The Changing Landscape of Primary Care: PROMETHEUS and the Medical Home Model

1. The Changing Landscape of Primary Care: PROMETHEUS and the Medical Home Model Jesse C James, MD MBA Resident Physician Internal Medicine, UNCH

2. OUTLINE: Medical Home • Introduction • Background • Features • Benefits/Barriers • QUESTIONS

3. OBJECTIVES • WHAT IS A MEDICAL HOME? • WHERE DID THE MEDICAL HOME COME FROM? • WHAT DO MEDICAL HOMES DO? • HOW DOES A MEDICAL HOME WORK? • WHO DOES THE MEDICAL HOME BENEFIT? • WHAT ARE THE BARRIERS TO ADOPTION? • WHERE IS THE MEDICAL HOME GOING? We are going to answer these questions but should raise many more questions than we answer.

4. WHAT IS A MEDICAL HOME? “Home is not the place you live, but where they understand you.” -Cristion Morgenstern

6. DEFINITION • CMS: “Practices …become medical homes by demonstrating they have capabilities to provide medical home services.” • ACP: In a MH, a personal physician works with a team of professionals in a practice that is organized according to the principles of the MH. • Wiki: “continual care that is managed and coordinated by a personal physician with the right tools that will lead to better health outcomes” • AAFP: focal point for patients to receive “a basket of acute, chronic, and preventive medical care” that is accessible, accountable, comprehensive, safe, valid and satisfying. A medical home is what primary care should be and does what primary care should do.

7. DEFINITION MH is a physician based practice that is not a gatekeeper for, but is a navigator of, complex medical care. These physicians are knowledgeable of and responsible for the comprehensive care of their patient population and these practices demonstrate transparent, high quality care to payers and stakeholders. The MH concept involves a realignment of incentives and redesign of practice to make the medical home practice possible. Application of the MH concept creates an environment where MH practices can thrive.

8. HISTORY 1967 AAP introduces “medical home” as model for pediatric chronic disease (Sia, 2004) 1978 WHO recognizes “primary care” core elements (WHO, 1978) 2000s Evidence basis grows for and policy consensus supports IT adoption 2001 Crossing the Quality Chasm IOM report describes gaps between evidence based care and commonly occurring care (IOM, 2001) • AAP publishes definition with 30+ elements (Palfrey 2008) 2006 TRHCA mandates CMS MH demonstration project 2007 AAFP,ACP,AAP,AOA announce joint principles of “PCMH” There have been two distinct phases: Pre-Quality Movement MH 1967-1999 and Modern Quality Movement MH (2000-present).

9. GLOSSARY • MH: Any medical home, with either basic or advanced capabilities • CMH: Core Medical Home with basic features • AMH: Advanced Medical Home • PCMH: Patient Centered Medical Home=CMH • MH Practice: individual practices • MH Concept: broad reform to reimbursement landscape Framework: MH can be Core or Advanced depending on capabilities. “Patient-Centered”, ”Physician-Guided” are common descriptors.

11. WHAT DOES A MEDICAL HOME DO? “Home is the place where, when you have to go there, they have to let you in.” -Robert Frost

12. FRAMEWORK: Advanced vs Core

13. FRAMEWORK: MH Concept CMH CMH AMH CMH AMH CMH

14. Core Medical Home Features • PCP identified as responsible for care. • Enhanced access or extended hours. • Team approach to care that leverages non-physician staff. • Teams provide standardized evidence-based care. • Practice utilizes tools to track demographic data and clinical progress. Core Elements address enhanced access, quality, and coordination.

15. Advanced Medical Home Features • System is capable of same day scheduling and predictive modeling for access. • Practice encourages self management via patient access to EMR. • Practice uses data from EMR to improve care and identify special populations. • Practice tracks test, referrals, prescriptions. • Outcomes are reported to stakeholders and reviewed to improve care. Advanced Elements maximize open access, quality demonstration, care coordination via skillful use of health care IT.

