August 2014 Four Innovative Strategies to Help Providers Succeed Under Payment Reform Prepared by Bailit Health Purchasing, LLC To learn more about RWJF-supported In February 2014, Robert Wood Johnson Foundation (RWJF) payment reform grantees payment reform activities, visit RWJF’s met to explore innovative activities that providers and payers had initiated to ensure Payment Reform webpage. that new payment models were successful in propelling improvements in quality of care and reductions in the growth of health care costs. Experts from around the country The authors, Michael Bailit and joined the grantees to share experiences and best practices. The primary focus of the Margaret Houy, acknowledge and meeting was on provider-based activities that were making a difference in terms of appreciate the support and guidance systems transformation. This brief summarizes the following selected innovations of Bonnie Austin, Hilary Kennedy, described by presenters during the meeting: and Enrique Martinez-Vidal of AcademyHealth and Andrea Ducas of • experimenting with target population identification for care management; the Robert Wood Johnson Foundation, • applying a laser focus on target population needs and creative care management and the time of those interviewed for responses; and highlighted within this brief. • understanding costs in order to improve efficiency; and • supporting providers with information and consultation. This brief explores each of these “bright lights” and draws lessons from providers and insurers on the ground. The brief also identifies characteristics that position organizations for success in these efforts: • An organization’s willingness to create cultural and temporal space for innovation by valuing change as a catalytic agent and dedicating resources to problem solving; • A willingness of those involved to look at the problem and possible solutions through a different lens; and • Recognizing the importance of data to build evidence-based processes. Readers are encouraged to view the webinars associated with these examples of providers and insurers in action. Links are provided within the text to help guide this exploration. RWJF supports several grants testing health care payment reforms, which are managed by AcademyHealth. Four Innovative Strategies to Help Providers Succeed Under Payment Reform #1: Experimenting With Target entry of “wheeled walker” in the clinical record. An important aspect to this finding is that the signal isn’t the walker per se, Population Identification for but the fact that the clinician included the wheeled walker in Care Management their clinical notes. One of the oft-referenced essential elements of care delivery UPMC Health Plan has also created a model that predicts the reform is providers risk-stratifying their patient populations and likelihood of readmission within 30 days. The benefit of the then applying differentiated care management resources based on model is that, unlike other predictive readmission models, the a patient’s risk profile. Therefore, accurately identifying high-risk risk of readmission is calculated prior to the first admission; patients is essential to effective use of care management services. that is, the risk of readmission is known before the member To help practices identify these patients, payers often generate even shows up at a hospital for the initial admission. This en- patient lists from their predictive modeling software and provide ables UPMC hospitals to initiate readmission reduction man- those lists to practices. However, the quality of the lists can be agement during the initial admission for each patient identified highly variable, including names of deceased patients, patients under this methodology as being at high risk for readmission. who may have been at high risk in the past but are no longer so, patients listed as high-risk because of pregnancy, and/or patients Linda Thomas-Hemak, MD, president and CEO of The Wright who are not being seen by the practice. As a result, providers Center in northeastern Pennsylvania, a patient-centered medical often do not use the lists to identify their high-risk patients. home and residency training facility for primary care providers, described ways in which her practice has worked collaboratively Pamela Peele, PhD, chief analytics officer at the UPMC Health with their payers to improve predictive modeling. Plan in Pittsburgh, Pa., offered the following insights on why practices have grown frustrated with payer-supplied patient lists. • Insurers can share modeling details with providers and She explained that insurers and providers often confuse two key, providers can clean their data to support more accurate and interrelated analytic concepts when working with predictive mod- predictive modeling. As reported by Dr. Thomas-Hemak, the eling, resulting in reports that are not very useful to providers and health plans participating in a statewide patient-centered med- lead to misunderstandings among the parties. First, predictive ical home initiative shared detailed information about their modeling reports are built