CEO Interview Series: Poised for Change
August 28, 2011
Posted by chcablogadmin in : ACO Update, Healthcare Reform, Leadership
The following interview with Peggy Troy, President and CEO, Children’s Hospital of Wisconsin, is another in the series of CEO interviews with Jacqueline Kueser, CHCA Vice President, regarding children’s hospitals’ responses to the current and envisioned health care environment. Peggy candidly shares their post reform strategy, market position strengths and pursuits. – JR
Peggy Troy
Our Vision
Our organization does not intend to merge with an adult ACO, and we are not staying the same. We cannot be successful in the future in our current structure.
We have a vision that the children of Wisconsin are the healthiest in the nation. Our goals for the post-reform environment include:
- Regional independence;
- Meaningful relationships across the state to create necessary infrastructure and reduce costs, and
- An understanding of the implications of leveraging our health plan knowledge to expand our medical risk-taking beyond the Medicaid population.
Benefiting from Reform
The good news: The post reform policies of “no lifetime limits” and not excluding pre-existing conditions have resulted in additional annual revenues for our organization.
The challenges: To focus our efforts in this complex environment, we recently hired a new Advisor on Health Reform. We consider ourselves well positioned to pilot payment reform projects with 44,000 Medicaid HMO lives, 67 primary care physicians, distributed urgent care centers and hospital relationships and a foster care/ adoption program with 3,000 lives. In addition to focusing on payment reform, we are looking at what it takes to become a medical home. We also plan to transition from serving as an episodic and acute care center to a system of integrated care delivery with a high degree of accountability.
In terms of wellness and prevention, we continue our aggressive work in asthma care. Asthma represents 9.5 percent of our admissions, and we’d like to never admit another kid with asthma. We’re working on this through medical homes, case managers and our region’s school systems.
In terms of a payment model, we are working with the new Wisconsin Secretary of Health on ideas for proving a medical home for populations such as foster care children, of which there are 2,000 in Milwaukee County and 6,500 in the state. We’re also evaluating opportunities to expand our program for medical homes for children with special health care needs.
We’re developing an asthma pilot with an insurer in our market, which will share the expenses of a dedicated asthma case manager and share in savings from avoiding unnecessary hospitalization and ED utilization. I’d like to build on this idea and five years from now have different payor relationships and reimbursement structures than today.
This being said, we still must perform heart transplants and we need financial resources for these highly specialized services.
Adult Market Activity and Competition
In terms of pediatrics, I’m messaging to our large adult systems that our organization plans to remain a “Switzerland” among regional health care providers. We’re collaborating with several adult systems and making moves such as agreeing to put our neonatologists and nurse practitioners into adult hospitals. This makes good business sense when close in geography.
Health Plan and Positioning with Payers
We currently have a medical health plan covering pregnant women, children and families. We are evaluating the implications of the reform legislation for expansion particularly in light of the coming 2014 health insurance exchanges. We are gathering information to help us understand the implications of developing a broader insurance product for children. For example, we are reviewing regulations defining pediatric specialists and how they get paid particularly for multi-system conditions. We are concerned about the possibility of Medicaid moving to a block grant which, if not done carefully, could cause real erosion in coverage for children.
Market Positioning into the Future
No road map exists; we are working as an architect in an uncertain world. We need to start thinking differently than bigger is better. We need to adopt new capabilities in care management across settings. We need to switch from episode-centric care–and somehow protect ourselves in the transition–to managing a child’s health needs throughout childhood.
We are studying pediatric data to evaluate why kids come to our hospital. We need to understand our costs and efforts in complex care, secondary care and primary care to better position ourselves with adult providers and employers. We will need to be cognizant of the path as a high-end tertiary provider with a reimbursement base that erodes our ability to fund research and education.
One option for children’s hospitals in general may be to regionalize services to get to the required scale to compete. Only five percent of children need high-end services. This begs the question of how many high-end programs are needed across the country particularly with the shrinking talent pool and the costly infrastructure of these programs. Is regional alignment an option? This could be a great advantage to achieve the necessary scale. In this model, would we be able to create a superstructure that would benefit research, provide for concentration of high-end services, decrease costs and attract talent?
