Outcomes-based Contracting Insights from WEDI-Con15
- 1. Information Strategy Route Map Outcomes-based Contracting Presented by: Ken Barrette of Optimity Advisors Copyright © 2015
- 2. Today’s Presentation Topics: 1. Understand Concept of Outcomes-based Contracting 2. Data Discussion and Opportunity 3. Case Study 4. Delivery Framework Key Learnings: 1. Outcomes-based Contracting 2. Importance of Data Framework / Informatics 3. Appreciation of Collaboration and Time to Implement
- 3. Outcomes-based Contracting Rolls Royce pioneered concept Outcomes-based Contracting - ‘Power by the Hour©’* • Shifted traditional engine sales and service (paying for unit, activity, and parts) to pay for keeping planes ‘healthy’ and operational in the air • Aligned performance measures to outcomes expected • Transformed reactive service and maintenance to predictive prevention • Provided immediate value to customers through: Predictable costs Reduced upfront capital investment Prevented catastrophic events Improved aircraft value (‘health’) over time Happy customers – increased market share *Source: https://en.wikipedia.org/wiki/Power_by_the_Hour
- 4. Outcomes-based Contracting What is Outcomes Based Contracting? KEY CHARACTERISTICS: • A focus on business outcomes rather than activities and tasks • The use of measurable performance standards that are tied to the required outcomes. • Structure, Process Outcomes • A pricing model that comprises or includes rewards and risks Traditional Model Outcomes- based Model Source: http://outcomesbasedhealthcare.com/Contracting_for_Outcomes.pdf Source: Donabedian, A. (2005). Evaluating the quality of medical care. The Millbank Quarterly, 83, 4, 691-729.
- 5. What Opportunity Does Outcomes- based Contracting Address? Healthcare costs are growing faster than the available budgets. This is not sustainable in the future. Value($) Time Healthcare Costs Healthcare Budget Budgetary Gap
- 6. Aligning Data Across Complex Health Ecosystems Developing and implementing Outcomes-based Contracting program requires strong data and technology coordination across stakeholders.
- 7. Information Management Evolving Industry standards and efforts are aligning to make Outcomes-based Contracting ‘practical’. Digital Maturity Patient Experience and outcomes National Standards Powerful Analytical Solutions Quality of Reporting Technology Integration Behavioral Insights Cost reduction
- 8. Components of a Outcomes-based Contracting Model • Business Intelligence (data and information) • Performance Against Outcomes Metrics • Payment and Reimbursement Modeling • System Readiness for Change • Governance Establishing an Outcomes-based reimbursement contract requires a systematic approach to planning and realization. Quality -Outcomes -Safety -Experience Payment -Cost for all health care delivery Value÷ Source: HFMA 2011 – Value in Healthcare: Current State and Future Directions
- 10. Growth of Health Care Quality Measures The health quality measures inventory is growing. U.S. Health Department of Health and Human Services Measures Inventory National Quality Measures Clearing House Source: AHRQ
- 11. Measuring Quality Regulatory-driven Measures/Reporting Industry Standards NCQA- HEDIS Meaningful Use AMA- PCPI Stars QRS CQM PQMP-CHIPRA IHI-Whole System Measures OQR IPR PQRS HIQRP Structured and Unstructured Data Structured Data (Claims, Electronic Medical Record, Financial/Actuary, Utilization, Biometrics Lab, Pharma, etc.) Unstructured (Social Media, Health Monitoring, Research, Mobile Apps, Patient Voice, etc.) Data Attributes (Syntax, Format, Definition, Situation, Relationship, Metadata Taxonomy) Data Attributes (Distributed Network, Hashtag, Emoticon, Wiki-Collective, Social, Patient Health Records) PROM URAC PQA Performance Data Capture, Aggregation, Analysis Business Informatics Outcomes-basedContracting Opportunities MACRA/MIPS
- 12. Basic Data Framework Developing a Value-based Outcomes arrangement requires data aggregation and analysis across multiple data types and measures. Identify the treatments and the patients that drive costs Quantitative Data Qualitative Data Activity-Level Data Medical/Encounter Prescribing Patterns Supplies/Equipment Financial Data Year of Care Cost per Occurrence Other financial variables e.g. - Rebates - Excess Risk Indicators - Risk adj. payments Clinical Quality Readmission LOS Medical Adherence Safety Never Events/Exclusions Medical Adherence Patient Experience Simplification Lower out of pocket Quality of Life Satisfaction One-time set-up cost Data Monitoring Technology Population Identification: • Conditions • Risk scores/stratification • Personal data (age, gender, ethnicity, etc.) • Bio-physical data • Socio-economic indicators Construct the Episodic/Treatment Groupers
- 13. Beyond Traditional Data Standards Healthcare has been traditionally focused on interoperable, fixed data layouts and definitions. We have a unique opportunity to develop informatics that use metadata, distributed networks research, and social/wiki conventions (#hashtags, emoticons) Data Collection Archiving Sharing Networking Analysis Linked Data Patient Stories Emoticons Hashtags Conversational Context
- 14. Case Study
- 15. Case example: London-based Clinical Commissioner A 10 year journey to population level Outcomes-based Payment • A membership organization of 44 Group Practices (GPs) across a London borough commissions health services for a population of around 310,600 • 2015-16 healthcare budget allocation of $575MM • Key Demographic Variables – Urban deprivation is higher than the average – Population profile is younger than the UK average – Population is highly ethnically diverse – Life expectancy is below that of London and England, for both males and females • The combination of increasing demand for healthcare and cost inflation in excess of income growth results in a real terms financial challenge - in a “no change” scenario, it is estimated that this is a “gap” of about $20MM million in 2014/15 and $15MM million in 2015/16. • Add to this the reduction in social care budget from $130MM in 2013/14 by $10 MM in 2014/15 and a further $11MM in 2015/16
- 16. The journey Moving from current reimbursement (bundled payments) to population- based outcome contracting. Source: Need to Nurture: Outcomes-based commissioning in the NHS, Health Foundation, 2015
- 17. •Identify data sources •Finance and activity data for current delivery model Initial target group baseline data analysis and assessment •Full baseline data set •Define and cost the activity in the new care delivery model Full population baseline data analysis •Full baseline for full population •Model system impacts •Model upfront investments Model new care delivery model costs and volumes •Design outcome metrics •Model potential benefits for risk and gainsharing Alternative payment and reimbursement mechanisms Outcomes-based Model Approach The data and information Optimity Advisors is using to support the roadmap development.