16. Elements of the Medical Home

17. EXAMPLE: GEISINGER 250 PCPs serving population of 2.5 million Pennsylvanians. Pilot redesigned PCP to AMH model: “Personal Health Navigator” 24 hour access Home based monitoring Patient accessible EMR for refills and education Monthly physician level quality reports Standardized “all or nothing” bundles $1800 monthly physician stipend; $5000 transformation grant 20% reduction in all hospitalizations and 7% total medical cost Geissinger is a vertically integrated system that piloted an AMH, produced IMPRESSIVE results and shared savings with PCPs.

18. EXAMPLE: CMS PCMH Demonstration • Tax Relief and Health Care Act of 2006 • Focused on patients with chronic disease • CMS will recruit 50 practices in 8 states, 400 practices and 2000 physicians. • Recruitment Jan 2009 • Initial application March 2009 • Two Tiers of MH representing core and advanced elements CMS has created a MH pilot that will evaluate Core and Advanced MHs , will pay a maintenance stipend and share savings.

19. EXAMPLE: CMS PCMH Demonstration • TIER 1: 17 elements • Describe MH to patient • Establish written standards on access • Use data to identify/track patients • Build integrated care plans • Track test and results • TIER 2: 19 elements • Use CCHIT-EHR • Systematic approach to coordinated care • Utilize e-prescription software • Collect and report performance measures and revise processes based on results. CMS has created a MH pilot that will evaluate Core and Advanced MHs , will pay a maintenance stipend and share savings.

20. EXAMPLE: CMS PCMH Demonstration CMS will pay a Care Management Fee per enrolled patient that is adjusted for severity of chronic disease.

21. WHERE ARE MEDICAL HOMES GOING? “There’s nothing half so pleasant, as coming home again.” -Margaret Elizabeth Sangster

22. Benefits • Continuous care improves patient satisfaction, education and use of preventive services (Starfield 1998) • Registries currently underused, associated with lower HgbA1c, improved chronic care (East 2003). • Team work essential component of high performing practices (Grumbach 2001). • Reduced cost, improved quality demonstrated at Geisinger. Cost reduction, patient satisfaction, and quality improvement have been demonstrated in MH pilots .

23. Barriers • Unclear message to providers and patients about MH. • Physician reluctance to change- tradition of autonomy. • NCQA tiers set to qualify 50%, 25%, 10% of practices. • High transition cost and maintenance fees for EMR. • Cost paid by PCP while savings reaped by hospitals and payers- classic market inefficiency. • Future of MH practices and concept is uncertain. The major barrier is the high transformation cost in the presence of insufficient reimbursement .

24. FUTURE DIRECTION • Stop the bickering. • It’s the economy…of course. • Geisinger expanding its pilot system wide. • Ultimately, adoption will depend on a compelling case being made to PCPs. • If the business case is made, there will be opportunities to train practices, support IT and provide disease management. THE AMH HAS THE POTENTIAL TO FUNDATMENTALLY CHANGE THE PRIMARY CARE EXPERIENCE…

25. Update: Tri-Caucus House Bill • American Affordable Choices Act 2009 • Directs HHS to “establish a medical home pilot program” • Must include rural, urban, and underserved areas • Differentiates “Community-Based” from Independent PCMH The house bill picks up where the planned CMS demonstration left off

26. Update: Tri-Caucus House Bill • Appropriates $200M per year FY10-14 in addition to appropriation in TRHCA 2006 (CMS Demonstration) • Pilot to last not more than 5 years after which Secretary must report to Congress and consider expansion • Includes $1.2B for States to fund their own pilots The house bill picks up where the planned CMS demonstration left off

27. Update: HELP Senate Bill • Affordable Health Choices Act • Sec.747. Funds grants for public or private entities to provide training to PCPs to operate as PCMHs • Sec. 212. Funds grants for States or State designated entities to fund “Community Health Teams” that will contract with PCPs for MH support • Appropriates $125M per year from FY10-14 The Senate Bill funds construction of the required MH infrastructure.

28. Update: HELP Senate Bill • “Community Health Teams” must: - collaborate with State officials and local PCPs on chronic disease management - implement multidisciplinary community preventive care plans - advise and assist PCPs in “monitoring health outcomes and resources” - provide “24-hour” care management and support around care transitions - demonstrate capacity to implement and maintain HIT The Senate Bill includes funding for PCPs to “outsource” MH capabilities.

