Clinical Integration: The Strategic Why and the Tactical How

1. Clinical Integration: The Strategic Why and the Tactical How HFMA West Virginia Chapter September 25, 2014

2. QUALITY & COST SOFTWARE HELATH PLAN SERVICES DATA ANALYTICS STRATEGIC & CLINICAL CONSULTING Valence Health – Lori Fox Ward, RN, BSN • Technology-enabled services since 1996 • National presence with 500 employees, 4 offices • Serve IDNs, IPAs, PHOs, ACOs • Serve 39,000 physicians, 120+ hospitals • Support nearly 20 million patients • Privately held • 35% growth in 2013 Accountable Care Clinical Integration Population Health • Vice President of Strategic Initiatives for Valence Health • Has 20 plus years of experience in the managed care industry working with providers and health plans designing Clinically Integrated Networks and implementing Value-based contracting arrangements 

3. Objectives

4. Market Trends for Hospitals and Physicians Hospitals Physicians • Real income has not increased in 30 years, particularly in Primary Care • Unfair negotiations with Payors • Pressures to report quality and cost of care • Difficult to remain independent • Physicians organizing to manage populations • Increasing Medicaid enrollment • Mandated Managed Care penetration • Pressure to demonstrate quality • Pressure to manage populations; emphasis on wellness and keeping patients out of the hospital

5. Areas of Vulnerability driving Change • Medicaid expansion • New populations in 2013 and further expansion in 2014 may create downward pressure on rates and utilization • Managed Care Plans attempting to reduce costs by: • Reducing inpatient utilization • Reducing ER utilization • Care provided at lowest cost option • Health Insurance Exchanges • Shift commercial enrollment into new products with potentially different/lower reimbursement • Increased Provider competition • Consolidation • Local/regional/national competitors • Pricing structure • Greater price sensitivity for patients/families • Physician incentives to direct care to lower-price alternatives

6. How Systems are Responding Increasing financial opportunity and alignment PROVIDER-SPONSOREDPLANS BUNDLEDPAYMENTS CLINICAL INTEGRATION SHAREDRISK CAPITATIONFULL RISK Provider-SPONSOREDPLANS SHAREDSAVINGS BUNDLEDPAYMENTS P4P PCMH CLINICAL INTEGRATION SHAREDRISK CAPITATIONFULL RISK SHAREDSAVINGS P4P PCMH

7. Clinical Integration as the Foundation Progression to new models Positioning for the future Clinically Integrated:Delivering results Clinically Integrated:Can begin contracting Population Management: Accountable Care Organization; Bundled Payments; Value-Based Care Accountability:FinancialManagement Delivery SystemImprovement Clinical Integration Program Establish Structure & Network Information Technology

8. What is a Clinically Integrated Network? A Clinically Integrated Network (CIN) is an active and ongoing program to evaluate and modify practice patterns by the network's physician participants and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality The program may include: • establishing mechanisms to monitor and control utilization of health care services that are designed to control costs and assure quality of care; • selectively choosing network physicians who are likelyto further these efficiency objectives; and • the significant investment of capital, both monetary and human, in the necessary infrastructure and capability to realize the claimed efficiencies.”

9. Why Pursue Clinical Integration: Improve Physician Alignment and Achieve the Triple Aim • Ties physicians closer to hospital and fosters collaboration to increase quality and efficiency • Presents a powerful business model to thrive in the advent of consumerism, pay-for-performance, accountable care, and quality report cards • Leverages existing efforts (e.g. PCMH) • Allows hospitals to legally provide additional office practice support to CIN member physicians beyond just managed care contracting: • IT system infrastructure • Insurance • Group purchasing discounts • Allows provider networks that include independent physicians to collectively negotiate with health plans without FTC scrutiny 1 Improved quality and patient experience 2 Better health outcomes 3 Reduced per capita healthcare costs

10. Clinical Integration Checklist

11. Legal Analysis and Options • Utilize up-to-date FTC and DOJ guidance • Organize in a structure that supports program objectives • Other Considerations: • Ancillarity: Is joint payor contracting reasonably necessary to the achievement of cost savings/quality goals? • Market dominance: Does the CIN lock up a disproportionate share of the providers in any specialty/market? • Health Insurance Portability and Accountability Act (HIPAA) • Program-specific restrictions for ACO and state ACE/CCE initiatives

12. Physician Governance • Physician leadership and engagement are key • Diversify clinical integration governance committee; include physicians that represent different perspectives • Create an imperative; a new vision • Leverage physician leaders and champions in the community • Include the “difficult” physicians • Physicians and hospitals need to “play nice” in the sandbox Create a Winning Team

