The Changing Behavioral Health Care Landscape: Integration, Innovation, and Financing Models Friday, May 17, 2013

1. The Changing Behavioral Health Care Landscape: • Integration, Innovation, and Financing Models • Friday, May 17, 2013 • County of San Bernardino Health Services Auditorium • Friday, July 12, 2013 • Koinonia Church, Hanford, CA • Friday, August 16, 2013 • San Leandro Marina Community Center • Friday, September 20, 2013 • Redding Memorial Veterans Hall • Charles G. Ray • AHP Healthcare Solutions

2. Thank You Sponsors! • • UCLA Integrated Substance Abuse Programs • • Pacific Southwest Addiction Technology Transfer Center • • California Department of Health Care Services • • County Alcohol and Drug Program Administrators Association of California • • NIDA Clinical Trials Network – Pacific Region Node and Western States Node • • Alameda County Behavioral Health Care Services • • County of San Bernardino Department of Behavioral Health • • Kings County Behavioral Health • Shasta County Health and Human Services Agency

3. AGENDA • Welcome & Introductions • Logistics and Orientation • Objectives • Overview of Issues and Trends • Understanding Health Care Reform • Optimizing Behavioral Health Revenue • Innovations in Behavioral Health • Marketing Your Value-Add Propositions

4. Key Concepts • Fear, anxiety and uncertainty are normal reactions to abnormal events • These are abnormal times and abnormal events are unfolding around us with increasing frequency • The Information Age, the Great Recession, Health Care Reform, elections, wars, and globalization represent a lot co-occurring abnormal conditions • Complexity, volatility and paradigm-shifting ensue

5. Key Concepts • This is your field. You worked hard to get here. • This field was carved from the stone of ignorance and fear and discrimination • We’ve won important Civil Rights battles in the form of the ADA, COBRA, HIPAA, EMTALA, MHPAEA and now the PPACA • Our work is not done yet. Far from it! • More to come for those who can perceive the opportunities and mobilize their resources despite the fear and uncertainty.

6. Key Concepts • Discontinuity and Disruption (P. Druker) • Instability (A. Toffler) • Decay and Irrelevance (G. Hammel) • Tipping Point (M. Gladwell) • Strategic Inflection Point (A. Grove) • Value Migration (A. Slywotzky) • Disruptive Innovation (C. Christensen)

7. Issues • Reducing ED admissions and re-admissions • Medicaid managed care • Managed care business operations and infrastructure • Competition • Prescription drug abuse • Financial risk • Licensure and credentialing • Compliance with Mental Health Parity & Addiction Equity Act • State definitions of Essential Health Benefits • Preservation of system of care and prevention

8. Issues • “Diabesity” epidemic • Whole health, person-centered care • Medication assisted treatment • Integration(vertical) • Consolidation (horizontal) • Carve-in • Retail healthcare • Health Coaches • Continued de-institutionalization • eHealth / mHealth

9. International Comparison of Spending on Health, 1980–2010 Average spending on healthper capita ($US PPP) Total health expenditures aspercent of GDP Notes: PPP = purchasing power parity; GDP = gross domestic product. Source: Commonwealth Fund, based on OECD Health Data 2012.

10. Health Care Costs Concentrated in Sick Few—Sickest 10 Percent Account for 65 Percent of Expenses 1% 5% 22% $90,061 10% 50% $40,682 65% 50% $26,767 97% $7,978 Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2009 Annual mean expenditure Source: Agency for Healthcare Research and Quality analysis of 2009 Medical Expenditure Panel Survey.

11. Problem: Causes of Premature Death in the General Population N Engl J Med. 2007 Sep 20;357(12):1221-8.

12. Impact Statement Health Care reform

13. Reform • Coverage expansion • New models • ACOs and integrated delivery systems • Health Care (Medical) Homes & Dual Eligibles Initiatives • New administrative structure • Essential Health Benefits (benchmark plans) • Health Insurance Exchanges • New risk-based financing mechanisms Medicaid managed care and capitation

14. Coverage Expansions Below 133% FPL ($29,500 family) 133 – 400% FPL ($88,000 family) State Exchanges Coverage for essential MH/SA at parity & prevention @ no co-pays Helps individuals and small employers with purchasing health insurance Assist by voucher to pay premiums or cost sharing Develops consumer friendly tools & plain language on insurance One application to both exchanges or Medicaid; can do on the web Medicaid Expansion To Childless Adults • Coverage for essential MH/SA at parity for benchmark plan • Feds pay 100% for 3 years, then down 90% • Simplified enrollment, express apps: web too • Integrated data with State exchanges: one application • Foster kids up to age 26

