CEO Interview Series: Payment Reform and the Data Gap
June 5, 2011
Posted by chcablogadmin in : ACO Update
The following interview with Narendra Kini, M.D, President and CEO, Miami Children’s Hospital, is another in a series of CEO interviews with Jacqueline Kueser, CHCA Vice President, regarding children’s hospitals’ responses to the current and envisioned health care environment. Dr. Kini shares his thoughts on the basket approach to bundled payment, the urgency of implementing EMR across all children’s hospitals, and both independent and united paths to survive in an increasingly consolidated environment. This week’s Executive Dialogue will offer a facilitated discussion and visioning sessions on additional strategies. — JR
Interview with M. Narendra Kini, M.D., MHA, President and CEO, Miami Children’s Hospital
- Narendra Kini, M.D., MHA
Payment Reform
All hospitals are experiencing an evolution in payment reform in terms of how we manage cost and outcomes. The new payment scheme will be tied to diagnosis related groups (DRGs); the days of fee for service (FFS) are gone. This move toward basket payment for outcomes along with shifts in tort reform will drive significant changes in the provision of care and the investment required going forward.
Health Information Exchange
How will we achieve outcomes across a population? In terms of information exchange, it is a matter of numbers. Only 14 percent of hospitals are digitized. Where is the information that will fuel HIE? We will need a critical mass of at least 50 percent EMR adoption and thus HIE maturity is likely 5-10 years away.
Managing Population Health
In terms of population health, the trend to an accountable care model across the industry will require children’s hospitals to become centers of excellence and expand into primary care and secondary preventive care. We must have a footprint in prevention to have an impact in an accountable care environment. The challenge is the requirement to be extrinsically networked and digitized in order to intervene at the right time.
Independent and Merged Paths in a Consolidating Environment
Three necessary steps for children’s hospitals to become an independent accountable care model include:
- Create centers of excellence – including an extensive network of digitized information regardless of location;
- Outreach – moving to virtual outreach and telemedicine/ telepresence; and
- Knowledge transfer – providing knowledge to parents to make decisions early, e.g. home monitoring of diabetes patients. We need ways to scale these efforts.
If we don’t move in this direction, children’s hospitals risk being absorbed and we could end up with adult providers taking care of kids. The future consolidated landscape within 5-10 years means children’s hospitals must move quickly to ensure survival.
An alternative model is the creation of zones of pediatric systems for dominance via consolidation/merger. The risks of merging regionally include medical staff reaction, fiscal models of operation, payor mix, level of IT individualization (i.e. Epic, Cerner) and culture. It certainly seems necessary to consider the potential ideal environment for a merged model across children’s hospitals to ensure the best children’s care continues to be available in the Switzerland model.
add a commentCEO Interview Series: The Fundamental Challenges of an ACO
May 15, 2011
Posted by chcablogadmin in : ACO Update
Alan Goldbloom, M.D., President and CEO, Children’s Hospitals and Clinics of Minnesota, presents the distinct challenge for children’s hospitals in creating an ACO model. Jacqueline Kueser, CHCA Vice President, recently interviewed Alan as part of a series of CEO interviews about post reform strategies. As a former pediatrician and hospital administrator in Canada, his experience on both sides of the universal, government-funded health care debate brings unique perspective. Read or re-read Alan’s blog posted last year with his insightful comparison of the two national systems. — JR
Interview with Alan Goldbloom, M.D., President and CEO, Children’s Hospitals and Clinics of Minnesota
Alan Goldbloom, M.D.
“Accountable care” is built on the premise of assuming responsibility for broad-based care ranging from primary to tertiary. Children’s hospitals have a fundamental problem adapting to this model of care. The majority of freestanding children’s hospitals function as tertiary, regional providers, and not necessarily as integrated delivery systems. With increasing numbers of beds (often 30 – 50%) devoted to intensive care, and with admissions coming from all over a region, we may have little or no involvement in their primary, long-term care. Moreover, many of the outpatients who come for specialty care may be seen only for a single episode of illness, with subsequent care provided by primary care practitioners dispersed across the hospital’s catchment area. The prospect of having formal relationships with all referring physicians in a region is difficult to imagine, even though such relationships are the underpinning of many payment reform models. This is in sharp contrast to some of the large adult integrated delivery networks who own regional medical centers, smaller outlying hospitals and primary care practices.
At Children’s of Minnesota, we are implementing three strategies to help us move closer to an accountable care framework:
1.) Physician alignment—we are forming a Clinically Integrated Network (CIN) with primary care and specialty practices throughout the Twin Cities. The CIN will replace our current Physician Hospital Organization, will set quality and performance standards, will be connected by information technology, and will allow for collective contracting arrangements with payors (including bundled payments). We have also begun to purchase some smaller primary care practices, and are developing Professional Services Agreements with others, whereby we would purchase their assets, contract on their behalf, and contract with the physicians to provide the care. We have learned in our region that one size cannot fit all. Therefore, the goal is to offer a variety of arrangements that would ultimately advance care integration in the metro area, and establish a framework for accountable care.
