London Health and Care
Leaders Forum
11th March 2014
Payment Innovation Break-out
1
There are 3 major complementary payment models being
deployed in US
Pay for value
Most applicable for:
▪ Bonus payments tied to quality
▪ Bonus payment tied to value
▪ Discrete services provided by entity
Episode-based payment
▪ Acute procedures
 Retrospective Episode Based Payment
(REBP)
 Bundled payment
with limited influence on upstream or
downstream costs (e.g., MRI,
prescription, medical device, Health
Risk Assessment)
(e.g., CABG, hips, perinatal)
▪ Most inpatient stays including postacute care, readmissions
▪ Acute outpatient care (e.g., broken arm,
URI, some cancers, some behavior
health)
Population-based payment
Full alignment
of payment to
outcomes
▪ Capitation
▪ Care for people with long term
condition (e.g., managing diabetes,
CHF) and elderly
▪ Primary prevention for healthy
2
These models deliver significant net savings
Сost savings as %
NY Care Coordination Program
Colorado Children's Health
Florida Capital Health
Community Care NC
Oklahoma Medicaid
Montefiore ACO
Sacramento ACO
CareOregon
BCBSM Michigan
Minnesota Health Partners
Geisinger PCMH
South Carollina
BCBSMA AQC
Group Health
Care First PCMH
Beacon Pioneer ACO
3-22%
range
7-10% most
0
5
10
15
20
25
30
3
Speakers
• Dr. Philip Ozuah
• John Wardell
• Ric Marshall
4
Payment Innovation
Philip O. Ozuah, MD, PhD
Chief Operating Officer
Montefiore Health System
National Health Expenditures Per Capita
1980-2007
Health Expenditures as % of GDP
Byzantine Medicare Inpatient Payment
Update
Hospital
Adjusted
Operating &
Capital Base
Payment
Rate
2009
Operating
& Capital
Base
Payment
Rate
2008
Wage Index
MS-DRG
Weight
(Medical
Severity
Adjusted*
Diagnosis
Related Group
weight **)
* Principal Diagnosis, Procedure,
Complications & co-morbidities
** 745 individual DRG weights
Hospital
Adjusted
Base
Payment
Rate
2009
Direct (pass-through) &
Indirect Medical
(Interns, Residents/bed)
Education Pmt.
Disproportionate Share
Payments (if Medicaid &
SSI Pt Days >15% of total)
Other Policy Payments
Mean ‘08 Payment
$9,278 all hospitals
PAYMENT
RATE FOR AN
INDIVIDUAL
PATIENT’S
ADMISSION
$13,499 large teaching
$6,026 small rural
(Critical Access
Hospital>35 mi, Medicaredependent>60%)
Outlier Payments (Est.
Cost > Loss Threshold)
Reduction for Early
Transfer (LOS <mean
LOS-1)
Reduction if Quality
Indicators not Provided
Copyright 2008, J.B. Silvers, Weatherhead School of Management. Case Western University
Complicated Medicare Physician Payment
Adjusted for geographical cost
factors
Conversion
Factor
2009
Conversion
Factor
2008
Relative Value Units (RVU)*
-work
-practice expense
-malpractice expense
Physician
Payment
Rates by
procedure
2009
Limitation
Update
* Determined for 10,000 procedures
as defined by Healthcare Common Procedure
Coding System (HCPCS)
SUSTAINABLE GROWTH
RATE (SGR)
UPDATE ADJUSTMENT
FACTOR (UAF)
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 changes
and max allowable under SGR (=< 7%)
Copyright 2008, J.B. Silvers, Weatherhead School of Management. Case Western University
Cost Shifting Approach
To Financial Sustainability
Hospital Operating Margins by Payer*
Medicaid
Medicare
Commercial
25%
20%
15%
23%
10%
Cross-subsidization
5%
0%
-5%
-10%
-14.70%
-9.40%
-15%
-20%
*Source: http://publications.milliman.com/research/health-rr/pdfs/hospital-physician-cost-shiftRR12-01-08.pdf, shows hospital operating margins by payer from 2006, based upon American
Hospital Association survey data
3.8%
overall
margin
Alternative to Cost Shifting
Medicaid
Medicare
Commercial
25%
20%
15%
23%
10%
5%
0%
-5%
-9.40%
-10%
-15%
-14.70%
-20%
Focus on efficiency and rooting out
waste to improve operating margins
The challenge
Episodic Cost Accountability
Traditional
Fee-for-Service
Minimal
Pay-forPerformance
Total Cost Accountability
Bundled
Payments
Shared
Savings
Partial
Risk
Savings Potential for Health Plans and Customers
Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives
Full
Risk
Substantial
Montefiore’s model is evolving…
Evolving model…
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
This is payment
and delivery
system reform
London Health and Care
Leaders Forum
14th March 2014
John Wardell
Deputy Chief Officer
Tower Hamlets Clinical Commissioning Group
15
Understanding the development of federated networks
Tower Hamlets before networks
23
5
20
6
3
2 4
1
19
22
21
26
27
24
7
8
10
12
11
13
15 16
23
Pop: 33,186
3
2
1
25
14
9
• 8 LAPs
• 36 practices
• Total population
of ~245,000
• Practice list sizes
of 3,000 to 11,000
8 Networks1 were formed in the borough during 2009
30
32
31
29
28
8
5 Pop: 29,801
6
20
19
4
Pop: 35,720 7
22
21
Pop: 28,995
10
25
14
9
12
11
13
17
30
Pop: 18,027
15 16
17
18
26
27
24
29
28
32
31
Pop: 27,839
Pop: 29,892
18
33
Pop: 31,975
36
35
33
36
35
34
34
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
16
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
17
How did it work…
Care packages are:
Networks:
• Reducing variability through the use of evidence
based pathways
• Focus on population health across a defined area
• 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 approach
• Costing of care packages
• 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
What supports it all?
