Preparing for a New Payment System

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Preparing for a New Payment System

• K. Eric De Jonge, M.D
• Karl.e.dejonge_at_medstar.net
• April 30, 2008

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Brief Description- WHC

• 900-bed, non-profit, tertiary care, teaching
  hospital- FFS and Specialty-dominated
• (1999)-- Portable primary medical and social
  services for frail and most ill elders
• Tight link to hospital service/ Wireless EMR
• 4 MDs, 4 NPs, 3 SWs, 1 LPN, 4 Office staff
• 615 active patients (2 teams)

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WHC Economics

• Budget of 1.6 M
• FFS covers 75 of costs
• Gap of 400K ? Philanthropy, WHC subsidy
• No formal credit for downstream revenue (10M
  in 2006)
• No payment for preventing Medicare A events

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Base Principles

• Hub
• Outstanding team of primary care medical and SW
  staff, 24/7 direct access to on-call MD, urgent
  visits (only M-F)
• Daily loving care-- families, aides, neighbors,
  church
• Spokes
• Transport, ER, Acute, Rehab, and specialty
  services
• Portable pharmacy, labs, X-ray, DME
• VNA, hospice, legal counsel / APS
• Clinical staff and wireless EMR links across
  settings
• Economics
• Geographic efficiency, inpatient service volume,
  MA waiver , philanthropy , EMR prompts for
  correct coding

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Our Toughest Challenges

• Emotional strain of intense patient care
• Difficult / unsafe behaviors of patients and
  caregivers
• Short-term / volume mindset of payment systems
• Little credit for preventing high-cost events or
  outcomes
• THIS WILL CHANGE SOON, with or without IAH
• WWW.DARTMOUTHATLAS.ORG -gt Driving Policy
• Portable Technology
• Fast and reliable wireless connectivity
• Better / payable point-of-service diagnostics and
  therapeutics

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Lessons for IAH / New Payment System

• Medicare is changing from paying for volume to
  paying for results
• Those who build integrated health systems over
  time and setting for ill elders will benefit
• Think? Mayo and Cleveland Clinics
• Primary care-based, 24/7 access, ALL needed
  services, over all settings

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Specific Lessons for IAH

• Key Clinical Elements
• Hub- People with skill and compassion for elders
• Long-term trust and reliability
• Medical and Social services on same team
• 24/7 direct access / urgent visits within 6-12
  hours
• Coordinate all spokes of clinical care (e.g.
  transport)
• Control over ALL settings, to really generate
  savings
• Home, Acute Care, SNF, Specialists, Rehab, EOL

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IAH Economics- WHC Model

• 600 Patients ? 200 IAH-Eligible
• 200 x 50,000/year 10M expected costs
• 5 savings required by IAH
• 2,500/ patient ? Reduce to average 47,500/ year
• Remove outliers on both sides
• Share in savings beyond 5

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IAH- Sensitivity Model 200 pts. who avg.
50,000/year
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Summary

• Medicare is changing to pay for results
• Benefits to health systems with primary medical
  and social services across ALL settings
• IAH will hurt those who offer one silo of care
  and reward those with a hub primary care team AND
  all spokes of geriatrics services