Center for Medicare and
Medicaid Innovation Grant
Barbara McAneny MD, CEO
Innovative Oncology Business
Solutions, Inc.
Funded BY CMMI:
• The project described is supported by Funding
Opportunity Number CMS-ICI-12-0001 from
Centers for Medicare and Medicaid Services,
Center for Medicare and Medicaid Innovation
• The content of the presentation and the
projects are solely the responsibility of the
author and does not necessarily represent the
official views of HHS or of any of its agencies.
Another Disclaimer
• The opinions expressed are my own and do
not necessarily reflect the opinions of the
AMA
Why do we need to change?
• What have we already tried?
• How did that work?
• What are are out options?
The Best Health Care in the
World???
• HOW THE US STACKS UP ON PREVENTABLE DEATHS 1.
France -- 652. Japan -- 713. Australia -- 714. Spain -- 745. Italy -746. Canada -- 777. Norway -- 808. Netherlands -- 829. Sweden -8210. Greece --8411. Austria -- 8412. Germany -- 9013. Finland -9314. New Zealand -- 9615. Denmark -- 10116. UK -- 10317.
Ireland --10318. Portugal --10419. US -- 110The U.S. ranks at the
bottom of 19 industrialized nations in the number of
preventable deaths by conditions such as diabetes, epilepsy,
stroke, influenza, ulcers, pneumonia, infant mortality and
appendicitis. The number at the right represents the number of
preventable deaths per 100,000 population in each country in
2002-2003.Source: Commonwealth Fund, Health Affairs, World
Health Organization
Patient’s Inability to pay
• 62.1% of Bankruptcies are from Medical
bills : 48% of the bills are from Hospitals,
18% drugs, 15% physicians
• Annual Health Care Costs $16,771
• 2/3 of filers were insured
Some People are Suffering
(seniors)
Not everyone is suffering
• ANNUAL COMPENSATION OF HEALTH INSURANCE COMPANY
EXECS (2006, 2007, or 2008 figures): • Ronald A. Williams, Chair/
CEO, Aetna Inc., $23,045,834; $24.3 million in 2008 • H. Edward
Hanway, Chair/ CEO, Cigna Corp, $30.16 million • David B. Snow,
Jr, Chair/ CEO, Medco Health, $21.76 million • Michael B.
MCallister, CEO, Humana Inc, $20.06 million • Stephen J. Hemsley,
CEO, UnitedHealth Group, $13,164,529 • Angela F. Braly,
President/ CEO, Wellpoint, $9,094,771; $9.8 million in 2008 • Dale
B. Wolf, CEO, Coventry Health Care, $20.86 million • Jay M.
Gellert, President/ CEO, Health Net, $16.65 million • William C. Van
Faasen, Chairman, Blue Cross Blue Shield of Massachusetts, $3
million plus $16.4 million in stock options
HMO Profits
HMO
Net Income
Net Income after Tax before extra items
In millions of USD (except for per share
items)
3 months ending 2010-06-30
United Healthcare
Humana
Cigna Corporation
Wellpoint, Inc.
Aetna, Inc.
$1,123M
$1340.08M
$294M
$722M
$491M
http://www.google.com/finance?q=NYSE:
We already have a government run
health care system
Medicare 101
• Part A: Hospital insurance trust fund
• Part B: Supplementary Medical Insurance
Trust Fund from general tax revenues and
a premium paid by enrollee
• Sustainable Growth Rate Formula (SGR)
– Designed to control Part B expenses
– Zero Sum Game (Budget Neutrality)
We Cannot Afford Medicare as it
is
Medicare Deficit
Costs of Part A
Health Insurance Trust Fund is
Going Broke
Part B Expenses
Part B Expenses
Physician Income Already at Risk
Threatening Future Viability of Medical Oncology Delivery Model
1
Profit per Patient
Drug Margins1
Private Practice Medical Oncologists
Private Practice Medical Oncologists
Measured as gross revenue divided by total number of patients
Source:
.
McKesson, “Onmark 3rd Annual Benchmarking Survey Shows Community Oncology Practices Seeing More Patients,
Makey Uses Profit Per Physician,” July 29, 2008, available at: www.mckesson.com, accessed September 2, 2009.
