Hospital Readmission Penalties Create Continued Policy Debate

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (See also:  http://www.valianthealth.com/blog/hospital-readmission-penalties-create-continued-policy-debate/ )

 

A by-product of CMS’ cost reduction efforts associated with payment (or penalty) for quality results, is the much vilified Star Rating measure on All-Cause Hospital Readmissions. These efforts hit the Medicare Advantage plan’s Star Ratings results but also impact hospitals Medicare reimbursement rates directly. 

Two-thirds of hospitals are now facing readmission penalties totaling approximately $280 million in 2013, according to experts.  These 2,271 U.S. hospitals were found to have readmission rates higher than the CMS models predicted, and each of them will receive a penalty this year, as high as 1% of their reimbursement for Medicare patients. (Penalties will increase to 3% by 2015.)

The number of hospitals penalized is much higher than most observers would have anticipated on the basis of CMS's previous public reports, which identified less than 5% of hospitals as outliers.  (See NEJM Article by Drs. Karen E Joynt, MD & Ashish K. Jha, MD)  Path Forward on Medicare Readmissions at http://www.nejm.org/doi/full/10.1056/NEJMp1300122 )

The debate includes concerns that the safety-net hospitals caring for a higher proportion of members with socio-economic challenges are those least able to afford a penalty. Most agree, however, that setting a lower quality standard for these hospitals would not be ideal.   Many hospitals (and associated Medicare Advantage Plans) now have placed special focus on “helping patients make the transition from inpatient care to outpatient or community settings”.  A key part of this coordination is the ability to identify and intervene early in the hospitalization and post-discharge course.

See Links:  http://www.chrt.org/blog/the-aca-and-the-hospital-readmissions-policy-debate/

          http://www.nytimes.com/2013/03/30/business/hospitals-question-fairness-of-new-medicare-rules.html?pagewanted=all&_r=0

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Health Systems Around the World Could Learn From MA

John Campo, Vice President, Business Development, Valiant Health (See: http://www.valianthealth.com/blog/health-systems-around-the-world-could-learn-from-ma-plans/)

A new study by the Boston Consulting Group (BCG) suggests that health systems around the world can learn a lot from the care-delivery models used by private payers in U.S. Medicare Advantage plans. 

BCG concluded that Medicare Advantage plans, which impose classic managed care techniques to an elderly population, as compared to traditional Medicare fee-for-service plans, vary in a couple of key ways. 

1. Focused on mechanisms designed to encourage the delivery of cost-effective quality care
2. Identify  and focus on clinical best practices
3. Tap into a selective network of providers
4. Apply active care management strategies based on prevention to minimize expensive acute care

BCG’s study included an analysis of claims data for 3 million Medicare patients. They concluded that on three internationally accepted dimensions of health care quality—single-year mortality, recovery from acute episodes of care requiring hospitalization, and the sustainability of health over time—patients enrolled in Medicare Advantage plans had better outcomes than those participating in Medicare on a traditional fee-for-service basis.

Medicare Advantage plans in the US are under continued scrutiny to “prove” quality by meeting established benchmarks for various domains, including patient satisfaction, quality outcomes, access to care, and use of preventive services.  MA plan executives are faced with fee reductions if quality metrics are not met under “Star Ratings” programs imposed by CMS.

See Links:  http://finchannel.com/Main_News/Business/127573_Managed_Medicare_Advantage_Plans_Demonstrate_Better_Outcomes_for_Patients/
http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-134145

John Campo is responsible for Valiant Health’s growth, including client engagement and satisfaction. He brings over 15 years of diversified healthcare experience to Valiant Health. Prior to joining our leadership team, John founded and owned the CAMPO Group: Strategic Managed Care Consultants where he engaged leading pharmaceutical, biotechnology, specialty pharmacy, and health insurance clients. John’s background includes healthcare contracting, trade relations, reimbursement, specialty pharmacy distribution, quality improvement and Medicare. His leadership background includes working for a Fortune 500 PBM, HMO, and Specialty Pharmacy organization in leadership roles as well as being responsible for Managed Markets National Account Management for a large ethical US Pharmaceutical firm. He holds a BS in Business from Brescia University.

