordable Care Act. Life Sciences can have a role in sharing both the upside and downside associated with the new pay for performance models defined by the act. However, it will require more than new contracting models.

The three contracting models start to address sharing in the risk of reimbursement and decreasing costs.

However, why should the innovation stop at the point of these three contracting models or even at contracting overall? Isn't there an opportunity to develop deeper collaborative partnerships that are focused on 1.) the patient, 2.) the patient's outcomes, and 3.) decreasing the total-cost-of-care.

For instance, what about "services wrappers" with which life sciences companies could surround their brands? Service wrappers that would deliver unbranded education and patient support irrespective of the brand that a patient is prescribed.

The current approach of every brand offering its own patient services creates complexities for providers in ensuring their patient is signed-up with the correct "branded" program. Given the number of patients, diseases conditions, and treatment options, the idea of brand specific support services could, and has led to hundreds of different patient support programs, which are neither cost effective nor easy for the provider to stay abreast and ensure every patient is enrolled in the "branded" program.

Contracting would still have an important role in broader unbranded patient support programs.  If a patient was prescribed a competitor's brand AND placed on another life sciences company's support program, the plan or provider would reimburse the life sciences company for the cost of the program at a pre-determined price. If a patient was prescribed the life science company's brand and placed in its program, the plan or provider would be reimbursed at a variable price of the branded product based upon patient outcomes.

Life science companies have spent decades understanding the needs, attitudes and behaviors of patients. These insights enable relevant messaging and sustained engagement with patients. Now, imagine if programs were developed that leveraged real-time data EHR, from the provider and payer and the insights from life sciences companies around the patient attitudes, needs, and behavior.   In the future, first diagnosis could lead to immediate engagement with a health coach; bi-weekly peer patient support group meetings with a clinician; pro-active follow-up on tests/future office appointments, refills reminders, and remote monitoring.  Additionally, how about  continual reassessment of the patients risk for disease progression or a critical care event such that limited support resources could be directed to those patients that would benefit most from support interventions.

Yes, this would require new approaches to data sharing in a HIPAA compliant manner and it would require contracting for both Value-added Agreement and a Performance Based Agreement simultaneously. It would require the parties to leverage new analytic capabilities to identify which patients are most at risk as well as those patients that would benefit most.

Many of the challenges that previous article identified will still exist - administrative burden associated with tracking contract performance, aligning on end-points for reimbursement, and building partnership trust. Others challenges will diminish with the formation of ACOs that take on the role of payer and provider with a comprehensive view to patient administrative and clinical data.

If all parties focus on the patient, the patient's outcomes, and decreasing the total cost of care for their patients, everyone is positioned to succeed. However, it will require new approaches to contracting, service offerings and collaborative partnerships with all the partners in healthcare.

The benefits to all parties are there. The challenge is realizing them.

 

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Patient-Centered Data-Driven Care: Carolina Advanced Health

Jason Burke
Jason Burke|July 16, 2012

CAH LogoThis week, I had the opportunity to tour Carolina Advanced Health.  This new facility, which represents a partnership between BlueCross BlueShield of North Carolina (BCBSNC) and University of North Carolina Health Care (UNC), is a model for a patient-centered medical home that places a heavy emphasis on team-based care.  Though it has only been open for 6 months, their progress towards re-inventing the concept of patient- and team-centered care is impressive.  It also shows how information and technology, combined with novel care models, can offer truly transformative results.

Dr. Thomas K. Warcup has a very interesting job: build a provider organization capable of delivering multi-disciplinary patient-centered care, and avoid be trapped by the legacy thinking that many experienced and talented employees may bring to the table.  He appears to be very good at his job.  One thing is clear from my first meeting with him: he cares very deeply about enabling new models of effective patient care.

It is hard for me to summarize the model at CAH.  On the one hand, it is completely intuitive:

  • put the collection of medical resources that should be involved in a patient's care under the same roof, sharing the same information  infrastructure
  • develop more time-sensitive and comprehensive care plans that more completely address the complex needs of patients suffering with chronic conditions like diabetes, high cholesterol, asthma, and heart disease
  • create different engagement models with those patients that make them feel more empowered and cared for
  • reward longer-term health outcomes, not service volumes

Simple.  But it is also complex.  Dr. Warcup and his team clearly have their work cut out for them, but by all outward signs, they seem to be off to a great start.  Consider a primary care setting where:

  • Primary care physicians, nurses, care managers, behavioral health specialists, and others all consult regularly on the best interest of a patient.
  • Office hours reflect patient's work lives, and appointments are scheduled within 48 hours
  • Examination rooms are intentionally designed as discussion spaces with patients and their families
  • Lab equipment produces on-site sample results in minutes using only a finger prick
  • Patients are encouraged to email/call their health practitioners
  • An automated prescription sample dispenser allows patients to leave their doctor visit with medications in hand

What's not to like?