29. QUESTIONS • Is the Medical Home model simply paying primary care doctors more to do what they are already doing? • Will Payers, Employers, and Hospitals partner to make the case to PCPs? • The AMH appears more costly than the CMH, do outcomes justify the additional cost? Will free-riders dilute the dose effect? • Will there be expansion of the care coordination and disease management market? Will PCPs “outsource” medical home elements? • Is there a market for “Medical Home Construction” services?

30. “Nothing in this title shall be construed to authorize any federal officer...supervision or control over the practice of medicine or the manner in which medical services are provided.” • Social Security Act 1965

32. Case Study: PROMETHEUS Payment ® Incorporated The intersection of business strategy and public policy

33. OUTLINE • What is the origin of Prometheus? • How does Prometheus work? • How are episodes quantified? • How are costs calculated? • What have the pilots shown so far? • What are the implications?

34. PROMETHEUS Payment: Private Sector Innovation Paves the Way for Reimbursement Reform BACKGROUND • Provider payment Reform for Outcomes, Margins, Evidence, Transparency, Hassel-reduction, Excellence, Understandability, and Sustainability • Convened in 2004 in response to The Institute of Medicine (IOM) call for novel payment model and effective, efficient, patient-centered care. Funded initially by GE Corporate Health 2004 to design and model episodes and payment. • Funded currently $6 million by to implementation and evaluate pilot program • A comprehensive cross setting Episode of Care (EOC) payment model • Evidence-based episodes • Shared-savings and quality-based reimbursement • Collaboration-based bonuses • The price of an episode of medical care is specific to any patient-provider-payer triad. The price include all the services recommended and implied by evidence-supported or expert opinion Sources: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf Gosfield, A. "PROMETHEUS Payment®: Better for Patients, Better for Physicians." Journal of Medical Practice Management . September/October 2006. 100-104

35. Evidence informed Case Rate and Potentially Avoidable Complication Payment Payment Methodology 70% based on clinician quality 30% based on referral quality Geographic Price Index and Severity Adjustment 10% Margin Payment = + P A C Cost Core Services +

36. Current Payment Systems Maintain Perverse Incentives

37. Prometheus Includes Evidence Based Care and Expected Rates of Complications in its Reimbursement System Step 1: Translate CPGs into clinical services Step 3: Construct Evidence -informed Case Rates (ECRs) Step 2: Estimate cost of CPG services + implied services Step 4: Pay Providers Source: Gosfield, “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere” .June 2008. accessed June 14 2009. CPG: Clinical practice guidelines Implied services include care coordination, IT, disease management, etc.

38. Step 1: How are episodes quantified? Prometheus Translates Guidelines and Expert Practice Into Core Clinical Services • The Prometheus group has deconstructed CPGs to list all distinct services that clinicians must provide for high quality care • For some diagnoses, there are a limited numbers of guidelines. • In general, actual practice involves more care than is described in guideline recommendations. • The cores clinical services consider CPGs, expert clinician experience, and evidence based practice AHRQ/ USPSTF CPGs Actual Practice CPGs Step 1: Translate guidelines into core clinical services Source: Ostbye, et al., Is There Time For Management of Patients With Chronic Diseases in Primary Care?, 3 Annals of Family Medicine, 2005. 209–14 Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf

39. Step 2: How are episodes costs calculated? Cost are calculated from millions of claims • Prometheus group accessed a database with several million unique patients • Costs calculated from all annual claims for patients with target diagnoses 2005-2006. • Claims from inpatient facilities, inpatient professionals, outpatient facilities, outpatient professionals, and pharmacy • Calculated cost included both guideline supported care and clinically necessary implied services Ambltry. Claims Hospital Claims Patient Reminders Step 2: Calculate cost of core clinical services

40. STEP 3: The Core Clinical Services are the Foundation for the ECR. • The ECR determines the annual budget per patient. • PAC allowance is a quality bonus. • 10% margin encourages reinvestment • Cost adjusted for disease severity. • Cost adjusted for local price “normal” variations. • Core services are the base. Step 3: Construct an ECR PAC BONUS 10% MARGIN SEVERITY ADJUSTMENT LOCAL COSTS ADJUSTMENT CORE SERVICES COSTS Source: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf de Brantes, Gosfield, Emery, Rastogi, D’Andrea, "Sustaining the Medical Home: How PROMETHEUS Payment® Can Revitalize Primary Care“. May 2009. PAC: Potentially Avoidable Cost; ECR: Evidence –informed Case Rate