July ACO Call: Colorado Strategies
August 28, 2011
Posted by chcablogadmin in : ACO Update, Healthcare Reform
Notes from July 21, 2011
Presenters:
Bruce A. Harma, FACHE, Director, Managed Care, Children’s Hospital Colorado
Dave Anderson, BDC Advisors
Presentation
Appendix – Medicaid ACC
Value Based Payment Models Grid — UPDATED
CHCA hosts a monthly conference call series highlighting Owner Hospitals’ movements in the evolving post-reform and ACO marketplace. During the July call, Bruce A. Harma, FACHE, Director, Managed Care, Children’s Hospital Colorado, provided background about the state’s Medicaid accountable care collaborative, shared one of his hospital’s accountable care initiatives for the commercial sector, and highlighted several quasi-governmental agencies working on reform initiatives in Colorado. Attached are the handouts from this conference call and the audio recording.
Overview
Colorado is very proactive in the area of health care reform. The political arena around health care is very active and the state is lock-step with federal reform initiatives. (Editor’s Note: this call updates previous information present in ACO Update on Colorado’s Medicaid Accountable Care Collaborative.)
State’s ACO Plan
Colorado’s Accountable Care Collaborative project was created in response to failed attempts at capitated managed care in the state. In addition, 85 percent of Medicaid is in an unmanaged Fee-For-Service (FFS) system. The current economic situation is unprecedented and Medicaid caseload is at an all-time high. The goal of the collaborative is to reduce costs and improve health, not just utilize more services.
There are three program components: statewide data and analytics contractor (SDAC), regional care collaborative organizations (RCCOs) and primary care medical providers.
The SDAC vendor, Treo Solutions, Inc., is responsible for data repository, data analytics and reporting, web Portal and access, and accountability and continuous improvement.
The PCMP provides a medical home with focus on primary care, general practice, internal medicine, pediatrics, geriatrics, or obstetrics and gynecology. Services are provided by a physician, advanced practice nurse or physician assistant. They are also responsible for the appropriate referrals.
The role of the RCCOs is to provide network and regional strategy, provider support, medical management, accountability and care coordination. Currently two RCCOs are up and running—Colorado Access and Rocky Mountain Health Plan. Enrollment for each RCCO will be expanded In July of 2012.
In terms of performance measures, in the initial year the collaborative will calculate monthly utilization measures and quarterly cost savings analyses. In subsequent years, there will be hybrid of utilization and quality outcomes measures.
Payment for the collaborative is collected through stakeholder participation—fee-for-service (FFS) reimbursement to PCMPs for medical services, a per member per month (PMPM) fee to PCMP for medical home services, and a PMPM fee to the RCCOs for PCMP support and care coordination. The collaborative will be eligible for incentives after documented savings.
The initial enrollment goal is 60,000 total Medicaid clients (40,000 adults and 20,000 children). Expansion enrollment goals include the approximately 400K remaining Medicaid FFS clients. Clients for the collaborative are selected from claims history—FFS and primary care patients—dual eligibility and institutionalized patients are excluded.
The access to care is client-centered. The PCMP serves as the medical home and refers to specialists. Referrals are not needed for emergency care, early prevention screening and diagnostic testing, anesthesiology, transportation, family planning, behavioral health, obstetrics and dental and vision care.
Colorado Pediatric Collaborative (CPC) – Children’s Hospital Colorado’s Accountable Care Initiative
The CPC is a three-organization partnership between Children’s Hospital Colorado, Colorado Pediatric Partners (a multi-specialty IPA of over 200 physicians) and Physician Health Partners (multiservice center providing quality improvement, EHR support, clinical reporting, care coordination strategies, contracting, etc.).
The model of the collaborative includes evidence-based guidelines and clinical education, clinical quality improvement, and HIT and data analytics. The CPC’s Triple Aim approach to clinical integration includes population health, patient experience and per capita cost.
