"Delivery System Reform in Rhode
Island: BCBSRI's role in 2013 and
beyond"
Gus Manocchia, chief medical officer, BCBSRI
September 20, 2013
The Rhode Island Healthcare Landscape
The U.S. spends more per person on care than any country in the world, with the average
family of four spending more than $20,000 annually.
In Rhode Island, skyrocketing healthcare costs contribute to an ongoing weak local
economy.
Flaws in the current healthcare system have led to increased costs and fragmented and
inconsistent care.
The current system focuses on:
• Patients who are already ill
• Paying for the number of services, not the quality of those services
• The service provided but not the cost/benefit of providing it
Key Cost Drivers
The cost of healthcare services for BCBSRI’s insured members exceeded $1.3 billion in
2011. A breakdown of those costs:
Pharmacy: Drug costs are expected to
grow faster than those for both hospital
care and other professional services
through 2019.
Professional services:
Providers’ reimbursement
is based on the number of
patients he/she sees, not
the quality of care
delivered.
Hospitals: Increases in
hospital reimbursements
continue to outpace
inflation and account for
more than one-third of our
members’ claims.
BCBSRI’s perspective on transformation
Informed Patient makes better choices
•
We are committed to providing our members with more transparent
data on the quality and cost of healthcare services
•
We want them to be informed healthcare consumers
•
Currently, our members can read and write “reviews” about a
provider they have seen
•
This fall they will be able to use a member out of pocket estimator as
well as a “Ways to Save” tool
Giving our members tools to be educated consumers- Physician Finder
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Members can search “Estimated
Costs by Treatment”
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Members can also search “Estimated
Costs by Doctor”
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Coordination of Patient Care
• Coordinated, team based care is the future of
healthcare
• Rhode Island’s healthcare providers, with the
support of payers and regulators, must evolve to an
aligned, patient-centric healthcare delivery system
resulting in:
– Improved patient health outcomes and care experience
– Higher quality of care and patient safety
– Lower cost of care for patients
Patient-Centered Medical
Homes
Group
Covered Adult Lives
Anchor
6755
Aquidneck
1973
Coastal
Medical Assoc of Rhode Island
RIPCPC
24085
5211
28678
University Internal Medicine
3038
University Medicine
8709
WellOne
1996
Wood River
Total
785
92657
In total, 38% of Blue
Cross local adult
membership has an
affiliation with either a
PCMH or CSI-sponsored
physician.
Primary Care Practice Transformation
• RI has the highest per capita rate of NCQA recognized PCMH sites,
which offers a level of discipline not found in non-PCMH practices
• 200k unique member encounters by nurse case managers per year
• Implementation of team-based care maximizing the use of each
individual
• Consistent use of EHR systems greatly improved
– 245 PCMH Providers already attested to Meaningful Use
• Pre-visit planning saving time and empowering employees
• Improved After Hours and Same Day Access through weekend pilots
and NCQA required same day visit slots
• Patient portal roll out at most sophisticated sites
• High sense of camaraderie and collaboration across program – shared
learning
• Quality, utilization, and cost of care benchmarks increasingly becoming
a part of practice life
Our investments in PCMH’s have helped create infrastructure, process, technology, and expertise in patient –
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centered care
* Specific to BCBSRI program only
Patient-Centered Medical
Homes
Avoided ER
3,227
Mean $/ER Visit
×
$1,200
Savings
=
$3,872,400
Benchmark
Blue Cross Commercial members in a PCMH could
incur 15% fewer emergency room visits than members
who are not in a PCMH.
This 15% translates to a potential of 3,227 avoided
emergency room visits.
Patient-Centered Medical
Homes
BCBSRI Commercial Membership Inpatient
Benchmark
Blue Cross Commercial members in a PCMH could incur
11% fewer inpatient admissions and 17% fewer inpatient
readmissions than members who are not in a PCMH. This
translates to a potential of 756 fewer inpatient admissions
and 100 fewer inpatient readmissions. The decreased
utilization ultimately equates to more than $12M in
potential savings.