19
Cost of Parts B&D
Decline in Drug Administration
Since 2004
Source: Projections based on data from the Centers for Medicare & Medicaid Services
Future needs for cancer care
• 70% of cancer patients will be in Medicare in
2030
• (60% are Medicare now)
• 30% shortfall in number of oncologists needed
to treat cancer patients
• 30% cut in the conversion factors will put the
rest of community oncology at risk, and
severely strain the hospital based clinics
Triple Aim
• Better health
• Better Healthcare
• Lower cost
CMS Demonstration Projects
• Since 1967 CMS has had the authority to
create demonstration projects
– Disease management and care coordination (6)
• Nurses are care managers
– Value based payment(4)
Medicare Demonstration Projects
• Integrated systems: Group practice
demonstrations
• Value based purchasing (P4P)
• Disease management
• Utilization Review
Disease management
• CBO Jan 2012: “most programs have not
reduced Medicare spending: In nearly every
program involving disease management and
care coordination, spending was either
unchanged or increased relative to the
spending that would have occurred in the
absence of the program”
Medicare Group Practice
Demonstration Project
• The 10 practices, chosen from 26 applicants, are:
• Dartmouth-Hitchcock Clinic, Bedford, N.H.
• Deaconess Billings Clinic, Billings, Mont.
• The Everett Clinic, Everett, Wash.
• Forsyth Medical Group, Winston-Salem, N.C.
• Geisinger Health System, Danville, Pa.
• Marshfield Clinic, Marshfield, Wis.
• Middlesex Health System, Middletown, Conn.
• Park Nicollet Health Services, St. Louis Park, Minn.
• St. John's Health System, Springfield, Mo.
• University of Michigan Faculty Group Practice, Ann Arbor
2 of the 10 saved some money
• In the first year, Marshfield saved the
Medicare trust fund just more than $6 million,
and the facility is set to receive roughly $4.5
million of that. Forsyth saved Medicare about
$3.5 million and is in line for a roughly $2.8
million payout.
CBO on the P4P demonstration
• A detailed analysis of the demonstration is
currently available only for the first two years.
That analysis showed that, for patients in the 10
group practices during the second year, average
Medicare spending excluding the bonuses paid to
physician groups was about 1 percent below
projections; with bonuses included, average
Medicare spending was just 0.1 percent below
projections—about $7 per beneficiary.
Value Based Systems
CBO comments 1/2012
• In one of the four demonstrations
examined, Medicare made bundled
payments that covered all hospital and
physician services for heart bypass
surgeries; Medicare’s spending for those
services was reduced by about 10 percent
under the demonstration. Other
demonstrations of value-based payment
appear to have produced little or no savings
for Medicare.
My Theory
• Hospital based systems are not the answer:
– Overpaid
– Inefficiencies are built in
– No incentive to decrease utilization
• Practices, if right sized and properly
structured, can be very efficient ways to
deliver cancer care
– Big enough to attain economies of scale
– Small enough to be managed
Potential Cost Savings from Medical
Homes:
Supporting Literature
Study
Patient
Types
ED
Visits
IP Adm
Group Health Coop of Puget Sound (12 mos)
All Pts
- 29 %
- 11 %
Community Care of North Carolina
Asthma
- 16 %
- 40%
Health Partners Medical Group BestCare Patient Centered
Medical Home (PCMH) (5 Yrs)
All Pts
- 39 %
- 24 %
Genessee Health Plan HealthWorks PCMH (4 yrs)
All Pts
- 50%
- 15 %
Johns Hopkins Guided Care (12 mos)
Chronic
Disease
- 15 %
- 24 %
Geisenger Health System ProvenHealth Navigator
Chronic
Disease
---
- 14 %
Intermountain Healthcare Medical Group PCMH
All Pts
---
- 10%
Chemotherapy costs by site of
service (annualized)
• Physician fee schedule payments: $47,500
• Hospital Outpatient Prospective Payment
System: $54,000
• Milliman Client Report Oct 19, 2011 by Fitch and Pyenson
MEDPAC March 2011
• When patients visit a physician office that is
part of a hospital’s outpatient department,
Medicare pays a facility fee to the hospital and
a reduced fee for the physician’s services. The
combined fees paid for visits to hospital-based
practices are often more than 50 percent
greater than rates paid to freestanding
practices.