As many of you know, I am a huge advocate of agile methods in software engineering.  So I was both surprised and delighted to see that some of those principles were actually being applied in CAH's care team orchestration.  The whole care team actually "scrums" around patient care on a regular basis (though I'm not sure they would call it that), using shared status information to drive care decisions and activity coordination.  I don't know whether the borrowing from agile was intentional or coincidental, but it seems like a great idea to me.

Information flow is a critical part of the CAH model, so having a facility that can integrate medical records, claims, pharmacy, and other information about a patient is a huge enabler.  Going beyond that, though, CAH also uses a variety of real-time wireless medical devices, telemedicine technologies, survey instruments, and Internet-based information resources to assess, educate, and monitor patients. Dr. Warcup described the benefits of seeing physiological data while patients are in their day-to-day lives, giving practitioners an accurate picture of current medical issues while allowing those same practitioners to dispel unnecessary patient anxieties (and associated costs).

One of the more compelling aspects of the CAH model was an information system that stratifies the current status of every patient on a nightly basis using a green-yellow-red code.  As new information enters the system -- a medication adherence issue, a medical device reporting a metric out of bounds, etc. -- care teams are able to see daily which patients are entering an elevated risk, and can intervene as needed.  The system is even smart enough to know which disease conditions "trump" others; of the chronic conditions that CAH currently focuses on, diabetes is currently king.

Seeing this in practice at CAH, I was reminded of a prior blog post where I discussed 9 ways analytics can transform health care.  On my undoubtedly incomplete list, #4 was medical indicator selection.  The natural tendency in our industry is to codify an ever-growing list of medical measures and rules.  The problem with that approach -- as we have seen in other market segments like fraud -- is that a linear implementation process is unsustainable: it does not reflect the natural system complexity, it does not easily provide discrimination of decision-making priorities, it requires a time delay between available knowledge and implementation of that knowledge, and it becomes exponentially more difficult to model inter-dependencies over time.  A smarter approach is one based in analytics, allowing the data to inform you about the patterns, relationships, contigencies, and priorities.

I have no idea how CAH is planning to handle these issues, but seeing an organization like CAH focusing on making more information-based decisions is inspiring, and it gets my brain thinking about the possibilities. In a world where practitioners and institutions will be monitoring thousands of variables and performance measures covering health outcomes, risks, quality, safety, utilization, profitability, and more, I suspect analytics can offer a better way to characterize and prioritize day-to-day work that, like CAH's operating model, is much more patient-centered and value-oriented.

 

 

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What compelling event will move you?

Alice Swearingen
Alice Swearingen|July 9, 2012

I recently faced a tough decision- do I repair and revive my home air conditioning unit yet another year or do I replace it?  As I discussed the options with the project manager for several hours on a Saturday morning, thankfully before this incredible heat wave, I was struck at how similar this decision was to the business decision to move Life Science Managed Markets divisions to the powerful world of Advanced Analytics.

Sound like a stretch?  Let’s compare the 2 system purchasing scenarios; I think you will come to a similar conclusion.

Rationale- Both purchasing decisions are driven by a perceived inefficiencies, compelling events, and a need for improvement- “How much money could be saved through new technology driven efficiencies?”

Timing of Compelling Events- The compelling event is often driven by timing of anticipated changes.  For me it was the typical hot and humid southern summer, for life science organizations it can be driven by the timing of health care reform market changes, generic intrusion, or new product launches.

Worthy Investment- Each purchase requires a look at the bigger financial picture- without it- the decision will always be “repair over replace”. Investment decisions include: “How long will it take to capture my return on investment?  Will quality and dependability improve? Will the purchase improve my marketability and make me more competitive?"

Realized Savings- Savings for both systems will begin immediately upon installation and system use.

Improved Security- Each system includes advanced technology to alert users as conditions change.

Perhaps the comparison stretch is easier for me because I work with both issues directly or indirectly every day- and as the project manager  outlined the 2 A/C options I faced, I noted similarities:

Option 1- Keep the existing system, recharge and repair it.  The costs and time associated with this option are minimal, yet so are the benefits- leaving several concerns unaddressed.   This is the least expensive option, at least from a cash outlay expense, yet is it really the least expensive?  What about the opportunity cost of missed savings that can be found in the new system?

Option 2- Replace the old unit with a well-known brand that provides a high-efficiency, warrantied system with numerous upgrade options, removing the inherent concerns with the current system.  For life science organizations concerns include: disparate data sets, outmoded modalities- such as spreadsheets, and insufficient capabilities- resulting in contracts that are seen through a limited perspective.

If you are running a life science managed markets division of any size you are weighing these 2 options every day whether you realize it or not, so what are you choosing?  One vice president of Strategic Accounts stated, “In essence we are trying to optimize, but when it comes down to brass tacks, we get what we get”.  That is a tough place to be in a multi-million dollar negotiation with a health plan or PBM.  How long do you plan to stay at this disadvantaged position?  Are you accepting this as your fate due to the compelling events mentioned above?

