Bundled Payments - Partnership for Healthcare Payment Reform

Report
Bundled Payment Across the US Today:
Status of Implementations and
Operational Findings
Presentation to:
Partnership for Healthcare Payment Reform
May 22, 2012
Background and Introduction
 Bailit Health Purchasing is a health care consulting
firm dedicated to working with public agencies and
private purchasers to expand coverage and improve
health care system performance.
 We conducted over 25 telephone interviews to obtain
the results of this study.
 We are also technical assistance contractors to
AF4Q and are facilitating a multi-stakeholder
PROMETHEUS implementation in South Central
Pennsylvania.
2
Purpose and Scope of Study
 Purpose was to convey the experience of organizations
that have initiated bundled payment arrangements over
the past few years.
 We hope to provide payers and providers with insight
into key design elements and considerations to help
inform those seeking to implement bundled payments.
 Our research focused upon 19 bundled payment
initiatives, including all of the PROMETHEUS
implementations, the Partnership for Healthcare
Payment Reform, and other pilots.
3
Organization
Organizational Type
Aetna
Payer
Aligning Forces for Quality (AF4Q) in South Central
Pennsylvania
Anthem Blue Cross and Blue Shield of Missouri
Multi-stakeholder payment reform collaborative
Anthem Blue Cross Blue Shield of Wisconsin
Payer
Arkansas Medicaid
Payer
Blue Cross Blue Shield of North Carolina
Payer
Cigna
Payer
Colorado Business Group on Health
Employer coalition
Colorado Choice Health Plan
Payer
Crozer-Keystone Health System
Provider
Employers’ Health Coalition
Payer
Geisinger Health System
Provider
HealthNow New York
Payer
Horizon Healthcare Innovations of New Jersey
Payer
Independence Blue Cross
Payer
Integrated Healthcare Association
Multi-stakeholder quality improvement collaborative
integrated Physicians Network
Provider
Johns Hopkins Hospital and Health System
Provider
Massachusetts General Hospital
Provider
Massachusetts Medicaid
Payer
Partnership for Healthcare Payment Reform
Multi-stakeholder payment reform collaborative
PCD Partners
Consultant to St. Johnsbury, VT pilot
PepsiCo
Payer
Priority Health
Payer
Swedish American Medical Group
Provider
Vermont Green Mountain Care Board
Multi-stakeholder payment reform collaborative
Payer
4
Why Bundled Payment?
 For the most part, payers and providers referenced
experimenting with bundled payment as an approach
to achieve one or more goals of the Triple Aim.
 Payer sentiment: “…we currently pay for waste. This
is a payment model that will require doctors to think
differently and get rid of waste.”
 Provider sentiment: “…there is a benefit to
developing clinical pathways [around bundles] even if
there is no payment model.”
5
Current Phase of Implementation
Implementation Stage
Number of Interviewees
Fully operationalized - at least one bundle
9
Observational phase
2
Developmental phase
8
6
Sites with Operational Bundles
by Condition Type
Outpatient
Procedural
Inpatient
Procedural
7
1
Chronic
Medical
Conditions
1
7
Sites with Operational Bundles
by Condition Type
Outpatient
Procedural
Inpatient
Procedural
Joint Replacements
7 out 9 pilot sites
Chronic
Medical
Conditions
8
Sites with Operational Bundles
by Condition Type
Outpatient
Procedural
Inpatient
Procedural
Joint Replacements
PCI
CABG
Bariatric Surgery
Chronic
Medical
Conditions
9
Sites with Operational Bundles
by Condition Type
Outpatient
Procedural
Inpatient
Procedural
Cataract Removal
Perinatal Care
Joint Replacements
PCI
CABG
Bariatric Surgery
Chronic
Medical
Conditions
10
Sites with Operational Bundles
by Condition Type
Outpatient
Procedural
Inpatient
Procedural
Cataract Removal
Perinatal Care
Joint Replacements
PCI
CABG
Bariatric Surgery
Chronic
Medical
Conditions
COPD
CHF
Asthma
Diabetes
11
Sites with Planned or Observational
Bundles by Condition Type
Outpatient
Procedural
Chronic
Medical
Conditions
2
6
Asthma
COPD
Diabetes
CAD
CHF
Developmental
Disabilities
ADHD
Oncology
Inpatient
Procedural
4
1
Acute Medical
Conditions
1
12
Issues with Defining Bundles
 Time-intensive process with much negotiation
 Organizational culture and relationships strongly
influenced the speed at which bundle definitions were
established
 Narrow definitions keep volume and risk low
13
Choosing the Right Partner
“Bundled payment requires a deep commitment
and very strong provider relationships. You can’t
impose this on providers – you need to do it with
them and not to them.”
- Payer
14
Choosing the Right Partner
 Some payers set qualifying criteria for participation
– Facility accreditation
– Physician credentialing
– Use of specific surgical safety and verification processes, etc.
