ACOs and the Impact on
Supply Chain
Today’s Presenters
Dennis Orthman, CMRP
• Senior Director
• SMI - Strategic Marketplace Initiative
Thomas M. Lubotsky, FACHE
• Vice President Supply Chain and Clinical
•
Resource Management
Advocate Health System
SMI PROVIDER PARTNERS
Adventist Health System
Celeste West, Carole Owens
Advocate Health Care
Thomas Lubotsky
Allina Hospitals and Clinics
Cheryl Harelstad
Ascension Health Alliance
Michael Gray
Avera Health
*Steve Huckabaa
Baptist Health System
Sherry Wininger
BayCare Health System
Judith Lipscomb
Beth Israel Deaconess Medical Center
Steve Cashton
BJC HealthCare
*Nancy LeMaster
CHE
Florence Doyle
Catholic Health Initiatives
Kevin Kakuda, Bev Slate
Catholic Health Partners
Calvin Wright, Ed Pryor
Children's Hospital of Philadelphia
Joni Rittler
CHRISTUS Health
Ed Hardin
Cleveland Clinic
Simrit Sandhu
Dana-Farber Cancer Institute
John Willi
Denver Health and Hospital Authority
Philip Pettigrew, Stewart Layhe
Duke University Health System
Jane Pleasants
Fairview Health Services
LeAnn Born
Fletcher Allen Health Care
Charles Miceli
FMOL Health System
William Mosser
Geisinger Health System
*Deborah Petretich Templeton, Joel Meckley
Greenville Hospital System
John Mateka
Group Health Cooperative
David Efroymson
Inova Health System
Charles Neikam
Intermountain Healthcare
*Brent Johnson
Johns Hopkins Health System
Bill Kennett
Kaiser Permanente
Laurel Junk
Kettering Health Network
Trisha Osborn
LHP Hospital Group
Andrew Montgomery
Lifespan
Nicholas Dominick, Ed Bonetti
Mayo Clinic
*James Francis
Mercy / ROi
*Vance Moore, Gene Kirtser
Methodist Hospital System, The
Gary Wagner
North Shore Long Island Jewish Health
System
Donna Drummond
Northwestern Memorial HealthCare
Gary Fennessy
Novant Health
Mark Welch
Ochsner Health System
Michael Louviere
Ohio State University Medical Center
Rosalind Parkinson
Orlando Health
Randy Hayas, Rosaline Parson
OSF Healthcare System
John Horne
Parallon Business Solutions
Jay Kirkpatrick
Parkland Health & Hospital System
Joe Velasquez
Partners HealthCare
Lisa, Scannell, Mark Faulkner
Presbyterian Healthcare Services
Matthew Pehrson
Providence Health & Services
David Hunter
Roper St. Francis Healthcare
Scott Ferguson
Sanford Health
Thomas Harvieux
Scottsdale Healthcare
Michael Hildebrandt
Sentara Healthcare
Doug Farley, Nancy Grunewald
SSM Health Care
Michael Rosenblatt
St. Luke's Health System
Cameron Marlowe
Texas Health Resources
John Gaida
Thomas Jefferson University Hospitals
Robert Burkholder
UAB Health Sustem
Bob Taylor
University Kentucky HealthCare
Lorra Miracle
UnityPoint Health
Peggy Samuels, Sandra Erickson
UPMC
James Szilagy, David Hargraves
Virginia Mason Medical Center
Milrose Mercado
Yale New Haven Health System
Pam Scagliarini
SMI INDUSTRY PARTNERS
,
3M Health Care
Bruce Bald, Paul Heerwald, Matt Schroer
Abbott Laboratories
Steve Christian, Jay Sullivan, Hal Lowe,
David Pacitti
Aesculap
Mark Meyer, Janelle Begole
American Contract Systems
David Thomson
Baxter Healthcare Corporation
Alan Mavis, Brad Newman
Becton, Dickinson & Company (BD)
*Stephen Gundersen, Dennis Black
Boston Scientific Corporation
Lawrence Strauss, Jim Mayberry
BSN Medical, Inc.
Mike Richards
C.R. Bard, Inc.
*Carol Stone, Brian Kelly
Cardinal Health
Kenneth Kohler, Eric Nelson
Care Line Industries, Inc.
David Love
Carefusion
Maryann Restino, David Dahle
Coloplast Corporation
*Keith Johnson
Cook Medical Incorporated
David Reed
Covidien
Armin Cline, Matt Gattuso, Bill Fallon
DeRoyal
Bill Pittman, Greg Hodge
Georgia-Pacific Corporation
Dave Chybowski, Joe Sandora
Global Healthcare Exchange (GHX)
*Bruce Johnson, Karen Conway,
Derek Smith
Hill-Rom Company, Inc.