on correlation, not causation. When respective predictive models with all participating providers. providers expect all patients listed to be high-risk patients, they The two dominant plans for Dr. Thomas-Hemak’s practice also are expecting the claims data to be able to make the causal links to met individually with her and members of her team, including risk status, which is not possible. care managers and an electronic medical record (EMR) data and application specialist, to discuss ways to optimize report Second, when providers expect all patients listed to be at high accuracy and integration into practice workflow. This informa- risk, they assume no false positives. Because predictive models are tion enabled the Center’s team to not only better understand future predictions and not past observations, the list will include the meaning of the respective point scores, but also to realize both true positives and false positives. Based on her experience, that they needed to take corrective action and actively engage Dr. Peele suggests maximizing the accuracy and usefulness of and communicate with payers in an ongoing registry-validation predictive modeling results by minimizing false positives. process. Specifically, they needed to update their active patient and care management registry. This “clean” list of assigned pa- Dr. Peele explains that the challenge is for the analytics to be smart tients led to a more useful risk-stratified care management list. in finding useful correlations and to optimize the trade-off between the number of true and false positives produced. Both providers • Providers need to be curious and demanding about how a and insurers can work collaboratively to achieve that goal. model’s predictions are developed. Dr. Thomas-Hemak and her team have a detailed understanding of the two predictive • Insurers can create forward-looking models, rather than models used by their major health plan partners. In order to past-oriented models. UPMC Health Plan has found that ap- reach that level of understanding, they had to: proximately 80 percent of people who are high utilizers of med- ical care in one year are not the high medical utilizers in the – Be persistent. They met with plan representatives multiple next year, creating the challenge to find the 20 percent who will times to discuss the same questions or issues until they were be year two high medical utilizers. As a result, UPMC Health answered or resolved. Plan has created several models that focus on the future use of services. In one, UPMC Health Plan analyzed 441,000 clini- – Be collaborative. They approached the payers with the atti- cal notes from medical records, looking for words that were tude and intention of mutually solving a problem or learning associated with high future use of urgent clinics or emergency together. As a result, the initial defensive attitude of some departments. One correlation they found was associated with payers dissolved and the parties were able to develop trusting 2 Four Innovative Strategies to Help Providers Succeed Under Payment Reform relationships that have led insurers and providers to make telephone contacts with the patients. The care manager, commu- systemwide improvements in their business processes and to nity health assistant, and social worker work closely to meet total enhance payer-practice collaboration. patient needs, including medical, behavioral health, housing, transportation, and other social service needs. This model allows – Accept the model’s limitations and apply discerning logic. By both the social worker and care manager to work at the top of understanding the models’ data sources, prediction logic, false his/her license. The goal of the model is to provide intensive ser- positive rate, and model limitations, the Wright Center’s pro- vices during a time of crisis in order to stabilize patients so they viders and care managers can account for model limitations, can return to their regular care managers. During the time that such as having pregnant women appear on the high risk list, the pod is supporting a patient, the team members work closely without dismissing the entire list. By having an in-depth un- with each patient’s primary care team. Thus far, the pod has derstanding of the predictive models, the team’s care managers transitioned two patients back to the regular case manager. Early recognized the superiority of one model over another. Dr. experience suggests that there will be a sub-group of patients Thomas-Hemak describes one as more predictive and popu- who will be best served by the pod on a long-term basis. lation-based, and the other as reactive and outdated. With this understanding, her practice is able to maximize the usefulness Accepting the new model has taken time. In implementing this of the information provided by the insurers. program, coaching was necessary to help current care manag- ers and primary care clinicians understand that the pods were View a webinar, “Unlocking Capacity for Health Care Transfor- designed to augment what was otherwise being provided. With mation,” featuring