According to many of you interviewed by Pharmaceutical Executive, http://www.sas.com/reg/wp/corp/47003  you have reached the tipping point or the compelling event, yet you are unsure where to find Option 2.   You recognize, “ A strong contracts analytics solution can ensure millions of dollars are not left on the table during contract negotiations.”  Isn't it time to invest and improve your "comfort level" just as I did with my new home air conditioner?

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Courting Better Health: Time to Focus on Health Analytics

Jason Burke
Jason Burke|June 29, 2012

 

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The unfolding of this week’s news has been fascinating to watch, from the chaos on the steps of the Supreme Court to the various analyses from a wide variety of stakeholders and the resulting news coverage. No matter your political views, the ruling from the Supreme Court to uphold the Affordable Care Act, including the individual mandate that all Americans buy health insurance, has removed much of the uncertainty that has dogged the health care industry for the last two years.

And with the clarity of health reform comes the need for more sophisticated analytic standards to support clinical, financial and operational decision making. Health analytics will continue to play a key role as data collection, convergence and analysis are critical to the health care transformation taking place in our nation. Health care stakeholders including health plans, providers and pharmaceutical and medical device manufacturers, can now move forward with their investments and implementation of innovative programs that require advanced analytics such as accountable care initiatives, bundled payment programs, value-based contracting, and more individualized health insurance offerings.

The law is anticipated to have a far-reaching impact on the nation’s health care system, with approximately 30 million of the 50 million uninsured Americans able to get coverage beginning in 2014. This presents both opportunities and challenges.

  • If there were any lingering doubts, it is now clear that payers will need to be armed with more sophisticated intelligence to help drive consumer engagement and support decision-making.  In an open insurance market, insurers will compete on a wider variety of factors than in today’s geographically-oriented business models.
  • Connecting data silos within and across enterprises will be required for an improved understanding of the needs of both individual patients and populations and to accurately reflect provider performance. Most executives I talk to clearly realize the untapped value of the data they already collect, but they also acknowledge a lack of the deeper analytic insights needed to improve patient outcomes, address reimbursement challenges and enhance margins.
  • With or without the ACA, the issues of rising health care costs, declining workforce health and productivity, and rapidly rising chronic health conditions remain and will continue to affect our nation’s ability to compete globally. Solutions will need to be multifaceted: employers, providers, payers, researchers, and consumers will all need to experience changes in behaviors and incentives.  The politics involved shouldn’t matter, but the data involved and the end goal of improving health and health care for all Americans does.

The political polarization of this issue – especially in an election year – will undoubtedly fuel ongoing debates and maneuverings that will hold the attention of media, industry stakeholders and consumers alike.  And that is a real shame because virtually none of the weekly public discourse focuses on the fundamental truths of health reform.  Right now, the system is unsustainable.  Right now, patients need more medical and financial decision making to be fact-based.  Right now, behaviors and incentives are not optimized or even aligned towards any measurable health value that would enable us to simultaneously manage costs and outcomes.  The real issues facing our industry are not about government powers or taxes or political philosophies.  Until our industry is routinely making information-based decisions, every person in our country will be paying – in one form or another – more than necessary for care that too often falls short.

Vivek Wadhwa wrote in the Washington Post yesterday about the growing opportunities for innovation in health transformation.  In an email to me and others concerning the article, he drew a comparison to Peter Diamandis’ book Abundance: The Future is Better Than You Think, saying that “instead of rationing healthcare and fighting over who gets insurance coverage, we should focus our energies on making it abundant.”  I could not agree more.  Here’s hoping the priority and attention shifts to building a health ecosystem where health insights are in abundance.

Analytics & electronic medical records can support breakthroughs in university medical research

Eric Brinsfield
Eric Brinsfield|June 14, 2012

I was recently interviewed for an article about the use of analytics in medical research at colleges and universities. It’s not surprising this topic is gaining attention.  As a result of Meaningful Use, the ongoing digitization of medical records has created unprecedented opportunities for university researchers to make breakthroughs in preventative medicine, drug efficacy and safety, and better patient outcomes.

Research at institutions of higher education is critical to advances in medicine, and SAS has been a valuable tool in those efforts for decades. For example, Duke University’s Cancer Institute is studying patient side effects from colon cancer treatment.  Using mobile device-enabled software to enter data, physicians can ask colon cancer patients about the side effects and symptoms they experience and record their responses. This direct patient interaction provides robust data, which can supplement the information from large patient data registries. With analytics from SAS, they can analyze all their data to better manage and anticipate adverse patient effects caused by different cancer treatments.
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    Welcome to the SAS Health and Life Sciences blog. We explore how the health care ecosystem – providers, payers, pharmaceutical firms, regulators and consumers – can collaboratively use information and analytics to transform health quality, cost and outcomes.

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