The Business Case for Planned Care

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The Business Case for Planned Care

• February 2006
• Roger Chaufournier
• CEO
• InnovoCare Solutions
• A Patient Infosystems/CareGuide Subsidiary

2
Chronic Disease Management is now a market
opportunity

• 99 million people with chronic disease
• 470 Billion annual medical costs
• 230 Billion in lost productivity
• 80 of premium is in medical losses
• 80 of these dollars are chronic care
• 160 disease management companies
• Companies make a living doing what you do!

3
Health Expenditures
of Total Average Patients Patients Costs
Annual Cost Per 1,200
Acute Low grade Worried
well 6,600 Prevalent chronic
Procedures 71,600 Rare
Chronic Multiple Co-Morbid
1/3 1/3 1/3
90 9 1
Source Accredo Health/Southwest Securities
4
Achieving benefit in the
short-term Mean Total Health Care Costs Among
Diabetic Patients By Improvement in HbA1C
Levels
Wagner et al.. JAMA. 2001 Jan 10285(2)182-9.
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Achieving benefit in the short-term
Healthcare Costs over 3 months for CHF Patients
Under Care Management Program or Usual Care
Rich MW, Nease RF. Arch. Int. Med.
19991591690-1700
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Achieving benefit in the short-term Effect of
Better Glycemic Control on Work Productivity
within 15 weeks
Testa and Simonson - JAMA 1998 2801490-6
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Why Redesign?

• Every system is perfectly
• designed to achieve the results it achieves
• Don Berwick

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The Prevalent System of Care Delivery
20 Compliance With Guidelines
Practice Working in a vacuum
45 Internet Traffic Patients Seeking
Self Management Info
Less Than 18 Use IT For Patient Care
40 waste inefficiency
Delays Waits For Access 1-12 weeks
31 Staffing Ratio
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The Capacity of the Current System

• Sample Economics of a Primary Care Microsystem
• Staffing
  13 One physician, one nurse, two
  MAs
• Panel size
  2000
• Provider available hours 6
  hours per day, 5 days per week, 46
  weeks
• Office visit capacity _at_ 4 per hr 5520
• Office visit demand _at_ 2.75 per yr 5500
• Encounters per patient per yr 2.75
• Revenue _at_ 90 per visit
  496,800
• Staffing expense
  279,000
• Practice overhead _at_40 198,720
• Margin
  19,080

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PLANNED CARE MODEL
Health System
Organization of Health Care
Community
Self-Mgt Support
Delivery System Design
Decision support
Clinical Information Systems
Resources and Policies

Informed, Activated Patient
Prepared, Proactive Practice Team
Productive Interactions Evidence-based clinical
management Collaborative treatment plan Effective
therapies Self-management support Sustained
follow-up
SOURCE Ed Wagner, M.D. et al ICIC
Functional and Clinical Outcomes
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Common Symptoms of Push Back?

• We cant do group visits because Medicaid wont
  reimburse..
• We cant do email because nobody will pay for
  it..
• We cant afford an HbA1c Analyzer because...
• We cant afford to do this work because Medicaid
  is cutting back.
• But Blue Cross wont pay for.bla, bla, bla, bla.

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Variables That Influence the Core Business Case

• Reimbursement Environment
• Self-activation capacity of the patient
  population (self-management case mix)
• The degree of integration of idealized design
  principles into the Delivery System Design and
  Organization of the Health System components
• Maturity of implementation of the Planned Care
  model

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Patient Self-Confidence InManaging Their Illness
New Unfamiliar/Unexpected Episodes

• Interventions
• Phone
• E-Mail
• Group Visits
• Group Visits
• Self-Mgt
• Plans
• Coaching
• One on One
• visit
• Follow-up
• phone

Self-Confident
SELF-CONFIDENCE TO MANAGE THEIR ILLNESS
Low Confidence
Time and Progression of Disease
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What Resources Are Required to Improve Work?

• Staff time
• Access to computer
• Opportunity cost from patient visits
• Data entry time
• Redesign resources
• Attention from senior leadership

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The worse case scenario
Staff time 3 Nurses _at_ 20/hr 2 Med Assistants
_at_ 12/hr 1 MD _at_ 60/hr Total for 2 hour meeting
a week 288 per meeting 48 meetings a year
13,824 Lost clinical revenue 5 patients per
hour _at_ 100 a visit 500 48,000 a year (48 x
1,000) Computer 3,000 Data entry time 1
person x 2 hrs. 40/week Redesign resources
10,000 Attention from senior management ?
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What is the commitment?
Staff time 13,824 Data entry time 1,920 Lost
clinical revenue 48,000 Computer
3,000 Redesign resources 10,000 Travel 19,
800 Total 87,544
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What was the real cost?