Dr. Thomas-Hemak presenting a summary of time and experience, primary care physicians and practice-based her findings. care managers are becoming more supportive of the model and are making referrals to the pod. Geisinger will be formally evaluating the effectiveness of the #2: Applying a Laser Focus on pilot pod in July 2014, comparing patients receiving support Target Population Needs and from the pod with matched patients receiving standard care management services. Creative Care Management • Using data to select and track program success. Health Quality Responses Partners (“HQP”) is an organization dedicated to the design, Organizations that have strong program results know the impor- testing, and dissemination of models of advanced preventive tance of understanding the needs of their target population and care that improve the health of vulnerable populations. Its core developing new program interventions to address those needs. program is a community-based care management program for The following are two examples of innovations focused on cre- Medicare beneficiaries at risk of needing emergency department atively meeting patient needs. and inpatient services. By providing intensive care management services and an array of targeted support services, HQP has been • Breaking a proven model to meet new needs. Geisinger Health able to significantly reduce inpatient admissions and patient Plan and the larger Geisinger Health System are built on a deaths among this population, while reducing costs for high- primary care model anchored by practices that are supported by er-risk patients.2, 3 clinical care managers. In fact, effective care management is a core component of its ProvenHealth Navigator (Advanced Med- One of its key success factors4 is providing population-relevant ical Home) program.1 However, Geisinger leadership recognized services. Since its 2000 launch, HQP has developed a robust that there was a group of complex patients that needed addition- portfolio of 30+ carefully selected interventions, which includes al services and asked Joann Sciandra, RN, BSN, CCM, associate implementing strong, evidence-based patient education inter- vice president, population health at Geisinger Health Plan, to ventions that teach patients about their diseases and conditions, lead a cross-functional team to develop a new care model. how to recognize symptoms and do self-care—for example, adhering to diet and exercise regimens—and how to do condi- The team saw an opportunity to further differentiate inter- tion-specific self-monitoring. Moreover, to assure that patients ventions by developing an interdisciplinary “pod” to provide have access to services such as exercise programs, HQP offers intensive ambulatory care services for a subset of very complex classes at convenient locations. For example, Cooper Aerobics patients. The model is being piloted with five clinics that are in Center in Dallas created a seated chair exercise program that close proximity and have a strong connection to the local hos- demonstrated effectiveness for participants, and HQP adopted pital. The pod, which consists of a care manager, a non-licensed that program and now offers it to its participants. community health assistant, and a social worker, has a caseload of 40 patients and provides extensive in-hospital, in-home, and 3 Four Innovative Strategies to Help Providers Succeed Under Payment Reform Once an intervention has been selected, HQP carefully im- Physicians embraced the new tool they were given, seeing a plements the intervention in the same way it was originally significant opportunity to improve day-to-day practice. Armed evaluated and found to be effective at mitigating risk. For with scorecards to track progress on quality indices that they have each intervention, HQP collects performance data and runs defined, physician groups are showing that improvements in qual- statistical analyses correlating program offerings with key ity parallel decreases in costs. A recent collaboration with Kaplan6 success indices, such as emergency department and inpatient has led the group to explore the benefits of a more refined costing utilization. Data are reviewed regularly and program adjust- approach called time-driven, activity-based costing. This method ments are made as necessary. Ken Coburn, MD, HQP’s CEO encourages use of personnel at the top of their license. Seeing data and medical director, emphasizes that continually assessing the indicating a 20-fold difference in the cost per minute to perform need for new programs, seeking out best-in-class interventions, a task, with no corresponding quality difference, is motivating systematically implementing the programs, and assessing them additional change. Another result of physician access to new cost is foundational to his organization’s success. information was the orthopedists creating a “perfect care quality index” for their own initiative that integrated numerous measures View a webinar, “Population-Based Approaches to Care Manage- with supporting dashboards. ment,” featuring Dr. Coburn and Ms. Sciandra presenting their