The Future of Academic Medicine: Rosy or Rocky? Steven Lipstein
Population Changes
Health Care Financing System
Financing Fi Changes
Health Care Delivery System
Delivery Delivery Changes D&K
Health Professions Education System
September 7, 2017
1
America’s “Triple Aim” for Health Care
• Improve Population Health • Improve Health Care Quality, Safety and Outcomes • Reduce Per Capita Health Care Costs
2
Ascending to the “Triple Aim” Summit
Improving Health Improving Quality of Care/Service Reducing Per Capita Cost Bipartisan Budget Act of 2015
Site Neutral Payment Reductions at Off-Campus Provider-Based Hospital Outpatient Departments • Merit-Based Incentive Payment System (MIPS)
Medicare Access & CHIP Reauthorization Act (MACRA) of 2015 – • Part B Alternative Payment Model (APM) Path The “SGR Fix” • •
Medicare (CMS) Alternative Payment Models
• •
Medicare (CMS) Pay for Performance Taxpayer Relief Act of 2013 – The “Fiscal Cliff” Budget Control Act of 2011 – The “Sequester” Affordable Care Act of 2010 – “Obamacare” Reinvestment/Recovery Act of 2009 – The “Stimulus” Baseline 2008
Medicare Advantage (Full/Partial Risk) Accountable Care Organizations (Shared Savings) Bundled Payment for Care Improvement (BPCI) Oncology Care Model (OCM) •Value-Based Purchasing •Hospital Readmission Reduction •Hospital-Acquired Conditions 0.8% Medicare Payment 2% Medicare Payment Coverage Expansions IT Meaningful Use
Health Care Financing System Population Changes The American Population Over Age 65 Will Double In Size By 2030
Medicare
Medicaid Expansion Is Variable State-to-State
Medicaid
Premiums And Out-of-Pocket Cost Sharing Grow Faster Than Wages
Self-Insured Employers
The Affordable Care Act Is Reducing The Number of Uninsured
Commercial Insurance 4
Medicare Math 1965
1982
2015
Beneficiaries
20 M
Life Expectancy at Age 65 (U.S.) (Women/Men)
81/78
84/80
86/83
Life Expectancy at Birth (U.S.)
74/67
78/71
81/76
17%
14%
15%
U.S. Poverty Rate Life Expectancy at Age 65 (Highest Country) (Women/Men) Life Expectancy at Birth (Highest Country) Poverty Rate of Highest Country Payroll Tax Ratio of Workers/Beneficiary
82/81
(Iceland)
77/72
(Norway/Sweden)
80 M
84/81
(Iceland)
80/77
(Norway/Iceland)
11%
?
89/84 87/81
(Japan/Switzerland)
9%
Switzerland
0.35%
1.45%
4.5
? 2.3
Medicare ACO “Attributed Lives” Medical Education + Disproportionate Share + Uncompensated Care
87/84
(Japan/Switzerland)
Sweden
Medicare Advantage Enrollees
Sources: OECD.org; Census.gov
2030
$2.5 B
17.2 M
↑
7.7 M
↑
$25.0 B
?
