Dr. Teresa Bartlett

1. Sedgwick © 2013 Confidential – Do not disclose or distribute.
Teresa Bartlett, MD

2. Sedgwick © 2013 Confidential– Do not disclose or distribute. 2
Objective
• Consumerism
• Setting the stage
• Discuss Affordable Care Act
• Explain Basic Premises of ACA
• Evidence Based Medicine
• Explore Potential Impact on Workers Comp System

3. • Political
component
• Media
• Direct to
consumer
advertising
• Technology
• Provider
marketing
• Payer
communication
Consumerism Impacting the Health
Delivery Model
Accesstoinformation
Knowledgemanagement
• Perceptions
• Health risks
• Treatment
impact
• Care
coordination
• Outcome data
• Generational
considerations
• Nurse navigators
• Medical literacy
• Physician
scheduling
services
• Sound technology
solutions
• Key stakeholder
awareness
• Consumer driven
plans
Modelconsiderations

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Disease Burden: the perfect storm
• Patients with 1 chronic condition
– 3 times higher health care spend
• Patient with 5 or more chronic conditions
– 17 times higher health care spend
• 4 out of 5 Medicare beneficiaries are affected by at least one chronic condition
• Medicare population incident rates of:
– Obesity 38%
– Diabetes 27%
• Americans are living longer (78.2 years)
– Number of Medicare recipients expected to double in next 40 years
www.aha.org/research/policy/2012.shtml

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Aberrant Economic Model
• Employers and Government pay for services
• Individuals consume the care
• Providers set prices
• Archaic administrative system

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Drawback of Fee for Service model
• Limited physician patient time
• Rewards volume not value
• Coordinated care takes too much time and is not rewarded
• Quality care not rewarded

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Affordable Care Act
• Signed into law 2010
• Challenged constitutionality upheld June 2012
• Major Focus
– Create value based networks
– Create integrated health systems

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Legality
• Federal Trade Commission/Department of Justice February 13, 2013
letter of guidance (CIN)
– Antitrust law
– Usually joint contracting by physicians constitutes price fixing
– Rule of reason
– Measurement
– Time and Financial Commitment
– Initial Capital investment
– Financial risk
Norman Physician Hospital Organization

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Health Care Change Impact in South Carolina
• Increased access to the Medicaid program
– 726,847 or 18% of South Carolina’s non-elderly residents are uninsured
• 50,000 young adults gained insurance coverage in South Carolina as of December
2011 (3.1 million nationwide)
• Medicare recipients saved over $84.3 million on prescription drugs since enactment
of Medicare Part D (drug coverage)
– In 2012: 52,686 individuals in South Carolina saved over $35.6 million, or an
average of $677 per beneficiary.
• Preventive Health Coverage at no cost share: colonoscopy, Pap
smears, mammograms, well-child visits, and flu shots for all children and adults
– In 2011 and 2012, 71 million Americans with private health insurance gained
preventive service coverage with no cost-sharing
– 980,000 in South Carolina.
Healthcare.gov

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Examples of Affordable Care Act Grants to South Carolina
• $4,300,000 for health professions workforce demonstration projects
Assistance for low income families to fund training to enter health care professions
in high demand
• $2,811,027 for school based centers to help clinics expand their capacity to provide
more health care services and modernize their facilities
• $7,283,151 for maternal, infant, early childhood home visiting programs for at risk
families
– health care
– early education
– parenting skills
– child abuse prevention
– nutrition
Healthcare.gov

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Primary Care Physicians’ Collaboration (Columbia, SC)
• 800 diabetic patients
• Sponsored by BlueCross BlueShield of South Carolina, BlueChoice®, HealthPlan, and Palmetto
Primary Care Physicians
• 2-year study
• Patient-centered medical home
• Results
– 14.7 percent fewer inpatient hospital days
– 25.9 percent fewer emergency room visits.
– better control of their blood pressure, cholesterol and glucose levels.
– healthier body mass index (BMI) rates, and
– more of them received eye exams.
• Patient-centered medical home
– Primary care based
– Leads medical team including care coordinators
– Coordinates health needs including prevention, acute and chronic care
– Providers were paid a per member per month fee plus a bonus for improved health in
additional to fee for service
• Led to initiation of other projects (heart failure and hypertension)