findings. Dr. Lee reported that quality has climbed across the system as a result of this work, and costs have plummeted in the areas where this approach has been piloted. She opined that the widely refer- #3: Understanding Costs in Order enced estimates of 30 percent waste in the U.S. health care system7 are significant understatements, based on her experience at the to Improve Efficiency University of Utah Health System. Vivian S. Lee, MD, PhD, MBA, senior vice president of the Uni- Interestingly, the University of Utah Health System to date has versity of Utah Health System, described in compelling fashion been involved in little payment reform or provider compensation how her academic medical center “developed an algorithm for reform. Dr. Lee reported that the health system is entering into change management” when it decided to tackle the problem of the CMS Bundled Payment for Care Improvement Initiative. In not knowing the actual costs of the services it delivers. addition, it has not changed provider compensation incentives The impetus for this work was multifold. First, in 2012, the system (although discussions have begun), and has not found the current discussed the need to reduce its costs and decided that it had to clinician compensation system to be an impediment to efforts to better understand its costs in order to reduce them. Second, the reduce system waste.8 health system was considering a bundled payment project but View a webinar, “Harnessing Your Organization’s Big Data to Im- had no means for appropriately allocating funds without knowing prove Outcomes, Reduce Costs, and Improve Service,” featuring how to accurately allocate costs. Finally, Dr. Lee and her peers Dr. Lee presenting a summary of her findings. were reading and talking about the writings of Michael Porter and Bob Kaplan of the Harvard Business School, who said that one of health care’s biggest problems was not knowing costs.5 #4: Supporting Providers With With the goal of developing a tool to measure value systemwide for any provider, diagnosis, or even patient, a dedicated team of Information and Consultation employees took six months to define costs and then tie them to Working with providers operating under population-based quality outcomes. The resulting tool, referred to as “value-driven payment contracts to support their cost and quality management outcomes,” gave health system employees the ability to see real efforts was the focus of a presentation by Lisa Whittemore, MSW, cost data and how costs varied within their system with little MPH, vice president, Network Performance Improvement, for associated variation in quality. Blue Cross Blue Shield of Massachusetts (BCBSMA). Ms. Whitte- more explained that BCBSMA has a four-component strategy to Having created the analytic tool, the health system then needed to assist the 85 percent of its provider network operating under the equip its physicians and other staff with the means to use the data plan’s “Alternative Quality Contract.”9 to improve performance. It started with systemwide lean training to help clinicians learn how to identify opportunities for improve- • Consultative support: BCBSMA meets quarterly with each of ment and “make providers problem solvers.” The training was 18 medical groups. A medical director attends each meeting, and introduced to clinicians as a way to help them make their own may be joined by a pharmacist, social worker, and/or nurse. The lives easier, and not as an initiative to save money. For example, plan and medical group prepare for each meeting and jointly set physicians were asked to address concerns such as “why do I have the agenda. The meeting’s focus is on concrete actions the group to wait so long for the procedure room to turn around?” can take to improve performance, e.g., how to reduce the emer- 4 Four Innovative Strategies to Help Providers Succeed Under Payment Reform gency department visit rate for attributed patients. BCBSMA BCBSMA has demonstrated how health insurers can serve as will also work with groups between meetings if health plan data valuable partners to providers functioning under payment reform analysis identifies a significant opportunity for improvement. models, supplying sophisticated analyses that increase the likeli- hood of provider success. • Training: The health plan is assisting its contracted providers to develop new sets of skills so that they will succeed in a trans- formed business environment. Training programs have included Conclusion a rigorous leadership program on topics including adaptive re- The programmatic “bright lights” discussed in this paper vary serve10 and behavior change that takes place one day per month widely. However, when considering why these innovations were over eight months, and a 2.5-day specialist leadership training effective in these particular organizations, there are several focusing on negotiation skills and practice variation analysis. unifying organizational characteristics that are distinctive and instructional: • Best practice sharing/collaboration opportunities: BCBSMA regularly conducts practice variation