41. Step 4: How is the PAC bonus funded? Prometheus Designates PAC Costs Into a Trust • Prometheus calculates the cost of all care and all avoidable complications. • For diabetes, PACs include costs of diabetes-related inpatient stays (e.g., DKA), professional services during admissions, all claims and procedures with PAC codes, and drugs used to treat PACs. • For this example, $400 M would be reserved for paying bonuses for high quality, cost saving care. All Diabetes Related Claims $1.3 B P A C Claims $800 M Medical $ 500M Pharmacy $300M Medical $ 600M Pharmacy $700M Typical Care Claims $500 M Medical $ 100M Pharmacy $400M Source: Gosfield, A. “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere”. June 2008. http://www.prometheuspayment.org/publications/pdf/MakingItReal-Final.pdf de Brantes, F. Payment Reform: A model for Chronic Care. Avalere. June 12 2009. DKA: Diabetic Ketoacidosis

42. Step 4: Incoparte Rewards for High Preformance • Providers and hospitals submit claims as in FFS. • The plans have a budget based on ECRs. Providers that stay under budget receive a PAC bonus at the years end that is based both their own quality and that of their referral centers.   • The quality assessments includes established measures patient experience and clinical structure, processes and outcomes. 70% Provider Quality 30% Referral Quality P A C BONUS

43. SUMMARY: ECR and Bonus Calculation Payment Methodology 70% based on clinician quality 30% based on referral quality Geographic Price Index and Severity Adjustment 10% Margin Payment = + P A C Cost Core Services +

44. ECRs have been developed for diagnoses across settings.

45. The Prometheus Payment Model is Currently in the Pilot Phase de Brantes, F. Payment Reform: A model for Chronic Care. Avalere. (Presentation)June 12 2009. ECOH: Employer’s Coalition on Health.

46. Comparison of Prometheus Pilot Site Data with Database • Prelim data shows opportunity to reduce errors and increase appropriate pharmaceutical spending • PACs are significantly higher in costs for pilot markets and pharmaceutical cost are much lower as well. • Opportunities exists to minimize PACs and may include increasing evidence-based pharmaceutical spending. Pilot Database Pilot Database de Brantes, F. Prometheus Summary. Avalere. (Presentation) Dec 2008.

47. Comments on Prometheus • “There is no more important issue in health care than the need to reform a broken provider payment system ... In moving towards a bundled payment system for distinct episodes of illness, the PROMETHEUS Payment model is clearing a promising path forward.”Andrew Webber, President and CEONational Business Coalition on Health, Washington, D.C. • “I've always been struck by how unfair most payment systems could be—that they really don't do a good job of accounting for patient severity. PROMETHEUS aims to bring clarity and fairness to the payment process, while increasing quality and value of care.”Keith Michl, M.D., Practicing InternistSouthwestern Vermont Medical Center, Manchester Center, Vt. PROMETHEUS Payment Set to Test New Method of Paying Providers for High-Quality Health Care. Comments from PROMETHEUS Board Members http://www.rwjf.org/pr/product.jsp?id=30231. Accessed June 22, 2009

48. Future Directions and Implications • Prometheus currently advises Health Partners of MN and MN Hospital Association on developing ECRs and the State Legislature of Utah. • Prometheus plans to double its number of conditions over the next year. The success of the new payment system could lead to more widespread use of EOC and more innovation in EOC project design. • Currently ECRs are calculated based on average price for a class of drug and physicians are not assumed to use the lowest price or generic effective drug. • This is a single model of EOC payment and single demonstration, Medicare, Geisinger of PA and a number of other health systems and payers are experimenting with realigning incentives with quality based reimbursement. • In its pilots, Prometheus has functioned essentially like FFS + P4P because providers have been reluctant to accept risk of pure bundled payment. Payer market penetration or experience with alternative payment methods may change the prevailing dynamic.