1. Accountable Care Organizations: Payer and provider collaborations to increase population health Continuing Education: Iowa

2. Welcome and introductions Why Accountable Care? What Are Accountable Care Organizations? How do Accountable Care Organizations differ from Traditional Models? Success of Accountable Care Take Home Messages Q&A Today’s discussion 2

3. Why Accountable Care?

4. The Affordable Care Act did not solve the health costs crisis – ACOs can help Improve quality Improve satisfaction Improve efficiency External ACO goals An Accountable Care Organization (ACO) is a provider-based organization willing to take responsibility for managing the health of a defined population 4

5. 70% Adults who had difficulty making doctors’ appointments, getting phone advice, or receiving care after hours 27% Report that no one informed them of their test results or they had to call repeatedly to obtain them 47% Report at least one failure of coordination, e.g., communication between health care providers Only 50% Say their provider asks about their goals and concerns $3.5 billion Cost of medication-related injuries that harm 1.5 million people per year 44,000 People who have died in hospitals each year as a result of preventable medical errors $2 billion Annual cost of medical errors for hospitalized patients 5 The case for change Sources: *Improving Quality and Reducing Costs in Health Care: Engaging Consumers Using Electronic Tools Bipartisan Policy Center Health Information Technology Initiative, December 2012 2012: Towers Watson/National Business Group on Health Employer Survey, 2006: Board of Healthcare Services, Institute of Medicine, “Preventing Medication Error”, 2010: Adapted from Organization for Economic Cooperation and Development, OECD Health Data

6. 6 Why do providers want to change? Private payers are hospitals’ most profitable business… …And they are a shrinking part of hospital revenues Aggregate Hospital Payment-to-Cost Ratios Distribution of Hospital Cost by Payer Type (% of Total Cost) - 1980 / 1990 / 2010 Breakeven Source: American Hospital Association Chartbook, “Treads Affecting Hospital and Health Systems”- Chapter 4.5 “Distribution of Hospital Cost by Payer Type, 1980, 2000, and 2011” and Chapter 4.6 “Aggregate Hospital Payment-to-Cost Ratios for Private Payers, Medicare, and Medicaid, 1991 – 2011” AHA. 2012. http://www.aha.org/research/reports/tw/chartbook/ch4.shtmlhttp://www.aha.org/research/reports/tw/chartbook/ch4.shtml

7. PROVIDER RISK PROVIDER REWARD Total accountability for cost and care Changes to care processes Metrics about care SAVINGS Competitor A Competitor B Competitor C Leading the industry to a better model of care Pay-for-Performance (P4P) Patient Centered Medical Home (PCMH) Accountable Care Organization (ACO) attribution High performance networks Joint venture ACO product

8. What are Accountable Care Organizations?

9. Better health outcomes Empowered doctors Engaged patients += 9 Electronic Medical Record Care Management Solutions Health Information Exchange Real Time Claims Analysis Technology Support Care Management Support What is an accountable care organization (ACO)?

10. Insurance Carrier and Healthcare Provider Members Enhanced member experience Lower out-of-pocket costs Quality-based, coordinated care Tools to support a healthy lifestyle Employers Cost savings Sustainable solution Improved quality Enhanced wellness and care management Improved employee productivity Care Providers Brokers Innovative client cost savings solution Increased growth through opportunity to differentiate Reimbursement incentives aligned with efficient, quality care based on measures and patient satisfaction Technology enhancement supporting care coordination 10 Accountable care benefits all stakeholders

11. Better Health Better Cost Better Care 11 Population Health Management Care Coordination Patient Engagement Goals of Accountable Care Organizations

12. How do Accountable Care Organizations differ from Traditional Models?

13. 13 Three transformational goals make the difference: 1.Improve patient health at a lower cost – strategic financial incentives drive the insurance carrier and the provider system to work in collaboration to improve quality while controlling costs. 2.Technology to help patients make informed health care decisions – doctors use technology that provides the right information at the right time to make the best possible decisions. 3.An exceptional member experience – a coordinated and measured experience that improves health outcomes. Moving from patient treatment to population health management

14. Accountable Care Network Insurance carrier will provide: A comprehensive plan design Innovative online tools for members Insurance carrier will provide: A comprehensive plan design Innovative online tools for members Healthcare organizations provide: Network physicians More member management at the primary care level of chronic conditions Healthcare organizations provide: Network physicians More member management at the primary care level of chronic conditions Improved care quality and coordination A risk/reward pay model for insurance carrier and physicians to encourage quality, efficiency & patient satisfaction 14 A unique collaboration between insurance carriers and healthcare providers Accountable Care Network

15. Patient Primary care physician Specialist physician Lab work Pharmacy Home health Outpatient Inpatient Electronic Health Record 15 One patient. One record. Integrated health care delivery system.

16. 16 Chronic Heart Conditions Other Chronic Conditions Preventive Care Hypertension: High blood pressure control Lipid profile, low density lipoprotein control, Aspirin or other antithrombotic treatment Heart Failure monitor Tobacco cessation Colorectal cancer screening High blood pressure screening Flu vaccine BMI screening and follow up Mammogram Diabetes – LDL, blood pressure management, HA1c, tobacco non-use, Aspirin treatment for IVD patients ACO CARE: Screening for future fall risk Example metrics to evaluate the ACO’s ability to manage population health Lower cost, better experience and higher quality too

17. Success of Accountable Care Models

18. 28% – 64% More patients reaching blood pressure and cholesterol level goals 1 (NovaHealth) 50% Fewer hospital bed days 3 (Carilion) 10% Fewer high-tech imaging scans 2 (Carilion) 11% More generic drug prescribing 3 (Carilion) 12% Better per member per month (PMPM) payments 3 (Banner) 7% Better use of medical services 3 (Banner) 32% Fewer hospital readmissions 3 (Banner) 9% Less radiology use from 2012 to 2013 3 (Banner) 5% Lower medical trend 3 (Banner) 19% Fewer avoidable emergency room visits 3 (Carilion) Actual results may vary. Changing how health care is delivered. And already seeing great results. 18 Sources: 1 ”Payer-Provider Collaboration in Accountable Care Reduced Use and Improved Quality in Maine Medicare Advantage Plan,” Aetna and NovaHealth, Health Affairs, Volume 31, Number 9, September 2012. 2 Aetna-Carilion accountable care network, Modern Health Care, December 17, 2013. 3 Aetna ACS Analytics, for the year 2013.

19. Traditional Health Care Patient fills out multiple paper forms with the same information Accountable Care Information is all in one record; no need to fill out multiple forms As data are limited, doctor can’t compare clinical information Patient data are analyzed and presented with treatments based on best practices Patients seek care only when they are already sick Limited ability to improve quality Provider payments contingent on service volume At-risk patients are identified early and treated before crises occur Better care management decisions Provider payments are aligned to focus on improvement of quality, clinical efficiencies and total cost of care Incomplete or lost information leads to duplicate tests Entire care team has access to the same information Accountable care improves upon the traditional health system 19

20. A Look Ahead

21. Today’s business model Focus on volume Impersonal care Onus on member to share health information Lots of duplicative tests Treating symptoms Tomorrow’s business model Focus on value Personalized care plans for chronic, at risk and healthy patients Efficient use of member’s time through information sharing Improving health outcomes Integrated care plan Patient Provider Payment reform Health plan services Care management Health information technology Accountable care changes the provider focus from volume to value to drive sustainability 21

22. Questions?