Organisational development
Information and technology
Payment Model
Contracted at network level 70% upfront and 30% on performance
18
Outcomes
19
MMR Immunisation 2006-10
Improving MMR vaccination rates:
herd immunity is a realistic goal.
Cockman P, Dawson L, Mathur R,
Hull S, BMJ2011;343doi:
10.1136/bmj.d5703
Maintaining MMR improvement
20
Critical success factors
•
•
•
•
•
•
•
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)
21
Behaviour change
Guideline
Comparative
Feedback
Education
Belief
Practice
networks
Act
IT
Dashboard
IT
Prompts &
Decision
support
Incentives
Motivate
IT
Review
& recall
IT
Equity
audit
22
Integration Going Forward
23
Forward Plan
2016/17
fully capitated
Current state and
14/15
2014/15 and
15/16 local
provider consortia
2015/16 and
16/17 shadow
capitation
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
Pay for performance
model
Pay for performance
model
Pay for performance
model
Capitated model
Service
configuration
Services contracted
individually
Services contracted
through consortia
Services contracted
through consortia
Services contracted
through consortia
Health and social
care
Separate social and health
funding
Joint working agreed
Joint working agreed
Pooled social and health
funding
Outcome linked
reward/risk
Commissioners bear risk
for activity and outcomes
Providers share more risk
for activity and outcomes
Providers share more risk
for activity and outcomes
Provides control/share
full risk for activity and
outcomes
Enablers for end
state
Agreement on
reimbursement models to
be implemented
Indicative individual
budgets
Indicative individual
budgets with shadow
capitation model
Might need to break PbR
for target population
24
What are we commissioning for integrated care
Joint health, social care and mental health approach
WELC will provide nine key interventions for its population underpinned by five components and enablers
Areas of interventions
Essential components
Enablers
Self-care
Self-care, behaviour,
and expectation management
Information sharing platform
Patient engagement
Care
coordination
Care planning
Health and social care
navigation
Case management
Specialist input In the
community
Evidence-based pathways & care packages
(e.g. last years of life, diabetes, COPD, CHD.
falls,alcohol and substance misuse)
Joint decision making
and accountability
Joint health & social care
assessment
Clinical leadership and
culture development
Ensuring
people are in
the most
appropriate
setting of
care
Discharge support for
mental health patients from
secondary to primary care
Mental health liaison (RAID)
Creation of new roles within
the workforce:
• Case manager
• Hybrid health & social worker
• Health & social care coordinator
• Discharge coordinator based in acute
wards
Discharge support from acute to
community
Organisation of practices into networks
Rapid response with short
team reablement
Information sharing
and
decision support
Aligned incentives and
reimbursement
models
25
Contracting approach – Standard NHS Contracts
Provider specific schedules
Provider specific schedules
CCG
Generic
schedule
for all
Care Coordination
Rapid response
Discharge
Management
Mental Health
Liasion (RAID)
Social services
Integration function delivered collectively by all providers in collaboration
26
Provider assurance process
SEP
OCT
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
NOV-JAN
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
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
Evaluation
• Further dialogue with providers about plans and clarification of details
+
Prospectus
• Brings key documents together
• Adds detail to provider letter
• Signals what might be in future phases
Not approved
Formal tender process
• Likely to be competitive dialogue
• Likely to be 6-9 months
+
Payment mechanism
• Sets out approach to payment on outcomes
• Outlines incentives for providers to work
together to provide integration of services
+
KPIs
• Sets out individual
services and system
side performance
measures
Dashboard
MAR
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)
FEB
Indicative summary provider development approach to commissioning integrated care services
Approved
Contracting process
• Service specification and integration written into existing contracts with providers
• Payment on outcomes 14/15
6-9 month procurement process
Monitoring
• Development of 15/16 contract begins for similar process to start in Sept 2014
27
Questions?
28
London Health and Care
Leaders Forum
14th March 2014
Ric Marshall
Director of Pricing
Monitor
29
Contents
• The Health & Social Care Act 2012
• What next for 2014?
30
The Health & Social Care Act 2012 sets out the approach
for pricing and the roles for NHS England and Monitor
What next for 2014?
32
Thank you…..
• Any questions please?
• Further information:
• http://www.monitornhsft.gov.uk/sites/default/files/publications/MakingThePaymentS
ystemDoMore%20-%2028Feb.pdf