The Future of Healthcare: Accountability and Transparency for Outcomes and Costs Excel for New Leaders Curt Steinhart, MD – OU Medical System Dale W. Bratzler, DO, MPH – OU Physicians

OBJECTIVES Give examples of what is “Right Here, Right Now” Show relevance to stakeholders – Physicians – Leaders – Administrators Place current and near-term imperatives in the context of the “Four Actions Framework”

Why was health reform inevitable?

Notes: GDP refers to gross domestic product. Dutch and Swiss data are for current spending only, and exclude spending on capital formation of health care providers. Source: OECD Health Data Exhibit 1. Health Care Spending as a Percentage of GDP, 1980–2013 Percent * 2012.

Background JAMA. 2013;310(18): Where do we spend our healthcare dollar? Hospitals and other care facilities, along with professional services are the primary target of most efforts to reign in healthcare spending.

Rising “Consumerism” around Health Care Consumer groups increasingly demanding data about the quality and costs of care (“transparency”) – Rising co-pays and deductibles – Costs for insurance growing much faster than incomes – Increased lay reports about quality issues in healthcare Legislators responded

Growing Recognition……… US has the best “sick care” (not chronic care) system in the world – High tech – Complex care – Heavily hospital- and specialty-based – Very costly But……… Our population is not healthy

JAMA. 2013;310(18): How are those paying the bills responding?

Many Quality and Payment Provisions in the ACA Required by law…. – Public quality reporting: Hospitals, dialysis units, nursing homes, home health agencies, physician practices, cancer centers….. – Value-based payment Reward high quality care – penalize poor quality care – Hold providers accountable for overall costs of care (“efficiency”)

Healthcare quality is in the public domain for most settings of care!

Move to “Value” Value = Quality (and Service)/Costs Goal: We want the highest quality of care (and service) at the lowest costs.

Incremental FFS payments for value Bundled payments for acute episode Bundled payments for chronic care/ disease carve-outs Accountability for Population Health Current State: Payments for Reporting Range of Models in Existence or Development Increasing assumed risk by provider Increasing coordination/integration required From…...get paid more for doing more To…...profiting by keeping your population of patients healthy, delivering high-quality care, and doing so at less cost

Physician Practices

Physician Quality Reporting System (PQRS) Impact on Physician Payment PQRS Incentives YearSuccessfulNot Successful % % % % % % No Incentive-1.5% No Incentive-2.0%

Physician Medicare Value Modifier

Quality and Resource Use Report (QRUR) The Medicare Report Card!

Quality and Resource Use Report (QRUR)

Nine percent (9%) of a physician’s Medicare payment in 2017 is tied to performance on PQRS measures, meaningful use, and the physician value modifier for care provided in 2015.

Payment reform is very bipartisan…....and not limited to Medicare or Medicaid

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Is payment reform bipartisan?? Facts about MACRA: Bill sponsor in the House was a Republican (a physician) from Texas The Senate vote was 92 to 8! The House vote was 392 to 37!

TITLE I—SGR Repeal and Medicare Provider Payment Modernization Creates incentives to use alternate payment models (APMs) – ACOs – Medical Homes – Bundled payment arrangements – Other (being developed) Financial incentives to participate in APMs as well as exclusion from the MIPS assessment

TITLE I—SGR Repeal and Medicare Provider Payment Modernization Eligible Professional Alternate Payment Mechanisms “Substantial portion” of revenues* from “approved” alternate payment models  5% bonus each year from  0.75% increase per year beginning in 2026 Merit-based Incentive Payment System† Providers receive a score of Each year, CMS will establish a threshold score based on the median or mean composite performance scores of all providers  Providers scoring below the threshold will be subject to payment reductions (capped at 4% in 2018, 5% in 2019, 7% in 2020, and 9% in 2021 to 2023).  Providers scoring above the threshold will receive bonus payments (up to three times the annual penalty cap). *25% of Medicare payments % of Medicare payments % of Medicare payments 2023 and beyond †Scores will be posted to Physician Compare website

It’s not just Medicare Humana UnitedHealthcare BlueCross Medicaid Others (including some employers) Most of the third-party payers have some incentive programs for quality metrics, or have begun focusing on cost and quality.

What are they measuring for quality? Most are focused on primary care services in the office setting – Common conditions (diabetes, hypertension, COPD, ischemic vascular and coronary disease) – Preventive services Vaccinations Screening examinations – particularly cancer screening – At risk behaviors – smoking, obesity Some specialty-specific quality metrics (particularly specialty-specific registries)

What are they measuring for quality? They are also measuring costs of care and “efficiency”……and they are holding us accountable for the “episode of care.”

Hospital Stay Medicare Part A costs 30 days post-discharge 3 d AdmissionDischarge All Medicare Part A and Part Charges An “episode” of care Medicare Spending per Beneficiary Cost Efficiency Measure

Aetna’s model for cost efficiency

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What about hospitals? A long list of quality and cost metrics now impact hospital payment! – Publicly reported on Hospital Compare website – Used to adjust hospital payments!

Examples of hospital metrics Hospital-acquired infections and complications Hospital-acquired conditions Avoidable hospital readmissions Avoidable hospital admissions Hospital mortality rates for common conditions Patient satisfaction

Going forward…...most assuredly there will be… …greater accountability for costs and quality …greater transparency for all providers of care …market pressure to improve efficiency ………….and the pace is speeding up dramatically!

Sylvia M. Burwell, January 26, 2015

Hip and knee replacements are some of the most common surgeries that Medicare beneficiaries receive. In 2013, there were more than 400,000 inpatient primary procedures in Medicare, costing more than $7 billion for hospitalization alone.

FOUR ACTIONS FRAMEWORK