15. California by the Numbers

16. California by the Numbers

17. California

18. California FQHCs • 118 Federally-Qualified Health Centers Statewide • 1,039 FQHC Service Sites • www.statehealthfacts.org

19. Prevalence of Serious Mental Illness Among Adults Ages 18 – 64 by Current Medicaid Status and Eligibility for Medicaid Expansion or Health Insurance Exchanges: California, US

20. Prevalence of Substance Use Disorders Among Adults Ages 18 – 64 by Current Medicaid Status and Eligibility for Medicaid Expansion or Health Insurance Exchanges: California, US

21. SUD in CA Medicaid Expansion and Health Insurance Marketplace • Most common characteristics of persons with SUD in Medicaid expansion population in California is: • Male • 18-34 years old • Non-Hispanic White or Hispanic • Less than High School Education Sources: 2008 – 2010 National Survey on Drug Use and Health (Revised March 2012) 2010 American Community Survey

22. California & ACOs • CMS has approved 400+ ACOs nationwide. • Include a range of providers and sizes; about half are physician-led organizations that serve fewer than 10,000 beneficiaries. • One-fifth include rural health centers, community health centers, and critical access hospitals, which serve rural and low-income communities. • Nearly 30 ACOs in CA • Almost half sponsored by physicians and IPAs (independent practice associations)

23. Sampling of Golden State ACOs • Brown & Toland Physicians, based in San Francisco; • HealthCare Partners Medical Group, which serves Los Angeles and Orange counties; • Heritage California ACO, which serves southern, central and coastal California; • Monarch HealthCare, based in Orange County; • PrimeCareMedical Network, which serves Riverside and San Bernardino counties; • Sharp HealthCare System, based in San Diego • ApolloMed Accountable Care Organization in Glendale; • Golden Life Healthcare in Sacramento; • John Muir Physician Network in Walnut Creek; • Meridian Holdings in Hawthorne; • North Coast Medical ACO in Oceanside; and • Torrance Memorial Integrated Physicians • UCLA ACO • Cedars Sinai ACO • Hill Physicians/Dignity Health, serving Sacramento • Palo Alto Medical Foundation • Santa Clara County IPA • St. Joseph Health

24. Golden State ACOs

25. Golden State ACOs

26. Golden State ACOs

27. Population Health Management • ACOs must develop a process for identifying patients who have complex needs (multiple chronic conditions) or are at high risk of developing such needs and provide them with wellness and prevention programs, disease management, and complex case management, as indicated • ACOs make available or support providers’ use of electronic prescribing, electronic health records systems, registries, and self-management tools

28. PCMH Principles • Personal physician- each patient has an ongoing relationship with a personal physician trained to provide first contact, continuous and comprehensive care. • Physician directed medical practice – the personal physician leads a team of individuals at the practice level who collectively take responsibility for the ongoing care of patients. • Whole person orientation– the personal physician is responsible for providing for all the patient’s health care needs or taking responsibility for appropriately arranging care with other qualified professionals. This includes care for all stages of life; acute care; chronic care; preventive services; and end of life care. Source: Patient Centered Primary Care Collaborative

29. PCMH Principles • Care is coordinatedand/or integrated across all elements of the complex health care system (e.g., subspecialty care, hospitals, home health agencies, nursing homes) and the patient’s community (e.g., family, public and private community-based services). • Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner. Source: Patient Centered Primary Care Collaborative

30. PCMH • Quality and safety are hallmarks of the medical home: • Advocacy for patients • Evidence-based medicine and clinical decision-support tools guide decision making • Accountability for continuous quality improvement • Patients actively participate in decision-making andtheirfeedback is sought • Health IT is utilized appropriately to support care, performance, education, and communication • Practices go through a voluntary recognition process • Patients and families participate in quality improvement activities at the practice level. Source: Patient Centered Primary Care Collaborative

31. PCMH Principles • Enhanced access to care is available through systems such as open scheduling, expanded hours and new options for communication • Paymentappropriately recognizes added value The payment structure should be based on the following framework: • reflect the value of care management work and coordination of care • support adoption and use of health IT and use of monitoring • support enhanced communication such as secure e-mail and telephone • allow share in savings from reduced hospitalizations • It should allow for incentives for achieving quality improvements. Source: Patient Centered Primary Care Collaborative

32. Integration Patient Value defined here (health/cost) Managing Knowledge (training, process improvement, etc) Informing & Educating (patient and family education) Measuring and Monitoring (testing, records, etc) Assuring Access to Services (continuum of care, hotline, transport) Assessment Diagnosis History Testing Consult Preparing Counseling Interviews Teaming Intervening Orders Procedures Counseling Therapy Prevention Risk Factors Screening Monitoring Monitoring & Managing Compliance Lifestyle Recovery & Rehab Fine tuning Discharge planning Provider Margins made here Feedback Loops Source: M. Porter and E. Olmstead Teisberg