We are collaborating with payers to move several initiatives forward. One of our current clinical initiatives is Pediatric Respiratory Care (ABC program) treating asthma, bronchiolitis (home oxygen program) and croup. There is strong evidence that our initiative is driving some savings in addition to reducing length of stay and admissions. Two other projects are focused on immunizations and an obesity pilot. Taking these types of quality initiatives straight to payers can be powerful. We’ve seen lots of interest from payers in our discussions.
There are myriad reimbursement models we’re discussing for the collaborative. We’re not closing any doors on possibilities. Some of the options include shared savings, PMPM case management fees with or without shared savings and global risk sharing/episodes of care bundling. One out-of-the-box financing idea is at-risk deductible capture or direct monthly member pre-pay.
Center for Improving Value in Health Care
CIVHC is one of the quasi-governmental state agencies providing state directed reform initiatives. This Colorado managed care collaborative has been up and running for some time and offers macro integration with long-term goals. CIVHC’s unique role includes identifying and supporting initiatives to break down silos and scale up solutions. It also provides data to allow the market to measure and purchase services based on value. The group is getting some traction in helping to channel resources to support transformation and our hospital has a participating work group. The organization’s long-term goals include specific targets in four focus areas—consumer-centered experience, improved population health, bending he cost curve and increased transparency. For more information, visit www.civhc.org.
Colorado Regional Health Information Organization (CORHIO)
Sponsored by the government and private sector, CORHIO is designated by the state to facilitate HIE. The organization collaborates with health care stakeholders including physicians, hospitals, clinics, mental health, public health, long-term care, laboratories, imaging centers, health plans and patients. The goals are to have HIE deployed in every CO community by 2015 and establishing 85 percent of all primary care and safety net care providers as well as all providers statewide are meaningful users of HER by 2015. For more information, visit www.corhio.org.
CO Health Insurance Exchange
Colorado is one of the states moving on this federal initiative. The Exchange has a nine-member oversight board appointed by the governor of Colorado and in now active. They have had their first meeting and operational leadership is in place. Public interest has been overwhelming. The Exchange has four main work groups: date analysis, simulations, and demographics; small Employers Focus; IT solutions, and marketing, education and outreach. The deadline for federal certification is Jan. 1, 2013.
Q&A
Dave Anderson asked Bruce some follow up questions.
Q: There is good work going on in Colorado but several groups are in slightly different stages. It is obvious that some kind of managed care is needed to manage Medicaid costs. Will RCCOs manage entire populations including children? Will it be more difficult for them to access children’s hospitals and does this make force you to contract with large, integrated adult systems?
A: We decided early on what our role would be. We didn’t want to tie ourselves to any single RCCO. We will work with and collaborate with all of them via our specialists. We’re working closely with the state and it’s our best approach. We have good relationships with RCCOs in our service area. We have to focus on pediatric care as much and possible and try to change the mindset.
Q: Are different RCCOs treating you differently?
A: We have seen some RCCO patients in our facility. We currently have good relationships and communications with them. We might be able to contract more in the future.
Q: How are you approaching value based payment models or incentives around traditional FFS savings?
A: The data repository and analytics are different for pediatrics. You will want to have an impact on contractors doing this work and potentially engage a pediatric subcontractor. Case management for children is different as well. We’re facing this battle on several fronts. We’re collaborating with commercial payers to measure us on a playing field for pediatrics.
Q: How much will the CO Health Insurance Exchange affect you?
A: The underlying notion is reimbursement from participants will be low. Colorado Medicaid reimbursement is one of the lowest in the country. Exchange reimbursement is expected to be in aggregate closer to Medicaid reimbursement that that of commercial payers. Of course, our concern is that it will drive down revenue stream.
Q: Do you how many patients will come from the Exchange and how much it is like to affect children?