5
Medicaid Expansion: Status of State Decisions
Washington Montana
Oregon Idaho
Vermont
North Dakota Minnesota
South Dakota
Michigan
Wyoming Nebraska
Nevada Utah
Colorado
California
Arizona
Pennsylvania
Iowa Illinois
Kansas
Oklahoma New Mexico
New York
Wisconsin
Missouri Arkansas
Indiana
Ohio
West Virginia
Kentucky
Maine
New Hampshire Massachusetts Rhode Island Connecticut New Jersey Delaware Washington, DC Maryland Virginia
North Carolina
Tennessee
South Carolina Georgia
Texas Alaska
Hawaii
Louisiana
Alabama Mississippi
Expanded Medicaid (30 + DC) Have not expanded Medicaid (20)
Expansion states as of December 2015
Source: Tom Enders, Manatt, 2015 6
Commercial Payor Math Annual Growth: Premiums, Deductibles, Wages 2009 – 2016*
Deductibles
Premiums
Wages
*Projected growth 2015-2016. Sources: The Kaiser Family Foundation – and – Health Research & Educational Trust, Bureau of Labor Statistics, Mercer (2015/2016 US Compensation Planning Survey), The Commonwealth Fund
7
The Affordable Care Act
Percent of Population Without Health Insurance Coverage (under age 65)
20.0%
20.3%
19.6%
19.2%
18.4%
16.4% 15.4%
15.3%
16.0% 15.0%
14.9%
14.0%
14.7%
Not Expanding
10.9% 8.2%
7.8%
Expanding 2009
2010
2011
2012
States Not Expanding
2013
2014
2015
2016
States Expanding
Source: US Department of Health and Human Services
8
Health Care Financing System Population Changes The American Population Over Age 65 Will Double In Size By 2030
Medicare
Medicaid Expansion Is Variable State-to-State
Medicaid
Premiums And Out-of-Pocket Cost Sharing Grow Faster Than Wages
Self-Insured Employers
The Affordable Care Act Is Reducing The Number Of Uninsured
Commercial Insurance 9
Health Care Delivery System Financing Changes Pay-For-Performance Penalties-For-Variation - Readmissions
- Value-Based Purchasing - Hospital Acquired Conditions
Bundled Payments For Care Improvement (BPCI)
Continuing (People-Based) Care Systems MD/Practitioner Offices
Home
Schools
Workplace
Mental Health Centers
Extended Care
Episodic (Facility- Based) Care Systems Outpatient Centers
Specialty Care (Outpatient)
Community and Specialty Hospitals
Specialty Care (Inpatient, including Rehab)
Teaching Hospitals (Adult and Pediatric)
Regional Referral (Inpatient) Care
Oncology Care Model
(OCM)
Shared Savings Models (ACOs)
Full/Partial Risk Capitation 10
Pay-For-Performance BJC has 22 pay-for-performance (sometimes called “value-based” payment) arrangements across 7 different payors − Includes BJC hospitals and BJC Medical Group (employed physicians) − Includes Commercial, Medicare Advantage and Exchange populations Performance metric categories focus on clinical quality and efficiency − Hospital performance metrics are generally consistent with BJC’s clinical quality scorecard, including a subset of CMS’ Value-Based Purchasing metrics − Metrics included for BJC Medical Group align with NCQA HEDIS measures such as: •
Breast Cancer Screening
•
Colorectal Cancer Screening
•
Diabetes: HbA1c Control
•
Diabetes: LDL Control
•
Annual PCP Visit
11
Penalties-For-Variation (BJC 2014 – 2016) • Value Based Purchasing Incentive Payments/Penalties $ 1.5 million - Processes of Care - Patient Experience* - Efficiency* - Outcomes* • Readmission Rate Penalties* ($ 4.7) million • Health Care Acquired Condition Penalties *Major Concern: Outcomes measures are NOT adjusted for patient/community socio-economic status (SES). ($ 7.8) million Total
12
Bundled Payments For Care Improvement (BPCI) The Centers for Medicare and Medicaid Innovation (CMMI) offers physicians, hospitals and post acute care providers economic incentives to improve quality and reduce cost for an “episode of care.” – 48 episodes (including both procedural and medical) – Provides a single payment (actual or simulated) for all services delivered during the episode 2 Phases – Phase I: – Phase II: historical period 4 Models – Model 1: (currently – Model 2: through true up – Model 3: true up – Model 4: through 30, participants / 7 in Phase I)
