Bundled payment is one of several CMS pilot projects for payment reform designed to achieve clinical and financial integration between physicians and hospitals, leading to enhanced quality and reduced costs.  The process of care redesign associated with managing effectively within a global payment (Part A and Part B) can be an early stepping stone to developing more comprehensive models of care integration, such as an accountable care organization (“ACO”)…

Click here for the complete article written by Senior Vice President Mark Dubow, MBA and Senior Advisor Robert Minkin, MBA which was published by CA Healthcare News in their June 2010 issue.

The Camden Group Announces Affiliation with Long Time Client GRIPA

Los Angeles, California, May, 26, 2010— The Camden Group, a national healthcare business advisory firm, today announced that it is now affiliated with Greater Rochester Independent Practice Association (GRIPA), a leading physician hospital organization (PHO).

The Camden Group sought the affiliation with GRIPA given the increased demand from healthcare clients to find ways to facilitate improved coordination of care and achieve greater integration in order to deliver greater value to healthcare consumers.  With its 812-physician membership, two community hospitals, and a medical management and IT staff, GRIPA is one of the first in the nation to achieve a favorable advisory opinion from the FTC on their plan for clinical integration.  Camden clients will now have direct access, including site visits, to GRIPA in order to learn and understand ways to deliver accountable care.

“We are thrilled to have this unique opportunity to be affiliated with such a groundbreaking organization – one that we have worked with for several years,” said Steve Valentine, president of The Camden Group.  “Healthcare is changing, and it’s moving in a very clear direction.  GRIPA embodies the future of healthcare and achieves the core objectives defining this new age in accountable healthcare –  greater clinical quality, improved cost effectiveness, and superior patient experience.”

In addition to The Camden Group’s affiliation with GRIPA, the firm announced earlier this year its hiring of GRIPA’S former CEO, James Smith, FACHE, as senior vice president.  Smith is heading up The Camden Group’s advisory services in clinical integration and the development of accountable care organizations.   Eric Nielsen, M.D., the current CMO of GRIPA, also recently joined The Camden Group as Medical Director for the firm.

“This collaboration brings great exposure and expertise for both our organizations,” said Gregg Coughlin, president of GRIPA.  “Healthcare is revolutionizing at an incredible pace, given the anticipated impact of healthcare reform.  Together, we’re dedicated to innovating the industry to make healthcare work better – for everyone.”

This latest news follows the recent announcement by The Camden Group that it has added Robert A. Minkin, former CEO of Exempla Saint Joseph Hospital, to serve as senior advisor to the firm.  Minkin is a leading national expert on bundled payments.  Under Minkin’s leadership as president and CEO, Exempla Saint Joseph won the bid to participate in a three-year CMS Acute Care Episode (“ACE”) demonstration project to “bundle” payments to hospitals and physicians.  Exempla Saint Joseph is one of four hospitals with cardiac programs to participate in the pilot demonstration.

About The Camden Group

The Camden Group provides a vast array of consulting services on areas ranging from hospital operations improvement, strategic, financial and business planning, and physician group advisory services. Since its founding in 1970, The Camden Group has advised more than 1,000 hospitals, medical groups, outpatient facilities, and other healthcare organizations nationwide. For more information, please visit www.thecamdengroup.com.

Contact:

Sarita Choy, Marketing/Communications Coordinator

The Camden Group

310.320.3990

schoy@thecamdengroup.com

www.thecamdengroup.com

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by James R. Smith, MBA, FACHE

Now that healthcare legislation has been passed, the industry shift towards accountable care accelerates.   Healthcare costs are expected to continue to rise even as reimbursement rates decline.  As a result of these challenges and in response to the demand for increased quality and enhanced patient experience, accountable care organizations (“ACOs”) and clinically integrated organizations are being formed across the country.  Payers, including government, employers, and health plans, are taking notice of this trend and considering either beginning or expanding their participation with such organizations.  The following are five reasons why hospitals, physicians, and payers should support and develop clinically integrated and “accountable” delivery systems or ACOs:

I.  Increasing healthcare costs. 

Healthcare costs continue to increase and erode the ability to balance state and national budgets, as well as weaken the country’s position in the world market.  The Kaiser Family Foundation estimates that Medicare alone, currently 3.6 percent of the United States Gross Domestic Product (“GDP”), will grow to 4.2 percent of GDP by 2018 and to 6.4 percent of GDP by 2030.  The Commonwealth Fund National Scorecard on U.S. Health System Performance  2008 shows that U.S. healthcare spending per capita and as a percentage of GDP is respectively more than twice and 50 percent higher than the next industrialized nation.  Concurrently, physicians’ and hospitals’ per unit of service revenue increases are not meeting providers’ increased costs, and employers and payers are seeing utilization and technology use sky rocket, driving double digit premium and per member medical cost increases.  Simultaneously international quality studies have shown the U.S. population is a poor performer in many areas of community health.  This expensive healthcare system is not performing to the level expected nor creating the value needed.

International Comparison of Spending on Health 1980-2005

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II.  New incentive systems and models promote quality and cost savings.

New models of shared risk have emerged under different names.  Some pay-for-performance (“P4P”) models compensate physicians for clinical care improvements that require some degree of collaboration with hospitals (e.g., Bridges to Excellence®, Medicare’s Physician Group Practice Demonstration).  Other P4P programs reward hospitals for improvements that may require physicians to collaborate (e.g., The Leap Frog Group, Medicare’s Hospital Quality Incentive Demonstration).  There are also other models led by physician groups or hospitals in which all parties have jointly assumed risk through global capitation or fixed-payment “guarantees” for elective procedures and a ninety-day follow-up period [e.g., HealthCare Partners (“HCP”) or Geisinger Health System respectively].

Some are using clinical integration to evolve a network creating accountability and performance through new community-based models, organized structures, processes, and management [e.g., Greater Rochester Independent Practice Association (“GRIPA”) and Advocate Health].  C. Schoen et al suggest that these options may achieve promising long-term savings as depicted in the next graphic. 

Total National Health Expenditures 2008-2017

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III.  New IT and connectivity solutions allow for creation of structures and processes through integrated delivery systems.

Health and healthcare delivery are re-organizing ‒ enabled by a myriad of new IT and connectivity solutions.  GRIPA Connect™ is an example of a set of solutions used to create an electronically connected provider network.  Installation of these electronically connected provider solutions enabled GRIPA to meet the FTC clinical integration requirements, and created an organization, structures, processes, real-time reporting, and action-oriented culture usually found only in employed physician models.  Technology is now available to allow independent practitioners and hospitals form the connections needed to clinically integrate and collaborate in accountable care.  The following illustrates a CI model and the connections and real-time activity reporting now being used within the network.

Click image to enlarge

A dependable, accessible infrastructure of shared experts and analysts, as well as a set of reports with active management and support by skilled staff can create real physician and network alignment and positive quality, service, and cost saving results.

IV.  New ways to create structure and process result in quality and cost performance improvement.

Due to the advancements in technology, clinically integrated organizations and ACOs are able to monitor, report, and act upon data — in nearly real-time, which facilitates the use of evidence-based guidelines and, for payers, the first opportunity to integrate value-based benefit plans, enabling a new path to metric-driven accountability.  This can be the basis on which to eventually build an aligned partnership of members, providers, and payers focused on the health and wellness of the individual and population, and focused on the best healthcare value (i.e., advanced care quality and cost performance improvement).

The FTC and Medicare have promoted clinical integration and ACOs through a series of regulatory actions and pilots programs during the past decade.  Structures and processes, such as real-time alerts, tracking, and the efficacy of electronic interchange, along with setting guidelines and the ability to exchange immediate feedback, have been demonstrated successfully by GRIPA, Advocate Health, and others.  Lessons on how to build and operate these organizations have been learned and are now being adopted by others.  The tools developed, along with committed physicians and leadership focused on change, support the structures and processes, which enable real-time analysis, action, and adjustment.  The work required is the active focus on care and service coupled with continuous process improvement, which then becomes part of the culture of the network.  The “glue” is the incentives developed to continuously raise the bar while rewarding the efforts of members, employers, and providers.