13. Alignment with Key Physicians Requires Balance Between Value Drivers Engaged, collaborative, aligned physician network DESIRED STATE Qualities the CIN Needs (Recruitment Criteria) • High-quality physician groups with strong values • Good cultural fits and appetites for innovation • Experience in value-based models • Groups willing and able to share data; have effectively adopted an EHR • Eagerness to help build and shape the CIN, including physician (especially PCP) participation in leadership • Broad enough geography and PCP/Specialist coverage to provide care across the continuum Benefits the CIN Offers (Value Proposition) • Increased access to continuum of care data • Performance & benchmarking data • Promotion of a quality brand • Preserve reimbursement opportunities • More voice in market • Improved PCP-Specialist communication • Improved coordination of care and services for patients • Optimize current IT capabilities • Maintain or enhance patient volume NETWORK DEVELOPMENT CURRENT STATE

14. Conditions and Requirements of Participation Practice Performance • IT solution • Training and onboarding • Physician change management • Staff change management Care Delivery • Best practices • Quality initiatives • Care mgmt. Policies • Performance • Data sharing • Governance • Credentialing Participation Agreement • Quality and citizenship measures • Qualifications • Technology requirements • Text • Text • Text • Text • Mitigation of Barriers • Physician designed criteria • Physician designed policies and best practices • CIN Quality support • CIN IT support Collaborative CIN Design

15. Clinical and Financial Data Integration Access to Data is Key

16. Clinical and Financial Data Integration • Ability to analyze quality, utilization and cost • Identify high cost, high risk patients • Target over-utilization; high cost services • Comprehensive patient data, viewed across providers • Data needs to be actionable and as close to real-time as possible • Use data that is most readily available • Physician performance against peersand external targets/benchmarks • Tools to support populationmanagement

17. Data Integration: Patient Profile • Patient Summaries

18. Data Integration: Gaps in Care

19. Data Integration: Population Management • Population Management Snapshot

20. Quality & Performance Measures • Clinical quality and operational improvement projects are necessary components of a CI program • Define how quality is measured; adopt and promote EBGs • Performance initiatives are meaningful; span across specialties and sites of care • Develop care programs to address clinical priority populations • CIN may need to support care redesign: • Increase quality • More effectively manage costs • Reduce variation and eliminate unnecessary waste • Improve care delivery at the local level • Remediation plan to address poor performers is required

21. QI Program Components

22. Performance Dashboard

23. Contract Negotiations • A network of providers may be attractive to payers • Although the sole purpose for creating a CI network is not negotiating better rates with payers, CI Networks are rewarded for demonstrated value • Develop a strategy to take to the payers to promote consistency • Improved/enhanced reimbursement • Standard quality measures • P4P vs. Shared savings / shared risk • Challenges/Issues: • Physicians giving contracting authority to the CIN • Exclusivity vs. non-exclusivity • Opt-in / Opt-out

24. Reward For Performance • Examples of contracting models that reward performance: • Enhanced base rates - increased fee-for-service rates based on expected performance • PCP Engagement fee - incentive for increased care coordination activity • Performance incentives- incentive payments made for performance improvement initiatives • Shared savings- savings shared based on a reduction in the cost of care • These may be a starting point to move towards greater levels of financial accountability

25. Creating Incentives for Change • Align Incentives Program Assumptions: • Modify compensation to reward desired outcomes • Compensation must be altered for a significant portion of a practice for physicians to take notice • Incentives should mimic what you are trying to accomplish at each phase • Reduce complexity of distribution methodology • Increase transparency across network • Set tangible, measureable targets

26. Lessons Learned

27. Educate Your Constituents ACO HEDIS NQF Shared Savings HCHAPS STARS PQRS Healthcare is an alphabet soup

28. Employ a variety of methods Emails In Person Call • Phone calls • Direct calls • Conference calls • Webcasts • Personalized emails • Email blasts • Electronic newsletter • One-on-One meetings • Town hall meetings • Focus Groups • Demonstrations • Practice Manager meetings Technology Miscellaneous Print • CIN/hospital website • Applications (phone, tablet) • Webinars • YouTube • Social media • Physician portal • Medical conferences • CME events • Summits • Newsletter • Brochure • Pre-sale packet • Recruitment packet A combination of these media will be used to reach each target audience

29. Critical Success Factors / Best Practice • Develop a value proposition for all stakeholders • Communicate goals early and often • Consistent and ongoing leadership commitment through the full implementation of the clinically integrated network • People may be doubtful, cynical, etc. – engagement in the process is key to obtaining commitment • Help physicians achieve maximum rewards IT’S ALL ABOUT PHYSICIAN ENGAGEMENT!!

30. Questions?

31. Thank You ! To learn more about Valence Health’s capabilities, Contact: Lori Fox Ward at 312-277-6304 or Lfox@valencehealth.com information@valencehealth.com www.valencehealth.com