Providers receive historical data; redesign care delivery Providers are required to go at risk; initial 2% or 3% discount off performance; additional savings can be achieved during a measurement
Hospital services only, during an inpatient admit covering all DRGs 12 Phase II participants / 0 in Phase I) All services provided during an episode 3 days prior to an admission 30, 60, or 90 post-discharge (as selected by participant) retrospective (currently 60 Phase II participants / 364 in Phase I) Post-acute services only after an inpatient discharge, retrospective (currently 20 Phase II participants / 240 in Phase I) All services provided during an episode 3 days prior to admission 60, or 90 post – single prospective payment (currently 8 Phase II
13
Oncology Care Model (OCM) Physician groups who prescribe chemotherapy may participate: – Traditional Medicare patients; a five-year commitment; 100 physician groups; approximately 175,000 episodes – Hospitals that employ, or otherwise are contracted with an eligible physician group may participate Services provided to a patient over a six month period (not just those that are related to the cancer) are totaled and compared to a target calculated for each participating physician group: – Each six month “episode” begins with the first administration of a chemo drug – The first two years require a larger discount off the group’s historical benchmark – 4%, but no downside risk – After the first two years, a participating group may choose to accept a downside, and the up front discount would be reduced to 2.75% During an episode, CMS will continue to make FFS payments to all providers. In addition, CMS will pay $160 per patient per month to help physicians modify care delivery and improve care coordination: – Functions as an advance, as the $160 per patient per month is included in calculation of total spend used to determine if savings are achieved, but is not included in the historical benchmark Includes 39 metrics focused on quality, patient satisfaction and efficiency (cost) of care delivery: – A “multiplier” will be established based on a group’s performance on the measures and applied to dollars saved in relation to the group’s target, with the result paid as shared savings – Invites other commercial payors and states to apply to participate in order to create a tipping point, and gives physicians a more significant incentive to redesign care for all patients – Other payors, who are selected to participate do not have to use the same design as OCM, but their approach must be approved by CMMI 14
Health Care Delivery System Financing Changes Pay-For-Performance Penalties-For-Variation - Readmissions
- Value-Based Purchasing - Hospital Acquired Conditions
Bundled Payments For Care Improvement (BPCI)
Continuing (People-Based) Care Systems MD/Practitioner Offices
Home
Schools
Workplace
Mental Health Centers
Extended Care
Episodic (Facility- Based) Care Systems Outpatient Centers
Specialty Care (Outpatient)
Community and Specialty Hospitals
Specialty Care (Inpatient, including Rehab)
Teaching Hospitals (Adult and Pediatric)
Regional Referral (Inpatient) Care
Oncology Care Model
(OCM)
Shared Savings Models (ACOs)
Full/Partial Risk Capitation 15
Shared Savings Models (ACOs)
Number of Lives Attributable to ACOs (28.3 million) 30
Millions of Lives
25 20
Medicaid ̴ 2.9 million Medicare ̴ 8.3 million •
838 ACOs Nation-Wide – 434 CMS ACOs
15 10
Private Payers ̴ 17.2 million
5 0 Source: Leavitt Partners in partnership with Accountable Care Learning Collaborative, January 2016
16
Full / Partial Risk Capitation
Total Medicare Advantage Enrollment (millions)
16.8
17.6
15.7 14.4 13.1
9.7
10.5
11.1
11.9
8.4 6.9
6.8
6.2
6.8 5.6
5.3
5.3
5.6
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % of Medicare Beneficiaries:
18% 17% 31%
15% 14% 13% 13% 13% 16% 19% 22% 23% 24% 25% 27% 28% 30% 31%
NOTE: Includes MSAs, cost plans, demonstration plans, and Special Needs Plans as well as other Medicare Advantage plans.
Source: CMS Medicare Advantage Enrollment Files, 1999 – 2016.
