BENDING THE COST CURVE:
CURVE SOME
POLICY ISSUES AND PERSPECTIVES
Stephen
St
h M.
M Shortell,
Sh t ll Ph.D.
Ph D
Blue Cross of California Distinguished Professor of
Health Policy and Management
Dean, School of Public Health
y
Universityy of California-Berkeley
Academy
A
d
Health
H lth Annual
A
l Meeting
M ti
Boston, MA
June 28, 2010
Some Issues and Questions
•
•
•
•
•
•
Who Qualifies?
H
How
M
Many?
?
How Fast?
Geographic Coverage?
How Best To Match Risk And Reward?
How Best To Strike The Public/Private Payer
Balance?
• How Best To Deal With The Barriers And
Challenges?
A
Accountable
bl C
Care O
Organizations
i i
National Health Care Reform Legislation (HR 3590)
creates voluntary programs for ACOs beginning 2012
ACOs are entities that accept
p responsibility
p
y for the cost
and quality of care provided to a given population of
patients and provide the data on their performance
Includes physician practices and may include hospitals,
nursing homes
homes, home health agencies
agencies, and other
provider organizations
Important Reminder
Many Different Types of ACOS
Operating in
Many Different Contexts
Similar for Forms of Payment
Five Different Models
•
Integrated Delivery Systems (Kaiser-{Permanente, Group Health
C
Cooperative
i off P
Puget S
Sound,
d H
Henry F
Ford
dH
Health
lhS
System,
Intermountain Health System, Trinity Health System)
•
Multi-Specialty Group Practices (Mayo Clinic, Billings Clinic,
Cleveland Clinic, Virginia Mason, Marshfield Clinic)
•
Physician Hospital Organizations (Advocate, Middlesex)
•
Independent Practice Associations (IPAs – Hill Physicians
Group, Health Partners in Los Angeles, many others)
•
“Virtual” Physician Organizations (Community Care of North
Carolina Grand Junction
Carolina,
Junction, Colorado
Colorado, Humboldt County
County,
California)
Key Idea
Co-evolution of payment and
organizational
g
form
“the chicken and the egg”
Ability to Respond
ACOs
Payment Form
Full Capitation
Partial Capitation
Episode of Illness
Bundled Payment
Fee-For-Service
IDS
MSGP
PHO
IPA
Virtual
Qualification Levels
Level 3
Level 2
Level 1
Level 1 – Little or No Formal Risk. Largely
Still Fee-For Service, but With Shared
Savings
Sa
gs if Qua
Quality
ty Ca
Care
e Ca
Can Be
e Delivered
e e ed
Below Spending Target
Criteria
• Legal Practice Entity
• Report Basic Set Performance
Measures
• Sufficient
S ffi i
# off Primary
Pi
Care
C
Physicians
Ph i i
Level 2 – More Use of Bundled Payments
y
and Other At-Risk Payments. But Also
Can Earn Greater Rewards
Criteria
C
it i
• Above Plus a More Comprehensive
p
Set
of Performance Measures
• Specific Standards for Financial
Reporting and Cash Reserves
Level 3 – Partial and Full Capitation
p
Payment Models. Greatest Risk but Also
Greatest Rewards
Criteria
• Above Plus Publicly Reported
Comprehensive Set of Performance
Measures Drawn From Electronic
Health Records
• Meet More Stringent Standards for
Financial Reporting and Required to
Hold Larger Cash Reserves
Challenges to ACO Formation
•
•
•
•
•
•
•
Small physician practices
Physician autonomy
Lack of capital
p
Lack of infrastructure
Lack of leadership
Need for aligned incentives
Legal and regulatory
• Gainsharing Prohibitions
Anti Trust
• Anti-Trust
• Corporate Practice of Medicine Laws
• Strained hospital
hospital-physician
physician relationships
Technical Assistance
• Administrative, Governance, and Legal Assistance
• Care Management Support Assistance
Assistance-Practice
Practice
Redesign, Process Improvement, Team Development
pp Implementation
p
• EHR Support
• Clinical and Managerial Leadership Development
Target Loosely Organized IPAs and Small Physician
Practices
“Twinning” Idea
Other
• Payment Incentives to Encourage
Primary Care
• Remove Legal Barriers
• Require Public Reporting
Available at www.Amazon.com
Thank You!
“H lthi Li
“Healthier
Lives IIn A S
Safer
f W
World”
ld”