• Midwest Cluster- 13,000-20,000 in one year as
  a result of participation in an the HRSA Health
  Disparity Collaboratives
• AHRQ 6.41- 21.93 per patient

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If we are investing these resources and emotional
energy where does the return on investment (ROI)
come from?
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Three Dimensions of the Business Case

• Reduce Costs
• Improve Productivity
• Enhance Revenues
• Margin Revenues - Expenses

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REDUCING COSTS
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Integrating Idealized Design and Lean Thinking
Principles

• Up to 40 of operating costs represent
  opportunity costs for a health care organization
• Examples
• No shows
• Duplicate labs
• Phone calls
• Missing charts
• Double data entry

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Principles that Drive Costs Downward

• Access
• Interaction-flow
• Lean Principles
• Reliability-reexamine roles
• Vitality
• Process Mapping

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Waste Associated with Access

• Examples (only the tip of the Iceberg)
• No shows
• Telephone calls
• Waiting time
• Disruption of work flow
• Wasted will of patients

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What happens in Open Access- Example of Nurse
Triage ?

• 1. Call answered by a receptionist, message
  taken, or appointment booked without further
  discussion (1-3 minutes)
• 2. The chart is pulled and a message attached (2
  minutes)
• 3. If no appointment made, patient chart and
  message reviewed and prioritized prior to call
  back (4 minutes)
• 4. A call back is placed. More information
  obtained and then appointment made, referral made
  or a physician consult is required before
  resolution (5 minutes Note not all callbacks are
  reached on a first attempt)
• 5. An additional call back to patient after a
  physician or nurse consult (2 minutes)
• 6. Receptionist asked to schedule an appointment,
  complete a managed care referral form or call a
  script to a pharmacy (3-5 minutes)
• 7. An entry into patients chart is made (3
  minutes)
• 8. The chart is refilled (2 minutes)
• Total Staff Time 24 minutes _at_ an average cost
  of 14/hr
• Total annual dollar impact 10 calls a day 200
  days 11,200 in staff time annually
• Source Case study from NCQA Web site

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Source Marjorie Godfrey Dartmouth Hitchcock
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Other Examples of Cost Reduction Strategies

• Process mapping
• Standardization of inventory in exam rooms
• Introduction of protocols
• Management of pharmaceuticals
• Restructuring debt

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IMPROVING PRODUCTIVITY
28
Health System
Organization of Health Care
Community
Self-Mgt Support
Delivery System Design
Decision support
Clinical Information Systems
Resources and Policies

Informed, Activated Patient
Prepared, Proactive Practice Team
Productive Interactions Evidence-based clinical
management Collaborative treatment plan Effective
therapies Self-management support Sustained
follow-up
Functional and Clinical Outcomes
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What is the new work of Planned Care?

• Seamless information flow and efficient date
  entry
• Population and patient level analysis of data
  and key indicators
• Anticipation of patient needs and planning of
  the visit
• Interaction when and how the patient needs it
  (phone, electronic, group)
• Adjusting resources and staffing based on
  self-activation status
• Idealized flow and interaction when the patient
  engages the delivery system

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PLANNED CARE IN THE NEW ENVIRONMENT
Guidelines In exam room With PDAs EMR
eliminate All paper Registry used For Master
Scheduling Community Resources Part of care
team
Reimbursement Aligned to support Planned care
Group Visits Used 25 17 visits by
Email
Open Access No shows decrease to 2-5
Continuous Flow minimize On-site time
Care Team Work Spread 81 Ratio
M.D. N..P. N.P. R.N.
R.N. M.A. DIETICIAN
EXTERNAL TEAM
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Who will do this new work?

• Reexamination of the resources and roles within
  and external to the organization
• Optimizing the care team is the major leverage
  point
• Alternative models

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What do the data suggest on staffing?
The following slides on staffing provided with
permission by David N. Gans, FACMPE Director,
Practice Management Resources Medical Group
Management Association 104 Inverness Terrace
East, Englewood, CO 80112 [phone] ext.
270 dng_at_mgma.com
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Profitability by FTE Support Staff
Source MGMA data
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Rightsizing Staff for Maximum Profitability
Source MGMA data
35
Examining Productivity and Staffing
Source MGMA data
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Examples of Different Approaches

• 1-8 Staff Care Team Model
• 1-3 Care Manager Teams
• Patient Owned MSO Model
• Centralized Disease Management Resource-UK Model
• Outsourced disease management partnerships

