Maryland All-Payer Model, Hospital Global Budgets Sule Calikoglu
Maryland All-Payer Model, Hospital Global Budgets Sule Calikoglu Gerovich, PhD Director, Center for Population-based Methdologies Marylands Hypothesis Marylands All Payer Model Enhance Patient Experience Better Population Health Lower Total Cost of Care An all payer system that is accountable for the total cost of care on a per capita basis is an effective model for establishing policies and incentives to drive system progress toward achieving the Three Part Aim. 2 Lower Cost Annual hospital SPENDING CAP 3.58% per capita 3 Medicare SAVINGS TARGET
$330 million over 5 years GROWTH in Maryland spending per capita for Medicare cannot exceed nation Improve Care REDUCE READMISSIONS: patients who return to the hospital within 30 days of discharge Maryland ranks poorly (almost last) 49 of 51 states and D.C. 4 Bring Maryland readmissio n rates to NATIONAL AVERAGE in 5 years Better,
SAFER care Safer Care REDUCE INFECTIONS AND COMPLICATIONS: patients who get sicker while in the hospital Maryland rates of infection HIGHER than nation 5 REDUCE infections and complicatio nsby 30% in 5 years Better, SAFER care Focus Shifts from Rates to Revenues Former Model: New Model: Volume Driven Population and Value Driven Units/Cases Revenue Base
Year Updates for Trend, Population, Value Rate Per Unit or Case Allowed Revenue for Target Year Hospital Revenue Unknown at the beginning of year More units creates more revenue Known at the beginning of year More units does not create more revenue Global Budget Model Efficient High Quality Hospital
Inefficient Low Quality Hospital 7 The Global Budget Model: revenue budget with annual adjustments Adjust for Populatio n and Market Share Changes The initial revenue budget would be based on historical revenue This budget could be enhanced or reduced based on hospital efficiency and utilization The budget would be adjusted annually for changes in market share, population and quality Global Budget Model
The key aspects of the Global Revenue Budget are as follows: Fixed revenue base for 12 month period with annual adjustments Hospitals change their rates within +-5% corridor to charge for their budget If a hospital reduces potentially avoidable utilization (PAU), they retain savings 8 Invest savings in care improvement. Annual adjustments for medical inflation, population growth, market shifts etc. Annual quality adjustments Maryland Performance-Based Payment Programs and Risk levels
9 Potentially Avoidable Utilization: Unplanned Care Definition of PAU: Hospital care that is unplanned and can be prevented through improved care coordination, effective primary care and improved population health. 10 Unplanned Admissions 55 % of all inpatient admissions are Medical admissions from Emergency Departments 61 % of all inpatient admissions are from ED PAU Distribution of Medical Cases from ED From ED Total Number of Admissions Total % No-ED Admissions 15.69% 4.90% 18.01%
Admission Number of Type Admissions Number of Admissions % 61.41% % Medical 381,013 54% 166,015 24% 547,028 78% Surgical 48,300 7% 106,022
15% 154,322 22% Grand Total 429,313 61% 272,037 39% 701,350 100%PQI: AHRQ Prevention Quality Indicators (PQIs)* 11 Other Readmission PQI Sepsis Readmissions: 30 day all cause readmissions Addressing Disparities is an important strategy in reducing PAUs % Inpatient Admissions by Race 70%
59% 60% 54% 50% 40% 30% 20% 10% 0% 12% 10% 9% % PQI % Readmission White 12 14% African-American % Medical Admissions from ED CMS and National Strategy--Change Provider Payment
Structures, Delivery of Care and Distribution of Information Focus Areas 13 Description Source: Summarized from Sylvia Burwell (US Secretary of Health & Human Services) presentation Healthcare Landscape in Maryland Hospitals: Maryland starts new All-Payer Model January 2014 14 Moves from volume-based payment for hospital to per capita measures, including quality requirements Delivery System Organizing in Alignment: Mature medical home models in place for many privately covered persons Accountable Care Organizations (ACOs) started
Managed care organizations expanded efforts to address Medicare patients Hospitals and regional partnerships organizing around communities and geographic areas Extensive planning in 2016 Significant progress in HIE infrastructure development Maryland is in a Period of Rapid Cycle Change Care Delivery and Financing Population Person-Centered Tailoring care to persons needs. Shared Information, collaborative care coordination. Value-Based Movement from volume-based care to value, incremental movement towards financial and outcomes responsibility shared by all stakeholderspayers, providers, individuals. Competition
