Presentation is loading. Please wait.

Presentation is loading. Please wait.

Charles G. Ray Network-based Business Models in Behavioral Healthcare-Horizontal and Vertical Integration June 7, 2012.

Similar presentations


Presentation on theme: "Charles G. Ray Network-based Business Models in Behavioral Healthcare-Horizontal and Vertical Integration June 7, 2012."— Presentation transcript:

1 Charles G. Ray Network-based Business Models in Behavioral Healthcare-Horizontal and Vertical Integration June 7, 2012

2 Why Network-based Business Models?

3 1. Administrative Mandates (HIPAA 5010, ICD-10, etc.) 2. Care Management, Data Analytics, and Informatics. 3. Health Insurance Exchanges and Individual Markets. 4. New Provider Payment & Delivery Systems (ACOs, PCMHs, etc.) 5. Bending the Cost Curve. 6. Medicare and Medicaid. 7. Health Information Exchanges and EMRs. 8. Consumer's Role in the Modernization of Healthcare (social networking, incentives, CDHP, etc.) 9. Reform Uncertainties. 10. Payer/Provider Interoperability. We’re Not Alone Top 10 Issues: Managed Care Executives Group

4 1. Be Strategic with Health Insurance Exchanges 2. Regulate Commercial Health Insurance Market Effectively 3. Simplify and Integrate Eligibility Systems 4. Expand Provider and Health System Capacity 5. Attend to Benefit Design 6. Focus on the Dually Eligible 7. Use Data Meaningfully 8. Pursue Population Health Goals 9. Engage the Public in Policy Development and Implementation 10.Demand Quality and Efficiency from the Health Care System We’re Not Alone 10 Priorities: National Academy for State Health Policy

5 What to Expect? More… Emphasis on mission-critical IT infrastructure, certified systems, and Meaningful Use Aggressive contracting with commercial payers and discounts Managed care and utilization review Medication assisted treatment (MAT) ACOs and Patient-Centered Medical Home (health home) models (integration and consolidation) Care Coordination and Medical Case Mgmt Standardization of practice guidelines

6 More… Complex coding and electronic billing (EDI) Demand for data management and reporting Competition Integration Merger & Acquisition

7 Stronger business acumen Aggressive strategic planning Accelerated business modeling Subject Matter Expertise Affiliation, Joint Ventures and Mergers & Acquisitions – Strength in Numbers! Resources and Capabilities to Execute Demand for…

8 Vertical Integration –Unify the supply chain under one roof (single owner) –Each “link” produces a market-specific service that satisfies a common need, coming together for a single service experience –Examples? Professional Education + Prevention + Treatment + Case Mgmt + insurance Horizontal Integration –Strategy for increasing market share by associating with, merging with or acquiring like companies in adjacent or overlapping markets –Unifying marketing capabilities to present a common brand image Integration

9 1.Complexity and Variation: multiple payer systems, enforcing disparate code-sets and applying different business rules with varying approaches to reimbursement 2.Changing business and regulatory environments 3.Increased competition and medicalization 4.Demand for integration and consolidation 5.Selecting and implementing IT 6.Access to sufficient subject matter expertise 7.Access to capital What Problems Should We be Solving?

10 Discontinuity and Disruption (P. Druker) Instability (A. Toffler) Decay and Irrelevance (G. Hammel) Tipping Point (M. Gladwell) Strategic Inflection Point (A. Grove) Value Migration (A. Slywotzky) Disruptive Innovation (C. Christensen) Key Concepts for Today

11 Provider Network Models Independent Practice Association (IPA) Management Services Organization (MSO) Administrative Services Organization (ASO) Technology Services Organization (TSO) Community Behavioral Health Organization (CBHO) Specialty Preferred Provider Networks

12 Some business models assemble providers in self- directed groups within a geographic region to invent and implement healthcare solutions, form collaborative efforts to implement these solutions, and to exert political influence upward within the medical and payer communities to effect positive change. Shared services can include facilities, personnel, supplies, services, technology, and professional services including credentialing, billing, marketing, legal and accounting. Definition