*Susan Schuette, David Corigliano
Infor (previously Lawson)
*Keith Lohkamp, Michelle Robbins
Integrated Medical Systems
International (IMS)
Kevin McMillen, James Mundy III
Johnson & Johnson Health Care
Systems, Inc.
Larry Malloy, Fred Wagner, Bill
Donato
Kimberly-Clark Health Care
Keith Kuchta, Kelly Pawlowski
Management Health Solutions
(AtPar)
Michael Ferris
McKesson Healthcare Corporation
Mary Jo Ellis, Scott Pruyn, Jeff Bennish
Medical Action Industries, Inc.
Chris Corp
Mediclick, Inc.
Mike Merwarth, Nick Toscano
Medline Industries, Inc.
Tim Jacobson, Tom Egan
MedSpeed
Gail Nelson
Molnlycke Health Care
Ron Spinuzzi
Omnicell, Inc.
James Taylor
Owens & Minor, Inc.
Charles Colpo, Joe Alex
PAR Excellence Systems, Inc.
Richard Felger
RoundTable Healthcare Partners
John McConachie
Sage Products
William Howes
SciQuest
David Forlenza
Seneca Medical, Inc.
Lisa Hohman
Smith & Nephew
Randolph Williams, Larry Dooley
Smiths Medical
Regina McIntosh, Connie Pettijohn
Staples
Susan Louis
SterilMed, Inc.
Randy Marker
STERIS Corporation
Tim Chapman, Cary Majors
Stryker Corporation
Lara Latham, Walker Lambiotte
Suture Express
Brian Forsythe
TECSYS
Nancy Pakieser, Peter Brereton
Thermo Fisher Scientific - Fisher
HealthCare Division
David Bespalko, Dino Alfano
VUEMED
Lana Makhanik
W.L. Gore & Associates, Inc.
Gene Tierney
This Executive Briefing and
other free SMI Tools are
available at
www.smisupplychain.com
Slide 6
ACOs: Foundational Keys:
• MDs are the decision-makers and
leaders whose buy-in is crucial for an
accountable care program to succeed.
• Payment models incentivize providers
to become successful episodic care
managers, a key step toward population
health management.
Slide 7
ACO Growth in 2013
Slide 8
5 elements of accountable care
impacting supply chain
1 Physician Integration
2 Alignment of Incentives
3 Clinical Integration
4 Information Management
5 Supply Chain Engagement.
Slide 9
Element #1
Physician Integration
In 2000, 57 %
of physicians
were
independent.
In 2013, 39 %
were
independent.
Hospital Physician Employment Trend
2011-2014 © 2011-2013 MDSI
100.0%
50.0%
85.7%
80.0%
88.9%
100.0%
100.0%
0.0%
0-50 beds 51-100
beds
101-250
beds
251-500
beds
500+
beds
% expected to have fewer employed physicians
% expected to have more employed physicians
Slide 10
Element #2
Alignment of Incentives
• Volume – will no longer drive physician
compensation or hospital compensation
• ACO payment models can include:
Bundled
Payments
Capitation
(full/partial)
Shared
Savings
• Measurements for hospitals include:
Patient Falls
HAIs
Readmissions
Slide 11
Element #3
Clinical Integration
Accountable
care seeks to
monitor and
coordinate care
across all
stages and
locations of
care, often via a
patientcentered
medical home
(PCMH).
PCMH:
• takes an integrated team
consultation approach.
• assigns a care coordinator to:
– avoid unnecessary testing
– perform patient education
– coordinate follow-up care
– fill/monitor prescriptions
Slide 12
Element #4
Information Management
Evidence
Patient
Tracking
Performance
Value Based
Metrics
Contracting
Population
Health
Interconnected Information Systems
EHR
Data
Warehouse
ERP
HIE
Slide 13
Element #4
Information Management
• Serious Challenges
– Costs
– Lack of uniform standards
– Limits on data mineability
– Resistance
“Big data equals
big costs.”
Patrick Flaherty
UPMC,
SMI Provider Partner
“When folks deploy EHRs, only about 30 percent of
the information is really reportable, with the rest in
free-form text that structured reports cannot pull
out.” Mary Beth Lang, PhD, UPMC, SMI Provider
Partner
Slide 14
Element #5
Supply Chain Engagement
• Emergence of the “Service Line”
organizational model presents a supply
chain opportunity.
• Service line leadership monitors and
manages cost, quality, and outcomes.
• Supply chain’s value analysis approach
needs to integrate with service lines.
