IHI Expedition Expedition: Preparing Care Teams for Bundled Payments - - PowerPoint PPT Presentation

IHI Expedition

Expedition: Preparing Care Teams for Bundled Payments Session 1: Volume to Value March 24, 2015 Trisha Frick, MS, RN Lucy Savitz, PhD, MBA Nick Bassett, MBA Molly Bogan, MA

Begins at 1:00 PM ET

Today’s Host

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Akiera Gilbert is a Project Assistant at the Institute for Healthcare Improvement. She is primarily responsible for the Passport membership, and is involved in the facilitation of Expeditions. Her work also delves into the Conversation Ready Project within Patient and Family- Centered Care, as well as the Primary Care

• Collaborative. Akiera is a second-year student at

Northeastern University, and is on her first co-op at IHI. She is pursuing a Bachelor of Science in Human Services (concentrating in Public Health) and a minor in Social Entrepreneurship.

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What is an Expedition?

ex•pe•di•tion (noun)

• 1. an excursion, journey, or voyage made for some specific

purpose

• 2. the group of persons engaged in such an activity
• 3. promptness or speed in accomplishing something

Expedition Director

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Molly Bogan, MA, co-leads IHI’s Quality, Cost and Value portfolio of work. Molly began her career in health working in clinics and outreach programs in Washington State. She went on to join the US Peace Corps, assisting local government with health services planning in Paraguay. Molly also managed a USAID Global Health fellowship program and an NIH-funded child health improvement research program at Harvard School of Public Health in Boston, MA. Molly holds a Master of Arts in International Development and Global Health Affairs from the University of Denver. Prior to joining IHI, Molly was the Director of Finance and Administration for an international health non-profit

• rganization.

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Chat

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What is your goal for participating in this Expedition?

Please send your message to All Participants

Today’s Agenda

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• Ground Rules & Introductions
• Pre- Survey Debrief
• Moving from Volume to Value
• IHI’s Model for Improvement
• Action Period Assignment

Ground Rules

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• We learn from one another – “All teach, all

learn”

• Why reinvent the wheel? - Steal shamelessly
• This is a transparent learning environment
• All ideas/feedback are welcome and

encouraged!

Expedition Objectives

At the conclusion of this Expedition, participants will be able to:

• Describe the benefits of transitioning to a value-

based purchasing model

• Understand and apply an activity-based cost

accounting methodology to at least one care process

• Demonstrate examples of how to engage

stakeholders in building a bundle

• Describe how to customize care team redesign to

deliver optimum care under value-based purchasing

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Schedule of Calls

Session 1 – Moving from Volume to Value Date: Tuesday, March 24, 1:00 - 2:30 PM Eastern Time Session 2 – Building a Care Bundle Date: Tuesday, April 7, 1:00 - 2:00 PM Eastern Time Session 3 – Collecting Data Using Activity-based Costing Date: Tuesday, April 21, 1:00 - 2:00 PM Eastern Time Session 4 – Engaging Stakeholders in Bundle Design Date: Tuesday, May 5, 1:00 - 2:00 PM Eastern Time Session 5 – Care Team Redesign Date: Tuesday, May 19, 1:00 - 2:00 PM Eastern Time Session 5 – Putting it All Together: Case Study Date: Tuesday, June 2, 1:00 - 2:00 PM Eastern Time

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Pre-Work Assignment & Survey Results

• Complete the IHI Open School Course QI 102: The

Model For Improvement: Your Engine for Change

• Complete the Preparing Care Teams for Bundled

Payments Pre-Survey (thanks to all who already completed!)

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Faculty

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Lucy Savitz, PhD, MBA Director of Research and Education Intermountain Healthcare Salt Lake City, Utah Trisha Frick, MS, RN Assistant Director of Managed Care Johns Hopkins HealthCare LLC Glen Burnie, Maryland Nick Bassett, MBA Healthcare Transformation Manager Intermountain Healthcare Salt Lake City, Utah

Introduction to Bundled Payments

Public and private payers are moving toward global payment arrangements with health care providers Agreements tie set payments to successful deployment

• f specific bundles of care

Require teams from across the system – from contracting and finance teams to physicians and front- line care teams – to engage in coordinating care

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Volume to Value

Focus on the cultural changes required to coordinate care under the new payment structures Relationship between better patient care and potential savings – keep the patient at the center Quality indicators must not decline as costs are reduced New skill sets and mindsets required – are your teams ready?

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Setting the Stage

“Bundled payment is generally touted as a promising example of payment innovation — but the true benefit of bundling payments derives from reengineering care delivery, not from combining separately paid line items into a single tab. Bundled payment provides the impetus, but the work of care redesign must follow if the promise of bundled payment is to be realized.”

