1. #HASummit14 Session #20: The Price is Right! How to Thrive in the New Value-based Care Delivery World Tom Burton Executive Vice President, Health Catalyst Co-founded Health Catalyst 2008 Intermountain Healthcare – 2002-2008

2. #HASummit14 2 Come on down!

3. #HASummit14 Learning Objectives Understand how to use analytics to manage at-risk contracts in value-based care delivery Understand network optimization through provider selection and leakage reduction Understand a balanced approach to care management Understand the three capabilities required for systematic population health management

4. #HASummit14 Fee for Service Fee for Value The Common Denominator: Reduce Costs, Improve Quality 4 Cost Payment Cost Payment

5. #HASummit14 Balancing Short-term Imperatives with Long-term Transformation 5 Short-term goal: Successfully Manage At-Risk Contracts Owner: Accountable Care Team Long-term goal: Transform the Care Delivery System Owner: Care Delivery Team Cost Accountable Care Population Health Management

6. #HASummit14 Lowest bid, but still make money 6 Last Years PMPM Payment 180 PMPM BID 175182165170 - Actual PMPM Cost -170 PMPM Margin 512-50

7. #HASummit14 Diabetes Population to Bid On 15,000 Diabetes Patients Total claims paid last year for this patient group was $45 Million or payments of $250 PMPM (per member per month) Readmission Rate of 15.1% Number of inpatient days last year was 9,014 This is a condition capitation arrangement with the payer for primary or secondary diagnosis of diabetes What is your PMPM bid? Remember the winner is the lowest bid, but still make money 7

8. #HASummit14 Lowest bid, but still make money Show all results screen at this point 8 Last Years PMPM Payment 250 PMPM BID 245249235240 - Actual PMPM Cost -240240 PMPM Margin 59-50

9. #HASummit14 9 Need for Improved Costing Bundled payment of $15,000 Yes Maybe No – unless actual cost can be reduced to < $15 K

10. #HASummit14 Allocations of costs to activities 10 Data CaptureData Analysis Results EMRs HR Supplies Data Provisioning Enterprise Data Warehouse Ratio of Cost to Charges Volumes Relative Value Units Duration Based Explicit (e.g. Drugs) More Allocated More Explicit 2) Attach costs to Patients Not just by charge items but by more explicit activities Prioritized cost reduction opportunities based on actual workflow variation Less Expensive Staffing Models through predictive activity based algorithms Informed payer contracting by understanding true PMPM costs for specific populations 1) Attach costs to Drivers using best available costing method: 3) Custom groupers of like patients to identify opportunities Bundled payments Payer negotiations Outsource decisions on specialty care Rx Blood How an Activity Based Costing Solutions Works: General Ledger Real-Time Location Services (RTLS) Cost Center Manager User Interface

11. #HASummit14 Retrospective Analytics 11 Month-Over-Month PMPM Performance Principle: Know what’s driving your PMPM payments AND costs

12. #HASummit14 PMPM Trend, Continued Top Contributors to the Overall Trend 12

13. #HASummit14 Fit Bit Charge 13

14. #HASummit14 Network Management Moving Beyond our Four Walls 14 How do I reduce costs? How do I improve referral patterns? Who are my best (lowest cost, highest quality) partners? How do I reduce leakage? Partners Out-of-Network In Network Manage Leverage data on leakage and referrals to pinpoint opportunities to improve the performance of your provider network. Optimize Overlay information about your patient population’s needs and your provider population (including accessibility, cost, and quality) to identify gaps.

15. #HASummit14 Network Optimization Game Polarity Principle: Reduce inappropriate utilization costs AND reduce out of network leakage Game: Include anywhere from 1 to all 10 providers Must reach target of <10% leakage AND PMPM must be less than $240 PMPM 20 Seconds on the Clock Press button to calculate PMPM & Leakage 15

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17. #HASummit14 Stop 17 3 8 4 5 10 9 6 7 2 1 STO P 0:010:020:030:040:050:060:070:080:090:100:110:120:130:140:150:160:170:180:190:30

18. #HASummit14 18 Network coverage optimization Service Area Definition Dartmouth Atlas Hospital Referral Regions (boundaries based on cardiac surgery and neurosurgery) Central Place Theory (boundaries based on distribution of medical specialties) Venn overlap of Health Referral Regions and Central Place Theory boundaries

19. #HASummit14 Example: Leakage 19

20. #HASummit14 20 Where do your patients live?

