Grassroots Physician Perspective of ACO Transition Building & Executing New Delivery Models Philip Gaziano, MD CEO and Chair of ACA November 17th, 2013

ACA & QHI Introduction Accountable Care Associates, LLC (ACA): Founded in 2010, it is physician owned and operated, and a provider MCO to support and partner with physicians and hospitals in managed healthcare delivery. Philip Gaziano, M.D. is Chairman and CEO, and he helped develop some of ACA’s services from 1998 to 2010 in Hampden County Physicians Associates, a Massachusetts based multi-specialty physician practice now served by ACA . ACA Provides: Contracting, Consulting, Care Coordination, Reinsurance, Coding, Clinical Rounding, Provider Educational, Chart Auditing, Risk Adjustment, Compliance, Quality Measures Management, Custom Work Flow Design, and Other Provider MSO Services for Managed Healthcare Delivery. Quality Health Ideas, LLC (QHI): Founded in 2003, it is an IT and Data Management Company, that is physician owned and operated by Philip Gaziano, M.D. and Felicitas Thurmayr, M.D. Ph.D. QHI Builds and Provides: Data Management, Quality Registry, Decision Support, EMR/EHR Integration, HIE Integration, and Web Integration Tools and Services. Phil to present slide

Healthcare Delivery & Payment Improvements Require: Care Coordination, Clinical Support, Admin & Medical Director Support, & New Data Services & Tools The Good News Is That: Costly, Slow, Data or Corporate Integrations Are Not Necessary © 2013 All Rights Reserved

About, Our Network, Integration, & Provider Diversity In 7 States (soon to be 10 to 11) We are Now Serving: 1,500 PCPs & over 50,000 Network Specialists Connected to 37 Hospitals (17 Hospitals = Partners) 50% of PCPs are in practice groups of 1, 2, or 3 20% of PCPs are still use paper charts 29 different PCP EMRs – that do not share data Hospitals have different EHRs, not connected to PCPs Integrated – Only By Our Web Tools © 2013 All Rights Reserved

We Are Adding Medicare ACO Members in up to 11 States for 2013 Our ACA & QHI Growth HCPA 1996 Total PCPs Served: 7 Total Network Docs: 250 Managed Members: 300 Our Employees: 1 Counties / States: 1 / 1 Care Managed ($Million/yr.): 0.2 ACA 2010 140 2,000 18,000 18 3 / 1 125 January 2012 250 5,000 34,000 50 4 / 1 290 Late in 2013 1,500 >50,000 150,000 >150 30 / 10 $1.5 Billion We Are Adding Medicare ACO Members in up to 11 States for 2013 © 2013 All Rights Reserved

Global Delivery Systems We Have or are Developing Services For: Medicare Advantage (Including SNP) Medicare ACOs (Pioneer & Shared Savings) Managed Medicaid Dual Eligible (Medicare + Medicaid: SCO, PACE…) Commercial Plans (HMO & PPO)(Like BCBS-AQC) State ACOs, Exchanges, Coops, and Pilots Captives & Self Insured © 2013 All Rights Reserved

Old HMOs vs. New ACOs: © 2013 All Rights Reserved

Physician Perspectives Change is hard (usually only done if no other option) Choices: Independence vs. Practice Aggregation “One size doesn’t fit all” & “Timing is Everything”* Satisfaction from: quality, control, & compensation Risks (financial & legal) must be low Changes require new data, but (too much data – or confusing & wrong data is worse) Improved providers’ work flows are needed (wrong tools can: reduce efficiency & increase risk) Needed guidance, & support… …whom to call & with whom to partner? © 2013 All Rights Reserved

Where is Healthcare Waste ? Repeated Testing Unmanaged Pharmacy Reduced Prevention Unmanaged Chronic Diseases Some Post Acute Discharge Expenses Member Psychosocial Needs © 2013 All Rights Reserved

Some Global Budget Examples Healthcare Spending ($/Year) % Possible Waste % Physician Costs % Hospital Costs SNF Costs Rx. Other Costs % Management Infrastructure Costs (Old) Commercial $6,000 15+% 20% 22% 5% 23% 8% Medicaid $8,000 20+% 15% 30% 10% Medicare $11,000 30+% 11% 12% 24% © 2013 All Rights Reserved