• Tom Williams and Jill Yegian, Modern Healthcare blog

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IHI Expedition: Preparing Care Teams for Bundled Payments

March 24, 2015 Webinar Lucy A. Savitz, Ph.D., MBA Director of Research and Education Intermountain Institute for Health Care Delivery Research

The Burning Platform

Driving Change

• An eagerness to accelerate reforms in

healthcare financing ahead of evidence that the new models will succeed.

• Bundled payments and other ACA payment

reforms have strong Federal support and a growing private-sector following.

The Promise

• Bundled payment will lead to higher-

quality, more coordinated care and lower costs.

• Episode-based bundled payment may

serve to align financial incentives across the spectrum of care.

Creating a Learning Commons

• Evaluation results of in-progress,

episodic bundle payment initiatives will not be available for several years.

• Making the case for shared learning as

we go.

Medicare’s Bundled Payment Initiative: Most Hospitals Are Focused on A Few High-Volume Conditions

Tsai TC et al., Health Affairs, March 2015, 371-380

• Aim is to bundle a single payment for an episode of

acute care (while hospitalized) with related post- acute care in an appropriate setting.

• Participating hospitals are:

– Mostly large – Non-profit – Teaching hospitals in the Northeast – Cover conditions with high clinical volumes

Reported Findings

Claims-based analysis Focused on only a few clinical conditions

• No significant differences in spending

between participating & non-participating hospitals

• Post-acute care explains the largest

variation in overall spending

– Presents an opportunity to align incentives across providers

HHS Announcement

In three words, our vision for improving health delivery is about better, smarter, healthier. If we find better ways to pay providers, deliver care, and distribute information:

• Encourage the integration and coordination of clinical care services
• Improve population health
• Promote patient engagement through shared decision making

Incentives

• Create transparency on cost and quality information
• Bring electronic health information to the point of care for meaningful use

Focus Areas Description Care Delivery Information

• Promote value-based payment systems

– Test new alternative payment models – Increase linkage of Medicaid, Medicare FFS, and other payments to value

• Bring proven payment models to scale

HHS Announcement

Better Care. Smarter Spending. Healthier People

 We can receive better care.  We can spend our health dollars more wisely.  We can have healthier communities, a healthier economy, and a healthier country.

Source: CMS

Target percentage of Medicare FFS payments linked to quality and alternative payment models in 2016 & 2018

2016

All Medicare FFS (Categories 1-4) FFS linked to quality (Categories 2-4) Alternative payment models (Categories 3-4)

2018 50 % 85 % 30 % 90 %

Source: CMS

Payment Taxonomy Framework

Category 1: Fee for Service— No Link to Quality Category 2: Fee for Service—Link to Quality Category 3: Alternative Payment Models Built on Fee- for-Service Architecture Category 4: Population-Based Payment Description Payments are based

• n volume of

services and not linked to quality or efficiency At least a portion of payments vary based on the quality or efficiency

• f health care delivery

Some payment is linked to the effective management of a population or an episode

• f care. Payments still triggered by

delivery of services, but opportunities for shared savings or 2-sided risk Payment is not directly triggered by service delivery so volume is not linked to

• payment. Clinicians and
• rganizations are paid and

responsible for the care of a beneficiary for a long period (e.g. >1 yr) Medicare FFS  Limited in Medicare fee- for-service  Majority of Medicare payments now are linked to quality  Hospital value- based purchasing  Physician Value- Based Modifier  Readmissions/Hosp ital Acquired Condition Reduction Program  Accountable care organizations  Medical homes  Bundled payments  Comprehensive primary care initiative  Comprehensive ESRD  Medicare-Medicaid Financial Alignment Initiative Fee-For-Service Model  Eligible Pioneer accountable care

• rganizations in years 3-

5

Source: CMS

Sustainable Growth Rate

SGR Repeal & Reform Timeline

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sunset of existing quality value penalties under PQRS, VBM, EHR 12/31/2017

Permanent repeal of SGR

0.5% update in physician payments (2014-2018) 0% update in physician base payments (2019-2023) APM participating providers exempt from MIPS; receive annual 5% bonus (2018-2023)

Merit-Based Incentive Payment System (MIPS) adjustments

2018 +/-4% 2019 +/- 5% 2020 +/- 7%

Track 1 Track 2

2021 & beyond +/- 9%

• CBO estimate of bipartisan, bicameral bill: @$122B/10 years
• Medicare extenders will add another @$25 - 30B to cost of bill

Current law

2018 4%

Physician Quality Reporting System Penalty

2015

• 1.5%

2016 & beyond

• 2.0%

Meaningful Use Penalty (up to %)

2015

• 1.0%

2016

• 2.0%

2017

• 3.0%

2018

• 4.0%

Value-based Payment Modifier penalty (up to %)

2015

• 1.0%

2016

• 2.0%

2017

• 4.0% (NPRM)

