Strategy and Leadership:
Achieving Rewards for Measurable Value
Understand Your Market | Prepare to Change|
Innovate Around Value | Lead and Manage Change
Jim Hoyme
Therapy Partners
[email protected]
Planning to Deliver Value
• Therapy Partners - MSO and Value Networks
• Signs of the Times – Connect the Dots for Opportunity
• Volume to Value Change Revolution in the Market
• Leading Change
Therapy Partners
Minnesota-Western Wisc
MSO
Value
Networks
All Health Plan Contracts Under TPI
TIN including Risk Sharing
Value Based, Shared Savings Contracts
Health Plan, ACO
FOTO Care / Outcomes Management
Strategy and Change Leadership
Common Billing Office
Rev Cycle & Payment Managemt
Common Billing & EMR Technology
High Touch FOTO Training for
High Level Outcomes
Credentialing, Compliance
FOTO Outcomes Management
for Clinics
Professional Development –
Leadership – Strategy - Collaboration
Risk Sharing Contract Management
with Plans and ACO
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Therapy Partners MSO
Brings Measurable VALUE to
The Member Practices, Health Plans, and ACOs
Member Practices
Plans and ACOs
• Reduce
Operational Costs
• Improve
Reimbursement
• Strengthen
Market Position
• Simplify
Processes / Reduce Costs
• Predictable
Outcomes and Costs
• Triple Aim
Value
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MSO and FOTO
2006 tp 2009 - Failure
2010 on - Raging
Success
No Leadership
Leadership: Clear Direction
Cast no FOTO Vision
Vision: Strength in mkt; help team
Lacked clear Reason (Urgency)
Urgency: Pilot; Help PTs and Pts.
No defined Management
Management: Goals, Accountable
High resistance – 20% embrace
Fully embraced with rewards
Negative impact on culture
Positive impact – proud of quality
Inconsistent process and use
Defined processes and message
Low outcome scores
High level outcomes
“65 / 20 / 40”
“85 / 45 / 19”
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Therapy Partners Value Networks
Value Networks
• Goal – Win – Win
Win - Increase $$ to Practices
Win - Reduce TCOC for Plans
• Value Network Model
 Loose knit
 Keep own TIN and own billing/EMR
 Organize around “Measured Value” using FOTO
 Seek Value Based, Shared Savings Pilots/Contracts
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Therapy Partners Value Networks
Value Networks
• Most clients have existing networks
• Health plans embrace value focus and our value-based,
shared savings models
• 3 Plans have provided us large amounts of cost data -
health services provided for musculoskeletal conditions
• Work with plans to analyze cost data – develop pilot
models
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What’s Going On Around Us
Connect the DOTS
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PwC Health Care Division
“Approximately 50% of the $3Trillion spent on
health care in the US in 2012 was either
unnecessary or duplicative.”
The Message . . .
We waste about $1.5T annually on services that
add no value to patients.
Could greater access to skilled therapists
with proven value outcomes reduce
unnecessary costs?
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United Health Care
“In 2013, the US spent 17% its health care
expenditures on musculoskeletal conditions.
Only 7% of people with musculoskeletal
conditions received physical therapy care”
The Message . . .
We spend ≅ $500B/yr on MSK pain. $250B wasted?
Could greater access to skilled PTs reduce cost of
musculoskeletal conditions?
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United Health Care 3/14
“In 2012, the most costly procedures performed
in operating rooms were
1. Spinal Fusions
2. Total Knee Replacements
3. Cardiac Angioplasty
4. Total Hip Replacements
The Message . . .
We spend a lot of money on orthopedic surgeries
Could greater access to skilled PTs with proven
outcomes reduce a % of these surgeries?
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ACA – Obama Care
“We must insure more people and reduce
the rapidly rising costs in health care so
100% of Americans can get better care
at a lower cost.”
The Message . . .
The government is demanding Greater Access,
Better Quality, Lower Total Costs
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ACA – Obama Care
“We must hold providers accountable
through accountable care organizations,
outcomes, and financial risk sharing.”
The Message . . .
The government is demanding accountability – what
gets measured gets managed
Can innovative therapists deliver measured outcomes
and successfully share financial risk?
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Health Plan Execs
“Even if we have a President and Congress who
repeal the ACA – health care reform will
continue. Rising costs are unsustainable for the
people who pay for health care.” cost.”