Achieving 5 Stars on the Rx Side—The Secret?

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (www.valianthealth.com )

http://www.valianthealth.com/blog/achieving-5-stars-on-the-rx-sidethe-secret/

To succeed in an increasingly challenging reimbursement environment, Medicare Advantage plans must work in close collaboration with physicians to identify at-risk populations and facilitate interventions that that improve quality and lower cost.  That is true for both the Part C & Part D portions of the program.

Some Medicare Advantage plans will thrive at the top of the quality ratings heap no matter what happens in the surrounding environment.  Those plans have some common elements that give them a weighty advantage in terms of statistics and actual results.  The common themes?  Cooperative providers, clean data management processes, enabled clinical teams and executive leadership, and a clear, prioritized plan.  In a phrase, they are able to exert maximal control over the variables that drive results which drive reimbursements.  

Kaiser Permanente, for example, attributes its success to “a deep understanding of the star measures along with internal and external organizational processes and protocols”.  They believe this has allowed the plan to achieve a Part D summary rating of 5 in 7 of the 8 regions. 

Matt Nye, the vice president of Pharmacy Care Support Services, National Pharmacy Programs and Services of Kaiser Permanente spoke at the Academy of Managed Care Pharmacy’s spring meeting in San Diego in April 2013.  His discussion included a brief company overview: coverage of 9 states and D.C. with 8.9 million members, 165,000 employees, 15,000 physicians, 36 hospitals and medical centers, and 1.05 million Medicare members. Nye noted that Kaiser’s program includes outpatient, inpatient, and ambulatory care pharmacies and services, home infusion, drug distribution, mail order and central fill operations, and centralized services.

Kaiser has some advantages in drug therapy management relating to its business model:  it is an integrated practice model.  He noted that they have placed an emphasis sharing accountability between physicians and pharmacists to ensure the appropriate use of medications. 

Even if a plan does not have the benefit of “owning” the full scope of clinical, distributive, and practice infrastructure, the lessons learned from Kaiser can still be applied.  Using technology and data management techniques, internal and organizational processes can be aligned to create common incentives and opportunities to maximize quality results to assure success in the current and future years.

Link:  http://www.ajmc.com/conferences/AMCP_Spring-2013/Optimizing-Care-Deliver-with-Medicare-Star-Ratings-The-Successes-and-Challenges-of-Managed-Care-Organizations

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Cambria Health Advisory Professionals is proud to publish a new white paper!

Jumping New & Higher Hurdles--How US Pharmaceutical & Device Manufacturers Can Stretch Resources to Achieve Success in Today’s Post Health Reform Environment

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals, Senior Partner, Valiant Health, & Managing Partner at Quo Magis Partners

Introduction

Pharmaceutical and Medical Device Manufacturers doing business in the United States are dealing with an unprecedented level of change. Even for seasoned managers, this requires ever greater attention to operational and compliance details at the very time when innovation and revenues are under extreme pressure.  This demands thoughtful and determined leadership, willing to consider “outside the box” ways to get things done.  This paper is intended to provide practical advice on ways to achieve results in today’s environment by engaging in flexible teaming, using large or small consultancies and service providers.

The Rules Have Changed

With health care reform and today’s economic chaos, factors outside your control are changing the rules of engagement, from how to get your product to market to how to report your results, to how to manage your people. 

Product commoditization and price pressures present critical challenges to the top line.  It’s not just you---it’s your customers.  Today’s health plans, hospitals, and medical communities are plagued with their own versions of “change hell”, with regulations coming out in thousands of pages, impossible to consume, much less to implement, in tight timelines.  Employers and consumers are just beginning to understand the implications of health reform and the regulatory environment.  Nothing was ever this hard before.  Quitting is not a good option for most of us,—and certainly some will find a way to thrive in the “new normal”.

