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London Health and Care Leaders Forum 11th March 2014 Payment Innovation Break-out 1.

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Presentation on theme: "London Health and Care Leaders Forum 11th March 2014 Payment Innovation Break-out 1."— Presentation transcript:

1 London Health and Care Leaders Forum 11th March 2014 Payment Innovation Break-out 1

2 There are 3 major complementary payment models being deployed in US 2 Full alignment of payment to outcomes Most applicable for: Episode-based payment  Retrospective Episode Based Payment (REBP)  Bundled payment Pay for value ▪ Bonus payments tied to quality ▪ Bonus payment tied to value Population-based payment ▪ Capitation ▪ Care for people with long term condition (e.g., managing diabetes, CHF) and elderly ▪ Primary prevention for healthy ▪ Acute procedures (e.g., CABG, hips, perinatal) ▪ Most inpatient stays including post-acute care, readmissions ▪ Acute outpatient care (e.g., broken arm, URI, some cancers, some behavior health) ▪ Discrete services provided by entity with limited influence on upstream or downstream costs (e.g., MRI, prescription, medical device, Health Risk Assessment)

3 These models deliver significant net savings % range 7-10% most Сost savings as %

4 Speakers 4 Dr. Philip Ozuah John Wardell Ric Marshall

5 Payment Innovation Philip O. Ozuah, MD, PhD Chief Operating Officer Montefiore Health System

6 National Health Expenditures Per Capita

7 Health Expenditures as % of GDP

8 Byzantine Medicare Inpatient Payment Hospital Adjusted Operating & Capital Base Payment Rate 2009 Operating & Capital Base Payment Rate 2008 Update Wage Index MS-DRG Weight (Medical Severity Adjusted* Diagnosis Related Group weight **) Hospital Adjusted Base Payment Rate 2009 * Principal Diagnosis, Procedure, Complications & co-morbidities ** 745 individual DRG weights Direct (pass-through) & Indirect Medical (Interns, Residents/bed) Education Pmt. Disproportionate Share Payments (if Medicaid & SSI Pt Days >15% of total) Other Policy Payments (Critical Access Hospital>35 mi, Medicare- dependent>60%) Outlier Payments (Est. Cost > Loss Threshold) Reduction for Early Transfer (LOS

9 Complicated Medicare Physician Payment Limitation Adjusted for geographical cost factors Conversion Factor 2009 Conversion Factor 2008 Update Relative Value Units (RVU)* -work -practice expense -malpractice expense Physician Payment Rates by procedure 2009 * Determined for 10,000 procedures as defined by Healthcare Common Procedure Coding System (HCPCS) UPDATE ADJUSTMENT FACTOR (UAF) SUSTAINABLE GROWTH RATE (SGR) Growth rate that reflects inflation, enrollment, real GDP per capita and policy changes Change required to recoup (or pay extra) the cumulative difference between actual changes and max allowable under SGR (=< 7%) Copyright 2008, J.B. Silvers, Weatherhead School of Management. Case Western University

10 Cost Shifting Approach To Financial Sustainability *Source: RR pdf, shows hospital operating margins by payer from 2006, based upon American Hospital Association survey datahttp://publications.milliman.com/research/health-rr/pdfs/hospital-physician-cost-shift- RR pdf Hospital Operating Margins by Payer* 3.8% overall margin Cross-subsidization

11 Alternative to Cost Shifting Focus on efficiency and rooting out waste to improve operating margins

12 The challenge Traditional Fee-for-Service Pay-for- Performance Bundled Payments Shared Savings Partial Risk Full Risk Episodic Cost AccountabilityTotal Cost Accountability Minimal Substantial Savings Potential for Health Plans and Customers Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives

13 Montefiore’s model is evolving… FromTo Fee-for-serviceRisk & shared savings One marketMultiple markets Scale for volumeScale for covered lives CentralizedNetworked Owned entitiesPartnerships More employed MDsMore voluntary MDs Evolving model…

14 This is payment and delivery system reform

15 London Health and Care Leaders Forum 14th March 2014 John Wardell Deputy Chief Officer Tower Hamlets Clinical Commissioning Group 15

16 16 Tower Hamlets before networks 8 Networks 1 were formed in the borough during 2009 Why networks? Focus on population health across a geography Collaborative relationships with wide range of partners (e.g. Borough, schools, charities) Sufficient scale for specialisation of staff, ability to access rare skills and ensure access, resources (e.g. equipment) Integration with estates plan Understanding the development of federated networks Pop: 29,892 Pop: 18,027 Pop: 29,801 Pop: 35,720 Pop: 28,995 Pop: 33,186 Pop: 27,839 Pop: 31, LAPs 36 practices Total population of ~245,000 Practice list sizes of 3,000 to 11,000

17 17 Case for change… Wide variation in clinical practice and outcomes for diabetes patients Economies of scale Poor uptake of diabetes education and retinal screening Need to do things differently The right people to do the right tasks at the right time Specialist support Transparency of data Putting the patient at the centre of their care