21. #HASummit14 21 Where are your patients receiving care? Network overlay on population density

22. #HASummit14 22 How far is it to drive to your PCP? Network drive time isochrones

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25. #HASummit14 25 3 8 4 5 10 9 6 7 2 1 Ready

26. #HASummit14 Stop STO P 3 8 4 5 10 9 6 7 2 1 0:010:020:030:040:050:060:070:080:090:100:110:120:130:140:150:160:170:180:190:30

27. #HASummit14 Game 1 Principle Review Network Optimization Designing a care delivery network should include the following considerations  Who are the low cost providers? (you want them in your network)  Where does your population live?  What are the natural barriers geographically (rivers, freeways, train tracks)? This can cause leakage  ACTION: remove and add providers to my network to minimize leakage AND achieve the lowest appropriate cost 27

28. #HASummit14 28 Come on down!

29. #HASummit14 Back & Neck Pain Population 12,000 Back & Neck Pain Patients Total claims paid last year for this patient group was $9 Million Last years actual cost was $114 PMPM, payment was $125 PMPM Number of inpatient days last year was 1,894 This is a condition capitation arrangement with the payer for primary or secondary diagnosis of neck and back pain What is your PMPM bid? Remember the winner is the lowest bid, but still make money 29

30. #HASummit14 Lowest bid, but still make money Show all results screen at this point 30 Last Years PMPM Cost 114 PMPM BID 115119124120 - Actual PMPM Cost -118 PMPM Margin -3162

31. #HASummit14 31 Predictive Analytics Predictive model for rising risk patients Principle: Use data beyond traditional claims to predict rising risk in populations

32. #HASummit14 Grand America Spa Package 32

33. #HASummit14 Care Management 33 Concentration of Health Care Spending in the U.S. Population, 2010 (≥$53,238)(≥$18,086)(≥$10,044)(≥$6,696)(≥$4,639)(≥$829)(<$829) Percent of Total Health Care Spending Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, 2010. Today: High-Risk, High-Cost Patients

34. #HASummit14 High-Risk, High-Cost Patients 34

35. #HASummit14 Care Management 35 Identify Right patients Right care Right provider Intervene Plan Execute Adjust Assess Compliance ROI Care Management Identify the highest risk, highest cost patients in need of care management. Patient Engagement Care management will not be the most appropriate intervention for every patient. As you target more populations with a wider array of interventions, this becomes patient engagement. The principles—identify, intervene, assess—remain. Tomorrow: Patient Engagement

36. #HASummit14 Care Management Resources Types of care and case managers Community Care generalist. RN and behavioral clinicians, who support primary care physicians and their MAs Chronic disease clinic specialist. Specialized RN (e.g., certified diabetic educators) and behavioral clinicians who support chronic disease clinic patients Inpatient specialists. Focus on “slow-to-recover” patients Case managers. Focus on pragmatic “creative exceptions” to health benefit program coverages

37. #HASummit14 37 Care Management for Patients with Chronic Conditions Primary Care Physician Chronic Disease MD Sub- specialist (endocrin- ologist) Medical Assistant Generalist Care Managers (RN, Beh) Specialist Care Managers (RN, Beh) MD and/or Advanced Practice Clinician Clinical Operations and Behavioral

38. #HASummit14 Care Management Game Principle: Match interventions to patients needs Balance your Care Management Strategy Game: Given $100 Budget Buy Different Darts (Intervention Opportunities) $25 for Red (High Risk, High Cost) $10 for Yellow (Rising Risk) $ 5 for Green (Preventative/Latent Risk) Throw at Balloons (popped balloon = realized savings: Red $50, Yellow $25, Green $10) 38

39. #HASummit14 Care Management Opportunity Dart Board 39 Preventative / Latent RiskRising Risk High Cost High Risk

40. #HASummit14 Game 2 Principle Review Care Management Traditional Process – Very Rare that this produces an ROI  List High Risk, High Cost Patients – perform a bunch of interventions to attempt to lower costs in the short term Balanced Approach – Greater chance for long term ROI  Involve more stakeholders – better Patient Engagement  Choose the right interventions for the right patients  Play to win Long Term – ounce of Prevention, pound of cure 40

41. #HASummit14 41 Come on down!

42. #HASummit14 Full Capitation Population 175,000 Members Total claims paid last year for this patient group was $500 Million Last years payments were $238 PMPM and next years predicted cost are $225 PMPM using rising risk models Number of inpatient days last year was 38,820 This is full capitation arrangement with the payer What is your PMPM (per member per month) bid? Remember the winner is the lowest bid, but still make money 42

43. #HASummit14 Lowest bid, but still make money Show all results screen at this point 43 Predictive Cost 225 PMPM BID 230190220215 - Actual PMPM Cost -200 PMPM Margin 30-102015

44. #HASummit14 44 Prescriptive Analytics Opportunity analysis can focus efforts Principle: Use variation and volume key process analysis to identify opportunities likely to produce significant savings Total Variable Cost Severity Adjusted Coefficient of Variation