We have learned in our region that one size cannot fit all. Therefore, the goal is to offer a variety of arrangements that would ultimately advance care integration in the metro area, and establish a framework for accountable care. — Alan Goldbloom, M.D.
2.) Hospital alignment—we are in discussions with regional hospitals to help staff their pediatric units, provide subspecialty support, and share pediatric protocols and standards. This would allow us to leverage our brand more broadly in a market that is highly competitive for tertiary/quaternary pediatric care; by enhancing the pediatric care in these regional hospitals, we would enhance and grow the relationships that ultimate result in our hospital being their first choice for more complex services.
3.) Maternal-fetal medicine—we are creating partnerships for joint mother/baby facilities to enable the neonates and their families to take advantage of services on the children’s hospital campus. At our Minneapolis campus, this will involve a new Mother-Baby Pavilion built in partnership with the largest adult system in the state (Allina), who would move all of their obstetrics from their flagship hospital, Abbott Northwestern, onto the Children’s campus. In addition to providing a home base for our joint fetal diagnostics and intervention program, it will be both a normal and high-risk maternity center with 4,000 deliveries per year. Moreover, it will be adjacent to our NICU so the sickest newborns will no longer be separated from their mothers. The second component of the program is to extend the partnership into the other adult hospitals in the Allina network, thereby developing a single standard of neonatal care.
Our future efforts will need to focus on ambulatory networks and data exchange with other physician and hospital providers. We will also evaluate the feasibility of owning a managed care plan to enable us to assume more risk. The concept of assuming total risk is not foreign to me, since I worked previously (in Toronto) in a system where we had a global budget for the hospital. We knew on January 1 each year what our revenue would be for the next 12 months, and had to meet our mandate to provide care. I actually don’t recall it was any more challenging than trying to deal with the ongoing uncertainties of Medicaid funding in the U.S. today, especially now that we are in an era when most states are facing budget deficits. I am therefore open to the option of having both the risk and the responsibility for care, with the qualifier that we need to carefully model such a plan around the reality of decreased resources in the future.
add a commentOperating in a Statewide Accountable Care Environment from Within a Health Care System
May 15, 2011
Posted by chcablogadmin in : ACO Update
To learn more about North Carolina’s state programs in the evolving accountable care environment, as well as operating a children’s hospital as part of a large, adult-oriented health care system, we spoke with Alan Stiles, M.D., Brewer Distinguished Professor and Chair, North Carolina Children’s Hospital (part of the University of North Carolina’s UNC Health Care). Here is what we learned.
Community Care of North Carolina (CCNC) was established in July, 1998, and designed to build on the state’s existing Medicaid primary care case management program, which essentially created medical homes for Medicaid beneficiaries. The goal is to work with leadership throughout the state to improve quality and access to affordable care for North Carolinians with special attention to underserved and low income populations.
Fourteen participating networks of community physicians, hospitals and health departments, covering the entire state address overall status of enrollees by proactively managing their care through risk stratification and disease and case management, as well as providing enhanced access to care. The networks work with the state in defining, tracking and reporting performance measures that help gauge effectiveness of participating networks in achieving quality, utilization and cost objectives.
Participation is optional for the state’s approximately 1.4 million Medicaid eligibles. About 945,000 of those eligible participate in the primary care case management program. Of those, about 875,000 participate also in CCNC. CCNC’s quality/cost-saving initiatives have focused on asthma disease management, chronic care (deals with Medicare/Medicaid dual eligibles), diabetes disease management, emergency room use reduction, pharmacy (primarily focused on long term care facilities), high cost/high risk patients and heart failure. Results have been impressive — $147 million saved in fiscal year 2007 according to a William Mercer (actuarial firm) study; a 34 percent lower hospital admission rate for asthma patients under age 21; eight percent lower use of ERs by asthma patients; 24 percent lower episode costs for asthma patients; seven percent increase in referrals for diabetic eye exams, and 23 percent increase in biannual foot exams for diabetics.
Dr. Stiles credits CCNC with stabilizing Medicaid payment for care and spurring care improvement.
As the environment changed with payment reform and with the probability of ACO formation on the horizon, the Hospital has focused on cost reduction, not only in its operations, but in helping to reduce the cost of care and is doing so in concert with the other children’s programs in the state. Five percent of children on Medicaid account for 50 percent of pediatric Medicaid costs (30 percent of adults in Medicaid account for 50 percent of Medicaid adult program costs). Dr. Stiles is confident quite a lot can still be done to reduce the cost of caring for these high cost patients. He thinks costs for the high cost group of children can be reduced by 25 percent. He would partner with practices to help them change work processes and the primary care physicians’ skill set regarding care of children with chronic illness. Other issues to address are those associated with transition to adulthood as parents often stay heavily engaged with the care of these patients as the patients grow up.