analysis, looking for oppor- • An organization’s willingness to create cultural and temporal space tunities for improvement, and develops distribution curves to be for innovation by valuing change as a catalytic agent and dedicat- shared with the medical groups. These analyses are used as the ing resources to problem solving: basis for conversation, and have created a means for engaging – The Wright Center made time to meet regularly with insurers specialists. In addition, the plan convenes a provider forum three and pushed for changes that enhanced alignment and collab- times a year to discuss topics of interest to the groups. Finally, oration. BCBSMA sets annual performance goals with each group every January and February. – The University of Utah Health System had a dedicated group of analysts focused on new cost accounting activity for six • Data and actionable reports: BCBSMA produces many quality months. and efficiency reports for its contracted medical groups. The central report, however, is a dashboard containing the trend in • A willingness of those involved to look at the problem and possible the medical group’s population health risk and seven graphs. The solutions through a different lens: dashboard graphs contain the following information: – UPMC Health Plan focused on developing predictive models – quality indicators, comparing performance to the prior year that were forward looking. and to current year performance targets; – Geisinger saw intensive outpatient care management pods as – total medical expense trends; complementing primary care providers, rather than under- mining them. – avoidable emergency department visit opportunities, by condition; • Recognizing the importance of data to build evidence-based processes: – spending by expense category compared to all medical – BCBSMA is dedicating leadership and analytic resources to groups, adjusted for differences in health status; share reports with their risk-based provider groups. – spending vs. expected by condition category; – HQP utilizes a portfolio of multiple proven interventions, the reliable delivery and effectiveness of which are continuously – potential savings that could be achieved by moving patients monitored. with low-weight disease-related groups to lower-cost hospi- tals; and – The University of Utah Health System shares the results of its cost reports to drive cost savings and quality improvement. – percentage of admissions and spending at different hospitals. Finally, and critically, each organization has leadership that is BCBSMA produces a suite of additional reports for medical firmly committed to driving delivery system change. All of the groups. For example, a medication refill report provides infor- cited organizations have developed a vision of best practice, and mation for five conditions, identifying patients who have been have pushed themselves to innovate on an ongoing basis, always filling their prescriptions in a timely manner less than 80 percent seeking ways to better what they are doing. Organizations wishing of the time. Examples of other reports and notifications include to adopt these “bright light” strategies and emulate their organiza- daily hospital admission notification, weekly chronic condition tions must be willing to question the status quo in their organiza- opportunity reports, and emergency department and inpatient tions and challenge themselves to improve. utilization reports. 5 Four Innovative Strategies to Help Providers Succeed Under Payment Reform Endnotes 6. Kaplan RS and Anderson SR. “Time-driven and activity-based costing.” Har- 1. Steele, G. “Reforming the Healthcare Delivery System.” Presented to the Com- vard Business Review. November, 2004. mittee on Finance, United States Senate. April 21, 2009. 7. Wennberg JE, Fisher E and Skinner J. “Geography and the Debate over Medi- 2. Brown, RS, Peikes D, et al. “Six features of Medicare Coordinated Care care Reform” Health Affairs, February 2002 web exclusive and Berwick DM Demonstration programs that cut hospital admissions of high-risk patients.” and Hackbarth AD. “Eliminating Waste in US Health Care” JAMA 2012 Apr Health Affairs 2012: 31(5). 11; 307(14):1513-16. 3. Coburn KD, Marcantonio S, et al. “Effect of a Community-Based Nursing 8. Algorithms for innovation: searching for solutions to impossible problems. Utah: Intervention on Mortality in Chronically Ill Older Adults: A Randomized University of Utah Health Sciences, 2013. Controlled Trial.” PLoS Medicine 2012: 9(7): e1001265. 9. Alternative Quality Contract. Massachusetts: Blue Cross Blue Shield of Mas- 4. Ken Coburn’s presentation at the RWJ Foundation Payment Reform Grantee sachusetts, 2014, http://www.bluecrossma.com/visitor/about-us/affordabili- Meeting, February 27-28, 2014, Washington, DC. ty-quality/aqc.html (accessed July 2014). 5. Porter ME. “Discovering - and Lowering - the Real Costs of Health Care.” 10. Nutting PA, et al. “Initial Lessons From the First National Demonstration Harvard Business Review, 2011. Project on Practice Transformation to a Patient-Centered Medical Home.” Ann Fam Med 2009 May 1; 7(3);254-60. 6