Download NM MOR

Medical Economics or “What makes me
mad about Health Care reimbursement”
Lance Wilson, M.D.
Senior Medical Director
ABQ Health Partners
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
Agenda
• About me
• Where is your head on this?
• Objectives
• “Outside Hospital” Video
• U.S. Health Care Spend Figures
• Behavioral Impact on Spend
• FFS vs. Value
• Medicare Advantage Primer
• Small Group Discussions
• Questions
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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About Me
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Questions
• Where does Health Care happen most of the time?
• Where should it happen?
• What type of practice do you want to be in and why?
-Health System Owned
-Integrated System
-Health Plan Owned
-Independent
• What do you want to focus on in your practice?
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Objectives
• Describe the factors that contribute to the Health Care spend in the US,
including the categories and the sources of funding.
• Understand the impact of behaviors on the burden of cost.
• Contrast volume (FFS) based care and value based care models.
• Understand the basic funding mechanism for Medicare Advantage
plans
• Understand the different practice models so as to make an informed
decision about what type of practice you want to end up in.
• Develop an internal prioritization plan for how you will truly impact the
health of your patients in your practice.
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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“Outside Hospital”
https://www.youtube.com/watch?feature=
player_embedded&v=xskFo75Wdhs
Can’t get this video
embedded, if you will have
internet access, will you
please have it ready to go?
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Consumer Price Index (CPI) vs. Health Care CPI
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Spend as % GDP Developed Countries
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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2014 US Spend by Category in Billions
Other Supplies,
DME, $46 $57
Rx, $298
Home Health, $83
Nursing Home, $156
Hospitals, $972
Other Services, $150
Dentists, $114
Physicians, $604
Other Providers, $84
Total spend ~ $3 trillion
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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2014 US Spend by Funding Source in Billions
$991
$619
$480
$330
$162
Medicare
Medicaid
Private Insurance
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
Out of Pocket
VA
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Where are the Profits in Health Care?
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Pharma Profits
• Percapita drug spend in US is 40% higher than in Canada, 75%
higher than in Japan and three times higher than in Denmark
• Largest drug companies made $76B in profits in 2006
-BTW the first year of Medicare’s drug benefit plan
• Slow down is happening
-Top 15 Pharma companies had revenue increases from $515B to $527B
2013 to 2014 (only 2.4% increase)
-Almost all of that was due to Sovaldi as Gilead revenue increased from
$11B to $24B 2013 to 2014
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Not For Profit Hospitals have the highest profits
• 15 For-Profit Hospitals had Revenue > $2.5B in 2014
• 40 Not-For-Profit Hospitals had revenue > $4B in 2014
• Non-Profit means
-No income tax
-Policy on how to help patients in financial need
-Commuity needs assesment
• Does not mean
-No profit-profits are used to buy equipment, update facilities, buy land, pay massive
salaries, buy other systems
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Health Plans are doing OK too!
• United HealthGroup, Wellpoint, Humana, Aetna and Cigna all
large enough in revenue to be in Fortune 100
• Aetna 2014
-$58B in revenue
-$2B in profit
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Life Expectancy vs. Spend
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Spend at end of life
• 25%-30% of Medicare dollars each year are spent on the 5% of
beneficiaries who die.
• 1/3 of those dollars are spent in the last MONTH of life
• More than ½ of adults say they would prefer to die at home.
• >75% die in hospitals or nursing homes
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Behavioral Burden on Health
• Cigarettes
• Obesity
-Diet
-Exercise
• Alcohol Consumption
• Sexual Practices
• Disease Screening
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Cigarette Smoking
• >400,000 deaths each year due to smoking related disease
• Estimated that 5%-10% of all health care dollars are spent on
smoking related disease
-$150-$300 Billion in 2014
• Quitting before age 50 = 50% reduction in chance of dying
before age 65
• Smoking cessation remains among the most cost-effective
healthcare interventions.
-ROI 5:1 (at least)
• Few interventions in fact have a lower cost per Quality Adjusted
Life Years (QALY) saved
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Obesity
• Second leading factor contributing to mortality in US.