Our Budgetary Goals 15+% 20% 22% 5% 23% 8% 20+% 15% 30% 10% 30+% 11% Healthcare Spending ($/Year) % Possible Waste % Physician Costs % Hospital Costs SNF Costs Rx. Costs % Other Costs % Management Infrastructure Costs (Old) Commercial $6,000 15+% 20% 22% 5% 23% 8% Medicaid $8,000 20+% 15% 30% 10% Medicare $11,000 30+% 11% 12% 24% © 2013 All Rights Reserved

Management Budgets Old Style Managed Care (HMO Type): Newer Delegated Style (as by ACA) (HMO, PPO, ACO…) Managed Care: New Private &/Or Hospital Based © 2013 All Rights Reserved

Medicare Budget Outcomes: Medicare Members Ranked by % of & Total Annual Expenses % of Total Care Budget Used $ Million Used For 6,000 Members Not Managed ACA Top 3% 50% 42% 30.0 20.2 Next 17% 30% 43% 18.0 16.3 Next 30% 10% 12% 6.0 5.8 Lower 50% Total: 100% 60.0 48.0 © 2013 All Rights Reserved

BCBS-AQC Efficiency Outcomes © 2013 All Rights Reserved

AQC Quality Measure Outcomes: 2012 BCBS-AQC PCP Scores for Quality/P4P -vs.- CareScreenTM Office (Not Necessarily the PCP) Use /100 Members /Year © 2013 All Rights Reserved © 2012 All Rights Reserved

Our 4 Year AQC Outcomes & Both Quality and Satisfaction Improved 7.9% 5.5% 4 yr. Ave. = below 2% /yr. 2011 & 2012 = 0% = Real Savings & Both Quality and Satisfaction Improved © 2013 All Rights Reserved

Unique Aspects of ACCS Our National Medicare SSP-ACO Does Not Require Practice Integration ACA Centralized Data and Compliance Local Clinical Control & Branding Proven Care & Quality Coordination Proven Provider Education, Audits, & Feedback No Initial Costs For Local Group Free Data Tools + Clinical Support New QVU Payment system available © 2013 All Rights Reserved

Our QVU Based CMS Innovation Center Grant Based on our new QVU Payment Data Medicare, Medicaid, Dual Eligible, & Chip Commercial Too – We Have 6 Partners Added Information Sharing A Model for the Future © 2013 All Rights Reserved

Global Delivery Risk Reduction Best practice activities increased Test tracking = better than EMR alone Malpractice cases are reduced Malpractice premiums decreased Satisfaction improved for all Practitioner work flow redesigns help Global Delivery Systems Should Reduce Risk © 2013 All Rights Reserved

Overall Quality Measures: (Medicare, Medicaid, & Commercial) All measures improved All practitioners improved Practice & provider cultures are changing Members noticed and satisfaction is up The health plans and employers noticed Our MA Plans Ranked #2 & #4 in US

A Multi-Specialty Group Breakdown 16% of Members are in global managed care contracts, And they require 19% of the PCPs’ time (about 5 to 10 extra min. /visit)  Contributes 50% of practice revenues (for RVUs, QVUs, & management) © 2013 All Rights Reserved

Payment Considerations © 2013 All Rights Reserved

Fee For Service (RVU Based) Payments = Volume Payments Do not account for quality differences Do not reward prevention Do nor reward efficiency (savings) Do not reward Care Coordination May Reward adverse effects and bad outcomes © 2013 All Rights Reserved

Capitation Payment Considerations May account for quality differences Rewards prevention better May reward efficiency (savings) May reward Care Coordination May change who sees the beneficiary May be interoperated as an entitlement © 2013 All Rights Reserved

Global Payment Considerations Accounts for and rewards quality Rewards prevention best (and promotes wellness) Rewards efficiency (and gives savings) Rewards Care Coordination Produces the greatest innovation The way of the future © 2013 All Rights Reserved

QVUs (Better than RVUs for Global Systems) QVUs = Quality Value Units Designed by ACA & QHI for Payments Tracked and Reported Real Time Attributed QVUs Have Predictive Value Provide Quality Tracking Provide Budget Tracking © 2013 All Rights Reserved

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