Do Heart Failure Disease Management Programs Make Financial Sense Under a Bundled Payment System? Zubin J. Eapen, Shelby D. Reed, Lesley H. Curtis, Adrian F. Hernandez, Eric D. Peterson AHA Scientific Sessions 2010 November 16, 2010

Disclosures n n ZJ Eapen: none n n SD Reed: Celladon Corporation (significant), Johnson & Johnson (modest) n n LH Curtis: Johnson & Johnson (significant) n n AF Hernandez: American Heart Association Data Analytic Co- Chair (modest) n n ED Peterson: American Heart Association Data Analytic Co-Chair (modest), Intuitive Health (modest)

Background n n Medicare’s Hospital Insurance Trust Fund faces economic insolvency by n n 1 out of every 5 Medicare beneficiaries are readmitted within 30 days. n n Heart failure (HF) is the most common reason for hospital admission in elderly Americans. Jencks SF. N Engl J Med 2009; 360:

Background n n There is little incentive in a fee-for-service model to improve transitions of care. n n In 2013, Medicare has proposed to pilot bundling HF payments for up to 30 days following an index hospitalization. n n Disease management programs can reduce all-cause readmissions for heart failure.

Rationale and objectives Bundled payments can provide incentives for improving transitions of care n n Objectives l l Determine the cost-neutral point for the typical HF disease management program l l Evaluate the cost-savings potential of published programs under bundled payments l l Assess the impact of program efficacy and the baseline readmission rate on the savings potential of disease management

Methods n n Design l l Decision analytic model n n Setting and Patients l l Hypothetical cohort of patients discharged after an index hospitalization for heart failure n n Measurements l l Costs of disease management programs and inpatient care over 30 and 180 days

Decision tree Routine outpatient care Not readmitted Readmitted Not readmitted Enhanced outpatient care Readmitted HF patient discharged after index hospitalization

Model inputs Retrospective cohort studies Meta-analyses 5 randomized trials of disease management Inpatient claims for Medicare beneficiaries discharged with HF Decision Analysis

Parameters used in decision analytic models 30-day readmission, % (95% CI)* 22.9 (22.8, 23.0) 180-day readmission, % (95% CI)* 54.1 (54.0, 54.2) Median 30-day inpatient costs, $ (25 th to 75 th )  9,923 (6,599, 18,976) Median 180-day inpatient costs, $ (25 th to 75 th ) + 13,463 (7,065, 27,044) Pooled relative risk reduction for disease management, %  21 * Arch Intern Med. 2008;168(22): * Curtis LH et al. Arch Intern Med. 2008;168(22): adjusted to 2010 dollars + adjusted to 2010 dollars Gwadry-Sridhar FH. Arch Intern Med. 2004;  Gwadry-Sridhar FH. Arch Intern Med. 2004;

Disease management programs Duration of follow-up (months) Relative risk reduction, % (95% CI) Total program cost per patient* Rich MW. N Engl J Med. 1995:333: (5, 50)$ Cline CM. Heart. 1998;80: (-6, 51)$ Stewart S. Arch Intern Med. 1998;158: (-8, 47)$ Riegel B. Arch Intern Med. 2002;162: (-9, 32)$ Krumholz HM. J Am Coll Cardiol. 2002;39: (8, 48)$ *adjusted to 2010 dollars

Base Case Analyses 30-day180-day

30-day cost savings of evaluated programs

Cost savings are proportional to the baseline readmission rate

Cost savings under bundled payments for varying effect sizes

Addressing outlying costs Median 30-day inpatient costs, $ (25 th to 75 th )**9,923 (6,599, 18,976) Median 180-day inpatient costs, $ (25 th to 75 th )**13,463 (7,065, 27,044) Mean 30-day inpatient costs, $ (95% CI)17,122 (17,049, 17,195) Mean 180-day inpatient costs, $ (95% CI)22,505 (22,440, 22,570)

Using mean inpatient costs to create bundled payments

Reducing the bundled payment amount

Limitations n n Costs for inpatient care vary considerably. n n Disease management programs have not been designed to target reductions in readmitted patients within 30 days. n n The efficacy of the program was assumed to remain constant over the specified timeframes. n n Cost data for program implementation over 30 days is lacking.

Conclusion and Implications n n Bundled payments for HF admissions provide hospitals with a potential financial incentive to implement disease management programs. n n Savings are sensitive to the baseline rate of readmission and program efficacy. n n Providers can retain the financial incentive to invest in interventions with a smaller effect size.

Acknowledgements Melissa Greiner, MS Shelby Reed, PhD Lesley Curtis, PhD Adrian Hernandez, MD, MHS Eric Peterson, MD, MPH