37
Clinica Campesina Model
OLD System New Team Based System
C.E.O
M.D.
C.O.O
C.F.O..
SAME NUMBER OF PEOPLE
38
U.K. MODEL
Midwife Welfare Rights Worker Public Health D
istrict Nurse Health Visiting Nurse
Finance MGR Primary Care Development Manage
r
Care Teams 4-5 M.D. 2 R.N. 1 Mgr.
2 Clerical
Population
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Whatcom County Outsourced Partnerships
Hospital Insurers Primary Care Specialists
Ancillary Providers Providers
Peace Health
Executive Director Coordinator Statistician
Analysts Care Managers Information Systems
40
CareSouth Carolina
Planned Care Teams Care Manager Medical
Assistant Nurse
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PATIENT OWNED MSOMODEL
ATTRIBUTES Patient owned Co-Op Model Providers
staff model Reinsure for catastrophic
Clinicians Nurse Mid-Levels Case
Dietician Masseuse
Exercise Salaried
Managers Coach
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REVENUE ENHANCEMENT
43
St. John Valley Health Center

• Community provider
• National Health Services Corps Site
• Participated in Bureau of Primary Health Care
  Health Disparities Collaborative
• Adopted Planned Care Model

44
St. Johns Valley Health Center

• 170 Patients with Diabetes identified for the
  clinic
• In 1 year these patients generated 312 initial
  visits 170 follow-up visits _at_47 each 22,654
• 46 new patients recruited
• Generated 30,083.00 labs. income (net of 6,000
  expense)
• Generated 31,075 in diabetes education visits
  (350 for 10 sessions)
• Generated 15,000 in internal referral charges
• Total new income 99,542.60
• Source Dana Green, P.A. St. John Valley
  Hospital

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Impact of Idealized Design

• Deposit Family Care Center, New York
• Visit volume increased by 22 due to increased
  efficiencies and decreased no show rates
• This resulted in actual provider office hours
  decreasing
• Increase in charges by 44
• Increased patient satisfaction
• Source John Giannone, M.D Giannone, John.
  M.D. Open Access as an Alternative to Patient
  Combat, Family Practice Management January
  2003.

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Other Revenue Enhancement Examples

• G.A. Carmichael (Mississippi) tobacco settlement
  money/Nissan direct contracting
• Laurel Family Health Care (PA.)
• Mark Lyons negotiated with Aetna for 350
  classes 140 I year follow-up 30/hr individual
  counseling
• Clinica Campasena 1M annually from health plan
  quality incentive pool!

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White River RedeFin Measures
48
Revenue Maximization

• Collections at the point of service
• Use of greeter
• Moving collections to point of service
• Implement RVUs and adjust master pricing
• Process map billing cycle
• Manage denials

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Breakthroughs in Reimbursement

• CMS rewarding Premier Hospitals based on quality
  outcomes
• States reimbursing for Group Visits
• First Health and Blue Cross California
  reimbursing for e-mail visits
• Provider incentive pools
• CMS CCIP Program
• Wellmark Recognize and Reward Program

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Bringing it all together..

• CareSouth Carolina

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(No Transcript)
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CareSouth Carolina

• The next few slides were obtained through
  interviews and site visits with CareSouth Carolina

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Our Population

• 43 Of Our Patients Are Uninsured
• 35 Of Our Patients Have Medicaid
• 15 Of Our Patients Have Medicare
• 7 Of Our Patients Are Privately Insured
• 63 African Americans, 5 Hispanics and Native
  Americans
• 94 are lt 200 poverty
• 2002 Total Patients 23,000
• 2002 Total Encounters 83,632

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Example

• Time with doctor has gone from 8.2 minutes to
  12.5 minutes
• Total visit time has gone from 90 minutes to 47
  minute average
• HbA1c for their population of focus came down
  from 11 to 8
• Encounters and revenue for behavioral health
  services skyrocketed (in Medicaid cost based
  reimbursed and Medicare is 60 of the cap for
  behavioral counseling services)
• There are several key clinical indicators where
  they have reversed the health disparities and
  outcomes for minority populations are better
• Third available appointment has gone from 140 to
  14 days
• Went from breakeven/deficit spending to 7
  positive margin

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CareSouth Data Profile State Budget and Control
Board State Health Plan Claims for January 1,
2000-December 31, 2001 Patients with Diabetes
(primary and secondary diagnosis)
Revised March 14, 2003
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CareSouth CarolinaCost Reduction

• Reduce waste and inefficiency with planned care
  visits
• Define roles and responsibilities of the team
  match skills, training to the job providers
  dont do data entry!

57
CareSouth CarolinaImproved Productivity

• Planned care visits
• Depression Management
• Microsystem team identification of roles and
  responsibilities
• Care Management
• Average Team Productivity gt 5,300

58
CareSouth CarolinaEnhanced Revenues

• Foundation established for fundraising high
  profile community membership
• 5 million goal
• Over 1 Million in additional grant revenue
  realized
• Behavioral Health Revenues almost tripled
• Negotiation with Medicaid

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Percent of Self Management Goals Set That Are Met
60
Access Visit cycle Value Added Time
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Average Time Spent with Clinician
62
Vitality Increased Medical Productivity
63
Vitality Increased Patients Served
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What Can You Do to Drive a Business Case?

