But really … ..what is an ACO?

1. But really…..what is an ACO? When broken down into its simplest form, an ACO is not so much a thing” as it is a set of operating and behavioral/cultural principles designed and implemented to accomplish two overarching goals“: Transformation and expansion of the care delivery enterprise to deliverthe right care (via evidence-based population-specific disease management care guidelines and appropriateness criteria) in the most appropriate setting (i.e.: ambulatory setting where appropriate/avoid unnecessary ED/hospitalizations by 24/7 ambulatory access), at the right time (i.e.: preventive screenings, chronic disease status checks, etc).Further, the Care Delivery System will embrace performance measurement and use such to continually improve individual and population outcomes. * Transformation of the payment system to models and methodologies that reward value(*) rather than volume *as measured by both individual and population outcomes/results

2. ACO Opportunity – What Does it Mean? Cultural/Behavioral/Paradigm Shift FROM • Profit from sickness • Minimal focus on high utilization • Emphasis on procedures • $ in Specialty Care • Minimal consult/continuum management • Fragmentation • Misaligned financial incentives • Autonomy is paramount • All care driven by MD….i.e. if there is a highest cost model… • Patient and family members as nuisance TO • Profit from wellness/health • Reduce preference and supply driven care • Emphasis on Prevention • Increase $ in Primary care • PCP team manages care through continuum • Integration/Interdependent • Aligned financial incentives • Evidence-based and consistent, reliable medicine & service • Responsibility shifted to non-physician providers • Patient and family members as integral members of the team

3. ACO Guiding Principles and Attributes Clockwork Medicine/Seamless Transitions Team Care – including case management and patient self-care Performance-driven Provider Network Payment for Value IT as a key enabler

4. Don’t Underestimate the Magnitude of Change………Expectations of Participating Physicians Participating physicians will need to agree to (most or all): Open sharing of clinical files Referral constraints – i.e. refer within Network/Group Use of and adherence to Clinical Guidelines Practice expectations around documentation, computerized ordering, etc. Willingness to use case managers, physician extenders, hospitalists, etc Utilize group practice services such as after-hours care, nurse triage, central scheduling, etc. Reporting of process and outcome measures Participation in peer review activities up to and including terminating nonperforming physicians when other remediation efforts have failed

5. Volume Driven to Value Driven Care Transition in both the Payment and the Delivery Systems Delivery System IDEAL Value Driven Coordinated Care TODAY (TRANSITION) YESTERDAY Volume Driven Fragmented Care Payment System Episode-of-Care or Comprehensive Care Payment Fee-for-Service Adapted from: Harold D. Miller. From Volume To Value: Better Ways To Pay For Health Care Health Affairs, September/October 2009; 28(5): 1418-1428.

6. Follow the money Jerry Chronic diseases are also the primary driver of health care costs – accounting for more than 75 cents of every dollar we spend on health care in this country. In 2007, this amounted to $1.65 trillion of the $2.2 trillion spent on health care. CDC

7. “One quarter of Medicare beneficiaries have five or more chronic conditions, sees an average of 13 physicians each year, and fills 50 prescriptions per year.” ― Clayton M. Christensen, The Innovator's Prescription: A Disruptive Solution for Health Care “The art of medicine consists of amusing the patient while nature cures the disease.” Voltaire

9. Realign the Business and Clinical Strategies We must be able to manage a population and not a group of patients Advanced Palliative • Complex Case Management • Palliative Care • Chronic High Risk • Disease Management • Case Management • Well-controlled • & Healthy • Screening and Prevention • Wellness

10. “Perfection is not attainable but if we chase perfection we can catch excellence”- Vince Lombardi

11. The thing about paradigms…Shift Happens!

12. Why all the focus on Disease Management? • Approximately 12 billion dollars a year are spent on “ potentially preventable” readmissions. (Medicare Payment Advisory Commission) • There has been a paradigm shift for healthcare as Medicare moves to cut reimbursement for readmissions while focusing funding on follow up educational services and prevention for discharged patients at high risk. • On February 4, 2013 Medicare announced the Comprehensive ESRD care initiative.

13. Transformation and Change • There is profound concern regarding the future sustainability of the Medicare program and efforts to ensure resources are being utilized in the most cost effective manner have emerged. • Proposals have been made for ACOs to be created to focus on systems to deliver care to the general population. • On February 4, 2013 Medicare announced the Comprehensive ESRD care initiative.

14. “Bad healthcare” contributes to increased cost • People with the highest medical costs are often those who receive “bad healthcare” . • They are the chronically ill who cycle in and out of emergency departments and doctor’s offices. • Multiple “emergency room visits and hospital admissions should be considered failures of the healthcare system until proven otherwise”

15. Why Kidney Disease? Prevalent patients surviving cohort year without ESRD, age 65 & older (Medicare) & 20–64 (MarketScan & Ingenix i3). • 25 million Americans with CKD • Increasing due to diabetes, aging, and the obesity epidemic

16. Current outcomes in Late Stage CKD present an ideal population for improved outcomes at lower costs… There is direct savings in pt. management. 82% of patients start dialysis with catheters. The overwhelming cost of care in the “acute” phase of dialysis far outweighs the cost of prevention and disease management. The initial cost to manage a patient in the early initiation of HD spike as does the mortality rate.