Healthy competition based on patient satisfaction, quality, outcomes, and cost of care All-Payer Hospital initiatives continue on an all payer basis, with global budgets used as one tool for alignment with other providers. Non-hospital initiatives build on common principles and measures. Focused on the Needs of the Community Community needs known and addressed Supporting Social Needs Address social determinants of health Identifying High-Risk Individuals Focus on complex patients with high-needs, highrisk, and individuals with chronic disease Responsibility for prevention and self-management of health; active relationship with PCP and coordination team Engaged Patient Working with a Primary Provider/Team Receiving Meaningful Care Coordination 15
PCP, Specialists, Nurse Practitioner, community health workers etc. Consistent and coordinated support based on individual need CY 2014 All-Payer Model Results Good initial results but complex transformation ahead 16 All hospitals on global budgets, ~95% of revenues All Payer hospital revenue growth was contained to 1.47%, compared to the 3.58% per capita ceiling Medicare hospital savings of $116 million were achieved toward the $330 million five year requirement Rate of hospital acquired conditions declined by 28% Percent readmissions declined by 4.5%, faster than the national declines for Medicare Core Approach--Tailoring Care Delivery to Persons Needs. Balanced approached between short and long term investments A B Address modifiable
risks and integrate and coordinate care, develop advanced patient-centered medical homes, primary care disease management, public health, and social service supports, and integrated specialty care 17 High need/ complex 40 K Chronically ill but at high risk to be high need >200 K Care plans, support services, case management, new models, and other interventions for individuals with significant demands on health care resources C
Promote and maintain health (e.g. via patientcentered medical homes) The Next Steps Needed for MarylandCare Improvements that Reduce Hospitalizations Fully implement care coordination to scale, first for complex and high needs patients Organize and engage consumers, primary care, longterm care, and other providers in care coordination and chronic care management 18 Intense focus on Medicare and dual eligible, where supports are immature Build on growing Primary Medical Home Models and Accountable Case Organizations, global budgets and geographic areas, and Medicare Chronic Care Management fees Ensure focus on qualified Alternative Payment Models for physicians and other providers to optimize payment levels under Medicare physician payment rules (MACRA legislation)
Optimize acute/post-acute Transformation Planning in 2015 Funding provided in rates for focus on reducing potentially avoidable utilization (PAU) Hospital and Partnerships reports 19 Hospital FY 2014 and FY 2015 reports for investments to reduce PAU Eight regional partnership plans filed System Transformation Plans filed by all hospitals Twenty-two Implementation proposals filed HSCRC and other reviewers, including consultants, assessing reports and plans Statewide HIE Infrastructure (CRISP) to Support Care Redesign in Progress Care Managers
Risk stratified patient analysis Care profile view Care manageme nt tools Notifications New clinical data feeds for care manageme nt Performanc e metrics Consent manageme nt 20
Clinicians Point-ofCare Richer clinical query portal information Care profile view Notification s In-context alerts Care alerts receive & create Consent manageme nt LTC/HH/ Other Providers Richer clinical query
portal information Care profile view Performanc e metrics Consent manageme nt Public Officials Performan ce metrics Statewide & regional analytics ACO, PCMH, Other Payers Risk stratified
patient analysis Care profile view Care manageme nt tools Notifications New clinical data feeds for care manageme nt Performanc e metrics Consent manageme nt Patients Control of health data consent All providers have a patientcentric understandi ng of their health status Plans Focused on All-Payer Model Evolution
21 The existing contract requirement with CMS: By January 2017 Maryland must submit a proposal for a new model which shall limit, at a minimum, the Medicare per beneficiary total cost of care growth rate to take effect no later than January 2019 HSCRC will focus on this effort with DHMH and stakeholders All-Payer Model focuses on delivery system redesign as the driver of lower growth in costs HSCRC is focusing on progressing alignment models and getting data and waivers to support efforts beyond hospitals Thank you! [email protected] 22
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