13 IPA, MSO, TSO - Some network models are primarily concerned with shared services, especially billing and IT. The entity’s revenues come from its members. ASO, CBHO, IPA - Some are more concerned with managed care contracting and may assume financial risk in capitation, sub-cap and carve-out models –These models develop additional centralized capacity for network management, utilization review, quality assurance, claims re-pricing and processing –Revenues come from payers PPN - Others desire to contract at discounted fee-for-service rates with many payers, owning as much of the market share as possible while centralizing credentialing. Revenues also come from payers. Definition

14 By Payers Network Access Fees (“rental” or “lease” models) based on numbers of “lives” served Recurring administrative service fees Percent of savings Capitation profit model By Providers Recurring administrative fees Distinct service fees Getting Paid

15 Credibility and reputation of participants Trust and collegial relationships Alignment of financial incentives Adequate time for implementation Professional management and access to expertise Financial Plan and access to capital Deep understanding of market & niche Critical Success Factors

16 A.Centralized Practice Management Services B.Marketing and Contracting (avoiding price fixing!) C.Technical Support, Training and Education D.Billing Operations E.Information Technology F.Procurement G.Professional Services (consultants, legal, accounting) Core Functions

17 Provider owned and operated entities developed to provide access to infrastructure and core capabilities for the benefit of members. Includes formal organizational structure, mission, governance, management, staff, budget, policies, procedures, infrastructure and core services Common Features

18 Increases funding opportunities Enhances revenue management and cash flow Provides a centralized, reliable source of expertise and dedicated IT support Enhances purchasing power and allied representation Promotes industry standard operating procedures and Best Practices Improves capacity to respond to change Increases user satisfaction among clinic staff and providers Creates economies of scale and strength in numbers – critical assets in the new business environment Common Benefits

19 Self-insured employers Health plans Managed care organizations Publicly-funded programs Medicaid managed care plans Managed behavioral health organizations Markets

20 Accreditation (NCQA, URAC) Claims throughput and accuracy Customer service Access to services Network’s quality of care Outcomes Patient Satisfaction with network Overall savings accrued to payers (claims and admin) Performance Measures

21 Insurance Laws (being careful not have to become a licensed HMO) Anti-Kick-Back Laws (and anti-referral laws) Anti-Trust Laws (observing price-fixing and monopolies) Reimbursement (cannot bill for centralized services) Discontinuing relationships (survivability of contracts) Common Concerns

22

23

24

25 Mission & Goals (PSO Sample) Mission –To provide members a foundation to continuously improve upon their business practices, administrative efficiency, quality of care, and clinical outcomes through enhanced deployment and utilization of information technology Goals 1.Enhance revenue through improved operational efficiencies 2.Capitalize on economies of scale and technical expertise 3.Achieve greater reliability and stability in data management and information exchange 4.Assist providers in improving care and outcomes

26 PSO Model Hosting Services Server Administration Operations Connectivity Disaster Recovery Hardware and Operating Systems Upgrades ASP Services Software Patches, Upgrades and Maintenance User Support Training Implementation Reporting Electronic Data Interchange (EDI) & Health Info Exchange (HIE) Services Data Integration Mgmt Data Warehousing RHIO Participation Transaction Processing Business Intelligence Consulting Services Strategic Planning Process Improvement Help-Desk Office Automation Project Mgmt

27 PSO Model Hosting Services Server Administration Operations Connectivity Disaster Recovery Hardware and Operating Systems Upgrades ASP Services Software Patches, Upgrades and Maintenance User Support Training Implementation Reporting Electronic Data Interchange (EDI) & Health Info Exchange (HIE) Services Data Integration Mgmt Data Warehousing RHIO Participation Transaction Processing Business Intelligence Consulting Services Strategic Planning Process Improvement Help-Desk Office Automation Project Mgmt Members Non- Members Trading Partners and Payers

