ACCOUNTABLE CARE ORGANIZATIONS: CAN THEY IMPROVE POPULATION HEALTH?

1. ACCOUNTABLE CARE ORGANIZATIONS: CAN THEY IMPROVE POPULATION HEALTH? Stephen M. Shortell, Ph.D. Blue Cross of California Distinguished Professor of Health Policy and Management Dean Emeritus, School of Public Health University of California-Berkeley University of Texas Clinical Effectiveness and Safety Conference Grand Hyatt Hotel San Antonio, Texas September 26, 2013

2. We have gone from…

3. They are almost everywhereA family of “multicorns”

4. ACOs are entities that accept accountability for the cost and quality of care provided to a defined population of potential patients Accountable Care Organizations (ACOs)

5. 32 Pioneers 222 Shared Savings Over 200 Private Sector Accountable Care Organizations

6. Reaching for the Triple Aim Improved quality and overall patient experience Improved population health Constrained costs

7. ACOs can improve care ACOs can control costs

8. But by themselves, ACOs cannot improve population health

9. Personal behaviors 30% Physical and social environment 30% Genetics 30% Health care delivery 10% The Determinants of Health Source: McGinnis, J. Michael and William H. Foege, “Actual Causes of Death in the United States,” Journal of the American Medical Association 270(18):2207-12,November 10, 2003.

10. Do they improve care? And do they control costs?

11. We have a pervasive, long-standing “chronic illness”: fragmented care Problem: Solution: Create systems of integrated care

12. “But I make my money from fragmented care.” Problem: Solution: Not any more!

13. Some Key Issues Enrollment size matters – achieve sufficient savings to spread overhead and related costs Care management is key: 5/50 stratification Multiple chronic illness, frail elderly, dual eligibles, mental illness

14. Some Key Issues(cont’d) Building new relationships Business model changes most for hospitals Integrating different professional/social identities Collaborative governance New tools required: Information exchange across the continuum Predictive risk modeling

15. Some Key Issues(cont’d) Patient activation and engagement Agreeing on a common set of cost and quality measures and thresholds, across payer contracts

16. What is Needed?A New Care Management Platform

17. New Care Management Platform Reduce office visits Expand between-visit at-home care management Improve “hand-offs” Smoother “glide paths” to health recovery Technology enabled within a foundation of continuous improvement.

18. Some Required Changes Inpatient Care Workflow and Redesign Care Transition Management e.g. Coleman Care Transition Model Physician Referral Patterns Interoperable EHRs From Inpatient Margin to Total Care Margin

19. Early Lessons from Brookings-Dartmouth ACO Pilot Studies Source: B.K Larson, A.D. VanCitters, S.A.Kreindler, K. Carluzzo, J. Gbemudu, F. Wu, E.C. Nelson, S. Shortell, E. Fisher. “Insights from transformations under way at four Brookings-Dartmouth accountable care organization pilot sites.,” Health Affairs, 2012 Nov;31(11):2395-406.

20. Common Challenges: • Developing the care management capabilities across the entire continuum • Building trusting relationships with physicians, payers and other partners • Navigating the legal and contractual relationships

21. Common Elements Across All Four Sites: • Electronic health record functionality • Disease registries • Data warehouses • Predictive modeling to identify high-risk patients • High-risk patient complex care management programs • Physician champions • Mature quality improvement – Six Sigma, LEAN

22. Facilitators of ACO Formation and System Transformation • Source: B.K Larson, A.D. VanCitters, S.A.Kreindler, K. Carluzzo, J. Gbemudu, F. Wu, E.C. Nelson, S. Shortell, E. Fisher. “Insights from transformations under way at four Brookings-Dartmouth accountable care organization pilot sites.,” Health Affairs, 2012 Nov;31(11):2395-406.

23. Facilitators of ACO Formation and System Transformation (cont’d) • Source: B.K Larson, A.D. VanCitters, S.A.Kreindler, K. Carluzzo, J. Gbemudu, F. Wu, E.C. Nelson, S. Shortell, E. Fisher. “Insights from transformations under way at four Brookings-Dartmouth accountable care organization pilot sites.,” Health Affairs, 2012 Nov;31(11):2395-406.

24. Importance of Managing Social Identities Balance organizational identity/socialization with professional identity/socialization Use ACOs as a framework or mechanism or vehicle for promoting more integrated coordinated care See: S.A. Kreindler, B.K. Larson, F.M. Wu, J. K.L. Carluzzo, A.D. Van Citters, S.M. Shortell, E.C. Nelson, and E.S. Fisher. “Interpretations of Integration in Early Accountable Care Organizations,” Milbank Quarterly, Vol, 90, No. 3, 2102, pp. 457-483.

25. ACO’s Are in the Eye of the Beholder An IPA: it’s about better coordinated care, not integration A medical group: it’s about integration for employed physicians, but not affiliates A hospital system: it’s about developing an equal partnership between physicians and the hospital An integrated delivery system: it’s about a cultural change, not a structural change See: S.A. Kreindler, B.K. Larson, F.M. Wu, J. K.L. Carluzzo, A.D. Van Citters, S.M. Shortell, E.C. Nelson, and E.S. Fischer. “Interpretations of Integration in Early Accountable Care Organizations,” Milbank Quarterly, Vol, 90, No. 3, 2102, pp. 457-483.