• Medical costs estimated to be $147B in 2008
• Not clear if it is increased body fat or lack of physical activity
• Increased risk of:
-DM, HTN, CAD, GB disease, osteoarthritis, OSA, respiratory diseases
and some types of cancer
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Other Behaviors that Affect Health
• Disease Screening Practices
-U.S. Preventative Services Task Force
-Primary vs. Secondary Prevention
• Alcohol Consumption
• Prescription and Illicit Drug use
• Sexual Practices
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Volume vs. Value Based Care
Volume
Value
• More visits in clinic
• More Meds
• More procedures
• More tests
• Hard to pay for other services-
• More virtual visits
• Get patients off meds
• Appropriate procedures
• Appropriate testing
• Easier to pay for other services
• Focus on quality
• Can get paid in advance of care
CDE, Case Mgr, transportation
• Focus on quantity
• Get paid after services rendered
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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“Managed Care”
Specialist
“Risk”
“Population Health
Management”
Pharmacy
PCP
Care
Manager
$
$
“Medicare Advantage”
“Value Based Care”
$
$
$
$
Social
Worker
Facilities
(SNFs, Hospitals,
etc.)
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
Hospitalist
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Traditional Payment for Medicare Advantage (MA)
$
PCP
$
$
Specialist Hospitalist
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
$
Facilities
(SNFs, Hospitals,
etc.)
$
Pharmacy
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Risk Bearing Medical Group
Medicare Advantage “MA”
$
$
PCP
$
Non Affiliate
Providers
Specialist
Hospitalist
Hospitals, Facilities
(SNFs, Dialysis, etc.)
Care
Manager
$
Affiliate
Providers
Social
Worker
Pharmacy
Pharmacist
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
Home Visit Team
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How do MA plans get funded?
• Star rating of the plan
-HEDIS
-Surveys
• Risk adjustment factor for each member
-Based on Hierarchical Condition Categories (HCC)
ICD-10 codes that are weighted
80 categories, 3000 codes risk adjust
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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Illustrative member example: codes chosen
90 y/o M with depression, spinal stenosis with cord
compression. Previously alcoholic, sober for 20 years:
Scenario X
General
Depression NOS
Cervical Spinal Stenosis
History alcohol abuse
HCC Total Score
ICD9
311
723.0
V11.3
RAF
.000
.000
.000
.000
General
ICD9
RAF
Major Depression
296.20
.330
Cervical Spinal Stenosis
723.0
.000
Cord Compression NOS
336.9
.509
Alcohol dependence in remission
303.93
.420
Scenario Y
HCC Total Score
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
CMS pays based on
these Risk Adjustment
Factors, which has
substantial revenue
implications
1.259
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Illustrative member example: HCCs (revenue)
90 y/o M with depression, spinal stenosis with cord
compression. Previously alcoholic, sober for 20 years:
Scenario X
PMPM amount from CMS to Health Plan based
only on patient demographics (age and
gender).
Scenario Y
PMPM amount from CMS over baseline = ̴
$50 x 12 = $600
PMPY amount = ̴ $7200
It is imperative that we code appropriately to ensure that we have the maximum financial resources
available next year to care for our patients
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DaVita HealthCare
Partners
Inc. All Inc.
rightsAll
reserved.
Proprietary and
confidential.
For confidential.
internal use only.
©2014
HealthCare
Partners
rights reserved.
Proprietary
and
For internal use only.
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Vastly Different Costs Across Levels of Care
Scenario X – Sub-optimally Managed
CHF exacerbation
CHF exacerbation
Admitted to IP for CHF
exacerbation, SOB, 3 days
$5,000
SNF Stay: Weakness, 15
days because caretaker
not arriving until that time
$6,000
Development of C. Diff @ SNF
Admitted to IP for C. diff
colitis, 10 days
$8,000
SNF Stay: 10 days
$4,500
UTI
Patient develops fever,
dysuria, calls ambulance + ER
visit + IP admission due to
sepsis
Total
Scenario Y – Well Managed Care
$4,500
$28,000
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
Hospitalist sees patient in ED
with borderline exacerbation,
1 dose IV lasix in ER and d/c
home
$3,500
Hospitalist confirms with CM home
visit team following discharge, and
d/c on oral diuretics
5 visits by CM home visit providers, to $1,500
check weight, medication review,
care coordination
Clinic Based Care Team (CM, RN,
PCC, MA) work with PCP to ensure
patient gets appropriate f/up
UTI
Patient calls Care Manager as
soon as symptoms develop, PCC
gets patient scheduled w/PCP
and tx with abx for mild UTI
$400
$200
$5,600
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Small Group Discussions
• Where does Health Care happen most of the time?
• Where should it happen?
• What type of practice do you want to be in and why?
-Independent
-Health System Owned
-Integrated System
-Health Plan Owned
• What do you want to focus on in your practice?
• How has you thinking about this changed in the past 30
minutes?
©2016 DaVita HealthCare Partners Inc. All rights reserved. Proprietary and confidential. For internal use only.
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