• Analyze the practice and understand your business
  case
• Aggressively work on systems supporting care
  delivery-drive waste out of the system
• Use data to drive decisions, identify waste and
  improve your cost and revenue position
• Document and use your outcomes to influence your
  revenue streams

65
Creating a Business Case

Understand your Business Case (Use data to
under- stand where you are)
Change Packages (How to get there)
Prioritize your action plan
Gap Analysis (Where you want to be)
Clinical Measures Volumes Patient mix Panel
Size Productivity Revenue/collections Unit
cost Margin/ profitability Cycle Time Demand vs.
Supply Access Satisfaction Staff Vitality
Value stream analysis Process Mapping Gap
Analysis Benchmarking
Access Cycle time Manpower/supply Demand
Management Revenue Enhancement Cost/waste
reduction Improving Productivity Influencing
reimbursement Staff development Leadership Patient
Recruitment/Retention
Eliminate waste and improve flow Optimize care
team Manage demand/ Match capacity and
demand Provide seamless, coordinated care Use a
planned approach Enhance revenue Set system level
aims Build loyalty Focus leadership on
improvement Establish effective communications
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How do we get anything done?
Process
Inspect
Wait
Administrative
Move
Adapted from Michael Ricard
67
Value Analysis using Process Mapping approach

• Shows the Big Picture
• Describes a process as it works today an as-is
  model
• High touch, low-tech
• Identifies strengths and opportunities
• Captures the complexity and disconnects of key
  operational issues
• Identifies outside areas involved in the process

Adapted from Michael Ricard
68
Access

• Change concepts
• Shape demand/match capacity to demand
• (Panel Size/Advanced Access)
• Toolkits
• Understanding patient panels and why they matter
• Eliminating waits Understanding and managing
  capacity and demand

69
Cycle Time

• Change concepts
• Optimize the care team
• Eliminate waste and streamline work flow
• Toolkits
• Optimizing the care team
• Concepts of waste/value stream mapping
• Reducing visit cycle time

70
Manpower/Supply

• Change concepts
• Optimize the care team
• Build loyalty in patients and staff
• Establish effective communications
• Toolkits
• Optimizing the care team
• Building an effective team
• HR best practices
• Incentive systems

71
Demand Management

• Change concepts
• Create a planned visit for each encounter
• Shape demand and match capacity and demand
• Toolkits
• Understanding and managing demand and capacity
• Understanding patient panels and why they matter
• Group visits A Primer
• Optimize the care team

72
Revenue Enhancement

• Change concepts
• Enhance revenue
• Toolkits
• Care team role in health center finance
• ROI How to measure the impact of change
• RVU Basics
• Maximizing revenue through better collections
• Introduction to pay for performance
• Using data to influence external stakeholders

73
Cost/Waste Reduction

• Change concepts
• Eliminate waste and reduce cost
• Toolkits
• Concepts of waste/value stream mapping
• More lean thinking concepts
• Using community resources effectively
• Care team role in health center finance
• Pharmacy as an opportunity to help your business
  case

74
Improving Productivity

• Change concepts
• Optimize the care team
• Create a planned visit for each encounter
• Provide seamless and coordinated care to patients
• Toolkits
• Optimizing the care team
• Reducing visit cycle time
• Understanding patient panels and why they matter
• Understanding and managing demand and capacity
• Incentive systems

75
Influencing Reimbursement

• Change concepts
• Enhance revenue
• Focus leadership attention on improvement
• Toolkits
• Using data to influence external stakeholders
• Introduction to pay for performance
• ROI Using it to analyze the impact of change

76
Staff Development

• Change concepts
• Build loyalty in patients and staff
• Focus leadership attention on improvement
• Optimize the care team
• Establish effective communications
• Toolkits
• Optimizing the care team
• Building an effective team
• HR best practices
• Incentive systems

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Leadership

• Change concepts
• Establish effective communications
• Focus leadership attention on improvement
• Establish system level performance aims
• Build loyalty in staff and patients
• Toolkits
• Building an effective team
• HR best practices

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Patient Recruitment/Retention

• Change concepts
• Build loyalty in patients and staff
• Provide seamless and coordinated care
• Create a planned visit for each encounter
• Shape demand and match capacity and demand
• Toolkits
• Eliminating waits Reducing cycle time
• Eliminating waits Understanding and managing
  demand and capacity
• Understanding patient panels

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Time for Dialogue..