A: There hasn’t been any analysis or numbers we’ve seen.
add a commentCEO Interview Series: Regionalization and Market Positioning
July 24, 2011
Posted by chcablogadmin in : ACO Update, Healthcare Reform, Innovation, Leadership
The following interview with Steve Altschuler, President and CEO, Children’s Hospital of Philadelphia, is another in the series of CEO interviews with Jacqueline Kueser, CHCA Vice President, and Toomas Truumees, Partner, DSI, regarding children’s hospitals’ responses to the current and envisioned health care environment. Once again, Steve openly shares CHOP’s strategy and market position strengths and pursuits. (See “Steve Altschuler Talks CHOP Strategy” from April 2011.) – JR
Steven Altschuler
CHOP’s Vision for the Future
The vision of the Children’s Hospital of Philadelphia is to remain a leader in pediatric health care. While this seems basic and elementary, it is actually complex and perhaps even visionary. We expect to remain a leader in changing the way we deliver care, a leader in identifying new therapies, and in developing new ways to deliver them to the market. To remain a leader, we will focus much of our effort on margin generation.
Our growth plans also reflect how we define our vision of leadership. For example, CHOP has a large regional footprint, the largest in the country. Our vision is to double the size of our footprint over the next five years. We have 200 primary care physicians and have plans to employ twice that number. Our leadership vision is a complete transformation of the enterprise from a children’s hospital located in a major U.S. city into a large regional network of pediatric care anchored by a children’s hospital delivering the most specialized pediatric care available anywhere in the world. Our institution will remain exclusively focused on the needs of children.
CHOP’s $2 Billion – Ten-Year Strategy
Our primary strategy calls for a $2 billion investment in developing our facilities, our services and our infrastructure by the year 2020. It calls for expansion of our CHOP Care Network, expansion of our Ambulatory Care Center, and for significant investment in our Information Technology capabilities.
To achieve the objectives of this strategy we first must ensure adequate cash flow to be able to finance this expansion. Cash flow demands that all of CHOP management, including administration and clinical components, consider the cost-of-care in designing and delivering care to our patient population. We must be able to employ actuarial-based accounting and rigid cost-controls as well as we establish and benefit from a “cost sensitive” culture.
Another significant challenge to accomplishing this growth strategy is further developing relationships with our “payor community.” We must develop and implement new and innovative concepts as we negotiate new contracts to ensure we have the resources we need to achieve our goals.
The Impact of Payment Reform
Payment reform, which will be driven first by the market and economic climate, and then by health reform, must be effectively managed if we are to reach our financial requirements. The challenge for CHOP will be how to plan for a five-to-10 percent decrease in revenues over a three-to-five year period, and at the same time maintain our ambitious plans for expansion.
One solution we’ve identified is to work with some of our payors to decrease administrative burden on a contractual basis. We are also focused more in the bundled payment approach, not global capitation. Another aspect of our value based health care plan is our aggressive alteration of the care model with IT enhancements to shift care from specialists to primary care physicians. We want to decrease the rate of referrals to decrease cost, enhance profession satisfaction of the PCP, and increase specialist efficiency.
I anticipate some children’s hospitals will be challenged in this new economic environment. Currently, children’s hospitals receive 30 percent of their margins from cardiac and neonatal care. In five years, services like cardiology will be a commodity. Children’s hospitals must then compete on cost and quality with no margin. Therefore, we must radically change the organization to sustain our mission.
Alternative Paths for Children’s Hospitals
CHOP’s vision, in light of the challenges I have discussed, will work for CHOP. The strategy used by others must be developed to answer their goals and challenges, and the solutions will be different for each.
However, I believe there are essentially three effective strategies that can be employed by almost any children’s hospital that will enable them to operate, and to even prosper, in light of today’s economic climate. I offer them for consideration.
1. Luminary Programs: The luminary programs only a children’s hospital can provide will offer significant margin. Those children’s hospitals that can develop four or five cutting-edge services and attract international patients will be positioned to withstand future economic hurdles.
2. Pediatric Networks: For those children’s hospitals not equipped to offer luminary programs, they must have access to capital to build networks, and perform commodity services at a lower cost.
3. Super-Regional Pediatric Health Care Network: Children’s hospitals in adjoining regions can merge to offer pediatric care in a specific area of the country. It would require excellent management expertise to administer a large network of complex institutional relationships.