 Employer coalitions did the same
– Review of performance on key metrics
– Internal name brand recognition
 Other payers used less formal criteria
– Readiness for change
– Trusting relationship
– Experience in transforming clinical processes
15
Setting Rates
 Risk-adjusted rates are the most common, but also
the most laborious and expensive
 Flat-fee rates are less common, but reported to be
easier and less expensive to administer
– homogeneous populations / low PAC rates (e.g., elective
knee replacements, perhaps)
– narrow bundle definitions
– standardized clinical processes
– lack of resources to invest in risk-adjustment methodology
 Rates are typically set conservatively in the beginning
16
Risk Adjustments
“…this is where the rubber hits the
road. We want to provide a fair deal,
but we don’t want to preserve the
status quo.”
- Payer
17
Risk Adjustments
 Shared savings (i.e., no downside risk) is the most
popular approach
 Only one pilot was using a shared-risk approach
 Full risk was being used, but with limits on provider risk
– exclusion of readmissions outside of the provider’s system
– use of stop-loss insurance and high-cost outlier exclusion
 Providers are likely to evolve to take on greater risk
over time
18
Making Payments
“Bundled payment can’t be viewed
as just another way to get paid. It’s
the care coordination and interaction
within the care delivery team that
actually improves care.”
- Payer
19
Making Payments
 FFS with retrospective reconciliation is the most
common approach to payment
 Some consider it to not be true “bundled payment”
 Two pilot sites were actively using prospective
payment; one was considering it for the future
 “…if the provider can’t integrate sufficiently to take
one bundled payment [we won’t work with them]”
20
To automate or not to automate?
 For most, the choice is manual
– Reports of up to 2 skilled FTEs to do manual reconciliation
– Each claim needs to be touched and either “zeroed-out” and
applied to the bundle or paid
 Automation has its benefits
– Single platform where payers and providers can review data
– Dynamic and static reports
– Complexity handled with greater ease
 Is the money spent on bundled payment
administration a zero-sum game?
– Set-up fees and monthly processing fees
– Pilots in the early phases tend to think so, while pilots ready
to scale see a need to invest in IT tools to be successful
21
Tracking and Reporting Spending
 Payers are typically reporting spending to providers
on a monthly or quarterly basis
 Administrative lag time is hard to overcome, even
with the available software programs
 Some providers want more frequent reports, but
others understand the data are meant to impact
future patients
22
Tracking and Reporting Spending
 One payer went from “dumping data” to creating a
report that compares performance to budget and
identifies leakage for providers
 More sophisticated payers and plans are hoping to
incorporate gaps in care reports
23
Identifying Index Patients
 Plan or provider?
 A process to reconcile the entire population of
patients must exist to reduce ability to “game the
system.”
24
Views on Performance Adjustments
“Quality measurements need to be
included to demonstrate the value
proposition for patients, purchasers and
providers. Outcomes need to be
improved if this payment methodology is
to have staying power.”
- Payer
25
Views on Performance Adjustments
“K.I.S.S.”
-Payer
26
Performance Adjustments
 Despite the strong support for adjusting performance
based on quality, only one pilot reported doing so
 Finding measures suitable and specific to the bundle
proved to be difficult
– WOMAC scores varied in popularity for joint replacement
– Payers were sensitive to the administrative burden of quality
reporting
 Future use of performance adjustments seems likely
27
Volume of Bundled Payments
 Volume of bundles has stayed relatively low ~ 10-50
bundles per year per pilot
 Narrow definitions and many exclusions
– One pilot studied the effect of the look-back period on volume
and found a 14% drop due to exclusions when expanding the
episode time window
 Gaps in continuous enrollment caused a 40 percent
drop in expected paid bundles in one pilot
 ASO clients and BlueCard carriers
28
Results
 Very few initiatives had a formal evaluation of
their program
 One formally evaluated program reported:
– 40% decrease in readmissions,
– 50% decrease in complications, and
– mortality reduced to nearly zero.
 Preliminary results of early pilots are
suggesting modest cost savings
29
Keys to Success
 Executive support and organizational commitment
from both payer and providers
 “Can’t have lieutenants living in the past”
 Trust and patience
 Willingness to “kick the tires” with technology
30
Future of Bundled Payments
“We’re worried about the operational
investments so we won’t take it to scale
until it has proven value.”
- Payer
31
Future of Bundled Payments
 Future is promising, but many are still in a “wait and
see” approach
 Waiting for results of Medicare’s experience with the
Bundled Payment for Care Improvement Initiative
 Some national carriers trying to establish a consistent
methodology
 Can bundled payments exist in ACOs?
32
Words of Wisdom from Interviewees
“It’s the road less traveled, so expect
some ambiguity.”
- Provider
33
Words of Wisdom from Interviewees
“Keep your sense of humor!”
- Provider
34
Contact Information
Bailit Health Purchasing, LLC
www.bailit-health.com
781-453-1166
Megan Burns
Senior Consultant
Michael Bailit
President
[email protected]
[email protected]
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