COA Practice Impact Report
CMMI Grant
• $19.8M
• 7 practices
• Significant savings from being an Oncology
Medical Home
• Goal is to learn how to do bundled payments
• Shared savings, but not gainsharing
COME HOME Model
Oncology Patient
1. Best Practices Care: Triage, Diagnostic &
Therapeutic Pathways
2. Electronic Health Records – to
share/track real-time patient information;
monitor quality
3. Team-Based Care: Med/Rad Onc, Diag Radiology, NPs, RNs, LPNs, Pharmacists, Med
Techs, Care Coordinators, first responders – working as team to keep patients in OP
setting and out of ER and hospital
4. Active Disease Management: Patient
Education, patient/provider web portal
5. Enhanced Access: 24/7 Triage Line with
“first responders” (8-6) and On-Call
Providers (6-8)
6. Enhanced Care: On- or near-site lab,
imaging, pharmacy
7. Financial Support for Medical Home
Services
COME HOME Project Partners
• Innovative Oncology Business Solutions (IOBS) – managing organization
formed for the purposes of administering project
• Seven community oncology practices
–
–
–
–
–
–
–
New Mexico Cancer Center
Center for Cancer & Blood Disorders (Ft. Worth)
Dayton Physician Network (OH)
Space Coast Oncology
Maine Center for Cancer Medicine
NW Georgia Oncology Centers
To be determined
• Net.Orange – HIT company creating customized quality & pathway
performance dashboards using claims data and integrated EHRs
• KEW Group – integration of genetic markers into diagnostic and therapeutic
pathways
• UTHSC – evaluation, cost, quality measurement expertise; using claims data
for rapid-cycle feedback of cost/utilization performance
COME HOME: Targeted Patients
• Newly diagnosed or relapsed oncology patients
• Seven tumor types will be put on Diagnostic/
Therapeutic Pathways:
–
–
–
–
–
–
–
Breast
Lung
Colorectal
Lymphoma
Melanoma
Pancreas
Thyroid
• Seeking care @ 1 of 7 participating sites
COME HOME: Estimated
Enrollment
Patient Type
Medicare
Non-Medicare
Total
Breast Cancer
1,587
304
1,891
Lung Cancer
1,536
294
1,830
Colorectal Cancer
888
170
1,058
Lymphoma
538
103
641
Melanoma
439
84
523
Pancreas
402
77
479
Thyroid
147
28
175
Other Cancers
2,485
476
2,961
Total Cases
8,022
1,536
9,558
Community Oncology Medical
HOME
• Medical home model of aggressive
management of the side effects of cancer and
its therapies
• Patient education
• Triage
• Same day visits
• Prospective interventions
COME HOME: Services To Be
Delivered
• Enhanced Services (Phase I)
– Patient education & medication management
– 24/7 practice access: telephone triage, triage
pathways, night/weekend clinic hours, on-call
physicians
– On-site or near-site imaging, lab testing
– Admitting physicians who shepherd pts through IP
encounters, avoiding handoffs & readmits, ensure
seamless care
Pathways
• Diagnostic pathways, including genetic
markers (Phase II)
• Therapeutic pathways, including genetic
markers (Phase III)
• Decision support
Data Management is Key
• Extracting data from EHRs
– All practices fully electronic
– Outcomes will be documented
• Combining with Medicare Claims Data
– Essential to know savings
• Real time (or close)
– Able to drill down to monitor adherence
• Control groups
Projected Savings to Medicare
(CMS)
Service
Average Cost Baseline
Per Unit of
Total Costs
Service
Per Patient*
Hospital
$8,225
$17,108
- 21.15 %
$13,489
$3,619
ED Visits
$ 554
$ 1,136
- 52.2 %
$543
$ 593
Physician
$ 228
$ 6,398
+ 7.6 %
$6,882
Pharmacy
$
90
$13,355
- 3.4 %
$12,905
$ 450
Other
$9,480
$28,573
0.00 %
$28,573
$
$66,569
6.276 %
$62,391
$4,178
Total
Projected
Decrease in
Costs
Projected
Total Costs
Per Patient
Projected
Average
Savings Per
Patient
- $ 484
*Cost Projections based on Medical Expenditure Panel Survey (MEPS) data for Medicare beneficiaries in ‘poor
health’, inflated to reflect higher expenditures associated with cancer.
0
Bundled payments
•
•
•
•
First one to get the money wins?
Transparency is essential
Need a quality pool
Need a mechanism to avoid the law of small
numbers
• Need good data on costs and payments, real
time
Shared savings
• Not Gainsharing: I don’t want to compete
against myself
• Pick a target with a reputation for quality
• Need accurate claims data
• NCCN systems defined as the patients treated
by an NCCN hospital
Questions?
• I appreciate the opportunity to present this
project
• Thanks for listening