Independent children’s hospitals that are not successful in rationalizing care for complex services or developing integrated systems must find alternatives for long-term sustainability.
add a commentApril ACO Call: Current Integration Efforts at Driscoll Children’s Hospital (Corpus Christi)
July 10, 2011
Posted by chcablogadmin in : ACO Update
Mary Dale Peterson, M.D., MHA, FACHE, President and CEO, Driscoll Children’s Health Plan
Dave Anderson, BDC Advisors
CHCA hosts a monthly conference call series highlighting Owner Hospitals’ movements in the evolving post-reform and ACO marketplace. During the April call, Mary Dale Peterson, M.D., President and CEO, Driscoll Children’s Health Plan, provided an overview of the integration efforts and ACO framework at Driscoll. (Also see “Lessons from 10 Years of Operating a Child-Focused HMO” posted March 6, 2011 in CHCA’s ACO Update). Dave Anderson from BDC Advisors provided context following Mary’s presentation. Attached are the handouts from this conference call and the audio recording.
Overview
Mary Dale Peterson, M.D., is President and CEO of the 60,000 member Driscoll Children’s Health Plan serving both pregnant women and children over a 14 county area. Ten years ago, Driscoll Children’s Hospital created the health plan to assist in providing coverage to children in south Texas.
Dr. Peterson described the current successes and challenges of her endeavors in a recent CHCA conference call:
Mary Dale Peterson, M.D.
Our plan currently emphasizes the integration of cost and quality across the hospital and the health plan. The hospital represents 30 percent of the plan’s costs. The plan works on decreasing utilization. My work with the CEO and CFO of the hospital enables a good understanding of the necessary steps to do so. The plan has reduced utilization by 18 percent over the last three years, but improved all metrics with the hospital. Over the past four to eight years, the plan breaks even and provides revenue to the system.
The primary care physicians practice in a 501(a) entity and are closely aligned with the system. Our relationship building efforts with the physicians are well received. The physicians responded to increased well child visits and decreased ED utilization once incentives were aligned. Eight years ago, with a grant, the plan placed EMRs in physician offices. Now, we are looking to get a health information exchange up and running. Our OBs and PCPs are the core of what we do and I assist them in doing that at all times.
The plan provides prenatal education using lay health workers, dieticians and lactation specialists to improve nutrition, eliminate substance abuse, and understand the signs and symptoms of preterm labor. The plan works with physicians to decrease elective inductions and works with hospitals to implement associated guidelines. We’ve brought on MFM physicians. With 13 percent of pregnant women who are diabetic, the MFMs can do the hand-holding and make the OBs feel more comfortable with waiting until 39 weeks to deliver. Very premature (less than 28 weeks) births are now regionalized to Level 3c NICUs. Our outcomes from these efforts include a 75 percent decrease in traumatic deliveries and a $10 million savings to the state while increasing the number of infants at the children’s hospital. We are focusing on getting families to the best facilities to improve outcomes. We are working with the Vermont Oxford Network dataset to validate our efforts.
Another project focuses on early childhood dental caries. We’ve taught the primary care physicians some basic dental health that includes the application of fluoride varnish to newly erupted baby teeth to decrease the number of children needing dental surgery.
Our efforts include preventing sickness, not just hospital care. We focus on coordination of care. However, we continue to struggle with decreasing payments from the state. We see the answer in increasing quality. The state faces a $27 billion deficit and provider payments are scheduled to decrease by 10 percent. The plan has improved its relationship with the state and saved the state millions while maintaining provider rates through incentive payments and improved prevention efforts to decrease utilization.
The challenge for the system as a whole is to balance the decreased revenue from decreased utilization with more quaternary and tertiary care services that only children’s hospitals can provide. Thus, the system goal is now to increase the health plan presences in south Texas and ensure quaternary cases are covered by the highest quality providers. We’re facing a $20 million shortfall from the state. This is unsustainable. We must prove we are valuable to both the state and the community we serve.
add a comment
