KELLY PRICE, SENIOR DIRECTOR DATAGEN GROUP JONATHAN W. PEARCE, CPS, FHFMA PRINCIPAL, SINGLETRACK ANALYTICS. Evaluating Opportunities in the Medicare Bundled Payment Program

What’s happening? BPCI open enrollment ended April 18 Hospitals will receive data this summer Need to make decisions by November SingleTrack/DataGen Over 20 organizations from round 1 Data partner to the AAMC convened hospitals and other "independent" awardees

Overview Program Rules BPCI includes 48 episode “families” and 197 DRGs Participating organizations can participate in any or all episode families What criteria and analyses should be used for episode selection?

Financial Opportunities

Distribution of Episode Cost Individual Episodes

Attacking High-Cost Cases Individual Episodes

Moving the Cost Curve Down Individual Episodes

Reducing Internal Hospital Costs Part of the strategy for most All of the strategy for some  Gainsharing waiver offers greater potential for savings Length of Stay variation  But sometimes an extra day is good downstream Device costs – not easy to analyze from the administrative data

Total Financial Risk

Intra-Episode Variation Coefficient of Variation =.57Coefficient of Variation =.27

Episode Risk Decreases with Population Size

Hospital Discount as Percent of Hospital Cost  Episode average=$25,000  Hospital portion=$10,000  2% * $25k=$500  $500/$10,000=5%

Hospital Discount as Percent of Hospital Cost Target is discounted 2-3% of episode cost Hospital frequently assumes the entire discount Effective hospital discount depends on the hospital percentage of total episode cost

Savings Opportunity is in Post-Acute Period It’s NOT here:

Savings Opportunity Percentage of cost in post- discharge period varies by DRG

Clinical Coordination Opportunities

Understanding the services

Post Acute Cost Trends

Post Acute Cost Variation by Provider

Episode Costs by Admitting Physician

Path of Care

Analyses of Readmissions Readmission DRG Hospital of readmission Timing of readmission Post-acute provider from whom readmission originated

Putting It All Together Is there sufficient cost variation to create opportunities for savings Are the drivers of variation actionable Are your clinicians sufficiently involved to drive change