Six Challenges That Rock Your Boat

In order to succeed, manufacturers need to think differently.  Today’s burdens emanate from at least 6 sources:

1)    Pressures on Revenue

2)    Access to the Market

3)    Cost of Operations

4)    Regulatory Overload & Unpredictability

5)    Customer “Shape-Shifting”

6)    Talent Acquisition & Retention

Given Today’s Reality, What Now? 

Manufacturers doing business in 2013 can still take a few steps forward:  

1)    Understand your budgetary certainties

2)    Choose your priorities, streamline operations

3)    Don’t expect miracles 

4)    Identify new ways to partner with each customer segment

5)    Use data to inform your decisions

Recruit talent to your teams.   The last few years may have created too much rapid turnover in some companies; the “old timers” with valuable experience and perspective that informs and trains the younger executives may be depleted.  An alternative way to meet your needs, yet maintain control is to optimize the use of short-term, experienced contractors/consultants or service organizations to get results on an ongoing basis.

Remember the "Fail Fast" Rule   If the project is going to be delayed, has the wrong scope, or is doomed from the outset, don’t pour money down a hole.  Similarly, if the contractor is a bad fit, end it quickly and seek a replacement.

Boutique vs. Big Box Partners? 

You can choose from a variety of consulting or service organizations---large or small, generalist or specialist.  If you are looking for results at the lowest price in the shortest timeframe, you may want to consider mixing it up a little---using both kinds of companies to extend your own teams. 

Included in this paper is a list of some example boutique firms with an edge on talent and experience that may be just what you need to make traction, with some suggestions on how to engage them.    Download the paper here, free of charge:  Jumping New & Higher Hurdles:  How US Pharmaceutical & Device Manufacturers Can Stretch Resources to Achieve Success in Today’s Post Health Reform Environment

Terri is the founder of Cambria Health Advisory Professionals and a Managing Partner at Quo Magis Partners, and a Senior Partner at Valiant Health. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders. a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Thought Leader colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.

(UN)-Intended Consequences in Health Plan Consolidation

---Lowell T .Davies, Economist & Commentator

I should first acknowledge that I predicted a wave of consolidation in the health care industry as a response to the passing of the Affordable Care Act a few years ago. The fact that I predicted this shouldn’t illustrate any intelligence on my part; rather it shows the obvious true nature of Obamacare. In my opinion, one I share with many commentators, creating tumult in the insurance industry was an intended consequence of the legislation.

Consolidation, indeed, is just gaining momentum.  For example, in a recent article in Managed Health Care Executive, author James Burns outlines 5 potential issues raised by the potential merger of Wellpoint and Amerigroup, both large insurers. He explains that the Antitrust Division has made a second request for information on the merger, possibly inferring that they may not allow the deal. He goes on to say, however, that if the merger is allowed, the companies may encounter hurdles at the state level if politicians and regulators fear anticompetitive behavior. The article is informative on the subject, but what I took away from it is something of a wholly different nature. (See this excellent author’s work:  http://www.dickinson-wright.com/bdsfiles/News/d2f4dc06-6d34-4858-9f67-06c31bdb6656/Presentation/NewsAttachment/bc6d294b-54f3-4b81-8fe8-2f2019ea2439/MHEBurnsArticle.pdf)

This merger is likely to go through, as will others. It is my contention that the regulators behind enforcement of Obamacare would rather deal with a few behemoth insurers than a slew of smaller ones. 

While the insurance industry needs to consolidate to survive the measures enacted in the ACA, this is not a good thing for the average consumer. If competition leads to lowered prices, then the opposite is true of consolidation. From the standpoint of the Federal government however, if there are fewer companies to monitor then law and regulatory enforcement becomes that much easier. Furthermore, from the standpoint of this cynic, it also becomes easier to sway corporate leadership to act on behalf of said government’s interests; they do, after all, hold the most enticing bargaining chip that exists: control of the budgets of the largest payer sources in health care.