17
Health Care Delivery System Financing Changes Pay-For-Performance Penalties-For-Variation - Readmissions
- Value-Based Purchasing - Hospital Acquired Conditions
Bundled Payments For Care Improvement (BPCI)
Continuing (People-Based) Care Systems MD/Practitioner Offices
Home
Schools
Workplace
Mental Health Centers
Extended Care
Episodic (Facility- Based) Care Systems Outpatient Centers
Specialty Care (Outpatient)
Community and Specialty Hospitals
Specialty Care (Inpatient, including Rehab)
Teaching Hospitals (Adult and Pediatric)
Regional Referral (Inpatient) Care
Oncology Care Model
(OCM)
Shared Savings Models (ACOs)
Full/Partial Risk Capitation 18
Can Any Stand-Alone Hospital or Health System Create a Total Cost of Care (Accountability) System All by Itself?
Episodic (Facility-Based) Care System
Fi
Continuing (People-Based) Care System
Delivery D&K
Total Cost of Care (Accountability) System
19
The Math of Population Health Assume the Average Annual Premium is $8,100 or $675 PMPM Based on aggregated information from electronic medical records and insurance claims data, and then analyzed by computer software programs, patients are placed into groups, by risk strata, and into disease registries (e.g. diabetes)
Healthy = Low Risk = Rising Risk = High Risk = Malignancy Catastrophic
No Chronic Conditions ($150 PMPM) Single Chronic Condition ($500 PMPM) Double Chronic Conditions ($1,000 PMPM) Triple Chronic Conditions ($3,000 PMPM) ($5,000 PMPM) ($12,000 PMPM)
Rising and High Risk Patients are likely to benefit the most from definitive and disciplined care management models.
20
The “Must Haves” of a Total Cost of Care (Accountability) System A Large, Diverse, and Inclusive Risk Pool: Healthy, Low Risk, Risking Risk, High Risk, Malignancy, Catastrophic. Size Matters. Risk-Based Capital (Asset Risk, Underwriting Risk, Utilization Risk, Interest Rate Risk); the money set aside as reserves to cover total cost of care risk cannot be simultaneously deployed to the academic missions of education and research. Data Analytics Care Management Models Friends and Collaborators, who can help defray the cost and disperse the risk associated with ALL OF THE ABOVE. (Very few academic medical centers or health system have the size, scale, and financial strength to do this by themselves.)
21
BJC Hospitals & O/P Centers 2017 ILLINOIS
IOWA
NEBRASKA
MISSOURI
Metro Northwest Barnes-Jewish St. Peters Hospital St. Peters, MO
Metro North
Progress West HealthCare O’Fallon, MO Mid Missouri Boone Hospital Center Columbia, MO
Hospital
HealthCare
Metro West
Missouri Baptist Medical Center
Metro South
St. Louis Children’s Specialty Care Center BJH/WU Ortho Center
BJH/WUSM Center for Advanced Medicine South County
Southwest
Hospital Multi-Specialty Outpatient Center
Missouri Baptist Sullivan Hospital Sullivan, MO
ARKANSAS
Hospital Metro Central
Alton, IL
KANSAS
Alton
Memorial
Barnes-Jewish West County Hospital
OKLAHOMA
Christian
Northwest
Barnes-Jewish Hospital St. Louis Children’s Hospital The Rehabilitation Institute of St. Louis Metro East Memorial Hospital Belleville, IL
Memorial Hospital East Shiloh, IL
Southeast
Parkland Health Center Bonne Terre, MO Farmington, MO
22
BJC Providers and WU Physicians 2017 WU Physicians
BJC Home Care 432 Staff
1,475 MDs 264 APs 1,082,666 Visits 1,114,682 Procedures $1.1B Revenue
HealthSouth Rehabilitation 2 Locations (2017) 2,100 Admissions
139,539 Visits
41,400 Visits
$56.2M Revenue
$43.0M Revenue BJC Hospice 139 Staff 54,143 Visits 98,989 Days $19.5M Revenue BJC Corporate Health 3 Locations
Bethesda Long-Term Care