The Message . . .
The private sector is demanding measurable quality
health care at lower costs.
Can therapists prove they deliver excellent functional
and cost outcomes?
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Med Director - Large Plan
“We have a shortage of 1° care MDs across the
country – we need at least 300 more 1° care MDs in
our small state and at least that many ‘mid-level’
providers. It’s the same all over the country and
will get worse as more people are insured.”
The Message . . .
Patients must wait too long to see a qualified provider
when we are trying to attain better access
Can skilled therapists become 1° care for MSK?
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US Military and Keiser
“PTs serve as primary care providers for
musculoskeletal pain. It reduces pressure on
primary care MDs, is more efficient, and they
know more about the problems than MDs.”
The Message . . .
Skilled PTs can provide quicker access better care for
MSK patients
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Virginia Mason MD-PT Team
“Physical therapy is the best treatment for LBP.
Same day access to PT reduces costs dramatically
and results in measurable functional gains.
Because we have such great results, we get more
LBP patients”
The Message . . .
Quick access for people with LBP to skilled PTs
results in lower costs and better outcomes
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Julie Fritz, PT, PhD and
Intermountain Research Team – Spine
“Physical Therapy provided within 2 weeks of
primary care MD visit for patients with LBP
yields lower total cost of care. Delayed
physical therapy care resulted in higher total
costs.”
The Message . . .
Early access to PTs results in lower costs
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Alfred Gellhorn, MD
U of Washington Research Team –
Spine
“Early access to physical therapists for Medicare
patients with LBP resulted in lower costs.”
The Message . . .
Early access to PTs results in lower costs
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Incentives Drive Behavior
“A majority of providers are paid based on volume
of services provides – FFS. More interventions
results in higher payments. Care is driven not by
what is best for the patient but by what provides
best reimbursement for the provider.”
The Message . . .
FFS creates volume incents high utilization and drives
up costs with no regard for quality – function/health
Can skilled therapists reduce costs if given an incentive
to achieve high outcomes?
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In a word . . .
Yes!
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TPI Data from Health Plan
“For people with MSK conditions who received PT –
Upstream Costs – 40%
Physical Therapy Costs – 30%
Downstream Costs – 30%.
Upstream Costs 40%
1° Care Visits, Imaging, Injections,
Ortho Visits, Meds
PT Costs 30%
Downstream 30%
Imaging, injections, ortho
visits, surgery, surg ctr, hosp
The Message . . .
Inconsistent care paths, many providers, no measured
outcomes – high costs
Can a consistent care path involving earlier PT with a
focus on outcomes reduce unnecessary costs?
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TPI – PT Network Pilot
“PTs using FOTO to manage their care and focus on
achieving higher functional outcomes reduced
TECOC associated with shoulder pain by 30% and
shared in the savings. Big reduction in hospital,
significant reduction in imaging/orthopedic surgery,
and slight reduction in direct PT costs.”
The Message . . .
Outcomes, value-focused physical therapy care can
reduce total cost of care
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$3T in
health care
costs – 17%
MSK pain $500B
Spine
Fusions,
Total Joints
Very Costly
Hold
Providers
Accountable
Outcomes
Many PTs
Best Access
Point for
MSK Pts
Research
Early PT Low $ High
Results
Must
Reduce Cost
of Health
Care
Measured
Quality –
Better
Health
Half of
Health Care
$$ add no
Value
But must
have better
access to
care
Plans will
Provide
Incentives
for Value
Shortage of
Primary
Care
Providers
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Spine
Fusions,
Total Joints
Very Costly
Hold
Providers
Accountable
-Outcomes
$3T in health
care costs –
17% MSK
pain - $500B
Skilled
Innovative
Physical
Therapists
Can be a Value
Based Solution
Must
Reduce Cost
of Health
Care
But must
have better
Measured
access
Quality –
to care
Better
Health
Half of Health
Care $$ add
no Value
Plans will
Provide
Incentives
for Value
Research
Early PT Low $ High
Results
Many PTs
Best Access
Shortage of Point for
Primary MSK Pts
Care
Providers
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The Volume to Value
Revolution
“If the rate of change on the outside
exceeds
the rate of change on the inside . . .
the end is in sight.”
