1. Practice Transformation: Using Technology to Improve Models of Care and Transitions in Care Mat Kendall, EVP Aledade DISCLAIMER: The views and opinions expressed in this presentation are those of the author and do not necessarily represent official policy or position of HIMSS.

2. Learning Objectives Define Accountable Care Organization Describe Medicare Shared Savings Programs Factors of successful ACO Identify criteria for selecting an ACO 2

3. Fee for Service Health Care: The Wrong Incentives The result... 3 Fee for Service Health Care has created a system where doctors are rewarded for ordering more test, referrals, and procedures – health care volume. But the system does not reward providers for keeping patients healthy and creating value.

4. Accountable Care: Lasting Health Care Reform Accountable Care Organizations (ACOs) are groups of providers who assume responsibility for the quality and cost efficiency of the health care for a designated patient population 4

5. ACOs Are Growing Rapidly As of 2015, 420+ ACOs have been established across the country, representing 7.8 million Medicare beneficiaries 5 In 2014, Medicare distributed over $300 million to 53 ACOs

6. Types of Accountable Care Organizations All cost reductions go to payers; no financial incentive for providers to deliver high-quality care at lower cost 6 ACO: Shared Savings Payers set quality targets and baseline costs per patient; ACO receives reimbursement if quality targets are met and costs come below baseline ACO: Two-Sided Risk Payers set quality targets and baseline costs per patient; ACO shares in higher percentage of savings, but can see losses if costs come in above baselines ACO: Capitation (Full or Partial) CO receives a per patient payment; providers responsible for delivering care at or below that level

7. Avoiding Hospital Admission: Current FFS System 7 Primary Care Provider Implements a Flu Shot Drive Increasing Adherence by 300 Patients 3 Patients Avoid Hospital Admission Due to Pneumonia Total Savings for Medicare: $27,144

8. Avoiding Hospital Admission: Current FFS System 8 Drive Cost: $1,500 Flu Shot Profit: $567 Total Savings for Medicare: $27,144 $933 Net Loss for Provider ($567 - $1,500) Provider Financial Results from Flu Shot Drive

9. Avoiding Hospital Admission: MSSP ACO 9 3 Patients Avoid Hospital Admission Due to Pneumonia Total Savings for Medicare: $27,144 ACO Successfully Participates in Medicare Shared Savings Program Medicare Savings: $13,572 ACO Shared Savings $13,572

10. Physician-Led ACOs: Early Results 10 In 2013, 24% (53/220) of qualifying ACOs earned shared savings – and those ACOs generated savings of $652 million, taking home >$300 million in bonuses 72% of the ACOs that earned savings were physician-led. %

11. ACOs: The Role of Primary Care Physicians 11 Patients and primary care doctors are the players who win when money is saved We waste about $1T per year in US healthcare 80% of providers are digitized, so we have the data we need to identify waste and capture savings We have new payment models that reward providers for saving money Most of the savings come from avoiding hospital visits and specialists

12. A Network of Primary Care Providers 12 These doctors influence 85% of downstream cost and only account for 5% of costs. They dictate: What treatments Which hospitals Which specialists Which tests and drugs Primary Care Doctors Own the patient relationships and trust Primary care providers are the “quarterbacks ” of the system – it’s time they were paid and treated like it Primary Care Physicians are Best Positioned to Coordinate Care and Drive Savings

13. Case Study: Rio Grande Valley ACO Health Providers Rio Grande Valley ACO 18 primary care docs and 20 mid level practitioners in 13 practices Focus on practice changes Central role for Information Technology Year 1 results: $20 million in total savings $11 million return to ACO Per Patient Costs went from $14,100 to $12,000 Top 5% in the nation for diabetes control 13

14. Case Study: Palm Beach ACO Palm Beach ACO case study 130 primary care docs in 83 independent practices Central ACO staff of 13 Focus on practice changes Year 1 results: $22 million in total savings $11 million return to ACO Hospitalizations per thousand fell by 5.8% ($6.5 million) SNF costs reduced by 16.6% ($6.7 million) 14

15. Key Factors: ACO Selection 15 When choosing an ACO, consider four key factors: Characteristic s and Composition Does the ACO include specialists, or just primary care providers? Cost and Reimburseme nt Are there upfront costs? How are shared savings dispensed among ACO participants? Provider and Partner Engagement Will ACO management provide in- office guidance and expertise? Data and Technology Who owns patient data? Does ACO management provide analytical capabilities and EHR optimization?

16. How Different ACO Types Compare Hospital-organizedInsurer-organized Primary Care- organized Characteristics and Composition Grow hospital network; shared savings competes with bottom line Improve data collection for provider tiering; centralize care management Maintain independence; focus on unnecessary costs (ED visits, hospitalizations) to achieve savings Costs and Reimbursements Use hospital infrastructure; apply savings after expenses Use insurer infrastructure, apply savings after expenses Optimize provider’s existing infrastructure, no ACO costs, savings distributed before expenses Physician / Practice Engagement Minimal; hospital-led Moderate; leverage central administrative support Moderate; providers comprise ACO leadership In-Practice Support Minimal; practice remotely reports metrics Minimal; practice submits reports like P4P programs Consistent; trusted, capable on-the-ground staff partners with practice Patient Expectations Maximize hospital capacity/technology use Use centralized tools/resources Better care; stronger physician/patient relationship Patient Focus In hospital network; hospital holds patient data In insurance plan; insurer holds patient data All; provider holds patient data Data / technology Approach Use hospital information exchange, analytic tools Use insurer claims-based analytic tools Comprehensive – support community information exchange, EHR optimization Examples of Different ACO Models

17. Questions: 17 Mat Kendall, EVP Aledade mat@aledade.com