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Clinically Integrated Organization (CIO)
• Legal entity
• Structured to hold contracts for
• Commercial
• Government based products
• Challenge for hospital systems to create arrangements that
allow for shared savings
• Develop partnerships with physicians outside of the
contractual arrangements in place today

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CIO
• Physician will be paid for care management and evidenced based care
• Patient centric medicine
• Health plans are likely to
– Employ physicians
– Purchase physician practices

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Accountable Care Organization (ACO)
• State based entity
• Qualifies to participate in Medicare shared savings program
• Must have 5000 Medicare beneficiaries
• Comply with 33 Quality Metrics
PRIMARY MODEL
• Medicare shared savings program
• Launched 1-1-12
• Maximum shared savings for hospitals and physicians is
10% of aggregate cost of patient care
THE BASIC PREMISE
Moves from fee for service to a value based reimbursement

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Measurements for ACO
Value
• Better care
• Preventative care
• Patient safety
• Care coordination between specialties
• Focus on AT RISK populations
Measurement and Reporting
• Year one: must report on all 33 measures
• Year two: must fall within the 30th percentile of National Medicare
quality performance measures for 70% of required measures
• Year three: must meet the standards established in the second year

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Other Models
• Pioneer ACOs
– Health organizations selected by the federal government prior to the ACA to
participate in a shared savings model
– Had prior managed care experience
– Can achieve greater savings and assume greater risk
– Can move to a capitated model in the 3rd year
• Bundled payments
• Patient centered medical homes (PCMH)
www.innovation.cms.gov

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Models
• Advanced payment
– Developed by CMS innovation to provide up front monthly payments to
encourage the development of ACOs in rural areas
– Limited capital
– Loans are deducted from any future savings
• Shared savings
Health organizations can opt for one or two risk models
– Bonus only- no risk
• Only available for the first 3 years
– Complex formula
• Higher savings
• Quality benchmarks

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Health Exchanges
• Federal
• State
• Private

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Health Insurance Exchanges
• 12 million Americans expected to begin purchasing health insurance
• October 2013 for coverage beginning 2014
• Federal subsidies will entice many to market
– Public
– Private
• Insurers need to be careful to balance healthy and sick members
• State requirement to educate consumers on financial assistance options
– 100% to 400% of poverty level qualify for subsidy or reduced cost
sharing
• 40% of the volume will come from 5 states: NY, CA, TX, FL, IL
• State Insurance Exchanges are projecting $205 Billion opportunity for the
health sector within the first seven years of operation

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• Insurer-run (plan choices)
• Retailer-run (companies outside health industry that sell their
own insurance products and will have bundles or buy up
products such as wellness
• Third-party-run (an administrator that links consumers to a
variety of plan choices across multiple insurers. (large brokers
and insurance firms)
Private Exchanges

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Industry Implications of Health Insurance Exchanges
• Providers
– Increased number of patients pent up need for care
– New expectations of patients (increased focus on customer experience)
– Uncertain payment landscape
• Insurers
– Pricing
– Risk selection
– Which markets should they enter
• Employers
Role of exchanges in the future
Penalty $2000/full time employee
Dropping coverage may lead to pressure to increase wages
Tax benefits of offering coverage
Employees view health care as a valuable benefit
Source:Health Research Institute analysis

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Only 20% of a physicians practice is based on hard science
According to the Federal Government
Evidenced based medicine leads to healthier patients and
reduced costs

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Dartmouth Atlas of Healthcare
US and UK data show that much of the variation in use of
healthcare is accounted for by the willingness and ability of doctors
to offer treatment rather than differences in illness or patient
preference. Identifying and reducing such variation should be a
priority for health providers “
John Wennberg”
EXAMPLE
The rates of coronary stents are three times higher in
Elyria, Ohio, compared with nearby Cleveland, home
of the famous Cleveland Clinic