28 ASP Services Key benefits include expert applications support, system configuration management, help desk management and software upgrade support. Sample Services:  Software Maintenance – Application configuration, DBMS management, management of software patches and major software upgrades for hosted PSO-standard applications  User Support – Problem resolution and vendor liaison support for hosted PSO-standard applications  Application Training – End user training for hosted PSO-standard applications  Implementation Support – Project management associated with the installation and implementation of hosted PSO-standard applications  Report Development – Analysis, design and development of application based reports for hosted PSO-standard applications

29 EDI/HIE Services Key benefits include access to a central technology and support organization to implement and manage health information exchange activities. Sample Services: Data Integration Management – Planning, management, implementation and on- going monitoring of interfaces and data integration tools including interface engines and ETL tools Data Warehousing – Development of data warehouse/repositories and associated interfaces/extracts RHIO Administration – Coordination and planning with data sharing partners Transaction Processing – On-going operations, management, monitoring, maintenance and problem resolution for EDI/HIE transactions Business Intelligence– Analysis, design and development of reports, portals and BI tools

30 Consulting Services Key benefits include access to more cost-effective IT professionals on an as-needed basis to enhance members’ existing IT resources Sample Services:  Planning – Strategic planning, needs assessment and product evaluation  Operations Improvement – Business reengineering and operations improvement associated with PSO-standard applications  Help Desk Support – Receipt, triaging, logging, dispatch and tracking of service requests  Support – Administration and maintenance of accounts  Office Automation Support – Administration and end user support for hosted office automation applications (e.g., word processing, spread sheets and publication software)  Project Management – Planning and oversight of IT related projects (e.g., product selection and implementation)

31 Examples Community Health Access Network (CHAN) –CHCs in New Hampshire –Technical and application support services for , Internet access and 3 software applications: EMR, PMS, Finance Health Choice Network (HCN) –Florida-based, CHCs and other providers in 10 states –Strategic Planning, application hosting, network administration and various other IT services. Council of Community Clinics (CCC) –CHCs in San Diego and Imperial Counties –Project management, application hosting, network administration and various other IT services Oregon Community Health Information Network (OCHIN) –State of Oregon, CHCs in Oregon/California, CareOregon, and HRSA –ASP support for EPIC EMR and other IT services Community Health Center Association of NY State (CHCANYS) –More than 50 CHCs throughout New York State –Funding advocacy, best practice collaboration, vendor coordination, and IT leadership and direction of New York Health Choice Network (NY HCN)

32

33 Financial Models For-Profit / Not-for-Profit Subscription/Membership Monthly Dues Access Fee Transaction Fee Joint Venture Ownership/Shared Cost of Doing Business

34 Next Steps 1.Assess Level of Interest Among Allies 2.Assess Needs, Capabilities and Commitment Gap Analysis Cost/Benefit Analysis Readiness and Capabilities Assessment 3.Conduct Regulatory Analysis 4.Conduct Market Analysis Determine size of potential market and demand for offering Assess capacity to reach decision-makers and close deals 5.Develop a Multi-Year Financial Plan Determine capital available and capital required Determine ability to absorb risk Determine ROI goals Develop feasible and sustainable business model

35 Assessment Market and demand Business and Strategic Plans Leadership Team Board Staffing Performance Financials IT Infrastructure Alliances Regulations

36 Planning Business Plan Financial Plan Strategic Plan Marketing Plan Contingency Plan IT Plan Implementation Plan Product/Service Development Staffing Plan (Recruitment & Retention)

37 Review Key Business Decisions Feasible and Sustainable Market Type of Entity Ownership Structure and Governance Models Meet Resource Requirements – personnel, technology, professional, and financial Engage Subject Matter Experts Develop Implementation Plan

38 Thank You Charles G. Ray AHP Healthcare Solutions


Download ppt "Charles G. Ray Network-based Business Models in Behavioral Healthcare-Horizontal and Vertical Integration June 7, 2012."

Similar presentations


Ads by Google