Jack Welch
Former CEO, GE
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BIG
Change
In Provider Incentives is Coming
180
Financial
Incentives
Fee for Service
Volume Incentive
Shared Savings; TCOC
Value Incentive
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And When Incentives
Change 180° . . .
Provider Behavior Must Change
Accordingly
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$
Financial Incentives for
Health Care Providers
$
are
Volume Based
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The
Volume Equation
(Profitable Services x Max Fees) x (Max f )
Minus
Minimized Expense
This Creates Conflict
Provider – How can I maximize Volume so I can get paid more?
Payers – How can we minimize Volume so I can pay less?
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But it’s
NOT Based On
What Consumers Want
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Volume Based
Provider Focus
Drive Consumer Demand for
ChanGe
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To Models that Deliver
Value
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“The days of business as usual are over. Incremental fixes
attempted by health care policy makers have not worked.
It’s time for a fundamental change. A change from provider
focused volume incentives to models that reward providers
for delivering patient centered value collaboratively achieving the Best Outcomes at the Lowest
Total Cost.”
Michael Porter, Phd, Harvard Business School
from
The Strategy That Will Fix Health Care - HBR
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The Value Equation
Quality + Service + Convenience + Caring
Cost
How can I maximize value to my patients?
The Value Equation
Is What Consumers Want
Individuals who are your patients
Business who employ them
Health Plans who insure them
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But Providers
Do Not Have a
Financial Incentive to Deliver Value
because
”The more you do, the more you get paid”
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So the Market is
Changing
and
Financial Incentives
are beginning to
Reward
Value
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Reimbursement
Value – Risk Share
Innovation
Collaboration
Key Aspects
of Health
Care Reform
that Drive
Value
Triple Aim
Value
Patient
Centeredness
Consolidation
ACOs
Patient Centered
Medical Home
Power
Innovation
Government
Purchasers of Health Care
Health Plans
ACOs – Medical Homes
Integration
Care Model Change
Risk Sharing Payment
Arrangements
Reality
Your Strategy
Aligning Health Care Reform for Value Focused Success
The Triple Aim
Value
Measurable Quality
An Exceptional Patient
Experience
Lower TCOC
Outcomes
Patient Centeredness
Collaboration
Care Management
Your Mission
Your Culture
Excellent
Care M anagem ent
Physical T her apy Value
Increasing
Function
Over
Utilization
Under
Utilization
Increasing Visits
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FOTO’s 9 Cell Value Matrix
Fewer Visits - Efficiency
Higher than Expected
1
2
3
Expected
Increasing
Functional
Change –
Effectiveness
4
7
5
6
Lower than Expected
8
9
Lower than Expected
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It’s Time for
Innovation . . .
But ChanGe doesn’t
come easy
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50-70%
Take Your
Time
30-40%
Go with the Flow
But Won’t Try to
Convert Resistors
15-20%
20-30%
Hold You
Back
5-10%
Hate It!
Resist It!
Try to Make
It Fail!
Hate It!
Resist It!
Most People
Struggle with
Change
And Need Leaders
to Guide Them and
Managers to Help
Them
15-20%
Embrace
Change
Convert
Resistors
20-30%
Will Help
You
5-10%
Love it!
I’m Your
Change
Champion
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Leaders
Managers
Vision | Drive Change | Inspire |
Define the Culture
Plan | Organize | Analyze |
Hold People Accountable
+ Leadership Poor Managemt
+ Leadership
+ Managemt
Leaders: compelling urgency –
vision - ongoing enthusiasm
Managers: fail to plan – fail to hold
team members accountable
Result: Early progress; change
dies
Leaders: compelling urgency –
vision - inspiration –enthusiasm
Managers: Solid plan – Analyze
problem solve – accountability
Results: Change is Culture
Poor Leadership Poor Managemt
Leaders: Early urgency/vision –
lack enthusiasm – not a priority
Managers: fail to plan – fail to hold
team members accountable
Result: Change never starts
Poor Leadership + Managemt
Leaders: Early urgency/vision –
lack enthusiasm – not a priority
Managers: Want to succeed – plan
– analyze –problem solve- give up
Result: Good start; change dies
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Making the FOTO Change
Work
Requires Effective
Leadership and
Management
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“In God we Trust . . .
Everyone else bring data.”
Edward Deming - Statistician
Dennis Hart, PT, PhD
FOTO Inc.
2/3/1948 – 4/11/2012
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