26. Are ACOs More Than a Guess? Some emerging evidence

27. The Downside • Of the 32Pioneer ACOs: • 14 Generated losses for Medicare • 7Increased costs enough that they owe Medicare $4.5 million • 7 Will transition to Medicare’s more flexible Shared Savings Program • 2 Will drop out of Medicare accountable care Source: “Complex Coordination, “ Modern Healthcare Magazine, July 22, 2013

28. Medicare Physician Group Practice Demonstration • Annual savings per beneficiary/year were modest overall • But significant for dual eligible population – over $500 per beneficiary, per year • Improvement on nearly all of 32 quality of care measures • Source: CH Colla, DE Wennberg, E. Meara, et al. “Spending Differences Associated • with the Medicare Physician Group Practice Demonstration.” JAMA, • September 12, 2012, 308 (10) 1015-23.

29. Results of Massachusetts Alternative Quality Contract (AQC) • Based on global budget and pay-for-performance • 2.8 percent savings over two years compared to control group • Shifted procedures, imaging and tests to facilities with lower fees plus reduced utilization • Quality of care improved by 3.7 percentage points on chronic care management measures • Savings were greater in second year than first year, and quality improvement was greater in second year than first year. • Source: Z. Song, S.G. Safran, B. E. Landon, et al. Health Affairs, August 2012, • 1885-1894.

30. Comparison of Accountable Physician Practices Versus Other Practices Crude measures Adjusted measures Source: Weeks WB, Gottlieb DJ, Nyweide, DJ, et al. “Higher Health Care Quality and Bigger Savings Found at Large Multispecialty Medical Groups,” Health Affairs. May 10, 2010, 29(5): 991-997

31. Sacramento Blue Shield: Dignity-Hill-Calpers Experience • 42,000 Calpers Members • Set target premium first – no increase in 2010– and then worked backward to achieve it • Saved $20 million -- $5 million more than target, while meeting quality metrics • Package of interventions:

32. Sacramento Blue Shield: Dignity-Hill-Calpers Experience (cont’d) • Package of interventions: • Integrated discharge planning • Care transitions and patient engagement • Created a health information exchange • Found that top 5,000 members accounted for 75% of spending • Evidence-based variance reduction • Visible dashboard of measures to track progress

33. But what about population health? • How do we bridge the divide • between health and health care?

34. The challenge is to move from a culture of sickness to a culture of health. • How do we create a market for health?

35. Changing payment toward risk-based • global budgets unleashed great • opportunities for innovation.

36. Pay technology-enabled, team-based systems of care to keep people well. • Requires people engagement, not just patient engagement • Requires community-wide population focus, not just individual ACO or integrated delivery system focus

37. Building Blocks of the Community Health Care Management System Community population-based needs assessment Identification of community assets, capabilities, and resource requirement Alignment of service providers, managers, and governance within and across medical, health, and community sectors Capability Wheel Information Systems • Source: Shortell, S.M. , R.R. Gillies, D.A. Anderson, et al. Remaking Healthcare in America: The Evolution of Organized Delivery Systems, 2nd edition, San Francisco: Jossey-Bass, 2000

38. Population-Based Health Continuum Goal: Creating the Chronically Well Chronically well Sporadically well Sporadically ill Chronically ill Healthcare Delivery System Housing Physical and Social Environment Education Religious Organization Jobs Family Support Services Community A group of individuals with a sense of shared space, shared responsibilities, and perceived interdependence • Adapted from Shortell, S.M. , R.R. Gillies, D.A. Anderson, et al. Remaking Healthcare in America: The Evolution of Organized Delivery Systems, 2nd edition, San Francisco: Jossey-Bass, 2000, page 64

39. Delivery System Changes • Redefine the “product” • From illness to wellness • From patients to healthy people • Redefine the place • From office, clinic or hospital bed to home, workplace, school • Redefine the “providers” • Beyond healthcare professionals to teachers, social workers, architects, urban planners, community development specialists

40. Population Health Data Management • Collect individual health status data • Stratify populations based on risk/need for care predictive model • Tools to engage people in their health and health care • Health information exchange capabilities – portability of records • Workflow tools for providers to use evidence-based protocols

41. Public Health Sector Changes • Greater flexibility in use of funds • New partnerships with delivery systems • Better targeting of those most in need of preventive services • Joint development of goals with metrics to measure progress • Shared infrastructure for sustainability of workforce

42. Community-Development and Social Service Sector Changes • “Health in All” policies • Health effects of zoning regulations, housing permits, transportation, labor, and educational policies

43. A Bold Proposal • CMS and other payers: • Create a risk-adjusted population-wide health budget to be overseen by a community-wide entity tied to multi-year performance targets • Examples might include: • Reduction in newly diagnosed diabetics • Reduced infant mortality • Reduced pre-term births • Reduced obesity rates – children and adults • Lower blood pressure for CHF Patients • Reduced disability and work loss days due to illness • Greater functional health status scores among samples of the population • Source: S.M. Shortell, “A Bold Proposal for Advancing Population Health,” Discussion Paper, Institute of • Medicine, National Academy of Science, August 8, 2013.

44. Some Interest in California • Payment Reform Ideas (1 = Low to 10 = High) • Create Accountable Care Communities Focused on Population 7.5 • Pilot Incentives in a Community to Link Delivery System and 7.0 • Community Efforts to Improve Health • Is your Organization Attempting to Link Patient Care with Yes = 67% • Private or Public Community Efforts to Improve Population • Health? • Source: CAL SIMS Project, Integrated Health Association, May 16. 2013

45. Some Examples • Cambridge Health Alliance • Robert Wood Johnson Foundation and Federal Reserve Board Human Capital Investments • Ontario Family Health Networks • Others on the IOM Roundtable

46. Key Challenge • Building the needed partnerships based on: • Shared goals • Shared information, • Innovations in use of human resources • Cross-sector, cross-boundary leadership

47. Have you seen this billboard yet? We work to keep you out of bed. VISIONARY HEALTH SYSTEM 47

48. Thank You • “Healthier Lives In A Safer World”