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A Clinical Home Run for the Sandovals Designing Payment for Purpose

March 10, 2009 . A Clinical Home Run for the Sandovals Designing Payment for Purpose. Arnold Milstein, MD, MPH. Learning How to Pay From Lean Benchmark Providers. RWJF and CHCF supported search for “lean care idols”.

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A Clinical Home Run for the Sandovals Designing Payment for Purpose

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  1. March 10, 2009 A Clinical Home Run for the Sandovals Designing Payment for Purpose Arnold Milstein, MD, MPH

  2. Learning How to PayFrom Lean Benchmark Providers RWJF and CHCF supported search for “lean care idols” Lowering total annual cost by >15% pivots on designed-for-purpose chronic care Chronic care designed to lower total cost (and raise Q) requires shared savings with, or global cap, of PCPs

  3. Three Ingredients Were Applied to Two Reengineering Goals: A. ↓Health Crises/Year (Primary) B. ↓Cost/Service (Secondary) Salient Caring, Tailored to ↓↓Hospital Use Team-based Production Tight Supplier Mgmt (↓ Both) (↓ Crises/Year) (↓ Cost/Service) See “Medical Homes – And Medical Home Runs?” By A. Milstein, Sept. 10, 2008. Health Affairs Blog. URL: http://healthaffairs.org/blog/2008/09/10/medical-homes-and-medical-home-runs/ And R. Bohmer & D. Lawrence in Health Affairs Sept/Oct 2008

  4. Lowering Hospital Use is Not Rocket Science: U.S. Chronic Illness Patients’ Experience of Care (10 yrs after IOM Blue Ribbon Quality Report) Reference: Schoen C, Osborn R, How S, Doty M, Peugh J. In chronic condition: Experiences of patients with complex health care needs, in eight countries, 2008. Health Affairs. 2008;8:w1-w16.

  5. Final Evolutionary Step is Rocket Science: Fluid “Learning Organizations” OfferLower Near-term & Greater Long-term Gains • Industrial engineering core • Lowering cost/service is primary • No detectable performance limits • Larger scale required • Shared plan savings not essential

  6. Options for Funding the Sandovals’ Care • Today: 5-10% savings via “20/20”: (a) incentivize sicker patients to switch to better (Q + E) PCPs (b) incentivize better PCPs to ↑↑ throughput via team-based care • Tomorrow: ~35% (?) savings via “ACOs”: incentivize all providers to boost value • Reference pricing encourages all patients to select higher value providers • Chronic & preventive care providers share in plan’s total PMPM savings only when needed • Episodic care providers share in plan’s total episode savings only when needed • Transforming care savings into care affordability will require expanded professionalism and/or more provider competition

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