15 Hospitals
156,000 Admissions 585,000 ER Visits 46,600 IP Surgeries 82,700 OP Surgeries $4.7B Revenue
35,360 Visits $11.0M Revenue BJC Behavioral Health
$25.2M Revenue BJC in the Community* 243 Programs 506,000 Participants 62 Staff $21.5M Budget BJC in the Schools**
5 Locations 320,630 Visits
BJC/Memorial Medical Groups
$60.1M Revenue
381 MDs 163 APs 1,237,000 Visits $170M Revenue
*Screenings, Services, Raising STL, Advocacy and Mobile Vans **Child Health and Youth Development
3 Locations 69,046 Days
25 Programs 193 Schools 24,200 Students 18 Staff $1.3M Budget
23
24
BJC Collaborative: By the Numbers Reporting Period
System
Net Revenue (in thousands)
Operating Margin
Employees
Days Cash on Hand
Debt/Total Capitalization
BJC HealthCare St. Louis, MO
12/31/2016
$4,763,000
3.0%
31,031
335
26.0%
Saint Luke's Health System Kansas City, MO
12/31/2016
$1,517,962
4.4%
10,600
166
36.6%
CoxHealth Springfield, MO
09/30/2016
$1,329,483
2.2%
10,789
199
44.0%
Memorial Health System Springfield, IL
09/30/2016
$1,006,420
2.4%
5,961
228
37.5%
09/30/2016
$412,447
5.0%
2,990
214
27.7%
Southern Illinois Healthcare Carbondale, IL
03/31/2017
$583,507
4.0%
3,699
281
30.9%
Sarah Bush Lincoln Health System Mattoon, IL
06/30/2016
$300,680
10.0%
2,250
346
14.8%
Decatur Memorial Hospital Decatur, IL
09/30/2016
$267,258
not reported
2,147
110
7.1%
Blessing Health System IL
Total BJC Collaborative
Quincy,
$10,180,757
69,467
25
BJC HealthCare: 2017 Strategic Imperatives and Goals I.
Taking Exceptional Care of People High Reliability Patient Outcomes (Clinical Care and Service) Clinical Information Management (w/BJC Collaborative) High Engagement (Employees and Medical Staff)
II.
Operating in a Financially Responsible Way Revenues Exceed Expenses, by an Amount Sufficient to Renew and Expand BJC’s Patient Care Enterprise, Including Human, Physical and Financial Assets (w/BJC Collaborative)
III. Positioning for Long-Term Success
Delivery System Network and Service Line Growth (w/BJC Collaborative) Delivery System Renewal and Capacity Planning Readiness for Total Cost of Care Management and Risk Contracting (w/BJC Collaborative) Non-Acute Entry Access Points
IV. Staying True to Academic and Social Missions Reduce Disparities: Access and Outcomes Education, Research and Clinical Programs of Distinction
26
The BJC Collaborative, LLC Eight (8) Independently Owned And Governed Health Systems, covering Eastern Kansas, Missouri, and Southern Illinois Large Purchasing Group (Vizient/MSS) • • • •
Supply Chain Capital Equipment Clinical Engineering IT Infrastructure
Regional Specialty Care Networks • •
Cancer Care Neuro-Specialty Care
Population Health Infrastructure (Not Risk Contracting or Care Delivery) • •
Combined Revenues of $10 Billion (Makes Us “Large” Without Fixed Asset Mergers) Shared Investment In Data Analytics And Care Management Models
27
Key Questions for UAB Leaders, Faculty and Staff Is UAB an Episodic (Facility-Based) Care System? A Continuing (People-Based) Care System? Both? Are Financing Changes – specifically Total Cost of Care (Accountability) Systems emerging in this region of the country? At what pace? And to what extent? Are Physicians, Nurses and other Health Professionals ready, willing and/or able to change whatever needs changing to adapt to a Total Cost of Care model of financing and care delivery? How much money is in the UAB bank account? How do University leaders think about taking insurance risk inside the University structure and onto the University balance sheet? Who are UAB’s future friends and collaborators?
28