ROI – Quality Performance
BCBSRI PCMH vs. Plan
79.02%
74.27%
80.00%
76.28%
69.55%
69.38%
70.00%
61.88%
60.00%
59.94%
62.66%
54.20%
51.92%
PCMH Performance
50.00%
Plan Performance
Based on PCMH
Weighting
40.00%
30.00%
27.04%
19.73%
20.00%
10.00%
0.00%
DM HbA1C Poor
Control
(>9%)
DM HbA1C
Control
(<8%)
DM - LDL
Control
(<100)
DM - BP
Control
Adult BMI
HTN - BP
Control
(<140/90)
Our PCMH partners have materially higher quality scores when compared to our network
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Expanding our PCMH Footprint
# of
Providers
% of RI Providers in
PCMH’s
# of
Members
Members
% of BCBSRI Members
in a PCMH
140000
35%
120000
30%
100000
25%
80000
20%
Members
60000
15%
40000
10%
20000
5%
0
% of in state members
0%
2009 2010 2011 2012 2013
* The # of PCMH providers has grown from 32 to
an expected 330, an annual growth rate of 58%
* The # of members in a PCMH has grown from 15k to an
expected 127k , a compound annual growth rate of 63%
We’ve experienced rapid growth rates in both physician adoption and PCMH membership since 2009 and will
continue to drive new ways to enroll our physicians and members in PCMH’s
* Specific to BCSRI program only
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Patient-Centered Medical
Homes
Forecasted Value
Claims Expense
w/o PCMH
Claims Expense
w/ PCMH
Year 1
$
1,790.6 M
$
1,772.8 M
$
17.8 M
Year 2
$
1,898.1 M
$
1,865.2 M
$
32.9 M
Year 3
$
2,012.0 M
$
1,969.7 M
$
42.3 M
$
93.0 M
Total
Aggregate
Savings
Adoption of value-based contracting
• Reimbursing providers based value, not
volume improves care and affordability
– Future reimbursement increases are based on
actions that measurably improve patient
experience, health outcomes and cost
improvement
– Provider cost and quality data become
transparent
– Non-participating (engaged) providers could see
fee reductions
Moving to value-based contracting
• Shared savings agreements:
– Coastal Medical
– University Medicine Foundation
• Bundled payment arrangements in
development
• Creating new products with provider
partners:
– Lifespan
– CNE
• New relationships emerging in the market
– CNE affiliation with RIPC
– CNE merger with Memorial Hospital
Spectrum of Payment Models for Health Plans and Providers
PAYMENT MODEL
Performance
Based Fee for
Service
Fee for
Service
Negotiated
Payment for
Volume
Negotiated
Payment for
Volume
+
Escalators for
Quality and
Patient
Experience
(Prospective
without “settle
up”)
Shared
Savings
Global Target
with
Shared Savings
If Interim Costs
< Target
Risk
Sharing
Global Target
with
Shared Savings
if Interim Costs
< Target
and
Shared Losses if
Interim Costs
> Target
Full
Capitation
Global Target
with
All Savings /
Losses Going
to Provider
Care Delivery System Today and in Five Years
Level of Delivery System and BCBS Integration (Financial, Capabilities, People)
High
Low
Traditional Model
BCBSRI / Delivery System Value Creation for Care
Collaboration
Delivery
Description
Contractual Fee For
Service Relationship
Contractual Relationship
with Shared Value
Contractual Relationship
with Shared Value with
BCBSRI integrated services
Value Levers
Credentialing
In Network Benefits
Pay for Performance
Care Model Coordination
Aligned vision / planning
Shared economics
Information Sharing
Enterprise alignment
with an integrated view of
patient
% of members in
each model
Today
 60%
 35%
 5%
2015
 40-50%
 30-40%
 20-30%
A simpler, less expensive system
• Parity with national benchmarks for
administrative cost levels across the
system
• Processes and information are directly
related to patient care and simplified
• Unnecessary and redundant process
between delivery system and partners
are identified and eliminated
Operating Leaner and Smarter
Focused efforts to improve performance
in key areas of staffing, operations, and
supplier contracting have resulted in an
annual expense reduction of close to $15
million.
By 2014, we plan to reduce our overall
operating expense base by 25% since 2009
through more efficient operations and
technology
SelectRI
Lower costs. Enhanced primary care. Better value. SelectRI gives employers
and their employees more for their healthcare dollars.
• SelectRI is an innovative network
option that empowers members to get
the care they need at the best price.
• They’ll still have the flexibility to
choose any provider in our national
network, but when they use SelectRI
providers, they’ll have the lowest outof-pocket costs and access to
comprehensive primary care with many
extra services.
SelectRI
—James Schwartz, MD, Coastal Medical
SelectRI is changing the way care is delivered in
Rhode Island through a partnership with Coastal
Medical, the state’s largest private primary care
group.
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SelectRI
24
Wellness Features
• Wellness Portal
– Health Assessment (HA) - $50 Incentive for Completion
– Online Tools and Programs
– PureRunner Mobile App
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• Telephonic Wellness Coaching
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