Emergency Medicine and Value-Driven Healthcare Reform AACEM, April 2013 Brent R. Asplin, MD, MPH President and Chief Clinical Officer Fairview Health Services Minneapolis, MN E-mail: basplin1@fairview.org

Goals Drivers of “population health” Accountable Care Organization (ACO) Perspectives Strategic Landscape for EM

Average Annual Premiums for Single and Family Coverage, 1999-2012 $15,745* * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012.

Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2012 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2012; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2012 (April to April).

Mortality Amenable to Health Care—Global Deaths per 100,000 population* * Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections. See Appendix B for list of all conditions considered amenable to health care in the analysis. Data: E. Nolte, RAND Europe, and M. McKee, London School of Hygiene and Tropical Medicine, analysis of World Health Organization mortality files and CDC mortality data for U.S. (Nolte and McKee, 2011). Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

Paul Starr’s account of the rise of the American medical industry during the 20th century

Value Based Purchasing Pay for performance PQRS Value-based Modifier Episodes of care & bundled payments Hospital readmissions Accountable care organizations (ACOs)

Accountable Care Organizations Provider-led organizations with a strong primary care base that take accountability for the full spectrum of healthcare services for a defined population Financial incentives tied to: Total cost of care Quality and patient satisfaction

CMS ACO Programs (260 Participating Organizations) Physician Group Practice Transitions Program Six organizations (started Jan 2011) Pioneer ACO Program 32 organizations (started Jan 2012) Medicare Shared Savings Program 27 organizations began in April 2012 89 organizations began in July 2012 106 organizations announced in Jan 2013

Interesting ACOs “Diagnostic Clinic Walgreens Well Network” All of Florida “Scott and White Healthcare Walgreens Well Network, LLC” Texas

The Paradox of ACOs Every dollar of waste in healthcare is somebody’s dollar of revenue Hospitals stand to lose the most from reductions in TCOC Admissions for chronic diseases Readmissions ED visits

Private Exchanges and Narrow Network Products Don’t underestimate how quickly markets will move toward value-based insurance products Partnerships between payers and delivery systems Many of the providers are Independent Practice Associations (IPAs)

New payer/provider partnerships are emerging in the Twin Cities market Providers Relationship Payer New products 50% ownership; new products New product Merger 13

Implications for Emergency Medicine Reduction of avoidable ED visits is a goal for every one of the 260 ACOs and private insurance products in the US today Contrary to what you may hear, this is based on sound economics Every smart ACO should try to partner with EDs to coordinate care and create alternatives to admissions/readmissions

ED Acute Care Framework (Peter Smulowitz, MD and colleagues) Opportunity #1 Opportunity #2 Source: Smulowitz et al. Annals of EM. 2012

Marginal Cost of Acute Care for Low Acuity Conditions Regardless of setting, the marginal cost of producing acute care is relatively low How expensive is it for you to diagnose acute otitis in your ED? This is much different than the cost incurred by the payer (i.e. patient, health plan, government) Widely variable depending on the location

Medicare Reimbursement ED vs. Office Visit Source: Smulowitz et al. Annals of EM. 2012 (In Press)

ED Acute Care Framework (Peter Smulowitz, MD and colleagues) Opportunity #1 Source: Smulowitz et al. Annals of EM. 2012

The Value of Emergency Care The most expensive routine decision in healthcare The more “accountability” we take for reducing potentially avoidable admissions and re-admissions, the more “value” we will create for the system

Hub of the Enterprise? “Accountability” + “Value” = ? A new revenue stream for emergency medicine? Why wouldn’t you become part of risk based products? Private insurance, ACOs, Medicare Advantage plans, etc….

Opportunities for an Emergency Care Hub Coordination of transitions Reducing avoidable admissions and readmissions Rapid complex diagnostic evaluations Especially for patients with complex conditions Communication interface with other care delivery hubs PCMH and geriatrics

The Irony of Emergency Medicine and Value Based Healthcare We are often pushed to the fringe as a provider to avoid rather than pulled into the middle of the operation Providing better care for complex patients is the answer---won’t happen without better coordination in the ED

Hubs for Managing Population Health Primary Care Patient-Centered Medical Home Geriatric Services Continuum The Emergency Care System Behavioral Health Capabilities

The market is changing… Methodologies Payment Care Delivery Population/ Global Individual/ Discount Fee For Service Encounter Episode/Lifetime X Today Transition Market Relevance Global Adoption Value Volume

Discussion E-mail: basplin1@fairview.org

US Gross HC Spending

2010 Healthcare Spending as a Percent of GDP

Variations in practice and spending 14 March, 2001 The Dartmouth Atlas 1. The paradox of plenty 2. What’s going on? 3. What might we do? 4. Is there reason for hope? 32

ED Acute Care Framework Opportunity #2 Source: Smulowitz et al. Annals of EM. 2012 (In Press)

Disrupting Healthcare A simple question: Will your economics be disrupted or will you do the disrupting?

Acute Unscheduled Care Patient Satisfiers Biggest drivers of satisfaction for most acute unscheduled conditions: Timely access Low cost

The Strategic Opportunity We already know how to deliver acute unscheduled care quickly and at a low marginal cost Why are we content to do this in an environment that has: Long waiting times due to hospital boarding; and High fixed hospital costs that drive a non-competitive business model?

Disruptive Alternatives to ED Care Free-standing centers Target complexity is above standard urgent care Rapid throughput and lower cost Not hospital-based (no EMTALA)

Disruptive Alternatives to ED Care

Disruptor vs. Disruptee? We have already solved the most difficult challenge of acute unscheduled care: The 168 Hour Work-Week! There are important opportunities to step out of the hospital (literally and virtually) to capture demand for low-cost alternatives to ED care

The Cycle of Disruption Original Provider Disruptive Alternative Hospital OR Inpatient Stay Surgical Specialists Specialty Care Primary Care Retail Clinics The Hospital ED Ambulatory Surgery ED Observation Non-Surgical Specialists Primary Care Retail Clinics Virtual Care Free-Standing EDs plus which of the above???