18 18 How did it work… Care packages are:Networks: Focus on population health across a defined area Have collaborative relationships with a wide range of partners (e.g. Borough, Schools, Charities) Provide sufficient scale for: – Specialisation of staff – Ability to access rare skills – Resources (e.g. equipment) – Ability to ensure access Integrate with estates plan Organisational developmentInformation and technology What supports it all? Payment Model Contracted at network level 70% upfront and 30% on performance Reducing variability through the use of evidence based pathways Ensuring the right people to do the right tasks at the right time Enabling transparency of data at individual patient, clinician, practice, and network level Facilitating an integrated and coherent approach Costing of care packages

19 19 Outcomes

20 Improving MMR vaccination rates: herd immunity is a realistic goal. Cockman P, Dawson L, Mathur R, Hull S, BMJ2011;343doi: /bmj.d5703 MMR Immunisation Maintaining MMR improvement 20

21 21 Good clinical leadership and engagement of specialists Emphasis on quality of care and outcomes for patients Contracting and paying for outcomes Organisational development IT and information sharing Presentation of the right data regularly Geographical network boundaries (not based on historical practice relationships with one another) Critical success factors

22 Behaviour change Guideline EducationIncentives Comparative Feedback Practice networks BeliefActMotivate IT Equity audit IT Dash- board IT Review & recall IT Prompts & Decision support 22

23 23 Integration Going Forward

24 24 Forward Plan 2015/16 and 16/17 shadow capitation 2014/15 and 15/16 local provider consortia Current state and 14/ /17 fully capitated Enablers for end state Payor/provider configuration Local CCGs provider consortia for all IC services Reimbursement model Capitated model Pay for performance model Service configuration Services contracted through consortia Services contracted individually Health and social care Pooled social and health funding Joint working agreed Separate social and health funding Outcome linked reward/risk Provides control/share full risk for activity and outcomes Providers share more risk for activity and outcomes Commissioners bear risk for activity and outcomes Might need to break PbR for target population Indicative individual budgets with shadow capitation model Indicative individual budgets Agreement on reimbursement models to be implemented

25 25 What are we commissioning for integrated care WELC will provide nine key interventions for its population underpinned by five components and enablers Health and social care navigation Self-care, behaviour, and expectation management Care planning Specialist input In the community Discharge support from acute to community Discharge support for mental health patients from secondary to primary care Rapid response with short team reablement Mental health liaison (RAID) Areas of interventionsEssential components Information sharing platform Evidence-based pathways & care packages (e.g. last years of life, diabetes, COPD, CHD. falls,alcohol and substance misuse) Joint health & social care assessment Creation of new roles within the workforce: Case manager Hybrid health & social worker Health & social care coordinator Discharge coordinator based in acute wards Organisation of practices into networks Enablers Patient engagement Joint decision making and accountability Clinical leadership and culture development Information sharing and decision support Aligned incentives and reimbursement models Care coordination Ensuring people are in the most appropriate setting of care Self-care Joint health, social care and mental health approach Case management

26 26 Contracting approach – Standard NHS Contracts CCG Mental Health Liasion (RAID) Discharge Management Rapid responseSocial services Care Co- ordination Integration function delivered collectively by all providers in collaboration Generic schedule for all Provider specific schedules

27 Provider assurance process Indicative summary provider development approach to commissioning integrated care services Prospectus Brings key documents together Adds detail to provider letter Signals what might be in future phases Payment mechanism Sets out approach to payment on outcomes Outlines incentives for providers to work together to provide integration of services Provider letter Lists for each provider the services we anticipate they will provide in 14/15 Signals 70/30 split for 14/15 Outlines next steps (below comes from CCG) KPIs Sets out individual services and system side performance measures SEP month procurement process Stage 1 assessment Individual providers outline how they will provide services against the borough integrated care services specifications Also asked about how they will integrate with others OCT Stage 2 assessment Providers given feedback to Stage 1 Providers asked jointly to outline how they will ensure services are integrated Asked if they are revising responses to Stage 1 in the light of and feedback or work done with other providers to date NOV-JAN Provider collaborative interview Providers given feedback to Stage 2 and questions to answer at interview Presentation and interview on collaboration governance arrangements and plans to deliver jointly on KPIs JAN Evaluation Further dialogue with providers about plans and clarification of details FEB Formal tender process Likely to be competitive dialogue Likely to be 6-9 months MAR Not approved Contracting process Service specification and integration written into existing contracts with providers Payment on outcomes 14/15 Approved Dashboard 27 Monitoring Development of 15/16 contract begins for similar process to start in Sept 2014

28 Questions? 28

29 London Health and Care Leaders Forum 14th March 2014 Ric Marshall Director of Pricing Monitor 29

30 Contents 30 The Health & Social Care Act 2012 What next for 2014?

31 The Health & Social Care Act 2012 sets out the approach for pricing and the roles for NHS England and Monitor

32 What next for 2014? 32

33 Thank you….. Any questions please? Further information : nhsft.gov.uk/sites/default/files/publications/MakingThePaymentS ystemDoMore%20-%2028Feb.pdfhttp://www.monitor- nhsft.gov.uk/sites/default/files/publications/MakingThePaymentS ystemDoMore%20-%2028Feb.pdf


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