Research Questions How m uch risk contracting is really out there? - - PDF document

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Brandeis University

Risk Contracting and Physician Com pensation in Large MD Groups

Robert Mechanic Brandeis University The Estes Park Institute January 26, 20 15

Brandeis University

Research Questions

• How m uch risk contracting is really
• ut there?
• How have m edical groups prepared

for paym ent reform ?

• How is MD com pensation aligned

with health system incentives?

• What do m edical groups see as the

largest hurdles?

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Brandeis University Surveyed Groups (Fall 2011) Atrius Health Group Health Physicians Mayo Clinic Austin Regional Clinic Health Care Partners Oschner Health System Billings Clinic HealthPartners Medical Group Palo Alto Medical Foundation Dean Health System Henry Ford Medical Group Scott & White Healthcare The Everett Clinic Intermountain Medical Group Sharp Rees‐Stealy Med Group Fallon Clinic Kaiser Permanente Med Group Virginia Mason Medical Group Geisinger Health System Marshfield Clinic Wenatchee Valley Med Center Brandeis University

Num ber of FTE Physicians by Type

‐ 100 200 300 400 500 600 700 800 900 1,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Primary Care MDs Specialist MDs Hospitalist MDs

Note: Excludes the Permanente Medical Group.

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Facility and Health Plan Ownership

67.0% 43.0% 57.0% 57.0% 24.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Hospital Skilled Nursing Facility Ambulatory Surgery Center Health Plan Physician‐Only

Source: Self-reported survey data from 21 CAPP medical groups. Brandeis University

Paym ent Profile

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Type of contract as a percent of total patient revenue

Fee for Service, 54% FFS w/P4P, 3% FFS ‐ Affiliated Plan, 8% Shared Savings, 2% Shared Risk, 3% Partial Capitation, 5% Global Capitation, 25% Note: Calculated as a simple (unweighted) average (n= 21).

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20 10 Patient Revenue by Contract Type

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 FFS Affiliated Health Plan Risk

Source: Self-reported survey data from 21 CAPP medical groups.

FFS-based Risk-based

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Physician Com pensation

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20 10 PCP Com pensation Method

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Production Salary Performance Other

Source: Self-reported survey data from 21 CAPP medical groups.

FFS-based Risk-based

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Group Paym ent vs. PCP Com pensation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of Compensation Based on Productivity Risk Contracts as Percent of Total Revenue

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Dean Clinic transition toward a value- based compensation plan (specialty)

FFS/Volume Based Value Based

Source: Craig Sammit, MD

One example:

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98% 2% 95% 60% 20% 15% 10% 10% 40% 20% 20% 15% 10% 10%

0% 20% 40% 60% 80% 100%

2009 2010 Option A 2010 Option B Future? Dean PCMH Compensation Model Transition Efficiency Quality Service Panel Size RVUs - 5% RVUs Salary 95% 115% 115% 100%

Dean Clinic Realignment of Primary Care Compensation

Source: Craig Sammit,,MD

One example (continued)

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Operating Characteristics

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System Assets by Type of Group

80.0% 50.0% 80.0% 40.0%

45.0% 36.0% 64.0% 73.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Hospital Skilled Nursing Facility Ambulatory Surgery Center Health Plan FFS Groups Risk Groups

Source: Self-reported survey data from 21 CAPP medical groups. Brandeis University

Data Managem ent Capacity

0% 20% 40% 60% 80% 100% 120%

Physician and patient reminders Patient disease registries Data warehouse & analytic software Results management Shared electronic health record

Risk‐Based (N=11) FFS ‐ Based (N=10)

Source: Author’s analysis of self-reported survey data from 21 CAPP medical groups.

Percent of Groups Reporting “Fully Im plem ented”

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Perform ance Im provem ent Initiatives

0% 20% 40% 60% 80% 100%

Patient engagement initiatives

• Mgmt. Programs for High Risk Patients

Establish preferred relationships with efficient hospitals & specialists Reduce network leakage Reduce avoidable admissions & readmissions

Risk‐Based (N=11) FFS ‐ Based (N=10)

Source: Author’s analysis of self-reported survey data from 21 CAPP medical groups.

Percent of Groups Reporting They are “Far Along”

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Attitude toward expanding future risk contracting (n=15)

• All expect expanded risk contracting
• 11 groups seeking new risk contracts
• 3 were preparing for paym ent

system change

• 1 group not interested

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What are the largest challenges to increasing your revenue from alternative paym ent contracts? (N=14)

0% 20% 40% 60% 80% 100% 120%

Physician and staff resistance Payer willness to offer risk contracts PPO‐dominated market not appropriate for risk contracting Need to improve data management and information systems Need to improve care management capabilities

Very Important Somewhat Important

Source: Author’s analysis of self-reported survey data from 21 CAPP medical groups. Brandeis University

Conclusions and Issues

• “Many large m edical groups will need

to acquire new skills and tools to be ready for paym ent reform ”, Hea lth Affa irs Sept 20 12

• Significant challenges and cost to

im plem ent these changes broadly

• Sources of capital for infrastructure?

– Insurers? – Hospitals? – Governm ent?

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Thank You

Robert Mechanic Senior Fellow Heller School for Social Policy & Mgm t. Brandeis University m echanic@brandeis.edu http:/ healthforum .brandeis.edu