1. P.J. Brennan, MD Chief Medical Officer Penn Medicine April 25, 2015
Pay for Performance: Alternative Payment Models in CV Care – Are you ready?
P.J. Brennan, MD
Chief Medical Officer
Penn Medicine
April 25, 2015

2. ACCME Disclosures
NO DISCLOSURES

3. Patients as Consumers of Health Care
Patients are increasingly being exposed to the cost of care through higher copays and deductibles
Many people (81%) purchasing insurance in the exchanges are selecting plans (e.g. bronze, silver) with sizeable deductions
Employees enrolling in private exchanges are more likely to select high-deductible plans

4. National Trends Toward Value
The shift from volume-based to value-based payments continues (e.g. value-based purchasing)
Cost-sharing organizational arrangements (e.g. ACOs) and new payment models (e.g. bundles) have begun to proliferate differentially across markets
Our costs are increasing (e.g. increasing length of stay, increasing skill mix, need for academic support) at the same time that national policy, payers, and patients are focused on cost reductions
Patients are being “steered” towards specific providers and making their own choices on the basis of cost

5. Program Goals ↓ Unnecessary clinical variation
Value brings together quality and cost as defined around the patient.
Quality relates to patient outcomes whether it be the avoidance of complications or the improvement in functional status over time
So our ultimate goal is to move UPHS up the “value arc” shown here that results in both higher quality and lower cost and the intermediate goals listed on the right are some of the ways in which we will achieve this goal.
Since we have proposed a set of incremental resources to work on this project, we are looking to achieve a minimum of 10x the investment annually once we have ramped up the effort.
↓ Unnecessary clinical variation
↓ Potentially avoidable conditions/costs
Delivering the right care in the most appropriate setting
↓ LOS
Improve patient flow & clinical care processes
Improve operational/support processes
Efficient supply/resource use
Higher Quality
Reduction in preventable conditions/
costs
UPHS
UPHS
Lower Cost
Reduction in unnecessary costs

6. Experimenting with new payment models
Accountability for Managing Care
Low
High
Era of Reform
1990s
2010s
Hospitals and physicians are increasingly being asked to take on more financial risk and accountability for “managing appropriate care”
New payments models, like bundled payments, require us to better coordinate primary and specialty care to treat specific patient populations

7. Powerful Signals from Government
Setting Value-Based Payment Goals — HHS Efforts to Improve U.S. Health Care
Sylvia M. Burwell | January 26, 2015DOI: /NEJMp
“The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways:
Using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models;
Changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and
Harnessing the power of information to improve care for patients.”

8. 1. Characteristics of Payment Models

9. 2. The Framework for Care
Build a set of interventions that integrate the care continuum. ?
Hospital Stay
Outpatient
Post-acute Services/ Chronic Care Management
Risk Stratification
Interdisciplinary Care
Closing the Loops
Getting Information to the Right Place
Follow-up Programs & New Payment Models
Risk assessment linked to interventions
Real-time readmission feedback
Shared clinical protocols across the continuum
Patient & family education
Med rec across the continuum
Goals of care conversations
Referrals to post- acute services
Followup appointments & slots
Followup phone calls
MyPenn Pharmacy
PCP contact info
Discharge summary to next provider
Loopback communication & trouble-shooting
Integrated platform of wraparound programs
Care connectors
Bundled payment experiments

10. 3. Where Does Cost Accrue in a 90-Day Hospital Bundle
Starts with Admit
Anchor Admit
33% of Bundle Spending
Re- Admits
17%
Home Health 6%
Other Part B 7%
Physician Services (PCPs & Specialists)
11%
Inpatient Stay thru 90+ Days Post Discharge
Core BPCI Elements
Starts with a hospitalization
Defined at MS-DRG level
CMS expects 2% savings/bundle
Includes all costs for up to 90 days post discharge
No change in fee for service billing
SNF/IRF/ LTCH
26%

11. 3. Distribution of costs in a 90 day PCI bundle
Percutaneous Coronary Intervention:
Based on data, a large portion of 90-day bundle costs occur in the post acute setting.
Spending Distribution for PCI
Average Spend per Bundle: $21,922
“Manageable Post-Acute Costs”
SNF, IRF, & Readmission expenses represent 21% or $4,644 of the PCI bundle cost

12. 3. Using Data Science to Detect HF
Algorithm <1> Detection HF patients
Value: Increase HF Service Line volume by at least 300 patients*
Algorithm <2> Detect High Risk HF patient
Value: Productivity multiplier for resources. Apply less resources to low risk and more resources to high risk to avoid Readmits and delay progression of illness
Algorithm <3> Detect candidates for Adv Care
Value: Increase volume for Advance Care and reduce risk of unsuccessful therapy
Goal of this Example: Provide more detail on the value the Data Science project.
Show how it is a key component of major clinical initiatives that will change how care is delivered, improve the patients outcome and the cost to deliver it.
This diagram plan was created jointly by the Data Science team and the HF illness team in trying to define a HF product for patients and payers.
*Assumptions based on FY14: 66% of 900 HUP HF patients where captured into the HV Service Line at HUP. Creating an opportunity to identify 300 patients on admission to connect to HVSL for Penn Medicine.

13. The Array of Continuity Services
We already have many of these services and they are successful. There are a few additional programs we envision and growth of a few programs – and we are requesting funding in support of that. We face a challenge – many of these programs and supports are managed in silos and we see an opportunity to better integrate the pre- and post acute care efforts to make the whole greater than the sum of the parts.
Service
Lines
HCHS
Targeted Programs
Internal & External
Programs
HCHS Agencies
Penn Care at Home
Wissahickon Hospice
CANCER SL
TCM
IMPaCT
Disease
Management Prgms
Caring Way
GSPP
Rehab
Referring
Providers
GSPP LTACH
MSK SL
Home Infusion
Telehealth
Hospital at Home
Telewound
Telemedicine
HV SL
Non Penn Community Health Services
Non-Penn Hospice
Non Penn Homecare
Non Penn
LTACHs
WH SL
NS SL
PPMC SNF
PCRC SNF
Care Connectors/
Nurse Navigators
E-Lert
Life Line
Healthy Planet
My Penn Pharmacy
My Penn Medicine
Quality DataMart
Clinical Data Registries
Connectivity
Integrated data

14. “No Regret Moves” to Drive Value
General Principals
Establish benchmark goals for outcomes, service, cost
Map clinical pathways that can achieve goals (Engagement)
Promote coordination/integration of patient services (Continuity)
Improve efficiency by lower costs and LOS across all services (Value)
UPHS Strategies
Manage patients populations at a lower cost (cost of care)
Manage high CMI patients with “acute expression of chronic disease”
Leverage the advantage of a common EHR across all our sites

15. Conclusion
Pressure to reduce health care costs; patients, payors and purchasers of health care want better value
Financial payments are a reward/penalty system. Historical Models have rewarded utilization. New health care payment models are being designed to reward or penalize hospitals and physicians based on value
Variations in care are everywhere; eliminating those that are unnecessary is essential to better value care.
Use evidence-based medicine to reduce unnecessary variation to improve quality, patient experience, and lower the cost of care