Slide 15
Advocate Health Care
Hospitals
4 teaching hospitals
1 children's hospital
1 critical access hospital
5 level 1 trauma centers
Physicians
6,250 medical staff
members
4,525 Advocate Physician
Partners
1,250 employed physicians
Post-acute
$5.0B Revenue
AA Rated
34,000 Associates
16
17
Key Drivers Of Physician
Engagement
Culture
Feedback
Loop
Governance
Transparency
of Results
Infrastructure
Incentives
18
Advocate Physician Partners
Vision
To be a faith-based system providing the safest
environment and best health outcomes, while building
lifelong relationships with the people we serve.
Our Role
To drive improvement in health outcomes,
care coordination and value creation through an
innovative and collaborative partnership with our
physicians and the Advocate system.
19
Pluralistic Physician Approach
Active physicians on medical staffs (6,250)
Total APP physicians (4,525)
25% PCPs – 75% specialists
Employed/affiliated
(1,250)
Advocate
Medical
Group
(1,067)
20
Dreyer
Affiliated
(183)
Independent APP
(3,275)
Independent non-APP
(1,725)
More Than 100 Physicians
Involved In APP Governance
APP Board of Directors
Class A - Physicians
Class B - Advocate
PHO Boards
Contract
Finance
Committee
Utilization
Management
Committee
Credentialing
Committee
Pharmacy &
Therapeutics Committee
21
Quality & CI
Improvement
Committee
Clinical Integration
Measures Committee
Audit
Committee
Value Based Agreements
Contract
Lives
Total Spend
Commercial
389,000
$1.8 B
Medicare Advantage
27,000
$0.3 B
Advocate Employee
23,000
$0.1 B
Medicare ACO
114,000
$1.3 B
553,000
$3.5 B
Total
22
14
Advancing Evidence-Based
Medicine And Care
Year
2004
Physician Reminders for Care
Chart Based Patient Management
2006
Patient Outreach
2007
Physician Office Staff Training
Pharmacy Academic Detailing Program
Our cost is 1530
Generic Voucher Program
2008
Diabetes Collaborative
Patient Coaching Program
Hospitalists
2009
Diabetes Wellness Clinics
Asthma and HF/CAD Collaborative
2011
Access and COPD Collaborative
2012
Patient Experience CME and Coaching
Practice Coaching (Data Sharing)
23
Projects do not Advance if:
 Decrease in Safety and/or Quality
 No Value-Based Cost Benefit
Mission:
To continuously improve the
standard of care across the system,
rooted in evidence and achieved
through shared best practices
Principles:
 Data-Driven
 Evidence-based
 Best Practices
Focus Areas:
Involve:
Tools:
 Physicians
 Nurses
 Allied Health
Providers
 Staff
 Education (CBTs, Rounds, Thought Leaders)
 Physician to Physician Detailing
 Communications/PR (Multiple “Touch Points”)
 Metrics (Feedback, Tracking)
 Formulary Restrictions (Pharmacy, Supply Chain)
 EMR (Removal, Clinical Decision Support, Hard
Stops, Order Sets)
 Guidelines / Policies
 CI Measures
 Lab utilization
 Imaging utilization
 Pharmacy utilization
 Physician preference items
 Supply chain opportunities
VALUE
Better health outcomes
(including those that matter to patients)
Cost to achieve those health outcomes
Clinical Effectiveness Governance
• Clinical Effectiveness Advisory Committee
– Multi-disciplinary senior leadership team
• Provide advice and oversight
• Remove barriers to progress
• Membership
VP, Medical Management
Sr. Leadership, APP
Chief Nurse Executive
VP, Finance
VP, Supply Chain
VP, CHIS
Medical Staff Leadership
VP, Information Systems
• Specialist Subcommittees
Clinical Integration Goal
Cardiac Rhythm Management Devices
Supply Chain –
Cardiac Rhythm
Management
Compliance –
Practice Group
Percentage of
total CRM
implants using
devices designated
by Advocate
Supply Chain
Cardiologists,
>=90% of
Cardio
total CRM 0.50
Electrophysiology
implants Point
Cardiovascular
use devices
Surgery,
designated
Interventional
by
Cardiology
Advocate
Supply
Chain
Targeted Area of Focus:
Clinical Effectiveness
26
>=90% of
total
CRM
implants
Governance of Product Use
and Adoption
New Product
Introductions
Variation of Use is
widely permissive.
Advocate Physician Partners
Combined Incentive Fund Distribution History
2008-2013 ($ in millions)
Note: 2008-2010 unearned applied to clinical integration incentive only
28
2013 Value Report
To download a copy of the 2013 Value Report, go to:
advocatehealth.com/valuereport
29
Questions
30