45. #HASummit14 Improvement Prioritization 45 Care Process Families by Resources Consumed (High to Low) Total Resources Consumed Top 10 Care Process Families account for 34% of the opportunity Top 40 Care Process Families account for 80% of the opportunity

46. #HASummit14 The Long-term Vision: Transforming Care Delivery 46 Short-term goal: Successfully Manage At-Risk Contracts Owner: Accountable Care Team Long-term goal: Transform the Care Delivery System Owner: Care Delivery Team Cost Accountable Care Population Health Management

47. #HASummit14 Outlier Management # of Cases Current Condition: Significant Volume and Variation # of Cases Option 1: “Punish the Outliers” or “Cut Off the Tail” Mean Focus on Minimum Standard Metric Excellent OutcomesPoor Outcomes Excellent Outcomes Poor Outcomes Outlier Management Set a minimum standard of quality Focus improvement effort on those not meeting the minimum standard

48. #HASummit14 Excellent OutcomesPoor Outcomes # of Cases Excellent Outcomes # of Cases Option 2: Identify Best Practice “Narrow the curve and shift it to the right” Mean Poor Outcomes Inlier Management (Focus on Better Care) Inlier Management Identify evidenced based “Shared Baseline” Focus improvement effort on reducing variation Often those performing the best make the greatest improvements Current Condition: Significant Volume and Variation

49. #HASummit14 Creating a Case for Quality 49 Dr. J. 15 Cases $60,000 Avg. Cost Per Case Mean Cost per Case = $20,000 $40,000 x 15 cases = $600,000 opportunity Total Opportunity = $600,000 Total Opportunity = $1,475,000 $35,000 x 25 cases = $875,000 opportunity Total Opportunity = $2,360,000 Total Opportunity = $3,960,000 Cost Per Case, Vascular Procedures

50. #HASummit14 A NEW CAR!!! 50 Remote Control ^ From:

51. #HASummit14 ADOPTION OUTCOMES IMPROVEMENT BEST PRACTICES ANALYTICS How do we transform? How are we doing? What should we be doing?

52. #HASummit14 52 Map the Process Care improvement map – Includes workflow & clinician's decision-flow across care continuum Identify Common Problems - Potential Improvements Specific AIM Statements for outcomes and process to measures for focused improvement Scope the problem – Define Precise Patient Registries Specific clinical inclusion and exclusion criteria for the sub-cohort of patients for the AIM Adopt Standardization Aids Checklists, order sets, and protocols to make it easy for clinicians to choose the best action Produce Actionable Visualizations Scorecards and dashboards that promote best practice behaviors and invite action BEST PRACTICES What should we be doing?

53. #HASummit14 53 Infrastructure: Hosting / Hardware 53 e.g. EPSi, Peoplesoft, Lawson e.g. Lawson, Peoplesoft, Ultipro Subject Area Mart Designer Source Mart Designer EMR Financial Patient Sat. HR Administrative Claims Financial Patient Sat. HR Administrative Claims e.g. Epic, Cerner NextGen e.g. Press Ganey, NRC Picker e.g. API Time Tracking e.g. Medicare Private Payers Shared Frameworks & Tools for improvement Comorbidity Analyzer, Registry Repository, Attribution Modeler, Common Definition Repository, Hierarchies, CAFE, Atlas, IDEA, Eventalytics, Geospatial, Risk & Severity Profiling, etc Shared Frameworks & Tools for improvement Comorbidity Analyzer, Registry Repository, Attribution Modeler, Common Definition Repository, Hierarchies, CAFE, Atlas, IDEA, Eventalytics, Geospatial, Risk & Severity Profiling, etc Metadata Driven ETL Engine Needed Analytics Capabilities: Analyze and Interpret Data Show correlation and causation Integrate clinical, financial, and patient experience data Predict outcomes and prescribe actions Shared Reoccurring Data Tasks Cohort Definitions Patient/Provider Attribution Severity/Comorbidity Analysis Calculation/Term Definition Comparative Repositories Source Data Integration Automatically co-locate data from different source transactional systems (EMR, Claims, Financial, Patient Satisfaction) Automatically connect data together with key identifiers (Patient, Location, Provider) Infrastructure Security and Auditing capabilities Metadata Repository ANALYTICS How are we doing?

54. #HASummit14 54 Improvement Capacity Assessment Evaluation of organizational capacity for change, current capabilities, and gaps Governance Data Governance/Data Stewardship and Advanced Organizational Governance & Prioritization Improvement Methodology Systematic improvement incorporating LEAN / PDSA principles, AGILE software development, etc. Accelerated Practices Training Systematic training of Adaptive Leadership, Quality Improvement/LEAN skills, and Technology 54 ADOPTION How do we transform?

55. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS Information System Centric “If we build it they will come.” Focus on reducing information request queue. No real outcomes improve.

56. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS Research Centric Academic ideas with no practical application. Lots of published papers. No real outcomes improve.

57. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS Motivational Speaker Centric Management “Flavor of the month.” Most clinicians disengage if best practice and analytics are both missing. No real outcomes improve.

58. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS LEAN Centric Un-sustainable Improvements. Can’t manually measure after 2 or 3 projects. Limited Improvement.

59. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS Automation Centric “Paved Cow Paths.” Process is electronic but NOT improved – many EMR “analytics” deployments. Limited Improvement.

60. #HASummit14 ADOPTION BEST PRACTICES ANALYTICS Science Project Centric Pockets of excellence, Limited roll-out of improvement across all units and facilities. Limited Improvement.

61. #HASummit14 ADOPTION OUTCOMES IMPROVEMENT BEST PRACTICES ANALYTICS Scalable & Sustainable Outcomes Improvement

62. #HASummit14 Outcomes Improvement Game Principle: You need three systems to succeed Best Practice = What should you be doing? Analytics = How are you doing? Adoption = How do you accelerate change? Game: Try to get all three systems Frisbees contain one of the three systems (2 wilds have all 3) You get 2 free picks You can earn 3 additional pick by guessing within $10 of the price of three health related items 62

63. #HASummit14 Guess price within $10 63 Wireless Blood Pressure Monitor Edge 25 GPS Cycling Computer $169.99$129.95

64. #HASummit14 ADOPTION OUTCOMES IMPROVEMENT BEST PRACTICES ANALYTICS How do we transform? How are we doing? What should we be doing? Game 3 Principle Review - Three Systems You need three systems to succeed Best Practice = What should you be doing? Analytics = How are you doing? Adoption = How do you accelerate change?

65. #HASummit14 Spin the Wheel and win an Apple Watch 65

66. #HASummit14 The Price is Right Lessons Learned PMPM Bidding - At Risk Contracting  Retrospective Analytics – know your historic costs before you go at risk  Predictive Analytics – anticipate rising risk  Prescriptive Analytics – let data point to outcomes improvement opportunities Network Optimization Game  Know where your patients live  Be aware of natural boundaries thru geo-spatial analytics  Include lowest cost providers in your network Care Management Game  Increase patient engagement with more stakeholders  Match interventions to patients using analytics  Have balanced care management strategy (more than claims based CM) Outcomes Improvement Game  Analytics, Best Practices AND Adoption produce Outcomes Improvement  If you are missing one or two of these three systems then results are limited 66

67. #HASummit14 Choose one thing… 67 Write down one thing will you do differently after hearing this presentation

68. #HASummit14 Thank You 68

69. #HASummit14 69 Session Feedback Survey 1.On a scale of 1-5, how satisfied were you overall with this session? 1)Not at all satisfied 2)Somewhat satisfied 3)Moderately satisfied 4)Very satisfied 5)Extremely satisfied 2.What feedback or suggestions do you have?

70. #HASummit14 Upcoming Sessions Breakout Sessions – Wave 4 (1:15 PM – 2:00 PM) 26)Panel – How Community Hospitals Thrive with Analytics John Wadsworth, Vice President, Technical Operations, Health Catalyst 27)Quality Improvement in Healthcare: An ACO Palliative Care Case Dr. Robert Sawicki, MD, Senior Vice President, Supportive Care, OSF Healthcare Roopa Foulger, Executive Director, Data Delivery, OSF Healthcare Linda Fehr, RN, Division Director, Supportive Care, OSF Healthcare 28)Clinical Standards Work To Improve Evidence-Based Care Delivery: A How-To Workshop Charles Macias, MD, MPH, Chief Clinical Systems Integration Officer, Texas Children’s Hospital Terri Brown, MSN, RN, CPN, Assistant Director, Clinical Outcomes & Data Support; Research Specialist, Center for Research and EBP, Texas Children’s Hospital 29)Five Months to Improvement: How Stanford Built an Improvement Program the Gets Results Spencer H. Kubo, MD, Associate Professor of Radiology (Pediatric Radiology), Stanford University Medical Center 30)Breaking Down Silos: Resolving Academic, Medical, and Research Interests Once and for All Samuel L. Volchenboum, MS, MD, PhD, Assistant Professor of Pediatrics, Director, Informatics Program, The University of Chicago Medicine) 70 Location Imperial Ballroom B Imperial Ballroom A Grand Salon Murano Venezia

71. #HASummit14 71 3 8 4 5 10 9 6 7 2 1 Ready A B D H G E F C I J N K M L