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Why Such Variation in Care?
• Supply-sensitive care
– due to differences in local capacity, and a payment system that ensures that
existing capacity remains fully deployed
• Patient Preference-sensitive care comprises treatments for conditions where
legitimate treatment options exist
– Options involve significant trade offs and different possible outcomes
– Informed and educated decision
– Medical outcomes can vary greatly from place to place

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Effective Care
Proven
Value
No trade
offs
Evidenced
Based
Caused By:
Underuse
Fragmented
Care
Lack of
system
Process
The
Solution:
Clinically
Integrated
Quality
Care
Financial
Incentives

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EBM Tools for Practicing Physicians
• Electronic Medical Records
• Prevents duplication of services
• Eliminates medication errors
• Office Notes appear as template (drop down/canned text)
• Links to latest evidenced based information
• Health alerts
– Pertinent items only to avoid “alert fatigue”
• Software tools to grade quality of evidence
• Transparency of performance
• Practice management
• Measurement
• Improvement plan

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Challenges of Today’s World
• Learning versus dependency on technology
• Students and Residents use of smart technology
• Ensuring reference material is readily available
• Ensuring smart technology does not replace “Real Learning”

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Post Graduate Education
• Communication is key
• It is not enough to prove you know what to do
• COMMUNCICATION SKILLS ASSESSMENT

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Importance of Communication Skills
• Medical Literacy
• Self Care
• Lifestyle choices
Patient
Education
• Better Results
• Transfer of specific
knowledge
Consulting
Physician
Education
BetterOutcomes

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Impact of Evidence Based Medicine
• Already seeing changes
• Physician/practices are spending up to 25% more time to
justify tests
• Health plans are offering incentives and disincentives to
physicians
– High cost imaging services
– Hospitals seeing dramatic reductions
• Physicians want positive position shared savings
• Hospitals want shared savings
– Following the lead of health plans

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South Carolina
Workers’ Compensation Medical Spend Trend
Average Medical Spend
Medical Category 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Chiro $695 $952 $304 $493 $415 $286 $366 $73 $485 $450
Diagnostic $249 $377 $362 $454 $343 $326 $393 $223 $232 $272
DME $335 $785 $949 $1,227 $1,265 $927 $1,180 $836 $835 $1,506
In Patient Hosp $10,675 $9,988 $19,977 $11,763 $6,659 $57,365 $8,567 $10,087 $6,942 $11,189
Misc Medical $697 $317 $988 $706 $726 $864 $154 $259 $757 $276
Occ Therapy $729 $1,165 $1,002 $890 $892 $886 $1,386 $808 $726 $791
Out Patient Clinic $158 $101 $98 $191 $205 $160 $307 $423 $330 $485
Out Patient Surgery $2,059 $1,148 $1,536 $2,012 $1,090 $1,431 $1,425 $1,862 $1,657 $1,775
Pharmacy $575 $554 $603 $844 $650 $851 $838 $687 $659 $815
Practioner $915 $547 $500 $719 $548 $589 $746 $678 $644 $739
PT $1,060 $1,577 $1,295 $1,662 $1,533 $1,255 $1,431 $1,438 $1,651 $1,656
Medical Exam-Independent
(IME)/Agreed $775 $431 $399 $591 $419 $253 $1,144 $1,247 $540 $557
Field Case Management Fee $988 $1,117 $2,926 $1,503 $3,780 $1,494 $680 $1,594 $1,823 $1,965
All Other Medical $533 $460 $506 $1,192 $850 $808 $1,036 $1,360 $710 $836
Grand Total $892 $706 $789 $985 $755 $1,071 $939 $844 $744 $890

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Likely impact on Workers’ Compensation
Benefits
– Use evidence based care and best practices
– High quality
– Single claim and note format
– Enhanced coordination of care
– Reduced duplication of services
– Enhanced communication
– Higher adoption of EHR
Potential Challenges
– Person centric ( focus on all medical problems not just WC)
– Networks
• Primary Care Single CIO
• Specialists multiple CIO

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New Models of Care

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Trends to watch for
• Hospital costs will continue to grow
• Physician alignment will be a moving target
• Health plans will evolve and try to grow in new lines of business
• New models of care
• Increased Transparency
• Volume will still be a focus
• Information technology is key
• Consolidations
• Creative branding

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Questions and Discussion