2019 & beyond

• 5.0%

2018 & beyond ???%

Ready to Test the Waters

Getting to Bundles

• Identify potential areas to bundle
• Identify available clinical champion(s)
• Identify payer partner(s)
• Flow chart out the episode process of care across the

continuum

• Capture cost and revenue streams for each process segment
• Identify cost structure and/or innovation opportunities to

streamline/eliminate waste

• Apply parameters to historical data &/or run prospective

“shadow” system to assess net financial impact

• Determine which opportunities present “goodness of fit”
• Collaboratively establish monitoring/feedback system—cost,

quality, service, patient experience

Launch

TPS Lean

Based on U.S. Manufacturing Expertise

• Henry Ford first to use concepts of

eliminating waste & increasing efficiency

• Taiichi Ohno pioneered Toyota

Production System (TPS), drawing on writings of Ford

• Deming added to Japanese post WWII

bid to overtake U.S. manufacturing

Quality Costs

• Represent the difference between the

actual cost of a product or service and what the reduced cost would be if there were no possibility of substandard service, failure of products, or defects in their manufacture.

• Commonly accepted categories of quality

cost (in manufacturing circa 1945) are:

– Failures – Appraisal – Prevention

Muda or Quality Waste

• Mistakes
• Defects
• Overproduction
• Processing
• Transportation and/or Motion
• Waiting
• Inventory

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Capturing Waste

• Designing an effective system for

capturing costs

• Requires comprehensive

identification & collection of data

• Must be practical
• Determining when, where, & how to

use a tool

Evolving Technology, Ease of Use

3 5 2 6 4 5 3 2 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Average Number of Activities

(Number of observations per unit)

5 10 15 20 25 30 35

% Interrupted

3 5 2 6 4 5 3 2 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

Average Number of Interruptions

(Number of observations per unit)

3 5 2 6 4 5 3 2 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Avg Number of Abandoned Activities

(Number of observations per unit)

Facilitated Discussion

Questions & Answers Group Discussion

Questions/Discussion

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Raise your hand Use the chat

Action Period Assignment

• Identify one patient population to test a

potential bundled payment design.

• Consider one of the top 10 DRGs or procedures

from your systems

• Request for volunteers to share learning from

test at start of next session

Expedition Communications

• All sessions are recorded
• Materials are sent one day in advance
• Listserv address for session communications:

bundledpaymentexp@ls.ihi.org

• To add colleagues, email us at info@ihi.org

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Session 2

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Tuesday, April 7, 2015, 1:00 - 2:00 PM ET

Building a Care Bundle

Trisha Frick, MS, RN Assistant Director of Managed Care Johns Hopkins HealthCare LLC Glen Burnie, Maryland Nick Bassett, MBA Healthcare Transformation Manager Intermountain Healthcare Salt Lake City, Utah

Thank You!

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Molly Bogan mbogan@ihi.org Akiera Gilbert agilbert@ihi.org

Please let us know if you have any questions or feedback following today’s Expedition webinar.

Videos

Bob Lloyd’s Whiteboard Videos:

• Model for Improvement, Part 1:

http://www.ihi.org/education/IHIOpenSchool/resources/P ages/AudioandVideo/Whiteboard3.aspx

• Model for Improvement, Part 2:

http://www.ihi.org/education/IHIOpenSchool/resources/P ages/AudioandVideo/Whiteboard4.aspx

• PDSA Cycles, Part 1:

http://www.ihi.org/education/IHIOpenSchool/resources/P ages/AudioandVideo/Whiteboard5.aspx

• PDSA Cycles, Part 2:

http://www.ihi.org/education/IHIOpenSchool/resources/P ages/AudioandVideo/Whiteboard6.aspx

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What are we trying to accomplish? How will we know that a change is an improvement? What change can we make that will result in improvement?

Model for Improvement

Act Plan Study Do

Aim of Improvement Measurement

• f

Improvement Developing a Change Testing a Change

Adapted from Langley, G. J., Nolan, K. M., Nolan, T. W., Norman, C. L., & Provost, L. P. The Improvement Guide: A Practical Approach to Enhancing Organizational

• Performance. San Francisco, CA: Jossey-Bass, 1996.

Why Test?

• Increase the belief that the change will result in

improvement

• Predict how much improvement can be

expected from the change

• Learn how to adapt the change to conditions in

the local environment

• Evaluate costs and side-effects of the change
• Minimize resistance upon implementation

Repeated Use of the PDSA Cycle

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Hunches Theories Ideas Changes that Result in Improvement

A P S D A P S D

Very Small Scale Test Follow-up Tests Wide-Scale Tests

• f Change

Implementation of Change Sequential building of knowledge under a wide range

• f conditions

Spread

Multiple PDSA Cycle Ramps

Transfusion Administration Safety Communication and Awareness Strategies Engaging with Leadership

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Implementing Transfusion Guidelines

Final Questions/Discussion

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Raise your hand Use the chat