Florida Public Health Institute/Community Health NETwork Carl Patten, JD, MPH

1. The path to health care system transformation: Patient Centered Medical Homes and Accountable Care Organizations Florida Public Health Institute/Community Health NETwork Carl Patten, JD, MPH Director, Florida Blue Center for Health Policy August 27, 2013

2. Agenda and Overview • Key drivers of and obstacles to changes • Seizing the future: the role of patient-centered medical homes and accountable care organizations • Navigating the chasm • Key takeaways • Questions

3. Key drivers of and obstacles to change

4. The need for change has long been clear, but the path is not. • Drivers of change • Access • Quality • Cost • Obstacles to change • Entangled and complex challenges • Requires comprehensive solutions • Political sensitivity

5. Seizing the future The role of patient-centered medical homes and accountable care organizations

6. PCMHs is supported by significant history and broad stakeholder alignment • History • Medical Home concept established in 1967 • Chronic care model established in 1996 • Joint PCMH Principles established in 2007 (ACA) • Stakeholder Acceptance • Joint Principles of the Patient Centered Medical Home endorsed by AAFP, AAP, ACP and American Osteopathic Association • Patient-Centered Primary Care Collaborative: employers, physician groups, labor unions, health plans, consumer groups and other stakeholders • NCQA PCMH 2011 Standards

7. Although the PCMH model is well-established, it is not a panacea • Requires funding for robust implementation and impact • Significant workflow redesign and organizational culture changes required • Requires high level of cooperation within and among practices and organizations

8. ACOs have less history than PCMHs, but the model is connected to other concepts • Legal and financial infrastructure to create appropriate incentives • Flexibility • “Medical neighborhood” • Rooted in concepts such as HMOs, pay-for-performance and other approaches to improve the cost-effectiveness of care • Formalized by Dr. Eliott Fisher in 2006

9. Although there are overlapping concepts between PCMHs and ACOs, they have distinct roles

10. RELATIONSHIP BETWEEN PCMHs AND ACOs • PCMHs ARE THE “WHAT”, AND ACOs ARE THE “HOW” THAT DELIVERS THE “WHAT”.

11. Providers will likely take on more risk moving forward • Medical trend continues to outpace CPI. Driven in part by: • Fragmented fee-for-service • Provider consolidation The Accountable Care Glide Path

12. The transition of risk allocation must be purposeful, yet strategic • How does risk allocation to ACOs impact the quality and cost of care for different populations? • Specialized skill • The capacity to manage risk will likely differ among organizations • Consumers must be protected; however, organizations must not be unnecessarily burdened

13. There are other unanswered questions • Payment and risk • How to overcome the entrenchment of fee-for-service model? • Is the ability to assess the risk of populations assigned to ACOs adequate? • What is the best way assign patients to ACOs? • How will the financial health of ACOs be monitored? • How are patients and families adequately engaged? • Operational • Can the cultural transition to population health be made? • How will HIT and administrative infrastructure requirements be addressed?

14. The neighbors are restless • Physicians • Hospitals • Payers

15. However, public sector efforts are robust regarding PCMHs and ACOs • PCMHs • Federal PCMH Collaborative • Policies and programs promoting PCMHs have been adopted by 43 states • Community Care of North Carolina • Links Medicaid and CHIP enrollees to community-based primary care • $1 billion savings over 4 years • ACOs • Medicare Shared-Savings Program • Pioneer ACO Program • Advance Payment ACO Program

16. Private sector efforts are becoming more prevalent • As of August of 2012, 80 organizations identified having private pay only or public and private pay ACO contracts • Blue Shield of California and CalPERS ACO pilot • 40,000 members • $15 million in savings • BCBS of Massachusetts Alternative Quality Contract • Brookings-Dartmouth Partnership

17. Florida Blue is demonstrating leadership in the effort to implement PCMHs and ACOs • Approximately 30% of medical spend is through value based models • One of the largest PCMH programs in the country with over 2,200 PCPs and 240 groups • Eight ACO agreements with more in the pipeline • Physicians in PCMH program have performed the same or better compared to non-participating peers in all of the 29 metrics • Emergency room visits have dropped by 12% • Overall cost reduction of 4% during the first year

18. Navigating the chasm Research, evaluation and commitment will be crucial

19. Research conducted to-date indicates PCMHs and ACOs are promising and provide direction for improvement • Signs of success • PCMH model has an established history and is built on firm evidence • Several PCMH programs have produced improved quality, cost savings and better coordination among high risk/high need patients • ACOs have been successful in engaging physicians and moving the needle in forming agreements linking payment to quality measures and efficiency • Opportunities for improvement identified by the research • Patient engagement • Reducing utilization among low-risk patients • Patient and provider education • Useful data sharing between payers and providers

20. There is much more to learn • Examples of systemic issues • Coordination of public and private multi-payer programs • Impact of models on vulnerable populations • Example of organizational issues • Desired leadership characteristics needed for organizational adaptation • Feasible financing models • Allocation of resources (human, financial, technological) • Stakeholder dynamics, including community organizations • Standardization of performance measures of ACOs and PCMHs

21. The public and private sectors must work together to navigate the unknown • Encourage broad participation and a broad variety of structures • Information sharing • Encourage robust participation and research within the private sector through appropriate incentives • Coordination of implementation and requirements (performance measures and payment incentives)

22. Evaluation of ACOs must advance beyond formation of the neighborhood to the effectiveness of the neighborhood • Most evaluation efforts have focused on the ability to form ACOs • Relationship between risk presented by various payment models and ability to improve quality and efficiency of care • Impact on vulnerable populations and providers that deliver care to them

23. Key Takeaways

24. Takeaways • PCMHs are rooted in primary care and backed by history and strong evidence • ACOs serve as catalysts for the proliferation of PCMH principles throughout the health care system • These models have gained significant traction • We are at the precipice of a journey of transformation that will require continuous learning, broad participation and research and evaluation • Research and evaluation must be coordinated and build upon efforts to identify core metrics for useful comparisons to inform implementation efforts

25. Questions?