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You Could Go From No Network to a Narrow Network to a Value Network?
Ron Present, Partner Mark Renken, Director September 4 – 6, 2019
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Topics for Discussion Industry Mandate: Participation in a Clinically Integrated Narrow Network What Does a Clinically Integrated Narrow Network Look Like? Managed Care Impact – Is it an Added Value? Transitioning From a Narrow Network to a Value Network
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Speakers and Disclosure
Ron Present Partner and Health Care Industry Group Leader with Brown Smith Wallace CEO of Value Network Solutions™ Licensed and Certified Nursing Home Administrator Over 30 years experience in health care with emphasis in post-acute care and, acute and post-acute provider integration Mark Renken Director, Health Care Industry Group with Brown Smith Wallace Operations Director of Value Network Solutions™ Over 30 years experience in health care with emphasis in acute care and physician practice management Other than the impact to our identified companies, we have no commercial gain for this presentation
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Clinically Integrated Narrow Networks – Key to Survivability
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Industry Megatrends That Drive All of Us
Aging Population Personnel Shortage Technology Reimbursement And Payment Decreased NH Utilization Consolidation Chronically ill Resource usage Family geography Population health Skilled nursing Unskilled labor Accessible Primary Care Multiple options Tele-health Care at home – Smart Home Wearables Virtual communities Artificial Intelligence Case Rate for complete care Shared financial risk FFS to Value-Based Medicare Advantage increase Occupancy decline Reduction of NH beds Shuttering SNF beds - 1) lack of staff; 2) out of network Vertical and horizontal Mega deals Payor-Provider convergence
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Industry Megatrends – Payor/Provider Convergence
Growth of Special Needs Plans (SNPs) Skilled Nursing News December 2018 The number of provider-sponsored I-SNPs doubled from 2016 to 2018 Enrollment has more than doubled in the same time frame Long-term care providers lead 21 of the 24 provider-led I-SNPs
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Payor and Occupancy Trends
©2019 National Investment Center for Seniors Housing & Care (NIC). Medicare patient day mix fell to a time-series low of 12.1% Nationally Managed Medicare was at 6.4% in 2018
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Payor and Occupancy Trends
©2019 National Investment Center for Seniors Housing & Care (NIC).
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Payor and Occupancy Trends
Skilled nursing overall occupancy decreased to a new low at 81.7% as of the second quarter 2018
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Clinically Integrated Narrow Networks – Key to Survivability
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In the US, approximately…*
By Definition - Individual Services Are Not an Integrated Network In the US, approximately…* Active Hospitals – 6,200 Active Physicians – 100,000 47% employed 46% self-employed 70% under 40 employed 38% over 55 employed SNF/NH Combined – 15,600 Medicare HH – 11,600 Urgent Care Centers – 8,100 Outpatient Surgery Center Hospital LTACH Skilled Nursing Facility Home Urgent Care Lab/ Imaging Physicians Wellness Pharmacy Health Higher Acuity Medium Lower *Data is from 2017 and 2018
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Post-Acute Narrow Network Massive Opportunity for Home Health
Medicare patients discharged to home healthcare from a hospital had nearly a 6 percent higher risk of returning to a hospital after 30 days than those discharged directly to post-acute care nursing facilities. ©2019 National Investment Center for Seniors Housing & Care (NIC) While home health care may cost less, it doesn't have the same intensity of care as a skilled nursing facility, which may be sending many of them back into the hospital" March 2019 UPI Communication between hospitals and HHC is suboptimal, and patients are often not prepared to receive HHC. April 2019 AMDA – The Society for Post-Acute and Long-Term Medicine 60% - insufficient information to guide patient management 44% - problems related to inadequate patient information 52% - Patient preparation to receive HH was inadequate
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Integrated Narrow Network
Patient must have options Geographic coverage All provider types, not all providers Agreed upon service capabilities Consider IL and AL Best location is not always convenient Clinically Integrated Narrow Network Shared clinical knowledge Provider vetting process Shared patient information Like minded providers Provider removal process Meaningful metrics Consistent downstream communication Consistent patient communication Tax status insignificant Quality drives care; not ownership Network Process
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Impact of Managed Care
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Financial Risk Transference to the Provider
Fee for Service Paid for each unit of service w/o constraint on spending Pay for Coordination Additional per capita payment based on ability to manage care Pay for Performance Payments tied to objective measures of performance Episodic Payments Payment based on delivery of services within given timeframe Shared Savings Shared savings from better care coordination and disease management Capitation Providers share savings from better care coordination and disease management Quality is not considered Same payment regardless of outcome Value based purchasing; penalty for readmissions Bundled payments; all inclusive fee for care Accountable Care Organization (ACO) Full risk; Medicare Advantage
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Medicare Advantage - Managed Care Financial Outcomes
Financial Incentives - Kaiser Family Foundation – 2018 Medicare Advantage (MA) Plan bonuses grew from $3.0 billion in 2015 to $6.3 billion in 2018 Health Care Costs Total health care costs for dual-eligible beneficiaries Avalere FFS - $13,398 Medicare Advantage - $11,159 Physician owned ACOs New England Journal of Medicine Reduced Post-Acute costs by 7% compared to non-ACO attributed patients SNF savings per episode using MA compared to Medicare Incidental Economist Heart Failure - $259.20 Joint replacement - $369.60 Stroke - $462.00 Discharge destination FFS Home Health – 16% SNF – 16% MA plans Home Health – 11% SNF – 11%
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Medicare Advantage - Managed Care Clinical/Operational Outcomes
Outcomes similar depending on research MA outperformed FFS on all 16 clinical quality measures used in study. Health Services Research 2017 MA enrollees reported better experiences overall, but FFS beneficiaries reported better access to care. Health Services Research 2017 Non-skilled in-home services will be allowed as a supplemental benefit for MA plans in 2019 Bipartisan Budget Act of 2018 Greater flexibility in covered services starting in “have a reasonable expectation of improving or maintaining the health or overall function” of beneficiaries with chronic conditions. CMS Rate Adjustment and Final Call Letter 2019 Compared to FFS patients, MA patients had a shorter course of rehabilitation but were more likely to be discharged to the community successfully and were less likely to experience a 30-day hospital readmission. PLOS Medicine 2018 After adjusting for risk factors, MA patients spent 5.1 fewer days in the SNF PLOS Medicine 2018
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Transition from a Narrow Network to a Value Network
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“Provider Focus” Integrated Narrow Network Patient must have options
Geographic coverage All provider types, not all providers Established service capabilities Consider IL and AL Best location is not always convenient Clinically Integrated Narrow Network Shared clinical knowledge Provider vetting process Shared patient information Like minded providers Removal process Meaningful metrics Consistent downstream communication Consistent patient communication Tax status insignificant Quality drives care; not ownership “Provider Focus”
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Transition to a Value Network – Patient Focus
Potential of owned insurance company Like minded Connect disparate EMRs Increase market share Incorporate IL and AL Clinical “SWAT” team Clinically Integrated Narrow Network Shared clinical knowledge Provider vetting process Shared patient information Like minded providers Removal process Meaningful metrics Consistent downstream communication Consistent patient communication Tax status insignificant Quality drives care; not ownership Joint patient follow-up after discharge Potential of legal entity Network based payor contracts Predictive modeling Shared financial risk (up and down) Joint social determinants resolution Integrated QA process – “grand rounds” Patient incentives for in-network
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Questions
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Ron Present rpresent@bswllc.com 314.406.5105
Mark Renken
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