This all sounds conspiratorial and I’ll admit that it’s not crystal clear yet, but the pathway is set forth if you’ve read the bill. I hate to end on such a sour note, but I honestly fear that the march toward single-payer has officially begun and that we will, beginning here with insurers, see one domino after another fall in line. 

Cambria Releases White Paper: Health Care Reform & Star Ratings for Health Plans: How to Manage Through the Murkiness of Medicare’s New Realities

---Terri Bernacchi, PharmD, MBA, Cambria Health Advisory Professionals, Managing Partner at Quo Magis Partners

The entire white paper can be downloaded at the following link:  http://www.sharedhealthdecisions.com/5273/5294.html   This excerpt highlights the “5 Essential Pillars for Success” for Medicare Advantage plans. 

The Five Essential Pillars

Any team can only cope with what they understand.  Breaking the Star Ratings program down into bite-size pieces will make tackling these components more achievable so that challenges can be overcome and measure results maximized.   A manager should delegate specific goals to specific team members, so that no one person must manage it all.  In our estimation, there are five principals that can be applied to this effort.   Without any one of the following components in a fully operational state, a plan cannot hope to improve its rating: 

1.    Cohesive Team Pulling in the Same Direction

·         Plan executives must clearly state the goals, designate team members at all levels of the operation, in every department.  

·         Results should be part of the team and individual incentive /merit program.

·         Redundancy of critical functions should be built into the team, to plan for potential staff attrition in critical places.  An understudy will always be in place and ready for a chance “at bat”.    

2.     Communication-Up, Down, Sideways

·         Tracking results and targets requires careful and consistent communication of initiatives. 

·         In addition to routine meetings, email blasts, and conferences, the program or star manager must be willing to nudge already overworked colleagues to meet milestones and deadlines.

·         Communication requires careful listening to members, providers, technologists, and managers.  Sometimes the challenge itself has been misidentified, requiring a shift in strategy.  Without careful listening, the team could plow on in the wrong direction and completely miss the mark. 

3.    Access to Data- Timely & Accurate

·         Because there are a number of places where data is imported, cross- walked, converted, transferred to vendors or auditors, and later to CMS, any dropped or misaligned data could cost the plan meaningful points on the numerator or denominator.   

·         Processes to assure that the data is complete and accurate from the claims systems, which validate what is supplied to CMS, should be executed at least monthly to confirm the current state. This will also allow managers to tackle the measures which will have the greatest impact or which represent low hanging fruit for achieving results. 

·         Managers and Star Team Members need ready-access to that data so that they can troubleshoot problems or success early.

·         Instill in the team a little dose of “data skepticism” such that they don’t just accept results that “don’t look right”.  Waiting to identify a data process problem may result in a lack of time to act. 

4.    A Means to Navigate:  Technology/ Software

·         Access to data is not enough without a means to manage it.  The executive has a need to identify which providers are helping or hurting; which measures are lagging or improving; which team members are achieving results (or not).  

·         By identifying the challenges, managers can assign the most adept teams to focus on results at the provider, member, data or campaign level.   

·         Software that can capture the data, identify the priorities, and assign the resources to resolving them is an essential tool in achieving results, when implemented into Standard Operating Procedures.  Without such software, a team must rely upon many manual processes that could be costly to manage, with key tasks subject to “slipping through the cracks”.

5.    A Roadmap:  “Hope is NOT a good strategy”

·         Once a plan manager knows where the results lie, and where the gaps are, there is a need for the team to know what to do about it and how to do it.

·         The Roadmaps or “Campaigns” that a plan constructs to address specific measures should identify a strategy for pursuit of the mathematical result, incorporating tactics that may involve the provider community, the staff outreach department or the member himself. 