V.  Healthcare is local ‒ these organizations are constructed at ground level and built, operated, and focused to align payers, members, and providers.

Payers – governmental, commercial and self-funded employers ‒ have an opportunity to adopt and benefit from the development of innovative technology and structural and process change.  As physicians, hospitals, and other providers learn and use these new connections and systems the power of the connected components in a continuum of care becomes apparent.  When there is transparency and communication in near real-time, timeliness, efficiency, and accuracy of care is improved.  These changes will transform the health delivery system and ultimately raise the trust and accountability between participants, physicians, providers, and payers.  The key benefits for payers will initially be quality-based, but as the iterative improvement process continues, and the culture of improvement and transparency is embraced, investments will pay off in reduction of waste, forgone inappropriate tests and procedures, and truly evidence-based care to the benefit of member, payer, and provider.  Systems and networks that have been early adopters of these measures have demonstrated positive results and continue to develop ways to improve.

Members benefit from improved health and quality of life, the motivation to strive for wellness, and personal out-of-pocket savings.  Everyone benefits through a system of care based on scientific evidence, adoption of best practices, high standards of quality of care and service, and enhanced communications between patient and provider. 

Physicians and hospitals gain enhanced linkage and alignment with each other, which facilitates implementation of quality improvement initiatives and provides “branding” consistency to patients and payers.  United branding helps present a collaborative entity working to improve the health of the population it serves.  The expansion of physician leadership in clinical care redesign improves revenue yield (e.g., P4P, global payments), facilitates clinical resource reduction, creates a sustainable form of gain-sharing, and provides a vehicle to increase market share and patient preference.

For more information on developing accountable and clinically integrated organizations, please contact James Smith at jsmith@thecamdengroup.com or 800.360.0603 x6108.

There is much to debate in drafting healthcare reform legislation:  who to cover, how to cover them, how to pay for it, and who will pay.  But one thing seems clear:  the current provider payment model that is based on a fee-for-service chassis is going to have to change.  The inherent incentive to do more than may be necessary coupled with inadequate accountability for the quality of care or health outcomes are two major reasons for rethinking the nation’s dependence on the fee-for-service model.  Accountable Care Organizations (“ACOs”) are being proposed as part of Medicare payment reform and are also being considered by some commercial carriers as a mechanism to shift responsibility to networks of hospitals and physicians for “bending the cost curve” and improving quality.  Is your organization (either hospital or physician group) ready for a world of ACOs?  Regardless of the organizational model selected, here are the top ten questions to discuss among senior leadership to assist in identifying action items to prepare for the “new world.”

1.  Do you have the ability to aggregate clinical and financial data from community physicians as well as hospital(s), pharmacies, and independent diagnostic centers? 

Changing and uncertain reimbursement methodologies are a cause for concern with most hospital boards.  A focused discussion of specific performance improvement efforts designed to manage costs and quality will open dialogue between management and governance, identify perceived versus real opportunities, and establish targets/accountabilities.  Key areas of focus must include labor cost management, productivity, clinical protocols, revenue cycle, patient throughput, and emerging models of care coordination.  Specific institutional performance compared to best practice benchmarks will foster board conversation.

2.  Do you have a culture and discipline to measure and enforce clinical and service standards?

This isn’t just a “brush-up” on traditional medical staff peer review.  This means creating a discipline that is less forgiving about inconsistent application of established standards and protocols.  It requires timely information (e.g., “report cards”) as well as timely feedback loops and education.  It also requires enforcement of sanctions if expected behaviors/outcomes are not being met.  This will apply to physicians, clinical staff, and administrative leadership.

3.  Do you have a culture that embraces and encourages a relentless pursuit of improved quality and efficiency in care delivery?

Achieving the types of cost savings likely to be demanded will require rethinking traditional ways of delivering patient care.  This starts at the physician office and includes every component of care along the continuum.  It truly begins in the patient’s home, where efforts to engage patients in taking responsibility for their health and self-care will be ever-more important.  The way that most patients interact with our healthcare system hasn’t fundamentally changed in 50 years, despite advances in technology and changing demographics.  While there are some models that may hold promise (e.g. medical home, wireless technology), the successful ACO will continually promote innovation in search of “a better way” to delivery clinical care.