Each of the N.C. program chairs was asked to look at the top 50-100 high “cost” children their institutions treated last year. A key finding was that many were “geographically challenged” (i.e., they are not near a children’s hospital and do not generally “trust” local primary care providers to care for them). This group incurred enormous emergency department costs. As a result, effort is under way to get primary care medical homes better trained and enabled to do more on their own. One area being explored is the possibility of changing payment incentives so primary care physicians can provide longer visits. The group is also exploring the use of telemedicine.
While North Carolina is well ahead of others in managing care quality and cost, and NC Children’s Hospital has been a leader in that regard, there is more yet to do. The changes on the horizon create both opportunities and challenges. Being part of a system affords certain opportunities, but it also creates complications and challenges at the same time. And there are still questions about how to best relate to primary care practices outside of the system that refer large percentages of inpatients to the Hospital for care.
add a commentMarch ACO Call: Current Integration Efforts at Children’s Hospital Los Angeles
April 3, 2011
Posted by chcablogadmin in : ACO Update
Steven Peiser, Associate Vice President, Contracting, Children’s Hospital Los Angeles and Children’s Hospital Los Angeles Medical Group
Dave Anderson, BDC Advisors
CHCA hosts a monthly conference call series highlighting Owner Hospitals’ movements in the evolving post-reform and ACO marketplace. During this call, Steven Peiser, Associate Vice President, Contracting, Children’s Hospital Los Angeles and Children’s Hospital Los Angeles Medical Group, provided an update to last quarter’s profile on market movements. (See “What’s it Like in California?” posted Dec. 19, 2010 in CHCA’s ACO Update). Dave Anderson from BDC Advisors provided national context following Steven’s presentation. Attached are the handouts from this conference call and the audio recording.
Note: Our next call, April 21, 2011, 11:00 a.m. CST, features Driscoll Children’s Health Plan (DCHP) CEO, Mary Dale Peterson, M.D.
Overview
Steven Peiser
California is a microcosm of the ACO environment with large physician groups controlling much of the marketplace with strong emphasis on care management across the continuum. The medical groups in CA are mostly delegated by the payors to take on risk for Commercial and Medi-Cal managed care HMO membership. These medical groups through the years have effectively and efficiently evolved under risk based arrangements and developed their infrastructure to handle risk, control costs and coordinate care. Complicating the picture is a $20 billion state shortfall and a 25 percent uninsured population. The market continues to experience increases in capitation contracting but decreases in HMO enrollment. Super physician groups of 600,000+ members exist and some groups are moving to specialty capitation. Rapid consolidation between hospital and medical groups is occurring. Physician supply is a major issue with a significant lack of primary care physicians and an over abundance of specialty based physicians.
Emerging Payment Structures
Bundled payments in transplant and cardiac exist with specialty risk capitation emerging. Large health plans keep everyone on their toes regarding evidence based medicine. For Los Angeles Children’s Hospital, a paradigm shift in terms of the care delivery cultural mindset will be necessary. Incentives will shift to appropriate care, evidenced based care, remote care, case rates, shared risk, bundled payments and capitation.
Los Angeles Children’s Hospital Initiatives
Our goals include increasing the referral base, participation in accountable care organizations, and forming a regional strategy to participate in the state California Children’s Services (CCS) pilot. We are currently:
a) Reaching out to community hospitals for hospital within a hospital initiatives; CHLA has already developed a hospital within a hospital arrangement with a facility in the san Fernando Valley market of Los Angeles, which will encompass running a 24 bed general pediatrics and PICU unit under CHLA’s license. At present CHLA is awaiting approval of this arrangement from the state and federal regulators. CHLA is in discussion at present with another facility and its strategic goal is to achieve a total of 5 Hospital within a Hospital relationships in targeted geographic areas throughout Los Angeles.
b) Expanding multi-specialty centers; in collaboration with Children’s Hospital Los Angeles Medical Group (CHLAMG), CHLA just completed its initial strategic implementation of a multi-specialty center in the San Gabriel Valley area of Los Angeles. CHLA is in the process of moving forward on another site with the goal of having five multi-specialty center locations throughout Los Angeles.
c) CHLA is also focused on developing laboratory services outreach centers and currently runs three centers in Los Angeles and is looking to additional an additional three sites over the year.
d) Redesigning the patient placement center with an emphasis on access and providing referring physicians with a centralized and coordinated approach to assisting with admissions and outpatient scheduling;
e) Establishing physician satellite offices; currently CHLAMG has 23 satellite physician office locations throughout the Los Angeles market;
f) Increasing use of evidence-based protocols;
g) Increasing hospitalists use; and
h) Focusing on outcomes measures.
Our approach continues to evolve with multiple pilots and initiatives to prepare the organization for multiple potential marketplace demands.
Dave Anderson
National Perspective
As payment structures evolve and integrated delivery systems emerge, caution is still the word for taking on risk or moving forward in the marketplace without incentive alignment. Emerging payment structures may be a win-win for the health plan, not for the providers. Be wary of diminishing returns for providers and a “fast forward” to a lower cost basis. It is important to note the recent Rand study indicated bundled payments are the most capable for bending the cost curve overall.