These campaigns imply an action-orientation whereby one is not just looking at the data, but is deploying resources under a specific program to achieve named and documented targets, perhaps over a short period, or over the whole year. 

More information regarding Valiant Health’s ProActive® Management technology can be found at www.valianthealth.com.

Terri is the founder of Cambria Health Advisory Professionals, and a Managing Partner at Quo Magis Partners. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders, a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.

Managing External Vendors in the New Health Care Industry: Maximize Visibility, Accountability, and Governance

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals and Managing Partner at Quo Magis Partners 

Whether one considers the provider (hospital/medical), pharmaceutical or device industry, or the health plan perspective, today’s health care executive must be more be nimble than ever before in managing strained budgets and people resources, overcoming ever-greater challenges.  As the realities of Health Care Reform (HCR) unwind upon these organizations, managers must deal with new legal requirements and penalties that are still only partially defined.  Health care has always been a bit different from other business sectors because the customer consuming the good or service must rely on others to 1) select the product (e.g., the physician) and 2) still others to assure payment (e.g., insurance companies or administrators).  At the end of the day, however, regardless of what a health related company offers, it is ultimately the consumer who is to be satisfied. 

More than ever before, as costs shift back to the member through higher out-of-pocket cost-sharing or restricted choices, and as coverage rules are tightened in order to squeeze more out of every dollar, health care industry players must focus on how to attract and retain the individual.  A company’s resources will be focused more intensively on how to get to the patient or to smaller local units like the Accountable Care Organization (ACO) or local exchanges as traditional health plan and support vendors (like Pharmacy Benefit Managers and TPAs) consolidate and refuse to cover anything but the minimums. 

Today, getting to market successfully means that some key projects are managed internally, while others must be executed through a variety of vendors that promise lower costs and expedited results.   Managing your own company’s resource is one thing; staying on top of an outside vendor is quite another.    When engaging with any vendor--- after the contract has gone through procurement and the signatures have been applied to the deal---implementation and ongoing execution is the hard part.  Both sides name the business sponsors and managers for the relationship.   Over time, however, the designees are likely to shift and the Governance Plan may be neglected.  Senior executives may be late to realize that something has run amuck where promised results have not materialized or unanticipated snags have cropped up, costing precious resources or results.   

Certainly, if it hopes to be successful in the marketplace, a vendor will do its best to meet promises made to you.  Whether the deal involves a key project requiring executive oversight for an IT outsourcing deal, a business process service need, or (more commonly these days) is focused on a Copay Discount program which is a component of the launch of your product in the US market, the recipe for success is the same.    A few of these are spelled out below: 

1.       Emphasize the expectation for ongoing governance and accountability early in the vendor negotiation process.    This includes spelling out the key performance metrics and the frequency of reporting.

2.       Offer those in your company responsible for the ongoing management the program, assurances that executives are monitoring results, with results reported directly to your Board or senior management team.  Under larger vendor agreements, this designated manager may be responsible for a function that would have previously represented hundreds of employees; executive oversight should be reflective of that degree of resource allocation.

3.       Intervene early if something is going awry (delays, cost-overruns, or poor quality) by tracking key metrics on a routine basis. 

Additional insights for the reader may be gained from the linked research article, Critical Aspects of Governance in Outsourcing: Insights from Industry, by Markus Biehl, et al.  http://www.meritoutsourcing.com/images/Outsourcing_research_paper.pdf

The authors noted the high degree of (>75%) dissatisfaction of the buyer with outsourcing vendor deals; they also cited a strong correlation between governance and oversight capabilities and buyer satisfaction.  Obviously, players in the US health care industry will continue to use of external vendors to manage critical programs or projects because it is efficient.  These deals should be accompanied by a strong, accountable process for executives to measure results and intervene early.

Terri is the founder of Cambria Health Advisory Professionals and a Managing Partner at Quo Magis Partners. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders. a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.  *see: www.quomagis.com