4.  What is the depth of physician leadership to assist in driving this change?

Clinical integration, care delivery redesign, development of clinical guidelines, and reporting – all necessary components – require a deep bench of clinical leaders.  Today there is too often a dependence on a few physicians who are continually relied upon to drive change.  Developing emerging leaders through education and empowerment will be critical steps to be accomplished sooner rather than later.  This includes physician leaders as well as other members of the clinical team such as nursing, pharmacists, social workers, and educators – and yes, even administrators. 

5.  How do you currently interact with your community?

As providers, generally we prepare ourselves for the times when patients come to us for care or advice.  But in an ACO world, we will need to think more about the general population in our community – how do we reach out to them even if they do not need medical care right now?  What kinds of opportunities for electronic communication, home monitoring, or other forms of interaction have we implemented?  How robust is our patient web portal?  Do we really live our mission statement (which in many cases is to “improve the health of the communities we serve”)?

6.  How honest are you in assessing what you really do well (and not so well)?

In today’s world, the incentive is to provide as broad an array of services and capabilities as possible in an effort to capture as much volume (and revenue) as possible.  But in an ACO world, it is likely that you will want to take a much more objective view of what kinds of services you should be offering versus those that you should contract with others in the community to provide – who can deliver better outcomes more efficiently.  This is the time to truly evaluate, for example, whether you should be providing open heart surgery or whether another community provider is really more capable of delivering the outcomes and efficiencies required in a global payment environment.

7.  How close are you to having a “care management” culture to address the continuum of care?

Do your case managers work closely with hospitalists and other physicians in assuring that the most efficient care is delivered both in and outside the hospital (e.g. follow-up appointments, alerts for repeat admissions, etc.)?  Do your primary care physicians have mechanisms to identify problem signs in patients with chronic disease (e.g., ED activity, specialty referrals required, etc.)  Case management, where the focus is on managing patients who present with complex problems, needs to evolve to care management, where potential problems are identified before they result in expensive care.  Ultimately, this will require the capability to do predictive modeling to identify both individual patient risks as well as more general trends that impact health status of a population.

9.  Does your approach to capital decision-making include consideration for the potential of the project or equipment to improve efficiency or enhance quality ‒ or both?

Traditional ROI models that assume a consistent revenue stream based on today’s payment structure could lead to decisions that may be appropriate in the short-term, but fateful for the long-term.  Assumptions should weigh the risks of a rapid change in payment structures.  And leadership must weigh the pros and cons of investing in the future (i.e., IT and care management infrastructure) versus investing in the present (e.g. more imaging equipment).

9.  What incentives are built into your compensation structures?

Productivity models (e.g. wRVUs for physicians) work well in a fee-for-service environment, but if payment requires efficiency and quality outcomes, is your incentive structure going to facilitate achievement of the desired behavior and results?  Also a review of incentives for administrative leadership may be warranted – do the incentives reward “silo” performance at the expense of system-wide performance?

10.  How informed is your board, medical staff, and middle management?

Moving toward systems of accountable care requires all oars moving in the same direction, at the same time, and with a consistent effort.  That won’t happen unless everyone knows that the rules are changing.  The change in mindset and definitions of success will not happen overnight, and in fact will likely take years.  Assuring that all participants have a view into the future will facilitate effective change.

The concept of ACOs requires an organizational culture of mutual accountability based on individual responsibility – with a focus on optimizing the health (not just the medical care) of all patients – are you ready?

For more information on preparing your organization for ACOs, contact Laura Jacobs, MPH at 310.320.3990 or ljacobs@thecamdengroup.com.

Join us at this upcoming event in Scottsdale, Arizona, February 28 through March 2, 2010.  Our Senior Vice President, Brian Silverstein M.D., and our Senior Medical officer, Eric Nielsen, M.D., will be presenting on Sunday at 2:30 p.m.  They’ll be talking about value-based payment – from clinical integration to accountable care.   

Here’s a link to where you can register:  http://www.healthcarestrategy.com/conferences/2010/PSS2010.asp