- 18. The 10 year roadmap Using data and information to shape the journey Identify sources Assure comparability and data quality Identify gaps Determine information system interoperability Develop new data requirements to support outcomes measurement Design an integrated information system architecture Run new systems on contract performance monitoring Decision support dashboards for contract performance monitoring Baseline •Population •Finance •Activity •Quality and performance Years 1-3 •Risk stratification •Cost* versus price •Activity shift incentivised •Outcome contracts for 2-3 population cohorts Years 4-10 •Population health system analytics (commissioner) •Decision support tools •Performance monitoring •Risk and gain share based on outcomes (commissioners and providers) *Patient level and actual cost not bundled payments
- 19. Enabling Outcomes-based Contracting Short term intensive baseline and setup support and long-term performance management support Baseline for outcomes contracting Setting up the integrated system for real time decisions Performance reporting
- 20. Example Technology Target State The target technology architecture comprises of 4 key outputs: CACI Database Livedash Waiting times Standard Reports Performance vs Planned 1 2 WS ETL - UP Data Mart FrontEnd Business Schema MS SQL Server Livedash MS SQL Server KPI Customer Centric Financial Enterprise Data Warehouse LaaS Big Data Analytic Environment Integration&DataWarehouse File Storage ETL Livedash One repository where data is collected ETL - IN Clinical data dB and excel Community Rio Non Clinical dB iCare dB LocalEnvironment Data Sources Unstructured data Emails etc. ANALYTICS Combined analytics Predictions 1 2 LocalLocal Distributed Processing Cluster NoSQL Data Store MODELLING Population modelling 1 2 big Service Data Performance RTTs Daily sit reps Commissioners’ reports Service Line Reports
- 22. Outcomes-based Contracting Delivery Framework Our approach to transformation and out performance emphasizes collaborative business engagement, rapid and iterative implementation, focused communication and change management to result in desired ROI Discovery - Critical Success Factors: Participation and accountability cross strategy, operations and implementation teams Business engagement and shared accountability for business case, scope prioritization/sequencing and budget Upfront agreement on success measurements Implementation - Critical Success Factors: Deep and shared understanding of the strategic goals and business rationale and sustained business sponsorship and engagement Holistic portfolio/program/product and change management approach Effective benefit realization measurement and reporting Strategy Definition Time-Boxed Discovery INFORM Project initiation Strategy review and intent Opportunities analysis and research Current State & Operational Pain Points Gap and priority analysis Business Case & Success Criteria Future State Vision, Scope & Roadmap Budget & Organization Plan Roles identification to support ongoing innovation Discovery Iterative Initiative Implementation Business process, role and technology architecture design Proof of concept Rapid Interactive Elaboration, Design & Prototyping Output/Product Prioritisation & Ownership Data Architecture, Mining, Design, Development and Visualization Change Management and Training Planning and Execution Program/Project, Vendor and Communication Management throughout Business Process Data & Architecture Design Roll Out & Change Manage ment Management & Oversight Iterative Elaboration, Build and Test Cycles ROI / Benefits Realizatio n Measurement and continuous improvement OUTPERFORM
- 23. What You Need to Know • Delivery on Results is One Component of a Successful Shared Collaboration in Outcomes-based Contracting • The Dawn of Using Unstructured Data is Here • Importance of Business Informatics (vs. data warehouse) • Define Denominator (Quality) Clearly – Identify Performance Measures • Start Now – Leverage Quality Measures, Episodic Groupings, Pharma as Critical Components and Understand Iterating and Time to Mature • Leverage Global Health Intellectual Property/Processes/Knowledge Sharing
- 24. Thanks for Participating Questions?Ken Barrette Partner Washington, DC | Brussels | London | Los Angeles | New York | Zurich 1600 K Street NW, Suite 200, Washington DC 20006 d: 202.341.2651 t:202.540.9222 e: ken.barrette@optimityadvisors.com www.optimityadvisors.com twitter.com/optimity www.linkedin/company/optimity-advisors