33. Common Collaborative Care Models • 1. Coordinated model: behavioral services available at a separate clinic/location • Access and convenience is low; patients may not show up for referral/follow up care • 2. Co-located model: behavioral services available at the same medical center/clinic • More convenient for patients and providers • 3. Integrated: behavioral services are part of the medical treatment within the clinic • Creates a “medical home” for the patient with all services under unified management • Facilitates closer communication, patient tracking and follow up Source: Patient Centered Primary Care Collaborative

34. ACOs and PCMH:Side-by-Side What role do you see yourselves playing?

35. ACO Payment Health Research & Educational Trust, 2012

36. Medicaid Expansion

37. Medicaid Health Homes • Defined in Section 2703 of the ACA • to expand traditional and existing medical home models • to build linkages to community and social supports • to enhance coordination of medical, behavioral, & long-term care • New Medicaid State Plan Option effective 1/1/2011 • - a comprehensive system of care coordination for individuals with chronic conditions • Health Home providers will coordinate all primary, acute, behavioral health and long term services and supports to treat the “whole-person” • Can include dual eligibles

38. Health Homes • The chronic conditions listed in statute include • mental health condition, • substance abuse disorder • asthma, • diabetes, • heart disease, and • obesity (as evidenced by a BMI of > 25). • States may add other chronic conditions for approval by CMS

39. Health Homes: Key Features • Shared services, goals and risk • Central management • Community or regional networks • Multi-disciplinary community health teams • Dedicated care coordinators • Integrated primary care/behavioral health services • High-performing primary care providers • Population management tools • Health information technology & data exchange

40. Health Homes: BH Rationale • People with BH conditions die years earlier by up to 25-35 years • One million people with behavioral health conditions will die from heart attack or stroke in the next 5 years. • Behavioral health conditions are implicated in all major chronic diseases, and vice versa • Disabled Medicaid beneficiaries with SMI - 29% to 49%. • SMIs represented in 3 of the top 5 most prevalent dyads are in the highest-cost 5% of beneficiaries

41. State Health Home ActivityAs of November 2012

42. Medicaid Expansion • Between 2014 and 2019, a full Medicaid expansion will provide health insurance coverage to 17 million people with incomes less than 138 percent of the federal poverty level (FPL) who were previously uninsured. • About 40 percent of this group – or 6.6 million individuals – with serious or moderate mental illnesses who are currently uninsured will obtain health insurance through the Medicaid expansion by 2019.

43. Essential Health Benefits • Mental Health and Substance Use Disorders treatment are among what HHS calls Essential Health Benefits (EHB). States are defining these now.

44. Parity & Equity Applies • The Mental Health Parity & Equity Act (2008) applies to Medicaid Expansion, all Medicaid Managed Care Plans (expansion or not), and all CHIP. • Highlights • Fair coinsurance (equal to majority medical co-pay) • Equitable access in terms of number days/visits allowed, frequency, duration of treatment • Provides for in and out of network coverage where same is covered for medical • Mandates parity in utilization review guidelines and practices • Ensures access to and equitable coverage for inpatient, outpatient, ED and Rx formulary • Disallows “EAP Gatekeeper” and “Fail First” practices in UM • Mandates fairness in network admission standards and method/setting UCR rates of reimbursement for providers

45. State ProgressAs of 1/4/13

46. Who Benefits from the ACA?

47. Community-Based Strategy forImproving Care of High-Cost Patients Regulatory relief, technical assistance Seed funding • Medical home care management fee • Accountable Care Organizations • Bundled payment for acute episodes • Partial capitation • Shared savings and shared risks • Gain-sharing • Value-based purchasing • Public–private payer harmonization • Medical homes • Primary care practice teams • System of off-hours care • Transitions in care • Reduced readmissions • Care coordination • Electronic health records • Electronic prescribing • Meaningful use • Support for self-care • Mobile health applications • Computerized decision support

48. Synergistic Strategy: Cumulative Savings, 2013–2023 Source: Commonwealth Fund Notes: SGR = sustainable growth rate formula; GDP = gross domestic product. * Malpractice policy savings included with provider payment policies. ** Target policy was not scored.

49. Consolidation & integration

50. M&A Activity 2012 • In 2012, dealmakers committed $143.3 billion to finance the year’s activity in the health care merger, acquisition and takeover market. • In terms of the number of health care deals announced, 2012 was one of the busiest in the past decade, with 1,063 deals, up 5.9% compared with 2011’s 1,004. Source: Irving Levin Associates, January 2013